EXHIBIT 10.3
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CREDIT AGREEMENT
DATED AS OF JUNE 17, 1996
AMONG
BWAY CORPORATION
MILTON CAN COMPANY, INC.
BROCKWAY STANDARD, INC.
THE ADDITIONAL BORROWERS
THE LENDERS PARTIES HERETO
BANKERS TRUST COMPANY,
AS ADMINISTRATIVE AGENT AND
SYNDICATION AGENT
AND
NATIONSBANK, N.A. (SOUTH),
AS DOCUMENTATION AGENT AND
PAYING AGENT
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS..................... 1
Section 1.1 Definitional Appendix........................................ 1
Section 1.2 Accounting Terms; Financial Statements....................... 1
ARTICLE II
LOAN PROVISIONS............................ 2
Section 2.1 Revolving Loan Commitments................................... 2
Section 2.2 Obligations; Notes........................................... 2
Section 2.3 Borrowing Options............................................ 3
Section 2.4 Minimum Amount of Each Borrowing............................. 4
Section 2.5 Notice of Borrowing.......................................... 4
Section 2.6 Conversion or Continuation................................... 4
Section 2.7 Disbursement of Funds........................................ 5
Section 2.8 Interest..................................................... 6
Section 2.9 Pricing Adjustments.......................................... 9
Section 2.10 Interest Periods.............................................10
Section 2.11 Swing Line Loans.............................................10
Section 2.12 Letters of Credit............................................12
Section 2.13 Increased Costs, Illegality, Etc.............................18
Section 2.14 Replacement of Lenders.......................................20
Section 2.15 Change of Lending Office.....................................21
Section 2.16 Funding Losses...............................................21
Section 2.17 Pro Rata Borrowings..........................................22
ARTICLE III
TERMINATION OF COMMITMENTS, PREPAYMENTS
AND FEES...................................22
Section 3.1 Mandatory Revolving Loan and Swing Line Loan
Prepayments and Commitment Reductions........................22
Section 3.2 Voluntary Prepayments........................................23
Section 3.3 Voluntary Commitment Reductions and Optional
Commitment Increases.........................................24
Section 3.4 Mandatory Prepayment and Commitment Reduction................25
Section 3.5 Other Provisions With Respect to the Loans...................26
Section 3.6 Order of Prepayments and Payments............................26
Section 3.7 Commitment Fees..............................................27
Section 3.8 Additional Fees..............................................28
Section 3.9 Payments.....................................................28
ARTICLE IV
REPRESENTATIONS AND WARRANTIES......................30
Section 4.1 Due Organization and Standing..............................30
Section 4.2 Power and Authority........................................30
Section 4.3 Subsidiaries...............................................30
Section 4.4 No Violation of Agreements.................................31
Section 4.5 Due Authorization, etc.....................................31
Section 4.6 Indebtedness for Money Borrowed............................31
Section 4.7 Fiscal Year................................................32
Section 4.8 Title to and Conditions of Properties......................32
Section 4.9 Litigation, Proceedings, Licenses, Permits.................32
Section 4.10 Governmental Consents, etc.................................33
Section 4.11 Financial Statements.......................................33
Section 4.12 No Material Adverse Change.................................34
Section 4.13 Tax Returns and Payments...................................34
Section 4.14 Patents, etc...............................................34
Section 4.15 ERISA......................................................35
Section 4.16 Governmental Regulation....................................36
Section 4.17 Federal Reserve Regulations................................36
Section 4.18 Solvency...................................................36
Section 4.19 Certain Fees...............................................36
Section 4.20 Environmental Matters......................................37
Section 4.21 Disclosure.................................................38
Section 4.22 Survival of Warranties; Covenant Regarding.................38
ARTICLE V
COVENANTS...............................38
Section 5.1 Affirmative Covenants......................................38
Section 5.1.1 Financial Statement, Reports and Other Information.....38
Section 5.1.2 Discharge of Taxes, etc................................41
Section 5.1.3 Corporate Existence; Business..........................41
Section 5.1.4 Compliance With Laws...................................42
Section 5.1.5 Performance of Loan Documents..........................42
Section 5.1.6 Inspection of Books and Properties.....................42
Section 5.1.7 Books and Records......................................43
Section 5.1.8 ERISA..................................................43
Section 5.1.9 Insurance..............................................44
Section 5.1.10 Use of Proceeds........................................44
Section 5.1.11 Maintenance of Properties..............................44
Section 5.1.12 Licenses, Permits, Etc..................................45
Section 5.1.13 Environmental Notification..............................45
Section 5.1.14 Senior Note Refinancing.................................45
Section 5.2 Negative Covenants..........................................46
Section 5.2.1 Liens...................................................46
Section 5.2.2 Indebtedness for Money Borrowed.........................46
Section 5.2.3 Affiliate Transactions..................................46
Section 5.2.4 Dividends; Distributions................................46
Section 5.2.5 Investments.............................................48
Section 5.2.6 Mergers and Consolidations..............................49
Section 5.2.7 Purchase of Stock or Assets.............................49
Section 5.2.8 Sale of Assets..........................................50
Section 5.2.9 Sales of Accounts Receivable............................50
Section 5.2.10 Subsidiaries............................................51
Section 5.2.11 Charter Amendments......................................51
Section 5.2.12 Plan Assets.............................................51
Section 5.3 Financial Covenants.........................................52
Section 5.3.1 Leverage Ratio..........................................52
Section 5.3.2 Interest Coverage Ratio.................................52
Section 5.3.3 Capital Expenditures....................................52
Section 5.3.4 Consolidated Net Worth..................................52
ARTICLE VI
CONDITIONS OF CREDIT.............................52
Section 6.1 Conditions Precedent to the Initial Borrowing...............52
Section 6.2 Conditions Precedent to All Credit Events...................54
ARTICLE VII
EVENTS OF DEFAULT................................55
Section 7.1 Events of Default...........................................55
Section 7.2 Remedies....................................................57
ARTICLE VIII
THE AGENTS................................58
Section 8.1 Appointment.................................................58
Section 8.2 Nature of Duties............................................59
Section 8.3 Lack of Reliance on the Agents..............................59
Section 8.4 Certain Rights of the Agents................................59
Section 8.5 Reliance....................................................59
Section 8.6 Indemnification.............................................60
Section 8.7 The Agents in Their Individual Capacities...................60
Section 8.8 Holders.....................................................60
Section 8.9 Resignation...................................................60
ARTICLE IX
BWAY GUARANTY................................61
Section 9.1 BWAY Guaranty................................................61
Section 9.2 Bankruptcy...................................................61
Section 9.3 Nature of Liability..........................................62
Section 9.4 Guaranty Absolute............................................62
Section 9.5 Independent Obligation.......................................62
Section 9.6 Authorization................................................62
Section 9.7 Reliance.....................................................63
Section 9.8 Waiver.......................................................63
Section 9.9 Guaranty Continuing..........................................64
Section 9.10 Binding Nature of Guaranty...................................64
Section 9.11 Judgments Binding............................................65
ARTICLE X
BORROWER GUARANTY............................65
Section 10.1 Borrower Guaranty............................................65
Section 10.2 Bankruptcy...................................................65
Section 10.3 Nature of Liability..........................................65
Section 10.4 Guaranty Absolute............................................66
Section 10.5 Independent Obligation.......................................66
Section 10.6 Authorization................................................66
Section 10.7 Reliance.....................................................67
Section 10.8 Waiver.......................................................67
Section 10.9 Guaranty Continuing..........................................68
Section 10.10 Binding Nature of Guaranty...................................68
Section 10.11 Judgments Binding............................................68
ARTICLE XI
MISCELLANEOUS.............................69
Section 11.1 No Waiver; Modifications in Writing.........................69
Section 11.2 Amendments..................................................69
Section 11.3 Notices, etc................................................70
Section 11.4 Costs, Expenses, Taxes and Indemnification..................71
Section 11.5 Special Expenditures........................................72
Section 11.6 Confirmations...............................................72
Section 11.7 Adjustment..................................................73
Section 11.8 Right of Setoff.............................................73
Section 11.9 Execution in Counterparts...................................74
Section 11.10 Binding Effect; Assignment..................................74
SECTION 11.11 CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL...............76
SECTION 11.12 GOVERNING LAW...............................................77
Section 11.13 Severability of Provisions..................................77
Section 11.14 Headings....................................................77
Section 11.15 Time........................................................77
Section 11.16 Further Assurances..........................................77
Section 11.17 Prior Agreements............................................77
DEFINITIONAL APPENDIX.......................................................1
EXHIBITS
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Exhibit 1.1(A) Form of Subsidiary Guaranty
Exhibit 1.1(B) Form of Contribution Agreement
Exhibit 1.1(C) Form of Cost Adjustment Certificate
Exhibit 1.1(d) Form of Pricing Certificate
Exhibit 1.1(e) Form of Intercompany Note
Exhibit 2.2(a) Form of Revolving Note
Exhibit 2.2(b) Form of Swing Line Note
Exhibit 2.5 Form of Notice of Borrowing
Exhibit 2.6 Notice of Conversion or Continuation
Exhibit 2.11(b) Form of Swing Line Notice of Borrowing
Exhibit 2.11(d) Form of Swing Line Loan Participation Certificate
Exhibit 2.12 Form of Notice of Issuance/Amendment of Letter of Credit
Exhibit 3.3(b) Form of Commitment Increase Request
Exhibit 3.9(c) Form of Tax Certificate
Exhibit 5.1.1(b) Form of Certificate of a Responsible Officer of BWAY
Exhibit 5.1.1(c) Form of Certificate from the Chief Financial Officer of BWAY
Exhibit 5.1.1(d) Form of Acquisition Compliance Certificate
Exhibit 6.1(c) Form of Opinion of Kirkland & Ellis
Exhibit 6.1(h) Form of Responsible Officer's Certificate
Exhibit 11.10(d) Form of Assignment Agreement
SCHEDULES
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Schedule 1.1(a) Commitment Amounts
Schedule 4.1 Due Organization and Standing
Schedule 4.3 Subsidiaries of BWAY
Schedule 4.4 Approvals and Consents
Schedule 4.6 Indebtedness for Money Borrowed
Schedule 4.8 Title to Properties
Schedule 4.9 Litigation and Proceedings
Schedule 4.10 Governmental Consents
Schedule 4.11(b) Pro Form Consolidated Balance Sheet
Schedule 4.11(c) Forecasts
Schedule 4.11(d) Material Liabilities
Schedule 4.15 Underfunded Pension Plans
Schedule 4.19 Brokers' Fees
Schedule 4.20 Environmental Matters
Schedule 5.2.5 Investments
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of June 17, 1996 and is entered into
by and among BWAY CORPORATION, a Delaware corporation ("BWAY"), BROCKWAY
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STANDARD, INC., a Delaware corporation ("Brockway"), MILTON CAN COMPANY, INC., a
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Delaware corporation ("Milton"), the Additional Borrowers, the undersigned
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financial institutions in their capacities as lenders hereunder (collectively,
the "Lenders," and each individually, a "Lender"), BANKERS TRUST COMPANY, as
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Administrative Agent and Syndication Agent for the Lenders, and NATIONSBANK,
N.A. (SOUTH), as Documentation Agent and Paying Agent for the Lenders.
RECITALS:
WHEREAS, the Borrowers have requested the Lenders to make available to
the Borrowers a revolving credit facility (including letter of credit and
swingline subfacilities) in an initial aggregate principal amount not to exceed
$150,000,000 at any time outstanding;
WHEREAS, the proceeds of the revolving credit facility described above
will be used by the Borrowers for ongoing working capital and general corporate
purposes, including, without limitation, to (i) fund the Refinancings, (ii) to
provide all or a portion of the funds necessary to finance Acquisitions
(including the Davies Acquisition) and (iii) to pay all fees, costs and expenses
incurred in connection with the transactions contemplated hereby;
WHEREAS, the Lenders are willing to extend commitments to make the
Revolving Loans and Swing Line Loans, and to issue or participate, as the case
may be, in Letters of Credit, to the Borrowers, in each case for the respective
purposes provided herein and on the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 Definitional Appendix. Unless the context otherwise
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requires, each capitalized term used herein, including the preamble and recitals
above, and defined in the attached Definitional Appendix (which is hereby
incorporated by reference and deemed to be a part of this Agreement) shall have
the meaning ascribed to such term in the Definitional Appendix.
Section 1.2 Accounting Terms; Financial Statements. All accounting
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terms used herein but not expressly defined in this Agreement shall have the
respective meanings given to them in accordance with generally accepted
accounting principles in effect on the Closing Date in the United States of
America ("Agreement Accounting Principles"). Except as otherwise expressly
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provided herein, all computations and determinations for purposes of determining
compliance with the financial requirements of this Agreement (including, without
limitation, Adjusted Consolidated EBITDA, Consolidated EBITDA, Consolidated
Interest Expense, Consolidated Net Income, Consolidated Net Loss, Consolidated
Net Worth, Consolidated Total Assets, Consolidated Total
Indebtedness and all other consolidated amounts) shall be made in accordance
with Agreement Accounting Principles and on a basis consistent with the
presentation of the financial statements delivered pursuant to Section 4.11
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hereto. Notwithstanding the foregoing sentence, the financial statements
required to be delivered pursuant to Section 5.1.1 shall be prepared in
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accordance with generally accepted accounting principles in the United States of
America as in effect on the respective dates of their preparation.
ARTICLE II
LOAN PROVISIONS
Section 2.1 Revolving Loan Commitments. Each Lender, severally but
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not jointly, hereby agrees, on the terms and subject to the conditions
hereinafter set forth and in reliance upon the representations and warranties
set forth herein and in the other Loan Documents, to make loans to the Borrowers
on a revolving basis from time to time from and after the date of this Agreement
to, but not including, the Termination Date, in its Pro Rata Share of such
aggregate amount as the respective Borrower may request, but not exceeding in an
aggregate principal amount at any one time outstanding (giving effect to the
contemporaneous application of any Revolving Loan proceeds to the payment of any
L/C Obligations, Revolving Loans or Swing Line Loans) the Revolving Loan
Commitment of such Lender at such time minus (a) such Lender's Pro Rata Share of
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the aggregate principal amount of outstanding Swing Line Loans and (b) such
Lender's Pro Rata Share of the L/C Obligations outstanding at such time.
Notwithstanding the foregoing, (i) at no time shall the aggregate principal
amount of all outstanding Revolving Loans and Swing Line Loans made to any
Sublimit Borrower plus the aggregate outstanding L/C Obligations of all Letters
of Credit issued for the account of such Sublimit Borrower exceed the applicable
Sublimit Amount for such Sublimit Borrower, or (ii) at no time prior to the
Senior Note Refinancing shall the aggregate outstanding principal amount of all
Revolving Loans and Swing Line Loans plus the aggregate amount of L/C
Obligations outstanding exceed $98,000,000 (it being understood that the
Borrowers may incur Loans under the terms of this Agreement contemporaneously
with the consummation of the Senior Note Refinancing to provide necessary funds
therefor). Prior to the Termination Date, Revolving Loans may be repaid and
reborrowed by the Borrowers in accordance with the provisions hereof.
Section 2.2 Obligations; Notes.
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(a) Revolving Loan Obligations. The Borrowers' obligations to each
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Lender to repay the principal of, and interest on, all of the Revolving Loans
made by each Lender hereunder shall be evidenced by a promissory note (each a
"Revolving Note" and collectively the "Revolving Notes") duly executed and
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delivered by the Borrowers substantially in the form of Exhibit 2.2(a) hereto,
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the terms of which are incorporated herein by reference in their entirety and
made a part hereof and shall (i) be payable to the order of each Lender in the
amount of such Lender's Revolving Loan Commitment, (ii) be dated the Closing
Date, (iii) provide that each Revolving Loan evidenced thereby shall be repaid
on the Termination Date as provided herein and (iv) bear interest as provided in
this Agreement. Each Lender will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of all or any portion of its Revolving Note attach a schedule or make a
notation of the principal amount of Loans evidenced
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thereby. Such internal records as maintained by each Lender shall, absent
manifest error, constitute prima facie evidence of the amounts outstanding under
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the Revolving Loans. Notwithstanding the foregoing, the failure by any Lender
to make a notation with respect to any Revolving Loan shall not limit or
otherwise affect the obligation of the Borrowers hereunder or under such
Lender's Revolving Note with respect to such Revolving Loan and payments of
principal by the Borrowers shall not be affected by the failure to make a
notation thereof nor shall such failure or error affect any rights of the
Borrowers hereunder or under applicable law. Although the Revolving Notes shall
be dated the Closing Date, interest in respect thereof shall be payable only for
the periods during which the Revolving Loans evidenced thereby are outstanding
and although the stated amount of the Revolving Notes shall be equal to each
Lender's Revolving Loan Commitment, each Revolving Note shall be enforceable
with respect to the Borrowers' obligation to pay the principal amount thereof
only to the extent of the unpaid principal amount of the Revolving Loans at the
time evidenced thereby. Subject to the earlier acceleration or prepayment of
the Revolving Loans as permitted or required by this Agreement, the Borrowers
shall repay all Revolving Loans then outstanding on the Termination Date.
(b) Swing Line Loan Obligations. The Borrowers' obligation to the
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Swing Line Lender to repay the principal of, and interest on, all of the Swing
Line Loans made by the Swing Line Lender hereunder shall be evidenced by a
promissory note (the "Swing Line Note") duly executed and delivered by the
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Borrowers substantially in the form of Exhibit 2.2(b) hereto, the terms of which
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are incorporated herein by reference in their entirety and made a part hereof
and shall (i) be payable to the order of the Swing Line Lender in the amount of
the Swing Line Commitment, (ii) be dated the Closing Date, (iii) provide that
each Swing Line Loan evidenced thereby shall be repaid as provided herein and
(iv) bear interest as provided in this Agreement. The Swing Line Lender will
note on its internal records the amount of each Swing Line Loan made by it and
each payment in respect thereof and will prior to any transfer of all or any
portion of its Swing Line Note attach a schedule or make a notation of the
principal amount of Loans evidenced thereby. Such internal records as
maintained by the Swing Line Lender shall, absent manifest error, constitute
prima facie evidence of the amounts outstanding under the Swing Line Loans.
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Notwithstanding the foregoing, the failure by the Swing Line Lender to make a
notation with respect to any Swing Line Loan shall not limit or otherwise affect
the obligation of the Borrowers hereunder or under the Swing Line Lender's Swing
Line Note with respect to such Swing Line Loan and payments of principal by the
Borrowers shall not be affected by the failure to make a notation thereof nor
shall such failure or error affect any rights of the Borrowers hereunder or
under applicable law. Although the Swing Line Note shall be dated the Closing
Date, interest in respect thereof shall be payable only for the periods during
which the Swing Line Loans evidenced thereby are outstanding and although the
stated amount of the Swing Line Note shall be equal to the Swing Line
Commitment, the Swing Line Note shall be enforceable with respect to the
Borrowers' obligation to pay the principal amount thereof only to the extent of
the unpaid principal amount of the Swing Line Loans at the time evidenced
thereby. Subject to the earlier acceleration or prepayment of the Swing Line
Loans as permitted or required by this Agreement, the Borrowers shall repay all
Swing Line Loans outstanding on the Termination Date.
Section 2.3 Borrowing Options. The Revolving Loans shall, at the
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option of a Borrower and except as otherwise provided in this Agreement, consist
of (i) Prime Rate Loans, (ii) Eurodollar Rate Loans or (iii) part Prime Rate
Loans and part Eurodollar Rate Loans, provided (A) that all Loans made pursuant
to the same Borrowing shall be of the same Type and (B) no Interest
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Periods in excess of one month shall be selected prior to the earlier to occur
of (1) the 90th day after the Closing Date and (2) the date upon which the
Administrative Agent determines in its sole discretion (and notifies the
Borrowers) that the primary syndication of the Revolving Loan Commitments has
been completed. As to any Eurodollar Rate Loan, any Lender may, if it so
elects, fulfill its commitment to make such Loan by causing a foreign branch or
affiliate of such Lender to make or continue such Loan, provided that in such
event such Lender's Pro Rata Share of the Revolving Loan shall, for purposes of
this Agreement, be considered to have been made by such Lender and the
obligation of the Borrowers to repay such Lender's Pro Rata Share of the
Revolving Loan shall nevertheless be to such Lender and shall be deemed held by
such Lender for the account of such branch or affiliate.
Section 2.4 Minimum Amount of Each Borrowing. The aggregate
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principal amount of each Borrowing by a Borrower hereunder shall be not less
than $3 million ($100,000 in the case of Swing Line Loans) and, in each case, if
greater, shall be in an integral multiple of $500,000 above such minimum
($100,000 in the case of Swing Line Loans); provided, however, that any
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Borrowing consisting of Revolving Loans made pursuant to Section 2.11(c) may be
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in the amount of the Swing Line Loan(s) refunded thereby.
Section 2.5 Notice of Borrowing. Whenever a Borrower desires to make
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a Borrowing of Revolving Loans hereunder, it shall give the Paying Agent at its
Payment Office and the Administrative Agent at its Administrative Office at
least one (1) Business Day's prior written notice (or telephonic notice promptly
confirmed in writing) of each Prime Rate Loan, and at least (3) three Business
Days' prior written notice (or telephonic notice promptly confirmed in writing)
of each Eurodollar Rate Loan, to be made hereunder. In each case such notice
shall be given prior to 12:00 noon (Eastern time) on the date specified. Each
such notice (a "Notice of Borrowing"), which shall be in the form of Exhibit 2.5
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hereto, shall be irrevocable, shall be deemed a representation by the Borrowers
that all conditions precedent to such Borrowing have been satisfied (or will be
satisfied as of the time such Borrowing is actually made) and shall specify (i)
the aggregate principal amount of the Loans to be made pursuant to such
Borrowing and the applicable Borrower with respect thereto, (ii) the date of
Borrowing (which shall be a Business Day) and (iii) whether the Loans being made
pursuant to such Borrowing are to be Prime Rate Loans or Eurodollar Rate Loans
and, with respect to Eurodollar Rate Loans, the Interest Period to be applicable
thereto. The Paying Agent shall promptly give each Lender written notice (or
telephonic notice confirmed in writing) of each proposed Borrowing with respect
to Revolving Loans, of such Lender's Pro Rata Share thereof and of the other
matters covered by the Notice of Borrowing. Without in any way limiting the
Borrower's obligation to confirm in writing any telephonic notice, the Agents
may act without liability upon the basis of telephonic notice believed by the
Agents in good faith to be from the appropriate Borrower prior to receipt of
written confirmation, with the Agents' records being, absent manifest error,
conclusive and binding on all parties hereto.
Section 2.6 Conversion or Continuation. Any Borrower may elect (i)
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at any time to convert Prime Rate Loans or any portion thereof to Eurodollar
Rate Loans and (ii) at the end of any Interest Period with respect thereto, to
convert Eurodollar Rate Loans or any portion thereof into Prime Rate Loans or to
continue such Eurodollar Rate Loans or any portion thereof for an additional
Interest Period; provided, however, that the aggregate principal amount of the
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Eurodollar Rate Loans
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for each Interest Period therefor must be in an aggregate principal amount of
$3,000,000 or an integral multiple of $500,000 in excess thereof. Each
conversion or continuation of Revolving Loans shall be allocated among the
Revolving Loans of the Lenders in accordance with their respective Pro Rata
Shares. Each such election shall be in substantially the form of Exhibit 2.6
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hereto (a "Notice of Conversion or Continuation") and shall be made by giving
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the Administrative Agent and the Paying Agent at least three Business Days'
prior written notice thereof, given not later than 12:00 noon (Eastern time) on
such third prior Business Day, specifying the applicable Borrower, the amount
and type of conversion or continuation, in the case of a conversion to or a
continuation of Eurodollar Rate Loans, the Interest Period therefor, and in the
case of a conversion, the date of conversion (which date shall be a Business Day
and, if a conversion from Eurodollar Rate Loans, shall also be the last day of
the Interest Period therefor). The Paying Agent shall promptly notify each
Lender of its receipt of a Notice of Conversion or Continuation and of the
contents thereof. Notwithstanding the foregoing, no conversion in whole or in
part of Prime Rate Loans to Eurodollar Rate Loans, and no continuation in whole
or in part of Eurodollar Rate Loans upon the expiration of any Interest Period
therefor, shall be permitted at any time at which an Unmatured Event of Default
or an Event of Default shall have occurred and be continuing. If, within the
time period required under the terms of this Section 2.6, the Agents do not
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receive a Notice of Conversion or Continuation from a Borrower containing a
permitted election to continue any Eurodollar Rate Loans for an additional
Interest Period or to convert any such Loans, then, upon the expiration of the
Interest Period therefor, such Loans will automatically convert to Prime Rate
Loans. Each Notice of Conversion or Continuation shall be irrevocable (except
as otherwise provided in Sections 2.13(a) and (b)).
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Section 2.7 Disbursement of Funds. No later than 12:00 noon (Eastern
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time) on the date specified in the applicable Notice of Borrowing, so long as
the Paying Agent has notified such Lender of such Notice of Borrowing, each
Lender will make available its Pro Rata Share of the Borrowing requested to be
made on such date in Dollars and in immediately available funds, at the Payment
Office, and the Paying Agent will promptly make available to the respective
Borrower at the Payment Office the aggregate of the amounts so made available by
the applicable Lenders. Unless the Paying Agent shall have been notified by any
Lender prior to the date of a Borrowing that such Lender does not intend to make
available to the Paying Agent such Lender's Pro Rata Share of such Borrowing,
the Paying Agent may assume that such Lender has made such amount available to
the Paying Agent on such date of Borrowing and the Paying Agent may, in reliance
upon such assumption, make available to the respective Borrower a corresponding
amount. If such corresponding amount is not in fact made available to the
Paying Agent by such Lender on the date of Borrowing, the Paying 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 Paying
Agent's demand therefor, the Paying Agent shall promptly notify the respective
Borrower and such Borrower shall immediately pay such corresponding amount to
the Paying Agent. The Paying Agent shall also be entitled to recover from such
Borrower interest on such corresponding amount, in respect of each day from the
date such corresponding amount was made available by the Paying Agent to such
Borrower to but excluding the date such corresponding amount is recovered by the
Paying Agent, at a rate per annum equal to the rate applicable to Prime Rate
Loans or Eurodollar Rate Loans, as the case may be, applicable during the period
in question to such corresponding amount and, upon payment of such amounts to
the Paying Agent, such Borrower shall be entitled to recover such amounts from
such Lender. Any amounts due hereunder to the Paying Agent from the
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Lenders which are not paid when due shall bear interest payable by such Lender,
from the date due until the date paid, at the Federal Funds Rate for the first
three days after the date such amount is due and thereafter at the Prime Rate,
together with the Paying Agent's standard interbank processing fee. Further,
such Lender shall be deemed to have assigned any and all payments of principal
and interest made on its Loans, amounts due with respect to Letters of Credit
(or its participations therein) and any other amounts due to it hereunder first
to the Paying Agent to repay any outstanding Loans made available on behalf of
such Lender by the Paying Agent pursuant to this Section 2.7 until such Loans
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have been funded (as a result of such assignment or otherwise) and then to repay
Loans of all Lenders other than such Lender until each Lender has outstanding
Loans equal to its Pro Rata Share of all Loans (as a result of such assignment
or otherwise). Such Lender shall not have recourse against the respective
Borrower with respect to any amounts paid to the Paying Agent or any Lender with
respect to the preceding sentence; provided, however, that such Lender shall
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have full recourse against the Borrowers to the extent of the amount of such
Loans it has so been deemed to have made. Nothing herein shall be deemed to
relieve any Lender from its obligation to fulfill its Revolving Loan Commitment
hereunder or to prejudice any rights which the Borrower may have against any
Lender as a result of any default by such Lender hereunder.
Section 2.8 Interest.
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(a) Prime Rate Revolving Loans. Each Borrower agrees to pay interest
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in respect of the unpaid principal amount of each Prime Rate Revolving Loan from
the date the proceeds thereof are made available to such Borrower (whether
pursuant to a new Borrowing or upon a conversion pursuant to Section 2.6) until
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maturity (whether by acceleration or otherwise) of such Prime Rate Revolving
Loan or until such Prime Rate Revolving Loan is converted into a Eurodollar Rate
Revolving Loan, at a rate per annum equal to the Prime Rate in effect from time
to time plus the Applicable Prime Rate Margin. The "Applicable Prime Rate
---------------------
Margin" means (i) for the period from and including the Closing Date to but
- ------
excluding the next Pricing Certificate Delivery Date, 0%, and (ii) for each
portion of each subsequent Pricing Period, the Applicable Prime Rate Margin set
forth below corresponding to the Leverage Ratio as of the Date of Determination,
as follows:
============================================
Applicable Prime
Leverage Ratio Rate Margin
--------------------------------------------
2.50:1.00 and lower 0%
--------------------------------------------
>2.50:1.00; 3.25:1.00 0.25%
--------------------------------------------
>3.25:1.00; 3.75:1.00 0.50%
--------------------------------------------
>3.75:1.00; 4.00:1.00 0.75%
--------------------------------------------
>4.00:1.00 1.25%
============================================
Notwithstanding the foregoing, in the event that BWAY achieves an
Investment Grade Rating, then from and after the date on which BWAY notifies the
Administrative Agent in writing of such Investment Grade Rating until such time
as BWAY no longer has an Investment Grade Rating
-6-
(in which case the Applicable Prime Rate Margin shall be determined as provided
above by reference to the Leverage Ratio), the Applicable Prime Rate Margin
shall be the Applicable Prime Rate Margin set forth below corresponding to the
applicable Investment Grade Rating, with the Applicable Prime Rate Margin
changing as of the date of any change in such Investment Grade Rating (and in
the case of any split rating, the more favorable rating shall be determinative):
=======================================
Investment Applicable Prime
Grade Rating Rate Margin
---------------------------------------
BBB-/Baa3 0%
---------------------------------------
BBB/Baa2 or better 0%
=======================================
(b) Eurodollar Rate Revolving Loans. Each Borrower agrees to pay
-------------------------------
interest in respect of the unpaid principal amount of each Eurodollar Rate
Revolving Loan from the date the proceeds thereof are made available to such
Borrower (whether pursuant to a new Borrowing or upon a conversion pursuant to
Section 2.6) until maturity (whether by acceleration or otherwise) of such
- -----------
Eurodollar Rate Revolving Loan at a rate per annum equal to the relevant
Eurodollar Rate plus the Applicable Eurodollar Rate Margin. The "Applicable
----------
Eurodollar Rate Margin" means (i) for the period from and including the Closing
- ----------------------
Date to but excluding the next Pricing Certificate Delivery Date, 1.00%, and
(ii) for each portion of each subsequent Pricing Period, the Applicable
Eurodollar Rate Margin set forth below corresponding to the Leverage Ratio as of
the Date of Determination, as follows:
===============================================
Applicable Eurodollar
Leverage Ratio Rate Margin
-----------------------------------------------
1.00:1.00 and lower 0.50%
-----------------------------------------------
>1.00:1.00; 1.75:1.00 0.65%
-----------------------------------------------
>1.75:1.00; 2.50:1.00 1.00%
-----------------------------------------------
>2.50:1.00; 3.25:1.00 1.25%
-----------------------------------------------
>3.25:1.00; 3.75:1.00 1.50%
-----------------------------------------------
>3.75:1.00; 4.00:1.00 1.75%
-----------------------------------------------
>4.00:1.00 2.25%
===============================================
Notwithstanding the foregoing, in the event that BWAY achieves an
Investment Grade Rating, then from and after the date on which BWAY notifies the
Administrative Agent in writing of such Investment Grade Rating until such time
as BWAY no longer has an Investment Grade Rating (in which case the Applicable
Eurodollar Rate Margin shall be determined as provided above by
-7-
reference to the Leverage Ratio), the Applicable Eurodollar Rate Margin shall be
the Applicable Eurodollar Rate Margin set forth below corresponding to the
applicable Investment Grade Rating, with the Applicable Eurodollar Rate Margin
changing as of the date of any change in such Investment Grade Rating (and in
the case of any split rating, the more favorable rating shall be determinative):
============================================
Investment Applicable Eurodollar
Grade Rating Rate Margin
--------------------------------------------
BBB-/Baa3 0.50%
--------------------------------------------
BBB/Baa2 or better 0.375%
============================================
(c) Swing Line Loans. Each Borrower agrees to pay interest in respect
----------------
of the unpaid principal amount of each Swing Line Loan from the date the
proceeds thereof are made available to such Borrower until maturity (whether by
acceleration or otherwise) of such Swing Line Loan or until such Swing Line Loan
is converted to Revolving Loans at a rate per annum equal to the Prime Rate in
effect from time to time plus the Applicable Prime Rate Margin.
(d) Default Rate Interest. Overdue principal and (to the extent
---------------------
permitted by applicable law) overdue interest in respect of each Loan shall bear
interest, payable on demand, after as well as before judgment, at a rate per
annum equal to (i) if such Loan is a Prime Rate Loan, the Prime Rate plus the
Applicable Prime Rate Margin set forth in Section 2.8(a) (as the same may be
--------------
adjusted pursuant to Section 2.9), as the case may be, plus 2% per annum or (ii)
-----------
if such Loan is a Eurodollar Rate Loan, the Eurodollar Rate then in effect plus
the Applicable Eurodollar Rate Margin set forth in Section 2.8(b) (as the same
--------------
may be adjusted pursuant to Section 2.9), as the case may be, plus 2% per annum
-----------
(any such applicable rate of interest in the foregoing clauses (i) and (ii)
being the "Default Rate").
------------
(e) Accrual and Payment of Interest. Interest shall accrue from and
-------------------------------
including the date of any Borrowing (whether pursuant to a new Borrowing or upon
a conversion pursuant to Section 2.6) to but excluding the date of any repayment
-----------
thereof. Interest on Eurodollar Rate Loans shall be payable by the Borrowers in
arrears on the last day of each Interest Period and, in the case of an Interest
Period in excess of three months, at intervals of every three months after the
initial date of such Interest Period (each such date, a "Eurodollar Interest
-------------------
Payment Date"). Notwithstanding the above, interest on Eurodollar Rate Loans
- ------------
shall be due and payable on any amount repaid or reborrowed, as the case may be,
on the date of such repayment or reborrowing, as the case may be, and upon final
maturity of such Loan (whether by acceleration or otherwise) and after such
maturity, on demand. Interest on Prime Rate Loans shall be due and payable
quarterly in arrears on each Quarterly Payment Date, on maturity (whether by
acceleration or otherwise) and after such maturity, on demand. Interest on all
Eurodollar Rate Loans shall be computed on the basis of a year consisting of 360
days and actual days elapsed and interest on all Prime Rate Loans shall be
computed on the basis of a year consisting of 365 or 366 days, as applicable,
and actual days elapsed.
-8-
(f) Notification of Rate. The Administrative Agent, upon determining
--------------------
the Eurodollar Rate for any Interest Period, shall promptly give the Borrowers,
the Paying Agent and the other Lenders written or telephonic notice (promptly
confirmed in writing) thereof. Such determination shall, absent manifest error
and subject to the provisions of Section 2.13, be final, conclusive and binding
------------
upon all parties hereto.
(g) Maximum Interest. If any interest payment or other charge or fee
----------------
payable hereunder exceeds the maximum amount then permitted by applicable law,
the Borrowers shall be obligated to pay the maximum amount then permitted by
applicable law and the Borrowers shall continue to pay the maximum amount from
time to time permitted by applicable law until all such interest payments and
other charges and fees otherwise due hereunder (in the absence of such restraint
imposed by applicable law) have been paid in full.
Section 2.9 Pricing Adjustments. On each Pricing Certificate
-------------------
Delivery Date, BWAY shall deliver a Pricing Certificate to the Agents
demonstrating the calculation of the Leverage Ratio as of the most recent Date
of Determination. Adjustments to the Applicable Prime Rate Margin, Applicable
Eurodollar Rate Margin or the Applicable Commitment Fee, if any, as evidenced by
such Pricing Certificate shall be effective on the date of receipt of such
Pricing Certificate by the Administrative Agent or, in the case of any
adjustment to the Applicable Prime Rate Margin, Applicable Eurodollar Rate
Margin or Applicable Commitment Fee due to an Investment Grade Rating (including
any change in the Investment Grade Rating), as of the date of any change in such
Investment Grade Rating. Any failure by the Borrowers to deliver a Pricing
Certificate within forty-five (45) days after the end of any fiscal quarter
(ninety (90) days after the end of the fourth fiscal quarter in any Fiscal Year)
or upon the consummation of any Substantial Acquisition shall, subject to
Section 2.8(d), result in the highest Applicable Prime Rate Margin, Applicable
- --------------
Eurodollar Rate Margin and Applicable Commitment Fee applying from such date
until the date such Pricing Certificate is received by the Administrative Agent.
The Administrative Agent shall promptly give the Paying Agent and the other
Lenders written or telephonic notice of any such adjustment.
Notwithstanding anything in Section 2.8 or 2.9 to the contrary, if any
------------------
Pricing Certificate delivered by BWAY demonstrating the appropriate Leverage
Ratio shall prove to have incorrectly understated the Leverage Ratio (as
determined by reference to a subsequent officer's certificate delivered pursuant
to Section 5.1.1(b) or subsequent publicly filed consolidated financial
----------------
statements of BWAY), such Pricing Certificate shall no longer be in effect, and
the Administrative Agent shall calculate the difference between the amount of
interest (and the amount of Commitment Fees and the amount of Letter of Credit
Fees) actually paid by the Borrowers on the basis of such incorrect Pricing
Certificate and the amount of interest (and the amount of Commitment Fees and
the amount of Letter of Credit Fees) which would have been due had such
incorrect Pricing Certificate not been delivered. The Administrative Agent
shall notify the Borrowers of the amount of such difference, if any, in a
statement setting forth the method of calculation of such amount (which
calculation, in the absence of demonstrable error, shall be deemed correct) and
the Borrowers shall pay such amount to the Paying Agent for the account of the
Lenders within three Business Days of such notice.
-9-
Notwithstanding anything in Section 2.8 or 2.9 to the contrary, if
------------------
BWAY delivers a Cost Adjustment Certificate in respect of an Acquisition
pursuant to Section 5.1.1(d) (an "Initial Cost Adjustment Certificate"), then
---------------- -----------------------------------
upon the delivery of the related Cost Adjustment Certificate pursuant to Section
-------
5.1.1(b) for the first four full fiscal quarters following such Acquisition (or,
- --------
in the event BWAY determines that it shall not realize the cost reduction
synergies set forth in the Initial Cost Adjustment Certificate, the next
complete fiscal quarter following such determination), to the extent such
subsequent Cost Adjustment Certificate indicates that the actual cost reduction
synergies of the type set forth in the Initial Cost Adjustment Certificate for
the period covered thereby are less than the cost reduction synergies estimated
by BWAY in the Initial Cost Adjustment Certificate for such period, the
Administrative Agent shall calculate the difference between the amount of
interest (and the amount of Commitment Fees and the amount of Letter of Credit
Fees) actually paid by the Borrowers on the basis of the Initial Cost Adjustment
Certificate and the amount of interest (and the amount of Commitment Fees and
the amount of Letter of Credit Fees) which would have been due had the actual
cost reduction synergies contained in the subsequent Cost Adjustment Certificate
been substituted for the estimated cost reduction synergies contained in the
Initial Cost Reduction Certificate. The Administrative Agent shall notify the
Borrowers of the amount of such difference, if any, in a statement setting forth
the method of calculation of such amount (which calculation, in the absence of
demonstrable error, shall be deemed correct) and the Borrowers shall pay such
amount to the Paying Agent for the account of the Lenders within three Business
Days of such notice.
Section 2.10 Interest Periods. At the time any Borrower gives any
----------------
Notice of Borrowing or a Notice of Conversion or Continuation with respect to
Eurodollar Rate Loans, such Borrower shall elect, by giving the Administrative
Agent written notice, the interest period (each an "Interest Period") applicable
---------------
to the related Eurodollar Rate Borrowing, which Interest Period shall, at the
option of such Borrower, be a one, two, three or six month period, provided
that: (i) the Interest Period for any Eurodollar Rate Loan shall commence on the
date of such Borrowing and each Interest Period occurring thereafter in respect
of a continuation of such Eurodollar Rate Loan shall commence on the day on
which the immediately preceding Interest Period for such Loan expires; (ii) if
any Interest Period would otherwise expire on a day which is not a Business Day,
such Interest Period shall expire on the next succeeding Business Day, provided,
--------
however, that if any Interest Period in respect of a Eurodollar Rate Loan would
- -------
otherwise expire on a day which is not a Business Day and after which no
Business Day occurs in the same month, such Interest Period shall expire on the
immediately preceding Business Day; (iii) if an Interest Period begins on the
last Business Day of a calendar month (or 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 the first,
second, third or sixth, as applicable, succeeding calendar month; (iv) no
Interest Period shall extend beyond the Termination Date; and (v) no more than
ten (10) separate Interest Periods shall exist at any time.
Section 2.11 Swing Line Loans.
----------------
(a) Swing Line Commitment. Subject to the terms and conditions
---------------------
hereof, the Swing Line Lender agrees to make swing line loans ("Swing Line
----------
Loans") to the Borrowers on any Business Day from time to time from and after
the Closing Date to, but not including, the Termination Date in an aggregate
principal amount at any one time outstanding not to exceed
-10-
$10,000,000; provided, however, that in no event may the amount of any Borrowing
-------- -------
of Swing Line Loans cause the outstanding Revolving Loans of any Lender (other
than the Swing Line Lender), when added to such Lender's Pro Rata Share of the
then outstanding Swing Line Loans and L/C Obligations (after giving effect to
the use of proceeds of such Swing Line Loans) to exceed such Lender's Revolving
Loan Commitment. Amounts borrowed by the Borrowers under this Section 2.11(a)
---------------
may be repaid and, to but excluding the Termination Date, reborrowed.
(b) Procedure for Swing Line Borrowing. The Swing Line Loans shall
----------------------------------
be made and maintained as Prime Rate Loans and, notwithstanding Section 2.6,
-----------
shall not be entitled to be converted into Eurodollar Rate Loans. The
applicable Borrower shall give the Administrative Agent and the Swing Line
Lender a notice of borrowing (a "Swing Line Notice of Borrowing") in the form of
------------------------------
Exhibit 2.11(b) hereto (which notice shall be irrevocable must be received by
- ---------------
the Administrative Agent and the Swing Line Lender prior to 12:00 noon Eastern
time), on the requested borrowing date (which shall be a Business Day)
specifying the amount of each requested Swing Line Loan, which shall be in a
minimum amount of $100,000 or an integral multiple thereof. On the requested
borrowing date, the Swing Line Lender will make available the proceeds of the
Swing Line Loan requested in immediately available funds, at the Payment Office
of the Paying Agent, and the Paying Agent shall promptly thereafter make
available to such Borrower at the Payment Office the amount so made available by
the Swing Line Lender.
(c) Refunding of Swing Line Loans. The Swing Line Lender, at any time
-----------------------------
in its sole and absolute discretion, may on behalf of each Borrower (which
hereby irrevocably authorizes the Swing Line Lender to so act on its behalf)
request each Lender (including the Swing Line Lender) to make a Revolving Loan
in an amount equal to such Lender's Pro Rata Share of all or part of the
principal amount of the Swing Line Loans (the "Refunded Swing Line Loans")
-------------------------
outstanding on the date such notice is given. Unless any of the events
described in Section 7.1(e) or 7.1(f) shall have occurred (in which event the
------------------------
procedures of paragraph (d) of this Section 2.11 shall apply) and regardless of
------------
whether the conditions precedent set forth in this Agreement to the making of a
Revolving Loan are then satisfied, each Lender shall make the proceeds of its
Revolving Loan available to the Paying Agent at its Payment Office prior to
12:00 noon, Eastern time, in funds immediately available on the Business Day
next succeeding the date such notice is given. The proceeds of such Revolving
Loans shall then be made immediately available to the Swing Line Lender at its
Payment Office, and immediately applied to repay the Refunded Swing Line Loans,
and, until converted into Eurodollar Rate Loans, shall constitute Prime Rate
Revolving Loans.
(d) Participation in Swing Line Loans. If, prior to the making of
---------------------------------
Prime Rate Revolving Loans pursuant to paragraph (c) of this Section 2.11, one
------------
of the events described in Sections 7.1(e) or 7.1(f) shall have occurred, then,
-------------------------
subject to the provisions of clause (e) below, each Lender will, on the date
such Revolving Loans were to have been made, purchase from the Swing Line Lender
an undivided participating interest in the Refunded Swing Line Loan in an amount
equal to its Pro Rata Share of such Refunded Swing Line Loan. Upon request,
each Lender will immediately transfer to the Swing Line Lender, in immediately
available funds, the amount of its participation and upon receipt thereof the
Swing Line Lender will deliver to such Lender a Swing Line Loan Participation
Certificate substantially in the form of Exhibit 2.11(d) hereto (a "Swing Line
--------------- ----------
Loan Participation Certificate") dated the date of receipt of such funds and in
- ------------------------------
such amount.
-11-
(e) Obligations Unconditional. Each Lender's obligation to make
-------------------------
Revolving Loans in accordance with clause (c) above and to purchase
participating interests in accordance with clause (d) above shall be absolute
and unconditional and shall not be affected by any circumstance, including,
without limitation, (i) any set-off, counterclaim, recoupment, defense or other
right which such Lender may have against the Swing Line Lender, any Borrower or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of any Event of Default or Unmatured Event of Default; (iii) any adverse change
in the condition (financial or otherwise) of any Borrower or any other Person;
(iv) any breach of this Agreement by any Borrower or any other Person; (v) any
inability of any Borrower to satisfy the conditions precedent to Borrowing set
forth in this Agreement on the date upon which such participating interest is to
be purchased or (vi) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing. If any Lender does not make
available to the Swing Line Lender the amount required pursuant to clause (c) or
(d) above, as the case may be, the Swing Line Lender shall be entitled to
recover such amount on demand from such Lender, together with interest thereon
for each day from the date of non-payment until such amount is paid in full at
the Federal Funds Rate for the first three days and at the Prime Rate
thereafter. Notwithstanding the foregoing provisions of this Section 2.11(e),
---------------
no Lender shall be required to make a Revolving Loan to any Borrower for the
purpose of refunding a Swing Line Loan pursuant to clause (c) above or to
purchase a participating interest in a Swing Line Loan pursuant to clause (d)
above if an Event of Default or Unmatured Event of Default has occurred and is
continuing and, prior to the making by the Swing Line Lender of such Swing Line
Loan, the Swing Line Lender has received written notice from such Lender
specifying that such Event of Default or Unmatured Event of Default has occurred
and is continuing, describing the nature thereof and stating that, as a result
thereof, such Lender shall cease to make such Refunded Swing Line Loans and
purchase such participating interests, as the case may be; provided, however,
-------- -------
that the obligation of such Lender to make such Refunded Swing Line Loans and to
purchase such participating interests shall be reinstated upon the earlier to
occur of (i) the date upon which such Lender notifies the Swing Line Lender that
its prior notice has been withdrawn and (ii) the date upon which the Event of
Default or Unmatured Event of Default specified in such notice no longer is
continuing.
Section 2.12 Letters of Credit.
-----------------
(a) Issuance by Facing Agent. Subject to the terms and conditions
------------------------
hereof and provided that no Event of Default or Unmatured Event of Default shall
have occurred and be continuing, any Borrower may request, in accordance with
this Section 2.12, that the Facing Agent issue on behalf of the Lenders, and
------------
upon request the Facing Agent shall issue Letters of Credit denominated in
Dollars for the account of such Borrower with the face amount of each Letter of
Credit in a minimum amount of $100,000 or such lesser amount as the Facing Agent
may approve; provided, however, that (i) each Letter of Credit shall be issued
-------- -------
in favor of a Permitted Beneficiary; (ii) no Borrower shall request the Facing
Agent to issue any Letter of Credit if, after giving effect to such issuance,
the L/C Obligations then outstanding would exceed $12,500,000 or if the face
amount of such requested Letter of Credit exceeds the Total Available Revolving
Commitment then in effect, and (iii) in no event shall the Facing Agent issue
any Letter of Credit having an expiration date later than one year from the date
of issuance (or in any event later than thirty (30) days prior to the
Termination Date), provided that any Letter of Credit may be extendable for
successive periods of up to one year (but not beyond a date which is thirty (30)
days prior to the Termination Date) on
-12-
terms acceptable to the Facing Agent. Each request for an issuance of, or an
amendment to, a Letter of Credit shall be in the form of Exhibit 2.12 hereto,
------------
appropriately completed. The issuance of a Letter of Credit pursuant to this
Section 2.12 shall be deemed (A) to be a Borrowing for purposes of, without
- ------------
limitation, the satisfaction of the applicable conditions set forth in Article
-------
VI hereof and (B) to reduce availability under the Revolving Loan Commitments of
- --
the Lenders then in effect by an amount equal to the L/C Obligations with
respect to such Letter of Credit until such time as such Letter of Credit is no
longer outstanding and all amounts drawn thereunder have been reimbursed.
(b) Participation of Lenders. Immediately upon the issuance of each
------------------------
Letter of Credit, each Lender shall be deemed to, and hereby agrees to, have
irrevocably purchased from the Facing Agent a participation in such Letter of
Credit and drawings thereunder in an amount equal to such Lender's Pro Rata
Share of the maximum amount which is or at any time may become available to be
drawn thereunder. The Facing Agent shall give the Agents written notice of the
issuance or amendment of a Letter of Credit on the date of issuance or amendment
thereof and provide the Agents with a copy of each Letter of Credit and
amendment thereto. The Administrative Agent shall give each Lender written
notice of the issuance and amendment of a Letter of Credit within five (5)
Business Days after each such Letter of Credit has been issued or amended
pursuant to the terms hereof.
(c) Requests for Issuance. Whenever a Borrower desires the issuance
---------------------
or extension of a Letter of Credit, it shall deliver to the Facing Agent, the
Paying Agent and the Administrative Agent a written notice in the form of
Exhibit 2.12 hereto no later than 12:00 noon (Eastern time) at least five (5)
- ------------
Business Days (or such shorter period as may be agreed to by the Facing Agent in
any particular instance) in advance of the proposed date of issuance or
extension. That notice shall specify (i) the applicable Borrower and the
proposed date of issuance or extension (which shall be a Business Day), (ii) the
type of Letter of Credit, (iii) the Stated Amount of the Letter of Credit, (iv)
the expiration date of the Letter of Credit, (v) the name and address of the
beneficiary (which shall be a Permitted Beneficiary) and (vi) such other
information as the Facing Agent may reasonably request. Prior to the date of
issuance, the applicable Borrower shall specify a precise description of the
documents and the verbatim text of any certificate to be presented by the
beneficiary which, if presented by the beneficiary on or prior to the expiration
date of the Letter of Credit, would require the Facing Agent to make payment
under the Letter of Credit; provided, however, that the Facing Agent, in its
-------- -------
sole judgment, may require changes in any such documents and certificates. In
determining whether to pay under any Letter of Credit, the Facing Agent shall be
responsible only to determine that the documents and certificates required to be
delivered under that Letter of Credit have been delivered and that they comply
on their face with the requirements of that Letter of Credit. In the event that
any terms or conditions of such written notice of issuance or amendment or any
other document delivered in connection therewith are inconsistent with the terms
and conditions of this Agreement, the terms and conditions of this Agreement
shall control.
(d) Reimbursement of Drawings. In the event of any request for
-------------------------
drawing under any Letter of Credit by the beneficiary thereof, the Facing Agent
shall notify the applicable Borrower, the Agents and the Lenders prior to the
date on which the Facing Agent intends to honor such drawing, and such Borrower
shall reimburse the Facing Agent on the day on which such drawing is honored in
an amount in same day funds equal to the amount of such drawing, provided that,
anything
-13-
contained in this Agreement to the contrary notwithstanding, (i) unless such
Borrower shall have notified the Facing Agent and the Agents prior to 12:00 noon
(Eastern time) one Business Day prior to such drawing that such Borrower intends
to reimburse the Facing Agent for the amount of such drawing with funds other
than the proceeds of Revolving Loans, such Borrower shall be deemed to have
timely given a Notice of Borrowing to the Administrative Agent requesting the
Lenders to make a Prime Rate Revolving Loan on the date on which such drawing is
honored in an amount equal to the amount of such drawing, and (ii) subject to
satisfaction or waiver of the conditions specified in Section 6.2, the Revolving
-----------
Lenders shall, on the date of such drawing, make a Prime Rate Revolving Loan in
the amount of such drawing, the proceeds of which shall be made available to the
Facing Agent by the Paying Agent and applied directly by the Facing Agent for
the amount of such drawing; and provided further, that, if for any reason,
-------- -------
proceeds of Revolving Loans are not received by the Facing Agent on such date in
an amount equal to the amount of such drawing, the Borrower shall reimburse the
Facing Agent, on the Business Day immediately following the date of such
drawing, in an amount in same day funds equal to the excess of the amount of
such drawing over the amount of such Revolving Loans, if any, which are so
received, plus accrued interest on such amount at the then applicable rate of
interest for Prime Rate Loans for the first such Business Day and, thereafter,
the rate set forth in Section 2.12(f)(iii).
--------------------
(e) Failure to Reimburse. In the event that the applicable Borrower
--------------------
shall fail to reimburse the Facing Agent as provided in Section 2.12(d) in an
---------------
amount equal to the amount of any drawing honored by the Facing Agent under a
Letter of Credit issued by it, the Facing Agent shall promptly notify the Agents
and each Lender of the unreimbursed amount of such drawing and of such Lender's
respective participation therein. Each Lender shall make available to the
Paying Agent for distribution to the Facing Agent an amount equal to its
respective participation in same day funds at the Payment Office of the Paying
Agent not later than 1:00 p.m. (New York time) on the Business Day after the
date notified by the Facing Agent. In the event that any Lender fails to make
available to the Facing Agent the amount of such Lender's participation in such
Letter of Credit as provided in this Section 2.12(e), the Facing Agent shall be
---------------
entitled to recover such amount on demand from the Lender together with interest
at the Federal Funds Rate until three days after the date on which the Facing
Agent gives notice of payment and at the Prime Rate for each day thereafter
until such amount is paid. Further, such Lender shall be deemed to have
assigned any and all payments made of principal and interest on its Loans,
amounts due with respect to its Letters of Credit and any other amounts due to
it hereunder to the Facing Agent to fund the amount of any drawn Letter of
Credit which such Lender was required to fund pursuant to this Section 2.12(e)
---------------
until such amount has been funded (as a result of such assignment or otherwise).
The failure of any Lender to make funds available to the Facing Agent of such
amount shall not relieve any other Lender of its obligation hereunder to make
funds available to the Facing Agent pursuant to this Section 2.12(e). The
---------------
Paying Agent shall distribute to each Lender which has paid all amounts payable
by it under this Section 2.12(e) with respect to any Letter of Credit issued by
---------------
the Facing Agent such Lender's Pro Rata Share of all payments received by the
Facing Agent from the applicable Borrower in reimbursement of drawings honored
by the Facing Agent under such Letter of Credit when such payments are received.
(f) Letter of Credit Fees. Each Borrower agrees to pay to the Facing
---------------------
Agent the following amounts with respect to each Letter of Credit issued by the
Facing Agent:
-14-
(i) a facing fee to the Facing Agent for its own account in a per
annum amount equal to 0.25% of the Stated Amount of such Letter of Credit
outstanding from time to time, payable quarterly in arrears on each Quarterly
Payment Date (or if such day is not a Business Day, then on and through the
immediately preceding Business Day), on the expiration date and after the
expiration date, on demand, commencing on the first such day after the issuance
of such Letter of Credit and continuing until such Letter of Credit has been
drawn or expired, and calculated on the basis of a 360-day year and the actual
number of days elapsed;
(ii) a Letter of Credit fee (the "Letter of Credit Fee") per annum to
--------------------
the Facing Agent for the account of the Lenders equal to the Applicable
Eurodollar Rate Margin determined pursuant to Section 2.8(b) and Section 2.9 as
-------------- -----------
in effect from time to time of the Stated Amount of such Letter of Credit
outstanding from time to time, payable quarterly in arrears on each Quarterly
Payment Date (or if such day is not a Business Day, then on and through the
immediately preceding Business Day), on the expiration date and after the
expiration date, on demand, commencing on the first such day after the issuance
of such Letter of Credit and continuing until such Letter of Credit has been
drawn or expired, and calculated on the basis of a 360-day year and the actual
number of days elapsed;
(iii) to the Facing Agent for the account of the Lenders with respect
to drawings made under any such Letter of Credit, interest, payable on demand,
on the amount paid by the Facing Agent in respect of each such drawing from the
date of the drawing through the date such amount is reimbursed by the applicable
Borrower (including any such reimbursement out of the proceeds of Revolving
Loans pursuant to Section 2.1(b)) at a rate for the first Business Day equal to
--------------
the applicable rate of interest for Prime Rate Loans, and thereafter at a rate
that is at all times equal to 2.0% per annum in excess of the interest rate
otherwise payable under this Agreement for Prime Rate Loans as then in effect;
and
(iv) to the Facing Agent for its own account with respect to the
issuance, amendment or transfer of any such Letter of Credit and each drawing
made thereunder, documentary and processing charges in accordance with the
Facing Agent's standard schedule for such charges in effect at the time of such
issuance, amendment, transfer or drawing, as the case may be.
Promptly upon receipt by the Facing Agent of any amount described in
clause (ii) or (iii) of this Section 2.12(f), the Facing Agent shall distribute
---------------
to each Lender its Pro Rata Share of such amount; provided, however, that
-------- -------
amounts described in clause (iii) above that accrue prior to the date upon which
Lenders are required (x) to fund Prime Rate Revolving Loans pursuant to Section
-------
2.12(d)(ii) or (y) to make available to the Facing Agent the amount of such
- -----------
Lender's participation in such Letter of Credit, as the case may be, in respect
of any unreimbursed drawings under any Letter of Credit may be retained by the
Facing Agent.
(g) Reimbursement Obligation Unconditional. The obligation of each
--------------------------------------
Borrower to reimburse the Facing Agent for drawings made under the Letters of
Credit issued by the Facing
-15-
Agent shall be unconditional and irrevocable and shall be paid strictly in
accordance with the terms of this Agreement under all circumstances including,
without limitation, the following circumstances:
(i) any lack of validity or enforceability of any Letter of Credit;
(ii) the existence of any claim, set-off, defense or other right which
each Borrower may have at any time against a beneficiary or any transferee of
any Letter of Credit (or any persons or entities for whom any such transferee
may be acting), the Facing Agent or any other Person, whether in connection with
this Agreement, the transactions contemplated herein or any unrelated
transaction;
(iii) any draft, demand, certificate or any other document presented
under any 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) payment by the Facing Agent under any Letter of Credit against
presentation of a demand, draft or certificate or other document which does not
comply with the terms of such Letter of Credit;
(v) any other circumstance or happening whatsoever which is similar
to any of the foregoing; or
(vi) the fact that an Event of Default shall have occurred and be
continuing;
provided, however, that the Borrowers shall not be obligated to reimburse the
- -------- -------
Facing Agent for any wrongful payment made by the Facing Agent under a Letter of
Credit as a result of acts or omissions constituting willful misconduct or gross
negligence on the part of the Facing Agent.
(h) Increased Costs. If, after the Closing Date, by reason of (i) any
---------------
change in applicable law, regulation, rule, decree or regulatory requirement or
any change in the interpretation or application by any judicial or regulatory
authority of any law, regulation, rule, decree or regulatory requirement or (ii)
compliance by the Facing Agent, any Agent or any Lender with any direction,
request or requirement (whether or not having the force of law) of any
governmental or monetary authority including, without limitation, Regulation D:
(A) the Facing Agent, any Agent or any Lender shall be subject to any
tax, levy, charge or withholding of any nature or to any variation thereof or to
any penalty with respect to the maintenance or fulfillment of its
obligations under this Section 2.12, whether directly or by such being
------------
imposed on or suffered by the Facing Agent, such Agent or such Lender (except
for (x) changes in the rate of tax on, or determined by reference to, the net
income or profits of such Lender imposed by the jurisdiction in which such
Lender's principal office or applicable lending office is located and (y) United
States withholding taxes, which shall be governed by the provisions of Section
-------
3.8);
- ---
-16-
(B) any reserve, deposit or similar requirement of any Governmental
Authority is or shall be applicable, imposed or modified in respect of any
Letters of Credit issued by the Facing Agent and participated in by the Lenders;
or
(C) there shall be imposed on the Facing Agent by any Governmental
Authority any other condition regarding any Letter of Credit issued pursuant to
this Section 2.12;
------------
and the result of the foregoing is to directly or indirectly increase the cost
to the Facing Agent, any Agent or any Lender of issuing, making or maintaining
any Letter of Credit, or to reduce the amount receivable in respect thereof by
the Facing Agent, any Agent or any Lender, then and in any case the
Administrative Agent may notify the Borrowers and the Borrowers shall pay on
demand such amounts as the Administrative Agent may reasonably specify to be
necessary to compensate the Facing Agent, any Agent or any Lender for such
additional cost or reduced receipt together with interest on such amount from
the date demanded until payment in full thereof at a rate equal at all times to
the Default Rate. The determination by the Facing Agent, any Agent or any
Lender of any amount due pursuant to this Section 2.12(h) shall be set forth in
---------------
a certificate delivered to the Administrative Agent (which certificate the
Administrative Agent shall promptly deliver to the Borrower) setting forth the
calculation thereof in reasonable detail, and shall, in the absence of manifest
error, be final, conclusive and binding on all of the parties hereto.
(i) Indemnification. In addition to amounts payable as elsewhere
---------------
provided in this Section 2.12, each Borrower hereby agrees to protect,
------------
indemnify, pay and hold the Facing Agent, the Agents and the Lenders harmless
from and against any and all claims, demands, liabilities, damages, losses,
costs, charges and expenses (including reasonable attorneys' fees and allocated
costs of internal counsel) which the Facing Agent, the Agents and the Lenders
may incur or be subject to as a consequence, direct or indirect, of (i) the
issuance of or payment of any drawing under, any Letter of Credit, other than as
a result of the gross negligence or willful misconduct of the Facing Agent, any
Agent or any Lender as determined by a court of competent jurisdiction, or (ii)
the failure of the Facing Agent to honor a drawing under any Letter of Credit as
a result of any act or omission, whether rightful or wrongful, of any present or
future de jure or de facto government or governmental authority (all such acts
------- --------
or omissions herein called "Government Acts").
---------------
(j) Letter of Credit Beneficiaries. As between (i) the Borrowers and
------------------------------
(ii) the Facing Agent, the Agents and the Lenders, the Borrowers assume all
risks of the acts and omissions of, or misuse of the Letters of Credit issued by
the Facing Agent by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, the Facing Agent shall not
be responsible: (A) for the form, validity, sufficiency, accuracy, genuineness
or legal effect of any document submitted by any party in connection with the
application for and issuance of such Letters of Credit, even if it should in
fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (B) for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any such Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason; (C) for
failure of any such Letter of Credit to comply fully with conditions required in
order to draw on such Letter of Credit; (D) for errors, omissions, interruptions
or delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher; (E)
-17-
for errors in interpretation of technical terms; (F) for any loss or delay in
the transmission or otherwise of any document required in order to make a
drawing under any such Letter of Credit or of the proceeds thereof; (G) for the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; and (H) for any consequences arising
from causes beyond the control of the Facing Agent including, without
limitation, any Government Acts, in each case other than as a result of the
gross negligence or willful misconduct of the Facing Agent. None of the above
shall affect, impair, or prevent the vesting of any of the Facing Agent's rights
or powers hereunder.
(k) Facing Agent. In furtherance and extension and not in limitation
------------
of the specific provisions hereinabove set forth, any action taken or omitted by
the Facing Agent under or in connection with the Letters of Credit issued by it
or the related certificates, if taken or omitted in good faith and not with
gross negligence or willful misconduct as determined by a court of competent
jurisdiction, shall not put the Facing Agent under any resulting liability to
any Borrower, any Agent or any Lender.
(l) No Indemnification for Certain Acts. Notwithstanding anything to
-----------------------------------
the contrary contained in this Section 2.12, neither BWAY nor any Subsidiary
------------
shall have any obligation to indemnify the Agents, the Facing Agent or any
Lender in respect of any liability incurred by any Agent, the Facing Agent or
any Lender arising out of the gross negligence or willful misconduct of any
Agent, the Facing Agent or any Lender, as determined by a court of competent
jurisdiction, or out of the wrongful dishonor by the Facing Agent of a proper
demand for payment made under the Letters of Credit issued by it.
Section 2.13 Increased Costs, Illegality, Etc.
---------------------------------
(a) In the event that any Lender shall have determined (which
determination shall, absent manifest error, be final, conclusive and binding
upon all parties hereto but, with respect to clause (i) below, may be made only
by the Administrative Agent):
(i) on any Interest Rate Determination Date that, by reason of any
changes arising after the Closing Date affecting the interbank Eurodollar
market, adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of Eurodollar Rate; or
(ii) at any time, any Lender shall incur increased costs or reduction
in the amounts received or receivable hereunder with respect to any Eurodollar
Rate Loan because of (x) any change since the Closing 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 payments to any Lender of the principal of or
interest on the Obligations or any other amounts payable hereunder (except for
(a) changes in the rate of tax on, or determined by reference to, the net income
or profits of such Lender imposed by the jurisdiction in which its principal
office or applicable lending office is located and (b) United
-18-
States withholding taxes, which shall be governed by the provisions of Section
-------
3.8) or (B) a change in official reserve requirements (but, in all events,
- ---
excluding reserves required under Regulation D to the extent included in the
computation of the Eurodollar Rate) and/or (y) other circumstances since the
Closing Date affecting such Lender or the interbank Eurodollar market or the
position of such Lender in such market (excluding, however, differences in a
Lender's cost of funds from those of the Administrative Agent which are solely
the result of credit differences between such Lender and the Administrative
Agent); or
(iii) at any time, that the making or continuance of any Eurodollar
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 force of law) or (z) impracticable
as a result of a contingency occurring after the Closing Date, which materially
and adversely affects the interbank Eurodollar market in general;
then, and in any such event, such Lender (or the Administrative Agent, in the
case of clause (i) above) shall promptly give notice (by telephone confirmed in
writing) to the Borrowers and to the Agents of such determination (which notice
the Administrative Agent shall promptly transmit to each of the other Lenders).
Thereafter (x) in the case of clause (i) above, Eurodollar Rate Loans shall no
longer be available until such time as the Administrative Agent notifies the
Borrower and the 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 or Continuation given by any Borrower with respect to Eurodollar
Rate Loans which have not yet been incurred (including by way of conversion)
shall be deemed rescinded by such Borrower, (y) in the case of clause (ii)
above, each Borrower shall pay to such Lender, upon written demand therefore,
such additional amounts (in the form of an increased rate of, or a different
method of calculating, interest or otherwise as such Lender 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 as to
the additional amounts owed to such Lender, showing the basis for the
calculation thereof in reasonable detail, submitted to the Borrowers by such
Lender shall, absent manifest error, be final and conclusive and binding on all
the parties hereto; provided, however, that the failure to give any such notice
-------- -------
(except that the respective Lender shall not be entitled to receive additional
amounts pursuant to this Section 2.13(a)(y) for periods occurring prior to the
------------------
180th day before the giving of such notice) shall not release or diminish the
Borrowers' obligations to pay additional amounts pursuant to this Section
-------
2.13(a)(y), and (z) in the case of clause (iii) above, the Borrowers shall take
- ----------
one of the actions specified in Section 2.13(b) as promptly as possible and, in
---------------
any event, within the time period required by law. In determining such
additional amounts pursuant to clause (y) of the immediately preceding sentence,
each Lender shall act reasonably and in good faith and will, to the extent the
increased costs or reductions in amounts receivable relate to such Lender's
loans in general and are not specifically attributable to a Loan hereunder, use
averaging and attribution methods which are reasonable and which cover all loans
similar to the Loans made by such Lender provided that the loan documentation
for such other loans permits the Lender to receive increased costs of the type
described in this Section 2.13(a).
---------------
(b) At any time that any Eurodollar Rate Loan is affected by the
circumstances described in Section 2.13(a)(ii) or (iii), the applicable Borrower
----------------------------
may (and in the case of a Eurodollar
-19-
Rate Loan affected by the circumstances described in Section 2.13(a)(iii) shall)
--------------------
either (i) if the affected Eurodollar Rate Loan is then being made initially or
pursuant to a conversion, by giving the Administrative Agent telephonic notice
(confirmed in writing) on the same date that such Borrower notified by the
affected Lender or the Administrative Agent pursuant to Section 2.13(a)(ii) or
----------------------
(iii), cancel the respective Borrowing, or (ii) if the affected Eurodollar Rate
- -----
Loan is then outstanding, upon at least three Business Days' written notice to
the Administrative Agent, require the affected Lender to convert such Eurodollar
Rate Loan into a Prime Rate Loan, provided that (A) if more than one Lender is
--------
affected at any time, then all affected Lenders must be treated the same
pursuant to this Section 2.13(b), and (B) such outstanding Eurodollar Rate Loans
---------------
may remain outstanding until the end of the current Interest Period therefor if
the circumstances described in Section 2.13(a)(iii) do not require such Loans to
--------------------
be repaid under applicable law prior to the end of such Interest Period.
(c) Capital Requirements. If at any time after the Closing Date any
--------------------
Lender determines that the introduction of or any change in any applicable law
or governmental rule, regulation, order, guideline or request (whether or not
having the force of law) concerning capital adequacy, or any change in
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency, will have the effect of increasing the amount of
capital required or expected to be maintained by such Lender or any corporation
controlling such Lender based on the existence of such Lender's Revolving Loan
Commitment or Loans hereunder or its obligations hereunder, then each Borrower
shall pay within five (5) days after 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 and which will, to the extent the increased costs
or reduction in the rate of return relates to such Lender's commitments or
obligations in general and are not specifically attributable to the Revolving
Loan Commitments, Loans and obligations hereunder, cover all commitments and
obligations similar to the Revolving Loan Commitments, Loans and obligations of
such Lender hereunder provided that the loan documentation for such other
commitments or obligations permits the Lender to make the determination
specified in this Section 2.13(c), and such Lender's determination of
---------------
compensation owing under this Section 2.13(c) shall, absent manifest error, be
---------------
final, conclusive and binding on all the parties hereto. Each Lender, upon
determining that any additional amounts will be payable pursuant to this Section
-------
2.13(c), will give prompt written notice thereof to the Agents and the Borrower,
- -------
which notice shall show the basis for calculation of such additional amounts in
reasonable detail, although the failure to give any such notice (except that the
respective Lender shall not be entitled to receive additional amounts pursuant
to this Section 2.13(c) for periods occurring prior to the 180th day before the
---------------
giving of such notice) shall not release or diminish any Borrower's obligations
to pay additional amounts pursuant to this Section 2.13(c). The obligations of
---------------
the Borrowers under this Section 2.13(c) shall survive payment in full of the
---------------
Obligations and termination of this Agreement.
Section 2.14 Replacement of Lenders. If any Lender (a) becomes a
----------------------
Defaulting Lender, (b) is owed increased costs under Section 2.13(a)(ii) or
----------------------
(iii), Section 2.13(c), Section 2.12(h) or Section 3.11 materially in excess of
- ----- --------------- --------------- ------------
those of the other Lenders, (c) is affected by the circumstances under Section
-------
2.13(a)(iii) which prevents such Lender from funding Eurodollar Rate Loans and
- ------------
no
-20-
other Lender is similarly affected or (d) refuses to consent to a proposed
amendment, modification, supplement, termination, waiver or consent with respect
to this Agreement as contemplated by clause (i) through (v), inclusive, of the
first proviso to Section 11.2(a) which has been approved by the Required Lenders
---------------
as provided in Section 11.2(b), the Borrowers shall have the right, if no
---------------
Unmatured Event of Default or Event of Default then exists, to replace such
Lender (the "Replaced Lender") with one or more other Eligible Assignee or
---------------
Assignees (collectively, the "Replacement Lender") reasonably acceptable to the
------------------
Administrative Agent, provided that (i) at the time of any replacement pursuant
--------
to this Section 2.14, the Replacement Lender shall enter into one or more
------------
Assignment Agreements pursuant to which the Replacement Lender shall acquire all
of the Revolving Loan Commitment and outstanding Loans of, and participation in
Letters of Credit and Swing Line Loans by, the Replaced Lender, and (ii) all
obligations of the Borrowers owing to the Replaced Lender (including, without
limitation, such increased costs and excluding 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 documentation and the payment of amounts referred to in clauses (i)
and (ii) above, the Replacement Lender shall become a Lender hereunder and the
Replaced Lender shall be released from its obligations under the Loan Documents
and shall cease to constitute a Lender hereunder, except with respect to
indemnification provisions under this Agreement, which shall survive as to such
Replaced Lender. Notwithstanding anything to the contrary contained above,
neither the Facing Agent nor the Swing Line Lender may be replaced hereunder at
any time while it has Letters of Credit or Swing Line Loans, respectively,
outstanding hereunder unless arrangements satisfactory to the Facing Agent or
Swing Line Lender (including the furnishing of a standby letter of credit in
form and substance, and issued by an issuer satisfactory to the Facing Agent or
the furnishing of collateral of a kind, in amounts and pursuant to arrangements
satisfactory to the Facing Agent) have been made with respect to such
outstanding Letters of Credit or Swing Line Loans.
Section 2.15 Change of Lending Office. Each Lender agrees that it
------------------------
will use reasonable efforts to designate an alternate Lending Office with
respect to any of its Eurodollar Rate Loans affected by the matters or
circumstances described in Section 2.13 to reduce the liability of the Borrowers
------------
or avoid the results described thereunder, so long as such designation is not
financially disadvantageous to such Lender as determined by such Lender in its
sole discretion and will not result in the imposition upon the Borrowers of an
increased liability for Taxes pursuant to Section 2.13(a) or 3.8(a).
-------------------------
Section 2.16 Funding Losses. Each Borrower shall compensate each
--------------
Lender, upon its written request (which request shall set forth the basis for
requesting such amounts in reasonable detail and which request shall, absent
manifest error, be final, conclusive and binding upon all of the parties
hereto), for all losses, expenses and liabilities (including, without
limitation, any interest paid by such Lender to lenders of funds borrowed by it
to make or carry its Eurodollar Rate Loans to the extent not recovered by such
Lender in connection with the liquidation or re-employment of such funds and
including the compensation payable by such Lender to a Person to which the
Lender has participated all or a portion of such Borrowing) and any loss
sustained by such Lender in connection with the good faith liquidation or good
faith re-employment of such funds (including, without limitation, a return on
such liquidation or re-employment that would result in such Lender receiving
less than it would have received had such Eurodollar Rate Loan remained
outstanding until the last
-21-
day of the Interest Period applicable to such Eurodollar Rate Loans) which the
Lender may sustain as a result of: (i) for any reason (other than a default by
such Lender) a Borrowing of, or conversion from or into or continuation of,
Eurodollar Rate Loans does not occur on a date specified therefor in a Notice of
Borrowing or Notice of Conversion or Continuation (whether or not withdrawn,
except for such notices withdrawn pursuant to Sections 2.13(a) and (b)); (ii)
------------------------
any payment, prepayment or conversion or continuation of any of its Eurodollar
Rate Loans occurring for any reason whatsoever on a date which is not the last
day of an Interest Period applicable thereto; (iii) any repayment of any of its
Eurodollar Rate Loans not being made on the date specified in a notice of
payment given by a Borrower; or (iv) (A) any other failure by any Borrower to
repay its Eurodollar Rate Loans when required by the terms of this Agreement or
(B) an election made by any Borrower pursuant to Section 2.14. A written notice
------------
as to additional amounts owed such Lender under this Section 2.16 and delivered
------------
to the Borrowers and the Administrative Agent by such Lender shall, absent
manifest error, be final, conclusive and binding for all purposes.
Section 2.17 Pro Rata Borrowings. All Borrowings of Revolving Loans
-------------------
under this Agreement shall be loaned by the Lenders pro rata on the basis of
their respective Pro Rata Shares. No Lender shall be responsible for any default
by any other Lender in its obligation to make Loans hereunder and each Lender
shall be obligated to make the Loans provided to be made by it hereunder,
regardless of the failure of any other Lender to fulfill its Commitment
hereunder.
ARTICLE III
TERMINATION OF COMMITMENTS, PREPAYMENTS
AND FEES
Section 3.1 Mandatory Revolving Loan and Swing Line Loan Prepayments
--------------------------------------------------------
and Commitment Reductions.
- -------------------------
(a) If at any time the sum of (i) the aggregate principal amount of
all Revolving Loans and Swing Line Loans outstanding plus (ii) the aggregate
----
amount of L/C Obligations outstanding exceeds the Total Revolving Loan
Commitment then in effect, the Borrowers shall immediately prepay the Revolving
Loan Obligations in an aggregate principal amount equal to such excess together
with any accrued but unpaid interest with respect to such excess. If at any
time the sum of (1) the aggregate principal amount of all Revolving Loans and
Swing Line Loans outstanding made to any Sublimit Borrower plus (2) the
----
aggregate amount of L/C Obligations outstanding for all Letters of Credit issued
for the account of such Sublimit Borrower, exceeds the applicable Sublimit
Amount for such Sublimit Borrower, then such Sublimit Borrower shall immediately
repay Revolving Loan Obligations in an aggregate principal amount equal to such
excess together with any accrued but unpaid interest with respect to such
excess. If at any time the aggregate principal amount of all Swing Line Loans
outstanding exceeds the Swing Line Commitment of the Swing Line Lender then in
effect, the Borrowers shall, within one Business Day after notice thereof by the
Swing Line Lender, immediately prepay the Swing Line Loan Obligations in an
aggregate principal amount equal to such excess together with any accrued but
unpaid interest with respect to such excess.
-22-
(b) If an Event of Default shall have occurred and the Administrative
Agent shall have notified the Borrowers of the election of the Required Lenders
to take any action specified in Section 7.2, the Available Revolving Commitment
-----------
of each Lender and the unutilized Swing Line Commitment of the Swing Line Lender
shall, subject to reinstatement pursuant to Section 7.2, be automatically
-----------
terminated without any action on the part of or the giving of notice to any
Borrower by any Lender.
Section 3.2 Voluntary Prepayments. (a) Any Borrower may repay
---------------------
Revolving Loans and Swing Line Loans in whole at any time or in part from time
to time, without penalty or premium, on the following terms and conditions: (i)
such Borrower shall give the Administrative Agent and the Paying Agent written
notice (or telephonic notice promptly confirmed in writing) of its intent to
prepay the Loans, the amount of such prepayment and, in the case of Eurodollar
Rate Loans, the specific Borrowing or Borrowings pursuant to which made, which
notice shall be given by such Borrower at least one Business Day prior to the
date of such prepayment of any Prime Rate Revolving Loan or at least three
Business Days prior to the date of such prepayment of any Eurodollar Rate
Revolving Loan (or by 12:00 noon (Eastern time) on the date of prepayment in the
case of a prepayment of Swing Line Loans), and which notice shall promptly be
transmitted by the Paying Agent to each of the Lenders; (ii) each partial
prepayment of any Borrowing (other than a Borrowing of Swing Line Loans) shall
be in an aggregate principal amount of at least $3,000,000 and in integral
multiples of $500,000 above such minimum and each partial prepayment of a Swing
Line Loan shall be an aggregate principal amount of at least $100,000 and in
integral multiples of $100,000 above such minimum, provided that no partial
prepayment of Eurodollar Rate Loans made pursuant to a single Borrowing under
the Revolving Loan shall reduce the outstanding Loans made pursuant to such
Borrowing to an amount less than the minimum borrowing amount as set forth in
Section 2.4; (iii) any repayment of a Eurodollar Rate Loan on a day other than
- -----------
the last day of an Interest Period applicable thereto shall be subject to the
provisions of Section 2.16; and (iv) prepayments of Revolving Loans shall be
------------
applied pro rata among the Lenders based on their respective Pro Rata Shares.
(b) In the event a Lender refuses to consent to certain proposed
amendments, modifications, supplements, terminations, waivers or consents with
respect to this Agreement as contemplated by clause (i) through (v), inclusive,
of the first proviso to Section 11.2(a) which have been approved by the Required
---------------
Lenders as provided in Section 11.2(b), the Borrowers shall have the right, upon
---------------
five Business Days' prior notice to the Agents (which notice the Paying Agent
shall promptly transmit to each of the Lenders) to repay all Loans, together
with accrued and unpaid interest, fees and all other amounts due and owing to
such Lender in accordance with Section 3.3(c) so long as (i) in the case of the
--------------
repayment of Revolving Loans of any Lender pursuant to this clause (b), the
Revolving Loan Commitment of such Lender is terminated concurrently with such
repayment pursuant to Section 3.3(c) (at which time Schedule 1.1(a) shall be
-------------- ---------------
deemed modified to reflect the changed Revolving Loan Commitments) and (ii) in
the case of the repayment of Loans of any Lender, the consents required by
Section 11.2(b) in connection with the repayment pursuant to this clause (b)
- ---------------
have been obtained.
-23-
Section 3.3 Voluntary Commitment Reductions and Optional Commitment
-------------------------------------------------------
Increases.
- ---------
(a) After the Closing Date, the Borrowers shall have the right, upon
at least five (5) Business Days' prior written notice to the Agents and the
Lenders, given prior to 12:00 noon (Eastern time) on the fifth Business Day
preceding the proposed reduction date, without premium or penalty, to
permanently reduce or terminate the Total Available Revolving Commitment in
whole at any time or in part from time to time, in a minimum aggregate amount of
$5,000,000 (unless the Total Revolving Loan Commitment at such time is less than
$10,000,000, in which case, in an amount equal to the Total Revolving Loan
Commitments at such time) and, if such reduction is greater than $5,000,000, in
integral multiples of $1,000,000 above such minimum; provided, however, that (i)
-------- -------
no such reduction or termination of the Revolving Loan Commitments shall be
permitted if, after giving effect thereto and to any prepayment or payment of
the Revolving Loans and Swing Line Loans on the proposed reduction date, the
then outstanding aggregate principal amount of Revolving Loans and Swing Line
Loans plus the then aggregate amount of L/C Obligations outstanding would exceed
the Total Revolving Loan Commitment then in effect, and (ii) all prepayments of
Eurodollar Rate Loans shall be subject to Section 2.16. Simultaneously with
------------
each reduction or termination of the Revolving Loan Commitments, the Borrowers
shall pay to the Paying Agent for the account of each Lender the Commitment Fee
accrued on the amount of the Revolving Loan Commitment of each Lender so reduced
or terminated through the date thereof. Any reduction in the Revolving Loan
Commitment of the Swing Line Lender below $5,000,000 shall, without any further
action on the part of the Borrowers, cause a dollar for dollar reduction in the
Swing Line Commitment of the Swing Line Lender.
(b) So long as no Event of Default or Unmatured Event of Default
exists, the Borrowers may request at any time after the 90th day after the
Closing Date, by written notice to the Administrative Agent in the form of
Exhibit 3.3(b) hereto, that the Total Revolving Loan Commitment be increased by
- --------------
$25,000,000 (the "Increase Amount"). Such request shall be irrevocable and
---------------
binding on the Borrowers. The Administrative Agent shall promptly notify the
Paying Agent and each Lender of such request and of such Lender's Pro Rata Share
of the Increase Amount. If a Lender agrees, in its individual and sole
discretion, to so increase its Revolving Loan Commitment by an amount equal to
its Pro Rata Share of the Increase Amount (an "Accepting Lender"), it shall
----------------
deliver to the Administrative Agent a written notice of its agreement to so
increase no later than 14 days from the date on which the Administrative Agent
notified the Lenders of such request. With respect to any Lender that fails to
accept or respond to the Borrowers' request for an increase in the Total
Revolving Loan Commitment (a "Declining Lender"), such Declining Lender's
----------------
Revolving Loan Commitment shall not be increased and such Declining Lender's Pro
Rata Share of the Increase Amount may be allocated by the Administrative Agent
to one or more Accepting Lenders which, in such Lender's sole and absolute
discretion, accepts any such allocation by the Administrative Agent in writing.
To the extent of any shortfall in the Increase Amount (the "Shortfall Amount"),
----------------
the Borrowers may designate one or more Eligible Assignees other than a Lender
(which Eligible Assignee shall be acceptable to the Administrative Agent) to
become a Lender (a "New Lender"), with the aggregate initial Commitments for all
----------
such New Lenders in an amount not to exceed the Shortfall Amount. The Borrowers
shall also have the right to require any Declining Lender to assign in full its
rights and obligations under this Agreement to an Eligible Assignee (but
-24-
not more than one Eligible Assignee) designated by the Borrowers and acceptable
to the Administrative Agent, that agrees to accept all of such rights and
obligations (a "Replacing Lender"), provided that (i) such assignment is
---------------- --------
otherwise in compliance with Section 11.10(d), and (ii) such Declining Lender
----------------
receives payment in full of all obligations of the Borrowers owing to the
Declining Lender and any such assignment shall be effective on the date
specified by the Borrowers and agreed to by the Replacing Lender and the
Administrative Agent. Notwithstanding anything to the contrary herein, the sum
of the increase in the Commitments of all Accepting Lenders and the Commitments
of all New Lenders shall not exceed the Increase Amount. The increase in the
Commitments of Accepting Lenders and the assignment to any New Lenders shall
occur on such date as determined by the Administrative Agent, with prior notice
thereof to the Borrowers, the Paying Agent, the Lenders and the New Lenders.
Prior to such increase, the Borrowers agree to execute new Notes reflecting the
increased Commitments of all Lenders and New Lenders and deliver same to the
Administrative Agent, which shall deliver each Lender's new Note upon surrender
of its old Note.
(c) In the event a Lender refuses to consent to certain proposed
amendments, modifications, supplements, terminations, waivers or consents with
respect to this Agreement as contemplated by clause (i) through (v), inclusive,
of the first proviso to Section 11.2(a) which have been approved by the Required
---------------
Lenders as provided in Section 11.2(b), the Borrowers shall have the right, upon
---------------
five Business Days' prior notice to the Agents (which notice the Paying Agent
shall promptly transmit to each of the Lenders) to terminate the entire
Revolving Loan Commitment of such Lender, so long as all Loans, together with
accrued and unpaid interest, fees and all other amounts, due and owing to such
Lender are repaid concurrently with the effectiveness of such termination
pursuant to Section 3.2(b) and the Borrowers shall pay to the Facing Agent at
--------------
such time an amount in cash equal to such Lender's Pro Rata Share of the
outstanding L/C Obligations (which cash shall be held by the Facing Agent as
security for the obligations of the Borrowers hereunder in respect of the
outstanding L/C Obligations pursuant to a cash collateral agreement to be
entered into in form and substance reasonably satisfactory to the Facing Agent,
which shall permit certain Permitted Investments reasonably satisfactory to the
Facing Agent until the proceeds are applied to the secured obligations) (at
which time Schedule 1.1(a) 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 2.12(h) and (i), 2.13,
-------------------------------
2.16, 3.8, and 11.4 which shall survive as to such repaid Lender).
- -------------------
Section 3.4 Mandatory Prepayment and Commitment Reduction. If BWAY
---------------------------------------------
or any Subsidiary receives any Excess Sale Proceeds, then BWAY shall, or shall
cause its applicable Subsidiary to, on the first Business Day after receipt of
such Excess Sale Proceeds, prepay the unpaid principal amount of the Revolving
Loans, if any, and contemporaneously therewith there shall be a permanent
reduction of the Total Revolving Loan Commitment (and with respect to each
Lender, a permanent reduction of such Lender's Revolving Loan Commitment based
on such Lender's Pro Rata Share thereof), such prepayment and permanent
reduction to be in an amount equal to the aggregate amount of Excess Sale
Proceeds. In the event that any Excess Sale Proceeds remain after the
prepayment of Revolving Loans, any excess will be deposited with the Facing
Agent to cash collateralize any L/C Obligations then outstanding, but only to
the extent and in the aggregate amount of such Obligations; provided, however,
-------- -------
that BWAY and its Subsidiaries shall only be required to
-25-
deposit such excess proceeds if and for so long as an Unmatured Event of Default
or an Event of Default has occurred and is continuing at such time or if and to
the extent the aggregate outstanding Revolving Loan Commitments have, pursuant
to the preceding sentence, been reduced to an amount less than the L/C
Obligations then outstanding. Prepayments of Loans described in this Section
-------
3.4 shall be applied first to the payment of Prime Rate Loans and second to the
- ---
payment of Eurodollar Rate Loans, and, within such Eurodollar Rate Loans, pro
rata in order of the maturity of such Loans.
Section 3.5 Other Provisions With Respect to the Loans. If no Event
------------------------------------------
of Default or Unmatured Event of Default shall have occurred and be continuing,
at the election of BWAY any monies otherwise required to be used to prepay a
Eurodollar Rate Loan pursuant to Section 3.1 or 3.4 on a date other than the
------------------
last day of the Interest Period applicable thereto shall be paid to the Paying
Agent (the "Deposited Monies") when due but, until the earlier of the occurrence
----------------
of an Event of Default and the end of the applicable Interest Period when the
Deposited Monies shall be applied to make such prepayment, shall be held in an
account by the Paying Agent for the benefit of the Lenders and the Borrowers
shall have no right to or interest in such funds and such funds shall be used to
prepay such Eurodollar Rate Loan upon the earlier of the occurrence of an Event
of Default or at the end of the applicable Interest Period; provided, however,
-------- -------
that any funds held in such account shall be invested by the Paying Agent (to
the extent the Paying Agent is reasonably able to do so) on behalf of the
Borrowers at the direction of the Borrowers in Permitted Investments selected by
the Borrowers and having a maturity not exceeding the Business Day prior to the
end of the relevant Interest Period. Interest on the applicable Loans shall
continue to accrue until the Deposited Monies are applied to the prepayment
thereof. Any such investments shall be held by the Paying Agent or under the
control of the Paying Agent. The interest accruing on such investments and any
profits realized from such investments shall be, after giving effect to such
repayment of such Loans with the Deposited Monies, paid to the Borrowers;
provided, however, that any loss resulting from such investments shall be
- -------- -------
charged to and be immediately payable by the Borrowers upon demand of the Paying
Agent. BWAY and the Borrowers hereby indemnify and hold harmless the Paying
Agent for any losses or expenses which are incurred by the Paying Agent as a
result of any investment so made by the Paying Agent and the Paying Agent shall
not be liable to BWAY or any Borrower in any manner for any losses or expenses
charged against such funds as a result of any investment so made by the Paying
Agent, provided that BWAY and the Borrowers shall not be obligated to so
indemnify the Paying Agent for losses and expenses resulting from the willful
misconduct or gross negligence on the part of the Paying Agent.
Section 3.6 Order of Prepayments and Payments. All repayments or
---------------------------------
prepayments of principal of Revolving Loans made by the Borrowers pursuant to
Sections 3.1 and 3.2 shall be made to each Lender in proportional amounts equal
- --------------------
to such Lender's Pro Rata Share of such payment and (ii) applied (A) first to
the payment of Prime Rate Loans and second to the payment of Eurodollar Rate
Loans and (B) with respect to Eurodollar Rate Loans, in such order as the
Borrowers, subject to Section 3.5, shall request (and in the absence of such
-----------
request, as the Administrative Agent shall determine).
-26-
Section 3.7 Commitment Fees.
---------------
(a) The Borrowers shall pay to the Paying Agent for pro rata
distribution to each Lender (based on its Pro Rata Share) a commitment fee
(collectively, the "Commitment Fees") for the period commencing on the Closing
---------------
Date to and including the Termination Date computed at a per annum rate equal to
the Applicable Commitment Fee on the aggregate of each Lender's daily average
unused Revolving Loan Commitment (without giving effect to any outstanding Swing
Line Loans), as the Applicable Commitment Fee may be adjusted from time to time
pursuant to Section 2.9. The "Applicable Commitment Fee" means (i) for the
----------- -------------------------
period from and including the Closing Date to but excluding the next Pricing
Certificated Delivery Date, 0.30%, and (ii) for each portion of each subsequent
Pricing Period, the Applicable Commitment Fee set forth below corresponding to
the Leverage Ratio as of the Date of Determination, as follows:
========================================
Applicable
Leverage Ratio Commitment Fee
----------------------------------------
1.00:1.00 and lower 0.20%
----------------------------------------
>1.00:1.00; 1.75:1.00 0.25%
----------------------------------------
>1.75:1.00; 2.50:1.00 0.30%
----------------------------------------
>2.50:1.00; 3.25:1.00 0.35%
----------------------------------------
>3.25:1.00; 3.75:1.00 0.40%
----------------------------------------
>3.75:1.00; 4.00:1.00 0.45%
----------------------------------------
>4.00:1.00 0.50%
========================================
Notwithstanding the foregoing, in the event that BWAY achieves an Investment
Grade Rating, then from and after the date on which BWAY notifies the
Administrative Agent in writing of such Investment Grade Rating until such time
as BWAY no longer has an Investment Grade Rating (in which case the Applicable
Commitment Fee shall be determined as provided above by reference to the
Leverage Ratio), the Applicable Commitment Fee shall be the Applicable
Commitment Fee set forth below corresponding to the applicable Investment Grade
Rating, with the Applicable Commitment Fee changing as of the date of any change
in such Investment Grade Rating (and in the case of any split rating, the more
favorable rating shall be determinative):
=====================================
Investment Applicable
Grade Rating Commitment Fee
-------------------------------------
BBB-/Baa3 0.20%
-------------------------------------
BBB/Baa2 or better 0.15%
=====================================
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(b) Unless otherwise specified, accrued Commitment Fees shall be due
and payable quarterly in arrears on each Quarterly Payment Date or upon such
earlier dates as the Revolving Loan Commitment shall terminate. The Commitment
Fees shall be computed on the basis of a year consisting of 360 days and actual
days elapsed.
Section 3.8 Additional Fees. BWAY shall pay, without duplication as
---------------
to any fees expressly set forth in this Agreement, the separately negotiated
fees (the "Additional Fees") as required by the separate agreements between BWAY
---------------
and BT and NationsBank.
Section 3.9 Payments.
--------
(a) All payments by the Borrowers under this Agreement or under any
Loan Document shall be made without setoff, counterclaim or other defense and in
such amounts as may be necessary in order that all such payments (after
deduction or withholding for or on account of any present or future taxes
(withholding or otherwise), levies, imposts, duties, assessments or other
charges of whatsoever nature imposed by any government or any political
subdivision or taxing authority thereof, other than any franchise tax or tax
imposed on or measured by the net income of a Lender pursuant to the income tax
laws of the United States of America or the jurisdictions where such Lender's
principal or lending offices are located (collectively the "Taxes")) shall not
-----
be less than the amounts otherwise specified to be paid under this Agreement.
Each Borrower shall indemnify and hold the Agent, the Facing Agent and the
Lenders harmless against any and all such Taxes together with all interest or
penalties owing in respect thereof. A certificate as to any additional amount
payable to a Lender under this Section submitted to the Borrowers and the
Administrative Agent by such Lender shall show in reasonable detail the amount
payable and the calculations used to determine in good faith such amount, and
shall, absent manifest error, be final, conclusive and binding upon all parties
hereto. With respect to each deduction or withholding for or on account of any
Taxes, the Borrowers shall promptly furnish to each Lender such certificates,
receipts and other documents as may be reasonably required (in the judgment of
such Lender) to establish any tax credit to which such Lender may be entitled.
(b) All payments (including prepayments) to be made by the Borrowers
on account of principal or interest on any of its Obligations shall be made to
the Paying Agent at its Payment Office for the ratable account of the Lenders or
for the Swing Line Lender or the Facing Agent, as the case may be, not later
than 12:00 noon (Eastern time) on the date when due, in each case in lawful
money of the United States of America and in immediately available funds. Except
as otherwise required under this Agreement, all payments (including prepayments)
received by the Paying Agent on account of principal or interest on the
Obligations or Letter of Credit Fees, Commitment Fees or Additional Fees shall
be deemed made, and shall be distributed by the Paying Agent to the Lenders, the
Agents, the Swing Line Lender or the Facing Agent, as the case may be, and with
respect to any such payments to the Lenders distributed by the Paying Agent to
the Lenders in accordance with their Pro Rata Shares, and, as among all Lenders
(including the Swing Line Lender and the Facing Agent), be applied ratably
according to the amount of principal, interest, Letter of Credit Fees,
Commitment Fees then due and owing to such Lenders or the Swing Line Lender or
the Facing Agent, at the time such payment is received. If any payment
hereunder becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day (provided,
--------
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however, that if a payment in respect of a Eurodollar Rate Loan would otherwise
- -------
be made on a day which is not a Business Day and after which no Business Day
occurs in the same month, such payment shall be made on the next preceding
Business Day), and, with respect to payments on principal and, to the extent
permitted by law, interest thereon, interest thereon shall be payable at the
then applicable rate during such extension. Payments received after 12:00 noon
(Eastern time) on any date shall be deemed received on the next succeeding
Business Day.
(c) Each Lender that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code), shall submit to the Borrowers
within 31 days after it becomes a Lender hereunder duly completed and signed
copies of (i) Internal Revenue Service ("IRS") Form 1001 (relating to such
---
Lender and entitling it to a complete exemption from United States withholding
on all amounts to be received by such Lender at any Lending Office designated by
such Lender, including fees, under this Agreement) and, if necessary to prevent
backup withholding, IRS Form W-8 (relating to the foreign status exemption from
United States federal income tax backup withholding), (ii) IRS Form 4224
(relating to all amounts to be received by such Lender at any Lending Office
designated by such Lender, including fees, under this Agreement) and, if
necessary to prevent backup withholding, IRS Form W-9 (certification of taxpayer
identification number) or (iii) IRS Form W-8 (relating to the exemption from
United States federal income tax withholding on payments of portfolio interest
under Section 871(h) or Section 881(c) of the Code) together with a certificate
substantially in the form of Exhibit 3.8(c) hereto. Thereafter and from time to
--------------
time, each such Lender, to the extent legally entitled to do so, shall submit to
the Borrowers such additional duly completed and signed copies of the previously
provided forms (or such successor forms as shall be adopted from time to time by
the relevant United States taxing authorities) as may be (i) requested by the
Borrowers from such Lender and (ii) required under then-current United States
law or regulations to avoid United States withholding taxes on payment in
respect of amounts to be received by such Lender at any Lending Office
designated by such Lender, including fees, under this Agreement. Upon the
request of the Borrowers, each Lender that is a United States person (as such
term is defined in Section 7701(a)(30) of the Code) shall submit to the
Borrowers a certificate to the effect that it is such a United States person.
If any Lender determines that it is unable to submit to the Borrowers any form
or certificate that such Lender is obligated to submit pursuant to this Section,
or that such Lender is required to withdraw or cancel any such form or
certificate previously submitted, such Lender shall promptly notify the
Borrowers of such fact. Any amount that would otherwise have been required to
be paid by the Borrowers in respect of United States withholding Taxes pursuant
to this Section shall not be payable by the Borrowers to any Lender that (i) is
neither (a) entitled to submit the form or forms required by the first sentence
of this Section 3.8(c) (or said successor forms) other than on account of a
--------------
change in applicable law or regulations or in any treaty after the date hereof
nor (b) a United States person (as such term is defined in Section 7701(a)(30)
of the Code), or (ii) has failed to submit any form or certificate that it was
required to file pursuant to this Section and entitled to file under applicable
law.
-29-
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Agents and the Lenders to enter into this
Agreement and the other Loan Documents and to make the Loans, and issue (or
participate in) the Letters of Credit as provided herein, BWAY and the Borrowers
make the following representations and warranties as of the Closing Date and as
of the date of each subsequent Credit Event, all of which shall survive the
execution and delivery of this Agreement and the other Loan Documents and the
making of the Loans and issuance of the Letters or Credit, with the occurrence
of each Credit Event on or after the Closing Date being deemed to constitute a
representation and warranty that the matters specified in this Article IV are
----------
true and correct on and as of the Closing Date and on and as of the date of each
such Credit Event, provided that any representation or warranty which by its
--------
terms is made as of a specified date shall be required to be true and correct on
the date of each Credit Event but only as of such specified date:
Section 4.1 Due Organization and Standing. Except as set forth on
-----------------------------
Schedule 4.1 hereto, BWAY and each Subsidiary of BWAY (other than an
- ------------
Insignificant Subsidiary) is a corporation duly organized, validly existing and
in good standing under the laws of its respective jurisdiction of incorporation.
BWAY and each Subsidiary of BWAY is duly qualified and in good standing as a
foreign corporation, and is duly authorized to do business, in each jurisdiction
in which the ownership or leasing of its or their properties or the conduct of
its or their business requires such qualification, except where the failure to
be so qualified could not reasonably be expected to have a Material Adverse
Effect.
Section 4.2 Power and Authority. BWAY and each Subsidiary of BWAY has
-------------------
all requisite corporate power and authority to own, operate and encumber its
property and assets and to carry on its business as presently conducted and as
proposed to be conducted. Each of BWAY and its Subsidiaries has all requisite
power and authority (corporate and otherwise) (i) to execute, deliver and
perform its obligations under each of the Loan Documents to which it is a party,
and (ii) to execute, deliver and perform its obligations under all other
agreements and instruments executed and delivered by it pursuant to or in
connection with any Loan Document to which it is a party or bound thereby.
Section 4.3 Subsidiaries. Schedule 4.3 attached hereto is a
------------ ------------
complete and correct list of all Subsidiaries of BWAY as of the Closing Date.
Except as set forth on Schedule 4.3, all of the issued and outstanding shares of
------------
capital stock of each such Subsidiary other than directors' qualifying shares or
shares required to be owned by foreign nationals, if any, are owned directly or
indirectly by BWAY as of the Closing Date. As of the Closing Date all shares of
capital stock of each Subsidiary of BWAY owned by BWAY or any Subsidiary of BWAY
have been validly issued, are fully paid and non-assessable and all such shares
owned directly or indirectly by BWAY are owned free and clear of all Liens
except as set forth on Schedule 4.3. Except as set forth on Schedule 4.3, no
------------ ------------
authorized but unissued or treasury shares of capital stock of any Wholly-Owned
Subsidiary are subject to any option, warrant, right to call or commitment of
any kind or character. Except as set
-30-
forth on Schedule 4.3, as of the Closing Date, BWAY has no Subsidiaries other
------------
than Wholly-Owned Subsidiaries.
Section 4.4 No Violation of Agreements. The execution, delivery and
--------------------------
performance by each of BWAY and its Subsidiaries of each of the Loan Documents
to which it is a party and all other agreements and instruments to be executed
and delivered by BWAY or any of its Subsidiaries pursuant hereto or thereto or
in connection herewith or therewith, do not and will not (i) violate in any
material respect any provisions of any law, statute, rule, regulation
(including, without limitation, Regulations G, T, U or X of the Board), order,
license, permit, writ, judgment, decree, determination or award presently in
effect having applicability to BWAY or any of its Subsidiaries, (ii) conflict
with or result in a breach of or constitute a tortious interference with or
constitute a default under the certificate of incorporation or by-laws, or other
organizational documents, as the case may be, of either BWAY or any of its
Subsidiaries or any indenture or loan or credit agreement, or any other material
agreement or instrument, to which BWAY or any of its Subsidiaries is a party or
by which BWAY or any of its Subsidiaries or any of their respective properties
are bound or affected, or any governmental permit, license or order, (iii)
result in or require the creation or imposition of any Lien (except for
Permitted Liens) of any nature upon or with respect to any of the properties now
owned or hereafter acquired by BWAY or any of its Subsidiaries, or (iv) require
any approval of stockholders or any approval or consent of any Person which have
not been obtained on or prior to the Closing Date, except for such approvals and
consents referred to on Schedule 4.4 hereto. Neither BWAY nor any Subsidiary of
------------
BWAY is in default under or in violation of any such law, statute, rule,
regulation, judgment, decree, license, order or permit described above or any
indenture, mortgage, deed of trust, agreement or other instrument described
above or under its charter or by-laws, in each case the consequences of which
default or violation, either in any one case or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
Section 4.5 Due Authorization, etc. The execution, delivery and
-----------------------
performance (or filing, as the case may be) of each of the Loan Documents, and
the consummation of the transactions contemplated thereby, have been duly
authorized by all requisite corporate action on the part of the BWAY and its
Subsidiaries party to such Loan Documents and no other corporate proceedings on
the part of BWAY or its applicable Subsidiaries are necessary to authorize any
of the Loan Documents. Each of the Loan Documents to which it is a party and
each other agreement or instrument executed and delivered by BWAY or any of its
Subsidiaries pursuant hereto or thereto or in connection herewith or therewith
has been duly executed and delivered (or filed, as the case may be) by BWAY or
such Subsidiary and constitutes or will constitute a legal, valid and binding
obligation of BWAY or such Subsidiary, enforceable against the Borrower or such
Subsidiary in accordance with its respective terms (subject, as to enforcement,
to bankruptcy, insolvency, reorganization and other similar laws affecting the
enforcement of creditors' rights generally and general equitable principles).
Each of the Loan Documents is in full force and effect and BWAY, the Borrowers
and the other parties thereto (other than the Lenders) have performed and
complied with all the terms, provisions, agreements and conditions set forth
therein and required to be performed or complied with by such parties on or
before the Closing Date.
Section 4.6 Indebtedness for Money Borrowed. Attached hereto as
-------------------------------
Schedule 4.6 is a complete and correct list of all Indebtedness for Money
- ------------
Borrowed of BWAY and each Subsidiary
-31-
of BWAY outstanding as of the Closing Date, showing the aggregate principal
amount which will be outstanding on the Closing Date after giving effect to the
transactions contemplated hereunder and the making of the Loans hereunder. The
Borrowers have delivered or caused to be delivered to the Administrative Agent
and each Lender on or prior to the Closing Date a true and complete copy of the
form of each instrument evidencing Indebtedness for Money Borrowed listed on
Schedule 4.6 and of each instrument pursuant to which such Indebtedness for
- ------------
Money Borrowed was issued. No Indebtedness for Money Borrowed of the Borrowers
to any party is contractually senior in priority of payment to the Obligations.
Section 4.7 Fiscal Year. The fiscal year (the "Fiscal Year") of BWAY
----------- -----------
and each of its Subsidiaries ends on the Sunday closest to September 30 of each
calendar year.
Section 4.8 Title to and Conditions of Properties. Except as
-------------------------------------
disclosed on Schedule 4.8 hereto, as of the Closing Date, each Borrower or one
------------
of its Subsidiaries has valid, legal and marketable title to, or a subsisting
leasehold interest in, all material items of real and personal property
reflected on the Balance Sheet or acquired after the date of the Balance Sheet
except for assets sold, transferred or otherwise disposed of in the ordinary
course of business since the date of the Balance Sheet, in each case (except as
to leasehold interests) free and clear of all Liens, except Permitted Liens. As
of the Closing Date, except as disclosed on Schedule 4.8, substantially all
------------
items of real and material personal property owned by, leased to or used by each
Borrower and/or each Subsidiary of such Borrower are in adequate operating
condition and repair, ordinary wear and tear excepted, are free and clear of any
known defects except such defects as do not substantially interfere with the
continued use thereof in the conduct of normal operations, and are able to serve
the function for which they are currently being used.
Section 4.9 Litigation, Proceedings, Licenses, Permits. There is no
------------------------------------------
action, suit or proceeding, or any governmental investigation or any arbitration
pending or, to the knowledge of BWAY or any Borrower, threatened in writing
against BWAY or any of its Subsidiaries or any material property of any thereof
before any court or arbitrator or any governmental or administrative body,
agency or official (i) except as provided on Schedule 4.9 hereto, which asserts
------------
the invalidity, or seeks to enjoin, or otherwise materially interferes with, the
performance or consummation, of any Loan Document, or (ii) which could
reasonably be expected to have a Material Adverse Effect. Neither BWAY nor any
of its Subsidiaries (A) is in default with respect to any order of any court,
arbitrator or governmental body or is subject to or party to any order of any
court or governmental authority arising out of any action, suit or proceeding
against it under any statute or other law respecting antitrust, monopoly,
restraint of trade, unfair competition or similar matters or (B) has violated or
is in violation of any statute, rule or regulation of any governmental authority
in each case where such violation or default could reasonably be expected to
have a Material Adverse Effect. BWAY and each of its Subsidiaries have been and
are current and in good standing with respect to all governmental approvals,
permits, certificates, licenses, inspections, consents and franchises necessary
to continue to conduct their respective businesses in accordance with applicable
laws, rules and regulations and to own or lease and operate their respective
properties, except where the failure to be so could not reasonably be expected
to have a Material Adverse Effect.
-32-
Section 4.10 Governmental Consents, etc. Except to the extent not
---------------------------
required to be obtained prior to the Closing Date and except as disclosed on
Schedule 4.10 hereto, no authorization, consent, approval, license,
- -------------
qualification or formal exemption from, nor any filing, declaration or
registration with, any court, governmental agency or regulatory authority or any
securities exchange or any other Person is required in connection with the
execution, delivery and performance by BWAY and its Subsidiaries of any Loan
Documents, and all of such consents shall have been obtained prior to, and shall
remain in full force and effect on, and any requirements described on Schedule
--------
4.10 shall have been met on or prior to, the Closing Date.
- ----
Section 4.11 Financial Statements.
--------------------
(a) The Borrowers have heretofore caused to be delivered to each
Lender complete and correct copies of (i) the audited consolidated balance
sheets of BWAY and its Subsidiaries for the fiscal years ended September 30,
1994 and 1995, and the audited consolidated statements of income and
consolidated statements of cash flows for such years then ended, certified by
Deloitte & Touche, whose report thereon is incorporated by reference therein,
and (ii) the unaudited consolidated balance sheet of BWAY and its Subsidiaries
as of March 31, 1996 (such unaudited consolidated balance sheet and notes
thereto as of March 31, 1996 being herein referred to as the "Balance Sheet"),
-------------
together with unaudited consolidated statements of income and consolidated
statements of cash flows for the three months and six months ended March 31,
1996. As of the Closing Date, such consolidated balance sheets and the notes
thereto fairly present the assets, liabilities and financial condition of BWAY
and its Subsidiaries as at the respective dates thereof, and such consolidated
statements of income and consolidated statements of cash flows and the notes
thereto fairly present the results of operations of BWAY and its Subsidiaries
for the respective periods therein referred to, all in accordance with generally
accepted accounting principles consistently applied throughout the respective
periods involved and the prior periods, except as stated therein or in the notes
thereto and except for normally occurring year-end audit adjustments and the
absence of footnote disclosures.
(b) The Borrowers have furnished to the Agents the pro forma
consolidated balance sheet (the "Pro Forma") of BWAY and its Subsidiaries
---------
attached hereto as Schedule 4.11(b). As of the Closing Date, the Pro Forma
----------------
fairly presents BWAY's assets, liabilities and financial condition, on a
consolidated basis, taking into account the transactions contemplated by the
Loan Documents and the making of the Loans hereunder based on the assumptions
set forth in the notes to the Pro Forma.
(c) The Borrowers have furnished to the Agents initial Forecasts for
BWAY and its Subsidiaries attached hereto as Schedule 4.11(c). For purposes of
----------------
this Agreement, "Forecasts" shall mean forecasted balance sheets for the
---------
forthcoming three (3) years, year-by-year; forecasted cash flow statements for
the forthcoming three (3) years, year-by-year; forecasted profit and loss
statements for the forthcoming three (3) years, year-by-year, and for the
forthcoming Fiscal Year, quarter-by-quarter, together with appropriate
supporting details consistent with Schedule 4.11(c). The initial Forecasts have
----------------
been prepared by BWAY and the Borrowers on the basis of the
-33-
assumptions set forth therein and represent, as of the Closing Date, the good
faith estimate of BWAY and the Borrowers regarding the course of BWAY's and the
Borrowers' business for the periods covered thereby. BWAY and the Borrowers
believe in good faith on the Closing Date that the assumptions set forth in the
initial Forecasts are reasonable.
(d) Except as set forth on Schedule 4.11(d) hereto, neither BWAY nor
----------------
any of its Subsidiaries has any material liabilities or obligations of any
nature, whether absolute, accrued, contingent or otherwise, or any material
unsatisfied judgments or any leases for a period in excess of five (5) years
which either individually or in the aggregate are material (herein called
"Material Liabilities"), except (a) Material Liabilities which are fully
- ---------------------
reflected or reserved against on (i) the Pro Forma, with respect to the period
from the Closing Date until the delivery of the initial Most Recent Balance
Sheet in Fiscal Year 1996 and (ii) the Most Recent Balance Sheet, with respect
to all periods thereafter, (b) Material Liabilities incurred subsequent to the
date of the Pro Forma or the Most Recent Balance Sheet, as the case may be, in
the ordinary course of business, and (c) Material Liabilities incurred or
assumed in connection with an Acquisition permitted under Section 5.2.7. The
-------------
reserves, if any, reflected on the Pro Forma or the Most Recent Balance Sheet,
as the case may be, for all Material Liabilities referred to in clause (a) above
are appropriate and reasonable as of the date of the Pro Forma or Most Recent
Balance Sheet, as the case may be.
Section 4.12 No Material Adverse Change. Since September 30, 1995
--------------------------
there has been no material adverse change in the condition (financial or
otherwise), business, assets, liabilities, prospects or results of operations of
BWAY and its Subsidiaries taken as a whole.
Section 4.13 Tax Returns and Payments. BWAY and each of its
------------------------
Subsidiaries has timely filed or caused to be filed all material tax returns
which are required to be filed, and has paid all material taxes shown to be due
and payable on said returns or on any assessments made against it or any of its
property and all other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority (other than those the amount or validity
of which is being contested in good faith by appropriate proceedings diligently
conducted and with respect to which adequate reserves in conformity with
generally accepted accounting principles have been provided on the books of BWAY
or such Subsidiary, as the case may be); and no tax liens have been filed and no
claims are being asserted with respect to any such taxes, fees or other charges
(other than such liens or claims, the amount or validity of which is currently
being contested in good faith by appropriate proceedings diligently conducted
and with respect to which adequate reserves in conformity with generally
accepted accounting principles have been provided).
Section 4.14 Patents, etc. BWAY and each of its Subsidiaries own,
-------------
are licensed or otherwise have the lawful right to use, or have all permits and
other governmental approvals, patents, trademarks, trade names, copyrights,
technology, know-how and processes used in or necessary for the conduct of their
businesses except where the failure to own or have the right to use could not
reasonably be expected to have a Material Adverse Effect. To the best of BWAY's
and each Borrow er's knowledge, the use of such permits and other governmental
approvals, patents, trademarks, trade names, copyrights, technology, know-how
and processes by BWAY and each of its Subsidiaries does
-34-
not infringe on the rights of any Person, subject to such claims and
infringements as do not, in the aggregate, give rise to any liability on the
part of BWAY or any of its Subsidiaries which could reasonably be expected to
have a Material Adverse Effect. The consummation of the transactions
contemplated by the Loan Documents will not impair the ownership of or rights
under (or the license or other right to use, as the case may be) any permits,
governmental approvals, patents, trademarks, trade names, copyrights,
technology, know-how or processes by BWAY or any of its Subsidiaries in any
manner which could reasonably be expected to have a Material Adverse Effect.
Section 4.15 ERISA. (a) No Plan has been terminated as a result of
-----
which termination BWAY or any of its Related Persons has any material liability.
Except as set forth on Schedule 4.15 hereto, all Employee Benefit Plans have
-------------
been operated and administered in a manner so as not to result in any material
liability for failure to comply with ERISA, and if intended to qualify under
Section 401(a) or 403(a) of the Code, in a manner so as not to result in any
material liability for failure to comply with the applicable provisions thereof.
Neither BWAY nor any of its Related Persons has engaged in any transaction in
connection with which any such entity could be subjected to either a material
civil penalty assessed pursuant to Section 502(i) of ERISA or a material tax
imposed by Section 4975 of the Code. All material payments have been made or
will be made prior to the due date of all amounts which BWAY or any Related
Person is required under the terms of each Employee Benefit Plan to have paid as
a contribution to such Employee Benefit Plan as of the last day of the most
recent fiscal year of such Employee Benefit Plan ended prior to the date hereof.
None of the Employee Benefit Plans which is subject to Part 3 of Subtitle B of
Title 1 of ERISA or Section 412 of the Code had an accumulated funding
deficiency (as defined in Section 302 of ERISA and Section 412 of the Code),
whether or not waived, as of the last day of the most recent fiscal year of such
Plan or as of the date any such Plan was spun off from its predecessor Plan. No
material liability to the PBGC has been or is expected by BWAY or any Borrower
to be incurred with respect to any Plan by BWAY or any of its Related Persons,
and there has occurred no Reportable Event nor any event or condition which
presents a risk of termination of any Plan by the PBGC. Assuming that no
portion of the Loan proceeds to be advanced hereunder is attributable, directly
or indirectly, to the assets of any Employee Benefit Plan or Plan (within the
meaning of Section 4975(e) of the Code), the execution, performance and delivery
of the Loan Documents by any party thereto or any actions by any Subsidiary of
BWAY related thereto will not involve any prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code for which an
exemption therefrom is not available. Except as set forth on Schedule 4.15
-------------
hereto, the aggregate fair market value of the assets of the Plans (determined
in the latest actuarial valuation for each respective Plan) exceeds the
aggregate present value of accrued benefits under such Plans (using the
actuarial assumptions used for funding purposes in the latest valuation for each
respective Plan) and, with respect to any Plan the fair market value of the
assets of which does not exceed the present value of accrued benefits thereunder
(an "Underfunded Plan"), the amount by which the present value of accrued
----------------
benefits under each Underfunded Plan exceeds the fair market value of the assets
of such Underfunded Plan is not material to BWAY and its Subsidiaries taken as a
whole. There have been no Plan amendments that have materially increased the
excess of the present value of accrued benefits of any such Plan over the fair
market value of its assets since the last actuarial valuation for each
respective Underfunded
-35-
Plan, and no such Plan provides for subsidized early retirement benefits that
could materially adversely affect the funded status of the Plan in the event of
a reduction in force or plant closing.
(b) Except as set forth on Schedule 4.15, no material withdrawal
-------------
liability has been or is expected to be incurred by BWAY or any of its
Subsidiaries or any of their respective Related Persons with respect to any
Multiemployer Plan if a complete or partial withdrawal (within the meaning of
Sections 4203 and 4205, respectively, of ERISA) from such Multiemployer Plan by
any such Person were to occur. All material payments have been made of all
amounts which BWAY or any of its Related Persons is required under the terms of
any Multiemployer Plan to have paid as a contribution to such Multiemployer Plan
as of the last day of the most recent fiscal year of such Multiemployer Plan
ended prior to the date hereof.
(c) The present value of the future cost to BWAY and its Subsidiaries
of medical and life insurance benefits that BWAY or any of its Subsidiaries as
of the Closing Date is obligated to provide to current or future retirees or
terminated employees does not exceed $2,000,000, calcu lated on the basis of
actuarial factors considered by BWAY and the Borrowers to be reasonable
estimates of future experience.
Section 4.16 Governmental Regulation. Neither the Borrower nor any
-----------------------
of its Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, the
Investment Company Act of 1940 or any other federal or state statute or
regulation such that its ability to incur any Obligations is limited or its
ability to consummate the transactions contemplated hereby is materially
impaired.
Section 4.17 Federal Reserve Regulations. Neither BWAY nor any of
---------------------------
its Subsidiaries is engaged, directly or indirectly, principally, or as one of
its important activities, in the business of extending, or arranging for the
extension of, credit for the purpose of purchasing or carrying any Margin Stock,
within the meaning of Regulation G, U or X of the Board. Following application
of the proceeds of each Loan, not more than 25% of the value of the assets
(either of any Borrower only or of BWAY and its Subsidiaries on a consolidated
basis) will be Margin Stock.
Section 4.18 Solvency. BWAY, each Borrower and each of their
--------
respective Subsidiaries is Solvent and will continue to be Solvent after giving
effect to (i) the transactions contemplated by the Loan Documents; (ii) the
payment of all fees, costs and expenses payable by BWAY, the Borrowers and their
Subsidiaries with respect to the transactions contemplated by the Loan
Documents; and (iii) all obligations, if any, under any Plan or the equivalent
for unfunded past service liability, and any other unfunded medical (including
post-retirement) and death benefits.
Section 4.19 Certain Fees. No broker's or finder's fees or
------------
commissions or similar fees were paid or will be payable by BWAY or any
Subsidiary of BWAY with respect to the transactions contemplated by the Loan
Documents except for any fees paid pursuant to the terms of the Loan Documents
and any such fees paid in connection with any Acquisition. BWAY and each
-36-
Borrower covenants that it will indemnify the Agents and each Lender against and
hold the Agents and each Lender harmless from any claim, demand or liability for
broker's or finder's fees or similar fees or commissions alleged to have been
incurred in connection with any such Acquisition, or the transactions
contemplated hereby other than claims, demands or liabilities of Persons
retained or claiming to have been retained by any Agent or any Lender. The
obligations of BWAY and the Borrowers under this Section shall survive the
termination of this Agreement and the discharge of the Borrower's obligations
hereunder and under the Obligations.
Section 4.20 Environmental Matters. Except as otherwise set forth on
---------------------
Schedule 4.20, to BWAY's and each Borrower's best knowledge after due inquiry
- -------------
(i) the operations of BWAY and each of its Subsidiaries comply and will be
operated so as to continue to comply with all Environmental Laws except where
the failure to so comply could not reasonably be expected to have a Material
Adverse Effect; (ii) BWAY and each of its Subsidiaries has obtained and will
continue to maintain all permits, certificates, licenses and approvals necessary
or required under the Environmental Laws for their respective operations, and
all such permits, certificates, licenses and approvals are in good standing and
BWAY and its Subsidiaries are in compliance with all terms and conditions of
such permits, certificates, licenses and approvals except in each case where
failure to so obtain, maintain or comply could not reasonably be expected to
have a Material Adverse Effect; (iii) neither BWAY nor any of its Subsidiaries
nor any of their present or past properties or operations (whether owned or
leased) are subject to: (a) any written order, decree or agreement from or with
any governmental authority or private party related to non-compliance with or
liability under any Environmental Laws, (b) any pending or threatened judicial
or administrative proceeding, action, suit or investigation related to any non-
compliance with or liability under Environmental Laws, (c) any Remedial Action
or (d) any liabilities, obligations or costs arising from the Release or
threatened Release of a Contaminant except where the events described in clauses
(a) through (d) could not reasonably be expected to have a Material Adverse
Effect; (iv) neither BWAY nor any of its Subsidiaries has filed any notice
required under any Environmental Laws indicating past or present treatment,
storage or disposal of a hazardous waste, as that term is defined under 40 CFR
Part 261 or any state equivalent; (v) neither BWAY nor any of its Subsidiaries
has failed to file any notice required under any Environmental Laws reporting a
Release of a Contaminant except where the failure to so file could not
reasonably be expected to have a Material Adverse Effect; (vi) there is not now,
nor has there ever been, on or in the property of BWAY or on or in the property
of any of its Subsidiaries except where the following has been materially in
compliance with Environmental Laws, and has not resulted in contamination or
except where the occurrence of any of the following could not be reasonably
expected to have a Material Adverse Effect: (A) any generation, handling,
treatment, recycling, storage or disposal of any hazardous waste, as that term
is defined under 40 CFR Part 261 or any state equivalent, (B) any underground
storage tanks or surface impoundments, (C) any asbestos-containing material, or
(D) any polychlorinated biphenyls (PCB's); (vii) neither BWAY nor any of its
Subsidiaries has received any written notice or claim to the effect that it is
or may be liable to any Person as a result of the Release or threatened Release
of a Contaminant into the environment, or as a result of exposure to asbestos,
which may result in material liability in excess of workers compensation; and
(viii) no Environmental Lien has attached to any property currently or, to
BWAY's best knowledge, formerly owned, or leased by BWAY or its Subsidiaries.
-37-
Section 4.21 Disclosure. No statement, fact, representation or
----------
warranty of BWAY or its Subsidiaries contained in the Loan Documents or any
other document furnished to the Lenders by or on behalf of BWAY or any
Subsidiary for use in connection with the transactions contemplated by the Loan
Documents contains any untrue statement of a material fact nor do such documents
taken as a whole omit to state a material fact necessary in order to make the
statements contained herein or therein, as the case may be, not misleading when
made. The pro forma forecasts, projections and pro forma financial information
contained in such materials are based upon good faith estimates and assumptions
believed by BWAY and the Borrowers to be reasonable at the time made, it being
recognized by the Lenders that such pro forma forecasts and projections as to
future events are not to be viewed as facts and that actual results during the
period or periods covered by any such pro forma forecasts and projections will
differ from the forecasted or projected results. As of the Closing Date there
is no fact known to BWAY or any Borrower which could reasonably be expected to
have a Material Adverse Effect which has not been disclosed herein or in such
other documents, certificates and statements furnished to the Lenders for use in
connection with the transactions contemplated hereby.
Section 4.22 Survival of Warranties; Covenant Regarding Disclosure.
-----------------------------------------------------
All representations and warranties contained in this Agreement and the other
Loan Documents shall survive the execution and delivery of this Agreement and
such other Loan Documents, as the case may be, and the termination hereof and
thereof. The Borrowers may from time to time propose in writing to the
Administrative Agent and Lenders modifications or supplements to the disclosures
contained herein or the disclosure schedules attached to this Agreement in order
to maintain the accuracy thereof; provided, however, that any modifications or
-------- -------
supplements to the disclosures contained in this Agreement or the disclosure
schedules attached to this Agreement and provided by the Borrowers after the
Closing Date shall not be deemed a part of this Agreement until accepted in
writing by the Required Lenders.
ARTICLE V
COVENANTS
Section 5.1 Affirmative Covenants. BWAY and the Borrowers covenant
---------------------
and agree that for so long as this Agreement is in effect and until the
Obligations and all other obligations incurred hereunder or under any other Loan
Document, whether or not matured, are paid in full and all Commitments have
terminated, each of BWAY and each Borrower will, unless first having procured
the written consent of the Required Lenders:
Section 5.1.1 Financial Statement, Reports and Other Information.
--------------------------------------------------
Furnish to the Agents:
(a) Within five (5) Business Days after any Responsible Officer of
BWAY or of any Borrower shall have obtained knowledge of the occurrence of an
Event of Default and/or an Unmatured Event of Default, the written statement of
the chief financial officer, chief
-38-
operating officer or chief executive officer of BWAY or any Borrower setting
forth the details of each such Event of Default or Unmatured Event of Default
which has occurred and is continuing and the action which BWAY and Borrowers
propose to take with respect thereto.
(b) Within forty-five (45) days after the end of each fiscal quarter
(ninety (90) days after the end of each fourth fiscal quarter in each Fiscal
Year), unaudited consolidated financial statements consisting of a consolidated
balance sheet and statement of stockholder's equity of BWAY and its Subsidiaries
as at the end of such fiscal quarter, consolidated statements of income and cash
flows of BWAY and its Subsidiaries for such fiscal quarter and for the fiscal
year through such quarter, all in reasonable detail, and in connection with such
financial statement deliveries, (i) a certificate from a Responsible Officer of
BWAY addressed to the Lenders substantially in the form of Exhibit 5.1.1(b)
----------------
hereto, to the extent applicable, stating that no Event of Default or Unmatured
Event of Default has come to his attention and was continuing at the end of such
quarter, or on the date of his certificate, or, if such an Event of Default or
Unmatured Event of Default has come to his attention and was continuing at the
end of such quarter or on the date of his certificate, indicating the nature of
such Event of Default or Unmatured Event of Default and the action which BWAY
and the Borrowers propose to take with respect thereto and setting forth
detailed computations as to compliance with the covenants set forth in Sections
--------
5.2.1, 5.2.2, 5.2.4, 5.2.5, 5.2.7, 5.2.8 and Section 5.3, (ii) a Cost Adjustment
- --------------------------------------------------------
Certificate in respect of each Acquisition consummated during the preceding four
fiscal quarter period and for which BWAY delivered an Initial Cost Adjustment
Certificate and (iii) a Pricing Certificate with respect to the preceding four
fiscal quarter period. To the extent that the accounting principles utilized in
the preparation of any financial statements delivered by BWAY and the Borrowers
pursuant to Section 5.1.1(b) or (c) are at variance with the Agreement
-----------------------
Accounting Principles, such financial statements shall be accompanied by a
statement detailing the nature of such variance.
(c) As soon as possible, but in no event later than ninety (90) days
after the end of each Fiscal Year of BWAY, (a) consolidated financial statements
consisting of a consolidated balance sheet and statement of stockholder's equity
of BWAY and its Subsidiaries as at the end of such Fiscal Year, consolidated
statements of income and cash flows of BWAY and its Subsidiaries for such Fiscal
Year, setting forth in comparative form the corresponding figures for the
preceding Fiscal Year, certified (without adverse opinions, scope limitations or
qualifications with respect to (A) the continuance of BWAY and each of its
Subsidiaries as a going concern and (B) departures from generally accepted
accounting principles other than departures (x) which are not material, (y)
which will not cause the financial statements to fail to meet the requirements
of the Securities and Exchange Commission for financial information to be
contained or incorporated by reference in registration statements and (z) which
do not cause the financial statements to fail to present fairly the financial
condition of BWAY and its Subsidiaries on a consolidated basis) without
qualification as to scope of examination by independent public accountants of
recognized national standing and reputation selected by BWAY accompanied by (b)
a certificate from the Chief Financial Officer of BWAY to the Lenders
substantially in the form of Exhibit 5.1.1(c)
----------------
-39-
hereto, to the extent applicable, stating that no Event of Default and no
Unmatured Event of Default has come to his attention which was continuing at the
end of such Fiscal Year or on the date of his certificate, or, if such an Event
of Default or Unmatured Event of Default has come to his attention, the
certificate shall indicate the nature of such Event of Default or Unmatured
Event of Default and the action which BWAY and the Borrowers propose to take
with respect thereto, and stating whether or not since the end of the prior
Fiscal Year there has been any material adverse change in the condition
(financial or otherwise), properties, business or results of operations of BWAY
and its Subsidiaries taken as a whole, and (c) a certificate from such
accountants addressed to the Lenders setting forth computations as to compliance
based upon the annual audit of the consolidated books of BWAY and its
Subsidiaries with the covenants set forth in Sections 5.2.1, 5.2.2, 5.2.4,
-----------------------------
5.2.5, 5.2.7, 5.2.8 and Section 5.3 hereof.
- ------------------- -----------
(d) As soon as practicable but in no event less than five (5) Business
Days prior to the date on which any Material Acquisition is consummated (i)
financial statements of the Target and its Subsidiaries, if any, on a
consolidated basis, for the most recently completed fiscal year of the Target,
(ii) copies of all other consolidated balance sheets and consolidating balance
sheets (to the extent available) and related statements of operations and
statements of cash flows of the Target and its Subsidiaries, if any, acquired in
such Material Acquisition, that are to be delivered to BWAY or any of its
Subsidiaries in connection with such Material Acquisition, (iii) to the extent
then available, copies of all purchase agreements, agreements of merger, letters
of intent or other operative agreements entered into by BWAY or any of its
Subsidiaries in connection with such Material Acquisition (it being understood
and agreed that, to the extent such agreements or letters of intent have not
been entered into at such time, copies of such agreements and letters of intent
shall be delivered reasonably promptly after the execution thereof), (iv) an
Acquisition Compliance Certificate substantially in the form of Exhibit 5.1.1(d)
----------------
hereto (an "Acquisition Compliance Certificate") of BWAY completed in respect of
----------------------------------
such Material Acquisition, (v) in the case of any Substantial Acquisition, at
BWAY's option, a Cost Adjustment Certificate completed in respect of such
Substantial Acquisition, and (vi) any other information relating to such
Material Acquisition reasonably requested by the Administrative Agent or any
Lender.
(e) As soon as available, copies of final versions of all financial or
other reports or statements submitted to BWAY or any of its Subsidiaries by
independent public accountants in connection with any annual, interim or special
audit made by them of the books of BWAY or any of its Subsidiaries.
(f) Within five (5) days after obtaining knowledge thereof, notice
of any action, suit, proceeding or investigation pending or threatened against
or affecting BWAY or any of its Subsidiaries or any of their respective
properties before any court, governmental agency or regulatory authority
(foreign, Federal, state or local), which, if determined adversely to BWAY or
any of its Subsidiaries could reasonably be expected to have a Material Adverse
Effect.
-40-
(g) As soon as available, copies of financial statements, reports,
notices and proxy statements sent by BWAY to its security holders generally (in
their capacity as security holders only) and all regular and periodic reports
and final registration statements or other official statements (and all
amendments or supplements thereto) required to be filed by BWAY and its
Subsidiaries with the Securities and Exchange Commission or with any national
securities exchange on which any of its securities are listed with respect to
its securities outstanding or to be outstanding or furnished to a purchaser or a
prospective purchaser thereof, and copies of all press releases and other
statements made available generally by BWAY and its Subsidiaries to the public
concerning material developments in the business of BWAY and its Subsidiaries.
(h) Such other information respecting the properties, business
affairs, financial condition and/or operations of BWAY or any of its
Subsidiaries as the Administrative Agent or any Lender may from time to time
reasonably request.
(i) Within ten (10) Business Days after the Closing Date, forecasted
balance sheets for the forthcoming five years, year-by-year, forecasted cash
flow statements for the forthcoming five years, year-by-year, forecasted profit
and loss statements for the forthcoming five years, year-by-year, and for the
forthcoming Fiscal Year, quarter-by-quarter, together with appropriate
supporting details, all with respect to BWAY and its Subsidiaries and based on
the good faith estimate of BWAY and its reasonable assumptions regarding the
course of BWAY's and its Subsidiaries' business for the periods covered thereby.
Section 5.1.2 Discharge of Taxes, etc. Pay and cause each of its
------------------------
Subsidiaries to pay (i) all taxes, assessments and governmental charges or
levies imposed upon it or any of them or upon its or any of their income,
profits or property prior to the date on which penalties attach thereto, and
(ii) all claims for labor, material or supplies which, if unpaid, might become a
Lien upon the property of BWAY or any Subsidiary prior to the time they are
overdue and may become a Lien upon any such property, except to the extent that
the aggregate of all such taxes, assessments, governmental charges, levies,
penalties and claims referred to in clause (i) and (ii) above not so paid, does
not exceed $1,000,000 at any time outstanding for BWAY and its Subsidiaries
taken as a whole; provided, however, that neither BWAY nor any Subsidiary of
-------- -------
BWAY shall be required to pay or discharge any such tax, assessment, charge,
levy or claim while the same is being contested by it in good faith and by
appropriate proceedings diligently conducted and so long as BWAY or such
Subsidiary, as the case may be, shall have set aside on its books reserves
(segregated to the extent required by generally accepted accounting principles)
reasonably deemed by it to be adequate with respect thereto and in conformity
with generally accepted accounting principles.
Section 5.1.3 Corporate Existence; Business.
-----------------------------
(a) Except as otherwise permitted by Section 5.2.7 and except that any
-------------
Subsidiary (other than a Borrower) may be liquidated, dissolved, wound up,
merged or amalgamated where such liquidation, dissolution, merger, winding-up or
amalgamation could not reasonably be expected to
-41-
have a Material Adverse Effect, (i) preserve and maintain, and cause each
of its Subsidiaries to preserve and maintain, its corporate existence,
rights and franchises and (ii) qualify and remain qualified, and cause each
of its Subsidiaries to qualify and remain qualified, as a foreign
corporation authorized to do business in each other jurisdiction in which
the failure to so qualify or remain qualified could reasonably be expected
to have a Material Adverse Effect.
(b) Continue to operate the business of BWAY and its Subsidiaries
taken as a whole in the packaging industry or in lines of businesses
substantially similar thereto.
Section 5.1.4 Compliance With Laws. Comply, and cause each of its
--------------------
Subsidiaries to comply, with all laws, rules, regulations and governmental
orders (foreign, federal, provincial, state and local) having applicability to
any of them or to the business or businesses at any time conducted by any of
them, where the failure to so comply could reasonably be expected to have a
Material Adverse Effect.
Section 5.1.5 Performance of Loan Documents. Duly and punctually pay
-----------------------------
and perform its obligations and cause each of its Subsidiaries to pay and
perform its obligations under the Loan Documents in all material respects in
accordance with the terms thereof.
Section 5.1.6 Inspection of Books and Properties.
----------------------------------
(a) Permit, and cause each of its Subsidiaries to permit, any Lender
or its respective representatives (including without limitation any accounting
and/or financial advisor or other similar professional retained by or on behalf
of the Administrative Agent pursuant to Section 10.4), at any reasonable time
------------
during regular business hours, and from time to time upon reasonable written
notice of such Lender to BWAY and the Borrowers, to visit and inspect its and
their respective properties, to examine and make copies of and take abstracts
from its and their respective records and books of account, and to discuss its
and their respective affairs, finances and accounts with its and their
respective principal officers and, with the written consent of BWAY (which
consent shall not be required if an Event of Default has occurred and is
continuing), which consent shall not be unreasonably denied, their respective
independent public accountants, in all cases acting reasonably both as to
frequency and as to scope.
(b) The Agents and each Lender agree that all materials and
information (other than publicly available material and information) obtained by
or provided to the Agents or such Lender pursuant to the foregoing provisions of
this Section which are identified or designated by BWAY or any Borrower in
writing as confidential and which was not previously in the possession of or
known to the recipient thereof on a non-confidential basis shall be held in
confidence and that the Agents or such Lender, as the case may be, will use its
best efforts not to disclose any such information unless the same has previously
been made public, provided that nothing in this Agreement shall prohibit the
--------
Agents or such Lender, as the case may be, from, or subject the Agents or such
Lender to liability for, disclosing any of such information (i) pursuant to any
order, writ, judgment, decree, injunction or ruling of any governmental body
(including any Lender regulators) to whose
-42-
jurisdiction the Agents or such Lender may be subject, (ii) pursuant to any
applicable requirement of law or regulation, (iii) to the auditors, attorneys
and other advisors of the Agents or such Lenders to the extent required in
connection with their services to the Agents or such Lender with respect to this
Agreement, (iv) to the extent necessary in the enforcement of rights hereunder
or under the Loan Documents during the continuance of an Unmatured Event of
Default or Event of Default, or (v) to actual or prospective Assignees or
participants as permitted by Section 11.10(g) or to any Lender hereunder.
----------------
Section 5.1.7 Books and Records. Keep, or cause to be kept, and
-----------------
cause its Subsidiaries to keep or cause to be kept, adequate records and books
of account, in which complete entries are to be made reflecting its and their
business and financial transactions, such entries to be made in accordance with
generally accepted accounting principles consistently applied.
Section 5.1.8 ERISA.
-----
(a) Within five (5) days after it or any of its Related Persons
knows or has reason to know that a Reportable Event notice of which has not
been waived by PBGC has occurred, deliver, or cause such Related Persons to
deliver, to the Administrative Agent and each Lender a certificate of a
Responsible Officer of BWAY or such Related Person, as the case may be,
setting forth the details of such Reportable Event.
(b) Upon the request of the Administrative Agent or any Lender
made from time to time and promptly confirmed in writing, deliver, or cause
such Subsidiary to deliver, to the Administrative Agent and each Lender a
copy of the most recent actuarial report and annual report completed with
respect to any Employee Benefit Plan of BWAY or any of its Related Persons.
(c) Within ten (10) days after it or its Related Persons knows or
has reason to know that any of the following have occurred with respect to
any Plan: (A) any such Plan has been terminated and such termination could
reasonably be expected to result in material liability to BWAY or its
Related Persons, (B) the Plan Sponsor intends to terminate any such Plan
and such termination could reasonably be expected to result in material
liability to BWAY or its Related Persons, or (C) the PBGC has instituted or
indicated its intention to institute proceedings under Section 4042 of
ERISA to terminate any such Plan, deliver, or cause such Subsidiary to
deliver, to the Administrative Agent and each Lender a written notice
thereof.
(d) Within five (5) days after it or any of its Related Persons
knows or has reason to know that any of them has experienced or caused a
complete withdrawal or partial withdrawal (within the meaning of Sections
4203 and 4205, respectively, of ERISA) from any Multiemployer Plan and such
withdrawal could reasonably be expected to result in material liability to
BWAY or its Related Persons, deliver or cause such Subsidiary to deliver to
the Administrative Agent and each Lender a written notice thereof.
-43-
(e) Within ten (10) days after it or any of its Related Persons knows
or has reason to know that a "prohibited transaction" within the meaning of
Section 406 of ERISA with respect to any Employee Benefit Plan has occurred and
such prohibited transaction could reasonably be expected to result in material
liability to BWAY or its Related Persons, deliver or cause such Subsidiary or
Related Person to deliver to the Administrative Agent and each Lender a
certificate of a Responsible Officer of BWAY or Subsidiary or Related Persons,
as the case may be, setting forth the details of such prohibited transaction and
BWAY's or such Borrower's proposed response thereto. For purposes of this
Section, BWAY and the Borrowers shall be deemed to have knowledge of all facts
known by the Plan Administrator of any Plan of which BWAY or any Related Person
to BWAY is the Plan Sponsor, and each Subsidiary of BWAY shall be deemed to have
knowledge of all facts known by the Plan Administrator of any Plan of which such
Subsidiary or any Related Person to such Subsidiary is a Plan Sponsor.
Section 5.1.9 Insurance. Maintain, and cause each of its
---------
Subsidiaries to maintain, such insurance, to such extent and against such
hazards and liabilities, as is customarily maintained by Persons similarly
situated to the extent that such insurance is available at commercially
reasonable rates (and including such insurance effected through self-insurance,
provided adequate reserves therefor, if required by and in accordance with
generally accepted account principles, are maintained), and furnish to the
Administrative Agent in sufficient quantity for distribution to each Lender,
upon written request, information as to the insurance carried by BWAY or any
Subsidiary of BWAY.
Section 5.1.10 Use of Proceeds. (i) Use the proceeds of the
---------------
Revolving Loans, Letters of Credit and Swing Line Loans only (A) to repay all of
the indebtedness outstanding under the Existing Credit Agreement, (B) to repay
all of the indebtedness outstanding under the Senior Notes, including the
payment of a make-whole premium thereunder, (C) to finance the Davies
Acquisition and other Acquisitions as permitted hereunder, (D) to pay fees,
costs and expenses incurred in connection with the Refinancings, the Davies
Acquisition and this Agreement, (E) in the case of Letters of Credit, for
general corporate purposes of BWAY and its Subsidiaries, and (F) for ongoing
working capital and general corporate purposes of BWAY and its Subsidiaries
permitted hereunder; and (ii) not use any part of the proceeds of any Loan or
Letter of Credit hereunder for any purpose other than as set forth in this
Section, including without limitation, to purchase or carry any Margin Stock or
to extend credit to others, in either case in violation of Regulation G, U or X
of the Board.
Section 5.1.11 Maintenance of Properties. Maintain and cause
-------------------------
each of its Subsidiaries to maintain, in good repair, working order and
condition, excepting ordinary wear and tear and damage due to casualty or
condemnation, all of its properties material to its operations and will make or
cause to be made all appropriate repairs, renewals and replacements thereof.
With respect to all items of leased equipment, BWAY shall, and shall cause each
of its Subsidiaries to, keep, maintain, repair, replace and operate such leased
equipment in accordance with the terms of the applicable lease to the extent
necessary to avoid material detriment to such equipment, unless the provisions
of such lease are being contested in good faith by BWAY or such Subsidiary.
-44-
Section 5.1.12 Licenses, Permits, Etc. Maintain, and cause each
----------------------
of its Subsidiaries to maintain, in full force and effect all licenses, permits,
governmental approvals, franchises, authorizations or other rights necessary for
the operation of its respective business, except where the failure to obtain and
maintain any of the foregoing could not reasonably be expected to have a
Material Adverse Effect; and notify the Administrative Agent (which notice the
Administrative Agent shall promptly transmit to each of the other Lenders) in
writing, promptly after learning thereof, of the suspension, cancellation,
revocation or discontinuance of or of any pending or threatened action or
proceeding seeking to suspend, cancel, revoke or discontinue any such license,
permit, governmental approval, franchise authorization or right.
Section 5.1.13 Environmental Notification.
--------------------------
(a) Notify the Administrative Agent in writing on the date of delivery
of the quarterly financial statements and officer's certificate under
Section 5.1.1(b), promptly, and in any event within twenty (20) days after
---------------
BWAY or any Borrower's learning thereof, of any of the following of which
BWAY or any Borrower has not already given the Administrative Agent notice:
(i) written notice or claim to the effect that BWAY or any of its
Subsidiaries is or may be materially liable to any Person as a result of
the Release or threatened Release of any Contaminant into the environment;
(ii) written notice that BWAY or any of its Subsidiaries is subject to
investigation by any governmental authority as a result of a material
Release or threatened Release of any Contaminant into the environment;
(iii) written notice that any property of BWAY or its Subsidiaries, whether
currently or formerly owned, is subject to an Environmental Lien; (iv)
written notice of violation to BWAY or any of its Subsidiaries with respect
to environmental compliance of conditions which could reasonably be
expected to result in a notice of violation of any Environmental Laws,
which violation could reasonably be expected to have a Material Adverse
Effect; (v) written notice of commencement of any material judicial or
administrative proceeding alleging a material violation of any
Environmental Laws; or (vi) any proposed acquisition of stock, assets, real
estate, or leasing of property, or any other action by BWAY or its
Subsidiaries that could reasonably be anticipated to subject BWAY or its
Subsidiaries to environmental, health or safety liabilities, obligations or
costs that could reasonably be expected to have a Material Adverse Effect.
(b) Upon written request by the Administrative Agent, BWAY and the
Borrowers shall promptly submit to the Administrative Agent and the Lenders
a report providing in reasonable detail an update of the status of any
environmental, health or safety compliance, hazard or liability issue
identified in any notice or report required pursuant to clause (a) above
and any other environmental, health and safety compliance obligation,
remedial obligation or liability that could reasonably be expected to have
a Material Adverse Effect.
Section 5.1.14 Senior Note Refinancing. On or prior to five
-----------------------
(5) Business Days after the Closing Date, cause to be paid in full all
outstanding indebtedness under the Senior Notes,
-45-
including any make-whole premium, such that the Senior Notes shall have been
fully satisfied (the "Senior Note Refinancing"), pursuant to documentation
-----------------------
satisfactory to the Administrative Agent.
Section 5.2 Negative Covenants. BWAY and the Borrowers
------------------
covenant and agree that for so long as this Agreement is in effect and until the
Obligations and all other obligations incurred hereunder, whether or not
matured, are paid in full and all Commitments have terminated, without the prior
written consent of the Required Lenders, neither BWAY nor any Borrower will, nor
will it permit any Subsidiary of BWAY or any Borrower to:
Section 5.2.1 Liens. Except for Permitted Liens, create,
-----
incur, assume or permit to exist any Lien on any of its or any of its
Subsidiaries' existing or future properties, assets (including stock of any
Subsidiaries), income or rights in any thereof whether now owned or hereafter
acquired.
Section 5.2.2 Indebtedness for Money Borrowed. Create, incur,
-------------------------------
assume or suffer to exist any Indebtedness for Money Borrowed except for:
(a) the Obligations under the Loan Documents;
(b) Indebtedness for Money Borrowed constituting intercompany loans
and advances to the extent permitted by Section 5.2.5(c);
----------------
(c) Indebtedness for Money Borrowed consisting of Financing Lease
Obligations, and Indebtedness for Money Borrowed issued, incurred or
assumed in respect of the purchase price of property, provided that in no
--------
event shall the aggregate amount of all such obligations outstanding at any
time exceed $5 million; or
(d) subject to BWAY's and the Borrowers' compliance with Sections
--------
5.3.1 and 5.3.2, BWAY and its Subsidiaries may incur, assume or suffer to
---------------
exist any unsecured Indebtedness for Money Borrowed (other than
Indebtedness for Money Borrowed permitted under clauses (a), (b) and (c)
above).
Section 5.2.3 Affiliate Transactions. Enter into or engage in
----------------------
any transaction or contract with any Affiliate of BWAY or any Affiliate of any
Borrower, other than transactions by BWAY or any of its Subsidiaries in the
ordinary course of business and on terms and conditions substantially as
favorable to BWAY or such Subsidiaries, as the case may be, as would be
obtainable by BWAY or such Subsidiaries, as the case may be, at the time in a
comparable arm's-length transaction with a Person other than an Affiliate,
except that BWAY and any of its Wholly-Owned Subsidiaries may engage in
transactions with or among each other in the ordinary course of business.
Section 5.2.4 Dividends; Distributions. Declare or pay any
------------------------
dividend or distribution, or purchase or redeem any shares of any class of
capital stock of BWAY or any Subsidiary of BWAY, or make any other payment or
distribution on or in respect of any class of capital stock of BWAY or any of
its Subsidiaries, or set aside any amounts for any such purposes, except that:
-46-
(a) any Subsidiary of any Borrower may pay dividends or make distributions
to such Borrower or to any Wholly-Owned Subsidiary of such Borrower;
(b) BWAY may pay cash dividends, make distributions on its capital stock or
make purchases or redemptions of its capital stock to the extent that the
aggregate amount of all such dividends, distributions, purchases and redemptions
from and after the Closing Date to the date of the proposed dividend,
distribution, purchase or redemption (after giving effect to such proposed
dividend, distribution, purchase or redemption) would not exceed the sum of (A)
$5,000,000 plus (B) an amount equal to (1) 50% of the Consolidated Net Income of
----
BWAY for the period from July 1, 1996 to the date of payment of such proposed
dividend, distribution, purchase or redemption minus (2) 100% of the
-----
Consolidated Net Loss of BWAY for the period from July 1, 1996 to the date of
payment of such proposed dividend, distribution, purchase or redemption plus (C)
----
100% of the cash proceeds (net of the fees, costs and expenses of sale and
underwriting discounts and commissions) received by BWAY from sales of capital
stock of BWAY from the Closing Date to the date of payment of such proposed
dividend, distribution, purchase or redemption; provided, however, that no Event
-------- -------
of Default or Unmatured Event of Default shall have occurred and be continuing
before or after giving effect to any such proposed dividend, distribution,
purchase or redemption; and provided further, that if all of the conditions to
-------- -------
the declaration of a dividend or distribution set out in this subsection are
satisfied at the time such dividend or distribution is declared, then such
dividend or distribution may be paid or made within forty-five (45) days after
such declaration even if the payment of such dividend, the making of such
distribution or the declaration thereof would not have been permitted under this
Section 5.2.5(b) at any time after such declaration;
- ----------------
(c) any Borrower may pay cash dividends or make distributions on its
capital stock solely (i) for the purpose of providing all or any portion of the
funds necessary for any Wholly-Owned Subsidiary of BWAY to consummate an
Acquisition as permitted hereunder, (ii) to permit BWAY to pay dividends,
distributions or make purchases or redemptions as permitted by clause (b) above,
and (iii) to pay or reimburse BWAY, or provide BWAY with funds necessary to pay,
for any operating costs and expenses incurred by BWAY;
(d) BWAY may distribute shares of its capital stock to holders of the same
or another class of its capital stock as a stock dividend or in connection with
a stock split;
(e) BWAY or any Subsidiary of BWAY may make any Investment permitted by
Section 5.2.5; and
- -------------
(f) BWAY may redeem or repurchase options to purchase common stock held by
employees or former employees of BWAY or any of its Subsidiaries.
-47-
Section 5.2.5 Investments. Have or make any Investment in any
-----------
Subsidiary or other Affiliate or any other Person except for:
(a) existing Investments and commitments to make Investments set forth on
Schedule 5.2.5 hereto;
- --------------
(b) Permitted Investments;
(c) (i) BWAY may make intercompany loans and advances to any Borrower and
any Borrower may make intercompany loans and advances to BWAY or any other
Borrower, provided that each such intercompany loan and advance shall be
--------
evidenced by an Intercompany Note, (ii) BWAY or any Borrower may make
intercompany loans and advances to any Guarantor Subsidiary, provided that (A)
--------
at no time shall the aggregate outstanding principal amount of all intercompany
loans and advances made pursuant to this clause (ii) by BWAY and the Borrowers
exceed $2,000,000 and (B) each intercompany loan and advance made to a Guarantor
Subsidiary shall be evidenced by an Intercompany Note;
(d) Investments constituting equity contributions to the capital of any
Wholly-Owned Subsidiary of BWAY (other than a Foreign Subsidiary);
(e) loans and advances by BWAY and its Subsidiaries to employees of BWAY
and its Subsidiaries for moving and travel expenses and other similar expenses,
in each case incurred in the ordinary course of business, in an aggregate
outstanding principal amount not to exceed $2,500,000 at any time (determined
without regard to any write-down or write-offs of such loans and advances);
(f) Investments by BWAY or any Subsidiary of BWAY in Persons as permitted
by Section 5.2.7;
-------------
(g) Investments made by BWAY or any Subsidiary of BWAY in respect of debt
or equity securities to the extent received in a transaction permitted by
Section 5.2.8;
- --------------
(h) Investments consisting of securities or notes received in settlement of
accounts receivable incurred in the ordinary course of business from a customer
which BWAY or any Subsidiary has reasonably determined is unable to make cash
payments in accordance with the terms of such account receivable; and
(i) in addition to investments permitted by clauses (a) through (h) above,
so long as no Event of Default or Unmatured Event of Default then exists or
would result therefrom, BWAY and its Subsidiaries may make additional
Investments in a Person so long as the amount of any such Investment (at the
time of making thereof) does not exceed an amount equal to $10,000,000 (the
"Investment Basket") less the aggregate amount of the Investment Basket
- ------------------
previously used to make Investments pursuant to this clause (i) to the extent
such
-48-
Investments are then still outstanding (determined without regard to any write-
downs or write-offs thereof and net of cash repayments of principal in the case
of loans and cash equity returns (whether as a redemption or a repurchase, but
excluding any dividends thereon) in the case of equity Investments).
Section 5.2.6 Mergers and Consolidations. Merge into or
--------------------------
consolidate with any Person except that:
(a) any Wholly-Owned Subsidiary of any Borrower may merge or
consolidate with and into any Borrower (with such Borrower as the survivor)
or another Wholly-Owned Subsidiary of any Borrower which is a Guarantor
Subsidiary;
(b) a Wholly-Owned Subsidiary of any Borrower may be liquidated and
its assets distributed to one or more Wholly-Owned Subsidiaries which is a
Guarantor Subsidiary and/or such Borrowers;
(c) any non-Wholly-Owned Subsidiary may be liquidated and its assets
distributed in accordance with applicable law;
(d) any Subsidiary of BWAY (other than a Borrower) may merge or
consolidate with and into BWAY (with BWAY as the survivor); and
(e) any non-Wholly-Owned Subsidiary may merge with and into a Wholly-
Owned Subsidiary (with such Wholly-Owned Subsidiary as the survivor and
remaining a Wholly-Owned Subsidiary after such merger)
Section 5.2.7 Purchase of Stock or Assets. Acquire any assets,
---------------------------
capital stock or debt securities of any Person (an "Acquisition") except that:
-----------
(a) BWAY and its Subsidiaries may acquire inventory and other assets other
than capital stock in the ordinary course of business;
(b) BWAY or any Subsidiary of BWAY may make any Investment permitted by
Section 5.2.5;
- -------------
(c) BWAY or any Subsidiary of BWAY may make Acquisitions so long as no
Event of Default or Unmatured Event of Default exists or would result therefrom;
provided that (i) BWAY shall have delivered to the Administrative Agent a
- --------
certificate of the chief financial officer of BWAY, which certificate shall (A)
demonstrate (with detailed calculations satisfactory to the Administrative
Agent) compliance with Section 5.3.1 after giving effect to such Acquisition and
-------------
(B) certify that no Event of Default or Unmatured Event of Default then exists
or would result therefrom, and (ii) the proceeds of any Loans or Letters of
Credit shall not be directly or indirectly used in connection with any such
Acquisition unless (A) BWAY
-49-
shall have delivered to the Administrative Agent on or before such
Acquisition a certificate of the chief financial officer of BWAY, which
certificate shall demonstrate (with detailed calculations satisfactory to
the Administrative Agent) that if such Acquisition had been consummated on
the date occurring twelve months prior to the last day of the most recently
ended fiscal quarter of BWAY, the Leverage Ratio for the four most recently
completed fiscal quarters shall be equal to or less than 4.00 to 1.00 (it
being understood and agreed that BWAY shall not be required to comply with
the Leverage Ratio requirement of this clause (c)(ii) as a condition to
incurring Loans hereunder in connection with the Davies Acquisition), (B)
BWAY shall have complied with the requirements set forth in Section
-------
5.1.1(d), if applicable, (C) to the extent such Acquisition is of the
--------
equity interests of any Person, such Person shall comply with the
requirements of Section 5.2.10, and (D) that the board of directors of the
--------------
Target shall have adopted a resolution approving such Acquisition pursuant
to applicable corporate law; and
(d) BWAY may make purchases or redemptions of its capital stock as
permitted under Section 5.2.4(b).
----------------
Section 5.2.8 Sale of Assets. Sell, lease, assign, transfer or
--------------
otherwise dispose of any assets (other than cash or Permitted Investments) or
related group of assets, including shares of capital stock, to a Person which is
not a Borrower or a Wholly-Owned Subsidiary of a Borrower (other than a Foreign
Subsidiary) except for (i) sales or other dispositions of inventory in the
ordinary course of business, (ii) sales or other dispositions of plant,
equipment or other property which is obsolete, worn out or otherwise not useable
in BWAY's or any Subsidiary's business, (iii) sales or other dispositions of
assets if the aggregate book value (at the time of disposition thereof) of all
assets disposed of by BWAY and its Subsidiaries subsequent to the Closing Date
plus the aggregate book value of all assets then proposed to be sold or disposed
- ----
of does not exceed 15% of Consolidated Total Assets, provided that (A) each such
--------
sale or disposition shall be approved by the board of directors of the Person
selling or disposing of such assets and shall be in an amount at least equal to
the fair market value thereof, and (B) an amount equal to the net proceeds of
such sales and dispositions shall be used by BWAY or any Subsidiary within 12
months of such sale or disposition to reinvest in productive assets of a kind
then used or usable in the business of BWAY or any Subsidiary, and (iv) sales or
other dispositions of assets in excess of those permitted under clause (iii)
above, provided that (A) an amount equal to the net proceeds from all such sales
--------
or dispositions ("Excess Sale Proceeds") are applied pursuant to Section 3.4
-------------------- -----------
with a corresponding reduction in the Total Revolving Loan Commitment as
provided in Section 3.4 and (B) each such sale or disposition shall be approved
-----------
by the board of directors of the Person selling or disposing of such assets and
shall be in an amount at least equal to fair market value thereof and for
proceeds consisting of at least 80% in cash.
Section 5.2.9 Sales of Accounts Receivable. Sell or otherwise
----------------------------
dispose of any account receivable except for purposes of collection in the
ordinary course of business.
-50-
Section 5.2.10 Subsidiaries. Have any Subsidiaries other than
------------
Wholly-Owned Subsidiaries of BWAY in existence on the date of this Agreement,
provided that Subsidiaries (including, without limitation, Foreign Subsidiaries)
may be created or acquired, as permitted under, or not otherwise prohibited by,
this Agreement, so long as:
(a) if the aggregate Investment by BWAY or any of its Subsidiaries in
any Wholly-Owned Subsidiary (other than a Foreign Subsidiary) exceeds
$2,000,000, or the fair market value of such Wholly-Owned Subsidiary's
(other than a Foreign Subsidiary) assets exceeds $2,000,000 (a "Significant
------------
Subsidiary"), such Significant Subsidiary shall become an Additional
----------
Borrower under this Agreement by delivering to the Administrative Agent (i)
a supplement to this Agreement and the Contribution Agreement in such form
as the Administrative Agent shall request, executed and delivered by a duly
authorized Responsible Officer of such Significant Subsidiary, whereby such
Significant Subsidiary shall become a Borrower for all purposes under the
Loan Documents and shall be bound by all of the terms and conditions
thereof, and (ii) such resolutions, incumbency certificates, officer
certificates and legal opinions substantially similar to those delivered by
the Borrowers on the Closing Date and others as reasonably requested by the
Administrative Agent, in form and substance satisfactory to the
Administrative Agent, and the Borrowers (including any Additional Borrower)
shall execute and deliver to the Administrative Agent new Notes to reflect
the addition of such Additional Borrower hereunder, and the Administrative
Agent shall deliver each Lender's new Notes upon surrender of its old
Notes; or
(b) if such Subsidiary is not a Significant Subsidiary, then the
Administrative Agent shall promptly receive (i) a Subsidiary Guaranty by
such Subsidiary of the Notes and all of the Obligations pursuant to a
subsidiary guaranty substantially in the form of Exhibit 1.1(a) hereto or
--------------
such other form as the Administrative Agent may reasonably request,
executed and delivered by a duly authorized Responsible Officer of such
Subsidiary, and (ii) such resolutions, incumbency certificates, officer
certificates and legal opinions substantially similar to those delivered by
the Borrowers on the Closing Date and others as are reasonably requested by
the Administrative Agent, in form and substance satisfactory to the
Administrative Agent; provided, however, that no Foreign Subsidiary shall
-------- -------
be required to comply with the provisions of this Section 5.2.10(b).
Section 5.2.11 Charter Amendments. Amend BWAY's or any
------------------
Subsidiary's articles or certificate of incorporation or by-laws except for
amendments which are not materially adverse to BWAY or such Subsidiary and do
not adversely affect the interests of the Agents or the Lenders in any material
respect.
Section 5.2.12 Plan Assets. Without the prior written consent
-----------
of the Lenders, cause or permit any Plan assets to be used other than for
payment of Plan benefits and Plan administrative expenses, except with respect
to the termination of the Plan in existence at Milton.
-51-
Section 5.3 Financial Covenants. BWAY and the Borrowers covenant and
-------------------
agree that for so long as this Agreement is in effect and until the Obligations
and all other obligations incurred hereunder whether or not matured, are paid in
full, BWAY and the Borrowers will:
Section 5.3.1 Leverage Ratio. As of the end of each fiscal
--------------
quarter, calculated for the most recently completed four fiscal quarters,
maintain a Leverage Ratio for such period of less than or equal to 4.25 to 1.00.
Section 5.3.2 Interest Coverage Ratio. As of the end of each fiscal
-----------------------
quarter, calculated for any Test Period, maintain an Interest Coverage Ratio for
such period ending on the last day of the fiscal quarter set forth below of not
less than the ratio set forth opposite such fiscal quarter:
Interest
Fiscal Quarter Coverage Ratio
-------------- --------------
Fiscal Quarters ending on or prior 2.75:1.00
to June 30, 1997
All Fiscal Quarters ending after 3.00:1.00
June 30, 1997
Section 5.3.3 Capital Expenditures. Not, and not permit any of
--------------------
Subsidiaries to, expend or incur any Capital Expenditure in any Fiscal Year if
the aggregate amount of the Capital Expenditures expended or incurred by BWAY
and its Subsidiaries in such Fiscal Year would exceed $40 million in any Fiscal
Year.
Section 5.3.4 Consolidated Net Worth. Permit Consolidated Net
----------------------
Worth to be less than (i) $60,000,000 at the Closing Date through June 30, 1996,
and (ii) as at the last day of each succeeding fiscal quarter of BWAY and its
Subsidiaries and until (but excluding) the last day of the next following fiscal
quarter of BWAY and its Subsidiaries, the sum of (A) the amount of Consolidated
Net Worth required to be maintained pursuant to this Section 5.3.4 as at the end
-------------
of the immediately preceding fiscal quarter, plus (B) 50% of Consolidated Net
----
Income (without reduction for any net loss or negative Consolidated Net Income)
during the immediately preceding fiscal quarter of BWAY and its Subsidiaries.
ARTICLE VI
CONDITIONS OF CREDIT
Section 6.1 Conditions Precedent to the Initial Borrowing. The
---------------------------------------------
right of the Borrowers to make the Initial Borrowing and the obligation of the
Lenders to make the Initial Loan under this Agreement shall be subject to the
fulfillment, at or prior to the time of the making of such Initial Loan, of each
of the following conditions:
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(a) BWAY, the Borrowers and each Subsidiary of BWAY shall have duly
executed and delivered to the Administrative Agent, with a signed counterpart
for each Lender, this Agreement and all of the other Loan Documents, all of
which shall be in full force and effect.
(b) No Event of Default or Unmatured Event of Default shall have
occurred and be continuing or will occur after giving effect to the making of
the Initial Loans and the consummation of the transactions contemplated by the
Loan Documents.
(c) The Administrative Agent shall have received the signed opinion of
Kirkland & Ellis, counsel to BWAY and its Subsidiaries, dated the Closing Date
and addressed to the Agents and the Lenders in the form of Exhibit 6.1(e)
--------------
hereto, with such changes (if any) therein as shall be acceptable to the
Administrative Agent and as to such other matters as the Administrative Agent
may reasonably request.
(d) The Administrative Agent shall have received a copy of all
resolutions (in form and substance reasonably satisfactory to the Administrative
Agent) adopted by the Board of Directors of BWAY and all Subsidiaries that are
parties to any Loan Document, authorizing or relating to (i) the execution,
delivery and performance of the Loan Documents and the other documents and
instruments provided for therein and (ii) the consummation of the transactions
contemplated hereby and thereby, together with by-laws of BWAY and such
Subsidiaries, all certified by the Secretary or an Assistant Secretary of BWAY
and such Subsidiary. Such certificate shall be dated the Closing Date and shall
state that the resolutions set forth therein have not been amended, modified,
revoked or rescinded as of such date and are at such date in full force and
effect.
(e) The Administrative Agent shall have received certified copies of
the charters of BWAY and all Subsidiaries that are parties to any Loan Document
in their respective jurisdictions of incorporation and evidence of their good
standing therein.
(f) The Administrative Agent shall have received a certificate of the
Secretary or an Assistant Secretary of BWAY and each Subsidiary that is a party
to any Loan Document, dated the Closing Date as to the incumbency and signature
of the officers of BWAY and any applicable Subsidiary executing any Loan
Document and any certificate or other document or instrument to be delivered
pursuant thereto by or on behalf of BWAY or such Subsidiary, together with
evidence of the incumbency of such Secretary or Assistant Secretary, as the case
may be.
(g) Contemporaneously with the funding of the Initial Loans, Brockway
shall have paid in full all outstanding indebtedness under the Existing Credit
Agreement such that the Existing Credit Agreement shall have been terminated,
pursuant to documentation reasonably satisfactory to the Administrative Agent.
(h) The Administrative Agent shall have received a certificate
executed by a Responsible Officer of BWAY and the Borrowers, dated the Closing
Date and in the form of Exhibit 6.1(h) hereto.
--------------
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(i) Contemporaneously with the funding of the Initial Loans, the
Borrowers shall have paid in full all separately negotiated fees, including,
without limitation, the Additional Fees.
(j) The Administrative Agent shall have received a Notice of Borrowing
with respect to the Initial Loans hereunder and an initial Pricing Certificate.
(k) All corporate and other proceedings taken in connection with the
transactions hereunder at or prior to the Closing Date and all documents
incident thereto shall be reasonably satisfactory in form and substance to the
Administrative Agent.
(l) The Administrative Agent shall have received such other documents
or legal opinions as the Administrative Agent or the Required Lenders may
reasonably request, all in form and substance satisfactory to the Administrative
Agent. The Borrowers shall have furnished to the Administrative Agent or the
Lenders such additional copies or executed counterparts of the documents
referred to above as the Administrative Agent or any Lender may request.
Section 6.2 Conditions Precedent to All Credit Events. The
-----------------------------------------
right of the Borrowers to make any Borrowing or to have issued any Letter of
Credit, and the obligation of each Lender to make a Loan (including the Loans
made on the Closing Date and Swing Line Loans) in respect of any such Borrowing
and the obligation of the Facing Agent to issue or any Lender to participate in
any Letter of Credit shall, in each case, be subject to the fulfillment at or
prior to the time of the making of such Borrowing, or the issuance of such
Letter of Credit, as the case may be, of each of the following conditions:
(a) The representations and warranties contained in this Agreement and
in the other Loan Documents shall each be true and correct in all material
respects at and as of such time, as though made on and as of such time, except
to the extent such representations and warranties are expressly made as of a
specified date in which event such representation and warranty shall be true and
correct as of such date, in accordance with and after giving effect to any
updated disclosure made by BWAY or the Borrowers in accordance with Section
-------
4.22; and each of the Loan Documents shall be in full force and effect.
(b) No Event of Default or Unmatured Event of Default shall have
occurred and shall then be continuing on such date or will occur after giving
effect to such Borrowing (including, without limitation, the use of proceeds
requirements set forth in Section 5.1.10).
--------------
(c) (i) Prior to the making of each Loan, the Administrative Agent
and the Paying Agent shall have received a Notice of Borrowing
meeting the requirements of Section 2.5; and
-----------
(ii) Prior to the issuance of each Letter of Credit, the
Administrative Agent, the Paying Agent and the Facing Agent shall
have received a request for the issuance of a Letter of Credit
meeting the requirements of Section 2.12(c).
---------------
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The acceptance of the benefits of each such Credit Event by the
Borrowers shall be deemed to constitute a representation and warranty by BWAY
and the Borrowers to the effect of paragraphs (a) through (c) of this Section
-------
6.2.
- ---
ARTICLE VII
EVENTS OF DEFAULT
Section 7.1 Events of Default. The occurrence of any of the
-----------------
following events shall constitute an "Event of Default":
----------------
(a) Payments. Any Borrower (i) shall fail to pay when due (whether at
--------
maturity, upon acceleration, by mandatory prepayment or otherwise) any payment
of principal on any Obligation or (ii) shall default in the payment of interest
on any Obligation or default in the payment of any fee or other amount owing
hereunder or under any other Loan Document when due and, in the case of this
clause (ii), such default in payment shall continue for a period of three (3)
Business Days; or
(b) Representations and Warranties. Any representation or warranty on
------------------------------
the part of BWAY or any Subsidiary contained in any Loan Document or any
document, instrument or certificate delivered pursuant thereto shall have been
incorrect in any material respect when made or deemed to have been made; or
(c) Certain Covenants. BWAY or any Borrower shall default in
-----------------
the performance or observance of any term, covenant, condition or agreement on
its part to be performed or observed under Article V hereof except for Sections
--------- --------
5.1.1(b), (c), (e)-(i), 5.1.2, 5.1.4, 5.1.5, 5.1.6, 5.1.7, 5.1.9 and 5.1.11; or
- ---------------------------------------------------------------------------
(d) Other Covenants. BWAY or any of its Subsidiaries shall default in
---------------
the performance or observance of any term, covenant, condition or agreement on
its part to be performed or observed hereunder or under any Loan Document (and
not constituting an Event of Default under any other clause of this Section 7.1)
-----------
and, with respect only to such defaults as are capable of being remedied, such
default shall continue unremedied for a period of fifteen (15) Business Days
after written or telephonic (promptly confirmed in writing) notice thereof has
been given to the Borrowers by the Administrative Agent or any Lender; or
(e) Bankruptcy. BWAY or any of its Subsidiaries shall become
----------
insolvent or generally fail to pay, or admit in writing its inability to pay,
its debts as they become due, or shall voluntarily commence any proceeding or
file any petition under any bankruptcy, insolvency or similar law or seeking
dissolution or reorganization or the appointment of a receiver, trustee,
custodian or liquidator for it or a substantial portion of its property, assets
or business or to effect a plan or other arrangement with its creditors, or
shall file any answer admitting the jurisdiction of the court and the
-55-
material allegations of an involuntary petition filed against it in any
bankruptcy, insolvency or similar proceeding, or shall be adjudicated bankrupt,
or shall make a general assignment for the benefit of creditors, or shall
consent to, or acquiesce in the appointment of, a receiver, trustee, custodian
or liquidator for a substantial portion of its property, assets or business; or
(f) Involuntary Proceedings. Involuntary proceedings or an
-----------------------
involuntary petition shall be commenced or filed against BWAY or any of its
Subsidiaries under any bankruptcy, insolvency or similar law or seeking the
dissolution or reorganization of it or the appointment of a receiver, trustee,
custodian or liquidator for it or of a substantial part of its property, assets
or business, or any writ, judgment, warrant of attachment, execution or similar
process shall be issued or levied against a substantial part of its property,
assets or business, and such proceedings or petition shall not be dismissed, or
such writ, judgment, warrant of attachment, execution or similar process shall
not be released, vacated or fully bonded, within sixty (60) days after
commencement, filing or levy, as the case may be, or any order for relief shall
be entered in any such proceeding; or
(g) Indebtedness for Money Borrowed. (i) BWAY or any of its
-------------------------------
Subsidiaries shall default in the payment when due, after the expiration of
applicable grace periods, whether at stated maturity or otherwise, of any
Indebtedness for Money Borrowed having an aggregate principal amount of
$2,000,000 or more, or (ii) an event of default as defined in any mortgage,
indenture, agreement or instrument under which there may be issued, or by which
there may be secured or evidenced, any such Indebtedness for Money Borrowed
shall occur which then permits any holder thereof to cause any such Indebtedness
for Money Borrowed of BWAY or any of its Subsidiaries to become due and payable
prior to the stated maturity or due date thereof; or
(h) Judgments. One or more judgments or decrees shall be entered
---------
against BWAY or any of its Subsidiaries involving, individually or in the
aggregate, a liability (not paid or not fully covered by insurance) of
$1,000,000 or more and a sufficient number of such judgments or decrees shall
not have been vacated, discharged, satisfied or stayed pending appeal within
sixty (60) days from the entry thereof so as to bring the aggregate below the
$1,000,000 threshold set forth above; or
(i) Loan Documents. Any of the Loan Documents shall cease for any
--------------
reason to be in full force and effect (other than termination in accordance with
its terms) or BWAY or any of its Subsidiaries shall disavow or seek to
discontinue its obligations thereunder, or shall contest the validity or
enforceability of any thereof; or
(j) ERISA. Either (i) any Reportable Event which constitutes
-----
reasonable grounds for the termination of any Plan by the PBGC or for the
appointment by the appropriate United States District Court of a trustee to
administer or liquidate any Plan shall have occurred; (ii) a trustee shall be
appointed by a United States District Court to administer any Plan; (iii) the
PBGC shall institute proceedings to terminate any Plan; (iv) any Plan shall be
terminated; or (v) BWAY or any ERISA Affiliate shall become liable to the PBGC
pursuant to ERISA Sections 4063 or 4064; and the aggregate outstanding liability
---
of BWAY and all ERISA Affiliates with respect to the Plan (assuming the Plan had
terminated) and all other Plans as to which any of the events (i) through (v)
has occurred
-56-
exceeds $4,000,000 or a contribution failure occurs with respect to any Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA; or
(k) Other ERISA. Either (i) a trustee shall be appointed by a United
-----------
States District Court to administer any Multiemployer Plan; (ii) the PBGC shall
institute proceedings to terminate any Multiemployer Plan; (iii) BWAY or any
ERISA Affiliates shall become liable to any Multiemployer Plan pursuant to
ERISA Section 4201; or (iv) any Multiemployer Plan shall be terminated; and the
---
aggregate out-standing liability of BWAY, all of its Subsidiaries, and all ERISA
Affiliates with respect to the Multiemployer Plan (assuming the Multiemployer
Plan had terminated if either (i) or (ii) has occurred) and all other
Multiemployer Plans as to which any of the events (i) through (iv) has occurred
exceeds $4,000,000; or
(l) Change of Control. A Change of Control shall occur.
-----------------
Section 7.2 Remedies. If an Event of Default shall occur and
--------
be continuing, the Administrative Agent may and, at the direction of the
Required Lenders shall, take one or more of the following actions: (a) by
written or oral or telephonic notice (in the case of oral or telephonic notice
confirmed in writing promptly thereafter) to the Borrowers declare the Total
Revolving Loan Commitment to be terminated whereupon the Total Revolving Loan
Commitment shall forthwith terminate, (b) by written or oral or telephonic
notice (in the case of oral or telephonic notice confirmed in writing promptly
thereafter) to the Borrowers declare all sums then owing by the Borrowers
hereunder to be forthwith due and payable, whereupon all such sums shall become
and be immediately due and payable without presentment, demand, protest or
notice of any kind (except as expressly provided for herein), all of which are
hereby expressly waived by the Borrowers, or (c) exercise any remedies available
under any Loan Document or otherwise. In the case of the occurrence of any
Event of Default described in clause (e) or (f) of Section 7.1, the Total
-- -- -----------
Revolving Loan Commitment shall forthwith terminate and the Obligations,
together with accrued interest thereon, shall become due and payable forthwith
without the requirement of any such acceleration or request, and without
presentment, demand, protest or other notice of any kind, all of which are
expressly waived, and other amounts payable by the Borrowers hereunder shall
also become immediately due and payable, all without notice of any kind.
If the maturity of the Obligations has been accelerated pursuant to
the preceding paragraph, the Borrowers shall, on the Business Day it receives
notice from the Administrative Agent or the Required Lenders thereof, deposit in
an account with the Administrative Agent, for the benefit of the Lenders, an
amount in cash equal to the L/C Obligations as of such date. Such deposit shall
be held by the Administrative Agent as collateral for the payment and
performance of the L/C Obligations. The Administrative Agent shall have
exclusive dominion and control, including the exclusive right of withdrawal,
over such account. Other than any interest earned on the investment of such
deposits in Permitted Investments, which investments shall be made at the option
and sole discretion of the Administrative Agent, such deposits shall not bear
interest. Interest or profits, if any, on such investments shall accumulate in
such account. Monies in such account shall (i) automatically be applied by the
Administrative Agent to reimburse the Facing Agent for any Letter of Credit
-57-
disbursement, (ii) be held for the satisfaction of the reimbursement obligations
of the Borrowers at such time and (iii) be applied to satisfy the Obligations.
If the Borrowers are required to provide an amount of cash collateral hereunder
as a result of an acceleration of the Obligations, such amount (to the extent
not applied as aforesaid) shall be returned to the Borrowers within three
Business Days after all Events of Default have been cured or waived and the
acceleration has been rescinded and annulled as provided in the succeeding
paragraph.
Anything in this Section 7.2 to the contrary notwithstanding, the
-----------
Administrative Agent shall, if requested by (x) the Required Lenders in the case
of clause (a) below or (y) all Lenders in the case of clause (b) below, within
thirty (30) days of (a) the delivery to the Borrowers of a notice of
acceleration of the Obligations or (b) an automatic acceleration of the
Obligations by reason of the occurrence of any Event of Default described in
clause (e) or (f) of Section 7.1, rescind and annul any acceleration of the
-- -- -----------
Obligations; provided, however, that at the time such acceleration is so
-------- -------
rescinded and annulled (i) all past due interest and principal, if any, on the
Obligations and all other sums payable under this Agreement and the other Loan
Documents (except any principal and interest on any Obligations which has become
due and payable by reason of such acceleration pursuant to this Section 7.2)
-----------
shall have been duly paid and (ii) no other Event of Default or Unmatured Event
of Default shall have occurred and be continuing and the Administrative Agent
shall have received the certificate of a Responsible Officer of the Borrowers to
such effect. If any reduction in commitments has occurred pursuant to this
Section 7.2 in connection with any such acceleration, then upon the rescission
- -----------
and annulment of such acceleration pursuant to this Section 7.2, the Revolving
-----------
Loan Commitment of each Lender and the Swing Line Commitment of the Swing Line
Lender shall be reinstated to the respective amounts thereof which would have
been in effect on the date of such rescission and annulment had no commitment
reduction occurred pursuant to this Section 7.2.
-----------
ARTICLE VIII
THE AGENTS
Section 8.1 Appointment. The Lenders hereby designate BT and
-----------
NationsBank as Agents (for purposes of this Article VIII, the term "Agent" shall
------------
include BT in its capacity as Administrative Agent and shall include NationsBank
in its capacity as Paying Agent). Each Lender hereby irrevocably authorizes and
each holder of any Note by its acceptance of such Note shall be deemed
irrevocably to authorize, each Agent to take such action on its behalf under the
provisions of this Agreement, the other Loan 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 Agents by the terms hereof and thereof and such other powers as
are reasonably incidental thereto. Each Agent may perform any of its duties
hereunder by or through its officers, directors, agents or employees.
-58-
Section 8.2 Nature of Duties. Neither of the Agents shall have any
----------------
duties or responsibilities except those expressly set forth in this Agreement.
Neither of the Agents nor any of their respective officers, directors, agents or
employees shall be liable for any action taken or omitted by it or them
hereunder or under any other Loan Document or in connection herewith or
therewith, unless caused by its or their gross negligence or willful misconduct.
The duties of the Agents shall be mechanical and administrative in nature;
neither of the Agents shall have by reason of this Agreement or any other Loan
Document a fiduciary relationship in respect of any Lender or in respect of each
other; and nothing in this Agreement or any other Loan Document, expressed or
implied, is intended to or shall be so construed as to impose upon any Agent any
obligations in respect of this Agreement or any other Loan Document except as
expressly set forth herein.
Section 8.3 Lack of Reliance on the Agents. Independently and
------------------------------
without reliance upon the Agents, each Lender and the holder of each Note, 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 BWAY and its
Subsidiaries in connection with the making and the continuance of the Loans and
the issuance of the Letters of Credit and the taking or not taking of any action
in connection herewith and (ii) its own appraisal of the creditworthiness of
BWAY and its Subsidiaries and, except as expressly provided in this Agreement,
the Agents shall not 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 the issuance of the Letters of Credit or at any time or times
thereafter. Neither of the Agents 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, effectiveness, genuineness, validity, enforceability,
perfection, collectibility, priority or sufficiency of this Agreement or any
other Loan Document or the financial condition of BWAY 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 Loan Document, or the financial condition of BWAY or any
of its Subsidiaries or the existence or possible existence of any Unmatured
Event of Default or Event of Default.
Section 8.4 Certain Rights of the Agents. If the Agents or any
----------------------------
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 Loan Document, the Agents or such Agent shall be entitled to refrain
from such act or taking such action unless and until the Agents or such Agent
shall have received instructions from the Required Lenders; and no Agent shall
incur any liability to any Person by reason of so refraining. Without limiting
the foregoing, no Lender shall have any right of action whatsoever against any
Agent as a result of such Agent acting or refraining from acting hereunder or
under any other Loan Document in accordance with the instructions of the
Required Lenders. In addition, no Agent shall have any liability in respect of
any actions or the refraining from taking actions by any other Agent or Agents.
Section 8.5 Reliance. Each Agent shall be entitled to rely,
--------
and shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype
-59-
or telecopier message, cablegram, radiogram, order or other document or
telephone message signed, sent or made by any Person that such Agent believed to
be the proper Person and, with respect to all legal matters pertaining to this
Agreement and any other Loan Document and its duties hereunder and thereunder,
upon advice of counsel selected by it.
Section 8.6 Indemnification. To the extent any Agent is not
---------------
reimbursed and indemnified by BWAY and the Borrowers, the Lenders will reimburse
and indemnify such Agent, in proportion to their respective Pro Rata Shares as
used in determining the Required 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 such Agent in performing its
respective duties hereunder or under any other Loan Document, in any way
relating to or arising out of this Agreement or any other Loan 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 gross negligence or willful
misconduct of such Agent seeking indemnity pursuant to this Section 8.6.
-----------
Section 8.7 The Agents in Their Individual Capacities. With
-----------------------------------------
respect to their obligation to make Loans under this Agreement, to issue or
participate in Letters of Credit, each of the Agents shall have the rights and
powers specified herein for a "Lender" and may exercise the same rights and
powers as though it were not performing the duties specified herein; and the
term "Lender", or "Required Lenders, "holders of Notes" or any similar terms
shall, unless the context clearly otherwise indicates, include the Agents in
their individual capacities. Each Agent may accept deposits from, lend money
to, and generally engage in any kind of banking, trust or other business with
BWAY or any Affiliate of BWAY as if it were not performing the duties specified
herein, and may accept fees and other consideration from BWAY or any Borrower
for services in connection with this Agreement and otherwise without having to
account for the same to the Lenders.
Section 8.8 Holders. Each 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 such 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.
Section 8.9 Resignation.
-----------
(a) Each of the Agents may resign from the performance of all its
functions and duties hereunder and/or under the other Loan Documents at any time
by giving 15 Business Days' prior written notice to each Borrower and the
Lenders, in which case the remaining Agent, if any, shall succeed to the
functions and duties of such resigning Agent. Each such resignation shall take
effect upon the expiration of such 15-day period, provided that the resignation
--------
of the last remaining
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Agent shall take effect upon the appointment of a successor Agent, pursuant to
clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation of the last remaining Agent,
the Lenders shall appoint a successor Agent hereunder or thereunder who shall be
a commercial bank or trust company reasonably acceptable to BWAY (it is
understood and agreed that at least one Lender shall be acceptable to BWAY and,
in the absence of BWAY's acceptance of any Lender, as the Lenders shall
determine).
(c) Following any notice of resignation by any Agent, if a successor
Agent shall not have been so appointed within said 15 Business Days, the
respective Agent, with the consent of BWAY, shall then appoint a successor Agent
who shall serve as Agent hereunder or thereunder until such tune, if any, as the
Lenders appoint a successor Agent as provided above.
(d) If no successor Agent has been appointed pursuant to clause (b) or
(c) above by the 20th Business Day after the date such notice of resignation was
given by the respective Agent, the respective Agent's resignation shall become
effective and the Lenders shall thereafter perform all the duties of the
respective Agent hereunder and/or under any other Loan Document until such time,
if any, as the Lenders appoint a successor Agent as provided above.
ARTICLE IX
BWAY GUARANTY
Section 9.1 BWAY Guaranty. In order to induce the Agents and
-------------
the Lenders to enter into this Agreement and to extend credit hereunder and in
recognition of the direct benefits to be received by the Guarantor from the
proceeds of the Loans and the issuance of Letters of Credit, the Guarantor
hereby agrees with the Agents and Lenders as follows: the Guarantor hereby
unconditionally and irrevocably guarantees as primary obligor and not merely as
surety the full and prompt payment when due, whether upon maturity, by
acceleration or otherwise, of any and all Guaranteed Obligations of each
Borrower to the Agents and the Lenders. If any or all of the indebtedness of
any Borrower to any Agent or the Lenders becomes due and payable hereunder or
under such other Loan Documents, the Guarantor unconditionally promises to pay
such indebtedness of such Borrower to the Agents and the Lenders, or order, on
demand, together with any and all reasonable expenses which may be incurred by
the Paying Agent, the Administrative Agent or the Lenders in collecting any of
such indebtedness. The Guarantor further agrees that all payments made by it
with respect to any Guaranteed Obligations pursuant to its Guaranty shall be
made in Dollars.
Section 9.2 Bankruptcy. The Guarantor unconditionally and
----------
irrevocably guarantees the payment of any and all indebtedness of each Borrower
to the Agents and the Lenders whether or not due or payable by such Borrower
upon the occurrence of any of the events specified in Section 7.1(e) or (f), and
---------------------
unconditionally and irrevocably promises to pay such indebtedness to the Agents
and the Lenders, or order, on demand, in Dollars.
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Section 9.3 Nature of Liability. The liability of the
-------------------
Guarantor hereunder is exclusive and independent of any security for or other
guaranty of the indebtedness of any Borrower whether executed by the Guarantor,
any other Guarantor, any other guarantor or by any other party, and the
liability of the Guarantor hereunder shall not be affected or impaired by: (i)
any direction as to application of payment by any such Borrower or by any other
party; or (ii) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the indebtedness of any
such Borrower; or (iii) any payment on or in reduction of any such other
guaranty or undertaking; or (iv) any dissolution, termination or increase,
decrease or change in personnel by any such Borrower; or (v) any payment made to
the Paying Agent, the Administrative Agent or the Lenders on the indebtedness
which the Paying Agent, the Administrative Agent or such Lenders repay to any
such Borrower pursuant to court order in any bankruptcy, reorganization,
arrangement, moratorium or other debtor relief proceeding, and the Guarantor
waives any right to the deferral or modification of its obligations hereunder by
reason of any such proceeding.
Section 9.4 Guaranty Absolute. The Guaranty is a guaranty of
-----------------
payment not merely a guaranty of collection. No invalidity, illegality,
irregularity or unenforceability of all or any part of the indebtedness
guaranteed hereby or of any security therefor shall affect, impair or be a
defense to the Guaranty contained in this Article IX, and the Guaranty contained
----------
in this Article IX shall be primary, absolute and unconditional notwithstanding
----------
the occurrence of any event or the existence of any other circumstances which
might constitute a legal or equitable discharge of a surety or guarantor except
payment in full of the Guaranteed Obligations.
Section 9.5 Independent Obligation. The obligations of the
----------------------
Guarantor hereunder are independent of the obligations of any other Guarantor,
any other guarantor or of any Borrower, and a separate action or actions may be
brought and prosecuted against the Guarantor whether or not action is brought
against any other Guarantor, any other guarantor or any Borrower and whether or
not any other Guarantor, any other guarantor or any Borrower be joined in any
such action or actions. The Guarantor waives, to the fullest extent permitted
by law, the benefit of any statute of limitations affecting its liability
hereunder or the enforcement thereof. Any payment by any Borrower or other
circumstance which operates to toll any statute of limitations as to such
Borrower shall operate to toll the statute of limitations as to the Guarantor.
Section 9.6 Authorization. The Guarantor authorizes the
-------------
Administrative Agent and the Lenders without notice or demand, and without
affecting or impairing its liability hereunder, from time to time to:
(i) 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
indebtedness (including any increase or decrease in the rate of interest
thereon), 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;
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(ii) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or otherwise
deal with in any manner and in any order any property by whomsoever at any time
pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset
thereagainst;
(iii) exercise or refrain from exercising any rights against any
Borrower or others or otherwise act or refrain from acting;
(iv) release or substitute any one or more endorsers, guarantors, any
Borrower or other obligors;
(v) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and may subordinate the
payment of all or any part thereof to the payment of any liability (whether due
or not) of any Borrower to its creditors other than the Lenders;
(vi) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of any Borrower to the Lenders regardless of what
liability or liabilities of such Borrower remain unpaid; and/or
(vii) consent to or waive any breach of, or any act, omission or
default under, this Agreement, any of the Loan Documents or any of the
instruments or agreements referred to herein, or otherwise amend, modify or
supplement this Agreement or any of such other instruments or agreements.
Section 9.7 Reliance. It is not necessary for the Administrative Agent
--------
or the Lenders to inquire into the capacity or powers of BWAY or its
Subsidiaries or the officers, directors, partners or agents acting or purporting
to act on its behalf, and any indebtedness made or created in reliance upon the
professed exercise of such powers shall be guaranteed hereunder.
Section 9.8 Waiver. (a) The Guarantor waives any right to require the
------
Paying Agent, the Administrative Agent or the Lenders to (i) proceed against any
Borrower, any other Guarantor, any other guarantor or any other party, (ii)
proceed against or exhaust any security held from any Borrower, any other
Guarantor, any other guarantor or any other party or (iii) pursue any other
remedy in the Administrative Agent's or the Lenders' power whatsoever. The
Guarantor waives any defense based on or arising out of any defense of any
Borrower, any other Guarantor, any other guarantor or any other party other than
payment in full of the Guaranteed Obligations, including, without limitation,
any defense based on or arising out of the disability of any Borrower, any other
Guarantor, any other guarantor or any other party, or the unenforceability of
the Guaranteed Obligations or any part thereof from any cause, or the cessation
from any cause of the liability of any
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Borrower, other than payment in full of the Guaranteed Obligations. The
Administrative Agent and the Lenders may, at their election, foreclose on any
security held by the Administrative Agent or the Lenders by one or more judicial
or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable (to the extent such sale is permitted by applicable
law), or exercise any other right or remedy the Administrative Agent and the
Lenders may have against any Borrower or any other party, or any security,
without affecting or impairing in any way the liability of the Guarantor
hereunder except to the extent the Guaranteed Obligations have been paid. The
Guarantor waives any defense arising out of any such election by the
Administrative Agent and the Lenders, even though such election operates to
impair or extinguish any right of reimbursement or subrogation or other right or
remedy of the Guarantor against any Borrower or any other party or any security.
Without limiting the generality of the foregoing, the Guarantor hereby agrees
with the Administrative Agent and the Lenders 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 paid in full in cash.
(b) The Guarantor waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
indebtedness. The Guarantor assumes all responsibility for being and keeping
itself informed of each Borrower's financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which the Guarantor
assumes and incurs hereunder, and agrees that the Administrative Agent and the
Lenders shall have no duty to advise the Guarantor of information known to it
regarding such circumstances or risks.
Section 9.9 Guaranty Continuing. 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 the Administrative Agent or any
Lender, of any holder of any Note, 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 the Administrative Agent or any Lender
or any subsequent holder of a Note, would otherwise have. No notice to or
demand on the Guarantor in any case shall entitle the Guarantor to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Administrative Agent or any Lender or any holder,
creator or purchaser to any other or further action in any circumstances without
notice or demand.
Section 9.10 Binding Nature of Guaranty. This Guaranty shall
--------------------------
be binding upon the Guarantor and its successors and assigns and shall inure to
the benefit of the Administrative Agent and the Lenders and their successors and
assigns.
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Section 9.11 Judgments Binding. If claim is ever made upon the
-----------------
Administrative Agent or any Lender, any subsequent holder of a Note for
repayment or recovery of any amount or amounts received in payment or on account
of any of the Guaranteed Obligations and any of the aforesaid payees repays all
or part of said amount by reason of (i) any judgment, decree or order of any
court or administrative body having jurisdiction over such payee or any of its
property or (ii) any settlement or compromise of any such claim effected by such
payee with any such claimant (including any Borrower) then and in such event the
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon BWAY notwithstanding any revocation hereof or the
cancellation of any Note, or other instrument evidencing any liability of any
Borrower, and BWAY 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.
ARTICLE X
BORROWER GUARANTY
Section 10.1 Borrower Guaranty. In order to induce the Agents
-----------------
and the Lenders to enter into this Agreement and to extend credit hereunder and
in recognition of the direct benefits to be received by the Guarantor from the
proceeds of the Loans and the issuance of Letters of Credit, the Guarantor
hereby agrees with the Agents and Lenders as follows: the Guarantor hereby
unconditionally and irrevocably guarantees as primary obligor and not merely as
surety the full and prompt payment when due, whether upon maturity, by
acceleration or otherwise, of any and all Guaranteed Obligations of each other
Borrower to the Agents and the Lenders. If any or all of the indebtedness of
any other Borrower to any Agent or the Lenders becomes due and payable hereunder
or under such other Loan Documents, the Guarantor unconditionally promises to
pay such indebtedness of such other Borrower to the Agents and the Lenders, or
order, on demand, together with any and all reasonable expenses which may be
incurred by the Paying Agent, the Administrative Agent or the Lenders in
collecting any of such indebtedness. The Guarantor further agrees that all
payments made by it with respect to any Guaranteed Obligations pursuant to its
Guaranty shall be made in Dollars.
Section 10.2 Bankruptcy. The Guarantor unconditionally and
----------
irrevocably guarantees the payment of any and all indebtedness of each other
Borrower to the Agents and the Lenders whether or not due or payable by such
other Borrower upon the occurrence of any of the events specified in Section
-------
7.1(e) or (f), and unconditionally and irrevocably promises to pay such
- -------------
indebtedness to the Agents and the Lenders, or order, on demand, in Dollars.
Section 10.3 Nature of Liability. The liability of the
-------------------
Guarantor hereunder is exclusive and independent of any security for or other
guaranty of the indebtedness of any Borrower whether executed by the Guarantor,
any other Guarantor, any other guarantor or by any other party, and the
liability of the Guarantor hereunder shall not be affected or impaired by: (i)
any direction as to application of payment by any such Borrower or by any other
party; or (ii) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the
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indebtedness of any such Borrower; or (iii) any payment on or in reduction of
any such other guaranty or undertaking; or (iv) any dissolution, termination or
increase, decrease or change in personnel by any such Borrower; or (v) any
payment made to the Paying Agent, the Administrative Agent or the Lenders on the
indebtedness which the Paying Agent, the Administrative Agent or such Lenders
repay to any such Borrower pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
the Guarantor waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding.
Section 10.4 Guaranty Absolute. The Guaranty is a guaranty of
-----------------
payment not merely a guaranty of collection. No invalidity, illegality,
irregularity or unenforceability of all or any part of the indebtedness
guaranteed hereby or of any security therefor shall affect, impair or be a
defense to the Guaranty contained in this Article X, and the Guaranty contained
---------
in this Article X shall be primary, absolute and unconditional notwithstanding
---------
the occurrence of any event or the existence of any other circumstances which
might constitute a legal or equitable discharge of a surety or guarantor except
payment in full of the Guaranteed Obligations.
Section 10.5 Independent Obligation. The obligations of the
----------------------
Guarantor hereunder are independent of the obligations of any other Guarantor,
any other guarantor or of any Borrower, and a separate action or actions may be
brought and prosecuted against the Guarantor whether or not action is brought
against any other Guarantor, any other guarantor or any Borrower and whether or
not any other Guarantor, any other guarantor or any Borrower be joined in any
such action or actions. The Guarantor waives, to the fullest extent permitted
by law, the benefit of any statute of limitations affecting its liability
hereunder or the enforcement thereof. Any payment by any Borrower or other
circumstance which operates to toll any statute of limitations as to such
Borrower shall operate to toll the statute of limitations as to the Guarantor.
Section 10.6 Authorization. The Guarantor authorizes the
-------------
Administrative Agent and the Lenders without notice or demand, and without
affecting or impairing its liability hereunder, from time to time to:
(i) 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
indebtedness (including any increase or decrease in the rate of interest
thereon), 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;
(ii) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or otherwise
deal with in any manner and in any order any property by whomsoever at any time
pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset
thereagainst;
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(iii) exercise or refrain from exercising any rights against any
Borrower or others or otherwise act or refrain from acting;
(iv) release or substitute any one or more endorsers, guarantors, any
Borrower or other obligors;
(v) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and may subordinate the
payment of all or any part thereof to the payment of any liability (whether due
or not) of any Borrower to its creditors other than the Lenders;
(vi) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of any Borrower to the Lenders regardless of what
liability or liabilities of such Borrower remain unpaid; and/or
(vii) consent to or waive any breach of, or any act, omission or
default under, this Agreement, any of the Loan Documents or any of the
instruments or agreements referred to herein, or otherwise amend, modify or
supplement this Agreement or any of such other instruments or agreements.
Section 10.7 Reliance. It is not necessary for the
--------
Administrative Agent or the Lenders to inquire into the capacity or powers of
BWAY or its Subsidiaries or the officers, directors, partners or agents acting
or purporting to act on its behalf, and any indebtedness made or created in
reliance upon the professed exercise of such powers shall be guaranteed
hereunder.
Section 10.8 Waiver. (a) The Guarantor waives any right to
------
require the Paying Agent, the Administrative Agent or the Lenders to (i) proceed
against any Borrower, any other Guarantor, any other guarantor or any other
party, (ii) proceed against or exhaust any security held from any Borrower, any
other Guarantor, any other guarantor or any other party or (iii) pursue any
other remedy in the Administrative Agent's or the Lenders' power whatsoever.
The Guarantor waives any defense based on or arising out of any defense of any
Borrower, any other Guarantor, any other guarantor or any other party other than
payment in full of the Guaranteed Obligations, including, without limitation,
any defense based on or arising out of the disability of any Borrower, any other
Guarantor, any other guarantor or any other party, or the unenforceability of
the Guaranteed Obligations or any part thereof from any cause, or the cessation
from any cause of the liability of any Borrower, other than payment in full of
the Guaranteed Obligations. The Administrative Agent and the Lenders may, at
their election, foreclose on any security held by the Administrative Agent or
the Lenders by one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable (to the extent such sale is
permitted by applicable law), or exercise any other right or remedy the
Administrative Agent and the Lenders may have against any Borrower or any other
party, or any security, without affecting or impairing in any way the liability
of the Guarantor hereunder except to the extent the Guaranteed Obligations have
been paid. The Guarantor waives any
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defense arising out of any such election by the Administrative Agent and the
Lenders, even though such election operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of the Guarantor against
any Borrower or any other party or any security. Without limiting the
generality of the foregoing, the Guarantor hereby agrees with the Administrative
Agent and the Lenders 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 paid in full in cash.
(b) The Guarantor waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
indebtedness. The Guarantor assumes all responsibility for being and keeping
itself informed of each Borrower's financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which the Guarantor
assumes and incurs hereunder, and agrees that the Administrative Agent and the
Lenders shall have no duty to advise the Guarantor of information known to it
regarding such circumstances or risks.
Section 10.9 Guaranty Continuing. 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 the Administrative Agent or any
Lender, of any holder of any Note, 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 the Administrative Agent or any Lender
or any subsequent holder of a Note, would otherwise have. No notice to or
demand on the Guarantor in any case shall entitle the Guarantor to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Administrative Agent or any Lender or any holder,
creator or purchaser to any other or further action in any circumstances without
notice or demand.
Section 10.10 Binding Nature of Guaranty. This Guaranty shall
--------------------------
be binding upon the Guarantor and its successors and assigns and shall inure to
the benefit of the Administrative Agent and the Lenders and their successors and
assigns.
Section 10.11 Judgments Binding. If claim is ever made upon
-----------------
the Administrative Agent or any Lender, any subsequent holder of a Note for
repayment or recovery of any amount or amounts received in payment or on account
of any of the Guaranteed Obligations and any of the aforesaid payees repays all
or part of said amount by reason of (i) any judgment, decree or order of any
court or administrative body having jurisdiction over such payee or any of its
property or (ii) any settlement or compromise of any such claim effected by such
payee with any such claimant (including any Borrower) then and in such event the
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon it notwithstanding any revocation hereof or the
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cancellation of any Note, or other instrument evidencing any liability of any
Borrower, and Borrower 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.
ARTICLE XI
MISCELLANEOUS
Section 11.1 No Waiver; Modifications in Writing. No failure
-----------------------------------
or delay on the part of the Administrative Agent or any Lender in exercising any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or remedy preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. The remedies provided for herein and in the other Loan Documents are
cumulative and are not exclusive of any remedies that may be available to the
Administrative Agent, the Paying Agent or any Lender at law, in equity or
otherwise.
Section 11.2 Amendments. (a) No amendment, modification,
----------
supplement, termination or waiver of or to any provision of this Agreement or
any other Loan Document, nor consent to any departure by BWAY, any Borrower or
any Subsidiary therefrom, shall be effective unless the same shall be in writing
and signed by or on behalf of the Required Lenders; provided, however, that no
-------- -------
such amendment, modification, supplement, termination, waiver or consent, as the
case may be, shall, without the consent of each Lender (other than a Defaulting
Lender), (i) extend the final scheduled maturity of any Loan or Note or extend
the stated maturity of any Letter of Credit beyond the Termination Date, or
reduce the rate or extend the time of payment of interest or fees thereon, or
reduce the principal amount thereof, (ii) amend, modify or waive any provision
of this Section 11.2, (iii) reduce any 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 Revolving Loan Commitments are included on the
Closing Date), (iv) consent to the assignment or transfer by BWAY or any
Borrower of any of its rights and obligations under this Agreement or (v) amend
or modify the definition of "Pro Rata Share"; provided further, that no such
-------- -------
amendment, modification, supplement, termination, waiver or consent shall (A)
increase the Commitment 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, Unmatured Events of Default or
Events of Default or of a mandatory reduction in the Total Revolving Loan
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), (B) without the
consent of the Facing Agent and the Swing Line Lender, amend, modify or waive
any provision of Article II or alter its rights or obligations with respect to
----------
Letters of Credit or Swing Line Loans, respectively or, (C) without the consent
of the Agents, amend, modify or waive any provision of Section 11 as same
----------
applies to the Agents or any other provision as same relates to the rights or
obligations of the Agents. Any amendment, modification or supplement of or to
any provision of this Agreement or any other Loan
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Document, any waiver of any provision of this Agreement or any other Loan
Document, and any consent to any departure by BWAY, any Borrower or any
Subsidiary from the terms of any provision of this Agreement or any other Loan
Document, shall be effective only in the specific instance and for the specific
purpose for which made or given.
(b) If, in connection with any proposed amendment, modification,
supplement, termination, waiver or consent of any of the provisions of this
Agreement as contemplated by clause (i) through (iv), inclusive, of the first
proviso to Section 11.2(a), the consent of the Required Lenders is obtained but
---------------
the consent of one or more of such other Lenders whose consent is required is
not obtained, BWAY shall have the right, so long as each non-consenting Lender
whose individual consent is required is treated as described in either clause
(i) or (ii) below, to either (i) replace such non-consenting Lender or Lenders
with one or more Replacement Lenders pursuant to Section 2.14 so long as at the
------------
time of such replacement, each such Replacement Lender consents to the proposed
amendment, modification, supplement, termination, waiver or consent, or (ii)
terminate such non-consenting Lender's Commitment and prepay in full its
outstanding Loans, in accordance with Sections 3.3(c) and 3.2(b); provided,
-------------------------- --------
however, that unless Commitments and Loans repaid pursuant to the preceding
- -------
clause (ii) 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
the existing Lenders (who in each case must specifically consent thereto), then
in the case of any action pursuant to the preceding clause (ii) the Required
Lenders (determined before giving effect to the proposed action) shall
specifically consent thereto; and provided further, that BWAY shall not have the
-------- -------
right to replace a Lender solely as the 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 11.2(a).
---------------
Section 11.3 Notices, etc. Except where telephonic instructions or
-------------
notices are authorized herein to be given, all notices, demands, instructions
and other communications (collectively, "Notices") required or permitted to be
-------
given to or made upon any party hereto or any other Person shall be in writing
and (except for written confirmations of telephonic or telex instructions) shall
be personally delivered or sent by registered or certified mail, postage
prepaid, return receipt requested, or by a reputable courier delivery service,
or by prepaid telex, TWX or telegram (with messenger delivery specified in the
case of a telegram), or by telecopier. Notices shall be deemed to be given for
purposes of this Agreement (a) if given by telex, when such telex is transmitted
to the telex number specified in this Section and the appropriate answerback is
received, (b) if given by mail, 72 hours after such communication is deposited
in the mails with first class postage prepaid, addressed as aforesaid or (c) if
given by any other means (including, without limitation, by air courier), when
delivered at the address specified in this Section; provided, however, that any
-------- -------
Notice of Borrowing to the Administrative Agent and the Paying Agent shall not
be effective until received. Unless otherwise specified in a Notice sent or
delivered in accordance with the foregoing provisions of this Section Notices
shall be given to or made upon the respective parties hereto at their respective
addresses (or to their respective telex, TWX or telecopier numbers) indicated on
their signature pages hereto or in any Assignment Agreement and, in the case of
telephonic instructions or notices, by calling the telephone number or numbers
indicated for such party. Except where notice is specifically required by this
Agreement or any other Loan Document,
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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.
Section 11.4 Costs, Expenses, Taxes and Indemnification. Each
------------------------------------------
Borrower agrees to pay all reasonable costs and expenses incurred by the
Administrative Agent in connection with the negotiation, preparation, printing,
typing, reproduction, execution and delivery of this Agreement and the other
Loan Documents, any amendment or modifications of (or supplements to) any of the
foregoing and any and all other documents furnished pursuant hereto or thereto
or in connection herewith or therewith, including without limitation the
reasonable fees and out-of-pocket expenses of Winston & Strawn, special counsel
to the Administrative Agent, and any local counsel retained by the
Administrative Agent relative thereto or the reasonable allocated costs of staff
counsel as well as the fees and out-of-pocket expenses of counsel, independent
public accountants and other outside experts retained by the Administrative
Agent in connection with the administration of this Agreement and the other Loan
Documents and all search fees, appraisal fees and expenses, title insurance
policy fees, costs and expenses and filing and recording fees and all costs and
expenses (including, without limitation, reasonable attorneys' fees and expenses
or the reasonable allocated costs of staff counsel), if any, incurred by the
Paying Agent, the Administrative Agent or any Lender in connection with the
enforcement of this Agreement, any other Loan Document or any other agreement
furnished pursuant hereto or thereto or in connection herewith or therewith. In
addition, each Borrower shall pay any and all stamp, transfer and other similar
taxes payable or determined to be payable in connection with the execution and
delivery of this Agreement, any Loan Document (except as otherwise provided
therein) or the making of any Loan, and each agrees to save and hold the Paying
Agent, the Administrative Agent and each Lender harmless from and against any
and all liabilities with respect to or resulting from any delay in paying, or
omission to pay, such taxes. Any portion of the foregoing fees, costs and
expenses which remains unpaid following the Paying Agent's the Administrative
Agent's or any Lender's statement and request for payment thereof shall bear
interest from the date of such statement and request to the date of payment at
the Default Rate. Each Borrower will indemnify and hold harmless the Paying
Agent, the Administrative Agent and each Lender and each director, officer,
employee, agent, attorney and Affiliate of the Paying Agent, the Administrative
Agent and each Lender (each such Person, an "Indemnified Party") from and
-----------------
against all losses, claims, damages, expenses or liabilities to which such
Indemnified Party may become subject, insofar as such losses, claims, damages,
expenses or liabilities (or actions, suits or proceedings including any inquiry
or investigation or claims in respect thereof) arise out of, in any way relate
to, or result from the transactions contemplated by this Agreement or any of the
other Loan Documents or Loan Documents or any use of proceeds of any Loans or
Letters of Credit (including, without limitation, in connection with any
Acquisitions) and to reimburse each Indemnified Party upon their demand, for any
reasonable legal or other expenses (or (but not as well as) the reasonable
allocated costs of staff counsel) incurred in connection with investigating,
preparing to defend or defending any such loss, claim, damage, liability, action
or claim; provided, however, (i) that no Indemnified Party shall not have the
-------- -------
right to be so indemnified hereunder for its own gross negligence or willful
misconduct or bad faith as finally determined by a court of competent
jurisdiction after all appeals and the expiration of time to appeal and (ii)
that nothing contained herein shall affect the obligations and liabilities of
the Lenders to the Borrowers contained herein. If any action, suit or
proceeding arising from any of the
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foregoing is brought against the Paying Agent, the Administrative Agent, any
Lender or any other Person indemnified or intended to be indemnified pursuant to
this Section 11.4, each Borrower will, if requested by the Paying Agent, the
------------
Administrative Agent, any Lender or any such Indemnified Party, resist and
defend such action, suit or proceeding or cause the same to be resisted and
defended by counsel reasonably satisfactory to the Person or Persons indemnified
or intended to be indemnified. Each indemnified Person shall, unless the Paying
Agent, the Administrative Agent, a Lender or other indemnified Person has made
the request described in the preceding sentence and such request has been
complied with, have the right to employ its own counsel (or (but not as well as)
staff counsel) to investigate and control the defense of any matter covered by
such indemnity and the reasonable fees and expenses of such counsel shall be at
the expense of the indemnifying party. Excluding any liability arising out of
the gross negligence or willful misconduct of any Lender or of any Agent, the
Borrower further agrees to indemnify and hold the Paying Agent, the
Administrative Agent and each Lender harmless from all loss, cost (including
reasonable attorney fees), liability and damage whatsoever incurred by any Agent
or any Lender by reason of any violation of any Environmental Laws for which the
BWAY or any of its Subsidiaries has any liability or which occurs upon any real
property owned by BWAY or any of its Subsidiaries, or which is related to any
property currently or formerly owned, leased or operated by BWAY or any of its
Subsidiaries, or by reason of the imposition of any Environmental Lien or which
occurs by a breach of any of the representations, warranties or covenants
relating to environmental matters contained herein, including, without
limitation, by reason of any matters disclosed in Schedule 4.20; provided,
------------- --------
however, that, with respect to any liabilities arising from acts or failure to
- -------
act for which BWAY or any of its Subsidiaries is strictly liable under any
Environmental Law, the Borrowers' obligation to the Agents and the Lenders under
this indemnity shall likewise be without regard to fault on the part of BWAY or
any such Subsidiary with respect to the violation of law which results in
liability to any Agent or any Lender.
Section 11.5 Special Expenditures. If any Borrower shall fail to do
--------------------
any act or thing which it has covenanted to do hereunder or under any other Loan
Document or any representation or warranty on the part of BWAY or any Borrower
contained herein or therein shall be breached, the Administrative Agent may
(but shall not be obligated to) do the same or cause it to be done or remedy any
such breach, and may expend its funds for such purpose, and will use its best
efforts to give prompt written notice to the Borrowers that it proposes to take
such action. Any and all amounts so expended by the Administrative Agent shall
be repayable to it by the Borrower promptly upon the Administrative Agent's
demand therefor, with interest at the Default Rate in effect from time to time
during the period from the date so expended by the Administrative Agent to the
date of repayment.
Section 11.6 Confirmations. Each Borrower and each holder of any
-------------
Obligation agree from time to time, upon written request received by it from the
other, to confirm to the other in writing (with a copy of each such confirmation
to the Administrative Agent) the aggregate unpaid principal amount of the Loans
then outstanding in respect of such Obligation; each such holder agrees from
time to time, upon written request received by it from the Borrowers, to make
the relevant internal records of such holder maintained by it with respect to
such Obligation available for reasonable inspection by the Borrowers at the
office of such holder.
-72-
Section 11.7 Adjustment.
----------
(a) If at any time any Lender (a "Benefitted Lender") shall receive
-----------------
any payment (other than a payment received by the Swing Line Lender in respect
of any Swing Line Loan in which no Lenders have purchased a participation
pursuant to Section 2.11(d)) and of all or part of any of its Loans, or interest
---------------
thereon, including as the result of Section 11.8, in a greater proportion
------------
relative to such Lender's Pro Rata Share, than any such payment to any other
Lender in respect of such other Lender's Pro Rata Share, or interest thereon,
such Benefitted Lender shall purchase for cash from the other Lenders such
portion of each such other Lender's Loans as shall be necessary to cause such
Benefitted Lender to share the excess payment ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or benefits
- -------- -------
is thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest. Each Borrower agrees that each Lender so
purchasing a portion of another Lender's Loans may exercise all rights of
payment (including, without limitation, rights of set-off) with respect to such
portion as fully as if such Lender were the direct holder of such portion.
(b) If any Lender (a "Collateral Benefitted Lender") shall at any time
----------------------------
receive any collateral in respect of its Loans (whether voluntary or
involuntary, by set-off, pursuant to events or proceedings of the nature
referred to in Section 7.1(e) or 7.1(f), or otherwise) in a greater proportion
------------------------
than any such collateral received by any other Lender in respect of such other
Lender's Loans, such Collateral Benefitted Lender shall provide such other
Lenders with the benefits of any such collateral as shall be necessary to cause
such Collateral Benefitted Lender to share the benefits of such collateral
ratably with each of the Lenders; provided, however, that if all or any portion
-------- -------
of such benefits is thereafter recovered from such Collateral Benefitted Lender,
such benefits shall be returned to the extent of such recovery but without
interest.
Section 11.8 Right of Setoff. (a) In addition to any rights and
---------------
remedies of the Lenders provided by law, each Lender shall have the right,
without prior notice to the Borrowers, any such notice being expressly waived by
the Borrowers, upon the occurrence and during the continuance of an Event of
Default, to setoff and apply against any Indebtedness, whether matured or
unmatured, of any Borrower to such Lender, any amount owing from such Lender to
any Borrower, at or at any time after, the occurrence of such Event of Default,
and to the fullest extent permitted by applicable law, the aforesaid right of
setoff may be exercised by such Lender against any Borrower or against any
trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receivers, or execution, judgment or attachment creditor of any
Borrower, or against anyone else claiming through or against, any Borrower or
such trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receivers, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of setoff shall not have been exercised
by such Lender prior to the making, filing or issuance, or service upon such
Lender of, or of notice of, any such petition, assignment for the benefit of
creditors, appointment or application for the appointment of a receiver, or
issuance of execution, subpoena, order or warrant. Each Lender agrees promptly
to notify the Borrowers and the Administrative Agent after any such setoff and
application made by
-73-
such Lender, provided that the failure to give such notice shall not affect the
--------
validity of such setoff and application.
(b) Each Borrower expressly agrees that to the extent such Borrower
makes a payment or payments and such payment or payments, or any part thereof,
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or are required to be repaid to a trustee, receiver, or any other party
under any bankruptcy act, state or federal law, common law or equitable cause,
then to the extent of such payment or repayment, the Indebtedness to any Agent
or the Lenders or part thereof intended to be satisfied shall be revived and
continued in full force and effect as if said payment or payments had not been
made.
Section 11.9 Execution in Counterparts. This Agreement may be
-------------------------
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counter-parts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.
Section 11.10 Binding Effect; Assignment.
--------------------------
(a) This Agreement shall be binding upon, and inure to the benefit of,
BWAY, the Borrowers, the Agents and the Lenders and their respective successors
and assigns upon the execution by BWAY, the Borrowers, the Agents and each
Lender; provided, however, that neither BWAY nor any Borrower may assign its
-------- -------
rights or obligations hereunder or in connection herewith or any interest herein
(voluntarily, by operation of law or otherwise) without the prior written
consent of all Lenders.
(b) Any Lender may make, carry or transfer Loans at, to or for the
account of, any of its branch offices or the office of an Affiliate of such
Lender.
(c) Each Lender may at any time sell to one or more Lenders or other
entities ("Participants") participating interests in all or any portion of its
------------
Commitment and related outstanding obligations of such Lender hereunder (in
respect of any Lender, its "Credit Exposure"). In the event of any such sale by
---------------
a Lender of participating interests to a Participant, such Lender's obligations
under this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, and BWAY, the Borrowers and the Agents
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement. Each Borrower agrees
that if amounts outstanding under this Agreement or any of the Loan Documents
are due or unpaid, or shall have been declared or shall have become due and
payable upon the occurrence of an Event of Default, each Participant shall be
deemed to have the right of set-off in respect of its participating interest in
amounts owing under this Agreement and the Loan Documents to the same extent as
if the amount of its participating interest were owing directly to it as a
Lender under this Agreement or any other Loan Document, provided that such right
--------
of set-off shall be subject to the obligation of such Participant to share with
the Lenders, and the Lenders agree to share with such Participant, as provided
in Section 11.7. Each Borrower also agrees that each
------------
-74-
Participant shall be entitled to the benefits of Sections 2.13 and 2.16 with
----------------------
respect to its participation in the Loans and Letters of Credit outstanding from
time to time, provided that such Participant's benefits under Sections 2.13 and
-------- -----------------
2.16 shall be limited to the benefits that the Lender granting the participation
- ----
would be entitled to thereunder with respect to the Credit Exposure so
participated. Each Lender agrees that any agreement between such Lender and any
such Participant in respect of such participating interest shall not restrict
such Lender's right to approve or agree to any amendment, supplement,
modification or waiver to this Agreement or any of the Loan Documents except for
any amendment, supplement, modification or waiver which reduces the rate or
amount of principal, interest or fees payable by any Borrower or extends the
Termination Date or the scheduled date for any payment of interest.
(d) Any Lender may at any time assign to one or more Lenders or other
entities, including an Affiliate thereof (each an "Assignee"), all or any part
--------
of its Credit Exposure pursuant to an Assignment Agreement (an "Assignment
----------
Agreement") in substantially the form of Exhibit 11.10(d) hereto, provided that
- --------- ---------------- --------
(i) any assignment shall require the prior written consent of each Facing Agent
which has issued a Letter of Credit that remains outstanding at such time (with
the consent of such Facing Agent not to be unreasonably withheld), (ii) if such
assignment is to a Person other than a Lender, it assigns its entire Credit
Exposure or a portion of its Credit Exposure in an amount not less than
$5,000,000, (iii) any assignment shall require the prior written consent of the
Administrative Agent, which consent shall not be unreasonably withheld, and (iv)
any assignment to an Assignee other than another Lender, or an Affiliate of the
assigning Lender or another Lender, shall require the prior written consent of
the Borrowers (with the consent of the Borrowers not to be unreasonably withheld
or delayed). Upon execution of an Assignment Agreement and the payment of a
nonrefundable assignment fee of $3,500 in immediately available funds to the
Administrative Agent in connection with each such assignment, each Assignee
shall become a party to this Agreement as a Lender and the Assignee shall have,
to the extent of such assignment, the same rights and benefits as it would have
if it were a Lender hereunder and the holder of the Obligations and, if the
Assignee has expressly assumed, for the benefit of the Borrowers, some or all of
the transferor Lender's obligations hereunder, such transferor Lender shall be
relieved of its obligations hereunder to the extent of such assignment and
assumption. Such Assignment Agreement shall be deemed to amend this Agreement
and Schedule 1.1(a) hereto to the extent, and only to the extent, necessary to
---------------
reflect the addition of such Assignee as a Lender and the resulting adjustment
of all or a portion of the rights and obligations of such transferor Lender
under this Agreement, the Commitments, the determination of Pro Rata Share
(rounded to twelve decimal places), the Loans and any outstanding Letters of
Credit and new Notes shall be issued, at the Borrowers' expense, to such
Assignee and to the assigning Lender upon the request of such Assignee or such
assigning Lender, such new Notes to be in conformity with the requirements of
Section 2.2 (with the appropriate modifications) to the extent needed to reflect
- -----------
the revised Commitment of the Assignee and the assigning Lender.
(e) For so long as any Lender shall be in default of its obligation to
fund its Pro Rata Share of any Revolving Loan, to reimburse the Facing Agent for
any drawings under any Letters of Credit or to fund its participation in any
Swing Line Loan, no Commitment Fees shall be accrued by or paid to such Lender.
-75-
(f) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time pledge or create a security interest in all or any
portion of its rights under this Agreement and the other Loan Documents
(including, without limitation, the Notes held by it) in favor of any Federal
Reserve Lender in accordance with Regulation A of the Federal Reserve Board
without notice to or consent of the Borrowers and no such pledge or assignment
shall release the transferor Lender from its obligations hereunder.
(g) A Lender may furnish any information concerning BWAY or any of its
Subsidiaries in the possession of such Lender from time to time to Lenders,
Assignees and Participants (including prospective Assignees and Participants),
provided that with respect to any such information which has been identified or
- --------
designated by the Borrower as confidential and which has not previously been
made public, any such Assignee or Participant shall have agreed to hold such
information in confidence and not to disclose such information (subject to the
exceptions specified in Section 5.1.6 hereof) and any prospective Assignee or
-------------
Participant shall have agreed to return such information which is in written
form to the Borrowers or otherwise destroy such information if it does not
become an actual Assignee or Participant.
SECTION 11.11 CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. BWAY
---------------------------------------------
AND EACH BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF
ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK CITY IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, AND BWAY AND EACH BORROWER HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH UNITED STATES FEDERAL OR NEW YORK STATE COURT AND BWAY AND EACH
BORROWER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
----- ---
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
- ----------
ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. AS A METHOD OF SERVICE,
BWAY AND EACH BORROWER ALSO IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL
PROCESS IN ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY COURT IN OR OF THE STATE
OF NEW YORK BY THE DELIVERY OF COPIES OF SUCH PROCESS TO BWAY OR SUCH BORROWER,
AT ITS ADDRESS SPECIFIED IN SECTION 11.3 HEREOF OR BY CERTIFIED MAIL DIRECT TO
------------
SUCH ADDRESS. BWAY AND EACH BORROWER HEREBY IRREVOCABLY APPOINT THE SECRETARY
OF STATE OF THE STATE OF NEW YORK, OR SUCH OTHER PERSON AS BWAY OR SUCH BORROWER
MAY FROM TIME TO TIME HEREAFTER SELECT WITH THE ADMINISTRATIVE AGENT'S CONSENT,
AS ITS AGENT FOR THE PURPOSE OF ACCEPTING SERVICE OF ANY PROCESS WITHIN THE
STATE OF NEW YORK. EACH OF BWAY, EACH BORROWER, THE PAYING AGENT, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY WAIVES ALL RIGHT TO A JURY TRIAL IN
ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS
-76-
AGREEMENT OR ANY LOAN DOCUMENT OR ANY MATTER ARISING HEREUNDER OR THEREUNDER.
SECTION 11.12 GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE A
-------------
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. NOTHING CONTAINED IN THIS AGREEMENT AND NO
ACTION TAKEN BY ANY AGENT OR ANY LENDER PURSUANT HERETO SHALL BE DEEMED TO
CONSTITUTE THE AGENTS OR THE LENDERS A PARTNERSHIP, AN ASSOCIATION, A JOINT
VENTURE OR OTHER ENTITY.
Section 11.13 Severability of Provisions. 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 or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 11.14 Headings. The Table of Contents and Article and
--------
Section headings used in this Agreement are for convenience of reference only
and shall not affect the construction of this Agreement.
Section 11.15 Time. Time shall be of the essence of this Agreement.
----
Section 11.16 Further Assurances. BWAY and Borrowers agree to do
------------------
such further acts and things and to execute and deliver to the Administrative
Agent and the Paying Agent such additional assignments, agreements, powers and
instruments as the Administrative Agent or the Paying Agent may reasonably
require or deem advisable to carry into effect the purposes of this Agreement or
to better assure and confirm unto the Agents and the Lenders, their respective
rights, powers and remedies hereunder.
Section 11.17 Prior Agreements. In the event any terms or conditions
----------------
contained in the Loan Documents conflict with any agreements entered into by
BWAY or any Borrower with BT or NationsBank prior to the Closing Date, the terms
and conditions contained in the Loan Documents shall be controlling.
[Signature pages follow]
-77-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
BWAY CORPORATION BROCKWAY STANDARD, INC.
By: By:
-------------------------- ---------------------------
Name: Name:
------------------------ -------------------------
Title: Title:
----------------------- ------------------------
MILTON CAN COMPANY, INC.
By:
---------------------------
Name:
-------------------------
Title:
------------------------
Address for BWAY and each Borrower:
BWAY Corporation
8607 Roberts Drive
Suite 250
Atlanta, Georgia 30350
Attention: David P. Hayford
Tel No.: (770) 645-4843
Telecopier No.: (770) 587-0186
-78-
BANKERS TRUST COMPANY, in its individual capacity
and as Administrative Agent and Syndication Agent
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Address:
Bankers Trust Company
One Bankers Trust Plaza
130 Liberty Street
New York, NY 10006
Attention: Mary Zadroga
Tel. No.: (212) 250-8596
Fax No.: (212) 250-2340
With a copy to:
Bankers Trust Company
233 South Wacker Drive
Suite 8400
Chicago, IL 60606
Attention: Lianne M. Mech
Tel. No.: (312) 993-8119
Fax No.: (312) 993-8137
-79-
NATIONSBANK, N.A. (SOUTH), in its individual
capacity and as Documentation Agent and Paying
Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address:
NationsBank, N.A. (South)
Independence Center, 15th Floor
101 North Tryon Street
Charlotte, NC 28255-0065
Attention: Margaret Rhodes, Agency Services
Tel. No.: (704) 386-2881
Fax No.: (704) 388-9436
with a copy to:
NationsBank, N.A. (South)
NationsBank Corporate Center
100 North Tryon Street
NC1007-08-08
Charlotte, NC 28255-0065
Attention: Mark Halrast, Senior Bank Debt
Tel. No.: (704) 386-0649
Fax No.: (704) 388-1270
-80-
DEFINITIONAL APPENDIX
TO
CREDIT AGREEMENT
----------------
As used in this Agreement, unless the context requires a different
meaning, the following terms have the meanings indicated:
"Accepting Lender" is defined in Section 3.3(b).
---------------- --------------
"Acquisition" is defined in Section 5.2.7.
----------- -------------
"Acquisition Compliance Certificate" is defined in Section 5.1.1(d).
---------------------------------- ----------------
"Acquisition EBITDA" means the sum of Consolidated EBITDA as
------------------
calculated for the applicable Target for the most recent twelve month period
(which may include periods preceding the date of Acquisition of such Target)
(and for purposes of Consolidated EBITDA, assuming the Target is the only Person
for which the determination of Consolidated EBITDA is to be made) and based on
the financial statements of such Target delivered pursuant to Section 5.1.1(d),
----------------
it being understood that Acquisition EBITDA shall not take into account any
income, expenses or other items otherwise to be included in the calculation of
Consolidated EBITDA relating to assets not acquired in the applicable
Acquisition.
"Additional Borrower" means a Wholly-Owned Subsidiary of BWAY that
-------------------
becomes a Borrower after the Closing Date pursuant to Section 5.2.10(a).
-----------------
"Additional Fees" is defined in Section 3.7.
--------------- -----------
"Adjusted Consolidated EBITDA" means for any Test Period, the sum of
----------------------------
the amounts for such period of (i) Consolidated Net Income (or Consolidated Net
Loss), (ii) provisions for taxes based on income, (iii) Consolidated Interest
Expense, (iv) depreciation expense, (v) amortization expense and (vi) other non-
cash items reducing Consolidated Net Income, minus non-cash items increasing
-----
Consolidated Net Income, other than items excluded from the calculation thereof,
all as determined on a consolidated basis for BWAY and its Subsidiaries.
"Administrative Agent" shall mean BT in its capacity as Administrative
--------------------
Agent for the Lenders hereunder, and shall include any successor to the
Administrative Agent appointed pursuant to Article VIII.
------------
"Administrative Office" means the office of the Administrative Agent
---------------------
located at One Bankers Trust Plaza, 130 Liberty Street, New York, New York
10006.
"Affiliate" means, with respect to any Person, any Person or group
---------
acting in concert in respect of the Person in question that, directly or
indirectly, controls or is controlled by or is under
1
common control with such Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person or group of Persons,
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of management and policies of such Person, whether through
(i) the ownership of voting securities or (ii) by contract or otherwise.
Neither any Lender nor any parent of any Lender nor any of their respective
Subsidiaries shall, for purposes of this Agreement, be deemed to be an Affiliate
of BWAY or of any Affiliate of BWAY.
"Agents" shall mean and include each of the Administrative Agent and
------
the Paying Agent.
"Agreement" means this Credit Agreement, as the same may at any time
---------
be amended, restated, supplemented or otherwise modified in accordance with the
terms hereof and in effect.
"Agreement Accounting Principles" is defined in Section 1.2.
------------------------------- -----------
"Applicable Commitment Fee" is defined in Section 3.6(a).
------------------------- --------------
"Applicable Eurodollar Rate Margin" is defined in Section 2.8(b).
--------------------------------- --------------
"Applicable Prime Rate Margin" is defined in Section 2.8(a).
---------------------------- --------------
"Assignee" is defined in Section 11.11(d).
-------- ----------------
"Assignment Agreement" is defined in Section 11.10(d).
-------------------- ----------------
"Available Revolving Commitment" means, as to any Lender at any time,
------------------------------
an amount equal to the excess, if any, of (i) such Lender's Revolving Loan
Commitment over (ii) the sum of (A) the aggregate principal amount then
outstanding of Revolving Loans made by such Lender and (B) such Lender's Pro
Rata Share of the L/C Obligations and Swing Line Loans then outstanding.
"Balance Sheet" is defined in Section 4.11(a).
------------- ---------------
"Bankruptcy Code" means Title 11 of the United States Code entitled
---------------
"Bankruptcy," as now or hereafter in effect, or any successor thereto.
"Benefitted Lender" is defined in Section 11.7(a).
----------------- ---------------
"Board" means the Board of Governors of the Federal Reserve System.
-----
"Borrower Guaranty" means the Guaranty of each Borrower contained in
-----------------
Article X.
- ---------
"Borrowing" means the incurrence pursuant and subject to Article II of
--------- ----------
this Agreement of one Type of Loan by a Borrower from all of the Lenders having
a Commitment for the Type of
2
Loan subject to the Borrowing on a pro rata basis on a given date (or resulting
--- ----
from conversions on a given date), having in the case of Eurodollar Rate Loans,
the same Interest Periods.
"Borrowers" shall mean and include each of Brockway, Milton and each
---------
Additional Borrower.
"Brockway" is defined in the preamble of this Agreement.
--------
"BT" means Bankers Trust Company, in its individual capacity.
--
"Business Day" means (i) for all purposes other than as covered by
------------
clause (ii) below, any day excluding Saturday, Sunday and any day which shall be
in the City of New York, Chicago or Charlotte a legal holiday or a day on which
banking institutions are authorized by law or other governmental actions to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Rate Loans, any day
which is a Business Day described in clause (i) and which is also a day for
trading by and between Lenders in U.S. dollar deposits in the interbank
Eurodollar market.
"BWAY" is defined in the preamble of this Agreement.
----
"BWAY Guaranty" means the Guaranty of BWAY contained in Article IX.
------------- ----------
"Capital Expenditure" means, with respect to BWAY and its
-------------------
Subsidiaries, without duplication, all expenditures by such Person which should
be capitalized in accordance with generally accepted accounting principles,
including, without limitation, all such expenditures with respect to fixed or
capital assets, expenditures for maintenance and repairs which should be
capitalized in accordance with generally accepted accounting principles, and the
amount of all Financing Lease Obligations incurred by such Person, but excluding
therefrom any Acquisition permitted under Section 5.2.8 involving all or
-------------
substantially all of the assets of, or any smaller portion that constitutes an
operating unit or division of, any Person, or any equity interest in such
Person.
"Change of Control" means the occurrence of any of the following
-----------------
events: (i) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Securities and Exchange Act of 1934, as amended (the "Exchange
Act")), other than Warren Hayford, his spouse and his direct descendants, is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all securities that such Person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of 25% or more of the then outstanding voting stock of
BWAY other than in a transaction having the approval of the board of directors
of BWAY at least a majority of which members are Continuing Directors; or (ii)
Continuing Directors shall cease to constitute at least a majority of the
directors constituting the board of directors of BWAY; or (iii) any Borrower
shall cease to be a Wholly-Owned Subsidiary of BWAY (except in connection with
any sale or disposition permitted under Section 5.2.8).
-------------
3
"Closing Date" means June 17, 1996.
------------
"Code" means the Internal Revenue Code of 1986, as from time to time
----
amended, including the regulations proposed or promulgated thereunder, or any
successor statute and the regulations proposed or promulgated thereunder.
"Collateral Benefitted Lender" is defined in Section 11.7(b).
---------------------------- ---------------
"Commercial Letters of Credit" means the commercial Letters of Credit
----------------------------
issued by the Facing Agent for the account of a Borrower pursuant to Section
-------
2.12, each of which is drawable upon presentation of documents evidencing the
- ----
sale or shipment of goods purchased by such Borrower or any of its Subsidiaries
in the ordinary course of its business.
"Commitment" means, with respect to each Lender, the Revolving Loan
----------
Commitment of such Lender, and "Commitments" means such commitments of all
-----------
Lenders collectively.
"Commitment Fees" has the meaning assigned to that term in Section
--------------- -------
3.7(a).
- ------
"Consolidated EBITDA" means, for any period, the sum of the amounts
-------------------
for such period of (i) Consolidated Net Income (or Consolidated Net Loss), (ii)
provisions for taxes based on income, (iii) Consolidated Interest Expense, (iv)
depreciation expense, (v) amortization expense and (vi) other non-cash items
reducing Consolidated Net Income, minus non-cash items increasing Consolidated
-----
Net Income, other than items excluded from the calculation thereof, all as
determined on a consolidated basis for BWAY and its Subsidiaries; it being
understood and agreed that for purposes of calculating the Leverage Ratio,
Consolidated EBITDA shall be calculated for the four fiscal quarter period
ending on the last day of the most recent fiscal quarter and shall include (A)
Acquisition EBITDA for such period of each Target acquired during or after such
period to the extent not otherwise taken into account in the calculation of
Consolidated EBITDA and (B) in the event BWAY elects to submit an Initial Cost
Adjustment Certificate pursuant to Section 5.1.1(d)(v) for a Substantial
-------------------
Acquisition, solely for purposes of the calculation of the Leverage Ratio under
Sections 2.8, 2.9, 2.12(f)(ii) and 3.7 in connection with such Acquisition and
- --------------------------------------
during the period from the date of such Acquisition through the last day of the
fourth fiscal quarter occurring after the date of such Acquisition (the "Cost
----
Synergy Period"), Consolidated EBITDA shall be increased by the amount of
- --------------
estimated cost reduction synergies set forth on such Initial Cost Adjustment
Certificate delivered pursuant to Section 5.1.1(d) (as such amount may be
----------------
reduced as set forth on a subsequent Cost Adjustment Certificate delivered
pursuant to Section 5.1.1(b), it being understood that, during the Cost Synergy
----------------
Period for a particular Acquisition, all actual cost reduction synergies of the
types set forth on the applicable Cost Adjustment Certificate for such
Acquisition shall be disregarded in connection with the calculation of the
Leverage Ratio under Sections 2.8, 2.9, 2.12(f)(ii) and 3.7.
--------------------------------------
"Consolidated Interest Expense" means, for any period, the total
-----------------------------
consolidated interest expense of BWAY and its Subsidiaries for such period
(calculated without regard to any limitation on the payment thereof) plus,
----
without duplication, that portion of Financing Lease Obligations of
4
BWAY and its Subsidiaries representing the interest component of Financing
Leases of BWAY and its Subsidiaries, determined on a consolidated basis for such
period.
"Consolidated Net Income" and "Consolidated Net Loss" means, for any
----------------------- ---------------------
period, the net income (or loss) of BWAY and its Subsidiaries on a consolidated
basis for such period taken as a single accounting period determined in
conformity with generally accepted accounting principles; provided, however,
-------- -------
that there shall be excluded (i) the income (or loss) of any Person which
becomes a Subsidiary of BWAY to the extent that such income (or loss) is accrued
prior to the date it becomes a Subsidiary of BWAY or is merged into or
consolidated with any Subsidiary of BWAY or that Person's assets are acquired by
BWAY or any of its Subsidiaries, except as otherwise provided in the definition
of "Consolidated EBITDA", (ii) the income (or loss) of any Person in which any
-------------------
other Person (other than BWAY or any of its Subsidiaries) has a joint interest,
except to the extent of the amount of dividends of other distributions actually
paid to BWAY or any of its Subsidiaries or the amount of any capital calls or
contributions or other funding of such losses actually required from BWAY or any
of its Subsidiaries during such period, (iii) the income of any of BWAY's
Subsidiaries to the extent that the declaration or payment of dividends or
similar distributions by that Subsidiary of that income is not at the time
permitted by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
that Subsidiary except to the extent of the amount of dividends or other
distributions actually paid to BWAY or any of its Subsidiaries that is not
subject to the restriction described in this clause (iii), (iv) the excess (but
not the deficit), if any, of (A) any gain which must be treated as an
extraordinary item under generally accepted accounting principles or any gain
realized upon the sale or other disposition of any real property or equipment
that is not sold in the ordinary course of business or of any capital stock of
BWAY or a Subsidiary of BWAY over (B) any loss which must be treated as an
extraordinary item under generally accepted accounting principles or any loss
realized upon the sale or other disposition of any real property or equipment
that is not sold in the ordinary course of business or of any capital stock of
BWAY or a Subsidiary of BWAY, and (v) any non-cash restructuring charges, in an
aggregate amount not to exceed $12,000,000, reducing Consolidated Net Income and
resulting fro.
"Consolidated Net Worth" means, as of any date on which the amount
----------------------
thereof is to be determined, the sum of the following in respect of BWAY and its
Subsidiaries (determined on a consolidated basis and excluding any upward
adjustment after the Closing Date due to revaluation of assets): (i) the stated
amount of issued and outstanding share capital, plus (ii) the amount of
----
additional paid-in capital and retained earnings (or, in the case of a deficit,
minus the amount of such deficit), plus (iii) the amount of any foreign currency
- ----- ----
translation adjustment (if positive or, if negative, minus the amount of such
-----
translation adjustment), minus (iv) the stated amount of any treasury stock.
-----
"Consolidated Total Assets" means, with respect to BWAY, the book
-------------------------
value, determined on a consolidated basis in accordance with generally accepted
accounting principles, of all assets of BWAY and its Subsidiaries.
"Consolidated Total Indebtedness" means, at any date of determination,
-------------------------------
the total of all Indebtedness for Money Borrowed of BWAY and its Subsidiaries on
a consolidated basis.
5
"Contaminant" means any pollutant, contaminant (as those terms are
-----------
defined in 42 U.S.C. (S)9601(33)), toxic pollutant (as that term is defined in
33 U.S.C. (S)1362(13)), hazardous substance (as that term is defined in 42
U.S.C. (S)9601(14)), hazardous chemical (as that term is defined by 29 CFR
(S)1910.1200(c)), hazardous waste (as that term is defined in 42 U.S.C.
(S)6903(5)), or any state or local equivalent of such laws and regulations,
including, without limitation, radioactive material, special waste,
polychlorinated biphenyls, asbestos, petroleum, including crude oil or any
petroleum-derived substance, waste, or breakdown or decomposition product
thereof, or any constituent of any such substance or waste.
"Continuing Directors" means, as of any date, the collective
--------------------
reference to (i) all members of the board of directors of BWAY who have held
office continuously since the date hereof, and (ii) all members of the board of
directors of BWAY who assumed office after the date hereof and whose appointment
or nomination for election by BWAY's shareholders was approved by a vote of at
least 50% of the Continuing Directors in office immediately prior to such
appointment or nomination.
"Contribution Agreement" means the Contribution Agreement in
----------------------
substantially the form of Exhibit 1.1 (B) hereto dated as of the Closing Date
---------------
among BWAY, the Borrowers and the Administrative Agent, as amended,
supplemented, restated or otherwise modified from time to time.
"Cost Adjustment Certificate" means a certificate of a Responsible
---------------------------
Officer delivered by BWAY pursuant to Section 5.1.1(b) or 5.1.1(d) substantially
----------------------------
in the form of Exhibit 1.1(C) hereto.
--------------
"Credit Event" means the making of any Loan and the issuance of any
------------
Letter of Credit.
"Credit Exposure" is defined in Section 11.10(c).
--------------- ----------------
"Date of Determination" means, for purposes of determining the
---------------------
applicable Leverage Ratio on any Pricing Certificate Delivery Date, the last day
of the most recently completed fiscal quarter of BWAY.
"Davies Acquisition" means the acquisition of the Davies Can Division
------------------
by Brockway Standard, Inc. from Van Dorn Company and Crown Cork & Seal Company,
Inc., pursuant to the Davies Acquisition Documents.
"Davies Acquisition Documents" means the Asset Purchase Agreement
----------------------------
dated as of April 29, 1996 among Brockway and/or its designee, BWAY, Van Dorn
Company, an Ohio corporation, and Crown Cork & Seal Company, Inc., a
Pennsylvania corporation, and all documents, agreements and instruments executed
and/or delivered in connection therewith.
"Declining Lender" is defined in Section 3.3(b).
---------------- --------------
"Default Rate" is defined in Section 2.8(d).
------------ --------------
6
"Defaulting Lender" means any Lender with respect to which a Lender
-----------------
Default is in effect.
"Deposited Monies" is defined in Section 3.5.
---------------- -----------
"Documentation Agent" shall mean NationsBank in its capacity as
-------------------
Documentation Agent, it being understood and agreed that the Documentation Agent
shall have no obligations or duties as an agent under this Agreement or the
other Loan Documents for or on behalf of any party to this Agreement or any
other Loan Document.
"Dollar" and "$" shall mean lawful currency of the United States of
------ -
America unless a currency of another country is specifically designated.
"Eligible Assignee" means (i) a commercial Lender organized under the
-----------------
laws of the United States of America, or any State thereof, and having total
assets in excess of $5,000,000,000; (ii) a savings and loan association or
savings Lender organized under the laws of the United States of America, or any
State thereof, and having total assets in excess of $5,000,000,000; or (iii) a
commercial Lender which is organized under the laws of any other country, and
which has total assets in excess of $5,000,000,000, provided that such Lender is
--------
acting through a branch or agency located in the United States of America.
"Employee Benefit Plan" means an "employee benefit plan", as defined
---------------------
in Section 3(3) of ERISA, which is or has been established or maintained, or to
which contributions are or have been made, by BWAY or any of its Subsidiaries or
any ERISA Affiliate.
"Environmental Laws" means any and all applicable foreign, federal,
------------------
state or local laws, statutes, ordinances, codes, rules, regulations, orders,
decrees, judgments, directives and cleanup or action standards, levels or
objectives imposing liability or standards of conduct for or relating to the
protection of health, safety or the environment, including, but not limited to,
the following statutes as now written and amended, and as amended hereafter: the
Federal Water Pollution Control Act, 33 U.S.C. (S) 1251 et seq., the Clean Air
-------
Act, 42 U.S.C. (S) 7401 et seq., the Toxic Substances Control Act, 15 U.S.C. (S)
-------
2601 et seq., the Solid Waste Disposal Act, 42 U.S.C. (S) 6901 et seq., the
------- -------
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
(S) 9601 et seq., the Emergency Planning and Community Right-to-Know Act of
-------
1986, 42 U.S.C. (S) 11001 et seq., and the Safe Drinking Water Act, 42 U.S.C.
-------
(S) 300f et seq.
-------
"Environmental Lien" means a Lien in favor of any governmental
------------------
authority for (i) any liability under foreign, federal, state or local
environmental laws or regulations, or (ii) damages arising from, or costs
incurred by such governmental authority in response to, a Release or threatened
Release of a Contaminant into the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
from time to time amended.
7
"ERISA Affiliate" means each trade or business (whether or not
---------------
incorporated) which together with BWAY or a Subsidiary of BWAY would be deemed
to be a "single employer" within the meaning of Section 4001(b) of ERISA or
Section 414 of the Code.
"Eurodollar Rate" means, with respect to each Interest Period to be
---------------
applicable to a Eurodollar Rate Loan, the rate obtained by dividing (i) the
arithmetic average (rounded upward to the nearest 1/16th of 1%) of the offered
quotation, if any, to first-class Lenders in the interbank Eurodollar market by
each Reference Lender for U.S. Dollar deposits of amounts in immediately
available funds comparable to the principal amount of the Eurodollar Rate Loan
to be made by such Reference Lender with maturities comparable to such Interest
Period, determined as of approximately 10:00 a.m. (New York City time) two (2)
Business Days prior to the commencement of such Interest Period (provided that
if any Reference Lender fails to provide the Administrative Agent in a timely
fashion with its quotation then the Eurodollar Rate shall be calculated using
the quotation of the other Reference Lender), by (ii) a percentage equal to 100%
minus the stated maximum rate (expressed as a percentage) as prescribed by the
Board of all reserve requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves and all reserves required to
be maintained against "Eurocurrency Liabilities" as specified in Regulation D
(or any successor regulation)) applicable on the first day of such Interest
Period to any member bank of the Federal Reserve System in respect of Eurodollar
funding or liabilities. The determination of the Eurodollar Rate by the
Administrative Agent shall be conclusive and binding on all parties to this
Agreement absent manifest error.
"Eurodollar Rate Loan" means any Loan or any portion thereof during
--------------------
any period in which it or any such portion of it bears interest at a rate
determined with reference to the Eurodollar Rate.
"Eurodollar Rate Revolving Loan" means a Revolving Loan or any portion
------------------------------
thereof during any period in which it bears interest at the Eurodollar Rate.
"Event of Default" is defined in Section 7.1.
---------------- -----------
"Excess Sale Proceeds" is defined in Section 5.2.8.
-------------------- -------------
"Existing Credit Agreement" means that certain Third Amended and
-------------------------
Restated Revolving Credit Loan Agreement dated as of June 29, 1994, as amended,
among BWAY, Brockway, BT, as Agent, and the lenders parties thereto.
"Facing Agent" means BT or such other Revolving Lender as may from
------------
time to time have been designated as such by a Borrower and shall have agreed in
writing to act in such capacity.
"Federal Funds Rate" means on any day the weighted average of the rate
------------------
on overnight Federal funds transactions with members of the Federal Reserve
System only arranged by Federal funds brokers as published as of such day by the
Federal Reserve Lender of New York, or if not so
8
published, the rate then used by first class Lenders in extending overnight
loans to other first class Lenders.
"Financing Lease" means, at the time any determination thereof is to
---------------
be made, any lease of property, real or personal, in respect of which the
present value of the minimum rental commitment is capitalized on the balance
sheet of the lessee in accordance with generally accepted accounting principles.
"Financing Lease Obligation" means, at the time any determination
--------------------------
thereof is to be made, the amount of the liability in respect of a Financing
Lease which would at such time be so required to be capitalized on such a
balance sheet in accordance with generally accepted accounting principals.
"Fiscal Year" is defined in Section 4.7.
----------- -----------
"Forecasts" is defined in Section 4.11(c).
--------- ---------------
"Foreign Subsidiary" means any Subsidiary of BWAY that is incorporated
------------------
under the laws of any jurisdiction other than the United States of America, any
state thereof, or any territory thereof.
"Government Acts" is defined in Section 2.12(i).
--------------- ---------------
"Governmental Authority" means any foreign, Federal, state, municipal
----------------------
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign.
"Guaranteed Obligations" means (i) with respect to BWAY, all
----------------------
indebtedness of the Borrowers to the Administrative Agent, the Paying Agent and
the Lenders under this Agreement and the other Loan Documents, and (ii) with
respect to any Borrower, all indebtedness of the other Borrowers to the
Administrative Agent, the Paying Agent and the Lenders under this Agreement and
the other Loan Documents. The word "indebtedness" as used in the preceding
sentence is used in its most comprehensive sense and includes any and all
advances, debts, obligations, guarantees, loans, fees, indemnities, interest and
liabilities of BWAY or any Borrower arising in connection with this Agreement
and any other Loan Document, heretofore, now, or hereafter made, incurred or
created, whether voluntarily or involuntarily, absolute or contingent,
liquidated or unliquidated, determined or undetermined, whether or not such
indebtedness is from time to time reduced, or extinguished and thereafter
increased or incurred, whether BWAY or any Borrower may be liable individually
or jointly with others, whether or not recovery upon such indebtedness may be or
hereafter become barred by any statute of limitations, and whether or not such
indebtedness may be or hereafter become otherwise unenforceable.
"Guarantor" shall mean each Person guarantying the obligations of
---------
another pursuant to a Guaranty, including, without limitation, BWAY pursuant to
the BWAY Guaranty, and each Borrower pursuant to the Borrower Guaranty.
9
"Guarantor Subsidiary" means any Subsidiary of BWAY that has executed
--------------------
and delivered a Subsidiary Guaranty in accordance with terms of this Agreement.
"Guaranty" or "Guaranties" shall mean and include each of the BWAY
-------- ----------
Guaranty and the Borrower Guaranty.
"Increase Amount" is defined in Section 3.3(b).
--------------- --------------
"Indebtedness" means, without duplication, all obligations of a Person
------------
or a Subsidiary of such Person which are classified upon a balance sheet of such
Person or such Subsidiary in accordance with generally accepted accounting
principles as liabilities of such Person or such Subsidiary or that indebtedness
of any other individual or entity for which such Person or such Subsidiary is
liable, and in any event shall include, unless otherwise excepted in
subparagraphs (i) through (v) below, the following:
(i) all indebtedness guaranteed, directly or indirectly, in any manner
by such Person or such Subsidiary or endorsed (otherwise than for
collection or deposit in the ordinary course of business) or discounted
with recourse (including, without limitation, any letter of credit,
performance bond, surety bond or similar obligation issued for the account
of such Person or for which that Person is otherwise liable for
reimbursement thereof);
(ii) all indebtedness in effect guaranteed, directly or indirectly, by
such Person or such Subsidiary through an agreement, contingent or
otherwise, (a) to purchase such indebtedness, or (b) to purchase, sell or
lease (as lessee or lessor) property, products, materials or supplies, or
to purchase or sell transportation or services, for the purpose of enabling
the debtor to make payments of such indebtedness or to assure the owner of
such indebtedness against loss, regardless of the delivery or non-delivery
for any reason of the property, products, materials or supplies or the
furnishing or nonfurnishing for any reason of the transportation or
services, except supply contracts for goods or inventory to be used by such
Person or such Subsidiary in its business entered into in the ordinary
course of business of such Person or such Subsidiary, or (c) other than as
permitted by this Agreement, to make any loan, advance, capital
contribution or other investment in any debtor for the purpose of assuring
a minimum equity, asset base, working capital or other balance sheet
condition for any date, or to provide funds for the payment of any
liability, dividend or stock liquidation payment, or otherwise to supply
funds to or in any manner invest in any debtor;
(iii) the portion of indebtedness of any joint venture, partnership or
other person or entity for which such Person or such Subsidiary is liable,
other than guaranties by such Person or such Subsidiary;
(iv) all indebtedness, including Financing Lease Obligations, of such
Person or such Subsidiary created or arising under any conditional sale
agreement or other title retention agreement or under any Financing Lease,
even though the rights and remedies of the seller
10
or lender or lessor under such agreement or lease in the event of default
are limited to repossession or sale of property; and
(v) all indebtedness secured by any mortgage, lien, pledge, charge,
security interest, option or other encumbrance upon or in property owned by
such Person or such Subsidiary, even though such Person or such Subsidiary
has not assumed or become liable for the payment of such indebtedness.
For the purpose of computing the "Indebtedness" of such Person or a Subsidiary
of such Person there shall be excluded any particular Indebtedness if, upon or
prior to the maturity thereof, there shall have been irrevocably deposited with
the proper depositary in trust the necessary funds (or evidences of such
Indebtedness, or other securities, if permitted by the instrument creating such
Indebtedness or otherwise consented to by the relevant Person to which such
Indebtedness is owed) except to the extent that such funds are subject to any
writ, judgment, warrant of attachment, execution or similar process, for the
payment, redemption or satisfaction of such Indebtedness; and thereafter such
funds, evidences of Indebtedness and securities so deposited shall not be
included in any computation of the assets of such Person or a Subsidiary of such
Person.
"Indebtedness for Money Borrowed" means, without duplication, (i) all
-------------------------------
Indebtedness of the Person in question or a Subsidiary of such Person, current
or funded, secured or unsecured, incurred in connection with borrowings
(including the sale of debt securities) by such Person or a Subsidiary or the
making available of credit or funds to the Person or a Subsidiary of the Person
other than trade accounts payable and accrued expenses arising in the ordinary
course of business, (ii) all Indebtedness of the Person or a Subsidiary of the
Person, as the case may be, issued, incurred or assumed in respect of the
purchase price of property except for trade and intercompany accounts payable,
(iii) all Financing Lease Obligations of the Person or a Subsidiary of the
Person, and (iv) any guarantee or other obligation specified in subparagraph (i)
----------------
or (ii) of the definition of "Indebtedness" in respect of Indebtedness of any
----
other Person of any of the types specified in the preceding clauses (i), (ii)
and (iii).
"Indemnified Party" has the meaning assigned to that term in Section
----------------- -------
11.4.
- ----
"Initial Borrowing" means the first Borrowing by the Borrower under
-----------------
this Agreement.
"Initial Borrowing Date" means the date of the Initial Borrowing.
----------------------
"Initial Cost Adjustment Certificate" is defined in Section 2.9.
----------------------------------- -----------
"Initial Loan" means the first Loan made by the Lenders under this
------------
Agreement.
"Insignificant Subsidiary" means a Subsidiary of BWAY (other than a
------------------------
Borrower) which is acquired in any Acquisition after the Closing Date having
assets with an aggregate book value of less than $500,000, provided that such
Subsidiary shall only constitute an Insignificant Subsidiary during the thirty
(30) days immediately following the acquisition thereof.
11
"Intercompany Note" means a promissory note, in the form of Exhibit
----------------- -------
1.1(e), evidencing an intercompany loan and advance permitted under Section
- ------ -------
5.2.5(c).
- --------
"Interest Coverage Ratio" means, as of any date of determination, for
-----------------------
any Test Period, the ratio of (i) Adjusted Consolidated EBITDA for such period
to (ii) Consolidated Interest Expense for such period.
"Interest Period" means any interest period applicable to a Loan as
---------------
determined pursuant to Section 2.10.
------------
"Interest Rate Determination Date" means any date on which the
--------------------------------
Administrative Agent is required to determine the applicable Eurodollar Rate in
connection with a Notice of Borrowing or Notice of Conversion or Continuation
delivered by the Borrower.
"Investment" means, with respect to any Person (such Person being
----------
referred to in this definition as the "Investor"), any amount paid by the
--------
Investor, directly or indirectly, or any transfer of property, directly or
indirectly, by the Investor to any other Person for capital stock issued by, or
as a capital contribution to, or any amount which the Investor has loaned or
advanced, directly or indirectly, to, any other Person, including, in the case
of any Person which becomes a Subsidiary of the Borrower, the aggregate
principal amount of Indebtedness for Money Borrowed of such Person outstanding
at the time such Person becomes a Subsidiary. The calculation of any Investment
shall be exclusive of amounts paid for goods or services in the ordinary course
of business on terms customary for the industry.
"Investment Grade Rating" means a rating of BWAY's senior unsecured
-----------------------
long-term debt outstanding, without third-party enhancement, by Standard &
Poor's Corporation of BBB- or better, or by Moody's Investor Services, Inc. of
Baa3 or better; provided, however, that to the extent that BWAY does not have
-------- -------
any issuance of senior unsecured long-term debt outstanding, then if there is an
"implied" senior unsecured long-term debt rating of BWAY which is publicly
published by either Standard & Poor's Corporation or Moody's Investor Services,
Inc., such "implied" rating shall be used for purposes of determining the
applicable Investment Grade Rating until such time as BWAY has an actual
issuance of senior unsecured long-term debt.
"L/C Obligations" means, at any time, an amount equal to the sum of
---------------
(i) the aggregate Stated Amount of the then outstanding Letters of Credit and
(ii) the aggregate amount of drawings under Letters of Credit which have not
been reimbursed and which have not been converted to Revolving Loans pursuant to
Section 2.12(e).
- ---------------
"Lenders" and "Lender" have the respective meanings assigned to those
------- ------
terms in the preamble to this Agreement and shall include each Assignee and
Eligible Assignee thereof that shall become a party to this Agreement pursuant
to Section 11.11.
-------------
"Lender Default" shall mean (i) the failure or refusal (which has not
--------------
been cured or retracted) of a Lender to make available its portion of any
Borrowing or to fund its portion of any
12
unreimbursed payment under Section 2.12(e) or (ii) a Lender having notified the
---------------
Agents and/or BWAY that it does not intend to comply with its obligations under
Sections 2.1, 2.11(c) or (d) or 2.12(b) or (e), in the case of both clauses (i)
- ----------------------------------------------
and (ii) above solely as a result of the appointment of a receiver or
conservator with respect to such Lender at the direction or request of any
regulatory agency or authority.
"Lending Office" means for each Lender, the office specified for such
--------------
Lender pursuant to Section 11.3 as the office from which its Pro Rata Share of
------------
any Borrowing will be made.
"Letter of Credit Fee" is defined in Section 2.12(f)(ii).
-------------------- -------------------
"Letters of Credit" means the Commercial Letters of Credit and the
-----------------
Standby Letters of Credit.
"Leverage Ratio" means, as of the date of any determination, the ratio
--------------
of (i) Consolidated Total Indebtedness as of such date to (ii) Consolidated
EBITDA for the four fiscal quarter period ending on the last day of the most
recently completed fiscal quarter; provided, however, that with respect to any
-------- -------
Acquisition made during such four fiscal quarter period, the Leverage Ratio
shall be determined on a pro forma basis as if such Acquisition had been
--- -----
consummated on the first day of such four fiscal quarter period.
"Lien" means any mortgage, pledge, security interest, encumbrance,
----
lien or charge or deposit arrangement of any kind (including, without
limitation, any conditional sale or other title retention agreement or lease in
the nature thereof, any sale of receivables with recourse against the seller or
any Affiliate of the seller, any filing or agreement to file a financing
statement as debtor under the Uniform Commercial Code or any similar statute,
other than to reflect ownership by a third party of property leased to BWAY or
any of its Subsidiaries under a lease which is not in the nature of a
conditional sale or title retention agreement or in connection with any
permitted sale of accounts receivable and any subordination arrangement in favor
of another Person).
"Loan" means any of the Revolving Loans, Letters of Credit or the
----
Swing Line Revolving Loans and "Loans" means all of such Loans collectively.
-----
"Loan Documents" means, collectively, this Agreement, the Notes, the
--------------
Contribution Agreement, the Subsidiary Guaranties, and all other agreements,
assignments, instruments and documents from time to time executed in connection
with this Agreement or any other Loan Document, in each case as the same may at
any time and from time to time be amended, supplemented, restated or otherwise
modified in accordance with the terms thereof and in effect.
"Margin Stock" has the meaning provided in Regulation U of the Board,
------------
as from time to time in effect or any successor to all or any portion thereof
establishing margin credit restrictions.
"Material Acquisition" means an Acquisition the purchase price of
--------------------
which is greater than $3,000,000.
13
"Material Adverse Effect" means a material adverse effect on (i) the
-----------------------
properties, business, condition (financial or otherwise) or results of
operations of BWAY and its Subsidiaries taken as a whole or (ii) the validity or
enforceability of any of the Loan Documents or the rights or remedies of the
Agents or the Lenders thereunder.
"Material Liabilities" is defined in Section 4.11(d).
-------------------- ---------------
"Milton" is defined in the preamble of this Agreement.
------
"Most Recent Balance Sheet" means the most recent consolidated balance
-------------------------
sheet of BWAY and its Subsidiaries delivered to the Administrative Agent and
each Lender pursuant to Section 5.1.1(b).
----------------
"Multiemployer Plan" means any plan described in Section 4001(a)(3) of
------------------
ERISA and not excluded pursuant to Section 4021(b) thereof to which
contributions are or have been made by the Borrower or any of its Subsidiaries
or any ERISA Affiliate.
"NationsBank" shall mean NationsBank, N.A. (South), in its individual
-----------
capacity.
"New Lender" is defined in Section 3.3(b).
---------- --------------
"Note" means any of the Revolving Notes or the Swing Line Revolving
----
Note and "Notes" means all of such Notes collectively.
-----
"Notice of Borrowing" is defined in Section 2.5.
------------------- -----------
"Notice of Conversion or Continuation" is defined in Section 2.6.
------------------------------------ -----------
"Notices" is defined in Section 11.3.
------- ------------
"Obligations" means the Revolving Loan Obligations, the Swing Line
-----------
Loan Obligations, the L/C Obligations and all other liabilities and obligations
of the Borrowers now or hereafter arising under this Agreement or any of the
other Loan Documents, whether for principal, interest, reimbursements, fees,
expenses, indemnities or otherwise, and whether primary, secondary, direct,
indirect, contingent, fixed or otherwise (including obligations of performance).
"Participants" is defined in Section 11.10(c).
------------ ----------------
"Payment Office" means the office of the Paying Agent located at
--------------
NationsBank, N.A. (South), Agency Services, Independence Center, 101 North Tryon
Street, 15th Floor, Charlotte, North Carolina 28255-0065.
14
"Paying Agent" shall mean NationsBank in its capacity as Paying Agent
------------
for the Lenders hereunder, and shall include any successor to the Paying Agent
appointed pursuant to Article VIII.
------------
"PBGC" means the Pension Benefit Guaranty Corporation created by
----
Section 4002(a) of ERISA.
"Permitted Beneficiary" means any insurance company, state workers'
---------------------
compensation authority, state or Federal environmental agency, related trustee
or surety, local utility, municipality, other domestic or foreign Governmental
Authority, any vendor of goods or services being purchased by a Borrower or any
of its Subsidiaries, any domestic or foreign financial institution, or any other
Person approved by the Facing Agent, in its sole discretion.
"Permitted Investments" mean (i) any evidence of indebtedness,
---------------------
maturing not more than one year after the date of issue, issued by the United
States of America, or any instrumentality or agency thereof and guaranteed fully
as to principal, interest and premium, if any, by the United States of America,
(ii) any certificate of deposit, maturing not more than 360 days after the date
of purchase issued by a commercial banking institution which is a member of the
Federal Reserve System and which has a combined capital and surplus and
undivided profits of not less than $200 million, (iii) commercial paper,
maturing not more than 360 days after the date of purchase, issued by a
corporation (other than BWAY or any Subsidiary of BWAY or any of their
respective Affiliates) organized and existing under the laws of any state within
the United States of America with a rating, at the time of purchase, of "P-2"
(or higher) according to Moody's Investors Service, Inc. or "A-2" (or higher)
according to Standard & Poor's Corporation, (iv) demand deposits with any Lender
or trust company, (v) investments in money market funds having a rating from
each of Moody's Investors Service, Inc. and Standard & Poor's Corporation in the
highest investment category granted thereby (including without limitation funds
for which any Lender or the Administrative Agent is investment manager or
adviser), and (vi) reverse repurchase agreements with respect to indebtedness
issued by the United States of America, or any instrumentality or agency thereof
and guaranteed fully as to principal, interest and premium, if any, by the
United States of America.
"Permitted Liens" means with respect to any Person:
---------------
(a) Liens in favor of the United States of America or any political
subdivision thereof to secure partial payments under contracts;
(b) Liens incurred or deposits made in the ordinary course of business
in connection with worker's compensation, unemployment insurance and other types
of social security benefits, or to secure the performance of statutory
obligations, surety and appeal bonds, bids, tenders, leases, performance and
return-of-money bonds and other similar obligations not incurred in connection
with the borrowing of money;
(c) Liens for taxes, assessments or governmental charges not then due
and delinquent or the validity of which is being contested in good faith by
appropriate proceedings
15
diligently conducted and as to which such Person has established adequate
reserves in conformity with generally accepted accounting principles on its
books;
(d) Liens arising in connection with court proceedings, provided, that
--------
the execution of such Liens is effectively stayed and such Liens are contested
in good faith by appropriate proceedings diligently conducted and as to which
such Person has established adequate reserves in conformity with generally
accepted accounting principles on its books;
(e) Liens arising in the ordinary course of business and not incurred
in connection with the borrowing of money, including, without limitation,
encumbrances in the nature of zoning restrictions, easements, rights and
restrictions of record on the use of real property, which do not materially
interfere with the conduct of the business of such Person;
(f) Liens incidental to the conduct of business or the ownership of
properties and assets (including warehousemen's and attorney's liens, mechanics'
liens, materialmen's liens, carriers' liens and statutory landlords' liens) and
Liens to secure the performance of bids, tenders or trade contracts, or to
secure statutory obligations, surety or appeal bonds or other Liens of a like
general nature incurred in the ordinary course of business and not in connection
with the borrowing of money, provided, that in each case, the obligation secured
--------
is not overdue, or is being contested in good faith by appropriate proceedings
diligently conducted and as to which such Person has established adequate
reserves in conformity with generally accepted accounting principles on its
books;
(g) Liens on fixed assets created or incurred within 180 days of the
date of acquisition to secure or provide for all or a portion of the purchase
price of such fixed assets provided, that (i) such liens do not extend to other
--------
property of BWAY, any Borrower or any Subsidiary thereof, (ii) the aggregate
principal amount of Indebtedness secured by such Liens does not exceed at the
time of purchase or incurrence 100%, or is not less than 60%, of the lesser of
the fair market value or the purchase price of the fixed assets subject to such
Liens and (iii) after giving effect to the incurrence of such Lien and the
Indebtedness secured thereby, there exists no Event of Default or Unmatured
Event of Default;
(h) Liens created upon the incurrence or assumption of Financing Lease
Obligations or Indebtedness in connection with a transaction permitted under
Section 5.2.2(b); provided, that (i) such liens do not extend to other property
- ---------------- --------
of BWAY, any Borrower or any Subsidiary thereof, (ii) the aggregate principal
amount of Indebtedness secured by such Liens does not exceed at the time of
purchase or incurrence 100%, or is not less than 60%, of the lesser of the fair
market value or the purchase price of the assets subject to such Liens and (iii)
after giving effect to the incurrence of such Lien and the Indebtedness secured
thereby, there exists no Event of Default or Unmatured Event of Default;
(i) Precautionary filings under the Uniform Commercial Code by
bailors, lessors or consignors;
16
(j) Liens existing on any property prior to the Acquisition thereof,
prior to the Acquisition of the Person which owns such property or prior to the
Person becoming a Subsidiary, by BWAY or any of its Subsidiaries, in each case
which lien was not created in contemplation of such acquisition, providing such
Liens secure Indebtedness for Money Borrowed which does not exceed $10 million
at any time outstanding;
(k) Liens created by or pursuant to this Agreement and other Loan
Documents;
(l) Rights of setoff of depository banks; and
(m) Extensions, renewals or refinancings or any Lien referred to in
clauses (g), (h) and (j) above, provided that the principal amount of the
--------
indebtedness or obligation secured thereby is not increased and that any such
extension, renewal or replacement is limited to the property originally
encumbered thereby.
"Person" means an individual or a corporation, partnership, limited
------
liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"Plan" means any plan described in Section 4021(a) of ERISA and not
----
excluded pursuant to Section 4021(b) thereof, which may be or has been
established or maintained, or to which contributions are or have been made, by
BWAY or any of its Related Persons or any Subsidiary of BWAY or any Related
Persons to such Subsidiary, but not including any Multiemployer Plan.
"Plan Administrator" has the meaning assigned to the term
------------------
"administrator" in Section 3(16)(A) of ERISA.
"Plan Sponsor" has the meaning assigned to the term "plan sponsor" in
------------
Section 3(16)(B) of ERISA.
"Pricing Certificate" means a certificate of a Responsible Officer of
-------------------
BWAY substantially in the form of Exhibit 1.1(d) attached hereto and delivered
--------------
by BWAY pursuant to Section 2.9 demonstrating the appropriate Leverage Ratio.
-----------
"Pricing Certificate Delivery Date" means the date of delivery to the
---------------------------------
Administrative Agent of a Pricing Certificate demonstrating the Leverage Ratio
as of the most recent Date of Determination, which delivery shall occur (i) on
the date of delivery of the financial statements for each fiscal quarter
required pursuant to Section 5.1.1(b), and (ii) the date on which any
----------------
Substantial Acquisition is consummated.
"Pricing Period" means, with respect to any Date of Determination, the
--------------
period commencing on the day immediately after such Date of Determination and
ending on the next Date of Determination.
17
"Prime Rate" means the greater of (i) the rate which NationsBank
----------
announces from time to time as its prime lending rate, as in effect from time to
time and (ii) the Federal Funds Rate plus one-half of one percent ( 1/2%). The
Prime Rate is a reference rate and does not necessarily represent the lowest or
best rate actually charged to any customer. NationsBank may make commercial
loans or other loans at rates of interest at, above or below the Prime Rate.
"Prime Rate Loan" means any Loan or any portion thereof during any
---------------
period in which it or any such portion of it bears interest at a rate determined
with reference to the Prime Rate.
"Prime Rate Revolving Loan" means a Revolving Loan or any portion
-------------------------
thereof during any period in which it or any such portion of it bears interest
at a rate determined with reference to the Prime Rate.
"Pro Forma" is defined in Section 4.11(b).
--------- ---------------
"Pro Rata Share" means, with respect to any Lender and any described
--------------
aggregate or total amount, the amount equal to the result obtained by
multiplying such aggregate or total amount by a fraction, the numerator of which
shall be such Lender's Revolving Loan Commitment in effect at the time (or, if
the Total Revolving Loan Commitment has been terminated, the principal amount of
such Lender's Revolving Loans then outstanding) and the denominator of which
shall be the Total Revolving Loan Commitment in effect at the time (or, if the
Total Revolving Loan Commitment has been terminated, the aggregate principal
amount of all Revolving Loans then outstanding).
"Quarterly Payment Date" means the last Business Day of March, June,
----------------------
September and December of each year.
"Reference Lenders" means BT and NationsBank.
-----------------
"Refinancings" means, collectively, the Senior Note Refinancing and
------------
the termination of the Existing Credit Agreement and the repayment in full of
all obligations outstanding thereunder.
"Refunded Swing Line Loans" is defined in Section 2.11(c).
------------------------- ---------------
"Regulation D" means Regulation D of the Board as from time to time in
------------
effect and any successor to all or a portion thereof establishing reserve
requirements.
"Related Person" means, with respect to any Person, any trade or
--------------
business (whether or not incorporated) which, together with such Person, is
under common control as described in Section 414(c) of the Code, is a member of
a controlled group, as defined in Section 414(b) of the Code, or is a member of
an affiliated service group, as defined in Section 414(m) of the Code which
includes such Person.
18
"Release" means release, spill, emission, leaking, pumping, pouring,
-------
emptying, dumping, injection, deposit, disposal, discharge, dispersal, escape,
leaching or migration into the indoor or outdoor environment or into or out of
any property of BWAY or its Subsidiaries, including the movement of Contaminants
through or in the air, soil, surface water, groundwater or property of BWAY or
its Subsidiaries.
"Remedial Action" means actions required to (i) clean up, remove,
---------------
treat or in any other way address Contaminants in the indoor or outdoor
environment; (ii) prevent or minimize the Release or threat of Release of
Contaminants so they do not migrate or endanger or threaten to endanger public
health or welfare or the indoor or outdoor environment; or (iii) perform pre-
remedial studies and investigations and post-remedial monitoring and care.
"Replaced Lender" is defined in Section 2.14.
--------------- ------------
"Replacement Lender" is defined in Section 2.14.
------------------ ------------
"Replacing Lender" is defined in Section 3.3(b).
---------------- --------------
"Reportable Event" means a "reportable event" described in Section
----------------
4043(b) of ERISA or in the regulations thereunder or receipt of a notice of
withdrawal liability or reorganization with respect to a Multiemployer Plan
pursuant to Section 4202 or 4242 of ERISA.
"Required Lenders" means, as of the date of determination thereof, the
----------------
Lenders having greater than 50% of the sum of (i) the aggregate principal amount
of Loans and other extensions of credit then outstanding under any of the Loan
Documents plus (ii) the aggregate amount of the remaining available Commitments
of the Lenders under any of the Loan Documents; provided, however, that for
-------- -------
purposes of determining the amount of a Lender's Loans, each Lender shall be
deemed to hold the principal amount of Swing Line Loans and the amount of L/C
Obligations equal to its Pro Rata Share of the Swing Line Loans and L/C
Obligations then outstanding; and provided further, that so long as there exists
-------- -------
only two Lenders under this Agreement, Required Lenders shall constitute all
Lenders.
"Responsible Officer" means, with respect to any Person, any of the
-------------------
Chairman of the Board of Directors, the President, any Senior Vice President,
the Treasurer, the Chief Financial Officer, the Controller or any Executive Vice
President of such Person.
"Revolving Loans" means, collectively, the loans by each of the
---------------
Lenders to the Borrower in accordance with Section 2.1, which shall be comprised
-----------
of a Prime Rate Revolving Loan, a Eurodollar Rate Revolving Loan or any
combination of the foregoing.
"Revolving Loan Commitment" means, with respect to any Lender, the
-------------------------
principal amount set forth opposite such Lender's name on Schedule 1.1(a) hereto
---------------
under the caption "Amount of Revolving Loan Commitment." The Revolving Loan
Commitment of each Lender shall be subject to adjustment or reduction from time
to time in accordance with the terms of this Agreement.
19
"Revolving Loan Obligations" means the obligations of the Borrowers to
--------------------------
repay principal, and pay interest, on the Revolving Loans pursuant to Section
-------
2.2(a).
- ------
"Revolving Note" has the meaning specified in Section 2.2.
-------------- -----------
"Senior Note Refinancing" is defined in Section 5.1.14.
----------------------- --------------
"Senior Notes" means, collectively, Brockway's 8.35% Senior Notes due
------------
September 1, 2001 in the aggregate principal amount of $50 million.
"Shortfall Amount" is defined in Section 3.3(b).
---------------- --------------
"Solvent" shall mean, when used with respect to any Person, that (i)
-------
the fair salable value of its assets as a going concern or in an orderly
liquidation, whichever is greater, is in excess of the total amount of its
liabilities (including for purposes of this definition all liabilities, whether
or not reflected on a balance sheet prepared in accordance with generally
accepted accounting principles, and whether direct or indirect, fixed or
contingent, disputed or undisputed); (ii) it is able to pay its debts or
obligations in the ordinary course as they mature; and (iii) that Person has
capital sufficient to carry on its business and all business in which it is
about to engage.
"Standby Letters of Credit" means any of the standby Letters of Credit
-------------------------
issued by the Facing Agent for the account of a Borrower pursuant to Section
-------
2.12.
- ----
"Stated Amount" means, with respect to any Letter of Credit, the
-------------
stated or face amount of such letter of credit to the extent available at the
time for drawing (subject to presentment of all requisite documents), as the
same may be increased or decreased from time to time in accordance with the
terms of such Letter of Credit.
"Sublimit Amount" means, with respect to any Sublimit Borrower, as of
---------------
any date of determination, an amount equal to the greater of (i) $25,000,000 or
(ii) the product of (A) 4 multiplied by (B) the Consolidated EBIDTA of such
-------------
Sublimit Borrower for the four fiscal quarter period ending on the last day of
the most recently completed fiscal quarter.
"Sublimit Borrower" means Milton or any Additional Borrower.
-----------------
"Subsidiary" of any Person shall mean and include (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 directly or
indirectly through Subsidiaries and (ii) any partnership, association, joint
venture, limited liability company or other entity in which such Person directly
or indirectly through Subsidiaries, has more than a 50% equity interest at the
time. Unless otherwise expressly provided, all references to a "Subsidiary"
shall mean a Subsidiary of BWAY.
20
"Subsidiary Guaranties" means, collectively, (i) the Subsidiary
---------------------
Guaranty in substantially the form of Exhibit 1.1 (A) hereto dated as of the
---------------
Closing Date and executed by each Subsidiary of BWAY (other than a Borrower or a
Foreign Subsidiary) in favor of the Administrative Agent and the Lenders and
(ii) any Subsidiary Guaranty executed by any Subsidiary of BWAY after the
Closing Date pursuant to Section 5.2.12, in each case as amended, supplemented,
--------------
restated or otherwise modified from time to time.
"Substantial Acquisition" means an Acquisition (other than the Davies
-----------------------
Acquisition) the purchase price of which is greater than $20,000,000.
"Swing Line Commitment" means, with respect to the Swing Line Lender
---------------------
at any date, the obligation of the Swing Line Lender to make Swing Line Loans
pursuant to Section 2.11 in the amount referred to therein.
------------
"Swing Line Lender" means NationsBank.
-----------------
"Swing Line Loans" is defined in Section 2.11(a).
---------------- ---------------
"Swing Line Loan Obligations" means the obligations of the Borrowers
---------------------------
to repay principal, and pay interest, on the Swing Line Loans pursuant to
Section 2.2(b).
- --------------
"Swing Line Loan Participation Certificate" is defined in Section
----------------------------------------- -------
2.11(d).
- -------
"Swing Line Note" is defined in Section 2.2(b).
--------------- --------------
"Syndication Agent" shall mean BT in its capacity as Syndication
-----------------
Agent, it being understood and agreed that the Syndication Agent shall have no
obligations or duties as an agent under this Agreement or the other Loan
Documents for or on behalf of any part to this Agreement or any other Loan
Document.
"Target" means the Person an equity interest in which is to be
------
acquired, or the Person whose assets are to be acquired, in any Acquisition.
"Taxes" has the meaning assigned to that term in Section 3.8(a).
----- --------------
"Termination Date" means June 17, 2001.
----------------
"Test Period" means, for any determination under this Agreement, the
-----------
four consecutive fiscal quarters of BWAY then last ended; provided, however,
-------- -------
that if four fiscal quarters have not been completed since the Closing Date,
then the Test Period shall mean the number of fiscal quarters of BWAY that have
been completed since the Closing Date; and provided, further, that in the event
-------- -------
of any Substantial Acquisition the Test Period following the first determination
date after the closing date of any such Substantial Acquisition (the "Reset
-----
Date") shall mean the number of fiscal quarters of BWAY that have been completed
since the Reset Date, until four fiscal quarters have been
21
completed since the Reset Date, and thereafter the four fiscal quarters of BWAY
then last ended (until any subsequent Substantial Acquisition occurs in which
case the foregoing provisions shall apply).
"Total Available Revolving Commitment" means, at the time any
------------------------------------
determination thereof is made, the sum of the respective Available Revolving
Commitments of the Lenders at such time.
"Total Revolving Loan Commitment" means, at any time any determination
-------------------------------
thereof is to be made, the sum of the respective Revolving Loan Commitments of
the Lenders at such time.
"Type" means any type of Loan, namely, a Prime Rate Loan or a
----
Eurodollar Rate Loan.
"Underfunded Plan" has the meaning assigned to that term in Section
---------------- -------
4.15.
- ----
"Unmatured Event of Default" means an event, act or occurrence which
--------------------------
with the giving of notice or the lapse of time (or both) would become an Event
of Default.
"Wholly-Owned Subsidiary" means, with respect to any Person, at any
-----------------------
time any Subsidiary of such Person, all of the outstanding shares of capital
stock of which (other than qualifying shares required to be owned by directors
and/or other nominal amounts of shares required to be held other than by such
Person under applicable law) are at the time owned directly by such Person
and/or one or more Wholly-Owned Subsidiaries of such Person. Unless otherwise
expressly provided, all references to a "Wholly-Owned Subsidiary" shall mean a
Wholly-Owned Subsidiary of BWAY.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. The words "herein," "hereof"
and words of similar import as used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision in this Agreement.
Unless specifically stated to the contrary, all references to "Sections,"
"subsections," "paragraphs," "Exhibits" and "Schedules" in this Agreement shall
refer to Sections, subsections, paragraphs, Exhibits and Schedules of this
Agreement unless otherwise expressly provided; references to Persons include
their respective permitted successors and assigns or, in the case of
governmental Persons, Persons succeeding to the relevant functions of such
persons; and all references to statutes and related regulations shall include
any amendments of same and any successor statutes and regulations.
22