Exhibit 10.8
AMENDED AND RESTATED MONITORING AGREEMENT (this "Agreement"),
dated as of September 30, 2004, among GRAHAM PACKAGING HOLDINGS COMPANY, LP, a
Pennsylvania limited partnership ("GPHC"), GRAHAM PACKAGING COMPANY, LP, a
Delaware limited partnership ("Opco"), BLACKSTONE MANAGEMENT PARTNERS III
L.L.C., a Delaware limited liability company ("BMP"), and GRAHAM ALTERNATIVE
INVESTMENT PARTNERS I, a Pennsylvania limited partnership ("GAIP").
WHEREAS, BMP, by and through itself, its affiliates and their
respective officers, employees and representatives, has expertise in the areas
of finance, strategy, investment and acquisitions relating to the business of
GPHC and Opco; and
WHEREAS, GAIP, by and through itself, its affiliates and their
respective officers, employees and representatives, has expertise in the
operations of the business of GPHC and Opco; and
WHEREAS, GPHC, Opco and BMP are parties to a Monitoring
Agreement, dated as of February 2. 1998 (the "Existing Monitoring Agreement");
and
WHEREAS, the parties hereto desire that, effective as of the
Closing Date contemplated by the Stock Purchase Agreement, dated as of July 28,
2004, by and among Opco, OI Plastic Products FTS, Inc., a Delaware corporation,
and Owens-Illinois, Inc., a Delaware corporation (the "Closing Date"), the
Existing Monitoring Agreement be amended and restated as set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals and
the covenants and conditions contained herein, the parties hereto agree that the
Existing Monitoring Agreement is hereby amended and restated as of the Closing
Date as follows:
1. Appointment. GPHC and Opco hereby appoint BMP and GAIP to render the
advisory and consulting services described in Section 2 hereof for the term of
this Agreement.
2. Services.
(a) BMP hereby agrees that during the term of this Agreement it
shall render to GPHC and Opco, by and through itself, its affiliates,
and their respective officers, employees and representatives as BMP in
its sole discretion shall designate from time to time, advisory and
consulting services in relation to the affairs of GPHC, Opco and their
subsidiaries, including, without limitation, (i) advice in designing
financing structures and advice regarding relationships with GPHC,
Opco and their subsidiaries' lenders and bankers; (ii) advice
regarding the structure and timing of public and private offerings of
debt and equity securities of GPHC, Opco and their subsidiaries; (iii)
advice regarding property dispositions or acquisitions; and (iv) such
other advice directly related or ancillary to the above financial
advisory services as may be reasonably requested by GPHC and Opco. It
is expressly agreed that the services to be performed hereunder shall
not include investment banking or other financial advisory services
rendered by BMP or its affiliates to GPHC and Opco in connection with
any specific acquisition, divestiture, refinancing or recapitalization
by GPHC, Opco or any of their subsidiaries. BMP may be entitled to
receive additional compensation for providing services of the type
specified in the preceding sentence by mutual agreement of GPHC, Opco
or such subsidiary and BMP.
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(b) GAIP hereby agrees that during the term of this Agreement it
shall render to GPHC and Opco, by and through itself, its affiliates,
and their respective officers, employees and representatives as GAIP
in its sole discretion shall designate from time to time, advisory and
consulting services in relation to the business and operations of
GPHC, Opco and their subsidiaries.
3. Fees.
(a) GPHC and Opco and their respective successors, jointly and
severally, agree to pay to BMP an annual fee (the "BMP Monitoring
Fee") of $3,000,000, payable in quarterly installments on March 31,
June 30, September 30 and December 31 (each such date, a "Payment
Date") of each year commencing on December 31, 2004 and continuing
through the earlier of (i) the date on which affiliates of BMP hold,
directly or indirectly, beneficial ownership of less than 10% of the
equity interests of GPHC acquired on February 2, 1998 pursuant to the
Agreement and Plan of Recapitalization, Redemption and Purchase, dated
as of December 18, 1997, by and among GPHC, Graham Packaging
Corporation, a Pennsylvania corporation, GAIP, Graham Engineering
Corporation, a Pennsylvania corporation, Graham Capital Corporation, a
Pennsylvania corporation, Graham Recycling Corporation, a Pennsylvania
corporation, Donald C. Graham, BCP/Graham Holdings LLC, a Delaware
limited liability company, and BMP/Graham Holdings Corporation, a
Delaware corporation, or (ii) such date as GPHC, Opco and BMP shall
agree (the "BMP Termination Date").
(b) GPHC and Opco and their respective successors, jointly and
severally, agree to pay to GAIP an annual fee (the "GAIP Monitoring
Fee") of $1,000,000, payable in quarterly installments through the
earlier of (i) the date on which GAIP and its affiliates hold,
directly or indirectly, beneficial ownership of less than one-third
(1/3rd) of the equity interests of GPHC that were held by such
entities on February 2, 1998, or (ii) such date as GPHC, Opco and GAIP
shall agree (the "GAIP Termination Date"), but in either case subject
to Section 3(c). The GAIP Monitoring Fee will be paid on each Payment
Date on which GPHC, Opco or any of their respective successors pays a
portion of the BMP Monitoring Fee. GAIP hereby acknowledges and agrees
that, subject to Section 3(c), its right to the GAIP Monitoring Fee
will terminate at the BMP Termination Date. GAIP hereby further
acknowledges and agrees that BMP shall have the right in its sole
discretion:
o to terminate its right to the BMP Monitoring Fee, in which case,
subject to Section 3(c), GAIP's right to the GAIP Monitoring Fee will
also be terminated;
o to reduce the amount of the BMP Monitoring Fee, in which case, subject
to Section 3(c), the amount of the GAIP Monitoring Fee will also be
reduced on a proportionate basis; or
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o to accept a monetization or a buy out of the BMP Monitoring Fee, in
which case, subject to Section 3(c), GAIP will be deemed to have
agreed to a monetization or buy out of the GAIP Monitoring Fee on a
proportionate basis.
(c) Notwithstanding anything herein to the contrary, GAIP's right
to receive the GAIP Monitoring Fee may not terminate or be subject to
any reduction (it being agreed that a deferral of fees pursuant to
Section 3(e) shall not be considered a reduction), monetization or buy
out unless GAIP has received GAIP Monitoring Fees aggregating not less
than $4,000,000 (including any payments made to GAIP in respect of any
monetization or buy out of the GAIP Monitoring Fee).
(d) The quarterly installments of the BMP Monitoring Fee and GAIP
Monitoring Fee payable on December 31, 2004 shall not be prorated. Any
BMP Monitoring Fee or GAIP Monitoring Fee for the last calendar year
of this Agreement shall be prorated for the period of such year ending
on the BMP Termination Date or the GAIP Termination Date, as the case
may be.
(e) To the extent required by any debt financing of GPHC, Opco or
any of their subsidiaries, payment of the BMP Monitoring Fee and the
GAIP Monitoring Fee shall be deferred until the earlier of (i) the
dissolution of GPHC and (ii) the first date on which the payment of
such deferred BMP Monitoring Fee and GAIP Monitoring Fee is not
prohibited under such debt financing. Any BMP Monitoring Fee and GAIP
Monitoring Fee deferred pursuant to this Section 3(e) shall bear
interest at a rate of 10% per annum, compounded annually, from the
date deferred until paid.
4. Reimbursements. In addition to the fees payable pursuant to this
Agreement, GPHC and Opco shall, subject to Sections 6.4(vii) and 6.7 of the
Fifth Amended and Restated Agreement of Limited Partnership of GPHC, dated as of
February 2, 1998, jointly and severally, pay directly or reimburse BMP and GAIP
for their respective Out-of-Pocket Expenses (as defined below). For the purposes
of this Agreement, the term "Out-of-Pocket Expenses" shall mean the reasonable
out-of-pocket costs and expenses reasonably incurred by BMP, GAIP or their
respective affiliates in connection with the services rendered hereunder in
pursuing, or otherwise related to, the business of GPHC or Opco, including,
without limitation, (i) fees and disbursements of any independent professionals
and organizations, including, without limitation, independent accountants,
outside legal counsel or consultants, (ii) costs of any outside services or
independent contractors such as financial printers, couriers, business
publications, on-line financial services or similar services and (iii)
transportation, per diem costs, word processing expenses or any similar expense
not associated with its ordinary operations. All reimbursements for
Out-of-Pocket Expenses shall be made promptly upon or as soon as practicable
after presentation by BMP or GAIP to GPHC or Opco of a written statement
thereof.
5. Indemnification.
(a) GPHC and Opco, jointly and severally, will indemnify and hold
harmless BMP, GAIP, their respective affiliates, and their respective
partners (both general and limited), members (both managing and
otherwise), officers, directors, employees, agents and representatives
(each such person being an "Indemnified Party") from and against any
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and all losses, claims, damages and liabilities, whether joint or
several (the "Liabilities"), related to, arising out of or in
connection with the advisory and consulting services contemplated by
this Agreement or the engagement of BMP and GAIP pursuant to, and the
performance by BMP and GAIP of the services contemplated by, this
Agreement, whether or not pending or threatened, whether or not an
Indemnified Party is a party, whether or not resulting in any
liability and whether or not such action, claim, suit, investigation
or proceeding is initiated or brought by GPHC or Opco. GPHC and Opco,
jointly and severally, will reimburse any Indemnified Party for all
reasonable costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) as such costs and expenses
are incurred in connection with investigating, preparing, pursuing,
defending or assisting in the defense of any action, claim, suit,
investigation or proceeding for which the Indemnified Party would be
entitled to indemnification under the terms of the previous sentence,
or any action or proceeding arising therefrom, whether or not such
Indemnified Party is a party thereto. GPHC and Opco will not be liable
under the foregoing indemnification provision with respect to any
Indemnified Party, to the extent that any loss, claim, damage,
liability, cost or expense is determined by a court, in a final
judgment from which no further appeal may be taken, to have resulted
primarily from the gross negligence or willful misconduct of BMP or
GAIP. If an Indemnified Party is reimbursed hereunder for any
expenses, such reimbursement of expenses shall be refunded to the
extent it is finally judicially determined that the Liabilities in
question resulted primarily from the gross negligence or willful
misconduct of BMP or GAIP.
(b) Notwithstanding any provision herein to the contrary, no
partner of GPHC or Opco shall be liable for any obligations of GPHC or
Opco hereunder, including, without limitation, the payment of the BMP
Monitoring Fee or the GAIP Monitoring Fee pursuant to Section 3
hereof, the payment or reimbursement of Out-of-Pocket Expenses
pursuant to Section 4 hereof and the indemnification obligations under
Section 5(a) hereof.
6. Accuracy of Information. GPHC and Opco shall furnish or cause to be
furnished to BMP and GAIP such information as BMP or GAIP believe appropriate to
its monitoring services hereunder and to the ownership by affiliates of BMP or
GAIP of equity interests of GPHC and/or Opco (all such information so furnished
being the "Information"). GPHC and Opco recognize and confirm that each of BMP
and GAIP (i) will use and rely primarily on the Information and on information
available from generally recognized public sources in performing the services
contemplated by this Agreement without having independently verified the same,
(ii) does not assume responsibility for the accuracy or completeness of the
Information and such other information and (iii) is entitled to rely upon the
Information without independent verification.
7. Term. This Agreement shall be effective as of the Closing Date and shall
continue as to BMP until the BMP Termination Date and as to GAIP, until the GAIP
Termination Date; provided that Section 4 hereof shall remain in effect with
respect to Out-of-Pocket Expenses incurred prior to the BMP Termination Date;
and provided further that Section 3(b) hereof shall remain in effect as to GAIP
until GAIP has received GAIP Monitoring Fees aggregating not less than
$4,000,000 as provided in Section 3(c) . The provisions of Sections 5, 6 and 8
hereof and other sections hereof as the context so requires shall survive the
termination of this Agreement.
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8. Permissible Activities. Subject to applicable law, nothing herein shall
in any way preclude BMP, its affiliates or their respective partners (both
general and limited), members (both managing and otherwise), officers,
directors, employees, agents or representatives from engaging in any business
activities or from performing services for its or their own account or for the
account of others, including, without limitation, for companies that may be in
competition with the business conducted by GPHC or Opco.
9. Miscellaneous.
(a) No amendment or waiver of any provision of this Agreement, or
consent to any departure by either party hereto from any such
provision, shall be effective unless the same shall be in writing and
signed by all of the parties hereto. Any amendment, waiver or consent
shall be effective only in the specific instance and for the specific
purpose for which given. The waiver by any party of any breach of this
Agreement shall not operate as or be construed to be a waiver by such
party of any subsequent breach.
(b) Any notices or other communications required or permitted
hereunder shall be sufficiently given if delivered personally or sent
by facsimile, Federal Express or other overnight courier, addressed as
follows or to such other address of which the parties may have given
notice:
If to BMP:
c/o The Blackstone Group L.P.
345 Park Avenue, 31st Floor
New York, New York 10154
Attention: Howard A. Lipson
Facsimile: (212) 583-5703
If to GPHC or to Opco:
c/o Graham Packaging Holdings Company, LP
2401 Pleasant Valley Road
York, PA 17402
Attention: John E. Hamilton
Facsimile: (717) 849-8541
If to GAIP:
c/o Graham Capital Company
1420 Sixth Avenue
York, PA 17403
Attention: William H. Kerlin, Jr.
Facsimile: (717) 848-5951
Unless otherwise specified herein, such notices or other
communications shall be deemed received (i) on the date delivered, if delivered
personally or sent by facsimile, and (ii) one business day after being sent by
Federal Express or other overnight courier.
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(c) This Agreement shall constitute the entire agreement between
the parties with respect to the subject matter hereof, and shall
supersede all previous oral and written (and all contemporaneous oral)
negotiations, commitments, agreements and understandings relating
hereto, including without limitation the Existing Monitoring
Agreement.
(d) The rights granted to BMP and GAIP shall not be transferred
or assigned without the prior written consent of GPHC and Opco, except
that each of BMP and GAIP may transfer or assign its rights under this
Agreement to any of its affiliates.
(e) This Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York.
This Agreement shall inure solely to the benefit of, and be binding
upon, BMP, GAIP, GPHC, Opco and their respective successors and
assigns and, unless otherwise expressly provided herein, nothing in
this Agreement, express or implied, is intended to or shall confer
upon any other person any rights, benefits or remedies of any nature
whatsoever under or by reason of this Agreement; provided that the
provisions of Section 5 hereof shall inure to the benefit of each
Indemnified Party.
(f) This Agreement may be executed by one or more parties to this
Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the
same instrument.
(g) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered by their duly authorized officers or agents as of the
date first above written.
BLACKSTONE MANAGEMENT PARTNERS III L.L.C.
By: /s/ Howard A. Lipson
---------------------------------
Name: Howard A. Lipson
Title:
GRAHAM PACKAGING HOLDINGS COMPANY, LP
By: BCP/Graham Holdings, LLC, its managing general partner
By: /s/ John E. Hamilton
---------------------------------
Name: John E. Hamilton
Title: Vice President
GRAHAM PACKAGING COMPANY, L.P.
By: GPC Opco GP, LLC, its general partner
By: /s/ John E. Hamilton
---------------------------------
Name: John E. Hamilton
Title: Chief Financial Officer, Treasurer and Secretary
GRAHAM ALTERNATIVE INVESTMENT PARTNERS I
By: Graham Family Growth (GP) Company, its general partner
By: GPC Investments, LLC, its general partner
By: /s/ William H. Kerlin, Jr.
---------------------------------
Name: William H. Kerlin, Jr.
Title: President
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