Exhibit 2.1
REORGANIZATION AGREEMENT
dated March 15, 2002,
between
ANCHOR GLASS CONTAINER CORPORATION
and
CERBERUS CAPITAL MANAGEMENT, L.P.
TABLE OF CONTENTS
Page
ARTICLE I
THE PURCHASE AND SALE OF SERIES C PARTICIPATING PREFERRED
STOCK AND NEW COMMON STOCK
1.1 The Purchase of the Preferred Stock and the New Common Stock.........2
1.2 Use of Proceeds......................................................2
1.3 The Closing..........................................................2
1.4 Additional Actions at the Closing....................................2
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
2.1 Organization, Qualification, Corporate Power and Authority...........3
2.2 Capitalization.......................................................3
2.3 Noncontravention.....................................................4
2.4 SEC Documents; Financial Statement; Undisclosed Liabilities..........4
2.5 Absence or Changes of Events.........................................5
2.6 Contracts............................................................7
2.7 Tax Matters..........................................................8
2.8 Tangible Assets......................................................9
2.9 Properties...........................................................9
2.10 Copyrights, Patents, Trademarks and Licenses, Etc...................11
2.11 Licenses and Authorizations.........................................12
2.12 Litigation..........................................................12
2.13 Collective Bargaining Agreements; Labor Disputes....................13
2.14 Employee Benefits...................................................13
2.15 Environmental Laws..................................................15
2.16 Legal Compliance....................................................15
2.17 Insurance Coverage..................................................16
2.18 Brokers' Fees.......................................................16
2.19 Settlement Agreement................................................16
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Page
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF CCM
3.1 Organization, Qualification, Corporate Power and Authority..........16
3.2 Noncontravention....................................................17
3.3 Brokers' Fees.......................................................17
3.4 Investment Intent...................................................17
3.5 Available Funds.....................................................17
ARTICLE IV
COVENANTS
4.1 Reasonable Best Efforts.............................................18
4.2 Approvals; Consents.................................................18
4.3 Bankruptcy Covenants................................................18
4.4 Operation of Business...............................................19
4.5 Notice of Breaches..................................................21
4.6 Exclusivity.........................................................21
4.7 Full Access.........................................................22
4.8 Disclosure Statement................................................22
4.9 Restrictions on Transfer of Securities..............................22
4.10 Insurance Policies..................................................23
4.11 Directors' and Officers' Insurance..................................23
4.12 Payment of Subsequent Equity Fee....................................25
ARTICLE V
CONDITIONS TO CLOSING
5.1 Conditions to Obligations of Each Party.............................25
5.2 Conditions to Obligations of the Investors..........................26
5.3 Conditions to Obligations of the Company............................27
5.4 Frustrations of Conditions..........................................27
ARTICLE VI
TERMINATION
6.1 Termination.........................................................27
6.2 Effect of Termination; Investor Breakup Fee.........................29
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Page
ARTICLE VII
DEFINITIONS
ARTICLE VIII
GENERAL PROVISIONS
8.1 Press Releases and Announcements....................................33
8.2 No Third Party Beneficiaries........................................33
8.3 Entire Agreement....................................................33
8.4 Succession and Assignment...........................................33
8.5 Counterparts........................................................33
8.6 Headings............................................................33
8.7 Notices.............................................................34
8.8 Governing Law.......................................................34
8.9 Amendments and Waivers..............................................35
8.10 Severability........................................................35
8.11 Expenses............................................................35
8.12 Construction........................................................35
Schedule 2.2 - Capitalization
Schedule 2.4 - Undisclosed Liabilities
Schedule 2.5 - Absence of Changes or Events
Schedule 2.6 - Contracts
Schedule 2.9 - Properties
Schedule 2.10 - Intellectual Property
Schedule 2.12 - Litigation
Schedule 1.13 - Collective Bargaining Agreements
Schedule 2.14 - Employee Benefits
Schedule 2.15 - Environmental Laws
Schedule 2.17 - Insurance Coverage
Exhibit A - Series C Participating Preferred Stock Certificate of Designations
Exhibit B - Term Sheet for Tranche B Term Loan
Exhibit C - Reorganization Plan
Exhibit D - Amended and Restated Certificate of Incorporation of the Company
Exhibit E - Amended and Restated By-laws of the Company
Exhibit F - Settlement Agreement
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REORGANIZATION AGREEMENT
This Reorganization Agreement (this "Agreement") is dated as of March 15,
2002 between Anchor Glass Container Corporation, a Delaware corporation (the
"Company"), and Cerberus Capital Management, L.P. ("CCM"), on behalf of one or
more funds or affiliates to be designated by it (each, an "Investor" and,
collectively, the "Investors" and together with the Company, the "Parties").
PRELIMINARY STATEMENT
A. The Company wishes to sell to the Investors in the aggregate, and the
Investors wish to purchase in the aggregate from the Company, (i) 75,000 shares
of a new series of participating preferred stock, par value $.01 per share, of
the Company designated Series C Participating Preferred Stock of the Company
(the "Series C Preferred Stock"), the terms and conditions of which are
contained in the Certificate of Designations set forth on Exhibit A, and (ii)
9,000,000 shares of new common stock, par value $0.10 per share (the "New Common
Stock"), of the Company.
B. Ableco Finance, LLC, an affiliate of the Investors, has offered to
provide $100 million in the aggregate of debtor-in-possession credit facility
(the "DIP Facility"), subject to approval of the Bankruptcy Court (as defined
hereinafter).
C. The Investors will also provide a Tranche B Term Loan to the Company
(the "Tranche B Term Loan") in an aggregate principal amount of $20,000,000,
substantially in accordance with the term sheet set forth on Exhibit B hereto.
D. Concurrently with the execution of this Agreement, the Company is paying
the Investors an initial equity fee in the aggregate amount of $500,000 in
immediately available funds.
E. The purchase of the Series C Preferred Stock and New Common Stock
contemplated by this Agreement and the making of the Tranche B Term Loan will be
consummated under the Plan of Reorganization of the Company attached hereto as
Exhibit C (the "Reorganization Plan").
F. Upon consummation of the Reorganization Plan, the Amended and Restated
Certificate of Incorporation of the Company (the "Amended and Restated
Certificate of Incorporation") shall be as set forth on Exhibit D and the
Amended and Restated By-laws of the Company (the "Amended and Restated By-laws")
shall be as set forth on Exhibit E.
G. The transactions contemplated by this Agreement will be consummated
pursuant to the Reorganization Plan as confirmed by an order (the "Confirmation
Order") of the United States Bankruptcy Court for the Middle District of
Florida, Tampa Division (the "Bankruptcy Court"), in which the Company files the
petition (the "Petition") containing such plan.
H. Certain transactions contemplated by this Agreement will require prior
Bankruptcy Court approval pursuant to a separate order entered by the Bankruptcy
Court (the "Approval Order") as soon as practicable after the Petition has been
filed.
The Parties therefore agree as follows:
ARTICLE I
THE PURCHASE AND SALE OF SERIES C participating
PREFERRED STOCK AND NEW COMMON STOCK
1.1 The Purchase of the Preferred Stock and the New Common Stock. Upon the
terms and subject to the conditions hereof as incorporated within the
Reorganization Plan, at the Closing (as defined below) the Company shall issue
and sell to each Investor, and each Investor shall purchase from the Company, a
number of shares of Series C Preferred Stock (such shares, the "Purchased Series
C Shares") and a number of shares of New Common Stock (such shares, the
"Purchased Common Shares" and together with the Purchased Series C Shares the
"Purchased Shares") set forth opposite the name of each Investor set forth on
Schedule 1 hereto, such Purchased Common Shares in the aggregate representing
all of the reorganized Company's fully diluted common equity, without taking
into account (a) the participation rights of the Series C Preferred Stock and
(b) stock-option plans to be instituted for the reorganized Company. At the
Closing (i) the Company shall issue to each Investor certificates for such
Investor's Purchased Series C Shares and Purchased Common Shares registered in
the names as directed by such Investor no less than one (1) Business Day prior
to the Closing and (ii) each Investor shall transfer and deliver to the Company
in immediately available funds its pro rata share of the payment for the
Purchased Series C Shares ($75,000,000 in the aggregate) and the Purchased
Common Shares ($5,000,000 in the aggregate) (collectively, the "Purchase
Price").
1.2 Use of Proceeds. The Company shall use the net proceeds of the Purchase
Price to satisfy partially the Company's obligations under the Reorganization
Plan and for general corporate purposes.
1.3 The Closing. Unless this Agreement is terminated pursuant to Article
VI, the Parties shall cause the closing of the transactions contemplated by this
Agreement (the "Closing") to take place at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇
LLP on a date to be agreed by the Company and the Investors within two Business
Days (or such other number of days not to exceed seven Business Days as the
Company and the Investors shall agree) after the date of satisfaction or waiver
of all the conditions to the obligations of the Parties to consummate the
transactions contemplated hereby set forth in Section 5.1 (the "Closing Date").
1.4 Additional Actions at the Closing. At the Closing, the Company shall
"substantially consummate" the Reorganization Plan (as such term is used in
Title 11 of the United States Code (the "Bankruptcy Code")). In addition, upon
the terms and subject to the conditions hereof, at the Closing, the Company
shall (a) deliver to the Investors the various certificates, instruments and
documents referred to in Section 5.2; (b) cause the Amended and Restated
Certificate of Incorporation to be filed with the Secretary of State of the
State of Delaware; and (c) cause the Board of Directors of the Company to adopt
the Amended and Restated By-laws. The Investors shall (a) fund the Tranche B
Term Loan; (b) deliver to the Company the Purchase Price in immediately
available funds; and (c) deliver to the Company the various certificates,
instruments and documents referred to in Section 5.3.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to each Investor, except in each case
as set forth in the Schedules (which Schedules shall be in form and substance
reasonably satisfactory to the Investors and delivered by the Company to the
Investors at or before the close of business on March 22, 2002) hereto, as
follows:
2.1 Organization, Qualification, Corporate Power and Authority. (a) The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the state of Delaware. The Company is duly qualified
to conduct business and is in good standing under the laws of each jurisdiction
in which the nature of its businesses or the ownership or leasing of its
properties requires such qualification, other than where the failure to be so
qualified would not individually or in the aggregate have a Company Material
Adverse Effect. The Company has all requisite corporate power and authority to
carry on the businesses in which it is engaged and to own and use the properties
owned and used by it.
(b) The Company has all requisite corporate power and authority to enter
into and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. Subject to approval by the Bankruptcy Court:
(a) all corporate and stockholder acts and other proceedings required to be
taken by the Company to authorize the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and properly taken and (b) this Agreement has been duly executed and
delivered by the Company and constitutes a legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms.
(c) The Company has full corporate power and authority and possesses all
governmental franchises, licenses, permits, authorizations and approvals
necessary to enable it to own, lease or otherwise hold its assets and to carry
on its businesses as presently conducted, other than such the lack of which
would not, individually or in the aggregate, have a Company Material Adverse
Effect.
(d) The Company has no subsidiaries.
2.2 Capitalization. (a) As of the date hereof, the authorized capital stock
of the Company consists of 50,000,000 shares of Company Common Stock and
20,000,000 shares of Company Preferred Stock, of which 2,239,320 shares have
been designated Series A 10% Cumulative Convertible Preferred Stock (the "Series
A Preferred Stock") and 5,000,000 shares have been designated Series B 8%
Cumulative Convertible Preferred Stock (the "Series B Preferred Stock"). As of
March 8, 2002, 3,357,825 shares of Company Common Stock were issued and
outstanding, 2,239,320 shares of Series A Preferred Stock were issued and
outstanding, 3,360,000 shares of Series B Preferred Stock were issued and
outstanding, and 1,893,531 warrants to acquire Company Common Stock (the
"Warrants") were issued and outstanding. All of the issued and outstanding
shares of Company Capital Stock are validly issued, fully paid and nonassessable
and free of preemptive rights. Except
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as set forth above or as set forth in Schedule 2.2, as of the date hereof, there
are no shares of capital stock of the Company issued or outstanding, no options,
warrants or rights to acquire, or other securities convertible into, capital
stock of the Company, and no agreements or commitments obligating the Company to
issue, sell or acquire any shares of its capital stock.
(b) There are no voting trusts, proxies or other agreements or
understandings to which the Company is a party or by which the Company is bound
with respect to the voting of the capital stock of or other equity interest in
the Company. Except as contemplated by the Reorganization Plan, the Company is
not required to redeem, repurchase or otherwise acquire shares of capital stock
of or other equity interest in the Company as a result of the transactions
contemplated by this Agreement.
(c) On the Closing Date, after giving effect to the Reorganization Plan,
the authorized and outstanding capital stock of the Company will be as set forth
in Schedule 2.2.
(d) The Purchased Shares and the shares of New Common Stock (if any) to be
issued and delivered pursuant to the terms of the Series C Preferred Stock will
be duly authorized, validly issued, fully paid, nonassessable and free of
preemptive rights.
2.3 Noncontravention. None of the execution and delivery of this Agreement
by the Company, or consummation of the transactions contemplated hereby, after
giving effect to the Reorganization Plan, (a) will violate any provision of the
charter, by-laws or similar organizational documents of the Company, except to
the extent duly authorized by the Bankruptcy Court pursuant to the
Reorganization Plan or the Confirmation Order; (b) except for the applicable
requirements (except to the extent such requirements are rendered inapplicable
by operation of the Bankruptcy Code) of the Securities Act of 1933, as amended
(the "Securities Act"), the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), any applicable state and foreign securities laws, various
Environmental Laws and the HSR Act and other than approval by the Bankruptcy
Court of the Reorganization Plan, will require on the part of the Company any
filing with, or any permit, authorization, consent or approval of, any
Governmental Entity for the operation of, following the Closing Date, the
business of the Company as currently conducted, except where the failure to make
such filing or obtain such permit, authorization, consent or approval would not
individually or in the aggregate have a Company Material Adverse Effect; or (c)
violate, result in a breach of, constitute (with or without due notice or lapse
of time or both) a default under, result in the acceleration of, create in any
party any right to accelerate, terminate, modify or cancel, or require any
notice, consent or waiver under, any contract, lease, sublease, license,
sublicense, franchise, permit, indenture, agreement or mortgage for borrowed
money, instrument of indebtedness, Lien or other material arrangement, to which
the Company is a party or by which the Company is bound or to which any of its
material assets is subject or any judgment, order, writ, injunction, decree,
statute, rule or regulation applicable to the Company or any of its properties
or assets, other than such conflicts, violations, breaches, defaults,
accelerations, terminations, modifications, cancellations or notices, consents
or waivers as would not individually or in the aggregate have a Company Material
Adverse Effect.
2.4 SEC Documents; Financial Statements; Undisclosed Liabilities. (a) The
Company has filed all required reports, schedules, forms, statements and other
documents with the Securities and Exchange Commission (the "SEC") since December
31, 1998 (the "SEC Documents"). The
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Company has delivered to the Investors (i) the Company's annual reports on Form
10-K for its fiscal years ended December 31, 1999, 2000 and, in substantially
final form, 2001, (ii) its quarterly reports on Form 10-Q for its fiscal
quarters ended March 31, 2001, June 30, 2001 and September 30, 2001 and (iii)
all of the other SEC Documents filed by it since December 31, 1998. The audited
balance sheets of the Company (including the notes thereto) set forth in the
most recent SEC Document of the Company filed prior to the date hereof on Form
10-K shall be hereinafter referred to as the "Actual Balance Sheet". As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the Securities Act, or the Exchange Act, as the case may be,
applicable to such SEC Documents. The financial statements of the Company
included in the SEC Documents comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, were prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly present
the consolidated financial position of the Company, as of the dates thereof, and
the consolidated results of operations and statements of cash flows of the
Company, for the periods then ended (subject, in the case of any unaudited
statements, to the absence of footnotes and to normal year-end audit
adjustments).
(b) There are no material liabilities or obligations (whether accrued,
absolute, contingent or unasserted), except (1) as disclosed, reflected or fully
reserved against in the Actual Balance Sheet, (2) for items set forth in
Schedule 2.4, (3) for other liabilities and obligations incurred in the ordinary
course of business consistent with past practice since the Balance Sheet Date
and (4) for liabilities and obligations that, when taken together, would not
reasonably be expected to result in a Company Material Adverse Effect.
2.5 Absence of Changes or Events. Except as set forth in Schedule 2.5,
since the Balance Sheet Date, the Company has conducted its business in the
ordinary course substantially consistent with past practices; provided that from
and after the filing of the Petition, the Company may be required to subject
certain transactions to Bankruptcy Court approval, may be precluded from paying
pre-petition liabilities except as otherwise authorized by the Bankruptcy Court,
may be granted authority to incur new and replacement Liens in favor of its
debtor-in-possession lenders and certain other secured creditors, and may be
subject to set-off, recoupment and reclamation claims by creditors, and to the
alteration of normal trade credit terms by many suppliers. As a result of the
Petition, the Company may be in default in many of its obligations to creditors,
which creditors are stayed from proceeding on their claims. Except as set forth
above, there has not been since the Balance Sheet Date:
(a) any material adverse change in the condition of the Company's
business, operating results, assets or properties (including, but not
limited to, the Company's plants, properties and equipment), taken as
a whole;
(b) any creation or assumption by the Company of any Lien on any of the
Company's properties or assets other than in the ordinary course of
business consistent with past practices;
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(c) any making of any loan, advance or capital contribution to or
investment in any Person other than in customers or suppliers of the
Company (who are not Affiliates) in the ordinary course of business;
(d) any damage, destruction or other casualty loss (whether or not covered
by insurance) or condemnation or other governmental taking or sale in
lieu thereof affecting the Company;
(e) any transaction or commitment made, or any contract or agreement
entered into, by the Company (including the acquisition or disposition
of any assets not in the ordinary course of business) or any
relinquishment by the Company of any contract or other right, in any
such case, that is material to its business, except for dispositions
of obsolete or worn-out equipment;
(f) any change in any method of accounting or accounting practice
(including consistent application) by the Company, except, after the
filing of the Petition, as may be required by GAAP;
(g) any (i) individual employment, deferred compensation, severance,
retirement or other similar agreement entered into with any director,
officer or employee of the Company (or any amendment to any such
existing agreement), (ii) grant of any severance or termination pay to
any director, officer or employee of the Company, or (iii) change in
compensation or other benefits payable to any director, officer or
employee of the Company pursuant to any severance or retirement plans
or policies thereof, except in each case, such agreements, grants or
changes as have been (A) on a Company-wide basis pursuant to a written
Company policy concurrently in effect, (B) in the ordinary course of
business consistent with past practices or (C) after the filing of the
Petition, set forth in the Reorganization Plan; or
(h) any agreement (including any modification, cancellation or termination
of any existing agreement) with or for the benefit of (i) any
stockholder, officer or director of the Company, or (ii) Consumers
Packaging, Inc., G&G Investments, Inc., Glenshaw Holdings, Inc., GGC
Holdings, Inc., Hillsboro Glass Company, I.M.T.E.C. Enterprises Inc.,
Consumers International Inc., Consumers U.S., Inc., or CUS II, Inc. or
(iii) any of their respective officers, directors or Affiliates, other
than, compensatory arrangements with non-executive employees entered
into in the ordinary course of business;
(i) any capital expenditure, or commitment for a capital expenditure, for
additions or improvements to property, plant and equipment, which
expenditure or commitment, when taken together with all other such
expenditures and commitments, exceeds that set forth on the Company's
budget previously furnished by the Company to the Investors.
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2.6 Contracts. Except as set forth in Schedule 2.6, the Company is not a
party to or bound by:
(a) (i) any lease of real property ("Real Property Leases") under which
the Company uses or occupies or has the right to use or occupy, now or
in the future, any real property, in each case providing for annual
rentals of more than $100,000 per annum or $1,000,000 in the
aggregate, or (ii) any lease of personal property under which the
Company uses or has the right to use, now or in the future, any
personal property, in each case providing for annual rentals of more
than $50,000 per annum or $500,000 in the aggregate;
(b) except as set forth in the capital expenditure budget referred to in
Section 2.5(h), any agreement for the purchase of materials, supplies,
goods, services, equipment or other assets that provides for either
(i) annual payments by the Company of $500,000 or more or (ii)
aggregate payments by the Company of $1,000,000 or more, or any
agreement for the purchase of real property;
(c) any sales, distribution or other similar agreement providing for the
sale by the Company of materials, supplies, goods, services, equipment
or other assets that provides for either (i) annual payments to the
Company of $2,500,000 or more or (ii) aggregate payments to the
Company of $5,000,000 or more, or any agreement for the sale of real
property or granting to a third party an option to purchase or lease,
or a right of first refusal to purchase or lease, any real property of
the Company, except for sales of, or grants of options with respect
to, real property in connection with the disposition of assets as set
forth in Section 2.5(e);
(d) any partnership, joint venture or other similar agreement or
arrangement which is material to the business of the Company;
(e) any agreement relating to the acquisition or disposition of any
business (whether by merger, sale of stock, sale of assets or
otherwise) that provides for aggregate payments by or to the Company
of $1,000,000 or more;
(f) any agreement that limits the freedom of the Company to compete in any
line of business or with any person or in any area or to own, operate,
sell, transfer, pledge or otherwise dispose of or encumber any Asset
or which would so limit any freedom of the Investors after the
Closing;
(g) any option, license, franchise or similar agreement that provides for
either (i) annual payments by the Company of $250,000 or more or (ii)
aggregate payments by the Company of $500,000 or more, or that grants
the Company or any material third party rights in any Intellectual
Property Rights ("Intellectual Property Contracts");
(h) any agency, dealer, sales representative, marketing, distribution or
other similar agreement that provides for either (i) annual payments
by the Company of $250,000 or more or (ii) aggregate payments by the
Company of $500,000 or more;
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(i) any agreement with or for the benefit of (i) any stockholder, officer
or director of the Company, or (ii) Consumers Packaging, Inc., G&G
Investments, Inc., Glenshaw Holdings, Inc., GGC Holdings, Inc.,
Hillsboro Glass Company, I.M.T.E.C. Enterprises Inc., Consumers
International Inc., Consumers U.S., Inc., or CUS II, Inc. or any of
their respective officers, directors or Affiliates, other than
compensatory arrangements with non-executive employees entered into in
the ordinary course of business; or
(j) any other agreement or commitment not made in the ordinary course of
business that is material to the Company taken as a whole.
Except as set forth in Schedule 2.6, all such agreements listed in such Schedule
(collectively, the "Contracts") are valid and binding agreements of the Company
and are in full force and effect in all material respects. Except as set forth
in Schedule 2.6, the Company has performed in all material respects all
obligations required to be performed by it to date under the Contracts; to the
knowledge of the Company, no condition exists that with notice or lapse of time
or both would constitute a material default on the part of the Company
thereunder; and, to the Company's knowledge, no other party to any of the
Contracts is in material breach or default thereunder. The Company has delivered
or made available true and complete copies of each of the Contracts (including
all modifications, amendments and supplements) to the Investors prior to the
date hereof.
2.7 Tax Matters. (a) The Company has timely filed all Tax Returns that it
is or was required to file, and all such Tax Returns are true and complete in
all material respects. The Company has timely paid all Taxes of the Company that
were due and payable prior to the date hereof, and will timely pay all Taxes of
the Company that are due and payable prior to the Closing Date. All Taxes that
the Company is or was required by law to withhold or collect have been duly
withheld or collected and, to the extent required, have been paid to the proper
Governmental Entity, except for amounts being contested in good faith by
appropriate proceedings for which adequate reserves are reflected on the Actual
Balance Sheet and amounts which are properly disclosed in the Company Financial
Statements.
(b) The Company has delivered or otherwise made available to the Investors
true and complete copies of all federal income Tax Returns for the Company
together with all related examination reports and statements of deficiency, for
all periods commencing on or after December 31, 1996.
(c) The federal income Tax Returns of the Company have been audited by the
Internal Revenue Service or are closed by the applicable statute of limitations
for all taxable years through the taxable year 1997.
(d) No Tax Liens have been filed and no claims are being asserted with
respect to any Taxes of the Company. No examination or audit of any Tax Return
of the Company by any Governmental Entity is currently in progress. The Company
has not been informed by any jurisdiction that the jurisdiction believes that
the Company was required to file any Tax Return that has not since been timely
filed or, if not timely filed, with respect to which an assessed amount has not
since been paid.
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The Company has not waived any statute of limitations with respect to Taxes or
agreed to an extension of time with respect to a Tax assessment or deficiency
which waiver or extension of time is still in effect.
(e) The Company has not been included in any combined, consolidated or
unitary group for federal, state or local income Tax purposes. No consent or
election under Section 341 of the IRC has been made for the Company nor has any
other Tax election been made for the Company that could reasonably be expected
to have a Company Material Adverse Effect.
(f) The Company is not and never has been a "United States real property
holding corporation" as defined in Section 897 of the IRC.
(g) The net operating loss carryover available under Section 172(a) of the
IRC to the Company for the taxable year of the Company that began on January 1,
2002 is not less than $149,000,000 (although the per year limitation will be
applicable to such amount).
(h) The purchase of the Purchased Shares will not be a factor causing any
payments to be made by the Company to be nondeductible (in whole or in part)
pursuant to Section 280G of the Code. The Company is not a party to any
agreement that provides for the payment of any amount that would be
nondeductible (in whole or in part) pursuant to Section 162(m) of the Code.
2.8 Tangible Assets. The Company owns or leases all tangible assets, if
any, necessary for the conduct of its business as presently conducted. Each such
tangible asset is free from material defects, is in good operating condition and
repair and has been properly maintained (given due account to the age and length
of use of same, ordinary wear and tear excepted) and is suitable for the
purposes for which it is presently used.
2.9 Properties. (a) The Company has (i) good and valid title to all
material tangible assets (other than the Real Properties which are covered
below) used in its businesses (except for property sold or otherwise disposed of
in the ordinary course of business consistent with past practices), (ii) good
and valid fee simple title (which is insurable at regular rates by a reputable
title company) to the Fee Properties (as hereinafter defined), and (iii) valid
leasehold interests in the Leased Properties (as hereinafter defined), in the
case of each of clauses (i) through (iii) above, free and clear of all Liens,
except for the following:
(A) Those matters relating to each Fee Property and Leased Properties
set forth on Schedule 2.9(a);
(B) Liens disclosed on the Actual Balance Sheet or the notes thereto;
(C) Liens for taxes not yet due or being contested in good faith or
which, though due, may be paid without interest or penalty, in each case
for which adequate accruals or reserves have been established on the Actual
Balance Sheet; or
(D) In the case of the Real Properties, Liens that do not secure any
monetary obligations and that do not materially (individually or in the
aggregate with all other matters)
-9-
detract from the value of the property to which they relate as now used or
adversely affect the continued use of the property to which they relate in
the conduct of the business of the Company currently conducted thereat, or
in the case of personal property, Liens that do not secure any monetary
obligations and that do not materially (individually or in the aggregate
with all other matters) detract from the value of the property to which
they relate, as now used or adversely affect the continued use of such
assets in the conduct of the business of the Company as currently utilized.
(b) Schedule 2.9(b) identifies all of the material real properties owned
(the "Fee Properties") or leased (the "Leased Properties") by the Company (the
Fee Properties and the Leased Properties, collectively, the "Real Properties").
(c) Except as set forth on Schedule 2.9(c), to the Company's knowledge, the
buildings and structures constituting part of the Fee Properties and the Leased
Properties and related equipment, are in good operating condition and repair and
have been properly maintained in a manner consistent with standards generally
followed in the industry (giving due account to the age and length of use of
same, ordinary wear and tear excepted and damage by fire and other casualty
covered by insurance excepted), and are structurally sound.
(d) Except as set forth on Schedule 2.9(d) or as would not reasonably be
expected to result in a Company Material Adverse Effect, the buildings and
structures constituting part of each of the Fee Properties and the Leased
Properties currently have access to (i) public roads or valid easements over
private streets or private property for such ingress to and egress from such
property and (ii) water supply, storm and sanitary sewer facilities, telephone,
gas and electrical connections, fire protection, drainage and other public
utilities, in each case as is reasonably necessary for the current use of such
properties.
(e) The installation and construction of the buildings and structures
located on the Fee Properties and the Leased Properties have been completed in
material compliance with all laws, rules, regulations, judgments, orders,
permits, licenses and other requirements of and agreements with all Governmental
Entities applicable to such properties; and all building permits, certificates
of occupancy, licenses and other authorizations required for current uses of
such properties have been obtained, other than those the failure of which to
obtain would not materially adversely affect the continued use of the relevant
property as now used, and true and complete copies thereof (to the extent in the
Company's possession) have been provided to the Investors. The provisions of
this Section do not apply to the requirements under Environmental Laws, which
are covered elsewhere in this Agreement.
(f) Except as set forth in Schedule 2.9(f), (i) each lease entered into for
the Leased Properties (each, a "Real Property Lease") is in full force and
effect and has not been amended, modified or supplemented, (ii) except as is
being contested in good faith and for which adequate reserves have been
established in accordance with GAAP, all rent and other sums and charges payable
under each Real Property Lease are current, (iii) no notice of a material
default on the part of the tenant or termination notice has been served under
any Real Property Lease which remains outstanding, (iv) other than as may exist
as of the date hereof (but not as of the Closing Date) or by reason of filing of
the
-10-
Petition, no uncured material default or termination event exists (and no
condition exists which with the giving of notice or the passage of time or both
would constitute a material default or termination event) under any Real
Property Lease and (v) the consummation of the transactions provided for herein
will not constitute a material default under any Real Property Lease or grounds
for the termination thereof
(g) To the Company's knowledge, there is no underlying Lien affecting the
Leased Properties which is superior to the interest of the tenant under such
lease.
(h) There are no encroachments or other facts or conditions affecting any
of the Fee Properties or the Leased Properties that would be revealed by an
accurate survey or inspection thereof which would, individually or in the
aggregate, materially detract from the value of such property as now used or
materially adversely affect the continued use of such property in the conduct of
the business of the Company as currently utilized. None of the material
buildings and structures on the Fee Properties or the Leased Properties
materially encroaches upon real property of another person or upon the area of
any easement (other than encroachments on utility easements to the extent such
encroachments would not, individually or in the aggregate, materially detract
from the value of such property as now used or materially adversely affect the
continued use of such property in the conduct of the business of The Company as
currently utilized) affecting the Fee Properties or Leased Properties.
2.10 Copyrights, Patents, Trademarks and Licenses, Etc. Except as would not
reasonably be expected to result in a Company Material Adverse Effect, the
Company owns or is licensed or otherwise has the right to use all trademarks,
service marks, trade names, service names, and other indicia of origin,
including domain names, inventions, patents, trade secrets, know-how, copyright
(including any registration or applications for registration of any of the
foregoing) or any other similar type of proprietary intellectual property right,
and other rights that are reasonably necessary or appropriate for the operation
of the Company's business as currently conducted or contemplated (collectively,
the "Intellectual Property Rights"). Schedule 2.10 sets forth a true and
complete list and summary description of all Intellectual Property Rights that
have been Registered or that are otherwise material, and are owned by the
Company. The Intellectual Property Rights owned by the Company are valid,
subsisting and enforceable and have been used with reasonable Intellectual
Property notices and legends. Except as would not reasonably be expected to
result in a Company Material Adverse Effect, no Intellectual Property Right is
subject to any outstanding judgment, injunction, order or decree restricting the
use thereof by the Company or restricting the licensing thereof by the Company
to any person. Except as set forth on Schedule 2.10 or as would not reasonably
be expected to result in a Company Material Adverse Effect, (i) the Company is
not violating, nor has the Company violated, any intellectual property rights of
third parties, and no suit, action, reissue, reexamination, public protest,
interference, arbitration, mediation, opposition, cancellation or other
proceeding (collectively, "Suit") is pending concerning any claim or position
that the Company has violated any intellectual property rights, nor has any such
Suit or claim been threatened or asserted; (ii) the Company is in compliance
with, and has conducted its business so as to comply with, all terms of all
Intellectual Property Contracts, there exists no event, condition or occurrence
which, with the giving of notice or lapse of time, or both, would constitute a
breach or default by the Company or another person or entity under any
Intellectual Property Contract, and no party to any Intellectual Property
Con-
-11-
tract has given the Company notice of its intention to cancel, terminate or fail
to renew any Intellectual Property Contract; (iii) no Suit is pending concerning
the Intellectual Property Rights owned by the Company, including any Suit
concerning a claim or position that the Intellectual Property Rights have been
violated or are invalid, unenforceable, unpatentable, unregisterable,
cancelable, not owned or not owned exclusively by the Company, and no such Suit
or claim has been threatened or asserted; (iv) to the Company's knowledge, no
person or entity is violating any Intellectual Property Rights owned by the
Company; (v) the Company has timely made all filings and payments with the
appropriate foreign and domestic agencies required to maintain in subsistence
all Intellectual Property Rights owned by the Company that are Registered, and
to confirm and effect the Company's ownership thereof; and (vi) the Company has
taken all reasonable measures to protect the secrecy, confidentiality and value
of all confidential and proprietary information, trade secrets and know-how used
in the Company's business as currently conducted or contemplated (collectively,
"Business Trade Secrets"), including, without limitation, entering into
appropriate confidentiality agreements with all officers, directors, employees,
and other individuals or entities with access to the Business Trade Secrets.
2.11 Licenses and Authorizations. (a) The Company holds all licenses,
permits, certificates, franchises, ordinances, registrations, or other rights,
applications and authorizations filed with or granted, issued or entered by any
Governmental Entity, that are required for the conduct of its business as
currently conducted (each as amended to date) (collectively, the "Company
Authorizations"), other than such licenses, permits, certificates, franchises,
ordinances, registrations or other rights, applications and authorizations the
absence of which would not individually or in the aggregate materially impair
the ability of the Company to consummate the transactions contemplated hereby or
of the Company to own and operate the properties, assets and business of the
Company following the Closing in the ordinary course of business.
(b) The Company Authorizations are in full force and effect and have not
been suspended or modified in any material adverse respect, canceled or revoked,
and the Company has operated in compliance with all terms thereof or any
renewals thereof applicable to it, other than where the failure to so comply
would not individually or in the aggregate have a Company Material Adverse
Effect or materially impair the ability of the Company to own and operate the
properties, assets and business of the Company following the Closing. To the
Company's knowledge, there is not pending any application, petition, objection
or other pleading with any Governmental Entity which questions the validity of
or contests any Company Authorization or which could reasonably be expected, if
accepted or granted, to result in the revocation, cancellation, suspension or
any materially adverse modification of any Company Authorization.
2.12 Litigation. Except as set forth on Schedule 2.12, (a) there is no
action, suit, proceeding or investigation to which the Company is a party
(either as a plaintiff or defendant) pending or, to the Company's knowledge,
threatened before any Governmental Entity, (b) none of the Company or any
officer, director or employee of the Company has been permanently or temporarily
enjoined by any order, judgment or decree of any Governmental Entity from
engaging in or continuing to conduct the business of the Company and (c) there
is no outstanding order, judgment, injunction or decree of any Governmental
Entity or arbitration tribunal against the Company.
-12-
2.13 Collective Bargaining Agreements; Labor Disputes. Except as set forth
on Schedule 2.13, (i) the Company is not a party to any collective bargaining
agreement or other labor union contract applicable to any employee thereof; (ii)
there are no material grievances outstanding against the Company under any such
agreement or contract; (iii) there are no unfair labor practice charges or
complaints pending against the Company before the National Labor Relations Board
or any similar state agency and there are no complaints, charges, or claims
against the Company pending or to the knowledge of the Company, threatened to be
brought or filed with any authority, court or arbitrator based on, arising out
of, in connection with or otherwise relating to the employment or termination of
employment of any individual by the Company; and (iv) there are no strikes,
slowdowns, work stoppages, lockouts, union organizational campaigns or other
protected concerted activity under the National Labor Relations Act or, to the
Company's knowledge, threats thereof, by or with respect to any employees of the
Company. The Company is in compliance with all laws governing the employment of
labor, including, but not limited to, all such laws relating to wages, hours,
collective bargaining, discrimination, civil rights, safety and health, workers
compensation and collection and payment of withholding and/or Social Security
and similar taxes. The Company has not incurred any liability of obligation
under the Worker Adjustment and Retraining Notification Act or similar state
law, which remains unpaid or unsatisfied.
2.14 Employee Benefits. Except as otherwise disclosed in Schedule 2.14:
(a) Schedule 2.14(a) lists each Employee Plan. Prior to the execution
of Agreement, the Company has delivered or made available to the Investors
complete and accurate copies of the Employee Plans (and, if applicable,
related trust agreements) and all amendments thereto (including any summary
plan description and summary of material modifications) together with (i)
the most recent annual report prepared in connection with any Employee Plan
(Form 5500 including, if applicable, Schedule B thereto) and (ii) if
applicable, the most recent actuarial valuation report prepared in
connection with any Employee Plan. The Company has provided or made
available to the Investors complete actuarial data (including age, salary,
service and related data) for employees of the Company as of the most
recent practicable date.
(b) Neither the Company nor any of its ERISA Affiliates has incurred,
or reasonably expects to incur prior to the Closing, any liability under
Title IV of ERISA with respect to any plan covered or covered previously by
Title IV of ERISA. As of the Closing, no condition exists that is likely to
constitute grounds for termination by the PBGC of any Employee Plan subject
to Title IV of ERISA. No "reportable event", within the meaning of Section
4043(c) of ERISA, has occurred in connection with any Employee Plan subject
to Title IV of ERISA.
(c) Except as set forth on Schedule 2.14(c), none of the Employee
Plans is a Multiemployer Plan. To the Company's knowledge, no Employee Plan
which is a Multiemployer Plan is or is reasonably expected to become
"insolvent" or in "reorganization," as such terms are defined for purposes
of Title IV of ERISA. Between the date of this Agreement and the Closing
Date, the Company will use reasonable efforts to determine the aggregate
amount of withdrawal liability which would be incurred if the Company were
to incur a complete
-13-
withdrawal from any of the scheduled Multiemployer Plans on or before the
Closing Date and shall provide such withdrawal liability amount to the
Investors.
(d) Each Employee Plan which is intended to be qualified under Section
401(a) of the IRC received a favorable determination letter from the
Internal Revenue Service that it is so qualified and, to The Company's
knowledge, no event has occurred since the date of such determination
letter to adversely affect the qualified status of such Plan. Prior to the
execution of this Agreement, the Company has furnished or made available to
Buyer the most recent determination letter of the Internal Revenue Service
relating to each such Employee Plan for which such a letter has been
received. Except as set forth on Schedule 2.14(d), each Employee Plan and
to the knowledge of the Company, each Multiemployer Plan has been
maintained in compliance with its terms and with the requirements
prescribed by any and all applicable statutes, orders, rules and
regulations, including ERISA and the IRC, and with respect to each Employee
Plan maintained by the Company, the Company has submitted or will submit a
request for a determination letter from the Internal Revenue Service in
accordance with Revenue Procedure 2001-55.
(e) Schedule 2.14(e) lists each Benefit Arrangement. Prior to the
execution of this Agreement, The Company has furnished or made available to
the Investors copies or descriptions of each Benefit Arrangement. Each
Benefit Arrangement has been maintained in compliance with its terms and
with the requirements prescribed by any and all applicable statutes,
orders, rules and regulations.
(f) There has been no amendment to, written interpretation of or
announcement (whether written or not written) by the Company or any of its
ERISA Affiliates relating to, or change in employee participation or
coverage under, any Employee Plan or Benefit Arrangement which would
increase materially the expense of maintaining such Plan or Arrangement
above the level of the expense incurred in respect thereof for the most
recent fiscal year. Neither the Company nor any Affiliate nor, to the
knowledge of the Company, any employee of the Company has taken any action
or made any statement that could preclude or interfere with the right of
the Company or its successor to reduce or eliminate any post-retirement
welfare benefits provided under any Employee Plan or Benefit Arrangement.
(g) The accumulated post-retirement benefit obligations in accordance
with the principles of Financial Accounting Standard No. 106, is fairly
presented on Schedule 2.14(g).
(h) No legal action, suit or claim is pending or, to the knowledge of
the Company, threatened, with respect to any Employee Plan or Benefit
Arrangement (other than claims for benefits in the ordinary course). The
Company has not engaged in a transaction in connection with any Employee
Plan in which the Company would be subject to wither a civil penalty
pursuant to Section 502(i) of ERISA or tax pursuant to Section 4975 of the
IRC. Except as disclosed in Schedule 3.13(i), no employee of the Company
will become entitled to any retirement, severance or other benefit solely
as a result of the transactions contemplated hereby.
-14-
(i) The obligation for unfunded pension obligations, calculated in
accordance with the principles of Financial Accounting Standard No. 87,
under all defined benefit plans maintained by the Company is fairly
presented on Schedule 2.14(i).
(j) The Company does not employ any person outside the United States,
and no Employee Plan or Benefit Arrangement is maintained principally for
employees of the Company outside the United States.
(k) The assets include sufficient equipment, books, records (including
personnel and employment records), computer software programs and data,
rights under contracts and other assets necessary to administer the Benefit
Arrangements and Employee Plans without interruption on and after the
Closing Date.
(l) The Company shall provide with a list of each insurance policy of
the Company maintained under or in connection with any Benefit Arrangement
or Employee Plan.
2.15 Environmental Laws. Except as otherwise disclosed on Schedule 2.15:
(a) The Company has complied in all material respects with all
Environmental Laws and neither the Company nor any of its presently owned
real property or presently conducted operations, nor its previously owned
real property or prior operations, is subject to any Environmental Claims.
respecting (i) compliance with any Environmental Law or (ii) any potential
liabilities and costs or Remedial Action arising from the Release or
threatened Release of a Hazardous Material.
(b) The Company has obtained all material permits necessary for its
current operations under Environmental Laws, and all such permits are in
good standing and the Company is in compliance with all material terms and
conditions of such permits.
(c) Neither the Company, nor, to the Company's knowledge, any of its
predecessors in interest, has in violation of applicable law stored,
transported, treated or disposed of any Hazardous Material except in
material compliance with Environmental Laws.
(d) The Company has not received any Environmental Claims notice
indicating that it is not currently in compliance with, or that any
Governmental Entity is investigating its compliance with, any Environmental
Laws or that it is or may be liable to any other Person as a result of a
Release or threatened Release of a Hazardous Material.
(e) There has been no Release at any of the properties owned or
operated by the Company or a predecessor in interest, or to the Company's
knowledge, at any disposal or treatment facility which received Hazardous
Materials generated by the Company or any predecessor in interest.
2.16 Legal Compliance. The Company and the conduct and operation of its
business is and has been in compliance with each law (including rules,
regulations and administrative orders thereunder) of any Governmental Entity
that (a) affects or relates to this Agreement or the transac-
-15-
tions contemplated hereby or (b) is applicable to the Company or its respective
businesses, other than where the failure to be or to have been in compliance
would not individually or in the aggregate have a Company Material Adverse
Effect or materially impair the ability of the Company to own and operate the
properties, assets and business of the Company following the Closing in the
ordinary course of business.
2.17 Insurance Coverage. All material tangible assets and risks of the
Company are covered by currently effective insurance policies or binders of
insurance or programs of self-insurance in such types and amounts as are
consistent with customary practices and standards of companies engaged in
businesses and operations similar to the business conducted by the Company. The
Company has furnished or made available to the Investors true and complete
copies of all insurance policies and fidelity bonds relating to such
aforementioned tangible assets, the operation of the business of the Company and
the employees, officers and directors of the Company. Except as set forth on
Schedule 2.17, to the Company's knowledge, there is no material claim by the
Company pending under any of such policies or bonds relating to the assets, the
operation of the business or the employees, officers or directors of the
Company.
2.18 Brokers' Fees. The Company has no liability or obligation to pay any
fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement, except for the fees payable to
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, financial advisor to the
Company.
2.19 Settlement Agreement. The Company and ▇▇▇▇▇-Illinois and
▇▇▇▇▇-▇▇▇▇▇▇▇▇ Glass Container Inc. have entered into the Settlement Agreement
dated as of March 8, 2002 and a Limited License Agreement dated March 8, 2002,
and such agreements are in full force and effect and all payments required to be
made to date by the Company thereunder have been made. All litigation of
▇▇▇▇▇-Illinois or ▇▇▇▇▇-▇▇▇▇▇▇▇▇ Glass Container Inc. against the Company have
been settled.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF CCM
CCM represents and warrants to the Company as follows:
3.1 Organization, Qualification, Corporate Power and Authority. (a) CCM is
duly organized, validly existing and in good standing under the laws of the
State of Delaware. CCM is duly qualified to conduct business and is in good
standing under the laws of each jurisdiction in which the nature of its
businesses or the ownership or leasing of its properties requires such
qualification, other than where the failure to be so qualified would not
individually or in the aggregate have an Investor Material Adverse Effect. CCM
has all requisite power and authority to carry on the businesses in which it is
engaged and to own and use the properties owned and used by it. CCM has at all
times complied with, and is not in default under or in violation of, any
provision of its organizational documents, other than where the failure to so
comply and such defaults and violations would not individually or in the
aggregate have an Investor Material Adverse Effect.
-16-
(b) CCM has all requisite power and authority to execute and deliver this
Agreement. The execution and delivery of this Agreement by CCM, the performance
of this Agreement and the consummation of the transactions contemplated hereby
by CCM has been duly and validly authorized by all necessary action on the part
of CCM. This Agreement has been duly and validly executed and delivered by CCM
and constitutes a valid and binding obligation of CCM, enforceable against CCM
in accordance with its terms.
3.2 Noncontravention. Neither the execution and delivery of this Agreement
by CCM nor the consummation of the transactions contemplated hereby will (a)
violate any provision of CCM's organizational documents, (b) except for the
applicable requirements of the Securities Act and the Exchange Act and any
applicable state and foreign securities laws, require on the part of CCM any
filing with, or any permit, authorization, consent or approval of, any
Governmental Entity, other than where the failure to make or obtain such
filings, permits, authorizations, consents or approvals would not individually
or in the aggregate have an Investor Material Adverse Effect, or (c) violate,
result in a breach of, constitute (with or without due notice or lapse of time
or both) a default under, result in the acceleration of, create in any party any
right to accelerate, terminate, modify or cancel, or require any notice, consent
or waiver under, any contract, lease, sublease, license, sublicense, franchise,
permit, indenture, agreement or mortgage for borrowed money, instrument of
indebtedness, Lien or other arrangement to which CCM is a party or by which CCM
is bound or to which any of its assets is subject or any judgment, order, writ,
injunction, decree, statute, rule or regulation applicable to CCM or any of its
properties or assets, other than such conflicts, violations, breaches, defaults,
accelerations, terminations, modifications, cancellations or notices, consents
or waivers as would not individually or in the aggregate have an Investor
Material Adverse Effect.
3.3 Brokers' Fees. CCM does not have any liability or obligation to pay any
fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement.
3.4 Investment Intent. (a) Each Investor is a "qualified institutional
buyer" (as such term is defined in Rule 144A under the Securities Act), with
such knowledge and experience in financial and business matters as are necessary
in order to evaluate the merits and risks of an investment in the Purchased
Shares.
(b) CCM is acquiring the Purchased Shares for investment for CCM's own
account or for the account of investment funds and accounts managed by it or its
affiliates, and not with a view to, or for resale in connection with, any
distribution or public offering thereof in violation of the Securities Act.
3.5 Available Funds. CCM manages investment funds and managed accounts on a
discretionary basis with the funds necessary to consummate the transactions
contemplated hereby.
-17-
ARTICLE IV
COVENANTS
4.1 Reasonable Best Efforts. Each Party shall cooperate and use its
reasonable best efforts to fulfill the conditions precedent to the other Party's
obligations hereunder and to cause the transactions contemplated by this
Agreement to be consummated in accordance with the terms hereof, and without
limiting the generality of the foregoing shall use its reasonable best efforts
to obtain all necessary Governmental Entity and third-party approvals, waivers,
consents, permits, licenses, registrations and other authorizations required in
connection with this Agreement and the transactions contemplated hereby,
including, without limitation, entry of the Confirmation Order, and to make all
filings with and to give all notices to third parties which may be necessary or
reasonably required of it in order to consummate the transactions contemplated
hereby and thereby and to comply with its obligations under the Reorganization
Plan (except, with respect to the Investors, if the Plan is changed in any
material respect without the Investors' prior written consent).
4.2 Approvals; Consents. Each Party shall obtain and maintain in full force
and effect all approvals, consents, permits, licenses and other authorizations
from all Governmental Entities reasonably necessary or required, in the case of
the Investors, for the purchase of the Purchased Shares, and in the case of the
Company, for the operation of the business of the Company in the ordinary course
of business, as and when such approvals, consents, permits, licenses or other
authorizations are necessary or required, except where the failure to do so
would not have a Company Material Adverse Effect or an Investor Material Adverse
Effect, as applicable, or materially impair the ability of the Company or the
Investors to consummate the transactions contemplated hereby or the Company to
own and operate the properties, assets and business of the Company following the
Closing in the ordinary course of business. Without limiting the generality of
the foregoing, each Party shall maintain its respective authorizations in full
force and effect, shall not take any action which could reasonably be expected
to have a material adverse effect on such authorizations or any licenses and
authorizations, shall diligently pursue all applications and shall, prior to the
expiration date of any material authorization, timely file for the renewal of
any such authorization. The Parties shall consult with one another as to the
approach to be taken with any Governmental Entity with respect to obtaining any
necessary consent to the transactions contemplated hereby and by the
Reorganization Plan, and each of the Parties shall keep the other Party
reasonably informed as to the status of any such communications with any
Governmental Entity.
4.3 Bankruptcy Covenants. (a) The Company shall file its motion to approve
the Investor Breakup Fee as soon as practicable after the Petition Date, but in
no event later than five (5) Business Days after the Petition Date, seeking
therein the approval of the Bankruptcy Court to the payment of the Investor
Breakup Fee in accordance with the terms of this Agreement and the treatment of
any unpaid portion of the Investor Breakup Fee as an administrative priority
claim under Section 503(b) of the Bankruptcy Code. The motion and the Approval
Order shall be acceptable in form and substance to the Investors and their
counsel. The Company shall use its reasonable best efforts to cause the
Bankruptcy Court to enter the Approval Order as soon as practicable after the
Petition Date, but in any case, not later than thirty (30) days after the
Petition Date.
-18-
(b) As soon as practicable following the execution of this Agreement, the
Company shall file the Reorganization Plan with the Bankruptcy Court. As soon as
practicable following the filing of the Reorganization Plan, the Company shall
file with the Bankruptcy Court a Disclosure Statement related thereto in form
and substance reasonably acceptable to the Investors and the Company (the
"Disclosure Statement"). The Company shall exercise its reasonable best efforts
to (i) obtain Bankruptcy Court approval of the Disclosure Statement; (ii)
solicit and obtain acceptances of the Reorganization Plan in accordance with the
provisions of the Bankruptcy Code, and (iii) confirm the Reorganization Plan,
either consensually, or by way of "cram down" under Section 1129(b) of the
Bankruptcy Code. Without the prior written consent of the Investors, the Company
shall not amend or modify in any material respect any provision of the
Reorganization Plan material to the interests of the Investors pursuant to this
Agreement, or withdraw the Reorganization Plan or file any other plan of
reorganization, except in connection with termination of this Agreement. Without
the prior written consent of the Investors, which consent shall not be
unreasonably withheld or delayed, the Company shall not amend or modify in any
material respect the Disclosure Statement. Except in conjunction with
termination of this Agreement, all motions, agreements, orders, stipulations and
settlements entered into with respect to the Company or any of its rights,
obligations, assets or liabilities shall be consistent with the rights of the
Investors pursuant to this Agreement.
(c) Without limiting the provisions of this Agreement, the Approval Order
or the Reorganization Plan, the Company shall promptly provide the Investors
with drafts of all documents, motions, orders, filings or pleadings that the
Company proposes to file with the Bankruptcy Court which relate to the
consummation or approval of the Reorganization Plan or this Agreement, and will
provide the Investors with reasonable opportunity to review such filings to the
extent reasonably practicable. The Company shall promptly provide the Investors
with copies of all pleadings (other than proofs of claim below $10,000 in
amount) received by or served by or upon the Company in connection with the
Chapter 11 Proceeding after the date hereof, unless Cerberus Capital Management,
L.P. is specifically listed on the certificate of service relating to such
pleading.
(d) The Company shall oppose and/or seek any necessary relief to preclude
to the extent possible, any and all actions taken by third parties that if
successful, would be contrary to the terms of this Agreement, the Reorganization
Plan or otherwise adversely affect the consummation and implementation of the
Reorganization Plan, including, without limitation, any attempts to terminate or
modify the Company's exclusive right to file and confirm any plan of
reorganization under the Bankruptcy Code, any actions to terminate or modify the
automatic stay to allow the exercise of remedies against the Company or the
property of its bankruptcy estate, any motion to dismiss or convert the
bankruptcy case or any actions taken by third parties to obtain control,
directly or indirectly, of the Company for the purpose of withdrawing the
Reorganization Plan or otherwise precluding its confirmation.
4.4 Operation of Business. (a) Except as otherwise contemplated or
permitted by this Agreement, the Company shall conduct its operations in the
ordinary course of business and in compliance with all other applicable laws and
regulations, and, to the extent consistent therewith, use reasonable best
efforts to preserve intact its current business organization, keep its physical
assets in good working condition, pay all Taxes as they become due and payable,
maintain insurance on its business and assets (in amounts and types consistent
with past practice), keep available the services of
-19-
its operating management and employees and preserve its relationships with
customers, suppliers and others having business dealings with it to the end that
its goodwill and ongoing business shall not be impaired in any material respect.
(b) Without limiting the generality of the foregoing, prior to the Closing,
the Company shall not without the prior written consent of the Investors (which
consent shall not be unreasonably withheld or delayed) and except as otherwise
contemplated by this Agreement or the Reorganization Plan or as ordered by the
Bankruptcy Court:
(1) abandon or cancel any Intellectual Property Rights, or otherwise
take or omit to take any action which could reasonably be expected to have
an adverse effect on the value, validity or enforceability of the
Intellectual Property Rights;
(2) amend its certificate of incorporation, by-laws or other
comparable organizational documents;
(3) (A) declare, set aside or pay any dividends on, or make any other
distributions (whether in cash, securities or other property) in respect
of, any of its outstanding capital stock, (B) split, combine or reclassify
any of its outstanding capital stock or issue or authorize the issuance of
any other securities in respect of, in lieu of, or in substitution for,
shares of its outstanding capital stock, or (C) purchase, redeem or
otherwise acquire any shares of outstanding capital stock or any rights,
warrants or options to acquire any such shares;
(4) except for assets not in excess of $500,000 in fair market value
in the aggregate, sell, lease, license, mortgage, pledge, encumber or
dispose of (collectively, "Dispose") any of its assets or acquire or
Dispose of any assets or shares or other equity interests in or securities
of the Company, other than in the ordinary course of business;
(5) enter into, materially amend, terminate, breach in any manner that
would prevent the assumption thereof under Section 365 of the Bankruptcy
Code, or reject or be deemed to reject any Company Contract other than
entering into agreements with unaffiliated customers and suppliers, on an
arm's-length basis and in the ordinary course of business;
(6) change in any material respect its accounting methods, principles
or practices, except insofar as may be required by a concurrent change in
GAAP;
(7) issue, sell, grant or pledge any shares of its capital stock, any
other voting securities or any securities convertible into or exchangeable
for, or any rights, warrants or options to acquire, any such shares, voting
securities or convertible or exchangeable securities, other than upon the
exercise of options, or upon the conversion or exchange of securities,
outstanding on the date of this Agreement;
(8) make any Tax election or settle or compromise any material Tax
liability or any pending or threatened suit or action;
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(9) (x) grant Company Options or other equity-related awards, (y)
grant any increase (or any rights to an increase) in the compensation,
bonus, severance, termination pay or other benefits of any former or
current employee, agent, consultant, officer or director of the Company,
unless such increase is pursuant to the terms of the existing collective
bargaining agreement or any new collective bargaining agreement entered
into by the Company after the date hereof that is reasonably acceptable to
the Investors or (z) enter into or amend any employment agreement, deferred
compensation, consulting, severance, termination, indemnification or any
other such agreement with any such former or current employee, agent,
consultant, officer or director of the Company;
(10) incur any indebtedness other than pursuant to the DIP Facility
(it being understood that if the DIP Facility is not approved by the
Bankruptcy Court the Company may procure alternative debtor-in-possession
financing on terms reasonably satisfactory to the Investors) or the
Reorganization Plan;
(11) enter into any transaction, contract or arrangement with an
Affiliate;
(12) release any third party from any material obligation, or grant
any consent, under any confidentiality or other material agreement, or fail
to fully enforce any such agreement, except in the ordinary course of
business; or
(13) agree, in writing or otherwise, to take or file a motion seeking
permission for, or consent to any motion or other request by a third party
in respect of, any of the foregoing actions.
4.5 Notice of Breaches. Each Party shall promptly deliver to the other
Party written notice of any event or development that would (a) render any
statement, representation or warranty of such Party in this Agreement (including
the Disclosure Letter) inaccurate or incomplete in any material respect, or (b)
constitute or result in a breach by such Party of, or a failure by such Party to
comply with, any agreement or covenant in this Agreement applicable to such
Party. No such disclosure, in and of itself, shall be deemed to avoid or cure
any such misrepresentation or breach.
4.6 Exclusivity. (a) From and after the date hereof, the Company shall not,
and shall use its reasonable best efforts to cause each of its directors,
officers, employees, financial advisors, representatives or agents not to,
directly or indirectly, (i) solicit, initiate, engage or participate in or
encourage discussions or negotiations with any Person (other than the Investors)
concerning any merger, consolidation, sale of material assets, tender offer for,
recapitalization of or accumulation or acquisition of securities issued by the
Company, proxy solicitation or other business combination involving the Company
(collectively, "Company Acquisition Proposals") or (ii) provide any non-public
information concerning the business, properties or assets of the Company to any
Person in connection with any Company Acquisition Proposal (other than (x) to
the Investors, (y) to the Company's creditors in accordance with existing
confidentiality arrangements or (z) as may be required by the Bankruptcy Court).
The Company shall cease immediately any and all existing activities, discussions
or negotiations with any Person other than the Investors with respect to any
Company Acquisition Proposal.
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(b) Notwithstanding the provisions of Section 4.6(a), the Company may, to
the extent required by the fiduciary duties imposed under applicable law, in
good faith after consultation with outside legal counsel, participate in
discussions or negotiations with, and, subject to the requirements of Section
4.6(b)(ii), furnish information to, any Person or group of Persons (a "Third
Party") from which the Company has received a bona fide unsolicited indication
of interest which is reasonably likely to result in a Company Acquisition
Proposal from which the Company would receive, in the good faith judgment of the
board of directors of the Company (after consultation with an outside financial
advisor), greater value than the value of the transactions contemplated by this
Agreement (a "Superior Proposal"), so long as such Superior Proposal:
(i) is accompanied by satisfactory evidence of committed financing or
other ability to perform;
(ii) is accompanied by a deposit (by means of a certified check or
wire transfer) equal to or greater than the Investor Breakup Fee (as
defined in Section 6.2(b); and
(iii) the Company does not provide any non-public information to a
Third Party except pursuant to a written non-disclosure agreement executed
by such Third Party.
4.7 Full Access. The Company shall permit the Investors and the financial
advisors, legal counsel, accountants, consultants and other authorized
representatives of the Investors to have full access (at all reasonable times,
and in a manner so as not to interfere with normal business operations) to all
premises, properties, financial and accounting records, contracts, other records
and documents, and personnel, of or pertaining to the Company, provided that
each such authorized representative of the Investors other than legal counsel
has executed a confidentiality agreement which is satisfactory to the Company.
The Company shall cause its officers and management to cooperate fully with the
representatives and agents of the Investors and shall make themselves available
to the extent reasonably necessary to complete the due diligence process and the
consummation of the transactions contemplated hereby. During the period prior to
the Closing, the Company shall furnish as promptly as practicable to the
Investors (a) a copy of each report, schedule and other document filed by it
pursuant to the Exchange Act and any material document received by the Company
from a Governmental Entity, and (b) all other information as the Investors
reasonably may request in connection with the transactions contemplated hereby.
4.8 Disclosure Statement. The Company shall prepare the Disclosure
Statement in accordance with the provisions of the Bankruptcy Code and
applicable case law. The Investors shall furnish such information as the Company
may reasonably request to allow the Company to provide "adequate information" in
the Disclosure Statement within the meaning of that term under Section 1125 of
the Bankruptcy Code. The Company shall consult with the Investors and their
counsel in connection with, and shall permit the Investors and their counsel to
participate in, the preparation and Bankruptcy Court approval process of the
Disclosure Statement and any amendments or supplements thereto.
4.9 Restrictions on Transfer of Securities. Each certificate representing
(i) the Purchased Shares or (ii) any other securities issued in respect of the
Purchased Shares upon any stock split, stock
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dividend, recapitalization, merger, consolidation or similar event (the
securities described in clauses (i) and (ii) above being referred to
collectively as "Restricted Securities") shall, unless otherwise permitted by
this Section 4.9, be stamped or otherwise imprinted with a legend in
substantially the following form (in addition to any other legend(s) required
under any applicable state securities or "blue sky" laws):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
ANY STATE OR OTHER JURISDICTION. SUCH SECURITIES MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF IN ANY WAY IN THE ABSENCE OF SUCH
REGISTRATION OR DELIVERY OF AN OPINION TO THE COMPANY (FROM LEGAL
COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY) REASONABLY SATISFACTORY
TO THE COMPANY TO THE EFFECT THAT THE SALE, TRANSFER OR OTHER
DISPOSITION IS EXEMPT FROM REGISTRATION UNDER SUCH ACT AND LAWS. COPIES
OF THE AGREEMENT COVERING THE PURCHASE OF THESE SECURITIES AND THEIR
TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE
RECORD HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
DIRECTED TO THE SECRETARY OF THE COMPANY.
The Company shall promptly remove any such legend upon written request of
the record holder of any such certificate accompanied by an opinion of counsel
(by counsel reasonably acceptable to the Company) reasonably satisfactory to the
Company to the effect that such legend is no longer required by applicable law
and when such legend no longer is required by the terms of this Agreement.
4.10 Insurance Policies. The Company shall renew the insurance policy
covering (a) fiduciary liability expiring on May 28, 2002 and (b) property
liability expiring October 1, 2002, such that the Company is the sole
beneficiary and no other corporation or entity shall be covered by such
policies.
4.11 Directors' and Officers' Insurance. (a) Subject to Section 4.11(c),
the Investors and the Company agree that all rights to indemnification and all
limitations on liability existing in favor of any of all indemnified parties as
provided in the certificate of incorporation or by-laws of the Company in effect
as of the date hereof, shall survive the Closing and shall continue in full
force and effect to the fullest extent permitted by law. Subject to Section
4.11(c), for a period of not less than six years after the Closing, the Amended
and Restated Certificate of Incorporation and Amended and Restated By-laws shall
contain provisions no less favorable with respect to the elimination of
liability of directors and the indemnification of (and advancement of expenses
to) directors, officers, employees and agents than as are set forth in the
certificate of incorporation and by-laws of the Company, as in effect on the
date hereof, unless otherwise required by law.
(b) Subject to Section 4.11(c), as of the Closing, the Company shall
indemnify, defend and hold harmless each person who is now, or has been at any
time prior to the date of this Agree-
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ment or who becomes prior to the Closing, an officer, director, employee or
agent of the Company (collectively, the "Indemnified Parties") against all
losses, reasonable expenses (including reasonable attorneys' fees), claims,
damages, liabilities or amounts that are paid in settlement of, or otherwise in
connection with, any threatened or actual claim, action, suit, proceeding or
investigation (an "Indemnity Claim"), based in whole or in part on or arising in
whole or in part out of the fact that the Indemnified Party is or was a
director, officer, employee or agent of the Company or of any Subsidiary of the
Company or a trustee or fiduciary of any plan for the benefit of employees of
the Company and pertaining to any matter existing or arising out of actions or
omissions occurring at or prior to the Closing (including, without limitation,
any Indemnity Claim arising out of this Agreement or any of the transactions
contemplated hereby), whether asserted or claimed prior to, at or after the
Closing, in each case to the fullest extent permitted under the Delaware General
Corporation Law ("DGCL"), and shall pay any expenses, as incurred, in advance of
the final disposition of any such action or proceeding to each Indemnified Party
to the fullest extent permitted under the DGCL. Without limiting the foregoing,
in the event any such Indemnity Claim is brought against any of the Indemnified
Parties, (i) such Indemnified Parties may retain counsel (including local
counsel) satisfactory to them and which shall be reasonably satisfactory to the
Company and shall pay, jointly and severally, all reasonable fees and expenses
of such counsel for such Indemnified Parties; and (ii) the Company shall use all
reasonable efforts to assist in the defense of any such Indemnity Claim,
provided that the Company shall not be liable for any settlement effected
without its written consent, which consent, however, shall not be unreasonably
withheld.
(c) Notwithstanding anything to the contrary in this Section 4.11, in no
event shall any Indemnified Party be entitled to any indemnification or other
protection from the Company for (i) any action constituting a breach of such
Indemnified Party's duty of loyalty to the Company or the Company's stockholders
or (ii) any act or omission not taken in good faith or which involved
intentional misconduct or a known violation of law.
(d) With respect to any determination of whether an Indemnified Party is
entitled to indemnification under this Section 4.11, the Indemnified Party shall
have the right, as contemplated by the DGCL, to require that such determination
be made by special, independent legal counsel selected by the Indemnified Party
and approved by the Company (which approval shall not be unreasonably withheld)
and who has not otherwise performed services within the last three years for the
Company or any Subsidiary (other than as special counsel under this Agreement
for the purposes of this Section 4.11) or the Indemnified Party.
(e) The Company will maintain for a period of not less than six years from
the Closing, the Company's current directors' and officers' insurance and
indemnification policy to the extent that it provides coverage for events
occurring prior to the Closing ("D&O Insurance") for all persons who are
directors and officers of the Company on the date of this Agreement and for all
former directors and officers of the Company, so long as the annual premium
therefor would not be in excess of 200% of the last annual premium therefor paid
prior to the date of this Agreement (the "Maximum Premium"). If the existing D&O
Insurance expires, is terminated or canceled during such six-year period, the
Company will use its best efforts to cause to be obtained as much D&O Insurance
as can be obtained for the remainder of such period for an annualized premium
not in excess of the Maximum
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Premium, on terms and conditions no less advantageous to the covered persons
than the existing D&O Insurance.
(f) Notwithstanding any other provisions hereof, the obligations of the
Company contained in this Section 4.11 shall be binding upon the successors and
assigns of the Company. In the event the Company or any of its successors or
assigns (i) consolidates with or merges into any other person or (ii) transfers
all or substantially all of its properties or assets to any person, then, and in
each case, proper provision shall be made so that successors and assigns of the
Company honor the indemnification obligations set forth in this Section 4.11.
(g) The obligations of the Company under this Section 4.11 shall survive
the Closing and shall not be terminated or modified in such a manner as to
adversely affect any Indemnified Party to whom this Section 4.11 applies without
the consent of such affected person (it being expressly agreed that the
Indemnified Parties to whom this Section 4.11 applies shall be third party
beneficiaries of this Section 4.11, each of whom may enforce the provisions of
this Section 4.11).
4.12 Payment of Subsequent Equity Fee. The Company shall pay to the
Investors a subsequent equity fee in the aggregate amount of $500,000 in
immediately available funds on the later of (x) the date the Schedules are
agreed to by the Company and the Investors pursuant to the first paragraph of
Article II and (y) the first date on which the Company is in receipt of executed
Lock-up Letters (as such term is defined in Section 6.1(7)) from both the
Minimum Noteholders (as such term is defined in Section 6.1(7)) and the Minimum
Series A Holders (as such term is defined in Section 6.1(7)).
ARTICLE V
CONDITIONS TO CLOSING
5.1 Conditions to Obligations of Each Party. The respective obligations of
each Party to consummate the transactions to be performed by it in connection
with the Closing is subject to the satisfaction, or waiver by that Party, of the
following conditions:
(1) no statute, rule, order, decree or regulation shall have been
enacted or promulgated by any Governmental Entity that prohibits, and no
action, suit or proceeding shall be pending or threatened by any
Governmental Entity challenging, the consummation of any of the
transactions contemplated hereby;
(2) all consents, orders and approvals from all Governmental Entities
(including under applicable Environmental Laws) and other Persons or
entities listed in Schedule 2.3 or Schedule 3.2 shall have been obtained
and shall be in effect; and
(3) the Confirmation Order, in a form reasonably satisfactory to each
of the Parties (and, except as otherwise mutually agreed by the Parties,
the Reorganization Plan confirmed by the Bankruptcy Court shall not differ
materially from the Reorganization Plan appearing as Exhibit C), shall have
been entered by the Bankruptcy Court and shall have become a Final Order.
For purposes of this Agreement, a "Final Order" shall mean an order of
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the Bankruptcy Court that has been in full force and effect for 11 days
without any stay or material modification or amendment thereof, and the
time to appeal or petition for certiorari designated by statute or
regulation shall have expired and no appeal or petition for certiorari
shall be pending or, if an appeal or petition for certiorari has been
timely filed or taken, the order or judgment of the tribunal shall have
been affirmed (or such appeal or petition shall have been dismissed as
moot) by the highest court (or other tribunal having appellate jurisdiction
over the order or judgment) to which the order was appealed, or the
petition for certiorari shall have been denied, and the time to take any
further appeal or to seek further certiorari designated by statute or
regulation shall have expired.
5.2 Conditions to Obligations of the Investors. The obligation of the
Investor to consummate the transactions to be performed by the Investor in
connection with the Closing is subject to the satisfaction, or waiver by each
Investor, at and as of the Closing Date, of the following conditions:
(1) the representations and warranties of the Company contained in
this Agreement that are qualified as to materiality or Company Material
Adverse Effect shall be true and correct in all respects, with the same
effect as though such representations and warranties were made as of the
Closing Date; the representations and warranties of the Company made in
this Agreement that are not qualified as to materiality or Company Material
Adverse Effect shall be true and correct in all material respects as of the
time of the Closing Date as though made as of such time; the Company shall
have performed or complied in all material respects with all obligations
and covenants required by this Agreement to be performed or complied with
by the Company by the Closing Date; and the Company shall have delivered to
the Investors a certificate to the effect that each of the conditions
specified in Section 5.2 is satisfied;
(2) there shall not have occurred between the date of this Agreement
and the Closing Date a Company Material Adverse Effect;
(3) the Company shall have issued the Purchased Shares;
(4) the execution and delivery by senior operating management of
employment agreements with the Company reasonably satisfactory to the
Investors;
(5) at or prior to Closing, the Employee Plan that is treated as a
Multiemployer Plan shall have been merged into the Multiemployer Plan of
the Glass Model, Pottery, Plastics and Allied Workers Union on terms and
conditions reasonably satisfactory to the Investor (which shall include,
without limitation, a payment by the Company to such Plan of not more than
$20,000,000 at Closing);
(6) the Company shall have furnished to the Investor a certification,
dated not more than thirty (30) days prior to the Closing Date, stating
that the Company is not and never has been a "United States real property
holding corporation" as defined in Section 897 of the IRC;
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(7) the Investors shall have received not later than ten days prior to
the scheduled hearing for the Confirmation Order copies of the Phase I
Environmental Reports (and, if the results of such Phase I Environmental
Reports require, in the reasonable judgment of the Investors, Phase II
Environmental Reports, then Phase II Environmental Reports) prepared after
the date hereof with respect to all Fee Properties and Leased Properties;
and
(8) the derivative action currently pending in the Court of Chancery
of the State of Delaware captioned Comac Partners, L.P., et al. v. ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, et al., defendants, shall have been resolved for an amount to be
paid by the defendants (either directly or through the proceeds of
insurance) of at least $8 million and otherwise on a basis mutually
satisfactory to the Company and the Investors.
5.3 Conditions to Obligations of the Company. The obligations of the
Company to consummate the transactions to be performed by it in connection with
the Closing is subject to the satisfaction, or waiver by the Company, at and as
of the Closing Date, of the following conditions:
(1) the representations and warranties of the Investors contained in
this Agreement, shall be true and correct in all material respects as of
the Closing Date with the same effect as though such representations and
warranties were made as of the Closing Date, and each Investor shall have
delivered to the Company a certificate to the effect that each of the
conditions specified in this Section 5.3 is satisfied in all respects as to
such Investor;
(2) the Investor shall have delivered the Purchase Price against
delivery of the Purchased Shares and otherwise shall have performed or
complied in all material respects with the agreements and covenants
required to be performed or complied with by the Investors under this
Agreement as of or prior to the Closing; and
(3) the Investor, the Company and any other necessary third party
shall have executed and delivered all agreements relating to the Tranche B
Term Loan, there shall be no unsatisfied conditions precedent to the
funding of such loan other than the Closing hereunder and the Tranche B
Term Loan shall be funded concurrently with the Closing hereunder.
5.4 Frustrations of Conditions. Neither any Investor nor the Company may
rely on the failure of any condition set forth in Section 5.2 or 5.3
respectively, to be satisfied if such failure was caused by such party's failure
to act in good faith or to use its reasonable efforts to cause the Closing to
occur, as provided under this Agreement.
ARTICLE VI
TERMINATION
6.1 Termination. At any time prior to the Closing, this Agreement may be
terminated as follows:
(1) the Parties may terminate this Agreement by mutual written
consent;
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(2) the Investors may terminate this Agreement by giving written
notice to the Company in the event that (I) (A) the Company is in breach
(i) of any of its representations and warranties contained in this
Agreement that are qualified as to materiality or Company Material Adverse
Effect, (ii) of any of its representations and warranties contained in this
Agreement that are not qualified as to materiality or Company Material
Adverse Effect, except where the matters in respect of which such
representations and warranties are in breach would not individually or in
the aggregate have a Company Material Adverse Effect, or (iii) of any
covenant or agreement contained in this Agreement in any material respect,
and in either case such breach either (x) is not subject to cure or (y) if
subject to cure, is not cured by the earlier of the Confirmation Date or 30
days after delivery of written notice thereof (which notice shall specify
in reasonable detail the nature of such breach) and (B) the Investor is not
in material breach of any of its representations, warranties or obligations
hereunder or (II) in the good faith judgment of the Investors, the
estimated costs for any Environmental Liabilities of the Company will
materially exceed the $13,000,000 set aside in the Company's Reserve
Account for the Environmental Department;
(3) the Company may terminate this Agreement by giving written notice
to the Investors in the event that (A) any Investor is in breach (i) of any
of its representations and warranties contained in this Agreement that are
qualified as to materiality or Investor Material Adverse Effect, (ii) of
any of its representations and warranties contained in this Agreement that
are not qualified as to materiality or Investor Material Adverse Effect,
except where the matters in respect of which such representations and
warranties are in breach would not individually or in the aggregate have an
Investor Material Adverse Effect, or (iii) of its covenants or agreements
contained in this Agreement in any material respect, and in either case
such breach either (x) is not subject to cure or (y) if subject to cure, is
not cured by the earlier of the Confirmation Date or 30 days after delivery
of written notice thereof (which notice shall specify in reasonable detail
the nature of such breach) and (B) the Company is not in material breach of
any of its representations, warranties or obligations hereunder;
(4) either Party may terminate this Agreement by giving written notice
to the second Party (i) if on or prior to May 31, 2002, the Disclosure
Statement is not approved to the first Party's reasonable satisfaction;
(ii) if on or prior to July 31, 2002, the Confirmation Order has not been
entered by the Bankruptcy Court; or (iii) on or after September 30, 2002,
if the Closing shall not have occurred on or before such date (in each case
unless the failure results primarily from a breach of any representation,
warranty or other obligation under this Agreement or under the
Reorganization Plan on the part of the first Party);
(5) the Company may terminate this Agreement in connection with an
alternative transaction with a Third Party pursuant to a Superior Proposal
by giving written notice to the Investors;
(6) the Investors may terminate this Agreement by giving written
notice to the Company if the Company shall have accepted a Company
Acquisition Proposal, or shall have executed an agreement in principle (or
similar agreement) or definitive agreement providing for a Company
Acquisition Proposal with a Person other than any of the Investors;
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(7) the Investors may terminate this Agreement if the Company shall
not have delivered to the Investors, prior to the filing of the Petition,
executed lock-up letters (the "Lock-up Letters") in substantially the form
previously agreed to by the Investors from holders holding at least (I) 50%
in aggregate principal amount of the Company's 9-7/8% Senior Notes due 2008
(the "Minimum Noteholders") and (II) 50% in aggregate liquidation
preference of the Series A Preferred Stock (the "Minimum Series A
Holders"), pursuant to which the parties thereto agree to support and take
all reasonable actions to facilitate the solicitation, confirmation and
consummation of the Plan of Reorganization;
(8) the Investors may terminate this Agreement if the Company has not
delivered to the Investors the Schedules to this Agreement at or before the
close of business on March 22, 2002 in form and substance reasonably
satisfactory to the Investors; or
(9) the Investors may terminate this Agreement if the Closing has not
yet occurred and the EBITDA (defined as income from operations plus
depreciation, amortization and other non-cash charges) of the Company is
less that $75 million for the twelve months ended July 31, 2002 or $78
million for the twelve months ended August 31, 2002.
6.2 Effect of Termination; Investor Breakup Fee. (a) If either Party
terminates this Agreement pursuant to Section 6.1, all obligations of the
Parties hereunder will terminate without any liability of either Party to the
other Party except as specifically provided in this Section 6.2, provided that
this Section 6.2 and Article VIII shall survive any such termination.
(b) In the event that this Agreement is terminated pursuant to Section
6.1(5) or 6.1(6) (such a termination being herein called a "Breakup Event"),
then the Company shall pay to the Investors the aggregate amount of $5,000,000
(the "Investor Breakup Fee"), such Investor Breakup Fee having been approved by
the Bankruptcy Court pursuant to the Approval Order, by wire transfer of
immediately available funds upon the confirmation and consummation of any
alternative plan of reorganization with respect to the Company pursuant to a
Superior Proposal referred to in Section 6.1(5) or a Company Acquisition
Proposal referred to in Section 6.1(6), as applicable.
(c) In the event that this Agreement is terminated pursuant to Section
6.1(3), then no Investor Breakup Fee shall be payable and the Investor shall (i)
be liable for and pay to the Company any and all additional damages available
thereto at law or in equity to the extent of proven damages incurred by the
Company by reason thereof and (ii) repay the amounts reimbursed under the
Expense Letter.
ARTICLE VII
DEFINITIONS
When used in this Agreement, the following terms have the following
meanings:
"Affiliate" means a Person that directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with, the
first Person, including but not limited
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to a subsidiary of the first Person, a Person of which the first Person is a
subsidiary, or another subsidiary of a Person of which the first Person is also
a subsidiary.
"Balance Sheet Date" means December 31, 2001.
"Benefit Arrangement" means any employment, severance or similar contract
or arrangement (whether or not written) or any plan, policy, fund, program or
contract or arrangement (whether or not written) providing for compensation,
bonus, profit-sharing, stock option, or other stock related rights or other
forms of incentive or deferred compensation, vacation benefits, insurance
coverage (including any self-insured arrangements), health or medical benefits,
disability benefits, worker's compensation, supplemental unemployment benefits,
severance benefits and post-employment or retirement benefits (including
compensation, pension, health, medical or life insurance or other benefits) that
(i) is not an Employee Plan, (ii) is entered into, maintained, administered or
contributed to or obligated to be contributed to, as the case may be, by the
Company or an ERISA Affiliate and (iii) covers any employee or former employee
of the Company by virtue of the individual's employment with the Company.
"Business Day" means any day that is not a Saturday or Sunday or a legal
holiday on which banks are authorized or required by law to be closed in Florida
or New York.
"Company Material Adverse Effect" means a material adverse effect on (i)
the businesses, assets (including licenses, franchises and other intangible
assets), properties, financial condition or operating results of the Company,
taken as a whole or (ii) the ability of the Company to consummate the
transactions contemplated hereby.
"Confidentiality Agreement" means the confidentiality agreement dated as of
December 20, 2001 by and between the Company and Cerberus Capital Management,
L.P.
"control" (including the terms "controls," "controlled by" and "under
common control with") means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ownership of voting securities, by contract or credit
arrangement, as trustee or executor, or otherwise.
"Employee Plan" means any "employee benefit plan", as defined in Section
3(3) of ERISA, that (i) is subject to any provision of ERISA, (ii) is
maintained, administered or contributed to or obligated to be contributed to by
the Company or an ERISA Affiliate and (iii) covers any employee or former
employee of the Company by virtue of the individual's employment with the
Company.
"Environmental Claims" refers to any complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding, judgment, letter or other communication from any governmental
agency, department, bureau, office or other authority, or any third party
involving violations of Environmental Laws or Releases of Hazardous Materials
from (i) any assets, properties or businesses of the Company or any predecessor
in interest; (ii) adjoining properties or businesses; or (iii) or onto any
facilities which received Hazardous Materials generated by the Company or any
predecessor in interest.
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"Environmental Laws" includes the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), 42 U.S.C. 9601 et seq., as amended;
the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. 6901 et seq., as
amended; the Clean Air Act ("CAA"), 42 U.S.C. 7401 et seq., as amended; the
Clean Water Act ("CWA"), 33 U.S.C. 1251 et seq., as amended; the Occupational
Safety and Health Act ("OSHA"), 29 U.S.C. 655 et seq., as amended, and any other
federal, state or local laws, statutes, common law duties, rules, regulations,
ordinances and codes, together with all administrative orders, directed duties,
licenses, authorizations and permits of, and agreements with, any Governmental
Entity, in each case relating to environmental, health, safety and land use
matters imposing liability or establishing standards of conduct for protection
of the environment.
"Environmental Liabilities" means any monetary obligations, losses,
liabilities (including strict liability), damages, punitive damages,
consequential damages, treble damages, costs and expenses (including all
reasonable out-of-pocket fees, disbursements and expenses of counsel,
out-of-pocket expert and consulting fees and out-of-pocket costs for
environmental site assessments, remedial investigation and feasibility studies),
fines, penalties, sanctions and interest incurred as a result of any
Environmental Claim filed by any Governmental Authority or any third party which
relate to any violations of Environmental Laws, Remedial Actions, Releases or
threatened Releases of Hazardous Materials from or onto (i) any property
presently or formerly owned by the Company or any of its Subsidiaries or a
predecessor in interest, or (ii) any facility which received Hazardous Materials
generated by the Company or any of its Subsidiaries or a predecessor in
interest.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
under common control with the Company within the meaning of Section 414(b) or
(c) of the IRC (and Sections 414(m) and (o) of the IRC for purposes of
provisions relating to Section 412 of the IRC).
"Expense Letter" means the letter dated as of February 21, 2002 from
Cerberus Capital Management, L.P. to the Company.
"Governmental Entity" means any government or any court, arbitration
tribunal, administrative agency or commission or other governmental or
regulatory authority or agency, whether federal, state, local, or foreign.
"Hazardous Materials" shall include (a) any element, compound, or chemical
that is defined, listed or otherwise classified as a contaminants, pollutant,
toxic pollutant, toxic or hazardous substances, extremely hazardous substance or
chemical, hazardous waste, medical waste, biohazardous or infectious waste,
special waste, or solid waste under Environmental Laws; (b) petroleum,
petroleum-based or petroleum-derived products; (c) polychlorinated biphenyls;
(d) any substance exhibiting a hazardous waste characteristic including but not
limited to corrosivity, ignitibility, toxicity or reactivity as well as any
radioactive or explosive materials; and (e) any raw materials, building
components, including but not limited to asbestos-containing materials and
manufactured products containing Hazardous Materials.
-▇▇-
"▇▇▇ ▇▇▇" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended.
"Investor Material Adverse Effect" means a material adverse effect on the
ability of the Investors to consummate the transactions contemplated hereby.
"IRC" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor statute, and regulations promulgated thereunder.
"Lien" means any claim, pledge, option, charge, hypothecation, easement,
security interest, right-of-way, encroachment, mortgage, deed of trust or other
encumbrance.
"Multiemployer Plan" means a "multiemployer plan" as defined under Section
3(37) of ERISA.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, Governmental
Entity or other entity.
"Plan" means an employee benefit plan (as defined in Section 3(3) of ERISA)
which the Company sponsors or maintains or to which the Company makes, is
making, or is obligated to make contributions and includes any Pension Plan.
"Registered" means registered, issued, renewed or the subject of a pending
application, including, without limitation, the result of renewals, divisions,
reissuances, continuations, continuations-in-part, extensions, restorations and
reversions.
"Release" means a release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration of a Hazardous
Material into the indoor or outdoor environment or into or out of any real
property, including the movement of Hazardous Material through or in the air,
soil, surface water, groundwater or real property.
"Remedial Action" means all actions taken to (i) clean up, remove,
remediate, contain, treat, monitor, assess, evaluate or in any other way address
Hazardous Materials in the indoor or outdoor environment; (ii) prevent or
minimize a Release or threatened Release of Hazardous Materials so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment; (iii) perform pre-remedial studies and
investigations and post-remedial operation and maintenance activities; or (iv)
any other actions authorized by 42 U.S.C. 9601.
"Tax Returns" means all reports, returns, forms, declarations, statements
or other information supplied or required to be supplied to a taxing authority
in connection with Taxes.
"Tax" or "Taxes" means any and all federal, state, county, local, foreign
and other taxes, charges, fees, levies or other similar assessments or
liabilities, including, without limitation, income, gross receipts, ad valorem,
premium, value-added, excise, real property, personal property, sales, use,
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transfer, withholding, employment, payroll and franchise taxes imposed by any
Governmental Entity, and any interest, fines, penalties, assessments or
additions to tax resulting from, attributable to or incurred in connection with
any tax or any contest or dispute thereof.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Press Releases and Announcements. Neither Party shall issue any press
release or announcement relating to the subject matter of this Agreement without
the prior written approval of the other Party; provided, however, that either
Party may make any public disclosure it determines in good faith, after
consultation with counsel, is required by law or regulation (in which case the
disclosing Party shall advise the other Party and provide it with a copy of the
proposed disclosure prior to making the disclosure).
8.2 No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
8.3 Entire Agreement. This Agreement and the exhibits and schedules
attached hereto (and those provisions of the Expense Letter and the
Confidentiality Agreement that by their respective terms expressly survive the
execution and delivery of this Agreement) constitute the entire agreement
between the Parties and supersede any prior understandings, agreements or
representations by or among the Parties, written or oral, that may have related
in any way to the subject matter of the Agreement.
8.4 Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. Neither Party may assign either this Agreement or any of
its rights, interests or obligations hereunder without the prior written
approval of the other Party, except that any Investor may assign any of its
rights, interest or obligations under this Agreement to any one or more of its
Affiliates, or, with the consent of the Company (not to be unreasonably
withheld), any other Person, so long as (i) the Investors and its Affiliates
shall acquire or otherwise have the power to vote or direct the voting of more
than 51% of the Purchased Shares after giving effect to all such assignments,
and (ii) if such assignee is not an Affiliate, the Investors remain liable for
all its respective obligations hereunder. Any Person to which an Investor may
assign any portion of its rights to purchase Purchased Shares pursuant to this
Agreement as provided above (an "Assignee") shall as a condition to such
purchase deliver to the Company at the Closing a letter containing
representations and warranties by and with respect to such Assignee to the
effect set forth in Section 3 and shall agree to be bound by Section 4.9 hereof.
8.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
8.6 Headings. The section headings contained in this Agreement are inserted
for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
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8.7 Notices. (a) All notices, requests, demands, claims and other
communications hereunder shall be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly delivered (i) three
business days after it is sent by registered or certified mail, return receipt
requested, postage prepaid, (ii) one Business Day after it is sent via a
reputable international overnight courier service, or (iii) upon acknowledgment
of receipt by the recipient if delivered or sent by facsimile transmission, in
each case to the intended recipient as set forth below:
If to the Company: With a copy to:
Anchor Glass Container Corporation ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
One Anchor Plaza Parkway ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Investors: With a copy to:
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) Either Party may give any notice, request, demand, claim or other
communication hereunder by personal delivery, but no such notice, request,
demand, claim or other communication shall be deemed to have been duly given
unless and until it actually is received by the Party for whom it is intended.
Either Party may change the address to which notices, requests, demands, claims
and other communications hereunder are to be delivered by giving the other Party
notice in the manner herein set forth.
8.8 Governing Law. (a) This Agreement is governed by the law of the State
of New York, without regard to conflicts of laws principles.
(b) With respect to any suit, action or proceeding (any "Proceeding")
arising out of or relating to this Agreement, each of the Company and the
Investors (including any permitted assigns or transferees thereof) hereby
irrevocably (i) submits (A) before the Petition is filed, to the exclusive
jurisdiction of the courts of the State of New York and the courts of the United
States for the Southern District of New York and (B) from and after the Petition
is filed, to the exclusive jurisdiction of the Bankruptcy Court and waives any
objection to venue in the Bankruptcy Court, whether on the grounds of forum non
conveniens or otherwise, provided, however, that nothing herein shall limit the
appellate rights of any party; and (ii) consents to service of process in any
Proceeding by the mailing of copies thereof by registered or certified mail,
return postage prepaid, or by recognized express carrier or delivery service to
the Company and the Investors at their respective addresses as set forth in
Section 8.7 hereof; provided, however, that nothing herein shall limit the right
of any party to serve process in any other manner permitted by law.
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8.9 Amendments and Waivers. The Parties may amend any provision of this
Agreement at any time by a written instrument signed by both Parties. No waiver
by either Party of any default, misrepresentation or breach of warranty or
covenant hereunder, whether intentional or not, will be deemed to extend to any
prior or subsequent default, misrepresentation or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
8.10 Severability. If any provision of this Agreement is held or determined
to be illegal, invalid or unenforceable under any present or future law: (a)
such provision will be fully severable; (b) this Agreement will be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof; (c) the remaining provisions of this Agreement will
remain in full force and effect and will not be affected by the illegal, invalid
or unenforceable provision or by its severance herefrom; and (d) in lieu of such
illegal, invalid or unenforceable provision, there will be added automatically
as a part of this Agreement a legal, valid and enforceable provision as similar
in terms to such illegal, invalid or unenforceable provision as may be possible.
8.11 Expenses. Except as set forth in the Expense Letter, each Party shall
bear its own costs and expenses (including fees and expenses of its legal,
accounting and financial advisors) incurred in connection with this Agreement
and the transactions contemplated hereby.
8.12 Construction. The language used in this Agreement shall be deemed to
be the language chosen by the Parties hereto to express their mutual intent, and
no rule of strict construction shall be applied against either Party. Any
reference to any federal, state, local or foreign statute or law shall be deemed
also to refer to all rules and regulations promulgated thereunder, unless the
context requires otherwise.
[Signatures Begin on the Following Page]
The Parties hereby execute this Agreement on the date stated in the
introductory clause.
ANCHOR GLASS CONTAINER CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
CERBERUS CAPITAL MANAGEMENT, L.P.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
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