1
EXHIBIT 10.6
June , 1999
---
MASTER NETTING & AMENDMENT AGREEMENT
Pechiney S.A., a company incorporated under the laws of the Republic of
France ("COMPANY"), and each of the entities listed on Schedule 1 hereto
(individually, "COUNTERPARTY" and collectively, "COUNTERPARTIES") hereby amend
the terms of all foreign exchange transactions, interest rate and currency
swaps, options, caps, collars, and floors, and any similar transactions, which
have been entered into between the parties and are listed on Schedule 2 hereto
("EXISTING FX TRANSACTIONS") as evidenced by a trade ticket, term sheet,
confirmation or other similar documentation (collectively, "TRADE
DOCUMENTATION"). The parties hereby agree that the terms of this Agreement shall
apply with respect to all foreign exchange transactions, interest rate and
currency swaps, options, caps, collars, and floors, and any similar transaction
that may be entered into in the future between Company and each Counterparty
("FUTURE FX TRANSACTIONS") (Existing FX Transactions and Future FX Transactions
shall be collectively referred to as "FX TRANSACTIONS").
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Company and each Counterparty agree to the
following terms, and to the extent such terms have not been previously specified
or agreed to in any Trade Documentation, the same shall be deemed amended, and
any conflicting terms shall be deemed superseded to the extent of any such
conflict.
Each party agrees that it is entering into and maintaining the FX
Transactions in reliance on the fact that the terms and obligations under each
of the FX Transactions form a single agreement between the parties, and the
parties would not otherwise enter into any such FX Transactions.
I. OTHER DEFINED TERMS
"BUSINESS DAY" means a day on which commercial banks are open for
business in New York City and Paris, France.
"CLOSE-OUT AMOUNT" has the meaning specified in Paragraph III(B).
"CLOSE-OUT DATE" has the meaning specified in Paragraph III(A).
"DEFAULTING PARTY" has the meaning specified in Paragraph II(A).
"EUROS" means the lawful currency of the member states of the European
Union that adopt the single currency in accordance with the Treaty establishing
the European Community, as amended by the Treaty on European Union.
"EVENT PARTY" has the meaning specified in Paragraph IV(A).
"GUARANTEE" means the guarantee dated as of the date hereof by the
Guarantor in favor of Company in the form attached hereto as Exhibit A.
"GUARANTOR" means American National Can Group, Inc., a corporation
organized under the laws of the State of Delaware.
"MARKET VALUE" means, with respect to each Terminated Transaction, an
amount determined by the Non-defaulting Party, that would be paid to the
Non-defaulting Party (expressed as a negative number) or by the Non-defaulting
Party (expressed as a positive number) pursuant to any agreement between the
Non-defaulting Party and a leading dealer to enter into a transaction that would
have the effect of preserving for the Non-defaulting Party the economic
equivalent of any payment by the parties under the Terminated Transaction that
would, but for the Close-Out
2
Date, have been required after such date. Such amount shall be converted by the
Non-defaulting Party into Euros at a rate of exchange at which the
Non-defaulting Party would be able, acting in a reasonable manner and in good
faith, to purchase the relevant amount of Euros.
"NETTING EVENT" has the meaning specified in Paragraph IV(A).
"NON-DEFAULTING PARTY" has the meaning specified in Paragraph III(A).
"NON-EVENT PARTY" has the meaning specified in Paragraph IV(B).
"PROCEEDINGS" has the meaning specified in Paragraph V(B).
"TERMINATED TRANSACTIONS" has the meaning specified in Paragraph
III(B).
"UNPAID AMOUNTS" means, with respect to amounts owing to Company
(expressed as a negative number) and with respect to amounts owing to
Counterparty (expressed as a positive number), the amounts that became payable
to such party in respect of Terminated Transactions on or prior to the Close-Out
Date and which remain unpaid as of such Close-Out Date. Such amount shall be
converted by the Non-defaulting Party into Euros at a rate of exchange at which
the Non-defaulting Party would be able, acting in a reasonable manner and in
good faith, to purchase the relevant amount of Euros.
II. CROSS DEFAULT
(A) Each party agrees that the occurrence of any of the following
events with respect to a party ("DEFAULTING PARTY") shall constitute an event of
default ("EVENT OF DEFAULT") with respect to such party under each of the FX
Transactions between Company and the relevant Counterparty:
(1) failure to make, when due, any payment under any FX Transaction
required to be made by it if such failure is not remedied on or before the
second Business Day after notice of such failure is given to the Defaulting
Party;
(2) it: (a) is dissolved; (b) becomes insolvent or is unable to pay
its debts or fails or admits in writing its inability generally to pay its debts
as they become due; (c) makes a general assignment, arrangement or composition
with or for the benefit of its creditors; (d) institutes or has instituted
against it a proceeding seeking a judgment of insolvency or bankruptcy or any
other relief under any bankruptcy or insolvency law or other similar law
affecting creditors' rights, or a petition is presented for its winding-up or
liquidation, and, in the case of any such proceeding or petition instituted or
presented against it, such proceeding or petition (i) results in a judgment of
insolvency or bankruptcy or the entry of an order for relief or the making of an
order for its winding-up or liquidation or (ii) is not dismissed, discharged,
stayed or restrained, in each case within 15 days of the institution or
presentation thereof; (e) has a resolution passed for its winding-up, official
management or liquidation; (f) seeks or becomes subject to the appointment of an
administrator, provisional liquidator, conservator, receiver, trustee, custodian
or other similar official for it or for all or substantially all its assets; (g)
has a secured party take possession of all or substantially all its assets or
has a distress, execution, attachment, sequestration or other legal process
levied, enforced or sued on or against all or substantially all its assets and
such secured party maintains possession, or any such process is not dismissed,
discharged, stayed or restrained, in each case within 15 days thereafter; (h)
causes or is subject to any event with respect to it which, under the applicable
laws of any jurisdiction, has an analogous effect to any of the events specified
in clauses (a) to (g) (inclusive); or (i) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the foregoing
acts; or
(3) any other default or event of default by or in respect of it,
or any other similar condition or event (however described) in respect of any of
the FX Transactions.
2
3
(B) Each obligation of each party under each FX Transaction is subject
to the condition precedent that no Event of Default or any event which, with the
giving of notice or the lapse of time or both, would constitute an Event of
Default with respect to the other party to such FX Transaction has occurred and
is continuing.
III. CLOSE-OUT
(A) At any time after an Event of Default has occurred and is
continuing, the non-defaulting party to the relevant FX Transaction
("NON-DEFAULTING PARTY") shall be entitled to terminate all, but not less than
all, FX Transactions outstanding between the Defaulting Party and the
Non-defaulting Party on the date designated by the Non-defaulting Party as the
close-out date ("CLOSE-OUT DATE") in a written notice from the Non-defaulting
Party to the Defaulting Party. Such Close-Out Date shall be a day not earlier
than the date such notice is effective.
(B) Upon termination of the parties' FX Transactions, Counterparty or
Company, as the case may be, shall be obligated to pay to the other party with
respect to such terminated FX Transactions ("TERMINATED TRANSACTIONS") an amount
("CLOSE-OUT AMOUNT") equal to the sum of (i) the Market Value of each Terminated
Transaction on the Close-Out Date and (ii) any Unpaid Amounts.
(C) If the Close-Out Amount is a positive number, that amount shall be
immediately due and payable by Company to Counterparty; if the Close-Out Amount
is a negative number, the absolute value of that amount shall be immediately due
and payable by Counterparty to Company and such Close-Out Amount shall be
immediately due and payable by Guarantor under the terms of the Guarantee. The
Close-Out Amount shall be due and payable, together with interest on the unpaid
portion thereof (determined by the Non-defaulting Party in its discretion and in
good faith) from the Close-Out Date until paid in full.
(D) The parties agree that (1) the amount recoverable by a party
hereunder is a reasonable estimate of the loss it would have incurred on its FX
Transactions and is not a penalty, (2) such amount is payable for the loss of
bargain and the loss of protection against future risk and (3) neither party
shall be entitled to recover additional damages in respect of such losses.
IV. MULTILATERAL NETTING
(A) Each party agrees that the occurrence of any of the following
events shall constitute a netting event ("NETTING EVENT") and for purposes of
Paragraphs IV(A)(1), (2), (3), and (4), Counterparty will be the party with
respect to which the Netting Event has occurred, and for the purposes of
Paragraph IV(A)(5), Company will be the party with respect to which the Netting
Event has occurred ("EVENT PARTY").
(1) Guarantor fails to comply with or perform its obligations
under the Guarantee and such failure is continuing after the lapse of
any applicable grace period;
(2) Guarantor disaffirms, disclaims, repudiates, or rejects,
in whole or in part, or challenges the validity of, or otherwise
dishonors the Guarantee;
(3) the Guarantee terminates or fails or ceases to be in full
force and effect at any time during the term of any FX Transaction;
(4) any event or condition analogous to an event or condition
to Paragraph II(A)(2) herein occurs with respect to Guarantor; or
(5) any event or condition analogous to an event or condition
to Paragraph II(A)(2) herein occurs with respect to Company.
3
4
(B) Upon the occurrence of a Netting Event, an Event of Default and a
Close-Out Date shall be deemed automatically to occur on the Business Day next
following the Netting Event with respect to each FX Transaction between Company
and each and every Counterparty, and a Close-Out Amount with respect to all FX
Transactions between Company and each and every Counterparty shall be determined
in accordance with Paragraph III(B). Any such Close-Out Amount payable may, at
the option of the party that is not the Event Party ("NON-EVENT PARTY"), be
reduced by its set-off against any other Close-Out Amounts payable by any other
Counterparty to Company or be reduced by its set-off against any other Close-Out
Amounts payable by Company to any other Counterparty (as the case may be).
(C) If an obligation is unascertained, the Non-event Party may in good
faith estimate that obligation and set-off in respect of the estimate, subject
to the Non-event Party accounting to the other party when the obligation is
ascertained. These set-off provisions shall be without prejudice and in addition
to any right of set-off otherwise available to a party (whether by operation of
law, contract, or otherwise).
V. GOVERNING LAW AND JURISDICTION
(A) This Agreement and all FX Transactions shall be governed by, and
construed in accordance with, the laws of the State of New York.
(B) With respect to any suit, action or proceedings relating to any FX
Transaction or this Agreement ("PROCEEDINGS"), each party irrevocably submits to
the non-exclusive jurisdiction of the courts of the State of New York, and
waives any objection which it may have at any time to the laying of venue of any
Proceedings brought in any such court, waives any claim that such Proceedings
have been brought in an inconvenient forum and further waives the right to
object, with respect to such Proceedings, that such court does not have any
jurisdiction over such party.
VI. SERVICE OF PROCESS
Each party irrevocably appoints its process agent to receive, on its
behalf, service of process in any Proceedings. If for any reason any party's
process agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to
the other party. Nothing in this Agreement will affect the right of either party
to serve process in any other matter permitted by law.
Company appoints CT Corporation, having an address on the date hereof
at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its agent for service of process.
Each Counterparty appoints CT Corporation, having an address on the date hereof
at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its agent for service of process.
Promptly after the execution of this Agreement, each party shall arrange for its
process agent to issue a letter to all other parties wherein it accepts its
appointment.
VII. NOTICES
Notices and other communications shall be in writing and shall be
delivered to: (A) Company shall be sent to it at its address at 0 xxxxx xx
Xxxxxxxxxx Xxxxxxxx, 00000 Xxxxx Cedex 16 France, facsimile no.
011-331-5628-3318, attention: Xxxxxx Xxxxxxx d'Estaintot, and (B) each
Counterparty and the Guarantor at the address specified on Schedule 1 hereto.
Each party may by notice to the other change its banking details or the
address, telex or facsimile number at which notices or other communications are
to be given to it.
VIII. ESCROW
4
5
If, by reason of the time difference between the cities in which
payments are to be made under any FX Transaction, it is not possible for
simultaneous payments to be made on any date on which both parties thereto are
required to make such payments, either party may at its option and in its sole
discretion notify the other party that payments on such date are to be made into
escrow. In such case, the deposit of the payment due earlier on that date must
be made by 2:00 p.m. (local time at the place for the earlier payment) on that
date with an escrow agent that is a commercial bank, independent of either
party, with a minimum net worth of US $100,000,000 or its equivalent in another
currency, selected by such notifying party, accompanied by irrevocable payment
instructions (A) to release the deposited payment to the intended recipient upon
receipt by the escrow agent of the required deposit of the corresponding payment
from the intended recipient on the same date accompanied by irrevocable payment
instructions to the same effect, or (B) if the required deposit of the
corresponding payment is not made on that same date by the intended recipient,
to return the payment deposited to the party that paid it into escrow. The
notifying party must pay the costs of the escrow arrangements and will cause
those arrangements to provide that, in the case of a payment obligation under
any FX Transaction, the intended recipient of the payment due to be deposited
first will be entitled to interest on that deposited payment for each day in the
period of its deposit at the rate offered by the escrow agent for that day for
overnight deposits in the relevant currency in the office where it holds the
deposited payment (at 11:00 a.m. local time on that day) if the payment is not
released by 5:00 p.m. local time on the date it is deposited for any reason
other than the intended recipient's failure to make the escrow deposit it was
required to make in a timely manner.
IX. TERMINATION
This Agreement shall continue in force until terminated by Company upon
not less than ten (10) Business Days' prior written notice to the other parties
hereto; provided that notwithstanding any such termination, the provisions of
this Agreement shall remain in full force and effect as to any FX Transaction
entered into prior to such termination date and the provisions of this Agreement
shall continue to apply until all obligations of each party hereunder have been
fully performed.
X. REPRESENTATIONS AND WARRANTIES
Each party hereto, as an inducement to the other parties to enter into
this Agreement and each FX Transaction, represents and warrants to the other
parties hereto that: (A) it has the power to execute, deliver and perform this
Agreement; (B) this Agreement has been duly authorized, executed, and delivered
by it and does not contravene its governing documents or any contractual
restriction binding on it; (C) its obligations under this Agreement constitute
its legal, valid, and binding obligations, enforceable in accordance with the
terms (subject to applicable bankruptcy, reorganization, insolvency, moratorium
or similar laws affecting creditors' rights generally and subject, as to
enforceability, to equitable principles of general application (regardless of
whether enforcement is sought in a proceeding in equity or at law)); (D) no
Event of Default has occurred and is continuing with respect to it; (E) all
authorizations of, exemptions by, or filings with any governmental or regulatory
authority that are required to be obtained or made by it in connection with this
Agreement have been made and are in full force and effect; and (F) it is
authorized under all applicable law to enter into this Agreement and each of the
FX Transactions.
XI. AMENDMENT AND ASSIGNMENT
This Agreement may only be amended by mutual written consent of the
parties hereto and such written consent shall be designated as an amendment to
this Agreement. Neither party may assign its rights, interests or obligations
under this Agreement or under any FX Transaction without the prior written
consent of the other parties.
XII. COUNTERPARTS
This Agreement may be executed in any number of counterparts and all of
such counterparts taken together shall be deemed to constitute one and the same
instrument and agreement.
5
6
IN WITNESS WHEREOF, the parties have caused this document to be duly
executed on the day and year first written above.
PECHINEY S.A.
By:
------------------------------
Name:
Title:
[COUNTERPARTY]
By:
------------------------------
Name:
Title:
[COUNTERPARTY]
By:
------------------------------
Name:
Title:
[COUNTERPARTY]
By:
------------------------------
Name:
Title:
[COUNTERPARTY]
By:
------------------------------
Name:
Title:
6
7
SCHEDULE 1
[Names) of each Counterparty]
Guarantor:
American National Can Group, Inc.
0000 Xxxx Xxxx Xxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxx
Facsimile No.: 000-000-0000
8
SCHEDULE 2
[ List of Trades]
9
EXHIBIT A
[Form of Guarantee]
