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EXHIBIT 10.37
EXECUTION COPY
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (this "SUBORDINATION AGREEMENT") is made
as of the 22nd day of July, 1999, by and among AMERICAN NATIONAL CAN GROUP,
INC., a Delaware corporation (the "Company"), PECHINEY NORTH AMERICA, INC., a
Delaware corporation, and AMERICAN NATIONAL CAN COMPANY, a Delaware corporation
(collectively, the "INITIAL GRANTORS" and along with each other Subsidiary of
the Company which becomes a party to this Subordination Agreement by executing
an Addendum hereto in the form attached as Annex I, the "GRANTORS") in favor of
the Administrative Agent, for the ratable benefit of the Holders of Obligations,
under (and as defined in) the Credit Agreements referred to below;
WITNESSETH:
WHEREAS, the "COMPANY", one or more Subsidiaries of the Company
(whether now existing or hereafter formed, collectively referred to herein as
the "SUBSIDIARY BORROWERS"), the institutions from time to time parties hereto
as Lenders, and THE FIRST NATIONAL BANK OF CHICAGO, in its capacity as
contractual representative (the "ADMINISTRATIVE Agent") for itself and the other
Lenders, THE CHASE MANHATTAN BANK, as Syndication Agent (the "SYNDICATION
AGENT"), and ABN AMRO BANK N.V., as Co-Documentation Agent (the
"CO-DOCUMENTATION AGENT") and Arranger (the "ARRANGER"), and ROYAL BANK OF
CANADA , as Co-Documentation Agent (the "CO-DOCUMENTATION AGENT") and Arranger
(the "ARRANGER"), BANQUE NATIONALE DE PARIS, as Arranger (the "ARRANGER"), CHASE
SECURITIES INC., as Lead Arranger (the "LEAD ARRANGER") and Joint Book Manager
(the "JOINT BOOK MANAGER"), and BANC ONE CAPITAL MARKETS, INC., as Lead Arranger
(the "LEAD ARRANGER") and Joint Book Manager (the "JOINT BOOK MANAGER") have
entered into (i) a certain 5-Year Revolving Credit Agreement dated as of July
22, 1999 (as the same may be amended, modified, supplemented and/or restated,
and as in effect from time to time, the "5-YEAR CREDIT AGREEMENT") and (ii) a
certain 364-Day Credit Agreement dated as of July 22, 1999 (as the same may be
amended, restated, supplemented or otherwise modified, and as in effect from
time to time, the "364-DAY CREDIT Agreement", and, together with the 5-Year
Credit Agreement, the "CREDIT AGREEMENTS"), providing, subject to the terms and
conditions thereof, for extensions of credit and other financial accommodations
to be made by the Lenders to the Company and the Subsidiary Borrowers;
WHEREAS, it is a condition precedent to the initial extensions of
credit by the Lenders under each of the Credit Agreements that each of the
Grantors execute and deliver this Subordination Agreement; and
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
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SECTION l. Definitions. Terms defined in the Credit Agreements and not
otherwise defined herein have, as used herein, the respective meanings provided
for therein. For purposes of this Subordination Agreement, "LONG-TERM LENDERS"
shall mean all of the Lenders under the 5-Year Credit Agreement, and "SHORT-TERM
LENDERS" shall mean all of the Lenders under the 364-Day Credit Agreement.
"Lenders" shall mean, collectively, all of the Long-Term Lenders and all of the
Short-Term Lenders.
SECTION 2. Representations, Warranties and Covenants. Each of the
Grantors represents and warrants (which representations and warranties shall be
deemed with respect to each such Grantor to have been renewed at the time of the
making, conversion or continuation of any Loan or issuance of any Letter of
Credit and on the Conversion Date, provided at such time such Grantor is a
creditor of any Borrower or any Guarantor) that:
(a) It is a corporation, limited liability company,
partnership or other commercial entity duly incorporated or formed, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or formation and has all requisite authority to conduct its
business as a foreign Person in each jurisdiction in which its business is
conducted, except where the failure to have such requisite authority would not
have a Material Adverse Effect.
(b) It has the power and authority and legal right to execute
and deliver this Subordination Agreement and to perform its obligations
hereunder. The execution and delivery by it of this Subordination Agreement and
the performance by it of its obligations hereunder have been duly authorized by
proper proceedings, and this Subordination Agreement constitutes a legal, valid
and binding obligation of such Grantor, enforceable against such Grantor in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity (regardless of whether
enforcement is sought in equity or at law).
(c) Neither the execution and delivery by it of this
Subordination Agreement, nor the consummation by it of the transactions herein
contemplated, nor compliance by it with the terms and provisions hereof, will
violate any law, rule, regulation, order, writ, judgment, injunction, decree or
award binding on it or its certificate or articles of incorporation or by-laws,
limited liability company or partnership agreement (as applicable) or the
provisions of any indenture, instrument or material agreement to which it is a
party or is subject, or by which it, or its property, is bound, or conflict with
or constitute a default thereunder, or result in the creation or imposition of
any Lien in, of or on its property pursuant to the terms of any such indenture,
instrument or material agreement. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any Governmental Authority that has not been made, obtained or
given, or which, if not made, obtained or given, individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect, is
required to authorize, or is required in connection with the execution, delivery
and performance by it of this Subordination Agreement.
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In addition to the foregoing, each of the Grantors covenants
that, so long as any Lender has any Commitment outstanding under either of the
Credit Agreements or any amount payable under the Credit Agreements or any other
Obligations shall remain unpaid, it will fully comply with those covenants and
agreements of the Company applicable to each of the Grantors set forth in each
of the Credit Agreements.
SECTION 3. Subordination of Intercompany Indebtedness. Each of the
Grantors agrees that any and all claims of such Grantor against either the
Company, any Subsidiary Borrower or any other Grantor hereunder (each an
"Obligor"), any endorser or obligor of all or any part of the Obligations, or
against any of its properties shall be subordinate and subject in right of
payment to the prior payment, in full and in cash, of all Obligations; provided,
that, and not in contravention of the foregoing and notwithstanding any other
provision of this Agreement, so long as no Default or Unmatured Default has
occurred and is continuing such Grantor may make loans to and receive payments
in the ordinary course with respect to any "Intercompany Indebtedness" (as
defined below) to the extent permitted by the terms of the Credit Agreements and
the other Loan Documents. Notwithstanding any right of any Grantor to ask,
demand, xxx for, take or receive any payment from any Obligor, all rights, liens
and security interests of such Grantor, whether now or hereafter arising and
howsoever existing, in any assets of any other Obligor shall be and are
subordinated to the rights of the Holders of Obligations and the Administrative
Agent in those assets. No Grantor shall have any right to possession of any such
asset or to foreclose upon any such asset, whether by judicial action or
otherwise, unless and until all of the Obligations (other than contingent
indemnity obligations) shall have been fully paid and satisfied (in cash) and
all financing arrangements pursuant to any Loan Document among the Company or
any Subsidiary Borrower and the Holders of Obligations have been terminated. If
all or any part of the assets of any Obligor, or the proceeds thereof, are
subject to any distribution, division or application to the creditors of such
Obligor, whether partial or complete, voluntary or involuntary, and whether by
reason of liquidation, bankruptcy, arrangement, receivership, assignment for the
benefit of creditors or any other action or proceeding, or if the business of
any such Obligor is dissolved or if substantially all of the assets of any such
Obligor are sold, then, and in any such event, any payment or distribution of
any kind or character, either in cash, securities or other property, which shall
be payable or deliverable upon or with respect to any indebtedness of any
Obligor to any Grantor ("Intercompany Indebtedness") shall be paid or delivered
directly to the Administrative Agent for application on any of the Obligations,
due or to become due, until such Obligations (other than contingent indemnity
obligations) shall have first been fully paid and satisfied (in cash). Each
Grantor irrevocably authorizes and empowers the Administrative Agent to demand,
xxx for, collect and receive every such payment or distribution and give
acquittance therefor and to make and present for and on behalf of such Grantor
such proofs of claim and take such other action, in the Administrative Agent's
own name or in the name of such Grantor or otherwise, as the Administrative
Agent may deem necessary or advisable for the enforcement of this Section 3. The
Administrative Agent may vote such proofs of claim in any such proceeding,
receive and collect any and all dividends or other payments or disbursements
made thereon in whatever form the same may be paid or issued and apply the same
on account of any of the Obligations. Should
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any payment, distribution, security or instrument or proceeds thereof be
received by any Grantor upon or with respect to the Intercompany Indebtedness
prior to the satisfaction of all of the Obligations (other than contingent
indemnity obligations) and the termination of all financing arrangements among
the Company or any Subsidiary Borrower and the Holders of Obligations, such
Grantor shall receive and hold the same in trust, as trustee, for the benefit of
the Holders of Obligations and shall forthwith deliver the same to the
Administrative Agent, for the benefit of the Holders of Obligations, in
precisely the form received (except for the endorsement or assignment of such
Grantor where necessary), for application to any of the Obligations, due or not
due, and, until so delivered, the same shall be held in trust by such Grantor as
the property of the Holders of Obligations. If any such Grantor fails to make
any such endorsement or assignment to the Administrative Agent, the
Administrative Agent or any of its officers or employees are irrevocably
authorized to make the same. Each of the Grantors agrees that until the
Obligations (other than the contingent indemnity obligations) have been paid in
full (in cash) and satisfied and all financing arrangements among the Company
and the Subsidiary Borrowers and the Holders of Obligations have been
terminated, no Grantor will assign or transfer to any Person (other than the
Administrative Agent) any claim any such Grantor has or may have against any
Obligor.
SECTION 4. Successors and Assigns. This Subordination Agreement is for
the benefit of the Administrative Agent and the Holders of Obligations and their
respective successors and permitted assigns and in the event of an assignment of
any amounts payable under the Credit Agreements or the other Loan Documents in
accordance with the respective terms thereof, the rights hereunder, to the
extent applicable to the indebtedness so assigned, may be transferred with such
indebtedness. This Subordination Agreement shall be binding upon each of the
Grantors and their respective successors and assigns.
SECTION 5. Changes in Writing. Other than in connection with the
addition of additional Subsidiaries which become parties hereto by executing an
Addendum hereto in the form attached as Annex I, neither this Subordination
Agreement nor any provision hereof may be changed, waived, discharged or
terminated orally, but only in writing signed by each of the Grantors and the
Administrative Agent with the consent of the Required Lenders under the 5-Year
Credit Agreement (or all of the Long-Term Lenders if required pursuant to the
terms of Section 10.3 of the 5-Year Credit Agreement) or with the consent of the
Required Lenders under the 364-Day Credit Agreement (or all of the Short-Term
Lenders if required pursuant to the terms of Section 10.3 of the Credit
Agreement).
SECTION 6. GOVERNING LAW. ANY DISPUTE BETWEEN ANY GRANTOR AND ANY AGENT
OR ANY LENDER, OR ANY OTHER HOLDER OF OBLIGATIONS ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH, THIS SUBORDINATION AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE
RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING,
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WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1 ET SEQ., BUT OTHERWISE WITHOUT
REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS.
SECTION 7. CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.
(A) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B), EACH
OF THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG
THEM IN CONNECTION WITH, THIS SUBORDINATION AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE
RESOLVED EXCLUSIVELY BY STATE OR FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS,
BUT THE PARTIES HERETO ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE
TO BE HEARD BY A COURT LOCATED OUTSIDE OF CHICAGO, ILLINOIS. EACH OF THE PARTIES
HERETO WAIVES IN ALL DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. EACH OF THE GRANTORS AGREES THAT ANY AGENT,
ANY LENDER OR ANY HOLDER OF OBLIGATIONS SHALL HAVE THE RIGHT TO PROCEED AGAINST
SUCH GRANTOR OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE SUCH PERSON TO
(1) OBTAIN PERSONAL JURISDICTION OVER SUCH GRANTOR OR (2) ENFORCE A JUDGMENT OR
OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON. EACH OF THE GRANTORS AGREES
THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT
BY SUCH PERSON TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH
PERSON. EACH OF THE GRANTORS WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE
LOCATION OF THE COURT IN WHICH SUCH PERSON HAS COMMENCED A PROCEEDING DESCRIBED
IN THIS SUBSECTION (B).
(C) SERVICE OF PROCESS. EACH OF THE GRANTORS WAIVES PERSONAL SERVICE OF
ANY PROCESS UPON IT AND IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY
WRITS, PROCESS OR SUMMONSES IN ANY SUIT, ACTION OR PROCEEDING BY THE MAILING
THEREOF BY ANY AGENT OR THE HOLDERS OF OBLIGATIONS BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO THE GRANTORS IN CARE OF THE COMPANY AT THE ADDRESS
PROVIDED FOR NOTICES TO THE COMPANY UNDER THE CREDIT AGREEMENTS. NOTHING HEREIN
SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF ANY AGENT OR THE HOLDERS OF
OBLIGATIONS TO SERVE ANY SUCH WRITS, PROCESS OR SUMMONSES IN ANY OTHER MANNER
PERMITTED BY APPLICABLE LAW. EACH OF THE GRANTORS IRREVOCABLY WAIVES ANY
OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE
OR BASED ON
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THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS SUBORDINATION
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH IN ANY JURISDICTION SET FORTH ABOVE.
(D) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
SUBORDINATION AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED
OR DELIVERED IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SUBORDINATION AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.
(E) WAIVER OF BOND. EACH OF THE GRANTORS WAIVES THE POSTING OF ANY BOND
OTHERWISE REQUIRED OF ANY PARTY HERETO IN CONNECTION WITH ANY JUDICIAL PROCESS
OR PROCEEDING TO ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF
SUCH PARTY, OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER,
PRELIMINARY OR PERMANENT INJUNCTION, THIS SUBORDINATION AGREEMENT OR ANY OTHER
LOAN DOCUMENT.
(F) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO EACH OTHER
PARTY HERETO THAT IT HAS DISCUSSED THIS SUBORDINATION AGREEMENT AND,
SPECIFICALLY, THE PROVISIONS OF THIS SECTION 7, WITH ITS COUNSEL.
SECTION 8. No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Subordination Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Subordination Agreement shall be construed as if drafted jointly by the parties
hereto and no presumption or burden of proof shall arise favoring or disfavoring
any party by virtue of the authorship of any provisions of this Subordination
Agreement.
SECTION 9. Severability. Wherever possible, each provision of this
Subordination Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Subordination
Agreement shall be prohibited by or invalid under such
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law, such provision shall be ineffective to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or the remaining
provisions of this Subordination Agreement.
SECTION 10. Merger. This Subordination Agreement represents the final
agreement of the Grantors with respect to the matters contained herein and may
not be contradicted by evidence of prior or contemporaneous agreements, or
subsequent oral agreements, between the Grantors and any Holder of Obligations
or the Administrative Agent.
SECTION 11. Headings. Section headings in this Subordination
Agreement are for convenience of reference only and shall not govern the
interpretation of any provision of this Subordination Agreement.
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IN WITNESS WHEREOF, each of the undersigned Grantors has caused this
Subordination Agreement to be duly executed by its authorized officer as of the
day and year first above written.
AMERICAN NATIONAL CAN GROUP, INC.
By: Xxxxxx X. Xxxx
Its: Vice President and Treasurer
PECHINEY NORTH AMERICA, INC.
By: Xxxxxx X. Xxxx
Its: Treasurer
AMERICAN NATIONAL CAN COMPANY
By: Xxxxxx X. Xxxx
Its: Vice President and Treasurer
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ANNEX I TO SUBORDINATION AGREEMENT
Reference is hereby made to the Subordination Agreement (the
"Subordination Agreement") made as of the 22nd day of July, 1999 by Pechiney
North America, Inc., a Delaware corporation, and American National Can Company,
a Delaware corporation, American National Can Group, Inc., a Delaware
corporation (collectively, the "Initial Grantors" and along with any other
Subsidiaries of the Company which have become parties thereto and together with
the undersigned, the"Grantors") in favor of the Administrative Agent, for the
ratable benefit of the Holders of Obligations, under the Credit Agreements.
Capitalized terms used herein and not defined herein shall have the meanings
given to them in the Subordination Agreement. By its execution below, the
undersigned [NAME OF NEW GRANTOR], a [corporation] [partnership] [limited
liability company], agrees to become, and does hereby become, a Grantor under
the Subordination Agreement and agrees to be bound by such Subordination
Agreement as if originally a party thereto. By its execution below, the
undersigned represents and warrants as to itself that all of the representations
and warranties contained in Section 2 of the Subordination Agreement are true
and correct in all respects as of the date hereof.
IN WITNESS WHEREOF, [NAME OF NEW GRANTOR], a [corporation]
[partnership] [limited liability company] has executed and delivered this Annex
I counterpart to the Subordination Agreement as of this __________ day of
_________, ____.
[NAME OF NEW GRANTOR]
By:_____________________________________
Title:__________________________________
