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Exhibit 10.26
American National Can Group, Inc.
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TERM SHEET
JUNE 7, 1999
Borrowers: American National Can Group, Inc. (the "Company"), a
holding company indirectly owning American National Can
Company ("ANC") and certain subsidiaries acceptable to
the Lenders (the "Approved Subsidiary Borrowers"). The
Company and the Approved Subsidiary Borrowers are
hereinafter referred to collectively as the
"Borrowers".
Guarantee: ANC, Pechiney North America, Inc. and all hereinafter
created material domestic subsidiaries of the Company
shall unconditionally guarantee the obligations of the
Company and the Approved Subsidiary Borrowers. The
Company shall unconditionally guarantee the obligations
of the Approved Subsidiary Borrowers.
Lead Arranger and
Joint Book Manager: Chase Securities Inc. ("CSI").
Lead Arranger and
Joint Book Manager: Banc One Capital Markets, Inc. ("BOCM").
Global Administrative
Agent: The First National Bank of Chicago ("First Chicago" or
the "Global Administrative Agent").
Syndication Agent: The Chase Manhattan Bank,
CLO Administrative Agent,
Co-Documentation Agent
and Arranger: ABN AMRO Bank N.V.
Co-Documentation agent
and Arranger: Royal Bank of Canada
Arranger: Banque Nationale de Paris
Underwriting Lenders: First Chicago, The Chase Manhattan Bank, ABN AMRO Bank
N.V., Royal Bank of Canada and Banque Nationale de
Paris.
Lenders: Syndicate of lenders selected by BOCM and CSI in
consultation with the Company (collectively, the
"Lenders"); and, with respect to the "Liquidity
Facility". (as defined below) the initial lender shall
be ABN AMRO Bank N.V., which will also be sole provider
of the "Enhancer Facility" (as defined below).
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American National Can Group, Inc.
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DOCUMENTATION: The Facilities will be evidenced by one or more
credit agreements (collectively, the "Credit
Agreement"), guarantees and other loan documents
(collectively, the "Loan Documents") mutually
satisfactory to the Borrowers and the Lenders.
LENDER COMMITMENTS: Allocation of the commitments received from the
various Lenders shall be pro rata among the
5-Year Facility (as defined below) and the
364-Day Revolving Credit Facility (as defined
below).
FACILITIES:
AGGREGATE
AMOUNT: Up to $1.3 billion (the "Aggregate Commitment").
CURRENCIES: The entire Facility will be available in U.S.
Dollars, and a portion of the 5-Year Facility will
be available in eurosterling and euro.
PURPOSE: To refinance existing indebtedness, effect the
recapitalization of the Company and for general
corporate purposes, including friendly
acquisitions.
5-YEAR REVOLVING CREDIT
AMOUNT: Up to $650,000,000, comprised of a revolving
credit facility of up to $600,000,000 ("5-Year
Facility"), and a corporate loan option facility
of up to $50,000,000 as described on Annex I (the
"CLO Facility A")
MATURITY: 5-Year Facility: 5 years from the date
of execution of the
Credit Agreement (such
date of execution being
the "Closing Date").
LETTER OF CREDIT
SUBFACILITY: Up to $100 million of the 5-Year Facility shall be
available for the issuance of standby letters of
credit (the "Letters of Credit") by the Global
Administrative Agent or by any other Lender (each
such Lender an "Issuer") at the request and for
the account of the Company; provided, that the
program letters of credit issued by he "Enhancer"
under the CLO Facility shall not be a Letter of
Credit under the 5-Year Facility. No Letter of
Credit shall have an expiry date later than the
earlier of (a) one year after the date of issuance
and (b) five business days prior to final maturity
of the 5-Year Facility, provided that any Letter
of Credit with a one-year tenor may provide for
the renewal thereof for additional one-year
periods (which shall in no event extend beyond the
date referred to in clause (b) above). Immediately
upon the issuance of each Letter of Credit, each
Lender shall be deemed to have automatically and
unconditionally purchased and received from the
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AMERICAN NATIONAL CAN GROUP, INC.
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Issuer an undivided interest and participation in
and to such Letter of Credit, the obligations of
the Company in respect thereof, and the liability
of the Issuer thereunder, in an amount equal to
the face amount of such Letter of Credit
multiplied by such Xxxxxx's commitment percentage
under the 5-Year Facility. The Letter of Credit
Fee shall be equal to the applicable LIBOR Margin
for the 5-Year Facility. A Letter of Credit
fronting fee will be negotiated with each Issuer.
MULTICURRENCY
SUBFACILITY: A portion of the 5-Year Facility not in excess of
$400 million at any one time outstanding shall be
available to the Borrowers in eurosterling or euro
("Multicurrency Loans") with up to the equivalent
of $300 million available in euro and up to the
equivalent of $100 million available in
eurosterling (if Great Britain adopts the euro,
available in euro). The structure of the
Multicurrency Subfacility (for example, as to
which Lenders shall provide the loans thereunder)
and which companies will be designated as
Borrowers thereunder) shall be determined by the
Global Administrative Agent after consultation
with the Company (and during the syndication of
the Facilities, after discussion with the
Underwriting Lenders) so as to minimize
withholding taxes, but the Borrowers will be
required to indemnify and hold the Lenders
harmless against all withholding taxes related to
the Multicurrency Loans. If the Multicurrency
Subfacility is structured with one Lender fronting
loans for the other Lenders in respect of a
Multicurrency Loan, such fronting Lender shall
receive from the Borrowers a fronting fee in
respect thereof in an amount to be determined.
364-DAY REVOLVING CREDIT
AMOUNT: Up to $650,000,000, comprised of a revolving
credit facility of up to $600,000,000 ("364-Day
Revolving Credit Facility"), and a corporate loan
option facility of up to $50,000,000 as described
on Annex I (the "CLO Facility B", and together
with the CLO Facility A, the "CLO Facility")
MATURITY: 364-Day Revolving
Credit Facility: 364 days after the
Closing Date
SWING LINE
SUBFACILITY: Up to $25 million of the 364-Day Revolving Credit
Facility will be available for swingline loans
from First Chicago as swingline lender (the
"Swingline Lender"). All swingline loans shall
bear interest as agreed. Swingline loans will
reduce availability under the applicable Facility.
All swingline loans shall be repaid with interest
on the 7th business day after the date such
swingline loan is made. Interest on the
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American National Can Group, Inc.
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swingline loans shall be payable solely to the
Swingline Lender for its account. At any time upon
request of the Swingline Lender, or, if the Swingline
Lender is not repaid by the Company on the date when
due, each Lender will make a loan the proceeds of
which will be used to repay the swingline loan or, if
any such loan may not be made, irrevocably purchase
from the Swingline Lender, without recourse or
warranty, a participation in the swingline loan as
shall be necessary to cause each such Lender to share
ratably in such swingline loan.
EXTENSION: Not more than 59 days and not less than 30 days
before the end of the applicable 364-day period, the
Company may request in writing that the maturity date
for the expiring 364-Day Revolving Credit Facility be
extended for an additional 364 days. Within 30 days
after such extension request, each Lender may in its
sole discretion agree to such extension by giving
written notice thereof to the Company and the Global
Administrative Agent (and the failure to provide such
notice shall be deemed to be a declination of such
consent). Subject to the Majority Lenders agreeing
to extend, the then applicable expiration date of the
364-Day Revolving Credit Facility shall, following an
extension request, be extended for those consenting
Lenders by 364 days. The Company reserves the right
to replace dissenting Lender(s) with existing or new
Lenders. Such new Lender(s) must necessarily be an
assenting Lender(s) and be agreeable to the extension
request. Extension mechanics for the CLO Facility B
shall be similar to those contained in the 364-Day
Revolving Credit Facility.
CONVERSION TO
TERM LOAN: At the Company's option upon written notice to the
Global Administrative Agent (who shall promptly
notify each of the Lenders), the Company may convert
the aggregate outstanding principal amount of the
364-Day Revolving Credit Facility to a term loan
having a maturity not more than 364 days after the
conversion date identified in such notice.
Conversion mechanics for the CLO Facility B shall be
similar to those contained in the 364-Day Revolving
Credit Facility.
OTHER TERMS
BORROWING OPTIONS: LIBOR for U.S. Dollar loans and loans in
eurosterling adjusted for reserves.
EURIBOR for euro loans, adjusted for reserves.
Alternative Base Rate for U.S. Dollar loans.
Competitive Bid for U.S. Dollar loans.
LIBOR loans and EURIBOR loans (collectively,
"Adjusted IBOR Loans") will be available for interest
periods of one, two, three or six months. All
interest will be calculated on a 360-day basis.
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American National Can Group, Inc.
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The "Alternate Base Rate" means the greater of (i)
the corporate base rate of interest announced by
First Chicago from time to time changing when and
as said rate changes or (ii) the federal funds rate
+1/2%.
"LIBOR" means the rate which appears on Telerate
Page 3740 or 3750, as applicable, for deposits in
the amount and currency of, and for a maturity
corresponding to, the loan; provided, further, that
if Telerate Page 3740 or 3750 is not available,
LIBOR for the relevant Interest Period shall be
the rate at which deposits in the applicable
currency approximately equal in principal amount
to the Global Administrative Agent's portion of
the proposed loan and for the maturity equal to
the applicable Interest Period are offered by the
Global Administrative Agent in immediately
available funds in the London, England interbank
market at approximately 11:00 a.m., London time,
two (2) Business Days prior to the commencement of
such Interest Period, adjusted for reserves.
"EURIBOR" means the interest rate per annum equal
to the rate determined by the Global
Administrative Agent to be the rate at which
deposits in euro appear on the Telerate Page 248
as of 11:00 a.m., Brussels time, on the date that
is two (2) TARGET Settlement Days preceding the
first day of such Interest Period; provided, that
if such rate does not appear on the Telerate Page
248, then EURIBOR shall be an interest rate per
annum equal to the arithmetic mean determined by
the Global Administrative Agent (rounded upwards to
the nearest .01%) of the rates per annum at which
deposits in euro are offered by the three (3)
leading banks in the euro-zone interbank
market at approximately 11:00 a.m., Brussels time,
on the day that is two (2) TARGET Settlement Days
preceding the first day of such Interest Period to
other leading banks in the euro-zone interbank
market rate at which deposits in euro are
offered, adjusted for reserves.
"TARGET Settlement Day" means any day on which the
Trans-European Automated Real-Time Gross
Settlement Express Transfer (TARGET) System is
open.
COMPETITIVE BID
OPTION DESCRIPTION: The Company may request the Global Administrative
Agent to solicit competitive bids from the Lenders
to make loans in U.S. Dollars (each a "Competitive
Bid Loan") under the 5-Year Facility or the 364-Day
Revolving Credit Facility at a margin over or under
LIBOR (each such Competitive Bid Loan a
"Competitive Bid LIBOR Loan") or at an absolute
rate (each such Competitive Bid Loan a "Competitive
Bid Absolute Rate Loan"), for interest periods of
30 days or more. Each Lender will bid at its own
discretion for amount up to the total amount of
commitments and the Company will be under no
obligation to accept
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any of the bids. All such Competitive Bid Loans made
by a Lender shall be deemed usage of the applicable
Facility for the purpose of fees and availability.
However, each Lender's Competitive Bid Loans shall
not reduce such Lender's obligation to lend its pro
rata share of the remaining undrawn commitment under
the applicable Facility.
BID SELECTION MECHANISM: The Company will determine the aggregate amount of
bids, if any, it will accept. Bids will be accepted
in order of the lowest to the highest rates ("Bid
Rates"). If two or more Lenders bid at the same bid
rate and the amount of such bids accepted is less
than the aggregate amount of such bids, then the
amount to be borrowed at such Bid Rate will be
allocated among such Lenders in proportion to the
amount for which each Lenders bid at such Bid Rate.
If the bids are either unacceptably high to the
Company or are insufficient in amount, the Company
may cancel the auction.
INCREASED COSTS: The Credit Agreement will contain customary provisions
regarding availability, increased costs (including
capital cost increases imposed by regulatory
authorities), illegality and early payment of
deposit-based loans.
DEFAULT RATE: For the 5-Year Facility and the 364-Day Revolving
Credit Facility: After a Default and upon a vote of
the Majority Lenders, the interest rates and any
letter of credit fee will be equal to the then highest
rate (or fee) under the various Facilities plus 2% per
annum. For the CLO Facility: As set forth on Annex I.
FACILITY FEE: For the 5-Year Facility and the 364-Day Revolving
Credit Facility: A per annum fee calculated on a
360-day basis payable on each Lender's commitment
irrespective of usage beginning from the Closing Date,
quarterly in arrears and on termination of the
applicable Facility. (See Pricing Grid set forth
below).
For the CLO Facility: As set forth on Annex I.
INTEREST RATES: Each Borrower may request revolving credit loans
which bear interest at defined margins over such
Borrower's available and selected borrowing option.
5-YEAR FACILITY: See Pricing Grid set forth below.
364-DAY REVOLVING
CREDIT FACILITY: Same as Pricing Grid except that the Facility Fee will
be 0.05% less and the LIBOR and EURIBOR spread will be
0.05% more than indicated in the attached Pricing
Grid.
CLO FACILITY: See Annex I.
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PRICING GRID:
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PRICING GRID (AVERAGE TOTAL NET INDEBTEDNESS/CAPITAL)
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LEVEL I LEVEL II LEVEL III(1) LEVEL IV
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Credit Quality Based
upon Average Total
Net Indebtedness/
Capital(1),(2) <40% >40% but< >45% but< >50%
45% 50%
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Facility Fee 0.20% 0.225% 0.25% 0.30%
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Alternate Base Rate 0.0% 0.0% 0.0% 0.25%
Margin
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LIBOR and 0.80% 0.90% 1.00% 1.20%
EURIBOR Margin
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All-in 1.00% 1.125% 1.25% 1.50%
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(1)The Facilities will have opening pricing at Level III. All pricing will be
fixed at no less than Level III following initial funding under the Credit
Agreement until the Global Administrative Agent receives the certified
unaudited consolidated financial statements of the Company and its consolidated
subsidiaries for the fiscal quarter ending on March 31, 2000.
(2)For pricing purposes only, the Average Total Net Indebtedness/Capital ratio
will be defined as: (i) the average of the aggregate indebtedness for borrowed
money (including guarantee obligations, but excluding certain scheduled
obligations and liabilities supported by indemnities from Pechiney Plastic
Packaging, Inc. or guarantees from Pechiney S.A. ("Pechiney") or Waste
Management, Inc. as of the Closing Date) of the Company and its subsidiaries
minus the aggregate cash equivalents of the Company and its subsidiaries, in
each case as at the end of each of the four prior fiscal quarters (the "Average
Total Net Indebtedness"), divided by (ii) the sum of (A) the Average Total Net
Indebtedness, plus (B) Consolidated Net Worth (as defined below), including
minority interests, at the date of determination; provided, that for purposes
of calculating Average Total Net Indebtedness for the three fiscal quarters
immediately following the Closing Date, Average Total Net Indebtedness shall be
calculated (x) as of the end of the first fiscal quarter immediately following
the Closing Date for such fiscal quarter, (y) as of the end of the second fiscal
quarter immediately following the Closing Date for the two fiscal quarter
immediately following the closing Date for the two fiscal quarter period
ending on such date, and (z) as of the end of the third fiscal quarter
immediately following the Closing Date for the three fiscal quarter period
ending on such date.
DRAWDOWNS: Minimum amounts of $25 million with additional increments
of $1 million (or the approximate equivalents established
by the Administrative Agent in the applicable alternate
currency.) Drawdowns are at the applicable Borrower's
option with same-day notice for Alternate Base Rate Loans,
one business day for Competitive Bid Absolute Rate Loans,
three business days for Adjusted IBOR Loans, and five
business days for Competitive Bid LIBOR Loans.
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PREPAYMENTS: Alternate Base Rate Loans may be prepaid in whole
or in part at any time on one business day's
written notice. Adjusted IBOR Loans and
Competitive Bid Loans may not be prepaid before
the end of an Interest Period.
TERMINATION OR REDUCTION
OF COMMITMENTS: The Company may terminate the unused commitments
in amounts of at least $25 million at any time on
three business days' written notice. In addition,
in the event of a sale of assets which exceeds the
percentage of Consolidated Net Assets set forth in
paragraph 15 of the Covenants section below, a
mandatory reduction of the Aggregate Commitment
under the 5-Year Facility (and prepayment of any
outstanding borrowings thereunder in excess of
such reduced Aggregate Commitment) will be
required in the amount by which the net proceeds
from such sale exceed such percentage of
Consolidated Net Assets.
REPRESENTATIONS
AND WARRANTIES: The Company will make customary representations
and warranties, including but not limited to:
1. Corporate existence and standing
2. Authorization and validity
3. No conflict; government consent
4. Financial statements
5. Material Adverse Change (only on the date of
the initial borrowing and the date of any new
loans, and, in the case of the 364-Day
Revolving Credit Facility and the CLO
Facility B, on the date of conversion of such
Facility to a term loan)
6. Taxes
7. Litigation and contingent obligations
8. Subsidiaries
9. ERISA
10. Accuracy of information
11. Regulation U
12. Material agreements (subject to a threshold
of $15 million)
13. Compliance with laws
14. Investment Company Act
15. Public Utility Holding Company Act
16. Environmental compliance
17. Ownership of property
18. Year 2000 compliance
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Covenants: The Credit Agreement will have customary covenants,
including, but not limited to:
1. Financial Reporting: Annual certified
unqualified audited consolidated financial
statements of the Company and its
consolidated subsidiaries due within 90 days
after each fiscal year. Quarterly certified
unaudited consolidated financial statements of
the Company and its consolidated subsidiaries
due within 45 days after each of the first three
fiscal quarters. The Company will also provide
a quarterly no default certificate signed by an
Authorized Officer. The Company will further
provide such additional information as the
Global Administrative Agent may reasonably
request.
2. Use of proceeds
3. Notice of default, notice of material
litigation and other material notices
4. Conduct of business
5. Taxes
6. Insurance
7. Compliance with laws
8. Maintenance of properties
9. Inspection
10. Consolidations, mergers and acquisitions:
Neither the Company nor any of its material
subsidiaries will consolidate or merge into any
other person other than
a. With respect to the consolidation or merger
of the Company, the Company is the survivor
thereof and the merger is with a company in
a line of business substantially similar to
that of the Company and its subsidiaries as
of the Closing Date;
b. With respect to the consolidation or merger
of any subsidiary, the Company shall own a
portion of the survivor no smaller than the
portion of the subsidiary the Company owned
before the merger; and
c. Permitted Acquisitions. "Permitted
Acquisition" shall mean any acquisition
(i) consummated pursuant to a negotiated
acquisition agreement on a non-hostile
basis, (ii) the purchase price of which
shall not exceed 15% of the Consolidated
Net Assets of the Company in the aggregate
for all acquisitions consummated since the
Closing Date, (iii) in respect of which the
business being acquired shall be
substantially similar to that of the Company
and its subsidiaries as of the Closing
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Date, and (iv) for each such acquisition the
purchase price of which is greater than or
equal to $50 million, in respect of which the
Company shall have delivered a certificate
from an Authorized Officer demonstrating to
the reasonable satisfaction of the Global
Administrative Agent pro forma compliance with
the financial covenants for the twelve-month
period ending on the last day of the Company's
most recently completed fiscal quarter as if
such acquisition had occurred on the first day
of such twelve-month period;
provided, such permitted consolidations, mergers and
acquisitions shall be permitted only so long as no
Default or Unmatured Default has occurred and is
continuing or would occur after giving effect to such
merger, consolidation or acquisition
11. Guaranties of non-affiliates permitted up to, in the
aggregate, 5% of Consolidated Net Worth.
12. No liens on the stock of the Company's subsidiaries
and no other lien other than (i) with respect to sales
of accounts receivables for purposes of securitization
will be permitted up to an aggregate amount of 5% of
annual Consolidated Net Sales (provided that any claims
in respect of such lien shall represent no more than
the purchaser's pro-rata interest in the pool of
eligible receivables so sold) and (ii) Permitted Liens.
"Permitted Liens" shall include:
a. Customary permitted liens;
b. Liens in the ordinary course of
business;
c. Liens in connection with sale/leaseback
transactions to the extent such
sale/leaseback transactions are
otherwise permitted under the Credit
Agreement
d. Liens existing as of the Closing Date
(as scheduled); and
e. Additional liens, provided the
indebtedness secured thereby does not
exceed $75 million in the aggregate.
13. Transactions with affiliates to be on an arm's-length
basis and no loans or advances to Pechiney or any
other direct or indirect owners of 10% or more of the
stock of the Company (other than scheduled loans and
advances as of the Closing Date and loans or advances
in the ordinary course of business).
14. Sale/Leaseback transactions will be permitted up to
$50 million on an aggregate basis over the term of the
Credit Agreement Sale/Leaseback transactions in excess
of this amount shall be permitted provided the Company
prepays indebtedness under
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the 5-Year Facility in such like amount
15. Sale or other disposition of assets: The Company
may sell, lease, transfer, or otherwise dispose of
assets or the stock of its subsidiaries, provided
that after giving effect thereto the aggregate
amount of such dispositions (other than (a) in the
ordinary course of business or (b) in connection
with the sale of accounts receivable permitted
under paragraph 12 above) does not exceed 15% of
the Consolidated Net Assets during the term of the
Credit Agreement; provided that immediately after
the consummation of such transaction and after
giving effect thereto no Default or Unmatured
Default would exist. "Consolidated Net Assets"
shall mean total assets less goodwill for the
Company and its consolidated subsidiaries. In the
event of a sale of assets which exceeds such
percentage, a mandatory reduction of the Aggregate
Commitment under the 5-Year Facility (and
prepayment of any outstanding borrowings
thereunder in excess of such reduced Aggregate
Commitment) will be required in the amount by
which the net proceeds from such sale exceed such
percentage of Consolidated Net Assets.
16. Year 2000 issues
17. ERISA
18. Net rental obligations under operating leases will
be permitted up to $50 million on an aggregate
basis during any twelve-month period.
19. Subsidiary indebtedness to be limited to (i) loans
under the Facilities, (ii) existing indebtedness
payable to parties other than Pechiney or any of
its affiliates, (iii) indebtedness necessary to
manage the working capital needs of the currently
existing European-based subsidiaries of the
Company in an amount not to exceed $75 million in
the aggregate; and (iv) other unsecured
indebtedness in an amount not to exceed $75
million in the aggregate.
20. Compliance with environmental laws except where
the failure to comply would not have a material
adverse effect on the business, properties,
financial condition, prospects or results of
operations of the Company and its subsidiaries
taken as a whole.
21. Dividends and distributions will be permitted only
so long as no Default or Unmatured Default shall
have occurred and is continuing.
FINANCIAL COVENANTS: The following financial covenants shall be calculated on a
consolidated basis for the Company and its subsidiaries.
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1. Total Net Indebtedness to Capital Ratio: At no time
shall the ratio of (a) Total Net Indebtedness to (b)
Capital be greater than 0.55 to 1.00. Total Net
Indebtedness will equal the aggregate indebtedness for
borrowed money (including guarantee obligations, but
excluding certain scheduled obligations and liabilities
supported by indemnities from Pechiney Plastic
Packaging, Inc. or guarantees from Pechiney or Waste
Management, Inc. as of the Closing Date) of the Company
and its subsidiaries minus the aggregate cash
equivalents of the Company and its subsidiaries.
Capital will equal Total Net Indebtedness plus
"Consolidated Net Worth" (as defined below), including
minority interests.
2. Interest Coverage Ratio: The ratio of (a) EBITDA to
(b) interest expense shall be greater than 3.5 to 1.00
as of the end of the first three fiscal quarters
following the Closing Date (calculated as of the end of
the first fiscal quarter for such first fiscal quarter,
and as of the end of the second fiscal quarter for the
two fiscal quarter period then ending, and as of the
end of the third fiscal quarter for the three fiscal
quarter period then ending); and greater than 4.00 to
1.00 as at the end of each fiscal quarter thereafter
(calculated as of the end of each such fiscal quarter
for the four-fiscal quarter period ending on such
date). For purposes of calculation of this ratio,
EBITDA will include agreed upon add-backs for
restructuring charges related to plant closings.
3. Minimum Consolidated Net Worth: The Company will
maintain a Consolidated Net Worth at all times equal to
or greater than the sum of (i) eighty percent (80%) of
the Consolidated Net Worth of the Company and its
subsidiaries as at June 30, 1999 calculated on a pro
forma basis after giving effect to the restructuring
and dividend described in the Company's S-1, as amended
as of the date hereof, plus (ii) 50% of net income for
the Company and its consolidated subsidiaries
calculated separately (x) on December 31, 1999 for the
two fiscal quarter period ending on December 31, 1999
and (y) for each fiscal year thereafter commencing with
the fiscal year ending on December 31, 2000.
"Consolidated Net Worth" means total consolidated
shareholders' equity, excluding cumulative foreign
currency translation adjustment and minimum pension
liability adjustment.
The Financial Covenants shall be calculated exclusive
of the impact of payments by or liabilities of the
Company on certain scheduled obligations and
liabilities supported by indemnities form Pechiney
Plastic Packaging, Inc. or guarantees from Pechiney or
Waste Management, Inc. as of the Closing Date to
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the extent that the Company shall receive prompt
reimbursement for such payments under such
indemnities or support guarantees.
CONDITIONS
OF BORROWING: The obligations of the Lenders to make the initial
loan under the Facilities are subject to customary
conditions precedent, including but not limited to
the following:
1. Satisfactory Lenders' due diligence (including
review of environmental issues),
2. Payment of substantially all debt due to
Pechiney or any of its affiliates,
3. Payment of all debt and cancellation of the
commitments under ANC's existing bank credit
agreement (the "Existing Credit Agreement") and
all other bank lines of credit over $5 million
except for those that are scheduled in the
Credit Agreement,
4. Satisfactory completion of IPO,
5. Capital structure and corporate structure
consistent in all material respects with the
Company's S-1,
6. Delivery of Loan Documents satisfactory to the
Global Administrative Agent, including, without
limitation, legal opinions requested by the
Lenders and corporate resolutions,
7. The initial loans under the Credit Agreement
shall be made on or before August 16, 1999.
In addition, each loan (and each continuation or
conversion thereof) under the Facilities will be
subject to customary conditions precedent (borrowing
certificates, accuracy of all representations and
warranties (other than material adverse change which
shall be made only on the date of any new loan, and,
in the case of the 364-Day Revolving Credit Facility
and the CLO Facility B, as of the date such Facility
is converted to a term loan), no default certificate,
etc.).
DEFAULTS: The Agreement will have customary defaults
("Defaults"), as well as remedies in the event of a
default, including, but not limited to:
1. Any representation or warranty shall be false
as to a material fact or matter on the date as
of which made or deemed made
2. Non-payment of principal when due, or of
interest or fees or any other amounts payable
under the applicable Facility within 5 business
days of becoming due
3. Breach of any negative covenant or financial
covenant
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American National Can Group, Inc.
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4. Uncured breaches of any other terms or conditions
in the Credit Agreement for 30 days
5. Cross-acceleration to other Company or subsidiary
indebtedness greater than $15 million, with
cross-default to Company or subsidiary
indebtedness greater than $40 million, which
default would permit the holders of such
indebtedness to cause such indebtedness to become
due prior to its stated maturity
6. Voluntary or involuntary bankruptcy of the
Company, or any other Borrower or any material
subsidiaries
7. Unstayed judgments in excess of $15 million
8. Unfunded liabilities under pension plans in excess
of $300 million
9. ERISA events
10. Any person or group (excluding Pechiney) shall
acquire beneficial ownership of 30% or more of the
voting common stock of the Company or Continuing
Directors no longer constitute a majority of
Company's board of directors. "Continuing
Directors" means, as of any date of determination,
any member of the Board of Directors of the
Company who (i) was a member of such Board of
Directors on the Closing Date or (ii) was
nominated for election or elected to such Board of
Directors with the approval of a majority of the
Continuing Directors who were members of such
Board at the time of such nomination or election.
ASSIGNMENTS/
PARTICIPATIONS: The Lenders may sell assignments under the 5-Year Facility
and 364-Day Revolving Credit Facility with the consent of
the Company and the Global Administrative Agent (such
consents not to be unreasonably withheld, and which
consent of the Company shall not be required (i) so long
as a Default or Unmatured Default shall have occurred and
is continuing and (ii) for any assignment to another
Lender or to an affiliate of a Lender) or participations
in their commitments under the Facilities. Assignments
shall be in minimum amounts of $5,000,000 or such lesser
amount as may be acceptable to the Global Administrative
Agent and the Company (provided the consent of the Company
shall not be required to any reduction of such minimum
amount so long as a Default or Unmatured Default shall
have occurred and be continuing). Dissemination of
information to potential assignees or participants shall
be subject to execution of confidentiality agreements
reasonably satisfactory to the Company. The assignor
shall pay an assignment fee of $3,500 to Global
Administrative Agent upon any assignment by a Lender of
its rights and obligations under the Facilities
(including, but not limited to, an assignment by a Lender
to another Lender, but
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American National Can Group, Inc.
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excluding any assignment by a Lender to an
affiliate of such Lender) or such lesser amount
as may be acceptable to the Global
Administrative Agent.
MAJORITY LENDERS: "Majority Lenders" means Lenders (including the
Providers and Enhancer for the CLO Facility)
holding at least 51% of the commitments or, if
the commitments thereunder have been terminated,
of the outstanding loans. Majority Lenders
shall be calculated on an aggregated basis, as
applicable, for (i) the 5-Year Facility and the
5-year portion of the CLO Facility and (ii) the
364-Day Revolving Credit Facility and the
364-day portion of the CLO Facility
GOVERNING LAW: Illinois.
MISCELLANEOUS: This Term Sheet is intended as an outline and
does not purport to summarize all the terms,
conditions, representations, warranties and
other provisions which will be contained in
definitive legal documentation for this
transaction.
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American National Can Group, Inc.
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ANNEX I
TO TERM SHEET FOR
AMERICAN NATIONAL CAN GROUP, INC.
JUNE 7, 1999
CORPORATE LOAN OPTION FACILITY (THE "CLO FACILITY")
THE PROGRAM: A $100 million Corporate Loan Option program, provided
by either Windmill Funding Corporation ("Windmill") or
Amsterdam Funding Corporation ("Amsterdam").
PROGRAM LIMIT: $100 million
PARTIES INVOLVED
OBLIGOR: American National Can Group, Inc.
CLO ADMINISTRATIVE
AGENT: ABN AMRO Bank N.V. ("CLO ADMINISTRATIVE AGENT")
PURCHASERS: 1. Windmill and/or Amsterdam (also referred to as
the "Conduits"); and/or
2. ABN AMRO Bank N.V. and certain other lenders (the
"Liquidity Providers"); and
3. ABN AMRO Bank N.V., as the program letter of
credit provider (the "Enhancer").
GUARANTORS: ANC, Pechiney North America, Inc. and all hereinafter
created material domestic subsidiaries of the Company
shall unconditionally guarantee the obligations of
the Obligor under the Liquidity Facility and the
Enhancer Facility.
STRUCTURE
FACILITIES: The Obligor may elect to use the following facilities
(the Conduits and/or, on a pro rata basis, the
Liquidity Facility and the Enhancer Facility) and the
Conduit may use the Liquidity Facility and the
Enhancer Facility.
1. "Conduit Facility" means the $98,000,000
uncommitted facility to be
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American National Can Group, Inc.
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provided by the Conduits to purchase loans from the
Obligor.
2. "Liquidity Facility" means the $90,000,000 commitment
(90% of the Program Limit) to be provided by the
Liquidity Providers to purchase loans from the
Conduits or the Obligor. Liquidity Providers in
addition to ABN AMRO Bank N.V. will be limited to
financial institutions with a short-term CP rating of
at least A+/P-1 or A-1/P-1. The Liquidity Facility will
include a $45 million 364-day committed facility (the
"364-Day Liquidity Facility") and a $45 million 5-year
committed facility (the "5-Year Liquidity Facility").
3. "Enhancer Facility" means the $10,000,000 commitment
(10% of the Program Limit) to be provided by the
Enhancer (ABN AMRO Bank N.V.) to issue the program
letter of credit and to purchase loans from the
Conduits or the Obligor. The Enhancer Facility is
fully subordinated to the Liquidity Facility
throughout the life of the CLO Facility. The Enhancer
Facility will include a $5 million 364-day committed
facility (the "364-Day Enhancer Facility", and,
together with the 364-Day Liquidity Facility, the
"364-Day CLO Back-up Facility") and a $5 million
5-year committed facility (the "5-Year Enhancer
Facility", and together with the 5-Year Liquidity
Facility, the "5-Year CLO Back-up Facility").
The Liquidity Facility and Enhancer Facility
(collectively, the "CLO Back-up Facilities") provide
the back-stop to the Conduits' respective CP notes.
The CLO Back-up Facilities shall equal 102% of the
Windmill and/or Amsterdam Facilities or $100,000,000.
THE MAXIMUM PROCEEDS TO THE COMPANY WILL EQUAL $98,000,000
CLO FACILITY.
TERMINATION DATE: The Conduit Facility will terminate upon the earlier of
(a) 364 days from the Closing Date (subject to annual
renewal provisions) and (b) occurrence of a Conduit Event.
The CLO Back-up Facilities will terminate (i) 364 days
from the Closing Date (subject to annual renewal
provisions) in the case of the 364-Day CLO Back-up
Facility and (ii) 5 years from the Closing Date in the
case of the 5-Year CLO Back-up Facility.
TERMINATION EVENTS: Include but are not limited to:
1. A Default which is not waived or cured within any
applicable cure period under the Credit Agreement;
2. The Obligor fails to maintain the following financial
ratios:
- Total Net Indebtedness/Capital not more than 53%
- Interest Coverage Ratio not less than 3.75 to
1.00 as of the end of the first three fiscal
quarters following the Closing
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American National Can Group, Inc.
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Date (calculated as of the end of the first fiscal
quarter for such first fiscal quarter, and as of the
end of the second fiscal quarter for the two fiscal
quarter period then ending, and as of the end of the
third fiscal quarter for the three fiscal quarter
period then ending); and greater than 4.25 to 1.00 as
at the end of each fiscal quarter thereafter
(calculated as of the end of each such fiscal quarter
for the four-fiscal quarter period ending on such
date). For purposes of calculation of this ratio,
EBITDA will include agreed upon add-backs for
restructuring charges related to plant closings; or
3. The CLO Administrative Agent shall no longer deem the
Obligor to be an investment grade equivalent.
CONDUIT EVENT: Upon the occurrence of any of the following, the note
representing the underlying loan to the Obligor, held by the
Conduits, will be transferred to the Liquidity Providers and
Enhancer:
1. The date on which a Termination Event occurs; or
2. Conduits, for any reason, no longer provide funding.
PRICING:
CONDUIT FACILITY
RATE: Shall equal the sum of the following:
1. CP RATE: The A-1+/P-1 or A-1/P-1 CP equal to the actual
trade rate the Conduit achieves on tranches associated
with the Issuer (limited to not longer than 30 days). The
Conduit Facility Rates are quoted on a discount basis and
include dealer fees.
2. LIQUIDITY FACILITY FEE: A per annum fee calculated on a
360-day basis equal to (x) with respect to the 364-Day
Liquidity Facility, the Facility Fee applicable to the
364-Day Revolving Credit Facility, and (y) with respect
to the 5-Year Liquidity Facility, the Facility Fee
applicable to the 5-Year Facility, and payable on the
Liquidity Providers' commitment under the applicable
Liquidity Facility irrespective of usage, quarterly in
arrears and on termination of the applicable Liquidity
Facility.
3. ENHANCER FACILITY FEE: A per annum fee calculated on a
360-day basis equal to (x) with respect to the 364-Day
Enhancer Facility, the Facility Fee applicable to the
364-Day Revolving Credit Facility, and (y) with respect
to the 5-Year Enhancer Facility, the Facility Fee
applicable to the 5-Year Facility, and payable on the
Enhancer's
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AMERICAN NATIONAL CAN GROUP, INC.
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commitment under the applicable Enhancer
Facility, quarterly in arrears and on termination
of the applicable Enhancer Liquidity Facility.
CLO BACK-UP FACILITIES
FUNDING RATES: The purpose of the CLO Facility is to provide
funding via issuance of the CP Notes under the
Conduit Facility. However, if funding is not
available under the Conduit Facility, the CLO
Back-up Facilities shall be drawn upon to retire
the maturing CP, and the Obligor shall pay
interest under the CLO Back-up Facilities as
follows:
1. Liquidity Providers' Funding Rates:
For the 364-day Liquidity Facility:
i) Pricing for the 364-Day Revolving
Credit Facility per the Pricing Grid;
or
ii) after a Default: the Alternate Base
Rate plus the highest applicable margin
per the Pricing Grid plus 2.00% per
annum
For the 5-Year Liquidity Facility:
i) Pricing for the 5-Year Facility per the
Pricing Grid; or
ii) after a Default: the Alternate Base
Right Rate plus the highest applicable
margin per the Pricing Grid plus 2.00%
per annum
2. Enhancer Funding Rates:
For the 364-Day Enhancer Facility:
i) Pricing for the 364-Day Revolving
Credit Facility per the Pricing Grid
plus 0.50% per annum; or
ii) after a Default: the Alternate Base
Rate plus the highest applicable margin
per the Pricing Grid plus 3.00% per
annum
For the 5-Year Enhance Facility:
i) Pricing for the 5-Year Facility per the
Pricing Grid plus 0.50% per annum; or
ii) after a Default: the Alternate Base
Rate plus the highest applicable margin
per the Pricing Grid plus 3.00% per
annum
COST AND YIELD
PROTECTION: Usual and customary for transactions and
facilities of this type, including without
limitation, with respect to prepayments, changes
in the Global Administrative Agent's or CLO
Administrative Agent's interpretation of capital
adequacy and capital requirements, illegality,
and other similar
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provisions typically found in credit facilities
of this type.
ASSIGNMENTS/
PARTICIPATIONS: The Liquidity Providers may sell assignments
under the 364-Day Liquidity Facility and 5-Year
Liquidity Facility with the consent of the
Company and the CLO Administrative Agent (such
consents not to be unreasonably withheld, and
which consent of the Company shall not be
required (i) so long as a Default or Unmatured
Default shall have occurred and is continuing
and (ii) for any assignment to another Liquidity
Provider or Lender or to an affiliate of a
Liquidity Provider or Lender) or participations
in their commitments under the Liquidity
Facilities. Dissemination of information to
potential assignees or participants shall be
subject to execution of confidentiality
agreements reasonably satisfactory to the
Company. The assignor shall pay an assignment
fee of $3,500 to the CLO Administrative Agent
upon any assignment by a Liquidity Provider of
its rights and obligations under the Liquidity
Facilities (including, but not limited to, an
assignment by a Liquidity Provider to another
Liquidity Provider or Lender, but excluding any
assignment by a Liquidity Provider to an
affiliate of such Liquidity Provider) or such
lesser amount as may be acceptable to the CLO
Administrative Agent.
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