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Exhibit 10.38
SIXTH AMENDMENT TO LEASE AND SECOND AMENDMENT
TO OPTION AGREEMENT
THIS SIXTH AMENDMENT TO LEASE AND SECOND AMENDMENT TO OPTION AGREEMENT (the
"Amendment") dated as of the 5th day of February, 1997 by and between Fountain
Associates I, Ltd., a Florida limited partnership (the "Borrower"), Citicorp
Leasing, Inc., a Delaware corporation (the "Lender"), Anchor Glass Container
Corporation, a Delaware corporation ("Old Anchor") and Anchor Glass Acquisition
Corporation ("New Anchor").
WHEREAS, Old Anchor is the lessee of certain property in Hillsborough
County, Florida known as Anchor Place at Fountain Square (the "Property")
pursuant to that certain Lease Agreement dated as of March 31, 1988 by and
between Old Anchor and the Borrower, as modified and amended by that certain
First Amendment to Lease dated as of June 16, 1992, as further modified and
amended by that certain Second Amendment to Lease dated as of September 30,
1993, as further modified and amended by that certain Third Amendment to Lease
dated as of February 22, 1995, as further modified and amended by that certain
Agreement dated as of March 31, 1996, as further modified and amended by that
certain Amended and Restated Agreement dated as of September 12, 1996 ("Lease");
and
WHEREAS, the Borrower and Old Anchor are party to that certain Building
Option Agreement dated as of March 31, 1988 (the "Option"), as modified and
amended by the First Amendment to Building Option Agreement dated as of June 16,
1992 (the "Option Amendment"), as further modified and amended by that certain
Agreement dated as of June 16, 1992 (the "June 16, 1992 Agreement"), as further
modified and amended by that certain Agreement dated as of March 31, 1996 (the
"Agreement"), as further modified and amended by that certain Amended and
Restated Agreement dated as of September 12, 1996 (the "Amended and Restated
Agreement"; together with the Option, the Option Agreement, the June 16, 1992
Agreement and the Agreement, the "Option Agreement"); and
WHEREAS, effective as of June 16, 1992, the Lender purchased from First
Union National Bank of Florida, successor in interest to the Federal Deposit
Insurance Corporation as Receiver for Southeast Bank, N.A. a loan (the "Loan")
to the Borrower which financed the Borrower's acquisition of the Property; and
WHEREAS, the Borrower's obligation to repay the Loan is evidenced by that
certain Renewal First Mortgage Note dated as of June 16, 1992, as amended (the
"Note"); and
WHEREAS, to secure the Note, the Borrower executed and delivered that
certain Amended Mortgage and Security Agreement dated as of June 16, 1992 and
recorded in the real estate records of Hillsborough County, Florida in Book 6643
at page 1536 (the "Mortgage") and
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that certain Amended Assignment of Leases and Rents dated as of June 16, 1992
and recorded in the real estate records of Hillsborough County, Florida in Book
6643 at page 1571; and
WHEREAS, in connection with the purchase of the Loan, the Borrower, Old
Anchor and the Lender entered into that certain Confirmation and Modification of
Subordination, Nondisturbance and Attornment Agreement dated as of June 16, 1992
and recorded in the real estate records of Hillsborough County, Florida in Book
6643 at page 1588 (the "Nondisturbance Agreement"); and
WHEREAS, the Lease, the Option Agreement and the Nondisturbance Agreement
shall be referred to herein as the "Lease Documents" and the Note, the Mortgage
and the Assignment of Leases shall be referred to herein as the "Loan
Documents"; and
WHEREAS, in connection with the execution and delivery of the Agreement and
to secure Old Anchor's obligations under the Lease and the Option Agreement,
Vitro, S.A. ("Vitro"), executed and delivered to the Lender that certain
Guaranty Agreement dated as of March 31, 1996, as modified and amended by that
certain letter agreement dated September 11, 1996 (as amended, the "Guaranty");
and
WHEREAS, on September 13, 1996 and September 30, 1996, Old Anchor and
Anchor Recycling Corporation, respectively, filed their petitions for relief
pursuant to Chapter 11 of the United States Bankruptcy Code in the United States
Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") which
cases are being jointly administered (case numbers 96- 1434 and 96-1516); and
WHEREAS, on December 18, 1996 Old Anchor entered into an Asset Purchase
Agreement (the "APA") which was approved by Order of the Bankruptcy Court
entered on December 20, 1996; and
WHEREAS, in connection with the APA, Old Anchor desires to assume the Lease
and the Option Agreement and to assign both such contracts to New Anchor; and
WHEREAS, as a condition to such assignment and assumption, the parties
hereto desire to modify and amend the Lease and the Option Agreement in the
manner set forth herein;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Borrower, the Lender, Old Anchor and New Anchor hereby agree
as follows:
Section 1. Amendments to Lease.
--------------------
a. The Lease is hereby modified and amended to the extent
necessary to permit Old Anchor to assume and assign the Lease to New Anchor
pursuant to Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code and New Anchor
hereby assumes all of Old Anchor's obligations under the Lease, as modified
hereby, pursuant to Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code. Hereafter,
all references to the "Tenant" in the Lease shall be to New Anchor.
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b. The Lease is hereby modified and amended to extend the Term
of the Lease so that the Term ends at midnight on February 1, 1998; provided,
however, that if New Anchor does not exercise the Option to purchase the
Property by the date for exercising such Option provided for under this
Agreement, the Term of the Lease shall only be extended to midnight on January
2, 1998.
c. Section 9(a) (13) of the Lease is hereby deleted in its
entirety and the following is substituted therefor:
"(i) Failure of Tenant to maintain a Consolidated Net Worth at
any time of not less than the amount described in Section 8.9 of that
certain Credit Agreement among Tenant, various financial institutions,
Bankers Trust Company, as Issuing Bank, BTCommercial Corporation, as
Agent and Co-Syndication Agent and PNC Bank, National Association, as
Co-Syndication Agent and Issuing Bank, dated as of February 5, 1997 (the
"BT Agreement"); or
(ii) Failure of Tenant to maintain an Interest Coverage Ratio
for any period of four consecutive fiscal quarters as described in
Section 8.11 of the BT Agreement.
Copies of Sections 8.9 and 8.11 of the BT Agreements are attached hereto
as Exhibit "Q" and incorporated herein by reference."
d. Section 9(a)(14) of the Lease is hereby deleted in its entirety
and the following is substituted therefore:
"(14) A Change in Control as defined below:
'Change in Control' means (A) a sale of all or substantially all of the
assets of Tenant to any entity other than Consumers Packaging Inc., a company
organized under the federal laws of Canada ("Parent") or the liquidation or
dissolution of the Tenant; (B) a merger of Tenant and Tenant is not the
surviving entity unless consented to in writing by Citicorp Leasing, Inc.;
(C)the failure of Parent to own, beneficially and of record, a majority of the
issues and outstanding shares of voting stock of the Tenant either directly or
through one or more intermediate subsidiaries of the Parent (in each case, a
majority of the issues and outstanding shares of the voting stock of which is
owned, beneficially and of record, by its immediate parent corporation); or (D)
the failure of the Parent to be able to, or the contractual cessation or
surrender of the right to, designate for election a majority of the members of
the board of directors of the Tenant; provided, however, that any pledge of
voting stock of the Tenant or any such intermediate subsidiary of the Parent by
the Parent or any such intermediate subsidiary of the Parent shall not be deemed
to constitute a "Change of Control" under clause (C) or clause (D), above,
regardless of any change in the record ownership of such shares of voting stock
provided for under the provisions of a pledge agreement creating such pledge
unless and until (i) the Parent of such intermediate subsidiary, as the case may
be, ceases to be the beneficial owner of such shares of voting stock or (ii) the
Parent or such intermediate subsidiary ceases to have the right to direct the
voting of such shares of voting stock
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in any election of members of the board of directors of the Tenant, whether
pursuant to a provision of any such pledge agreement or otherwise."
e. The Lease is hereby modified and amended to the extent necessary
to provide that the obligations of Old Anchor set forth in that certain Letter
Agreement dated as of April 27, 1992 heretofore have been satisfied.
f. The Lease is hereby modified and amended to the extent necessary
to provide that the Monthly Rental (as defined in the Lease) shall hereafter be
increased by $25,373.40 which increase has been included in the Monthly Rental
since September 12, 1996.
g. The Lease is hereby modified and amended to the extent necessary
to provide that any existing default under the Lease is hereby waived, including
the Lease Default (as defined in the Amended and Restated Agreement); provided,
however, that the obligation of the Tenant pursuant to Section 9(b)(1) of the
Lease to pay to the Lender twelve percent (12%) of the existing Citicorp
indebtedness under the Note to be applied to the balance due under the Note is
not waived but rather shall be deferred until the earlier of (a) the maturity
date of the Note, (b) the date of an additional default under the Lease, as
amended hereby, or (c) the date the Property is purchased by New Anchor or sold
to a third party.
Section 2. Amendments to Option Agreement.
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a. The Option Agreement is hereby modified and amended to the
extent necessary to permit Old Anchor to assume and assign the Option Agreement
to New Anchor pursuant to Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code and
New Anchor hereby assumes all of Old Anchor's obligations under the Option
Agreement, as modified hereby, pursuant to Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx
Bankruptcy Code. Hereafter, all references to "Anchor" in the Option Agreement
shall be to New Anchor.
b. The Option Agreement is hereby modified and amended to the
extent necessary to provide that for purposes of calculating the amount due
under the Option Agreement, the total amount of Citicorp indebtedness (as
defined in the Option Agreement) shall be such indebtedness as reduced by the
amount paid to the Lender pursuant to Section 1(e) of this Amendment; provided,
however, that calculation of the Residual Value Guaranty Amount (as defined in
the Option Agreement) shall be eighty-eight percent (88%) of the total amount of
the Citicorp Indebtedness (as defined in the Option Agreement) without reduction
of the amount of such payment.
c. Section 2(a) of the Option Agreement is hereby deleted in its
entirety and the following is substituted therefore:
"(a) The term ("Term") of this Option, unless terminated
earlier as provided in Section 2(c) herein, shall expire on January 2,
1998, which date is one month prior to the last day of the term of that
certain Lease Agreement dated as of March 31, 1988, as amended, between
Fountain, as landlord, and New Anchor, as tenant, for the Property."
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d. Section 4 of the Option Agreement is hereby modified and
amended to provide that the closing and consummation of the sale and purchase of
the Property shall take place on or before February 1, 1998. Notwithstanding any
of the foregoing or any provision of the Option Agreement to the contrary, (i)
the parties agree that the closing with respect to the exercise of the Option
(as defined in the Option Agreement) shall not in any event occur prior to
January 2, 1998, and (ii) the Borrower shall not be obligated to close on a date
which is earlier than twenty (20) days after the Borrower received the Exercise
Notice.
e. Section 16(b) of the Option Agreement is hereby modified and
amended to delete the first sentence thereof and to substitute the following
therefor:
"Upon expiration or earlier termination of the Lease, if New Anchor has
not properly exercised the Option and consummated the acquisition of the
Property, then New Anchor shall pay to Citicorp Leasing, Inc., a
Delaware corporation ("Citicorp"), an amount (the "Residual Value
Guaranty Amount") equal to eighty- eight percent (88%) of the total
indebtedness encumbering the Property (the "Citicorp Indebtedness"),
which Residual Value Guaranty Amount shall be applied to the Citicorp
Indebtedness."
f. The Option Agreement is hereby modified and amended to provide
the following additional provisions:
20. Payments. The parties agree that the payments required
to be made under this Agreement to Fountain may be paid directly to
Citicorp Leasing, Inc. so long as any indebtedness is outstanding to
Citicorp Leasing, Inc. with the remainder being paid to Fountain after
the Citicorp Indebtedness is fully paid and that such payments will be
deemed proper payments made to Fountain.
21. Conflict. As long as the Citicorp Indebtedness is
outstanding, nothing contained herein shall eliminate or diminish the
rights of Citicorp Leasing, Inc. to receive payment described in the
loan documents executed by and between Fountain and Citicorp Leasing,
Inc. dated as of June 16, 1992 and nothing contained herein shall
eliminate or diminish the rights of Citicorp Leasing, Inc. under that
certain Lease Agreement dated March 31, 1988, as amended.
22. Subordination. This Agreement, and all rights of New
Anchor and Fountain contained herein shall, and are hereby deemed to be,
subject, subordinate and inferior in all respects to the mortgage
securing the Citicorp Indebtedness. In the event of a foreclosure of the
mortgage securing the Citicorp Indebtedness, all rights under this
Agreement afforded to New Anchor and Fountain, and each of them, shall,
at the option of Citicorp Leasing, Inc., be extinguished by such
foreclosure, and Citicorp Leasing, Inc. shall not be bound by Fountain's
obligations hereunder."
g. The June 16, 1992 Agreement is hereby deleted in its entirety.
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Section 3. Notices.
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The Lease Documents are hereby modified and amended to the extent
necessary to provide the following addresses for notices:
If to New Anchor: Anchor Glass Acquisition Corporation
0000 Xxxxxx Xxxxx Xxxxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxx X. Glaznavi, Chairman
Telephone: (000) 000-0000
Telefax: (000) 000-0000
With a copy to: Xxxxxx Xxxxxxx Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: X. Xxxx May, Esq.
Telephone: (000) 000-0000
Telefax: (000) 000-0000
If to the Borrower: Fountain Associates I, Ltd.
c/x Xxxxxx Management Company
0000 Xxxxxxxx Xxxxxxxx Xxxxxxxx
Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
With a copy to: Annis, Mitchell, Xxxxxx, Xxxxxxx & Xxxxx, P.A.
Xxx Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Telefax: (000) 000-0000
If to the Lender: Citicorp Leasing, Inc.
c/o Citibank, N.A.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telefax: (000) 000-0000
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With a copy to: Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
Suite 2400
600 Peachtree Street, N.E.
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, III
Telephone: (000) 000-0000
Telefax: (000) 000-0000
Section 4. Conditions to Effectiveness of Amendment.
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This Amendment shall become effective as of the date hereof when, and
only when:
a. the Lender shall have received, in form and substance
satisfactory to it, counterparts of this Amendment duly executed by the general
partner of the Borrower, Old Anchor and New Anchor and such other information,
documents, instruments, approvals or opinions as the Lender or the Lender's
counsel may require;
b. the Lender shall have received, in form and substance
satisfactory to it, counterparts of that certain Sixth Amendment to Note,
Mortgage and Security Agreement and Related Loan Documents duly executed by the
Borrower, and such other information, documents, instruments, approvals or
opinions as the Lender or the Lender's counsel may require;
c. the Lender shall have received, in form and substance
satisfactory to it,counterparts of that certain Amended and Restated Guaranty
and Put Agreement duly executed by Vitro, and such other information, documents,
instruments, approvals or opinions as the Lender or the Lender's counsel may
require;
d. New Anchor shall have paid to the Lender a fee in the amount of
$100,000; and
e. Old Anchor shall have paid to the Lender or at the Lender's
direction the past due pre-petition rental payments in the amount of $90,204.68,
plus accrued and unpaid charges and other obligations in the amount of
$3,608.18, plus the fees and expenses of Paul, Hastings, Xxxxxxxx & Xxxxxx, LLP,
counsel to the Lender.
Section 5. Representations and Warranties of the Borrower.
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The Borrower represents and warrants as follows:
a. The Borrower is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Florida.
b. The execution, delivery and performance by the Borrower's
general partner of this Amendment, and the Lease Documents, as amended hereby,
are within such partner's power, have been duly authorized by all necessary
corporate action and do not contravene (i) such partner's articles of
incorporation or by-laws, or (ii) any law or any contractual restriction binding
on or affecting such partner.
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c. Except for Bankruptcy Court approval, no authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for the due execution, delivery and
performance by the Borrower of this Amendment or any of the Lease Documents, as
amended hereby, to which the Borrower is or will be a party.
d. This Amendment and each of the other Lease Documents, as
amended hereby, to which the Borrower is a party, constitute legal, valid and
binding obligations of the Borrower, enforceable against the Borrower in
accordance with their respective terms.
Section 6. Representations and Warranties of Old Anchor.
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Old Anchor represents and warrants as follows:
a. Old Anchor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.
b. The execution, delivery and performance by Anchor of this
Amendment, and the Lease Documents, as amended hereby, are within Old Anchor's
power, have been duly authorized by all necessary corporate action and do not
contravene (i) Anchor's articles of incorporation or by-laws, or (ii) any law or
any contractual restriction binding on or affecting Old Anchor.
c. Except for the Bankruptcy Court approval obtained on December
20, 1996, no authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for the
due execution, delivery and performance by Old Anchor of this Amendment or any
of the Lease Documents, as amended hereby, to which Old Anchor is or will be a
party.
Section 7. Representations and Warranties of New Anchor.
---------------------------------------------
New Anchor represents and warrants as follows:
a. New Anchor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.
b. The execution, delivery and performance by New Anchor of this
Amendment, and the Lease Documents, as amended hereby, are within New Anchor's
power, have been duly authorized by all necessary company action and do not
contravene (i) New Anchor's organizational documents, or (ii) any law or any
contractual restriction binding on or affecting New Anchor.
c. This Amendment and each of the other Lease Documents, as
amended hereby, to which New Anchor is a party, constitute legal, valid and
binding obligations of New Anchor, enforceable against New Anchor in accordance
with their respective terms.
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Section 8. Reference to and Effect on the Loan Documents.
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a. The Borrower, Old Anchor and New Anchor hereby confirm and
acknowledge that the amount due to the Lender on account of the Loan on the date
hereof, after giving effect to payment of the past due rent and other amounts to
be paid as set forth in Section 5(b) hereof, is $10,149,357.83 in principal
indebtedness, plus accrued and unpaid interest and fees and expenses of
$61,453.33. Neither the Borrower, Old Anchor nor New Anchor has any knowledge of
any challenge to the Lender's claims arising under the Loan Documents or the
effectiveness of the Loan Documents.
b. The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of the Lender under any of the Lease Documents or Loan
Documents, nor constitute a waiver of any provision of any of the Lease
Documents or Loan Documents. Except as expressly set forth herein, this
Amendment shall not constitute a modification of the Lease Documents or the Loan
Documents or a course of dealing with the Lender at variance with the Lease
Documents or the Loan Documents such as to require further notice by the Lender
to require strict compliance with the terms of the Lease Documents and the Loan
Documents in the future.
Section 9. Costs, Expenses and Taxes.
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New Anchor agrees to pay on demand all reasonable costs and expenses in
connection with the preparation, execution, delivery, and administration of this
Amendment and the other instruments and documents to be delivered hereunder
including legal fees and expenses incurred in connection with the execution and
delivery of this Amendment. In addition, New Anchor shall pay any and all stamp
and other taxes payable or determined to be payable in connection with the
execution and delivery of this Amendment and the other instruments and documents
to be delivered hereunder, and agree to save the Lender harmless from and
against any and all liabilities with respect to, or resulting from any delay in
paying or omission to pay, such taxes.
Section 10. Execution in Counterparts.
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This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement.
Section 11. Governing Law.
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This Amendment shall be governed by, and construed in accordance with,
the laws of Florida.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
FOUNTAIN ASSOCIATES I, LTD.,
a Florida limited partnership
By: TWC Sixty, Inc., by its
General Partner
Witnesses:
/s/ (illegible) By: /s/ Xxxxx X. Xxxxxxx
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(illegible) Its: Sr. Vice President
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ANCHOR GLASS CONTAINER
CORPORATION
/s/ (illegible) By: /s/ Xxxxxx X. XxXxxx
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Director of Treasury Operations Its: Asst. Treasurer
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CITICORP LEASING, INC.
/s/ Xxxxx (Last Name illegible) By: /s/ Xxxxxxx Xxxxxx
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Xxxxx (Last Name illegible) Its: Vice President
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ANCHOR GLASS ACQUISITION
CORPORATION
Xxxxxxx Xxxxxxxx By: /s/ X. Xxxxxxx Lightnor, Jr.
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Executive Assistant Its: Vice President
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