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EXHIBIT 10.39
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 "Borrower"), 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 Borrower which become parties to this Subordination Agreement by executing
an Addendum hereto in the form attached as Annex I, the "GRANTORS") in favor of
the Agent, for the ratable benefit of the holders of Facility Obligations from
time to time (each a "HOLDER OF OBLIGATIONS", including (i) each Lender in
respect of its Advances, (ii) the Agent and the Lenders in respect of all other
present and future obligations and liabilities of the Borrower or any of the
Guarantors of every type and description arising under or in connection with the
Facility Agreements or any other Facility Loan Document, (iii) each Indemnitee
in respect of the obligations and liabilities of the Borrower or any of its
Subsidiaries to such Person hereunder or under the other Facility Loan
Documents, and (iv) their respective successors, transferees and assigns);
WITNESSETH:
WHEREAS, AMERICAN NATIONAL CAN GROUP, INC., a Delaware corporation (the
"BORROWER"), Windmill Funding Corporation ("WINDMILL"), and ABN AMRO BANK N.V.,
in its individual capacity as a Lender and in its capacity as agent (the
"AGENT") for itself and the other Lenders have entered into (i) a certain 5-Year
Finance Facility 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 FACILITY AGREEMENT") and (ii) a certain 364-Day Finance
Facility 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 FACILITY AGREEMENT", and, together with the 5-Year Facility
Agreement, the "FACILITY 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 Borrower;
WHEREAS, it is a condition precedent to the initial extensions of credit by
the Lenders under each of the Facility 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 Facility Agreements and not
otherwise defined herein have, as used herein, the respective meanings provided
for therein. For purposes of this Subordination Agreement, "5-YEAR CLO LENDERS"
shall mean all of the Lenders under the 5- Year Facility Agreement, and "364-DAY
CLO LENDERS" shall mean all of the Lenders under the 364- Day Facility
Agreement. "LENDERS" shall mean, collectively, all of the 5-Year CLO Lenders and
all of the 364-Day CLO 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 Advance and on the Conversion Date,
provided at such time such Grantor is a creditor of the 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 upon
(a) the business, condition (financial or otherwise), operations, performance,
properties or prospects of American National Can Company, the Borrower, or the
Borrower and its Subsidiaries, taken as a whole, (b) the collective ability of
the Borrower or any of its Subsidiaries to perform their respective obligations
under the Facility Loan Documents in any material respect, or (c) the ability of
the Lenders or the Agent to enforce in any material respect the Facility
Obligations ("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
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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.
In addition to the foregoing, each of the Grantors covenants that, so
long as any Lender has any Commitment outstanding under either of the Facility
Agreements or any amount payable under the Facility Agreements or any other
Facility Obligations shall remain unpaid, it will fully comply with those
covenants and agreements of the Borrower applicable to each of the Grantors set
forth in each of the Facility Agreements.
SECTION 3. Subordination of Intercompany Indebtedness. Each of the Grantors
agrees that any and all claims of such Grantor against either the Borrower or
any other Grantor hereunder (each an "OBLIGOR"), any endorser or obligor of all
or any part of the Facility 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 Facility Obligations; provided, that, and not in contravention
of the foregoing and notwithstanding any other provision of this Agreement, so
long as no Event of Default or Unmatured Event of 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 Facility Agreements and the other Facility
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 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 Facility Obligations (other than contingent indemnity
obligations) shall have been fully paid and satisfied (in cash) and all
financing arrangements pursuant to any Facility Loan Document among the 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
Agent for application on any of the Facility Obligations, due or to become due,
until such Facility Obligations (other than contingent indemnity obligations)
shall have first been fully paid and satisfied (in cash). Each Grantor
irrevocably authorizes and empowers the 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 Agent's own name or in the name of such Grantor or
otherwise, as
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the Agent may deem necessary or advisable for the enforcement of this Section 3.
The 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 Facility Obligations. Should 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
Facility Obligations (other than contingent indemnity obligations) and the
termination of all financing arrangements among the 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 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 Facility 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 Agent, the Agent or any of its
officers or employees are irrevocably authorized to make the same. Each of the
Grantors agrees that until the Facility Obligations (other than the contingent
indemnity obligations) have been paid in full (in cash) and satisfied and all
financing arrangements among the Borrower and the Holders of Obligations have
been terminated, no Grantor will assign or transfer to any Person (other than
the 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 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 Facility Agreements or the other Facility 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 of the Borrower 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 Agent.
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 FACILITY LOAN
DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE
RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION,
735 ILCS SECTION 105/5-1 ET SEQ., BUT
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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 FACILITY 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 BORROWER AT THE ADDRESS PROVIDED FOR
NOTICES TO THE BORROWER UNDER THE FACILITY 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 THE GROUNDS OF FORUM NON
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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
FACILITY 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 law,
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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 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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SIGNATURE PAGE TO SUBORDINATION AGREEMENT DATED
JULY, 1999
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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, 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 Borrower which have become parties thereto and together with the
undersigned, the"Grantors") in favor of the Agent, for the ratable benefit of
the Holders of Obligations, under the Facility 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:______________________________________
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