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Exhibit 10.22
AGREEMENT
AGREEMENT dated as of February 5, 1997, between The Travelers
Indemnity Company and Its Affiliates including The Aetna Casualty and Surety
Company and their predecessors ("Travelers/Aetna") and Anchor Glass Acquisition
Corporation, a Delaware Corporation ("New Anchor").
RECITALS
A. Travelers/Aetna issued workers compensation, general
liability, products liability, and automobile liability insurance policies to
Anchor Glass Container Corporation ("Anchor" or "Debtor"), and Travelers/Aetna
and Anchor entered into corresponding premium and reimbursement agreements (the
insurance policies and agreements, together, "Policies").
B. Anchor's obligations to pay liabilities and expenses
relating to claims arising under the Policies prior to January 1, 1997
("Obligations") are backed by a $9,500,000.00 letter of credit no. LASB-219420
issued by Bank of America International Trade Banking Division in favor or
Travelers/Aetna ("Existing LOC").
C. Pursuant to the Asset Purchase Agreement dated December 18,
1996 (Asset Purchase Agreement"), among the Debtor, Consumers Packaging Inc.,
and Xxxxx-Xxxxxxxx Glass Container Inc., and the Order dated December 20, 1996
that approves (i) the Asset Purchase Agreement and (ii) the assumption and
assignment of certain executory contracts, upon the closing of the transactions
pursuant to the Asset Purchase Agreement, the Policies will be assumed by the
Debtor and assigned to New Anchor, and New Anchor will assume the Obligations
related to any of the assumed Policies up to the aggregate amount of $30,614,000
("Aggregate Amount").
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D. Pursuant to the Agreement dated as of December 18, 1996
among Vitro, Sociedad Anonima, Consumers Packaging Inc., and Consumers on behalf
of New Anchor, the Existing LOC will be replaced by a new $9,500,000.00 letter
of credit ("New LOC") in favor of Travelers/Aetna. The New LOC will be in form
and content, and from an issuer, satisfactory to Travelers/Aetna.
E. Travelers/Aetna agrees to accept the New LOC, and surrender
the Existing LOC to issuer upon the closing of the transactions set forth in the
Asset Purchase Agreement, including New Anchor's assumption of the Policies and
the Obligations up to the Aggregate Amount.
F. Travelers/Aetna and New Anchor seek to specify the
circumstances constituting defaults pursuant to which Travelers/Aetna may, among
other things, draw the New LOC.
THEREFORE, Travelers/Aetna and New Anchor agree as follows:
1. Defaults. Each of the following will be a default:
(a) After the closing of the transactions
contemplated by the Asset Purchase Agreement, New
Anchor fails to pay any Obligations to
Travelers/Aetna (or its assignee) when due.
(b) New Anchor fails to maintain the New LOC or any
renewal, replacement, or amendment of it or fails to
provide notice of renewal or replacement of the New
LOC at least sixty (60) days prior to any expiration
thereof.
(c) New Anchor becomes insolvent or unable to pay its
debts as they become due or commences or has
commenced against it a case or proceeding under
applicable bankruptcy, insolvency, or similar laws.
2. Remedies.
(a) Upon a payment default as described in paragraph
1(a) hereof, Travelers/Aetna may provide written
notice to New Anchor of such
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default. If such default is not cured within three
business days of receipt of notice, Travelers/Aetna
may immediately:
(i) satisfy any amounts then due to
Travelers/Aetna by drawing on the New LOC or
on any letter of credit held by
Travelers/Aetna up to the amounts then due
and applying the amounts so drawn to all or
a portion of the amounts then due; and
(ii) pursue any and all other legal and
equitable rights and remedies available
under applicable law.
(b) Upon any default other than a payment
default as described in paragraph 1(a) hereof,
Travelers/Aetna may immediately:
(i) consider due and payable all
Obligations, including Obligations accruing
in the future;
(ii) satisfy amounts due to Travelers/Aetna
by drawing up to the full amount of the new
LOC or any letter of credit held by
Travelers/ Aetna and hold the proceeds of
any letter of credit until such time as
Travelers/Aetna has determined that the
Obligations up to the Aggregate Amount are
final and paid; and
(iii) pursue any and all other legal and
equitable rights and remedies, including
collection of the balance of the Obligations
up to the Aggregate Amount available under
applicable law.
3. Policies. The Policies and the rights and obligations
of Travelers/Aetna and New Anchor, as assignee, remain unchanged except as
modified by the Asset Purchase Agreement and this Agreement.
4. Notices. All notice, demands or communications
required or permitted to be given hereunder shall be in writing and shall deemed
to have been received when delivered personally or by electronic facsimile,
receipt confirmed (with a hard copy sent within one (1) business day by other
means described in this paragraph), to the party designated to receive such
notice, or on the date following the day delivered by sender to a nationally
recognized overnight courier for overnight priority delivery, directed to the
following addresses or to such other addresses as any party may reasonably
designate by written notice to the other party:
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To New Anchor: Xx. Xxxx Xxxxxxxx
Chief Executive Officer
Consumer Packaging Inc.
000 Xxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxx X0X0X0
Phone: (000) 000-0000
Fax: (000) 000-0000
Xx. Xxxx Xxxxxxxx
Glenshaw Glass
0000 Xxxxxxx Xxxxx Xxx.
Xxxxxxx Xxxx, Xxxxxxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
With a copy to: X. Xxxx May, Esq.
Xxxxxx Xxxxxxx Xxxxxx & Xxxxxxx
800 Grant Street, 42nd Fl.
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
To Travelers/Aetna: Xx. Xxxxx X. Xxxxxx
Second Vice President
The Travelers Indemnity Company
and its affiliates including The
Aetna Casualty and Surety Company
Xxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
With a copy to: Xxxxx Xxxx, Esq.
Counsel to The Travelers Indemnity
Company and its affiliates including
The Aetna Casualty and Surety Company
Xxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
5. Nothing herein shall affect the rights of New Anchor
or Consumers Packaging, Inc. with respect to the obligations of Xxxxx-Xxxxxxxx
Glass Container Inc. to New Anchor and Consumers Packaging Inc. under the Asset
Purchase Agreement.
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6. Miscellaneous. This Agreement (a) cannot be changed or
terminated except in a writing executed by the parties to this Agreement and (b)
will be governed by and construed in accordance with the laws of the State of
New York (without giving effect to conflicts of laws principles). This Agreement
may be executed in counterparts, each of which when executed constitutes an
original, and all of which, taken together, will constitute one instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered by their respective, duly authorized officers.
The Travelers Indemnity Company and Anchor Glass Acquisition Corporation,
Its Affiliates including The Aetna a Delaware Corporation
Casualty and Surety Company and
their predecessors
By: /s/ Xxxxx X. Xxxxxx Xx. By: /s/ Xxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxx Xx. Name: Xxxx X. Xxxxxxxx
Title: Second Vice President Title: Chief Executive Officer
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