SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) May 20, 1997
Anchor Resolution Corp.
(Exact name of Registrant as specified in its charter)
Delaware 0-14770 22-2452609
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) ID Number)
2701 N. Rocky Point Drive, Suite 1120, Tampa, Florida 33607
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number,
including area code: (813) 639-4330
N/A
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
On May 20, 1997, the Registrant and Anchor Recycling Corporation, as
debtors and debtors-in-possession under Chapter 11 of Title 11 of the United
States Code in Case No. 96-1434(PJW) and Case No. 96-1516(PJW) (Jointly
Administered), filed a proposed joint liquidating plan of reorganization (the
"Plan") with the United States Bankruptcy Court for the District of Delaware.
The complete text of the Plan is filed as an exhibit to this Report.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
2.1 Proposed Joint Chapter 11 Liquidating Plan of Reorganization of
Anchor Resolution Corp. and Anchor Recycling Corporation
dated May 20, 1997
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ANCHOR RESOLUTION CORP.
By: /s/ Robert D. McGrew
Name: Robert D. McGrew
Title: Chief Executive Officer
Dated: May 29, 1997
<PAGE>
EXHIBIT INDEX
Exhibit Description
2.1 Proposed Joint Chapter 11 Liquidating Plan of
Reorganization of Anchor Resolution Corp. and Anchor
Recycling Corporation dated May 20, 1997
Exhibit 2.1
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
- -------------------------------------------------x
In re :
:
ANCHOR RESOLUTION CORP. : Chapter 11
and ANCHOR RECYCLING : Case No. 96-1434 (PJW)
CORPORATION, : and
: Case No. 96-1516 (PJW)
Debtors. : (Jointly Administered)
- -------------------------------------------------x
JOINT CHAPTER 11 LIQUIDATING PLAN OF REORGANIZATION
OF
ANCHOR RESOLUTION CORP.
AND
ANCHOR RECYCLING CORPORATION
Dated: May 20, 1997
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, New York 10038
and
Young Conaway Stargatt & Taylor
Rodney Square North, 11th Fl.
Wilmington, DE 19899-0391
Co-counsel to the Debtors
<PAGE>
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND INTERPRETATION...............................1
1.1 Definitions.............................................1
1.2 Undefined Terms........................................22
1.3 Rules of Interpretation................................22
ARTICLE II CLASSIFICATION OF CLAIMS AND INTERESTS.....................23
2.1 Creation of Classes....................................23
2.2 Claims May Be in More Than One Class...................23
ARTICLE III IDENTIFICATION OF CLASSES OF CLAIMS THAT ARE
AND ARE NOT IMPAIRED UNDER THIS PLAN.........................24
3.1 Classes of Claims Not Impaired.........................24
3.2 Impaired Classes of Claims and Interests...............24
3.3 Impairment Controversies...............................24
ARTICLE IV PROVISIONS FOR TREATMENT OF CLASSES OF CLAIMS
AND INTERESTS..................................................25
4.1 Satisfaction of Claims..................................25
4.2 Class 1--Administrative Expense Claims..................25
4.3 Class 2--Priority Tax Claims............................26
4.4 Class 3--Priority Non-Tax Claims........................26
4.5 Class 4--Convenience Claims.............................27
4.6 Class 5--Senior Secured Noteholder Claims...............27
4.7 Class 6--Other Secured Claims...........................27
4.8 Class 7--Senior Debt Claims.............................28
4.9 Class 8--Subordinated Debenture Claims..................28
4.10 Class 9--Other Unsecured Claims.........................29
4.11 Class 10--Intercompany Claims...........................30
4.12 Class 11--Interests in Anchor...........................30
4.13 Class 12--Interests in Recycling........................30
ARTICLE V ACCEPTANCE OR REJECTION OF PLAN; CRAMDOWN.....................30
5.1 Classes and Claims Entitled to Vote.....................30
5.2 Class Acceptance Requirement............................31
5.3 One Vote per Holder.....................................31
5.4 Cramdown................................................31
ARTICLE VI FUNDING OF DISTRIBUTIONS AND PROVISIONS FOR
TREATMENT OF DISPUTED CLAIMS...................................32
6.1 Funding of Distributions Under this Plan................32
6.2 Distribution Procedures.................................33
6.2.1 Distributions to Holders of Allowed
Administrative Expense Claims, Allowed
Priority Tax Claims and Allowed Priority Non-Tax Claims.33
6.2.2 Distributions to Holders of Allowed Class
4 Convenience Claims...............................34
6.2.3 Distributions to Holders of Allowed Class
5 Senior Secured Noteholder Claims.................35
6.2.4 Distributions to Holders of Allowed Class
6 Other Secured Claims.............................36
6.2.5 Distributions to Holders of Allowed Class
7, Class 8 and Class 9 Claims......................36
6.2.6 Reserve For Estimated Expenses...................38
6.3 Manner of Distributions under this Plan.................38
6.3.1 Cash Payments..................................39
6.3.2 New Anchor Securities..........................39
6.3.3 Fractional Shares of New Anchor Securities.....39
6.3.4 Setoffs........................................40
6.3.5 De Minimis Distributions.......................40
6.3.6 Saturday, Sunday or Legal Holiday..............41
6.3.7 Failure to Negotiate Checks....................41
6.3.8 Unclaimed Property.............................41
6.3.9 Investment of Funds............................42
6.4 Distributions to Holders of Allowed Claims..............42
6.5 Resolution of Disputed Claims...........................44
ARTICLE VII IMPLEMENTATION AND MEANS OF CONSUMMATING THIS
PLAN...........................................................45
7.1 Substantive Consolidation...............................45
7.2 Merger/Dissolution of Corporate Entities................46
7.3 Corporate Action........................................46
7.4 Cancellation of Existing Securities and
Agreements............................................47
7.5 Registration Exemption for Anchor Resolution
Corp. Common Stock....................................50
7.6 Revesting of Assets.....................................50
7.7 The Administrative Trust................................51
7.7.1 Creation of the Administrative Trust............51
7.7.2 Transfers to the Administrative Trust..........51
7.7.3 The Administrative Trustee.....................51
7.7.4 Responsibilities...............................51
7.7.5 Powers.........................................52
7.7.6 Compensation...................................53
7.7.7 Termination....................................54
7.7.8. Tax Treatment of the Administrative Trust.....54
7.8 Remaining Assets........................................54
ARTICLE VIII EXECUTORY CONTRACTS AND UNEXPIRED LEASES..................54
8.1 Assumption/Rejection....................................54
8.2 Claims for Rejection Damages............................55
ARTICLE IX CONDITIONS PRECEDENT........................................55
9.1 Conditions Precedent to Confirmation....................55
9.2 Conditions Precedent to Effective Date..................57
ARTICLE X EFFECTS OF PLAN CONFIRMATION.................................58
10.1 Extent of Release.......................................58
10.2 Release by Debtors......................................58
10.3 Release by Creditors and Holders of Interests...........59
10.4 Injunction..............................................60
10.5 No Liability for Solicitation or Participation..........61
10.6 Limitation of Liability.................................61
10.7 Indemnification.........................................62
10.8 Other Documents and Actions.............................62
10.9 Term of Injunctions or Stays............................63
ARTICLE XI MODIFICATION, REVOCATION OR WITHDRAWAL OF THIS
PLAN...........................................................63
11.1 Modification of this Plan...............................63
11.2 Revocation or Withdrawal of this Plan...................63
ARTICLE XII RETENTION OF JURISDICTION.................................64
12.1 Jurisdiction of Bankruptcy Court.......................64
12.2 Failure of Bankruptcy Court to Exercise
Jurisdiction.........................................66
ARTICLE XIII MISCELLANEOUS PROVISIONS..................................67
13.1 Payment of Statutory Fees..............................67
13.2 Amounts of and Objections to Claims....................67
13.3 No Interest............................................67
13.4 No Attorneys' Fees.....................................68
13.5 Rights of Action.......................................68
13.6 Committee..............................................68
13.7 No Admissions..........................................68
13.8 Construction...........................................69
13.9 Time...................................................69
13.10 Governing Law..........................................69
13.11 Successors and Assigns.................................69
13.12 Severability...........................................69
13.13 Notices................................................70
13.14 Withholding and Reporting..............................70
EXHIBITS
Exhibit 1: Administrative Trust Agreement.............................A-1
Exhibit 2: Asset Purchase Agreement...................................A-2
Exhibit 3: Wind-down Budget...........................................A-3
Exhibit 4: List of Executory Contracts and Unexpired Leases
To Be Assumed................................................A-4
APPENDIXES
1. Property..........................................................B-1
2. List of Potential Avoidance Actions...............................B-2
<PAGE>
Anchor Resolution Corp. and Anchor Recycling Corporation, as debtors
and debtors-in-possession in the above-referenced Chapter 11 Cases, hereby
propose the following joint liquidating plan of reorganization pursuant to the
provisions of chapter 11 of title 11 of the United States Code:
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS. Unless otherwise provided in this Plan, the following
terms (which appear in this Plan as capitalized terms) have the respective
meanings set forth below, and such meanings shall be equally applicable to the
singular and plural forms of the terms defined, unless the context otherwise
requires.
"ADEQUATE PROTECTION ORDER" means collectively, (i) the "Order
Pursuant to Section 364(c) of the Bankruptcy Code and Rule 4001 of the Federal
Rules of Bankruptcy Procedure Authorizing Debtor to Obtain Permanent
Post-petition Financing, Granting Senior Liens and Priority Administrative
Expense Status, Modifying the Automatic Stay, Authorizing the Debtor to Enter
Into Agreements With Foothill Capital Corporation, As Agent and Lender, and
Congress Financial Corporation, as Co-Agent and Lender and the Granting of
Adequate Protection in Favor of the Noteholders" entered by the Bankruptcy Court
on November 15, 1996 and (ii) the Cash Collateral Order as modified by the
Partial Payment Order.
"ADMINISTRATIVE EXPENSE CLAIM" means a Claim for costs and expenses of
administration allowed under Section 503, 507(a)(1) or 507(b) of the Bankruptcy
Code.
"ADMINISTRATIVE AND PRIORITY DISTRIBUTION RESERVE SURPLUS" means cash,
including Earned Interest, deposited or held in the Distribution Reserve on
account of disputed or undetermined Administrative Expense Claims or Priority
Claims, to the extent that such Claims are disallowed in whole or in part after
the Effective Date.
"ADMINISTRATIVE TRUST" means the trust created pursuant to the
Administrative Trust Agreement on the Effective Date in accordance with this
Plan, the Confirmation Order and the Administrative Trust Agreement, the
purposes of which include, without limitation, (i) the receipt of the assets of
the Debtors' Estate on behalf of and for the benefit of the holders of Claims
under this Plan and otherwise to act as a "liquidating trust" within the meaning
of Treasury Regulations Section 301.7701-4(d), (ii) the sale, disposition,
collection, or other realization of value of any kind whatsoever in respect of
the Remaining Assets, (iii) the preservation and distribution of the
consideration to be distributed to holders of Claims pursuant to this Plan, the
Administrative Trust Agreement, the Confirmation Order, or such other Order as
may be entered by the Bankruptcy Court, (iv) the prosecution or settlement of
objections to Disputed Claims and (v) the performance of all other obligations
pursuant to this Plan, the Administrative Trust Agreement, the Asset Purchase
Agreement, and any other orders entered by the Bankruptcy Court.
"ADMINISTRATIVE TRUST AGREEMENT" means the Administrative Trust
Agreement to be dated the Effective Date establishing the terms and conditions
of the Administrative Trust, substantially in the form annexed to this Plan as
Exhibit 1.
"ADMINISTRATIVE TRUSTEE" means the trustee of the Administrative
Trust.
"ALLOWED" when used with respect to a Claim, means a Claim against the
Estate: (a) which has been scheduled as undisputed, noncontingent and liquidated
in the Schedules and as to which no proof of claim or objection has been timely
filed; (b) as to which a proof of claim has been timely filed and either (i) no
objection thereto has been timely filed or (ii) the Claim has been allowed (but
only to the extent allowed) by a Final Order of the Bankruptcy Court; (c) which
has been allowed under the provisions of this Plan; or (d) which is a
Professional Claim for which a fee award amount has been approved by Final Order
of the Bankruptcy Court.
"ALLOWED SENIOR SECURED NOTEHOLDER AMOUNT" means the aggregate amount
of the Claims arising under or in respect of the Senior Secured Notes which are
determined by Final Order of the Bankruptcy Court to be Secured Claims.
"AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT" means that
certain Amended and Restated Pledge and Security Agreement dated as of January
12, 1996 between Anchor and State Street.
"ANCHOR" means Anchor Resolution Corp. (formerly Anchor Glass
Container Corporation), as Debtor and Debtor-in-Possession.
"ASSET PURCHASE AGREEMENT" means that certain Asset Purchase
Agreement, dated as of December 18, 1996, among Anchor, Consumers Packaging Inc.
and Owens-Brockway Glass Container Inc., as amended by that certain Amendment to
the Asset Purchase Agreement made and entered into as of February 5, 1997 and
approved by the Bankruptcy Court on January 31, 1997, which is attached hereto
as Exhibit 2.
"AVAILABLE CASH" means all cash of the Debtors, the Estate and the
Administrative Trust including, without limitation or duplication, (i) the cash
in the Escrow Account (including interest earned thereon); (ii) cash in the
Operating Account, (iii) the cash proceeds realized from the sale, disposition,
collection or other realization of value in respect of the Remaining Assets
(including interest earned thereon, if any) after providing for the satisfaction
of all Allowed Claims and Disputed Claims in Classes 1, 2, 3, 4, 5 and 6 of this
Plan, and (iv) any interest or income earned on any of the Remaining Assets.
"AVOIDANCE ACTION" means an action which a trustee,
debtor-in-possession or other appropriate party in interest may assert under
Section 542, 544, 545, 547, 548, 549, 550 or 551 of the Bankruptcy Code
including those with respect to the Creditors listed on Appendix 2 hereto.
"BALLOT" means the ballot, the form of which has been approved by the
Bankruptcy Court, accompanying the Disclosure Statement provided to each holder
of a Claim entitled to vote to accept or reject this Plan or to make the
election to have such Claim treated as a Convenience Claim.
"BANKRUPTCY CODE" means title 11 of the United States Code, Section
101, ET SEQ., as now in effect or as hereafter amended.
"BANKRUPTCY COURT" means the United States Bankruptcy Court for the
District of Delaware or, if such court ceases to exercise jurisdiction over the
proceeding, the court or adjunct thereof that exercises jurisdiction over the
Chapter 11 Cases.
"BANKRUPTCY RULES" means the Federal Rules of Bankruptcy Procedure, as
amended and promulgated under Section 2075 of Title 28 of the United States
Code, and the local bankruptcy rules for the Bankruptcy Court as now in effect
or as the same may from time to time hereafter be amended.
"BENEFICIAL HOLDER" means, with respect to each Senior Secured Note,
Senior Note or Subordinated Debenture, the Person holding a beneficial interest
therein.
"BUSINESS DAY" means any day which is not a Saturday, a Sunday, or a
day which is a legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close in Wilmington,
Delaware; New York, New York; or Tampa, Florida.
"CASH COLLATERAL ORDER" means the "Final Order Approving Stipulation
Pursuant To Section 363(c) of The Bankruptcy Code And Rule 4001 of The Federal
Rules of Bankruptcy Procedure Authorizing The Debtor To Use Cash Collateral And
Granting Adequate Protection In Favor of The Noteholders" entered by the
Bankruptcy Court on February 11, 1997.
"CATCH-UP DISTRIBUTION" means the aggregate amount of cash (including
Earned Interest thereon, to the extent applicable, and without duplication)
and/or New Anchor Securities, as applicable, which the holder of a Claim in
Classes 7, 8 or 9 as the case may be, would have received on the Effective Date
and such other Distribution Dates occurring prior to the Final Distribution Date
had the Claim been an Allowed Claim on such dates rather than a Disputed Claim.
"CHAPTER 11 CASES" means either or both of the cases filed by the
Debtors under Chapter 11 of the Bankruptcy Code.
"CLAIM" means, as against the Estate: (a) any right to payment,
whether or not such right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured; or (b) any right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether or not such
right to an equitable remedy is reduced to judgment, fixed, contingent, matured,
unmatured, disputed, undisputed, secured or unsecured and including, without
limitation, any Claim which either Debtor may have against the other.
"CLASS" means each class or subclass of Claims or Interests
established pursuant to Article II of this Plan.
"CLASS 4 DISTRIBUTION RESERVE SURPLUS" means cash, including Earned
Interest, deposited or held in the Distribution Reserve on account of Disputed
Claims that would otherwise be Convenience Claims, to the extent that they are
disallowed in whole or in part after the Effective Date.
"CLASS 5 DISTRIBUTION RESERVE SURPLUS" means cash, including Earned
Interest, deposited or held in the Distribution Reserve on account of Disputed
Claims that would otherwise be Senior Secured Noteholder Claims, to the extent
that they are disallowed in whole or in part after the Effective Date.
"CLASS 6 DISTRIBUTION RESERVE SURPLUS" means cash, including Earned
Interest, deposited or held in the Distribution Reserve on account of Disputed
Claims that would otherwise be Other Secured Claims, to the extent that they are
disallowed in whole or in part after the Effective Date.
"CLASS 7 DISTRIBUTION RESERVE SURPLUS" means cash, including Earned
Interest, and New Anchor Securities deposited or held in the Distribution
Reserve on account of Disputed Claims that would otherwise be Senior Debt
Claims, to the extent that they are disallowed in whole or in part after the
Effective Date.
"CLASS 8 DISTRIBUTION RESERVE SURPLUS" means cash, including Earned
Interest, and New Anchor Securities deposited or held in the Distribution
Reserve on account of Disputed Claims that would otherwise be Subordinated
Debenture Claims, to the extent that they are disallowed in whole or in part
after the Effective Date.
"CLASS 9 DISTRIBUTION RESERVE SURPLUS" means cash, including Earned
Interest, and New Anchor Securities deposited or held in the Distribution
Reserve on account of Disputed Claims that would otherwise be Other Unsecured
Claims, to the extent that they are disallowed in whole or in part after the
Effective Date.
"COLLATERAL AGENT" means State Street as collateral agent for the
Senior Secured Noteholders pursuant to the Amended and Restated Collateral
Agency and Intercreditor Agreement dated as of January 12, 1996 between Anchor
and State Street.
"COMMITTEE" means the Official Committee of Unsecured Creditors
appointed in Anchor's Chapter 11 Case pursuant to Section 1102 of the Bankruptcy
Code.
"CONFIRMATION DATE" means the date on which the Bankruptcy Court
enters the Confirmation Order on its docket.
"CONFIRMATION HEARING" means the hearing before the Bankruptcy Court
pursuant to Section 1128 of the Bankruptcy Code to consider confirmation of this
Plan.
"CONFIRMATION ORDER" means the order of the Bankruptcy Court
confirming this Plan pursuant to Section 1129 of the Bankruptcy Code, as such
order may be amended, modified or supplemented.
"CONTAINER HOLDINGS" means Container Holdings Corp., a Delaware
corporation and a wholly-owned subsidiary of Vitro, S.A.
"CONVENIENCE CLAIMS" means any Claim that would otherwise be an
Allowed Other Unsecured Claim against either of the Debtors in an amount (a)
equal to or less than $100, or (b) greater than $100, but which is reduced to
$100 by written election of the holder of such Claim made on a validly executed
and timely delivered Ballot. All Claims that would otherwise be Allowed Other
Unsecured Claims of a single holder will be aggregated and treated as a single
Allowed Other Unsecured Claim for purposes of determining such holder's
entitlement to Convenience Claim treatment.
"CREDITOR" means any Person that is the holder of any Claim against
either of the Debtors.
"DEBTORS" means Anchor and Recycling.
"DISBURSING AGENT" means the Person or Persons (if any) appointed by
the Bankruptcy Court for the purpose of distributing or causing the distribution
of cash, New Anchor Securities and other Remaining Assets, as applicable, to
Creditors holding Allowed Claims.
"DISCLOSURE STATEMENT" means the Disclosure Statement with respect to
the Joint Chapter 11 Liquidating Plan of Reorganization of Anchor and Recycling
as originally filed with the Bankruptcy Court or as it may be altered, amended
or modified from time to time in accordance with the provisions of the
Bankruptcy Code and the Bankruptcy Rules.
"DISPUTED CLAIM" shall mean any Claim or any portion thereof for which
no Allowed amount has been established and (a) which is listed in the Schedules
as disputed, contingent or unliquidated, or (b) as to which (i) a proof of claim
has been filed, (ii) an objection, or a request for estimation, has been timely
filed (and not withdrawn) by the Debtors, the Administrative Trustee or any
other party in interest and (iii) no Final Order has Allowed or disallowed such
Claim or portion thereof. In the event that any part of a Claim is disputed,
such Claim in its entirety shall be deemed to constitute a Disputed Claim for
purposes of distribution under this Plan unless the Debtors or the
Administrative Trustee, as applicable, and the holder thereof agree otherwise.
Without limiting any of the above, a Claim that is the subject of a pending
application, motion, complaint or any other legal proceeding seeking to
disallow, subordinate or estimate such Claim shall be deemed to constitute a
Disputed Claim.
"DISTRIBUTION DATE" means the Effective Date and any subsequent date
on which distributions of cash, New Anchor Securities and other Remaining Assets
are to be made. Except with respect to the Effective Date and the Final
Distribution Date, a Distribution Date shall occur on March 30, June 30,
September 30 and December 30 of each year; PROVIDED, HOWEVER, that if the
aggregate value of cash, New Anchor Securities and other Remaining Assets to be
distributed on any such Distribution Date to Creditors holding Allowed Claims
entitled thereto does not equal or exceed $250,000, then the distributions shall
not be made on such Distribution Date but shall be made on the next subsequent
Distribution Date when the aggregate value of cash, New Anchor Securities and
other Remaining Assets to be distributed equals or exceeds $250,000.
"DISTRIBUTION LIST" has the meaning set forth in Section 6.3.3 of this
Plan.
"DISTRIBUTION RECORD DATE" has the meaning set forth in Section 7.4 of
this Plan.
"DISTRIBUTION RESERVE" means a reserve established to receive and
hold, in one or more segregated accounts to be established by the Administrative
Trustee, cash and, for distribution to the holders of the Senior Debt Claims,
Subordinated Debenture Claims and Other Unsecured Claims, New Anchor Securities
in an amount equal to the aggregate of (a) amounts thereof that would have been
distributed on the Effective Date on account of Disputed Claims (had they been
Allowed at that time) that would otherwise be (i) Administrative Expense Claims,
PROVIDED, that with respect to Administrative Expense Claims for which
applications for compensation of Professionals are or will be pending but are
then undetermined, the amount of cash deposited shall be the amount sought by
such Professionals or the maximum amount such Professionals indicate that they
intend to apply for, and PROVIDED FURTHER, that with respect to undetermined
Administrative Expense Claims arising out of the Escrow Indemnification
Obligation, the amount of cash deposited shall be $100,000, (ii) Priority Tax
Claims, (iii) Priority Non-Tax Claims, (iv) Convenience Claims, (v) Senior
Secured Noteholder Claims, (vi) Other Secured Claims, (vii) Senior Debt Claims,
(viii) Subordinated Debenture Claims and (ix) Other Unsecured Claims, plus (b)
Earned Interest on all cash in the Distribution Reserve, plus (c) an amount
equal to the unpaid amount of the monetary costs to cure all defaults of the
type described in Section 365(b)(1) of the Bankruptcy Code that are timely
asserted by the non-Debtor party to an unexpired lease or executory contract to
be assumed pursuant to this Plan or any order of the Bankruptcy Court to the
extent either such asserted defaults and/or the monetary costs to cure such
defaults are disputed by the Debtors or the Administrative Trustee, plus (d) an
amount equal to 110% of the sum of the estimated compensation and estimated
out-of-pocket fees and expenses of, or to be incurred by, the Administrative
Trustee, plus (e) an amount equal to 120% of the estimated wind-down expenses of
the Debtors and the Administrative Trustee remaining unpaid as of the Effective
Date as set forth in the Wind-down Budget.
"EARNED INTEREST" means, for purposes of distribution under this Plan,
interest for each day during the applicable period at a rate equal to (a) with
respect to Disputed Claims in each Class except for Class 5, the rate earned by
the Administrative Trust on the funds in the Distribution Reserve invested by
the Administrative Trustee in accordance with Section 6.3.9 of this Plan, or (b)
with respect to Disputed Claims in Class 5, the higher of (i) the six-month U.S.
Treasury Bill rate, as from time to time in effect, (ii) the rate earned by the
Administrative Trust on the funds in the Distribution Reserve invested by the
Administrative Trustee in accordance with 6.3.9 of this Plan, or (iii) such
other rate as may be determined by the Bankruptcy Court, in each case net of any
taxes paid with respect to the income earned on the applicable Distribution
Reserve.
"EFFECTIVE DATE" means the Business Day on which all of the conditions
specified in Section 9.2 of this Plan are first satisfied or waived.
"EMPLOYMENT AGREEMENTS" means those agreements effective February 6,
1997 between Anchor and Robert D. McGrew, Mark Stickel and Francisco Romero
providing for the terms and conditions of their employment.
"ESCROW ACCOUNT" means the account originally established by the
Debtors with Smith Barney Inc. as escrow agent pursuant to the Escrow Account
Order and continued by the Debtors and then the Administrative Trustee pursuant
to the Plan, the Confirmation Order and the Administrative Trust Agreement, as
applicable, (a) to hold cash, New Anchor Securities, the proceeds realized from
the sale or disposition of or collections from the Remaining Assets (including
interest and income earned on such proceeds, but net of all taxes, costs, fees
and expenses incurred by the Debtors or the Administrative Trustee in connection
with such dispositions and such interest and income earned) and any interest and
income earned, net of any related taxes, on any other Remaining Assets or other
value of any kind realized in respect of the Remaining Assets, including the
Remaining Assets in the Distribution Reserve, and (b) from which the initial
distributions shall be made to the holders of Allowed Claims and the
Distribution Reserve as of the Effective Date.
"ESCROW ACCOUNT ORDER" means the "Amended Order Approving Escrow
Agreement, Authorizing Debtors' Retention of Smith Barney As Escrow Agent,
Approving Investment Guidelines For Investment of Excess Cash From Sale of
Debtors' Assets and Authorizing Establishment and Use of Operating Account"
entered by the Bankruptcy Court on January 23, 1997.
"ESCROW AGREEMENT" means that certain Escrow Agreement made as of
January __, 1997 between Smith Barney Inc., as escrow agent, and Anchor approved
by the Escrow Account Order.
"ESCROW INDEMNIFICATION OBLIGATION" means the obligations of Anchor
pursuant to the Escrow Agreement to indemnify Smith Barney Inc. as escrow agent.
"ESTATE" means collectively, the estates created for each of the
Debtors in their Chapter 11 Cases pursuant to Section 541 of the Bankruptcy
Code.
"EXCULPATED PERSON" has the meaning set forth in Section 10.6 of this
Plan.
"FINAL DECREE" means the final decree entered by the Bankruptcy Court
on or after the Effective Date and pursuant to Bankruptcy Rule 3022.
"FINAL DISTRIBUTION" means the distribution which (i) after giving
effect to such distribution, results in Remaining Assets with a value of less
than $5,000 and (ii) the Administrative Trustee, after consultation with the
Committee, determines to be the Final Distribution.
"FINAL DISTRIBUTION DATE" means the date of the Final Distribution.
"FINAL ORDER" means a judgment, order, ruling or other decree issued
and entered by the Bankruptcy Court or by any state or other federal court or
other tribunal which judgment, order, ruling or other decree has not been
reversed, stayed, modified or amended and as to which (a) the time to appeal or
petition for review, rehearing or certiorari has expired and as to which no
appeal or petition for review, rehearing or certiorari is pending or (b) any
appeal or petition for review, rehearing or certiorari has been finally decided
and no further appeal or petition for review, rehearing or certiorari can be
taken or granted.
"FRACTIONAL COMMON SHARES POOL" has the meaning set forth in Section
6.3.3 of this Plan.
"FRACTIONAL PREFERRED SHARES POOL" has the meaning set forth in
Section 6.3.3 of this Plan.
"INITIAL DISTRIBUTION DATE" shall mean the date, on or subsequent to
the Effective Date, on which the first distribution, as applicable, of cash, New
Anchor Securities and other Remaining Assets is made to the holders of Allowed
Claims in a given Class of Claims.
"INSTRUMENT" has the meaning set forth in Section 7.4 of this Plan.
"INTERCOMPANY CLAIMS" shall mean all Claims held by Anchor against
Recycling or by Recycling against Anchor, including, without limitation, all
derivative Claims asserted by or on behalf of one Debtor against the other.
"INTEREST" means any ownership interest or share in the Debtors
(including, without limitation, all options, warrants or other rights to obtain
such an interest or share in the Debtors) whether or not transferable,
preferred, common, voting or denominated "stock" or a similar security.
"INTEREST PAYMENT ORDER" means the "Order Authorizing the Termination
of Interest Payments and Accruals In Favor of the Senior Secured Noteholders",
the entry of which has been requested jointly by Anchor and the Committee by
motion dated May __, 1997, which would authorize, INTER ALIA, (a) the
establishment of an interest bearing escrow account for the benefit of the
Allowed Claims of Senior Secured Noteholders and (b) the termination of interest
payments and accruals in favor of the Senior Secured Noteholders other than such
interest as is actually earned on the cash in such escrow account.
"LIENS" means all liens, mortgages, security interests, pledges,
charges, encumbrances or other legally cognizable security devices of any kind
against the Remaining Assets.
"NEW ANCHOR" means Anchor Glass Container Corporation (formerly Anchor
Glass Acquisition Corporation), a Delaware corporation.
"NEW ANCHOR COMMON STOCK" means the 490,898 shares of common stock,
par value $0.10 per share, of New Anchor issued to Anchor pursuant to the terms
and provisions of the Asset Purchase Agreement.
"NEW ANCHOR PREFERRED STOCK" means the $46,983,000 face amount of 10%
Series A Cumulative Convertible Preferred Stock of New Anchor issued to Anchor
pursuant to the terms and provisions of the Asset Purchase Agreement.
"NEW ANCHOR SECURITIES" means, collectively, the New Anchor Common
Stock and the New Anchor Preferred Stock.
"OPERATING ACCOUNT" means the account originally established by the
Debtors with Barnett Bank, N.A., Tampa, Florida pursuant to the Escrow Account
Order and continued by the Administrative Trustee or the Debtors pursuant to the
Confirmation Order and utilized by the Administrative Trustee to fund the
on-going operating expenses of the Administrative Trust.
"OTHER SECURED CLAIM" means any Secured Claim other than those
relating to the Senior Secured Notes.
"OTHER UNSECURED CLAIM" means any Claim against the Debtors that is
not an Administrative Expense Claim, a Priority Claim, a Convenience Claim, a
Secured Claim, a Senior Debt Claim, a Subordinated Debenture Claim or an
Intercompany Claim.
"OTHER UNSECURED CLAIMS DISTRIBUTION AMOUNT" means, at any date of
determination, the Class 9 Other Unsecured Claims' Ratable Portion of the
Available Cash and New Anchor Securities at such date.
"OWENS-BROCKWAY" means Owens-Brockway Glass Container Inc., a Delaware
corporation.
"PARTIAL PAYMENT ORDER" means the "Order Approving Partial Payment of
Principal Debt Owed to Senior Secured Noteholders and Modifying Cash Collateral
Order", as entered by the Bankruptcy Court on March 14, 1997.
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, joint ventures, trusts, land trusts,
business trusts, unincorporated organizations, or other organizations,
irrespective of whether they are legal entities, governments and agencies and
political subdivisions thereof or other entities.
"PETITION DATE" means the respective date on which each Debtor
commenced its Chapter 11 Case by filing a petition for relief under chapter 11
of the Bankruptcy Code.
"PLAN" means this chapter 11 liquidating plan of reorganization,
either in its present form or as it may be altered, amended, or modified from
time to time in accordance with the provisions of the Bankruptcy Code and the
Bankruptcy Rules.
"PREFERRED SHARES DISTRIBUTION LIST" has the meaning set forth in
Section 6.3.3 of this Plan.
"PRIORITY CLAIMS" means, collectively, Priority Tax Claims and
Priority Non-Tax Claims.
"PRIORITY NON-TAX CLAIM" means a Claim for an amount entitled to
priority under Section 507(a) of the Bankruptcy Code, other than an
Administrative Expense Claim or a Priority Tax Claim.
"PRIORITY TAX CLAIM" means a Claim for any Tax entitled to priority
under Subsection 507(a)(8) of the Bankruptcy Code.
"PROFESSIONAL" means any professional employed or to be compensated
pursuant to Section 327, 328, 330, 331, 503(b) or 1103 of the Bankruptcy Code.
"PROFESSIONAL CLAIM" means a claim for compensation and/or
reimbursement of expenses pursuant to Section 327, 328, 330, 331 or 503(b) of
the Bankruptcy Code in connection with an application made to the Bankruptcy
Court in the Chapter 11 Cases.
"PRO RATA SHARE" means, with respect to any distribution to a Class
under this Plan, proportionate sharing pursuant to which the ratio of the amount
distributed on account of an Allowed Claim to the amount of such Allowed Claim
is the same as the ratio of the total amount distributed to such Class to the
total amount of all Allowed Claims and Disputed Claims in such Class.
"RATABLE PORTION" means, with respect to any distribution of Available
Cash and New Anchor Securities to holders of Allowed Class 7, Class 8 and Class
9 Claims, proportionate sharing pursuant to which the ratio of the amount
distributed on account of such a Class to the amount of the sum of the
distributions to Class 7, Class 8 and Class 9 is the same as the ratio of the
total amount of all Allowed Claims and Disputed Claims in such a Class to the
total aggregate amount of all Allowed Claims and Disputed Claims in Class 7,
Class 8 and Class 9.
"RECORD HOLDER" means, with respect to each Senior Note, Senior
Secured Note or Subordinated Debenture, the Person listed as of the Distribution
Record Date as its registered holder on the appropriate ledger or record book.
"RECYCLING" means Anchor Recycling Corporation, as Debtor and
Debtor-in-Possession.
"RELEASEES" has the meaning set forth in Section 10.2 of this Plan.
"REMAINING ASSETS" means any and all cash, assets, or other property
of the Debtors, the Estate and the Administrative Trust of every kind and
character including, without limitation, (i) the property listed in Appendix 1,
(ii) the cash and New Anchor Securities in the Escrow Account, the Distribution
Reserve and the Operating Account, (iii) the Avoidance Actions and (iv) all
rights in, to and under the Asset Purchase Agreement including any claims or
causes of action against New Anchor and/or Owens-Brockway pursuant to the terms
and provisions of the Asset Purchase Agreement or otherwise.
"SCHEDULES" means the schedules of assets and liabilities filed by the
Debtors with the clerk of the Bankruptcy Court pursuant to Bankruptcy Rule 1007,
as they have been or may be amended or supplemented from time to time in
accordance with Bankruptcy Rule 1009.
"SECURED CLAIMS" means a prepetition Claim that is secured, in whole
or in part, as of the Petition Date, by a valid and perfected lien on property
on which the Estate has an interest or that is subject to setoff under Section
553 of the Bankruptcy Code, solely to the extent of the value of the interest of
the holder of such Claim in the Estate's interest in such property or to the
extent of the amount subject to setoff, as applicable, as determined pursuant to
Section 506(a) of the Bankruptcy Code.
"SENIOR DEBT" means, as such term is defined in the Subordinated
Debentures Indenture, the principal of, premium, if any, and interest on any
Indebtedness (as defined hereinafter) of Anchor, whether outstanding on the date
of the Subordinated Debentures Indenture or thereafter created, incurred,
assumed or guaranteed, unless, in the case of any particular Indebtedness, the
instrument under which such Indebtedness is created, incurred, assumed or
guaranteed expressly provides that such Indebtedness shall not be senior or
superior in right of payment to the Subordinated Debentures. Without limiting
the generality of the foregoing, "SENIOR DEBT" shall include all Obligations of
Anchor with respect to the Senior Secured Notes, the Senior Notes, and the
Senior Secured Deficiency Claims. For purposes of this definition of "SENIOR
DEBT" and as such term is defined in the Subordinated Debentures Indenture,
"INDEBTEDNESS", with respect to any Person, means and includes the aggregate
amount of, without duplication: (a) all obligations of such Person for borrowed
money; (b) all obligations of such Person evidenced by bonds, debentures, notes,
or other similar instruments, and all reimbursement or other obligations of such
Person in respect of letters of credit, bankers acceptances, or other financial
products (including for all purposes under the Subordinated Debentures Indenture
unpaid reimbursement obligations in respect of letters of credit); (c) all
obligations of such Person to pay the deferred purchase price of assets or
services, exclusive of trade payables that, by their terms, are due and payable
within ninety (90) calendar days of the creation thereof; (d) all obligations of
such Person in respect of capital leases; (e) all obligations or liabilities of
others secured by a Lien (as defined in the Subordinated Debentures Indenture)
on any asset owned by such Person, irrespective of whether such obligation or
liability is assumed by such Person, to the extent of the lesser of such
obligation or liability or the fair market value of such asset; (f) any
guaranties of such Person of any Indebtedness of another Person; (g) all
obligations of such Person to purchase, redeem, retire, defease or otherwise
acquire any Disqualified Stock (as defined in the Subordinated Debentures
Indenture); and (h) all obligations of such Person in respect of Interest Rate
Protection Agreements (as defined in the Subordinated Debentures Indenture) or
Currency Swap Agreements (as defined in the Subordinated Debentures Indenture)
(the amount of which shall be deemed to equal 5% of the notional amount, if
applicable). In the event of any inconsistency between these definitions of
"SENIOR Debt", and, for purposes of this definition of "SENIOR DEBT",
"INDEBTEDNESS" and such definitions in the Subordinated Debentures Indenture,
the definitions in the Subordinated Debentures Indenture shall govern.
"SENIOR DEBT CLAIMS" means the Claims of the holders of Senior Debt.
"SENIOR DEBT DISTRIBUTION AMOUNT" means, as of any date of
determination, the Class 7 Senior Debt Ratable Portion of the Available Cash and
the New Anchor Securities at such date.
"SENIOR NOTEHOLDERS" means the Beneficial Holders of the Senior Notes.
"SENIOR NOTEHOLDERS' TRUSTEE" means First Trust of Illinois, National
Association (the successor by acquisition to Continental Bank, National
Association) and its successors and assigns.
"SENIOR NOTES" means Anchor's 10.25% Senior Notes due 2002, Series A,
issued pursuant to the Senior Notes Indenture.
"SENIOR NOTES INDENTURE" means that certain indenture dated as of
October 15, 1992 between Anchor and the Senior Noteholders' Trustee pursuant to
which the Senior Notes were issued.
"SENIOR SECURED DEFICIENCY CLAIM" means the amount by which the
Allowed Claims for the Senior Secured Notes exceeds the Allowed Senior Secured
Noteholder Amount.
"SENIOR SECURED NOTEHOLDER CLAIMS" means the secured portion of the
Claims of the holders of Senior Secured Notes.
"SENIOR SECURED NOTEHOLDERS" means the Beneficial Holders of the
Senior Secured Notes.
"SENIOR SECURED NOTEHOLDERS FINANCING AGREEMENTS" means the Senior
Secured Notes, the Senior Secured Notes Purchase Agreements, the Amended and
Restated Pledge and Security Agreement, the Adequate Protection Order, the Cash
Collateral Order and the Partial Payment Order.
"SENIOR SECURED NOTES PURCHASE AGREEMENTS" means those certain Note
Purchase Agreements dated as of June 24, 1991, pursuant to which the Senior
Secured Notes were issued and that certain Noteholder Restructuring Agreement
dated as of January 12, 1996, which, INTER ALIA, amended those certain Note
Purchase Agreements, in each case together with any and all instruments,
documents and agreements entered into in connection with such agreements.
"SENIOR SECURED NOTES" means the $38,000,000 in original principal
amount of Floating Rate Series A Senior Secured Notes due July 15, 1998, the
$202,000,000 in original principal amount of 9.91% Series B Senior Secured Notes
due July 15, 1999, and the $10,000,000 in original principal amount of Floating
Rate Series C Senior Secured Notes due July 15, 1999 of Anchor issued pursuant
to the Senior Secured Notes Purchase Agreements.
"SMITH BARNEY ESCROW ACCOUNT" means an account within the Distribution
Reserve funded with $100,000 cash, to be held until six (6) months after
completion of the duties of Smith Barney Inc. as escrow agent under the Escrow
Agreement, for the payment of the Escrow Indemnification Obligation.
"STATE STREET" means State Street Bank and Trust Company of
Connecticut, N.A.
"SUBORDINATED DEBENTURES" means Anchor's 9.875% Senior Subordinated
Debentures due 2008, issued pursuant to the Subordinated Debentures Indenture.
"SUBORDINATED DEBENTURE CLAIMS" means the Claims of the holders of
Subordinated Debentures.
"SUBORDINATED DEBENTURES INDENTURE" means that certain Indenture dated
as of December 1, 1993 between Anchor and the Subordinated Debentures' Trustee
pursuant to which the Subordinated Debentures were issued.
"SUBORDINATED DEBENTURES' DISTRIBUTION AMOUNT" means, at any date of
determination, the Class 8 Subordinated Debentures' Ratable Portion of the
Available Cash and New Anchor Securities at such date.
"SUBORDINATED DEBENTURES' TRUSTEE" means The Chase Manhattan Bank as
trustee to the Beneficial Holders of the Subordinated Debentures.
"SUBORDINATED DEBENTURES' TRUSTEE REIMBURSEMENT AMOUNT" has the
meaning set forth in Section 4.9 of this Plan.
"TAX" means any tax, charge, fee, levy, impost or other assessment by
any federal, state, local or foreign taxing authority, including, without
limitation, income, excise, property, sales, transfer, employment, payroll,
franchise, profits, license, use, ad valorem, estimated, severance, stamp,
occupation and withholding tax. "Tax" shall include any interest or additions
attributable to, imposed on, or with respect to such assessments.
"TOTAL SENIOR DEBT RECOVERY AMOUNT" means payment in full, in cash, of
all principal, interest, penalties, fees, indemnifications, reimbursements,
damages and other liabilities payable under the documentation governing the
Senior Debt and due or to become due with respect to the Senior Debt (including
interest accruing after, or that would accrue but for the occurrence of the
commencement of, any bankruptcy, reorganization, liquidation or similar
proceeding at the rate specified in the applicable Senior Debt, whether or not
such interest is an allowable claim in any such proceeding).
"TRUSTEE" has the meaning set forth in Section 7.4 of this Plan.
"VOTING RECORD DATE" means 5:00 p.m. New York City time on
__________ __, 1997.
"WIND-DOWN BUDGET" means the budget of expenses dated as of
__________ __, 1997 and attached hereto as Exhibit 3 and such modifications to
such budgets as have been approved by order of the Bankruptcy Court after
appropriate notice to the Committee, for winding down the affairs of the
Debtors and the Administrative Trust, including, among other things, the sale,
disposition, collection, or other realization of value of any kind in respect
of the Remaining Assets, holding and distributing the consideration to be
distributed to holders of Claims pursuant to this Plan, the Administrative
Trust Agreement, the Confirmation Order, or such other orders as may be entered
by the Bankruptcy Court, the completion of the process of prosecution or
settlement of objections to Disputed Claims asserted by the Debtors or the
Administrative Trustee and the completion of all other obligations of the
Debtors and the Administrative Trust pursuant to this Plan, the Administrative
Trust Agreement, the Confirmation Order, or such other orders as may be entered
by the Bankruptcy Court.
1.2 UNDEFINED TERMS. Terms and phrases, whether capitalized or not,
that are used and not defined in this Plan, but that are defined in the
Bankruptcy Code, have the meanings ascribed to them in the Bankruptcy Code.
1.3 RULES OF INTERPRETATION. Unless otherwise specified, all section,
article, and exhibit references in this Plan are to the respective section in,
article of, or exhibit to this Plan, as the same may be amended, waived, or
modified from time to time. The headings in this Plan are for convenience of
reference only and shall not limit or otherwise affect the provisions hereof.
Words denoting the singular number shall include the plural number and vice
versa. The rules of construction set forth in Section 102 of the Bankruptcy Code
shall apply. In computing any period of time prescribed or allowed by this Plan,
the provisions of Bankruptcy Rule 9006(a) shall apply.
ARTICLE II
CLASSIFICATION OF CLAIMS AND INTERESTS
2.1 CREATION OF CLASSES. For purposes of organization only with
respect to Administrative Expense Claims and Priority Claims and for purposes of
organization, voting, and all confirmation matters with respect to other Claims
and Interests, this Plan classifies the Claims against and the Interests in the
Debtors as follows:
(a) Class 1--Administrative Expense Claims (Anchor and Recycling)
(b) Class 2--Priority Tax Claims (Anchor and Recycling)
(c) Class 3--Priority Non-Tax Claims (Anchor and Recycling)
(d) Class 4--Convenience Claims (Anchor and Recycling)
(e) Class 5--Senior Secured Noteholder Claims (Anchor)
(f) Class 6--Other Secured Claims (Anchor)
(g) Class 7--Senior Debt Claims (Anchor)
(h) Class 8--Subordinated Debenture Claims (Anchor)
(i) Class 9--Other Unsecured Claims (Anchor and Recycling)
(j) Class 10--Intercompany Claims (Anchor and Recycling)
(k) Class 11--Interests in Anchor
(l) Class 12--Interests in Recycling
2.2 CLAIMS MAY BE IN MORE THAN ONE CLASS. An Allowed Claim is part of
a particular Class only to the extent that the Allowed Claim qualifies within
the definition of that Class and such Claim shall be part of a different Class
to the extent that the remainder of the Claim qualifies within the description
of a different Class.
ARTICLE III
IDENTIFICATION OF CLASSES OF CLAIMS THAT
ARE AND ARE AND ARE NOT IMPAIRED UNDER THIS PLAN
3.1 CLASSES OF CLAIMS NOT IMPAIRED. The Classes containing
Administrative Expense Claims, Priority Tax Claims, Priority Non-Tax Claims,
Convenience Claims, and Other Secured Claims are not impaired under this Plan.
3.2 IMPAIRED CLASSES OF CLAIMS AND INTERESTS. Other than the Classes
specified in Section 3.1 above, all other Classes of Claims and Interests are
impaired under this Plan.
3.3 IMPAIRMENT CONTROVERSIES. If a controversy arises as to whether
any Claim or Interest, or any Class of Claims or Class of Interests, is impaired
under this Plan, such Class shall be treated as specified in this Plan unless
the Bankruptcy Court shall determine such controversy differently upon motion of
the party challenging the characterization of a particular Class of Claims or
Class of Interests under this Plan.
ARTICLE IV
PROVISIONS FOR TREATMENT OF CLASSES OF
CLAIMS AND INTERESTS
4.1 SATISFACTION OF CLAIMS. The treatment of and consideration to be
received by holders of Allowed Claims or Allowed Interests pursuant to this
Article IV shall be in full satisfaction, settlement, release and discharge of
such holder's respective Claims against or Interests in the Debtors and the
Estate, except as otherwise provided in this Plan or the Confirmation Order.
4.2 CLASS 1--ADMINISTRATIVE EXPENSE CLAIMS. Each holder of an Allowed
Administrative Expense Claim shall receive in full satisfaction thereof (i) the
amount of such Allowed Claim, in cash, on or as soon as practicable after the
later of (a) the Effective Date, or (b) the date that is ten (10) Business Days
after such Claim becomes an Allowed Claim; or (ii) such other treatment as may
be agreed upon in writing by the holder of such Claim, the Debtors, the
Administrative Trustee, or as the Bankruptcy Court has ordered; PROVIDED,
HOWEVER, that Allowed Administrative Expense Claims representing accounts
payable, or other claims, liabilities or obligations incurred in the ordinary
course of business of either Debtor subsequent to the Petition Date shall be
paid or performed by the respective Debtor in accordance with the terms and
conditions of each agreement relating thereto in the ordinary course of such
Debtor's business.
With the exception of applications for compensation for fees and
reimbursement of expenses filed by holders of Professional Claims, which
applications shall be filed no later than forty-five (45) days after the
Effective Date, and claims against the Smith Barney Escrow Account, which shall
be filed by a date to be agreed upon by and among the Debtors, Smith Barney Inc.
and the Committee, or such date as may be set by the Bankruptcy Court on notice
to those parties, all requests for payment of Administrative Expense Claims (or
any other means of preserving and obtaining payment of Administrative Expense
Claims found to be effective by the Bankruptcy Court) shall be filed by the
earlier of (i) forty-five (45) days after the date of service of notice of the
Effective Date, or (ii) any applicable bar date established by the Bankruptcy
Court and noticed separately by Debtors; and if such requests for payment of
Administration Expense Claims are not so filed, the holders of such Claims shall
be forever barred and shall not be able to assert such Claims in any manner
against the Debtors, the Administrative Trust or the Remaining Assets; PROVIDED,
however, that no such request for payment shall be required with respect to
claims, liabilities, or obligations incurred in the ordinary course of the
wind-down of the assets and property of the Estate incurred in accordance with
the Wind-down Budget, unless a dispute exists as to any such liabilities, or
unless the provisions of the Bankruptcy Code require the filing of a request for
payment as a precondition to payments being made on any such liability.
4.3 CLASS 2--PRIORITY TAX CLAIMS. Each holder of an Allowed Priority
Tax Claim shall receive in full satisfaction thereof (i) the amount of such
Allowed Claim, in cash, on or as soon as practicable after the later of (a) the
Effective Date, or (b) the date that is ten (10) Business Days after such Claim
becomes an Allowed Claim, or (ii) such other treatment as may be agreed upon in
writing by the holder of such Claim, the Debtors, the Administrative Trustee, or
as the Bankruptcy Court has ordered.
4.4 CLASS 3--PRIORITY NON-TAX CLAIMS. Each holder of an Allowed
Priority Non- Tax Claim shall receive in full satisfaction thereof (i) the
amount of such Allowed Claim, in cash, on or as soon as practicable after the
later of (a) the Effective Date, or (b) the date that is ten (10) Business Days
after such Claim becomes an Allowed Claim, or (ii) such other treatment as may
be agreed upon in writing by the holder of such Claim and the Debtors, the
Administrative Trustee, or as the Bankruptcy Court has ordered.
4.5 CLASS 4--CONVENIENCE CLAIMS. Each holder of an Allowed Convenience
Claim shall receive in full satisfaction thereof cash equal to the Allowed
Amount of such Claim, on or as soon as practicable after the later of (i) the
Effective Date, or (ii) the date that is ten (10) Business Days after such Claim
becomes an Allowed Claim.
4.6 CLASS 5--SENIOR SECURED NOTEHOLDER CLAIMS. Unless the Bankruptcy
Court shall have entered the Interest Payment Order, in which case the holders
shall be entitled to the treatment of their claims set forth therein, cash,
equal in amount to the amount by which the alleged amount of the Senior Secured
Noteholder Claims as of the Effective Date exceeds the sum of the total payments
made during the period from the Petition Date to the Effective Date or
thereafter on account of the Senior Secured Notes (the "Paid Portion of the
Allowed Senior Secured Noteholder Amount") shall be distributed to the Class 5
Distribution Reserve. Within ten (10) Business Days after the Bankruptcy Court
determines by a Final Order the Allowed Senior Secured Noteholder Amount, funds
equal in amount to the amount by which the Allowed Senior Secured Noteholder
Amount as of the Effective Date exceeds the Paid Portion of the Allowed Senior
Secured Noteholder Amount, together with Earned Interest on such Amount, shall
be distributed from such account to the Collateral Agent in full satisfaction
thereof. Any excess funds in such account after the distribution to the
Collateral Agent described in the preceding sentence shall constitute Available
Cash. The Senior Secured Deficiency Claim, if any, resulting from the Bankruptcy
Court's determination of the Allowed Senior Secured Noteholder Amount shall be
treated as a Class 7 Senior Debt Claim.
4.7 CLASS 6--OTHER SECURED CLAIMS. Each holder of an Allowed Other
Secured Claim shall receive in full satisfaction thereof either (a) cash equal
to the amount of such Allowed Secured Claim on or as soon as practicable after
the later of (i) the Effective Date and (ii) the date that is ten (10) Business
Days after such Claim becomes an Allowed Claim, or (b) the Administrative Trust
shall abandon the property that secures the Allowed Class 6 Claim to the holder
of such Claim.
4.8 CLASS 7--SENIOR DEBT CLAIMS. Each holder of an Allowed Senior Debt
Claim shall receive in full satisfaction thereof its Pro Rata Share of the
Senior Debt Distribution Amount on or as soon as practicable after the later of
(i) the Effective Date and (ii) the date that is ten (10) Business Days after
such Claim becomes an Allowed Claim, and thereafter on each subsequent
Distribution Date as contemplated by Section 6.2.5 of this Plan; PROVIDED,
HOWEVER, that if a holder of an Allowed Senior Debt Claim receives its first
distribution after the Initial Distribution Date, such holder shall also receive
a Catch-Up Distribution. In the event that the Senior Debt Distribution Amount
is insufficient to pay to the holders of the Senior Debt an aggregate amount
equal in value to the Total Senior Debt Recovery Amount, then the Subordinated
Debentures' Distribution Amount shall be disbursed by the Disbursing Agent after
payment of the Subordinated Debentures' Trustee Reimbursement Amount to the
Subordinated Debentures' Trustee, in accordance with the provisions of Sections
4.9 and 6.4(iv) of this Plan for distribution to the holders of Senior Debt
until the holders of Senior Debt shall have received an aggregate amount in cash
and New Anchor Securities in value equal to the Total Senior Debt Recovery
Amount. Senior Debt Claims shall be deemed Allowed unless an objection is filed
with the Bankruptcy Court prior to the Effective Date.
4.9 CLASS 8--SUBORDINATED DEBENTURE CLAIMS. Each holder of an Allowed
Subordinated Debenture Claim shall receive in full satisfaction thereof its Pro
Rata Share of the Subordinated Debentures' Distribution Amount on or as soon as
practicable after the later of (i) the Effective Date and (ii) the date that is
ten (10) Business Days after such Claim becomes an Allowed Claim, and on each
subsequent Distribution Date as contemplated by Section 6.2.5 of this Plan;
PROVIDED, HOWEVER, that if a holder of an Allowed Subordinated Debenture Claim
receives its first distribution after the Initial Distribution Date, such holder
shall also receive a Catch-Up Distribution; PROVIDED FURTHER, HOWEVER, that in
the event the holders of Allowed Senior Debt Claims have not received payment in
an aggregate amount in cash and New Anchor Securities having a value equal to
the Total Senior Debt Recovery Amount, then the Disbursing Agent shall, after
first distributing to the Subordinated Debentures' Trustee an amount (the
"Subordinated Debentures' Trustee Reimbursement Amount") equal to the (i)
reasonable compensation for its services, (ii) reimbursement of the reasonable
disbursements, advances and expenses incurred or made by the Subordinated
Debentures' Trustee including, without limitation, reasonable compensation,
disbursements and expenses of its agents and counsel, and (iii) the
indemnification obligations of Anchor, all pursuant to and as set forth in
Section 7.07 of the Subordinated Debentures Indenture, disburse the Subordinated
Debentures' Distribution Amount in accordance with the provisions of Section
6.4(iv) of this Plan for distribution to the holders of Senior Debt until the
holders of Senior Debt shall have received an aggregate amount in cash and New
Anchor Securities equal in value to the Total Senior Debt Recovery Amount.
Subordinated Debenture Claims shall be deemed Allowed unless an objection is
filed with the Bankruptcy Court prior to the Effective Date.
4.10 CLASS 9--OTHER UNSECURED CLAIMS. Each holder of an Allowed Other
Unsecured Claim shall receive in full satisfaction thereof its Pro Rata Share of
the Other Unsecured Claims Distribution Amount on or as soon as practicable
after the later of (i) the Effective Date and (ii) the next Distribution Date
following the date on which such Claim becomes an Allowed Claim, and thereafter
on each subsequent Distribution Date as contemplated by Section 6.2.5 of this
Plan; PROVIDED, HOWEVER, that if a holder of an Allowed Other Unsecured Claim
receives its first distribution after the Initial Distribution Date, such holder
shall also receive a Catch-Up Distribution.
4.11 CLASS 10--INTERCOMPANY CLAIMS. The holders of Intercompany Claims
shall not receive or retain any property under this Plan on account of such
Intercompany Claims, and such Intercompany Claims shall be canceled pursuant to
Section 7.1 of this Plan. Anchor and Recycling accept the treatment accorded the
holders of Class 10 Claims hereunder.
4.12 CLASS 11--INTERESTS IN ANCHOR. Holders of Class 11 Interests will
receive no distributions nor retain any property under this Plan. Class 11
Interests will be deemed canceled and be of no further force and effect on the
Effective Date and all certificates or other Instruments representing such
Interests shall be deemed extinguished. Container Holdings accepts the treatment
accorded the holders of Class 11 Interests hereunder.
4.13 CLASS 12--INTERESTS IN RECYCLING. Holders of Class 12 Interests
will receive no distributions nor retain any property under this Plan. Class 12
Interests will be deemed canceled and be of no further force and effect on the
Effective Date and all certificates or other instruments representing such
Interests shall be deemed extinguished. Anchor accepts the treatment accorded to
it as the holder of Class 12 Interests hereunder.
ARTICLE V
ACCEPTANCE OR REJECTION OF PLAN; CRAMDOWN
5.1 CLASSES AND CLAIMS ENTITLED TO VOTE. Each impaired Class of Claims
or Interests shall be entitled to vote separately to accept or reject this Plan.
The Beneficial Holders of Claims in Classes 5, 7, 8 and 9 as of the Voting
Record Date are entitled to vote to accept or reject this Plan. The Senior
Secured Noteholder Claims, the Senior Debt Claims, the Subordinated Debenture
Claims and the Other Unsecured Claims shall be deemed to be "Allowed" for
purposes of voting on this Plan unless, prior to the Voting Record Date, the
Debtors have filed an objection to the voting of any of those Claims with the
Bankruptcy Court.
Classes of Claims or Interests not impaired under this Plan shall not
be entitled to vote to accept or reject this Plan, and shall be presumed to have
accepted this Plan pursuant to Section 1126(f) of the Bankruptcy Code. Classes
1, 2, 3, 4, and 6 are not impaired and hence are not entitled to vote to accept
or reject this Plan and are presumed to have accepted this Plan.
5.2 CLASS ACCEPTANCE REQUIREMENT. A Class of Claims shall have
accepted this Plan if it is accepted by at least two-thirds (2/3) in amount and
more than one-half (1/2) in number of the Allowed Claims of such Class that have
voted on this Plan.
5.3 ONE VOTE PER HOLDER. If a holder of a Claim holds more than one
Claim in any one Class, all Claims of such holder in such Class shall be
aggregated and deemed to be one Claim for purposes of determining the number and
amount of Claims in such Class voting on this Plan.
5.4 CRAMDOWN. If all applicable requirements for confirmation of this
Plan are met as set forth in Bankruptcy Code Section 1129(a)(1) through (13)
except subsection (8) thereof, the Debtors shall request that the Bankruptcy
Court confirm this Plan in accordance with Section 1129(b) of the Bankruptcy
Code, so long as one impaired Class of Claims has accepted this Plan, on the
basis that this Plan is fair and equitable and does not discriminate unfairly
with respect to any non-accepting, impaired Class.
ARTICLE VI
FUNDING OF DISTRIBUTIONS
AND PROVISIONS FOR TREATMENT OF
DISPUTED CLAIMS
6.1 FUNDING OF DISTRIBUTIONS UNDER THIS PLAN. On or before the
Effective Date, there shall be a sufficient amount of cash in the Escrow Account
to make the distributions required to be made to the holders of Allowed Claims
in Classes 1, 2, 3, 4, 5 and 6 under this Plan. On the Effective Date, the
Administrative Trustee shall fund the Distribution Reserve for Classes 1, 2, 3,
4, 5 and 6 with cash, and will fund the Distribution Reserve for Classes 7, 8
and 9 with New Anchor Securities, and with their Ratable Portion of Available
Cash, in each case, free and clear of all Claims and Liens and contractually
imposed restrictions, except for any Lien provided for in this Plan and the
Liens which have attached to the net proceeds originally deposited into the
Escrow Account transferred to the Administrative Trust. Notwithstanding anything
herein to the contrary, Available Cash does not include (a) any cash in the
Distribution Reserve for Classes 1, 2, 3, 4, 5 and 6, which may be required to
be paid to Disputed Claims and (b) cash in the Distribution Reserve reserved to
meet the expenses of the Administrative Trustee pursuant to the Wind-down
Budget, unless such cash is transferred from the Distribution Reserve to the
Operating Account pursuant to this Plan. The Administrative Trustee may seek one
or more orders of the Bankruptcy Court, upon notice to the Committee, estimating
or modifying the amount of cash, New Anchor Securities or other property to be
deposited in any Distribution Reserve. All other cash amounts recovered by the
Administrative Trustee from Remaining Assets shall be allocated as provided for
herein, except as otherwise provided by order of the Bankruptcy Court upon
motion on notice to the Committee, determining that it is necessary to utilize
cash in any Distribution Reserve to pay amounts due to more senior classes or to
pay expenses incurred in connection with the Wind-down Budget.
6.2 DISTRIBUTION PROCEDURES. Except as otherwise provided in this
Plan, each initial distribution of cash, New Anchor Securities and other
property in respect of an Allowed Claim shall be made on the later of the
Effective Date and the date that is ten (10) Business Days after such Claim
becomes an Allowed Claim, or as soon thereafter as practicable. Distributions
required to be made on a particular date shall be deemed to have been made on
such date if actually made on such date or as soon thereafter as practicable. No
payments or other distributions of property shall be made on account of any
Claim or portion thereof unless and until such Claim or portion thereof is
Allowed by Final Order, or unless otherwise provided by order of the Bankruptcy
Court.
6.2.1 DISTRIBUTIONS TO HOLDERS OF ALLOWED ADMINISTRATIVE EXPENSE
CLAIMS, ALLOWED PRIORITY TAX CLAIMS AND ALLOWED PRIORITY NON-TAX CLAIMS
Commencing on the Effective Date, the Administrative Trustee shall, in
accordance with Sections 4.2, 4.3 and 4.4 of this Plan, respectively, distribute
to each holder of a then unpaid Allowed Administrative Expense Claim, Allowed
Priority Tax Claim and Allowed Priority Non-Tax Claim the cash distribution to
which the Allowed amount of such holder's Claim entitles such holder. The cash
deposited in the Distribution Reserve in respect of the remaining Administrative
Expense Claims, Priority Tax Claims and Priority Non-Tax Claims (or portions
thereof) shall be maintained by the Administrative Trustee as part of the
Distribution Reserve and shall be distributed to the holders of Administrative
Expense Claims, Priority Tax Claims and Priority Non-Tax Claims pursuant to
Sections 4.2, 4.3 and 4.4 of this Plan, respectively, if and to the extent that
the balance, if any, of such Claims is Allowed by Final Order.
To the extent that an Administrative Expense Claim, a Priority Tax
Claim or a Priority Non-Tax Claim is Allowed after the Effective Date, the
holder thereof shall be entitled to receive Earned Interest on the cash reserved
with respect to the Allowed amount of such Claim, calculated from the Effective
Date through and including the day preceding the applicable Distribution Date.
The Earned Interest on such distribution shall be paid at the same time as the
distribution made to the holder of an Allowed Administrative Expense Claim or
Priority Claim. The Administrative and Priority Distribution Reserve Surplus, if
any, resulting from the disallowance of all or a portion of the Disputed
Administrative Expense Claims and Priority Claims shall be transferred promptly
by the Administrative Trustee to the Distribution Reserve for the holders of
Class 7, Class 8 and Class 9 Allowed Claims in accordance with Section 6.2.5
below.
6.2.2 DISTRIBUTIONS TO HOLDERS OF ALLOWED CLASS 4 CONVENIENCE CLAIMS.
Commencing on the Effective Date, the Administrative Trustee shall, in
accordance with Section 4.5 of this Plan, distribute to each holder of a then
unpaid Allowed Convenience Claim the cash distribution to which the Allowed
amount of such holder's Claim entitles such holder. The cash deposited in the
Distribution Reserve in respect of the remaining Convenience Claims (or portions
thereof) shall be maintained by the Administrative Trustee as part of the
Distribution Reserve and shall be distributed to the holders of Convenience
Claims pursuant to Section 4.5 of this Plan, if and to the extent that the
balance, if any, of such Claims is Allowed by Final Order.
To the extent that a Convenience Claim is Allowed after the Effective
Date, the holder thereof shall be entitled to receive Earned Interest on the
cash reserved with respect to the Allowed amount of such Claim, calculated from
the Effective Date through and including the day immediately preceding the
applicable Distribution Date. The Earned Interest shall be paid at the same time
as the distribution made to the holder of an Allowed Convenience Claim. The
Class 4 Distribution Reserve Surplus, if any, resulting from the disallowance of
all or a portion of the Disputed Convenience Claims shall be transferred
promptly by the Administrative Trustee to the Distribution Reserve for the
holders of Class 7, Class 8 and Class 9 Allowed Claims in accordance with
Section 6.2.5 below.
6.2.3 DISTRIBUTIONS TO HOLDERS OF ALLOWED CLASS 5 SENIOR SECURED
NOTEHOLDER CLAIMS.
(a) If the Bankruptcy Court has not entered the Interest Payment
Order, commencing on the Effective Date, the Administrative Trustee shall, in
accordance with Section 4.6 of this Plan, distribute to the Collateral Agent for
distribution to the holders of then unpaid Allowed Senior Secured Noteholder
Claims the amount by which the Allowed Senior Secured Noteholder Amount as of
the Effective Date exceeds the Paid Portion of the Allowed Senior Secured
Noteholder Amount. To the extent that the Senior Secured Noteholder Claims are
Allowed after the Effective Date, the holders thereof shall be entitled to
receive Earned Interest on the cash reserved with respect to the amount by which
the Allowed Senior Secured Noteholder Amount as of the Effective Date exceeds
the Paid Portion of the Allowed Senior Secured Noteholder Amount, calculated
from the Effective Date through and including the day immediately preceding the
applicable Distribution Date. The Earned Interest on such distribution shall be
paid at the same time as the distribution made to the Collateral Agent on behalf
of the holders of Allowed Senior Secured Noteholder Claims. The Class 5
Distribution Reserve Surplus, if any, resulting from the disallowance of all or
a portion of the Senior Secured Noteholder Claims which are Disputed Claims
shall be transferred promptly by the Administrative Trustee to the Distribution
Reserve for the holders of Class 7, Class 8 and Class 9 Allowed Claims in
accordance with Section 6.2.5 below.
(b) If the Bankruptcy Court has entered the Interest Payment Order,
each holder of a then unpaid Allowed Senior Secured Noteholder Claim shall
receive the treatment provided for by that Order.
6.2.4 DISTRIBUTIONS TO HOLDERS OF ALLOWED CLASS 6 OTHER SECURED
CLAIMS. Commencing on the Effective Date, the Administrative Trustee shall, in
accordance with Section 4.7 of this Plan, distribute to each holder of a then
unpaid Allowed Other Secured Claim the cash distribution to which the Allowed
amount of such holder's Claim entitles such holder. The cash deposited in the
Distribution Reserve in respect of the remaining Other Secured Claims (or
portions thereof) shall be maintained by the Administrative Trustee as part of
the Distribution Reserve and shall be disbursed to the Disbursing Agent for
distribution to the holders of Other Secured Claims pursuant to Section 4.6 of
this Plan, if and to the extent that the balance, if any, of such Claims is
Allowed by Final Order.
To the extent that an Other Secured Claim is Allowed after the
Effective Date, the holder thereof shall be entitled to receive the cash
reserved with respect to the Allowed amount of such Claim and Earned Interest
thereon, calculated from the Effective Date through and including the day
immediately preceding the applicable Distribution Date. The Earned Interest on
such distribution shall be paid at the same time as the distribution made to the
holder of an Other Secured Claim. The Class 6 Distribution Reserve Surplus, if
any, resulting from the disallowance of all or a portion of the Other Secured
Claims which were Disputed Claims shall be transferred promptly by the
Administrative Trustee to the Distribution Reserve for the holders of Class 7,
Class 8 and Class 9 Allowed Claims in accordance with Section 6.2.5 below.
6.2.5 DISTRIBUTIONS TO HOLDERS OF ALLOWED CLASS 7, CLASS 8 AND CLASS 9
CLAIMS. Distributions on the Allowed amounts of Class 7, Class 8 and Class 9
Claims shall be made to the respective holders thereof in accordance with
Sections 4.8, 4.9 and 4.10 of this Plan, respectively. Available Cash and New
Anchor Securities in the Escrow Account shall be transferred to the Distribution
Reserve for the holders of Allowed Class 7, Class 8 and Class 9 Claims on the
Effective Date and on each succeeding Distribution Date and distributed with
each Class receiving its Ratable Portion of the Available Cash and New Anchor
Securities in its Distribution Reserve and each holder of a Claim in a Class
receiving its Pro Rata Share of the distribution to such Class; PROVIDED,
HOWEVER, that with respect to such distributions, in the event the aggregate
value available for distribution to all holders of Allowed Class 7, Class 8 and
Class 9 Claims aggregates less than $250,000, such amounts shall instead be
distributed to such holders on the next succeeding Distribution Date on which
the holders of such Allowed Class 7, Class 8 and Class 9 Claims would be
entitled to receive distributions.
To the extent that a Class 7, Class 8 or Class 9 Claim is a Disputed
Claim on the Effective Date, the distribution of Available Cash and New Anchor
Securities, allocable to such Disputed Claim shall be transferred from the
Escrow Account to the applicable Distribution Reserve. To the extent a Class 7,
Class 8 or Class 9 Claim is a Disputed Claim on any subsequent Distribution
Date, the Administrative Trustee shall, in the case of distributions of
Available Cash and New Anchor Securities from the Escrow Account, deposit into
the applicable Distribution Reserve, to the extent not previously transferred to
such Distribution Reserve pursuant to the preceding sentence, the Pro Rata Share
of funds and securities from the Escrow Account to which the holder of such
Disputed Claim would have been entitled had its Claim been Allowed as of such
date.
To the extent that a Class 7, Class 8 or Class 9 Claim is Allowed
after the Effective Date, the holder thereof shall be entitled to receive (a)
the cash reserved with respect to the Allowed amount of such Claim (including
cash representing distributions of funds in the Escrow Account) plus Earned
Interest thereon, calculated from the Effective Date through and including the
day immediately preceding the applicable Distribution Date and (b) the New
Anchor Securities reserved with respect to the Allowed amount of such Claim. The
Earned Interest on such distribution shall be paid at the same time as the
distribution made to the holder of an Allowed Claim in Class 7, Class 8 or Class
9.
To the extent that after the Effective Date a Class 7, Class 8 or
Class 9 Claim is disallowed or is Allowed in an amount less than the Disputed
Claim, the Class 7, Class 8 or Class 9 (as applicable) Distribution Reserve
Surplus resulting from the disallowance of all or a portion of such Claim shall
be transferred promptly by the Administrative Trustee to the applicable
Distribution Reserve, for subsequent distribution to the holders of Class 7,
Class 8 and Class 9 Allowed Claims in accordance with this Section 6.2.5.
6.2.6 RESERVE FOR ESTIMATED EXPENSES. No later than twenty-one (21)
Business Days prior to the making of the Final Distribution of cash and New
Anchor Securities from the Class 7, Class 8 and Class 9 Distribution Reserve,
the Administrative Trustee shall provide the Committee with an estimate of any
out-of-pocket expenses that are then unpaid or are anticipated to be incurred by
the Administrative Trustee and which were not provided for by the Wind-down
Budget and, unless the Administrative Trustee is notified of any objection to
such additional estimate on or before five (5) Business Days prior to the making
of such Final Distribution, the Administrative Trustee shall withdraw from any
applicable Distribution Reserve such additional amounts for payment of such
unpaid and projected compensation and out-of-pocket expenses, in addition to
reserving for those expenses provided for by the Wind-down Budget.
6.3 MANNER OF DISTRIBUTIONS UNDER THIS PLAN.
6.3.1 CASH PAYMENTS. Any payment made pursuant to this Plan may be
made either in cash, by check drawn on a bank that is a member of the New York
Clearing House Association or by wire transfer from such a bank, at the option
of the Administrative Trustee.
6.3.2 NEW ANCHOR SECURITIES. Any distribution of New Anchor Securities
to holders of Allowed Claims made pursuant to this Plan shall be distributed by
the transfer agent for the New Anchor Securities at the direction of the
Administrative Trustee or the Disbursing Agent.
6.3.3 FRACTIONAL SHARES OF NEW ANCHOR SECURITIES. Fractional shares of
New Anchor Securities shall not be issued or distributed. Instead, each time a
distribution is to be made to any Class of Allowed Claims, the aggregate of all
of the fractional interests in New Anchor Common Stock to which the holders of
Allowed Claims in such Class would otherwise be entitled shall be placed in a
separate pool (the "FRACTIONAL COMMON SHARES POOL") and the aggregate of all of
the fractional interests in New Anchor Preferred Stock to which the holders of
Allowed Claims in such Class would otherwise be entitled shall be placed in a
separate pool (the "FRACTIONAL PREFERRED SHARES POOL").
(a) All holders of Allowed Claims in such Class which would otherwise
be entitled to a fractional share of New Anchor Common Stock shall be placed on
a list (a "DISTRIBUTION LIST") in descending order according to the size of the
fractional interest in each share of New Anchor Common Stock to which each such
holder is entitled. In the event two or more holders of Allowed Claims are
entitled to the same fractional interest (rounded to six decimal places) in a
share of New Anchor Common Stock, their relative ranking on any Distribution
List shall be determined by lot. Based upon each Distribution List for each
share of New Anchor Common Stock for each Class, a whole share of New Anchor
Common Stock shall be distributed to holders entitled to the largest fractions
of each share of New Anchor Common Stock until all of the whole units of the
shares of New Anchor Common Stock in the Fractional Common Shares Pool for each
share of New Anchor Common Stock in each Class shall have been distributed;
(b) All holders of Allowed Claims in such Class which would otherwise
be entitled to a fractional share of New Anchor Preferred Stock shall be placed
on a list (a "PREFERRED SHARES DISTRIBUTION LIST") in descending order according
to the size of the fractional interest in each share of New Anchor Preferred
Stock to which each such holder is entitled. In the event two or more holders of
Allowed Claims are entitled to the same fractional interest (rounded to six
decimal places) in a share of New Anchor Preferred Stock, their relative ranking
on any Preferred Shares Distribution List shall be determined by lot. Based upon
each Preferred Shares Distribution List for each share of New Anchor Preferred
Stock for each Class, a whole share of New Anchor Preferred Stock shall be
distributed to holders entitled to the largest fractions of each share of New
Anchor Preferred Stock until all of the whole units of the shares of New Anchor
Preferred Stock in the Fractional Preferred Shares Pool for each share of New
Anchor Preferred Stock in each Class shall have been distributed.
6.3.4 SETOFFS. The Debtors may, but shall not be required to, set off
against any Claims and the payments or distributions to be made pursuant to this
Plan in respect of such Claims, any claims of any nature whatsoever any of the
Debtors may have against the Creditors, but neither the failure to do so nor the
allowance of any such Claims shall constitute a waiver or release by the Debtors
of any such claims any of the Debtors may have against such Creditors, and all
such claims shall be reserved to and retained by the Administrative Trustee.
6.3.5 DE MINIMIS DISTRIBUTIONS. No cash payment of less than five
($5.00) dollars shall be made to any Creditor on account of its Allowed Claim.
6.3.6 SATURDAY, SUNDAY OR LEGAL HOLIDAY. If any payment, distribution
or other act under this Plan is required to be made or performed on a date that
is not a Business Day, then the making of such payment or the performance of
such act may be completed on the next succeeding Business Day, but shall be
deemed to have been completed as of the required date.
6.3.7 FAILURE TO NEGOTIATE CHECKS. Checks issued in respect of
distributions under this Plan shall be null and void if not negotiated within
sixty (60) days after the date of issuance. Any amounts returned to the
Administrative Trustee or the Disbursing Agent in respect of such non-negotiated
checks shall be held in the Distribution Reserve. Requests for reissuance for
any such check may be made directly to the Administrative Trustee by the holder
of the Allowed Claim with respect to which such check originally was issued. Any
request for reissuance by the holder of an Allowed Claim in respect of such
voided check is required to be made before the second anniversary after the
Effective Date. Thereafter, all amounts represented by any voided check shall be
transferred promptly by the Administrative Trustee to the Distribution Reserve
for the holders of Allowed Claims in Classes 7, 8 and 9, in accordance with
Section 6.2.5 of this Plan, and all Claims in respect of void checks and the
underlying distributions shall be discharged and forever barred from assertion
against the Administrative Trust and the Remaining Assets.
6.3.8 UNCLAIMED PROPERTY. Except as otherwise provided in this Plan,
any distribution of cash or other property under this Plan which is unclaimed or
any interest or investment income that is not allocated after two (2) years
following the Effective Date shall be distributed by the Disbursing Agent to the
holders of Allowed Class 7, Class 8 and Class 9 Claims in accordance with
Section 6.2.5 of this Plan. Nothing contained in the Plan shall require the
Administrative Trustee or the Disbursing Agent to attempt to locate any holder
of an Allowed Claim other than by reviewing the records of the Administrative
Trust.
6.3.9 INVESTMENT OF FUNDS Cash held in the Distribution Reserve and
the Escrow Account shall be invested by the Administrative Trustee in United
States Treasury Bills, commercial paper having an investment grade rate of A-1
or its equivalent, as authorized by the Escrow Account Order, as permitted by
Section 345 of the Bankruptcy Code or by order of the Bankruptcy Court. All
investments the proceeds of which are necessary to fund the payments required to
be made on a Distribution Date under this Plan shall mature or otherwise be
converted into cash on or prior to each Distribution Date.
6.4 DISTRIBUTIONS TO HOLDERS OF ALLOWED CLAIMS. In accordance with
Bankruptcy Rule 3021, the Disbursing Agent or the Administrative Trustee, as the
case may be, shall deliver or cause to be delivered:
(i) on or as soon as practicable after the later of (A) the
Effective Date and (B) the date that is ten (10) Business Days after a
Class 1, Class 2, Class 3, Class 4 or Class 6 Claim, as the case may
be, becomes an Allowed Claim, cash to be distributed to the holder of
such Allowed Claim in accordance with the terms and provisions of
Article IV of this Plan;
(ii) on or as soon as practicable after the later of (A) the
Effective Date and (B) the date that is ten (10) Business Days after
the Bankruptcy Court determines by a Final Order the Allowed Senior
Secured Noteholder Amount, to the Collateral Agent on behalf of the
holders of Class 5 Allowed Claims, the amount by which the Allowed
Senior Secured Noteholder Amount as of the Effective Date exceeds the
Paid Portion of the Allowed Senior Secured Noteholder Amount to be
distributed pursuant to Section 4.6 of this Plan;
(iii) on or as soon as practicable after the later of (A) the
Effective Date and (B) the date that is ten (10) Business Days after a
Class 7 Claim becomes an Allowed Claim, and thereafter on each
subsequent Distribution Date, cash and New Anchor Securities
representing such holder's Pro Rata Share of the Senior Debt
Distribution Amount to be distributed pursuant to Section 4.8 of this
Plan to (a) the Senior Noteholders' Trustee for distribution to each
holder of a Senior Note which holds an Allowed Class 7 Claim and (b)
the Collateral Agent for distribution to each holder of a Senior
Secured Deficiency Claim which holds an Allowed Class 7 Claim, as
applicable; PROVIDED, HOWEVER, that in the event that and to the extent
the holders of the Senior Debt have not received an aggregate amount in
cash and New Anchor Securities having a value equal to the Total Senior
Debt Recovery Amount, then the Senior Noteholders' Trustee and the
Collateral Agent, as applicable, shall receive from the Disbursing
Agent and shall distribute to each holder of an Allowed Class 7 Claim
such holder's Pro Rata Share of the Subordinated Debentures'
Distribution Amount; PROVIDED FURTHER, HOWEVER, that such distribution
of the Subordinated Debentures' Distribution Amount shall be made only
after the Subordinated Debentures' Trustee has received the
Subordinated Debentures' Trustee Reimbursement Amount;
(iv) on or as soon as practicable after the later of (A) the
Effective Date and (B) the date that is ten (10) Business Days after a
Class 8 Claim becomes an Allowed Claim, and thereafter on each
subsequent Distribution Date, cash and New Anchor Securities
representing such holders' Pro Rata Share of the Subordinated
Debentures' Distribution Amount to be distributed pursuant to Section
4.9 of this Plan to the Subordinated Debentures' Trustee, for
distribution to each holder of a Subordinated Debenture; PROVIDED,
HOWEVER, that in the event that and to the extent that the holders of
Senior Debt have not received an aggregate amount in cash and New
Anchor Securities having a value equal to the Total Senior Debt
Recovery Amount, then until the Class 7 Claims have received the Total
Senior Debt Recovery Amount, the Subordinated Debentures' Trustee shall
receive only the Subordinated Debentures' Trustee Reimbursement Amount;
and
(v) on or as soon as practicable after the later of (A) the
Effective Date and the next Distribution Date following the date on
which such Claim becomes an Allowed Claim, and thereafter on each
subsequent Distribution Date to each holder of a Class 9 Allowed Claim,
such holder's Pro Rata Share of the Other Unsecured Claims Distribution
Amount to be distributed to the holders of such Claim pursuant to
Section 4.10 of this Plan; in each case subject to the provisions of,
among others, Sections 6.3.3 and 7.4 of this Plan. Anchor shall pay all
reasonable fees and expenses of the Senior Noteholders' Trustee and the
Collateral Agent in acting as secondary disbursing agents as and when
such fees and expenses become due and payable without further order of
the Bankruptcy Court. In its capacity as a disbursing agent, the Senior
Noteholders' Trustee shall retain whatever property it deems necessary
to enforce its charging lien, for and until satisfaction of any of its
unpaid fees and expenses in acting as a distribution agent under this
Plan.
6.5 RESOLUTION OF DISPUTED CLAIMS. Only Claims that are Allowed shall
be entitled to distributions under this Plan. The Administrative Trustee, the
Debtors and the Committee reserve the right to contest and object to any Claims,
including, without limitation, the Allowed Amount of the Senior Secured
Noteholder Claims. Effective as of the Confirmation Date, objections to, and
requests for estimation of, Claims, may be initiated and prosecuted only by the
Debtors, the Administrative Trustee or the Committee. Unless otherwise ordered
by the Bankruptcy Court, the Administrative Trustee or the Committee shall file
with the Bankruptcy Court all objections to Claims not previously objected to
and requests for estimation of each such Disputed Claim on or before ninety (90)
days after the Effective Date with the Bankruptcy Court, and shall serve such
objections and estimation requests on the holders of the Disputed Claims or
their attorneys where known, and on the Committee and/or the Administrative
Trustee, unless it is the person serving such pleading, request or notice.
Disputed Claims shall be determined and liquidated, at the option of
the party filing the objection, either in the (i) Bankruptcy Court or (ii) in
the administrative or judicial tribunals in which such Disputed Claims (a) are
the subject of litigation or other proceedings pending on the Effective Date or
(b) could have been resolved had the Chapter 11 Cases not been commenced. Any
such Disputed Claim whether determined in a non-bankruptcy forum or in the
Bankruptcy Court shall be deemed Allowed in such liquidated amount and paid in
accordance with the provisions of this Plan after an order determining such
amount becomes a Final Order.
ARTICLE VII
IMPLEMENTATION AND MEANS OF
CONSUMMATING THIS PLAN
7.1 SUBSTANTIVE CONSOLIDATION. This Plan is premised upon the
substantive consolidation of the Debtors. Accordingly, on the Effective Date,
Recycling and its Estate shall be merged with and into Anchor and its Estate,
and (i) all Intercompany Claims shall be canceled and no distributions shall be
made on account thereof; (ii) all assets and all liabilities of the Debtors
shall be merged into a single entity; (iii) all guaranties of either Debtor of
the payment, performance or collection of obligations of the other Debtor shall
be eliminated and canceled; (iv) any obligation of either Debtor and all
guaranties thereof executed by the other Debtor shall be treated as a single
obligation and such guaranties shall be deemed a single Claim against the
consolidated Debtors; (v) all joint obligations of both Debtors, and all
multiple Claims against such entities on account of such joint obligations,
shall be treated and allowed only as a single Claim against the consolidated
Debtors; and (vi) each Claim filed in the Chapter 11 Case of either Debtor shall
be deemed filed against the consolidated Debtors and to be a single obligation
of the consolidated Debtors.
7.2 MERGER/DISSOLUTION OF CORPORATE ENTITIES. Consistent with the
substantive consolidation of the Debtors provided by this Plan, on the Effective
Date, the following merger(s) shall be effective and effectuated pursuant to the
Confirmation Order without any further action by the stockholders or directors
of either of the Debtors:
(a) Recycling shall be merged with and into Anchor; and
(b) Any other affiliate of the Debtors may be (i)
merged into Anchor or (ii) dissolved.
Immediately after the substantive consolidation and mergers provided
for by Sections 7.1 and 7.2 of this Plan and on the Effective Date, Anchor shall
be dissolved without any further action by the stockholders or directors of the
Debtors in order to effectuate the provisions of this Plan in accordance with
the Confirmation Order and the officers and employees of the Debtors as of the
day preceding the Effective Date shall be deemed to be employees of the
Administrative Trust on the Effective Date. The Debtors' officers or the
Administrative Trustee shall file a certificate of merger of Recycling and any
other affiliate of the Debtors into Anchor, and a certificate of dissolution of
Anchor, and shall take all other actions necessary or appropriate to effect such
mergers and dissolution under Delaware state law.
7.3 CORPORATE ACTION. Upon entry of the Confirmation Order, the
mergers and dissolutions contemplated by Section 7.2 hereof shall be deemed
authorized and approved in all respects. On the Effective Date, the matters
provided under this Plan involving the capital and corporate structures of the
Debtors, including the mergers and dissolutions effectuated pursuant to Section
7.2 hereof, shall be deemed to have occurred and shall be in effect from and
after the Effective Date pursuant to applicable state laws without any
requirement of further action by the stockholders or directors of the Debtors.
On the Effective Date, the Administrative Trustee shall be authorized and
directed to take all necessary and appropriate actions to effectuate the
transactions contemplated by this Plan and the Disclosure Statement, including,
but not limited to the actions contemplated by Section 7.2 hereof.
7.4 CANCELLATION OF EXISTING SECURITIES AND Agreements. (a) On the
Effective Date, except as otherwise provided herein, all securities and all
instruments and agreements governing any Claims or Interests shall be deemed
cancelled and terminated, PROVIDED, HOWEVER, that except as otherwise provided
herein, notes, bonds and other evidences of Claims shall, effective upon the
Effective Date, represent the right to participate, to the extent such Claims
are Allowed, in the distributions contemplated by this Plan.
(b) The Confirmation Date shall be the Distribution Record Date for
determining which holders of Allowed Claims are entitled to receive
distributions under this Plan. As of the close of business on the Confirmation
Date, the transfer ledgers or registers and any other records determining record
ownership for the promissory notes, debentures, bonds, share certificates and
other instruments representing the Senior Secured Notes, the Senior Notes, the
Subordinated Debentures, and all other Claims and Interests in the Debtors
(collectively, the "INSTRUMENTS") shall be closed, and there shall be no further
changes in the Record Holders of any Instruments on the books of Anchor or
Recycling (or of the Collateral Trustee, the Senior Noteholders' Trustee, the
Subordinated Debentures' Trustee or any other trustees, collateral agents,
transfer agents or registrars such trustees may have employed in connection
therewith (collectively, the "TRUSTEES")), and Anchor and Recycling shall have
no obligation to recognize any transfer of any Instrument occurring thereafter,
but shall be entitled instead to recognize and deal with, for all purposes under
this Plan, except as otherwise provided herein, only those Persons reflected as
the Record Holders on such books as of the close of business on the Confirmation
Date. On or before the third Business Day next following the Confirmation Date,
the Trustees shall deliver to Anchor the transfer ledgers for the Instruments
and shall certify to the Debtors a list of the registered holders of the
Instruments as of the Confirmation Date for each of the Instruments designating
the name, address, taxpayer identification number (if known), certificate
number, and the amount of unpaid principal and accrued interest of the
Instruments for each holder. The unpaid principal and accrued interest
designated shall be the amount outstanding as of the Petition Date. Entities
that acquire Instruments after the Confirmation Date will not be entitled to or
share in any distribution under this Plan unless such holder can establish his
succession of title from the Record Holder of such Instrument as of the
Confirmation Date. Until the holders of record on the Confirmation Date or their
lawful successors or assigns surrender the Instruments pursuant to Section
7.3(c) hereof, such holders shall have no rights (and the Instruments shall
evidence no rights) except to surrender such Instruments pursuant to Section
7.3(c) hereof and to receive in exchange therefor the distribution (if any) to
which such holders are entitled pursuant to Article IV of this Plan.
(c) No holder of any Instrument shall be entitled to any distribution
under this Plan unless and until such holder shall have first surrendered or
caused to be surrendered the Instrument evidencing such Claim to the Debtors,
the Administrative Trustee or other entity designated by order of the Bankruptcy
Court, and the designated entity shall distribute or shall cause to be
distributed to the holders thereof (or the Trustees on their behalf) the
appropriate distribution of property hereunder. No distribution of property
hereunder shall be made to or on behalf of any such holder unless and until (i)
such Instrument is received by the Debtors, the Administrative Trustee or other
designated entity; or (ii) the unavailability of such Instrument is established
to the satisfaction of the Debtors or the Administrative Trustee and such holder
has executed and delivered an affidavit of loss and indemnity with respect
thereto in a form customarily utilized for such purpose that is satisfactory to
the Debtors or the Administrative Trustee, and, in the event that the Debtors or
the Administrative Trustee so requests, furnishes a bond in form and substance
(including, without limitation, with respect to amount) reasonably satisfactory
to the Debtors or the Administrative Trustee, as the case may be. Any such
holder that fails to surrender or cause to be surrendered such Instrument, or to
execute and deliver an affidavit of loss and indemnity with respect thereto in a
form customarily utilized for such purposes that is satisfactory to the Debtors
or the Administrative Trustee, as applicable, and, in the event that the Debtors
or the Administrative Trustee so request, fails to furnish a bond in form and
substance (including, without limitation, with respect to amount) reasonably
satisfactory to the Debtors or the Administrative Trustee within one hundred and
twenty (120) days after the later of (i) the Effective Date and (ii) the date
that is ten (10) Business Days after such Claim becomes an Allowed Claim, shall
be deemed to have forfeited all Claims against the Debtors or the Administrative
Trust represented by such Instrument, and all property in respect of such
forfeited distribution, including (if applicable) interest accrued thereon,
shall revert to the Administrative Trust for distribution to other Creditors
holding Allowed Claims, in accordance with Article VI of this Plan. As soon as
practicable after the surrender of such Instruments or the delivery of such
affidavit of loss and indemnity (and, if requested, the furnishing of a bond) as
provided in this Section 7.4(c), the Disbursing Agent shall make or shall cause
to be made the distributions provided pursuant to Article IV of this Plan.
(d) Each Creditor which is to receive a distribution under this Plan
in full satisfaction of a Secured Claim shall not receive such distribution
until such Creditor executes and delivers any documents necessary to release all
Liens arising under any applicable security agreement or non-bankruptcy law (in
recordable form if appropriate) in connection with such Secured Claim and such
other documents as the Debtors or the Administrative Trustee may reasonably
request.
(e) As of the Effective Date, (i) the Senior Secured Note Financing
Documents and the Senior Notes Indenture and the Subordinated Debentures
Indenture shall be terminated and deemed null and void and of no further force
and effect, except as otherwise provided herein, each of the Debtors, on the one
hand, and the Trustees, on the other hand, shall be released from any and all
obligations under the applicable indenture or security agreement except with
respect to the payments required to be made to each such Trustee in respect of
its Claims, or with respect to such other rights of such Trustee that, pursuant
to the terms of such indenture, survive the termination of such indenture.
Termination of the indentures shall not impair the rights of the holders of such
Claims to receive distributions on account of such Claims pursuant to this Plan,
and shall not impair the rights of any of the Trustees to enforce its charging
lien, created in law or pursuant to its indenture, against property that would
otherwise be distributed to the holders of such Claims.
7.5 REGISTRATION EXEMPTION FOR ANCHOR RESOLUTION CORP. COMMON STOCK.
The Confirmation Order shall provide that the distribution of New Anchor
Securities (including the New Anchor Common Stock into which the New Anchor
Preferred Stock is convertible) to the holders of Allowed Claims shall be exempt
from any and all federal, state and local laws requiring the registration of
such security, to the extent provided by Section 1145 of the Bankruptcy Code.
7.6 REVESTING OF ASSETS. The property of the Estate shall revest in
the Administrative Trust on the Effective Date. Except as otherwise expressly
provided in the Administrative Trust and this Plan, all assets and property of
the Debtors shall be revested in the Administrative Trust free and clear of all
Liens, Claims and Interests of holders of Claims and Interests, and all such
Liens, Claims and Interest, shall be extinguished.
7.7 THE ADMINISTRATIVE TRUST
7.7.1 CREATION OF THE ADMINISTRATIVE TRUST. On the Effective Date, the
Administrative Trust shall be created and established pursuant to the
Administrative Trust Agreement.
7.7.2 TRANSFERS TO THE ADMINISTRATIVE TRUST. On the Effective Date,
the Remaining Assets shall be transferred to the Administrative Trust free and
clear of all Claims and Liens and contractually imposed restrictions, except for
any Lien provided for in the Administrative Trust Agreement and this Plan.
7.7.3 THE ADMINISTRATIVE TRUSTEE. From and after the Effective Date, a
Person to be designated by the Debtors with the consent of the Committee prior
to the Confirmation Date shall serve as the Administrative Trustee pursuant to
the Administrative Trust Agreement and this Plan, until death, resignation or
discharge and the appointment of a successor Administrative Trustee in
accordance with the Administrative Trust Agreement. The Administrative Trustee
shall be the exclusive trustee of the Debtors' Estate under Title 11 for
purposes of 31 U.S.C. Section 3713(b) and 26 U.S.C. Section 6012(b)(3).
7.7.4 RESPONSIBILITIES. The responsibilities of the Administrative
Trustee under the Administrative Trust Agreement and this Plan shall include:
(i) the receipt of the assets of the Debtors' Estate on behalf of and for the
benefit of the holders of Claims under this Plan; maintaining the Operating
Account, the Distribution Reserve and the Escrow Account; investing the cash
held in the Distribution Reserve and the Escrow Account in accordance with
Section 6.3.9 of this Plan; pursuing objections to, estimations and settlements
of Claims; prosecuting retained causes of action including Avoidance Actions and
claims arising under the Asset Purchase Agreement; calculating and implementing
all distributions to be made under this Plan to Creditors holding Allowed
Claims; marketing, selling, leasing or otherwise disposing of or realizing the
value of all the Remaining Assets; filing all required tax returns and paying
taxes and all other obligations on behalf of the Administrative Trust from funds
in the Distribution Reserve and the Escrow Account; periodic reporting to the
Committee of the status of the Distribution Reserve, the Escrow Account and
Claims resolution process until such time as (a) this Plan is substantially
consummated and (b) the Claims resolution process is complete; and such other
responsibilities as may be vested in the Administrative Trustee pursuant to this
Plan, the Administrative Trust Agreement or Bankruptcy Court order or as may be
necessary and proper to carry out the provisions of this Plan.
7.7.5 POWERS. The powers of the Administrative Trustee shall, without
Bankruptcy Court approval in each of the following cases, include the power to
invest funds in, and withdraw, make distributions and pay taxes and other
obligations owed by the Debtors or incurred by the Administrative Trustee in
connection with the wind-down of the Estate, from the Distribution Reserve,
including from the Operating Account, and the Escrow Account in accordance with
this Plan; the power to engage employees and professional persons to assist the
Administrative Trustee with respect to its responsibilities; the power to retain
the services of experienced auctioneers, brokers, and/or marketing agents to
assist and/or advise in the sale or other disposition of the Remaining Assets;
the authority to pay the fees and expenses of the professional persons, agents
and employees engaged by the Administrative Trustee and to pay all other
expenses for winding down the affairs of the Debtors and the Administrative
Trust in each case in accordance with the Wind-down Budget, or as otherwise
agreed to by the Committee or determined by the Bankruptcy Court; the power to
dispose of, and deliver title to others of, or otherwise realize the value of
all the Remaining Assets; the power to compromise and settle claims and causes
of actions; the authority to act on behalf of the Debtors in all adversary
proceedings and contested matters (including, without limitation, Avoidance
Actions) pending in the Court and in all actions and proceedings pending
elsewhere, and, with the consent of the Committee, to settle, retain, enforce,
dispute or adjust any Claim or Interest and otherwise pursue actions involving
assets of the Debtors that could arise or be asserted at any time under the
Bankruptcy Code, unless otherwise waived or relinquished in this Plan; the power
to file a motion requesting that the Bankruptcy Court convert the Chapter 11
Cases to cases under chapter 7 of the Bankruptcy Code, subject to the rights of
all parties in interest to oppose such motion; and such other powers as may be
vested in or assumed by the Administrative Trustee pursuant to this Plan, the
Administrative Trust Agreement or Bankruptcy Court order or as may be necessary
and proper to carry out the provisions of this Plan. The Administrative Trustee
shall exercise such powers in accordance with the provisions of this Plan and
the Administrative Trust Agreement. The Administrative Trustee shall consult
with the Committee concerning any matter involving an amount equal to or
exceeding $100,000 and shall provide the Committee with such financial and
accounting information as the Committee may reasonably request.
7.7.6 COMPENSATION. In addition to reimbursement for the actual
out-of-pocket expenses incurred, the Administrative Trustee, and any employees
or professionals engaged or retained by the Administrative Trustee, shall be
entitled to reasonable compensation for services rendered in connection with the
preparation and implementation of this Plan. Subject to the terms and provisions
of the Wind-down Budget, with respect to the Administrative Trustee, the terms
of his compensation shall be as set forth in the Administrative Trust Agreement.
Subject to the terms and provisions of the Wind-down Budget, with respect to any
employees engaged and professionals retained, such compensation shall be in an
amount and on such terms as may be agreed to by the Administrative Trustee and
such employees or professionals with the consent of the Committee, including in
accordance with the Employment Agreements. Any dispute with respect to such
compensation shall be resolved by agreement among the parties or, if the parties
are unable to agree, as determined by the Bankruptcy Court.
7.7.7 TERMINATION. The duties, responsibilities and powers of the
Administrative Trustee shall terminate after the cash, New Anchor Securities and
other Remaining Assets have been distributed to the Creditors on the Final
Distribution Date in accordance with this Plan.
7.7.8 TAX TREATMENT OF THE ADMINISTRATIVE TRUST. It is intended that
the Administrative Trust will be treated as a "liquidating trust" within the
meaning of Treasury Regulations Section 301.7701-4(d).
7.8 REMAINING ASSETS. Transfers of the Remaining Assets on the
Effective Date shall be made pursuant to the terms of this Plan and,
accordingly, to the fullest extent permitted by law, shall be exempt from all
stamp taxes and similar taxes within the meaning of Section 1146(c) of the
Bankruptcy Code.
ARTICLE VIII
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
8.1 ASSUMPTION/REJECTION. Effective on and as of the Effective Date,
all executory contracts and unexpired leases that exist between the Debtors and
any Person which have not previously been assumed and assigned or rejected and
are not specified in the list of executory contracts and unexpired leases to be
assumed pursuant to this Plan attached to this Plan as Exhibit 4 are hereby
specifically rejected.
8.2 CLAIMS FOR REJECTION DAMAGES. Proofs of claims for damages
allegedly arising from the rejection pursuant to this Plan or the Confirmation
Order of any executory contract or any unexpired lease to which such Person is a
party must be filed with the Bankruptcy Court no later than twenty-five (25)
days after entry of the Confirmation Order. Any such proofs of claims not filed
within such time shall be forever barred from assertion against the Debtors, the
Administrative Trust and the Remaining Assets.
Objections to any such proof of claim shall be filed not later than
sixty (60) days after such proof of claim is filed, and the Bankruptcy Court
shall determine any such objection. Unsecured claims arising out of the
rejection of executory contracts and unexpired leases shall be Class 9 Other
Unsecured Claims entitled to treatment pursuant to Section 4.10 of this Plan.
ARTICLE IX
CONDITIONS PRECEDENT
9.1 CONDITIONS PRECEDENT TO CONFIRMATION. This Plan shall not be
confirmed unless and until the following conditions have occurred or been waived
by both the Debtors and the Committee:
(a) The Bankruptcy Court shall have entered a Final Order
in form and substance satisfactory to the Debtors and
the Committee, approving the substantive
consolidation of the Debtors unless such
consolidation is authorized by the Confirmation
Order;
(b) The form and substance of the Confirmation Order
shall be satisfactory to the Debtors and the
Committee; and
(c) The Bankruptcy Court shall have approved the
identity and appointment of the Administrative
Trustee and the form of the Administrative Trust
Agreement and shall have determined that the
Administrative Trustee is duly authorized to
take the action contemplated to be taken pursuant
to the Plan and the Administrative Trust
Agreement effective on the Effective Date,
unless such approval and appointment are
contained in the Confirmation Order.
(d) The Bankruptcy Court shall have entered a Final
Order in form and substance satisfactory to the
Debtors, the Administrative Trustee and the
Committee, decreeing that on the Effective Date
the transfers of assets by the Debtors
contemplated by the Plan (i) are or will be
legal, valid and effective transfers of
property, (ii) vest or will vest in the
transferee good title to such property free and
clear of all Claims and Liens, except those
provided for in the Plan, Confirmation Order and
Administrative Trust Agreement, (iii) do not or
will not constitute fraudulent conveyances under
any applicable law and (iv) do not and will not,
except as contemplated by the Administrative
Trust Agreement, subject the Administrative
Trust, the Administrative Trustee, or the
property so transferred to any liability by
reason of such transfer under applicable law or
any theory of law including, without limitation,
any theory of successor or transferee liability.
9.2 CONDITIONS PRECEDENT TO EFFECTIVE DATE. The Effective Date shall
occur after the following conditions have been satisfied or waived by the
Debtors and the Committee:
(a) The Confirmation Order and other orders specified in
Section 9.1 of this Plan shall either have become
Final Orders or such orders shall not have
been stayed, enjoined or restrained by order of
a court of competent jurisdiction;
(b) The Administrative Trustee shall have executed
the Administrative Trust Agreement evidencing
the Administrative Trustee's agreement to serve
in that capacity;
(c) The Distribution Reserve shall have been fully funded
in accordance with the Plan and any applicable orders
of the Bankruptcy Court relating thereto; and
(d) The merger(s)/dissolution(s) of corporate entities
described in Section 7.2 of this Plan and the
transfers and revesting of assets to the
Administrative Trust pursuant to Sections 7.6 and
7.8.2 of this Plan shall have occurred.
(e) The Confirmation Order shall provide that the
distribution of New Anchor Securities provided herein
shall be exempt from registration to the extent
provided by Section 1145 of the
Bankruptcy Code.
(f) The Confirmation Order shall provide that the
subordination of Claims effected by this Plan is
valid and enforceable, and shall approve the
subordination provided for in this Plan.
ARTICLE X
EFFECTS OF PLAN CONFIRMATION
10.1 EXTENT OF RELEASE. Except for the provisions of this Article X,
nothing contained in this Plan shall affect any right of any Person to assert or
pursue any claim or cause of action against any entity other than the Debtors.
10.2 RELEASE BY DEBTORS. On the Effective Date, each of the Debtors
and each of their shareholders derivatively is hereby deemed to have forever
waived and released unconditionally (a) each of the Debtors' present and former
directors employed during the course of the Chapter 11 Cases, officers,
employees, agents, consultants, advisors, attorneys, accountants and other
representatives and their respective successors and assigns, and the holders of
Interests, and (b) the Committee and, solely in their capacity as members or
representatives of the Committee, each member, consultant, advisor, attorney,
accountant or other representative of the Committee (the Persons specified in
clauses (a) and (b) referred to collectively as the "RELEASEES"), from any and
all claims, obligations, suits, judgments, damages, rights, causes of action and
liabilities whatsoever, whether known or unknown, foreseen or unforeseen,
existing or hereafter arising, in law, equity or otherwise, based in whole or in
part upon any act or omission by, or any transaction, agreement, event or other
occurrence in any way relating to the Debtors, any of the Releasees, or any of
their respective affiliates (as such term is defined in Section 101(2) of the
Bankruptcy Code), taking place on or prior to the Effective Date in any way
relating to the Chapter 11 Cases or this Plan; PROVIDED, HOWEVER, that
notwithstanding anything to the contrary herein, with respect to holders of
Interests, including Vitro, S.A. and any of its subsidiaries, affiliates,
officers, employees or agents, this release shall not constitute a release of
any defenses, offsets or counterclaims of any kind or nature whatsoever which
the Debtors or the Committee may have or assert in respect of any Claim which
Vitro, S.A. and/or such other holders of Interests may assert in the Chapter 11
Cases. Persons deemed to have released claims pursuant to this Section 10.2
shall be forever precluded from asserting whether directly, derivatively or
otherwise, any such claims against any Releasee.
10.3 RELEASE BY CREDITORS AND HOLDERS OF INTERESTS. On the Effective
Date, each holder (or representative thereof) of a Claim or Interest (a) who has
accepted this Plan, (b) whose Claim or Interest is in a class that has accepted
or is deemed to have accepted this Plan pursuant to Section 1126 of the
Bankruptcy Code or (c) who may be entitled to receive a distribution of property
pursuant to this Plan, shall be deemed to have forever waived and released
unconditionally the Debtors, and the Releasees from, any and all rights, claims,
causes of action, obligations, suits, judgments, damages and liabilities
whatsoever which any such holder may be entitled to assert, whether known or
unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity
or otherwise, based in whole or in part upon any act or omission, transaction,
agreement, event or other occurrence in any way relating to the Debtors, the
creation of the Administrative Trust, any of the Releasees, or any of their
respective affiliates (as such term is defined in Section 101(2) of the
Bankruptcy Code), the Chapter 11 Cases or this Plan; PROVIDED, HOWEVER, that
notwithstanding anything to the contrary herein, with respect to holders of
Interests, including Vitro, S.A. and any of its subsidiaries, affiliates,
officers, employees or agents, this release shall not constitute a release of
any defenses, offsets or counterclaims of any kind or nature whatsoever which
the Debtors or the Committee may have or assert in respect of any Claim which
Vitro, S.A. and/or such other holders of Interests may assert in the Chapter 11
Cases. Persons deemed to have released claims pursuant to this Section 10.3
shall be forever precluded from asserting any such claims against any Releasee.
10.4 INJUNCTION. Except as otherwise expressly provided herein, in the
Administrative Trust Agreement or the Confirmation Order, the entry of the
Confirmation Order shall, provided that the Effective Date occurs, permanently
enjoin all Persons that have held, currently hold or may hold a Claim or other
debt or liability that is subject to this Plan or who have held, currently hold
or may hold an Interest terminated pursuant to this Plan from taking any of the
following actions in respect of such Claim, debt or liability or such terminated
Interest: (a) commencing, conducting or continuing in any manner, directly or
indirectly, any suit, action or other proceeding of any kind against the
Debtors, the Administrative Trust, the Releasees or the Remaining Assets; (b)
enforcing, levying, attaching, collecting or otherwise recovering in any manner
or by any means, whether directly or indirectly, any judgment, award, decree or
order against the Debtors, the Administrative Trust, the Releasees or the
Remaining Assets; (c) creating, perfecting or enforcing in any manner directly
or indirectly, any Lien or encumbrance of any kind against the Debtors, the
Administrative Trust, the Releasees or the Remaining Assets; (d) asserting any
setoff, right of subrogation or recoupment of any kind, directly or indirectly,
against any debt, liability or obligation due to the Debtors, the Administrative
Trust, the Releasees, or the Remaining Assets; and (e) proceeding in any manner
in any place whatsoever that does not conform to or comply with or is
inconsistent with the provisions of this Plan; PROVIDED, HOWEVER, that
notwithstanding anything to the contrary herein, with respect to the holders of
Interests, including Vitro, S.A. and any of its subsidiaries, affiliates,
officers, employees or agents, if any such Person asserts a Claim in the Chapter
11 Cases, this injunction shall not apply to any defenses, offsets or
counterclaims of any kind or nature whatsoever which the Debtors or the
Committee may have or assert in respect of any such Claim which Vitro, S.A.
and/or such other holders of Interests assert in the Chapter 11 Cases.
10.5 NO LIABILITY FOR SOLICITATION OR PARTICIPATION. As specified in
Section 1125(e) of the Bankruptcy Code, Persons that solicit acceptances or
rejections of this Plan and/or that participate in the offer, issuance, sale, or
purchase of securities offered or sold under this Plan, in good faith and in
compliance with the applicable provisions of the Bankruptcy Code, are not
liable, on account of such solicitation or participation, for violation of any
applicable law, rule, or regulation governing the solicitation of acceptances or
rejections of this Plan or the offer, issuance, sale, or purchase of securities.
10.6 LIMITATION OF LIABILITY. None of the Debtors, holders of
Interests, the Committee and solely in their capacity as members of the
Committee, its members, the Administrative Trustee, any of their respective
affiliates or any of their respective officers, directors, employees, members or
agents, or any Professional employed by any of them (collectively, the
"EXCULPATED PERSONS"), shall have or incur any liability to any Person for any
act taken or omission made in good faith in connection with or in any way
related to negotiating, formulating, implementing, confirming or consummating
this Plan, the Disclosure Statement, the Asset Purchase Agreement, the
Administrative Trust Agreement, or any contract, instrument, release or other
agreement or document created in connection with or related to this Plan or the
administration of the Chapter 11 Cases. The Exculpated Persons shall have no
liability to any Creditor or holder of any Interest for actions taken under this
Plan, in connection therewith or with respect thereto, in good faith, including,
without limitation, failure to obtain confirmation of this Plan or to satisfy
any condition or conditions, or refusal to waive any condition or conditions
precedent to confirmation or to the occurrence of the Effective Date. Further,
the Exculpated Persons will not have or incur any liability to any holder of a
Claim, holder of an Interest, or party- in-interest herein or any other Person
for any act or omission in connection with or arising out of their
administration of this Plan or the property to be distributed under this Plan or
the operations or activities of the Administrative Trust, except for gross
negligence or willful misconduct as finally determined by the Bankruptcy Court,
and the Exculpated Persons are entitled to rely on, and act or refrain from
acting on, all information provided by other Exculpated Persons without any duty
to investigate the veracity or accuracy of such information.
10.7 INDEMNIFICATION. The Administrative Trust will indemnify, hold
harmless and reimburse (a) the Administrative Trustee and each of its
consultants, advisors, attorneys, accountants or other representatives and (b)
the Committee and, solely in their capacity as members or representatives of the
Committee, each member, consultant, advisor, attorney, accountant or other
representative of the Committee from and against any and all losses, claims,
causes of action, damages, fees, expenses, liabilities and actions (i) for any
act taken or omission made in good faith in connection with or in any way
related to negotiating, formulating, implementing, confirming or consummating
this Plan, the Disclosure Statement, the Asset Purchase Agreement, the
Administrative Trust Agreement or any contract, instrument, release or other
agreement or document created in connection with this Plan, the administration
of the Chapter 11 Cases or (ii) for any act or omission in connection with or
arising out of the administration of this Plan or the property to be distributed
under this Plan or the operations or activities of the Administrative Trust,
except for gross negligence or willful misconduct as finally determined by the
Bankruptcy Court. All rights of the Persons indemnified pursuant hereto shall
survive confirmation of this Plan.
10.8 OTHER DOCUMENTS AND ACTIONS. The Debtors, and the Administrative
Trustee may execute such documents and take such other action as is necessary to
effectuate the transactions provided for in this Plan.
10.9 TERM OF INJUNCTIONS OR STAYS. Unless otherwise provided, all
injunctions or stays provided for in the Chapter 11 Cases pursuant to Section
105 or 362 of the Bankruptcy Code or otherwise and in effect on the Confirmation
Date shall remain in full force and effect until the Effective Date.
ARTICLE XI
MODIFICATION, REVOCATION OR WITHDRAWAL OF THIS PLAN
11.1 MODIFICATION OF THIS PLAN. The Debtors, with the consent of the
Committee, may alter, amend or modify this Plan under Section 1127 of the
Bankruptcy Code or as otherwise permitted at any time prior to the Confirmation
Date. After the Confirmation Date and prior to the substantial consummation of
this Plan, the Debtors and any party in interest may, so long as the treatment
of holders of Claims or Interests under this Plan is not adversely affected,
institute proceedings in the Bankruptcy Court to remedy any defect or omission
or to reconcile any inconsistencies in this Plan, the Disclosure Statement or
the Confirmation Order and any other matters as may be necessary to carry out
the purposes and effects of this Plan; PROVIDED, HOWEVER, prior notice of such
proceedings shall be served in accordance with Bankruptcy Rule 2002.
11.2 REVOCATION OR WITHDRAWAL OF THIS PLAN.
(a) The Debtors reserve the right, with the consent of the Committee,
to revoke or withdraw this Plan at any time prior to the Confirmation Date.
(b) If the Debtors revoke or withdraw this Plan prior to the
Confirmation Date in accordance with Section 12.2(a) hereof, then this Plan
shall be deemed null and void. In such event, nothing contained herein shall be
deemed to constitute a waiver or release of any claims by or against the Debtors
or any other Person or to prejudice in any manner the rights of the Debtors or
any Person in any further proceedings involving the Debtors.
ARTICLE XII
RETENTION OF JURISDICTION
12.1 JURISDICTION OF BANKRUPTCY COURT.
(a) Following the Effective Date, and notwithstanding the entry of the
Confirmation Order, the Bankruptcy Court will retain exclusive jurisdiction of
all matters arising out of, or related to, the Chapter 11 Cases for the
following purposes:
(i) To hear and determine any and all pending
applications for the rejection, assumption or assignment of any
executory contract or unexpired lease, any objection to any Claim
resulting therefrom, and the allowance, reduction, expungement or
compromise of any Claim resulting therefrom;
(ii) To hear and determine motions,
applications, adversary proceedings, applications, contested matters
and other litigated matters pending on, filed or commenced after the
Effective Date;
(iii) To ensure that distributions to holders
of Allowed Claims are accomplished as provided herein;
(iv) To hear and determine objections to
(whether filed before or after the Effective Date) or requests for
estimation of Claims and Interests, to allow, disallow and/or estimate
any Claim or Disputed Claim in whole or in part and to hear and
determine any other issue presented hereby or arising hereunder;
(v) To enter and implement such orders as may
be appropriate in the event the Confirmation Order is for
any reason stayed, revoked, modified or vacated;
(vi) To construe and to take any action to
enforce this Plan or the Confirmation Order and to issue such orders as
may be necessary for the implementation, execution and consummation of
this Plan;
(vii) To hear and determine any applications
to modify this Plan, to cure any defect or omission or to reconcile any
inconsistency in this Plan, the Disclosure Statement or in any order of
the Bankruptcy Court, including, without limitation, the Confirmation
Order;
(viii) To hear and determine all applications
for compensation and reimbursement of expenses of Professionals
under Sections 330, 331 and 503(b) of the Bankruptcy Code;
(ix) To hear and determine all disputes or
controversies arising under the Asset Purchase Agreement, or in
connection with the interpretation, implementation or enforcement of
rights under that Agreement;
(x) To hear and determine disputes arising in
connection with the interpretation, implementation or enforcement
of this Plan or the Administrative Trust Agreement;
(xi) To hear and determine other issues
presented or arising under this Plan, including disputes among holders
and arising under agreements, documents or instruments executed in
connection with this Plan;
(xii) To construe, to take any action and
issue such orders, prior to and following the Confirmation Date, as may
be necessary for the enforcement, implementation, execution and
consummation of this Plan or for the maintenance of the integrity of
this Plan following consummation;
(xiii) To determine such other matters and for
such other purposes as may be provided in the Confirmation Order;
(xiv) To hear and determine any other matters
related hereto and not inconsistent with chapter 11 of the
Bankruptcy Code; and
(xv) To enter a final decree closing the
Chapter 11 Cases or converting them into chapter 7 cases.
(b) Following the Effective Date, the Bankruptcy Court will retain
non-exclusive jurisdiction of the Chapter 11 Cases for the following purposes:
(i) To recover all assets of the Debtors and
property of the Estate, wherever located;
(ii) To hear and determine any motions or
contested matters involving taxes, tax refunds, tax attributes and tax
benefits and similar or related matters with respect to the Debtors or
the Estate arising prior to the Effective Date or relating to the
period of administration of the Chapter 11 Cases, including, without
limitation, matters concerning federal, state and local taxes in
accordance with Sections 346, 505 and 1146 of the Bankruptcy Code; and
(iii) To hear any other matter not
inconsistent with the Bankruptcy Code.
12.2 FAILURE OF BANKRUPTCY COURT TO EXERCISE JURISDICTION. If the
Bankruptcy Court abstains from exercising or declines to exercise jurisdiction
over any matter arising under, arising in or related to the Chapter 11 Cases,
including with respect to the matters set forth above in Sections 12.1(a) and
(b) hereof, this Article shall not prohibit or limit the exercise of
jurisdiction by any other court having competent jurisdiction with respect to
such subject matter.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.1 PAYMENT OF STATUTORY FEES. All fees payable pursuant to Section
1930 of title 28 of the United States Code, as determined by the Bankruptcy
Court at the hearing pursuant to Section 1128 of the Bankruptcy Code, shall be
paid on or before the Effective Date.
13.2 AMOUNTS OF AND OBJECTIONS TO CLAIMS. All references to Claims and
amounts of Claims refer to the amount of the Claim Allowed by operation of law,
Final Order of the Bankruptcy Court or this Plan; PROVIDED, HOWEVER, that Claims
which have been objected to prior to the Voting Record Date and which have not
been Allowed or disallowed prior to the Confirmation Hearing shall be voted and
counted only to the extent and in such amount determined by the Bankruptcy Court
upon a request for such determination made by a holder of the Claim or any other
party. The Debtors and other interested parties reserve the right, both before
and after confirmation, to object to Claims so as to have the Court determine
the Allowed Amount of such Claim to be paid under this Plan. The Debtors and any
other objector shall serve a copy of each such objection upon the holder of the
Claim or Interest to which it pertains.
13.3 NO INTEREST. No interest, penalty or late charge is to be allowed
on any Claim or Interest subsequent to the Petition Date except as expressly
stated in this Plan, or Allowed by a Final Order of the Bankruptcy Court.
13.4 NO ATTORNEYS' FEES. No attorneys' fees will be paid by any Debtor
with respect to any Claim or Interest except as expressly specified herein or
Allowed by a Final Order of the Bankruptcy Court.
13.5 RIGHTS OF ACTION. Except as otherwise provided herein, any and
all rights and causes of action accruing to any of the Debtors, including the
Avoidance Actions and all rights and causes of action under the Asset Purchase
Agreement, shall become assets of the Administrative Trust. The Administrative
Trustee may pursue those rights and causes of action, as appropriate, in
accordance with what is in the best interests, and for the benefit of, the
Debtors and the Estate.
13.6 COMMITTEE. The Committee shall continue after the Effective Date.
The Administrative Trustee shall pay the reasonable fees and expenses of the
Committee and its professionals without further order of the Court. The
appointment of the Committee and its professionals shall terminate on the
earlier of the following dates: (i) when all or substantially all of the amounts
of Available Cash and Distribution Reserve have been distributed and all or
substantially all the Remaining Assets have been sold, disposed of, collected,
or value otherwise realized or (ii) the date that the Committee or its counsel
indicate in writing that the Committee is being terminated. Each member of the
Committee and each of its professionals has the right to resign at any time upon
five (5) days' notice to the Administrative Trustee, and, after such date, all
obligations and responsibilities of the members and professionals for the
Committee shall terminate; PROVIDED, HOWEVER, that the indemnification
obligation of the Administrative Trust shall continue to survive after such
resignation.
13.7 NO ADMISSIONS. Notwithstanding anything herein to the contrary,
nothing contained in this Plan (i) shall be deemed an admission by the Debtors
with respect to any matter set forth herein, including, without limitation,
liability on any Claim or Interest or the propriety of any classification of any
Claim or Interest, or (ii) constitutes an acknowledgment by the Debtors that
they have liability for liabilities that were assumed by Consumers and
Owens-Brockway pursuant to the Asset Purchase Agreement.
13.8 CONSTRUCTION. The rules of construction set forth in Bankruptcy
Code Section 102 shall apply to the construction of this Plan.
13.9 TIME. In computing any period of time prescribed or allowed by
this Plan, unless otherwise set forth herein, the provisions of Bankruptcy Rule
9006 shall apply.
13.10 GOVERNING LAW. Except to the extent the Bankruptcy Code, the
Bankruptcy Rules or other federal laws are applicable, the laws of the State of
Delaware shall govern the construction, implementation and enforcement of this
Plan and all rights and obligations arising under this Plan, without giving
effect to the principles of conflicts.
13.11 SUCCESSORS AND ASSIGNS. The rights, benefits and obligations of
any Person named or referred to in this Plan will be binding upon, and will
inure to the benefit of, the heir, executor, administrator, representative,
successor or assign of such Person.
13.12 SEVERABILITY. Should the Bankruptcy Court determine, prior to
the Confirmation Date, that any provision of this Plan is either illegal on its
face or illegal as applied to any Claim or Interest, such provision shall be
unenforceable as to all holders of Claims or Interests or to the specific holder
of such Claim or Interest, as the case may be, as to which the provision is
illegal. Such a determination of unenforceability shall in no way limit or
affect the enforceability and operative effect of any other provision of this
Plan.
13.13 NOTICES. All notices, requests, elections or demands in
connection with this Plan shall be in writing and shall be mailed by registered
or certified mail, return receipt requested, to:
Anchor Resolution Corp.
2701 N. Rocky Point Drive
Suite 1120
Tampa, Florida 33607
Attention: Mr. Robert D. McGrew
Chief Executive Officer
With copies to:
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, New York 10038
Attention: Robin E. Keller, Esq.
and
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Chaim J. Fortgang, Esq.
Scott K. Charles, Esq.
13.14 WITHHOLDING AND REPORTING. In connection with this Plan and all
instruments issued in connection therewith and distributions thereon, the Debtor
shall comply with all withholding and reporting requirements imposed by any
federal, state, local or foreign taxing authority and all distributions
hereunder shall, to the extent applicable, be subject to any such withholding
and reporting requirements.
<PAGE>
CONFIRMATION REQUEST
The Debtors hereby request confirmation of this Plan pursuant to
Section 1129(a) or, in the event that this Plan is not accepted by each of those
Classes of Claims and Interests entitled to vote, Section 1129(b) of the
Bankruptcy Code.
Dated: Tampa, Florida
May 20, 1997
Respectfully submitted,
ANCHOR RESOLUTION CORP.,
Debtor and Debtor-in-Possession
By /s/ Robert D. McGrew 5/20/97
President & CEO
ANCHOR RECYCLING CORP.,
Debtor and Debtor-in-Possession
By /s/ Robert D. McGrew 5/20/972
President & CEO
<PAGE>
Exhibit 1: Administrative Trust Agreement
<PAGE>
ANCHOR LIQUIDATING
ADMINISTRATIVE TRUST AGREEMENT
DATED AS OF ________ __, 1997
Established by
ANCHOR RESOLUTION CORP.
AND
ANCHOR RECYCLING CORPORATION
and
Accepted by
-----------------
as
Administrative Trustee
<PAGE>
TABLE OF CONTENTS
PAGE NUMBER
I. DEFINITIONS........................................................2
1.1 General.........................................................2
1.2 Certain Definitions.............................................2
II. CREATION OF THE TRUST.............................................5
2.1 Purpose of the Trust............................................5
2.2 Appointment and Acceptance of Administrative Trustee............5
2.3 Name of the Trust...............................................5
2.4 Transfer of Remaining Assets to the Trust......................5
2.5 Causes of Action................................................6
2.6 Exemption from Registration.....................................6
2.7 Termination of The Trust........................................6
III. RIGHTS, POWERS AND DUTIES OF ADMINISTRATIVE TRUSTEE..............7
3.1 Declaration Acknowledged in Beneficial Interest.................7
3.2 Responsibilities................................................7
3.3 Powers..........................................................7
3.4 Management of Trust.............................................8
3.5 Recovery on Causes of Action....................................9
3.6 Distribution Reserve............................................9
3.7 Distribution of Available Cash and New Anchor Securities........9
3.8 Disposition of Assets to Debtors and Other Interested
Parties.............................................................9
3.9 Assets Distributable to Unlocated Beneficiaries................10
3.10 Investments...................................................10
3.11 Selection of Agents...........................................10
3.12 Records and Reporting.........................................10
3.12.1 Records..................................................10
3.12.2 Periodic Reports.........................................10
3.12.3 Tax Information..........................................11
3.12.4 Additional Reports and Filings...........................11
IV. ADMINISTRATIVE TRUSTEE...........................................11
4.1 The Administrative Trustee.....................................11
4.1.1 Independent Administrative Trustee........................11
4.1.2 Administrative Trustee's Compensation and Reimbursement...12
4.1.3 Resignation...............................................12
4.1.4 Removal...................................................12
4.1.5 Appointment of Successor Administrative Trustee...........12
4.1.6 Trust Continuance.........................................12
4.2 Reliance by Administrative Trustee.............................13
4.3 Administrative Trustee's Standard of Care; Exculpation.........13
4.4 Indemnification................................................13
4.5 Insurance......................................................14
4.6 No Liability for Acts of Predecessors..........................14
4.7 No Implied Obligations.........................................14
4.8 No Personal Obligation for Trust Liabilities...................14
4.9 Bond Requirement; Exercise of Powers...........................14
4.10 Effect of Trust on Third Parties..............................14
4.11 Instructions and Exculpatory Provisions.......................14
V. MISCELLANEOUS.....................................................15
5.1 Applicable Law.................................................15
5.2 Relationship Created...........................................15
5.3 Interpretation.................................................16
5.4 Partial Invalidity.............................................16
5.5 Entire Agreement...............................................16
5.6 Counterparts...................................................16
5.7 Notices........................................................16
5.8 Effective Date.................................................17
5.9 Tax Provisions.................................................17
5.9.1 Income Tax Status.........................................17
5.9.2 Tax Returns and Reports...................................17
5.9.3 Withholding...............................................17
5.9.4 Tax Identification Numbers................................18
5.9.5 Tax Year..................................................18
5.10 Amendment of Trust............................................18
VI. RETENTION OF JURISDICTION........................................18
6.1 Retention Of Jurisdiction......................................18
<PAGE>
ANCHOR LIQUIDATING
ADMINISTRATIVE TRUST AGREEMENT
This Anchor Liquidating Administrative Trust Agreement (the
"Agreement"), dated as of __________ __, 1997, is established by Anchor
Resolution Corp. (formerly known as Anchor Glass Container Corporation) ("Old
Anchor") and Anchor Recycling Corporation (collectively, the "Debtors") pursuant
to the Debtors' Joint Chapter 11 Liquidating Plan of Reorganization (the "Plan")
in the Chapter 11 case styled In re Anchor Resolution Corp., (formerly known as
Anchor Glass Container Corporation) ("Old Anchor") and Anchor Recycling
Corporation ("Recycling"), Case No. 96-1434 (PJW) and Case No. 96-1516 (PJW)
(Jointly Administered), in the United States Bankruptcy Court for the District
of Delaware (the "Court"), and is accepted by the Administrative Trustee (as
defined in Section 1.2 hereof) for the benefit of the Trust Beneficiaries (as
defined in Section 1.2 hereof).
WHEREAS, on September 13, 1996, Old Anchor filed its voluntary
petition pursuant to Chapter 11 of the Bankruptcy Code with the Court, and on
September 30, 1996, Recycling filed its voluntary petition pursuant to Chapter
11 of the Bankruptcy Code with the Court;
WHEREAS, on February 5, 1997, Old Anchor consummated the sale of
substantially all of its assets and business (the "Asset Sale") to Consumers
Packaging Inc., a corporation organized under the federal laws of Canada and now
known as Anchor Glass Container Corporation ("New Anchor") and its assignee, and
Owens-Brockway Glass Container Inc. ("Owens") pursuant to the Asset Purchase
Agreement (as defined in Section 1.2 hereof) for consideration consisting of
cash and shares of New Anchor Common Stock (as defined in Section 1.2 hereof)
and New Anchor Preferred Stock (as defined in Section 1.2 hereof) (collectively,
the "New Anchor Securities");
WHEREAS, the Court confirmed the Plan by entering the Confirmation
Order (as defined in Section 1.2 hereof) on ________ __, 1997;
WHEREAS, the Plan provides for the creation of the Trust (as defined
in Section 1.2 hereof) and for the transfer of the Remaining Assets (as defined
in Section 1.2 hereof) to the Trust for the purposes described herein and in the
Plan;
WHEREAS, the Trust is intended to be treated as a liquidating trust
pursuant to Treasury Regulations Section 301.7701-4(d), and as a grantor trust
subject to the provisions of Subchapter J, Subpart E of the Internal Revenue
Code of 1986, as amended (the "Tax Code"), owned by the Trust Beneficiaries (as
defined in Section 1.2 hereof) as grantors;
WHEREAS, the Plan provides for and requires the appointment of the
Administrative Trustee for the purposes outlined herein and the Administrative
Trustee has been appointed and approved and has agreed to serve in such capacity
under the terms and conditions hereinafter set forth; and
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
do hereby covenant and agree as follows:
I. DEFINITIONS
1.1 GENERAL. All capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned thereto in the Plan, or, if not
defined in the Plan and defined in the Bankruptcy Code shall have the meanings
assigned thereto in the Bankruptcy Code unless the context clearly requires
otherwise.
1.2 CERTAIN DEFINITIONS. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires, the terms
defined in this Section 1.2 shall have the meaning assigned to them in this
Section 1.2, and shall include the plural as well as the singular, and the
masculine as well as the feminine.
"ADMINISTRATIVE TRUSTEE" means _____________, or any successor thereto
appointed pursuant to the terms of this Agreement.
"AGREEMENT" shall mean this Anchor Liquidating Trust Agreement dated
as of ______ __, 1997.
"ALLOWED" shall have the meaning assigned to it in Section 1.1 of the
Plan.
"ASSET PURCHASE AGREEMENT" shall have the meaning assigned to it in
Section 1.1 of the Plan.
"ASSET SALE" shall have the meaning given to such term in the third
paragraph of this Agreement.
"AVAILABLE CASH" shall mean all cash of the Debtors, the Estate and
the Trust including, without limitation or duplication, (i) the cash in the
Escrow Account (including interest earned thereon) (as defined below); (ii) cash
in the Operating Account; (iii) the cash proceeds realized from the sale,
disposition, collection or other realization of value of any kind whatsoever in
respect of the Remaining Assets (including interest earned thereon, if any)
after providing for the satisfaction of all Allowed Claims (as defined below)
and Disputed Claims (as defined below) in Classes (as defined below) 1, 2, 3, 4,
5 and 6 of the Plan and (iv) any interest, income or investment income earned on
any of the Remaining Assets.
"AVOIDANCE ACTION" shall have the meaning assigned to it in Section
1.1 of the Plan.
"CLAIM" shall have the meaning assigned to it in Section 1.1 of the
Plan.
"CLASS" shall have the meaning assigned to it in Section 1.1 of the
Plan.
"CREDITOR" shall have the meaning assigned to it in Section 1.1 of the
Plan.
"COMMITTEE" shall have the meaning assigned to it in Section 1.1 of
the Plan.
"CONFIRMATION ORDER" shall have the meaning assigned to it in Section
1.1 of the Plan.
"COURT" shall have the meaning given to such term in the introductory
paragraph of this Agreement.
"DEBTORS" shall have the meaning given to such term in the
introductory paragraph of this Agreement.
"DISBURSING AGENT" shall have the meaning assigned to it in Section
1.1 of the Plan.
"DISPUTED CLAIM" shall have the meaning assigned to it in Section 1.1
of the Plan.
"DISTRIBUTION DATE" shall have the meaning assigned to it in Section
1.1 of the Plan.
"DISTRIBUTION RESERVE" shall have the meaning assigned to it in
Section 1.1 of the Plan.
"DISTRIBUTION RESERVE SURPLUS" shall have the meaning for each Class
as assigned to it in Section 1.1 of the Plan.
"EARNED INTEREST" shall have the meaning assigned to it in Section 1.1
of the Plan.
"EFFECTIVE DATE" shall have the meaning assigned to it in Section 1.1
of the Plan.
"ESCROW ACCOUNT" shall have the meaning assigned to it in Section 1.1
of the Plan.
"ESCROW ACCOUNT ORDER" shall have the meaning assigned to it in
Section 1.1 of the Plan.
"ESTATE" shall have the meaning assigned to it in Section 1.1 of the
Plan.
"FINAL DISTRIBUTION DATE" shall have the meaning assigned to it in
Section 1.1 of the Plan.
"FINAL ORDER" shall have the meaning assigned to it in Section 1.1 of
the Plan.
"INTEREST" shall have the meaning assigned to it in Section 1.1 of the
Plan.
"NEW ANCHOR" shall have the meaning given to such term in the third
paragraph of this Agreement.
"NEW ANCHOR COMMON STOCK" shall have the meaning assigned to it in
Section 1.1 of the Plan.
"NEW ANCHOR PREFERRED STOCK" shall have the meaning assigned to it in
Section 1.1 of the Plan.
"NEW ANCHOR SECURITIES" shall have the meaning given to such term in
the third paragraph of this Agreement.
"OLD ANCHOR" shall have the meaning given to such term in the
introductory paragraph of this Agreement.
"OPERATING ACCOUNT" shall have the meaning assigned to it in Section
1.1 of the Plan.
"OWENS" shall have the meaning given to such term in the third
paragraph of this Agreement.
"PERMITTED INVESTMENTS" shall mean the investments permitted under
Section 6.3.9 of the Plan.
"PLAN" shall have the meaning given to such term in the introductory
paragraph of this Agreement.
"REMAINING ASSETS" means any and all cash, assets and other property
of the Debtors, the Estate and the Trust of every kind and character including,
without limitation, (i) the property listed in Appendix 1 to the Plan, (ii) the
cash and New Anchor Securities in the Escrow Account, the Distribution Reserve
and the Operating Account, (iii) the Avoidance Actions, and (iv) all rights in,
to and under the Asset Purchase Agreement, including any claims or causes of
action against New Anchor and/or Owens-Brockway pursuant to the terms and
provisions of the Asset Purchase Agreement or otherwise.
"TAX CODE" shall mean the Internal Revenue Code of 1986, as amended.
"TERMINATION DATE" shall have the meaning given to such term in
Section 2.7 hereof.
"TRUST" shall mean the Anchor Liquidating Trust created pursuant to
this Agreement on the Effective Date to wind-up the Debtors' Estates in
accordance with the Plan, the Confirmation Order and this Agreement.
"TRUST ASSETS" shall mean all (i) funds, assets and properties of the
Debtors and their Estates of any kind and character, including without
limitation the Remaining Assets, as the same exist as of the date hereof, and
(ii) all other funds, assets and properties of every kind and nature acquired or
received by the Trust (including those held in the Escrow Account) after the
date hereof, including, without limitation, the proceeds realized from the sale
or other disposition of or collections from the Remaining Assets and all
interest income and investment income earned on the Remaining Assets and such
other funds, assets and properties of the Trust, including those held in the
Escrow Account, the Distribution Reserve and the Operating Account.
"TRUST BENEFICIARY" shall mean each holder of an Allowed Claim in
accordance with the Plan.
"WIND-DOWN BUDGET" shall have the meaning assigned to it in Section
1.1 of the Plan.
II. CREATION OF THE TRUST
2.1 PURPOSE OF THE TRUST. The Debtors, the Trust Beneficiaries and the
Administrative Trustee, in compliance with the Plan, hereby constitute and
create the Trust to receive the Remaining Assets on behalf and for the benefit
of the holders of Allowed Claims and to perform such acts as are required with
respect to the Remaining Assets in accordance with the Plan, the Confirmation
Order and this Agreement, including, without limitation, (i) the sale,
disposition, collection, or other realization of value of any kind whatsoever in
respect of the Remaining Assets, (ii) the holding and investing of Trust Assets
and the distribution of the consideration to be distributed to holders of
Allowed Claims pursuant to the Plan, this Agreement, the Confirmation Order, or
such other Order as may be entered by the Court, (iii) the completion of the
process of prosecution or settlement of objections to Disputed Claims asserted
by the Debtors or other parties, (iv) prosecuting retained causes of action,
including Avoidance Actions and claims arising under the Asset Purchase
Agreement, and (v) the completion of all other obligations pursuant to the Plan,
this Agreement, the Asset Purchase Agreement, and any other orders entered by
the Court.
2.2 APPOINTMENT AND ACCEPTANCE OF ADMINISTRATIVE TRUSTEE. In
accordance with the provisions of the Plan, ___________ is hereby named,
constituted, and appointed as Administrative Trustee, to act and serve as
Administrative Trustee of the Trust upon and subject to the terms and conditions
set forth herein and in the Plan. The Administrative Trustee is willing, and
does hereby accept the appointment, to act and serve as Administrative Trustee
of the Trust, and to hold the Trust Assets and administer the Trust pursuant to
the terms and conditions of this Agreement and the Plan.
2.3 NAME OF THE TRUST. The Trust established hereby shall bear the
name "Anchor Liquidating Trust." In connection with the exercise of his power as
Administrative Trustee hereunder, the Administrative Trustee may use this name
or such variation thereon as the Administrative Trustee sees fit, or may use his
own name, as Administrative Trustee, as applicable.
2.4 TRANSFER OF REMAINING ASSETS TO THE TRUST. In accordance with the
provisions of the Plan, all right, title, and interests of the Debtors and their
Estates in and to the Remaining Assets are hereby transferred, on behalf and for
the benefit of the holders of the Allowed Claims, to and vested in the Trust.
From and after the Effective Date, all Remaining Assets, including the Available
Cash, the New Anchor Securities and the Retained Properties, shall be
administered by the Administrative Trustee on behalf of the Trust Beneficiaries.
Prior to the creation of the Trust, the Debtors shall have executed or caused to
be executed, and simultaneously with the creation of the Trust shall deliver or
cause to be delivered to, or upon the order of, the Administrative Trustee, any
and all documents and other instruments as may be necessary or useful to convey
and to confirm title to the Remaining Assets to the Trust, [including those
listed or described on Exhibit A hereto]. The Debtors (and any successor entity
thereto) will, upon the reasonable request of the Administrative Trustee,
execute, acknowledge and deliver such further instruments and do such further
acts as may be necessary or proper to transfer to the Administrative Trustee any
portion of the Remaining Assets intended to be conveyed hereby in the form and
manner provided for in the Plan and to vest in the Administrative Trustee the
powers, instruments or funds in trust hereunder. The Debtors, for themselves and
any predecessor or successor entity, hereby disclaim and waive any and all right
to any reversionary interest in any of the Remaining Assets.
2.5 CAUSES OF ACTION. All claims and causes of action which are
Remaining Assets, are hereby transferred to and vested in the Trust and
preserved for enforcement by the Administrative Trustee for the benefit of the
Trust Beneficiaries. To the extent permitted by law, all rights under Sections
363(h) and 553 of the Bankruptcy Code are also preserved for the benefit of the
Estates, and the Administrative Trustee shall have the right to exercise same.
2.6 EXEMPTION FROM REGISTRATION. The parties hereto intend that the
rights of the Trust Beneficiaries arising under this Trust shall not be
"securities" under applicable laws, but none of the parties hereto represent or
warrant that such rights shall not be securities or shall be entitled to
exemption from registration under applicable securities laws. If such rights
constitute securities, the parties hereto intend for the exemption from
registration provided by Section 1145 of the Bankruptcy Code to apply to their
issuance under the Plan.
2.7 TERMINATION OF THE TRUST. The Trust shall terminate (the
"Termination Date") upon the earlier to occur of: (A) the fulfillment of the
Trust's purpose by the liquidation of all of the Trust Assets and the
distribution of the Available Cash, New Anchor Securities and other Remaining
Assets to the Creditors on the Final Distribution Date in accordance with the
Plan or (B) three (3) years after the Effective Date. In order to terminate the
Trust prior to three (3) years after the Effective Date, the Administrative
Trustee shall deliver a notice to all Trust Beneficiaries setting forth the date
on which the Trust will terminate, and if no Trust Beneficiary files an
objection with the Court within forty-five (45) days after the date of such
notice the Trust shall terminate on the date set forth in the notice.
Notwithstanding the foregoing, in the event the Administrative Trustee shall
have been unable after continuing reasonable efforts to sell or otherwise
dispose of and realize upon the Trust Assets in the initial three (3) year term
of the Trust or if other circumstances require such extension, the
Administrative Trustee shall have the right to apply to the Court to extend the
term of the Trust for additional periods of time, provided that each such
extension must be approved by the Court by no later than six (6) months after
the beginning of the extended term.
III. RIGHTS, POWERS AND DUTIES OF ADMINISTRATIVE TRUSTEE
3.1 DECLARATION ACKNOWLEDGED IN BENEFICIAL INTEREST. The
Administrative Trustee hereby acknowledges that, on and after the Effective
Date, the Trust Beneficiaries, as their interests may appear, will have a
beneficial interest in all Trust Assets.
3.2 RESPONSIBILITIES. The responsibilities of the Administrative
Trustee under this Agreement and the Plan shall include: (i) the receipt of the
assets of the Debtors' Estate on behalf of and for the benefit of the holders of
Claims under the Plan; (ii) maintaining the Operating Account, the Distribution
Reserve and the Escrow Account; (iii) investing the cash held in the
Distribution Reserve and the Escrow Account in Permitted Investments in
accordance with Section 6.3.9 of the Plan; (iv) pursuing objections to,
estimations and settlements of Claims; (v) prosecuting retained causes of action
including Avoidance Actions and claims arising under the Asset Purchase
Agreement; (vi) calculating and implementing all distributions to be made under
the Plan to the Trust Beneficiaries; (vii) marketing, selling, leasing or
otherwise disposing of or realizing the value of all the Remaining Assets;
(viii) filing all required tax returns and paying taxes and all other
obligations on behalf of the Trust and the Trust Beneficiaries from funds in the
Distribution Reserve and the Escrow Account; (ix) periodic reporting to the
Committee of the status of the Distribution Reserve, the Escrow Account and
Claims resolution process until such time as (a) the purposes of the Trust are
substantially consummated and (b) the Claims resolution process is complete; and
(x) such other responsibilities as may be vested in the Administrative Trustee
pursuant to the Plan, this Agreement or Court order or as may be necessary and
proper to carry out the provisions of the Plan.
3.3 POWERS. The powers of the Administrative Trustee shall, without
Court approval in each of the following cases, include: (i) the power to invest
funds, and withdraw, make distributions and pay taxes and other obligations owed
by the Debtors or incurred by the Administrative Trustee in connection with the
wind-down of the Estates, from the Distribution Reserve, including from the
Operating Account, and the Escrow Account, all as set forth in and in accordance
with the Plan; (ii) the power to engage employees and professional persons to
assist the Administrative Trustee with respect to its responsibilities; (iii)
the power to retain the services of experienced auctioneers, brokers, and/or
marketing agents to assist and/or advise in the sale or other disposition of the
Remaining Assets; (iv) the authority to pay the fees and expenses of the
professional persons, agents and employees engaged by the Administrative Trustee
and to pay all other expenses for winding down the affairs of the Debtors and
the Trust in each case in accordance with the Wind-down Budget, or as otherwise
agreed to by the Committee or determined by the Court; (v) the power to dispose
of, and deliver title to others of, or otherwise realize the value of all the
Remaining Assets; (vi) the power to compromise and settle claims and causes of
actions; (vii) the authority to act on behalf of the Debtors in all adversary
proceedings and contested matters (including, without limitation, Avoidance
Actions) pending in the Court and in all actions and proceedings pending
elsewhere, and, with the consent of the Committee, to settle, retain, enforce,
dispute or adjust any Claim or Interest and otherwise pursue actions involving
assets of the Debtors that could arise or be asserted at any time under the
Bankruptcy Code, unless otherwise waived or relinquished in the Plan; (viii) the
power to file a motion requesting that the Court convert the Chapter 11 cases to
cases under chapter 7 of the Bankruptcy Code, subject to the rights of all
parties in interest to oppose such motion; and (ix) such other powers as may be
vested in or assumed by the Administrative Trustee pursuant to the Plan, this
Agreement or Court order or as may be necessary and proper to carry out the
provisions of the Plan. The Administrative Trustee shall exercise such powers in
accordance with the provisions of the Plan and this Agreement. The
Administrative Trustee shall consult with the Committee concerning any matter
involving an amount equal to or exceeding $100,000 and shall provide the
Committee with such financial and accounting information as the Committee may
reasonably request.
3.4 MANAGEMENT OF TRUST. Subject to the terms hereof and the Plan, the
Administrative Trustee shall take charge of the Trust Assets and shall endeavor
to collect, conserve, protect, and liquidate, or otherwise convert into cash,
marketable securities or other cash equivalents, all claims, causes of action,
and other assets which constitute the Trust Assets and all such other property
incidental thereto as may hereafter be acquired from time to time under this
Trust. The Administrative Trustee shall manage the affairs of the Trust,
negotiate and consummate sales of the Trust Assets, enter into agreements
binding the Trust, and execute, acknowledge, and deliver any and all instruments
which are necessary, required, or deemed by the Administrative Trustee to be
advisable in connection with the performance of the Administrative Trustee's
duties hereunder and shall have full power and authority to take any action
consistent with the purpose and provisions of the Plan. Except as otherwise
provided in this Agreement, and without prior or further authorization of the
Court, the Administrative Trustee may control and exercise authority over the
Trust Assets, the acquisition, management, and disposition thereof, and the
management and conduct of the business of the Trust to the same extent as if the
Administrative Trustee were the sole legal and beneficial owner thereof in his
own right. No person dealing with the Trust shall be obligated to inquire into
the authority of the Administrative Trustee in connection with the acquisition,
management, or disposition of Trust Assets. In connection with the management
and use of the Trust Assets, the Administrative Trustee, without limitation of
his power and authority, may do the following:
(i) accept the assets transferred and provided to the
Trust pursuant to this Agreement and the Plan;
(ii) distribute Available Cash and other assets to the
Trust Beneficiaries in accordance with the terms of
this Trust and the Plan;
(iii) endorse the payment of notes or other obligations
of any person or make contracts with respect thereto;
(iv) engage in all acts that would constitute ordinary course of
business in performing the obligations of an administrative
trustee under a trust of this type;
(v) invest Trust Assets in Permitted Investments in
accordance with Section 6.3.9 of the Plan;
(vi) continue the Escrow Account in accordance with the
Escrow Account Order and the Plan;
(vii) execute deeds, bills of sale and other
instruments of transfer in connection with the sale,
assignment or transfer of the Trust Assets; and
(viii) establish such bank accounts as he may deem necessary or
appropriate, draw checks on such bank accounts and perform
such other necessary and appropriate duties with respect to
such accounts, or designate individuals as signatories to draw
checks on such bank accounts and to perform such other duties
as he may direct and authorize.
3.5 RECOVERY ON CAUSES OF ACTION. The Administrative Trustee shall
investigate all claims and causes of action that are Trust Assets and may sue
upon, mediate, arbitrate, and/or compromise and settle all such claims and
causes of action.
3.6 DISTRIBUTION RESERVE. On the Effective Date, the Administrative
Trustee shall establish and fund the Distribution Reserve with cash and New
Anchor Securities in accordance with Section 6.1 of the Plan. Except as
otherwise provided in the Plan, each distribution of cash, New Senior Secured
Notes and New Anchor Securities in respect of a Disputed Claim which becomes an
Allowed Claim shall be made in accordance with the applicable provisions of the
Plan, including Section 6.2 of the Plan, together with Earned Interest on the
cash reserved for such Disputed Claim as provided in the Plan. Any Distribution
Reserve Surpluses arising as a result of the disallowance of all or a portion of
a Disputed Claim shall, in accordance with the Plan, be transferred to the
Distribution Reserve for Class 7, Class 8 and Class 9 Allowed Claims, unless
such funds are required to pay senior class distributions or pay expenses
incurred in connection with the Wind-down Budget.
3.7 DISTRIBUTION OF AVAILABLE CASH AND NEW ANCHOR SECURITIES. Pursuant
to the terms of the Plan, on the Distribution Dates provided for in the Plan the
Administrative Trustee shall distribute from the Trust Assets the amounts of
Available Cash and New Anchor Securities required in Articles IV and VI of the
Plan to holders of record of Allowed Claims in accordance with the treatment of
Claims provided in the Plan. In determining whether there is any Available Cash
available for distribution, the Administrative Trustee may, in his discretion,
give due consideration to the possibility that there may exist unasserted Claims
against the Trust or Disputed Claims which are not yet Allowed Claims or
otherwise not yet due and payable and shall establish the Distribution Reserve
therefor in accordance with Section 3.6 hereof. The Administrative Trustee shall
make vigorous and continuing efforts to dispose of the Trust Assets, to make
prompt and timely distributions, and to avoid undue prolongation of the duration
of the Trust.
3.8 DISPOSITION OF ASSETS TO DEBTORS AND OTHER INTERESTED PARTIES. The
Administrative Trustee is specifically authorized and empowered to negotiate at
arms length and enter into agreements with the Debtors' affiliates, the Trust
Beneficiaries and other interested parties for the sale of any portion of the
Trust Assets.
3.9 ASSETS DISTRIBUTABLE TO UNLOCATED BENEFICIARIES. The
Administrative Trustee shall, or shall appoint the Disbursing Agent to, hold any
unclaimed distributions or other payments to any Trust Beneficiaries or other
person entitled thereto who cannot be located. The Administrative Trustee shall,
and shall instruct the Disbursing Agent to, make disposition of any such
distributions or payments in accordance with Section 6.3.8 of the Plan.
3.10 INVESTMENTS. Pending distribution, the Administrative Trustee
shall invest the Trust Assets in Permitted Investments.
3.11 SELECTION OF AGENTS. The Administrative Trustee may select and
employ brokers, banks, custodians, investment advisors, attorneys, accountants,
auditors, and other agents on behalf of the Trust. Except as otherwise required
to fulfill the terms hereof, such agents may be employed without regard to prior
employment of such agents by any Trust Beneficiary or by the Creditors'
Committee. The Administrative Trustee may retain as a consultant to the Trust
any person or persons having particular knowledge of the Debtors' affairs
(including, without limitation, any officer or director or former officer or
director of any Debtor or any entity owned by a Debtor), and may place reliance
upon the advice of any such person. The Administrative Trustee may pay the
salaries, fees, and expenses of agents and consultants engaged by the
Administrative Trustee out of the Trust Assets. No Administrative Trustee shall
be liable for any loss to the Trust or any person interested therein by reason
of any mistake or default of any such agent or consultant as shall be selected
and employed or retained without fraud, willful misconduct or gross negligence.
3.12 RECORDS AND REPORTING.
3.12.1 RECORDS. The Administrative Trustee shall maintain good
and sufficient books and records of account relating to the Trust
Assets, the Available Cash, the management thereof, all transactions
undertaken by the Administrative Trustee, all expenses incurred by or
on behalf of the Trust, all distributions either contemplated or
effectuated under the Plan or this Agreement.
3.12.2 PERIODIC REPORTS. The Administrative Trustee
shall prepare the following reports and shall distribute
such reports to any Trust Beneficiary who requests a copy:
(A) on a quarterly basis commencing with the
first calendar quarter ending after the Effective Date, within
forty-five (45) days after the end of such calendar quarter, a
report of the activities of the Trust detailing for the
preceding quarterly period the activities of the Trust
including:
(i) an unaudited operating statement
(prepared on a cash basis) showing all revenues
received by the Trust and all expenses of operations
of the Trust (including all expenses associated with
the sale of any Trust Assets paid by the Trust);
(ii) an unaudited written report and
accounting showing (a) the assets and liabilities of
the Trust at the end of such period, (b) any changes
in the Trust Assets, (c) the amount of any reserves
or escrows of the Trust, (d) any material action
taken by the Administrative Trustee in the
performance of his duties under the Plan and this
Agreement; and
(iii) an overall status report of the
Trust for the next quarterly period;
and
(B) to the extent required by the Court or by
applicable law (or to gain an exemption from applicable law),
within 90 days after the end of each calendar year, beginning
with the first year end occurring after the Effective Date,
the Trust will prepare reports for the prior year as described
in clause (i) and (ii) above, except that such reports shall
be for a full year (or portion thereof in which the Trust has
been in existence); the financial statements included in such
reports need not be audited unless otherwise required by law.
All quarterly and, if prepared, annual reports shall be filed
with the Court. In addition, all monthly, quarterly and, if
prepared, annual reports may be filed with the Securities and
Exchange Commission (the "Commission") to the extent the
Administrative Trustee deems such action to be in the best
interest of the Trust or to the extent required by applicable
law or in order to gain an exemption from compliance with
applicable law.
3.12.3 TAX INFORMATION. The Administrative Trustee shall
furnish to the Trust Beneficiaries and other recipients of
distributions from the Trust such information and returns with respect
to any federal or state tax as shall be required by law.
3.12.4 ADDITIONAL REPORTS AND FILINGS. The Administrative
Trustee shall (i) prepare, file and distribute such additional
statements, reports and submissions as may be necessary to cause the
Trust and the Administrative Trustee to be in compliance with
applicable law and (ii) prepare and file with the Court such reports
and submissions as are required by the Plan. Copies of any such
reports, statements and submissions, in the discretion of the
Administrative Trustee, shall be filed with the Commission.
IV. ADMINISTRATIVE TRUSTEE
4.1 THE ADMINISTRATIVE TRUSTEE.
4.1.1 INDEPENDENT ADMINISTRATIVE TRUSTEE. The
Administrative Trustee may not be a Trust Beneficiary.
4.1.2 ADMINISTRATIVE TRUSTEE'S COMPENSATION AND REIMBURSEMENT.
In addition to reimbursement for the actual out-of-pocket expenses
incurred, the Administrative Trustee, and any employees or
professionals engaged or retained by the Administrative Trustee, shall
be entitled to reasonable compensation for services rendered in
connection with the preparation and implementation of the Plan. Subject
to the terms and provisions of the Wind-down Budget, with respect to
the Administrative Trustee, the terms of his compensation shall be as
set forth on Exhibit A hereto. Subject to the terms and provisions of
the Wind-down Budget, with respect to any employees engaged and
professionals retained, such compensation shall be in an amount and on
such terms as may be agreed to by the Administrative Trustee and such
employees or professionals. Any dispute with respect to such
compensation shall be resolved by agreement among the parties or, if
the parties are unable to agree, as determined by the Court.
4.1.3 RESIGNATION. The Administrative Trustee may resign as
Administrative Trustee hereunder by an instrument in writing signed by
the Administrative Trustee and filed with the Court. Such resignation
shall become effective 90 days following the giving of such notice or
upon the earlier appointment of a successor Administrative Trustee.
4.1.4 REMOVAL. The Administrative Trustee or any successor
Administrative Trustee may be removed at any time, with or without
cause, by the Court. Any Trust Beneficiary may apply to the Court for
an order removing the Administrative Trustee or any successor
Administrative Trustee for cause. Such removal shall be effective at
the time of the docketing of the Final Order removing the
Administrative Trustee or successor Administrative Trustee.
4.1.5 APPOINTMENT OF SUCCESSOR ADMINISTRATIVE TRUSTEE. In the
event of the resignation or removal of the Administrative Trustee the
Court shall appoint a successor Administrative Trustee. Written notice
of such appointment shall be given to the Committee immediately upon
such appointment. Any successor Administrative Trustee appointed
hereunder shall execute, acknowledge and deliver to the Court and to
the retiring Administrative Trustee an instrument duly accepting such
appointment and agreeing to be bound by the terms of this Agreement and
thereupon such successor Administrative Trustee, without further act,
deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the Administrative Trustee under this Agreement.
4.1.6 TRUST CONTINUANCE. The resignation or removal of the
Administrative Trustee shall not operate to terminate the Trust created
by this Agreement or to revoke any existing agency created pursuant to
the terms of this Agreement or invalidate any action theretofore taken
by the Administrative Trustee or any prior Administrative Trustee. In
the event of the resignation or removal of the Administrative Trustee,
such Administrative Trustee shall promptly execute and deliver such
documents, instruments and other writings as may be reasonably
requested by the successor Administrative Trustee to effect the
termination of the Administrative Trustee's capacity under this
Agreement and the conveyance of the Trust Assets then held by the
Administrative Trustee to such Administrative Trustee's successor;
deliver to the successor Administrative Trustee all documents,
instruments, records and other writings related to the Trust as may be
in the possession of the Administrative Trustee; and otherwise assist
and cooperate in effecting the assumption of its obligations and
functions by such successor Administrative Trustee. In the event that
there shall not have been appointed a successor Administrative Trustee
pursuant to the terms of the Trust Agreement on or before the effective
date of the resignation or removal of the Administrative Trustee, the
Court shall appoint an interim Administrative Trustee hereunder until
such successor Administrative Trustee shall have been appointed and
shall have taken office.
4.2 RELIANCE BY ADMINISTRATIVE TRUSTEE. The Administrative Trustee may
rely, and shall be fully protected personally in acting upon, any resolution,
statement, certificate, instrument, opinion, report, notice, request, consent,
order, or other instrument or document which the Administrative Trustee has no
reason to believe to be other than genuine and to have been signed or presented
other than by the proper party or parties or, in the case of facsimile
transmissions, to have been sent other than by the proper party or parties, in
each case without obligation to satisfy himself or herself that the same was
given in good faith and without responsibility for errors in delivery,
transmission, or receipt. In the absence of fraud, willful misconduct or gross
negligence, the Administrative Trustee may rely as to the truth of statements
and correctness of the facts and opinions expressed therein and shall be fully
protected personally in acting thereon. The Administrative Trustee may consult
with and rely on the advice of legal counsel and such other experts, advisors,
consultants or other professionals as shall have been retained pursuant to this
Agreement and shall be fully protected in respect of any action taken or
suffered by them in accordance with the written opinion of legal counsel.
4.3 ADMINISTRATIVE TRUSTEE'S STANDARD OF CARE; Exculpation. Neither
the Administrative Trustee, nor any director, officer, affiliate, employee,
employer, agent or representative of any Administrative Trustee shall be
personally liable in connection with the affairs of the Trust to any Trust
Beneficiary, or the Trust, or any other person, except for such of the
Administrative Trustee's acts or omissions as shall constitute fraud, willful
misconduct or gross negligence.
4.4 INDEMNIFICATION. Except in those situations in which the
Administrative Trustee is not exonerated of personal liability as aforesaid, the
Administrative Trustee (including, each former Administrative Trustee or estate
of a decedent Administrative Trustee) shall be defended, held harmless and
indemnified from time to time from the Trust Assets against any and all losses,
claims, costs, expenses and liabilities (including legal fees and expenses) and
any costs of defending any action to which the Administrative Trustee may be
subject in connection with any action, suit, proceeding or investigation brought
or threatened against such Administrative Trustee in such Administrative
Trustee's capacity as Administrative Trustee or in any other capacity
contemplated by this Agreement, the Plan or in any matter arising out of or
related to this Agreement or the affairs of the Trust. The Trust may indemnify
and hold harmless employees and agents of the Trust to the same extent as is
provided in this Section 4.4 for the Administrative Trustee.
4.5 INSURANCE. If the Administrative Trustee so desires, and if
available on commercially reasonably terms, the Administrative Trustee shall
endeavor to obtain insurance covering liabilities of the Administrative Trustee
(and such insurance coverage may extend beyond the term of the Trust for a
reasonable period), or employees or agents of the Trust incurred in connection
with their services to the Trust and with such coverages and limits as the
Administrative Trustee deems desirable.
4.6 NO LIABILITY FOR ACTS OF PREDECESSORS. No successor Administrative
Trustee shall be in any way responsible for the acts or omissions of the
Debtors, or officers, directors, agents, predecessors or successors thereof; or
of the Administrative Trustee in office prior to the date on which such person
becomes Administrative Trustee, unless a successor Administrative Trustee
expressly assumes such responsibility.
4.7 NO IMPLIED OBLIGATIONS. No Administrative Trustee shall be liable
except for the performance of such duties and obligations as are specifically
set forth herein, and no implied covenants or obligations shall be read into
this Trust.
4.8 NO PERSONAL OBLIGATION FOR TRUST LIABILITIES. Persons dealing with
the Administrative Trustee, or seeking to assert claims against the Debtor,
shall look only to the Trust Assets to satisfy any liability incurred by the
Administrative Trustee to such person in carrying out the terms of this Trust,
and the Administrative Trustee shall have no personal, individual obligation to
satisfy any such liability.
4.9 BOND REQUIREMENT; EXERCISE OF POWERS. The Administrative Trustee
shall not be required to furnish a bond to secure the proper performance of his
duties hereunder. Except as otherwise expressly provided in this Agreement, the
Administrative Trustee shall not be required to procure authorization by any
court in the exercise of any power conferred upon the Administrative Trustee by
this Trust.
4.10 EFFECT OF TRUST ON THIRD PARTIES. There is no obligation on the
part of any purchaser or purchasers from the Trust or any agent of the Trust, or
on the part of any other persons dealing with the Trust or any agent of the
Trust, to see to the application of the purchase money or other consideration
passing to the Trust or any agent of the Trust, or to inquire into the validity,
expediency, or propriety of any such transaction by the Trust or any agent of
the Administrative Trustee.
4.11 INSTRUCTIONS AND EXCULPATORY PROVISIONS.
(A) If (i) in performing the Administrative Trustee's duties
under this Agreement the Administrative Trustee is required to decide
between alternative courses of action, or (ii) the Administrative
Trustee is unsure of the application of any provision of this Agreement
or the Plan, then the Administrative Trustee may, promptly deliver a
notice to the Court requesting written instructions as to the course of
action desired by the Court. The Court shall make any determination
required pursuant to this section. If the Administrative Trustee does
not receive such written directions within 10 business days after it
has delivered such notice, or such shorter period of time set forth in
such notice, the Administrative Trustee may, but shall be under no duty
to, take or refrain from taking such action not inconsistent with this
Agreement as the Administrative Trustee shall deem advisable.
(B) The Administrative Trustee shall not have any obligation,
responsibility or liability for:
(i) any representations as to the value or
condition of the Trust Assets or any part thereof or
as to the title of the Debtors thereto;
(ii) the validity, execution (except the
Administrative Trustee's own execution),
enforceability, legality, or sufficiency of this
Agreement;
(iii) taking any action under this Agreement or the
Plan if taking such action (x) would subject the
Administrative Trustee to a tax in any jurisdiction where the
Administrative Trustee is not then subject to a tax or (y)
would require the Administrative Trustee to qualify to do
business in any jurisdiction where the Administrative Trustee
is not then so qualified, unless the Administrative Trustee
receives an indemnity (payable from the Distribution Reserve)
satisfactory to the Administrative Trustee against such tax
(or equivalent liability), or any liability resulting from
such qualification; and
(iv) expending the Administrative Trustee's personal
funds or otherwise incurring any financial liability in the
performance of the Administrative Trustee's rights or powers
hereunder if the Administrative Trustee shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably
assured or provided to the Administrative Trustee.
V. MISCELLANEOUS
5.1 APPLICABLE LAW. The Trust created herein shall be construed,
regulated, and administered under the laws of the State of New York without
regard to principles of conflicts of law; provided that the Trust and any
interpretation or enforcement of the provisions of this Agreement shall be
subject to the jurisdiction of the Court as contemplated by Section 6.l hereof.
5.2 RELATIONSHIP CREATED. The only relationship created by this Trust
is the trustee- beneficiary relationship between the Administrative Trustee and
the Trust Beneficiaries. No other relationship or liability is created. Nothing
contained herein shall be construed so as to constitute the Administrative
Trustee and the Trust Beneficiaries or their successors in interest as creating
any association, partnership, or joint venture of any kind.
5.3 INTERPRETATION. The enumeration and headings contained in this
Trust are for convenience of reference only and are not intended to have any
substantive significance in interpreting the same.
5.4 PARTIAL INVALIDITY. If any term or provision of this Agreement is
held to be illegal, invalid, or unenforceable under present or future laws
effective during the term of this Agreement, such term or provision shall be
fully severable and this Agreement shall be construed and enforced as if such
illegal, invalid, or unenforceable provision had never comprised a part of this
Agreement; and the remaining terms and provisions of this Agreement shall remain
in full force and effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance from this Agreement and this
Agreement shall be construed so as to limit any term or provision so as to make
it legal, valid and enforceable within the requirements of applicable law, in
lieu of such illegal, invalid or unenforceable provision, provided that such
construction, to the maximum extent possible, shall give effect to the purposes
of the Plan.
5.5 ENTIRE AGREEMENT. This Agreement (including the recitals hereof)
and the Plan constitute the entire agreement by and among the parties, and there
are no representations, warranties, covenants, or obligations except as set
forth herein and in the Plan. This Agreement and the Plan supersede all prior
and contemporaneous agreements, understandings negotiations, and discussions,
written or oral, if any, of the parties hereto relating to any transaction
contemplated hereunder. Except as otherwise specifically provided herein or in
the Plan, nothing in this Agreement is intended or shall be construed to confer
upon or to give any person other than the parties hereto and the Trust
Beneficiaries any rights or remedies under or by reason of this Agreement.
5.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original document, but all
of which counterparts shall together constitute one and the same instrument.
5.7 NOTICES. All notices, requests, consents and other communications
hereunder shall be in writing and shall be addressed (i) if to the
Administrative Trustee, to ___________, Administrative Trustee, [address],
telephone number: __________ and facsimile number: ___________, or such other
address as such Administrative Trustee will have furnished to the Administrative
Trustee and set forth in the quarterly report prepared under Section 3.12.2(A)
hereof, (ii) if to any Trust Beneficiary, to such Trust Beneficiary at the
address set forth in the books and records of the Debtor as of the Effective
Date, (iii) if to the Debtors, to [Chief Executive Officer], Anchor Resolution
Corp., [address], telephone number: __________ and facsimile number:
____________, or such other address as the Debtors will have furnished to the
Administrative Trustee in writing in accordance with this Section 5.7 or (iv) if
to the Committee, to the Committee, [address], telephone number: __________ and
facsimile number: ____________, Attention: _______________ ,or such other
address as the Committee will have furnished to the Administrative Trustee in
writing in accordance with this Section 5.7. All such notices, requests,
consents and other communications shall be given by facsimile, hand delivery,
overnight delivery or, to a Trust Beneficiary only, first class mail, postage
prepaid, and shall be deemed given when actually delivered or, with respect to a
Trust Beneficiary only, if mailed, three (3) business days after deposit in the
U.S. Mail.
5.8 EFFECTIVE DATE. This Trust, and the transfer of Trust Assets to
the Administrative Trustee, shall become effective on the Effective Date of the
Plan.
5.9 TAX PROVISIONS.
5.9.1 INCOME TAX STATUS. For all purposes of the Tax Code, the
Debtor shall be deemed to have transferred the Trust Assets to the
Trust Beneficiaries and the other recipients of distributions hereunder
pursuant to the Plan and thereupon the Trust Beneficiaries shall be
deemed to have transferred their share of the Trust Assets to the
Trust. For all federal income tax purposes consistent valuations shall
be used by the Trust and the Trust Beneficiaries for the transferred
Trust Assets. The Trust is intended to be treated as a liquidating
trust pursuant to Treasury Regulations Section 301.7701-4(d), and as a
grantor trust subject to the provisions of Subchapter J, Subpart E of
the Tax Code, owned by the Trust Beneficiaries as grantors. Any items
of income, deduction, credit, or loss of the Trust shall be allocated
for federal, state and local income tax purposes among the Trust
Beneficiaries pro rata on the basis of their beneficial interests;
provided, however that to the extent that any item of income cannot be
allocated in the taxable year in which it arises, the Trust shall pay
the federal, state and local taxes attributable to such income (net of
related deductions) and the amount of such taxes shall be treated as
having been received by, and paid on behalf of, the Trust Beneficiaries
when such allocations are ultimately made. The Administrative Trustee
is authorized to take any action that may be necessary or appropriate
to minimize any potential tax liability of the Trust Beneficiaries
arising out of the operations of the Trust.
5.9.2 TAX RETURNS AND REPORTS. In accordance with Treasury Regulation
Section 1.671-4(a), the Administrative Trustee shall cause to be prepared and
filed, at the cost and expense of the Trust, an annual information tax return
(Form 1041) with the Internal Revenue Service, with a schedule attached showing
the item of income, deduction, and credit attributable to the Trust and
detailing the allocation of such items of income, deduction, and credit among
the Trust Beneficiaries as required pursuant to the Form 1041 instructions for
grantor trusts. Copies of such Form 1041 and attached schedules will be
delivered promptly to each Trust Beneficiary. In addition, the Administrative
Trustee shall cause to be prepared and filed in a timely manner, such other
state or local tax returns as are required by applicable law by virtue of the
existence and operation of the Trust and shall pay any taxes shown as due
thereon. Within thirty (30) days after the end of each calendar year, the
Administrative Trustee shall cause to be prepared and mailed to a Trust
Beneficiary such other information as may be requested by such Trust Beneficiary
in writing to enable such Trust Beneficiary to complete and file his, her, or
its federal, state and local income and other tax returns.
5.9.3 WITHHOLDING. The Administrative Trustee may withhold
from the amount distributable from the Trust at any time such sum or
sums as may be sufficient to pay any tax or taxes or other charge or
charges which have been or may be imposed on the distributee or upon
the Trust with respect to the amount distributable or to be distributed
under the income tax laws of the United States or of any state or
political subdivision or entity by reason of any distribution provided
for any law, regulation, rule, ruling, directive, or other governmental
requirement.
5.9.4 TAX IDENTIFICATION NUMBERS. The Administrative Trustee
may require any Trust Beneficiary or other distributee to furnish to
the Administrative Trustee its Employer or Taxpayer Identification
Number as assigned by the Internal Revenue Service and the
Administrative Trustee may condition any distribution to any Trust
Beneficiary or other distributee upon receipt of such identification
number.
5.9.5 TAX YEAR. The taxable year of the Trust shall,
unless otherwise required by the Internal Revenue Code, be the
calendar year.
5.10 AMENDMENT OF TRUST. This Agreement may be amended, modified or
altered only upon the recommendation of the Administrative Trustee and subject
to Court approval.
VI. RETENTION OF JURISDICTION
6.1 RETENTION OF JURISDICTION. As provided in the Plan, the Court has
retained jurisdiction over the Trust, the Administrative Trustee, and the Trust
Assets, including, without limitation, the determination of all controversies
and disputes arising under or in connection with this Trust.
(Signature page follows)
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this instrument to be
executed as of the day and year first above written.
ANCHOR RESOLUTION CORP.
By:_____________________________
ANCHOR RECYCLING CORPORATION
By:_____________________________
ADMINISTRATIVE TRUSTEE
By:_____________________________
<PAGE>
Exhibit 2: Asset Purchase Agreement
<PAGE>
ASSET PURCHASE AGREEMENT
AMONG
ANCHOR GLASS CONTAINER CORPORATION
AND
CONSUMERS PACKAGING INC.
AND
OWENS-BROCKWAY GLASS CONTAINER INC.
<PAGE>
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS ...................................................- 2 -
ARTICLE 2
PURCHASE AND SALE .............................................- 7 -
2.01. PURCHASE AND SALE...............................- 7 -
2.02. EXCLUDED ASSETS.................................- 9 -
2.03. ASSUMPTION OF LIABILITIES.......................- 9 -
2.04. EXCLUDED LIABILITIES...........................- 11 -
2.05. ASSIGNMENT OF CONTRACTS AND RIGHTS.............- 11 -
2.06. PURCHASE PRICE; ALLOCATION OF PURCHASE PRICE...- 12 -
2.07. CLOSING........................................- 14 -
2.08. CLOSING BALANCE SHEET..........................- 15 -
2.09. ADJUSTMENT OF PURCHASE PRICE...................- 17 -
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER ......................- 18 -
3.01. AUTHORITY......................................- 18 -
3.02. NO CONFLICTS; CONSENTS.........................- 18 -
3.03. SUFFICIENCY OF AND TITLE TO THE PURCHASED
ASSETS.......................................- 19 -
3.04. ORGANIZATION AND STANDING; BOOKS AND
RECORDS......................................- 19 -
3.05. SEC DOCUMENTS; FINANCIAL STATEMENTS;
UNDISCLOSED LIABILITIES......................- 20 -
3.06. CONTRACTS......................................- 21 -
3.07. ABSENCE OF CHANGES OR EVENTS...................- 23 -
3.08. LITIGATION.....................................- 25 -
3.09. COMPLIANCE WITH LAWS AND COURT ORDERS..........- 25 -
3.10. EMPLOYEES......................................- 25 -
3.11. PROPERTIES.....................................- 26 -
3.12. ENVIRONMENTAL MATTERS..........................- 29 -
3.13. EMPLOYEE BENEFIT PLANS.........................- 31 -
3.14. LICENSES AND PERMITS...........................- 35 -
3.15. INSURANCE COVERAGE.............................- 35 -
3.16. INTELLECTUAL PROPERTY..........................- 35 -
3.17. CUSTOMERS......................................- 36 -
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYERS ......................- 36 -
4.01. AUTHORITY-CONSUMERS............................- 36 -
4.02. NO CONFLICTS; CONSENTS-CONSUMERS...............- 37 -
4.03. ACTIONS AND PROCEEDINGS, ETC...................- 37 -
4.04. AVAILABILITY OF FUNDS..........................- 38 -
4.06. AUTHORITY-OI...................................- 41 -
4.07. NO CONFLICTS; CONSENTS-OI......................- 41 -
4.08. ACTIONS AND PROCEEDINGS, ETC.-OI...............- 42 -
4.09. AVAILABILITY OF FUNDS-OI.......................- 42 -
ARTICLE 5
COVENANTS OF SELLER ...........................................- 43 -
5.01. CONDUCT OF THE BUSINESS........................- 43 -
5.02. ACCESS TO INFORMATION..........................- 43 -
5.03. NOTICES OF CERTAIN EVENTS......................- 45 -
5.04. ENVIRONMENTAL COVENANTS........................- 46 -
5.05. BANKRUPTCY COURT APPROVAL......................- 46 -
5.06. USE OF THE ANCHOR NAME.........................- 46 -
ARTICLE 6
COVENANTS OF BUYERS ...........................................- 47 -
6.01. CONFIDENTIALITY................................- 47 -
6.02. NO ADDITIONAL REPRESENTATIONS..................- 47 -
6.03. SUPPLEMENTAL DISCLOSURE........................- 47 -
6.04. ACCESS.........................................- 47 -
6.05. ASSIGNMENT TO NEW ANCHOR.......................- 48 -
6.06. FINANCINGS.....................................- 48 -
6.07. COMPOSITION OF NEW ANCHOR BOARD................- 48 -
6.08. STOCK MARKET LISTING...........................- 48 -
6.09. EXCHANGE ACT REGISTRATION......................- 49 -
6.10. AFFILIATE TRANSACTIONS.........................- 49 -
ARTICLE 7
COVENANTS OF ALL PARTIES .....................................- 49 -
7.01. BEST EFFORTS; FURTHER ASSURANCES..............- 49 -
7.02. CERTAIN FILINGS...............................- 50 -
7.03. PUBLIC ANNOUNCEMENTS..........................- 50 -
7.04. WARN ACT......................................- 50 -
ARTICLE 8
TAX MATTERS ..................................................- 51 -
8.01. TAX DEFINITIONS...............................- 51 -
8.02. TAX MATTERS...................................- 51 -
8.03. TAX COOPERATION; ALLOCATION OF TAXES..........- 52 -
ARTICLE 9
EMPLOYEES ...................................................- 53 -
9.01. RETIREMENT PLANS.............................- 53 -
9.02. OTHER EMPLOYEE PLANS AND BENEFIT
ARRANGEMENTS...............................- 55 -
9.03. EMPLOYEE COMMUNICATIONS......................- 56 -
9.04. THIRD PARTY BENEFICIARIES....................- 56 -
9.05. UNION EMPLOYEES..............................- 56 -
9.06. NON-UNION EMPLOYEES..........................- 57 -
ARTICLE 10
CONDITIONS TO CLOSING ......................................- 57 -
10.01. CONDITIONS TO BUYERS' OBLIGATIONS..........- 57 -
10.02. CONDITIONS TO OBLIGATIONS OF SELLER........- 63 -
10.03. FRUSTRATION OF CONDITIONS..................- 65 -
ARTICLE 11
SURVIVAL ...................................................- 65 -
11.01. SURVIVAL...................................- 65 -
ARTICLE 12
TERMINATION ................................................- 65 -
12.01. GROUNDS FOR TERMINATION....................- 65 -
12.02. EFFECT OF TERMINATION......................- 66 -
ARTICLE 13
MISCELLANEOUS ..............................................- 66 -
13.01. NOTICES....................................- 66 -
13.02. AMENDMENTS AND WAIVERS.....................- 68 -
13.03. FEES AND EXPENSES..........................- 68 -
13.04. SUCCESSORS AND ASSIGNS.....................- 69 -
13.05. GOVERNING LAW..............................- 69 -
13.06. COUNTERPARTS; EFFECTIVENESS................- 69 -
13.07. ENTIRE AGREEMENT; THIRD PARTY
BENEFICIARIES.............................- 69 -
13.08. BULK SALES LAWS............................- 69 -
13.09. CAPTIONS...................................- 69 -
13.10. SEVERABILITY...............................- 70 -
13.11. CONSENT TO JURISDICTION....................- 70 -
13.12. WAIVER OF JURY TRIAL.......................- 71 -
<PAGE>
ASSET PURCHASE AGREEMENT
AGREEMENT dated as of December 18, 1996 among Anchor Glass Container
Corporation, a Delaware corporation ("Seller"), Consumers Packaging Inc., a
corporation organized under the federal laws of Canada ("Consumers"), and
Owens-Brockway Glass Container Inc., a Delaware corporation ("OI"), Consumers
and OI being sometimes collectively referred to as the "Buyers."
W I T N E S E T H:
WHEREAS, Seller and its subsidiaries conduct a business which
manufactures, sells and distributes a diverse line of glass containers of
various types, designs and sizes, which are sold principally to customers in the
food and beverage industries (the "Business");
WHEREAS, OI desires to purchase from Seller certain of the assets of
the Business described on Appendix A (the "OI Assets"), and Seller desires to
sell the OI Assets to OI, upon the terms and subject to the conditions
hereinafter set forth;
WHEREAS, Consumers desires to purchase substantially all of the assets
of the Business (other than the OI Assets) and Seller desires to sell
substantially all of the assets of the Business to Consumers (other than the OI
Assets) upon the terms and subject to the conditions hereinafter set forth;
WHEREAS, on September 13, 1996, Seller filed a voluntary petition (the
"Petition") for reorganization relief pursuant to Chapter 11 of Title 11 of the
United States Code, 11 U.S.C. Sections 301 et seq. (the "Bankruptcy Code") in
the United States Bankruptcy Court for the District of Delaware and such case is
presently pending under Case No. 96-1434 PJW;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements herein contained, the
parties hereto agree as follows:
<PAGE>
ARTICLE 1
DEFINITIONS
Section 1.01. DEFINITIONS. (a) The following terms, as used herein,
have the following meanings:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such other Person.
"Balance Sheet Date" means June 30, 1996.
"Bankruptcy Court" means the United States Bankruptcy Court for the
District of Delaware.
"Citicorp" means Citicorp Leasing, Inc., a Delaware corporation and
the current holder of the Citicorp Loan.
"Citicorp Loan" means the loan evidenced and secured by the Renewal
First Mortgage Note dated as of June 16, 1992 by Landlord to Citicorp, the
Amended and Restated Mortgage and Security Agreement dated as of June 16, 1992
by Landlord to Citicorp and the Amended Assignment of Leases and Rents dated as
of June 16, 1992 by Landlord to Citicorp.
"Closing Balance Sheet" means a statement of the Purchased Assets and
the Assumed Liabilities as at the close of business on the Closing Date (or on
the date otherwise specified in Section 2.08(a)), together with the notes
thereto, prepared in accordance with the provisions of Section 2.08 and Exhibit
A hereto.
"Closing Date" means the date of the Closing.
"Closing Net Assets" means the excess of the value of the Purchased
Assets over the amount of the Assumed Liabilities as reflected on the Closing
Balance Sheet.
"Excluded Contracts" means (i) (A) all purchase or supply agreements
of Seller or any of its subsidiaries, (B) all agreements relating to the
disposition of assets of Seller or any of its subsidiaries, the consummation of
which has occurred prior to the date hereof, and (C) all agreements of Seller or
any of its subsidiaries relating to indebtedness for borrowed money, in each
case, other than those designated in writing by Buyers to Seller within 10 days
of the date hereof and (ii) all other contracts, agreements or instruments of
Seller or any of its subsidiaries that are designated in writing by Buyers to
Seller within 10 days of the date hereof as "Excluded Contracts" pursuant to
Section 2.01(iv).
"Final June 30 Net Assets" means the June 30 Net Assets as the same
may be adjusted and finally determined pursuant to Section 2.08.
"Final Post-Filing Trade Payables" means the trade payables of Seller
incurred subsequent to the filing of the Petition and in existence on the
Closing Date, as the same is finally determined pursuant to Section 2.08.
"Final Net Assets" means Closing Net Assets (i) as shown in Buyers'
calculation delivered pursuant to Section 2.08(a) if no notice of disagreement
with respect thereto is delivered pursuant to Section 2.08(b) or (ii) if such a
notice of disagreement is delivered, (A) as agreed by the parties pursuant to
Section 2.08(c) or (B) in the absence of such agreement, as shown in the
Accounting Referee's calculation delivered pursuant to Section 2.08(c); provided
that Final Net Assets shall not in any event be less than Buyers' calculation of
Closing Net Assets delivered pursuant to Section 2.08(a) nor more than Seller's
calculation of Closing Net Assets delivered pursuant to Section 2.08(c).
"Financing Letters" means the letter of Bankers Trust Company dated
December 2, 1996, the letter of BT Securities Corporation dated December 2,
1996, the letter of BT Commercial Corporation dated December 2, 1996, the letter
of PNC Capital Markets, Inc. dated November 22, 1996 and the letter of The
Toronto-Dominion Bank dated November 26, 1996.
"Headquarters Lease" means the Lease dated March 31, 1988 between
Landlord and Seller, as modified by the First Amendment to Lease dated June 16,
1992, the Letter Agreement dated as of April 27, 1992 attached as Schedule 1 to
said First Amendment to Lease, the Agreement dated as of June 16, 1992 attached
as Schedule 1 to the First Amendment to Building Option Agreement, the Second
Amendment to Lease dated as of September 30, 1993 and the Third Amendment to
Lease dated as of February 22, 1995, that certain Agreement dated as of March
31, 1996 among Seller, Landlord and Citicorp Leasing, Inc., which provided for
the waiver of the default under the Lease pursuant to Section 9(a)(13) of the
Lease (the "Lease Default") through September 15, 1996, and that certain Amended
and Restated Agreement dated as of September 12, 1996 among Seller, Landlord and
Citicorp Leasing, Inc., which provided for the waiver of the Lease Default
through January 15, 1997, and the Memorandum of Lease, the Building Option
Agreement (as modified by Amendment No. 1 to Building Option Agreement), the
Memorandum of Building Option Agreement, the Land Option Agreement, the
Memorandum of Land Option Agreement, the Option Agreement for Parking Easement
and Memorandum of Option for Parking Agreement (referred to therein).
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"Included Insurance Policies" means the policies of Seller and its
subsidiaries maintained under or in connection with any Benefit Arrangement or
Employee Plan, to the extent (i) the Seller's obligations under such Benefit
Arrangement or Employee Plan are an Assumed Liability, (ii) such policies have
been identified to Buyers pursuant to the provisions of Section 3.13(n) and
(iii) Buyers will have, within 10 days from the date hereof, expressly
identified such policies as "Included Insurance Policies" by written notice to
Seller.
"June 30 Net Assets" means the excess of the value of the Purchased
Assets over the amount of the Assumed Liabilities as reflected on the Reference
Balance Sheet.
"June 30 Trade Payables" means the trade payables of Seller and its
subsidiaries at June 30, 1996 as agreed to by Buyers and Seller or as finally
determined pursuant to Section 2.06(i).
"Landlord" means Fountain Associates I, Ltd., a Florida limited
partnership and the current holder of the landlord's interest under the
Headquarters Lease.
"Lenders" means Bankers Trust Company, BT Securities Corp., BT
Commercial Corporation, PNC Capital Markets, Inc. and The Toronto-Dominion Bank,
as lenders pursuant to the Financing Letters.
"Lien" means, with respect to any property or asset, any mortgage,
lien, pledge, charge, security interest, encumbrance or other adverse claim of
any kind in respect of such property or asset. For the purposes of this
Agreement, a person shall be deemed to own subject to a Lien any property or
asset which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such property or asset.
"Material Adverse Effect" means a material adverse effect on the
condition (financial or otherwise), business, assets or results of operations of
the Business, taken as a whole.
"New Anchor" means the subsidiary of Consumers to be formed under
Delaware law, to which Consumers shall assign its interest and obligations under
this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means an individual, corporation, partnership, association,
trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Purchase Option" has the meaning assigned to it in the Headquarters
Lease.
"Reference Balance Sheet" means the pro forma adjusted statement of
the Purchased Assets and Assumed Liabilities, and the notes thereto, as of June
30, 1996 and attached hereto as Exhibit A.
"Renewal Option" has the meaning assigned to it in the Headquarters
Lease.
"Residual Value Guaranty Amount" has the meaning assigned to it in the
Headquarters Lease.
"Sale Order" means an order issued by the Bankruptcy Court
substantially in the form of Exhibit B hereto, authorizing the assumption of
this Agreement and approving this Agreement and all of the transactions
contemplated hereby.
"Seller Defined Benefit Plans" means the Anchor Glass Container
Corporation Service Retirement Plan, the Pension Plan for Hourly Employees of
Latchford Glass Company and Associated Companies, the Anchor Glass Container
Corporation Retirement Plan for Salaried Employees, and the Retirement Plan for
Salaried Employees of Latchford Glass Company and Associated Companies.
"Seller Defined Contribution Plans" means the Anchor Glass Container
Corporation Salaried Employees Savings Plan and the Anchor Glass Container
Corporation Hourly Employees Supplemental Retirement Plan.
"Termination Option" has the meaning assigned to it in the
Headquarters Lease.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
TERM SECTION
Accounting Referee 2.06
Actual Balance Sheet 3.05
Allocation Statement 2.06
Apportioned Obligations 8.03
Assumed Liabilities 2.03
Bankruptcy Code Preamble
Benefit Arrangement 3.13
Books and Records 5.02
Business Preamble
Business Union Employees 9.05
CERCLA 3.12
Closing 2.07
Code 8.01
Confidentiality Agreements 6.01
Contracts 3.06
Coors 10.01
Employee Plan 3.13
Environmental Laws 3.12
ERISA 3.13
ERISA Affiliate 3.13
Estimated Final Net Assets 2.06
Estimated Purchase Price 2.06
Estimated Post-Filing Trade Payables 2.06
Exchange Act 3.02
Excluded Assets 2.02
Excluded Liabilities 2.04
Fee Properties 3.11
Governmental Entity 10.01
Hazardous Substances 3.12
Headquarters Property 3.11
Included Contracts 2.01
Intellectual Property Rights 3.16
Interim Order 5.05
Leased Properties 3.11
Multiemployer Plan 3.13
OI Assets Preamble
OI Assumed Obligations 2.03
Permit 3.14
Permitted Lien 3.11
Petition Preamble
Petty Cash 2.01
Post-Closing Tax Period 8.03
Pre-Closing Tax Period 8.01
Predecessor Entity 3.05
Purchased Assets 2.01
Purchase Price 2.06
Real Properties 3.11
Real Property Leases 3.06
SEC 3.05
SEC Documents 3.05
Securities Act 3.05
Seller Products and Services 3.17
Shares 2.06
Strohs 10.01
Tax 8.01
Vitro 3.06
Vitro Agreement 10.01
WARN Act 7.04
<PAGE>
ARTICLE 2
PURCHASE AND SALE
2.01. PURCHASE AND SALE. Except as otherwise provided below, upon the
terms and subject to the conditions of this Agreement, Buyers agree (OI's
undertaking being limited to the OI Assets) to purchase from Seller and Seller
agrees to sell, transfer, assign and deliver, or cause to be sold, transferred,
assigned and delivered, to Buyers (OI's interest being limited to the OI Assets)
at Closing, free and clear of all Liens, other than Permitted Liens, all of
Seller's and its subsidiaries' right, title and interest in, to and under the
assets, properties and business, of every kind and description, wherever
located, real, personal or mixed, tangible or intangible, owned, held or used
primarily in the conduct of the Business by Seller and its subsidiaries as the
same shall exist on the Closing Date, including all assets shown on the
Reference Balance Sheet and not disposed of in the ordinary course of business,
and all assets of the Business thereafter acquired by Seller and its
subsidiaries (the "Purchased Assets"), and including, without limitation, all
right, title and interest of Seller in, to and under:
(i) all real property and leases of, and other interests in,
real property used or owned or held for use in the conduct of the
Business, in each case together with all buildings, fixtures, and
improvements erected thereon, including without limitation the items
listed on Schedule 3.11(b), but excluding all residential real property
leases;
(ii) all personal property and interests therein, including
machinery, equipment, furniture, office equipment, communications
equipment, vehicles, storage tanks, spare and replacement parts, fuel
and other tangible property;
(iii) all raw materials, work-in-process,
finished goods, supplies and other inventories;
(iv) all rights under (A) all collective bargaining
agreements, employment and severance agreements, leases (other than all
residential real property leases), non-governmental licenses or
franchises, sales agreements, joint venture agreements, sales and
purchase orders, and the Included Insurance Policies, and (B) all other
contracts, agreements and instruments of Seller or any of its
subsidiaries (other than Excluded Contracts) relating to the Purchased
Assets or the Business, including without limitation the items listed
on Schedule 3.06(a), other than those contracts, agreements or
instruments in this Clause B that are designated in writing by Buyers
to Seller within 10 days of the date hereof as "Excluded Contracts"
(the items referred to in clauses (A) and (B), collectively, the
"Included Contracts");
(v) all accounts, notes and other receivables;
(vi) all prepaid expenses, including but not limited
to ad valorem taxes, leases and rentals;
(vii) all petty cash located at operating facilities
of the Business ("Petty Cash");
(viii) all of Seller's and its subsidiaries' rights, claims,
credits, causes of action or rights of set-off against third parties
relating to the Purchased Assets, including, without limitation,
unliquidated rights under manufacturers' and vendors warranties and
rebates;
(ix) all patents, copyrights, trademarks, trade names, service
marks, service names, technology, know-how, processes, trade secrets,
inventions, proprietary data, formulae, research and development data,
computer software programs and other intangible property, in each case
owned or licensed by Seller or any Affiliate of Seller and used or held
for use in the Business, and any applications for the same, including
without limitation the items listed on Schedule 3.16(a);
(x) all transferable licenses, permits or other governmental
authorization affecting, or relating in any way to, the Business,
including without limitation the transferable items listed on Schedule
3.14(a);
(xi) all books, records, files and papers, whether in hard
copy or computer format, used in the Business, including, without
limitation, engineering information, sales and promotional literature,
manuals and data, sales and purchase correspondence, lists of present
and former suppliers, lists of present and former customers, personnel
and employment records, and any information relating to Tax imposed on
the Purchased Assets;
(xii) all computer software programs and data
used in connection with the Business;
(xiii) all goodwill associated with the Business or the
Purchased Assets, together with the right to represent to third parties
that Buyers are the successors to the Business;
(xiv) all employee salary or bonus deferrals under any
employee benefit plan the obligations under which are an Assumed
Liability, to the extent the amount of such deferrals have not, as of
the Closing Date, been disbursed in accordance with such plan,
contributed to an employee benefit trust or paid as an insurance
premium; and
(xv) all air emissions Seller has, is entitled to or applied
for, including any air emissions where Seller has credit for or has
banked, applied to bank or agreed to sell or trade.
2.02. EXCLUDED ASSETS. Notwithstanding anything to the contrary herein
or otherwise, Buyers expressly understand and agree that the following assets
and properties of Seller (the "Excluded Assets") shall be excluded from the
Purchased Assets:
(i) all of Seller's cash and cash equivalents on hand
and in banks except for Petty Cash;
(ii) insurance policies, other than the Included Insurance
Policies;
(iii) the Excluded Contracts;
(iv) capital stock of subsidiaries of Seller;
(v) minute and stock books of Seller and its subsidiaries;
(vi) any Purchased Assets sold or otherwise disposed of in
the ordinary course of business and not in violation of any provisions
of this Agreement during the period from the date hereof until the
Closing Date; and
(vii) claims and causes of action to recover preferences,
fraudulent conveyances, to avoid liens and other similar rights under
the Bankruptcy Code belonging to Seller and its subsidiaries.
2.03. ASSUMPTION OF LIABILITIES. Upon the terms and subject to the
conditions of this Agreement, Buyers agree, OI's obligations being limited to
the assumption of the liabilities listed on Appendix B hereto (the "OI Assumed
Liabilities"), effective at the time of Closing, to assume the following
liabilities (the "Assumed Liabilities"):
(i) all liabilities of the types set forth on
the Reference Balance Sheet to the extent (except as
otherwise provided herein) included or reflected on
the Closing Balance Sheet;
(ii) all liabilities and obligations of Seller arising from
and after the Closing Date under all Included Contracts (other than
liabilities or obligations attributable to any failure by Seller to
comply with the terms thereof);
(iii) all liabilities and obligations under the Anchor Glass
Container Corporation Executive/Key Employee Retention Plan as such
Plan is in effect on the date hereof (other than liabilities and
obligations arising under such Plan prior to the Closing, which shall
remain liabilities and obligations of Seller);
(iv) all liabilities under Seller Defined Benefit Plans (but
excluding any and all liabilities for excise tax or related taxes or
penalties to the Internal Revenue Service arising out of the failure of
Seller to contribute to Seller Defined Benefit Plans) and all
liabilities to the PBGC in connection with Seller Defined Benefit
Plans, which liabilities shall be paid by the applicable Buyer in full
on the Closing Date to the extent due and owing on the Closing Date;
(v) all environmental liabilities relating to the Purchased
Assets or Business (but excluding any liabilities resulting from or
arising out of any (i) claim, action, suit, investigation, proceeding
or judgment relating to property disposed of by Seller or any of its
subsidiaries prior to the Closing Date or (ii) asbestos-related claims,
actions, suits, investigations, proceedings or judgments arising out of
any event or condition existing on or occurring prior to the Closing
Date);
(vi) trade payables of Seller which have arisen after the
filing of the Petition and which are in existence on the Closing Date;
(vii) accrued expenses relating to workers' compensation
claims;
(viii) all liabilities and obligations of Seller
arising under, related to or in connection with the Headquarters
Lease;
and
(ix) all liabilities and expenses in the aggregate relating to
insurance claims arising out of workers' compensation, general
liability, products liability, and automobile liability policies issued
to Seller by The Travelers Indemnity Company and its Affiliates
including The Aetna Casualty and Surety Company (or any predecessor)
for periods prior to January 1, 1997; provided, however, that the
amount of all such liabilities and expenses in the aggregate shall not
exceed the sum of all amounts shown on the Reference Balance Sheet for
all such insurance liabilities and expenses.
2.04. EXCLUDED LIABILITIES. Notwithstanding any provision in this
Agreement or any other writing to the contrary, Buyers are assuming only the
Assumed Liabilities (OI's obligations being limited to the OI Assumed
Liabilities) and are not assuming any other liability or obligation of Seller
(or any predecessor owner of all or part of its business and assets) of whatever
nature whether presently in existence or arising hereafter, including, without
limitation, except as set forth in clause (v) of Section 2.03, any liability for
any claim, action, suit or proceeding pending against, or judgment against,
Seller or any of its subsidiaries (including the Purchased Assets) as of the
Closing Date. All such other liabilities and obligations shall be retained by
and remain obligations and liabilities of Seller (all such liabilities and
obligations not being assumed being herein referred to as the "Excluded
Liabilities").
2.05. ASSIGNMENT OF CONTRACTS AND RIGHTS. Anything in this Agreement
to the contrary notwithstanding, this Agreement shall not constitute an
agreement to assign any Purchased Asset or any claim or right or any benefit
arising thereunder or resulting therefrom if an attempted assignment thereof,
without the consent of a third party thereto, would constitute a breach or other
contravention thereof or in any way adversely affect the rights of Buyers or
Seller thereunder. Seller and the applicable Buyer will use their best efforts
(but without any payment of money by Seller or Buyers) to obtain the consent of
the other parties to any such Purchased Asset or any claim or right or any
benefit arising thereunder for the assignment thereof to the applicable Buyer as
such Buyer may request. If such consent is not obtained, or if an attempted
assignment thereof would be ineffective or would adversely affect the rights of
Seller thereunder so that such Buyer would not in fact receive all such rights,
Seller and such Buyer will cooperate in a mutually agreeable arrangement under
which such Buyer would obtain the benefits and assume the obligations thereunder
in accordance with this Agreement, including sub-contracting, sub-licensing, or
sub-leasing to the applicable Buyer, or under which Seller would enforce for the
benefit of such Buyer, with such Buyer assuming Seller's obligations, any and
all rights of Seller against a third party thereto. Seller will promptly pay to
the applicable Buyer when received all monies received by Seller under any
Purchased Asset intended to be acquired hereunder by such Buyer or any claim or
right or any benefit arising thereunder, except to the extent the same
represents an Excluded Asset.
2.06. PURCHASE PRICE; ALLOCATION OF PURCHASE PRICE. (a) The purchase
price for the Purchased Assets (the "Purchase Price") is (i) an amount in cash
equal to (A) $333.6 million, of which Consumers shall pay $208.6 million and OI
shall pay $125.0 million, plus (B) the June 30 Trade Payables minus (C) the
Final Post-Filing Trade Payables and (ii) 490,000 shares of New Anchor common
stock and 1,876,000 shares of New Anchor 10% preferred stock (collectively, the
"Shares") (the terms of such 10% preferred stock being set forth on Appendix C)
which Consumers shall cause New Anchor to issue and deliver to Seller. Seller
and Consumers each hereby acknowledge and agree that OI has and shall have no
liability or obligation with respect to the Shares. The Purchase Price shall be
subject to adjustment as provided in Section 2.09, and shall be paid as provided
in Section 2.07. On the Closing Date, Buyers shall pay to Seller as provided in
Section 2.07 an aggregate amount in cash (the "Estimated Purchase Price") equal
to (i) $333.6 million (in the proportion specified in the first sentence of this
Section 2.06(a)) plus (ii) the June 30 Trade Payables minus (iii) the Estimated
Post-Filing Trade Payables plus or minus (iv) the amount set forth in Section
2.06(b) below as the adjustment to the Estimated Purchase Price, and Consumers
shall cause New Anchor to issue and deliver to Seller certificates representing
the Shares. If the June 30 Trade Payables exceed the Estimated Post-Filing Trade
Payables, the amount of such excess shall be paid by the Buyers in such
proportion as they may jointly specify to Seller; provided that if Buyers fail
to so specify, Buyers shall be jointly liable for the payment of the full amount
of such excess.
(b) Not less than three business days prior to the Closing
Date, Seller shall deliver to Buyers a certificate, signed by the chief
financial officer of Seller, setting forth Seller's good faith estimate
of trade payables incurred subsequent to filing of the Petition and
estimated to be in existence on the Closing Date (the "Estimated
Post-Filing Trade Payables"), together with reasonable information
supporting such estimate. Not less than three business days prior to
the Closing Date, Seller shall deliver to Buyers a certificate signed
by the Chief Financial Officer of Seller, setting forth Seller's good
faith estimate of Final Net Assets of Seller using Seller's December
31, 1996 Balance Sheet ("Estimated Final Net Assets"). If June 30 Net
Assets exceed Estimated Final Net Assets, the amount otherwise payable
to Seller by Buyers at the Closing shall be reduced (to be allocated
between them in accordance with their joint instructions), as an
adjustment to the Estimated Purchase Price, the amount of such excess.
If Estimated Final Net Assets exceed June 30 Net Assets, the applicable
Buyer or Buyers (in such proportion as Buyers shall jointly specify to
Seller; provided that if Buyers fail to so specify, Buyers shall be
jointly liable for the full amount of such excess) shall pay to Seller,
as an adjustment to the Estimated Purchase Price, the amount of such
excess.
(c) As soon as practicable after the Closing, Buyers shall
deliver to Seller a statement (the "Allocation Statement"), setting
forth the value of the Purchased Assets, which shall be used for the
allocation of the Purchase Price (together with the Assumed
Liabilities) among the Purchased Assets; provided that prior to the
Closing Date, if required as the result of transfer or similar taxes,
Buyers and Seller shall agree as to the allocation for Fee Properties.
(d) Seller shall have a period of 45 days after the delivery
of the Allocation Statement to present in writing to Buyers notice of
any objections Seller may have to the allocation set forth in the
Allocation Statement. Unless Seller timely objects, the Allocation
Statement shall be binding on the parties without further adjustment,
(e) If Seller shall raise any objections within the 45 day
period, Buyers and Seller shall negotiate in good faith and use their
best efforts to resolve such dispute. If the parties fail to agree
within 15 days after the delivery of the notice, then the disputed
items shall be resolved by Price Waterhouse LLP, or if such firm
declines to act in such capacity, by such other firm of independent
nationally recognized accountants chosen and mutually accepted by the
parties (the "Accounting Referee"). The Accounting Referee shall
resolve the dispute within 30 days of having the items referred to it.
The costs, fees and expenses of the Accounting Referee shall be borne
equally by Seller on the one hand and Buyers on the other.
(f) Any adjustment made with respect to the Purchase Price
pursuant to Section 2.09 of this Agreement shall be allocated in
accordance with the determination mutually agreed by Seller and Buyers.
In the event that an agreement is not reached within 15 days after the
determination of Final Net Assets pursuant to Section 2.09(a), the
disputed item(s) shall be resolved pursuant to Section 2.06(e) hereof.
(g) Seller and Buyers each agree to report an allocation of
such Purchase Price among the Purchased Assets in a manner entirely
consistent with the Allocation Statement (including any adjustment made
pursuant to Section 2.06(f) hereof), and agree to act in accordance
with such Allocation Statement in the filing of all tax returns
(including, without limitation, filing Form 8594 with its Federal
income tax return for the taxable year that includes the date of the
Closing) and in the course of any tax audit, tax review or tax
litigation relating thereto.
(h) Not later than 10 days prior to the filing of their
respective Form 8594 relating to this transaction, each party shall
deliver to the other parties a copy of its Form 8594.
2.07. CLOSING. Subject to the terms and conditions of this Agreement,
the sales and purchases of the Purchased Assets and the assumptions of the
Assumed Liabilities contemplated hereby shall take place at a closing (the
"Closing") to be held at the offices of Stroock & Stroock & Lavan, Seven Hanover
Square, New York, New York 10004 at 9:00 A.M., New York City time, on the later
to occur of (i) the date on which the conditions to Closing set forth in Article
10 shall have been satisfied or waived and (ii) the first business day following
the day that is ten days after the entry of the Sale Order, or at such other
time or place as Buyers and Seller may agree. At the Closing,
(a) Each Buyer shall deliver to Seller certified or official
bank checks payable to the order of Seller in an amount as to which
Buyers shall jointly notify Seller, which amounts together shall equal
the Estimated Purchase Price, or shall wire transfer such amounts to an
account designated in writing by Seller to Buyers not less than two
days prior to the Closing Date. Consumers shall cause New Anchor to
deliver to Seller certificates representing the Shares, which
certificates will be dated the Closing Date and will be issued and
registered in the name of the Seller, or in the name of such designees
of Seller as Seller so directs in a writing delivered to Consumers not
less than two days prior to the Closing Date.
(b) Seller and each Buyer shall enter into an assignment and
assumption agreement (OI's obligations being limited to the OI Assumed
Obligations) and Seller shall deliver to the applicable Buyer (or
permitted assignees as Buyers shall jointly instruct Seller) such
special warranty deeds (or local equivalents), bills of sale,
endorsements, consents, assignments and other good and sufficient
instruments of conveyance and assignment as the parties and their
respective counsel shall deem reasonably necessary or appropriate to
vest in the applicable Buyer all right, title and interest in, to and
under the Purchased Assets being acquired by such Buyer.
2.08. CLOSING BALANCE SHEET. (a) As promptly as practicable, but no
later than 90 days, after the Closing Date, Buyers will cause to be prepared and
delivered to Seller (a) the Closing Balance Sheet and (b) the Final Post- Filing
Trade Payables, together with an unqualified report of Arthur Andersen L.L.P.
thereon, and a certificate based on such Closing Balance Sheet setting forth
Buyers' calculation of Closing Net Assets and Final Post-Filing Trade Payables.
The Closing Balance Sheet shall include the Purchased Assets and Assumed
Liabilities as at the close of business on the Closing Date presented fairly in
accordance with generally accepted accounting principles through the application
of the accounting methods and such other procedures applied in the preparation
of the Reference Balance Sheet and without giving effect to any writedown of
non-current assets to reflect the sale of the Purchased Assets pursuant to this
Agreement otherwise required by generally accepted accounting principles.
Notwithstanding anything to the contrary contained herein, if the Closing Date
shall occur on or after January 10, 1997, the Closing Balance Sheet with respect
to the calculation of Closing Net Assets and Final Net Assets only shall include
the Purchased Assets and Assumed Liabilities as at the close of business on
January 10, 1997, but in all other respects shall be prepared on the basis set
forth above. In preparing the Closing and Reference Balance Sheets, consistent
account definitions, analytical procedures, and valuation methods should be
applied in determining the account balances. Except as provided below for
accruals for pension and other post-retirement benefit obligations, if, in
connection with the preparation of the Closing Balance Sheet or the calculation
of Closing Net Assets, any errors are discovered that affect the value of the
Purchased Assets or the Assumed Liabilities set forth on the Reference Balance
Sheet, the Reference Balance Sheet shall be adjusted to correct for the effect
of such errors. With regard to accruals for pension and other post-retirement
benefit obligations, if an error is discovered in the Reference Balance Sheet
that remains applicable at the Closing Balance Sheet date, then the Closing
Balance Sheet only, not the Reference Balance Sheet, shall be adjusted to
correct for the effect of such errors. For purposes of this Section 2.08, in
determining whether any corrections are to be made as a result of errors or
inconsistencies, corrections will not be made unless an individual item exceeds
$50,000 and the aggregate net amount of all such items exceeds $500,000. In
preparing the Reference Balance Sheet certain "excess" reserves were applied and
reallocated to cover reserve requirements for other accounts. Attached as part
of Exhibit A is the final June 30, 1996 reserve allocation of Seller. In the
preparation of the Closing Balance Sheet, the reallocation of such "excess"
reserves shall be applied consistent with Exhibit A. Exhibit A sets forth the
Reference Balance Sheet including explanatory notes as to the use of the
Reference Balance Sheet in the determination of Purchased Assets and Assumed
Liabilities, and in determining a purchase price adjustment (if any), pursuant
to the provisions of this Agreement.
(b) If Seller disagrees with Buyers' calculation of Closing Net Assets
or Final Post-Filing Trade Payables delivered pursuant to Section 2.08(a),
Seller may, within 45 days after delivery of the documents referred to in
Section 2.08(a), deliver a notice to Buyers disagreeing with such calculations
and setting forth Seller's calculations of such amounts. Any such notice of
disagreement shall specify those items or amounts as to which Seller disagrees
and the basis for such disagreement, and Seller shall be deemed to have agreed
with all other items and amounts contained in the Closing Balance Sheet and
Final Post-Filing Trade Payables and the calculation of Closing Net Assets and
Final Post-Filing Trade Payables delivered pursuant to Section 2.08(a).
(c) If a notice of disagreement shall be duly delivered pursuant to
Section 2.08(b), Buyers and Seller shall, during the 15 days following such
delivery, use their best efforts to reach agreement on the disputed items or
amounts in order to determine, as may be required, the amounts of Closing Net
Assets and Final Post-Filing Trade Payables, which amounts shall not be less
than the amounts thereof shown in Buyers' calculations delivered pursuant to
Section 2.08(a) nor more than the amounts thereof shown in Seller's calculations
delivered pursuant to Section 2.09(b). If during such period, Buyers and Seller
are unable to reach such agreement, they shall promptly thereafter cause the
Accounting Referee promptly to review this Agreement and the disputed items or
amounts for the purpose of calculating Closing Net Assets and Final Post-Filing
Trade Payables. In making such calculations, the Accounting Referee shall
consider only those items or amounts as to which Seller has disagreed. The
Accounting Referee shall deliver to Seller and Buyers, as promptly as
practicable, a report setting forth such calculations. Such report shall be
final and binding upon the parties hereto. The cost of such review and report
shall be borne (i) by Buyers if the difference between Final Net Assets and
Closing Net Assets as set forth in Buyers' calculation of Closing Net Assets
delivered pursuant to Section 2.08(a) is greater than the difference between
Final Net Assets and Closing Net Assets as set forth in Seller's calculation of
Closing Net Assets delivered pursuant to Section 2.08(b), (ii) by Seller if the
first such difference is less than the second such difference and (iii)
otherwise one-half by Seller and one-half by Buyers.
(d) Buyers and Seller agree that they will, and agree to cause their
respective independent accountants and actuaries to, cooperate and assist in the
preparation of the Closing Balance Sheet and the calculation of Closing Net
Assets and Final Post-Filing Trade Payables and in the conduct of the audits and
reviews referred to in this Section 2.08, including without limitation, the
making available to the extent necessary of books, records, work papers and
personnel.
2.09. ADJUSTMENT OF PURCHASE PRICE. (a) If Estimated Final Net Assets
exceed Final Net Assets, Seller shall pay to Buyers (to be allocated between
them in accordance with their joint instructions), as an adjustment to the
Purchase Price, in the manner and with interest as provided in Section 2.09(c),
the amount of such excess. If Final Net Assets exceed Estimated Final Net
Assets, the applicable Buyer or Buyers (in such proportion as Buyers shall
jointly specify to Seller; provided that if Buyers fail to so specify, Buyers
shall be jointly liable for the payment of the full amount of such excess) shall
pay to Seller, as an adjustment to the Purchase Price, in the manner and with
interest as provided in Section 2.09(c), the amount of such excess.
(b) If Final Post-Filing Trade Payables exceeds Estimated Post-Filing
Trade Payables, Seller shall pay to Buyers (to be allocated between them in
accordance with their joint instructions), as an adjustment to the Purchase
Price, in the manner and with the interest as provided in Section 2.09(c), the
amount of such excess. If Estimated Post-Filing Trade Payables exceeds Final
Post-Filing Trade Payables, the applicable Buyer or Buyers (in such proportion
as Buyers shall jointly specify to Seller; provided that if Buyers fail to so
specify, Buyers shall be jointly liable for the payment of the full amount of
such excess) shall pay to Seller, as an adjustment to the Purchase Price, in the
manner and with interest as provided in Section 2.09(c), the amount of such
excess.
(c) METHOD OF PAYMENT. Any payments pursuant to Sections 2.09(a) or
(b) shall be added together or netted against each other, as appropriate, and
shall be made at a mutually convenient time and place within 10 days after the
same have been determined. Any payments pursuant to this Section 2.09 shall be
made by delivery by the applicable Buyer or Buyers, or Seller, as the case may
be, of certified or official bank checks payable to the appropriate party or by
wire transfer of such funds to an account designated by such party or by causing
such payment to be credited to such account of such other parties as may be
designated by such party. The amount of any payment to be made pursuant to this
Section 2.09 shall bear interest from and including the Closing Date to but
excluding the date of payment at a rate per annum equal to the rate publicly
announced from time to time by Citibank, N.A. in New York City as its prime rate
in effect from time to time during the period from the Closing Date to the date
of payment. Such interest shall be payable at the same time as the payment to
which it relates and shall be calculated daily on the basis of a year of 365
days and the actual number of days elapsed.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyers as follows:
3.01. AUTHORITY. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Seller
has all requisite corporate power and authority to enter into this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. Subject to approval by the Bankruptcy Court, (a) all
corporate and stockholder acts and other proceedings required to be taken by
Seller to authorize the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
properly taken and (b) this Agreement has been duly executed and delivered by
Seller and constitutes a legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms.
3.02. NO CONFLICTS; CONSENTS. (a) Except as set forth in Schedule
3.02(a), the execution and delivery of this Agreement by Seller do not, and the
consummation of the transactions contemplated hereby and compliance with the
terms hereof will not, conflict with, or result in any violation of or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any obligation under, or
loss of a benefit relating to the Business under, or result in the creation of
any Lien (other than Permitted Liens) upon any of the Purchased Assets under,
any provision of (i) the Certificate of Incorporation or By-laws of Seller or
any of its subsidiaries, (ii) assuming the obtaining of all required consents,
any agreement or obligation to which Seller or any of its subsidiaries is a
party or by which any of the Purchased Assets are bound or (iii) any applicable
judgment, injunction, order or decree, or statute, law, ordinance, rule or
regulation, in each case other than such as, individually or in the aggregate,
would not have a Material Adverse Effect.
(b) No material consent, approval, license, permit, order or
authorization of, or registration, declaration or filing with, any Governmental
Entity is required to be obtained or made by or with respect to Seller or any of
its subsidiaries in connection with the execution, delivery and performance of
this Agreement or the consummation of the transactions contemplated hereby,
other than (i) compliance with and filings under the HSR Act, if applicable,
(ii) compliance with and filings under Section 13(a) or 15(d), as the case may
be, of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
(iii) compliance with and filings and notifications under applicable
Environmental Laws, (iv) compliance with any notices, motions, orders or
approvals required by the Bankruptcy Court or the Bankruptcy Code and the rules
thereunder, (v) those set forth on Schedule 3.02(a) and (vi) those that may be
required solely by reason of Buyers' participation in the transactions
contemplated hereby.
3.03. SUFFICIENCY OF AND TITLE TO THE PURCHASED ASSETS. (a) The
Purchased Assets constitute, and on the Closing Date will constitute, all of the
assets or property used or held for use primarily in the Business, except for
the Excluded Assets.
(b) Upon consummation of the transactions contemplated hereby, Buyers
will have acquired good and marketable title (which in the case of Fee
Properties are insurable at regular rates by a reputable title company) in and
to, or a valid leasehold interest in, each of the Purchased Assets to be
acquired by each of them, respectively, free and clear of all Liens, except for
Permitted Liens.
3.04. ORGANIZATION AND STANDING; BOOKS AND RECORDS. All subsidiaries
of Seller and their respective jurisdictions of incorporation are set forth on
Schedule 3.04(a). Each of Seller's subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation. Except as set forth on Schedule 3.04(b), each of Seller and its
subsidiaries has full corporate power and authority and possesses all
governmental franchises, licenses, permits, authorizations and approvals
necessary to enable it to own, lease or otherwise hold its assets and to carry
on its business as presently conducted, other than such the lack of which would
not, individually or in the aggregate, have a Material Adverse Effect. Each of
Seller and its subsidiaries is duly qualified and in good standing to do
business as a foreign corporation in each jurisdiction in which the conduct or
nature of its business or the ownership, leasing or holding of its properties
makes such qualification necessary, except such jurisdictions where the failure
to be so qualified or in good standing would not, individually or in the
aggregate, have a Material Adverse Effect.
Seller has prior to the execution of this Agreement delivered to
Buyers true and complete copies of the Certificate of Incorporation and By-laws,
each as amended to date and as currently in effect, of Seller and each of its
subsidiaries. The minute books of Seller and each of its subsidiaries (which
have been made available for inspection by Buyers prior to the date hereof) are
true and complete in all material respects.
3.05. SEC DOCUMENTS; FINANCIAL STATEMENTS; UNDISCLOSED LIABILITIES.
(a) Seller (and any entity to which it is a successor issuer for purposes of
Rule 12g-3 under the Exchange Act, each such entity being a "Predecessor
Entity") has filed all required reports, schedules, forms, statements and other
documents with the Securities and Exchange Commission (the "SEC") since June 30,
1993 (the "SEC Documents"). Seller has delivered to Buyers (i) Seller's annual
reports on Form 10-K for its fiscal years ended December 31, 1995, 1994 and
1993, (ii) its quarterly reports on Form 10-Q for its fiscal quarters ended
March 31, 1996 and June 30, 1996, and (iii) all of the other SEC Documents filed
since December 31, 1995. The audited consolidated balance sheets of Seller and
its subsidiaries (including the notes thereto) set forth in the most recent SEC
Document of Seller filed prior to the date hereof on Form 10-K, as updated or
modified by the consolidated balance sheet and the notes thereto set forth in
the June 30, 1996 Form 10-Q filed subsequently thereto, shall be hereinafter
referred to as the "Actual Balance Sheet." As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act,
as the case may be, applicable to such SEC Documents, and none of the SEC
Documents contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The financial statements of Seller and each Predecessor Entity
included in the SEC Documents comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, were prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly present
the consolidated financial position of Seller and its subsidiaries and of each
Predecessor Entity and its subsidiaries, as the case may be, as of the dates
thereof and the consolidated results of operations and statements of cash flows
of Seller and its subsidiaries and of each Predecessor Entity and its
subsidiaries, as the case may be, for the periods then ended (subject, in the
case of any unaudited statements, to the absence of footnotes and to normal
year-end audit adjustments).
(b) There are no material liabilities or obligations relating to the
Purchased Assets or the Business of any nature (whether accrued, absolute,
contingent or unasserted), except (1) as disclosed, reflected or fully reserved
against in the Actual Balance Sheet, (2) for items set forth in Schedule 3.05
and (3) for other liabilities and obligations incurred in the ordinary course of
business consistent with past practice since the Balance Sheet Date which,
individually or in the aggregate, are not material to the Purchased Assets and
the Business taken as a whole.
3.06. CONTRACTS. Except as set forth in Schedule 3.06(a), with respect
to the Business neither the Seller nor any of its subsidiaries is a party to or
bound by:
(a) (i) any lease of real property ("Real Property Leases")
under which Seller or any subsidiary of Seller uses or occupies or has
the right to use or occupy, now or in the future, any real property, in
each case providing for annual rentals of more than $90,000 per annum
or $1,000,000 in the aggregate or (ii) any lease of personal property
under which Seller or any subsidiary of Seller uses or has the right to
use, now or in the future, any personal property, in each case
providing for annual rentals of more than $50,000 per annum or $100,000
in the aggregate;
(b) any agreement for the purchase of materials, supplies,
goods, services, equipment or other assets that provides for either (i)
annual payments by Seller and its subsidiaries of $500,000 or more or
(ii) aggregate payments by Seller and its subsidiaries of $500,000 or
more, or any agreement for the purchase of real property;
(c) any sales, distribution or other similar agreement
providing for the sale by Seller or any of its subsidiaries of
materials, supplies, goods, services, equipment or other assets that
provides for either (i) annual payments to Seller and its subsidiaries
of $5,000,000 or more or (ii) aggregate payments to Seller and its
subsidiaries of $10,000,000 or more, or any agreement for the sale of
real property or granting to a third party an option to purchase or
lease, or a right of first refusal to purchase or lease, any real
property of Seller or any of its subsidiaries;
(d) any partnership, joint venture or other similar agreement
or arrangement;
(e) any agreement relating to the acquisition or disposition
of any business that provides for aggregate payments by or to Seller or
any of its subsidiaries of $10,000,000 or more (whether by merger, sale
of stock, sale of assets or otherwise);
(f) any option, license, franchise or similar agreement that
provides for either (i) annual payments by Seller and its subsidiaries
of $100,000 or more or (ii) aggregate payments by Seller and its
subsidiaries of $200,000 or more;
(g) any agency, dealer, sales representative, marketing,
distribution or other similar agreement that provides for either (i)
annual payments by Seller and its subsidiaries of $500,000 or more or
(ii) aggregate payments by Seller and its subsidiaries of $1,000,000 or
more;
(h) any agreement that limits the freedom of Seller or any of
its subsidiaries to compete in any line of business or with any person
or in any area or to own, operate, sell, transfer, pledge or otherwise
dispose of or encumber any Purchased Asset or which would so limit the
freedom of Buyers after the Closing Date;
(i) any agreement with or for the benefit of (i) any
stockholder, officer or director of Seller or any of its subsidiaries,
(ii) Vitro, S.A. or any of its subsidiaries ("Vitro") or (iii) any
employee of Seller or any of its subsidiaries (other than Seller and
its subsidiaries), other than, (x) in each case, agreements set forth
on Schedule 3.13(b), and (y) with respect to clause (iii) compensatory
arrangements with employees in general and agreements entered into in
the ordinary course of Business; or
(j) any other agreement or commitment not made in the ordinary
course of business that is material to the Business taken as a whole.
Except as set forth in Schedule 3.06(b), all such agreements listed in such
Schedule (collectively, the "Contracts") are valid and binding agreements of
Seller or one of its subsidiaries and are in full force and effect in all
material respects. Except as set forth in Schedule 3.06(c), each of Seller and
its subsidiaries has performed all material obligations required to be performed
by it to date under the Contracts and it is not in breach or default in any
material respect thereunder; to the knowledge of Seller, no condition exists
that with notice or lapse of time or both would constitute a material default
thereunder; and, to the knowledge of Seller, no other party to any of the
Contracts is in material breach or default thereunder. Seller has delivered or
made available true and complete copies of each of the Contracts (including all
modifications, amendments and supplements) to Consumers and to OI, those
specific Contracts requested by OI, prior to the date hereof.
3.07. ABSENCE OF CHANGES OR EVENTS. Except as set forth in Schedule
3.07(a), since the Balance Sheet Date, the Business has been conducted in the
ordinary course substantially consistent with past practices; provided that
since the filing of the Petition, Seller has been required to subject certain
transactions to Bankruptcy Court approval, has been precluded from paying
pre-petition liabilities except as otherwise authorized by the Bankruptcy Court,
has been granted authority to incur new and replacement liens in favor of its
debtor-in- possession lenders and certain other secured creditors, and has been
subject to set-off, recoupment and reclamation claims by creditors, and to the
alteration of normal trade credit terms by many suppliers. As a result of the
Petition, Seller is in default in many of its obligations to creditors, which
creditors are stayed from proceeding on their claims. In addition, prior to and
after the filing of the Petition, Seller experienced liquidity constraints which
caused it to alter certain normal business practices as set forth on Schedule
3.07(a). The existence of the constraints described herein are acknowledged by
Buyers. Except as set forth above, there has not been:
(a) any material adverse change in the condition
of the plant, property and equipment that constitutes
part of the Purchased Assets;
(b) any creation or assumption by Seller or any of its
subsidiaries of any Lien (other than Permitted Liens) on any Purchased
Asset other than in the ordinary course of business consistent with
past practices;
(c) any making of any loan, advance or capital contribution to
or investment in any Person other than loans, advances or capital
contributions to or investments in wholly-owned subsidiaries of Seller;
(d) any damage, destruction or other casualty loss (whether or
not covered by insurance) or condemnation or other governmental taking
or sale in lieu thereof affecting the Business or any Purchased Asset
which, individually or in the aggregate, has had or would reasonably be
expected to have a Material Adverse Effect (it being understood for
purposes of this clause (d) that a material adverse change in the
operations of any operating manufacturing plant shall constitute a
Material Adverse Effect);
(e) any transaction or commitment made, or any contract or
agreement entered into, by Seller or any of its subsidiaries relating
to the Business or any Purchased Asset (including the acquisition or
disposition of any such assets) or any relinquishment by Seller or any
of its subsidiaries of any contract or other right, in any such case,
that is material to the Business, taken as a whole;
(f) any change in any method of accounting or accounting
practice (including consistent application) by Seller or any of its
subsidiaries with respect to the Business;
(g) any (i) individual employment, deferred compensation,
severance, retirement or other similar agreement entered into with any
director, officer or employee of Seller or any of its subsidiaries (or
any amendment to any such existing agreement), (ii) grant of any
severance or termination pay to any director, officer or employee of
Seller or any of its subsidiaries, or (iii) change in compensation or
other benefits payable to any director, officer or employee of Seller
or any of its subsidiaries pursuant to any severance or retirement
plans or policies thereof, except in the case of clauses (ii) and
(iii), such grants or changes as may have been on a Seller-wide or
subsidiary-wide basis pursuant to a written Seller or subsidiary policy
concurrently in effect, or in the ordinary course of business
consistent with past practices;
(h) any labor dispute, other than routine individual
grievances, or any activity or proceeding by a labor union or
representative thereof to organize any employees of the Business, which
employees were not subject to a collective bargaining agreement at the
Balance Sheet Date, or any lockouts, strikes, slowdowns, work stoppages
or threats thereof by or with respect to such employees; or
(i) any capital expenditure, or commitment for a capital
expenditure, for additions or improvements to property, plant and
equipment in excess of that set forth on the budget used in connection
with Seller's debtor-in-possession financing previously furnished by
Seller to Buyers.
3.08. LITIGATION. Except as set forth on Schedule 3.08(a) or in the
most recent SEC Document of Seller filed prior to the date hereof on Form 10-K,
there are no (i) outstanding judgments, orders, injunctions or decrees of any
Governmental Entity or arbitration tribunal against Seller or any of its
subsidiaries or any Purchased Asset which, individually or in the aggregate,
have had or would reasonably be expected to have a Material Adverse Effect or
which would restrain, prohibit, alter or materially delay the transactions
contemplated by this Agreement or (ii) actions, suits, investigations or
proceedings pending against, or to the knowledge of Seller, threatened against
or affecting, the Business or any Purchased Asset before any court or arbitrator
or any Governmental Entity which, if determined or resolved adversely in
accordance with the plaintiff's demands, would, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect or which in
any manner challenge or seek to restrain, prohibit, alter or materially delay
the transactions contemplated by this Agreement. The provisions of this Section
do not apply to Environmental Laws, which are covered elsewhere in this
Agreement.
3.09. COMPLIANCE WITH LAWS AND COURT ORDERS. Except as set forth on
Schedule 3.09(a), neither Seller nor any of its subsidiaries is in violation of,
and has not since January 1, 1994 violated, any law, rule, regulation, judgment,
injunction, order or decree applicable to the Purchased Assets or the conduct of
the Business in any respect that, individually or in the aggregate, has had or
would reasonably be expected to have a Material Adverse Effect. The provisions
of this Section do not apply to Environmental Laws, which are covered elsewhere
in this Agreement.
3.10. EMPLOYEES. Schedule 3.10(a) sets forth a true and complete list
as of a recent date of the names, titles and annual salaries and cash bonuses of
all officers of Seller and its subsidiaries and all other employees of the
Business whose annual base salary exceeds $100,000. Except as set forth in
Schedule 3.10(b), to the actual knowledge of the executive officers of Seller
none of such employees has indicated to Seller or its subsidiaries that he
intends to resign or retire as a result of the transactions contemplated by this
Agreement or otherwise within one year after the Closing Date.
3.11. PROPERTIES. (a) (1) As of the date hereof, Seller and its
subsidiaries have (i) good and valid title to all material tangible Purchased
Assets (other than the Real Properties which are covered below) reflected on the
Actual Balance Sheet or acquired after the Balance Sheet Date (except for
property sold or otherwise disposed of since the Balance Sheet Date in the
ordinary course of business consistent with past practices), (ii) good and valid
fee simple title (which is insurable at regular rates by a reputable title
company) to the Fee Properties, and (iii) valid leasehold interests in the
Leased Properties, in the case of each of clauses (i) through (iii) above, free
and clear of all Liens, except for the following:
(v) Liens in favor of Seller Defined Benefit Plans for failure
to make required contributions to Seller Defined Benefit Plans which
arose by operation of law on September 16, 1996;
(w) Those matters relating to each Fee Property and Leased
Property set forth on Schedule 3.11(a);
(x) Liens disclosed on the Actual Balance Sheet or the notes
thereto;
(y) Liens for taxes not yet due or being contested in good
faith or which, though due, may be paid without interest or penalty, in
each case for which adequate accruals or reserves have been established
on the Reference Balance Sheet; or
(z) In the case of the Real Properties, Liens that do not
secure any monetary obligations and that do not materially
(individually or in the aggregate with all other matters) detract from
the value of the property to which they relate as now used or adversely
affect the continued use of the property to which they relate in the
conduct of the business of Seller or its subsidiaries currently
conducted thereat, or in the case of personal property, Liens that do
not secure any monetary obligations and that do not materially
(individually or in the aggregate with all other matters) detract from
the value of the property to which they relate, as now used or
adversely affect the continued use of such assets in the conduct of the
business of Seller or its subsidiaries as currently utilized.
(2) As of the Closing Date, Seller and its subsidiaries shall have (I)
good and valid title to all material tangible Purchased Assets (other than Real
Properties which are covered below) reflected on the Reference Balance Sheet or
acquired after the Balance Sheet Date (except for property sold or otherwise
disposed of since the Balance Sheet Date in the ordinary course of business
consistent with past practices), (II) good and valid fee simple title (which is
insurable at regular rates by a reputable title company) to the Fee Properties
and (III) valid leasehold interests in the Leased Properties, in the case of
each of clauses (I) through (III) above, free and clear of all Liens, except for
the following (collectively, "Permitted Liens"):
(A) Liens set forth on Schedule 3.11(a) that are in effect as
of the Closing Date and affect the property to which they relate, do
not secure any monetary obligation and do not, individually or in the
aggregate with all other matters, materially detract from the value of
the property to which they relate as now used or materially adversely
affect the continued use of the property to which they relate in the
conduct of the business of Seller or its subsidiaries currently
conducted thereat;
(B) Liens disclosed on the Reference Balance Sheet and in
effect as of the Closing Date; or
(C) Liens referred to in paragraphs (v), (y) and (z) of
Section 3.11(a)(1) and in effect as of the Closing Date.
Without limiting the foregoing, the items on Schedule 3.11(a) marked "not a
Permitted Lien" shall not be Permitted Liens for purposes of this Agreement.
(b) Schedule 3.11(b) identifies all of the real properties owned (the
"Fee Properties") or leased (the "Leased Properties") by Seller and its
subsidiaries (the Fee Properties and the Leased Properties being collectively
referred to as the "Real Properties").
(c) Except as set forth on Schedule 3.11(c), to the knowledge of
Seller, the buildings and structures constituting part of the Fee Properties and
the Leased Property covered by the Headquarters Lease (the "Headquarters
Property") and related equipment, are in good operating condition and repair and
have been reasonably maintained in a manner consistent with standards generally
followed in the industry (giving due account to the age and length of use of
same, ordinary wear and tear excepted and damage by fire and other casualty
covered by insurance excepted), are structurally sound.
(d) Except as set forth on Schedule 3.11(d), the buildings and
structures constituting part of each of the Fee Properties and the Headquarters
Property currently have access to (i) public roads or valid easements over
private streets or private property for such ingress to and egress from such
property and (ii) water supply, storm and sanitary sewer facilities, telephone,
gas and electrical connections, fire protection, drainage and other public
utilities, in each case as is reasonably necessary for the current use of such
properties.
(e) The installation and construction of the buildings and structures
located on the Fee Properties and the Headquarters Property have been completed
in material compliance with all laws, rules, regulations, judgments, orders,
permits, licenses and other requirements of and agreements with all Governmental
Entities applicable to such properties; and all building permits, certificates
of occupancy, licenses and other authorizations required for current uses of
such properties have been obtained, other than those the failure of which to
obtain would not materially adversely affect the continued use of the relevant
property as now used, and true and complete copies thereof (to the extent in
Seller's or any of its subsidiaries' possession) have been provided to Buyers.
The provisions of this Section do not apply to the requirements under
Environmental Laws, which are covered elsewhere in this Agreement.
(f) Except as set forth in Schedule 3.02(a) or Schedule 3.11(f), (i)
each Real Property Lease is in full force and effect and has not been amended,
modified or supplemented, (ii) all rent and other sums and charges payable under
each Real Property Lease are current, (iii) no notice of a material default on
the part of the tenant or termination notice has been served under any Real
Property Lease which remains outstanding, (iv) other than as may exist as of the
date hereof (but not as of the Closing Date) by reason of filing of the
Petition, no uncured material default or termination event exists (and no
condition exists which with the giving of notice or the passage of time or both
would constitute a material default or termination event) under any Real
Property Lease and (v) the consummation of the transactions provided for herein
will not constitute a material default under any Real Property Lease or grounds
for the termination thereof.
(g) There is no underlying Lien affecting the Seller's Headquarters
Lease (other than arising under the Citicorp Loan) which is superior to the
interest of the tenant under such lease.
(h) There are no encroachments or other facts or conditions affecting
any of the Fee Properties or the Headquarters Property that would be revealed by
an accurate survey or inspection thereof which would, individually or in the
aggregate, materially detract from the value of such property as now used or
materially adversely affect the continued use of such property in the conduct of
the business of the Seller or its subsidiaries as currently utilized. None of
the material buildings and structures on the Fee Properties or the Headquarters
Property materially encroaches upon real property of another person or upon the
area of any easement (other than encroachments on utility easements to the
extent such encroachments would not, individually or in the aggregate,
materially detract from the value of such property as now used or materially
adversely affect the continued use of such property in the conduct of the
business of Seller and its subsidiaries as currently utilized) affecting the Fee
Properties or Headquarters Property.
3.12. ENVIRONMENTAL MATTERS. (a) For purposes of this Section, the
following terms shall have the meanings set forth below:
(i) "Environmental Laws" means any applicable federal, state,
local and foreign law, treaty, regulation, rule, judicial decision,
judgment, order, decree, injunction, permit or agreement as in effect
on the date hereof relating to human health and safety, the environment
or to pollutants, contaminants, wastes or chemicals or toxic,
radioactive, ignitable, corrosive, reactive or otherwise hazardous
substances, wastes or materials;
(ii) "Hazardous Substances" means any pollutant, contaminant
or waste or any toxic, radioactive, ignitable, corrosive, reactive or
otherwise hazardous substance, waste or material, including petroleum,
its derivatives, by-products and other hydrocarbons, and any substance,
chemical or material regulated under Environmental Laws; and
(iii) For purposes of this Section 3.12, "Seller" and
"subsidiary" shall include any entity which is, in whole or in part, a
predecessor of Seller or any subsidiary of Seller.
(b) Except as disclosed on Schedule 3.12, to the actual knowledge
(without any independent investigation) of any of Seller's executive officers,
plant managers, corporate environmental personnel or plant personnel with
supervisory responsibility for environmental matters (if any):
(i) except for matters that have been resolved with no
obligation, whether monetary or otherwise, remaining on the part of the
Seller or any of its subsidiaries, no notice, notification, demand,
request for information, citation, summons or order has been issued,
and no complaint has been filed, no penalty has been assessed, no
investigation, action, claim, suit, proceeding or review is pending or
threatened by any Governmental Entity or other person with respect to
any matters relating to Seller or any subsidiary of Seller and relating
to or arising out of any Environmental Law;
(ii) no Hazardous Substance has been discharged, disposed of,
dumped, injected, pumped, deposited, spilled, leaked, emitted or
released at, on or under any property now or previously owned, leased
or operated by Seller or any subsidiary of Seller except in accordance
with Environmental Laws;
(iii) there are no liabilities of Seller or any subsidiary of
Seller of or relating to the Purchased Assets or the Business arising
under or relating to any Environmental Law;
(iv) no property now or previously owned, leased or operated
by Seller or any subsidiary of Seller nor any property to which Seller
or any subsidiary of Seller has, directly or indirectly, transported or
arranged for the transportation of any Hazardous Substances is listed
or proposed for listing, on the National Priorities List promulgated
pursuant to the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA"), on CERCLIS (as defined in CERCLA) or
on any similar federal, state or foreign list of sites requiring
investigation or cleanup (excluding any state lists of leaking
underground storage tanks); and
(v) Seller and its subsidiaries are in compliance with all
Environmental Laws and have obtained all permits, licenses and
authorizations of Governmental Entities relating to or required by
Environmental Laws and necessary or proper for the business of Seller
or any subsidiary of Seller as currently conducted.
(c) There has been no written environmental assessment,
investigation, study or audit conducted which Seller has in its possession in
relation to the current or prior business of Seller or any subsidiary of Seller
or any property or facility now or previously owned, leased or operated by
Seller or any subsidiary of Seller which has not been made available to Buyers.
3.13. EMPLOYEE BENEFIT PLANS.
(a) For purposes of this Section, the following terms shall have the
meanings set forth below:
"Benefit Arrangement" means any employment, severance or
similar contract or arrangement (whether or not written) or any plan,
policy, fund, program or contract or arrangement (whether or not
written) providing for compensation, bonus, profit-sharing, stock
option, or other stock related rights or other forms of incentive or
deferred compensation, vacation benefits, insurance coverage (including
any self-insured arrangements), health or medical benefits, disability
benefits, worker's compensation, supplemental unemployment benefits,
severance benefits and post-employment or retirement benefits
(including compensation, pension, health, medical or life insurance or
other benefits) that (i) is not an Employee Plan, (ii) is entered into,
maintained, administered or contributed to, as the case may be, by
Seller or any of its subsidiaries or ERISA Affiliate and (iii) covers
any employee or former employee of Seller or any of its subsidiaries by
virtue of the individual's employment with Seller or any of its
subsidiaries.
"Employee Plan" means any material "employee benefit plan", as
defined in Section 3(3) of ERISA, that (i) is subject to any provision
of ERISA, (ii) is maintained, administered or contributed to by Seller
or any of its subsidiaries or ERISA Affiliate and (iii) covers any
employee or former employee of Seller or any of its subsidiaries by
virtue of the individual's employment with Seller or any of its
subsidiaries.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated thereunder.
"ERISA Affiliate" of any entity means any other entity which,
together with such entity, would be treated as a single employer under
Section 414 of the Code.
"Multiemployer Plan" means any plan that is a multiemployer
plan, as defined in Section 3(37) or Section 4001(a)(3) of ERISA.
(b) Schedule 3.13(b) lists each Employee Plan. Prior to the
execution of this Agreement, Seller has delivered or made available to
Buyers complete and accurate copies of the Employee Plans (and, if
applicable, related trust agreements) and all amendments thereto and
written interpretations thereof (including any summary plan description
and summary of material modifications) together with (i) the most
recent annual report prepared in connection with any Employee Plan
(Form 5500 including, if applicable, Schedule B thereto) and (ii) if
applicable, the most recent actuarial valuation report prepared in
connection with any Employee Plan. Seller has provided or made
available to Buyers complete actuarial data (including age, salary,
service and related data) for employees of Seller and its subsidiaries
as of the most recent practicable date.
(c) Except as set forth on Schedule 3.13(c), neither Seller
nor any of its ERISA Affiliates has incurred, or reasonably expects to
incur prior to the Closing, any liability under Title IV of ERISA
arising in connection with the termination of, or complete or partial
withdrawal from, any plan covered or previously covered by Title IV of
ERISA that is likely to become, after the Closing Date, an obligation
of either Buyer or any of their ERISA Affiliates. Except as disclosed
in Schedule 3.13(c), no condition exists that is likely to constitute
grounds for termination by the PBGC of any Employee Plan subject to
Title IV of ERISA that is maintained solely by Seller or any of its
ERISA Affiliates. Except as set forth on Schedule 3.13(c), no
"reportable event", within the meaning of Section 4043(c)(5), (6) or
(10) of ERISA, has occurred in connection with any Employee Plan
subject to Title IV of ERISA.
(d) Except as disclosed in Schedule 3.13(d), none of the
Employee Plans is a Multiemployer Plan. To Seller's knowledge, no
Employee Plan which is a Multiemployer Plan is or is reasonably
expected to become "insolvent" or in "reorganization," as such terms
are defined for purposes of Title IV of ERISA. Between the date of this
Agreement and the Closing Date, Seller will use reasonable efforts to
determine the aggregate amount of withdrawal liability which would be
incurred if Seller were to incur a complete withdrawal from any of the
scheduled Multiemployer Plans on or before the Closing Date.
(e) Except as disclosed in Schedule 3.13(e), each Employee
Plan which is intended to be qualified under Section 401(a) of the Code
has received a favorable determination letter from the Internal Revenue
Service that it is so qualified and, to Seller's knowledge, no event
has occurred since the date of such determination letter to adversely
affect the qualified status of such Plan. Prior to the execution of
this Agreement, Seller has furnished or made available to Buyers the
most recent determination letter of the Internal Revenue Service
relating to each such Employee Plan for which such a letter has been
received. Except as set forth on Schedule 3.13(e), each Employee Plan
(other than a Multiemployer Plan) has been maintained in compliance
with its terms and with the requirements prescribed by any and all
applicable statutes, orders, rules and regulations, including ERISA and
the Code, except where failure to so maintain would not be reasonably
likely to have a Material Adverse Effect.
(f) Schedule 3.13(f) lists each Benefit Arrangement. Prior to
the execution of this Agreement, Seller has furnished or made available
to Buyers copies or descriptions of each Benefit Arrangement. Each
Benefit Arrangement has been maintained in compliance with its terms
and with the requirements prescribed by any and all applicable
statutes, orders, rules and regulations other than where the failure to
so maintain would not have a Material Adverse Effect.
(g) Except as disclosed by Seller in writing to Buyers prior
to the date hereof or as set forth on Schedule 3.13(g), there has been
no amendment to, written interpretation of or announcement (whether
written or not written) by Seller or any of its ERISA Affiliates
relating to, or change in employee participation or coverage under, any
Employee Plan or Benefit Arrangement which would increase materially
the expense of maintaining such Plan or Arrangement above the level of
the expense incurred in respect thereof for the most recent fiscal
year. Except as set forth in Schedule 3.13(g), neither Seller nor any
Affiliate or employee of Seller has taken any action or made any
statement that could preclude or interfere with the right of Seller or
its successor to reduce or eliminate any post-retirement welfare
benefits provided under any Employee Plan or Benefit Arrangement.
(h) The accumulated post-retirement benefit obligations as of
June 30, 1996, in accordance with the principles of Financial
Accounting Standard No. 106, is fairly presented in the Reference
Balance Sheet, subject to the adjustments and assumptions set forth on
Exhibit A.
(i) Except as disclosed in Schedule 3.13(i), no legal action,
suit or claim is pending or, to the knowledge of Seller, threatened,
with respect to any Employee Plan or Benefit Arrangement (other than
claims for benefits in the ordinary course). Except as disclosed in
Schedule 3.13(i), no employee of Seller or any of its subsidiaries will
become entitled to any retirement, severance or other benefit solely as
a result of the transactions contemplated hereby.
(j) The obligation for unfunded pension obligations as of June
30, 1996, calculated in accordance with the principles of Financial
Accounting Standard No. 87, under all defined benefit plans maintained
by Seller is fairly presented on the Reference Balance Sheet, subject
to the adjustments and assumptions set forth on Exhibit A.
(k) Except as set forth in Schedule 3.13 (k), (i) neither
Seller nor any subsidiary of Seller is a party to any collective
bargaining agreement or other material labor union contract applicable
to any employee thereof; (ii) there are no material grievances
outstanding against Seller or any of its subsidiaries under any such
agreement or contract; (iii) there are no unfair labor practice charges
or complaints pending against Seller or any of its subsidiaries before
the National Labor Relations Board or any similar state agency; and
(iv) there are no strikes, slowdowns, work stoppages, lockouts, union
organizational campaigns or other protected concerted activity under
the National Labor Relations Act or, to Seller's knowledge, threats
thereof, by or with respect to any employees of Seller or any of its
subsidiaries which are reasonably likely to have a Material Adverse
Effect.
(l) Except as set forth in Schedule 3.13(l), neither Seller
nor any of its subsidiaries employs any person outside the United
States, and no Employee Plan or Benefit Arrangement is maintained
principally for employees of Seller or its subsidiaries outside the
United States.
(m) The Purchased Assets include sufficient equipment, books,
records (including personnel and employment records), computer software
programs and data, rights under contracts and other assets necessary to
administer the Benefit Arrangements and Employee Plan without
interruption on and after the Closing Date.
(n) Seller has provided Buyers with a list of each insurance
policy of Seller or its subsidiaries maintained under or in connection
with any Benefit Arrangement or Employee Plan.
3.14. LICENSES AND PERMITS. Schedule 3.14(a) correctly describes each
material license, franchise, permit or other similar authorization affecting, or
relating to, the Purchased Assets or Business and issued by a Governmental
Entity (collectively, the "Permits"), together with the name of the Governmental
Entity issuing such Permit. Except as set forth on Schedule 3.14(b) and except
for matters which would not be reasonably likely to have a Material Adverse
Effect, such Permits are valid and in full force and effect and neither Seller
nor any subsidiary of Seller is in default under, and no condition exists that
with notice or lapse of time or both would constitute a default under, any such
Permit. In general, the Permits are not transferable by Seller and all or
substantially all of the Permits will be terminated or impaired or become
terminable as a result of the transactions contemplated by this Agreement. The
provisions of this Section do not apply to the requirements under Environmental
Laws, which are covered elsewhere in this Agreement.
3.15. INSURANCE COVERAGE. All material tangible Purchased Assets and
risks of Seller are covered by currently effective insurance policies or binders
of insurance or programs of self-insurance in such types and amounts as are
consistent with customary practices and standards of companies engaged in
businesses and operations similar to the Business. Seller has furnished or made
available to Buyers true and complete copies of all insurance policies and
fidelity bonds relating to the Purchased Assets, the operation of the Business
and the employees, officers and directors of Seller or its subsidiaries. Except
as set forth on Schedule 3.15, to the knowledge of Seller, there is no material
claim by Seller or any subsidiary of Seller pending under any of such policies
or bonds relating to the Purchased Assets, the operation of the Business or the
employees, officers or directors of Seller and its subsidiaries.
3.16. INTELLECTUAL PROPERTY. (a) Schedule 3.16(a) contains a list of
all trademarks, service marks, trade names, service names, inventions, patents,
trade secrets, know-how, copyright (including any registration or applications
for registration of any of the foregoing) or any other similar type of
proprietary intellectual property right, in each case which is owned or licensed
by Seller or any of its Affiliates and used or held for use primarily in the
Business (collectively, the "Intellectual Property Rights"). Schedule 3.06(a)
lists all licenses, sublicenses and other agreements to which Seller or any of
its Affiliates is a party and pursuant to which any Person is authorized to use
such Intellectual Property Rights.
(b) (i) Except as set forth on Schedule 3.16(b), neither Seller nor
any of its subsidiaries has been named as a defendant in any pending action,
suit, investigation or proceeding relating to, or otherwise has been notified in
writing of, any alleged claim of material infringement of any patents,
trademarks, trade names, service marks, service names, or copyrights of any
third party and (ii) Seller has no knowledge of any continuing material
infringement by any other person of any Intellectual Property Right. No
Intellectual Property Right is subject to any outstanding judgment, injunction,
order or decree restricting the use thereof by Seller or any of its subsidiaries
or restricting the licensing thereof by Seller or any of its subsidiaries to any
Person.
3.17. CUSTOMERS. Listed on Schedule 3.17 are the names of each
customer of Seller or any subsidiary of Seller that ordered products, goods or
services from Seller or a subsidiary of Seller (the "Seller Products and
Services") with an aggregate value of $5,000,000 or more during the twelve-month
period ended July 31, 1996. Except as set forth on Schedule 3.17, as of the date
hereof to the actual knowledge of the executive officers of the Seller, Seller
has not received any notice from any such customer that it has (i) ceased or is
planning to cease using the Seller Products and Services or (ii) within the past
30 days substantially reduced, or will substantially reduce, the amount of the
Seller Products and Services to be purchased in the future.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYERS
Consumers represents and warrants to Seller as follows in Sections
4.01 through 4.05, inclusive:
4.01. AUTHORITY-CONSUMERS. Consumers is a corporation duly organized,
validly existing and in good standing under the federal laws of Canada and has
all corporate powers and all material governmental licenses, authorizations,
permits, consents and approvals required to carry on its business as now
conducted. Consumers has all requisite corporate power and authority to enter
into this Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby to be consummated by Consumers. All corporate
and stockholder (or equivalent) acts and other proceedings required to be taken
by Consumers to authorize the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby to be
consummated by Consumers have been duly and properly taken. This Agreement has
been duly executed and delivered by Consumers and constitutes a legal, valid and
binding obligation of Consumers, enforceable against Consumers in accordance
with its terms.
4.02. NO CONFLICTS; CONSENTS-CONSUMERS. (a) The execution and delivery
of this Agreement do not, and the consummation of the transactions contemplated
hereby to be consummated by Consumers and compliance with the terms hereof to be
complied with by Consumers shall not, conflict with, or result in any violation
of or default (with or without notice or lapse of time, or both) under, (i) the
certificate of incorporation or by-laws of Consumers or other comparable
governing instruments of Consumers, as the case may be, or the comparable
governing instruments of any subsidiary of Consumers, (ii) any agreement or
obligation to which Consumers or any subsidiary of Consumers is a party or by
which any of their respective assets are bound, or (iii) any judgment,
injunction, order, or decree, or statute, law, ordinance, rule or regulation
applicable to Consumers or any subsidiary of Consumers or their respective
assets, in each case other than such as in the aggregate would not have a
material adverse effect on the ability of Consumers to consummate the
transactions contemplated hereby to be consummated by Consumers.
(b) No material consent, approval, license, permit, order or
authorization of, or registration, declaration or filing with, any Governmental
Entity is required to be obtained or made by or with respect to Consumers or any
of its subsidiaries or their respective Affiliates in connection with the
execution, delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby, other than (i) compliance with and filings
under the HSR Act, if applicable, (ii) compliance with and filings under Section
13(a) or 15(d), as the case may be, of the Exchange Act, (iii) compliance with
and filings and notifications under applicable Environmental Laws, (iv) any
notices, motions, orders or approvals required by the Bankruptcy Court or the
Bankruptcy Code and the rules thereunder and (v) those that may be required
solely by reason of Seller's participation in the transactions contemplated
hereby.
4.03. ACTIONS AND PROCEEDINGS, ETC. There are no (a) outstanding
judgments, orders, injunctions or decrees of any Governmental Entity or
arbitration tribunal against Consumers or any of its respective Affiliates, (b)
lawsuits, actions or proceedings pending or, to the knowledge of Consumers,
threatened against Consumers or any of its Affiliates, or (c) investigations by
any Governmental Entity which are, to the knowledge of Consumers, pending or
threatened against Consumers or any of its Affiliates, and which, in the case of
each of clauses (a), (b) and (c), have a material adverse effect on the ability
of Consumers to consummate the transactions contemplated hereby to be
consummated by Consumers.
4.04. AVAILABILITY OF FUNDS. Consumers has cash available or existing
borrowing facilities or firm commitments which together are sufficient to enable
New Anchor to purchase the portion of the Purchased Assets to be acquired by it
and otherwise consummate the transactions contemplated by this Agreement to be
consummated by Consumers.
4.05. NEW ANCHOR.
(a) New Anchor will be a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and will have all
corporate powers and all material governmental licenses, authorizations,
permits, consents and approvals necessary or required to enable it to own, lease
or otherwise hold the Purchased Assets to be purchased by Consumers hereunder
and to carry on its business. New Anchor will have all requisite corporate power
and authority to assume the rights, obligations and liabilities of Consumers
under this Agreement and to consummate the transactions contemplated hereby to
be consummated by Consumers. Prior to Closing, Consumers shall have assigned to
New Anchor all of Consumers' rights, and New Anchor shall have assumed all of
Consumers' obligations, under this Agreement as provided in Section 6.05 hereof
and, upon such assignment and assumption, this Agreement shall constitute a
legal, valid and binding obligation of New Anchor, as successor by assignment to
Consumers, enforceable in accordance with its terms (which assignment and
assumption shall not relieve Consumers of its obligations hereunder). All
corporate and stockholder (or equivalent) acts and other proceedings required to
be taken by New Anchor to consummate the transactions contemplated hereby to be
consummated by Consumers will be duly and properly taken. New Anchor will be
duly qualified and in good standing to do business as a foreign corporation in
each jurisdiction in which the conduct or nature of its business or the
ownership, leasing or holding of the Purchased Assets being purchased by
Consumers hereunder make such qualification necessary.
(b) New Anchor shall adopt and file with the Secretary of State of the
State of Delaware prior to Closing a Restated Certificate of Incorporation (the
"Certificate of Incorporation") which shall provide the terms set forth on
Appendix C with respect to the 10% Convertible Preferred Stock of New Anchor and
the terms set forth on Appendix D with respect to the 8% Junior Preferred Stock
and which Certificate of Incorporation shall be the certificate of incorporation
of New Anchor in effect at the Closing until thereafter amended as provided by
law and the Certificate of Incorporation. Not less than seven days prior to the
Closing, New Anchor shall furnish to Seller copies of the Certificate of
Incorporation and copies of the by-laws of New Anchor to be in effect at the
Closing until thereafter amended as provided by law, the Certificate of
Incorporation and such by-laws (the "By-laws") which shall be reasonably
satisfactory to Seller and New Anchor.
(c) The authorized capital of New Anchor will consist immediately
prior to the Closing of:
(i) 20,000,000 shares of Preferred Stock, par value
$25.00 per share, of which 2,160,000 shares will be issued and
designated 10% Convertible Preferred Stock, and 2,960,000
shares will be issued and designated 8% Junior Convertible
Preferred Stock, all of which will be issued to Consumers
prior to Closing for an aggregate cash purchase price of
$74,000,000. The rights, privileges and preferences of the 10%
Convertible Preferred Stock and the 8% Junior Convertible
Preferred Stock will be as stated in the Certificate of
Incorporation; and
(ii) 50,000,000 shares of Common Stock, par value
$.10 per share, of which 490,000 shares shall be issued to
Seller at Closing pursuant to this Agreement and 200,000
shares will be issued to Consumers prior to Closing for an
aggregate cash purchase price of $1,000,000.
(d) The Shares, when issued and delivered in accordance with the terms
hereof, will be duly authorized, validly issued, fully paid and non-assessable
and will be free of any liens, claims, charges, security interests, pledges,
voting or stockholder agreements, encumbrances or equities of any kind
whatsoever, will not be issued in violation of any preemptive rights and will
vest in Seller full rights with respect thereto, including the right to vote
such Shares on all matters properly presented to the stockholders of New Anchor
or to consent to the taking of certain actions, all to the extent to be set
forth in the Certificate of Incorporation and the By-laws. The shares of 8%
Junior Convertible Preferred Stock and Common Stock to be issued and outstanding
on the Closing Date will be duly authorized, validly issued, fully paid and
non-assessable The Common Stock issuable upon conversion of the 10% Convertible
Preferred Stock will have been duly and validly reserved for issuance and, upon
issuance in accordance with the terms of the Certificate of Incorporation, will
be duly authorized, validly issued, fully paid and non-assessable and will be
free of any liens, claims, charges, security interests, pledges, voting or
stockholder agreements, encumbrances or equities of any kind whatsoever, will
not be issued in violation of any preemptive rights and will vest in Seller full
rights with respect thereto, including the right to vote such Shares on all
matters properly presented to the stockholders of New Anchor or to consent to
the taking of certain actions, all to the extent to be set forth in the
Certificate of Incorporation and the By-laws. Except for (i) the issuances of
Common Stock, 10% Convertible Preferred Stock and 8% Junior Convertible
Preferred Stock contemplated by this Agreement, (ii) the issuance of Common
Stock upon conversion of the 10% Convertible Preferred Stock and the 8% Junior
Convertible Preferred Stock and (iii) the issuance of Warrants (and Common Stock
issuable upon exercise of the Warrants) to the Lenders as contemplated in the
Financing Letters, on the Closing Date there will be no outstanding options,
warrants, rights (including preemptive rights), calls, commitments, conversion
rights, rights of exchange, plans or other agreements of any character providing
for the purchase, issuance or sale of any shares of the capital stock of New
Anchor or any securities convertible into, or exercisable or exchangeable for,
or evidencing the right to subscribe for any such shares of capital stock or
other equity interests of New Anchor or obligating New Anchor to grant, extend
or enter into any such subscription, option, warrant, call or right.
(e) At the Closing, New Anchor will have no assets, business or
liabilities other than the Purchased Assets being purchased by Consumers
pursuant to this Agreement, the rights of Consumers under this Agreement and the
ancillary agreements contemplated by this Agreement, the liabilities and
obligations of Seller to be assumed by Consumers pursuant to this Agreement and
the ancillary agreements and the liabilities contemplated in the Financing
Letters and the cash consideration received from Consumers in exchange for the
shares of capital stock subscribed for by Consumers pursuant to this Section
4.05(c)(i-ii).
(f) The assignment to New Anchor of the rights of Consumers under this
Agreement and the assumption by New Anchor of the liabilities and obligations to
be assumed by Consumers pursuant to this Agreement shall not conflict with, or
result in any violation of or default and the consummation of the transactions
contemplated hereby to be then consummated by New Anchor and the compliance with
the terms hereof to be then complied with by New Anchor (with or without the
notice or lapse of time, or both) under, (i) the Certificate of Incorporation or
By-laws of New Anchor or (ii) any judgment, injunction, order, or decree, or
statute, law, ordinance, rule or regulation applicable to New Anchor or its
assets, in each case other than such as in the aggregate would not have a
material adverse effect on the ability of New Anchor to consummate the
transactions contemplated hereby.
(g) No material consent, approval, license, permit, order or
authorization of, or registration, declaration or filing with, any Governmental
Entity is required to be obtained or made by or with respect to New Anchor or
its affiliates in connection with the consummation of the transactions
contemplated hereby, other than (i) compliance with and filings and
notifications under applicable environmental laws, (ii) any notices, motions,
orders or approvals required by the Bankruptcy Court or the Bankruptcy Code and
the rules thereunder and (iii) those that may be required solely by reason of
Seller's participation in the transactions contemplated hereby.
OI represents and warrants to Seller as follows in Sections 4.06
through 4.09, inclusive:
4.06. AUTHORITY-OI. OI is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all corporate powers and all material governmental licenses, authorizations,
permits, consents and approvals required to carry on its business as now
conducted. OI has all requisite corporate power and authority to enter into this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby to be consummated by OI. All corporate and
stockholder (or equivalent) acts and other proceedings required to be taken by
OI to authorize the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby to be consummated by OI
have been duly and properly taken. This Agreement has been duly executed and
delivered by OI and constitutes a legal, valid and binding obligation of OI,
enforceable against OI in accordance with its terms.
4.07. NO CONFLICTS; CONSENTS-OI. (a) The execution and delivery of
this Agreement do not, and the consummation of the transactions contemplated
hereby to be consummated by OI and compliance with the terms hereof to be
complied with by OI shall not, conflict with, or result in any violation of or
default (with or without notice or lapse of time, or both) under, (i) the
certificate of incorporation or by-laws of OI or other comparable governing
instruments of OI, as the case may be, or the comparable governing instruments
of any subsidiary of OI, (ii) any agreement or obligation to which OI or any
subsidiary of OI is party or by which any of their respective assets are bound,
or (iii) any judgment, injunction, order, or decree, or statute, law, ordinance,
rule or regulation applicable to OI or any subsidiary of OI or their respective
assets, in each case other than such as in the aggregate would not have a
material adverse effect on the ability of OI to consummate the transactions
contemplated hereby to be consummated by OI.
(b) No material consent, approval, license, permit, order or
authorization of, or registration, declaration or filing with, any Governmental
Entity is required to be obtained or made by or with respect to OI or any of its
subsidiaries or its Affiliates in connection with the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby, other than (i) compliance with and filings under the HSR
Act, if applicable, (ii) compliance with and filings under Section 13(a) or
15(d), as the case may be, of the Exchange Act, (iii) compliance with and
filings and notifications under applicable Environmental Laws, (iv) any notices,
motions, orders or approvals required by the Bankruptcy Court or the Bankruptcy
Code and the rules thereunder and (v) those that may be required solely by
reason of Seller's participation in the transactions contemplated hereby.
4.08. ACTIONS AND PROCEEDINGS, ETC.-OI. There are no (a) outstanding
judgments, orders, injunctions or decrees of any Governmental Entity or
arbitration tribunal against OI or any of its Affiliates, (b) lawsuits, actions
or proceedings pending or, to the knowledge of OI, threatened against OI or any
of its Affiliates, or (c) investigations by any Governmental Entity which are,
to the knowledge of OI, pending or threatened against OI or any of its
Affiliates, and which, in the case of each of clauses (a), (b) and (c), have a
material adverse effect on the ability of OI to consummate the transactions
contemplated hereby to be consummated by OI.
4.09. AVAILABILITY OF FUNDS-OI. OI has cash available or has existing
borrowing facilities or firm commitments which together are sufficient to enable
it to purchase the portion of the Purchased Assets to be acquired by it and
otherwise consummate the transactions contemplated by this Agreement to be
consummated by OI.
ARTICLE 5
COVENANTS OF SELLER
Seller agrees that:
5.01. CONDUCT OF THE BUSINESS. From the date hereof until the Closing
Date, subject to the requirements and restrictions of the Bankruptcy Court
proceedings, Seller shall conduct the business in the ordinary course consistent
with past practice and use its best efforts to preserve intact the business
organizations and relationships with third parties and to keep available the
services of the present employees of the Business. Without limiting the
generality of the foregoing, from the date hereof until the Closing Date, Seller
will not:
(a) with respect to the Business acquire a material amount
of assets from any other Person;
(b) sell, lease, license or otherwise dispose of (i) property,
plant or equipment constituting part of the Purchased Assets or (ii)
any Purchased Assets (other than property, plant or equipment) other
than in the case of this clause (ii) (A) pursuant to existing contracts
or commitments and (B) in the ordinary course consistent with past
practice; or
(c) agree or commit to do any of the foregoing.
Seller will not (i) take or agree or commit to take any action that would make
any representation and warranty of Seller hereunder inaccurate in any respect
at, or as of any time prior to, the Closing Date or (ii) omit or agree or commit
to omit to take any action necessary to prevent any such representation or
warranty from being inaccurate in any respect at any such time.
5.02. ACCESS TO INFORMATION. (a) Subject to the restrictions contained
in the Confidentiality Agreement, from the date hereof until the Closing Date,
Seller (i) will give Buyers, their counsel, financial advisors, auditors and
other authorized representatives access to the offices, properties, books and
records of Seller relating to the Business, (ii) will furnish to Buyers, their
counsel, financial advisors, auditors and other authorized representatives such
financial and operating data and other information relating to the Business as
such Persons may reasonably request and (iii) will instruct the employees,
counsel and financial advisors of Seller to cooperate with Buyers in their
investigation of the Business; provided that no investigation by Buyers or other
information received by Buyers shall operate as a waiver or otherwise affect any
representation, warranty or agreement given or made by Seller hereunder. Any
investigation pursuant to this Section shall be conducted in such manner as not
to interfere unreasonably with the conduct of the business of Seller.
Notwithstanding the foregoing, Buyers shall not have access to personnel records
of Seller relating to individual performance or evaluation records, medical
histories or other information which in Seller's good faith opinion is sensitive
or the disclosure of which could subject Seller to risk of liability.
(b) After the Closing Date, the parties agree that they will each
cooperate with and make available to the other parties, during normal business
hours, all books of account and other financial records (including, without
limitation, accountant's work papers) pertaining to the Business (collectively,
"Books and Records"), information and employees (without substantial disruption
of employment) retained and remaining in existence after the Closing Date which
are necessary or useful in connection with any inquiry relating to Taxes or any
audit, investigation or dispute, any litigation or investigation or any other
matter requiring any such Books and Records, information or employees for any
reasonable business purpose. The party requesting any such Books and Records,
information or employees shall bear all of the out-of-pocket costs and expenses
(including, without limitation, attorneys' fees, but excluding reimbursement for
general overhead, salaries and employee benefits) reasonably incurred in
connection with providing such Books and Records, information or employees.
Seller may require certain financial information relating to the Business for
periods prior to the Closing Date for the purpose of filing federal, state,
local and foreign Tax Returns and other governmental reports, and Buyers agree
to furnish such information to Seller at Seller's request and expense.
(c) After the Closing, Seller will hold, and will use its best efforts
to cause its Affiliates and its and their respective officers, directors,
employees, accountants, counsel, consultants, advisors and agents to hold, in
confidence, unless required to disclose by judicial or administrative process or
by other requirements of law or if reasonably necessary in connection with any
disputes arising in connection with this Agreement or the transactions
contemplated hereby, all confidential documents and information concerning the
Business, except to the extent that such information can be shown to have been
(A) in the public domain through no fault of Seller or (B) later lawfully
acquired by Seller from sources other than those related to Seller's prior
ownership of the Business and the Purchased Assets. The obligation of Seller and
its Affiliates to hold any such information in confidence shall be satisfied if
they exercise the same care with respect to such information as they would take
to preserve the confidentiality of their own similar information.
5.03. NOTICES OF CERTAIN EVENTS. (a) Seller shall promptly notify
Buyers of:
(i) any notice or communication from any Person alleging that
the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;
(ii) any notice or other communication from any governmental
or regulatory agency or authority in connection with the transactions
contemplated by this Agreement;
(iii) any actions, suits, claims, investigations or
proceedings commenced or, to its knowledge threatened against, relating
to or involving or otherwise affecting Seller or the Business that, if
pending on the date of this Agreement, would have been required to have
been disclosed pursuant to Section 3.08 or that relate to the
consummation of the transactions contemplated by this Agreement;
(iv) the damage or destruction by fire or other casualty of
any Purchased Asset or part thereof or in the event that any Purchased
Asset or part thereof becomes the subject of any proceeding or, to the
knowledge of Seller, threatened proceeding for the taking thereof or
any part thereof or of any right relating thereto by condemnation,
eminent domain or other similar governmental action;
(v) any material changes of the type represented in Section
3.17 which occur from the date hereof until the Closing Date with
respect to customers listed on Schedule 3.17; and
(vi) any item that would have been required to be described on
Schedule 3.12 if Seller had knowledge of such item on or prior to the
date hereof and any adverse change in any of the items described on
Schedule 3.12.
(b) Seller shall promptly notify Buyers of, and furnish Buyers any
information either of them may reasonably request with respect to, the
occurrence to Seller's knowledge of any event or condition or the existence to
Seller's knowledge of any fact that would cause any of the conditions to Buyers'
obligations to consummate the purchase and sale of the Purchased Assets not to
be fulfilled. If between the Balance Sheet Date and the Closing Date, any of the
matters referenced in Section 5.03(a)(iv) shall have occurred, then Seller, at
its option, shall either repair any damage or casualty at its expense or deliver
to Buyers on the Closing Date any insurance proceeds (including but not limited
to condemnation insurance proceeds), or rights to receive insurance proceeds,
with respect thereto or the Purchase Price shall be reduced by such amount.
5.04. ENVIRONMENTAL COVENANTS. Prior to Seller's providing any
documents or other information to the New Jersey Department of Environmental
Protection, the Connecticut Commissioner of Environmental Protection or any
other federal or state environmental agency with respect to this Agreement or
the transactions contemplated hereby, Seller shall afford Consumers the
opportunity to review the form and substance of any such documents and other
information.
5.05. BANKRUPTCY COURT APPROVAL. (a) [Omitted]
(b) Seller agrees to pay a $3 million break-up fee to Ball-Foster
Glass Container Co., L.L.C. upon the terms and conditions contained in the
Interim Order dated October 15, 1996.
(c) Seller shall promptly make any filings, take all actions and use
its best efforts to obtain any and all other approvals and orders necessary or
appropriate for the consummation of the transactions contemplated hereby,
subject to its obligations to comply with any order of the Bankruptcy Court.
(d) In the event an appeal is taken from the Sale Order, Seller shall
immediately notify Buyers of such appeal and shall within one business day
provide Buyers with copies of the related notice of appeal. Seller shall also
provide Buyers with written notice of any motion or application filed in
connection with any appeal from such order.
5.06. USE OF THE ANCHOR NAME. After the Closing Date, neither Seller
nor any of its subsidiaries shall use the name or mark "Anchor" or "Anchor
Glass" or any derivative thereof, except that during the pendency of Seller's
bankruptcy case (Case No. 96-1434 PJW), Seller shall be permitted to use the
name "Anchor Glass Container Corporation" as its corporate name in connection
with all matters relating to such case, but for no other purpose. Upon
consummation of a plan of reorganization of Seller and its subsidiaries, Seller
and its subsidiaries shall promptly file with the applicable Governmental
Entities all documents necessary to delete from their names the name "Anchor" or
any derivative thereof and shall do or cause to be done all other acts,
including the payment of any fees required in connection therewith, to cause
such documents to become effective.
ARTICLE 6
COVENANTS OF BUYERS
Each Buyer individually agrees that:
6.01. CONFIDENTIALITY. Such Buyer acknowledges that the information
being provided to it in connection with the purchase and sale of the Purchased
Assets and the consummation of the other transactions contemplated hereby is
subject to the terms of a confidentiality agreement dated as of May 9, 1996 as
to OI, and as to Consumers, the agreements dated July 1, 1996, September 10,
1996 and October 14, 1996 (collectively, the "Confidentiality Agreements"), the
terms of which are incorporated herein by reference. Effective upon, and only
upon, the Closing, the Confidentiality Agreements shall terminate.
6.02. NO ADDITIONAL REPRESENTATIONS. Such Buyer acknowledges and
agrees that none of Seller or any other person has made any representation or
warranty, expressed or implied, with respect to the transactions contemplated
hereby, Seller and its subsidiaries or their assets, liabilities and business,
the accuracy or completeness of any information regarding Seller and its
subsidiaries furnished or made available to such Buyer and its representatives,
except as expressly set forth in this Agreement.
6.03. SUPPLEMENTAL DISCLOSURE. Such Buyer shall promptly after the
occurrence thereof notify Seller of, and furnish Seller any information it may
reasonably request with respect to, the occurrence to the knowledge of such
Buyer of any event or condition or the existence to such Buyer's knowledge of
any fact that would cause any of the conditions to Seller's obligation to
consummate the purchase and sale of the Purchased Assets not to be fulfilled.
6.04. ACCESS. On and after the Closing Date, each Buyer will afford
promptly to Seller and its agents reasonable access to Seller's former
properties, books, records, employees and auditors to the extent necessary to
permit Seller to determine any matter relating to its rights and obligations
hereunder or relating to the continuing administration of Seller's Chapter 11
case, or to any period ending on or before the Closing Date; provided that any
such access by Seller shall not unreasonably interfere with the conduct of the
business of such Buyer. Seller will hold, and will use its best efforts to cause
its officers, directors, employees, accountants, counsel, consultants, advisors
and agents to hold, in confidence, unless compelled to disclose by judicial or
administrative process or by other requirements of law, all confidential
documents and information concerning such Buyer or the Business provided to it
pursuant to this Section.
6.05. ASSIGNMENT TO NEW ANCHOR. Prior to the Closing, Consumers shall
have assigned to New Anchor all of its rights under this Agreement and shall
have caused New Anchor to assume all of the liabilities and obligations of
Consumers under this Agreement. Such assignment and assumption shall not relieve
Consumers of its liabilities and obligations under this Agreement.
6.06. FINANCINGS. Consumers shall use reasonable commercial efforts to
consummate the financing arrangements described in the Financing Letters,
including the satisfaction of all conditions precedent to such financing
arrangements.
6.07. COMPOSITION OF NEW ANCHOR BOARD. Consumers will take such
corporate action as is necessary and appropriate such that, upon the Closing,
the Board of Directors of New Anchor (the "Board") will consist of nine persons
serving three year terms and shall include (i) four persons designated by the
Seller (as the holder of the Shares), who will serve as directors of New Anchor
until their successors are duly elected and qualified (each, a "Seller
Director"), and (ii) five persons designated by Consumers, who will serve as
directors of New Anchor until their successors are duly elected and qualified
(each, a "Consumers Director"). Should any director be unwilling or unable to
continue to serve, or otherwise cease to serve (including by reason of their
removal or at the expiration of any applicable term of office), then the
resulting vacancies on the Board shall be filled by the holders of Shares, in
the case of vacancies of the Seller Directors, and by Consumers, in the case of
vacancies of Consumers Directors. At all times prior to three years after the
Closing Date, (i) the holders of the Shares shall be exclusively entitled to
nominate successors to all Seller Directors and (ii) Consumers shall be
exclusively entitled to nominate successors to all Consumers Directors. The
Board shall meet at least once each quarter.
6.08. STOCK MARKET LISTING. Promptly, but in any event prior to
consummation of Seller's plan of reorganization, Consumers will cause New Anchor
to list on a nationally recognized U.S. stock exchange or on the National Market
tier of the Nasdaq Stock Market subject to official notice of issuance, the
Common Stock and the 10% Convertible Preferred Stock to be distributed to Seller
pursuant to this Agreement.
6.09. EXCHANGE ACT REGISTRATION. Consumers will cause New Anchor to
promptly, but in any event prior to the consummation of Seller's plan of
reorganization, register the Shares on a Form 10 Registration Statement filed
with the SEC pursuant to the Exchange Act.
6.10. AFFILIATE TRANSACTIONS. For so long as the Seller or its
designees and assignees (including the present holders of unsecured claims
against Seller) own at least 25% of the Shares, New Anchor shall not enter into
any transaction or series of related transactions with Consumers or any
Affiliate of Consumers, and Consumers shall not enter into any transaction or
series of related transactions with New Anchor, unless such transaction or
series of related transactions is previously approved by the Board and is on
terms that are no less favorable to New Anchor than those that would have been
obtainable by New Anchor at the time of such transaction or series of related
transactions in a comparable transaction (or series of comparable related
transactions) with an unrelated Person. Immediately after the Closing Date, New
Anchor shall enter into a management agreement with John Ghaznavi, and a
consulting contract with G&G Investments, Inc., a corporation owned entirely by
John Ghaznavi, which contracts, on an aggregate basis, will not result in
payments by New Anchor in excess of $3,000,000 per annum for a period of three
years after the Closing Date.
ARTICLE 7
COVENANTS OF ALL PARTIES
Buyers and Seller agree that:
7.01. BEST EFFORTS; FURTHER ASSURANCES. (a) Subject to the terms and
conditions of this Agreement, Buyers and Seller will each use their best efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary or desirable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement. Seller and Buyers
each agree to execute and deliver such other documents, certificates, agreements
and other writings and to take such other actions as may be necessary or
desirable in order to consummate or implement expeditiously the transactions
contemplated by this Agreement and to vest in each Buyer good and marketable
title to the portion of the Purchased Assets to be acquired by such Buyer.
(b) Seller hereby constitutes and appoints, effective as of the
Closing Date, each Buyer and its successors and assigns as the true and lawful
attorney of Seller with full power of substitution in the name of such Buyer or
in the name of Seller, but for the benefit of such Buyer (i) to collect for the
account of such Buyer any items of Purchased Assets acquired by such Buyer and
(ii) to institute and prosecute all proceedings which such Buyer may in its sole
discretion deem proper in order to assert or enforce any right, title or
interest in, to or under the Purchased Assets acquired by such Buyer, and to
defend or compromise any and all actions, suits or proceedings in respect of the
Purchased Assets acquired by such Buyer. Such Buyer shall be entitled to retain
for its own account any amounts collected pursuant to the foregoing powers,
including any amounts payable as interest in respect thereof.
7.02. CERTAIN FILINGS. Seller and Buyers shall cooperate with one
another (a) in determining whether any action by or in respect of, or filing
with, any Governmental Entity is required, or any actions, consents, approvals
or waivers are required to be obtained from parties to any material contracts,
in connection with the consummation of the transactions contemplated by this
Agreement and (b) in taking such actions or making any such filings, furnishing
information required in connection therewith and seeking timely to obtain any
such actions, consents, approvals or waivers.
7.03. PUBLIC ANNOUNCEMENTS. The parties agree to consult with each
other before issuing any press release or making any public statement with
respect to this Agreement or the transactions contemplated hereby and, except as
may be required by applicable law or any listing agreement with any national
securities exchange, will not issue any such press release or make any such
public statement prior to such consultation.
7.04. WARN ACT. The parties agree to cooperate in good faith to
determine whether any notification may be required under the Worker Adjustment
and Retraining Notification Act (the "WARN Act") or any similar state or local
law as a result of the transactions contemplated by this Agreement. In
accordance with the WARN Act, or any similar state or local law, (i) Seller will
be responsible for providing any notification that may be required under the
WARN Act or any similar state or local law with respect to any employees of the
Business up to and including the Closing and (ii) the applicable Buyer will be
responsible for providing any notification that may be required under the WARN
Act or any similar state or local law with respect to any employees of the
Business after the Closing;
ARTICLE 8
TAX MATTERS
8.01. TAX DEFINITIONS. The following terms, as used herein, have the
following meanings:
"Code" means the Internal Revenue Code of 1986, as amended.
"Pre-Closing Tax Period" means any Tax period (or portion thereof)
ending on or before the close of business on the Closing Date.
"Tax" means any net income, alternative or add-on minimum tax, gross
income, gross receipts, sales, use, ad valorem, franchise, capital, paid-up
capital, profits, greenmail, license, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, property, environmental or windfall
profit tax, custom, duty or other tax, governmental fee or other like assessment
or charge of any kind whatsoever, together with any interest or any penalty,
addition to tax or additional amount imposed by any governmental authority
(domestic or foreign) responsible for the imposition of any such tax.
8.02. TAX MATTERS. Seller hereby represents and warrants to Buyers
that:
(a) Seller has timely paid all Taxes, and all interest and penalties
due thereon, payable by it for the Pre-Closing Tax Period which will have been
required to be paid on or prior to the Closing Date, the non-payment of which
would result in a Lien on any Purchased Asset, would otherwise adversely affect
the Business or would result in either Buyer becoming liable or responsible
therefor.
(b) Seller has established, in accordance with generally accepted
accounting principles applied on a basis consistent with that of preceding
periods, adequate reserves for the payment of, and will timely pay all Tax
liabilities, assessments, interest and penalties which arise from or with
respect to the Purchased Assets or the operation of the Business and are
incurred in or attributable to the Pre- Closing Tax Period, the non-payment of
which would result in a Lien on any Purchased Asset, would otherwise adversely
affect the Business or would result in either Buyer becoming liable therefor.
(c) The Closing Balance Sheet will reflect accrued and unpaid real and
personal property Taxes on all Purchased Assets using a ratable daily accrual
method. Seller will furnish Buyers with an analysis of this amount itemized by
property and jurisdiction.
8.03. TAX COOPERATION; ALLOCATION OF TAXES. (a) Buyers and Seller
agree to furnish or cause to be furnished to each other, upon request, as
promptly as practicable, such information and assistance relating to the
Purchased Assets and the Business as is reasonably necessary for the filing of
all Tax returns, and making of any election related to Taxes, the preparation
for any audit by any taxing authority, and the prosecution or defense of any
claim, suit or proceeding relating to any Tax return. Seller and Buyers shall
cooperate with each other in the conduct of any audit or other proceeding
related to Taxes involving the Business and each shall execute and deliver such
documents as are necessary to carry out the intent of this paragraph (a) of
Section 8.03.
(b) All real property taxes, personal property taxes and similar AD
VALOREM obligations levied with respect to the Purchased Assets for a taxable
period which includes (but does not end on) the Closing Date (collectively, the
"Apportioned Obligations") shall be apportioned between Seller and Buyers as of
the Closing Date based on the number of days of such taxable period included in
the Pre-Closing Tax Period and the number of days of such taxable period after
the Closing Date (such period, the "Post-Closing Tax Period"). Seller shall be
liable for the proportionate amount of such taxes that is attributable to the
Pre-Closing Tax Period, and Buyers shall be liable for the proportionate amount
of such taxes that is attributable to the Post- Closing Tax Period. Within 90
days after the Closing, Seller and Buyers shall each present a statement to the
other setting forth the amount of reimbursement to which each is entitled under
this Section 8.03(b) together with such supporting evidence as is reasonably
necessary to calculate the proration amount. The proration amount shall be paid
by the party owing it to the other within 10 days after delivery of such
statement. Thereafter, Seller shall notify Consumers or OI, as appropriate, upon
receipt of any bill for real or personal property taxes relating to the portion
of the Purchased Assets, part or all of which is attributable to the
Post-Closing Tax Period, and shall promptly deliver such bill to Consumers or
OI, as appropriate, who shall pay the same to the appropriate taxing authority,
provided that if such bill covers the Pre- Closing Tax Period, Seller shall also
remit prior to the due date of assessment to Consumers or OI, as appropriate,
payment for the proportionate amount of such bill that is attributable to the
Pre-Closing Tax Period. In the event that either Seller or Consumers or OI, as
appropriate, shall thereafter make a payment for which it is entitled to
reimbursement under this Section 8.03(b), the other party shall make such
reimbursement promptly but in no event later than 30 days after the presentation
of a statement setting forth the amount of reimbursement to which the presenting
party is entitled along with such supporting evidence as is reasonably necessary
to calculate the amount of reimbursement. Any payment required under this
Section and not made within 10 days of delivery of the statement shall bear
interest at the rate per annum determined, from time to time, under the
provisions of Section 6621(a)(2) of the Code for each day until paid.
(c) Any transfer, documentary, sales, use or other Taxes assessed upon
or with respect to the transfer of the Purchased Assets to Buyers and any
recording or filing fees with respect thereto shall be paid by Seller.
ARTICLE 9
EMPLOYEES
9.01. RETIREMENT PLANS. (a) Effective as of the Closing Date,
Consumers will cause New Anchor to assume sponsorship of the Seller Defined
Benefit Plans, (and shall assume the liability for any required contributions
with respect thereto accrued but not paid as of or prior to the Closing Date)
and the Seller Defined Contribution Plans, as well as the trusts maintained in
connection with such plans. New Anchor shall be entitled to receive from Seller,
within a reasonable time after the Closing Date, such pertinent data or
information as New Anchor may reasonably require to determine the service and
accrued benefits (or account balances, as the case may be) of participants and
former participants in the Seller Defined Benefit Plans and the Seller Defined
Contribution Plans.
(b) Effective as of the Closing Date, Consumers will cause New Anchor
to assume sponsorship of the Anchor Glass Container Corporation Non-Qualified
Additional Credited Service and ERISA Excess Plan and the Diamond Bathhurst Inc.
Preferred Compensation Plan, as well as the "rabbi trust" maintained in
connection therewith. New Anchor shall be entitled to receive from Seller,
within a reasonable time after the Closing Date, such pertinent data or
information as New Anchor may reasonably require to determine the service and
accrued benefits of participants and former participants in such Plans.
(c) Seller contributes to the Multiemployer Plans listed on Schedule
3.13(d). In connection with their assumption of the collective bargaining
agreements, OI will assume and Consumers will cause New Anchor to assume, in
such proportions as Buyers shall jointly advise Seller, effective as of the
Closing Date, Seller's obligations to contribute to the Multiemployer Plans.
Accordingly, to avoid the imposition of any withdrawal liability on Seller, OI
or New Anchor, as the case may be, shall, in the aggregate:
(A) contribute to each Multiemployer Plan for
substantially the same number of contribution base units for
which Seller has an obligation to contribute prior to the
Closing Date;
(B) provide to each Multiemployer Plan for a period
of five plan years commencing with the first plan year
beginning after the Closing Date, a bond to be obtained by
each Buyer or New Anchor issued by a corporate surety
corporation, or a sum to be provided by each Buyer or New
Anchor held in escrow by a bank or similar financial
institution, or an irrevocable letter of credit to be obtained
by each Buyer or New Anchor, equal to the greater of (I) the
average annual contribution required to be made by Seller
under the Multiemployer Plans for the three plan years
preceding the plan year in which the Closing Date occurs or
(II) the annual contribution that Seller was required to make
under each Multiemployer Plan for the last plan year prior to
the plan year in which the Closing Date occurs, or shall
obtain a waiver of the requirements to provide any of the
foregoing or shall comply with alternatives acceptable to the
Multiemployer Plan or Plans, in order to ensure compliance
with Section 4204 of ERISA. Each Buyer and New Anchor shall
cooperate with Seller to obtain a waiver of the bond, escrow
or letter of credit requirement set forth above. If at any
time during the first five plan years beginning after the
Closing Date, the applicable Buyer or New Anchor withdraws
from, or fails to make a required contribution to one of the
Multiemployer Plans, the bond, escrow, or letter of credit
obtained by such Buyer or New Anchor with respect to such
Multiemployer Plan, if any, shall be paid to such
Multiemployer Plan.
Notwithstanding any other provision hereof, the obligations of each
Buyer and New Anchor under this Section 9.01(c) are limited to the extent
necessary to comply with Section 4204 of ERISA. If a Buyer or New Anchor effects
a complete or partial withdrawal from a Multiemployer Plan during the first five
plan years following the Closing Date and such Buyer or New Anchor fails to make
any withdrawal liability payment to the Multiemployer Plan when due, then Seller
shall be secondarily liable to the Multiemployer Plan for any unpaid withdrawal
liability to the extent that Seller would have incurred such liability following
the Closing Date had such Buyer or New Anchor not agreed to the provisions of
this Section. Seller's obligations set forth in this paragraph shall continue
with respect to events that occurred prior to the last day of the five plan year
period referred to in this Section 9.01(c) (regardless of when notice of such
liability is received by any of the Buyers, New Anchor or Seller). Any of the
Buyers, New Anchor or Seller shall promptly notify the other parties of any
demand for payment of withdrawal liability received by any of the Buyers, New
Anchor or Seller within five years from the Closing Date. Buyers and Seller
agree to take, and Consumers agrees to cause New Anchor to take, all such
further action as may be necessary to satisfy the sale of assets exception
requirements set forth in Section 4204 of ERISA.
9.02. OTHER EMPLOYEE PLANS AND BENEFIT ARRANGEMENTS.
(a) Effective as of the Closing Date, Consumers will cause New Anchor
to assume sponsorship of (i) all Employee Plans and Benefit Arrangements which
provide post-retirement life insurance and health benefits, (ii) any and all
Employee Plans and Benefit Arrangements required to be maintained under or
pursuant to currently existing collective bargaining agreements, (iii) the
Anchor Glass Container Corporation Executive/Key Employee Retention Plan, (iv)
the Anchor Glass Container Corporation Health Care Flexible Spending Account
Plan, (v) the Anchor Glass Container Corporation Dependent Care Flexible
Benefits Plan, (vi) the Anchor Glass Container Medical and Dental Cafeteria
Plan, (vii) the Anchor Glass Container Health Care Flexible Spending Account
Plan for AFGWU Hourly Employees, (viii) the Anchor Glass Container Medical and
Dental Cafeteria Plan for AFGWU and GMP Hourly Employees and (ix) Seller's
short-term and long-term disability plans (but New Anchor may, in its sole
discretion, limit participation therein to persons who are disabled as of the
Closing Date and who remain continuously disabled thereafter). New Anchor shall
be entitled to receive from Seller, within a reasonable time after the Closing
Date, such pertinent data or information as New Anchor may reasonably require to
determine the benefits of participants and former participants in the Employee
Plans and Benefit Arrangements to be assumed by New Anchor pursuant to this
Section 9.02(a).
(b) Except as expressly provided in Sections 9.01 and 9.02(a), neither
Buyer is obligated to assume (nor is Consumers obligated to cause New Anchor to
assume) the sponsorship of any Employee Plan or Benefit Arrangement; provided
that either Buyer, in its sole discretion, may elect to assume (and Consumers
may elect to cause New Anchor to assume) the sponsorship of Employee Plans or
Benefit Arrangements in addition to those subject to Sections 9.01 and 9.02(a)
by furnishing written notice thereof to Seller not less than 15 days prior to
the Closing Date.
(c) Notwithstanding anything to the contrary, Consumers, in its sole
discretion, may direct the Seller, by written notice furnished not less than 15
days prior to the Closing Date, to amend any or all of (i) the Anchor Glass
Container Corporation Health Care Flexible Spending Account Plan, (ii) the
Anchor Glass Container Corporation Dependent Care Flexible Spending Account
Plan, (iii) the Anchor Glass Container Corporation Flexible Benefits Plan and
(iv) the Anchor Glass Container Medical and Dental Cafeteria Plan, in each case
so as to amend, modify or terminate, effective as of the Closing Date, any
benefit under such Plans other than a "flexible spending account" within the
meaning of Proposed Treasury Regulation 1.125-2, Q&A 7(c).
9.03. EMPLOYEE COMMUNICATIONS. Seller and Buyers shall each use their
best efforts to cooperate in making any required communications with employees
of Seller as they relate to any employee benefits or other matters described in
this Article 9.
9.04. THIRD PARTY BENEFICIARIES. No provision of this Agreement shall
create any third party beneficiary rights in any employee or former employee of
Seller or Buyers (including any beneficiary or dependent thereof) in respect of
continued employment or resumed employment, and no provision of this Agreement
shall create any rights in any such persons in respect of any benefits that may
be provided, directly or indirectly, under any employee benefit plan or
arrangement.
9.05. UNION EMPLOYEES. Employees of the Seller and its subsidiaries
who are covered by collective bargaining agreements are referred to herein as
"Business Union Employees." Effective as of the Closing, OI shall and Consumers
shall cause New Anchor to, subject to Section 10.01(h), (i) assume all of the
currently existing collective bargaining agreements with respect to the
Purchased Assets to be acquired by each such Buyer and (ii) employ all of the
Business Union Employees under said collective bargaining agreements. Without
limiting the generality of the foregoing, Business Union Employees shall be
given credit, for all purposes under their currently existing collective
bargaining agreements and all Employee Plans, Benefit Arrangements and Included
Insurance Policies pursuant thereto, for their service with Seller or its
subsidiaries before the Closing to the same extent such service was credited by
Seller or its subsidiaries.
9.06. NON-UNION EMPLOYEES. Effective as of the Closing, employees of
the Business (other than Business Union Employees) shall continue to be employed
on an "at will" basis (other than those who are employed under an employment
agreement listed in Schedule 3.06(a)). For any people who continue to be so
engaged, each Buyer agrees (and Consumers shall cause New Anchor to agree), with
respect to those persons employed by it, to provide such employees with salaries
and benefits generally comparable, in the aggregate, to those in effect for such
employees as of the Closing Date for a period of at least nine months after the
Closing Date; provided that notwithstanding the foregoing, neither Buyers nor
New Anchor shall be required to continue in effect any Employee Plan or Benefit
Arrangement after the Closing Date in order to fulfill the requirements of this
Section 9.06. Without limiting the generality of the foregoing, the applicable
Buyer or New Anchor, as the case may be, shall give such employees credit for
their service with Seller or its subsidiaries before the Closing Date, to the
same extent that such service was credited by Seller or its subsidiaries, for
all purposes under all employee benefit plans and arrangements maintained by the
applicable Buyer or New Anchor, as the case may be, for its respective employees
or assumed by such Buyer or New Anchor, as the case may be, pursuant to this
Agreement including, but not limited to, for purposes of determining severance,
vacation, eligibility, participation, and vesting; and provided that neither
Buyer nor New Anchor shall not be obligated to recognize service rendered after
December 31, 1994 under any plan (other than the Anchor Glass Container
Corporation Retirement Plan for Salaried Employees and the Retirement Plan for
Salaried Employees of Latchford Glass Company and Associated Companies) for
purposes of pension accruals, including early retirement subsidies,
pre-retirement death benefits, disability benefits, or any other pension
benefits which may increase with service and shall not be obligated to recognize
service rendered after December 31, 1994 for purposes of calculating the amount
of accrued benefit under the Anchor Glass Container Corporation Retirement Plan
for Salaried Employees and the Retirement Plan for Salaried Employees of
Latchford Glass Company and Associated Companies (in accordance with their terms
as of the date hereof).
ARTICLE 10
CONDITIONS TO CLOSING
10.01. CONDITIONS TO BUYERS' OBLIGATIONS. The obligations of each
Buyer to consummate the Closing are subject to the satisfaction (or waiver by
the applicable Buyer, without further notice to parties in interest or approval
by the Bankruptcy Court) of the following conditions:
(a) Except for the representations and warranties contained in
Section 3.12, the representations and warranties of Seller made in this
Agreement that are qualified as to materiality or Material Adverse
Effect shall be true and correct as of the Closing Date as though made
as of such time, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct in all
material respects on and as of such earlier date). The representations
and warranties of Seller made in this Agreement that are not qualified
as to materiality or Material Adverse Effect shall be true and correct
in all material respects as of the time of the Closing as though made
as of such time, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct in all
material respects on and as of such earlier date). Seller shall have
performed or complied in all material respects with all obligations and
covenants required by this Agreement to be performed or complied with
by Seller by the Closing Date. Seller shall have delivered to each
Buyer a certificate dated the Closing Date and signed by the chief
executive officer or chief financial officer of Seller confirming the
foregoing.
(b) No provision of any applicable statute, rule, regulation,
executive order, decree, temporary restraining order, judgment,
preliminary or permanent injunction or other order enacted, entered,
promulgated, enforced or issued by any Federal, state, local or foreign
government or any court of competent jurisdiction, administrative
agency or commission or other governmental authority or
instrumentality, domestic or foreign (a "Governmental Entity") shall be
in effect that (x) prevents the sale and purchase of the Purchased
Assets or any of the other transactions contemplated by this Agreement,
(y) would adversely affect or interfere with the operation of the
Business as currently conducted after the Closing, or (z) would require
the applicable Buyer or any of its Affiliates to sell or otherwise
dispose of, hold separate or otherwise divest itself of, or operate in
any particular manner, any of the Purchased Assets to be acquired by
such Buyer or any of the assets, properties or business of such Buyer
or any of its Affiliates.
(c) There shall not be pending or threatened by any
Governmental Entity any suit, action or proceeding, (i) challenging or
seeking to restrain, prohibit, alter or materially delay the sale and
purchase of the Purchased Assets or any of the other transactions
contemplated by this Agreement, or seeking to obtain from the
applicable Buyer or any of its Affiliates in connection with the sale
and purchase of the Purchased Assets to be acquired by such Buyer, any
material damages or (ii) seeking to prohibit the applicable Buyer or
any of its Affiliates from effectively controlling or operating a
material portion of the Business or the Purchased Assets to be acquired
by the applicable Buyer.
(d) The waiting period under the HSR Act relating to the
transactions contemplated by this Agreement shall have expired or been
terminated.
(e) Since the date hereof, there shall not have been any
material adverse change in the condition or operation of the property,
equipment or any plant of Seller.
(f) Vitro S.A. and Buyers shall have entered into a mutually
satisfactory agreement (the "Vitro Agreement") and the conditions to
the effectiveness thereof shall have been satisfied or waived and
assuming the consummation of the transactions contemplated by this
Agreement, the Vitro Agreement shall be in full force and effect.
(g) The Bankruptcy Court shall have issued the Sale Order on
or prior to December 20, 1996, and the Sale Order shall not be subject
to any stay.
(h) (i) The provisions of the master and local collective
bargaining agreements covering employees of Seller and its subsidiaries
relating to work rules shall have been amended to reflect prevailing
industry standards and (ii) any retroactive (but not prospective)
payments of wage increases forfeited in prior periods under such
agreements as a result of the consummation of the transactions
contemplated hereby shall have been waived or the Bankruptcy Court
shall have issued an order, not subject to stay, that Seller may assign
and the applicable Buyer may assume such collective bargaining
agreements without any acceleration of the deferred wage increases
negotiated under the current agreements.
(i) Buyers shall have obtained the consent of Coors Brewing
Company ("Coors"), and the parties (other than Seller) to the
agreements listed on Schedule 10.01, or the Bankruptcy Court shall have
issued an order, that Seller's supply agreement with Coors and the
agreements listed on Schedule 10.01, will not be terminated or
materially altered as a result of the transactions contemplated hereby.
(j) [OMITTED]
(k) Each Buyer, at its expense, shall have
received for each of the Fee Properties to be acquired
by such Buyer:
(I) an ALTA (or local equivalent) owner's extended
coverage policy of title insurance issued by a title
company satisfactory to such Buyer and dated the
Closing Date insuring the Company's or its
subsidiaries' title to such Fee Property in an amount
not exceeding the allocated portion of the Purchase
Price applicable thereto and free and clear of all
Liens and other exceptions to or exclusions from
coverage other than Permitted Liens. Without limiting
the foregoing, no such title insurance policy shall
create an exception for or exclusion from the
coverage of such policy or from the liability of the
title company on account of acts or omissions of
Seller or its subsidiaries or facts known to the
insured (or to its or their current or former
directors, stockholders, partners, officers, agents
or employees) where such acts or omissions occurred
prior to the Closing Date. Each such title insurance
policy shall contain, where obtainable in the
particular jurisdiction, ALTA (or local equivalent)
zoning, comprehensive, survey, contiguity (where
appropriate), nonimputation and public-street access
endorsements and otherwise be in form and substance
reasonably satisfactory to counsel for such Buyer;
and
(II) a survey of such Fee Property dated no earlier
than six months prior to the date hereof, prepared in
insurable form in accordance with standards
applicable to registered and licensed land surveyors
making surveys in the jurisdiction in which the Fee
Property is located. Each survey shall be certified
to the applicable Buyer and the title company and
shall show (A) the courses and distances of all
boundary lines of the Fee Property (including
appurtenant easements), (B) the location of all
improvements situated on or above such parcel and on
or above any easements or rights of way affecting the
Fee Property, (C) all encroachments of adjoining
improvements onto such Fee Property, (D) all
encroachments of improvements onto any adjoining
property, (E) the location of all easements and other
rights burdening the Fee Property and all
encroachments of improvements onto the areas of such
easements, (F) the location of all roadways, alleys,
rights of way and the like affecting the Fee
Property, (G) all accessways from the Fee Property to
public streets and (H) such other facts and
conditions affecting the Fee Property as are
appropriate, or as may have been reasonably requested
by the applicable Buyer, to be shown on such survey.
Each such survey shall otherwise be in form and
substance reasonably satisfactory to counsel for the
such Buyer.
(l) [OMITTED]
(m) The Bankruptcy Court shall have issued an
order not subject to any stay providing for the
assignment to each Buyer of all of the leases
relating to the Leased Property to be acquired and
assumed by such Buyer.
(n) As of the Closing Date, (i) there shall be no
material liabilities of Seller and its subsidiaries
(including any of their respective predecessors) or
of or relating to the Purchased Assets or the
Business arising under or relating to any
Environmental Law, except as disclosed on Schedule
3.12, and (ii) there shall have been no material
adverse change in the items (or the related
liabilities) disclosed on Schedule 3.12, taken as a
whole.
(o) Consumers shall have received in respect of
each Fee Property and Leased Property located in the
State of New Jersey, evidence of compliance by Seller
with the requirements of the New Jersey Industrial
Site Recovery Act, which evidence shall be
satisfactory to Consumers in its sole discretion and
shall not impose upon Consumers any obligations or
liabilities to which Consumers shall not have
consented in writing prior to the Closing.
(p) Consumers shall have received in respect of
each Fee Property and Leased Property located in the
State of Connecticut, a Connecticut Transfer Form
from Seller, which form shall be satisfactory to
Consumers in its sole discretion and shall not impose
upon Consumers any obligations or liabilities to
which Consumers shall not have consented in writing
prior to the Closing.
(q) Without limiting any conditions set forth in
Sections 10.01(o) and 10.01(p), Seller shall have
complied with all applicable environmental
notification statutes, laws and regulations unless
failure to do so would not have a Material Adverse
Effect.
(r) Consumers shall have received an agreement or
agreements among Seller, Consumers, Landlord and
Citicorp with respect to the Headquarters Lease that
acknowledges and provides that (i) Seller has assumed
the Headquarters Lease, cured all defaults thereunder
and satisfied all of its obligations thereunder
pursuant to the Letter Agreement dated as of April
27, 1992 attached as Schedule 1 to the First
Amendment to Lease; (ii) the Headquarters Lease is
modified (A) to provide that the Purchase Option and
the Termination Option may be exercised at any time
to and including April 17, 1997 or 60 days after the
Closing Date (whichever is later), that the purchase
price under the Purchase Option is the unpaid
principal amount of the Citicorp Loan and that the
Liens securing the Citicorp Loan will be released
upon closing and payment of the purchase price under
the Purchase Option, (B) to provide that the
expiration date of the Headquarters Lease and the
date of payment of the Residual Value Guaranty Amount
will be June 16, 1997 or 150 days after the Closing
Date (whichever is later), (C) to provide that
Seller, Consumers and Landlord do not need to
negotiate the renewal terms pursuant to the Renewal
Option and (D) to delete from the Lease the events of
default in subparagraphs (12), (13), (14) and (15)
and any other covenants, events of default and
provisions that are personal to Seller; (iii) the
Headquarters Lease, as so modified, is assigned to
Consumers or its designee; (iv) Consumers or its
designee assumes Seller's obligations under the Lease
(including the obligation to pay monthly rent) after
the Closing Date; and (v) Landlord and Citicorp
consent to the foregoing amendment, assignment and
assumption of the Headquarters Lease. The agreement
or agreements required under this clause (r) shall be
in form and substance reasonably satisfactory to
Consumers. Except for Consumers' legal fees and
expenses, Consumers shall not be required to make any
monetary payments to Landlord or Citicorp or
otherwise in order to obtain such agreement or
agreements.
(s) Consumers shall have consummated
the financing arrangements described in the
Financing Letters.
(t) The PBGC shall not have terminated
all of the Seller Defined Benefit Plans.
(u) Consumers or New Anchor shall have received
written assurance from the PBGC that the PBGC will
not terminate the Seller Defined Benefit Plans after
the Closing Date solely by reason of the assumption
of such Plans by New Anchor nor by reason of the
transactions contemplated by this Agreement.
10.02. CONDITIONS TO OBLIGATIONS OF SELLER. The obligations of Seller
to consummate the Closing are subject to the satisfaction (or waiver by Seller,
without further notice to parties in interest or approval by the Bankruptcy
Court) of the following conditions:
(a) The representations and warranties of Buyers
made in this Agreement that are qualified as to
materiality or Material Adverse Effect shall be true
and correct as of the Closing Date as though made as
of such time, except to the extent such
representations and warranties expressly relate to an
earlier date (in which case such representations and
warranties shall be true and correct in all material
respects on and as of such earlier date). The
representations and warranties of Buyers made in this
Agreement that are not qualified as to materiality or
Material Adverse Effect shall be true and correct in
all material respects as of the time of the Closing
as though made as of such time, except to the extent
such representations and warranties expressly relate
to an earlier date (in which case such
representations and warranties shall be true and
correct in all material respects on and as of such
earlier date). Each Buyer shall have performed or
complied in all material respects with all
obligations and covenants required by this Agreement
to be performed or complied with by such Buyer by the
Closing Date. Each Buyer shall have delivered to
Seller a certificate dated the Closing Date and
signed by the chief financial officer of such Buyer
confirming the foregoing.
(b) No provision of any applicable statute, rule,
regulation, executive order, decree, temporary
restraining order, judgment, preliminary or permanent
injunction or other order enacted, entered,
promulgated, enforced or issued by any Governmental
Entity shall be in effect that prevents the sale and
purchase of the Purchased Assets or any of the
transactions contemplated by this Agreement.
(c) There shall not be pending or threatened by
any Governmental Entity any suit, action or
proceeding, (i) challenging or seeking to restrain,
prohibit, alter or materially delay the sale and
purchase of the Purchased Assets or any of the other
transactions contemplated by this Agreement or
seeking to obtain from Seller or any of its
subsidiaries in connection with the sale and purchase
of the Purchased Assets any material damages.
(d) The waiting period under the HSR Act relating
to the transactions contemplated by this Agreement
shall have expired or been terminated.
(e) The Bankruptcy Court shall have issued the
Sale Order on or prior to December 19, 1996, and the
Sale Order shall not be subject to any stay.
(f) The PBGC shall not have terminated
all of the Seller Defined Benefit Plans.
(g) The conditions to the effectiveness of the
Vitro Agreement shall have been satisfied or waived
and assuming the consummation of the transactions
contemplated by this Agreement, the Vitro Agreement
shall be in full force and effect.
(h) New Anchor shall adopt and file with the
Secretary of State of the State of Delaware prior to
Closing the Certificate of Incorporation. Not less
than seven days prior to the Closing, New Anchor
shall furnish to Seller copies of the Certificate of
Incorporation and copies of the By-laws which shall
be reasonably satisfactory to Seller and New Anchor.
10.03. FRUSTRATION OF CONDITIONS. Neither Buyers nor Seller may rely
on the failure of any condition set forth in Section 10.01 or 10.02,
respectively, to be satisfied if such failure was caused by such party's failure
to act in good faith or to use its reasonable efforts to cause the Closing to
occur, as provided in this Agreement.
ARTICLE 11
SURVIVAL
11.01. SURVIVAL. The covenants, agreements, representations and
warranties of the parties hereto contained in this Agreement or in any
certificate or other writing delivered pursuant hereto or in connection herewith
shall not survive the Closing except for the covenants and agreements contained
herein which contemplate or specifically provide for performance after the
Closing Date.
ARTICLE 12
TERMINATION
12.01. GROUNDS FOR TERMINATION. This Agreement may be terminated at
any time prior to the Closing:
(i) by mutual written agreement of Seller
and Buyers;
(ii) by either Seller or Buyers if the
Closing shall not have been consummated on or before
January 31, 1997;
(iii) by either Seller or Buyers if there shall be
any law or regulation that makes the consummation of the transactions
contemplated hereby illegal or otherwise prohibited or if consummation
of the transactions contemplated hereby would violate any nonappealable
final order, decree or judgment of any court or governmental body
having competent jurisdiction;
(iv) [OMITTED]
(v) by Buyers if the Sale Order shall not
have been entered on or prior to December 20, 1996;
(vi) by Buyers or Seller if any Governmental
Entity shall have commenced litigation seeking to
enjoin consummation of the transaction; and
(vii) by Buyers or Seller if the Bankruptcy Court
shall have approved a sale of the Purchased Assets or Business (or the
stock of Seller) to a Person other than Buyers.
The party desiring to terminate this Agreement pursuant to clauses
(ii), (iii), (vi) or (vii) shall give notice of such termination to the other
parties.
12.02. EFFECT OF TERMINATION. If this Agreement is terminated as
permitted by Section 12.01, such termination shall be without liability of any
party (or any stockholder, director, officer, employee, agent, consultant or
representative of such party) to the other parties to this Agreement; PROVIDED
that if such termination shall result from the willful failure of any party to
fulfill a condition to the performance of the obligations of another party,
failure to perform a covenant of this Agreement or breach by any party to this
Agreement of any representation or warranty or agreement contained herein, such
party shall be fully liable for any and all losses incurred or suffered by the
other parties as a result of such failure or breach. The provisions of Sections
6.01 and 13.03 shall survive any termination hereof pursuant to Section 12.01.
ARTICLE 13
MISCELLANEOUS
13.01. NOTICES. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be delivered by
hand or sent by confirmed fax or sent, postage prepaid, by registered, certified
or express mail or reputable overnight courier service and shall be deemed given
when so delivered by hand, confirmed faxed or if mailed, three days after
mailing (one business day in the case of express mail or overnight courier
service), as follows (or to such other address or telecopy number as the
applicable party shall have notified the other parties in writing in accordance
with this Section):
(i) if to Consumers,
Consumers Packaging Inc.
401 The West Mall
Suite 900
Etobicoke, Ontario M9C 5J7
Attention: Chairman
Telecopy: (416) 232-3635
with copies to:
Jones, Day, Reavis & Pogue
599 Lexington Avenue
New York, NY 10022
Attention: Marc S. Kirschner, Esquire
Telecopy: (212) 755-7306
and
Eckert Seamans Cherin & Mellott
42nd Floor - 600 Grant Street
Pittsburgh, PA 15219
Attention: C. Kent May, Esquire
Telecopy: (412) 566-6099
(ii) if to OI,
Owens-Brockway Glass Container Inc.
One SeaGate
Toledo, Ohio 43666
Attention: Thomas L. Young
Telecopy: (419) 247-2226
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017-3954
Attention: Lillian E. Kraemer, Esquire
Telecopy: (212) 455-2502
(iii) if to Seller,
Anchor Glass Container Corporation
4343 Anchor Plaza Parkway
Tampa, FL 33634
Attention: Mark A. Kirk, CFO
Carl H. Young, III,
General Counsel
Telecopy: (813) 882-7859
with a copy to:
Stroock & Stroock & Lavan
Seven Hanover Square
New York, NY 10004
Attention: Robin E. Keller, Esq.
Telecopy: (212) 806-6006
13.02. AMENDMENTS AND WAIVERS. (a) Any provision of this Agreement may
be amended or waived prior to the Closing Date if, but only if, such amendment
or waiver is in writing and is signed, in the case of an amendment, by each
party to this Agreement, or in the case of a waiver, by the party against whom
the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
13.03. FEES AND EXPENSES. (a) Except as otherwise provided herein, all
costs and expenses incurred in connection with this Agreement shall be paid by
the party incurring such cost or expense.
(b) Seller shall pay all fees or commissions of any investment banker,
broker or finder retained by it and approved by the Bankruptcy Court that has
acted for Seller in connection with this Agreement or the transactions
contemplated hereby.
(c) Consumers shall pay all fees or commissions of Rothschild, Inc.,
which Consumers represents is the only investment banker, broker or finder that
has acted for Consumers which might be entitled to any fee or commission in
connection with this Agreement or the transactions contemplated hereby. OI
represents that no investment banker, broker or finder has acted for it in
connection with this Agreement or the transactions contemplated hereby.
13.04. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto except that, subject to Section
6.05, either Buyer may transfer or assign, in whole or from time to time in
part, to one or more of its Affiliates, the right to purchase all or a portion
of the Purchased Assets, but no such transfer or assignment will relieve such
Buyer of its obligations hereunder.
13.05. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the law of the State of New York, without regard to
the conflicts of law rules of such state. All references to dollars or $ in this
Agreement are to United States dollars.
13.06. COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
a counterpart hereof signed by the other parties hereto.
13.07. ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. This Agreement,
the Confidentiality Agreements and the documents referred to herein and therein
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, both
written and oral, between the parties with respect to such subject matter. No
representation, inducement, promise, understanding, condition or warranty not
set forth herein has been made or relied upon by any party hereto. Neither this
Agreement nor any provision hereof is intended to confer upon any Person other
than the parties hereto any rights or remedies hereunder.
13.08. BULK SALES LAWS. Buyers and Seller each hereby waive compliance
by Seller with the provision of the "bulk sales," "bulk transfer" or similar
laws of any state.
13.09. CAPTIONS. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
13.10. SEVERABILITY. If any provision of this Agreement (or any
portion thereof) or the application of any such provision (or any portion
thereof) to any Person or circumstance shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof (or the remaining portion thereof) or the application of such provision
to any other Persons or circumstances.
13.11. CONSENT TO JURISDICTION. Each party hereto irrevocably submits
to the exclusive jurisdiction of (a) the Supreme Court of the State of New York,
New York County, (b) the United States District Court for the Southern District
of New York, and (c) to the extent applicable, the United States Bankruptcy
Court for the District of Delaware for the purposes of any action, suit or other
proceeding arising out of or related to this Agreement, or any transaction
contemplated hereby but for no other purpose. Each party hereto agrees to
commence any action, suit or proceeding relating hereto either in the United
States District Court for the Southern District of New York or if such suit,
action or other proceeding may not be brought in such court for jurisdictional
reasons, in the Supreme Court of the State of New York, New York County or, to
the extent applicable, the United States Bankruptcy Court for the District of
Delaware. Each party hereto further agrees that service of any process, summons,
notice or document by U.S. registered mail to such party's respective address
set forth above shall be effective service of process for any action, suit or
proceeding in New York with respect to any matters to which it has submitted to
jurisdiction in this Section 13.11. Each party hereto irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby in (i) the Supreme Court of the State of New York, New York County, (ii)
the United States District Court for the Southern District of New York or (iii)
to the extent applicable, the United States Bankruptcy Court for the District of
Delaware, and hereby further irrevocably and unconditionally waives and agrees
not to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum. Consumers
also hereby irrevocably and unconditionally waives to the extent not prohibited
by applicable law, and agrees not to assert, by way of motion, as a defense or
otherwise, in any such action, suit or proceeding, any claim that it is not
subject personally to the jurisdiction of the above-named courts, that its
property is exempt or immune from attachment or execution, that the venue of any
such action, suit or proceeding brought in one of the above-named courts is
improper, or that this Agreement, or the transactions contemplated hereby may
not be enforced in or by such court.
13.12. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT, ANY OTHER DOCUMENT REFERRED TO
HEREIN OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
CONSUMERS PACKAGING INC.
By:/S/JOHN GHAZNAVI
Title: Chairman
OWENS-BROCKWAY GLASS CONTAINER INC.
By:/S/ G.J. LEMIEUX
Title: Vice President
ANCHOR GLASS CONTAINER CORPORATION
By:/S/CARL H. YOUNG, III
Title: Vice President
<PAGE>
APPENDIX A
OI ASSETS
1. All of the Purchased Assets located at or associated with Seller's
plants at Antioch, California and Hayward, California (the "Plants") (other than
Excluded Assets), including, without limitation, any and all sales or supply
agreements that are not Excluded Contracts and accounts receivable attributable
to sales by Seller of products manufactured at the Plants.
2. Seller's general partnership interest in the Rocky Mountain Bottle
Company, a general partnership created under the terms of a Partnership
Agreement dated March 24, 1995 between Seller and Coors Brewing Company, as
amended (the "Partnership").
3. Accounts receivable attributable to sales by Seller of products
manufactured by the Partnership.
4. Seller's rights under a certain Supply Agreement dated as of
January 1, 1995 between Seller and Coors Brewing Company (the "Supply
Agreement") and all molds, customer drawings, specifications, packaging
materials and other similar assets related directly to the production covered by
the Supply Agreement.
<PAGE>
APPENDIX B
OI ASSUMED LIABILITIES
All Assumed Liabilities that are associated directly with the OI
Assets, including, without limitation, all Seller's liabilities under directly
associated agreements (other than Excluded Contracts) and all pension
liabilities associated with the active employees at the Seller's plants at
Antioch, California (the "Plants") and Hayward, California, but excluding any
pension liabilities, including those described in Sections 2.03(iii) and (iv),
associated with any of Seller's retirees or any employees of Seller who are not
current active employees at the Plants.
<PAGE>
APPENDIX C
NEW ANCHOR
10.0% CONVERTIBLE PREFERRED STOCK
TERM SHEET
Issuer: New Anchor ("Anchor")
Security: 10.0% Convertible Preferred Stock
Amount: $54.0 million
Par Value: $25.00 per share
Total Shares: 2.2 million shares
Dividend: 10.0% cumulative dividend, payable quarterly in cash.
A scheduled cash dividend payment for the 10.0% Convertible
Preferred Stock cannot be postponed in order to pay a
scheduled cash dividend payment on the 8.0%
Junior Convertible Preferred Stock.
Voting: Non-voting unless scheduled cash dividend payments
are postponed for 12 consecutive quarters (3
years), at which time these shares as a class will
be allowed to nominate three board members.
Mandatory
Redemption: 12 years after issuance at par plus accrued and unpaid
dividends.
Optional Redemption: After 3 years, Anchor can redeem the 10.0% Convertible
Stock at par plus accrued and
unpaid dividends if Anchor's Common shares trade
above $6.00 per share (based on an initial price
of $5.00 per Common Share) for more than 60
consecutive days.
Convertibility: Convertible at the holders' option into Anchor Common
Shares at the Conversion Ratio.
Conversion Premium: 20.0%
Conversion Ratio: Each share of 10.0% Convertible Preferred
Stock will be convertible into 4.17 Anchor Common
Stock (based on an initial price of $5.00 per
Common Share).
Seniority: The 10.0% Convertible Preferred Stock will rank
ahead of all other Anchor equity instruments
including the 8.0% Junior Convertible Preferred
Stock and the Common Shares.
Registration: The 10.0% Convertible Preferred Stock will be registered
securities and freely tradeable on a nationally recognized
U.S. exchange or National Market.
Anti-Dilution: The 10.0% Convertible Preferred Stock and the 8.0% Junior
Convertible Preferred Stock will contain identical
anti-dilution provisions of a nature reasonably consistent
with similar provisions in similar securities. The
aforementioned anti-dilution provisions will not apply to
the warrants exercisable for nominal consideration into 10%
of the fully-diluted Common Shares of Anchor issuable to
Bankers Trust Company, its affiliates and/or
investors in Anchor's debt securities as contemplated by
the Financing Letters.
<PAGE>
APPENDIX D
NEW ANCHOR
8.0% JUNIOR CONVERTIBLE PREFERRED STOCK
TERM SHEET
Issuer: New Anchor ("Anchor")
Security: 8.0% Junior Convertible Preferred Stock
Amount: $74.0 million
Par Value: $25.00 per share
Total Shares: 3.0 million shares
Dividend: 8.0% cumulative dividend, payable quarterly,
payable-in-kind for three years at Anchor's option
and in cash thereafter. A scheduled cash dividend
payment for the 8.0% Junior Convertible Preferred
Stock cannot be made unless all accrued and unpaid
dividends on the 10.0% Convertible Preferred Stock
are paid in full.
Voting: Non-voting unless scheduled cash dividend payments
are postponed for 12 consecutive quarters (3
years), at which time these shares as a class will
be allowed to nominate three board members.
Mandatory Redemption: None.
Optional Redemption: After 3 years, Anchor can redeem the
8.0% Convertible Stock if Anchor's Common Shares
trade above $5.50 per share (based on an initial
price of $5.00 per Common Share) for more than 60
consecutive days. Anchor cannot redeem the 8.0%
Junior Convertible Preferred Stock if the 10.0%
Convertible Preferred Stock are outstanding.
Convertibility: Convertible at the holders' option into Anchor
Common Shares at the Conversion Ratio.
Conversion Premium: 10.0%
Conversion Ratio: Each share of 8.0% Junior Convertible
Preferred will be convertible into 4.55 Anchor
Common Shares (based on an initial price of $5.00
per Common Share).
Seniority: The 8.0% Convertible Preferred will rank junior
in liquidation, winding-up or other dissolution
of Anchor to the 10.0% Convertible Preferred Stock
and will rank senior to the Common Shares.
Registration: The 8.0% Junior Convertible Preferred Stock will
have registration rights.
Anti-Dilution: The 10.0% Convertible Preferred Stock and the 8.0%
Convertible Preferred Stock will contain identical
anti-dilution provisions of a nature
reasonably consistent with similar provisions in
similar securities. The aforementioned
anti-dilution provisions will not apply to the
warrants exercisable for nominal consideration
into 10% of the fully-diluted Common
Shares of Anchor issuable to Bankers Trust
Company, its affiliates and/or
investors in Anchor's debt securities as
contemplated by the Financing Letters.
<PAGE>
SELLER DISCLOSURE SCHEDULES
The Seller Disclosure Schedules to the Asset Purchase Agreement Dated
as of December 18, 1996, Between Anchor Glass Container Corporation and
Consumers Packaging Inc. and Owens-Brockway Glass Container Inc., which are
voluminous, have previously been separately filed with the Bankruptcy Court and
are not also being filed with this Plan. The Seller Disclosure Schedules may be
reviewed in the office of the Clerk of the Bankruptcy Court during normal
business hours.
<PAGE>
AMENDMENT TO
ASSET PURCHASE AGREEMENT
This AMENDMENT is made and entered into as of February 5,1997, by and
among ANCHOR GLASS CONTAINER CORPORATION, a Delaware corporation ("Anchor"),
CONSUMERS PACKAGING INC., a corporation organized under the federal laws of
Canada ("Consumers") and OWENS-BROCKWAY GLASS CONTAINER INC., a Delaware
corporation ("OI").
WITNESSETH:
WHEREAS, Anchor has entered into an Asset Purchase Agreement with Consumers
and OI, dated as of December 18, 1996 (the "Asset Purchase Agreement") with
respect to the sale by Anchor to Consumers and OI of substantially all of the
assets of Anchor on the terms and conditions specified in the Asset Purchase
Agreement, which Asset Purchase Agreement has been approved by order of the
United States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court") which has jurisdiction over the Bankruptcy Case filed by Anchor, as
debtor, pursuant to Chapter 11 of the Bankruptcy Code (Capitalized terms used
herein but not otherwise defined herein shall have the same meanings given them
in the Asset Purchase Agreement); and
WHEREAS, pursuant to Section 2.01(i) of the Asset Purchase Agreement,
Anchor agreed to transfer and assign to Consumers and OI, and Consumers and OI
agreed to purchase from Anchor, all of Anchor's right, title and interest in, to
and under the Purchased assets including all real property used or owned or held
for use in the Business in each case together with all buildings, fixtures and
improvements erected thereon; and
WHEREAS, pursuant to Section 2.06(b) of the Asset Purchase Agreement,
Anchor agreed to deliver to consumers and OI, three business days prior to the
Closing Date, a certificate, signed by Anchor's Chief Financial Officer, setting
forth (i) Anchor's good faith estimate of the Estimated Post-filing Trade
Payables and (ii) Anchor's good faith estimate of the Estimated Final Net
Assets; and
WHEREAS, Anchor has delivered the certificate described above dated January
24, 1997 and pursuant to Section 2.06 of the Asset Purchase Agreement. Consumers
and OI are obligated to pay to Anchor the Estimated Purchase Price in the amount
of $333,937,000 in cash, of which $205,575,000 is payable by Consumers; and
WHEREAS, Consumers and Anchor are desirous of amending the Asset Purchase
Agreement to eliminate from the Purchased Assets to be acquired by Consumers
three of the closed plants facilities owned by Anchor and to reduce the Purchase
Price and the Estimated Purchase Price otherwise payable by Consumers in cash on
the Closing Date by $5.7 million:
NOW, THEREFORE, in consideration of the foregoing and for good and valuable
consideration, the receipt and sufficiency of which hereby are acknowledge, the
parties hereto hereby agree as follows:
1. PURCHASED ASSETS. Notwithstanding anything to the contrary contained in
the Asset Purchase Agreement, including, without limitation, Section 2.01(i)
thereof, the Purchased Assets shall not include the plant facilities owned by
Anchor described on Schedule 3.11 (b) to the Asset Purchase Agreement as the
properties located at Corsicana, Texas (including the warehouse), Huntington
Park, California and San Leandro, California (collectively, the "Excluded
Properties"). Schedule 3.11 (b) to the Asset Purchase Agreement is hereby
amended to delete the Excluded Properties therefrom and the Asset Purchase
Agreement is hereby amended such that the terms "Purchased Assets" and "Real
Properties" as used in the Asset Purchase Agreement shall not include the
EXcluded Properties are hereby deleted. Consumers shall have the right to remove
any machinery and equipment (but not building fixtures) and Anchor owned
inventory located at any of the Excluded Properties within the lesser of 60 days
following the Closing Date or the date of sale of any Excluded Property.
2. ASSUMED LIABILITIES. Notwithstanding anything to the contrary contained
in the Asset Purchase Agreement, including, without limitation, Section 2.03(v)
thereof, the Assumed Liabilities shall not include any liabilities or
obligations of Anchor relating to or in connection with the Excluded Properties
(the "Related Liabilities").
3. PURCHASE PRICE. The Purchase Price and the Estimated Purchase Price for
the Purchased Assets are hereby reduced by $5.7 million. To effectuate such
reduction, (i) the amount of $333.6 million appearing in clause (i)(A) of the
first sentence of Section 2.06(a) of the Asset Purchase Agreement is hereby
reduced to $327.9 million and the amount thereof payable by Consumers is hereby
reduced from $208.6 million to $202.9 million and (ii) the amount of $333.6
million appearing in clause (i) of the fourth sentence of Section 2.06(a) of the
Asset Purchase Agreement is hereby reduced to $327.9 million.
4. CLOSING BALANCE SHEET. Notwithstanding anything to the contrary
contained in the Asset Purchase Agreement, including, without limitation,
Sections 2.08 and 2.09 thereof, the Excluded Properties and the Related
Liabilities, at a net value of $6.84 million, shall be excluded from the Closing
balance Sheet and solely for purposes of calculating any adjustment to the
Purchase Price pursuant to Section 2.09 of the Asset Purchase Agreement, the net
assets shown on the Reference Balance Sheet shall be reduced by the amount of
$6.84 million which is the agreed book value of the Excluded Properties net of
the Related Liabilities. It is the intention of the parties that this paragraph
4 shall preclude any adjustment in the Purchase Price pursuant to Section 2.09
of the Asset Purchase Agreement by reason of the exclusion of the Excluded
Properties net of the Related Liabilities from the Purchased Assets and the
Assumed Liabilities.
5. FUTURE SALES OF EXCLUDED PROPERTIES. Anchor agrees that, in connection
with the sale of any of the Excluded Properties by Anchor, it will include a
covenant restricting any subsequent owner from operating such Excluded Property
for the manufacture of glass containers.
6. ASSIGNMENT TO NEW ANCHOR. Prior to the Closing., Consumers shall have
assigned to New Anchor all of its rights under this Amendment and shall have
caused New Anchor to assume all of the liabilities and obligations of Consumers
hereunder. Such assignment and assumption shall not relieve Consumers of its
liabilities and obligations under this Amendment.
7. GOVERNING LAW, ETC. This Amendment shall be governed by, and construed
in accordance with, the laws of the State of New York, without regard to the
conflicts of law rules of such State. The provisions of Sections 13.11 (Consent
to Jurisdiction) and 13.12 (Waiver of Jury Trial) of the Asset Purchase
Agreement shall be applicable to this Amendment as though fully set forth
herein.
<PAGE>
IN WITNESS WHEREOF, each party has caused this Amendment to be executed
by its duly authorized representative as of the date first written above.
ANCHOR GLASS CONTAINER CORPORATION
By: /s/ Mark A. Kirk
Name: Mark A. Kirk
Title: Senior Vice President
CONSUMERS PACKAGING INC.
By: /s/ John J. Ghaznavi
Name: John J. Ghaznavi
Title: Chairman & Chief Executive Officer
OWENS-BROCKWAY GLASS CONTAINER INC.
By: /s/ James W. Baehren
Name: James W. Baehren
Title: Vice President
<PAGE>
Exhibit 3: Wind-down Budget
[TO BE PROVIDED]
<PAGE>
Exhibit 4: List of Executory Contracts and Unexpired Leases to be Assumed
[TO BE PROVIDED]
<PAGE>
APPENDIXES
1. Property
a. That certain real estate property located at 1901 S. Highway
287, Corsicana, Navarro, County, Texas ("Corsicana")
b. That certain vacant lot commonly known as 1940 Fairway
Drive, City of San Leandro, County of Alemeda, State
of California ("San Leandro").
c. That certain real properyt is an unincorporated area of the
County of Los Angeles, State of California, with a street
address of 7507 Roseberry Avenue ("Huntington Park").
2. List of Potential Avoidance Actions
[TO BE PROVIDED]
