AMENDMENT NO. 3 TO FORBEARANCE AGREEMENTDefault Notice Forbearance Agreement |
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Avenue Capital Partners IV, LLC | Avenue Capital Partners V, LLC | Avenue Global Opportunities Fund GenPar, LLC | Avenue International Master GenPar, Ltd | Avenue Partners, LLC | BURLINGTON RESINS, INC | DISTRIBUTORS RECYCLING, INC | GCM Little Arbor Master Fund, Ltd | GL Partners IV, LLC | GL Partners V, LLC | GLENVIEW CAPITAL MANAGEMENT, LLC | INVESTMENTS, INC | MORGAN STANLEY & CO, INC | NATVAR HOLDINGS, INC | Oaktree Value Opportunities Fund GP, Ltd | OCM Opportunities Fund IV GP, Ltd | OCM Opportunities Fund VII GP, Ltd | PLASTIC SPECIALTIES AND TECHNOLOGIES, INC | PURETEC CORPORATION | Tekni-Plex, Inc | TP/ELM ACQUISITION SUBSIDIARY, INC | TPI ACQUISITION SUBSIDIARY, INC | TRI-SEAL HOLDINGS, INC. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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Search Default Notice Forbearance Agreement by:
Exhibit
10.1
AMENDMENT
NO. 3 TO FORBEARANCE AGREEMENT
AMENDMENT
NO. 3 (the “Amendment”),
dated as of March 27, 2008, to the Forbearance Agreement (as amended, the “Agreement”)1 dated as of January 16, 2008 by and among
Tekni-Plex, Inc. (the “Company”),
each of the Company’s subsidiaries identified on the signature pages thereof
(the “Subsidiaries”),
the Holders of the Company’s 12 3/4% Senior Subordinated Notes due 2010 (the
“Notes”)
that were issued pursuant to that certain Indenture, dated as of June 21, 2000
(as supplemented on May 6, 2002, August 22, 2002, and April 25, 2005, the “Indenture”),
that are signatories thereto (each a “Noteholder,”
and collectively, the “Noteholders,”
and together with the Company, the “Parties”)
and U.S.
Bank National Association, as successor indenture trustee (the “Indenture
Trustee”) under the Indenture.
RECITALS
WHEREAS,
the parties hereto are desirous of extending the Agreement on the terms set
forth herein;
WHEREAS,
the Noteholders continue to collectively hold not less than $286,650,000 in
aggregate principal amount of the Notes, representing not less than 91% of the
aggregate principal amount of the Notes that are outstanding, and not less than
$178,275,000 in aggregate principal amount of the Second Lien Notes,
representing not less than 64% of the aggregate principal amount of the Second
Lien Notes that are outstanding.
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1
Each capitalized term used but not defined herein shall have the meaning
ascribed to it in the Agreement (and to the extent not defined therein,
the meaning ascribed to it in the
Indenture).
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NOW
THEREFORE, in consideration of the premises and the respective covenants and
agreements set forth in this Agreement, the Parties, each intending to be
legally bound, agree as follows:
1. Forbearance. Section
1(c) of the Agreement is hereby amended and restated in its entirety as
follows:
“(c) As used herein, the
term “Forbearance
Period” shall mean the period beginning on January 17, 2008 and ending
upon the occurrence of a Termination Event. As used herein, “Termination
Event” shall mean the earliest to occur of (i) 11:59 p.m. EST on May 13,
2008, (ii) 11:59 p.m. EST on April 1, 2008, unless by such time Paul, Weiss (as
defined below) delivers to the Company a written notice stating that either (A)
a term sheet (the “Restructuring
Term Sheet”) memorializing the restructuring transaction agreed to in
principle between holders of a majority in principal amount of the Notes and the
Required Preferred Stockholders (as defined in the Company’s Certificate of
Incorporation) on March 27, 2008, has been agreed to among the Company, holders
of a majority in principal amount of the Notes, the Required Preferred
Stockholders and the two holders of the Company’s common stock or (B) holders of
a majority in principal amount of the Notes have agreed to extend the date set
forth in this clause (ii) to a date specified in such written notice, (iii)
11:59 p.m. EST on April 15, 2008 if any required tender offer for the Notes
shall not have been launched by such time, unless Paul, Weiss delivers to the
Company a written notice stating that holders of a majority in principal amount
of the Notes have agreed to extend the date set forth in this clause (iii) to a
date specified in such written notice or waive compliance with this
clause
(iii), and (iv) four Business Days after the delivery by Paul, Weiss, as counsel
to the Noteholder Group, to the Company and the Indenture Trustee of a written
notice terminating the Forbearance Period (the “Termination
Notice”), which notice may be delivered at any time but only upon or
after the occurrence of any Forbearance Default (as defined below); provided,
however,
that notwithstanding the foregoing, this Agreement shall immediately terminate
upon the occurrence of a Forbearance Default under subsection (H) below, without
the need for delivery of the Termination Notice or any other
notice. As used herein, the term “Forbearance
Default” shall mean: (A) the valid acceleration of obligations arising
under (i) the 8 3/4% Senior Secured Notes due 2013 (the “Second
Lien Notes”) issued pursuant to that certain indenture dated as of
November 21, 2003 (the “Second
Lien Indenture”); (ii) the 10 7/8 % Senior Secured Notes due 2012 (the
“First
Lien Notes”) issued pursuant to that certain indenture dated as of June
10, 2005 (the “First
Lien Indenture”); or (iii) the Credit Agreement dated as of June 10,
2005, between the Company, as borrower, Citicorp USA, Inc. as administrative
agent, General Electric Capital Corporation as syndication agent, and the
lenders and issuers party thereto (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit
Agreement”); (B) the Company’s payment of or entry into an agreement to
pay the fees or expenses of any ad-hoc group of holders of First Lien Notes or
Second Lien Notes (other than the Noteholder Group); (C) the failure of the
Company and the Required Preferred Stockholders, after four business days’
written notice from Paul, Weiss, Rifkind, Wharton & Garrison LLP (“Paul
Weiss”, together with Houlihan, Lokey, Howard & Zukin Capital, Inc.
(“Houlihan
Lokey”), the “Advisors”)
as counsel to the Noteholder Group alleging such a failure, to engage in good
faith efforts to
negotiate,
document and consummate the transactions contemplated by the Restructuring Term
Sheet, which determination shall be made by the holders of a majority in
principal amount of the Notes in good faith and their reasonable discretion; (D)
the failure of the Company, after four business days’ written notice from Paul
Weiss alleging such a failure, to engage in good faith efforts to produce
documentation and due diligence materials reasonably requested by the Advisors,
which determination shall be made by the holders of a majority in principal
amount of the Notes in good faith and their reasonable discretion; (E) the
occurrence of any Event of Default other than the Interest Default; (F) the
failure of the Company to comply with any material term, condition, covenant or
agreement set forth in this Agreement; (G) the failure of any representation or
warranty made by the Company under this Agreement to be true and correct in all
material respects as of the date when made; (H) the commencement by or against
the Company or any Subsidiary that is a Significant Subsidiary as defined in the
Indenture of a case under title 11 of the United States Code; (I) the Company
engages in any material asset sales (other than the disposition of inventory),
material sale-leaseback, or material financing transaction (including any
increase in commitment under the Credit Agreement) without the consent of a
majority in principal amount of the Notes held by the Noteholder Group; (J) the
Company pays any management, sponsor or consulting fees to its preferred
stockholders or their affiliates; or (K) from and after February 14, 2008, the
Company enters into any material amendment, restatement, supplement or
modification to or under the Credit Agreement without the consent of a majority
in principal amount of the Notes held by the Noteholder Group (except to the
extent that such requirement that the Company obtain such consent would violate
Section 6.8 of the Credit Agreement).”
2. Effectiveness. This
Amendment shall become effective upon execution and delivery of counterparts of
this Agreement by the Noteholders (other than Barclays Bank, PLC, provided that
(i) this Amendment shall not be binding on Barclays Bank, PLC and (ii) all
references to the “Noteholders” or the “Noteholder Group” herein or in the
Agreement shall be deemed to exclude Barclays Bank, PLC, in each case unless and
until the Amendment is executed and delivered by such party), the Company and
the Subsidiaries. This Amendment shall be effective as to the
Noteholders, the Company and the Subsidiaries in accordance with Section 2
hereof regardless of whether the Indenture Trustee executes this
Agreement. This Amendment shall be effective as to the Indenture
Trustee upon the Indenture Trustee becoming a signatory
hereto.
3. Representations,
Warranties and Covenants.
(a) The
Company and the Subsidiaries represent, warrant and covenant as
follows:
(i) Except for
the Interest Default, no other Default or Event of Default has occurred and is
continuing.
(ii) The
execution, delivery and performance by the Company and the Subsidiaries of this
Agreement:
(1) are within
their corporate powers;
(2) have been
duly authorized by all necessary corporate action;
(3) do not and
will not (A) contravene their certificate of incorporation or by-laws or limited
partnership or other constituent documents, (B) violate any (i) applicable
material requirement of law or (ii) material order or decree of any
governmental
authority or arbitrator applicable to them, (C) materially conflict with or
result in the breach of, or constitute a default under, or result in or permit
the termination or acceleration of, any material contractual obligation of the
Company or the Subsidiaries, or (D) result in the creation or imposition of any
material lien or encumbrance upon any of the material property of the Company or
the Subsidiaries; and
(4) do not and
will not require the consent of, authorization by, approval of any governmental
authority.
(b) The
Noteholders represent as follows:
(i) As of the
date hereof, based on the representations of each of the individual Noteholders,
the Noteholders, in the aggregate, hold, with all rights, including without
limitation the right to vote, not less than $286,650,000 in principal amount of
the Notes, representing not less than 91% of the aggregate principal amount of
the Notes outstanding.
(ii) As of the
date hereof, based on the representations of each of the individual Noteholders,
the Noteholders, in the aggregate, hold, with all rights, including without
limitation the right to vote, not less than $178,275,000 in principal amount of
the Second Lien Notes, representing not less than 64% of the aggregate principal
amount of the Second Lien Notes outstanding.
4. Ratification
of Liability. The Company and its Subsidiaries hereby ratify
and reaffirm all of their payment and performance obligations and obligations to
indemnify, contingent or otherwise, under the Indenture.
5. Complete
Integration; Amendments. This Amendment, together with the
Agreement – which remains in full force and effect except as expressly modified
by this Amendment – constitutes the full and final agreement between the Parties
with respect to the subject matter hereof, and may not be modified or amended
except by a written instrument, signed by each of the Parties, expressing such
amendment or modification. The Parties warrant, promise and represent
that in
executing
this Amendment, each Party is not relying upon any oral representation, promise
or statement made by any other Party hereto and that each Party is not relying
upon any promise, statement or representation contained in any other written
instrument.
6. No
Other Amendments; Reservation of Rights, No Waiver. Other than
as otherwise expressly provided herein, this Amendment shall not be deemed to
operate as an amendment or waiver of, or to prejudice, any right, power,
privilege or remedy of the Noteholders or the Indenture Trustee, as applicable,
under the Indenture or applicable law, nor shall the entering into this
Amendment preclude the Noteholders from refusing to enter into any further
amendments or forbearances with respect to the Indenture. Other than
as expressly provided herein, this Amendment shall not constitute a forbearance
with respect to (i) any failure by the Company to comply with any covenant or
other provision in the Indenture or (ii) the occurrence or continuance of any
present or future Event of Default.
7. Counterparts/Facsimile
Transmission. This Amendment may be signed in counterparts,
each of which, when taken together, shall be deemed an
original. Execution of this Amendment is effective if a signature is
delivered by facsimile transmission or electronic (e.g., “pdf”)
transmission.
8. Successors
and Assigns. This Amendment shall be binding upon and inure to
the benefit of the Parties hereto and each of their respective successors,
assigns, heirs and personal representatives.
9. Authority. Any
person signing this Amendment in a representative capacity (i) represents and
warrants that he/she is authorized to sign this Amendment on behalf of the Party
he/she represents and that his/her signature upon this Amendment
will bind
the represented Party to the terms of this Amendment, and (ii) acknowledges that
the other Party to this Amendment has relied upon such representation and
warranty.
10. Governing
Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of New York, without regard to its choice
of law provisions.
11. Direction
to Indenture Trustee. The Noteholders’ agreement to forbear as
provided in the Agreement as amended by this Amendment shall constitute a
direction from such Noteholders to the Indenture Trustee to similarly forbear
during the Forbearance Period as extended hereby.
IN WITNESS
WHEREOF, each of the Parties hereto has caused this Amendment to be duly
executed and delivered as of the date first above written.
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TEKNI-PLEX,
INC.
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By:
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/s/
James E. Condon
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Name:
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James
E. Condon
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Title:
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Chief
Financial Officer
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SUBSIDIARIES
PURETEC
CORPORATION
NATVAR
HOLDINGS, INC.
TRI-SEAL
HOLDINGS, INC.
PLASTIC
SPECIALTIES AND TECHNOLOGIES, INC.
BURLINGTON
RESINS, INC.
PLASTIC
SPECIALTIES AND TECHNOLOGIES
INVESTMENTS,
INC.
DISTRIBUTORS
RECYCLING, INC.
TPI
ACQUISITION SUBSIDIARY, INC.
TP/ELM
ACQUISITION SUBSIDIARY, INC.,
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By:
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/s/
James E. Condon
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Name:
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James
E. Condon
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Title:
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Chief
Financial Officer
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THE
NOTEHOLDERS
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AVENUE
INVESTMENTS, L.P.
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By:
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Avenue
Partners, LLC,
its
General Partner
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By:
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/s/
Sonia Gardner
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Name:
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Sonia
Gardner
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Title:
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Member
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AVENUE-CDP
GLOBAL OPPORTUNITIES FUND, L.P.
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By:
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Avenue
Global Opportunities Fund GenPar, LLC,
its
General Partner
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By:
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/s/
Sonia Gardner
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Name:
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Sonia
Gardner
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Title:
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Member
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AVENUE
INTERNATIONAL MASTER, L.P.
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By:
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Avenue
International
Master GenPar,
Ltd.,
its
General Partner
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By:
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/s/
Sonia Gardner
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Name:
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Sonia
Gardner
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Title:
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Member
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AVENUE
SPECIAL SITUATIONS FUND IV, L.P.
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By:
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Avenue
Capital Partners IV, LLC,
its General Partner
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By:
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GL
Partners IV, LLC,
its
General Partner
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By:
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/s/
Sonia Gardner
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Name:
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Sonia
Gardner
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Title:
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Member
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AVENUE
SPECIAL SITUATIONS FUND V,
L.P.
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By:
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Avenue
Capital Partners V,
LLC,
its
General Partner
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