Exhibit 10.1
FORBEARANCE
AGREEMENT
FORBEARANCE AGREEMENT, dated as of April 3, 2009
(this " Agreement "), by and among (i) ICO NORTH AMERICA,
INC., a Delaware corporation (the " Borrower "), (ii) each
Subsidiary Guarantor party hereto (together with the Borrower, each
a " Company " and collectively, the " Companies "),
(iii) the Lenders party hereto, (iv) Jefferies Finance LLC, as lead
arranger, book manager, documentation agent and syndication agent,
(v) Jefferies Finance LLC, as administrative agent for the
Lenders (in such capacity, together with its successors and assigns
in such capacity, the " Administrative Agent ") and (vi) The
Bank of New York Mellon (formerly known as The Bank of New York),
as collateral agent for the Lenders (the " Collateral Agent
").
RECITALS
A. The Borrower, the
Subsidiary Guarantors, the Lenders, the Collateral Agent and the
Administrative Agent, and the other parties hereto are parties to
the Amended and Restated Revolving Credit Agreement, dated as of
April 7, 2008 (as amended or otherwise modified prior to the date
hereof, the " Credit Agreement "), pursuant to which the
Lenders extended certain commitments and made certain loans and
other financial accommodations available to the
Borrower. The obligations of the Borrower under the
Credit Agreement are guaranteed by the Subsidiary Guarantors and
are secured by the Pledged Collateral.
B. As of the date hereof,
certain material Defaults have occurred and are continuing, which
are listed on Exhibit A hereto, and such Defaults will become
Events of Default on April 7, 2009 (hereinafter referred to
collectively as the " Specified Events of Default ")
.
C. The Borrower has
requested that the Administrative Agent and the Lenders temporarily
forbear from exercising their rights and remedies as a result of
the occurrence and continuance of the Specified Events of Default
under the Credit Agreement .
D. The Administrative Agent
and the Lenders are willing to grant such forbearance
on a limited basis, subject to the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the premises
and the mutual covenants, representations, warranties and
agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
(a) Any capitalized term
used herein and not defined shall have the meaning assigned to it
in the Credit Agreement.
(b) As used in this
Agreement, the following terms shall have the respective meanings
indicated below, such meanings to be applicable equally to both the
singular and plural forms of such terms:
" Forbearance Effective Date " has the
meaning assigned to it in Section 4.
" Forbearance Period " means the period
commencing on the Forbearance Effective Date and ending on the
Termination Date, unless earlier terminated pursuant to the terms
and provisions of this Agreement.
" Paid in Full " means that the
Obligations (other than contingent indemnification obligations for
which no claim has been made or arisen) shall be repaid in full in
cash and all Commitments shall be terminated.
" Secured Creditor Remedies " means any
default-related action by any Agent or any Lender to
sell, foreclose, repossess or liquidate any of the Pledged
Collateral.
" Termination Date " means 11:00 a.m.
(New York Time) on the Final Maturity Date.
" Termination Event " means any one or
more of the following: (i) any representation or warranty made or
deemed made by or on behalf of any Company or by any officer of the
foregoing under or in connection with this Agreement or under or in
connection with any report, certificate or other document delivered
to any Agent or any Lender pursuant to this Agreement shall have
been incorrect in any material respect when made or deemed made,
(ii) any Company shall fail to perform or comply with any covenant
or any agreement or term contained in this Agreement, (iii) any
Default or Event of Default, other than the Specified Events of
Default, shall occur and be continuing under the Credit Agreement
or any of the other Loan Documents, or (iv) any "Event of Default",
as such term is defined in the Convertible Indenture, shall occur
and be continuing.
2. Acknowledgements of
the Companies.
(a) The Borrower and each
other Company acknowledge and agree that as of April 2, 2009, the
aggregate principal balance of the Loans on such date (inclusive of
capitalized interest) is $43,722,222.00 (the “ Existing
Principal ”). The Borrower and each other
Company acknowledge and agree that as of April 2, 2009, the
aggregate amount of accrued and unpaid and uncapitalized interest
of the Loans is $1,396,682.00 (the “ Existing Interest
”) and the accrued and unpaid fees payable pursuant to
Section 2.05 of the Credit Agreement is $370,180.00 (the “
Existing Fees ”; collectively with the Existing
Principal and the Existing Interest, the “ Outstanding
Indebtedness ”). The foregoing amounts do not
include other fees, expenses and other amounts that are chargeable
or otherwise reimbursable under the Credit Agreement and the other
Loan Documents. Neither the Borrower nor any other
Company has any rights of offset, defense, claim or
counterclaim with respect to any of the Obligations.
(b) The Borrower and each
other Company acknowledge and agree that the Specified Events of
Default constitute Defaults, and on and after April 7, 2009, will
constitute Events of Default, that have occurred and are continuing
as of the date hereof, are not capable of being cured and are
material. The existence of the Specified Events of
Default (i) relieved the Lenders and the Agents from any obligation
to extend any Loan or provide other financial accommodations under
the Credit Agreement or other Loan Documents and (ii) would, but
for the existence of this Agreement, permit the Lenders and the
Agents to, among other things, (A) accelerate all or any portion of
the Obligations and (B) subject to the terms of the Collateral
Trust Agreement, (1) commence any legal or other action to collect
any or all of the Obligations from the Borrower and any other
Company and/or any Pledged Collateral, (2) exercise any Secured
Creditor Remedies, including, without limitation, by foreclosing or
otherwise realizing upon any or all of the Pledged Collateral
and/or setting off and applying any deposits or other amounts or
proceeds of Pledged Collateral to the payment of any or all of the
Obligations, and (3) take any other enforcement action or otherwise
exercise any or all rights, remedies, powers and privileges
provided for by any or all of the Credit Agreement, the other Loan
Documents, applicable law and/or equity.
3. Limited
Forbearance by the Agents and the Lenders .
(a) Temporary
Forbearance . In accordance with the terms and
subject to the conditions of this Agreement and only so long as no
Termination Event shall have occurred and be continuing, the Agents
and the Lenders agree to temporarily forbear until the
Termination Date from (i) declaring all of the Obligations to be
immediately due and payable, (ii) foreclosing or directing the
foreclosure upon the Pledged Collateral, and (iii) exercising any
other Secured Creditor Remedies with respect to the Pledged
Collateral, in each case, solely by reason of, or as a result of
the occurrence of, the Specified Events of Default.
(b) Limited Effect of
Forbearance . Notwithstanding the foregoing, the
Companies and the Lenders acknowledge and agree that the temporary
forbearance granted by the Agents and the Lenders pursuant to this
Agreement shall not constitute, and shall not be deemed to
constitute, a waiver of the Specified Events of Default or of any
other Default or Event of Default under the Loan Documents or
a waiver of any of the rights and remedies provided thereunder,
under law, at equity or otherwise (except as otherwise expressly
provided in Section 3(a)).
(c) Termination of
Forbearance . On and after the Termination Date, or
such earlier date on which a Termination Event occurs and is
continuing, the Agents' and the Lenders' agreement hereunder to
forbear shall terminate automatically without the requirement of
any demand, presentment, protest, notice or further act or action
by the Agents or the Lenders. Each Company expressly
acknowledges and agrees that the effect of such termination will be
to permit the Agents and the Lenders to demand that the Obligations
be Paid in Full and to exercise any and all other rights and
remedies available to them under the Loan Documents and this
Agreement, at law, in equity (including, without limitation, any
Secured Creditor Remedy), or otherwise without any further lapse of
time, expiration of applicable grace periods, or (except as
otherwise required under provisions of applicable law that cannot
be waived) requirements of notice to any Company, all of which are
expressly waived by each Company.
(d) Default Interest
. The Administrative Agent, the Lenders and the
Companies hereby agree that (i) effective April 7, 2009, the
Obligations shall accrue interest at the Default Rate and (ii) such
interest shall be payable in cash upon the earlier of (a) the
occurrence of a Termination Event and (b) the Termination
Date.
4. Conditions to
Effectiveness; Post-Closing Obligations .
(a) This Agreement shall
become effective and be deemed effective as of the date when, and
only when, the Administrative Agent shall have received a copy of
this Agreement, duly executed by the Companies, the Administrative
Agent and the Required Lenders (the date of such effectiveness
being referred to as the “ Forbearance Effective Date
”):
(b) The Borrower shall pay
to the Administrative Agent within one Business Day of the
Forbearance Effective Date, for the account of or as directed by
each Lender on a pro rata basis, a nonrefundable fee equal to 0.75%
of the Existing Principal, in immediately available funds, in
Dollars, which fee shall be earned in full when paid.
(c) The Borrower shall pay
the invoiced legal fees and expenses of counsel to the Required
Lenders in respect of the negotiation, preparation, execution and
delivery of this Agreement within three Business Days of the
receipt of such invoice.
(d) The Companies shall
deliver to the Administrative Agent within three Business Days of
the Forbearance Effective Date:
(i) a certificate from the
Secretary of the Borrower (A) attesting to the resolutions of the
Borrower's Board of Directors authorizing the execution, delivery
and performance by the Borrower of this Agreement and the other
Loan Documents to be executed and delivered pursuant hereto to
which the Borrower is a party, and the performance of the Credit
Agreement, as amended, (B) authorizing specific officers of the
Borrower to execute the same, and (C) attesting to the incumbency
and signatures of such specific officers of the Borrower;
and
(ii) the financial statements
for the fiscal year ended December 31, 2008 required under Section
5.01(a) of the Credit Agreement and the related documents required
under Section 5.01(d) of the Credit Agreement, excluding the
requirement that the auditor opinion accompanying such financial
statements be delivered without a going concern
qualification.
(e) The Companies shall
deliver to the Administrative Agent within five Business Days of
the Forbearance Effective Date a counterpart signature page to this
Agreement, duly executed by the Collateral Agent.
Any breach of the obligations set forth in
Section 4(b), 4(c), 4(d) or 4(e) above shall constitute a
Termination Event.
5. Ratification of Loan
Documents and Pledged Collateral . Each Company
acknowledges that this Agreement constitutes receipt from the
Agents and the Lenders of proper notice of default, and subject to
the terms and conditions of this Agreement, notice of intent to
accelerate and opportunity to cure, and demand for
payment. Each Company waives to the extent permitted by
law (a) any further notice of default, notice of intent to
accelerate, or demand for payment and (b) any further opportunity
to cure the Specified Events of Default. Except as
modified by this Agreement, each Company acknowledges, ratifies,
reaffirms, and agrees that the Collateral Trust Agreement and the
perfected liens and security interests created thereby in favor of
the Collateral Agent for the benefit of the Lenders and the other
secured parties referred to therein in the Pledged Collateral are,
and will remain, in full force and effect and binding on all of the
Companies and are hereby ratified and confirmed in all
respects. Each Company acknowledges, ratifies and
reaffirms all of the terms and provisions of the Loan Documents
(including, without limitation, the Credit Agreement), except as
modified herein, which are incorporated by reference as of the
Forbearance Effective Date as if set forth herein including,
without limitation, all promises, agreements, warranties,
representations, covenants, releases, and indemnifications
contained therein.
6. Insolvency
Proceedings; FCC Matters.
(a) Insolvency
Proceedings and Certain Waivers. Each Company agrees
that if any Insolvency Proceeding with respect to any Company
exists, subject to and in furtherance of the terms set forth in the
Collateral Trust Agreement:
(i) such Company shall not
directly or indirectly object to, challenge, contest or otherwise
seek to invalidate or reduce (or support directly or indirectly any
other person in any such objection, challenge or contest) (A) the
existence, validity or amount of the obligations or (B) the extent,
legality, validity, perfection, priority or enforceability of any
lien, pledge, security interest or mortgage of the Collateral Agent
purportedly securing any of the Obligations;
(ii) such Company shall not
seek to subordinate or recharacterize any claim of the Collateral
Agent or any Lender against any other Company; and
(iii) such Company
acknowledges and agrees that the waivers set forth in this Section
constitute material consideration for the Agents and the Lenders to
execute and deliver this Agreement and that the Agents and the
Lenders are specifically relying on the truth and accuracy of the
foregoing.
(b) FCC Matters
. For the purposes of exercising any of their Secured
Creditor Remedies at any time that the Forbearance Period shall
cease to be in effect, subject to and in furtherance of the terms
set forth in the Collateral Trust Agreement, the Companies agree
with the Agent and the Lenders as follows:
(i) The Agents and the
Lenders are empowered to request, and each Company agrees to
authorize, the appointment of a receiver or trustee from any court
of competent jurisdiction. Such receiver or trustee
shall be instructed to seek from the FCC (and any other
Governmental Authority) all requisite consents to and approvals of
any assignment of any FCC License and assets of, or any
transfer of control of over any Person whose stock, partnership
interests, other securities or other Pledged Collateral is subject
to the Collateral Trust Agreement to the extent required for such
trustee or receiver to be granted the rights necessary to
accomplish the purpose of seeking a bona fide purchaser to whom
such FCC License ultimately will be assigned or control of such
entity ultimately will be transferred, subject to FCC and any other
governmental approvals.
(ii) Each Company agrees, at
the joint and several cost and expense of the Companies, to
reasonably cooperate with any such purchaser referred to in clause
(i) and with the Agents and Lenders in the preparation, execution
and filing of any applications and other documents and providing
any information that may be reasonably necessary in obtaining the
FCC's consent to the assignment or transfer to such purchaser of
the Pledged Collateral or any portion thereof or any of any FCC
License.
(iii) To the fullest extent
permitted by applicable law, each Company hereby agrees to consent
to and authorize any such transfer of control or assignment upon
the request of the Agents or Lenders following a Termination Event
or other expiration of the Forbearance Period, without limiting any
rights of the Agents or Lenders under this Agreement or any other
Loan Document to authorize the Agents or Lenders to nominate a
trustee or receiver to assume control of the Pledged Collateral,
subject only to any required consents, approvals or orders of
courts of competent jurisdiction, the FCC or other Governmental
Authority, for the purpose of effectuating the transactions
contemplated in this Section 6(b) and the other provisions of this
Agreement and the other Loan Documents. Such trustee or
receiver shall have all the rights and powers as provided to it by
law, court order or the Agents or Lenders under this Agreement and
the other Loan Documents.
(iv) Each Company shall
cooperate fully and use commercially reasonable efforts in
obtaining the consent of the FCC and the approval or consent of
each other Governmental Authority required to effectuate the
foregoing.
7. Representations and
Warranties . To induce the Agents and the Lenders to
enter into this Agreement, each Company hereby represents and
warrants to the Agents and the Lenders as follows:
(a) Duly Organized
. Each Company is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its
organization, and has the full power and authority to execute,
deliver and perform this Agreement and to perform the Credit
Agreement, as amended hereby.
(b) Authority
. The execution, delivery and performance by such
Company of this Agreement, and the performance by such Company of
the Credit Agreement
