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EXHIBIT 10.39
WAIVER AGREEMENT
Waiver Agreement (this "Agreement"), dated as of February 24,
1997, by and among Xxxx Group, Inc., a Delaware corporation (the "Company"); PNC
Bank, National Association ("PNC"); Bear, Xxxxxxx Securities Corp. ("Bear,
Xxxxxxx Securities"); Silver Oak Capital, L.L.C., as agent for Xxxxxx, Xxxxxx &
Co. and certain managed funds and accounts ("Xxxxxx, Xxxxxx"); Bear Xxxxxxx &
Co., Inc. ("Bear Xxxxxxx"); Halcyon/Xxxx X. Xxxxxx Management Company LLC
("Halcyon"); Intermarket Corp. ("Intermarket"); and Swiss Bank (together with
Bear, Xxxxxxx Securities; Xxxxxx, Xxxxxx; Bear Xxxxxxx; Halcyon; and
Intermarket, the "Current Debt Holders," and, collectively, together with PNC,
the "Lenders").
R E C I T A L S:
WHEREAS, PNC and the Company entered into that certain
Receivables Purchase Agreement, dated as of January 1, 1995 (as amended, the
"Receivables Purchase Agreement"); and
WHEREAS, Xxxx Xxxxxxx Mutual Life Insurance Company ("Xxxx
Xxxxxxx"), New York Life Insurance Company ("New York Life"), Massachusetts
Mutual Life Insurance Company ("Massachusetts Mutual"), Massmutual/Xxxxxxx CBO,
N.V. ("Massmutual" and, together with Xxxx Xxxxxxx, New York Life and
Massachusetts Mutual, the "Former Note Holders"), predecessors in interest to
the Current Debt Holders, and the Company entered into certain Note Agreements,
each dated as of September 15, 1993, providing for the issuance and sale of
$41,000,000 aggregate principal amount of the Company's 9.45% Series A Senior
Notes due September 15, 2003 (the "Series A Senior Notes")and $9,000,000
aggregate principal amount of the Company's 8.99% Series B Senior Notes due
September 15, 1999 (collectively with the Series A Senior Notes, the "Senior
Notes")(as amended, the "Note Agreements"); and
WHEREAS, The First National Bank of Boston ("Bank of Boston"),
a predecessor in interest to the Current Debt Holders, and the Company entered
into that certain Letter Agreement, dated February 9, 1995 pursuant to which
Bank of Boston extended certain financial accommodations to the Company,
including a loan in the maximum principal amount of $10,000,000 evidenced by a
promissory note dated February 1, 1995 to Bank of Boston in the
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original principal amount of $10,000,000 (collectively, the "Letter Agreement");
and
WHEREAS, Bank of Boston and the Company further entered into
that certain Amended and Restated Loan and Security Agreement, dated as of
January 5, 1996, pursuant to which Bank of Boston amended and restated the
financial accommodations extended to the Company under the Letter Agreement,
which are presently evidenced by an amended and restated commercial promissory
note dated January 5, 1996 to Bank of Boston in the original principal amount of
$10,000,000 (collectively, the "Restated Loan Agreement"); and
WHEREAS, pursuant to a certain Agreement, dated as of January
5, 1996 (the "January Consent"), PNC waived certain provisions of the
Receivables Purchase Agreement, the Former Note Holders waived certain
provisions of the Note Agreements and Bank of Boston waived certain provisions
of the Letter Agreement; and
WHEREAS, pursuant to a certain Amendment Agreement, dated as
of January 5, 1996 (the "Amendment Agreement"), the Former Note Holders and the
Company amended certain provisions of the Note Agreements; and
WHEREAS, in consideration of Bank of Boston entering into the
Restated Loan Agreement, the Company granted to Bank of Boston liens on and
security interests in certain of its assets, which liens and security interests
were consented to by PNC and the Former Note Holders in accordance with the
terms of the January Consent; and
WHEREAS, in further consideration of Bank of Boston entering
into the Restated Loan Agreement, Santa Fe Plastics Corporation, a California
corporation ("Santa Fe"), executed and delivered to Bank of Boston a Continuing
Guaranty, dated as of January 5, 1996 (the "Santa Fe Guaranty"), pursuant to
which Santa Fe guaranteed the payment of the Additional Obligations (as such
term is defined in the Restated Loan Agreement) to Bank of Boston; and
WHEREAS, on March 15, 1996, the Company sold to Alltrista
Corporation, an Indiana corporation ("Alltrista"), substantially all of its
equipment, contract rights (other than those relating to the sale of finished
home canning inventory), trademarks, and licenses used by the Company in its
consumer products/home canning business, and retained Alltrista as its
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sales agent for its finished home canning inventory (the "Alltrista
Transaction"); and
WHEREAS, in connection with the Alltrista Transaction,
pursuant to a certain Agreement dated as of March 15, 1996 (the "March
Consent"), PNC agreed to waive certain provisions, and to amend certain other
provisions, of the Receivables Purchase Agreement, the Former Note Holders
agreed to waive certain provisions of the Note Agreements, and Bank of Boston
agreed to waive certain provisions, and to amend certain other provisions, of
the Restated Loan Agreement, such waivers having been extended by subsequent
agreements, dated, respectively, as of May 15, 1996, as of June 10, 1996 (the
"June Consent"), as of July 1, 1996 (the "July Consent"), as of July 31, 1996,
as of August 30, 1996 (the "September Consent"), as of September 30, 1996 (the
"October Consent"), as of December 6, 1996, as of December 31, 1996, and as of
January 25, 1997 (collectively, the "Consents"), to and including February 22,
1997; and
WHEREAS, the Current Debt Holders are the successors in
interest to the Former Note Holders under the Note Agreements and to Bank of
Boston under the Letter Agreement and the Restated Loan Agreement, and Bear,
Xxxxxxx Securities is the registered holder, as the case may be, and legal owner
of the indebtedness of the Company under the Note Agreements, the Letter
Agreement and the Restated Loan Agreement; and
WHEREAS, the Company now further requests that PNC waive
certain provisions of the Receivables Purchase Agreement, the Current Debt
Holders waive certain provisions of the Note Agreements, and the Current Debt
Holders waive certain provisions, and amend certain other provisions, of the
Restated Loan Agreement.
WHEREAS, the Company and the Current Debt Holders are
discussing a restructuring of the debt of the Company involving the exchange of
debt of the Company for equity in the Company;
NOW, THEREFORE, in consideration of the foregoing premises and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereby agree as follows:
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SECTION 1. Waiver.
Subject to the further provisions of this Agreement:
(a) The Current Debt Holders (i) waive from and including
March 30, 1996 through and including March 7, 1997 any Default or Event of
Default (each as defined in the Note Agreements) solely arising out of the
Company's failure to comply with the provisions of Section 10.1 or 10.9 of the
Note Agreements, and (ii) waive from and including March 1, 1996 through and
including March 7, 1997 any Default or Event of Default solely arising out of
the Company's failure to comply with the provisions of Section 10.8 or 10.16 of
the Note Agreements;
(b) PNC (i) waives from and including March 30, 1996 through
and including March 7, 1997 any default or Termination Event (each as defined in
the Receivables Purchase Agreement) solely arising out of the Company's failure
to comply with Section 10.1 or 10.9 of the Note Agreements, including without
limitation any default or Termination Event arising under Section 6.17 of the
Receivables Purchase Agreement to the extent such default or Termination Event
solely relates to Section 10.1 or 10.9 of the Note Agreements, and (ii) waives
from and including March 1, 1996 through and including March 7, 1997 any default
or Termination Event solely arising out of the Company's failure to comply with
Section 10.8 or 10.16 of the Note Agreements, including without limitation any
default or Termination Event arising under Section 6.17 of the Receivables
Purchase Agreement to the extent such default or Termination Event solely
relates to Section 10.8 or 10.16 of the Note Agreements.
(c) The Current Debt Holders (i) waive from and including
March 30, 1996 through and including March 7, 1997 any default or Event of
Default (each as defined in the Restated Loan Agreement) solely arising out of
the Company's failure to comply with Section 10.1 or 10.9 of the Note
Agreements, and (ii) waive from and including March 1, 1996 through and
including March 7, 1997 any default or Event of Default solely arising out of
the Company's failure to comply with Section 10.8 or 10.16 of the Note
Agreements.
SECTION 2. Amendment to Restated Loan Agreement and
Receivables Purchase Agreement.
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(a) Amendment to Restated Loan Agreement. The Current Debt
Holders and the Company hereby agree that the definition of "Maturity Date" in
the Restated Loan Agreement is amended by deleting "February 22, 1997" and
inserting therefor "March 7, 1997."
(b) Receivables Purchase Agreement. PNC and the Company hereby
agree that the definition of "Termination Date" in the Receivables Purchase
Agreement is amended by deleting "February 22, 1997" and inserting therefor
"March 7, 1997."
SECTION 3. Expenses. Without limiting the generality of any
provision of the Receivables Purchase Agreement (as amended), the Note
Agreements (each as amended), or the Restated Loan Agreement (as amended), the
Company agrees that it will pay the reasonable fees, expenses and client charges
of counsel for each of the Lenders, for any service rendered in connection with
the transactions contemplated hereby (including, but not limited to,
negotiations between the Company and the Current Debt Holders involving a
restructuring of the debt involving the exchange of debt of the Company for
equity in the Company) and with respect to this Agreement, and the Company
further agrees that it will hereafter promptly pay any additional reasonable
fees, expenses and client charges of counsel for the Lenders, for any services
rendered in connection with the transactions contemplated hereby (including, but
not limited to, any negotiations between the Company and the Lenders involving a
restructuring of the debt involving the exchange of debt of the Company for
equity in the Company) and with respect to this Agreement.
SECTION 4. Representations, Warranties and Covenants.
(a) Corporate Power and Authority. Each party hereto
represents that it has all requisite corporate power and authority to enter into
and perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary
corporate action on the part of each such party.
(b) Compliance with Other Instruments, etc. The Company
represents that the consummation of the transactions contemplated by this
Agreement will not result in any breach of, or constitute a default under, or
result in the creation of any mortgage, lien, pledge, charge, security interest
or other encumbrance in respect of any property of the Company under, any
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indenture, mortgage, deed of trust, bank loan or credit agreement, corporate
charter, by-law, or other agreement or instrument to which the Company is a
party or by which the Company or any of its properties may be bound or affected,
or violate any existing law, governmental rule or regulations, or any order of
any court, arbitrator or governmental body, applicable to the Company or any of
its properties.
(c) Governmental Consent. The Company represents that no
consent, approval or authorization of, or registration, filing or declaration
with, any governmental authority is required for the validity of the execution
and delivery by the Company of this Agreement or the consummation of the
transactions contemplated hereby or thereby.
(d) Dividends. The Company shall not declare or pay any
dividends on its preferred stock on or before March 7, 1997.
SECTION 5. Effectiveness. This Agreement shall become
effective upon the delivery to the Company of a copy of this Agreement executed
by each of the Lenders.
SECTION 6. Counterparts; Separate Agreements. This Agreement
may be executed simultaneously in one or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.
SECTION 7. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, without
giving effect to conflicts of law principles.
SECTION 8. Headings. The headings of the several sections of
this Agreement are inserted for convenience only and shall not in any way affect
the meaning or construction of this Agreement.
SECTION 9. No Other Changes. (a) Except as expressly stated
herein, the Receivables Purchase Agreement (as amended), the Note Agreements
(each as amended), the Restated Loan Agreement (as amended), and the Consents
are unaffected hereby and shall remain in full force and effect in accordance
with the respective terms thereof.
(b) Except as expressly set forth herein, the Lenders do not
waive, and nothing herein shall be deemed a waiver of, (i)
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any breaches or defaults under the Note Agreements (each as amended), the
Receivables Purchase Agreement (as amended), the Restated Loan Agreement (as
amended), or any of the Consents, as the case may be, or any other agreements
executed concurrently therewith or pursuant thereto, whether known or unknown,
previously or hereafter arising, or of any nature or character whatsoever, or
(ii) any of their respective rights or remedies thereunder or under applicable
law, including (but not limited to) any Make-Whole Premium (as such term is
defined in the Note Agreements) to which the Note Purchasers may be entitled
pursuant to the terms of Section 9 of the Note Agreements (including, without
limitation, on account of the payments due under the terms of (A) Section 4(a)
and Schedule 1 to the March Consent, (B) Section 3 and Schedule 1 to the June
Consent, (C) Section 3 and Schedule 1 to the July Consent, (D) Section 3 and
Schedule 1 to the August Consent, (E) Section 3 and Schedule 1 to the September
Consent, and (F) Section 3 of the October Consent). Notwithstanding anything
potentially to the contrary herein, the Current Debt Holders do not waive any of
their respective rights or remedies to any Make-Whole Premiums to which the
Current Debt Holders may be entitled pursuant to the terms of Section 9 of the
Note Agreements (including, without limitation, on account of any of the
payments made pursuant to the Consents, including those listed in the previous
sentence).
SECTION 10. Reaffirmation. The Company hereby represents and
warrants to the applicable Lender that each of the representations and
warranties contained in the Restated Loan Agreement, the Note Agreements or the
Receivables Purchase Agreement, as the case may be, were true and correct in all
material respects when made and, except to the extent (a) that a particular
representation or warranty by its terms expressly applies only to an earlier
date, or (b) the Company has previously advised such Lender in writing as
contemplated under the respective agreement, are true and correct in all
material respects as of the date of this Agreement.
SECTION 11. Conflict of Terms. In the event of any
inconsistency between the provisions of this Agreement and any provision of the
Note Agreements (each as amended), the Receivables Purchase Agreement (as
amended), the Letter Agreement or the Restated Loan Agreement (as amended), as
the case may be, the terms and provisions of this Agreement shall govern and
control.
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IN WITNESS WHEREOF, the parties hereto have signed, or caused
their duly elected officer to sign on the date first written above.
XXXX GROUP, INC.
By: /s/ Xxxxxxxx X. Xxxxxx
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PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxx X. XxXxxx
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BEAR, XXXXXXX SECURITIES CORP.
By: /s/ W. Xxxxx Xxxxx
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SILVER OAK CAPITAL, L.L.C.
By: /s/ Xxxxxxx X. Xxxxxx
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BEAR XXXXXXX & CO., INC.
By: /s/ Xxxxxxx X. Xxxxxx
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HALCYON/XXXX X. XXXXXX
MANAGEMENT COMPANY LLC
By: /s/ Xxxxx X. Xxxxxx
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INTERMARKET CORP.
By: /s/ Xxxxxx X. Xxxxxx
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SWISS BANK
By: /s/ Xxxxx Shakkoor
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By: /s/ Xxxxxxxxx Xxxxx
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