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EXHIBIT 10.29
INTERCOMPANY AGREEMENT
This Intercompany Agreement (this "Agreement") is made and
entered into as of this 17 day of April, 1997 by and among G & G INVESTMENTS,
INC., a Delaware corporation ("G & G"), GLENSHAW GLASS COMPANY, a Pennsylvania
corporation ("Glenshaw"), HILLSBORO GLASS COMPANY, a Delaware corporation
("Hillsboro"), I.M.T.E.C. ENTERPRISES INC., an Oklahoma corporation ("IMTEC"),
CONSUMERS PACKAGING INC., a corporation organized under the federal laws of
Canada ("Consumers Packaging"), ANCHOR GLASS CONTAINER CORPORATION (formerly
known as Anchor Glass Acquisition Corporation), a Delaware corporation ("New
Anchor"), CONSUMERS INTERNATIONAL INC., a corporation organized under the
federal laws of Canada ("Consumers International"), CONSUMERS U.S., INC., a
Delaware corporation ("Consumers U.S."), BT COMMERCIAL CORPORATION ("BTCC"), as
agent for the Lenders identified in that certain Credit Agreement dated as of
February 5, 1997, as amended from time to time (the "Credit Agreement"), among
New Anchor, the Lenders named therein (including Bankers Trust Company as
Co-Syndication Agent and Issuing Bank ("BTCO") and PNC Bank, National
Association as Co-Syndication Agent and Issuing Bank), THE BANK OF NEW YORK, as
Trustee (the "New Anchor Trustee"), in respect of New Anchor's 11.25% First
Mortgage Notes due 2005 (the "First Mortgage Notes") issued under an Indenture
dated as of April 17, 1997 (the "Anchor Indenture") and THE BANK OF NEW YORK, as
Trustee (the "Consumers Trustee"), in respect of Consumers International's
10.25% Senior Secured Notes due 2005 (the "Senior Secured Notes") issued under
an Indenture dated as of April 17, 1997 (the "Consumers Indenture").
WHEREAS, the Credit Agreement requires New Anchor to covenant and
agree not to engage in transactions with Affiliates except on the terms and
conditions provided for in the Credit Agreement; and
WHEREAS, the Anchor Indenture and the Consumers Indenture
requires New Anchor and Consumers Packaging, respectively, to covenant and agree
not to engage in transactions with Affiliates except on the terms and conditions
provided for in the Anchor Indenture and the Consumers Indenture; and
WHEREAS, G & G, Glenshaw, Hillsboro, IMTEC, Consumers Packaging,
New Anchor, Consumers International and Consumers U.S. are Affiliates and it is
required by the terms of the Credit Agreement and a condition to the issuance of
the First Mortgage Notes under the Anchor Indenture and the Senior Secured Notes
under the Consumers Indenture that the parties enter into this Agreement;
NOW, THEREFORE, the undersigned, intending to be legally bound
hereby, do covenant and agree as follows:
1. Definitions. The following words and phrases have the meanings
ascribed to them below:
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"Affiliate" means, when used with reference to any Person, any
other Person directly or indirectly controlling, controlled by, or under direct
or indirect common control with, the reference person. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct or cause the direction of management or policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative of the foregoing or the ownership of more than 10% of the
Voting Stock of such Person; provided that BTCC, Bankers Trust Company and The
Toronto-Dominion Bank and their respective Affiliates will not be deemed to be
Affiliates of New Anchor.
"Affiliated Companies" means Consumers Packaging, G & G,
Glenshaw, Hillsboro, Consumers International, Consumers U.S., IMTEC, New Anchor
and any existing or future direct or indirect Subsidiary of any such Person.
"Affiliated Glass Manufacturers" means Consumer Packaging,
Glenshaw, Hillsboro, New Anchor and any of their respective Subsidiaries engaged
in the manufacture of glass products.
"Members of the Consumers Group" means Consumers Packaging and
its Subsidiaries (excluding Consumers U.S., New Anchor and each of their
Subsidiaries).
"Members of the Anchor Group" means New Anchor and its
Subsidiaries.
"Person" means an individual, partnership, corporation,
unincorporated organization, trust or joint venture, or a governmental agency or
political subdivision thereof.
"Plant Closing Event" means (a) with respect to the Members of
the Anchor Group, the permanent closing by an Affiliated Glass Manufacturer not
a Member of the Anchor Group of one or more of its manufacturing plants, which
closing has been approved by its board of directors, excluding, however, the
closing by Consumers Packaging of its plant at Xxxxxxxx, Ontario and (b) with
respect to the Members of the Consumers Group, the permanent closing by an
Affiliated Glass Manufacturer not a Member of the Consumers Group of one or more
of its manufacturing plants, which closing has been approved by its board of
directors, excluding, however, the closing by New Anchor of its plants at
Dayville, Connecticut and Houston, Texas and one additional plant which is
closed as part of New Anchor's business plan following the Anchor Acquisition
(as defined in the Anchor Indenture).
"Subsidiary", with respect to any Person, means (i) any
corporation of which the outstanding Capital Stock having at least a majority of
the votes entitled to be cast in the election of directors under ordinary
circumstances shall at the time be owned, directly or indirectly, by such Person
or (ii) any other Person of which at least a majority of the voting interest
under ordinary circumstances is at the time, directly or indirectly, owned by
such Person.
In addition to the foregoing, capitalized terms not otherwise defined herein
that are defined in the Credit Agreement have the meanings ascribed to them
therein.
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2. The Affiliated Companies acknowledge the restrictions
regarding "Affiliate Transactions" contained in the Credit Agreement, the Anchor
Indenture and the Consumers Indenture, and agree (so long as such agreements are
in effect) that they will not enter into any transaction in violation of any
such restrictions. Transactions covered by this Agreement shall be carried out
in accordance with this Agreement and transactions carried out in accordance
with paragraphs 2-11 of this Agreement shall be deemed to comply with the
restrictions on Affiliate Transactions contained in the Credit Agreement, the
Anchor Indenture and the Consumers Indenture.
3. The Members of the Consumers Group and the Members of the
Anchor Group shall not pay fees or commissions in connection with manufacturing
to Affiliates other than Affiliated Glass Manufacturers.
4. A Member of the Consumers Group may pay commissions to an
Affiliated Glass Manufacturer not a Member of the Consumers Group in connection
with manufacturing done by such Member of the Consumers Group for regular
customers of such Affiliated Glass Manufacturer so long as:
(a) such commissions shall not exceed 5% of the purchase price
paid by the customer for the relevant product;
(b) any such customer is not a regular customer of any Member
of the Consumers Group;
(c) subject to Section 8.25 of the Credit Agreement (so long
as the Credit Agreement is in effect), the aggregate commissions paid by the
Members of the Consumers Group in any twelve-month period shall not exceed the
sum of (i) the aggregate commissions received by the Members of the Consumers
Group pursuant to Section 6, (ii) $U.S.5.0 million and (iii) if the
manufacturing is being done by a Member of the Consumers Group as a result of a
Plant Closing Event, U.S. $2.5 million in addition to the U.S. $5.0 million of
commissions described in clause (ii) of this paragraph (c); provided, however,
the limitations contained in this paragraph (c) shall not apply to (and the
calculations made pursuant to this paragraph (c) shall not include) commissions
paid by the Members of the Consumers Group if the manufacturing is being done by
a Member of the Consumers Group as a result of furnace repairs, strikes or other
events of force majeure, in each case of a temporary nature, affecting the
operation by an Affiliated Glass Manufacturer not a Member of the Consumers
Group of one or more of its plants; and
(d) The relevant Affiliated Glass Manufacturer upon receipt of
payment from its customer will deduct the commission and the balance of the
payment will be remitted to the relevant Member of the Consumers Group.
5. A Member of the Anchor Group may pay commissions to an
Affiliated Glass Manufacturer not a Member of the Anchor Group in connection
with manufacturing done by such Member of the Anchor Group for customers of such
Affiliated Glass Manufacturer so long as:
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(a) such commissions shall not exceed 5% of the purchase price
paid by the customer for the relevant product;
(b) any such customer is not a regular customer of any Member
of the Anchor Group;
(c) subject to Section 8.25 of the Credit Agreement (so long
as the Credit Agreement is in effect), the aggregate commissions paid by the
Members of the Anchor Group in any twelve-month period shall not exceed the sum
of (i) the aggregate commissions received by the Members of the Anchor Group
pursuant to Section 6, (ii) $U.S.5.0 million and (iii) if the manufacturing is
being done by a Member of the Anchor Group as a result of a Plant Closing Event,
U.S. $2.5 million in addition to the U.S. $5.0 million of commissions described
in clause (ii) of this paragraph (c); provided, however, the limitations
contained in this paragraph (c) shall not apply to (and the calculations made
pursuant to this paragraph (c) shall not include) commissions paid by the
Members of the Anchor Group if the manufacturing is being done by a Member of
the Anchor Group as a result of furnace repairs, strikes or other events of
force majeure, in each case of a temporary nature, affecting the operation by an
Affiliated Glass Manufacturer not a Member of the Anchor Group of one or more of
its plants; and
(d) The relevant Affiliated Glass Manufacturer upon receipt of
payment from its customer will deduct the commission and the balance of the
payment will be remitted to the relevant Member of the Anchor Group.
6. In the event that an Affiliated Glass Manufacturer
manufactures products for a customer of a Member of the Consumers Group or a
Member of the Anchor Group, as the case may be, such Member of the Consumers
Group or such Member of the Anchor Group, as the case may be, shall be entitled
to receive a commission from such Affiliated Glass Manufacturer equal to 5% of
the purchase price paid by the customer on the same terms as are set forth in
Section 4 or 5 above, as the case may be.
7. If a customer is transferred from an Affiliated Glass
Manufacturer to a Member of the Consumers Group or a Member of the Anchor Group,
as the case may be, or from a Member of the Consumers Group or a Member of the
Anchor Group, as the case may be, to an Affiliated Glass Manufacturer, such
transfer shall be treated as if the transferee is filling orders for the
transferor and the provisions of Section 4, 5 or 6, as the case may be, shall
apply.
8. The Affiliated Glass Manufacturers may engage in joint
purchasing of raw materials, packaging materials, machinery, insurance,
maintenance services, environmental services and other items and services used
in their business; provided that (a) out-of-pocket costs (including
administrative costs (not including a xxxx-up, fees or commission) payable to
any Affiliate relating to the joint purchasing activities will be shared ratably
based on the respective amounts purchased and (b) no xxxx-up, commissions or
fees will be paid to any Affiliates.
9. The Affiliated Glass Manufacturers may provide technical,
engineering, mold design and similar services to each other in which case the
company receiving the service will pay the company providing the service per
diem costs (but not a xxxx-up, fees or
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commissions) based on a pro rata allocation of the total compensation of the
employee or employees providing the services as well as reasonable out-of-pocket
expenses of the employee for travel and related items.
10. The Affiliated Glass Manufacturers may manufacture materials
used in the glass manufacturing business, such as molds, for each other in which
case the manufacturing company shall be reimbursed by the company for which the
materials were made for the manufacturing company's manufacturing cost plus a
reasonable xxxx-up consistent with industry standards.
11. The Affiliated Companies may consolidate functions and
employee positions among each other in order to reduce costs in which case each
company will bear its pro rata share of the actual costs (but not xxxx-ups, fees
or commissions) of such functions and employees (including total employee
compensation) based upon a reasonable determination of the percentage of use.
12. This Agreement shall not govern or regulate (a) transactions
between or among Members of the Consumers Group, (b) transactions between or
among Members of the Anchor Group or (c) transactions between or among
Affiliated Companies not a Member of the Consumers Group or a Member of the
Anchor Group.
13. Each Affiliated Company shall cause any Person that becomes a
Subsidiary of such Affiliated Company to execute and deliver an Addendum to this
Agreement in the form of Exhibit A hereto and deliver such Addendum to BTCC, the
Consumers Trustee and the New Anchor Trustee.
14. This Agreement shall remain in effect until payment in full
of all principal and interest under the Credit Agreement, the Consumers
Indenture and the Anchor Indenture and the termination of all commitments
thereunder.
15. This Agreement shall be construed and enforced in accordance
with the laws of the State of New York, without regard to conflicts of laws
principles thereof.
16. Unless otherwise provided herein, any notice or other
communications herein required or permitted to be given shall be in writing and
may be personally served, telecopied or sent by mail and shall be deemed to have
been given when delivered in person, upon receipt of telecopy or four Business
Days after depositing it in the mail, registered or certified, with postage
prepaid and properly addressed. For the purposes hereof, the addresses of the
parties hereto (as provided in this paragraph) shall be as set forth below (any
of which address may be changed by notice given in accordance with this
paragraph).
(a) In the case of New Anchor, at
Anchor Glass Container Corporation
One Anchor Plaza
0000 Xxxxxx Xxxxx Xxxxxxx
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Xxxxx, XX 00000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
(b) In the case of G&G, at
0000 Xxxxxxx Xxxxx Xxxxxxx
Xxxxxxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
(c) In the case of Glenshaw, Hillsboro, IMTEC and
Consumers U.S., at:
c/o G & G Investments, Inc.
0000 Xxxxxxx Xxxxx Xxxxxxx
Xxxxxxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
(d) In the case of Consumers Packaging, and Consumers
International, at:
Consumers Packaging Inc.
000 Xxx Xxxx Xxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxx X0X 0X0
Facsimile No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
(e) In the case of BTCC, at:
00 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx Xxxxxxx
(f) In the case of the Consumers Trustee:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No: (000)000-0000
Attention: Corporate Trust Trustee Administration
(g) In the case of the New Anchor Trustee, at:
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000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No: (000)000-0000
Attention: Corporate Trust Trustee Administration
17. This Agreement supersedes all prior agreements as between the
parties with regard to the subject matter hereof other than the Credit
Agreement, the Consumer Indenture and the Anchor Indenture (including, without
limitation, the Affiliate Transactions Agreement, dated as of February 5, 1997).
All references in the Credit Agreement to the Affiliate Transactions Agreement
shall be deemed to be references to this Agreement.
18. In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
19. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
20. A. Any legal action or proceeding with respect to this
Agreement may be brought in the courts of the State of New York or the United
States District Court for the Southern District of New York, and, by execution
and delivery of this Agreement, each of the parties to this Agreement hereby
irrevocably accepts for itself and in respect of its respective property,
generally and unconditionally, the jurisdiction of the aforesaid courts. Each of
the parties to this Agreement hereby further irrevocably waives any claim that
any such court lacks jurisdiction over such party and agrees not to plead or
claim in any legal action or proceeding with respect to this Agreement brought
in any of the aforesaid courts, that any such court lacks jurisdiction over such
party. Each of the parties to this Agreement irrevocably consents to the service
of process in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to such party at its respective
address for notices pursuant to Paragraph 16, such service to become effective
30 days after such mailing. To the extent permitted by law, each of the parties
to this Agreement hereby irrevocably waives any objection to such service of
process and further irrevocably waives and agrees not to plead or claim in any
action or proceeding commenced hereunder that service of process was in any way
invalid or ineffective. Nothing herein shall affect the right of any party to
this Agreement to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against any party in any other
jurisdiction.
B. Each of the parties to this Agreement hereby irrevocably
waives any objection which it may now or hereafter have to the laying of venue
of any of the aforesaid actions or proceedings arising out of or in connection
with this Agreement brought in the courts referred to in Clause A above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
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C. Each of the parties to this Agreement waives any right to a
trial by jury in any action or proceeding arising out of this Agreement or any
transactions related hereto.
19. No amendment, modification, termination or waiver of any term
or provision of this Agreement, shall be effective without the prior written
concurrence of the parties hereto, except as otherwise permitted in the Credit
Agreement, the Consumers Indenture and the Anchor Indenture.
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IN WITNESS WHEREOF, the parties have executed this Intercompany
Agreement as of the day and year first above written.
G & G INVESTMENTS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
Title:
GLENSHAW GLASS COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title:
HILLSBORO GLASS COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title:
I.M.T.E.C. ENTERPRISES, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title:
CONSUMERS PACKAGING INC.
By: /s/ Xxxxx Xxxx
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Name: Xxxxx Xxxx
Title: Vice-President
By: /s/ M. Xxxxxxx Xxxxxxxx, Xx.
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Name: M. Xxxxxxx Xxxxxxxx, Xx.
Title: Vice President and
Chief Financial Officer
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ANCHOR GLASS CONTAINER CORPORATION
By: /s/ M. Xxxxxxx Xxxxxxxx, Xx.
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Name: M. Xxxxxxx Xxxxxxxx, Xx.
Title: Vice President and
Chief Financial Officer
CONSUMERS INTERNATIONAL, INC.
By: /s/ M. Xxxxxxx Xxxxxxxx, Xx.
-----------------------------------
Name: M. Xxxxxxx Xxxxxxxx, Xx.
Title: President
By: /s/ Xxxxx Xxxx
-----------------------------------
Name: Xxxxx Xxxx
Title: Secretary-Treasurer
CONSUMERS U.S., INC.
By: /s/ M. Xxxxxxx Xxxxxxxx, Xx.
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Name: M. Xxxxxxx Xxxxxxxx, Xx.
Title: Vice President and
Chief Financial Officer
BT COMMERCIAL CORPORATION,
for itself and as Agent
By: /s/ Xxxx Xxxxxxxx-Keskinyan
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Name: Xxxx Xxxxxxxx-Keskinyan
Title: Senior Vice President
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THE BANK OF NEW YORK,
as New Anchor Trustee
By: /s/ Xxxx X. Xxxxxxxxx
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Name: Xxxx X. Xxxxxxxxx
Title: Assistant Treasurer
THE BANK OF NEW YORK,
as Consumers Trustee
By: /s/ Xxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Assistant Treasurer
