Restructuring Agreement
Exhibit
10.1
Restructuring
Agreement
Restructuring Agreement (the “Agreement”), dated as of April 11, 2008, among Tekni-Plex, Inc. (“Tekni-Plex”) and its domestic subsidiaries party
hereto (the “Subsidiaries”, and together with Tekni-Plex, the
“Company”), and the parties signatory hereto (each a “Party” and collectively the “Parties”).
WHEREAS, the Parties hereto seek to enter into this Agreement to evidence and memorialize their support for the
Restructuring on the terms and conditions set forth
in the term sheet attached
hereto as Exhibit A (the “Term
Sheet”).1
NOW
THEREFORE, in consideration of the promises and the mutual covenants and
agreements set forth herein, the Parties hereby agree as follows:
1. Support
for the Term Sheet. Subject to the
conditions set forth therein and to definitive documentation consistent with the
Term Sheet, each Party hereto hereby agrees to take all actions reasonably
necessary to negotiate, document and consummate the transactions contemplated by
the Restructuring; provided
however that no Party hereto shall have any liability to any other Party
hereto for the failure of any class of security holders to reach the requisite
consent thresholds described in the Term Sheet if such Party acts in good faith
and complies with the terms of this Section 1. Upon the failure of
any condition set forth in the Term Sheet to be satisfied (by the date required
by such condition, if applicable), this Agreement shall terminate and each Party
shall be relieved of any and all obligations to take any further action in
connection with the Restructuring (except as expressly provided for in such
condition).
2. Effectiveness. This Agreement
shall become effective upon its execution by (i) the Company, (ii) entities that have
represented to Xxxx,
Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP that they hold at least 91% of the Subordinated Notes and at least 67% of the Second Lien Notes, (iii) Weston Presidio on behalf of each of its funds that holds Preferred Stock, (iv) Dr. F. Xxxxxxx
Xxxxx, (v) Tekni-Plex Partners LLC and (vi) MST/TP Partners LLC.
3. Successors
and Assigns. This Agreement shall be binding upon and inure to
the benefit of the Parties hereto and each of their respective successors,
assigns, heirs and personal representatives.
4. Third-Party
Beneficiaries. Nothing contained
in this Agreement shall confer any rights or remedies under or by reason of this
Agreement on any person or entity other than the Parties hereto, nor shall
anything in this Agreement relieve or discharge the obligation or liability of
any third party to any Party to this Agreement.
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1 Each
capitalized term used but not defined herein shall have the meaning ascribed to
it in the Term Sheet.
5. Authority. Any
person signing this Agreement in a representative capacity (i) represents and
warrants that he/she is authorized to sign this Agreement on behalf of the Party
he/she represents and that his/her signature upon this Agreement will bind the
represented Party to the terms of this Agreement, and (ii) acknowledges that the
other Party to this Agreement has relied upon such representation and
warranty.
6. Counterparts/Facsimile
Transmission. This Agreement may be signed in counterparts,
each of which, when taken together, shall be deemed an
original. Execution of this Agreement is effective if a signature is
delivered by facsimile transmission or electronic (e.g., “pdf”)
transmission.
7. 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.
IN WITNESS
WHEREOF, each of the Parties has caused this Agreement to be executed and
delivered as of the date first above written.
Remainder
of Page Left Intentionally Blank
TEKNI-PLEX,
INC.
By: /s/ Xxxxx X.
Xxxxxx
Name: Xxxxx
X. Xxxxxx
Title: Chief
Financial Officer
SUBSIDIARIES:
PURTEC
CORPORATION
XXXXXX
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.
By: /s/ Xxxxx
X. Xxxxxx
Name: Xxxxx
X. Xxxxxx
Title: Chief
Financial Officer
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Dr.
F. Xxxxxxx Xxxxx
By: /s/ Dr.
F. Xxxxxxx Xxxxx
Name: Dr.
F. Xxxxxxx Xxxxx
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Tekni-Plex
Partners LLC,
by
its Managing Member
Tekni-Plex
Management LLC
By:
/s/ Dr. F.
Xxxxxxx
Xxxxx
Name:
Dr. F. Xxxxxxx Xxxxx
Title:
Managing Member of
Tekni-Plex
Management LLC
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MST/TP
Partners LLC,
by
its Managing Member
Tekni-Plex
Management LLC
By:
/s/ Dr. F.
Xxxxxxx
Xxxxx
Name:
Dr. F. Xxxxxxx Xxxxx
Title:
Managing Member of
Tekni-Plex
Management LLC
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WESTON
PRESIDIO SERVICE COMPANY LLC
By: /s/ Xxxxx
Xxxxxxxx
Name: Xxxxx
Xxxxxxxx
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WESTON
PRESIDIO CAPITAL III, L.P.
WPC
ENTREPRENEUR FUND, L.P.
By:
Weston Presidio Capital
Management
III, LLC
Their
general partner
By: /s/ Xxxxx
Xxxxxxxx
Name: Xxxxx
Xxxxxxxx
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WESTON
PRESIDIO CAPITAL IV, L.P.
WPC
ENTREPRENEUR FUND II, L.P.
By: Weston
Presidio Capital Management
IV,
LLC
Their
general partner
By: /s/ Xxxxx
Xxxxxxxx
Name: Xxxxx
Xxxxxxxx
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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/ Xxxxx Xxxxxxx | |
Name: Xxxxx Xxxxxxx | |||
Title: Member |
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/ Xxxxx Xxxxxxx | |
Name: Xxxxx Xxxxxxx | |||
Title: Member |
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/ Xxxxx Xxxxxxx | |
Name: Xxxxx Xxxxxxx | |||
Title: Member |
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/ Xxxxx Xxxxxxx | |
Name: Xxxxx Xxxxxxx | |||
Title: Member |
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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By:
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GL Partners V,
LLC, its General
Partner
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By:
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/s/ Xxxxx Xxxxxxx | |
Name: Xxxxx Xxxxxxx | |||
Title: Member |
BARCLAYS BANK, PLC | |||
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By:
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/s/ Xxxxx Xxxxxx | |
Name: Xxxxx Xxxxxx | |||
Title: Managing Director |
XXXXXX XXXXXXX & CO., INC | |||
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By:
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/s/ Xxxxxx Xxxxxxx | |
Name: Xxxxxx Xxxxxxx | |||
Title: Managing Director |
OCM
OPPORTUNITIES FUND V, L.P.
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By:
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OCM
Opportunities Fund V GP, L.P.
Its: General Partner |
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By:
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Oaktree Fund GP I, L.P.
Its: General
Partner
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By:
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/s/ Xxxxxx X. X'Xxxxx | |
Name: Xxxxxx X. X'Xxxxx | |||
Title: Managing Director |
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By:
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/s/ Xxxxxx X. Xxxx | |
Name: Xxxxxx X. Xxxx | |||
Title: Managing Director |
OCM
OPPORTUNITIES FUND VI, L.P.
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By:
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OCM
Opportunities Fund VI GP, L.P.
Its: General Partner |
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By:
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Oaktree Fund GP I, L.P.
Its: General
Partner
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By:
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/s/ Xxxxxx X. X'Xxxxx | |
Name: Xxxxxx X. X'Xxxxx | |||
Title: Managing Director |
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By:
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/s/ Xxxxxx X. Xxxx | |
Name: Xxxxxx X. Xxxx | |||
Title: Managing Director |
OCM
OPPORTUNITIES FUND VII, L.P.
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|||
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By:
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OCM
Opportunities Fund VII GP, L.P.
Its: General Partner |
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By:
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OCM
Opportunities Fund VII GP Ltd.
Its: General Partner |
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By:
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Oaktree
Capital Management, L.P. Its: Director |
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By:
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/s/ Xxxxxx X. X'Xxxxx | |
Name: Xxxxxx X. X'Xxxxx | |||
Title: Managing Director |
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By:
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/s/ Xxxxxx X. Xxxx | |
Name: Xxxxxx X. Xxxx | |||
Title: Managing Director |
OCM
PRINCIPAL OPPORTUNITIES FUND III, L.P.
OCM PRINCIPAL OPPORTUNITIES FUND IIIA, L.P. |
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By:
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OCM
Opportunities Fund III GP, L.P.
Its: General Partner |
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By:
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Oaktree Fund GP I, L.P.
Its: General
Partner
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By:
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/s/ Xxxxxxx X. Xxxxxxxxx | |
Name: Xxxxxxx X. Xxxxxxxxx | |||
Title: Managing Director |
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By:
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/s/ Xxxxxxx X. Xxxxxx | |
Name: Xxxxxxx X. Xxxxxx | |||
Title: Vice President |
OCM
PRINCIPAL OPPORTUNITIES FUND IV, L.P.
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By:
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OCM
Opportunities Fund IV GP, L.P.
Its: General Partner |
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By:
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OCM
Opportunities Fund IV GP Ltd.
Its: General Partner |
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By:
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Oaktree
Capital Management, L.P. Its: Director |
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By:
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/s/ Xxxxxxx X. Xxxxxxxxx | |
Name: Xxxxxxx X. Xxxxxxxxx | |||
Title: Managing Director |
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By:
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/s/ Xxxxxxx X. Xxxxxx | |
Name: Xxxxxxx X. Xxxxxx | |||
Title: Vice President |
OAKTREE
VALUE OPPORTUNITIES FUND, L.P.
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|||
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By:
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Oaktree
Value Opportunities Fund GP, L.P.
Its: General Partner |
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By:
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Oaktree Value Opportunities Fund
GP Ltd.
Its: General
Partner
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By:
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Oaktree
Capital Management, L.P. Its: Director |
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By:
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/s/ Xxxxxx X. X'Xxxxx | |
Name: Xxxxxx X. X'Xxxxx | |||
Title: Managing Director |
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By:
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/s/ Xxxxxx X. Xxxx | |
Name: Xxxxxx X. Xxxx | |||
Title: Managing Director |
Exhibit
A
TEKNI-PLEX, INC.
TERM SHEET FOR RESTRUCTURING AND EXCHANGE
OFFER
This term
sheet describes the principal terms of a proposed restructuring (the “Restructuring”, and
its effective date, the “Effective Date”) of
Tekni-Plex, Inc. (“Tekni-Plex”),
together with its domestic subsidiaries (collectively, the “Company”), in the
context of an out of court restructuring and exchange offer with the support of
the requisite2 holders of each of the following securities
issued by Tekni-Plex: (i) 12 ¾% Senior Subordinated Notes due 2010 (the “Subordinated Notes”)
issued under that certain Indenture, dated as of June 21, 2000 (as supplemented
on May 6, 2002, August 22, 2002, April 25, 2005 and February 14, 2008 (the
“Subordinated Notes
Indenture”), (ii) Series A Preferred Stock (the “Preferred Stock”) and
(iii) common stock (the “Common
Stock”).
Exchange
Proponent
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Company
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Treatment
of Claims
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ABL Facility
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Company
will continue to honor the Amended and Restated Credit Agreement dated as
of February 14, 2008 among Tekni-Plex, the lenders party thereto, Citicorp
USA, Inc. and General Electric Capital Corporation (the “ABL
Facility”).
Company
shall obtain a new credit facility, on terms satisfactory to the
Consenting Noteholders (as defined below) and the Company, to refinance
the ABL Facility in the event the existing lenders thereunder do not agree
to finance the Company on substantially identical terms to the ABL
Facility, or on terms otherwise acceptable to the Company and the
Consenting Noteholders.
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First Lien Notes
and
Second Lien Notes
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Company
will continue to honor the 10 7/8% Senior Secured Notes due 2012 issued
pursuant to the Indenture dated as of June 10, 2005 (as supplemented from
time to time, the “First Lien
Indenture”) among Tekni-Plex and HSBC Bank USA, National
Association (the “First Lien
Notes”) and the 8 ¾%
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_______________
2Requisite
thresholds described below.
Senior
Secured Notes due 2013 issued pursuant to the Indenture dated as of
November 21, 2003 (as supplemented from time to time, the “Second Lien
Indenture”) among Tekni-Plex and HSBC Bank USA, National
Association (the “Second Lien
Notes”).
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Certain
Consenting Noteholders shall provide a take-out facility/tender process to
replace, redeem or repurchase, as necessary, any First Lien Notes that are
put in connection with the occurrence of a Change in Control (as defined
in the First Lien Indenture).
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Subordinated
Notes
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Subordinated
Notes held by noteholders consenting to the Restructuring (the “Consenting
Noteholders”) will be exchanged for 100% of common stock in
reorganized Tekni-Plex (the “New Common
Stock”), subject to dilution by the Management Incentive Plan
(defined below) and exercise of the Warrants (defined below).
Any
party (each a “Party”, and
collectively the “Parties”) to
the Restructuring Agreement to which this term sheet is exhibited, that
holds Preferred Stock or Common Stock and holds Subordinated Notes shall
exchange Subordinated Notes on the terms set forth herein.
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General Unsecured
Creditors
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General
unsecured claims will be paid in the ordinary course by the
Company.
The
Second Amended and Restated Employment Agreement dated May 13, 2005, by
and between Tekni-Plex, Inc. and Dr. F. Xxxxxxx Xxxxx (as extended,
amended, or supplemented prior to the Effective Date, the “Xxxxx Employment
Agreement”) shall be terminated (including its non-competition
provisions but excluding confidentiality provisions) and all claims
thereunder waived by all Parties; provided, however, (i)
the Company shall continue to pay ordinary course benefits and business
expenses (excluding golf club membership or any other extraordinary
expense) to Dr. F. Xxxxxxx Xxxxx accrued up to and including the Effective
Date and (ii) until the first anniversary of the Effective Date, Dr. F.
Xxxxxxx Xxxxx shall be obligated to comply with the covenants restricting
solicitation of employees of the Company in accordance with Section
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2
10(iv)
of the Xxxxx Employment Agreement. The Company shall pay all
reasonable costs and expenses of Tekni-Plex Partners LLC and MST/TP
Partners LLC arising in connection with implementation of the
Restructuring.
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Series A Preferred
Stock
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Preferred
Stock will be exchanged or redeemed on the Effective Date for a
distribution of the following warrant securities, which shall be
exercisable into New Common Stock and subject to dilution by any equity
issuances other than the warrants themselves, subject to anti-dilution
protection as described below (the “Warrants”):
·
Series
A Warrants: four year warrants exercisable into 2.5% of the
post-exercise New Common Stock (not subject to dilution for the issuance
of other Warrants) with a strike price of 75% of the Pre-Investment Equity
Value;
·
Series
B Warrants: five year warrants exercisable into 5% of the
post-exercise New Common Stock (not subject to dilution for the issuance
of other Warrants) with a strike price of 100% of the Pre-Investment
Equity Value; and
·
Series
C Warrants: five year warrants exercisable into 5% of the
post-exercise New Common Stock (not subject to dilution for the issuance
of other Warrants) with a strike price of 110% of the Pre-Investment
Equity Value.
“Pre-Investment
Equity Value” means the sum of: (1) the aggregate principal amount of
the Subordinated Notes exchanged for New Common Stock, (2) all accrued and unpaid
interest due under the Subordinated Notes exchanged for New Common Stock through and including the
Effective
Date (which, for the avoidance of
doubt, shall be the date on which such exchange is consummated), including additional interest
due on any missed interest payments to the extent provided for under the
Subordinated Note Indenture and (3) total restructuring
related fees and
expenses of the Company and advisors to the Consenting
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Noteholders, in an amount not to exceed $10,000,000.
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The definitive documentation
for the Warrants shall contain
customary terms and
protections, including: (a) cashless exercise rights upon the
occurrence of a liquidity event, (b) anti-dilution protection for
stock splits, stock
reclassifications, dividends in kind and other “organic” changes, (c) information rights (subject to
customary confidentiality provisions) and notice of certain corporate
events and (d)
Preemptive Rights (as defined below) on an as-converted basis. The Warrants will be transferable by each holder (it being
understood that affiliated funds or entities constitute a single
consolidated
holder) in a single
transaction, subject
to a right of first refusal by any entity that together with
affiliates, holds more than 30% of the New Common Stock.
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Upon the exercise of the Warrants,
the holders of Warrants will be required to enter into a shareholder
agreement (the “Shareholder
Agreement”), which shall contain customary
terms and conditions, including: (a) tag-along (such that the
holders of the Warrants are entitled to exit on a pro rata basis along
side the other holders of New Common Stock on any transaction in which the holders of New
Common Stock are offered tag-along rights) and drag-along rights, (b) proportionate piggyback
registration rights (such that the holders of the Warrants shall be
included in any offering on a pro rata basis if other holders of New
Common Stock are allowed to participate), (c) Preemptive
Rights (on any equity issuance or other transaction in which
the holders of New Common Stock or any affiliates thereof
are offered the
opportunity to participate) (the “Preemptive
Rights”), and (d) information rights
(subject to customary confidentiality provisions) and notice of
certain corporate
events. The holders of the Preferred Stock shall be consulted with in good
faith on the Shareholder Agreement, and shall be given a reasonable
opportunity to review it, prior to its execution, to ensure that it contains the provisions
set forth in clauses
(a) through (d) above
and that the basic
protections
customarily
associated with such
provisions are included therein, it being understood
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that the holders of Preferred
Stock shall
not be permitted to negotiate cutbacks,
percentages, notice or exercise periods and other similar provisions with
respect to clauses (a) through (d) above (clauses (a) through (d), subject
to the limitations above, collectively, the “Basic
Protections”) and it being further understood
that so long as the
Basic Protections
(which shall
not discriminate
against the holders of the Warrants) are provided therein it shall not be a condition
precedent to the Restructuring that such
holders are satisfied with the Shareholder
Agreement. For the avoidance of doubt, it is
understood that the
Shareholder Agreement will not have lesser protections for holders of New
Common Stock received upon exercise of Warrants than other minority
shareholders.
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Common Stock
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On
the Effective Date, Common Stock will be cancelled, redeemed or purchased,
and each holder will receive its pro rata distribution of
$250,000. The form of this distribution will be structured to
comply with the terms of the ABL Facility, the First Lien Indenture, the
Second Lien Indenture and the Subordinated Notes Indenture. The
Restructuring documentation will provide that upon receipt of its pro rata
share of such distribution, each member of Tekni-Plex Partners LLC and
MST/TP Partners LLC shall be deemed to have consented to the Restructuring
and to have waived all claims in connection therewith.
Existing
options, warrants or similar instruments convertible, exchangeable or
exercisable into the Common Stock will be cancelled.
The
Company will indemnify Dr. F. Xxxxxxx Xxxxx, acting within the authority
granted to him, and solely in his capacities, as Managing Member of
Tekni-Plex Management LLC, Managing Member of Tekni-Plex Partners LLC
(indirectly, as Managing Member of Tekni-Plex Management LLC) and Managing
Member of MST/TP Partners LLC (indirectly, as Managing Member of
Tekni-Plex Management LLC) for any claims and causes of action asserted
against him by members of Tekni-Plex Management LLC, Tekni-Plex Partners
LLC or MST/TP Partners LLC solely in connection with actions taken in
connection with
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approving
and implementing the Restructuring Agreement. For the avoidance
of doubt, the foregoing indemnity shall not cover any claims or causes of
actions based on (i) facts or circumstances occurring or arising prior to
the date on which the Company’s Board of Directors approved the
Restructuring Agreement, (ii) Dr. F. Xxxxxxx Xxxxx’x actions or inactions
as an officer or director of Tekni-Plex or any of its subsidiaries or
(iii) any payments or benefits received by Dr. F. Xxxxxxx Xxxxx and his
affiliates from Tekni-Plex or any of its subsidiaries.
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Senior
Management
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Senior
management to be satisfactory to Consenting Noteholders.
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Board
of Directors
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To
be appointed by Consenting Noteholders.
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Management
Incentive Plan
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A
management incentive plan providing for awards of options/restricted stock
to be implemented in connection with the Restructuring.
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Releases
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Mutual
releases of claims and causes of action assertable (whether directly or
derivatively) against the Company, the Board of Directors (including its
members acting in their capacity as officers, where applicable), Weston
Presidio and its related funds that hold Preferred Stock or LLC interests
in entities owning Common Stock, and the general partners of each such
fund (together with Xxxxxxx X. Xxxxxx, the “Weston Presidio
Entities”), other holders of Preferred Stock who consent to the
Restructuring and/or holders of Common Stock (including those who hold LLC
interests in entities owning Common Stock) who consent to the
Restructuring and the Consenting Noteholders, in each case in their
capacity as such.
The
release shall apply, without exception or limitation, to all claims and
causes of action in connection with, arising from or related to (i) the
Restructuring (other than for actual fraud), (ii) infusions of capital by
a Party (other than the Company) into the Company including the Common
Stock (directly or indirectly through Tekni-Plex Management LLC,
Tekni-Plex Partners LLC or MST/TP Partners LLC) and the Preferred Stock
and (iii) all payments and transactions set forth on any
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Party’s
Disclosure Schedule (as defined below). The release shall also
apply to all other claims and causes of action not included in clauses
(i)-(iii) above, provided, however, that
solely as to such other claims and causes of action not included in
clauses (i)-(iii) above, the release shall not apply to (A) any claims and
causes of action for payments or economic benefits that are unlawful, in
violation of any legal duty or recoverable under any statute, received by
the releasee or an affiliate of the releasee directly from Tekni-Plex or
any of its subsidiaries since May 1, 2002 (with respect to the Weston
Presidio Entities and Dr. F. Xxxxxxx Xxxxx) or January 1, 2007 (with
respect to each other Disclosing Party) or (B) any claims or causes of
action for, actual fraud, intentional misconduct, conscious disregard of
duty or knowing violation of law; provided however, for the avoidance of
doubt, the foregoing exclusions in clause (B) shall not include any claims
or cause of action for which the Company’s officers and directors are
currently indemnified or exculpated. The Parties that hold
Subordinated Notes hereby represent that (i) they do not currently intend
to prosecute any claims or causes of action against any Party, in each
case of the type described in the immediately preceding sentence and (ii)
they are aware of the significant deficiencies in the Company’s internal
controls (which have been described in various of the Company’s public
filings).
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In
connection with the release contained herein, (a) the
Weston Presidio
Entities shall deliver a schedule (the “WP Disclosure
Schedule”) setting forth any payments or any
economic benefits received by any Weston Presidio
Entity or any
affiliate thereof directly from Tekni-Plex or any of
its subsidiaries, in
each case since May
1, 2002, (b) each of
the members of the Board of Directors (other than Xxxxxxx X. Xxxxxx
and Dr. F. Xxxxxxx Xxxxx) shall deliver a schedule (the
“Board
Member Disclosure Schedule”) setting forth any payments
or economic
benefits received by
such
member or
any affiliate of such respective member directly from Tekni-Plex or any of
its subsidiaries, in each case since January 1, 2007 and (c) Dr. F.
Xxxxxxx Xxxxx shall deliver a schedule (the “Xxxxx Disclosure
Schedule”, and together with the WP Disclosure Schedule and the
Board Member Disclosure Schedule,
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the
“Disclosure
Schedules”, and the provider of a Disclosure Schedule, the “Disclosing
Party”) setting forth
any payments or
economic benefits received by him or any of his affiliates (including family
members) directly
from
Tekni-Plex or any of its subsidiaries, in each case since May 1,
2002.
Each
Disclosing Party shall provide its Disclosure Schedule to Xxxx, Weiss,
Rifkind, Xxxxxxx & Xxxxxxxx LLP as counsel to certain holders of
Subordinated Notes (the “Majority
Noteholders”) on or before April 11, 2008. If any
Disclosure Schedule is not satisfactory to the Majority Noteholders based
solely on any material payments or transactions listed thereon that are
not set forth on Schedule I hereto, the Majority Noteholders may terminate
the Restructuring Agreement by delivering written notice to each of the
Parties within two business days after the transmission of such Disclosure
Schedule to counsel to the Majority Noteholders. If no such
termination notice has been delivered by such time, the applicable
Disclosure Schedule shall be considered “final”, and any asserted or
unasserted objections thereto irrevocably waived.
The
release in favor of the Weston Presidio Entities shall, in no event, be on
terms less favorable than the release given to Dr. F. Xxxxxxx
Xxxxx.
Each
of the officers and directors of the Company shall maintain (and shall not
be deemed to have released or waived) their indemnification and
exculpation rights under the Amended and Restated Certificate of
Incorporation of Tekni-Plex, Inc. dated May 13, 2005 and the Amended and
Restated By-Laws.
Any
reference to a party getting a release will also include its
advisors.
The
foregoing releases shall not release any party (or its advisors) from any
duty of confidentiality to the Company.
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Conditions
|
Consent
to Restructuring shall be obtained on or before the Effective Date from
holders of not less than (i) 99.5% of Preferred Stock, (ii) 100% of Common
Stock, (iii) 85% of the indirect interests in Common Stock (based on unit
holdings of Tekni-Plex Partners LLC
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8
and
MST/TP Partners LLC) and (iv) 95% of Subordinated Notes. The
conditions set forth in clauses (i), (iii) and (iv) of the
immediately preceding sentence shall be waivable by the Company and
holders of a majority in principal amount of the Subordinated
Notes. In the event the failure to obtain requisite thresholds
of consent by the holders of Preferred Stock and the holders of indirect
interests in Common Stock is the reason the Restructuring has not been
consummated, the Company will (and its current intention is to do so in
such event) promptly commence a prepackaged chapter 11 bankruptcy
proceeding to implement the terms outlined herein, unless the Board of
Directors, in light of any material increase in the Company’s valuation,
determines in good faith that taking such action would be reasonably
expected to result in a breach of its fiduciary duties
under applicable law.
Each
Disclosure Schedule shall become final on or before April 15,
2008.
Except
with respect to the Shareholder Agreement, which shall contain and be
subject to review for the Basic Protections and shall otherwise be in form
and substance satisfactory to the Consenting Noteholders, all other
documentation to effectuate the Restructuring shall be in form and
substance reasonably acceptable to the Parties.
Requisite
lenders under the ABL Facility shall have consented to the Restructuring
and restricted payments as necessary to allow the Company to redeem or
exchange the Preferred Stock and distribute $250,000 to holders of Common
Stock.
Consummation
of the Restructuring and occurrence of the Effective Date shall occur on
or before May 13, 2008.
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The terms
set forth in this Term Sheet are part of a comprehensive compromise, each
element of which is an integral aspect of the proposed Restructuring and, as
such, is non-severable.
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