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PANOLAM INDUSTRIES INTERNATIONAL INC
·
8-K
Apr 3, 3:14 PM ET
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PANOLAM INDUSTRIES INTERNATIONAL INC 8-K
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Contents
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1. Incorporation of Preliminary Statements. The preliminary statements set forth above are hereby incorporated into this Agreement as accurate and complete statements of fact in all material respects. Without limiting the foregoing, the Borrower Parties hereby acknowledge and agree that (a) the Existing Events of Default have occurred and are continuing under the terms of the Credit Agreement, and that none of the Loan Parties have any disputes, defenses or counterclaims of any kind with respect thereto; (b) the Lenders are under no obligation to make Loans or other financial accommodations to the Company under the Credit Agreement; (c) the Agent, on behalf of the Lenders has, and shall continue to have, valid, enforceable and perfected security interests in and liens upon the Collateral heretofore granted by the Company to the Agent and Lenders pursuant to the Loan Documents or otherwise granted to or held by the Agent or the Lenders; (d) absent the effectiveness of this Agreement, the Agent and Lenders have the right to immediately enforce their security interest in, and Liens on, the Collateral and to exercise any and all remedies available to them under the Credit Agreement, at law and in equity; and (e) the outstanding Loans and all other Obligations are payable pursuant to the Credit Agreement, without defense, dispute, offset, withholding, recoupment, counterclaim or deduction of any kind (other than as provided in Section 2.7 of the Credit Agreement).
2. Forbearance.
(a) The Borrower Parties agree and acknowledge that the Existing Events of Default set forth on Schedule I have occurred and are continuing.
(b) The Company has advised the Agent that the Company will likely not be in compliance with certain provisions of the Credit Agreement which would give rise to the Anticipated Defaults set forth on Schedule II.
(a) The Agent shall have received counterparts of this Agreement duly executed and delivered by the Borrower Parties and the Requisite Lenders;
(b) All of the representations and warranties of the Borrower Parties contained in this Agreement shall be true and correct on and as of the Effective Date (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct as of such earlier date);
(c) The Agent shall have received, for the account and benefit of the Lenders, a forbearance fee in cash in the amount of 0.5% of the aggregate outstanding amount of Loans on the date hereof; and
(d) The Agent shall have received payment in full of all fees and expenses due and payable in accordance with the terms of this Agreement and the Credit Agreement (including the reasonable and documented legal fees and expenses of the Agent’s counsel and the fees and out-of-pocket expenses of its financial advisor, Conway Del Genio Gries & Co. (“CDG”) invoiced at least one day prior to the anticipated Effective Date of this Agreement).
4. Representations and Warranties. To induce the Agent and the Requisite Lenders to enter into this Agreement, each Borrower Party represents and warrants to the Agent and the Lenders (which representations and warranties shall be made on and as of the Effective Date):
(a) Each Borrower Party has the requisite corporate power and authority and the legal right to execute and deliver this Agreement, and to perform the transactions contemplated hereby. The execution, delivery and performance by each Borrower Party of this Agreement, (i) are within such Borrower Party’s corporate power; (ii) have been duly authorized by all necessary corporate or other action; (iii) do not contravene or cause such Borrower Party or any other Loan Party to be in default under (x) any provision of the such Borrower Party’s or other Loan Party’s formation documents or bylaws, (y) any contractual restriction contained in any indenture, loan or credit agreement, lease, mortgage, security agreement, bond, note or other agreement or instrument binding on or affecting such Borrower Party or other Loan Party or its property, or (z) any law, rule, regulation, order, license requirement, writ, judgment, award, injunction, or decree applicable to, binding on or affecting such Borrower Party or other Loan Party or its property; (iv) will not result in the creation or imposition of any Lien upon any of the property of such Borrower Party or other Loan Party or any Subsidiary thereof other than those in favor of the Agent or any Lender, all pursuant to the Loan Documents; and (e) do not require the consent or approval of any Governmental Authority or any other Person, other than those which have been duly obtained, made or complied with and which are in full force and effect and except, in each case, to the extent such contravention, default, Lien or failure to obtain such approval or consent could not reasonably be expected to result in a Material Adverse Effect.
(b) This Agreement has been duly executed and delivered by each Borrower Party. Each of this Agreement, the Credit Agreement (as modified herein) and the Loan Documents (as modified hereby) to which each Borrower Party is a party is the legal, valid and
binding obligation of such Borrower Party, enforceable against such Borrower Party in accordance with its terms, subject, as to enforceability, to (A) any applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting the enforceability of creditors’ rights generally and (B) general equitable principles, whether applied in a proceeding at law or in equity, and is in full force and effect.
(c) No Event of Default or Potential Event of Default under the Credit Agreement, other than the Existing Events of Defaults or the Anticipated Defaults, shall have occurred and be continuing or would result after giving effect to any of the transactions contemplated on the date hereof.
(d) No Forbearance Default (defined below) has occurred.
5. Forbearance Defaults: The following events shall constitute “Forbearance Defaults”):
(b) Except as expressly provided herein, the Releasors each expressly waive any statutory or other limitation on the enforceability of a general release of unknown claims which, if known, would have materially affected this Agreement. EACH RELEASOR HEREBY EXPLICITLY WAIVES ALL RIGHTS UNDER AND ANY BENEFITS OF ANY COMMON LAW OR STATUTORY RULE OR PRINCIPLE WITH RESPECT TO THE RELEASE OF SUCH CLAIMS. EACH RELEASOR AGREES THAT NO SUCH COMMON LAW OR STATUTORY RULE OR PRINCIPLE SHALL AFFECT THE VALIDITY OR SCOPE OR ANY OTHER ASPECT OF THIS AGREEMENT.
10. No Waiver. Each Borrower Party hereby acknowledges and agrees that the Agent’s or any Lender’s failure, at any time or times hereafter, to require strict performance by the Borrower Parties of any provision or term of this Agreement, the Credit Agreement or any other Loan Document shall not waive, affect or diminish any right of the Agent or any Lender thereafter to demand strict compliance and performance therewith. Any suspension or waiver by the Agent or the Lenders of a Forbearance Default or of an Event of Default shall not, except as
may be expressly set forth herein, suspend, waive or affect any other Forbearance Default or any other Event of Default, whether the same is prior or subsequent thereto and whether of the same or of a different kind or character.
11. Sole Benefit of Parties. This Agreement is solely for the benefit of the parties hereto, the Lenders and their respective successors and assigns, and no other Person shall have any right, benefit or interest under or because of the existence of this Agreement.
18. Headings. Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.
19. No Course of Dealing. The Requisite Lenders have entered into this Agreement on the express understanding with the Company that in entering into this Agreement the Requisite Lenders are not establishing any course of dealing with the Company. The Agent’s and the Lenders’ rights to require strict performance with all the terms and conditions of the Credit Agreement as modified by this Agreement and the other Loan Documents shall not in any way be impaired by the execution of this Agreement. Neither the Agent nor any Lender shall be obligated in any manner to execute any amendments or further waivers, and if any such amendments or further waivers are requested in the future, assuming the terms and conditions thereof are acceptable to them, the Agent and the Lenders may require the payment of fees in connection therewith.
20. Expenses. The Company hereby acknowledges and agrees that all fees, costs and expenses of Agent and Lenders (including the reasonable and documented fees, costs and expenses of counsel or other advisors, if any) incurred in connection with the transactions contemplated by this Agreement shall be payable by the Company in accordance herewith and with Section 10.2 of the Credit Agreement; provided, however, that such payments hereunder shall be made in accordance with Section 6(j) hereof.
21. Further Assurances. At the Agent’s request, the Borrower Parties shall execute and deliver such additional documents and take such additional actions as the Agent requests to effectuate the provisions and purposes of this Agreement and to protect and/or maintain perfection of the Lenders’ security interests in and liens upon the Collateral.
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