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EXHIBIT 10.11
EXECUTION COPY
INDEMNITY, SUBROGATION and CONTRIBUTION AGREEMENT
dated as of September 30, 1997, as amended and restated as of
May 31, 2000, among HUNTSMAN PACKAGING CORPORATION, a Utah
corporation (the "Borrower"), each Subsidiary of the Borrower
listed on Schedule I hereto (the "Guarantors") and BANKERS
TRUST COMPANY, a New York banking corporation ("Bankers
Trust"), as collateral agent (in such capacity, the
"Collateral Agent") for the Secured Parties (as defined in the
Credit Agreement referred to below).
Reference is made to (a) the Credit Agreement dated as of September 30,
1997, as amended and restated as of May 31, 2000, (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among the
Borrower, Aspen Industrial, S.A. de C.V., a Mexico corporation (the "Mexico
Borrower"), the lenders from time to time party thereto (the "Lenders") and
Bankers Trust, as administrative agent (in such capacity, the "Administrative
Agent") for the Lenders, and (b) the Guarantee Agreement dated as of September
30, 1997, as amended and restated as of May 31, 2000, among the Borrower,
Guarantors and the Administrative Agent (the "Guarantee Agreement"). Capitalized
terms used herein and not defined herein shall have the meanings assigned to
such terms in the Credit Agreement.
The parties hereto have entered into the Indemnity, Subrogation and
Contribution Agreement dated as of September 30, 1997, and are entering into
this Agreement to amend and restate such Indemnity, Subrogation and Contribution
Agreement in its entirety in the form hereof.
The Lenders have agreed to make Loans to the Borrower and the Mexico
Borrower, and the Issuing Bank has agreed to issue Letters of Credit for the
account of the Borrower, pursuant to, and upon the terms and subject to the
conditions specified in, the Credit Agreement. The Guarantors have guaranteed
such Loans and the other Obligations (as defined in the Guarantee Agreement) of
the Borrower and the Mexico Borrower under the Credit Agreement pursuant to the
Guarantee Agreement; the Borrower has guaranteed such Loans and the other
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Obligations of the Mexico Borrower under the Credit Agreement pursuant to the
Guarantee Agreement; the Borrower and the Guarantors also have granted Liens on
and security interests in certain of their assets to secure such guarantees. The
obligations of the Lenders to make Loans and of the Issuing Bank to issue
Letters of Credit are conditioned on, among other things, the execution and
delivery by the Borrower and the Guarantors of an agreement in the form hereof.
Accordingly, the Borrower, each Guarantor and the Collateral Agent
agree as follows:
SECTION 1. Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as the Guarantors may have under applicable law (but
subject to Section 3), the Borrower agrees that (a) in the event a payment shall
be made by any Guarantor under the Guarantee Agreement, the Borrower shall
indemnify such Guarantor for the full amount of such payment and such Guarantor
shall be subrogated to the rights of the Person to whom such payment shall have
been made to the extent of such payment and (b) in the event any assets of any
Guarantor shall be sold pursuant to any Security Document to satisfy a claim of
any Secured Party, the Borrower shall indemnify such Guarantor in an amount
equal to the greater of the book value or the fair market value of the assets so
sold.
SECTION 2. Contribution and Subrogation. Each Guarantor (a
"Contributing Guarantor") agrees (subject to Section 3) that, in the event a
payment shall be made by any other Guarantor under the Guarantee Agreement or
assets of any other Guarantor shall be sold pursuant to any Security Document to
satisfy a claim of any Secured Party and such other Guarantor (the "Claiming
Guarantor") shall not have been fully indemnified by the Borrower as provided in
Section 1, the Contributing Guarantor shall indemnify the Claiming Guarantor in
an amount equal to the amount of such payment or the greater of the book value
or the fair market value of such assets, as the case may be, in each case
multiplied by a fraction of which the numerator shall be the net worth of the
Contributing Guarantor on the date
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hereof and the denominator shall be the aggregate net worth of all the
Guarantors on the date hereof (or, in the case of any Guarantor becoming a party
hereto pursuant to Section 12, the date of the Supplement hereto executed and
delivered by such Guarantor). Any Contributing Guarantor making any payment to a
Claiming Guarantor pursuant to this Section 2 shall be subrogated to the rights
of such Claiming Guarantor under Section 1 to the extent of such payment.
SECTION 3. Subordination. Notwithstanding any provision of this
Agreement to the contrary, all rights of the Guarantors under Sections 1 and 2
and all other rights of indemnity, contribution or subrogation under applicable
law or otherwise shall be fully subordinated to the indefeasible payment in full
in cash of the Obligations. No failure on the part of the Borrower or any
Guarantor to make the payments required by Sections 1 and 2 (or any other
payments required under applicable law or otherwise) shall in any respect limit
the obligations and liabilities of any Guarantor with respect to its obligations
hereunder, and each Guarantor shall remain liable for the full amount of the
obligations of such Guarantor hereunder.
SECTION 4. Termination. Subject to the provisions of the last sentence
of Section 8 of this Agreement, this Agreement shall survive and be in full
force and effect so long as any Obligation is outstanding and has not been
indefeasibly paid in full in cash, and so long as the LC Exposure has not been
reduced to zero or any of the Commitments under the Credit Agreement have not
been terminated, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment, or any part thereof, of any Obligation is
rescinded or must otherwise be restored by any Secured Party or any Guarantor
upon the bankruptcy or reorganization of the Borrower, any Guarantor or
otherwise.
SECTION 5. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. No Waiver; Amendment. (a) No failure on the part of the
Collateral Agent or any Guarantor to exercise, and no delay in exercising, any
right, power or
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remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy by the Collateral Agent or
any Guarantor preclude any other or further exercise thereof or the exercise of
any other right, power or remedy. All remedies hereunder are cumulative and are
not exclusive of any other remedies provided by law. None of the Collateral
Agent and the Guarantors shall be deemed to have waived any rights hereunder
unless such waiver shall be in writing and signed by such parties.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to a written agreement entered into between
the Borrower, the Guarantors and the Collateral Agent, with the prior written
consent of the Required Lenders (except as otherwise provided in the Credit
Agreement).
SECTION 7. Notices. All communications and notices hereunder shall be
in writing and given as provided in the Guarantee Agreement and addressed as
specified therein.
SECTION 8. Binding Agreement; Assignments. Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party; and all covenants, promises
and agreements by or on behalf of the parties that are contained in this
Agreement shall bind and inure to the benefit of their respective successors and
assigns. Neither the Borrower nor any Guarantor may assign or transfer any of
its rights or obligations hereunder (and any such attempted assignment or
transfer shall be void) without the prior written consent of the Required
Lenders. Notwithstanding the foregoing, at the time any Guarantor is released
from its obligations under the Guarantee Agreement in accordance with such
Guarantee Agreement and the Credit Agreement, such Guarantor will cease to have
any rights or obligations under this Agreement.
SECTION 9. Survival of Agreement; Severability. (a) All covenants and
agreements made by the Borrower and each Guarantor herein and in the
certificates or other instruments prepared or delivered in connection with this
Agreement or the other Loan Documents shall be considered to have been relied
upon by the Collateral Agent, the other
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Secured Parties and each Guarantor and shall survive the making by the Lenders
of the Loans and the issuance of the Letters of Credit by the Issuing Bank, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loans or any other fee or amount payable under the
Credit Agreement or this Agreement or under any of the other Loan Documents is
outstanding and unpaid or the LC Exposure does not equal zero and as long as the
Commitments have not been terminated.
(b) In case any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any respect, no
party hereto shall be required to comply with such provision for so long as such
provision is held to be invalid, illegal or unenforceable, but the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby. The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 10. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement shall be effective with
respect to any Guarantor when a counterpart bearing the signature of such
Guarantor shall have been delivered to the Collateral Agent. Delivery of an
executed signature page to this Agreement by facsimile transmission shall be as
effective as delivery of a manually signed counterpart of this Agreement.
SECTION 11. Rules of Interpretation. The rules of interpretation
specified in Section 1.03 of the Credit Agreement shall be applicable to this
Agreement.
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SECTION 12. Additional Guarantors. Pursuant to Section 5.12 of the
Credit Agreement, each Subsidiary Loan Party that was not in existence or not
such a Subsidiary Loan Party on the date of the Credit Agreement is required to
enter into the Guarantee Agreement as a Guarantor upon becoming such a
Subsidiary. Upon execution and delivery, after the date hereof, by the
Collateral Agent and such a Subsidiary of an instrument in the form of Annex 1
hereto, such Subsidiary shall become a Guarantor hereunder with the same force
and effect as if originally named as a Guarantor hereunder. The execution and
delivery of any instrument adding an additional Guarantor as a party to this
Agreement shall not require the consent of any Guarantor hereunder. The rights
and obligations of each Guarantor hereunder shall remain in full force and
effect notwithstanding the addition of any new Guarantor as a party to this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first appearing above.
HUNTSMAN PACKAGING CORPORATION,
by
/s/ RICHARD P. DURHAM
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Name: Richard P. Durham
Title: President and CEO
EACH OF THE SUBSIDIARIES LISTED
ON SCHEDULE I HERETO, as a
Guarantor,
by /s/ RICHARD P. DURHAM
-----------------------------
Name: Richard P. Durham
Title: Authorized Officer
BANKERS TRUST COMPANY, as
Collateral Agent,
by /s/ ROBERT R. TELESCA
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Name: Robert R. Telesca
Title: Assistant Vice President
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SCHEDULE I
GUARANTORS
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Edison Plastics International Inc.
Huntsman Bulk Packaging Corporation
Huntsman Container Corporation International
Huntsman Edison Films Corporation
Huntsman Films Products of Mexico, Inc.
Huntsman KCL Corporation
Huntsman Packaging Georgia, Inc.
Huntsman Packaging of Canada, LLC
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Annex 1 to
the Indemnity, Subrogation and
Contribution Agreement
SUPPLEMENT NO. dated as of May 31, to the Indemnity,
Subrogation and Contribution Agreement dated as of September
30, 1997, as amended and restated as of May 31, 2000 (as the
same may be amended, supplemented or otherwise modified from
time to time, the "Indemnity, Subrogation and Contribution
Agreement"), among HUNTSMAN PACKAGING CORPORATION, a Utah
corporation (the "Borrower"), each Subsidiary of the Borrower
listed on Schedule I thereto (the "Guarantors"), and BANKERS
TRUST COMPANY, a New York banking corporation ("Bankers
Trust"), as collateral agent (the "Collateral Agent") for the
Secured Parties (as defined in the Credit Agreement referred
to below).
A. Reference is made to (a) the Credit Agreement dated as of September
30, 1997, as amended and restated as of May 31, 2000 (as amended, supplemented
or otherwise modified from time to time, the "Credit Agreement"), among the
Borrower, Aspen Industrial, S.A. de C.V., a Mexico corporation, the lenders from
time to time party thereto (the "Lenders") and Bankers Trust, as administrative
agent (in such capacity, the "Administrative Agent") for the Lenders, and (b)
the Guarantee Agreement dated as of September 30, 1997, as amended and restated
as of May 31, 2000 (the "Guarantee Agreement"), among the Borrower, the
Guarantors and the Administrative Agent.
B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Indemnity, Subrogation and
Contribution Agreement and the Credit Agreement.
C. The Borrower and the Guarantors have entered into the Indemnity,
Subrogation and Contribution Agreement in order to induce the Lenders to make
Loans and the Issuing
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Bank to issue Letters of Credit. Pursuant to Section 5.12 of the Credit
Agreement, each Subsidiary Loan Party that was not in existence or not a
Subsidiary Loan Party on the date of the Credit Agreement is required to enter
into the Guarantee Agreement as a Guarantor upon becoming a Subsidiary. Section
12 of the Indemnity, Subrogation and Contribution Agreement provides that
additional Subsidiaries of the Borrower may become Guarantors under the
Indemnity, Subrogation and Contribution Agreement by execution and delivery of
an instrument in the form of this Supplement. The undersigned Subsidiary of the
Borrower (the "New Guarantor") is executing this Supplement in accordance with
the requirements of the Credit Agreement to become a Guarantor under the
Indemnity, Subrogation and Contribution Agreement in order to induce the Lenders
to make additional Loans and the Issuing Bank to issue additional Letters of
Credit and as consideration for Loans previously made and Letters of Credit
previously issued.
Accordingly, the Collateral Agent and the New Guarantor agree as follows:
SECTION 1. In accordance with Section 12 of the Indemnity, Subrogation
and Contribution Agreement, the New Guarantor by its signature below becomes a
Guarantor under the Indemnity, Subrogation and Contribution Agreement with the
same force and effect as if originally named therein as a Guarantor and the New
Guarantor hereby agrees to all the terms and provisions of the Indemnity,
Subrogation and Contribution Agreement applicable to it as a Guarantor
thereunder. Each reference to a "Guarantor" in the Indemnity, Subrogation and
Contribution Agreement shall be deemed to include the New Guarantor. The
Indemnity, Subrogation and Contribution Agreement is hereby incorporated herein
by reference.
SECTION 2. The New Guarantor represents and warrants to the Collateral
Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different
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counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Supplement shall become
effective when the Collateral Agent shall have received counterparts of this
Supplement that, when taken together, bear the signatures of the New Guarantor
and the Collateral Agent. Delivery of an executed signature page to this
Supplement by facsimile transmission shall be as effective as delivery of a
manually signed counterpart of this Supplement.
SECTION 4. Except as expressly supplemented hereby, the Indemnity,
Subrogation and Contribution Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect,
neither party hereto shall be required to comply with such provision for so long
as such provision is held to be invalid, illegal or unenforceable, but the
validity, legality and enforceability of the remaining provisions contained
herein and in the Indemnity, Subrogation and Contribution Agreement shall not in
any way be affected or impaired. The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
SECTION 7. All communications and notices hereunder shall be in writing
and given as provided in Section 7 of the Indemnity, Subrogation and
Contribution Agreement. All communications and notices hereunder to the New
Guarantor shall be given to it at the address set forth under its signature.
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SECTION 8. The New Guarantor agrees to reimburse the Collateral Agent
for its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Collateral Agent.
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IN WITNESS WHEREOF, the New Guarantor and the Collateral Agent have
duly executed this Supplement to the Indemnity, Subrogation and Contribution
Agreement as of the day and year first above written.
[Name Of New Guarantor],
by
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Address:
BANKERS TRUST COMPANY, as Collateral Agent,
by
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Name:
Title:
Address:
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SCHEDULE I
to Supplement No.___ to the Indemnity,
Subrogation and Contribution Agreement
Guarantors
Name Address
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