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[EXHIBIT 10.2]
Joseph Adler
Vice President and Controller
VLASIC PLAZA - 6 EXECUTIVE CAMPUS - CHERRY HILL, NJ 08002-4112
Tel: 856-969-7165
Fax: 856-969-7403
[email protected]
July 24, 2000
TO EACH OF THE SIGNATORIES TO THE
COMMITMENT LETTER REFERRED TO BELOW:
Re: Supplemental Term Sheet for Waiver No. 5, Dealing with Family
Participation, dated June 26, 2000 (the "Term Sheet")
Ladies and Gentlemen:
Reference is herein made to the Term Sheet. All capitalized terms which are used
herein and not otherwise defined herein shall be defined as set forth in the
Term Sheet.
In consideration of the commitments made by you on the date hereof, pursuant to
the commitment letter executed by you (the "Commitment Letter"), to fund 50% of
the New Revolving Loans, up to the amount of $17,500,000 (the "Maximum Amount"),
Vlasic Foods International Inc. ("Vlasic") hereby agrees to pay the following
compensation to you (which shall be in addition to all other compensation
payable to you pursuant to the Term Sheet):
(a) A fee in an amount equal to either (i) the product of (w) the number of
common shares (the "Share Number") representing an aggregate of 5% of
the fully diluted common equity of Vlasic outstanding as of the date on
which you shall have elected to determine the fee payable under this
paragraph (a) (the "Election Date") times (x) the difference between
the closing price of Vlasic common stock on the Election Date over
$1.94 (plus any amount or amounts distributed, paid by dividend or
otherwise made available to common shareholders of Vlasic from June 26,
2000 through the Election Date); or (ii) if the election to determine
value shall be made in connection with a sale or liquidation of Vlasic,
the product of (y) the Share Number times (z) the difference between
the total, fully diluted per share consideration received upon such
sale or liquidation of Vlasic over $1.94 (plus any amount or amounts
distributed, paid by dividend or otherwise made available to common
shareholders of Vlasic from June 26, 2000 through the Election Date),
which fee payable under this paragraph (a) shall bear interest at the
rate applicable to the New Revolving Loans from the Election Date
through the date of payment, and, if such fee shall not be paid on the
date on which the Loans shall have been paid in full, thereafter, at
the default rate applicable to the New Revolving Loans (provided that
the fee provided in paragraph (e) shall not apply to any fee payable
under this paragraph (a));
(b) An origination fee in the amount of $350,000 (representing 2% of the
Maximum Amount);
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(c) Additional interest in the per annum amount of 2% on the outstanding
principal balance from time to time of the New Revolving Loans which
have been funded by you, which shall accrue from the date on which the
first such New Revolving Loan shall be made until the date on which
such New Revolving Loans are repaid in full;
(d) If any amendment, waiver or other modification to the Financing
Documents which is approved without your consent shall have the effect
of extending the maturity of any Loans beyond February 28, 2001, a fee
equal to $350,000 (representing 2% of the Maximum Amount) for each
calendar month (pro rated for each partial month) from February 28,
2001 until the date to which the maturity of such Loans has been
extended;
(e) If any amendment, waiver or other modification to the Financing
Documents which is approved without your consent shall have the effect
of deferring the payment date of any interest or fee payable to you
with respect to the New Revolving Loans, a fee equal to 2% of the
amount of interest or fee so deferred, for each calendar month (pro
rated for each partial month) from the original payment date for such
interest or fee until the date to which the payment of such interest
has been deferred; and
(f) If any amendment, waiver or other modification to the Financing
Documents which is approved without your consent shall have the effect
of reducing or forgiving any interest or fee to which you are entitled
under the Term Sheet, Vlasic agrees to pay the amount of such reduction
to you for the period during which such interest or fee accrues under
the Term Sheet and the Financing Documents, as the case may be.
The fees set forth in clauses (a) through (f) above shall be payable in
accordance with their terms on the date on which, but after, the Loans shall
have been paid in full.
Vlasic agrees and acknowledges that the payments set forth in this letter
constitute "Secured Obligations" and "Guaranteed Obligations" for purposes of
the Financing Documents and agrees to deliver to the Administrative Agent and
Collateral Agent by no later than July 24, 2000 a certificate complying with
Section 2.20(c) of the Credit Agreement with respect thereto. By your acceptance
hereof, however, you acknowledge and agree that the Secured Obligations and
Guaranteed Obligations so constituted are junior and subordinate in priority to
all other Secured Obligations and Guaranteed Obligations owing to the Banks and
the Agents, whether now or hereafter existing, and that for purposes of Section
14 of the Security Agreement no proceeds of any Collateral or any cash held in
the Collateral Accounts shall be applied to the payment of any of the Secured
Obligations so constituted until all such other Secured Obligations have been
paid in full.
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Vlasic further agrees as follows: (i) it shall pay the fees and disbursements of
Dechert Price & Rhoads in connection with the matters contemplated by the Term
Sheet, promptly after the submission of invoices therefor, (ii) it shall pay to
you any interest costs associated with the failure of Vlasic to borrow New
Revolving Loans on any date requested by Vlasic and (iii) Vlasic shall cause to
be delivered to you, prior to the delivery of your commitments regarding the New
Revolving Loans, opinions of Skadden, Arps, Slate, Meagher & Flom LLP and
outside New Jersey counsel to Vlasic acceptable to you, regarding the due
authorization of this letter agreement by Vlasic and the enforceability of this
letter agreement against Vlasic in accordance with the terms and conditions
hereof, which opinions shall be satisfactory to you.
This letter agreement shall be binding upon Vlasic and its successors and
assigns and shall inure to the benefit of you and your heirs, successors and
assigns. This letter agreement shall be governed by New York law applicable to
agreements made and to be performed entirely within such State.
Very truly yours,
VLASIC FOODS INTERNATIONAL INC.
By: ________________________________
Name: Joseph Adler
Title: Vice President and Controller
