UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) August 9, 1995
TRIARC COMPANIES, INC.
----------------------------------------------
(Exact Name of Registrant as Specified in Charter)
DELAWARE 1-2207 38-0471180
-------------- ----------- -------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
900 Third Avenue
New York, New York 10022
---------------------------------------- -------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code:(212)230-3000
-----------------------------------------------
(Former Name or Former Address, if
Changed Since Last Report)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On August 9, 1995, the Registrant, through Mistic Brands,
Inc., a wholly-owned subsidiary ("Mistic"), acquired (the
"Acquisition") from Joseph Victori Wines, Inc., a New York
corporation ("JVWNY"), Best Flavors, Inc., a Nevada corporation
("Best Flavors"), Nature's Own Beverage Company, a Delaware
corporation ("Nature's Own" and, together with JVWNY and Best
Flavors, collectively, the "Companies") and Joseph Umbach, all
of the tangible and intangible assets and operations of the
Companies, subject to related liabilities, other than the assets
and operations of the Companies relating to their alcoholic wine
business. The aggregate purchase price for the assets, which is
subject to certain post-closing adjustments, consisted of the
following: (i) $93 million in cash, (ii) certain deferred
payments in the aggregate amount of $3 million, to be made in
cash over three and a quarter years following the closing of the
Acquisition, and (iii) a promissory note in the original
principal amount of $1,000,000. As of the closing date of the
Acquisition, none of the Companies or Joseph Umbach had any
material relationship with the Registrant or any of its
affiliates, any director or any officer of Registrant or any
associate of any such director or officer.
The cash portion of the Acquisition purchase price was
financed through (a) a $25,000,000 capital contribution by the
Registrant to Mistic from the proceeds of a loan to the
Registrant from its subsidiary, Graniteville Company, and (b)
$71,500,000 of borrowings under a new $80,000,000 senior debt
financing (the "Mistic Facility") provided to Mistic by The
Chase Manhattan Bank (National Association), as Agent, and
certain other banks who are signatories to the Credit Agreement
providing for such financing. In connection with the
Acquisition, Graniteville Company increased its borrowings by
$41 million under its credit facility provided by The CIT
Group/Commercial Services, Inc. The Mistic Facility consists of
a $20,000,000 revolving credit facility (which includes a Letter
of Credit facility of up to $5 million) and a $60,000,000 term
credit facility. A copy of the Asset Purchase Agreement
relating to the Acquisition, the documents providing for the
financing for the Acquisition and the press release with respect
to the Acquisition are being filed herewith as exhibits hereto
and are incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(a) Financial Statements of Businesses Acquired
The financial statements of the business acquired in the
Acquisition are not being provided herewith since it is
impracticable for the Registrant to do so at the time this
Report is filed. Such required financial statements will be
filed as soon as practicable and in no event later than 60 days
after the date this Report must be filed.
(b) ProForma Financial Information
The proforma financial information required pursuant to
Article 11 of Regulation S-X is not being furnished herewith
since it is impracticable for the Registrant to do so at the
time this Report is filed. Such required proforma financial
information will be filed as soon as practicable and in no event
later than 60 days after the date this Report must be filed.
(c) Exhibits
2.1 Asset Purchase Agreement, among Mistic Brands, Inc.,
the Companies, and Joseph Umbach, dated as of August 9, 1995
10.1 Credit Agreement, among Mistic Brands, Inc., The Chase
Manhattan Bank (National Association), as Agent, and other banks
who are a party thereto, dated as of August 9, 1995
10.2 Amendment No. 6 to Revolving Credit, Term Loan and
Security Agreement, among Graniteville Company, C.H. Patrick &
Co., Inc., The CIT Group/Commercial Services, Inc., as agent,
and other financial institutions who are a party thereto, dated
as of August 3, 1995
99.1 Press release dated August 9, 1995
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
TRIARC COMPANIES, INC.
Date: August 14, 1995 By: Joseph A. Levato
-----------------------
Joseph A. Levato
Executive Vice President
and Chief Financial Officer
<PAGE>
Exhibit Index
Exhibit
No. Description Page No.
-------- ------------ --------
2.1 Asset Purchase Agreement, among
Mistic Brands, Inc., the
Companies, and Joseph Umbach,
dated as of August 9, 1995
Exhibit
No. Description Page No.
-------- ------------ --------
10.1 Credit Agreement, among Mistic
Brands, Inc., The Chase Manhattan
Bank (National Association), as
Agent, and other banks who are a
party thereto, dated as of August
9, 1995
10.2 Amendment No. 6 to Revolving
Credit, Term Loan and Security
Agreement, among Graniteville
Company, C.H. Patrick & Co., Inc.,
The CIT Group/Commercial Services,
Inc., as agent, and other
financial institutions who are a
party thereto, dated as of August
3, 1995
99.1 Press release dated August 9, 1995
<PAGE>
EXHIBIT 10.1
CREDIT AGREEMENT
Dated as of August 9, 1995
among
MISTIC BRANDS, INC.
THE LENDERS SIGNATORY HERETO
and
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)
as Agent
<PAGE>
Table of Contents
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS. . . . . . . . . . . .
Section 1.01. Definitions. . . . . . . . . . . . . . . . .
Section 1.02. Accounting Terms . . . . . . . . . . . . . .
.
ARTICLE 2. THE CREDIT . . . . . . . . . . . . . . . . . . . . .
.
Section 2.01. Loans. . . . . . . . . . . . . . . . . . . .
.
Section 2.02. The Notes. . . . . . . . . . . . . . . . . .
.
Section 2.03. Purpose. . . . . . . . . . . . . . . . . . .
.
Section 2.04. Borrowing Procedures . . . . . . . . . . . .
.
Section 2.05. Optional Prepayments and Conversions . . . .
.
Section 2.06. Mandatory Prepayments. . . . . . . . . . . .
.
Section 2.07. Interest Periods; Renewals . . . . . . . . .
.
Section 2.08. Changes of Commitments . . . . . . . . . . .
.
Section 2.09. Certain Notices. . . . . . . . . . . . . . .
.
Section 2.10. Minimum Amounts. . . . . . . . . . . . . . .
.
Section 2.11. Interest . . . . . . . . . . . . . . . . . .
.
Section 2.12. Fees . . . . . . . . . . . . . . . . . . . .
.
Section 2.13. Payments Generally . . . . . . . . . . . . .
.
ARTICLE 3. THE LETTERS OF CREDIT. . . . . . . . . . . . . . . .
.
Section 3.01. Letters of Credit. . . . . . . . . . . . . .
.
Section 3.02. Purposes . . . . . . . . . . . . . . . . . .
.
Section 3.03. Procedures for Issuance of Letters of
Credit . . . . . . . . . . . . . . . . . . . . . . . .
.
Section 3.04. Participating Interests. . . . . . . . . . .
.
Section 3.05. Payments . . . . . . . . . . . . . . . . . .
.
Section 3.06. Further Assurances . . . . . . . . . . . . .
.
Section 3.07. Obligations Absolute . . . . . . . . . . . .
.
Section 3.08. Cash Collateral Account. . . . . . . . . . .
.
Section 3.09. Letter of Credit Fees. . . . . . . . . . . .
.
ARTICLE 4. YIELD PROTECTION; ILLEGALITY; ETC. . . . . . . . . .
.
Section 4.01. Additional Costs . . . . . . . . . . . . . .
.
Section 4.02. Limitation on Fixed Rate Loans . . . . . . .
.
Section 4.03. Illegality . . . . . . . . . . . . . . . . .
.
Section 4.04. Certain Conversions pursuant to
Sections 4.01 and 4.03 . . . . . . . . . . . . . . . .
.
Section 4.05. Certain Compensation . . . . . . . . . . . .
.
Section 4.06. Lending Office Designations. . . . . . . . .
.
ARTICLE 5. CONDITIONS PRECEDENT.. . . . . . . . . . . . . . . .
.
Section 5.01. Documentary Conditions Precedent . . . . . .
.
Section 5.02. Additional Conditions Precedent. . . . . . .
.
Section 5.03. Deemed Representations . . . . . . . . . . .
.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES.. . . . . . . . . . .
.
Section 6.01. Incorporation, Good Standing and Due
Qualification. . . . . . . . . . . . . . . . . . . . .
.
Section 6.02. Corporate Power and Authority; No
Conflicts. . . . . . . . . . . . . . . . . . . . . . .
.
Section 6.03. Legally Enforceable Agreements . . . . . . .
.
Section 6.04. Litigation . . . . . . . . . . . . . . . . .
.
Section 6.05. Financial Statements . . . . . . . . . . . .
.
Section 6.06. Ownership and Liens. . . . . . . . . . . . .
.
Section 6.07. Taxes. . . . . . . . . . . . . . . . . . . .
.
Section 6.08. ERISA. . . . . . . . . . . . . . . . . . . .
.
Section 6.09. Subsidiaries and Affiliates. . . . . . . . .
.
Section 6.10. Capitalization . . . . . . . . . . . . . . .
.
Section 6.11. Credit Arrangements. . . . . . . . . . . . .
.
Section 6.12. Operation of Business. . . . . . . . . . . .
.
Section 6.14. Hazardous Materials. . . . . . . . . . . . .
.
Section 6.15. No Default on Outstanding Judgments or
Orders . . . . . . . . . . . . . . . . . . . . . . . .
.
Section 6.16. No Defaults on Other Agreements. . . . . . .
.
Section 6.17. Labor Disputes and Acts of God . . . . . . .
.
Section 6.18. Governmental Regulation. . . . . . . . . . .
.
Section 6.19. No Forfeiture. . . . . . . . . . . . . . . .
.
Section 6.20. Solvency . . . . . . . . . . . . . . . . . .
.
Section 6.21. Representations and Warranties in the
Mistic Acquisition Documents . . . . . . . . . . . . .
.
ARTICLE 7. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . .
.
Section 7.01. Maintenance of Existence . . . . . . . . . .
.
Section 7.02. Conduct of Business. . . . . . . . . . . . .
.
Section 7.03. Maintenance of Properties. . . . . . . . . .
.
Section 7.04. Maintenance of Records . . . . . . . . . . .
.
Section 7.05. Maintenance of Insurance . . . . . . . . . .
.
Section 7.06. Compliance with Laws . . . . . . . . . . . .
.
Section 7.07. Right of Inspection. . . . . . . . . . . . .
.
Section 7.08. Reporting Requirements . . . . . . . . . . .
.
Section 7.09. Interest Rate Protection Agreements. . . . .
.
Section 7.10. Additional Guarantors. . . . . . . . . . . .
.
ARTICLE 8. NEGATIVE COVENANTS.. . . . . . . . . . . . . . . . .
.
Section 8.01. Debt . . . . . . . . . . . . . . . . . . . .
.
Section 8.02. Guaranties . . . . . . . . . . . . . . . . .
.
Section 8.03. Liens. . . . . . . . . . . . . . . . . . . .
.
Section 8.04. Leases . . . . . . . . . . . . . . . . . . .
.
Section 8.05. Investments. . . . . . . . . . . . . . . . .
.
Section 8.06. Distributions. . . . . . . . . . . . . . . .
.
Section 8.07. Sale of Assets . . . . . . . . . . . . . . .
.
Section 8.08. Transactions with Affiliates . . . . . . . .
.
Section 8.09. Mergers. . . . . . . . . . . . . . . . . . .
.
Section 8.10. Acquisitions . . . . . . . . . . . . . . . .
.
Section 8.11. No Activities Leading to Forfeiture. . . . .
.
Section 8.12. Capital Expenditures . . . . . . . . . . . .
.
Section 8.13. Management Fees. . . . . . . . . . . . . . .
.
Section 8.14. Borrower Capital Stock . . . . . . . . . . .
.
Section 8.15. Rights under Other Agreements. . . . . . . .
.
Section 8.16. Restrictions . . . . . . . . . . . . . . . .
.
Section 8.17. Special Trademark Subsidiaries . . . . . . .
.
Section 8.18. No Foreign Trademarks. . . . . . . . . . . .
.
Section 8.19. Fiscal Year. . . . . . . . . . . . . . . . .
.
ARTICLE 9. FINANCIAL COVENANTS. . . . . . . . . . . . . . . . .
.
Section 9.01. Interest Coverage Ratio. . . . . . . . . . .
.
Section 9.02. Fixed Charge Coverage Ratio. . . . . . . . .
.
Section 9.03. Leverage Ratio . . . . . . . . . . . . . . .
.
Section 9.04. Minimum Net Worth. . . . . . . . . . . . . .
.
Section 9.05. Current Ratio. . . . . . . . . . . . . . . .
.
ARTICLE 10. EVENTS OF DEFAULT.. . . . . . . . . . . . . . . . .
.
Section 10.01. Events of Default . . . . . . . . . . . . .
.
Section 10.02. Remedies. . . . . . . . . . . . . . . . . .
.
Section 10.03. Cure. . . . . . . . . . . . . . . . . . . .
.
ARTICLE 11. THE AGENT.. . . . . . . . . . . . . . . . . . . . .
.
Section 11.01. Appointment, Powers and Immunities of
Agent. . . . . . . . . . . . . . . . . . . . . . . . .
.
Section 11.02. Reliance by Agent . . . . . . . . . . . . .
.
Section 11.03. Defaults. . . . . . . . . . . . . . . . . .
.
Section 11.04. Rights of Agent as a Lender . . . . . . . .
.
Section 11.05. Indemnification of Agent. . . . . . . . . .
.
Section 11.06. Documents . . . . . . . . . . . . . . . . .
.
Section 11.07. Non-Reliance on Agent and Other
Lenders. . . . . . . . . . . . . . . . . . . . . . . .
.
Section 11.08. Failure of Agent to Act . . . . . . . . . .
.
Section 11.09. Resignation or Removal of Agent . . . . . .
.
Section 11.10. Amendments Concerning Agency Function . . .
.
Section 11.11. Liability of Agent. . . . . . . . . . . . .
.
Section 11.12. Transfer of Agency Function . . . . . . . .
.
Section 11.13. Non-Receipt of Funds by the Agent . . . . .
.
Section 11.14. Withholding Taxes . . . . . . . . . . . . .
.
Section 11.15. Several Obligations and Rights of
Lenders. . . . . . . . . . . . . . . . . . . . . . . .
.
Section 11.16. Pro Rata Treatment of Loans, Etc. . . . . .
.
Section 11.17. Sharing of Payments Among Lenders . . . . .
.
Section 11.18. Security Documents. . . . . . . . . . . . .
.
Section 11.19. Collateral. . . . . . . . . . . . . . . . .
.
Section 11.20. Amendment of Article 11 . . . . . . . . . .
.
ARTICLE 12. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . .
.
Section 12.01. Amendments and Waivers. . . . . . . . . . .
.
Section 12.02. Usury . . . . . . . . . . . . . . . . . . .
.
Section 12.03. Expenses. . . . . . . . . . . . . . . . . .
.
Section 12.04. Survival. . . . . . . . . . . . . . . . . .
.
Section 12.05. Assignment; Participations. . . . . . . . .
.
Section 12.06. Notices . . . . . . . . . . . . . . . . . .
.
Section 12.07. Setoff. . . . . . . . . . . . . . . . . . .
.
SECTION 12.08. JURISDICTION; IMMUNITIES. . . . . . . . . .
.
Section 12.09. Table of Contents; Headings . . . . . . . .
.
Section 12.10. Severability. . . . . . . . . . . . . . . .
.
Section 12.11. Counterparts. . . . . . . . . . . . . . . .
.
Section 12.12. Integration . . . . . . . . . . . . . . . .
.
SECTION 12.13. GOVERNING LAW . . . . . . . . . . . . . . .
.
Section 12.14. Confidentiality . . . . . . . . . . . . . .
.
Section 12.15. Treatment of Certain Information. . . . . .
.
<PAGE>
EXHIBITS
Exhibit A Revolving Credit Note
Exhibit B Term Note
Exhibit C Unconditional Guaranty
Exhibit D1 Borrowing Base Certificate
Exhibit D2 Compliance Certificate
Exhibit E Opinion of Counsel to the Borrower and the
Guarantor
Exhibit F Security Agreement
Exhibit G Trademark Security Agreement
Exhibit H Pledge Agreement
Exhibit I Management Agreement
Exhibit J Affiliate Subordination Agreement
SCHEDULES
Schedule I Commitments
Schedule II Affiliates
Schedule III Credit Arrangements
Schedule IV Litigation
<PAGE>
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of August 9, 1995 among MISTIC
BRANDS, INC., a corporation organized under the laws of Delaware
(the "Borrower"), each of the lenders which is a signatory hereto
or which shall become a party hereto from time to time
(individually a "Lender" and collectively the "Lenders") and THE
CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), a national banking
association organized under the laws of the United States of
America, as agent for the Lenders (in such capacity, together
with
its successors in such capacity, the "Agent").
WHEREAS, the Borrower has been organized by Triarc
Companies,
Inc., a Delaware corporation (the "Guarantor"), for the purpose
of
effectuating the Mistic Acquisition;
WHEREAS, the Borrower shall, on the terms and conditions set
forth herein, incur Debt hereunder to finance the Mistic
Acquisition and for general working capital purposes; and
WHEREAS, the Guarantor shall unconditionally guaranty the
Debt of the Borrower incurred hereunder and the performance of
the
Borrower hereunder.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS.
Section 1.01. Definitions. As used in this Agreement the
following terms have the following meanings (terms defined in the
singular to have a correlative meaning when used in the plural
and
vice versa):
"Acceptable Acquisition" means any Acquisition which meets
all of the following conditions: (a) such Acquisition relates to
the Business and has been approved in good faith by the Board of
Directors of the Person making such Acquisition; (b) no Default
or
Event of Default exists or would exist after giving effect to
such
Acquisition; and (c) after considering the pro forma position of
the Consolidated Entities subsequent to such Acquisition, the
Borrower will continue to be in compliance with the financial
covenants contained in Article 9.
"Acquisition" means any transaction pursuant to which any
Consolidated Entity (a) acquires equity securities (or warrants,
options or other rights to acquire such securities) of any
Person,
(b) causes or permits any Person to be merged into any
Consolidated Entity, in any case pursuant to a merger, purchase
of
assets or any reorganization providing for the delivery or
issuance to the holders of such Person's then outstanding
securities, in exchange for such securities, of cash or
securities
of any Consolidated Entity, or a combination thereof, (c)
purchases all or substantially all of the business or assets of
any Person or (d) purchases assets of any Person other than raw
materials, inventory and equipment purchased in the ordinary
course of business.
"Additional Costs" shall have the meaning assigned to such
term in Section 4.01 hereof.
"Adjusted Working Capital" means, at any date of
determination thereof, the amount, if any, by which (a)
Consolidated Current Assets (other than cash and Cash
Equivalents)
exceed (b) Consolidated Current Liabilities (other than (i) the
outstanding principal amount of the Notes, (ii) the current
portion of Consolidated Funded Debt and (iii) any accrued
Management Fees).
"Affiliate" means any Person: (a) which directly or
indirectly controls, or is controlled by, or is under common
control with, any Consolidated Entity; (b) which directly or
indirectly beneficially owns or holds 10% or more of any class of
voting stock of any Consolidated Entity; (c) 10% or more of the
voting stock of which is directly or indirectly beneficially
owned
or held by any Consolidated Entity; or (d) which is a partnership
in which any Consolidated Entity is a general partner. The term
"control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting
securities, by contract, or otherwise.
"Affiliate Subordination Agreement" means the Affiliate
Subordination Agreement substantially in the form of Exhibit J to
be delivered by the Guarantor under the terms of this Agreement,
as amended or supplemented from time to time.
"Agent" shall have the meaning assigned to such term in the
introductory paragraph hereof.
"Agreement" means this Credit Agreement, as amended or
supplemented from time to time. References to Articles,
Sections,
Exhibits, Schedules and the like refer to the Articles, Sections,
Exhibits, Schedules and the like of this Agreement unless
otherwise indicated.
"Arkansas Litigation" means Raleigh Spring Water Company
d/b/a Clear Mountain Spring Water v. Joseph Victori Wines, Inc.,
Ouachita Coca-Cola Bottling and Coca-Cola Bottling Company of
Arkansas, Docket No. 92-4357, Circuit Court of Pulaski County,
Arkansas, Fifth Division.
"Assigned Agreements" means each and every one of the
leases,
contracts, permits, licenses, franchises and other agreements to
which any Obligor is a party or pursuant to which any Obligor has
been granted rights, including, without limitation, all supply
contracts, co-packer agreements, distribution agreements, all
Mistic Acquisition Documents, all leases and all policies of
property, casualty and liability insurance pursuant to which any
Obligor is a beneficiary.
"Banking Day" means any day on which commercial banks are
not
authorized or required to close in New York, New York and
whenever
such day relates to a Fixed Rate Loan or notice with respect to
any Fixed Rate Loan, a day on which dealings in Dollar deposits
are also carried out in the London interbank market.
"Borrower" shall have the meaning assigned to such term in
the introductory paragraph hereof.
"Borrowing Base" means, at any date of determination
thereof,
an amount determined by the Agent with reference to the most
recent Borrowing Base Certificate to be equal to the sum of (a)
80% of the aggregate book value (net of credit balances) of
Eligible Receivables, plus (b) 50% of the aggregate book value of
Eligible Inventory.
"Borrowing Base Certificate" means the borrowing base
certificate substantially in the form of Exhibit D1 to be
delivered by the Borrower under the terms of this Agreement.
"Business" means the business of researching, developing,
formulating, producing, marketing and selling of non-alcoholic
beverages including, without limitation, carbonated and
noncarbonated fruit drinks, ready-to-drink brewed iced teas and
naturally flavored sparkling waters or the ownership and/or
licensing of Trademarks in connection therewith.
"Capital Expenditure" means, with respect to any Person, any
expenditure made or obligation incurred by such Person to
purchase, acquire or construct fixed assets, plant and equipment
(including renewals, improvements, replacements and incurrence of
obligations under Capital Leases), but excluding expenditures
made
or obligations incurred in connection with an Acquisition.
"Capital Lease" means any lease which has been or should be
capitalized on the books of the lessee in accordance with GAAP.
"Cash Equivalents" means: (a) direct obligations of the
United States of America or any agency or instrumentality thereof
with maturities of one year or less from the date of acquisition;
(b) commercial paper of a domestic issuer rated at least "A-1" by
Standard & Poor's Corporation or "P-1" by Moody's Investors
Service, Inc.; (c) certificates of deposit and other time
deposits
with maturities of one year or less from the date of acquisition
issued by any commercial bank operating within the United States
of America having a combined capital and surplus in excess of
$100,000,000; (d) commercial paper, maturing not more than one
year after the date of acquisition, issued by a corporation
(other
than an Affiliate or Subsidiary of the Guarantor or the Borrower)
organized and existing under the laws of the United States of
America or any State thereof with a rating, at the time as of
which any investment therein is made, of "P-1" (or higher)
according to Moody's Investors Service Inc. or any successor
rating agency, or "A-1" (or higher) according to Standard &
Poor's
Corporation or any successor rating agency; (e) repurchase
obligations with a term of not more than 30 days for underlying
securities of the types described in clause (a) above entered
into
with any financial institution; and (f) money market or mutual
funds whose sole investments are comprised of investments
permitted under the foregoing clauses (a) through (e).
"Change of Control" means (a) the Guarantor or Nelson Peltz
and Peter May or any of the affiliates controlled by them,
including DWG Acquisition, L.P. or any affiliate thereof, shall
have ceased to own, directly or indirectly, at least 51% of the
Fully Diluted Outstanding Common Stock, (b) any Person or two or
more Persons acting in concert shall have acquired beneficial
ownership (within the meaning of Rules 13d-3 of the Securities
and
Exchange Commission under the Securities Exchange Act of 1934) of
(i) more than 10% of the Fully Diluted Outstanding Common Stock
(other than (w) the Guarantor, (x) any Affiliate, including,
without limitation, Nelson Peltz and Peter May and any of their
respective affiliates controlled by them including DWG
Acquisition
Group, L.P. or any affiliate thereof, so long as all such shares
shall remain subject to the Lien of the Pledge Agreement,
(y) Michael Weinstein, any member of his immediate family and any
trust for the benefit of any such family member or (z) Ernest
Cavallo, any member of his immediate family and any trust for the
benefit of any such family member) or (ii) more than 50% of the
outstanding shares of the common stock of the Guarantor (other
than Nelson Peltz and Peter May and any of their respective
affiliates controlled by them including DWG Acquisition Group,
L.P. or any affiliate thereof), (c) Michael Weinstein or Ernest
Cavallo shall have ceased to continue to serve in the operational
and managerial capacities in which they now serve or in enhanced
operational or managerial capacities with the Borrower and a
successor shall not be appointed within 180 days thereafter with
the prior consent of the Required Lenders (such consent not to be
unreasonably withheld or delayed) or (d) during any period of 12
consecutive months, individuals who at the beginning of such 12-
month period were directors of the Borrower cease for any reason
to constitute a majority of the Board of Directors of the
Borrower, unless their successors shall have been approved by a
majority of the continuing directors.
"`class' of Loans" shall have the meaning assigned to such
term in Section 2.01(c).
"Closing Date" means the date upon which the initial
borrowing or initial issuance of a Letter of Credit hereunder
occurs.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral" means all of any Obligor's or the Guarantor's
right, title and interest in and to Property in which such
Obligor
or the Guarantor has granted a Lien to the Agent under any
Facility Document.
"Commitments" means the Revolving Credit Commitments and the
Term Loan Commitments.
"Common Stock" shall mean (a) the common stock of the
Borrower, par value $1.00 per share, as authorized on the Closing
Date, (b) any other capital stock of any class or classes
(however
designated) of the Borrower, authorized on or after the Closing
Date, the holders of which shall have the right, without
limitation as to amount, either to all or to a share of the
balance of current dividends and liquidating dividends after the
payment of dividends and distributions on any shares entitled to
preference, and the holders of which shall ordinarily, in the
absence of contingencies or in the absence of any provision to
the
contrary in the charter of the Borrower, be entitled to vote for
the election of a majority of directors of the Borrower (even
though the right so to vote has been suspended by the happening
of
such a contingency or provision) and (c) any other securities
into
which or for which any of the securities described in (a) or (b)
may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or
otherwise.
"Compliance Certificate" means the compliance certificate
substantially in the form of Exhibit D2 to be delivered by the
Borrower under the terms of this Agreement.
"Consolidated Capital Expenditures" means, with respect to
any fiscal period, the aggregate amount of Capital Expenditures
made by the Consolidated Entities for such period, as determined
on a consolidated basis in accordance with GAAP.
"Consolidated Current Assets" means, at any date of
determination thereof, all assets of the Consolidated Entities
treated as current assets, as determined on a consolidated basis
in accordance with GAAP.
"Consolidated Current Liabilities" means, at any date of
determination thereof, all liabilities of the Consolidated
Entities treated as current liabilities, as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Debt" means, at any date of determination
thereof, the aggregate amount of Debt of the Consolidated
Entities
(other than Debt attributable to any Permitted SAR prior to the
time of exercise of such Permitted SAR), as determined on a
consolidated basis in accordance with GAAP.
"Consolidated EBIT" means, with respect to any fiscal
period,
the sum of (a) Consolidated Net Income for such period, plus (b)
the aggregate amount of (i) income taxes and (ii) Consolidated
Interest Expense, to the extent that such aggregate amount was
deducted in the computation of Consolidated Net Income for such
period.
"Consolidated EBITA" means, with respect to any fiscal
period, the sum of (a) Consolidated EBIT for such period, plus
(b)
the aggregate amount of amortization, to the extent that such
aggregate amount was deducted in the computation of Consolidated
EBIT for such period.
"Consolidated EBITDA" means, with respect to any fiscal
period, the sum of (a) Consolidated EBITA for such period, plus
(b) the aggregate amount of depreciation, to the extent that such
aggregate amount was deducted in the computation of Consolidated
EBITA for such period.
"Consolidated Entities" means, collectively, the Borrower
and
each Subsidiary of the Borrower whose accounts are or are
required
to be consolidated or included with the accounts of the Borrower
in accordance with GAAP.
"Consolidated Funded Debt" means, at any date of
determination thereof, the result of (a) the aggregate amount of
Consolidated Debt minus (b) the aggregate amount of Consolidated
Debt that is payable on demand or within one year of the creation
thereof other than any such Debt that, although payable within
one
year, constitutes payments required to be made on account of
principal of indebtedness expressed to mature more than one year
from the date of creation thereof.
"Consolidated Interest Expense" means, with respect to any
fiscal period, the amount of interest accrued on, and with
respect
to, Consolidated Debt (including, without limitation, Interest
Rate Protection Agreement costs and imputed interest on Capital
Leases but excluding any interest accruing on the judgment
entered
into in connection with the Arkansas Litigation) plus all finance
charges, premiums and other fees, charges and expenses accrued
with respect to Consolidated Debt during such period, as
determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, with respect to any fiscal
period, net income of the Consolidated Entities for such period
other than (a) extraordinary or nonrecurring gains or losses and
(b) expenses associated with any Permitted SAR prior to the time
of exercise of such Permitted SAR, as determined on a
consolidated
basis in accordance with GAAP.
"Consolidated Net Worth" means, at any date of determination
thereof, the amount of any capital stock, paid in capital and
similar equity accounts plus (or minus in the case of a deficit)
the capital surplus and retained earnings of the Consolidated
Entities at such date, as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Principal Payments" means, with respect to any
fiscal period, all principal due on Consolidated Debt (including,
without limitation, imputed principal on Capital Leases) for such
period, as determined on a consolidated basis in accordance with
GAAP.
"Current Ratio" means, at any date of determination thereof,
the ratio of (a) Consolidated Current Assets (other than prepaid
expenses) to (b) Consolidated Current Liabilities.
"Customer" means the account debtor with respect to any of
the Receivables or the purchaser of goods, services or both with
respect to any contract or contract right, or any Person who
enters into any contract or other arrangement with any Obligor,
pursuant to which such Obligor is to deliver any personal
Property
or perform any services.
"Debt" means, with respect to any Person (without
duplication): (a) indebtedness of such Person for borrowed money;
(b) indebtedness for the deferred purchase price of Property or
services (except trade payables in the ordinary course of
business); (c) Unfunded Benefit Liabilities of such Person; (d)
the face amount of any outstanding letters of credit issued for
the account of such Person; (e) obligations arising under
banker's
acceptance facilities; (f) Guaranties of such Person;
(g) obligations of other Persons secured by any Lien on Property
of such Person; (h) obligations of such Person as lessee under
Capital Leases; (i) the net obligations of such Person in respect
of Interest Rate Protection Agreements, foreign currency exchange
agreements, commodity purchase or option agreements or other
interest or exchange rate or commodity price hedging
arrangements;
and (j) all capital stock of such Person subject to repurchase or
redemption during the term of this Agreement, other than at the
sole option of such Person.
"Default" means any event which with the giving of notice or
lapse of time, or both, would become an Event of Default.
"Default Rate" means, with respect to the principal of any
Loan and, to the extent permitted by law, any other amount
payable
by any Obligor or the Guarantor under this Agreement, any Note or
any other Facility Document, or any Note that is not paid when
due
(whether at stated maturity, by acceleration or otherwise), a
rate
per annum during the period from and including the due date, to,
but excluding the date on which such amount is paid in full equal
to two percent (2%) above the Variable Rate as in effect from
time
to time plus the Interest Margin (if any); provided that, if the
amount so in default is principal of a Fixed Rate Loan and the
due
date thereof is a day other than the last day of the Interest
Period therefor, the "Default Rate" for such principal shall be,
for the period from and including the due date and to but
excluding the last day of the Interest Period therefor, two
percent (2%) above the interest rate for such Loan as provided in
Section 2.11 hereof and, thereafter, the rate provided for above
in this definition.
"Distribution" means, with respect to any Person, the
declaration or payment of any dividends by such Person, or the
purchase, redemption, retirement or other acquisition for value
of
any of its capital stock now or hereafter outstanding, or the
making of any distribution of assets to its stockholders as such
whether in cash, assets or in obligations of such Person, or the
allocation or other setting apart of any sum for the payment of
any dividend or distribution on, or for the purchase, redemption
or retirement of any shares of its capital stock, or the making
of
any other distribution by reduction of capital or otherwise in
respect of any shares of its capital stock; provided that the
term
"Distribution" shall not include any payments made under the
Management Agreement or the Tax Sharing Agreement.
"Dollars" and the sign "$" mean lawful money of the United
States of America.
"Domestic Subsidiary" means any direct or indirect
Subsidiary
of the Borrower which is not a Foreign Subsidiary.
"Eligible Inventory" means, as of any date of determination
thereof, all Inventory of the Obligors as to which the Agent
holds
a first priority perfected security interest, provided that such
Inventory: (a) is located in the United States; (b) does not
include unsalable goods returned or rejected by a Customer; and
(c) does not include goods to be returned to any Obligor's
suppliers.
"Eligible Receivables" means, as of any date of
determination
thereof, all Receivables of the Obligors as to which the Agent
holds a first priority perfected security interest, provided that
such Receivables: (a) arose in the ordinary course of business of
the Obligors; (b) do not represent amounts owed to the Obligors
for goods shipped on a consignment or "bill and hold" basis;
(c) represent amounts owed for goods sold or leased or services
rendered to a Customer; (d) are payable in Dollars; (e) do not
include any amount which is not due or has not been paid within
90
days of the invoice date; (f) do not have as the Customer a
Person
that is the subject of any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution or
liquidation law; (g) do not have as the Customer any Affiliate,
except for Receivables due from any Affiliate that are incurred
in
the ordinary course of business and in an arm's-length
transaction
in accordance with Section 8.09 so long as the aggregate amount
of
such Receivables does not exceed 20% of the aggregate unpaid
principal balance of all Receivables due from all Customers; (h)
do not have as the Customer a Person located outside the United
States unless the Receivable is supported by a letter of credit,
FICA insurance or other appropriate credit support; (i) do not
include any portion of a Receivable as to which the Customer has
asserted any defense; (j) do not include that portion of any
Receivable as to which any offset or counterclaim has been
asserted or can be asserted by any distributor for any
promotional, advertising or other expense; (k) do not include the
amount by which the aggregate unpaid principal balance of all
Receivables due from any single Customer exceeds 25% of the
aggregate unpaid principal balance of all Receivables due from
all
Customers; (l) do not include any Receivable due from a Customer
if 35% or more of the aggregate Receivables due from that
Customer
have not been paid within 90 days of the invoice date; (m) do not
include any Receivable arising out of any Assigned Agreement
which
by its terms, forbids or prohibits the assignment of such
Receivable or such Assigned Agreement for collateral purposes;
and
(n) do not include any Receivable (or portion thereof) the Agent
in the exercise of its good faith business judgment has deemed
ineligible because of the impairment of the collateral value
thereof to the Lenders, the impairment of the Lenders to realize
such value thereof or the significant uncertainty as to the
ability of the Customer to make payment thereunder.
"Employee SARs" means the stock appreciation rights issued
or
to be issued at a fair market value base price to directors,
officers or employees of or consultants to any Consolidated
Entity
pursuant to any qualified or non-qualified stock option plan or
agreement, employee stock ownership plan, stock purchase
agreement, stock plan, stock restriction agreement, employment
agreement or consulting agreement or such other options,
arrangements, agreements or plans approved by the Board of
Directors of the Borrower so long as the aggregate number of the
measurement shares to which such appreciation rights apply does
not exceed 10% of the Fully Diluted Outstanding Common Stock as
of
the Closing Date.
"Environmental Laws" means any and all applicable federal,
state, local and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders, decrees, permits, licenses, agreements
or other governmental restrictions relating to the environment or
to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or
hazardous substances or wastes into the environment including,
without limitation, ambient air, surface water, ground water, or
land, or otherwise relating to the manufacture, processing
distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, including any rules and
regulations promulgated thereunder.
"ERISA Affiliate" means any corporation or trade or business
which is a member of any group of organizations (i) described in
Section 414(b) or (c) of the Code of which any Consolidated
Entity
is a member, or (ii) solely for purposes of potential liability
under Section 302(c)(11) of ERISA and Section 412(c)(11) of the
Code and the lien created under Section 302(f) of ERISA and
Section 412(n) of the Code, described in Section 414(m) or (o) of
the Code of which any Consolidated Entity is a member.
"Event of Default" shall have the meaning assigned to such
term in Section 10.01 hereof.
"Excess Cash Flow" means, with respect to any Fiscal Year,
Consolidated EBITDA for such Fiscal Year plus the result of (a)
the sum of (i) non-cash charges, extraordinary or nonrecurring
non-cash losses incurred during such Fiscal Year (including,
without limitation, accrued but unpaid Management Fees and
expenses attributable to the Permitted SARs during such period)
to
the extent included in determining Consolidated EBITDA), plus
(ii)
Management Fees actually paid to the extent exceeding (A) during
the Fiscal Years ending on December 31, 1996 and December 31,
1997, $500,000 and (B) during each Fiscal Year ending thereafter,
$750,000 during each such Fiscal Year, plus (iii) any decrease in
Adjusted Working Capital for such Fiscal Year, minus (b) the sum
of (i) extraordinary or nonrecurring non-cash gains realized
during such Fiscal Year (to the extent included in determining
Consolidated EBITDA), plus (ii) the aggregate of all Consolidated
Principal Payments made during such Fiscal Year (other than any
Excess Cash Flow payments made pursuant to Section 2.06) on, or
with respect to, Consolidated Debt (excluding the Revolving
Credit
Notes), plus (iii) the aggregate amount of Consolidated Interest
Expense paid during such Fiscal Year, plus (iv) income taxes
paid,
including, without limitation, payments under the Tax Sharing
Agreement, by the Consolidated Entities during such Fiscal Year,
plus (v) Consolidated Capital Expenditures made during such
Fiscal
Year not otherwise deducted from Consolidated EBITDA (to the
extent that such Consolidated Capital Expenditures were permitted
hereunder), plus (vi) any increase in Adjusted Working Capital
for
such Fiscal Year plus (vii) net gains on asset sales (to the
extent included in determining Consolidated EBITDA).
"Facility Documents" means this Agreement, the Notes, the
Letters of Credit, any Interest Rate Protection Agreement to
which
a Lender is a party, the SAR Agreement, the SARs and the Security
Documents, as each may be amended or supplemented from time to
time.
"Federal Funds Rate" means, for any day, the rate per annum
(expressed on a 365/366 day basis of calculation) equal to the
weighted average of the rates on overnight federal funds
transactions as published by the Federal Reserve Bank of New York
for such day (or for any day that is not a Banking Day, for the
immediately preceding Banking Day).
"Fiscal Quarter" means any calendar quarter.
"Fiscal Year" means any calendar year.
"Fixed Base Rate" means with respect to any Interest Period
for a Fixed Rate Loan: the rate per annum determined by the Agent
to be the arithmetic mean (rounded upwards, if necessary, to the
nearest 1/32 of 1%) of the offered rates for Dollar deposits with
a term comparable to such Interest Period that appear on "Page
3750" on the Telerate Service (or such other page as may replace
such page on such service for the purpose of displaying the rates
at which Dollar deposits are offered by leading banks in the
London interbank deposit market) at approximately 11:00 a.m,
London time, on the second full Banking Day preceding the first
day of such Interest Period; provided, however, that if there
shall at any time no longer exist a page on the Telerate Service
that displays the rates at which Dollar deposits are offered by
leading banks in the London interbank market, "Fixed Base Rate"
shall mean, with respect to any Interest Period for a Fixed Rate
Loan, the rate per annum (rounded upwards, if necessary, to the
nearest 1/32 of 1%) quoted as the rate at which Dollar deposits
are offered by the Agent to leading banks in the London interbank
deposit market at approximately 11:00 a.m., London time, on the
second full Banking Day preceding the first day of such Interest
Period in an amount substantially equal to the amount of the
related Fixed Rate Loan of the Agent (in its capacity as a
Lender)
for a term equal to such Interest Period.
"Fixed Charge Coverage Ratio" means, at any date of
determination thereof, the ratio of (a) the result of (i)
Consolidated EBITDA for the four most recently ended Fiscal
Quarters, minus (ii) the aggregate amount of Consolidated Capital
Expenditures during such four most recently ended Fiscal Quarters
to (b) the sum of (i) all scheduled payments of principal due
during such four most recently ended Fiscal Quarters (excluding
any Excess Cash Flow repayments pursuant to Section 2.06) on, or
with respect to, Consolidated Debt (including, without
limitation,
imputed principal on Capital Leases), plus (ii) Consolidated
Interest Expense during such four most recently ended Fiscal
Quarters; provided that if such date is on or before June 30,
1996, all references to the four most recently ended Fiscal
Quarters contained in this definition shall be to the fiscal
period beginning on the Closing Date and ending on such date.
"Fixed Rate" means, for any Fixed Rate Loan for any Interest
Period therefor, a rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of one percent (1%)) reasonably determined
by
the Agent to be equal to the quotient of (i) the Fixed Base Rate
for such Loan for such Interest Period, divided by (ii) one minus
the Reserve Requirement for such Loan for such Interest Period.
"Fixed Rate Loan" means any Loan when and to the extent the
interest rate therefor is determined on the basis of the
definition "Fixed Rate."
"Food and Drug Act" means the Federal Food, Drug and
Cosmetic
Act, 21 U.S.C. Section 301 et seq., and the rules and regulations
promulgated thereunder.
"Foreign Subsidiary" means each direct or indirect
Subsidiary
of the Borrower which was created or organized under the laws of
a jurisdiction other than the United States of America, any state
thereof or the District of Columbia.
"Forfeiture Proceeding" means any action or proceeding
affecting any Consolidated Entity or the Guarantor before any
Governmental Authority or the receipt of notice which could
reasonably be expected to result in the seizure or forfeiture of
any of their respective Properties, which could reasonably be
expected to have a Material Adverse Effect.
"Fully Diluted Outstanding Common Stock" means, at any date
of determination thereof, the number of issued shares actually
outstanding (excluding any shares of the Borrower held by the
Borrower as "treasury stock") at such time together with the
number of shares of Common Stock which could be acquired at such
time pursuant to all rights, options, warrants or convertible or
exchangeable securities entitling the holders thereof to
subscribe
for or purchase or otherwise acquire shares of Common Stock as if
such rights, options, warrants or convertible or exchangeable
securities have been fully exercised or converted and the full
amount of all Common Stock obtained in connection therewith has
been issued.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time, applied
on a basis consistent with those used in the preparation of the
financial statements referred to in Section 6.05 (except for
changes concurred in by the Borrower's independent public
accountants).
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Guarantor" shall have the meaning assigned to such term in
the first recital hereof.
"Guaranty" means, with respect to any Person, guaranties,
endorsements (other than for collection in the ordinary course of
business) and other contingent obligations of such Person with
respect to the obligations of any other Person (including, but
not
limited to, an agreement to purchase any obligation, stock,
assets, goods or services or to supply or advance any funds,
assets, goods or services, or an agreement to maintain or cause
such Person to maintain a minimum working capital or net worth or
otherwise to assure the creditors of any such other Person
against
loss).
"Hazardous Materials" means any and all pollutants,
contaminants, toxic or hazardous wastes or any other substances,
the removal of which is required or the generation, manufacture,
refining, production, processing, treatment, storage, handling,
transportation, transfer, use, disposal, release, discharge,
spillage, seepage, or filtration of which is restricted,
prohibited or penalized by any applicable Environmental Law.
"Interest Coverage Ratio" means, at any date of
determination
thereof, the ratio of (a) Consolidated EBITA for the four most
recently ended Fiscal Quarters to (b) Consolidated Interest
Expense for such four most recently ended Fiscal Quarters;
provided that if such date is on or before June 30, 1996, all
references to the four most recently ended Fiscal Quarters
contained in this definition shall be to the fiscal period
beginning on the Closing Date and ending on such date.
"Interest Margin" means (a) if such Loan is a Variable Rate
Loan, 1.50% per annum or (b) if such Loan is a Fixed Rate Loan,
2.75% per annum.
"Interest Period" means, with respect to any Fixed Rate
Loan,
the period commencing on the date such Loan is made, converted
from a Variable Rate Loan or renewed, as the case may be, and
ending, as the Borrower may select pursuant to Section 2.07, on
the numerically corresponding day in the first, second, third, or
sixth calendar month thereafter, provided that each such Interest
Period which commences on the last Banking Day of a calendar
month
(or on any day for which there is no numerically corresponding
day
in the appropriate subsequent calendar month) shall end on the
last Banking Day of the appropriate calendar month.
"Interest Rate Protection Agreement" means, with respect to
any Person, an interest rate swap, cap or collar agreement or
similar arrangement between one or more financial institutions
(including, without limitation, the Lenders) and such Person
providing for the transfer or mitigation of interest risks either
generally or under specific contingencies.
"Inventory" means all of each Obligor's "inventory" (as such
term is defined in the UCC) now owned or hereafter acquired,
including, without limitation, all goods, merchandise and other
personal Property, whether tangible or intangible, wherever
located, furnished under any contract of service or held for sale
or lease, all raw materials, work in process, finished goods and
materials and supplies of any kind, nature or description which
are or might be used or consumed in such Obligor's business or
used in selling or finishing of such goods, merchandise and other
personal Property, and all documents of title or other documents
representing them.
"Investment" means any loan or advance to any Person or any
purchase or other acquisition of any capital stock, assets,
obligations or other securities of and Person, or any capital
contribution to, investment in, or other acquisition of any
interest in, any Person.
"Issuing Lender" means The Chase Manhattan Bank (National
Association), a national banking association organized under the
laws of the United States of America, acting in its capacity as a
Lender hereunder.
"Knowledge" means, with respect to any Person, after
reasonable inquiry, no information has come to the attention of
such Person, which information has given or should have
reasonably
given such Person actual or constructive knowledge of facts
contrary to the existence of or absence of such facts indicated.
"Lender" shall have the meaning assigned to such term in the
introductory paragraph hereof.
"Lending Office" means, for each Lender and for each type of
Loan, the lending office of such Lender (or of an affiliate of
such Lender) designated as such for such type of Loan on its
signature page hereof or such other office of such Lender (or of
an affiliate of such Lender) as such Lender may from time to time
specify to the Agent and the Borrower as the office by which its
Loans of such type are to be made and maintained.
"Letter of Credit Availability" means, at any date of
determination thereof, the amount by which (a) the lesser of (i)
the result of (A) the aggregate amount of the Revolving Credit
Commitments as of such date, minus (B) the unpaid aggregate
principal amount of the Revolving Credit Loans then outstanding
and (ii) $5,000,000 exceeds (b) the aggregate amount of the
Letter
of Credit Obligations at such date.
"Letter of Credit Funding" shall have the meaning assigned
to
such term in Section 3.05(b) hereof.
"Letter of Credit Obligations" means, at any date of
determination thereof, all liabilities of the Borrower with
respect to Letters of Credit, whether or not any liability is
contingent, including (without limitation) the sum (without
duplication) of (a) the aggregate amount available to be drawn
under the Letters of Credit then outstanding plus (b) the
aggregate amount of all unpaid Reimbursement Obligations;
provided
that such amount shall be reduced to the extent that (x) the sum
of (i) the Letter of Credit Availability plus (ii) the aggregate
amount of all Revolving Credit Loans outstanding exceeds (y) the
Borrowing Base.
"Letters of Credit" shall have the meaning assigned to such
term in Section 3.01(a) hereof.
"Leverage Ratio" means, at any date of determination
thereof,
the ratio of (a) Consolidated Funded Debt at such date (after
giving effect to any amortization payment made on such date) to
(b) Consolidated EBITDA for the four most recently ended Fiscal
Quarters; provided that (x) if such date is on or before June 30,
1996, Consolidated Funded Debt shall be equal to the product of
(i) Consolidated Funded Debt times (ii) a fraction, the numerator
of which is equal to the number of days from the Closing Date to
such date and the denominator of which is 366, (y) if such date
is
on or before June 30, 1996, all references to the four most
recently ended Fiscal Quarters contained in this definition shall
be to the fiscal period beginning on the Closing Date and ending
on such date and (z) there shall be included in Consolidated
EBITDA the net income (or loss) plus interest expense, taxes,
amortization and depreciation of any Person whose stock or assets
were acquired by any Consolidated Entity during such period
accrued from the beginning of the period for which Consolidated
EBITDA is being measured to the date of such acquisition.
"Lien" means any lien (statutory or otherwise), security
interest, mortgage, deed of trust, priority, pledge, charge,
conditional sale, title retention agreement, financing lease or
other encumbrance or similar right of others, or any agreement to
give any of the foregoing.
"Loan" means any loan made by a Lender pursuant to Section
2.01.
"Management Agreement" means the Management Services
Agreement dated as of the date hereof between the Borrower and
the
Guarantor, substantially in the form of Exhibit I, as the same
may
be amended or supplemented from time to time.
"Management Fees" means all fees and other amounts payable
by
the Consolidated Entities to the Guarantor in respect of
"Services" (as such term is defined under the Management
Agreement) provided by the Guarantor (including, without
limitation, fees due, amounts accrued, and overhead and
administrative costs billed by the Guarantor to the Borrower).
"Material Adverse Effect" means any material adverse effect
on (a) the business, profits, Properties or condition of the
Consolidated Entities, taken as a whole, (b) the ability of any
Obligor to perform any of its material obligations under each of
the Facility Documents to which it is a party, (c) the binding
nature, validity or enforceability of any of the Facility
Documents or (d) the validity, perfection, priority or
enforceability of the Liens in favor of the Agent securing the
Obligations hereunder, which, in each case, arises from, or
reasonably could be expected to arise from, any action or
omission
of action on the part of any Consolidated Entity or the Guarantor
or the occurrence of any event or the existence of any fact or
condition in respect of any Consolidated Entity or any of their
respective Properties.
"Mistic" means, collectively, Joseph Victori Wines, Inc., a
New York corporation, Best Flavors, Inc., a Nevada corporation,
and Nature's Own Beverage Company, a Delaware corporation.
"Mistic Acquisition" means the acquisition by the Borrower
of
substantially all of the Business of Mistic pursuant to the terms
of the Mistic Acquisition Documents.
"Mistic Acquisition Documents" means (a) the Mistic Asset
Purchase Agreement, (b) the Consulting Agreement dated as of the
Closing Date between the Borrower and Joseph Umbach, (c) the
Product and Royalty Agreement dated as of the Closing Date
between
the Borrower and each of the Mistic Sellers and (d) each of the
other agreements and instruments to be executed at the closing of
the Mistic Acquisition pursuant to the terms of each of such
Mistic Acquisition Documents.
"Mistic Acquisition Effective Time" means the time on the
Closing Date immediately after the Mistic Acquisition shall have
become effective.
"Mistic Asset Purchase Agreement" means the Asset Purchase
Agreement dated as of the date hereof among the Mistic Sellers,
the Borrower and the Guarantor.
"Mistic Sellers" means Mistic and Joseph Umbach.
"Multiemployer Plan" means, at a particular time, an
employee
benefit plan (a) which is a "multiemployer plan" as defined in
Section 3(37) of ERISA and which is contributed to by any
Consolidated Entity or any ERISA Affiliate or (b) with respect to
which any Consolidated Entity or any ERISA Affiliate would have
liability under Section 4212(c) of ERISA in the event of a
withdrawal or plan termination at such time.
"Notes" means the Revolving Credit Notes and the Term Notes.
"Obligations" means the unpaid principal of and interest on
(including interest accruing on or after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Notes and all other
obligations
and liabilities of any Obligor to the Agent or any Lender,
whether
direct or indirect, absolute or contingent, due or to become due,
or now existing or hereafter incurred, which may arise under, out
of, or in connection with, this Agreement, any Note, any Letter
of
Credit, any Interest Rate Protection Agreement to which a Lender
is a party, any other Facility Document and any other document
made, delivered or given in connection therewith or herewith,
whether on account of principal, interest, Guaranties,
reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all reasonable fees and
disbursements of counsel to the Agent or any Lender) or
otherwise.
"Obligors" means the Borrower and the Subsidiaries of the
Borrower which guaranty the Obligations in accordance with
Section
7.10 hereof.
"Participating Interest" means, with respect to each Letter
of Credit, (a) in the case of the Issuing Lender, its interest in
such Letter of Credit after giving effect to the granting of any
participating interest therein pursuant hereto and (b) in the
case
of each Participating Lender, its undivided participating
interest
in such Letter of Credit.
"Participating Lender" means, with respect to any Letter of
Credit, any Lender (other than the Issuing Lender) with respect
to
its Participating Interest in each Letter of Credit.
"Payor" shall have the meaning assigned to such term in
Section 11.13 hereof.
"PBGC" means the Pension Benefit Guaranty Corporation and
any
entity succeeding to any or all of its functions under ERISA.
"Permitted SARs" means the SARs and the Employee SARs.
"Person" means an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other
entity
of whatever nature.
"Plan" means, at a particular time, any employee benefit
plan
(other than a Multiemployer Plan) (i) which is covered by Title
IV
of ERISA and which is maintained or contributed to by any
Consolidated Entity or any ERISA Affiliate or (ii) with respect
to
which any Consolidated Entity or any ERISA Affiliate would have
any liability under Section 4069 of ERISA if such plan were
terminated at such time.
"Pledge Agreement" means the Pledge Agreement substantially
in the form of Exhibit H to be delivered by the Guarantor under
the terms of this Agreement, as amended or supplemented from time
to time.
"Prime Rate" means that rate of interest from time to time
announced by the Reference Lender at its Principal Office as its
prime commercial lending rate.
"Principal Office" means the principal office of the Agent,
presently located at 1 Chase Manhattan Plaza, New York, New York
10081.
"Pro Forma Balance Sheet" shall have the meaning assigned to
such term in Section 6.05(b) hereof.
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, and whether tangible or
intangible.
"Purchase Money Lien" means a Lien on any Property acquired
by any Consolidated Entity (including Property acquired pursuant
to an Acceptable Acquisition) or placed on any Property in order
to finance the acquisition of such Property, or the assumption of
any Lien on Property existing at the time of the acquisition of
such Property or of the Person holding such Property or a Lien
incurred in connection with any conditional sale or other title
retention agreement or a Capital Lease.
"Receivables" means all of each Obligor's accounts, contract
rights, instruments, documents, chattel paper, general
intangibles
relating to accounts, drafts and acceptances, and all other forms
of obligations owing to such Obligor arising out of or in
connection with the sale or lease of Inventory or for services
rendered, all guarantees and other security therefor, whether
secured or unsecured, now existing or hereafter created, and
whether or not specifically sold or assigned to the Agent under
the Security Agreement or under any other Facility Document.
"Reference Lender" means The Chase Manhattan Bank (National
Association) (or, with respect to Fixed Rate Loans, if The Chase
Manhattan Bank (National Association) no longer quotes on the
London interbank market, such successor leading bank in the
London
interbank market which shall be reasonably appointed by the Agent
and shall be reasonably acceptable to the Borrower).
"Regulation D" means Regulation D of the Board of Governors
of the Federal Reserve System as the same may be amended or
supplemented from time to time.
"Regulation G" means Regulation G of the Board of Governors
of the Federal Reserve System as the same may be amended or
supplemented from time to time.
"Regulation T" means Regulation T of the Board of Governors
of the Federal Reserve System as the same may be amended or
supplemented from time to time.
"Regulation U" means Regulation U of the Board of Governors
of the Federal Reserve System as the same may be amended or
supplemented from time to time.
"Regulation X" means Regulation X of the Board of Governors
of the Federal Reserve System as the same may be amended or
supplemented from time to time.
"Regulatory Change" means, with respect to any bank, any
change after the date of this Agreement in United States federal,
state, municipal or foreign laws or regulations (including
without
limitation Regulation D) or the adoption or making after such
date
of any written interpretations, directives or requests applying
to
a class of banks of which such bank is a member, of or under any
United States, federal, state, municipal or foreign laws or
regulations (whether or not having the force of law) by any court
or governmental or monetary authority charged with the
interpretation or administration thereof.
"Reimbursement Obligation" means the obligation of the
Borrower to reimburse the Issuing Lender in accordance with the
terms of this Agreement for the payment made by the Issuing
Lender
under any Letter of Credit.
"Required Lenders" means, at any time while no Obligations
are outstanding, Lenders having at least 51% of the aggregate
amount of the Revolving Credit Commitments and, at any time while
Obligations are outstanding, Lenders holding at least 51% of the
aggregate principal amount of the Obligations.
"Required Payment" shall have the meaning assigned to such
term in Section 11.13 hereof.
"Reserve Requirement" means for any Fixed Rate Loan for any
Interest Period therefor, the average maximum rate (expressed as
a decimal) at which reserves (including any marginal,
supplemental
or emergency reserves) are required to be maintained during such
Interest Period under Regulation D by member banks of the Federal
Reserve System in New York City with deposits exceeding
$1,000,000,000 against "Eurocurrency liabilities" (as such term
is
used in Regulation D). Without limiting the effect of the
foregoing, the Reserve Requirement shall reflect any other
reserves required to be maintained by such member banks by reason
of any Regulatory Change against (i) any category of liabilities
which includes deposits by reference to which the Fixed Base Rate
for Fixed Rate Loans is to be determined as provided in the
definition of "Fixed Base Rate" in this Section 1.01 or (ii) any
category of extensions of credit or other assets which include
Fixed Rate Loans.
"Revolving Credit Commitment" means, with respect to each
Lender, the obligation of such Lender to make Revolving Credit
Loans hereunder in the aggregate principal amount set forth in
Schedule I, as such amount may be reduced or otherwise modified
from time to time.
"Revolving Credit Commitment Percentage" means, as to any
Lender at any date of determination thereof, the percentage of
the
aggregate Revolving Credit Commitments constituted by such
Lender's Revolving Credit Commitment at such date.
"Revolving Credit Loan" shall have the meaning assigned to
such term in Section 2.01(a) hereof.
"Revolving Credit Notes" means the promissory notes issued
by
the Borrower in the form of Exhibit A hereto evidencing the
Revolving Credit Loans made by a Lender hereunder and all
promissory notes delivered in substitution or exchange therefor,
as amended or supplemented from time to time.
"Revolving Credit Termination Date" means the fourth
anniversary of the Closing Date.
"SAR Agreement" means the Stock Appreciation Right Agreement
dated as of the date hereof between the Borrower and the Agent
pursuant to which the SARs are issued.
"SARs" means the stock appreciation rights issued to the
Agent on the Closing Date.
"Security Agreement" means the Security Agreement in the
form
of Exhibit F to be delivered by the Borrower under the terms of
this Agreement, as amended or supplemented from time to time.
"Security Documents" means the Unconditional Guaranty, the
Security Agreement, the Trademark Security Agreement, the Pledge
Agreement, the Affiliate Subordination Agreement and each other
security document that may from time to time be delivered to the
Agent in connection herewith or therewith.
"Special Trademark Subsidiaries" means those Wholly-Owned
Subsidiaries of the Borrower created for the sole purpose of
owning Trademarks.
"Subsidiary" means, with respect to any Person, any
corporation or other entity of which at least a majority of the
securities or other ownership interest having ordinary voting
power (absolutely or contingently) for the election of directors
or other persons performing similar functions are at the time
owned directly or indirectly by such Person. "Wholly-Owned
Subsidiary" means, with respect to any Person, any such
corporation or other entity of which all of such securities or
other ownership interests are so owned by such Person.
"Tax Sharing Agreement" means the Tax Sharing Agreement
dated
as of the date hereof between the Guarantor and the Borrower, as
in effect on the Closing Date, as the same may be amended or
supplemented from time to time.
"Term Loan" shall have the meaning assigned to such term in
Section 2.01(b) hereof.
"Term Loan Commitment" means, with respect to each Lender,
the obligation of such Lender to make a Term Loan under this
Agreement in the aggregate principal amount set forth in Schedule
I.
"Term Loan Percentage" means, as to any Lender at any date
of
determination thereof, the percentage of the aggregate
outstanding
principal amount of Term Loans constituted by the outstanding
principal amount of such Lender's Term Loan at such date.
"Term Loan Termination Date" means September 30, 2001.
"Term Notes" means the promissory notes issued by the
Borrower in the form of Exhibit B hereto evidencing the Term Loan
made by a Lender hereunder and all promissory notes delivered in
substitution or exchange therefor, as amended or supplemented
from
time to time.
"Termination Date" means, with respect to any Revolving
Credit Loan, the Revolving Credit Termination Date, and, with
respect to any Term Loan, the Term Loan Termination Date.
"Trademark Security Agreement" means the Trademark Security
Agreement in the form of Exhibit G to be delivered by the
Borrower
under the terms of this Agreement, as amended or supplemented
from
time to time.
"Trademarks" shall have the meaning assigned to such term in
the Trademark Security Agreement.
"Transferor Lender" shall have the meaning assigned to such
term in Section 12.05(c) hereof.
"`type' of Loans" shall have the meaning assigned to such
term in Section 2.01(c) hereof.
"UCC" means the Uniform Commercial Code as in effect in the
State of New York.
"UCP" means the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce,
Publication No. 500.
"Unconditional Guaranty" means the Unconditional Guaranty in
the form of Exhibit C to be delivered by the Guarantor under the
terms of this Agreement, as amended or supplemented from time to
time.
"Unfunded Benefit Liabilities" means, with respect to any
Plan, the amount (if any) by which the present value of all
benefit liabilities (within the meaning of Section 4001(a)(16) of
ERISA) under the Plan exceeds the fair market value of all Plan
assets allocable to such benefit liabilities, as determined on
the
most recent valuation date of the Plan and in accordance with the
provisions of ERISA for calculating the potential liability of
any
Consolidated Entity or any ERISA Affiliate under Title IV of
ERISA.
"Variable Rate" means, for any day, the higher of (a) the
Federal Funds Rate for such day plus 1/2 of one percent and (b)
the Prime Rate for such day.
"Variable Rate Loan" means any Loan when and to the extent
the interest rate for such Loan is determined in relation to the
Variable Rate.
Section 1.02. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with
GAAP, and all financial data required to be delivered hereunder
shall, to the extent GAAP is applicable, be prepared in
accordance
with GAAP.
ARTICLE 2. THE CREDIT.
Section 2.01. Loans. (a) Subject to the terms and
conditions of this Agreement, each of the Lenders severally
agrees
to make revolving credit loans (the "Revolving Credit Loans") to
the Borrower from time to time from and including the Closing
Date
to but excluding the Revolving Credit Termination Date, in such
amounts that the aggregate principal amount of such Lender's
Revolving Credit Loans at any one time outstanding does not
exceed
the amount of its Revolving Credit Commitment. The aggregate
amount of the Revolving Credit Loans outstanding at any time
shall
never exceed the result of (i) the lesser of (A) the Borrowing
Base and (B) the aggregate amount of the Revolving Credit
Commitments minus (ii) the aggregate amount of Letter of Credit
Obligations outstanding at such time. The Revolving Credit Loans
shall be due and payable on the Revolving Credit Termination
Date.
(b) Subject to the terms and conditions of this
Agreement, each of the Lenders severally agrees to make a term
loan (the "Term Loans") to the Borrower on the Closing Date, in
an
amount equal to the amount of its Term Loan Commitment. The Term
Loans shall be repaid in twenty-four quarterly installments, each
such installment to be payable on the last day of each March,
June, September and December beginning on December 31, 1995 and
ending on the Term Loan Termination Date and to be in the
aggregate amounts set forth below, such that on each such payment
date, each Lender shall be paid an amount equal to such Lender's
pro rata share of the Term Loans (calculated based on its Term
Loan Percentage) of the amount set forth below:
Aggregate Amount
Payment Date of Installments
December 31, 1995 $ 1,250,000
March 31, 1996 $ 1,250,000
June 30, 1996 $ 1,250,000
September 30, 1996 $ 1,250,000
December 31, 1996 $ 1,250,000
March 31, 1997 $ 1,250,000
June 30, 1997 $ 1,250,000
September 30, 1997 $ 1,250,000
December 31, 1997 $ 2,500,000
March 31, 1998 $ 2,500,000
June 30, 1998 $ 2,500,000
September 30, 1998 $ 2,500,000
December 31, 1998 $ 2,500,000
March 31, 1999 $ 2,500,000
June 30, 1999 $ 2,500,000
September 30, 1999 $ 2,500,000
December 31, 1999 $ 3,750,000
March 31, 2000 $ 3,750,000
June 30, 2000 $ 3,750,000
September 30, 2000 $ 3,750,000
December 31, 2000 $ 3,750,000
March 31, 2001 $ 3,750,000
June 30, 2001 $ 3,750,000
September 30, 2001 $ 3,750,000
TOTAL $60,000,000
(c) The Loans may be outstanding as Variable Rate
Loans
or Fixed Rate Loans (each a "type" of Loans) and as Revolving
Credit Loans or Term Loans (each a "class" of Loans). Each type
of Loans of each Lender shall be made and maintained at such
Lender's Lending Office for such type of Loans.
Section 2.02. The Notes. The Revolving Credit Loans of
each
Lender shall be evidenced by a single promissory note in favor of
such Lender in the form of Exhibit A, dated the Closing Date,
duly
completed and executed by the Borrower. The Term Loan of each
Lender shall be evidenced by a single promissory note in favor of
such Lender in the form of Exhibit B, dated the Closing Date,
duly
completed and executed by the Borrower.
Section 2.03. Purpose. The Borrower shall use the proceeds
of the Term Loans solely to finance the Mistic Acquisition and
the
proceeds of the Revolving Credit Loans to finance the Mistic
Acquisition and for general corporate purposes including working
capital; provided that no more than $74,000,000 of the aggregate
amount of the proceeds of the Loans advanced on the Closing Date
are utilized to finance the Mistic Acquisition. Such proceeds
shall not be used for the purpose, whether immediate, incidental
or ultimate, of buying or carrying "margin stock" within the
meaning of Regulation U.
Section 2.04. Borrowing Procedures. The Borrower shall
give
the Agent notice of each borrowing to be made hereunder as
provided in Section 2.09. Not later than 12:00 noon New York,
New
York time on the date specified for such borrowing hereunder,
each
Lender shall, through its Lending Office, subject to the
conditions of this Agreement, make the amount of the Loan to be
made by it on such day available to the Agent at the Principal
Office in immediately available funds for the account of the
Agent. The amount so received by the Agent shall, subject to the
conditions of this Agreement, be made available to the Borrower,
in immediately available funds, by the Agent by crediting an
account of the Borrower designated by the Borrower and maintained
with the Agent at the Principal Office.
Section 2.05. Optional Prepayments and Conversions. The
Borrower shall have the right to make prepayments of principal
without penalty or premium (other than compensation payable in
accordance with Section 4.05), or to convert one type of Loans
into another type of Loans, at any time or from time to time;
provided that: (a) the Borrower shall give the Agent notice of
each such prepayment or conversion as provided in Section 2.09;
and (b) Fixed Rate Loans may be prepaid or converted only on the
last day of an Interest Period for such Loans unless the Borrower
agrees to provide to the Agent for the account of each Lender
compensation in accordance with Section 4.05. In the case of the
Term Loans, all prepayments shall be applied to the principal
installments of the Term Loans in the inverse order of their
maturities.
Section 2.06. Mandatory Prepayments.
(a) Excess Cash Flow. On the 10th day subsequent to
the date on which the Borrower furnishes the financial statements
required to be furnished by Section 7.08(a) hereof in respect of
each Fiscal Year (or, if the Borrower shall fail to furnish such
financial statements as required by Section 7.08(a) hereof, in
respect of any Fiscal Year, on the day falling 115 days after the
end of such Fiscal Year), the Borrower shall prepay the principal
of the Loans in an aggregate amount equal to (i) with respect to
the Fiscal Years ending on December 31, 1996 and December 31,
1997, 75% of the Excess Cash Flow for each such Fiscal Year and
(ii) with respect to the Fiscal Years ending thereafter, 50% of
the Excess Cash Flow for each such Fiscal Year, in each case to
be
applied (x) first, to the principal installments of the Term
Loans
in inverse order of their maturities until the Term Loans shall
have been paid in full and (y) second, to the Revolving Credit
Loans until the Revolving Credit Loans shall have been paid in
full.
(b) Sale of Assets. On the 180th day subsequent to
the
date on which any Consolidated Entity shall receive consideration
from the sale, lease, assignment, transfer or other disposition
of
any Property permitted under Section 8.07(a) or otherwise
consented to by the Required Lenders (but not including sales of
assets permitted pursuant to Section 8.07(b) or Section 8.07(c)),
the Borrower shall prepay the principal of the Loans in an
aggregate amount equal to (i) with respect to dispositions
occurring on or prior to December 31, 1997, 75% of the cash
consideration received (net of taxes and transaction expenses,
including commissions) and (ii) with respect to dispositions
occurring thereafter, 50% of the cash consideration received (net
of taxes and transaction expenses, including commissions), in
each
case to be applied (x) first, to the principal installments of
the
Term Loans in inverse order of their maturities until the Term
Loans shall have been paid in full and (y) second, to the
Revolving Credit Loans until the Revolving Credit Loans shall
have
been paid in full; provided in each case that such net cash
proceeds were not used or committed to be used within 180 days
from the date of receipt thereof to finance an Acceptable
Acquisition.
(c) Proceeds of Insurance. On the 180th day
subsequent
to the date on which any Consolidated Entity shall receive
insurance proceeds upon the occurrence of any casualty to any
Property of such Consolidated Entity any of which proceeds have
not been applied or committed to be applied toward repair or
replacement of the damaged Property, the Borrower shall prepay
the
principal of the Loans in an aggregate amount equal to (i) with
respect to casualties occurring on or prior to December 31, 1997,
75% of the proceeds received and not so applied or committed to
be
applied (net of taxes and transaction expenses, including
commissions) and (ii) with respect to casualties occurring
thereafter, 50% of the proceeds received and not so applied or
committed to be applied (net of taxes and transaction expenses),
in each case to be applied (x) first, to the principal
installments of the Term Loans in inverse order of their
maturities until the Term Loans shall have been paid in full and
(y) second, to the Revolving Credit Loans until the Revolving
Credit Loans shall have been paid in full.
(d) Reversions of Plans. On the 30th day subsequent
to
the date on which any Consolidated Entity shall receive proceeds
upon the reversion of any Plan, the Borrower shall prepay the
principal of the Loans in an aggregate amount equal to (i) with
respect to reversions occurring on or prior to December 31, 1997,
75% of the proceeds received (net of taxes and transaction
expenses) and (ii) with respect to reversions occurring
thereafter, 50% of the proceeds received (net of taxes and
transaction expenses), in each case to be applied (x) first, to
the principal installments of the Term Loans in inverse order of
their maturities until the Term Loans shall have been paid in
full
and (y) second, to the Revolving Credit Loans until the Revolving
Credit Loans shall have been paid in full.
(e) Initial Public Offering. On the date on which the
Borrower shall receive proceeds from the initial public offering
of Common Stock (other than an offering on Form S-8, S-4 or other
similar or successor registration forms), the Borrower shall
prepay the principal of the Loans in an aggregate amount equal to
(i) 100% of the proceeds received (net of underwriting
commissions
and discounts and other transactions costs) until $30,000,000 of
the principal of the Loans shall have been prepaid and (ii) 50%
of
the proceeds received (net of underwriting commissions and
discounts and other transactions costs) thereafter, in each case
to be applied (x) first, to the principal installments of the
Term
Loans in inverse order of their maturities until the Term Loans
shall have been paid in full and (y) second, to the Revolving
Credit Loans until the Revolving Credit Loans shall have been
paid
in full.
(f) Borrowing Base or Commitments Exceeded. If any
time prior to the Revolving Credit Termination Date, the
aggregate
amount of all Revolving Credit Loans shall exceed the result of
(i) the lesser of (A) the Borrowing Base and (B) the aggregate
amount of the Revolving Credit Commitments minus (ii) the
aggregate amount of Letter of Credit Obligations outstanding at
such time, the Borrower shall repay the Lenders forthwith such
amounts as may be necessary to eliminate such excess (and if the
Revolving Credit Loans cannot be repaid to eliminate any such
excess which is due to the amounts outstanding under Letters of
Credit or if prepayment on such date would cause Borrower to
incur
costs pursuant to Section 4.05, the Borrower shall deposit, until
such prepayment can be made or such additional costs avoided,
with
the Agent sufficient cash collateral to cover such excess which
shall be withdrawn by the Agent upon any drawing under a Letter
of
Credit for payment of Reimbursement Obligations or upon the
expiration of the applicable Interest Period, in each case to
eliminate such excess and any remaining funds on deposit in the
cash collateral account shall be paid to the Borrower), and the
failure of the Borrower to make such payment shall constitute an
Event of Default hereunder.
(g) Clean-Up Period. The Borrower shall repay the
Revolving Credit Loans so that there shall have been at least a
thirty day consecutive period between October 1 of each Fiscal
Year and March 31 of the immediately subsequent Fiscal Year in
which the aggregate outstanding principal balance of the
Revolving
Credit Loans shall be: (i) between October 1, 1995 and March 31,
1996, less than or equal to $7,000,000, (ii) between October 1,
1996 and March 31, 1997, less than or equal to $5,000,000 and
(iii) thereafter, $0, and the failure of the Borrower to make
such
payment shall constitute an Event of Default hereunder.
Section 2.07. Interest Periods; Renewals. (a) In the case
of each Fixed Rate Loan, the Borrower shall select an Interest
Period of any duration in accordance with the definition of
Interest Period in Section 1.01, subject to the following
limitations: (i) no Interest Period may extend beyond the
Termination Date; (ii) notwithstanding clause (i) above, no
Interest Period shall have a duration less than one month, and if
any such proposed Interest Period would otherwise be for a
shorter
period, such Interest Period shall not be available; (iii) if an
Interest Period would end on a day which is not a Banking Day,
such Interest Period shall be extended to the next Banking Day,
unless such Banking Day would fall in the next calendar month in
which event such Interest Period shall end on the immediately
preceding Banking Day; and (iv) no more than five Interest
Periods
of each Lender may be outstanding at any one time.
(b) Upon notice to the Agent as provided in Section
2.09, the Borrower may renew any Fixed Rate Loan on the last day
of the Interest Period therefor as the same type of Loan with an
Interest Period of the same or different duration in accordance
with the limitations provided above. If the Borrower shall fail
to give notice to the Agent of such a renewal, such Fixed Rate
Loan shall automatically become a Variable Rate Loan on the last
day of the current Interest Period.
Section 2.08. Changes of Commitments. (a) Immediately
following the making of the Term Loans, the Term Loan Commitments
shall be terminated on the Closing Date and shall not be
reinstated.
(b) The Borrower shall have the right to reduce or
terminate the amount of unused Revolving Credit Commitments at
any
time or from time to time, provided that: (i) the Borrower shall
give notice of each such reduction or termination to the Agent as
provided in Section 2.09; and (ii) each partial reduction shall
be
in an aggregate amount at least equal to $1,000,000. The
Revolving Credit Commitments once reduced or terminated may not
be
reinstated.
Section 2.09. Certain Notices. Notices by the Borrower to
the Agent of each borrowing pursuant to Section 2.04, and each
prepayment or conversion pursuant to Section 2.05 and each
renewal
pursuant to Section 2.07(b), and each reduction or termination of
the Revolving Credit Commitments pursuant to Section 2.08 shall
be
irrevocable and shall be effective only if received by the Agent
not later than 11:00 a.m. New York, New York time, and (a) in the
case of borrowings and prepayments of, conversions into and (in
the case of Fixed Rate Loans) renewals of (i) Variable Rate
Loans,
given the same Banking Day; and (ii) Fixed Rate Loans, given
three
Banking Days prior thereto; and (b) in the case of reductions or
termination of the Revolving Credit Commitments, given three
Banking Days prior thereto. Each such notice shall specify the
type and class of the Loans to be borrowed, prepaid, converted or
renewed and the amount thereof (subject to Section 2.10) (and, in
the case of a conversion, the type of Loan to result from such
conversion, and, in the case of a Fixed Rate Loan, the Interest
Period therefor) and the date of the borrowing or prepayment, or
conversion or renewal (which shall be a Banking Day). Each such
notice of reduction or termination shall specify the amount of
the
Revolving Credit Commitments to be reduced or terminated. The
Agent shall promptly notify the Lenders of the contents of each
such notice.
Section 2.10. Minimum Amounts. Except for borrowings which
exhaust the full remaining amount of the Commitments, prepayments
or conversions which result in the prepayment or conversion of
all
Loans of a particular type or class or conversions made pursuant
to Section 4.04, each borrowing, prepayment, conversion and
renewal of principal of Loans of a particular type shall be in an
amount not less than (i) $100,000 in the aggregate in the case of
Variable Rate Loans and (ii) $1,000,000 in the aggregate (plus
increments of $100,000 in excess thereof) in the case of Fixed
Rate Loans unless such minimum amount is waived by the Required
Lenders (borrowings, prepayments, conversions or renewals of or
into Loans of different types or, in the case of Fixed Rate
Loans,
having different Interest Periods at the same time hereunder to
be
deemed separate borrowings, prepayments, conversions and renewals
for the purposes of the foregoing, one for each type of Interest
Period). Anything in this Agreement to the contrary
notwithstanding, the aggregate principal amount of Fixed Rate
Loans having concurrent Interest Periods shall be at least equal
to $1,000,000.
Section 2.11. Interest. (a) Interest shall accrue on the
outstanding and unpaid principal amount of each Loan for the
period from and including the date of such Loan to but excluding
the date such Loan is due at the following rates per annum:
(i) for a Variable Rate Loan, at a variable rate per annum equal
to the Variable Rate plus the Interest Margin and (ii) for a
Fixed
Rate Loan, at a fixed rate equal to the Fixed Rate plus the
Interest Margin. If an Event of Default shall exist, interest
shall accrue on the outstanding principal amount of any Loan and
any other amount payable by the Borrower hereunder, under any
Note
or under any other Facility Document to the fullest extent
permitted by law from and including such due date to but
excluding
the date such amount is paid in full or such Event of Default is
cured or waived at the Default Rate.
(b) The interest rate on each Variable Rate Loan shall
change when the Variable Rate changes and interest on each such
Loan shall be calculated on the basis of a year of 360 days for
the actual number of days elapsed. Interest on each Fixed Rate
Loan shall be calculated on the basis of a year of 360 days for
the actual number of days elapsed. Promptly after the
determination of any interest rate provided for herein or any
change therein, the Agent shall notify the Borrower and the
Lenders in writing of such determination.
(c) Accrued interest shall be due and payable in
arrears upon any payment of principal or conversion and (i) for
each Variable Rate Loan, on the last day of each March, June,
September and December commencing the first such date after such
Loan; and (ii) for each Fixed Rate Loan, on the last day of the
Interest Period with respect thereto and, in the case of an
Interest Period greater than three months or 90 days, at three-
month intervals after the first day of such Interest Period;
provided that interest accruing at the Default Rate shall be due
and payable from time to time on demand of the Agent.
Section 2.12. Fees. (a) The Borrower shall pay to the
Agent for the account of each Lender a commitment fee on the
daily
average of the result of (a) the unused Revolving Credit
Commitment of such Lender minus (b) such Lender's pro rata share
of Letter of Credit Obligations, for the period from and
including
the Closing Date to the earlier of the date the Revolving Credit
Commitments are terminated or the Revolving Credit Termination
Date at a rate per annum equal to 1/2 of one percent, calculated
on the basis of a year of 360 days for the actual number of days
elapsed. The accrued commitment fee shall be due and payable in
arrears upon any reduction or termination of the Revolving Credit
Commitments and on the last Banking Day of each March, June,
September and December, commencing on the first such date after
the Closing Date.
(b) The Borrower shall pay to the Agent for its own
account the fees set forth in the fee letter dated as of the
Closing Date between the Borrower and the Agent.
Section 2.13. Payments Generally. All payments under this
Agreement, the Notes and the other Facility Documents shall be
made in Dollars in immediately available funds not later than
1:00
p.m. New York, New York time on the relevant dates specified
above
(each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Banking Day) by,
unless the Agent agrees to accept payment by other means, the
debiting by the Agent for the account of the applicable Lending
Office of each Lender, or by any Lender for whose account any
such
payment is to be made, of the amount of any such payment from any
ordinary deposit account of the Borrower with the Agent or such
Lender, as the case may be, and the Agent so doing shall promptly
notify the Borrower and any Lender so doing shall promptly notify
the Agent which in turn shall promptly notify the Borrower. The
Borrower shall, at the time of making each optional payment under
this Agreement, any Note or any other Facility Document, specify
to the Agent the principal or other amount payable by the
Borrower
under this Agreement, such Note or such other Facility Document
to
which such payment is to be applied (and in the event that it
fails to so specify, or if a Default or Event of Default has
occurred and is continuing, the Agent may apply such payment as
provided in Section 11.16). If the due date of any payment under
this Agreement, any Note or any other Facility Document would
otherwise fall on a day which is not a Banking Day, such date
shall be extended to the next succeeding Banking Day (unless, in
the case of a Fixed Rate Loan, such extension would carry such
due
date into another calendar month, in which event such payment
shall be due on the immediately preceding Banking Day) and
interest shall be payable for any principal so extended or
reduced
for the period of such extension or reduction. Each payment
received by the Agent hereunder, under any Note or any other
Facility Document for the account of a Lender shall be paid
promptly to such Lender, in immediately available funds, for the
account of such Lender's Lending Office.
ARTICLE 3. THE LETTERS OF CREDIT.
Section 3.01. Letters of Credit. (a) Subject to the terms
and conditions of this Agreement, the Issuing Lender, on behalf
of
the Lenders, and in reliance on the agreement of the Lenders set
forth in Section 3.04, agrees to issue on any Banking Day prior
to
the Revolving Credit Termination Date for the account of the
Borrower irrevocable standby and documentary letters of credit in
such form as may from time to time be approved by the Issuing
Lender acting reasonably (together with the applications
therefor,
the "Letters of Credit"); provided that on the date of the
issuance of any Letter of Credit, and after giving effect to such
issuance, the Letter of Credit Obligations shall not exceed the
Letter of Credit Availability.
(b) Each Letter of Credit shall (i) have an expiry
date
no later than the earlier of (A) one year from the date of
issuance provided that such Letter of Credit may automatically
renew for subsequent one year terms upon the failure of the
Issuing Lender to provide sixty days prior written notice of
termination and (B) the Revolving Credit Termination Date, (ii)
be
denominated in Dollars, (iii) be in a minimum face amount of
$100,000 and (iv) provide for the payment of sight drafts when
presented for honor thereunder in accordance with the terms
thereof and when accompanied by the documents described or when
such documents are presented, as the case may be.
Section 3.02. Purposes. The Borrower shall use the Letters
of Credit for the purpose of securing obligations incurred in the
ordinary course of business (including, without limitation, to
secure obligations under appeal bonds and insurance programs).
Section 3.03. Procedures for Issuance of Letters of Credit.
The Borrower may from time to time request that the Issuing
Lender
issue a Letter of Credit by delivering to the Issuing Lender at
its address for notices specified herein an application therefor
in such form as may from time to time be approved by the Issuing
Lender acting reasonably, completed to the reasonable
satisfaction
of the Issuing Lender, and such other certificates, documents and
other papers and information as the Issuing Lender may reasonably
request. Upon receipt of any application, the Issuing Lender
will
process such application and the certificates, documents and
other
papers and information delivered to it in connection therewith in
accordance with its customary procedures and shall promptly issue
the Letter of Credit, in such customized form as may reasonably
be
requested by the Borrower (but in no event shall the Issuing
Lender issue any Letter of Credit later than three Banking Days
after receipt of the application therefor and all such other
certificates, documents and other papers and information relating
thereto), by issuing the original of such Letter of Credit to the
beneficiary thereof or as otherwise may be agreed by the Issuing
Lender and the Borrower. The Issuing Lender shall furnish a copy
of such Letter of Credit to the Borrower promptly following the
issuance thereof.
Section 3.04. Participating Interests. In the case of each
Letter of Credit, effective as of the date of the issuance
thereof, the Issuing Lender agrees to allot and does allot to
each
other Lender, and each such Lender severally and irrevocably
agrees to take and does take a Participating Interest in such
Letter of Credit in a percentage equal to such Lender's pro rata
share of the Letter of Credit Obligations (calculated based on
its
Revolving Credit Commitment Percentage). On the date that any
Lender becomes a party to this Agreement in accordance with
Section 12.05, Participating Interests in any outstanding Letter
of Credit held by the Transferor Lender from which such
transferee
Lender acquired its interest hereunder shall be proportionately
reallotted between such transferee Lender and such Transferor
Lender. Each Participating Lender hereby agrees that its
obligation to participate in each Letter of Credit, and to pay or
to reimburse the Issuing Lender for its participating share of
the
drafts drawn thereunder, is absolute, irrevocable and
unconditional and shall not be affected by any circumstances
whatsoever, including, without limitation, the occurrence and
continuance of any Default or Event of Default, and that each
such
payment shall be made without any offset, abatement, withholding
or other reduction whatsoever.
Section 3.05. Payments. (a) In order to induce the
Issuing
Lender to issue the Letters of Credit, the Borrower hereby agrees
to reimburse the Issuing Lender, unless such Reimbursement
Obligation has been accelerated pursuant to Section 10.02, by not
later than 1:00 p.m., New York City time, on each date that the
Borrower has been notified by the Issuing Lender that any draft
presented under any Letter of Credit is paid by the Issuing
Lender, for (i) the amount of the draft paid by the Issuing
Lender
and (ii) the amount of any taxes, fees, charges or other
reasonable costs or expenses whatsoever incurred by the Issuing
Lender in connection with any payment made by the Issuing Lender
under, or with respect to, such Letter of Credit. Each such
payment shall, subject to the next sentence hereof, be made to
the
Issuing Lender at its office specified in Section 12.06, in
lawful
money of the United States and in immediately available funds by
not later than 1:00 p.m., New York City time, on the day that
payment is made by the Issuing Lender (or, if such drawing occurs
after 1:00 p.m. New York City time, on the next succeeding
Banking
Day). If such payment is not made in full, all amounts remaining
unpaid by the Borrower under this Section 3.05 shall, to the
extent otherwise permitted hereunder, automatically be deemed to
be a borrowing as Revolving Credit Loans bearing interest at the
Variable Rate plus the Interest Margin. Except as otherwise
permitted by the preceding sentence, interest on any and all
amounts remaining unpaid by the Borrower under this Section 3.05
at any time from the date such amounts become payable (whether at
stated maturity, by acceleration or otherwise) until payment in
full shall be payable to the Issuing Lender on demand at a
fluctuating rate per annum equal to the Default Rate.
(b) In the event that the Issuing Lender makes a
payment (a "Letter of Credit Funding") under any Letter of Credit
and is not reimbursed in full therefor on the date of such Letter
of Credit Funding, in accordance with the terms hereof, the
Issuing Lender will promptly through the Agent notify each
Participating Lender that acquired its Participating Interest in
such Letter of Credit from the Issuing Lender. No later than the
close of business on the date such notice is given if such notice
is given, each such Participating Lender will transfer to the
Agent, for the account of the Issuing Lender, in immediately
available funds, an amount equal to such Participating Lender's
pro rata share of the unreimbursed portion of such Letter of
Credit Funding (calculated based on its Revolving Credit
Commitment Percentage), together with interest, if any, accrued
thereon from and including the date of such transfer at a rate
per
annum equal to the Federal Funds Rate.
(c) Whenever, at any time after the Issuing Lender has
made a Letter of Credit Funding and has received from any
Participating Lender such Participating Lender's pro rata share
of
the unreimbursed portion of such Letter of Credit Funding, the
Issuing Lender receives any reimbursement on account of such
unreimbursed portion or any payment of interest on account
thereof, the Issuing Lender will distribute to the Agent, for the
account of such Participating Lender, its pro rata share thereof;
provided, however, that in the event that the receipt by the
Issuing Lender of such reimbursement or such payment of interest
(as the case may be) is required to be returned, such
Participating Lender will promptly return to the Agent, for the
account of the Issuing Lender, any portion thereof previously
distributed by the Issuing Lender to it.
Section 3.06. Further Assurances. The Borrower hereby
agrees to do and perform any and all acts and to execute any and
all further instruments from time to time reasonably requested by
the Issuing Lender more fully to effect the purposes of this
Agreement and the issuance of the Letters of Credit opened
hereunder.
Section 3.07. Obligations Absolute. The payment
obligations
of the Borrower under Section 3.05 shall be unconditional and
irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including,
without limitation, the following circumstances:
(a) the existence of any claim, set-off, defense or
other right which the Borrower may have at any time against any
beneficiary, or any transferee, of any Letter of Credit (or any
Persons for whom any such beneficiary or any such transferee may
be acting), the Issuing Lender or any Participating Lender, or
any
other Person, whether in connection with this Agreement, any
other
Facility Document, the transactions contemplated herein, or any
unrelated transaction;
(b) any statement or any other document presented
under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue
or inaccurate in any respect, provided that this subparagraph (b)
shall not relieve the Issuing Lender of any liability as to any
insufficiency determined to have resulted from (i) the gross
negligence or willful misconduct of the Issuing Lender or (ii)
violations of the standards set forth in the UCP;
(c) payment by the Issuing Lender under any Letter of
Credit against presentation of a draft or certificate which does
not comply with the terms of such Letter of Credit, provided that
this subparagraph (c) shall not relieve the Issuing Lender of any
liability determined to have resulted from (i) the gross
negligence or willful misconduct of the Issuing Lender or (ii)
violations of the standards set forth in the UCP; or
(d) any other circumstances or happening whatsoever,
whether or not similar to any of the foregoing, provided that
this
subparagraph (d) shall not relieve the Issuing Lender of any
liability determined to have resulted from (i) the gross
negligence or willful misconduct of the Issuing Lender or (ii)
violations of the standards set forth in the UCP.
Section 3.08. Cash Collateral Account. If the Commitments
are duly terminated and all amounts owing under this Agreement,
the Notes and the Letters of Credit become due and payable
pursuant to Section 10, the Borrower shall deposit with the
Agent,
on the date such obligations become due and payable, an amount in
cash or Cash Equivalents equal to the Letter of Credit
Obligations
as of such date and the Letter of Credit fees in accordance with
Section 3.09. Such amount shall be deposited in a cash
collateral
account to be established by the Agent, for the benefit of the
Issuing Lender and the Participating Lenders, and shall
constitute
collateral security for the Letter of Credit Obligations and
other
amounts owing hereunder. All amounts in such cash collateral
account shall be maintained pursuant to a cash collateral account
agreement which shall grant to the Agent a security interest in
all such funds and in any investments made therewith or proceeds
thereof to secure payment to the Agent of Reimbursement
Obligations with respect to outstanding Letters of Credit. In
the
event that the Agent pays any drawing under a Letter of Credit,
the Agent may withdraw funds on deposit to make reimbursement of
such drawing, in an amount equal to such drawing. Upon payment
by
the Borrower of all Reimbursement Obligations with respect to
Letters of Credit or the termination or other expiration of all
Letters of Credit, remaining funds on deposit in the cash
collateral account shall be returned promptly to the Borrower.
Section 3.09. Letter of Credit Fees. (a) The Borrower
agrees to pay the Agent, for the account of the Issuing Lender
and
the Participating Lenders, a non-refundable letter of credit fee
(a) of one-half of one percent of the face amount under each
documentary Letter of Credit payable on payment thereof and (b)
computed at the rate of two percent per annum of the aggregate
undrawn amount under each standby Letter of Credit, calculated on
the basis of a year of 360 days for the actual number of days
elapsed, payable on the last Banking Day of each March, June,
September and December, commencing on the first such date after
the Closing Date.
(b) The Borrower agrees to pay the Issuing Lender, for its
own account, its normal and customary administration, amendment,
transfer, payment and negotiation fees charged in connection with
its issuance and administration of letters of credit.
ARTICLE 4. YIELD PROTECTION; ILLEGALITY; ETC.
Section 4.01. Additional Costs. (a) The Borrower shall
pay
directly to each Lender from time to time on demand such amounts
as such Lender may determine (and reasonably substantiate in
writing) to be necessary to compensate it for any increased costs
which such Lender determines are attributable to its making or
maintaining any Fixed Rate Loans under this Agreement or its
Notes
or its obligation to make any such Loans hereunder, or any
reduction in any amount receivable by such Lender hereunder in
respect of any such Loans or such obligation (such increases in
costs and reductions in amounts receivable being herein called
"Additional Costs"), resulting from any Regulatory Change
relating
to any such Loans or such obligation which: (i) changes the basis
of taxation of any amounts payable to such Lender under this
Agreement or its Notes in respect of any of such Loans (other
than
franchise, capital, branch profits taxes or taxes imposed with
respect to the net income of such Lender or of its Lending Office
for any of such Loans by the jurisdiction in which such Lender is
organized or has its principal office or such Lending Office or
in
any other jurisdiction if not imposed by reason of the presence
of
the Borrower or its Affiliates in such jurisdiction); or
(ii) imposes or modifies any reserve, special deposit, deposit
insurance or assessment, minimum capital, capital ratio or
similar
requirements relating to any extensions of credit or other assets
of, or any deposits with or other liabilities of, such Lender
(including any of such Loans or any deposits referred to in the
definition of "Fixed Base Rate" in Section 1.01); provided that
no
such compensation shall be payable to the extent that the Fixed
Rate has been adjusted to account for such increased cost; or
(iii) imposes any other similar condition affecting this
Agreement
or its Notes (or any of such extensions of credit or
liabilities).
Each Lender will notify the Borrower in writing of any event
occurring after the date of this Agreement which will entitle
such
Lender to compensation pursuant to this Section 4.01(a) as
promptly as practicable after it obtains knowledge thereof and
determines to request such compensation. If any Lender requests
compensation from the Borrower under this Section 4.01(a), or
under Section 4.01(c), the Borrower may, by notice to such Lender
(with a copy to the Agent), require that such Lender's affected
Loans with respect to which such compensation is requested be
converted in accordance with Section 4.04. If any taxes are
imposed for which the Borrower would be required to make a
payment
under this Section 4.01, the Lender shall use its best efforts to
avoid or reduce such taxes by taking any appropriate action
(including, without limitation, assigning its rights hereunder to
a related entity or a different Lending Office).
(b) Without limiting the effect of the foregoing
provisions of this Section 4.01 (but without duplication), in the
event that, by reason of any Regulatory Change, any Lender either
(i) incurs Additional Costs based on or measured by the excess
above a specified level of the amount of a category of deposits
or
other liabilities of such Lender which includes deposits by
reference to which the interest rate on Fixed Rate Loans is
determined as provided in this Agreement or a category of
extensions of credit or other assets of such Lender which
includes
Fixed Rate Loans or (ii) becomes subject to restrictions on the
amount of such a category of liabilities or assets which it may
hold, then, if such Lender so elects by notice to the Borrower
(with a copy to the Agent), the obligation of such Lender to make
or renew, and to convert Variable Rate Loans hereunder shall be
suspended until the date such Regulatory Change ceases to be in
effect (and all affected Fixed Rate Loans held by such Lender
then
outstanding shall be converted in accordance with Section 4.04).
(c) Without limiting the effect of the foregoing
provisions of this Section 4.01 (but without duplication), the
Borrower shall pay directly to each Lender from time to time on
request such amounts as such Lender may determine to be necessary
to compensate such Lender for any costs which it determines are
attributable to the maintenance by it pursuant to the adoption,
effectiveness or implementation of, or any change in, any law or
regulation of any jurisdiction or any written interpretation,
directive or request (whether or not having the force of law and
whether in effect on the date of this Agreement or thereafter) of
any court or governmental or monetary authority of capital in
respect of its Loans hereunder, its obligation to make Loans
hereunder or its obligation to issue, or participate in, any
Letter of Credit (such compensation to include, without
limitation, an amount equal to any reduction in return on assets
or equity of such Lender to a level below that which it could
have
achieved but for such law, regulation, interpretation, directive
or request). Each Lender will notify the Borrower if it is
entitled to compensation pursuant to this Section 4.01(c) as
promptly as practicable after it determines to request such
compensation.
(d) Determinations and allocations by a Lender for
purposes of this Section 4.01 of the effect of any Regulatory
Change pursuant to subsections (a) or (b), or of the effect of
capital maintained pursuant to subsection (c), on its costs of
making or maintaining Loans, its obligation to make Loans or its
obligation to issue, or participate in, any Letter of Credit, or
on amounts receivable by, or the rate of return to, it in respect
of Loans or such obligation, and of the additional amounts
required to compensate such Lender under this Section 4.01, shall
be set forth in a certificate, signed by an officer of such
Lender, delivered to Borrower and the Agent, which includes the
amount required to be paid by the Borrower to such Lender and the
computations made by such Lender to determine such amount. Any
such determination and allocation shall be conclusive, absent
demonstrable error, provided that such determinations and
allocations are made on a reasonable basis.
Section 4.02. Limitation on Fixed Rate Loans. Anything
herein to the contrary notwithstanding, if:
(a) the Agent reasonably determines (which
determination shall be conclusive, absent demonstrable error)
that
quotations of interest rates for the relevant deposits referred
to
in the definition of "Fixed Base Rate" in Section 1.01 are not
being provided in the relevant amounts or for the relevant
maturities for purposes of determining the rate of interest for
any Fixed Rate Loans as provided in this Agreement; or
(b) the Required Lenders reasonably determine (which
determination shall be conclusive, absent demonstrable error) and
notify the Agent in writing that the relevant rates of interest
referred to in the definition of "Fixed Base Rate" in Section
1.01
upon the basis of which the rate of interest for any Fixed Rate
Loans is to be determined do not adequately cover the cost to the
Lenders of making or maintaining such Loans;
then the Agent shall give the Borrower and each Lender prompt
written notice thereof, and so long as such condition remains in
effect, the Lenders shall be under no obligation to make or renew
affected Fixed Rate Loans or to convert Variable Rate Loans into
affected Fixed Rate Loans and the Borrower shall, on the last
day(s) of the then current Interest Period(s) for the outstanding
affected Fixed Rate Loans, either prepay such Fixed Rate Loans or
convert such Fixed Rate Loans into Variable Rate Loans in
accordance with Section 2.05.
Section 4.03. Illegality. Notwithstanding any other
provision in this Agreement, in the event that it becomes
unlawful
for any Lender or its Lending Office to honor its obligation to
make, maintain or renew Fixed Rate Loans hereunder or convert
Variable Rate Loans into Fixed Rate Loans, then such Lender shall
promptly notify the Borrower thereof in writing (with a copy to
the Agent) and such Lender's obligation to make or renew Fixed
Rate Loans and to convert other Variable Rate Loans into Fixed
Rate Loans hereunder shall be suspended until such time as such
Lender may again make, renew, or convert and maintain such Fixed
Rate Loans and such Lender's outstanding Fixed Rate Loans, as the
case may be, shall be converted in accordance with Section 4.04.
Section 4.04. Certain Conversions pursuant to Sections 4.01
and 4.03. If Fixed Rate Loans are to be converted pursuant to
Section 4.01 or 4.03, such Lender's Fixed Rate Loans shall be
automatically converted into Variable Rate Loans on the last
day(s) of the then current Interest Period(s) for such Lender's
Fixed Rate Loans (or, in the case of a conversion required by
Section 4.03, on such earlier date as such Lender may specify in
writing to the Borrower with a copy to the Agent) and, unless and
until such Lender gives notice as provided below that the
circumstances specified in Section 4.01 or 4.03 which gave rise
to
such conversion no longer exist:
(a) to the extent that such Lender's Fixed Rate Loans
have been so converted, all payments and prepayments of principal
which would otherwise be applied to such Lender's Fixed Rate
Loans
shall be applied instead to its Variable Rate Loans; and
(b) all Loans which would otherwise be made or renewed
by such Lender as Fixed Rate Loans shall be made instead as
Variable Rate Loans and all Variable Rate Loans of such Lender
which would otherwise be converted into Fixed Rate Loans shall
remain as Variable Rate Loans.
If such Lender gives written notice to the Borrower (with a
copy to the Agent) that the circumstances specified in Section
4.01 or 4.03 which gave rise to the conversion of such Lender's
Fixed Rate Loans pursuant to this Section 4.04 no longer exist
(which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Fixed Rate Loans are
outstanding,
such Lender's Variable Rate Loans shall be automatically
converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Fixed Rate Loans to the extent
necessary so that, after giving effect thereto, all Fixed Rate
Loans held by the Lenders holding Fixed Rate Loans and by such
Lender are held pro rata (as to principal amounts, types, classes
and Interest Periods) in accordance with their respective
Commitments.
Section 4.05. Certain Compensation. Subject to such
Lender's reasonable efforts to mitigate such losses, costs and
expenses, the Borrower shall pay to the Agent for the account of
each Lender, upon the request of such Lender through the Agent,
such amount or amounts as shall be sufficient (in the reasonable
opinion of such Lender) to compensate it for any loss, cost or
reasonable expense which such Lender determines is attributable
to:
(a) any payment, prepayment, conversion or renewal of
a Fixed Rate Loan made by such Lender on a date other than the
last day of an Interest Period for such Loan (whether by reason
of
acceleration or otherwise); or
(b) any failure by the Borrower to borrow, convert
into
or renew a Fixed Rate Loan to be made, converted into or renewed
by such Lender on the date specified therefor in the relevant
notice under Sections 2.04, 2.05 or 2.07, as the case may be.
Without limiting the foregoing, such compensation shall
include an amount equal to the excess, if any, of: (i) the amount
of interest which otherwise would have accrued on the principal
amount so paid, prepaid, converted or renewed or not borrowed,
converted or renewed for the period from and including the date
of
such payment, prepayment or conversion or failure to borrow,
convert or renew to but excluding the last day of the then
current
Interest Period for such Fixed Rate Loan (or, in the case of a
failure to borrow, convert or renew, to but excluding the last
day
of the Interest Period for such Fixed Rate Loan which would have
commenced on the date specified therefor in the relevant notice)
at the applicable rate of interest for such Fixed Rate Loan
provided for herein; over (ii) the amount of interest (as
reasonably determined by such Lender) such Lender would have bid
in the London interbank market (if such Loan is a Fixed Rate
Loan)
for Dollar deposits for amounts comparable to such principal
amount and maturities comparable to such period. A determination
of any Lender as to the amounts payable pursuant to this Section
4.05 shall be conclusive absent demonstrable error.
Section 4.06. Lending Office Designations. Before giving
any notice to the Borrower pursuant to Section 4.01 or Section
4.03, a Lender shall, if possible, designate a different Lending
Office if such designation will avoid the need for giving such
notice and will not, in the reasonable judgment of the Lender, be
otherwise disadvantageous to the Lender.
ARTICLE 5. CONDITIONS PRECEDENT.
Section 5.01. Documentary Conditions Precedent. The
obligations of the Lenders to make the Loans constituting the
initial borrowing and of the Issuing Lender to issue the Letters
of Credit are subject to the condition precedent that the Agent
shall have received on or before the Closing Date each of the
following, in form and substance reasonably satisfactory to the
Agent:
(a) counterparts of this Agreement executed by the
Borrower;
(b) the Notes duly executed by the Borrower;
(c) the Unconditional Guaranty executed by the
Guarantor;
(d) the Security Agreement duly executed by the
Borrower together with (i) executed copies of the financing
statements (UCC-1) duly filed under the Personal Property
Securities Act and the Uniform Commercial Code of all
jurisdictions necessary or, in the reasonable opinion of the
Agent, desirable to perfect the security interests created by the
Security Agreement; (ii) executed copies of the termination
statements (UCC-3) to be filed under the Uniform Commercial Code
of all jurisdictions necessary to terminate the security
interests
of other Persons (other than Persons having Liens permitted under
Section 7.03) in and to the collateral purported to be covered by
the Security Agreement; and (iii) copies of searches identifying
all of the financing statements on file with respect to the
Borrower and the Seller in all jurisdictions referred to under
(i)
of this Section 5.01(d);
(e) the Trademark Security Agreement duly executed by
the Borrower together with (i) evidence that a trademark
assignment has been duly filed in the United States Patent and
Trademark Office and in all other jurisdictions as the Agent may
reasonably specify and all security interests in the collateral
purported to be created by the Trademark Security Agreement have
been duly perfected; (ii) evidence of the termination of all
assignments to other Persons in and to the collateral purported
to
be covered by the Trademark Security Agreement; and (iii) copies
of searches identifying all trademark assignments on file with
respect to the Borrower and the Seller in the United States
Patent
and Trademark Office and in all other jurisdictions as the Agent
may reasonably specify;
(f) the Pledge Agreement duly executed by the
Guarantor
together with (i) executed copies of the financing statements
(UCC-1) duly filed under the Uniform Commercial Code of all
jurisdictions necessary or, in the opinion of the Agent,
desirable
to perfect the security interests created by the Pledge
Agreement,
(ii) copies of searches identifying all of the financing
statements on file with respect to the Guarantor in all
jurisdictions referred to under (i) of this Section 5.01(f)
indicating that no party claims an interest in and to the
collateral purported to be covered by the Pledge Agreement and
(iii) stock certificates representing all of the outstanding
capital stock of the Borrower held by the Guarantor together with
undated stock powers executed in blank;
(g) the Management Agreement duly executed by the
Borrower and the Guarantor;
(h) the Affiliate Subordination Agreement duly
executed
by the Borrower and the Guarantor;
(i) certificates or other evidence of casualty
insurance policies covering all of the Property subject to the
Lien of the Agent under the Security Documents with appropriate
loss payable endorsements indicating assignment of proceeds
thereunder to the Agent and certificates or other evidence of
liability insurance with appropriate endorsements indicating the
coverage of the Agent as an additional insured;
(j) certificates of the Secretary or Assistant
Secretary of each of the Borrower and the Guarantor, dated the
Closing Date, (i) attesting to all corporate action taken by each
such Person, including resolutions of its Boards of Directors
authorizing the execution, delivery and performance of each of
the
Facility Documents to which it is a party and each other document
to be delivered pursuant to this Agreement, (ii) certifying the
names and true signatures of the officers of each such Person
authorized to sign the Facility Documents to which it is a party
and the other documents to be delivered by it under this
Agreement
and (iii) verifying that the charter and by-laws of each such
Person attached thereto are true, correct and complete as of the
date thereof;
(k) a certificate of a duly authorized officer of the
Borrower, dated the Closing Date, stating that the
representations
and warranties in Article 6 are true and correct on such date as
though made on and as of such date (provided that any
representations and warranties which speak to a specific date
shall remain true and correct in all material respects as of such
specific date), all agreements and conditions required to be
performed and complied with by such date have been performed and
complied with and that no event has occurred and is continuing
which constitutes a Default or Event of Default;
(l) good standing certificates and certified copies of
all charter documents with respect to each of the Borrower and
the
Guarantor certified by the Secretary of State of its jurisdiction
of incorporation, and evidence that it is qualified as a foreign
corporation in every other jurisdiction in which it does business
and in which the failure to qualify could reasonably be expected
to have a Material Adverse Effect;
(m) legal opinions of the Vice President and Associate
General Counsel of the Guarantor and Fish & Neave, special
trademark counsel to the Borrower, in substantially the form of
Exhibit E and as to such other matters as the Agent may
reasonably
request;
(n) evidence that the Mistic Acquisition shall have
been consummated in accordance with the Mistic Acquisition
Documents to be accompanied by opinions of (i) Paul, Weiss,
Rifkind, Wharton & Garrison, counsel to the Borrower and the
Guarantor, and (ii) Pryor, Cashman, Sherman & Flynn, counsel to
the Mistic Sellers, delivered in connection with the Mistic
Acquisition;
(o) a certificate of a duly authorized officer of the
Borrower, dated the Closing Date, attaching true and correct
copies of (i) all material consents under any indenture,
agreement, lease or instrument obtained in connection with the
Mistic Acquisition and (ii) all consents and authorizations
required or advisable in connection with the Mistic Acquisition
under any law, rule or regulation;
(p) evidence that the Guarantor shall deliver or cause
to be delivered to the Borrower a capital contribution in an
aggregate amount not less than $25,000,000;
(q) evidence of the repayment in full of all
indebtedness owed by Mistic to Bank of New York (including the
retirement of any outstanding letters of credit) and payment of
all fees, commissions and expenses payable in connection with
such
repayment;
(r) certified complete and correct copies of the
Mistic
Acquisition Documents (including all exhibits, schedules and
disclosure letters referred to therein or delivered pursuant
thereto, if any);
(s) certified complete and correct copies of the Tax
Sharing Agreement;
(t) certified complete and correct copies of each of
the financial statements referred to in Section 6.05;
(u) an independent field audit of the accounts
receivable, records, and information systems of Mistic;
(v) an initial borrowing notice of the Borrower
relating to the Loans to be made and the Letters of Credit to be
issued on the Closing Date together with a letter from the
Borrower containing wire transfer instructions and account
information relating to the funds to be made available by the
Lenders to the Borrower on the Closing Date;
(w) a Borrowing Base Certificate calculated on the
basis of the Borrower's Eligible Receivables as of a date not
more
than 30 days prior to the Closing Date and the Borrower's
Eligible
Inventory as of a date not more than 45 days prior to the Closing
Date; and
(x) evidence of insurance policies issued to the
Borrower by reputable insurers, acceptable to the Agent in its
reasonable discretion, and in amounts and providing such
coverages
as are acceptable to the Agent in its reasonable discretion,
which
insurance shall have been reviewed by one or more of the Agent's
risk managers and shall have been endorsed to require at least 30
days prior written notice to the Agent of cancellation, non-
renewal or any other material change.
Section 5.02. Additional Conditions Precedent. The
obligations of the Lenders to make any Loans pursuant to a
borrowing which increases the amount outstanding hereunder
(including the initial borrowing) or to issue any Letters of
Credit shall be subject to the further conditions precedent that
on the date of such Loans or the issuance of such Letters of
Credit the following statements shall be true: (a) the
representations and warranties contained in Article 6 and in each
of the other Facility Documents are true and correct on and as of
the date of such Loans or the issuance of such Letter of Credit
as
though made on and as of such date (provided that (x) any
representations and warranties which speak to a specific date
shall remain true and correct in all material respects as of such
specific date, (y) in the case of the initial borrowing and the
initial issuance of a Letter of Credit, such representations and
warranties shall only be required to be true and correct as of
the
Mistic Acquisition Effective Time and (z) in the case of
subsequent borrowings and subsequent issuances of Letters of
Credit, such representations and warranties shall only be
required
to be true and correct in all material respects as of the date of
such borrowings or such issuances); and (b) no Default or Event
of
Default has occurred and is continuing, or would result from such
Loans or the issuance of Letters of Credit.
Section 5.03. Deemed Representations. Each notice of
borrowing or request for the issuance of a Letter of Credit
hereunder and acceptance by the Borrower of the proceeds of such
borrowing or the benefit of such Letter of Credit shall
constitute
a representation and warranty that the statements contained in
Section 5.02 are true and correct both on the date of such notice
or request and, unless the Borrower otherwise notifies the Agent
prior to such borrowing or such issuance, as of the date of such
borrowing or such issuance.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES.
The Borrower hereby represents and warrants that:
Section 6.01. Incorporation, Good Standing and Due
Qualification. Each of the Consolidated Entities is duly
incorporated, validly existing and in good standing under the
laws
of the jurisdiction of its incorporation, has the corporate power
and authority to own its assets and to transact the business in
which it is now engaged or proposed to be engaged, and is duly
qualified as a foreign corporation and in good standing under the
laws of each other jurisdiction in which such qualification is
required, except where the failure to qualify could not
reasonably
be expected to have a Material Adverse Effect.
Section 6.02. Corporate Power and Authority; No Conflicts.
The execution, delivery and performance by each of the Obligors
of
the Facility Documents to which it is a party, the borrowings
hereunder and the issuance of the Letters of Credit have been
duly
authorized by all necessary corporate action and do not and will
not: (a) require any consent or approval of its stockholders;
(b) contravene its charter or by-laws; (c) violate any provision
of, or require any filing (other than the filing of the financing
statements and assignments required pursuant to the terms of the
Security Documents), registration, consent or approval under, any
law, rule or regulation (including, without limitation,
Regulations G, T, U and X of the Federal Reserve Board) or any
order, writ, judgment, injunction, decree, determination or award
presently in effect having applicability to the Guarantor or any
of its Subsidiaries; (d) result in a breach of or constitute a
default or require any consent under any indenture or loan or
credit agreement or any other agreement, lease or instrument to
which the Guarantor or any of its Subsidiaries is a party or by
which it or its Properties may be bound or affected; (e) result
in, or require, the creation or imposition of any Lien (other
than
as created under the Security Documents), upon or with respect to
any of the Properties now owned or hereafter acquired by the
Guarantor or any of its Subsidiaries; or (f) cause the Guarantor
or any of its Subsidiaries to be in default under any such law,
rule, regulation, order, writ, judgment, injunction, decree,
determination or award or any such indenture, agreement, lease or
instrument.
Section 6.03. Legally Enforceable Agreements. Each
Facility
Document to which any Obligor is a party is, or when delivered
under this Agreement will be, a legal, valid and binding
obligation of such Obligor enforceable against such Obligor in
accordance with its terms, except to the extent that such
enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting
creditors' rights generally and general principles of equity
(regardless of whether such enforceability is considered in a
proceeding at law or in equity).
Section 6.04. Litigation. Except as set forth on Schedule
IV hereto, there are no actions, suits or proceedings pending or,
to the Knowledge of the Borrower, threatened in writing against
or
affecting any Consolidated Entity before any Governmental
Authority that could reasonably be expected to have a Material
Adverse Effect.
Section 6.05. Financial Statements.
(a) The combined balance sheets of Mistic as at
December 31, 1994, 1993, 1992 and 1991, and the related combined
income statements and combined statement of cash flows and
changes
in stockholders' equity of Mistic, for the Fiscal Years then
ended, and the accompanying footnotes, together with the opinion
thereon of Grant Thornton LLP, independent certified public
accountants, and the interim combined balance sheet of Mistic as
at June 30, 1995 and the related combined income statement and
combined statements of cash flows and changes in stockholders'
equity of Mistic for the six month period then ended, copies of
which have been furnished to each of the Lenders, to the
Knowledge
of the Borrower, are complete and correct in all material
respects
and fairly present the financial condition of Mistic at such
dates
and the results of the operations of Mistic for the periods
covered by such statements, all in accordance with GAAP
consistently applied.
(b) A true and correct copy of the pro forma balance
sheet of the Borrower as of the Closing Date (the "Pro Forma
Balance Sheet") has heretofore been delivered to the Agent. The
Pro Forma Balance Sheet reflects in all material respects those
adjustments to the unaudited interim combined balance sheet of
Mistic as of June 30, 1995 to be made in connection with the
consummation of the Mistic Acquisition and the transactions
contemplated by the Facility Documents, as if such transactions
had occurred on June 30, 1995, subject to audit adjustments.
(c) The projected balance sheet of the Borrower for
its
current and subsequent Fiscal Years and its operating plan for
such Fiscal Years, including budget, personnel, facilities and
Capital Expenditure projections, on a monthly basis, and
projected
income and cash flows statements for each such Fiscal Year, on a
monthly basis, incorporating the items detailed in such operating
plan for each such Fiscal Year, and accompanied by a description
of the material assumptions used in making such operating plan,
have each been prepared as of the Closing Date in good faith and,
to the Knowledge of the Borrower, are based on reasonable
estimates for the operating performance of the Borrower on and
after the Closing Date.
(d) Except as set forth on the Pro Forma Balance
Sheet,
to the Knowledge of the Borrower, as of the Closing Date, there
are no liabilities of the Borrower, fixed or contingent, which
are
material but are not reflected on the Pro Forma Balance Sheet or
in the notes thereto and which would be required to be recorded
on
the Pro Forma Balance Sheet in accordance with GAAP. No
information, exhibit or report furnished by the Borrower, the
Guarantor or any Affiliate to the Lenders in connection with the
negotiation of this Agreement contained any material misstatement
of fact or omitted to state a material fact or any fact necessary
to make the statements contained therein not materially
misleading. Since December 31, 1994, there has been no change
(other than events affecting the general economy of the United
States or affecting all participants in the beverage industry)
which could reasonably be expected to have a Material Adverse
Effect.
Section 6.06. Ownership and Liens. Each of the
Consolidated
Entities has title to, or valid leasehold interests in, all of
its
material Properties reflected in the financial statements
referred
to in Section 6.05 (other than any Properties disposed of in the
ordinary course of business or otherwise disposed of in
accordance
with the terms of this Agreement), and none of the Properties
owned by any Consolidated Entity and none of its leasehold
interests is subject to any Lien, except as may be permitted
hereunder and except for the Liens created by the Security
Documents.
Section 6.07. Taxes. Each of the Consolidated Entities has
filed all material tax returns (federal, state and local)
required
to be filed and has paid all material taxes, assessments and
governmental charges and levies shown as due thereon, including
interest and penalties, if applicable. The charges, accruals and
reserves on the books of the Consolidated Entities in respect of
taxes, assessments and other governmental charges are adequate,
in
the aggregate, under GAAP.
Section 6.08. ERISA. Each Plan and, to the Knowledge of
the
Borrower, Multiemployer Plan, is in compliance in all material
respects with, and has been administered in all material respects
in compliance with, the applicable provisions of ERISA, the Code
and any other applicable federal or state law, and no event or
condition is occurring or exists concerning which any
Consolidated
Entity would be under an obligation to furnish a report to the
Lender in accordance with Section 7.08(k) hereof. As of the
Closing Date, there exists no Unfunded Benefit Liabilities.
Section 6.09. Subsidiaries and Affiliates. As of the
Closing Date, the Borrower has no Subsidiaries. As of the
Closing
Date, Schedule II sets forth the name of (a) each Subsidiary of
the Guarantor, in each case showing the jurisdiction of
incorporation of each such Subsidiary and percentage of the
Guarantor's ownership in such Subsidiary and (b) to the actual
knowledge of the Borrower, each Affiliate that has an ownership
interest in the Guarantor, in each case showing the percentage of
such Affiliate's ownership interest in the Guarantor. All of the
outstanding shares of capital stock of each Consolidated Entity
are validly issued, fully paid and nonassessable. Except as set
forth on Schedule II, no Consolidated Entity owns or holds the
right to acquire any shares of stock or any other security or
interest in any other Person.
Section 6.10. Capitalization. As of the Closing Date, the
authorized capital stock of the Borrower consists of 3,000 shares
of Common Stock, 884.25 shares of which are issued and
outstanding, and all of which are owned by the Guarantor. All of
the outstanding shares of Common Stock have been duly authorized
and validly issued, and are fully paid and non-assessable. There
are no outstanding preemptive, conversion or other rights,
options
or warrants granted or issued by or binding upon the Borrower for
the purchase or acquisition by any other Person of any shares of
capital stock of the Borrower or any other securities convertible
into, exchangeable for or evidencing the right to subscribe for
any shares of such capital stock. The Borrower is not subject to
any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any shares of its capital stock or
such other rights. The Borrower is not a party to any agreement
granting registration rights to any person with respect to any of
its equity or debt securities. Except as set forth in the
Facility Documents, the Borrower is not a party to any agreement
restricting the voting or transfer of any shares of the capital
stock of the Borrower.
Section 6.11. Credit Arrangements. As of the Closing Date,
Schedule III is a complete and correct list of all credit
agreements, indentures, purchase agreements, guaranties, Capital
Leases and other investments, agreements and arrangements
presently in effect providing for or relating to extensions of
credit (including agreements and arrangements for the issuance of
letters of credit or for acceptance financing) in respect of
which
any Consolidated Entity is in any manner directly or contingently
obligated; and the maximum principal or face amounts of the
credit
in question, outstanding and which can be outstanding, are
correctly stated, and all Liens of any nature given or agreed to
be given as security therefor are correctly described or
indicated
in such Schedule.
Section 6.12. Operation of Business. Each of the
Consolidated Entities possesses all material licenses, permits,
franchises, patents, copyrights, trademarks and trade names, or
rights thereto, to conduct the Business substantially as being
conducted and, to the Knowledge of the Borrower, no Consolidated
Entity is in violation of any valid rights of others with respect
to any of the foregoing.
Section 6.14. Hazardous Materials. Each of the
Consolidated
Entities is in compliance in all material respects with all
Environmental Laws in effect in each jurisdiction where it is
presently doing business. No Consolidated Entity is subject to
any material liability under any Environmental Law.
As of the Closing Date, no Consolidated Entity has received
any (i) notice from any Governmental Authority by which any of
its
present or previously-owned or leased real Properties has been
designated, listed, or identified in any manner by any
Governmental Authority charged with administering or enforcing
any
Environmental Law as a Hazardous Material disposal or removal
site, "Super Fund" clean-up site, or candidate for removal or
closure pursuant to any Environmental Law, (ii) notice of any
Lien
arising under or in connection with any Environmental Law that
has
attached to any revenues of, or to, any of its owned or leased
real Properties, or (iii) summons, citation, notice, directive,
letter, or other written communication from any Governmental
Authority concerning any intentional or unintentional action or
omission by such Consolidated Entity in connection with its
ownership or leasing of any real Property resulting in the
releasing, spilling, leaking, pumping, pouring, emitting,
emptying, dumping, or otherwise disposing of any Hazardous
Material into the environment resulting in any violation of any
Environmental Law.
Section 6.15. No Default on Outstanding Judgments or
Orders.
Each of the Consolidated Entities has satisfied all final
judgments in all material respects and no Consolidated Entity is
in default with respect to any final judgment, writ, injunction,
decree, law, rule or regulation of any Governmental Authority
which default could reasonably be expected to have a Material
Adverse Effect.
Section 6.16. No Defaults on Other Agreements. No
Consolidated Entity is a party to any indenture, loan or credit
agreement or any material lease or other material agreement or
instrument or subject to any charter or corporate restriction
which could reasonably be expected to have a Material Adverse
Effect. No Consolidated Entity is in default in any respect in
the performance, observance or fulfillment of any of the material
obligations, covenants or conditions contained in any agreement
or
instrument material to its business to which it is a party which
could reasonably be expected to have a Material Adverse Effect.
Section 6.17. Labor Disputes and Acts of God. Neither the
Business nor the Properties of any Consolidated Entity are
affected by any fire, explosion, accident, strike, lockout or
other labor dispute, drought, storm, hail, earthquake, embargo,
act of God or of the public enemy or other casualty (whether or
not covered by insurance), in each case which could reasonably be
expected to have a Material Adverse Effect.
Section 6.18. Governmental Regulation. No Obligor is
subject to regulation under the Public Utility Holding Company
Act
of 1935, the Investment Company Act of 1940, the Interstate
Commerce Act, the Federal Power Act or any statute or regulation
limiting its ability in any material respect to incur
indebtedness
for money borrowed as contemplated hereby.
Section 6.19. No Forfeiture. Neither any Consolidated
Entity nor the Guarantor is subject to a Forfeiture Proceeding.
Section 6.20. Solvency.
(a) The present fair saleable value of the assets of
each Obligor after giving effect to all the transactions
contemplated by the Facility Documents and the funding of the
Commitments and the issuance of the Letters of Credit hereunder
exceeds the amount that will be required to be paid on or in
respect of the existing debts and other liabilities (including
contingent liabilities) of such Obligor as they mature.
(b) The Property of each Obligor does not constitute
unreasonably small capital for such Obligor to carry out its
business as now conducted and as proposed to be conducted
including the capital needs of such Obligor.
(c) Each Obligor does not intend to, nor does such
Obligor believe that it will, incur debts beyond its ability to
pay such debts as they mature (taking into account the timing and
amounts of cash to be received by such Obligor, and of amounts to
be payable on or in respect of debt of such Obligor). The cash
available to such Obligor after taking into account all other
anticipated uses of the cash of such Obligor, is anticipated to
be
sufficient to pay all such amounts on or in respect of debt of
such Obligor when such amounts are required to be paid.
Section 6.21. Representations and Warranties in the Mistic
Acquisition Documents. The Agent has received a complete and
correct copy of the Mistic Acquisition Documents (including all
exhibits, schedules and disclosure letters referred to therein or
delivered pursuant thereto, if any) and all amendments thereto,
waivers relating thereto and other side letters or agreements
affecting the terms thereof. The Mistic Acquisition Documents
have been duly executed and delivered by the parties thereto and
are in full force and effect. Each of the representations and
warranties set forth in each of the Mistic Acquisition Documents
of the Borrower, and to the Knowledge of the Borrower, of each
such other Person party thereto, is true and correct in all
material respects as of the Closing Date. Each Mistic
Acquisition
Document is a legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with its terms,
except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and
other similar laws affecting creditors' rights generally and
general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in
equity).
All transactions contemplated by the Mistic Acquisition Documents
to be consummated on or prior to the Closing Date have been
consummated without amendment, waiver or modification of the
terms
thereof.
ARTICLE 7. AFFIRMATIVE COVENANTS.
So long as any Obligation shall remain unpaid, any Letter of
Credit shall remain outstanding or any Lender shall have any
Commitment, the Borrower shall, and shall cause each of its
Subsidiaries to:
Section 7.01. Maintenance of Existence. Preserve and
maintain its corporate existence and good standing in the
jurisdiction of its incorporation, and qualify and remain
qualified as a foreign corporation in each jurisdiction in which
such qualification is required, except where the failure to so
qualify could not reasonably be expected to have a Material
Adverse Effect.
Section 7.02. Conduct of Business. Continue to primarily
engage in the Business.
Section 7.03. Maintenance of Properties. Maintain, keep
and
preserve all of its Properties necessary or useful in the conduct
of the Business in good working order and condition, ordinary
wear
and tear excepted, except where the failure to maintain, keep or
preserve such Properties could not reasonably be expected to have
a Material Adverse Effect.
Section 7.04. Maintenance of Records. Keep adequate
records
and books of account in which true and correct entries will be
made reflecting all material financial transactions of each
Consolidated Entity and which shall be compiled in such form
which
will allow the Borrower to prepare its consolidated financial
statements in accordance with GAAP.
Section 7.05. Maintenance of Insurance. Maintain, or have
maintained on its behalf by the Guarantor or the Borrower,
insurance with financially sound and reputable insurance
companies
or associations accorded a rating by A.M. Best Company of "A-" or
better and a size rating of "XI" or better in such amounts and
covering such risks as are usually carried by companies engaged
in
the same or a similar business and similarly situated, which
insurance may provide for reasonable deductibility from coverage
thereof.
Section 7.06. Compliance with Laws. Comply in all material
respects with all applicable laws, rules, regulations and orders
(including, without limitation, the Food and Drug Act and any
Environmental Law), such compliance to include, without
limitation, paying before the same become delinquent all material
taxes, assessments and governmental charges imposed upon it or
upon its Property, except if they are being contested in good
faith by appropriate proceedings and for which appropriate
reserves are maintained.
Section 7.07. Right of Inspection. At any reasonable time
and from time to time, upon prior written notice and during
normal
business hours (but no prior notice shall be required if a
Default
or an Event of Default has occurred and is continuing), permit
the
Agent or any Lender or any agent or representative thereof, to
examine and make copies and abstracts from the records and books
of account of, and visit the Properties of, any Consolidated
Entity, and to discuss the affairs, finances and accounts of such
Consolidated Entity with its officers and directors and
independent accountants; provided that the Agent and the Lenders
agree that they shall use their best efforts to minimize
interference with such Consolidated Entity's business.
Section 7.08. Reporting Requirements. Furnish directly to
each of the Lenders:
(a) as soon as available and in any event within 105
days after the end of each Fiscal Year, consolidated and
consolidating balance sheets of the Consolidated Entities as of
the end of such Fiscal Year and consolidated and consolidating
income statements and statements of cash flows and changes in
stockholders' equity of the Consolidated Entities for such Fiscal
Year, all in reasonable detail and stating in comparative form
the
respective figures for the corresponding date and period in the
prior Fiscal Year (except that comparative figures shall not be
required in any financial statements delivered prior to September
30, 1996) and all prepared in accordance with GAAP and
accompanied
by an unqualified opinion thereon without qualification by
Deloitte & Touche LLP or other independent accountants of
national
standing selected by the Borrower;
(b) as soon as available and in any event within 50
days after the end of each of the first three Fiscal Quarters of
each Fiscal Year, consolidated and consolidating balance sheets
of
the Consolidated Entities as of the end of such Fiscal Quarter
and
consolidated and consolidating income statements and statements
of
cash flows and changes in stockholders' equity of the
Consolidated
Entities for the period commencing at the end of the previous
Fiscal Year and ending with the end of such Fiscal Quarter, all
in
reasonable detail and stating in comparative form the respective
figures for the corresponding date and period in the previous
Fiscal Year (except that comparative figures shall not be
required
in any financial statements delivered prior to September 30,
1996)
and all prepared in accordance with GAAP (subject to year-end
adjustments and the fact that there are no footnotes thereto) and
certified by the chief financial officer or the chief accounting
officer of the Borrower;
(c) simultaneously with the delivery of the financial
statements referred to in Section 7.08(a) and Section 7.08(b), a
Compliance Certificate of the chief financial officer or the
chief
accounting officer of the Borrower (i) certifying that no Default
or Event of Default has occurred and is continuing or, if a
Default or Event of Default has occurred and is continuing, a
statement as to the nature thereof and the action which is
proposed to be taken with respect thereto, and (ii) with
computations demonstrating compliance with the covenants
contained
in Article 9;
(d) simultaneously with the delivery of the annual
financial statements referred to in Section 7.08(a), a
certificate
of the independent public accountants who audited such statements
to the effect that (i) in making the examination necessary for
the
audit of such statements, they have obtained no knowledge of any
condition or event which constitutes a Default or Event of
Default, or if such accountants shall have obtained knowledge of
any such condition or event, specifying in such certificate each
such condition or event of which they have knowledge and the
nature and status thereof and (ii) such statements fairly present
the elements of the Borrowing Base (in accordance with the
definitions contained herein) as set forth in the Borrowing Base
Certificate for the month ending December 31;
(e) (i) as soon as available and in any event within
20
days after the end of each calendar month, (A) a Borrowing Base
Certificate and (B) a listing of Receivable balances not paid
within 90 days of the invoice date and (ii) as soon as available
and in any event with 20 days of the end of each Fiscal Quarter,
(A) a detailed aged trial balance of the existing Receivables,
specifying each Customer by name and the aged balance of all
Receivables due from such Customer and (B) a listing of all
Customers from which 35% or more of the aggregate amount of
Receivables due have not been not paid within 90 days of the
invoice date, specifying the names of such Customers and the
total
amount of Receivables of such Customers;
(f) simultaneously with the delivery of the financial
statements referred to in Section 7.08(a) and Section 7.08(b),
copies of all written agreements and invoices between any
Consolidated Entity and any Affiliate during each Fiscal Quarter
and a list of all payments made to or by any Affiliate (including
all Management Fees) during such Fiscal Quarter;
(g) not later than the 30th day subsequent to the
commencement of each Fiscal Year, (i) a projected balance sheet
of
the Consolidated Entities for such Fiscal Year on a monthly basis
and (ii) an operating plan for the Consolidated Entities for such
Fiscal Year, including budget, personnel, facilities and Capital
Expenditure projections, on a monthly basis, and a projected
income and cash flows statement for such Fiscal Year, on a
monthly
basis, incorporating the items detailed in such operating plan
for
such Fiscal Year, and accompanied by a description of the
material
assumptions used in making such operating plan;
(h) prior to the consummation of any Acceptable
Acquisition or, if the consideration for such Acceptable
Acquisition is less than $2,000,000, within 10 days after the
consummation thereof, all historical financial statements
delivered to any Consolidated Entity in connection with such
Acceptable Acquisition together with a pro forma balance sheet of
the Consolidated Entities on a monthly basis and a pro forma
projected income and cash flows statement for the Consolidated
Entities for the current and immediately subsequent Fiscal Year
on
a monthly basis, after giving effect to such Acceptable
Acquisition;
(i) promptly after the commencement thereof, notice of
all actions, suits, and proceedings before any Governmental
Authority which could reasonably be expected to result in
liability to any Consolidated Entity in excess of $2,000,000;
(j) as soon as possible and in any event within 10
days
after the occurrence of each Default or Event of Default a
written
notice setting forth the details of such Default or Event of
Default and the action which is proposed to be taken by the
Borrower with respect thereto;
(k) as soon as possible, and in any event within 10
days after any Consolidated Entity has Knowledge that any of the
events or conditions specified below with respect to any Plan or
Multiemployer Plan have occurred or exist, a statement signed by
a senior financial officer of the Borrower setting forth details
respecting such event or condition and the action, if any, which
such Consolidated Entity or an ERISA Affiliate proposes to take
with respect thereto (and a copy of any report or notice required
to be filed with or given to PBGC by such Consolidated Entity or
an ERISA Affiliate with respect to such event or condition): (i)
any reportable event, as defined in Section 4043(b) of ERISA,
with
respect to a Plan with Unfunded Benefit Liabilities in excess of
$1,000,000, as to which PBGC has not by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified
within
30 days of the occurrence of such event (provided that a failure
to meet the minimum funding standard of Section 412 of the Code
or
Section 302 of ERISA including, without limitation, the failure
to
make on or before its due date a required installment under
Section 412(m) of the Code or Section 302(e) of ERISA, shall be a
reportable event regardless of the issuance of any waivers in
accordance with Section 412(d) of the Code) and any request for a
waiver under Section 412(d) of the Code for any such Plan; (ii)
the distribution under Section 4041 of ERISA of a notice of
intent
to terminate any Plan or any action taken by such Consolidated
Entity or an ERISA Affiliate to terminate any Plan; provided that
as a result of such termination, such Consolidated Entity or such
ERISA Affiliate will incur liability in excess of $1,000,000;
(iii) the institution by PBGC of proceedings under Section 4042
of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan with Unfunded Benefit Liabilities in excess
of $1,000,000, or the receipt by such Consolidated Entity or any
ERISA Affiliate of a notice from a similarly underfunded
Multiemployer Plan that such action has been taken by PBGC with
respect to such Multiemployer Plan; (iv) the complete or partial
withdrawal from a Multiemployer Plan by such Consolidated Entity
or any ERISA Affiliate that results in a current payment
obligation in excess of $1,000,000 under Section 4201 or 4204 of
ERISA (including the obligation to satisfy secondary liability as
a result of a purchaser default) or the receipt of such
Consolidated Entity or any ERISA Affiliate of notice from a
Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA or that it intends to
terminate or has terminated under Section 4041A of ERISA; (v) the
adoption of an amendment to any Plan that pursuant to Section
401(a)(29) of the Code or Section 307 of ERISA would result in
the
loss of tax-exempt status of the trust of which such Plan is a
part if such Consolidated Entity or an ERISA Affiliate fails to
timely provide security in excess of $1,000,000 to the Plan in
accordance with the provisions of said Sections; (vi) any event
or
circumstance exists which may reasonably be expected to
constitute
grounds for such Consolidated Entity or any ERISA Affiliate to
incur liability in excess of $1,000,000 under Title IV of ERISA
or
under Sections 412(c)(11) or 412(n) of the Code with respect to
any Plan; or (vii) the Unfunded Benefit Liabilities of one or
more
Plans increase after the date of this Agreement in an amount
which
is material in relation to the financial condition of the
Consolidated Entities; provided, however, that such increase
shall
not be deemed to be material so long as it does not exceed during
any consecutive 3 year period $1,000,000;
(l) promptly after the request of any Lender, copies
of
each annual report filed pursuant to Section 104 of ERISA with
respect to each Plan (including, to the extent required by
Section
104 of ERISA, the related financial and actuarial statements and
opinions and other supporting statements, certifications,
schedules and information referred to in Section 103) and each
annual report filed with respect to each Plan under Section 4065
of ERISA; provided, however, that in the case of a Multiemployer
Plan, such annual reports shall be required to be furnished only
if they are reasonably available to any Consolidated Entity or an
ERISA Affiliate;
(m) subsequent to such Consolidated Entity having a
class of equity securities registered with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended, promptly after the sending or filing thereof,
copies of all proxy statements, quarterly financial statements
and
reports which any Consolidated Entity sends to its stockholders,
and copies of all regular, periodic and special reports, and all
registration statements which such Consolidated Entity files with
the Securities and Exchange Commission or any Governmental
Authority which may be substituted therefor, or with any national
securities exchange;
(n) promptly after becoming aware of the existence of
any material violation or alleged material violation of any
Environmental Law by any Consolidated Entity and with respect to
any facility owned or leased by such Consolidated Entity, prompt
written notice of and a description of the nature of such
violation or alleged violation, what action any Consolidated
Entity is taking or proposes to take with respect thereto and,
when known, any action taken, or proposed to be taken, by any
Governmental Authority with respect thereto;
(o) promptly after the commencement thereof or
promptly
after any Consolidated Entity knows of the commencement or threat
thereof, notice of any Forfeiture Proceeding; and
(p) such other information respecting the condition or
operations, financial or otherwise, of any Consolidated Entity as
the Agent or any Lender may from time to time reasonably request.
Section 7.09. Interest Rate Protection Agreements. Shall
procure within 90 days of the Closing Date and thereafter, so
long
as the aggregate principal amount of the Term Loans is in excess
of $20,000,000, maintain in full force and effect at all times
Interest Rate Protection Agreements which may be with one or more
of the Lenders to protect itself against fluctuations of interest
rates on a notional principal amount of not less than 50% of the
aggregate principal amount of the then outstanding Term Loans on
terms and conditions reasonably acceptable to the Agent (provided
that the term of such Interest Rate Protection Agreements may be
as short as two years subject to renewal for subsequent two year
terms or such shorter term as may coincide with the remaining
period in which the principal amount of the Term Loan (taking
into
account scheduled repayments hereunder) will exceed $20,000,000).
Section 7.10. Additional Guarantors. (a) Promptly upon any
Person becoming a Domestic Subsidiary, (i) cause such Domestic
Subsidiary to (A) guarantee the Obligations, pursuant to a
Guaranty substantially in the form of the Unconditional Guaranty,
(B) secure such Guaranty by granting a security interest in all
of
its personal Property to the Agent, pursuant to a security
agreement substantially in the form of the Security Agreement,
and
(C) secure such Guaranty by pledging all of the equity securities
held by such Domestic Subsidiary (provided that any securities of
a Foreign Subsidiary pledged will not exceed 65% of such Foreign
Subsidiary's voting capital), pursuant to a pledge agreement in
form and substance reasonably satisfactory to the Agent,
(ii) pledge all of the equity securities of such Domestic
Subsidiary owned by any Consolidated Entity to the Agent,
pursuant
to a pledge agreement in form and substance reasonably
satisfactory to the Agent, and (iii) deliver such proof of
corporate action, incumbency of officers, opinions of counsel and
other documents as is consistent with those delivered by the
Borrower pursuant to Article 4 hereof or as the Agent shall have
reasonably requested.
(b) Promptly upon any Person becoming a Foreign Subsidiary,
(i) pledge 65% of the equity securities constituting 65% of such
Foreign Subsidiary's voting capital owned by any Consolidated
Entity to the Agent, pursuant to a pledge agreement in form and
substance reasonably satisfactory to the Agent, and (ii) deliver
such proof of corporate action, incumbency of officers, opinions
of counsel and other documents as is consistent with those
delivered by the Borrower pursuant to Article 4 hereof or as the
Agent shall have reasonably requested.
ARTICLE 8. NEGATIVE COVENANTS.
So long as any Obligation shall remain unpaid, any Letter of
Credit shall remain outstanding or any Lender shall have any
Commitment, the Borrower shall not, and shall not permit any
Subsidiary to:
Section 8.01. Debt. Create, incur, assume or suffer to
exist any Debt, except:
(a) Debt of the Borrower under this Agreement, the
Notes, the Letters of Credit and the other Facility Documents;
(b) Debt described on Schedule III and any renewals,
extensions or refinancings thereof, provided that any such
renewal, extension or refinancing shall not increase the then
outstanding principal amount of such Debt;
(c) Debt consisting of Guaranties permitted pursuant
to
Section 8.02;
(d) Debt under Interest Rate Protection Agreements;
(e) Debt under the Permitted SARs;
(f) Debt consisting of accrued Management Fees
permitted by Section 8.13 provided that such Debt is subordinated
to the Obligations on terms and conditions set forth in the
Affiliate Subordination Agreement;
(g) accounts payable to trade creditors for goods or
services which are not aged more than 90 days from billing date
and current operating liabilities (other than for borrowed money)
which are not more than 90 days past due, in each case incurred
in
the ordinary course of business and paid within the specified
time, unless contested in good faith and by appropriate
proceedings;
(h) Debt (including Debt assumed in connection with an
Acceptable Acquisition) incurred in accordance with this Section
8.01(h) secured by Purchase Money Liens permitted by Section
8.03(i), provided that the aggregate principal amount of all such
Debt for all Consolidated Entities together with all Debt secured
by Purchase Money Liens described on Schedule III does not exceed
at any time (i) if such time is on or before December 31, 1995,
$1,500,000, (ii) if such time is after December 31, 1995 and on
or
before December 31, 1996, $3,000,000 and (iii) if such time is
after December 31, 1996, $5,000,000; and
(i) Debt incurred or assumed in accordance with this
Section 8.01(i) in connection with any Acceptable Acquisition
subordinated to the Obligations on terms and conditions
acceptable
to the Required Lenders, provided (i) that no such Debt shall be
incurred or assumed on or prior to December 31, 1996, (ii) if
such
Acceptable Acquisition occurs during the Fiscal Year ending on
December 31, 1997, the aggregate principal amount of the Debt
incurred or assumed in connection with such Acceptable
Acquisition
and for all prior Acceptable Acquisitions during such Fiscal Year
does not exceed $5,000,000 and (iii) if such Acceptable
Acquisition occurs during each Fiscal Year ending thereafter, the
aggregate principal amount of the Debt incurred or assumed in
connection with such Acceptable Acquisition and for all prior
Acceptable Acquisitions during each such Fiscal Year does not
exceed $7,500,000.
Section 8.02. Guaranties. Create, incur, assume or suffer
to exist any Guaranty, except:
(a) Guaranties by endorsement of negotiable
instruments
for deposit or collection or similar transactions in the ordinary
course of business;
(b) Guaranties by the Subsidiaries of the Borrower of
the Obligations;
(c) Guaranties by the Borrower of Debt of its
Subsidiaries permitted by Section 8.01 and rental obligations of
its Subsidiaries under leases permitted under Section 8.04; and
(d) Guaranties by the Borrower of the rental
obligations of distributors under leases; provided the aggregate
amount of such obligations guarantied does not exceed at any time
$1,000,000.
Section 8.03. Liens. Create, incur, assume or suffer to
exist any Lien, upon or with respect to any of its Property, now
owned or hereafter acquired, except:
(a) Liens in favor of the Agent on behalf of the
Lenders securing the Obligations hereunder, under the Notes,
under
the Letters of Credit and under the other Facility Documents;
(b) Liens for taxes or assessments or other government
charges or levies if not yet due and payable or if due and
payable
if they are being contested in good faith by appropriate
proceedings and for which appropriate reserves are maintained;
(c) Liens imposed by law, such as mechanic's,
materialmen's, landlord's, warehousemen's and carrier's Liens,
and
other similar Liens, securing obligations incurred in the
ordinary
course of business which are not past due for more than 60 days,
or which are being contested in good faith by appropriate
proceedings and for which appropriate reserves have been
established;
(d) Liens under workmen's compensation, unemployment
insurance, social security or similar legislation (other than
Liens in excess of $1,000,000 under ERISA or the related
provisions of the Code);
(e) Liens, deposits or pledges to secure the
performance of bids, tenders, contracts (other than contracts for
the payment of money), leases (permitted under the terms of this
Agreement), public or statutory obligations, surety, stay,
appeal,
indemnity, performance or other similar bonds, or other similar
obligations arising in the ordinary course of business;
(f) judgment and other similar Liens arising in
connection with court proceedings; provided that the execution or
other enforcement of such Liens is effectively stayed and the
claims secured thereby are being actively contested in good faith
and by appropriate proceedings;
(g) easements, rights-of-way, restrictions and other
similar encumbrances which, in the aggregate, do not materially
interfere with the occupation, use and enjoyment by any
Consolidated Entity of the Property encumbered thereby in the
normal course of its business or materially impair the value of
the Property subject thereto;
(h) Liens described on Schedule III provided that such
Liens shall secure only those obligations which they secure on
the
date hereof or any renewals, extensions or refinancings thereof
permitted pursuant to Section 8.01(b) but not the extensions of
such Liens to other Property; and
(i) Purchase Money Liens; provided that:
(i) any Property subject to such Purchase Money
Lien is acquired by any Consolidated Entity (A) in an Acceptable
Acquisition in compliance with Section 8.01(h) or (B) in the
ordinary course of its business, and the Lien on any such
Property
is created contemporaneously with, or assumed in connection with,
such acquisition;
(ii) the obligation secured by any Lien so
created,
assumed or existing shall not exceed 100% of the lesser of cost
or
fair market value as of the time of acquisition of the Property
covered thereby to such Consolidated Entity acquiring the same;
(iii) each such Lien shall attach only to the
Property so acquired and fixed improvements thereon; and
(iv) the obligations secured by such Lien are
permitted by the provisions of Section 8.01(h) and, in the case
of
Capital Expenditures, the related expenditure is permitted under
Section 8.12.
Section 8.04. Leases. Create, incur, assume or suffer to
exist any obligation as lessee for the rental or hire of any
Property, except:
(a) leases existing on the date of this Agreement and
any extensions, supplements or renewals thereof;
(b) Capital Leases permitted by Section 8.01, Section
8.03 and Section 8.12; and
(c) leases (other than Capital Leases) which do not in
the aggregate require the Consolidated Entities to make payments
(including taxes, insurance, maintenance and similar expense
which
any Consolidated Entity is required to pay under the terms of any
lease) in any Fiscal Year in excess of $500,000.
Section 8.05. Investments. Make any Investment, except
for:
(a) Investments in cash and Cash Equivalents;
(b) Investments in Property to be used or useful in
the
ordinary course of business of any Consolidated Entity;
(c) Investments in stock, obligations or securities
received in settlement of debts (created in the ordinary course
of
business) owing to any Consolidated Entity;
(d) Investments made in connection with an Acceptable
Acquisition of a Foreign Subsidiary;
(e) Investments of Property (other than the
Trademarks)
in any Obligor or in any corporation that concurrently with such
Investment becomes an Obligor;
(f) Investments of Property (other than the
Trademarks)
in any Foreign Subsidiary or in connection with an Acceptable
Acquisition of a Foreign Subsidiary, provided that the aggregate
amount of all such Investments does not exceed $2,000,000;
(g) Investments of the Trademarks in any Special
Trademark Subsidiary and Investments in certain assets permitted
under Section 8.17; and
(h) Investments in travel, vacation and similar
advances to employees of any Consolidated Entity for the
reimbursement of expenses made or incurred in the ordinary course
of business.
Section 8.06. Distributions. Make any Distribution, except
that:
(a) any Consolidated Entity may make Distributions
payable solely in its common stock; and
(b) any Subsidiary of the Borrower may make
Distributions to the Borrower or any Wholly-Owned Subsidiary of
the Borrower;
(c) the Borrower may make Distributions to fulfill its
obligations upon the exercise of the Permitted SARs so long as no
Default or Event of Default has occurred and is continuing or
would occur and be continuing after giving effect to such
Distribution; and
(d) the Borrower may make Distributions on the Closing
Date to the Guarantor not in excess of (a) $100,000 as
reimbursement for certain fees and expenses paid by the Guarantor
on behalf of the Borrower prior to the Closing Date, (b) $100,000
as reimbursement for legal fees and expenses provided by the
Guarantor on behalf of the Borrower prior to the Closing Date and
(c) $500,000 as reimbursement for fees and expenses for advisory
related services provided by the Guarantor in connection with the
Mistic Acquisition, the Loans and the Letters of Credit; provided
that the aggregate amount of all such fees and expenses together
with all other fees and expenses paid (whether or not paid on the
Closing Date) in connection with the Mistic Acquisition, the
Loans
and the Letters of Credit to be issued on the Closing Date shall
not exceed $4,000,000.
Section 8.07. Sale of Assets. Sell, lease, assign,
transfer
or otherwise dispose of any of its now owned or hereafter
acquired
Property (including, without limitation, shares of stock and
indebtedness, receivables and leasehold interests), except:
(a) any sale, lease, assignment, transfer or other
disposition of Property during each Fiscal Year for fair market
value in cash so long as the aggregate consideration for such
disposition and all other dispositions made during such Fiscal
Year does not exceed $2,000,000, the proceeds are applied in
accordance with Section 2.06(b) and no Default or Event of
Default
has occurred and is continuing or would occcur and be continuing
after giving effect to such disposition;
(b) for Inventory disposed of in the ordinary course
of
business; and
(c) the sale or other disposition of assets no longer
used or useful in the conduct of its business.
Section 8.08. Transactions with Affiliates. (a) Make any
Investment in an Affiliate; (b) transfer, sell, lease, assign or
otherwise dispose of any Property to any Affiliate; (c) merge
into
or consolidate with or purchase or acquire Property from any
Affiliate; or (d) enter into any other transaction directly or
indirectly with or for the benefit of any Affiliate (including,
without limitation, guaranties and assumption of obligations of
any Affiliate); provided that (x) any Affiliate who is an
individual may serve as a director, officer or employee of any
Consolidated Entity and receive reasonable compensation for his
or
her services in such capacity and (y) the Borrower may enter into
the Management Agreement, the Tax Sharing Agreement and any
Consolidated Entity may enter into other transactions (other than
Investments by any Consolidated Entity in any Affiliate)
providing
for the leasing of Property, the rendering or receipt of services
or the purchase or sale of inventory and other Property in the
ordinary course of business; provided that in each case in the
foregoing clause (y) the monetary or business consideration
arising therefrom would be substantially as advantageous to such
Consolidated Entity as the monetary or business consideration
which would be obtained in a comparable arm's length transaction
with a Person not an Affiliate. Notwithstanding the foregoing,
any Consolidated Entity may make payments to the Guarantor in
satisfaction of the Borrower's obligations under employee benefit
programs for employees of the Consolidated Entities.
Section 8.09. Mergers. Merge or consolidate with, or sell,
assign, lease or otherwise dispose of (whether in one transaction
or in a series of related transactions) all or substantially all
of its assets (whether now owned or hereafter acquired) to, any
Person, or acquire all or substantially all of the assets or the
business of any Person (or enter into any agreement to do any of
the foregoing), except that:
(a) any Wholly-Owned Subsidiary may merge into or
consolidate with or transfer substantially all of its assets to
the Borrower or any other Wholly-Owned Subsidiary of the
Borrower;
and
(b) any Consolidated Entity may effect any Acquisition
permitted by Section 8.10.
Section 8.10. Acquisitions. Make any Acquisition other
than
an Acceptable Acquisition.
Section 8.11. No Activities Leading to Forfeiture. Engage
in or propose to be engaged in the conduct of any business or
activity which could reasonably be expected to result in a
Forfeiture Proceeding.
Section 8.12. Capital Expenditures. Make or commit to make
any Capital Expenditure, except for Consolidated Capital
Expenditures made in the ordinary course of business (a) during
the Fiscal Year ending on December 31, 1995, not exceeding
$500,000 in the aggregate, (b) during the Fiscal Years ending on
December 31, 1996 and December 31, 1997, not exceeding $1,200,000
in the aggregate for each such Fiscal Year and (c) during each
Fiscal Year ending thereafter, not exceeding $1,500,000 in the
aggregate for each such Fiscal Year.
Section 8.13. Management Fees. Accrue or make any payment
with respect to Management Fees; provided that (a) Management
Fees
may be accrued and paid monthly in accordance with, and subject
to
the limitations contained in, the Management Agreement; (b) no
Default or Event of Default exists or would exist after giving
effect to the making of any such payment; (c) during the Fiscal
Year ending on December 31, 1995, no Management Fee may be
accrued
or paid; (d) during the Fiscal Year ending on December 31, 1996
and during each Fiscal Year ending thereafter, no more than
$1,500,000 in Management Fees may be accrued for each such Fiscal
Year; (e) during the Fiscal Year ending on December 31, 1996, no
more than $1,500,000 in Management Fees may be paid during such
Fiscal Year; (f) during the Fiscal Year ending on December 31,
1997 and during each Fiscal Year ending thereafter, no more than
$1,750,000 of Management Fees may be paid (including amounts
accrued and unpaid for prior Fiscal Years) during each such
Fiscal
Year; and (g) all such Management Fees are subordinate to the
Obligations on terms and conditions set forth in the Affiliate
Subordination Agreement.
Section 8.14. Borrower Capital Stock. Issue, sell or
exchange, agree or obligate itself to issue, sell or exchange,
any
additional shares of capital stock of the Borrower except
(a) directors' qualifying shares; (b) Common Stock issued as a
stock dividend or upon a stock split to holders of Common Stock
or
upon any subdivision or combination of shares of Common Stock;
(c)
shares of Common Stock, or options exercisable therefor, or
measurement shares for which stock appreciation rights have been
issued, to directors, officers or employees of or consultants to
any Consolidated Entity pursuant to any qualified or
non-qualified
stock option plan or agreement, employee stock ownership plan,
stock purchase agreement, stock plan, stock restriction
agreement,
employment agreement or consulting agreement or such other
options, arrangements, agreements or plans approved by the Board
of Directors of the Borrower so long as the aggregate number of
such shares does not exceed 15% of the Fully Diluted Outstanding
Common Stock at the time of proposed issuance; and (d) shares of
Common Stock so long as no more than 10% of the Fully Diluted
Outstanding Common Stock is issued to any Person or two or more
Persons acting in concert (other than (w) the Guarantor, (x) any
Affiliate, including, without limitation, Nelson Peltz and Peter
May and any of their respective affiliates controlled by them
including DWG Acquisition Group, L.P. or any affiliate thereof,
so
long as all such shares shall remain subject to the Lien of the
Pledge Agreement, (y) Michael Weinstein, any member of his
immediate family and any trust for the benefit of any such family
member or (z) Ernest Cavallo, any member of his immediate family
and any trust for the benefit of any such family member) and the
Guarantor continues to own, directly or indirectly at least 51%
of
the Fully Diluted Outstanding Common Stock.
Section 8.15. Rights under Other Agreements. Amend, or
waive or otherwise relinquish any of its rights or causes of
action in a manner adverse (or, in the case of any Mistic
Acquisition Document, materially adverse) to the Borrower and its
Subsidiaries, taken as a whole, or the Lenders under or arising
out of any provision of any Mistic Acquisition Document, the
Management Agreement and the Tax Sharing Agreement.
Section 8.16. Restrictions. Enter into, or suffer to
exist,
any agreement with any Person other than the Agent or the Lenders
that (a) prohibits, requires the consent of such Person for or
limits the ability of (i) any Consolidated Entity to make
Distributions, pay liabilities owed to any other Consolidated
Entity, make loans or advances to any Consolidated Entity or
transfer any of its property to any other Consolidated Entity,
(ii) any Consolidated Entity to create, incur, assume or suffer
to
exist any Lien upon any of its Property or (iii) any Obligor to
enter into any modification or supplement of the Facility
Documents; or (b) contains financial covenants which, taken as a
whole, are more restrictive on the Consolidated Entities than the
financial covenants contained in Article 9.
Section 8.17. Special Trademark Subsidiaries. Permit any
Special Trademark Subsidiary at any time to (i) create, incur,
assume or have outstanding any Debt or other liabilities or
obligations except for the Guaranty of the Obligations hereunder
or liabilities incurred in the ordinary course in connection with
the maintenance of its existence or the protection of the
Trademarks; (ii) own any asset except the Trademarks, rights
under
license agreements relating to the Trademarks and assets
(including cash and Cash Equivalents) owned in connection with
the
maintenance of its existence; (iii) enter into any transaction of
merger, consolidation or amalgamation other than into the
Borrower
or into another Special Trademark Subsidiary; (iv) create, incur
or permit to exist any Lien on or in respect of (except in favor
of the Agent to secure the Obligations or Liens permitted under
Section 8.03(b), Section 8.03(d), Section 8.03(e), Section
8.03(f)
or Section 8.03(g)), or sell, lease, assign, transfer or
otherwise
dispose of, any of its of the Trademarks other than to the
Borrower; (v) engage in any other business other than, whether
directly or indirectly, the holding of and licensing of the
Trademarks; or (vi) make or hold any Investment.
Section 8.18. No Foreign Trademarks. Permit any Foreign
Subsidiary to own a Trademark.
Section 8.19. Fiscal Year. Permit the fiscal year of the
Consolidated Entities to end on a day other than December 31.
ARTICLE 9. FINANCIAL COVENANTS.
So long as any Obligation shall remain unpaid, any Letter of
Credit shall remain outstanding or any Lender shall have any
Commitment:
Section 9.01. Interest Coverage Ratio. The Borrower shall
maintain, as determined at the end of each Fiscal Quarter, an
Interest Coverage Ratio of not less than the applicable ratio set
forth in the following table:
If such Fiscal Quarter ends Applicable Ratio
on or after December 31, 1995 and
on or before September 30, 1996 2.40 to 1.00
after September 30, 1996 and on or before
September 30, 1997 2.70 to 1.00
after September 30, 1997 and on or before
September 30, 1998 3.00 to 1.00
after September 30, 1998 and on or before
September 30, 1999 3.50 to 1.00
after September 30, 1999 4.00 to 1.00
Section 9.02. Fixed Charge Coverage Ratio. The Borrower
shall maintain, as determined at the end of each Fiscal Quarter,
a Fixed Charge Coverage Ratio of not less than the applicable
ratio set forth in the following table:
If such Fiscal Quarter ends Applicable Ratio
on December 31, 1995 1.60 to 1.00
on March 31, 1996 1.45 to 1.00
after March 31, 1996 and on or before
September 30, 1998 1.30 to 1.00
after September 30, 1998 and on or before
September 30, 2000 1.15 to 1.00
after September 30, 2000 1.10 to 1.00
Section 9.03. Leverage Ratio. The Borrower shall maintain,
as determined at the end of each Fiscal Quarter, a Leverage Ratio
of not greater than the applicable ratio set forth in the
following table:
If such Fiscal Quarter ends Applicable Ratio
on December 31, 1995 and
on March 31, 1996 4.50 to 1.00
on June 30, 1996 4.70 to 1.00
on September 30, 1996 4.00 to 1.00
after September 30, 1996 and on or before
September 30, 1997 3.50 to 1.00
after September 30, 1997 and on or before
September 30, 1998 3.00 to 1.00
after September 30, 1998 and on or before
September 30, 1999 2.50 to 1.00
after September 30, 1999 and on or before
September 30, 2000 2.25 to 1.00
after September 30, 2000 2.00 to 1.00
Section 9.04. Minimum Net Worth. The Borrower shall
maintain at all times Net Worth of not less than the applicable
amount set forth in the following table:
If such time is Applicable Amount
on or after the Closing Date and
on or before December 30, 1995 $25,000,000
after December 30, 1995 and on or before
December 30, 1996 $26,000,000
after December 30, 1996 and on or before
December 30, 1997 $29,000,000
after December 30, 1997 and on or before
December 30, 1998 $33,000,000
after December 30, 1998 and on or before
December 30, 1999 $39,000,000
after December 30, 1999 and on or before
December 30, 2000 $45,000,000
after December 30, 2000 $50,000,000
Section 9.05. Current Ratio. The Borrower shall maintain at
all times a Current Ratio of not less than the applicable ratio
set forth in the following table:
If such time is Applicable Ratio
on or after the Closing Date and
on or before March 31, 1996 1.05 to 1.00
between each April 1 and September 30
thereafter 1.20 to 1.00
between each October 1 and March 31
thereafter 1.10 to 1.00
ARTICLE 10. EVENTS OF DEFAULT.
Section 10.01. Events of Default. Any of the following
events shall be an "Event of Default":
(a) the Borrower shall: (i) fail to pay the principal
of any Note or any Reimbursement Obligation on or before the date
when due and payable; or (ii) fail to pay interest on any Note or
any fee or other amount due hereunder or under any other Facility
Document on or before 5 Banking Days after the date when due and
payable;
(b) any representation or warranty made or deemed made
by any Consolidated Entity in this Agreement or in any other
Facility Document or which is contained in any written
certificate, document, opinion, financial or other statement
furnished at any time under or in connection with any Facility
Document shall prove to have been incorrect in any material
respect on or as of the date made or deemed made;
(c) (i) the Borrower shall fail to perform or observe
any term, covenant or agreement contained in Section 2.03,
Section
3.02, Article 8 or Article 9; or (ii) any Consolidated Entity
shall fail to perform or observe any term, covenant or agreement
on its part to be performed or observed (other than the
obligations specifically referred to elsewhere in this Section
10.01) in any Facility Document to which it is a party and, in
each such case, such failure shall continue for 30 consecutive
days after the Borrower has obtained Knowledge thereof;
(d) any Consolidated Entity shall: (i) fail to pay any
Debt in an aggregate amount exceeding $2,000,000 (other than the
payment obligations described in (a) above), of such Consolidated
Entity, or any interest or premium thereon, when due (whether by
scheduled maturity, required prepayment, acceleration, demand or
otherwise), taking into account any applicable grace periods;
(ii)
fail to perform or observe any term, covenant or condition on its
part to be performed or observed under any agreement or
instrument
relating to any such Debt, when required to be performed or
observed, taking into account any applicable grace periods, if
the
effect of such failure to perform or observe is to accelerate, or
to permit the acceleration of, after the giving of notice or
passage of time, or both, the maturity of such indebtedness,
whether or not such failure to perform or observe shall be waived
by the holder of such indebtedness; or any such indebtedness
shall
be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), prior
to the stated maturity thereof;
(e) any Consolidated Entity: (i) shall generally not,
or be unable to, or shall admit in writing its inability to, pay
its debts as such debts become due; or (ii) shall make an
assignment for the benefit of creditors, petition or apply to any
tribunal for the appointment of a custodian, receiver or trustee
for it or a substantial part of its assets; or (iii) shall
commence any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or liquidation law
or statute of any jurisdiction, whether now or hereafter in
effect; or (iv) shall have had any such petition or application
filed or any such proceeding shall have been commenced, against
it, in which an adjudication or appointment is made or order for
relief is entered, or which petition, application or proceeding
remains undismissed for a period of 90 days or more; or (v) shall
be the subject of any such proceeding under which all or any
substantial part of its Property may be subject to seizure,
forfeiture or divestiture (other than a proceeding in respect of
a Lien permitted under Section 8.03(b)); or (vi) by any act or
omission shall indicate its consent to, approval of or
acquiescence in any such petition, application or proceeding or
order for relief or the appointment of a custodian, receiver or
trustee for all or any substantial part of its Property; or (vii)
shall suffer any such custodianship, receivership or trusteeship
to continue undischarged for a period of 90 days or more;
(f) one or more judgments, decrees or orders for the
payment of money in excess of $2,000,000 in the aggregate shall
be
rendered against any Consolidated Entity and such judgments,
decrees or orders shall continue unsatisfied and in effect for a
period of 30 consecutive days without being vacated, discharged,
satisfied or stayed or bonded pending appeal;
(g) any event or condition shall occur or exist with
respect to any Plan or Multiemployer Plan concerning which any
Consolidated Entity is under an obligation to furnish a report to
the Lender in accordance with Section 7.08(k) hereof and as a
result of such event or condition, together with all other such
events or conditions, such Consolidated Entity has incurred or is
reasonably likely to incur an obligation to pay in excess of
$1,000,000 to a Plan, a Multiemployer Plan, the PBGC, or a
Section 4042 Trustee (or any combination of the foregoing) which
is material in relation to the financial position of the
Consolidated Entities;
(h) the Unfunded Benefit Liabilities of one or more
Plans have increased after the date of this Agreement by an
amount
in excess of $1,000,000;
(i) a Change of Control shall have occurred;
(j) any Forfeiture Proceeding shall have been commenced
or any Consolidated Entity shall have given any Lender written
notice of the commencement of any Forfeiture Proceeding as
provided in Section 7.08(o);
(k) an "Event of Default" under and as defined in the
Unconditional Guaranty shall have occurred and be continuing; or
(l) any of the Security Documents shall at any time
after its execution and delivery and for any reason other than
pursuant to the terms hereof and thereof cease: (i) to create a
valid and perfected first priority security interest in and to
the
Property purported to be subject to such Agreement; or (ii) to be
in full force and effect or shall be declared null and void, or
the validity or enforceability thereof shall be contested by any
Obligor or the Guarantor or such Person shall deny it has any
further liability or obligation under the Security Documents or
such Person shall fail to perform any of its material obligations
thereunder and such default shall have continued for a period of
30 days after such Person has obtained Knowledge thereof.
Section 10.02. Remedies. If any Event of Default shall
occur and be continuing, the Agent shall, upon request of the
Required Lenders, by notice to the Borrower, (a) declare the
Commitments to be terminated, whereupon the same shall forthwith
terminate and so shall the obligations of the Issuing Lender to
issue any Letter of Credit, (b) declare the outstanding principal
of the Notes, all interest thereon and all other amounts payable
under this Agreement, the Notes and the other Facility Documents
to be forthwith due and payable, whereupon the Notes, all such
interest and all such amounts shall become and be forthwith due
and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by
the Borrower and/or (c) direct the Borrower to pay to the Agent
an
amount, to be held as cash security in the cash collateral
account
held by the Agent under Section 3.08, equal to the Letter of
Credit Obligations then outstanding; provided that, in the case
of
an Event of Default referred to in Section 10.01(e) or Section
10.01(i) above, the Commitments and the obligation to issue
Letters of Credit shall be immediately terminated, and the Notes,
the Letter of Credit Obligations, all interest thereon and all
other amounts payable under this Agreement, the Notes, the
Letters
of Credit and the other Facility Documents shall be immediately
due and payable without notice, presentment, demand, protest or
other formalities of any kind, all of which are hereby expressly
waived by the Borrower.
Section 10.03. Cure. If as of the end of any Fiscal Quarter
the Borrower shall have failed to be in compliance with the
provisions of Section 9.01, Section 9.02 or Section 9.03, no
Event
of Default shall be deemed to have occurred as a result of such
failure if, prior to the date that is thirty (30) days (and, in
the case of the Fiscal Quarter ending on December 31, sixty (60)
days) after the end of such Fiscal Quarter, the Borrower shall
have received a cash rebate of Management Fees from the Guarantor
in an amount sufficient such that the Borrower would have been in
compliance (on a pro forma basis) with the provisions of Section
9.01, Section 9.02 and Section 9.03 had the amount of Management
Fees deducted from EBIT been decreased by an amount equal to the
amount of such cash rebate received.
ARTICLE 11. THE AGENT.
Section 11.01. Appointment, Powers and Immunities of Agent.
Each Lender hereby irrevocably (but subject to removal by the
Required Lenders pursuant to Section 11.09) appoints and
authorizes the Agent to act as its agent hereunder and under any
other Facility Document with such powers as are specifically
delegated to the Agent by the terms of this Agreement and any
other Facility Document, together with such other powers as are
reasonably incidental thereto. The Agent shall have no duties or
responsibilities except those expressly set forth in this
Agreement and any other Facility Document, and shall not by
reason
of this Agreement be a trustee for any Lender. The Agent shall
not be responsible to the Lenders for any recitals, statements,
representations or warranties made by any Obligor, the Guarantor
or any of their respective officers and officials or by any other
Person contained in this Agreement or any other Facility
Document,
or in any certificate or other document or instrument referred to
or provided for in, or received by any of them under, this
Agreement or any other Facility Document, or for the value,
legality, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Facility Document or
any other document or instrument referred to or provided for
herein or therein, or for the perfection or priority of any
collateral security for the Loans or the Letters of Credit or for
any failure by any Obligor or the Guarantor to perform any of its
obligations hereunder or thereunder. The Agent may employ agents
and attorneys-in-fact and shall not be responsible, except as to
money or securities received by it or its authorized agents, for
the negligence or misconduct of any such agents or attorneys-in-
fact selected by it with reasonable care. Neither the Agent nor
any of its directors, officers, employees or agents shall be
liable or responsible for any action taken or omitted to be taken
by it or them hereunder or under any other Facility Document or
in
connection herewith or therewith, except for its or their own
gross negligence or willful misconduct.
Section 11.02. Reliance by Agent. The Agent shall be
entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telex,
telegram
or cable) reasonably believed by it to be genuine and correct and
to have been signed or sent by or on behalf of the proper Person
or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Agent.
The Agent may deem and treat each Lender as the holder of the
Obligations attributable to it for all purposes hereof unless and
until a notice of the assignment or transfer thereof satisfactory
to the Agent signed by such Lender shall have been furnished to
the Agent but the Agent shall not be required to deal with any
Person who has acquired a participation in any Obligation from a
Lender. As to any matters not expressly provided for by this
Agreement or any other Facility Document, the Agent in its
capacity as such shall in all cases be fully protected in acting,
or in refraining from acting, hereunder in accordance with
instructions signed by the Required Lenders, and such
instructions
of the Required Lenders and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders and any
other holder of all or any portion of any Obligation.
Section 11.03. Defaults. The Agent shall not be deemed to
have knowledge of the occurrence of a Default or Event of Default
(other than the non-payment of principal of or interest on the
Loans and the Letter of Credit Obligations to the extent the same
is required to be paid to the Agent for the account of the
Lenders) unless the Agent has received notice from a Lender or
the
Borrower specifying such Default or Event of Default and stating
that such notice is a "Notice of Default." In the event that the
Agent receives such a notice of the occurrence of a Default or
Event of Default, the Agent shall give prompt notice thereof to
the Lenders (and shall give each Lender prompt notice of each
such
non-payment). The Agent shall (subject to Section 11.08) take
such action with respect to such Default or Event of Default
which
is continuing as shall be directed by the Required Lenders;
provided that, unless and until the Agent shall have received
such
directions, the Agent may take such action, or refrain from
taking
such action, with respect to such Default or Event of Default as
it shall deem advisable in the best interest of the Lenders; and
provided further that the Agent shall not be required to take any
such action which it determines to be contrary to law.
Section 11.04. Rights of Agent as a Lender. With respect to
its Commitments and the Obligations held by it, the Agent in its
capacity as a Lender hereunder shall have the same rights and
powers hereunder as any other Lender and may exercise the same as
though it were not acting as the Agent, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include
the Agent in its capacity as a Lender. The Agent and its
affiliates may (without having to account therefor to any Lender)
accept deposits from, lend money to (on a secured or unsecured
basis), and generally engage in any kind of banking, trust or
other business with, any Consolidated Entity (and any of its
Affiliates) as if it were not acting as the Agent, and the Agent
may accept fees and other consideration from any Consolidated
Entity, the Guarantor and any Affiliate for services in
connection
with this Agreement or otherwise without having to account for
the
same to the Lenders. Although the Agent and its affiliates may
in
the course of such relationships and relationships with other
Persons acquire information about any Consolidated Entity, the
Guarantor, any Affiliate and such other Persons, the Agent shall
have no duty to disclose such information to the Lenders.
Section 11.05. Indemnification of Agent. The Lenders agree
to indemnify the Agent (to the extent not reimbursed under
Section
12.03 or under the applicable provisions of any other Facility
Document, but without limiting the obligations of the Borrower
under Section 12.03 or such provisions), ratably in accordance
with the aggregate unpaid principal amount of the Obligations
attributable to the Lenders (without giving effect to any
participations, in all or any portion of the Obligations, sold by
them to any other Person) (or, if no Obligations are at the time
outstanding, ratably in accordance with their respective
Commitments), for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of this Agreement, any other Facility
Document or any other documents contemplated by or referred to
herein or the transactions contemplated hereby or thereby
(including, without limitation, the costs and expenses which the
Borrower is obligated to pay under Section 12.03 or under the
applicable provisions of any other Facility Document but
excluding, unless a Default or Event of Default has occurred,
normal administrative costs and expenses incident to the
performance of its agency duties hereunder) or the enforcement of
any of the terms hereof or thereof or of any such other documents
or instruments; provided that no Lender shall be liable for any
of
the foregoing to the extent they arise from the gross negligence
or wilful misconduct of the Agent.
Section 11.06. Documents. The Agent will forward to each
Lender, promptly after the Agent's receipt thereof, a copy of
each
report, notice or other document required by this Agreement or
any
other Facility Document to be delivered to the Agent for such
Lender.
Section 11.07. Non-Reliance on Agent and Other Lenders.
Each Lender agrees that it has, independently and without
reliance
on the Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit
analysis of the Consolidated Entities and the Guarantor and
decision to enter into this Agreement and that it will,
independently and without reliance upon the Agent or any other
Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own analysis
and decisions in taking or not taking action under this Agreement
or any other Facility Document. The Agent shall not be required
to keep itself informed as to the performance or observance by
the
Consolidated Entities or the Guarantor of this Agreement or any
other Facility Document or any other document referred to or
provided for herein or therein or to inspect the Properties or
books of any Consolidated Entity or the Guarantor. Except for
notices, reports and other documents and information expressly
required to be furnished to the Lenders by the Agent hereunder,
the Agent shall not have any duty or responsibility to provide
any
Lender with any credit or other information concerning the
affairs, financial condition or business of any Consolidated
Entity or the Guarantor (or any of their respective Affiliates)
which may come into the possession of the Agent or any of its
affiliates. The Agent shall not be required to file this
Agreement, any other Facility Document or any document or
instrument referred to herein or therein, for record or give
notice of this Agreement, any other Facility Document or any
document or instrument referred to herein or therein, to anyone.
Section 11.08. Failure of Agent to Act. Except for action
expressly required of the Agent hereunder, the Agent shall in all
cases be fully justified in failing or refusing to act hereunder
unless it shall have received further assurances (which may
include cash collateral) of the indemnification obligations of
the
Lenders under Section 11.05 in respect of any and all liability
and expense which may be incurred by it by reason of taking or
continuing to take any such action.
Section 11.09. Resignation or Removal of Agent. Subject to
the appointment and acceptance of a successor Agent as provided
below, the Agent may resign at any time by giving 30 days prior
written notice thereof to the Lenders and the Borrower, and the
Agent may be removed at any time with or without cause by the
Required Lenders; provided that the Borrower and the other
Lenders
shall be promptly notified thereof. Upon any such resignation or
removal, the Required Lenders shall have the right to appoint a
successor Agent. If no successor Agent shall have been so
appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Agent's giving of
notice of resignation or the Required Lenders' removal of the
retiring Agent, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent, which shall be a bank which
has an office in New York, New York. The Required Lenders or the
retiring Agent, as the case may be, shall upon the appointment of
a successor Agent promptly so notify the Borrower and the other
Lenders. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and
obligations
hereunder. After any retiring Agent's resignation or removal
hereunder as Agent, the provisions of this Article 11 shall
continue in effect for its benefit in respect of any actions
taken
or omitted to be taken by it while it was acting as the Agent.
Section 11.10. Amendments Concerning Agency Function. The
Agent shall not be bound by any waiver, amendment, supplement or
modification of this Agreement or any other Facility Document
which affects its duties hereunder or thereunder unless it shall
have given its prior consent thereto.
Section 11.11. Liability of Agent. The Agent shall not have
any liabilities or responsibilities to any Consolidated Entity or
the Guarantor on account of the failure of any Lender to perform
its obligations hereunder, except with respect to any claim
arising out of the gross negligence or willful misconduct of the
Agent, or to any Lender on account of the failure of any
Consolidated Entity or the Guarantor to perform its obligations
hereunder or under any other Facility Document.
Section 11.12. Transfer of Agency Function. Without the
consent of the Borrower or any Lender, the Agent may at any time
or from time to time transfer its functions as Agent hereunder to
any of its offices wherever located, provided that the Agent
shall
promptly notify the Borrower and the Lenders thereof and such
transfer shall not impose any additional costs on the Borrower.
Section 11.13. Non-Receipt of Funds by the Agent. Unless
the Agent shall have been notified by a Lender or the Borrower
(either one as appropriate being the "Payor") prior to the date
on
which such Lender is to make payment hereunder to the Agent of
the
proceeds of a Loan or the Borrower is to make payment to the
Agent, as the case may be (either such payment being a "Required
Payment"), which notice shall be effective upon receipt, that the
Payor does not intend to make the Required Payment to the Agent,
the Agent may assume that the Required Payment has been made and
may, in reliance upon such assumption (but shall not be required
to), make the amount thereof available to the intended recipient
on such date and, if the Payor has not in fact made the Required
Payment to the Agent, the recipient of such payment (and, if such
recipient is the Borrower and the Payor Lender fails to pay the
amount thereof to the Agent forthwith upon demand, the Borrower)
shall, on demand, repay to the Agent the amount made available to
it together with interest thereon for the period from the date
such amount was so made available by the Agent until the date the
Agent recovers such amount at a rate per annum equal to the
average daily Federal Funds Rate for such period.
Section 11.14. Withholding Taxes. Each Lender represents to
the Agent and the Borrower that it is entitled to receive any
payments to be made to it hereunder without the withholding of
any
tax and will furnish, prior to becoming a Lender hereunder, one
copy to the Borrower and one copy to the Agent such forms,
certifications, statements and other documents as the Agent or
the
Borrower may request from time to time to evidence such Lender's
exemption from the withholding of any tax imposed by any
jurisdiction or to enable the Agent or the Borrower to comply
with
any applicable laws or regulations relating thereto. Without
limiting the effect of the foregoing, if any Lender is not
created
or organized under the laws of the United States of America or
any
state thereof, in the event that the payment of interest by the
Borrower is treated for U.S. income tax purposes as derived in
whole or in part from sources from within the U.S., such Lender
will furnish to the Agent Form 4224 or Form 1001 of the Internal
Revenue Service, or such other forms, certifications, statements
or documents, duly executed and completed by such Lender as
evidence of such Lender's exemption from the withholding of U.S.
tax with respect thereto. Until such Lender shall have furnished
to the Agent and the Borrower any requested form, certification,
statement or document, the Agent or the Borrower may withhold
taxes from any payment to such Lender at applicable rates.
Section 11.15. Several Obligations and Rights of Lenders.
The failure of any Lender to make any Loan to be made by it on
the
date specified therefor shall not relieve any other Lender of its
obligation to make its Loan on such date, but no Lender shall be
responsible for the failure of any other Lender to make a Loan to
be made by such other Lender. The amounts payable at any time
hereunder to each Lender shall be a separate and independent
debt,
and, except where action of the Required Lenders is expressly
required hereunder, each Lender shall be entitled to protect and
enforce its rights arising out of this Agreement, and it shall
not
be necessary for any other Lender to be joined as an additional
party in any proceeding for such purpose.
Section 11.16. Pro Rata Treatment of Loans, Etc. Except to
the extent otherwise provided: (a) each borrowing under Section
2.01 shall be made from the Lenders, each reduction or
termination
of the amount of the Commitments under Section 2.08 shall be
applied to the Commitments of the Lenders, and each payment of
commitment fee accruing under Section 2.11 shall be made for the
account of the Lenders, pro rata according to the amounts of
their
respective unused Commitments; (b) each conversion under Section
2.05 of Loans of a particular type (but not conversions provided
for by Section 4.04), shall be made pro rata among the Lenders
holding Loans of such type according to the respective principal
amounts of such Loans by such Lenders; (c) each prepayment and
payment of principal of or interest on Loans of a particular
type,
a particular class and a particular Interest Period shall be made
to the Agent for the account of the Lenders holding Loans of such
type, class and Interest Period pro rata in accordance with the
respective unpaid principal amounts of such Loans of such
Interest
Period held by such Lenders; and (d) each prepayment and payment
of fees under Section 3.09(a) and Letter of Credit Obligations
shall be made pro rata in accordance with the pro rata share of
the Lenders in the Letter of Credit Obligations held by each of
them.
Section 11.17. Sharing of Payments Among Lenders. If a
Lender shall obtain payment of any principal of or interest on
any
Obligation held by it through the exercise of any right of
setoff,
banker's lien, counterclaim, or by any other means, it shall
promptly purchase from the other Lenders participations in (or,
if
and to the extent specified by such Lender, direct interests in)
the Obligations of the other Lenders in such amounts, and make
such other adjustments from time to time as shall be equitable to
the end that all the Lenders shall share the benefit of such
payment (net of any expenses which may be incurred by such Lender
in obtaining or preserving such benefit) pro rata in accordance
with the unpaid principal and interest on the Obligations held by
each of them. To such end the Lenders shall make appropriate
adjustments among themselves (by the resale of participations
sold
or otherwise) if such payment is rescinded or must otherwise be
restored. Nothing contained herein shall require any Lender to
exercise any such right or shall affect the right of any Lender
to
exercise, and retain the benefits of exercising, any such right
with respect to any other indebtedness of the Borrower, the
Guarantor or their respective Affiliates.
Section 11.18. Security Documents. Subject to the foregoing
provisions of this Section 11, the Agent shall, on behalf of the
Lenders: (a) execute any and all of the Security Documents on
behalf of the Lenders; (b) hold and apply any and all Collateral,
and the proceeds thereof, at any time received by it, in
accordance with the provisions of the Security Documents and this
Agreement; (c) exercise any and all rights, powers and remedies
of
the Lenders under this Agreement or any of the Security
Documents,
including the giving of any consent or waiver or the entering
into
of any amendment, subject to the provisions of Section 11.03; (d)
execute, deliver and file financing statements, mortgages, deeds
of trust, lease assignments and other such agreements, and
possess
instruments on behalf of any or all of the Lenders; and (e) in
the
event of acceleration of the Borrower's obligations hereunder,
use
its best efforts to sell or otherwise liquidate or dispose of the
Collateral and otherwise exercise the rights of the Lenders
thereunder upon the direction of the Required Lenders.
Section 11.19. Collateral. Notwithstanding Section 11.18,
the Agent and the other Lenders agree, as among themselves, that
the Agent shall not, without the consent of the Required Lenders,
make any sale or disposition of the Collateral pursuant to any of
the Security Documents. The Agent acknowledges to the other
Lenders that it is acting in an agency capacity hereunder and
that
the security interest in the Collateral granted under the
Security
Documents secures the Obligations held by all of the Lenders. In
the event of any Default or Event of Default, the Agent will
apply
and/or pay over to the Lenders any net proceeds derived from the
Collateral pro rata on the basis of the aggregate unpaid
principal
amount of the Obligations held by the Lenders. The Agent will be
reimbursed or properly indemnified by the Lenders in the event
the
Agent is requested by the Lenders to take or omit to take any
action with respect to the Collateral (any such reimbursement or
indemnification to be pro rata as provided in Section 11.05).
The
Agent shall have the right to retain counsel to advise it as to
any action or decision with respect to the Collateral and shall
be
reimbursed by the other Lenders for the cost of the same (to the
extent the Agent is not reimbursed by the Borrower) prior to
distributing any of the Collateral or any proceeds thereof (any
such reimbursement to be pro rata as aforesaid).
Section 11.20. Amendment of Article 11. The Borrower hereby
agrees that the foregoing provisions of this Article 11
constitute
an agreement among the Agent and the Lenders and that any and all
of the provisions of this Article 11, other than Section 11.09,
Section 11.11, Section 11.12, Section 11.14 or any other
provision
the amendment of which would adversely affect the rights and
interests of the Borrower or the Guarantor, may be amended at any
time by the Required Lenders without the consent or approval of,
or notice to, the Borrower.
ARTICLE 12. MISCELLANEOUS.
Section 12.01. Amendments and Waivers. Except as otherwise
expressly provided in this Agreement, any provision of this
Agreement may be amended or modified only by an instrument in
writing signed by the Borrower, the Agent and the Required
Lenders, or by the Borrower and the Agent acting with the consent
of the Required Lenders and any provision of this Agreement may
be
waived by the Required Lenders or by the Agent acting with the
consent of the Required Lenders; provided that no amendment,
modification or waiver shall, unless by an instrument signed by
all of the Lenders or by the Agent acting with the consent of all
of the Lenders: (a) increase or extend the term, or extend the
time or waive any requirement for the reduction or termination,
of
the Commitments; (b) extend the date fixed for the payment of
principal of or interest on any Loan, any Letter of Credit
Obligation or any fee payable hereunder; (c) reduce the amount of
any payment of principal thereof or the rate at which interest is
payable thereon or any fee payable hereunder, (d) alter the terms
of this Section 12.01; (e) amend the definition of the term
"Required Lenders"; (f) waive any of the conditions precedent set
forth in Article 5 hereof; (g) discharge the Guarantor from the
Unconditional Guaranty; (h) discharge any Obligor from its
Guaranty of the Obligations (unless the stock of such Obligor is
sold in accordance with the terms of this Agreement); or (i)
release all or any part of the Collateral other than pursuant to
a disposition of Property permitted under Section 8.07, and
provided, further, that any amendment of Article 11 hereof or any
amendment which increases the obligations of the Agent hereunder
shall require the consent of the Agent. No failure on the part
of
the Agent or any Lender to exercise, and no delay in exercising,
any right hereunder shall operate as a waiver thereof or preclude
any other or further exercise thereof or the exercise of any
other
right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
Section 12.02. Usury. Anything herein to the contrary
notwithstanding, the obligations of the Borrower under this
Agreement, the Notes and the other Facility Documents shall be
subject to the limitation that payments of interest shall not be
required to the extent that receipt thereof would be contrary to
provisions of law applicable to a Lender limiting rates of
interest which may be charged or collected by such Lender.
Section 12.03. Expenses. The Borrower shall reimburse the
Agent on demand for all reasonable out-of-pocket costs, expenses
and charges (including, without limitation, reasonable fees and
charges of external legal counsel for the Agent) in connection
with the preparation of, and any amendment, (other than an
amendment to Article 12 that does not require the consent of the
Borrower) supplement, waiver or modification to (in each case,
whether or not consummated), this Agreement, any other Facility
Document and any other documents prepared in connection herewith
or therewith. The Borrower shall reimburse the Agent and each
Lender for all reasonable out-of-pocket costs expenses and
charges
(including, without limitation, reasonable fees and charges of
external legal counsel for the Agent and each Lender) in
connection with the enforcement or preservation of any rights or
remedies during the existence of an Event of Default (including,
without limitation, in connection with any restructuring or
insolvency or bankruptcy proceeding). The Borrower agrees to
indemnify the Agent and each Lender and their respective
directors, officers, employees and agents from, and hold each of
them harmless against, any and all losses, liabilities, claims,
damages or out-of-pocket expenses reasonably incurred by any of
them arising out of or by reason of any investigation or
litigation or other proceedings (including any threatened
investigation or litigation or other proceedings) relating to
this
Agreement or any other Facility Document or to any actual or
proposed use by any Borrower of the proceeds of the Loans or the
Letters of Credit or to the performance or enforcement of this
Agreement or the other Facility Documents, including, without
limitation, the reasonable fees and disbursements of counsel
incurred in connection with any such investigation or litigation
or other proceedings (but excluding any such losses, liabilities,
claims, damages or expenses incurred by reason of the gross
negligence or wilful misconduct of the Agent or any of the
Lenders).
Section 12.04. Survival. The obligations of the Borrower
under Sections 4.01, 4.05 and 12.03 shall survive the repayment
of
the Loans and the Letters of Credit and the termination of the
Commitments.
Section 12.05. Assignment; Participations.
(a) This Agreement shall be binding upon, and shall
inure to the benefit of, the Borrower, the Agent, the Lenders and
their respective successors and assigns, except that the Borrower
may not assign or transfer its rights or obligations hereunder.
Each Lender may assign or sell participations in all of its
rights
and obligations hereunder or any part of its rights and
obligations hereunder to another bank or other financial
institution provided that each such assignment shall be in a
minimum amount equal to $5,000,000 and further provided that any
assignment or participation by any Lender of its rights and
obligations in respect of the Letters of Credit shall require the
prior consent of the Issuing Lender, such consent not to be
unreasonably withheld, in which event (i) in the case of an
assignment, upon notice thereof by the Lender to the Borrower
with
a copy to the Agent, the assignee shall have, to the extent of
such assignment (unless otherwise provided therein), the same
rights, benefits and obligations as it would have if it were a
Lender hereunder; and (ii) in the case of a participation, the
participant shall have no rights under the Facility Documents and
all amounts payable by the Borrower under the Facility Documents,
including, without limitation, under Article 4, shall be
determined as if such Lender had not sold such participation.
The
agreement executed by such Lender in favor of the participant
shall not give the participant the right to require such Lender
to
take or omit to take any action hereunder except action directly
relating to (i) the extension of a payment date with respect to
any portion of the principal of or interest on any amount
outstanding hereunder allocated to such participant, (ii) the
reduction of the principal amount outstanding hereunder allocated
to such participant or (iii) the reduction of the rate of
interest
payable on such amount or any amount of fees payable hereunder to
a rate or amount, as the case may be, below that which the
participant is entitled to receive under its agreement with such
Lender. Such Lender may furnish any information concerning any
Consolidated Entity, the Guarantor or any of their respective
Affiliates in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and
participants); provided that such Lender shall require any such
prospective assignee or such participant (prospective or
otherwise) to agree in writing to maintain the confidentiality of
such information in accordance with the provisions of Section
12.14. In connection with any assignment or sale of a
participation interest pursuant to this paragraph (a), the
assigning or selling Lender shall pay the Agent an administrative
fee for processing such assignment or participation in the amount
of $2,500.
(b) In addition to the assignments and participations
permitted under paragraph (a) above, any Lender may assign and
pledge all or any portion of the Obligations held by it to (i)
any
affiliate of such Lender or (ii) any Federal Reserve Bank as
collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any Operating
Circular
issued by such Federal Reserve Bank. No such assignment shall
release the assigning Lender from its obligations hereunder.
(c) The assignor Lender shall be solely responsible for
obtaining from any participant or assignee and providing to the
Agent and Borrower all forms required under Section 11.14. If,
pursuant to this Section 12.05, any interest in this Agreement is
transferred to any assignee that is organized under the laws of
any jurisdiction other than the United States or any state
thereof, the Lender transferring such interest (the "Transferor
Lender") shall cause such assignee concurrently with the
effectiveness of such transfer, (a) to represent to the
Transferor
Lender (for the benefit of the Transferor Lender, the Agent and
the Borrower) that it is either (i) entitled to the benefits of
an
income tax treaty with the United States that provides for an
exemption from United States withholding tax on interest and
other
payments which may be made by the Borrower under this Agreement;
or (ii) is engaged in the trade or business within the United
States and such Loan is effectively connected with such trade or
business, (b) to furnish to the Transferor Lender, the Agent and
the Borrower either Internal Revenue Service Form 4224 or
Internal
Revenue Service Form 1001 (wherein such assignee claims
entitlement to complete exemption from federal withholding tax of
the United States of America on all payments hereunder) and (c)
to
agree (for the benefit of the Transferor Lender, the Agent and
the
Borrower) to provide to the Transferor Lender, Agent and Borrower
such forms or documentation as may be required from time to time,
including a new Form 4224 or Form 1001 upon the obsolescence of
any previously delivered form, in accordance with applicable laws
and regulations of the United States of America establishing the
current status of such assignee with regard to continued
entitlement to such complete withholding tax exemption.
Section 12.06. Notices. Unless the party to be notified
otherwise notifies the other party in writing as provided in this
Section, and except as otherwise provided in this Agreement,
notices shall be given to the Agent in writing, by telex,
telecopy
or other writing or by telephone, confirmed by telex, telecopy or
other writing, and to the Lenders and to the Borrower by ordinary
mail, hand delivery, overnight courier or telecopier addressed to
such party at its address on the signature page of this
Agreement.
Notices shall be effective: (a) if given by mail, 72 hours after
deposit in the mails with first class postage prepaid, addressed
as aforesaid; and (b) if given by telecopier, when confirmation
of
delivery of the telecopy to the telecopier number as aforesaid is
transmitted; provided that notices to the Agent and the Lenders
shall be effective upon receipt.
Section 12.07. Setoff. The Borrower agrees that, in
addition to (and without limitation of) any right of setoff,
banker's lien or counterclaim a Lender may otherwise have, each
Lender shall be entitled, at its option, to offset balances
(general or special, time or demand, provisional or final) held
by
it for the account of the Borrower at any of such Lender's
offices, in Dollars or in any other currency, against any amount
payable by the Borrower to such Lender under this Agreement, such
Lender's Note, any Letter of Credit or any other Facility
Document
which is not paid when due (regardless of whether such balances
are then due to the Borrower), in which case it shall promptly
notify the Borrower and the Agent thereof; provided that such
Lender's failure to give such notice shall not affect the
validity
thereof. Payments by the Borrower or the Guarantor hereunder
shall be made without setoff or counterclaim.
SECTION 12.08. JURISDICTION; IMMUNITIES. (a) EACH OF THE
BORROWER, THE AGENT AND THE LENDERS HEREBY IRREVOCABLY SUBMITS TO
THE JURISDICTION OF ANY NEW YORK STATE OR UNITED STATES FEDERAL
COURT SITTING IN NEW YORK COUNTY OVER ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY NOTE, ANY
LETTER
OF CREDIT OR ANY OTHER FACILITY DOCUMENT, AND EACH OF THE
BORROWER, THE AGENT AND THE LENDERS HEREBY IRREVOCABLY AGREES
THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURT. EACH OF
THE BORROWER, THE AGENT AND THE LENDERS IRREVOCABLY CONSENTS TO
THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO SUCH
PERSON
AT ITS ADDRESS SPECIFIED IN SECTION 12.06. EACH OF THE BORROWER,
THE AGENT AND THE LENDERS AGREES THAT A FINAL JUDGMENT IN ANY
SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER
PROVIDED BY LAW. EACH OF THE BORROWER, THE AGENT AND THE LENDERS
FURTHER WAIVES ANY OBJECTION TO VENUE IN SUCH STATE AND ANY
OBJECTION TO AN ACTION OR PROCEEDING IN SUCH STATE ON THE BASIS
OF
FORUM NON CONVENIENS. THE BORROWER FURTHER AGREES THAT ANY
ACTION
OR PROCEEDING BROUGHT AGAINST THE AGENT OR ANY LENDER SHALL BE
BROUGHT ONLY IN NEW YORK STATE OR UNITED STATES FEDERAL COURT
SITTING IN NEW YORK COUNTY. EACH OF THE BORROWER, THE AGENT AND
THE LENDERS WAIVES ANY RIGHT IT MAY HAVE TO JURY TRIAL.
(b) Nothing in this Section 12.08 shall affect the
right of the Borrower, the Agent or any Lender to serve legal
process in any other manner permitted by law or affect the right
of the Agent or any Lender to bring any action or proceeding
against the Borrower or its Property in the courts of any other
jurisdictions.
(c) To the extent that the Borrower has or hereafter
may acquire any immunity from jurisdiction of any court or from
any legal process (whether from service or notice, attachment
prior to judgment, attachment in aid of execution, execution or
otherwise) with respect to itself or its Property, the Borrower
hereby irrevocably waives such immunity in respect of its
obligations under this Agreement, the Notes, the Letters of
Credit
and the other Facility Documents.
Section 12.09. Table of Contents; Headings. Any table of
contents and the headings and captions hereunder are for
convenience only and shall not affect the interpretation or
construction of this Agreement.
Section 12.10. Severability. The provisions of this
Agreement are intended to be severable. If for any reason any
provision of this Agreement shall be held invalid or
unenforceable
in whole or in part in any jurisdiction, such provision shall, as
to such jurisdiction, be ineffective to the extent of such
invalidity or unenforceability without in any manner affecting
the
validity or enforceability thereof in any other jurisdiction or
the remaining provisions hereof in any jurisdiction.
Section 12.11. Counterparts. This Agreement may be executed
in any number of counterparts, all of which taken together shall
constitute one and the same instrument, and any party hereto may
execute this Agreement by signing any such counterpart.
Section 12.12. Integration. The Facility Documents set
forth the entire agreement among the parties hereto relating to
the transactions contemplated thereby and supersede any prior
oral
or written statements or agreements with respect to such
transactions.
SECTION 12.13. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH,
THE
LAW OF THE STATE OF NEW YORK EACH LETTER OF CREDIT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS
OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS
OR RULES ARE DESIGNATED, THE UCP AND AS TO MATTERS NOT GOVERNED
BY
THE UCP, THE LAWS OF THE STATE OF NEW YORK.
Section 12.14. Confidentiality. Each Lender and the Agent
agrees (on behalf of itself and each of its affiliates,
directors,
officers, employees and representatives) to use reasonable
precautions to keep confidential, in accordance with safe and
sound banking practices, any non-public information supplied to
it
by the Consolidated Entities or the Guarantor pursuant to the
Facility Documents, provided that nothing herein shall limit the
disclosure of any such information (i) to the extent required by
applicable statute, rule, regulation or judicial process, (ii) to
counsel for any of the Lenders or the Agent, (iii) to bank
examiners, and such Lender's auditors or accountants who agree to
keep such information confidential as provided herein, (iv) to
any
assignee or participant (or prospective assignee or participant)
so long as such assignee or participant (or prospective assignee
or participant) agrees in writing to use reasonable precautions
to
keep such information confidential as provided herein; and
provided finally that in no event shall any Lender or the Agent
be
obligated or required to return any materials furnished by the
Consolidated Entities or the Guarantor. All other parties to
whom
such information is given, including, without limitation,
prospective assignees and participants and the Lenders' auditors
and accountants shall be obligated to return all confidential
materials. The obligations of the Lenders and the Agent under
this Section 12.14 shall survive the repayment of the Loans and
the Letters of Credit and the termination of the Commitments.
Section 12.15. Treatment of Certain Information. The
Borrower (a) acknowledges that services may be offered or
provided
to it in connection with actions to be taken under this Agreement
and the other Facility Documents by each Lender or by one or more
of their respective subsidiaries or affiliates and (b)
acknowledges that information delivered to each Lender by any
Consolidated Entity, the Guarantor or any Affiliate may be
provided to each such subsidiary and affiliate; so long as, in
each case, each such subsidiary or affiliate agrees to use
reasonable precautions to keep such information confidential as
provided in Section 12.14.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
MISTIC BRANDS, INC.
By: Michael Weinstein
Name: Michael Weinstein
Title: Chief Executive
Officer
Address for Notices:
Mistic Brands, Inc.
2525 Palmer Avenue
New Rochelle, NY 10801
Attention: Chief Financial
Officer
Telecopier No.: (914) 637-0020
With a copy to:
Triarc Companies, Inc.
900 Third Avenue
New York, New York 10022
Attention: Executive Vice
President and General Counsel
Telecopier No.: (212) 230-3216
AGENT:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By: Michael D. Anthony
Name: Michael D. Anthony
Title: Vice President
Address for Notices:
New York Agency
4 Chase Metrotech Center
13th Floor
Brooklyn, NY 11245
Attention: Lucy D'Orazio
Telecopier No.: (718) 242-6909
with a copy to:
31 Mamaroneck Avenue
White Plains, NY 10601
Attention: Michael D. Anthony
Telecopier No.: (914) 328-8373
LENDERS:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By: Michael D. Anthony
Name: Michael D. Anthony
Title: Vice President
Lending Office and Address for
Notices:
31 Mamaroneck Avenue
White Plains, NY 10601
Attention: Michael D. Anthony
Telecopier No.: (914) 328-8373
<PAGE>
EXHIBIT A
REVOLVING CREDIT NOTE
$[_________] New York, New York
August 9, 1995
For value received, MISTIC BRANDS, INC., a corporation
organized under the laws of Delaware (the "Borrower"), hereby
promises to pay to the order of [_______________] (the "Lender")
at the principal office of The Chase Manhattan Bank (National
Association) at 1 Chase Manhattan Plaza, New York, New York 10081,
as agent for the Lender (in such capacity, together with its
successors in such capacity, the "Agent"), for the account of the
appropriate Lending Office of the Lender, the principal sum of
$[__________] or, if less, the amount loaned by the Lender to the
Borrower pursuant to the Credit Agreement referred to below, in
lawful money of the United States of America and in immediately
available funds, on the date(s) and in the manner provided in the
Credit Agreement referred to below. The Borrower also promises to
pay interest on the unpaid principal balance hereof, for the
period such balance is outstanding, at said principal office for
the account of said Lending Office, in like money, at the rates of
interest as provided in the Credit Agreement described below, on
the date(s) and in the manner provided in said Credit Agreement.
The date and amount of each type of Revolving Credit Loan
made by the Lender to the Borrower under the Credit Agreement
referred to below, and each payment of principal thereof, shall be
recorded by the Lender on its books and, prior to any transfer of
this Revolving Credit Note (or, at the discretion of the Lender,
at any other time), endorsed by the Lender on the schedule
attached hereto or any continuation thereof.
This is one of the Revolving Credit Notes referred to in that
certain Credit Agreement dated as of August 9, 1995 (as amended or
supplemented from time to time, the "Credit Agreement") among the
Borrower, each of the lenders which is signatory thereto
(including the Lender) and the Agent and evidences the Revolving
Credit Loans made by the Lender thereunder which shall, in the
aggregate amount among all such Revolving Credit Notes, not exceed
$20,000,000. All terms not defined herein shall have the meanings
given to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the
maturity of principal upon the occurrence of certain Events of
Default and for prepayments on the terms and conditions specified
therein.
The Borrower waives presentment, notice of dishonor, protest
and any other notice (except as provided in the Facility
Documents) with respect to this Revolving Credit Note.
This Revolving Credit Note is secured in accordance with, and
entitled to the benefits of, the Security Documents.
All obligations evidenced by this Revolving Credit Note are
guarantied by Triarc Companies, Inc., a Delaware corporation,
pursuant to, and subject to the terms and conditions of, the
Unconditional Guaranty.
This Revolving Credit Note shall be governed by, and
interpreted and construed in accordance with, the laws of the
State of New York.
MISTIC BRANDS, INC.
By:
Name:
Title:
<PAGE>
Amount of Amount of Balance Notation
Date Loan Payment Outstanding By
<PAGE>
EXHIBIT B
TERM NOTE
$[__________] New York, New York
August 9, 1995
For value received, MISTIC BRANDS, INC., a corporation
organized under the laws of Delaware (the "Borrower"), hereby
promises to pay to the order of [_______________] (the "Lender")
at the principal office of The Chase Manhattan Bank (National
Association) at 1 Chase Manhattan Plaza, New York, New York 10081,
as agent for the Lender (in such capacity, together with its
successors in such capacity, the "Agent"), for the account of the
appropriate Lending Office of the Lender, the principal sum of
$[__________] in lawful money of the United States of America and
in immediately available funds, on the date(s) and in the manner
provided in the Credit Agreement referred to below. The Borrower
also promises to pay interest on the unpaid principal balance
hereof, for the period such balance is outstanding, at said
principal office for the account of said Lending Office, in like
money, at the rates of interest as provided in the Credit
Agreement described below, on the date(s) and in the manner
provided in said Credit Agreement.
The date and amount of each type of Term Loan made by the
Lender to the Borrower under the Credit Agreement referred to
below, and each payment of principal thereof, shall be recorded by
the Lender on its books and, prior to any transfer of this Term
Note (or, at the discretion of the Lender, at any other time),
endorsed by the Lender on the schedule attached hereto or any
continuation thereof.
This is one of the Term Notes referred to in that certain
Credit Agreement dated as of August 9, 1995 (as amended or
supplemented from time to time, the "Credit Agreement") among the
Borrower, each of the lenders which is signatory thereto
(including the Lender) and the Agent and evidences the Term Loan
made by the Lender thereunder which shall, in the aggregate amount
among all such Term Notes, not exceed $60,000,000. All terms not
defined herein shall have the meanings given to them in the Credit
Agreement.
The Credit Agreement provides for the acceleration of the
maturity of principal upon the occurrence of certain Events of
Default and for prepayments on the terms and conditions specified
therein.
The Borrower waives presentment, notice of dishonor, protest
and any other notice (except as other provided in the Facility
Documents) with respect to this Term Note.
This Term Note is secured in accordance with, and entitled to
the benefits of, the Security Documents.
All obligations evidenced by this Term Note are guarantied by
Triarc Companies, Inc., a Delaware corporation, pursuant to, and
subject to the terms and conditions of, the Unconditional
Guaranty.
This Term Note shall be governed by, and interpreted and
construed in accordance with, the laws of the State of New York.
MISTIC BRANDS, INC.
By:
Name:
Title:
<PAGE>
Amount of Amount of Balance Notation
Date Loan Payment Outstanding By
<PAGE>
EXHIBIT C
UNCONDITIONAL GUARANTY
Dated as of August 9, 1995
by
TRIARC COMPANIES, INC.
in favor of
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)
as Agent
<PAGE>
UNCONDITIONAL GUARANTY
UNCONDITIONAL GUARANTY, dated as of August 9, 1995 (as
amended, supplemented or otherwise modified from time to time,
this "Agreement"), made by TRIARC COMPANIES, INC., a corporation
organized under the laws of Delaware (the "Guarantor") in favor of
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), a national
banking association, as agent (in such capacity, together with its
successors in such capacity, the "Agent") for the benefit of each
of the lenders (the "Lenders") signatory to the Credit Agreement
dated as of August 9, 1995 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement") among Mistic
Brands, Inc., a Delaware corporation (the "Borrower"), the Agent
and the Lenders.
W I T N E S S E T H :
WHEREAS, pursuant to the terms of the Credit Agreement and
the other Facility Documents, the Lenders have agreed to extend
credit to the Borrower upon the terms and subject to the
conditions set forth therein to be evidenced by the Notes issued
by the Borrower thereunder and the Letters of Credit issued
thereunder and to be guarantied by the Guarantor hereunder;
WHEREAS, the Borrower is a wholly-owned Subsidiary of the
Guarantor and the Guarantor will directly benefit from the making
of the Loans and the issuance of the Letters of Credit; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their extensions of credit to the Borrower under
the Credit Agreement that the Guarantor shall have executed and
delivered this Agreement to the Agent to guaranty the obligations
of the Borrower under the Notes, the Letters of Credit, the Credit
Agreement and the other Facility Documents.
NOW, THEREFORE, in consideration of the premises and to
induce the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective Loans and to purchase
Participating Interests in Letters of Credit issued under the
Credit Agreement, the Guarantor hereby agrees with the Agent, as
follows:
ARTICLE 1. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS.
Section 1.01. Guarantied Obligations. The Guarantor, in
consideration of the execution and delivery of the Credit
Agreement by the Lenders and the Agent, hereby irrevocably and
unconditionally guarantees to the Agent, for the benefit of the
Lenders, until final payment has been made:
(a) the due and punctual payment in full in cash by the
Borrower of the Obligations, in each case when and as the same
shall become due and payable, whether at maturity, pursuant to
mandatory or optional prepayment, by acceleration or otherwise,
all in accordance with the terms and provisions of the Credit
Agreement and the other Facility Documents, it being the intent of
the Guarantor that the guaranty set forth in this Section 1.01
(the "Unconditional Guaranty") shall be a guaranty of payment and
not a guaranty of collection; and
(b) the punctual and faithful performance, keeping,
observance, and fulfillment by the Borrower of all duties,
agreements, covenants and obligations of the Borrower contained in
each of the Facility Documents to which it is a party.
Section 1.02. Performance Under This Agreement. In the
event the Borrower fails to pay, on or before the due date
thereof, any Obligation or if the Borrower shall fail to perform,
keep, observe, or fulfill any other obligation referred to in
clause (a) or clause (b) of Section 1.01 hereof in the manner
provided in the Notes, the Letters of Credit or in any of the
other Facility Documents after, in each case, giving effect to any
applicable grace periods or cure provisions or waivers or
amendments, upon written request from the Agent therefor, the
Guarantor shall cause forthwith to be paid the moneys, or to be
performed, kept, observed, or fulfilled each of such obligations,
in respect of which such failure has occurred.
Section 1.03. Waivers. To the fullest extent permitted by
law, the Guarantor does hereby waive:
(a) notice of acceptance of the Unconditional Guaranty;
(b) notice of any borrowings under the Credit
Agreement, or the creation, existence or acquisition of any of the
Obligations, subject to the Guarantor's right to make inquiry of
the Agent to ascertain the amount of the Obligations at any
reasonable time and to consent to any amendments to the Credit
Agreement;
(c) notice of the amount of the Obligations, subject to
the Guarantor's right to make inquiry of the Agent to ascertain
the amount of the Obligations at any reasonable time;
(d) notice of adverse change in the financial condition
of the Borrower, any other guarantor or any other fact that might
increase the Guarantor's risk hereunder;
(e) notice of presentment for payment, demand, protest,
and notice thereof as to the Notes or any other Facility Document;
(f) notice of any "Default" or "Event of Default" under
and as defined in the Credit Agreement;
(g) all other notices and demands to which the
Guarantor might otherwise be entitled (except if such notice or
demand is specifically otherwise required to be given to the
Guarantor hereunder or under the other Facility Documents);
(h) the right by statute or otherwise to require any or
each Lender or the Agent to institute suit against the Borrower or
to exhaust the rights and remedies of any or each Lender or the
Agent against the Borrower, the Guarantor being bound to the
payment of each and all Obligations, whether now existing or
hereafter accruing, as fully as if such Obligations were directly
owing to each Lender by the Guarantor;
(i) any defense arising by reason of any disability or
other defense (other than the defense that the Obligations shall
have been fully and finally performed and indefeasibly paid) of
the Borrower or by reason of the cessation from any cause
whatsoever of the liability of the Borrower in respect thereof;
and
(j) any stay (except in connection with a pending
appeal or the automatic stay imposed under 11 U.S.C. Section 362 or any
successor or replacement thereof), valuation, appraisal,
redemption or extension law now or at any time hereafter in force
which, but for this waiver, might be applicable to any sale of
Property of the Guarantor made under any judgment, order or decree
based on this Agreement, and the Guarantor covenants that it will
not at any time insist upon or plead, or in any manner claim or
take the benefit or advantage of such law.
Until all of the Obligations shall have been paid in full, the
Guarantor shall not have any right of subrogation, reimbursement,
or indemnity whatsoever in respect thereof and no right of
recourse to or with respect to any assets or Property of the
Borrower or any of its Subsidiaries. Nothing shall discharge or
satisfy the obligations of the Guarantor hereunder except the full
and final performance and indefeasible payment of the Obligations
by the Guarantor, upon which each Lender agrees to transfer and
assign its interest in the Notes and other evidence of
indebtedness under the Facility Documents to the Guarantor without
recourse, representation or warranty of any kind (other than that
such Lender owns the Notes free of all Liens). All of the
Obligations shall in the manner and subject to the limitations
provided herein for the acceleration thereof forthwith become due
and payable without notice.
Section 1.04. Releases. The Guarantor consents and agrees
that, without notice to or by the Guarantor and without affecting
or impairing the obligations of the Guarantor hereunder, each
Lender or the Agent, in the manner provided herein, by action or
inaction, may:
(a) compromise or settle, extend the period of duration
or the time for the payment, or discharge the performance of, or
may refuse to, or otherwise not, enforce, or may, by action or
inaction, release all or any one or more parties to, any one or
more of the Notes or the other Facility Documents;
(b) grant other indulgences to the Borrower in respect
thereof;
(c) release or substitute any one or more of the
endorsers or guarantors of the Obligations whether parties hereto
or not; and
(d) exchange, enforce, waive, or release, by action or
inaction, any security for the Obligations (including, without
limitation, any of the collateral therefor) or any other guaranty
of any of the Obligations.
Section 1.05. Marshaling. The Guarantor consents and agrees
that:
(a) the Agent shall be under no obligation to marshal
any assets in favor of the Guarantor or against or in payment of
any or all of the Obligations; and
(b) to the extent the Borrower makes a payment or
payments to any Lender, which payment or payments or any part
thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside, or required, for any of the foregoing
reasons or for any other reason, to be repaid or paid over to a
custodian, trustee, receiver, or any other party under any
bankruptcy law, common law, or equitable cause, then to the extent
of such payment or repayment, the Obligation or part thereof
intended to be satisfied thereby shall be revived and continued in
full force and effect as if said payment or payments had not been
made and the Guarantor shall remain liable hereunder for such
Obligation.
Section 1.06. Liability. The Guarantor agrees that the
liability of the Guarantor in respect of this Article 1 shall not
be contingent upon the exercise or enforcement by any Lender or
the Agent of whatever remedies such Lender or the Agent may have
against the Borrower or the enforcement of any Lien or realization
upon any security such Lender or the Agent may at any time
possess.
Section 1.07. Unconditional Obligation. The Unconditional
Guaranty set forth in this Article 1 is an absolute,
unconditional, continuing and irrevocable guaranty of payment and
performance and shall remain in full force and effect until the
full and final payment of the Obligations without respect to
future changes in conditions, including change of law or any
invalidity or irregularity with respect to the issuance or
assumption of any obligations (including, without limitation, the
Notes and the Letter of Credit Obligations) of or by the Borrower,
or, except as otherwise provided herein, with respect to the
execution and delivery of any agreement (including, without
limitation, the Notes and the other Facility Documents) of the
Borrower.
Section 1.08. Election to Perform Obligations. Any election
by the Guarantor to pay or otherwise perform any of the
obligations of the Borrower under the Notes or under any of the
other Facility Documents, whether pursuant to this Article 1 or
otherwise, shall not release the Borrower from any of its other
obligations under the Notes, the Letters of Credit or any of the
other Facility Documents.
Section 1.09. No Election. The Agent shall have the right
to seek recourse against the Guarantor to the fullest extent
provided for herein for the Guarantor's obligations under this
Agreement (including, without limitation, this Article 1) in
respect of the Notes, the Letters of Credit and the other Facility
Documents. No election to proceed in one form of action or
proceeding, or against any party, or on any obligation, shall
constitute a waiver of the Agent's right to proceed in any other
form of action or proceeding or against other parties unless the
Agent has expressly waived such right in writing. Specifically,
but without limiting the generality of the foregoing, no action or
proceeding by any Lender or the Agent against the Borrower under
any document or instrument evidencing obligations of the Borrower
to such Lender or the Agent shall serve to diminish the liability
of the Guarantor under this Agreement (including, without
limitation, this Article 1) except to the extent that the Agent or
such Lender finally and unconditionally shall have realized
payment by such action or proceeding, notwithstanding the effect
of any such action or proceeding upon the Guarantor's right of
subrogation against the Borrower.
Section 1.10. Severability. Subject to Article 10 of the
Credit Agreement and applicable law, each of the rights and
remedies granted under this Article 1 to the Agent may be
exercised by the Agent without notice by the Agent to, or the
consent of or any other action by, any Lender, provided that the
Agent will promptly thereafter give each Lender (and, if
applicable, the Borrower) notice of any exercise of rights and
remedies by the Agent under this Article 1.
Section 1.11. Other Enforcement Rights. The Agent may
proceed, as provided in Article 1 hereof, to protect and enforce
the Unconditional Guaranty by suit or suits or proceedings in
equity, at law or in bankruptcy, and whether for the specific
performance of any covenant or agreement contained herein
(including, without limitation, in this Article 1) or in execution
or aid of any power herein granted; or for the recovery of
judgment for the obligations hereby guarantied or for the
enforcement of any other proper, legal or equitable remedy
available under applicable law.
Section 1.12. Delay or Omission; No Waiver. No course of
dealing on the part of any Lender or the Agent and no delay or
failure on the part of any such Person to exercise any right
hereunder (including, without limitation, this Article 1) shall
impair such right or operate as a waiver of such right or
otherwise prejudice such Person's rights, powers and remedies
hereunder. Every right and remedy given by the Unconditional
Guaranty or by law to any Lender or the Agent may be exercised
from time to time as often as may be deemed expedient by such
Person.
Section 1.13. Restoration of Rights and Remedies. If any
Lender or the Agent shall have instituted any proceeding to
enforce any right or remedy under the Unconditional Guaranty,
under any Note held by such Lender, or under any Security
Document, and such proceeding shall have been discontinued or
abandoned for any reason, or shall have been determined adversely
to such Lender or the Agent, then and in every such case each such
Lender, the Agent, the Borrower and the Guarantor shall, except as
may be limited or affected by any determination in such
proceeding, be restored severally and respectively to its
respective former positions hereunder and thereunder, and
thereafter, subject as aforesaid, the rights and remedies of such
Lender or the Agent shall continue as though no such proceeding
had been instituted.
Section 1.14. Cumulative Remedies. No remedy under this
Agreement (including, without limitation, this Article 1), the
Notes, the Letters of Credit or any of the other Facility
Documents is intended to be exclusive of any other remedy, but
each and every remedy shall be cumulative and in addition to any
and every other remedy given under this Agreement (including,
without limitation, this Article 1), the Notes, the Letters of
Credit or any of the other Facility Documents.
Section 1.15. Survival. The obligations of the Guarantor
under this Article 1 shall survive the transfer and payment of any
Obligation until the indefeasible payment in full of all the
Obligations and the expiration and termination of the Commitments.
Section 1.16. No Setoff, Counterclaim or Withholding; Gross-
Up. Except as otherwise required by law, each payment by the
Guarantor shall be made without setoff or counterclaim and, except
as provided in the Credit Agreement, without withholding for or on
account of any present or future taxes imposed by any Governmental
Authority. If any such withholding is so required, such Guarantor
shall make the withholding and pay the amount withheld to the
appropriate Governmental Authority before penalties attach thereto
or interest accrues thereon.
Section 1.17. Certain Distributions. The Guarantor agrees
that payments and distributions by the Borrower and its
Subsidiaries are specifically limited by and in accordance with
Section 8.06, Section 8.08 and Section 8.13 of the Credit
Agreement. The Guarantor agrees that it will not receive or
accept any payment, distribution or security from the Borrower or
any of its Subsidiaries if the transfer of such payment,
distribution or security would constitute or cause a "Default" or
an "Event of Default" under and as defined in the Credit
Agreement. The Guarantor agrees that if any payment or
distribution of any character (whether in cash, securities or
other Property) or any security shall be received by the Guarantor
in contravention of the terms of any one or more of the Facility
Documents and before the full payment of the Obligations, such
payment, distribution or security shall be held in trust for the
benefit of, and shall be paid over or delivered and transferred to
the Agent for application to the payment of the Obligations.
Until the Obligations shall have been paid in full, the Guarantor
shall have no right of recourse to or against any assets of the
Borrower or any of its Subsidiaries with respect to any payments
or distributions made and held in trust for the Agent or paid over
to the Agent pursuant to this Agreement. Nothing in this Section
1.17 shall be deemed to relieve the Borrower or any of its
Subsidiaries of its obligation to pay any amounts due to the
Guarantor that may be paid or accrued in accordance with Section
8.06, Section 8.09 and Section 8.14 of the Credit Agreement.
Section 1.18. Management Fees. The Guarantor agrees that,
so long as this Unconditional Guaranty shall be in full force and
effect, the fees paid to the Guarantor by the Borrower pursuant to
the Management Agreement shall not exceed the Borrower's allocable
portion of the "Service Costs" (as defined in the Management
Agreement) pursuant to the formula set forth in the Management
Agreement as in effect on the date hereof.
ARTICLE 2. REPRESENTATIONS AND WARRANTIES.
The Guarantor hereby represents and warrants as of the
Closing Date that:
Section 2.01. Incorporation, Good Standing and Due
Qualification. The Guarantor is duly incorporated, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation, has the corporate power and authority to own
its assets and to transact the business in which it is now
engaged, and is duly qualified as a foreign corporation and in
good standing under the laws of each other jurisdiction in which
such qualification is required, except where the failure to
qualify could not reasonably be expected to have a material
adverse effect on the business, profits, Properties or condition
of the Guarantor.
Section 2.02. Corporate Power and Authority; No Conflicts.
The execution, delivery and performance by the Guarantor of the
Facility Documents to which it is a party have been duly
authorized by all necessary corporate action and do not and will
not: (a) require any consent or approval of its stockholders;
(b) contravene its charter or by-laws; (c) violate any provision
of, or require any filing (other than the filing of the financing
statements and assignments required pursuant to the terms of the
Security Documents), registration, consent or approval under, any
law, rule or regulation (including, without limitation,
Regulations G, T, U and X of the Federal Reserve Board) or any
order, writ, judgment, injunction, decree, determination or award
presently in effect having applicability to the Guarantor or any
of its Subsidiaries; (d) result in a breach of or constitute a
default or require any consent under any indenture or loan or
credit agreement or any other material agreement, lease or
instrument to which the Guarantor or any of its Subsidiaries is a
party or by which it or its Properties may be bound or affected;
(e) result in, or require, the creation or imposition of any Lien
(other than as created under the Security Documents), upon or with
respect to any of the Properties now owned or hereafter acquired
by the Guarantor or any of its Subsidiaries; or (f) cause the
Guarantor or any of its Subsidiaries to be in default under any
such law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award or any such indenture, agreement,
lease or instrument.
Section 2.03. Legally Enforceable Agreements. Each Facility
Document to which the Guarantor is a party is a legal, valid and
binding obligation of the Guarantor, enforceable against the
Guarantor in accordance with its terms, except to the extent that
such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws
affecting creditors' rights generally and general principles of
equity (regardless of whether such enforceability is considered in
a proceeding at law or in equity).
Section 2.04. Financial Statements. The consolidated
balance sheet of the Guarantor and its Subsidiaries as at December
31, 1994, and the related consolidated income statement and
consolidated statement of cash flows and changes in stockholders'
equity of the Guarantor and its Subsidiaries, for the Fiscal Year
then ended, and the accompanying footnotes, together with the
opinion thereon of Deloitte & Touche LLP, independent certified
public accountants, and the unaudited interim consolidated balance
sheet of the Guarantor and its Subsidiaries as at June 30, 1995
and the related unaudited income statement and statement of cash
flows and changes in stockholders' equity of the Guarantor and its
Subsidiaries for the three month period then ended, copies of
which have been furnished to each of the Lenders, are complete and
correct in all material respects and fairly present the financial
condition of the Guarantor and its Subsidiaries at such dates and
the results of the operations of the Guarantor and its
Subsidiaries for the periods covered by such statements, all in
accordance with GAAP (subject, in the case of the aforementioned
interim financial statements, to year-end adjustments and that no
footnotes are provided) consistently applied. Except as set forth
on the consolidated balance sheet of the Guarantor and its
Subsidiaries as at June 30, 1995, on the Pro Forma Balance Sheet
and on Schedule I hereto, there are no liabilities of the
Guarantor and its Subsidiaries, fixed or contingent, which are
individually in excess of $20,000,000 but are not reflected in the
financial statements or in the notes thereto and which would be
required to be recorded in such financial statements or notes in
accordance with GAAP, other than liabilities arising in the
ordinary course of business since June 30, 1995. There is no fact
or facts actually known to the Guarantor, other than conditions
affecting the United States economy generally and trends affecting
generally the industries in which the Guarantor's Subsidiaries do
business, that the Guarantor has not disclosed to the Agent that
materially adversely affects or, so far as the Guarantor can now
reasonably foresee, will materially adversely affect, the
condition of the business, Properties or assets of the Guarantor
and its Subsidiaries, taken as a whole.
ARTICLE 3. FINANCIAL REPORTING REQUIREMENTS.
So long as any Obligation shall remain unpaid, any Letter of
Credit shall remain outstanding or any Lender shall have any
Commitment, the Guarantor shall deliver to the Agent: (a) as soon
as available and in any event within 105 days after the end of
each Fiscal Year, a consolidated balance sheet of the Guarantor
and its Subsidiaries as of the end of such Fiscal Year and a
consolidated income statement and consolidated statement of cash
flows and statements of additional capital (or equivalent
financial statements) of the Guarantor and its Subsidiaries for
such Fiscal Year, all in reasonable detail and stating in
comparative form the respective figures for the corresponding date
and period in the prior Fiscal Year and all prepared in accordance
with GAAP and accompanied by an unqualified opinion thereon by
Deloitte & Touche LLP or other independent accountants of national
standing selected by the Guarantor; provided that delivery within
the period specified above of copies of the Annual Report on Form
10-K of the Guarantor filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of this
subparagraph (a) so long as such Form 10-K shall contain the
information referred to in this subparagraph (a); (b) as soon as
available and in any event within 50 days after the end of each of
the first three Fiscal Quarters of each Fiscal Year, a
consolidated balance sheet of the Guarantor and its Subsidiaries
as of the end of such Fiscal Quarter and a consolidated income
statement and consolidated statement of cash flows of the
Guarantor and its Subsidiaries for the period commencing at the
end of the previous Fiscal Year and ending with the end of such
Fiscal Quarter, all in reasonable detail and stating in
comparative form the respective figures for the corresponding date
and period in the previous Fiscal Year and all prepared in
accordance with GAAP (subject to year-end adjustments and that no
footnotes are provided) and certified by the chief financial
officer or the chief accounting officer of the Guarantor; provided
that delivery within the period specified above of copies of the
Quarterly Report on Form 10-Q of the Guarantor filed with the
Securities and Exchange Commission shall be deemed to satisfy the
requirements of this subparagraph (b) so long as such Form 10-Q
shall contain the information referred to in this subparagraph
(b); and (c) promptly after the sending or filing thereof, copies
of all proxy statements, financial statements and reports which
the Guarantor sends to its stockholders, and copies of all
regular, periodic and special reports, and all registration
statements which the Guarantor files with the Securities and
Exchange Commission or any Governmental Authority which may be
substituted therefor.
ARTICLE 4. EVENTS OF DEFAULT.
Section 4.01. Events of Default. Any of the following
events shall be an "Event of Default":
(a) the Guarantor shall fail to pay any amount on or
before such date when due and payable under this Agreement and
under the Facility Documents;
(b) any representation or warranty made by the
Guarantor in this Agreement or in the Pledge Agreement shall prove
to have been incorrect in any material respect on or as of the
date made;
(c) the Guarantor shall fail to perform or observe any
term, covenant or agreement on its part to be performed or
observed (other than the obligations specifically referred to
elsewhere in this Section 4.01) in any Facility Document to which
it is a party and such failure shall continue for 30 consecutive
days after Knowledge thereof;
(d) the Guarantor shall: (i) fail to pay any Debt in an
aggregate amount exceeding $20,000,000 (other than the payment
obligations described in (a) above), of the Guarantor, or any
interest or premium thereon, when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise),
taking into account any applicable grace periods or waivers; or
(ii) fail to perform or observe any term, covenant or condition on
its part to be performed or observed under any agreement or
instrument relating to any such Debt, when required to be
performed or observed, taking into account any applicable grace
periods or waivers, if, in either case, the effect of such failure
to pay, perform or observe is to accelerate the maturity of such
indebtedness;
(e) the Guarantor: (i) shall generally not, or be
unable to, or shall admit in writing its inability to, pay its
debts as such debts become due; or (ii) shall make an assignment
for the benefit of creditors, petition or apply to any tribunal
for the appointment of a custodian, receiver or trustee for it or
a substantial part of its assets; or (iii) shall commence any
proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction, whether now or hereafter in effect; or (iv)
shall have had any such petition or application filed or any such
proceeding shall have been commenced, against it, in which an
adjudication or appointment is made or order for relief is
entered, or which petition, application or proceeding remains
undismissed for a period of 90 days or more; or (v) shall be the
subject of any such proceeding under which all or any substantial
part of its Property may be subject to seizure, forfeiture or
divestiture; or (vi) by any act or omission shall indicate its
consent to, approval of or acquiescence in any such petition,
application or proceeding or order for relief or the appointment
of a custodian, receiver or trustee for all or any substantial
part of its Property; or (vii) shall suffer any such
custodianship, receivership or trusteeship to continue
undischarged for a period of 90 days or more; or
(f) one or more judgments, decrees or orders for the
payment of money in excess of $20,000,000 in the aggregate shall
be rendered against the Borrower and such judgments, decrees or
orders shall continue unsatisfied and in effect for a period of 30
consecutive days without being vacated, discharged, satisfied or
stayed or bonded pending appeal.
Section 4.02. Remedies. If an Event of Default shall occur
and be continuing, the Agent may exercise all of the rights and
remedies conferred in this Agreement and in each of the other
Facility Documents; it being expressly understood that no such
remedy is intended to be exclusive of any other remedy or
remedies; but each and every remedy shall be cumulative and shall
be in addition to every other remedy given in this Agreement and
each of the other Facility Documents or now or hereafter existing
at law or in equity or by statute, and may be exercised from time
to time as often as may be deemed expedient by the Agent.
ARTICLE 5. MISCELLANEOUS
Section 5.01. Defined Terms. The terms used herein and not
defined herein shall have the meanings assigned to such terms in
the Credit Agreement.
Section 5.02. Amendments and Waivers. Except as otherwise
expressly provided in this Agreement, any provision of this
Agreement may be amended or modified only by an instrument in
writing signed by the Guarantor, the Agent and the Required
Lenders, or by the Guarantor and the Agent acting with the consent
of the Required Lenders and any provision of this Agreement may be
waived by the Required Lenders or by the Agent acting with the
consent of the Required Lenders; provided that no amendment,
modification or waiver shall, unless by an instrument signed by
all of the Lenders or by the Agent acting with the consent of all
of the Lenders: (a) discharge the Guarantor from the Unconditional
Guaranty; or (b) amend, waive or modify the definition of
Obligations.
Section 5.03. Expenses. The Guarantor shall reimburse the
Agent and each Lender for all reasonable out-of-pocket costs,
expenses and charges (including, without limitation, reasonable
fees and charges of external legal counsel for the Agent and each
Lender) in connection with the enforcement or preservation of any
rights or remedies during the existence of an "Event of Default"
(including, without limitation, to the extent permitted by law, in
connection with any restructuring or insolvency or bankruptcy
proceeding) under this Agreement or the Credit Agreement.
Section 5.04. Survival. The obligations of the Guarantor
under Section 5.03 shall survive the repayment of the Loans and
the Letters of Credit and the termination of the Commitments.
Section 5.05. Successors and Assigns. This Agreement shall
be binding upon, and shall inure to the benefit of, the Guarantor,
the Agent, the Lenders and their respective successors and
assigns.
Section 5.06. Notices. Unless the party to be notified
otherwise notifies the other party in writing as provided in this
Section, and except as otherwise provided in this Agreement,
notices shall be given to the Agent in writing, by telex, telecopy
or other writing or by telephone, confirmed by telex, telecopy or
other writing, and to the Lenders and to the Guarantor by ordinary
mail, hand delivery, overnight courier or telecopier addressed to
such party at its address on the signature page of this Agreement.
Notices shall be effective: (a) if given by mail, 72 hours after
deposit in the mails with first class postage prepaid, addressed
as aforesaid; and (b) if given by telecopier, when confirmation of
delivery of the telecopy to the telecopier number as aforesaid is
transmitted; provided that notices to the Agent and the Lenders
shall be effective upon receipt.
SECTION 5.07. JURISDICTION; IMMUNITIES. (A) EACH OF THE
GUARANTOR AND THE AGENT HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY NEW YORK STATE OR UNITED STATES FEDERAL COURT
SITTING IN NEW YORK COUNTY OVER ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT, AND EACH OF THE GUARANTOR
AND THE AGENT HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT
OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH
NEW YORK STATE OR FEDERAL COURT. EACH OF THE GUARANTOR AND THE
AGENT IRREVOCABLY CONSENT TO THE SERVICE OF ANY AND ALL PROCESS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH
PROCESS TO EACH OF THE GUARANTOR AND THE AGENT AT ITS ADDRESS
SPECIFIED IN SECTION 5.06. EACH OF THE GUARANTOR AND THE AGENT
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. EACH
OF THE GUARANTOR AND THE AGENT FURTHER WAIVES ANY OBJECTION TO
VENUE IN SUCH STATE AND ANY OBJECTION TO AN ACTION OR PROCEEDING
IN SUCH STATE ON THE BASIS OF FORUM NON CONVENIENS. THE GUARANTOR
FURTHER AGREES THAT ANY ACTION OR PROCEEDING BROUGHT AGAINST THE
AGENT OR ANY LENDER SHALL BE BROUGHT ONLY IN NEW YORK STATE OR
UNITED STATES FEDERAL COURT SITTING IN NEW YORK COUNTY. EACH OF
THE GUARANTOR AND THE AGENT WAIVES ANY RIGHT IT MAY HAVE TO JURY
TRIAL.
(b) Nothing in this Section 5.07 shall affect the right
of the Guarantor, the Agent or any Lender to serve legal process
in any other manner permitted by law or affect the right of the
Agent or any Lender to bring any action or proceeding against the
Guarantor or its property in the courts of any other
jurisdictions.
(c) To the extent that the Guarantor has or hereafter
may acquire any immunity from jurisdiction of any court or from
any legal process (whether from service or notice, attachment
prior to judgment, attachment in aid of execution, execution or
otherwise) with respect to itself or its property, the Guarantor
hereby irrevocably waives such immunity in respect of its
obligations under this Agreement.
Section 5.08. Headings. The headings and captions hereunder
are for convenience only and shall not affect the interpretation
or construction of this Agreement.
Section 5.09. Severability. The provisions of this
Agreement are intended to be severable. If for any reason any
provision of this Agreement shall be held invalid or unenforceable
in whole or in part in any jurisdiction, such provision shall, as
to such jurisdiction, be ineffective to the extent of such
invalidity or unenforceability without in any manner affecting the
validity or enforceability thereof in any other jurisdiction or
the remaining provisions hereof in any jurisdiction.
Section 5.10. Counterparts. This Agreement may be executed
in any number of counterparts, all of which taken together shall
constitute one and the same instrument, and any party hereto may
execute this Agreement by signing any such counterpart.
SECTION 5.11. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK.
Section 5.12. Subject to the Credit Agreement. Any and all
rights granted to the Agent under this Agreement are to be held
and exercised by the Agent for the benefit of the Lenders,
pursuant to the provisions of the Credit Agreement. To the extent
set forth in the Facility Documents, each of the Lenders shall be
a beneficiary of the terms of this Agreement. Any and all
obligations under this Agreement of the parties to this Agreement,
and the rights granted to the Agent under this Agreement, are
created and granted subject to the terms of the Credit Agreement.
Section 5.13. Term of Agreement. This Agreement shall be
and remain in full force and effect so long as any Obligation
shall remain unpaid, any Letter of Credit shall remain outstanding
or any Lender shall have any Commitment.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
GUARANTOR:
TRIARC COMPANIES, INC.
By:
Name:
Title:
Triarc Companies, Inc.
900 Third Avenue
New York, New York 10022
Attention: Executive Vice
President and General Counsel
Telecopier No.: (212) 230-3216
AGENT:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By:
Name:
Title:
Address for Notices:
New York Agency
4 Chase Metrotech Center
13th Floor
Brooklyn, NY 11245
Attention: Lucy D'Orazio
Telecopier No.: (718) 242-6909
with a copy to:
31 Mamaroneck Avenue
White Plains, NY 10601
Attention: Michael D. Anthony
Telecopier No.: (914) 328-8373
<PAGE>
EXHIBIT D1
BORROWING BASE CERTIFICATE
I. BOOK VALUE OF RECEIVABLES OF THE OBLIGORS $__________
II. AGGREGATE INELIGIBLE RECEIVABLES
((a)+(b)+(c)+(d)+(e)+(f)+(g)) $__________
(a) Over 90 Days Aged Receivables $__________
(b) Uninsured Foreign Receivables $__________
(c) Bankrupt Receivables $__________
(d) Disputed Receivables $__________
(e) Portion of Receivables Subject to Set-Off $__________
(including distributor reimbursements)
(f) Over 90 Days Cross-Aged Receivables $__________
(g) Other Ineligible Receivables (see attached)$__________
III. ELIGIBLE RECEIVABLES (I-II) $__________
IV. BOOK VALUE OF INVENTORY OF THE OBLIGORS $__________
V. AGGREGATE INELIGIBLE INVENTORY ((a)+(b)+(c)) $__________
(a) Foreign Inventory $__________
(b) Unsalable Inventory $__________
(c) Unusable Supplies $__________
VI. ELIGIBLE INVENTORY (IV-V) $__________
VII. TOTAL BORROWING BASE ((III*.80)+(VI*.50)) $__________
VIII. TOTAL REVOLVING CREDIT COMMITMENTS $__________
IX. AVAILABILITY (LESSER OF VII AND VIII) $__________
X. TOTAL REVOLVING CREDIT LOANS OUTSTANDING $__________
XI. TOTAL LETTER OF CREDIT OBLIGATIONS OUTSTANDING $__________
XII. UNUSED PORTION OF THE BORROWING BASE
AVAILABILITY (IX-X-XI) (if negative, our
check for said amount is attached) $__________
I, [_______________], the [_______________] of Mistic Brands,
Inc., in my capacity as such, hereby certify that, to the best of
my knowledge, the information contained herein is true and correct
and no Default has occurred and is continuing on the date hereof.
Date: [______] [__], 199[_] MISTIC BRANDS, INC.
By:___________________________
Name:
Title:
<PAGE>
EXHIBIT D2
COMPLIANCE CERTIFICATE
For the Fiscal Period Ending
[____________] [____], 19[____]
INTEREST COVERAGE RATIO (calculated for the period
of the four most recently ended Fiscal Quarters)
(a) Consolidated Net Income $____________
(b) Consolidated Income Taxes $____________
(c) Consolidated Interest Expense $____________
(d) Consolidated EBIT ((a)+(b)+(c)) $____________
(e) Consolidated Amortization $____________
(f) Consolidated EBITA ((d)+(e)) $____________
(g) Interest Coverage Ratio ((f)/(c)) _____________
(h) Required Ratio
(i) on or after December 31, 1995 and
on or before September 30, 1996 2.40
(ii) after September 30, 1996 and on or
before September 30, 1997 2.70
(iii) after September 30, 1997 and on or
before September 30, 1998 3.00
(iv) after September 30, 1998 and on or
before September 30, 1999 3.50
(v) after September 30, 1999 4.00
FIXED CHARGE COVERAGE RATIO (calculated for the period
of the four most recently ended Fiscal Quarters)
(a) Consolidated EBITA $____________
(b) Consolidated Depreciation $____________
(c) Consolidated EBITDA ((a)+(b)) $____________
(d) Consolidated Capital Expenditures $____________
(e) Consolidated Principal Payments $____________
(f) Consolidated Interest Expense $____________
(g) Fixed Charge Coverage Ratio (((c)-(d))/((e)+(f))) _____________
(h) Required Ratio
(i) on December 31,1995 1.60
(ii) on March 31, 1996 1.45
(iii) after March 31, 1996 and on or
before September 30, 1998 1.30
(iv) after September 30, 1998 and on or
before September 30, 2000 1.15
(v) after September 30, 2000 1.10
LEVERAGE RATIO (calculated as of the end
of the most recently ended Fiscal Quarter)
(a) Consolidated Funded Debt $____________
(b) Consolidated EBITDA for the Four Most
Recently Ended Fiscal Quarters $____________
(c) Leverage Ratio ((a)/(b)) _____________
(d) Required Ratio
(i) on December 31, 1995 and
on March 31, 1996 4.50
(ii) on June 30, 1996 4.70
(iii) on September 30, 1996 4.00
(iv) after September 30, 1996 and on or
before September 30, 1997 3.50
(v) after September 30, 1997 and on or
before September 30, 1998 3.00
(vi) after September 30, 1998 and on or
before September 30, 1999 2.50
(vii) after September 30, 1999 and on or
before September 30, 2000 2.25
(viii) after September 30, 2000 2.00
NET WORTH (calculated as of the end
of the most recently ended Fiscal Quarter)
(a) Consolidated Net Worth $____________
(b) Required Amount
(i) on or after the Closing Date and
on or before December 30, 1995 $25,000,000
(ii) after December 30, 1995 and on or
before December 30, 1996 $26,000,000
(iii) after December 30, 1996 and on or
before December 30, 1997 $29,000,000
(iv) after December 30, 1997 and on or
before December 30, 1998 $33,000,000
(v) after December 30, 1998 and on or
before December 30, 1999 $39,000,000
(vi) after December 30, 1999 and on or
before December 30, 2000 $45,000,000
(vii) after December 30, 2000 $50,000,000
CURRENT RATIO (calculated as of the end
of the most recently ended Fiscal Quarter)
(a) Consolidated Current Assets (other than
Prepaid Expenses) $____________
(b) Consolidated Current Liabilities $____________
(c) Current Ratio ((a)/(b)) _____________
(d) Required Ratio
(i) on or after the Closing Date and
on or before March 31, 1996 1.05
(ii) between each April 1 and September 30
thereafter 1.20
(iii) between each October 1 and March 31
thereafter 1.10
MANAGEMENT FEES (paid during the
most recently ended Fiscal Quarter) $____________
PAYMENTS TO AFFILIATES (paid during the
most recently ended Fiscal Quarter) $____________
CAPITAL EXPENDITURES (calculated for the most
recently ended Fiscal Quarter) $____________
EXCESS CASH FLOW-MANDATORY PREPAYMENT (calculated for the
most recently ended Fiscal Year)
(a) Consolidated EBITDA $____________
(b) Consolidated Non-cash Charges and Losses $____________
(c) Management Fees Paid
(i) in FY 1996, FY 1997 in excess of $500,000$____________
(ii) after FY 1997 in excess of $750,000 $____________
(d) Change in Adjusted Working Capital $____________
(e) Consolidated Non-cash Gains $____________
(f) Consolidated Principal Payments Paid $____________
(g) Consolidated Interest Expense $____________
(h) Consolidated Income Taxes $____________
(i) Consolidated Capital Expenditures $____________
(j) Consolidated Gains on Asset Sales $____________
(k) Excess Cash Flow
(((a)+(b)+(c))-((d)+(e)+(f)+(g)+(h)+(i)+(j)) _____________
(l) Mandatory Prepayment
(i) FY 1996, FY 1997 (.75*f) $____________
(ii) after FY 1997 (.50*f) $____________
I, [_______________], the [_______________] of Mistic Brands,
Inc., in my capacity as such, hereby certify that, to the best of
my knowledge, the information contained herein is true and correct
and no Default or Event of Default has occurred and is continuing
on the date hereof.
Date: [______] [__], 199[_] MISTIC BRANDS, INC.
By:___________________________
Name:
Title:
<PAGE>
EXHIBIT E
August 9, 1995
The Lenders Parties to the
Credit Agreement Referred to Below
c/o The Chase Manhattan Bank (National Association), as Agent
4 Chase Metrotech Center
Brooklyn, N.Y. 11245
Ladies and Gentlemen:
I am Vice President and Associate General Counsel of Triarc
Companies, Inc. (the "Guarantor") and in my capacity as such
have represented the Guarantor and its wholly-owned subsidiary
Mistic Brands, Inc. (the "Borrower"), in connection with the
execution and delivery of that certain Credit Agreement dated as
of August 9, 1995 (the "Credit Agreement") among the Borrower,
each of the lenders signatory thereto (the "Lenders") and The
Chase Manhattan Bank (National Association), as Agent (the
"Agent"), and the various other agreements and instruments
referred to in the next following paragraph. Except where
otherwise indicated, capitalized terms used herein and not
otherwise defined have the respective meanings given those terms
in the Credit Agreement. This opinion is being furnished to you
pursuant to Section 5.01(m) of the Credit Agreement.
In connection with this opinion, I have examined originals,
or copies certified or otherwise identified to my satisfaction,
of the following documents, each dated the date hereof:
a. the Credit Agreement;
b. the Notes;
c. the Unconditional Guaranty;
d. the Security Agreement;
e. the Trademark Security Agreement;
f. the Pledge Agreement;
g. the SAR Agreement;
h. the Affiliate Subordination Agreement; and
i. the uniform commercial code financing
statements being executed and delivered
pursuant to Section 5.01(d) and (f) of the
Credit Agreement, copies of forms of which
are attached hereto as Exhibit A
(collectively, the "Financing Statements").
The documents referred to in clauses (a) to (h) above are
hereinafter sometimes referred to collectively as the "Credit
Documents." The agreements referred to in clauses (d) to (f)
are collectively referred to as the "Security Documents." The
Guarantor and the Borrower are herein collectively referred to
as the "Obligors."
In addition, I have examined originals or copies of
originals, certified or otherwise identified to my satisfaction,
of (i) such corporate records and resolutions of the board of
directors of each Obligor and (ii) such other agreements,
documents, instruments, certificates of public and governmental
officials and corporate officers and other representatives of
entities referred to herein, and have made such inquiries of
such officers and other representatives, as I have deemed
relevant or appropriate as a basis for the opinions hereinafter
expressed.
In my examination of the aforesaid documents, I have
assumed, without independent investigation, the genuineness of
all signatures, the enforceability of the Credit Documents
against each party thereto, other than the Obligors, the legal
capacity of all individuals who have executed any of the Credit
Documents, the authenticity of all documents submitted to me as
originals, the conformity to the original documents of all
documents submitted to me as certified, photostatic, reproduced
or conformed copies of valid existing agreements or other
documents and the authenticity of all such latter documents.
In expressing the opinions set forth herein, I have relied
upon the factual matters contained in the representations and
warranties of the Obligors made in the Credit Documents and upon
certificates of public officials.
Based upon the foregoing and subject to the assumptions,
exceptions and qualifications set forth herein, I am of the
opinion that:
1. Each of the Borrower and the Guarantor is duly
incorporated, validly existing and in good standing under the
laws of the State of Delaware, has the corporate power and
authority to own its assets and to transact the business in
which it is now engaged, and is duly qualified as a foreign
corporation and in good standing under the laws of each other
jurisdiction set forth on Schedule 1 hereto.
2. The execution, delivery and performance by each of the
Borrower and the Guarantor of the Facility Documents to which is
a party, the borrowings by Borrower thereunder and the issuance
of the Letters of Credit and the issuance of the SARs have been
duly authorized by all necessary corporate action on the part of
Borrower and the Guarantor and do not and will not: (a) require
any consent or approval of its stockholders; (b) contravene its
charter or by-laws; (c) violate any provision of, or require
any filing (other than the filing of the Financing Statements
and assignments required pursuant to the terms of the Security
Documents), registration, consent or approval under, any law,
rule or regulation (including, without limitation, Regulations
G, T, U and X of the Federal Reserve Board) or, to my knowledge,
any order, writ, judgment, injunction, decree, determination or
award presently in effect binding upon the Guarantor or any of
its Subsidiaries; (d) result in a breach of or constitute a
default or require any consent under any indenture or loan or
credit agreement or any other material agreement, lease or
instrument to which the Guarantor or any of its Subsidiaries is
a party or by which it or its Properties may be bound or
affected; (e) to my knowledge, result in, or require, the
creation or imposition of any Lien (other than as created under
the Security Documents), upon or with respect to any of the
Properties now owned or hereafter acquired by the Guarantor or
any of its Subsidiaries; or (f) to my knowledge, cause the
Guarantor or any of its Subsidiaries to be in default under any
such law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award or any such indenture, agreement,
lease or instrument.
3. Each Facility Document to which it is a party has been
duly executed and delivered by each of the Borrower and the
Guarantor. Each Facility Document to which the Borrower or the
Guarantor is a party is a legal, valid and binding obligation of
such Person enforceable against such Person in accordance with
its terms.
4. Except as disclosed in Note 25 to the consolidated
financial statements of the Guarantor contained in the
Guarantor's Annual Report on Form 10-K and Quarterly Report on
Form 10-Q for the fiscal quarter ended March 31, 1995, or as
otherwise disclosed on Schedule I to the Guaranty, to the best
of my knowledge, there are no actions, suits or proceedings
pending or threatened in writing, against or affecting the
Borrower, the Guarantor or any of its Subsidiaries before any
Governmental Authority that could reasonably be expected to have
a Material Adverse Effect.
5. After giving effect to the making of the Loans on the
date hereof, and assuming that the Lenders are entering into the
Credit Documents in good faith without notice of any adverse
claim, the Security Documents are effective to create, in favor
of the Agent for itself and the other Lenders, a valid security
interest under the Uniform Commercial Code as in effect in the
State of New York (the "Uniform Commercial Code") in all of the
right, title and interest of the Borrower in, to and under the
Collateral (as defined in the Security Documents) to the extent
that Article 9 of the Uniform Commercial Code as in effect on
the date hereof is applicable thereto, except that (a) the
security interest in Collateral in which the Borrower or the
Guarantor acquires rights after the commencement of a case under
the Bankruptcy Code in respect of the Borrower or the Guarantor
may be limited by Section 552 of the Bankruptcy Code and (b) the
creation of a security interest in any "security" (as defined in
Section 8-102 of the Uniform Commercial Code) requires the
transfer of such security interest therein to the Agent pursuant
to Section 8-313(1) of the Uniform Commercial Code, which
transfer in the case of a "certificated security" (as defined in
said Section 8-102) may be effected in the manner contemplated
by paragraph 6(b) below.
6. The security interest referred to in paragraph 5 above
in the types of Collateral described below will be perfected as
described below:
(a) such security interest in that portion
of the Collateral consisting of
"indebtedness" owing to the Borrower that is
not evidenced by an "instrument" within the
meaning of such term in Section 9-105 of the
Uniform Commercial Code, "accounts" (as
defined in the Uniform Commercial Code) and
"general intangibles" (as defined in the
Uniform Commercial Code) may be perfected by
filing Financing Statements in the
appropriate offices in New York, the state
in which the Borrower has its chief
executive office;
(b) such security interest in that portion
of the Collateral consisting of instruments
or securities in certificated form will be
perfected when such instruments and the
certificates representing such securities
are delivered to the Agent in New York on
behalf of itself and the Lenders; provided
that the perfection of such security
interest may cease if the Agent fails to
maintain continuous possession of such
securities;
(c) such security interest in that portion
of the Collateral consisting of "goods" or
"documents covering goods" (as defined in
the Uniform Commercial Code) may be
perfected by filing Financing Statements in
the appropriate offices in the states in
which such goods are located; and
(d) such security interest in that portion
of the Collateral consisting of "proceeds"
(as defined in the Uniform Commercial Code)
may be perfected as and to the extent
provided in Section 9-306 of the Uniform
Commercial Code.
7. The authorized capital stock of the Borrower
consists of (a) 3,000 shares of Common Stock, 884.25 shares of
which are issued and outstanding, all of which are owned by the
Guarantor. All of the outstanding shares of Common Stock have
been duly authorized and validly issued, and are fully paid and
non-assessable. To my knowledge, there are no outstanding
preemptive, conversion or other rights, options or warrants
granted or issued by or binding upon the Borrower for the
purchase or acquisition by any other Person of any shares of
capital stock of the Borrower or any other securities
convertible into, exchangeable for or evidencing the right to
subscribe for any shares of such capital stock.
8. Neither the Borrower nor the Guarantor is subject to
regulation under the Public Utility Holding Company Act of 1935,
the Investment Company Act of 1940, the Interstate Commerce Act,
the Federal Power Act or any statute or regulation limiting is
ability in any material respect to incur indebtedness for money
borrowed as contemplated hereby.
The foregoing opinion is subject to the following
assumptions, exceptions and qualifications:
a. The enforceability of each of the Credit
Documents may be: (i) subject to bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting creditors' rights generally; (ii) subject
to general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in
equity), including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing; and (iii) subject
to the qualification that certain remedial provisions of the
Credit Documents are or may be unenforceable in whole or in part
under the laws of the State of New York, but the inclusion of
such provisions does not make the remedies afforded by the
Credit Documents inadequate for the practical realization of the
rights and benefits purported to be provided thereby, except for
the economic consequences resulting from any delay imposed by,
or any procedure required by, applicable New York laws, rules,
regulations and court decisions and by constitutional
requirements in and of the State of New York.
b. I express no opinion as to: (i) the
enforceability of any provisions contained in the Credit
Documents that purport to establish (or may be construed to
establish) evidentiary standards; (ii) the enforceability of any
provisions contained in the Security Documents or the
Unconditional Guaranty that constitute waivers which are
prohibited under the Uniform Commercial Code prior to default;
(iii) the enforceability of any provisions in the Unconditional
Guaranty purporting to preserve and maintain the liability of
any party thereto despite the fact the guaranteed obligations
are unenforceable due to illegality; or (iv) the enforceability
of forum selection clauses in the federal courts.
c. In giving the opinion set forth in paragraph 6
above, I express no opinion as to (i) any Obligor's right, title
or interest in or to any Collateral or the description of such
Collateral in the Security Documents; (ii) the laws of any other
state or the perfection and effect of perfection or non-
perfection of a security interest in the Collateral subject to
the laws of any state other than New York; (iii) the perfection
of security interests in fixtures, equipment used in farming
operations, farm products, consumer goods, timber or minerals or
the like, or accounts resulting from the sale thereof; or (iv)
the creation, validity, perfection, priority or enforceability
of any security interest sought to be created in any patents,
trademarks, trade names, service marks, copyrights, deposit
accounts, insurance policies, real property or any other items
of property to the extent that a security interest therein is
excluded from the coverage of Articles 8 or 9 of the Uniform
Commercial Code. In addition, except as specifically set forth
in paragraphs 6 and 7 above, I express no opinion as to the
perfection of any security interest. I express no opinion as to
the priority of any security interest.
d. I wish to point out that, in the case of proceeds
(as defined in Article 9 of the Uniform Commercial Code), the
continuation of perfection of any security interest therein (i)
is limited to the extent set forth in Section 9-306 of the
Uniform Commercial Code, (ii) if such proceeds consist of
property in which a perfect security interest cannot be obtained
or maintained by the filing of Uniform Commercial Code financing
statements in New York, will require additional compliance with
applicable provisions of the Uniform Commercial Code.
e. I call to your attention the fact that (i)
Article 9 of the Uniform Commercial Code requires the filing of
continuation statements within the period of six months prior to
the expiration of each five year period from the date of the
original filing of financing statements, as applicable, in order
to maintain the effectiveness of any filings in New York and
(ii) additional filings may be necessary if an Obligor changes
its name, identity or corporate structure or the jurisdictions
in which its places of business, its chief executive office or
the Collateral are located.
f. I express no opinion with respect to any
Collateral of the type described in Section 9-401(1)(a) or (b)
of the Uniform Commercial Code or represented by a certificate
of title.
The opinions expressed above are limited to the laws of the
State of New York, the federal laws of the United States and the
Delaware General Corporation Law. My opinions are rendered only
with respect to the laws, and the rules, regulations and orders
thereunder, which are currently in effect. Please be advised
that I am not admitted to practice in the State of Delaware.
This letter is furnished by me solely for your benefit in
connection with the transactions referred to in Credit Documents
and may not be relied upon it or circulated to any other person
or entity.
Very truly yours,
Stuart I. Rosen
Vice President and
Associate General Counsel
<PAGE>
August 9, 1995
WRITER'S DIRECT LINE: (212) 596-9152
The Chase Manhattan Bank
(National Association), as Agent
4 Chase Metrotech Center
Brooklyn, New York 11245
Ladies and Gentlemen:
We have acted as special trademark counsel to Mistic
Beverage, Inc., a Delaware corporation ("the Borrower"), and
Triarc Companies, Inc., a Delaware corporation (the "Guarantor")
in connection with the Borrower's acquisition of certain assets
from Best Flavors, Inc.
In our role as special trademark counsel to the
Borrower and the Guarantor, we were provided with and have
reviewed the following documents:
(1) the Asset Purchase Agreement dated as of August
9, 1995, by and among Mistic Brands, Inc. and
Joseph Victori Wines, Inc., Best Flavors, Inc.,
Nature's Own Beverage Company and Joseph Umbach
("Asset Purchase Agreement"); and
(2) the Trademark Security Agreement dated as of July
31, 1995 by Mistic Brands, Inc. in favor of The
Chase Manhattan Bank (National Association) as
Agent ("Trademark Security Agreement").
The Asset Purchase Agreement and the Trademark Security
Agreement are hereinafter collectively referred to as the
"Documents." Other terms defined (or incorporated by reference)
in the Asset Purchase Agreement are used herein as therein
defined.
In rendering our opinion, we have assumed without
independent investigation the legal capacity of all individuals
who have executed any of the Documents, the authenticity of all
documents submitted to us as originals and the conformity to
original documents of all documents submitted to us as copies.
We have further assumed, but have not verified, that each United
States trademark registration and application for registration
identified in Schedule A to the Trademark Security Agreement is
not subject to any agreement prohibiting the grant of a security
interest in such trademark registration or application for
registration. We have also relied upon the specific
representations and warranties of the Borrower made in the
Documents, including without limitation those representations
and warranties made in Section 3 of the Trademark Security
Agreement and Sections 5.11 and 5.17 of the Asset Purchase
Agreement. We have further relied upon the representations of
the Borrower as to the location of its chief executive office as
that term is used in Uniform Commercial Code ("UCC") Section 9-
103(3)(d).
Upon the basis of the foregoing, and subject to the
assumptions, exceptions and qualifications set forth herein, we
are of the opinion that:
1. Schedule A to the Trademark Security Agreement
completely and accurately lists all of the
Trademarks in which the Borrower has any right,
title or interest as of the Closing. To our
knowledge, each of the registrations listed on that
schedule is currently subsisting, valid and
enforceable.
2. The Trademark Security Agreement creates a valid
security interest in favor of the Agent in the
Collateral as defined in the Trademark Security
Agreement, as security for the payment of the
"Secured Obligations" described therein, and, upon
the filing of the UCC-1 Financing Statements with
the appropriate authorities in the State of New
York, the Agent will have a perfected security
interest in such "Collateral, and such security
interest will be senior to all other Liens, security
interests and encumbrances. It is also permissible,
although not mandatory, to record the Trademark
Security Agreement in the United States Patent and
Trademark Office. While such a filing has no effect
on the perfection of the security interest, it
provides notice to third parties of the existence of
the security interest.
We exclude from our opinion the effect of any antitrust
and bankruptcy issues that may arise under the laws of the
United States, or any foreign jurisdiction, as to which issues
we express no opinion. The enforceability of the Guarantor's
and the Borrower's obligations under the Trademark Security
Agreement is subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in
equity or at law).
We are qualified to practice law in the State of New
York, and we do not purport to be experts on, or to express any
opinion herein concerning, any law other than the law of the
State of New York and the Federal law of the United States
insofar as it applies to intellectual property.
We do not give any opinion except as set forth above. In
accordance with our firm's policy, this letter is furnished by
us solely for your information in connection with the subject
transaction and may be relied upon solely in connection
therewith. This letter may not be circulated to, or relied upon
by, any other Person, other than the Secured Parties, and is not
to be (i) quoted in whole or in part, or otherwise referred to,
in any public disclosure document or financial statement, of
(ii) filed with any governmental agency.
Very truly yours,
Susan Progoff
<PAGE>
EXHIBIT F
SECURITY AGREEMENT
Dated as of August 9, 1995
by
MISTIC BRANDS, INC.
in favor of
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)
as Agent
<PAGE>
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of August 9, 1995 (as amended,
supplemented or otherwise modified from time to time, this
"Agreement"), made by MISTIC BRANDS, INC., a corporation organized
under the laws of Delaware (the "Borrower") in favor of THE CHASE
MANHATTAN BANK (NATIONAL ASSOCIATION), a national banking
association, as agent (in such capacity, together with its
successors in such capacity, the "Agent") for the benefit of each
of the lenders (the "Lenders") signatory to the Credit Agreement
dated as of August 9, 1995 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement") among the
Borrower, the Agent and the Lenders.
W I T N E S S E T H :
WHEREAS, pursuant to the terms of the Credit Agreement and
the other Facility Documents, the Lenders have agreed to extend
credit to the Borrower upon the terms and subject to the
conditions set forth therein to be evidenced by the Notes issued
by the Borrower thereunder and the Letters of Credit issued
thereunder and to be guarantied by Triarc Companies, Inc., a
corporation organized under the laws of Delaware (the "Guarantor")
under the Unconditional Guaranty; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their extensions of credit to the Borrower under
the Credit Agreement that the Borrower shall have executed and
delivered this Agreement to the Agent to secure the obligations of
the Borrower under the Notes, the Letters of Credit, the Credit
Agreement and the other Facility Documents.
NOW, THEREFORE, in consideration of the premises and to
induce the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective Loans and to purchase
Participating Interests in Letters of Credit issued under the
Credit Agreement, the Borrower hereby agrees with the Agent, as
follows:
ARTICLE 1. DEFINITIONS.
Unless otherwise defined herein, terms which are defined in
the Credit Agreement and used herein are so used as so defined;
and the following terms have the following meanings:
"Assigned Agreements" means each and every one of the leases,
contracts, permits, licenses, franchises and other agreements to
which the Borrower is a party or pursuant to which the Borrower
has been granted rights, including, without limitation, all supply
contracts, co-packer agreements, distribution agreements, all
Mistic Acquisition Documents, all leases and all policies of
property, casualty and liability insurance pursuant to which the
Borrower is a beneficiary.
"Code" means the Uniform Commercial Code as in effect in the
State of New York.
"Collateral" means all of the Borrower's right, title and
interest in and to all the following, whether now owned or
hereafter acquired:
(a) all of the Receivables;
(b) all of the Equipment;
(c) all of the General Intangibles and all of the
right, title and interest of the Borrower in and to, and all
benefits of the Borrower pursuant to, the Assigned Agreements;
(d) all of the Inventory;
(e) (i) all of the Borrower's right, title and interest
in and to the goods and other Property, including but not limited
to all merchandise returned or rejected by Customers, represented
by or securing any of the Receivables; (ii) all of the Borrower's
rights as a consignor, a consignee, an unpaid vendor, mechanic,
artisan, or other lienor, including stoppage in transit, setoff,
detinue, replevin and reclamation; (iii) all additional amounts
due to the Borrower from any Customer relating to the Receivables,
irrespective of whether such additional amounts have been
specifically assigned to the Agent; (iv) all of the Borrower's
right, title and interest in other Property, including warranty
claims, relating to any goods whatsoever securing this Agreement;
(v) if and when obtained by the Borrower, all of the Borrower's
interest in personal Property of third parties in which the
Borrower has been granted a lien or security interest as security
for the payment or enforcement of Receivables; and (vi) any other
goods or personal Property now owned or hereafter acquired in
which the Borrower has expressly granted a security interest or
may in the future grant a security interest to the Agent for the
ratable benefit of the Lenders, in any amendment or supplement
hereto;
(f) all cash held as cash collateral by the Agent or
any Lender to the extent not otherwise constituting Collateral, or
other cash or Property at any time on deposit with or held by the
Agent or any Lender for the account of the Borrower (whether for
safekeeping, custody, pledge, transmission or otherwise), all
present and future deposit accounts (whether time or demand or
interest or non-interest bearing) of the Borrower with the Agent
or any Lender or any other Person including those to which any
such cash may at any time or from time to time be credited, all
amounts and reinvestments (however evidenced) of amounts from time
to time credited to such accounts, and all interest, dividends,
distributions and other proceeds payable on or with respect to (A)
such investments and reinvestments and (B) such accounts; provided
that until a Default or Event of Default shall have occurred and
be continuing, the Borrower shall have the right to withdraw all
such amounts from all such accounts not specifically designated as
cash collateral accounts without the consent of the Agent or such
Lender;
(g) all proceeds and products of the Collateral
referred to in the foregoing clauses (a), (b), (c), (d), (e), (f),
and in this clause (g), in whatever form, including, but not
limited to: cash, deposit accounts (whether or not comprised
solely of proceeds), certificates of deposit, insurance proceeds
(including, without limitation, hazard, flood and credit
insurance), negotiable instruments and other instruments for the
payment of money, chattel paper, security agreements or documents;
and
(h) all of the Borrower's ledger sheets, files,
records, books of account, business papers, computers, computer
software and programs, and documents relating to the Collateral
referred to in the foregoing clauses (a), (b), (c), (d), (e), (f)
or (g).
"Customer" means the account debtor with respect to any of
the Receivables or the purchaser of goods, services or both with
respect to any contract or contract right, or any Person who
enters into any contract or other arrangement with the Borrower,
pursuant to which the Borrower is to deliver any personal Property
or perform any services.
"Equipment" means all of the Borrower's "equipment" (as such
term is defined in the Code) now owned or hereafter acquired and
wherever located, including, without limitation, all machinery,
furniture, furnishings, fixtures, parts, accessories and all
replacements and substitutions therefor or accessions thereto.
"General Intangibles" means all of the Borrower's choses in
action, causes of action and all other "general intangibles" (as
such term is defined in the Code) now owned or hereafter acquired,
including, without limitation, goodwill, customer lists,
copyrights, Trademarks, tradenames, tradestyles, equipment
formulations, manufacturing procedures, quality control
procedures, product specifications, patents, copyrights, licenses,
franchises and tax refund claims.
"Inventory" means all of the Borrower's "inventory" (as such
term is defined in the Code) now owned or hereafter acquired,
including, without limitation, all goods, merchandise and other
personal Property, whether tangible or intangible, wherever
located, furnished under any contract of service or held for sale
or lease, all raw materials, work in process, finished goods and
materials and supplies of any kind, nature or description which
are or might be used or consumed in the Borrower's business or
used in selling or finishing of such goods, merchandise and other
personal Property, and all documents of title or other documents
representing them.
"Permitted Liens" means and includes any Lien or Liens which
the Borrower is permitted, by the terms of the Credit Agreement,
to create, incur, assume or suffer to exist.
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, and whether tangible or
intangible.
"Receivables" means all of the Borrower's accounts, contract
rights, instruments, documents, chattel paper, general intangibles
relating to accounts, drafts and acceptances, and all other forms
of obligations owing to the Borrower arising out of or in
connection with the sale or lease of Inventory or for services
rendered, all guarantees and other security therefor, whether
secured or unsecured, now existing or hereafter created, and
whether or not specifically pledged or assigned to the Agent
hereunder or under any other Facility Document.
"Secured Obligations" means the unpaid principal of and
interest on (including interest accruing on or after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Notes and all other obligations
and liabilities of any Obligor to the Agent or any Lender, whether
direct or indirect, absolute or contingent, due or to become due,
or now existing or hereafter incurred, which may arise under, out
of, or in connection with, the Credit Agreement, any Note, any
Letter of Credit, any Interest Rate Protection Agreement to which
a Lender is a party, any other Facility Document and any other
document made, delivered or given in connection therewith or
herewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including,
without limitation, all reasonable fees and disbursements of
counsel to the Agent or any Lender) or otherwise.
"Security" has the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
"Trademarks" shall have the meaning assigned to such term in
the Trademark Security Agreement.
ARTICLE 2. COLLATERAL
Section 2.01. Grant of Security Interest. As security for
the payment by the Borrower of the Secured Obligations and the
performance by the Borrower of its other obligations and
undertakings under this Agreement and under the other Facility
Documents, the Borrower does hereby grant, bargain, convey,
assign, transfer, mortgage, hypothecate, pledge, confirm and grant
a continuing security interest to the Agent in and to all right,
title and interest of the Borrower (but none of its obligations)
in the Collateral.
Section 2.02. Collateral Assignment of Contract Rights. (a)
To the extent permitted by each Assigned Agreement, the Borrower
hereby assigns and transfers to the Agent, in trust, nevertheless,
for the benefit of the Lenders, as collateral security for the
Secured Obligations, all right, title and interest of the Borrower
in and to, and all benefits accruing to the Borrower pursuant to,
each of the Assigned Agreements; provided, however, that, unless
an Event of Default shall be continuing and the Agent shall have
given the Borrower written notice of its intention to enforce its
rights, on behalf of the Lenders, under this Section 2.02, the
Borrower shall have the right to exercise any and all of its
rights under the Assigned Agreements to the same extent as if this
Agreement had not been executed (including, without limitation,
the right to enter into possession of and use any and all Property
leased or licensed to the Borrower, as lessee or licensee, the
right to use any or all of the facilities made available to the
Borrower and the right to make all waivers and agreements, to give
all notices, consents and releases, to take all action upon the
happening of any default giving rise to a right in favor of the
Borrower, under any of the Assigned Agreements, and to do any and
all other things whatsoever which the Borrower is or may become
entitled to do under any of the Assigned Agreements, including,
without limitation, the right to terminate or not renew any of the
Assigned Agreements); and provided, further, that during the
continuance of any Event of Default, upon written notice to the
Borrower, the Agent shall, to the extent permitted by each
Assigned Agreement, have the right to exercise any and all of the
Borrower's rights under the Assigned Agreements (including,
without limitation, all rights set forth in the parenthetical in
the immediately preceding proviso). The Borrower shall make a
good faith and reasonable effort to insert appropriate provisions
and to avoid the insertion of prohibitions or restrictions so that
each Assigned Agreement may be freely assignable and transferable.
(b) This Agreement is executed as security for the
Secured Obligations, and, therefore, the execution and delivery of
this Agreement shall not subject the Agent to, or transfer or pass
to the Agent, or in any way affect or modify, the liability of the
Borrower under any or all of the Assigned Agreements, it being
understood and agreed that notwithstanding this Agreement, all of
the obligations of the Borrower to each and every other party
under each and every one of the Assigned Agreements shall be and
remain enforceable by such other party, its successors and
assigns, against, but only against, the Borrower or Persons other
than the Agent, the Lenders and their respective successors and
assigns.
(c) To further protect the security afforded by this
Agreement, the Borrower agrees, subject to paragraph (a) above, as
follows:
(i) the Borrower will faithfully abide by, perform
and discharge each and every obligation, covenant, condition, duty
and agreement pursuant to each or any of the Assigned Agreements
the non-performance of which could reasonably be expected to have
a Material Adverse Effect;
(ii) the Borrower shall not amend, modify,
otherwise change or terminate any Assigned Agreement if such
amendment, modification, other change or termination could
reasonably be expected to have a Material Adverse Effect;
(iii) at the Borrower's sole cost and expense,
the Borrower will appear in and defend any action or proceeding
arising under, growing out of or in any manner connected with the
obligations, covenants, conditions, duties, agreements or
liabilities of the Borrower under any of the Assigned Agreements,
the non-performance of which could reasonably be expected to have
a Material Adverse Effect; and
(iv) should the Borrower fail to make any payment,
do any act or refrain from any act which this Agreement requires
the Borrower to make, do or refrain from, then the Agent may, upon
reasonable prior written notice to the Borrower (unless, in the
reasonable judgment of the Agent, the security provided hereby,
including the Collateral, taken as a whole, may be materially
harmed or impaired as a result of the Borrower's failure to pay,
act or refrain from acting, in which case the Agent need not so
notify the Borrower), but the Agent shall have no obligation to
(and shall not thereby release the Borrower from any obligation
hereunder), make, do or prevent the same in such manner and to
such extent as the Agent may deem necessary or advisable to
protect the security provided hereby, which rights of the Agent
shall specifically include, without limiting the Agent's general
powers herein granted, the right to appear in and defend any
action or proceeding purporting to affect the security hereof and
the rights or powers of the Agent hereunder (or any of them), and
upon the occurrence and during the continuance of an Event of
Default, the right to perform and discharge each and every one, or
any one or more, of the obligations, covenants, conditions, duties
and agreements of the Borrower contained in any one or more of the
Assigned Agreements; in exercising any such powers, the Agent may
pay necessary or advisable costs and expenses, employ counsel and
incur and pay reasonable attorneys' fees, and the Borrower will
reimburse the Agent for such costs, expenses and fees after
delivery of invoices or other evidences of the same.
Section 2.03. Sharing of Collateral. The Collateral shall
be held subject to the conditions and agreements in this Agreement
and in the other Facility Documents set forth for the common and
equal use, benefit and security of all and singular Person or
Persons who shall from time to time be Lenders and, except to the
extent specifically set forth in the Credit Agreement, without
preference of any of the Secured Obligations over any of the
others by reason of priority in time of issue, sale or negotiation
thereof or otherwise howsoever.
ARTICLE 3. REPRESENTATIONS, WARRANTIES AND COVENANTS
CONCERNING SECURITY
Section 3.01. Representations and Warranties. The Borrower
hereby represents and warrants:
(a) The Collateral in which the Borrower holds an
interest is owned solely by the Borrower and no other Person has
any right, title, interest, claim or Lien, other than Permitted
Liens.
(b) The Liens granted pursuant to this Agreement
constitute perfected Liens on the Collateral in favor of the
Agent, for the ratable benefit of the Lenders, which are prior to
all other Liens on the Collateral created by the Borrower and in
existence on the date hereof, other than Permitted Liens, and
which are enforceable as such against all creditors of and
purchasers from the Borrower and its predecessors in interest.
(c) No amount payable to the Borrower under or in
connection with any Receivable is evidenced by any instrument or
chattel paper which has not been delivered to the Agent. No
amount payable to the Borrower under or in connection with any
Assigned Agreement is evidenced by any instrument which has not
been delivered to the Agent.
Section 3.02. Sale of Collateral; Liens. Except as
specifically permitted herein or by the other Facility Documents,
the Borrower
(a) will not sell, assign or otherwise transfer any of
the Collateral,
(b) will keep all Collateral in existence on the date,
and all Collateral acquired after the date, of execution of this
Agreement, free from all Liens other than Permitted Liens, and
(c) will pay and discharge, when due, all taxes, levies
and other charges upon any Collateral, and shall defend all
Collateral against all claims of any Person (other than, with
respect to any Permitted Lien, the holder thereof) other than the
Agent, except if they are being contested in good faith by
appropriate proceedings and for which appropriate reserves are
maintained.
Section 3.03. Collection of Receivables. The Borrower may
collect its Receivables, but only until such time as the Agent
shall exercise its right under Section 4.02(b) to notify Customers
or other third parties to pay amounts owing under such Receivables
directly to the Agent. Upon the occurrence and during the
continuance of an Event of Default, the Borrower agrees to take
such action with respect to the collection of its Receivables and
the proceeds thereof as the Agent may direct.
Section 3.04. Offices, Location of Collateral, etc. (a) The
office where the Borrower keeps its records concerning the
Collateral and the Borrower's principal place of business and
chief executive office are located at are set forth in Part 1 of
Schedule A hereto; all of the Borrower's other places of business
are located at the addresses set forth in Part 2 of Schedule A
hereto and the Collateral is currently located only at the
locations referred to in this Section 3.04, except that certain
item(s) of Equipment and Inventory are located at the places
specified for such items in Part 3 of Schedule A hereto.
(b) Without the prior written consent of the Agent
(which consent shall not be unreasonably withheld or delayed), the
Borrower will not change the location of its chief executive
office; provided, however, that the Borrower may, upon not less
than thirty (30) days' prior written notice to the Agent, relocate
its chief executive office to any location in any jurisdiction in
the United States (each such jurisdiction being hereinafter
called a "Permitted Jurisdiction").
(c) The Borrower may relocate any item(s) of Inventory
or Equipment within (i) any Permitted Jurisdiction, and (ii) any
other jurisdiction so long as (in the case of this clause (ii)),
the Agent shall have a perfected first priority security interest
(or, if applicable, the foreign equivalent thereof) in such
item(s) and the aggregate value of such item(s) in such foreign
jurisdictions does not exceed 10% of the aggregate value of all
such item(s); provided, however, that the Borrower provides notice
of such relocation to the Agent on or before the date that is 60
days after such relocation took place.
The Borrower will with respect to each and every relocation of the
Borrower's chief executive offices or any item(s) of the
Collateral, take such action, at the Agent's reasonable request
and direction and at the Borrower' expense as provided in Section
3.09 (and including, without limitation, the preparation and
filing where appropriate of new or amended financing statements),
as may then be necessary or desirable to ensure the uninterrupted
continuation of the Agent's security interest in all of the
Collateral with the same priority as it had prior to any such
relocation.
Section 3.05. Financing Statements. The Borrower hereby
agrees to execute such financing statements as the Agent may
reasonably request, and to take such other action (including,
without limitation, the execution and filing, at its own expense,
of all continuation statements) as may be required to perfect and
to keep perfected the Agent's security interest in, and Lien upon,
the Collateral, and, unless prohibited by law, the Borrower hereby
authorizes the Agent to execute and file any such financing
statements and continuation statements on behalf of the Borrower.
Section 3.06. Insurance for Collateral. The Borrower agrees
to maintain, or cause to be maintained, policies of insurance as
required by the Credit Agreement, and to deliver to the Agent one
or more certificates evidencing such policies naming the Agent as
loss payee (and to the extent such policies are provided by co-
packers utilized by the Borrower, the Borrower shall use good
faith and reasonable efforts to ensure that the Agent is named as
loss payee thereunder) and, if requested by the Agent, the
certified copies of such policies. Each policy of insurance or
endorsement shall contain a clause requiring the insurer to give
not less than thirty (30) days' notice to the Agent in the event
of cancellation of the policy for any reason whatsoever and a
clause that the interest of the Agent shall not be impaired or
invalidated by any act or neglect of the Borrower nor by the
occupation of the premises where the Collateral is located for
purposes more hazardous than are permitted by such policy. If the
Borrower fails to provide such insurance, the Agent may, at the
Borrower's expense, procure the same, but shall not be required to
do so. The Borrower agrees to deliver to the Agent, promptly as
rendered, two copies of all reports made to any insurance company
by it that relate to the Collateral.
Section 3.07. Certain Information, etc. The Borrower will
deliver to the Agent at such times and in such form as shall be
reasonably designated by the Agent, assignments, schedules and
reports relating to the Collateral, and will furnish such other
information relevant to the Collateral as the Agent shall from
time to time reasonably request, including, without limitation,
the original delivery or other receipts for Inventory sold and
duplicate invoices relating to the Receivables. At the request of
the Agent, the Borrower will also promptly deliver to the Agent
any and all bills of sale for, certificates of title to or other
comparable evidence of ownership of, each item of the Equipment.
The Borrower will mark its books and records to reflect the
security interest of the Agent in Receivables and General
Intangibles.
Section 3.08. Protection of Collateral; Reimbursement. All
expenses of protecting, storing, warehousing, insuring, handling,
maintaining and shipping the Collateral, and all excise, property,
sales and use taxes imposed by any state, federal or local
authority on any of the Collateral or in respect of the sale
thereof shall be borne and paid by the Borrower; and if the
Borrower fails so to pay any portion thereof when due unless such
taxes are being contested in good faith by appropriate proceedings
and for which appropriate reserves are maintained, the Agent may,
after notice to the Borrower and opportunity to cure, at its
option, but shall not be required to, pay the same and charge the
Borrower therefor, and the Borrower agrees to reimburse promptly
the Agent therefor with interest at a rate equal to the Default
Rate. The Borrower shall pay all sums so paid or incurred by the
Agent for any of the foregoing and all costs and expenses
(including reasonable attorneys' fees, legal expenses and court
costs) that the Agent may reasonably incur in evaluating,
asserting, enforcing, defending or protecting its Lien on, or
rights and interest in, the Collateral, or any of its rights or
remedies under this Agreement or any other Facility Document, and,
until paid by the Borrower such sums shall be considered as
additional obligations owing by the Borrower under this Agreement
and, as such, shall be secured by all of the Collateral and the
proceeds from the sale thereof and by any and all other
collateral, security, assets, reserves or funds of the Borrower in
or coming into the hands of or inuring to the benefit of the
Agent. Subject to the provisions of the Credit Agreement and
except to the extent limited by applicable law, the Agent shall
not be liable or responsible in any way for the safekeeping of the
Collateral or for any loss or damage thereto (except any loss or
damage caused by the gross negligence or willful misconduct of the
Agent) or for any diminution in the value thereof, or any act or
default of any warehouseman, carrier, forwarding agency or other
Person.
Section 3.09. Further Assurances. So long as any of the
Secured Obligations or any Commitment shall be outstanding upon
the written request of the Agent, the Borrower, at its expense,
will timely execute, acknowledge, deliver, file and record, or
will cause to be executed, acknowledged, delivered, filed or
recorded, all such further instruments, deeds, conveyances,
mortgages, transfers, financing statements, continuation
statements and assurances as may be necessary or appropriate (and,
in any event, as may be reasonably requested by the Agent) to
subject to the Lien of this Agreement, and to preserve, continue
and protect the Lien of this Agreement on, the Collateral,
including, without limitation, any Collateral acquired after the
date of this Agreement, and for perfecting the Agent's rights in,
every part of the Collateral, or as may be required in order to
transfer to, or perfect the rights of any new agent or agents in,
the Collateral.
ARTICLE 4. DEFAULTS -- REMEDIES
Section 4.01. Nature of Events. An "Event of Default" shall
exist if any Event of Default under, and as defined in, the Credit
Agreement occurs and is continuing.
Section 4.02. Default Remedies. (a) If an Event of Default
exists and is continuing, the Agent may exercise all of the rights
and remedies conferred in this Agreement and in each of the other
Facility Documents, it being expressly understood that no such
remedy is intended to be exclusive of any other remedy or
remedies; but each and every remedy shall be cumulative and shall
be in addition to every other remedy given in this Agreement or
now or hereafter existing at law or in equity or by statute, and
may be exercised from time to time as often as may reasonably be
deemed expedient by the Agent.
(b) If an Event of Default exists and is continuing,
the Agent shall have the right, at any time and from time to time
during such default period, (i) to notify all Customers and other
third parties holding or otherwise concerned with the Collateral
that Receivables have been assigned to the Agent and that the
Agent has a security interest therein; (ii) to direct all such
Persons to make payments to the Agent of all or any part of the
sums owing the Borrower by such Persons; (iii) to enforce
collection of any of the Receivables by suit or otherwise; (iv) to
surrender, release or exchange all or any part of such
Receivables; or (v) to compromise, settle, extend or renew for any
period (whether or not longer than the original period) any
indebtedness thereunder or evidenced thereby.
(c) If an Event of Default exists and is continuing,
the Agent shall have the right, at any time or from time to time
during such default period, to take immediate possession of any or
all Collateral that is tangible personal Property, and may require
the Borrower to assemble such Collateral, at the expense of the
Borrower, and to make it available to the Agent at a place to be
designated by the Agent that is reasonably convenient to both
parties, and may enter any of the premises of the Borrower with or
without force or process of law, and keep and store the same on
such premises until sold (and if such premises be the Property of
the Borrower, the Borrower agrees not to charge the Agent for
storage thereof for a period of at least ninety (90) days after
sale or disposition of such Collateral).
(d) The Borrower and the Agent agree that ten (10)
Banking Days' prior written notice to the Borrower of any public
or private sale or other disposition of Collateral shall be
reasonable notice thereof, and such sale shall be at such
reasonable locations as the Agent shall designate in such notice.
Except as expressly set forth in any Facility Document, any other
requirement of notice, demand or advertisement for sale is, to the
extent permitted by law, waived by the Borrower. Sales for cash,
or on credit to a wholesaler, retailer or user of the Collateral,
at any public or private sale, if made in good faith, are all
hereby deemed (without limitation) to be commercially reasonable
(as defined in the Code). The Agent shall have the right to bid
at any such sale on behalf of any one or more Lenders (who shall
also have the right to bid individually). Proceeds arising from
any such sale shall be applied to the repayment of the Secured
Obligations in the manner set forth in the Credit Agreement.
(e) If an Event of Default exists and is continuing,
the Agent may also, with or without proceeding with sale or
foreclosure or demanding payment of the Secured Obligations,
without prior notice, appropriate and apply to the payment of the
Secured Obligations and the other obligations secured under this
Agreement any and all Collateral in its possession and any and all
balances, credits, deposit accounts, reserves or other moneys due
or owing to the Borrower held by the Agent under this Agreement or
otherwise. The Agent shall promptly notify the Borrower of any
such appropriation by the Agent.
(f) Anything in this Agreement contained to the
contrary notwithstanding, and in view of the fact that federal and
state securities laws may impose certain restrictions on the
method by which a sale of the Collateral that consists of
Securities may be effected after an Event of Default, the Borrower
agrees that upon the occurrence and during the existence of an
Event of Default, the Agent may, from time to time, attempt to
sell all or any part of such Collateral by means of a private
placement restricting the bidders and prospective purchasers to
those who will represent or agree as to their investment intent or
method of resale or both in a manner reasonably required by the
Agent to assure compliance with applicable securities laws. The
Agent shall give the Borrower written notice prior to making any
such offer of any such Collateral. Each of the Agent and the
Borrower may solicit offers to buy such Collateral, or any part of
it, for cash, from a limited number of investors deemed by the
Agent, in its reasonable business judgment, to be responsible
parties who might be interested in purchasing such Collateral, and
if the Agent and the Borrower collectively solicit such offers
from not less than five (5) such investors, then the acceptance by
the Agent of the highest offer obtained therefrom shall be deemed
to be a commercially reasonable method of disposition (as defined
in the Code) of such Collateral unless applicable law provides
otherwise.
(g) All covenants, conditions, provisions, warranties,
guaranties, indemnities and other undertakings of the Borrower
contained in this Agreement or any other Facility Document or
contained in any agreement supplementary to this Agreement or any
other Facility Document, shall be deemed cumulative to and not in
derogation or substitution of any of the terms, covenants,
conditions or agreements of the Borrower contained in this
Agreement or any other Facility Document.
(h) The Borrower will pay to the Agent all reasonable
expenses (including court costs and reasonable attorneys' fees and
expenses) of, or incident to, the enforcement of any of the
provisions of this Agreement and all other charges due against the
Collateral, including, without limitation, taxes (other than
income taxes imposed upon the Agent in connection therewith),
assessments, security interests, Liens or encumbrances upon the
Collateral and any expenses, including transfer or other similar
taxes, arising in connection with any sale, transfer or other
disposition of Collateral.
Section 4.03. Other Enforcement Rights. The Agent may
proceed to protect and enforce this Agreement by suit or suits or
proceedings in equity, at law or in bankruptcy, and whether for
the specific performance of any covenant or agreement in this
Agreement contained or in execution or aid of any power in this
Agreement granted, or for foreclosure under this Agreement, or for
the appointment of a receiver or receivers for the Collateral or
any part thereof, for the recovery of judgment for the obligations
secured by this Agreement or for the enforcement of any other
proper, legal or equitable remedy available under applicable law.
Section 4.04. Effect of Sale, etc. (a) Any sale or sales
pursuant to the provisions of this Agreement, whether under any
right or power granted hereby or thereby or pursuant to any legal
proceedings, shall operate to divest the Borrower of all right,
title, interest, claim and demand whatsoever, either at law or in
equity, of, in and to the Collateral, or any part thereof, so
sold, and any Property so sold shall be free and clear of any and
all rights of redemption by, through or under the Borrower. At
any such sale any Lender may bid for and purchase the Property
sold and may make payment therefor as set forth in clause (b) of
this Section 4.04, and any such Lender so purchasing any such
Property, upon compliance with the terms of sale, may hold, retain
and dispose of such Property without further accountability.
(b) The receipt by the Agent, or by any Person
authorized under any judicial proceedings to make any such sale,
of the proceeds of any such sale shall be a sufficient discharge
to any purchaser of the Collateral, or of any part thereof, sold
as aforesaid; and no such purchaser shall be bound to see to the
application of such proceeds, or be bound to inquire as to the
authorization, necessity or propriety of any such sale. In the
event that, at any such sale, any Lender is the successful
purchaser, it shall be entitled, for the purpose of making
settlement or payment, to use and apply such Collateral to its
Secured Obligations by crediting thereon the net proceeds of such
sale.
Section 4.05. Delay or Omission; No Waiver. No course of
dealing on the part of the Agent nor any delay or failure on the
part of the Agent to exercise any right shall impair such right or
operate as a waiver of such right or otherwise prejudice the
Agent's rights, powers and remedies. No waiver by the Agent of
any Default or Event of Default, whether such waiver be full or
partial, shall extend to or be taken to affect any subsequent
Default or Event of Default, or to impair the rights resulting
therefrom except as may be otherwise expressly provided in this
Agreement. Upon the occurrence and during the existence of an
Event of Default, every right and remedy given by this Agreement,
by any other Facility Document or by law to the Agent may be
exercised from time to time as often as may be deemed expedient by
the Agent.
Section 4.06. Restoration of Rights and Remedies. If the
Agent shall have instituted any proceeding to enforce any right or
remedy under this Agreement or under any other Facility Document
and such proceeding shall have been discontinued or abandoned for
any reason, or shall have been determined adversely to the Agent,
then and in every such case the Agent, the Borrower and the
Lenders shall, subject to any determination in such proceeding, be
restored severally and respectively to their former positions
under this Agreement and under the other Facility Documents, and,
unless otherwise determined in such proceeding, thereafter all
rights and remedies of the Agent shall continue as though no such
proceeding had been instituted.
Section 4.07. Application of Proceeds. The proceeds of any
exercise of rights with respect to the Collateral, or any part
thereof, and the proceeds and the avails of any remedy under this
Agreement shall be paid to and applied in accordance with the
provisions of the Credit Agreement. If there is a deficiency, the
Borrower shall, subject always to the other provisions of this
Agreement, remain liable therefor and shall forthwith pay the
amount of any such deficiency to the Agent. If there is an
excess, such excess shall be returned to the Borrower.
Section 4.08. Waivers by the Borrower. (a) To the extent
permitted by applicable law, the Borrower hereby waives notice of
acceptance of this Agreement and of extensions of credit, loans,
advances or other financial assistance under the Facility
Documents or under any other agreement, note, document or
instrument now or at any time or times hereafter executed by the
Borrower and delivered to the Agent or any Lender in connection
with or pursuant to a Facility Document. To the extent permitted
by applicable law, the Borrower further waives presentment and
demand for payment of any of the Secured Obligations, protest and
notice of dishonor or default with respect to any of the Secured
Obligations, and all other notices to which the Borrower might
otherwise be entitled, except as otherwise expressly provided in
this Agreement or in the other Facility Documents.
(b) The Borrower (to the extent that it may lawfully do
so) covenants that it will not at any time insist upon or plead,
or in any manner claim or take the benefit or advance of, any stay
(except in connection with a pending appeal or the automatic stay
imposed under 11 U.S.C. Section 362 or any successor or replacement
thereof), valuation, appraisal, redemption or extension law now or
at any time hereafter in force that, but for this waiver, might be
applicable to any sale made under any judgment, order or decree
based on this Agreement or any other Facility Document; and the
Borrower (to the extent that it may lawfully do so) hereby
expressly waives and relinquishes all benefit and advance of any
and all such laws and hereby covenants that it will not hinder,
delay or impede the execution of any power in this Agreement or
therein granted and delegated to the Agent, but that it will
suffer and permit the execution of every such power as though no
such law or laws had been made or enacted.
Section 4.09. Consent. The Borrower hereby consents that
from time to time, before or after the occurrence or existence of
any Event of Default, with or without notice to or assent from the
Borrower, any security at any time held by or available to the
Agent for any of the Secured Obligations, or any other security at
any time held by or available to the Agent for any obligation of
any other Person secondarily or otherwise liable for any of the
Secured Obligations, may be exchanged, surrendered, or released,
and the Borrower shall remain bound under this Agreement
notwithstanding any such exchange, surrender or release.
ARTICLE 5. DEFEASANCE
Section 5.01. Satisfaction and Discharge. If the Borrower
shall pay and discharge the entire indebtedness on all Secured
Obligations outstanding by paying or causing to be paid the
principal of, and interest on, all Secured Obligations
outstanding; and if the Borrower shall also pay or cause to be
paid all other sums payable under this Agreement with respect to
the Secured Obligations and all sums payable under any one or more
of the other Facility Documents; and if all Commitments shall have
been terminated, then and in that case all of the right, title and
interest of the Agent in the Collateral created hereby shall cease
and terminate, and thereupon the Agent, upon written request of
the Borrower, shall forthwith execute and deliver, without
recourse, proper deeds, assignments and other instruments
acknowledging satisfaction or and discharging all of the right,
title and interest of the Agent in the Collateral created hereby
(subject to any disposition thereof that may have been previously
made by the Agent pursuant to any of the Facility Documents).
Section 5.02. Disposal of Assets; Release of Lien. So long
as no Default or Event of Default shall exist and be continuing or
be created as a result thereof, if the Borrower shall sell, lease,
transfer or otherwise dispose of its Property in accordance with
the provisions of the Credit Agreement, then the Agent, upon
payment to it of all amounts then due and owing as fees and
expenses under this Agreement, shall forthwith execute proper
instruments releasing the interests in such Property so disposed
of from the Lien of the Agent created under this Agreement.
ARTICLE 6. MISCELLANEOUS
Section 6.01. Amendments and Waivers. Except as otherwise
expressly provided in this Agreement, any provision of this
Agreement may be amended or modified only by an instrument in
writing signed by the Borrower, the Agent and the Required
Lenders, or by the Borrower and the Agent acting with the consent
of the Required Lenders and any provision of this Agreement may be
waived by the Required Lenders or by the Agent acting with the
consent of the Required Lenders; provided that no amendment,
modification or waiver shall, unless by an instrument signed by
all of the Lenders or by the Agent acting with the consent of all
of the Lenders: (a) permit the creation of any Lien with respect
to any of the Collateral (other than Permitted Liens) that is
prior or equal to the Lien of the Agent; (b) effect the
deprivation of any Lender of the benefit of any Lien upon all or
any part of the Collateral; (c) create any priority with respect
to any portion of the Secured Obligations over any other portion
with respect to the Lien upon all or any part of the Collateral;
or (d) amend, waive or modify the definition of Secured
Obligations.
Section 6.02. Survival. The obligations of the Borrower
under Section 3.08 or Section 4.02(h) shall survive the repayment
of the Secured Obligations and the termination of the Commitments.
Section 6.03. Successors and Assigns. This Agreement shall
be binding upon, and shall inure to the benefit of, the Borrower,
the Lenders and their respective successors and assigns.
Section 6.04. Notices. Unless the party to be notified
otherwise notifies the other party in writing as provided in this
Section, and except as otherwise provided in this Agreement,
notices shall be given to the Agent in writing, by telex, telecopy
or other writing or by telephone, confirmed by telex, telecopy or
other writing, and to the Lenders and to the Borrower by ordinary
mail, hand delivery, overnight courier or telecopier addressed to
such party at its address on the signature page of the Credit
Agreement. Notices shall be effective: (a) if given by mail, 72
hours after deposit in the mails with first class postage prepaid,
addressed as aforesaid; and (b) if given by telecopier, when
confirmation of delivery of the telecopy is transmitted to the
telecopier number as aforesaid is transmitted; provided that
notices to the Agent and the Lenders shall be effective upon
receipt.
SECTION 6.05. JURISDICTION; IMMUNITIES. (A) EACH OF THE
BORROWER AND THE AGENT HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY NEW YORK STATE OR UNITED STATES FEDERAL COURT
SITTING IN NEW YORK COUNTY OVER ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT, AND EACH OF THE BORROWER AND
THE AGENT HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW
YORK STATE OR FEDERAL COURT. EACH OF THE BORROWER AND THE AGENT
IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY
SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS
TO EACH OF THE BORROWER AND THE AGENT AT ITS ADDRESS SPECIFIED IN
SECTION 6.04. EACH OF THE BORROWER AND THE AGENT AGREES THAT A
FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON
THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. EACH OF THE
BORROWER AND THE AGENT FURTHER WAIVES ANY OBJECTION TO VENUE IN
SUCH STATE AND ANY OBJECTION TO AN ACTION OR PROCEEDING IN SUCH
STATE ON THE BASIS OF FORUM NON CONVENIENS. THE BORROWER FURTHER
AGREES THAT ANY ACTION OR PROCEEDING BROUGHT AGAINST THE AGENT OR
ANY LENDER SHALL BE BROUGHT ONLY IN NEW YORK STATE OR UNITED
STATES FEDERAL COURT SITTING IN NEW YORK COUNTY. EACH OF THE
BORROWER AND THE AGENT WAIVES ANY RIGHT IT MAY HAVE TO JURY TRIAL.
(b) Nothing in this Section 6.05 shall affect the right
of the Borrower, the Agent or any Lender to serve legal process in
any other manner permitted by law or affect the right of the Agent
or any Lender to bring any action or proceeding against the
Borrower or its property in the courts of any other jurisdictions.
(c) To the extent that the Borrower has or hereafter
may acquire any immunity from jurisdiction of any court or from
any legal process (whether from service or notice, attachment
prior to judgment, attachment in aid of execution, execution or
otherwise) with respect to itself or its property, the Borrower
hereby irrevocably waives such immunity in respect of its
obligations under this Agreement.
Section 6.06. Headings. The headings and captions hereunder
are for convenience only and shall not affect the interpretation
or construction of this Agreement.
Section 6.07. Severability. The provisions of this
Agreement are intended to be severable. If for any reason any
provision of this Agreement shall be held invalid or unenforceable
in whole or in part in any jurisdiction, such provision shall, as
to such jurisdiction, be ineffective to the extent of such
invalidity or unenforceability without in any manner affecting the
validity or enforceability thereof in any other jurisdiction or
the remaining provisions hereof in any jurisdiction.
Section 6.08. Counterparts. This Agreement may be executed
in any number of counterparts, all of which taken together shall
constitute one and the same instrument, and any party hereto may
execute this Agreement by signing any such counterpart.
SECTION 6.09. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK.
Section 6.10. Subject to the Credit Agreement. Any and all
rights granted to the Agent under this Agreement are to be held
and exercised by the Agent for the benefit of the Lenders,
pursuant to the provisions of the Credit Agreement. To the extent
set forth in the Facility Documents, each of the Lenders shall be
a beneficiary of the terms of this Agreement. Any and all
obligations under this Agreement of the parties to this Agreement,
and the rights granted to the Agent under this Agreement, are
created and granted subject to the terms of the Credit Agreement.
Section 6.11. Power of Attorney. The Borrower hereby makes,
constitutes and appoints the Agent the true and lawful agent and
attorney in fact of the Borrower, with full power of substitution
(a) if an Event of Default exists and is continuing,
and to the fullest extent permitted by applicable law, to receive,
open and dispose of all mail addressed to the Borrower relating to
the Collateral and remove therefrom any notes, checks,
acceptances, drafts, money orders or other instruments included in
the Collateral, with full power to endorse the name of the
Borrower upon any such notes, checks, acceptances, drafts, money
orders, instruments or other documents relating to the Collateral
and to effect the deposit and collection thereof, and the further
right and power to endorse the name of the Borrower on any
document relating to the Collateral;
(b) if an Event of Default exists and is continuing, to
sign the name of the Borrower to drafts against its debtors, to
notices to such debtors, to assignments and notices of
assignments, financing statements, continuation statements or
other public records or notices and all other instruments and
documents; and
(c) to do any and all things necessary to take such
action in the name and on behalf of the Borrower to carry out the
provisions of this Agreement, including, without limitation, the
grant of the security interest granted to the Agent with respect
to the Collateral and the Agent's rights created under this
Agreement after a request by the Agent to take any action, and the
failure or refusal of the Borrower to comply with such request
within five (5) Banking Days.
The Borrower agrees, in the absence of willful wrongdoing or gross
negligence, that neither the Agent nor any of its agents,
designees or attorneys-in-fact will be liable for any acts of
commission or omission, or for any good faith error of judgment or
mistake of fact or law with respect to the exercise of the power
of attorney granted under this Section 6.11. The power of
attorney granted under this Section 6.11 is coupled with an
interest and shall be irrevocable so long as any Secured
Obligation, Letter of Credit or Commitment remains outstanding.
Section 6.12. Term of Agreement. This Agreement shall be
and remain in full force and effect so long as any Secured
Obligation, Letter of Credit or Commitment is outstanding.
[Remainder of Page Intentionally Left Blank]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
BORROWER:
MISTIC BRANDS, INC.
By:
Name:
Title:
AGENT:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By:
Name:
Title:
<PAGE>
EXHIBIT G
TRADEMARK SECURITY AGREEMENT
Dated as of August 9, 1995
by
MISTIC BEVERAGE, INC.
in favor of
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)
as Agent
<PAGE>
TRADEMARK SECURITY AGREEMENT
TRADEMARK SECURITY AGREEMENT, dated as of August 9, 1995
(as amended, supplemented or otherwise modified from time to
time, this "Agreement"), made by MISTIC BRANDS, INC., a
corporation organized under the laws of Delaware (the
"Borrower") in favor of THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), a national banking association, as agent (in such
capacity, together with its successors in such capacity, the
"Agent") for the benefit of each of the banks (the "Banks")
signatory to the Credit Agreement dated as of August 9, 1995 (as
amended, supplemented or otherwise modified from time to time,
the "Credit Agreement") among the Borrower, the Agent and the
Lenders.
W I T N E S S E T H :
WHEREAS, pursuant to the terms of the Credit Agreement and
the other Facility Documents, the Lenders have agreed to extend
credit to the Borrower upon the terms and subject to the
conditions set forth therein to be evidenced by the Notes issued
by the Borrower thereunder and the Letters of Credit issued
thereunder and to be guarantied by Triarc Companies, Inc., a
corporation organized under the laws of the State of Delaware
(the "Guarantor") under the Unconditional Guaranty; and
WHEREAS, it is a condition precedent to the obligation of
the Lenders to make their extensions of credit to the Borrower
under the Credit Agreement that the Borrower shall have executed
and delivered this Agreement to the Agent to secure the
obligations of the Borrower under the Notes, the Letters of
Credit, the Credit Agreement and the other Facility Documents.
NOW, THEREFORE, in consideration of the premises and to
induce the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective Loans and to
purchase Participating Interests in Letters of Credit issued
under the Credit Agreement, the Borrower hereby agrees with the
Agent, as follows:
ARTICLE 1. DEFINITIONS.
Unless otherwise defined herein, terms which are defined in
the Credit Agreement and used herein are so used as so defined;
and the following terms have the following meanings:
"Code" means the Uniform Commercial Code as in effect in
the State of New York.
"Collateral" means all of the right, title and interest of
the Borrower in, to and under the Trademarks, whether now owned
or hereafter acquired, together with all the proceeds thereof
and any replacements, additions or substitutions thereof or
thereto and all accounts arising from the sale or disposition
thereof.
"Secured Obligations" means the unpaid principal of and
interest on (including interest accruing on or after the filing
of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the
Borrower, whether or not a claim for post-filing or post-
petition interest is allowed in such proceeding) the Notes and
all other obligations and liabilities of any Obligor to the
Agent or any Lender, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with,
the Credit Agreement, any Note, any Letter of Credit, any
Interest Rate Protection Agreement to which a Lender is a party,
any other Facility Document and any other document made,
delivered or given in connection therewith or herewith, whether
on account of principal, interest, reimbursement obligations,
fees, indemnities, costs, expenses (including, without
limitation, all reasonable fees and disbursements of counsel to
the Agent or any Lender) or otherwise.
"Trademarks" means, collectively, all of the Borrower's
right, title and interest in and to the trademarks and trademark
applications and registrations listed on Schedule A hereto, and
all other trademarks and trademark applications and
registrations in which the Borrower has or shall now or
hereafter have any right, title or interest, and all proceeds of
the foregoing (including, without limitation, license royalties
and proceeds of infringement suits); and all general intangibles
associated with the foregoing, including, without limitation,
all goodwill associated with the trademarks, the trademark
applications and registrations and the business of the Borrower
to which such trademarks and trademark applications and
registrations relate, the right to sue for past, present and
future infringements, all rights corresponding thereto
throughout the world and all divisions, renewals and extensions
thereof.
ARTICLE 2. COLLATERAL
Section 2.01. Grant of Security Interest. As security for
the payment by the Borrower of the Secured Obligations and the
performance by the Borrower of its other obligations and
undertakings under this Agreement and under the other Facility
Documents, the Borrower does hereby grant, bargain, convey,
assign, transfer, mortgage, hypothecate, pledge, confirm and
grant a continuing security interest to the Agent in and to all
right, title and interest of the Borrower (but none of its
obligations) in the Collateral.
ARTICLE 3. REPRESENTATIONS, WARRANTIES AND COVENANTS
CONCERNING SECURITY
Section 3.01. Trademarks, etc. The Borrower represents,
warrants and covenants that:
(a) Schedule A hereto completely and accurately lists
all of the Trademarks in which the Borrower has any right, title
or interest;
(b) to its Knowledge, except as set forth on Schedule
B, the Trademarks are subsisting and have not been adjudged
invalid or unenforceable, in whole or in part;
(c) to its Knowledge, except as set forth on Schedule
B, each of the Trademarks is valid and enforceable;
(d) except as set forth on Schedule B, the Borrower
is the sole and exclusive owner of the entire and unencumbered
right, title and interest in and to each of the "Mistic" and
"Royal Mistic" Trademarks and, to its Knowledge, all of the
other Trademarks in which the Borrower holds an interest, free
and clear of any Liens, charges and encumbrances, including
without limitation, licenses and covenants by the Borrower not
to sue third persons;
(e) the Borrower has registered, or applied to
register, and recorded each of the material Trademarks in which
the Borrower holds an interest that could be registered and
recorded with the United States Patent and Trademark Office and
has not taken any action or failed to take any action which
action or failure to act could or might impair or diminish any
Trademarks and the Borrower has delivered to the Agent true,
correct and complete copies of all trademark registration
certificates, assignments, renewal certificates, and all other
instruments filed with United States Patent and Trademark Office
or otherwise relevant to the chain of title of the Trademarks;
(f) the Borrower has the unqualified right to enter
into this Agreement and perform its terms;
(g) as it determines in its good faith and reasonable
business judgment, the Borrower will use for the duration of
this Agreement appropriate standards of quality in the
manufacture, promotion, advertisement, sale or distribution of
its products sold under the Trademarks; and
(h) to its Knowledge, except as set forth on Schedule
B, there are no claims against the Borrower asserting the
invalidity, misuse, unenforceability or ownership of any
Trademarks owned or used by the Borrower, no such claims are
threatened and there are no grounds for the same.
Section 3.02. No Inconsistent Agreements. Except for
licenses of the Trademarks granted in the ordinary course, until
all of the Secured Obligations and the Letters of Credit shall
have been satisfied in full and the Commitments terminated, no
Grantor will, without the Agent's prior written consent, enter
into any agreement (including, without limitation, a license
agreement) that materially and adversely affects the Agent's
rights under this Agreement.
Section 3.03. After-Acquired Trademarks Subject to this
Agreement. (a) If the Borrower shall obtain rights to any new
trademarks, or become entitled to the benefit of any trademark
or trademark application or registration for any renewal or
extension or of any Trademark, the same shall automatically be
deemed subject to this Agreement and included within the term
"Trademark," and the Borrower shall give to the Agent notice
thereof in writing at the end of each Fiscal Quarter.
(b) The Borrower grants the Agent a power-of-
attorney, irrevocable so long as any Secured Obligation, any
Letter of Credit or Commitment remains outstanding, to amend
Schedule A (without requirement of any consent or further action
on the part of the Borrower) to include any future registered
trademarks and trademark applications that are Trademarks under
the definition of such term in Section 1.01 or under Section
3.03(a).
Section 3.04. Trademark Applications. The Borrower shall
have the duty to prosecute diligently any trademark application
of the Trademarks pending as of the date of this Agreement or
thereafter and to preserve and maintain all rights in trademark
applications and registrations of the Trademarks unless the
Borrower, so long as no Default or Event of Default shall then
exist, determines in its good faith and reasonable business
judgment to discontinue the use of or the application for any
such Trademark other than the "Mistic" and "Royal Mistic"
Trademarks. Any expenses incurred in connection with such an
application shall be borne by the Borrower.
Section 3.05. Further Assurances. So long as any of the
Secured Obligations, any Letter of Credit or any Commitment
shall be outstanding, upon the written request of the Agent, the
Borrower, at its expense, will timely execute, acknowledge,
deliver, file and record, or will cause to be executed,
acknowledged, delivered, filed or recorded, all such further
instruments, agreements, assignments and assurances (including,
without limitation, all continuations, statements of use and
declarations of noncontestability) as may be necessary or
appropriate (and, in any event, as may be reasonably requested
by the Agent):
(a) to preserve and continue in force each of the
Trademarks (including the continued use of such Trademarks) and
to pay any and all fees and expenses in connection therewith
(including, without limitation, payment of such maintenance
fees, if any, as may be imposed by the United States Patent and
Trademark Office or by any other Governmental Authority in any
jurisdiction) unless the Borrower, so long as no Default or
Event of Default shall then exist, determines in its good faith
and reasonable business judgment to discontinue the use of or
the application for any such Trademark other than the "Mistic"
and "Royal Mistic" Trademarks; and
(b) subject to this Agreement, to preserve, continue
and protect the Lien of this Agreement on, and the right of the
Agent in and to, the Trademarks.
ARTICLE 4. DEFAULTS -- REMEDIES
Section 4.01. Nature of Events. An "Event of Default"
shall exist if any Event of Default under, and as defined in,
the Credit Agreement occurs and is continuing.
Section 4.02. Default Remedies. (a) If an Event of
Default exists and is continuing, the Agent may exercise all of
the rights and remedies of a secured party under the Code and
all of the rights and remedies in this Agreement or in any other
Facility Document conferred, it being expressly understood that
no such remedy is intended to be exclusive of any other remedy
or remedies, but each and every remedy shall be cumulative and
shall be in addition to every other remedy given in this
Agreement or in any other Facility Document or now or hereafter
existing at law or in equity or by statute, and may be exercised
from time to time, during such period, as often as may
reasonably be deemed expedient by the Agent. Without limiting
the foregoing, this Agreement is executed in furtherance of, and
supplementary to, the provisions of the Security Agreement, the
terms and conditions of which are incorporated hereby as if set
forth in full herein.
(b) The Borrower and the Agent agree that ten (10)
Banking Days' prior written notice to the Borrower of any public
or private sale or other disposition of Collateral shall be
reasonable notice thereof, and such sale shall be at such
reasonable locations as the Agent shall designate in such
notice. Except as expressly set forth in any Facility Document,
any other requirement of notice, demand or advertisement for
sale is, to the extent permitted by law, waived by the Borrower.
Sales for cash, or on credit to a wholesaler, retailer or user
of the Collateral, at any public or private sale, if made in
good faith, are all hereby deemed (without limitation) to be
commercially reasonable (as defined in the Code). The Agent
shall have the right to bid at any such sale on behalf of any
one or more Lenders (who shall also have the right to bid
individually). Proceeds arising from any such sale shall be
applied to the repayment of the Secured Obligations in the
manner set forth in the Credit Agreement.
(c) If an Event of Default exists and is continuing,
the Agent shall have the right, but shall in no way be obligated
to, bring suit in its own name to enforce the Trademarks and any
license thereunder, in which event the Borrower shall at the
request of the Agent do any and all lawful acts and execute any
and all proper documents reasonably required by the Agent in aid
of such enforcement, and the Borrower shall promptly, upon
demand, reimburse and indemnify the Agent for all reasonable
costs and expenses incurred by the Agent in the exercise of its
rights under this Section 4.02(c).
(d) All covenants, conditions, provisions,
warranties, guaranties, indemnities and other undertakings of
the Borrower contained in this Agreement or any other Facility
Document, or contained in any agreement supplementary to this
Agreement or any other Facility Document, shall be deemed
cumulative to and not in derogation or substitution of any of
the terms, covenants, conditions or agreements of the Borrower
contained in this Agreement or any other Facility Document.
(e) The Borrower will pay to the Agent all reasonable
expenses (including court costs and reasonable attorneys' fees
and expenses) of, or incident to, the enforcement of any of the
provisions of this Agreement and all other charges due against
the Collateral, including, without limitation, taxes (other than
income taxes imposed upon the Agent in connection therewith),
assessments, security interests, Liens or encumbrances upon the
Collateral and any expenses, including transfer or other similar
taxes, arising in connection with any sale, transfer or other
disposition of Collateral.
Section 4.03. Other Enforcement Rights. The Agent may
proceed to protect and enforce this Agreement by suit or suits
or proceedings in equity, at law or in bankruptcy, and whether
for the specific performance of any covenant or agreement in
this Agreement contained or in execution or aid of any power in
this Agreement granted, or for foreclosure under this Agreement,
or for the appointment of a receiver or receivers for the
Collateral or any part thereof, for the recovery of judgment for
the obligations secured by this Agreement or for the enforcement
of any other proper, legal or equitable remedy available under
applicable law.
Section 4.04. Application of Proceeds. The proceeds of
any exercise of rights with respect to the Collateral, or any
part thereof, and the proceeds and the avails of any remedy
under this Agreement shall be paid to and applied in accordance
with the provisions of the Credit Agreement. If there is a
deficiency, the Borrower shall, subject always to the other
provisions of this Agreement, remain liable therefor and shall
forthwith pay the amount of any such deficiency to the Agent.
If there is an excess, such excess shall be returned to the
Borrower.
ARTICLE 5. DEFEASANCE
Section 5.01. Satisfaction and Discharge. If the Borrower
shall pay and discharge the entire indebtedness on all Secured
Obligations outstanding by paying or causing to be paid the
principal of, and interest on, all Secured Obligations
outstanding; and if the Borrower shall also pay or cause to be
paid all other sums payable under this Agreement with respect to
the Secured Obligations and all sums payable under any one or
more of the other Facility Documents; and if all Commitments
shall have been terminated, then and in that case all of the
right, title and interest of the Agent in the Collateral created
hereby shall cease and terminate, and thereupon the Agent, upon
written request of the Borrower, shall forthwith execute and
deliver, without recourse, proper deeds, assignments and other
instruments acknowledging satisfaction or and discharging all of
the right, title and interest of the Agent in the Collateral
created hereby (subject to any disposition thereof that may have
been previously made by the Agent pursuant to any of the
Facility Documents).
Section 5.02. Disposal of Assets; Release of Lien. So
long as no Default or Event of Default shall exist and be
continuing or be created as a result thereof, if the Borrower
shall sell, lease, transfer or otherwise dispose of its Property
in accordance with the provisions of the Credit Agreement, then
the Agent, upon payment to it of all amounts then due and owing
as fees and expenses under this Agreement, shall forthwith
execute proper instruments releasing the interests in such
Property so disposed of from the Lien of the Agent created under
this Agreement.
ARTICLE 6. MISCELLANEOUS
Section 6.01. Amendments and Waivers. Except as otherwise
expressly provided in this Agreement, any provision of this
Agreement may be amended or modified only by an instrument in
writing signed by the Borrower, the Agent and the Required
Lenders, or by the Borrower and the Agent acting with the
consent of the Required Lenders and any provision of this
Agreement may be waived by the Required Lenders or by the Agent
acting with the consent of the Required Lenders; provided that
no amendment, modification or waiver shall, unless by an
instrument signed by all of the Lenders or by the Agent acting
with the consent of all of the Lenders: (a) permit the creation
of any Lien with respect to any of the Collateral (other than
Permitted Liens) that is prior or equal to the Lien of the
Agent; (b) effect the deprivation of any Lender of the benefit
of any Lien upon all or any part of the Collateral; (c) create
any priority with respect to any portion of the Secured
Obligations over any other portion with respect to the Lien upon
all or any part of the Collateral; or (d) amend, waive or modify
the definition of Secured Obligations.
Section 6.02. Survival. The obligations of the Borrower
under Section 4.02(c) or Section 4.02(e) shall survive the
repayment of the Secured Obligations and the termination of the
Commitments.
Section 6.03. Successors and Assigns. This Agreement
shall be binding upon, and shall inure to the benefit of, the
Borrower, the Agent and their respective successors and assigns.
Section 6.04. Notices. Unless the party to be notified
otherwise notifies the other party in writing as provided in
this Section, and except as otherwise provided in this
Agreement, notices shall be given to the Agent in writing by
telex, telecopy or other writing or by telephone, confirmed by
telex, telecopy or other writing, and to the Lenders and to the
Borrower by ordinary mail, hand delivery, overnight courier or
telecopier addressed to such party at its address on the
signature page of the Credit Agreement. Notices shall be
effective: (a) if given by mail, 72 hours after deposit in the
mails with first class postage prepaid, addressed as aforesaid;
and (b) if given by telecopier, when confirmation of delivery of
the telecopy is transmitted to the telecopier number as
aforesaid is transmitted; provided that notices to the Agent and
the Lenders shall be effective upon receipt.
SECTION 6.05. JURISDICTION; IMMUNITIES. (A) EACH OF THE
BORROWER AND THE AGENT HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY NEW YORK STATE OR UNITED STATES FEDERAL
COURT SITTING IN NEW YORK COUNTY OVER ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND EACH OF THE
BORROWER AND THE AGENT HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS
IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURT. EACH OF THE
BORROWER AND THE AGENT IRREVOCABLY CONSENTS TO THE SERVICE OF
ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES OF SUCH PROCESS TO EACH OF THE BORROWER AND
THE AGENT AT ITS ADDRESS SPECIFIED IN SECTION 6.04. EACH OF THE
BORROWER AND THE AGENT AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY LAW. EACH OF THE BORROWER AND THE AGENT
FURTHER WAIVES ANY OBJECTION TO VENUE IN SUCH STATE AND ANY
OBJECTION TO AN ACTION OR PROCEEDING IN SUCH STATE ON THE BASIS
OF FORUM NON CONVENIENS. THE BORROWER FURTHER AGREES THAT ANY
ACTION OR PROCEEDING BROUGHT AGAINST THE AGENT SHALL BE BROUGHT
ONLY IN NEW YORK STATE OR UNITED STATES FEDERAL COURT SITTING IN
NEW YORK COUNTY. EACH OF THE BORROWER AND THE AGENT WAIVES ANY
RIGHT IT MAY HAVE TO JURY TRIAL.
(b) Nothing in this Section 6.05 shall affect the
right of the Borrower, the Agent or any Lender to serve legal
process in any other manner permitted by law or affect the right
of the Agent or any Lender to bring any action or proceeding
against the Borrower or its property in the courts of any other
jurisdictions.
(c) To the extent that the Borrower has or hereafter
may acquire any immunity from jurisdiction of any court or from
any legal process (whether from service or notice, attachment
prior to judgment, attachment in aid of execution, execution or
otherwise) with respect to itself or its property, the Borrower
hereby irrevocably waives such immunity in respect of its
obligations under this Agreement.
Section 6.06. Headings. The headings and captions
hereunder are for convenience only and shall not affect the
interpretation or construction of this Agreement.
Section 6.07. Severability. The provisions of this
Agreement are intended to be severable. If for any reason any
provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction, such
provision shall, as to such jurisdiction, be ineffective to the
extent of such invalidity or unenforceability without in any
manner affecting the validity or enforceability thereof in any
other jurisdiction or the remaining provisions hereof in any
jurisdiction.
Section 6.08. Counterparts. This Agreement may be
executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing any such
counterpart.
SECTION 6.09. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK.
Section 6.10. Subject to the Credit Agreement. Any and
all rights granted to the Agent under this Agreement are to be
held and exercised by the Agent for the benefit of the Lenders,
pursuant to the provisions of the Credit Agreement. To the
extent set forth in the Facility Documents, each of the Lenders
shall be a beneficiary of the terms of this Agreement. Any and
all obligations under this Agreement of the parties to this
Agreement, and the rights granted to the Agent under this
Agreement, are created and granted subject to the terms of the
Credit Agreement.
Section 6.11. Power of Attorney. The Borrower hereby
makes, constitutes and appoints the Agent the true and lawful
agent and attorney in fact of the Borrower, with full power of
substitution
(a) if an Event of Default exists and is continuing,
to sign the name of the Borrower to drafts against its debtors,
to notices to such debtors, to assignments and notices of
assignments, financing statements, continuation statements or
other public records or notices and all other instruments and
documents; and
(b) to do any and all things necessary to take such
action in the name and on behalf of the Borrower to carry out
the provisions of this Agreement, including, without limitation,
the grant of the security interest granted to the Agent with
respect to the Collateral and the Agent's rights created under
this Agreement after a request by the Agent to take any action,
and the failure or refusal of the Borrower to comply with such
request within five (5) Banking Days.
The Borrower agrees, in the absence of willful wrongdoing or
gross negligence, that neither the Agent nor any of its agents,
designees or attorneys-in-fact will be liable for any acts of
commission or omission, or for any good faith error of judgment
or mistake of fact or law with respect to the exercise of the
power of attorney granted under this Section 6.11. The power of
attorney granted under this Section 6.11 is coupled with an
interest and shall be irrevocable so long as any Secured
Obligation, Letter of Credit or Commitment remains outstanding.
Section 6.12. Term of Agreement. This Agreement shall be
and remain in full force and effect so long as any Secured
Obligation, Letter of Credit or Commitment is outstanding.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
BORROWER:
MISTIC BRANDS, INC.
By:
Name:
Title:
AGENT:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By:
Name:
Title:
STATE OF NEW YORK )
)ss.
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this
____ day of __________, 1995, by _____________, the _________ of
Mistic Brands, Inc., a Delaware corporation, on behalf of the
corporation.
_________________________________
Notary Public
STATE OF NEW YORK )
)ss.
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this
____ day of __________, 1995, by _____________, the _________ of
The Chase Manhattan Bank (National Association), a national
banking association, on behalf of the association.
________________________________
Notary Public
<PAGE>
EXHIBIT H
PLEDGE AGREEMENT
Dated as of August 9, 1995
by
TRIARC COMPANIES, INC.
in favor of
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)
as Agent
<PAGE>
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of August 9, 1995 (as amended,
supplemented or otherwise modified from time to time, this
"Agreement"), made by TRIARC COMPANIES, INC., a corporation
organized under the laws of Delaware (the "Guarantor"), in favor
of THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), a national
banking association, as agent (in such capacity, together with its
successors in such capacity, the "Agent") for the benefit of each
of the lenders (the "Lenders") signatory to the Credit Agreement
dated as of August 9, 1995 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement") among Mistic
Brands, Inc., a corporation organized under the laws of Delaware
(the "Borrower"), the Agent and the Lenders.
W I T N E S S E T H :
WHEREAS, pursuant to the terms of the Credit Agreement and
the other Facility Documents, the Lenders have agreed to extend
credit to the Borrower upon the terms and subject to the
conditions set forth therein to be evidenced by the Notes issued
by the Borrower thereunder and the Letters of Credit issued
thereunder and to be guarantied by the Guarantor under the
Unconditional Guaranty; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their extensions of credit to the Borrower under
the Credit Agreement that the Guarantor shall have executed and
delivered this Agreement to the Agent to secure the Unconditional
Guaranty by the Guarantor of the obligations of the Borrower under
the Notes, the Letters of Credit, the Credit Agreement and the
other Facility Documents.
NOW, THEREFORE, in consideration of the premises and to
induce the Lenders to enter into the Credit Agreement and to
induce the Lenders to make its loans and to purchase Participating
Interests in Letters of Credit issued under the Credit Agreement,
the Guarantor hereby agrees with the Agent, as follows:
ARTICLE 1. DEFINITIONS.
Unless otherwise defined herein, terms which are defined in
the Credit Agreement and used herein are so used as so defined;
and the following terms have the following meanings:
"Code" means the Uniform Commercial Code as in effect in the
State of New York.
"Collateral" means all of the right, title and interest of
the Guarantor in, to and under the Pledged Stock, whether now
owned or hereafter acquired, together with all the proceeds
thereof and dividends thereon and any replacements thereof,
additions thereto or substitutions therefor and all accounts
arising from the sale or disposition thereof.
"Equity Rights" means, with respect to any Person, any
subscriptions, options, warrants, commitments, preemptive rights
or agreements of any kind (including, without limitation, any
stockholders' or voting trust agreements) for the issuance, sale,
registration or voting of, or outstanding securities convertible
into, any additional shares of capital stock of any class.
"Pledged Stock" means all of the Guarantor's right, title and
interest, if any, in and to all of the issued and outstanding
shares of capital stock and all Equity Rights in the Borrower
owned by the Guarantor, together with its rights to receive
dividends and distributions by the Borrower whether in cash,
stock, securities or other property, and whether during the
continuance of or on account of the liquidation of the Borrower,
and all of its other rights as stockholder or holder of other
securities of the Borrower.
"Secured Obligations" means the unpaid principal of and
interest on (including interest accruing on or after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Notes and all other obligations
and liabilities of any Obligor to the Agent or any Lender, whether
direct or indirect, absolute or contingent, due or to become due,
or now existing or hereafter incurred, which may arise under, out
of, or in connection with, the Credit Agreement, any Note, any
Letter of Credit, any Interest Rate Protection Agreement to which
a Lender is a party, any other Facility Document and any other
document made, delivered or given in connection therewith or
herewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including,
without limitation, all reasonable fees and disbursements of
counsel to the Agent or any Lender) or otherwise.
"Security" has the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
ARTICLE 2. COLLATERAL
Section 2.01. Grant of Security Interest. As security for
the payment by the Guarantor of its Unconditional Guaranty of the
Secured Obligations and the performance by the Guarantor of its
other obligations and undertakings under this Agreement and under
the other Facility Documents, the Guarantor does hereby grant,
bargain, convey, assign, transfer, mortgage, hypothecate, pledge,
confirm and grant a continuing security interest to the Agent in
and to all right, title and interest of the Guarantor in the
Collateral.
Section 2.02. Delivery of Certificates; Delivery of
Financing Statements. (a) The Guarantor hereby delivers to the
Agent all of the certificates evidencing the Pledged Stock owned
by the Guarantor, in each case, endorsed in blank or accompanied
with appropriate undated stock powers duly executed in blank. The
Guarantor has caused the Lien of the Agent in and to the Pledged
Stock to be registered upon the books of the Borrower. All other
shares of the Pledged Stock subsequently acquired by the Guarantor
shall be pledged and delivered to the Agent promptly upon the
acquisition thereof, accompanied by stock powers duly executed in
blank.
(b) The Guarantor has executed and delivered to the
Agent such financing statements as the Agent has requested, with
respect to that portion of the Collateral in which a Lien may be
perfected by the filing of a financing statement against the
Guarantor.
ARTICLE 3. REPRESENTATIONS, WARRANTIES AND COVENANTS
CONCERNING SECURITY
Section 3.01. Title; Liens. The Guarantor represents,
warrants and covenants that Schedule A hereto completely and
accurately lists all of the Pledged Stock held by the Guarantor
and the Collateral in which the Guarantor holds an interest is
owned solely by the Guarantor and, except as contemplated by the
Facility Documents, no other Person has any right, title,
interest, claim or Lien thereon, or thereto.
Section 3.02. Sale of Collateral; Liens. So long as
Guarantor shall have any obligations under the Unconditional
Guaranty, the Guarantor
(a) will not sell, assign or otherwise transfer any of
the Collateral if a Default or Event of Default exists or would
exist after giving effect to such transfer;
(b) will keep all Collateral in existence on the date,
and all Collateral acquired after the date, of execution of this
Agreement, free from all Liens, and
(c) will pay and discharge, when due, all taxes, levies
and governmental charges upon any Collateral, and shall defend all
Collateral against all claims of any Person other than the Agent,
except if they are being contested in good faith by appropriate
proceedings and for which appropriate reserves are maintained.
Section 3.03. Voting Rights Concerning Collateral; Proxy.
(a) During the term of this Agreement, and so long as no Event of
Default shall have occurred and be continuing, the Guarantor shall
have the right to vote the Collateral on all corporate questions
for all purposes as if this Agreement had not been executed.
(b) Upon the occurrence and during the continuance of
an Event of Default, the Agent, upon prior written notice to the
Guarantor, shall be permitted to exercise all voting powers
pertaining to the Collateral. After the occurrence and during the
continuance of any such Event of Default, this Section 3.03(b)
shall constitute and grant an irrevocable proxy which shall become
effective and shall entitle the Agent, at its election, to vote
the Collateral upon any and all corporate matters.
Section 3.04. Chief Executive Office. The office where the
Guarantor keeps its records concerning the Collateral in which the
Guarantor holds an interest and the Guarantor's principal place of
business and chief executive office is located at the location set
forth in Schedule B. So long as the Guarantor provides the Agent
with written notice within thirty (30) days of any such
relocation, the Guarantor may relocate its principal place of
business and chief executive office, respectively.
Section 3.05. No Restrictions. The Guarantor represents and
warrants that, except as contemplated by the Facility Documents,
each of the shares of the Pledged Stock is fully paid and non-
assessable, that there are no restrictions upon the transfer
(other than pursuant to state and federal securities laws) of, or
the right to vote in respect of, any of the Collateral and that
the Guarantor has the right to pledge and grant a security
interest in or otherwise transfer such Collateral free of any
Lien.
Section 3.06. Subsequent Changes Affecting Collateral. The
Guarantor hereby represents and warrants that it has made its own
arrangements for keeping informed of changes or potential changes
affecting the Collateral (including, without limitation, rights to
convert, rights to subscribe, payment of dividends, reorganization
or other exchanges, tender offers and voting rights of the Pledged
Stock), and the Guarantor agrees that the Agent shall have no
responsibility or liability for informing the Guarantor of any
such changes or potential changes or for taking any action or
omitting to take any action with respect thereto. The Agent may,
upon the occurrence and during the continuance of an Event of
Default, without prior notice and at its option, transfer or
register the Collateral or any part thereof, into its or its
nominee's name without any indication that such Collateral is
subject to the security interest hereunder. The Agent will
promptly notify the Guarantor of any such action taken by the
Agent.
Section 3.07. Adjustments with Respect to Collateral. In
the event that, during the term of this Agreement, any stock
dividend, reclassification, adjustment or other change is declared
or made in the capital structure of the Borrower, or any option
included with the Collateral is exercised, or both, all new,
substituted and additional shares, or other Securities, issued by
reason of any such change or exercise shall be delivered and held
by the Agent under the terms of this Agreement in the same manner
as the Collateral originally pledged hereunder; provided, however,
that nothing contained in this Section 3.07 shall be deemed to
permit the issuance of any warrants or other rights or options by
the Borrower that is prohibited by the Facility Documents.
Section 3.08. Equity Rights with Respect to Collateral. In
the event that during the term of this Agreement any Equity Rights
shall be issued or exercised in connection with the Collateral,
such warrants, rights and options and all new stock or other
Securities acquired by the Guarantor in connection therewith shall
be assigned and delivered to the Agent to be held under the terms
of this Agreement in the same manner as the Collateral originally
pledged hereunder; provided, however, that nothing contained in
this Section 3.08 shall be deemed to permit the issuance of any
Equity Rights by the Borrower that is prohibited by the Facility
Documents.
Section 3.09. Reimbursement. The Guarantor shall pay any
and all reasonable costs, including, without limitation,
reasonable attorneys' fees, legal expenses and court costs, that
the Agent may incur in enforcing, defending or protecting its Lien
on, or rights and interests in, the Collateral, or any its rights
and remedies under this Agreement and, until paid by the
Guarantor, such sums shall be considered as additional obligations
owing by the Guarantor hereunder and, as such shall be secured by
all of the Collateral. Subject to the terms of the Credit
Agreement and except to the extent limited by applicable law and
except for the gross negligence and willful misconduct of the
Agent, the Agent shall not be liable or responsible in any way for
the safekeeping of the Collateral or for any loss or damage
thereto or for any diminution in the value thereof.
Section 3.10. Further Assurances. So long as any of the
Secured Obligations or any Commitment shall be outstanding, upon
the written request of the Agent, the Guarantor, at its expense,
will timely execute, acknowledge, deliver, file and record, or
will cause to be executed, acknowledged, delivered, filed or
recorded, all such further instruments, conveyances, transfers,
financing statements, continuation statements and assurances as
may be necessary or appropriate (and, in any event, as may be
reasonably requested by the Agent) to subject to the Lien of this
Agreement, and to preserve, continue and protect the Lien of this
Agreement on, the Collateral, including, without limitation, any
Collateral acquired after the date of this Agreement, or as may be
required in order to transfer to, or perfect the rights of any new
agent or agents in, the Collateral.
ARTICLE 4. DEFAULTS -- REMEDIES
Section 4.01. Nature of Events. An "Event of Default" shall
exist if any Event of Default under, and as defined in, the Credit
Agreement or the Unconditional Guaranty occurs and is continuing.
Section 4.02. Default Remedies. (a) If an Event of Default
exists and is continuing, the Agent may exercise all of the rights
and remedies conferred in this Agreement and in each of the other
Facility Documents and any and all of the rights and remedies of
a secured party under the Code, it being expressly understood that
no such remedy is intended to be exclusive of any other remedy or
remedies; but each and every remedy shall be cumulative and shall
be in addition to every other remedy given in this Agreement or
now or hereafter existing at law or in equity or by statute, and
may be exercised from time to time, during such period, as often
as may reasonably be deemed expedient by the Agent.
(b) If an Event of Default exists and is continuing,
the Agent shall have the rights, at any time or from time to time,
to sell any or all of the Collateral.
(c) The Guarantor and the Agent agree that ten (10)
Banking Days' prior written notice to the Guarantor of any public
or private sale or other disposition of Collateral shall be
reasonable notice thereof, and such sale shall be at such
reasonable locations as the Agent shall designate in such notice.
Except as expressly set forth in any Facility Document, any other
requirement of notice, demand or advertisement for sale is, to the
extent permitted by law, waived by the Guarantor. Sales for cash,
at any public or private sale, if made in good faith, are all
hereby deemed (without limitation) to be commercially reasonable
(as defined in the Code). The Agent shall have the right to bid
at any such sale on behalf of any one or more Lenders (who shall
also have the right to bid individually). Proceeds arising from
any such sale shall be applied to the repayment of the Secured
Obligations in the manner set forth in the Credit Agreement.
(d) Anything in this Agreement contained to the
contrary notwithstanding, and in view of the fact that federal and
state securities laws may impose certain restrictions on the
method by which a sale of the Collateral that consists of
Securities may be effected after an Event of Default, the
Guarantor agrees that upon the occurrence and during the
continuance of an Event of Default, the Agent may, from time to
time, attempt to sell all or any part of such Collateral by means
of a private placement restricting the bidders and prospective
purchasers to those who will represent or agree as to their
investment intent or method of resale or both in a manner
reasonably required by the Agent to assure compliance with
applicable securities laws. The Agent shall give the Guarantor
written notice prior to making any such offer of any such
Collateral. Each of the Agent and the Guarantor may solicit
offers to buy such Collateral, or any part of it, for cash, from
a limited number of investors deemed by the Agent, in its
reasonable business judgment, to be responsible parties who might
be interested in purchasing such Collateral, and if the Agent and
the Guarantor collectively solicit such offers from not less than
five (5) such investors, then the acceptance by the Agent of the
highest offer obtained therefrom shall be deemed to be a
commercially reasonable method of disposition (as defined in the
Code) of such Collateral unless applicable law provides otherwise.
(e) All covenants, conditions, provisions, warranties,
guaranties, indemnities and other undertakings of the Guarantor
contained in this Agreement or any other Facility Document or
contained in any agreement supplementary to this Agreement or any
other Facility Document, shall be deemed cumulative to and not in
derogation or substitution of any of the terms, covenants,
conditions or agreements of the Guarantor contained in this
Agreement or any other Facility Document.
(f) The Guarantor will pay to the Agent all reasonable
expenses (including court costs and reasonable attorneys' fees and
expenses) of, or incident to, the enforcement of any of the
provisions of this Agreement and all other charges due against the
Collateral, including, without limitation, taxes (other than
income taxes imposed upon the Agent in connection therewith),
assessments, security interests, Liens or encumbrances upon the
Collateral and any expenses, including transfer or other taxes,
arising in connection with any sale, transfer or other disposition
of Collateral.
Section 4.03. Other Enforcement Rights. The Agent may
proceed to protect and enforce this Agreement by suit or suits or
proceedings in equity, at law or in bankruptcy, and whether for
the specific performance of any covenant or agreement in this
Agreement contained or in execution or aid of any power in this
Agreement granted, or for foreclosure under this Agreement, or for
the appointment of a receiver or receivers for the Collateral or
any part thereof, for the recovery of judgment for the obligations
secured by this Agreement or for the enforcement of any other
proper, legal or equitable remedy available under applicable law.
Section 4.04. Effect of Sale, etc. (a) Any sale or sales
pursuant to the provisions of this Agreement, whether under any
right or power granted hereby or thereby or pursuant to any legal
proceedings, shall, except as may otherwise be prohibited by law,
operate to divest the Guarantor of all right, title, interest,
claim and demand whatsoever, either at law or in equity, of, in
and to the Collateral, or any part thereof, so sold, except as may
otherwise be prohibited by law, and any Collateral so sold shall
be free and clear of any and all rights of redemption by, through
or under the Guarantor. At any such sale any Lender may bid for
and purchase the Collateral sold and may make payment therefor as
set forth in clause (b) of this Section 4.04, and any such Lender
so purchasing any such Collateral, upon compliance with the terms
of sale, may hold, retain and dispose of such Collateral without
further accountability.
(b) The receipt by the Agent, or by any Person
authorized under any judicial proceedings to make any such sale,
of the proceeds of any such sale shall be a sufficient discharge
to any purchaser of the Collateral, or of any part thereof, sold
as aforesaid; and no such purchaser shall be bound to see to the
application of such proceeds, or be bound to inquire as to the
authorization, necessity or propriety of any such sale. In the
event that, at any such sale, any Lender is the successful
purchaser, it shall be entitled, for the purpose of making
settlement or payment, to use and apply such Collateral to the
Secured Obligations by crediting thereon the net proceeds of such
sale.
Section 4.05. Delay or Omission; No Waiver. No course of
dealing on the part of the Agent nor any delay or failure on the
part of the Agent to exercise any right shall impair such right or
operate as a waiver of such right or otherwise prejudice the
Agent's rights, powers and remedies. No waiver by the Agent of
any Default or Event of Default, whether such waiver be full or
partial, shall extend to or be taken to affect any subsequent
Default or Event of Default, or to impair the rights resulting
therefrom except as may be otherwise expressly provided in this
Agreement. Upon the occurrence and during the continuance of an
Event of Default, every right and remedy given by this Agreement,
by any other Facility Document or by law to the Agent may be
exercised from time to time as often as may be deemed expedient by
the Agent.
Section 4.06. Restoration of Rights and Remedies. If the
Agent shall have instituted any proceeding to enforce any right or
remedy under this Agreement or under any other Facility Document
and such proceeding shall have been discontinued or abandoned for
any reason, or shall have been determined adversely to the Agent,
then and in every such case the Agent and the Guarantor and the
Lenders shall, subject to any determination in such proceeding, be
restored severally and respectively to their former positions
under this Agreement and under the other Facility Documents, and,
unless otherwise determined in such proceeding, thereafter all
rights and remedies of the Agent shall continue as though no such
proceeding had been instituted.
Section 4.07. Application of Proceeds. The proceeds of any
exercise of rights with respect to the Collateral, or any part
thereof, and the proceeds and the avails of any remedy under this
Agreement shall be paid to and applied in accordance with the
provisions of the Credit Agreement. If there is a deficiency, the
Guarantor shall, subject always to the other provisions of this
Agreement, remain liable therefor and shall forthwith pay the
amount of any such deficiency to the Agent. If there is an
excess, such excess shall be returned to the Borrower.
Section 4.08. Waivers by the Guarantor. (a) To the extent
permitted by law, the Guarantor hereby waives notice of acceptance
of this Agreement and of extensions of credit, loans, advances or
other financial assistance under the Facility Documents or under
any other agreement, note, document or instrument now or at any
time or times hereafter executed by the Guarantor and delivered to
the Agent or any Lender in connection with or pursuant to a
Facility Document. To the extent permitted by law, the Guarantor
further waives presentment and demand for payment of any of the
Secured Obligations, protest and notice of dishonor or default
with respect to any of the Secured Obligations, and all other
notices to which the Guarantor might otherwise be entitled, except
as otherwise expressly provided in this Agreement or in the other
Facility Documents.
(b) The Guarantor (to the extent that it may lawfully
do so) covenants that it will not at any time insist upon or
plead, or in any manner claim or take the benefit or advance of,
any stay (except in connection with a pending appeal or the
automatic stay imposed under 11 U.S.C. Section 362 or any successor or
replacement thereof), valuation, appraisal, redemption or
extension law now or at any time hereafter in force that, but for
this waiver, might be applicable to any sale made under any
judgment, order or decree based on this Agreement or any other
Facility Document; and the Guarantor (to the extent that it may
lawfully do so) hereby expressly waives and relinquishes all
benefit and advance of any and all such laws and hereby covenants
that it will not hinder, delay or impede the execution of any
power in this Agreement or therein granted and delegated to the
Agent, but that it will suffer and permit the execution of every
such power as though no such law or laws had been made or enacted.
Section 4.10. Consent. The Guarantor hereby consents that
from time to time, before or after the occurrence or existence of
any Event of Default, with or without notice to or assent from the
Guarantor, any security at any time held by or available to the
Agent for any of the Secured Obligations, or any other security at
any time held by or available to the Agent for any obligation of
any other Person secondarily or otherwise liable for any of the
Secured Obligations, may be exchanged, surrendered, or released
and any of the Secured Obligations may be changed, altered,
renewed, extended, continued, surrendered, compromised, waived or
released, in whole or in part, as the Agent or any holder thereof
may see fit (except that the Guarantor shall have the right to
consent prior to any amendment of the Secured Obligations), and
the Guarantor shall remain bound under this Agreement
notwithstanding any such exchange, surrender, release, change,
alteration, renewal, extension, continuance, compromise, waiver or
release.
ARTICLE 5. DEFEASANCE
Section 5.01. Satisfaction and Discharge. If the Borrower
or the Guarantor shall pay and discharge the entire indebtedness
on all Secured Obligations outstanding by paying or causing to be
paid the principal of, and interest on, all Secured Obligations
outstanding; and if the Borrower or the Guarantor shall also pay
or cause to be paid all other sums payable under this Agreement
with respect to the Secured Obligations and all sums payable under
any one or more of the other Facility Documents; and if all
Commitments shall have been terminated, then and in that case all
of the right, title and interest of the Agent in the Collateral
created hereby shall cease and terminate, and thereupon the Agent,
upon written request of the Guarantor, shall forthwith execute and
deliver, without recourse, assignments and other instruments
(including stock certificates and termination statements)
acknowledging satisfaction and discharging all of the right, title
and interest of the Agent in the Collateral created hereby
(subject to any disposition thereof that may have been previously
made by the Agent pursuant to any of the Facility Documents).
Section 5.02. Disposal of Assets; Release of Lien. So long
as no Default or Event of Default shall exist or be created as a
result thereof, if the Guarantor shall sell, assign or transfer
the Pledged Stock to a Person other than an Affiliate, then the
Agent, upon payment to it of all amounts then owed to it as fees
and expenses under this Agreement resulting from such sale, shall
forthwith return the certificates evidencing the Pledged Stock so
sold and shall forthwith execute proper instruments releasing the
interest in such Pledged Stock so sold from the Lien of the Agent
created under this Agreement.
ARTICLE 6. MISCELLANEOUS
Section 6.01. Amendments and Waivers. Except as otherwise
expressly provided in this Agreement, any provision of this
Agreement may be amended or modified only by an instrument in
writing signed by the Guarantor, the Agent and the Required
Lenders, or by the Guarantor and the Agent acting with the consent
of the Required Lenders and any provision of this Agreement may be
waived by the Required Lenders or by the Agent acting with the
consent of the Required Lenders; provided that no amendment,
modification or waiver shall, unless by an instrument signed by
all of the Lenders or by the Agent acting with the consent of all
of the Lenders: (a) permit the creation of any Lien with respect
to any of the Collateral that is prior or equal to the Lien of the
Agent; (b) except as provided herein, effect the deprivation of
any Lender of the benefit of any Lien upon all or any part of the
Collateral; (c) create any priority with respect to any portion of
the Secured Obligations over any other portion with respect to the
Lien upon all or any part of the Collateral; or (d) amend, waive
or modify the definition of Secured Obligations.
Section 6.02. Survival. The obligations of the Guarantor
under Section 3.09 or Section 4.02(h) shall survive the repayment
of the Loans and the termination of the Commitments.
Section 6.03. Successors and Assigns. This Agreement shall
be binding upon, and shall inure to the benefit of, the Guarantor,
the Lenders and their respective successors and assigns.
Section 6.04. Notices. Unless the party to be notified
otherwise notifies the other party in writing as provided in this
Section, and except as otherwise provided in this Agreement,
notices shall be given to the Agent in writing, by telex, telecopy
or other writing or by telephone, confirmed by telex, telecopy or
other writing, and to the Lenders and to the Guarantor by ordinary
mail, hand delivery, overnight courier or telecopier addressed to
such party at its address on the signature page of the Credit
Agreement. Notices shall be effective: (a) if given by mail, 72
hours after deposit in the mails with first class postage prepaid,
addressed as aforesaid; and (b) if given by telecopier, when the
confirmation and delivery of the telecopy is transmitted to the
telecopier number as aforesaid is transmitted; provided that
notices to the Agent and the Lenders shall be effective upon
receipt.
SECTION 6.05. JURISDICTION; IMMUNITIES. (A) EACH OF THE
GUARANTOR AND THE AGENT HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY NEW YORK STATE OR UNITED STATES FEDERAL COURT
SITTING IN NEW YORK COUNTY OVER ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT, AND EACH OF THE GUARANTOR
AND THE AGENT HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT
OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH
NEW YORK STATE OR FEDERAL COURT. EACH OF THE GUARANTOR AND THE
AGENT IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS
IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH
PROCESS TO EACH OF THE GUARANTOR AND THE AGENT AT ITS ADDRESS
SPECIFIED IN SECTION 6.04. EACH OF THE GUARANTOR AND THE AGENT
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. EACH
OF THE GUARANTOR AND THE AGENT FURTHER WAIVES ANY OBJECTION TO
VENUE IN SUCH STATE AND ANY OBJECTION TO AN ACTION OR PROCEEDING
IN SUCH STATE ON THE BASIS OF FORUM NON CONVENIENS. THE GUARANTOR
FURTHER AGREES THAT ANY ACTION OR PROCEEDING BROUGHT AGAINST THE
AGENT OR ANY LENDER SHALL BE BROUGHT ONLY IN NEW YORK STATE OR
UNITED STATES FEDERAL COURT SITTING IN NEW YORK COUNTY. EACH OF
THE GUARANTOR AND THE AGENT WAIVES ANY RIGHT THEY MAY HAVE TO JURY
TRIAL.
(b) Nothing in this Section 6.05 shall affect the right
of the Guarantor, the Agent or any Lender to serve legal process
in any other manner permitted by law or affect the right of the
Agent or any Lender to bring any action or proceeding against the
Guarantor or its property in the courts of any other
jurisdictions.
(c) To the extent that the Guarantor has or hereafter
may acquire any immunity from jurisdiction of any court or from
any legal process (whether from service or notice, attachment
prior to judgment, attachment in aid of execution, execution or
otherwise) with respect to itself or its property, the Guarantor
hereby irrevocably waives such immunity in respect of its
obligations under this Agreement.
Section 6.06. Headings. The headings and captions hereunder
are for convenience only and shall not affect the interpretation
or construction of this Agreement.
Section 6.07. Severability. The provisions of this
Agreement are intended to be severable. If for any reason any
provision of this Agreement shall be held invalid or unenforceable
in whole or in part in any jurisdiction, such provision shall, as
to such jurisdiction, be ineffective to the extent of such
invalidity or unenforceability without in any manner affecting the
validity or enforceability thereof in any other jurisdiction or
the remaining provisions hereof in any jurisdiction.
Section 6.08. Counterparts. This Agreement may be executed
in any number of counterparts, all of which taken together shall
constitute one and the same instrument, and any party hereto may
execute this Agreement by signing any such counterpart.
SECTION 6.09. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK.
Section 6.10. Subject to the Credit Agreement. Any and all
rights granted to the Agent under this Agreement are to be held
and exercised by the Agent for the benefit of the Lenders,
pursuant to the provisions of the Credit Agreement. To the extent
set forth in the Facility Documents, each of the Lenders shall be
a beneficiary of the terms of this Agreement. Any and all
obligations under this Agreement of the parties to this Agreement,
and the rights granted to the Agent under this Agreement, are
created and granted subject to the terms of the Credit Agreement.
Section 6.11. Power of Attorney. The Guarantor hereby
makes, constitutes and appoints the Agent the true and lawful
agent and attorney in fact of the Guarantor, with full power of
substitution
(a) if an Event of Default exists and is continuing,
and to the fullest extent permitted by applicable law, to transfer
any of the Collateral on the books of the issuer thereof to the
name of the Agent or its nominee, and to indorse for negotiation
its name on any of the Collateral; and
(b) to do any and all things necessary to take such
action in the name and on behalf of the Guarantor to carry out the
provisions of this Agreement, including, without limitation, the
grant of the security interest granted to the Agent with respect
to the Collateral and the Agent's rights created under this
Agreement after a request by the Agent to take any action, and the
failure or refusal of the Guarantor to comply with such request
within five (5) Banking Days.
The Guarantor agrees, in the absence of willful wrongdoing or
gross negligence, that neither the Agent nor any of its agents,
designees or attorneys-in-fact will be liable for any acts of
commission or omission, or for any good faith error of judgment or
mistake of fact or law with respect to the exercise of the power
of attorney granted under this Section 6.11. The power of
attorney granted under this Section 6.11 is coupled with an
interest and shall be irrevocable so long as the Unconditional
Guaranty remains outstanding.
Section 6.12. Term of Agreement. This Agreement shall be
and remain in full force and effect so long as the Unconditional
Guaranty is outstanding.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
GUARANTOR:
TRIARC COMPANIES, INC.
By:
Name:
Title:
AGENT:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By:
Name:
Title:
<PAGE>
SCHEDULE A
Corporation Class of Shares No. of Shares Certificate Number
Mistic Brands, Common 884.25 1
Inc.
<PAGE>
SCHEDULE B
900 Third Avenue
New York, NY 10022
<PAGE>
EXHIBIT I
MANAGEMENT SERVICES AGREEMENT
This MANAGEMENT SERVICES AGREEMENT (the "Agreement") is made
as of August ___, 1995 by and between Triarc Companies, Inc., a
Delaware corporation ("Triarc"), and Mistic Brands, Inc. a
Delaware corporation (the "Company").
Triarc currently provides certain contract management
services to certain of its subsidiaries (the "Subsidiaries"), and
the Company wishes to have Triarc provide management services to
it.
Triarc and the Company desire to enter into this
Agreement to set forth the terms and conditions upon which Triarc
will provide certain management services to the Company.
Accordingly, the parties hereto agree as follows:
1. Term. The term of this Agreement shall be effective as
of January 1, 1996 and shall continue until December 31, 1996 (the
"Original Term"), and thereafter shall automatically be extended
for successive one year periods (the Original Term, as so
extended, the "Term") unless either party hereto notifies the
other party hereto at least 90 days prior to the then scheduled
end of the Term of its desire that this Agreement be terminated;
provided, however, that if any of the Subsidiaries decides not to
renew its respective management services agreement with Triarc,
then Triarc shall notify the Company of such decision and the
Company shall have the right, exercisable within 30 days after
receiving such notice from Triarc, not to renew this Agreement.
2. Services to be Provided. Triarc shall provide to the
Company during the Term the services listed in this Agreement and
such other management services as the Company may reasonably
request (collectively, the "Services"). Such Services shall
include the following:
a. Legal. Expertise and assistance in legal
matters, including any reporting obligations of the
Company under the Securities Exchange Act of 1934, and
the services of a Corporate Secretary and such other
support staff as Triarc shall reasonably consider to be
appropriate and necessary to handle such matters.
b. Accounting. Expertise and assistance in
financial presentation and planning and such services as
are reasonably necessary for the Company to comply with
its financial reporting obligations to third parties,
including report preparation, compliance with Generally
Accepted Accounting Principles, footnote disclosure,
compilation and review.
c. Finance. Expertise and assistance in treasury
functions, (including ensuring that the Company is in
compliance with current lender requirements, monitoring
of debt covenants, negotiation of waivers and
exceptions, monitoring of cash flow and negotiation of
lines of credit), expertise and assistance in evaluating
and facilitating financing sources and opportunities,
and providing of such other financial expertise as may
be required from time to time.
d. Tax. Services and expertise required for all
federal, state and local tax preparation, planning and
audits.
e. Risk Management. Services of a risk manager
and appropriate support staff to obtain and maintain
insurance policies covering property and casualty,
workers compensation, comprehensive general liability
and other risks.
f. Information Technology. Expertise and
assistance in connection with the design, installation
and maintenance of computer and data systems.
g. Benefits Design and Administration. Services
and expertise relating to the design and administration
of employee benefit plans, including executive
compensation arrangements, retirement plans, and health
insurance programs.
h. Investor Relations. Expertise and assistance in
connection with investor relations and other communications.
i. Other. Such other services as the parties
hereto may agree are necessary for the efficient and
profitable operations of the Company.
3. Fees. In consideration for the providing of the
Services, the Company agrees to pay with respect to each fiscal
quarter of Triarc (each a "Triarc Quarter") a service fee (the
"Fee") equal to the product of (i) 1.05 and (ii) the product of
(1) the Service Cost (as defined in Section 4 below) incurred
during such Triarc Quarter and (2) a fraction, the numerator of
which is the greater of (x) the Company's EBITDA (as defined in
this Section 3 below) for the most recent period consisting of
four full fiscal quarters of the Company which ended immediately
prior to the first day of the Triarc Quarter for which the Fee is
being computed (the "Reference Period") and (y) 10% of the
Company's net sales for such Reference Period, and the denominator
of which is the sum of the numerators for all of the Subsidiaries
for such Triarc Quarter. For example, the Fee for the fiscal
quarter of Triarc beginning January 1, 1996 and ending March 31,
1996 shall be computed based on the Service Cost incurred by
Triarc during such period, and the numerator for the Company shall
be the greater of the Company's EBITDA or 10% of its net sales for
the period of four fiscal quarters ended December 31, 1995. For
purposes of this Agreement, EBITDA for any time period means
operating profit (loss) for such period plus depreciation for such
period, amortization during such period and non-recurring charges
such as restructuring charges for such period. The parties hereto
agree and acknowledge that the Fee payable hereunder will be
subordinated in the manner and to the extent set forth in that
certain Affiliate Subordination Agreement between the Company and
The Chase Manhattan Bank (National Association), as Agent, and
shall be subject to Sections 8.08 and 8.13 of that certain Credit
Agreement, among the Company, the lenders signatory thereto and
The Chase Manhattan Bank (National Association), as Agent.
4. Service Cost. The term "Service Cost" with respect to
any Triarc Quarter means 94.8% of the aggregate of (i) all direct
and indirect cash costs which are incurred by Triarc during such
Triarc Quarter and which are, in the reasonable business judgment
of Triarc, necessary for the efficient and profitable operations
of the Subsidiaries (including but not limited to all cash costs
of (a) personnel, (b) operating expenses (such as office costs,
travel and entertainment), (c) overhead costs (such as costs for
office space and assets), (d) fees and other amounts paid to third
parties, and (e) any and all cash costs incurred in connection
with the termination or maintenance of any services or expenses
incurred under this Agreement or any prior agreement that Triarc
in its business judgment no longer considers appropriate or useful
to the long term benefit of the Subsidiaries); provided, however,
that service costs shall not include costs to acquire or place in
service any capital assets; and (ii) depreciation charged to the
profit and loss statement of Triarc during such Triarc Quarter in
respect of any capital assets in accordance with generally
accepted accounting principles.
5. Billing. Triarc shall submit to the Company on or
before the 25th day of the first month within each Triarc Quarter
its good faith estimate of the Service Cost Triarc expects to
incur with respect to such Triarc Quarter and the estimated Fee
payable by the Company with respect to such Triarc Quarter. The
Company shall pay one-third of the estimated Fee, up to a maximum
of $166,650 per month, on the last day of each month during such
Triarc Quarter, with any portion of the estimated Fee for any
Triarc Quarter in excess of $500,000 to be paid on the last day of
such Triarc Quarter. Within 45 days after the end of each Triarc
Quarter, Triarc shall submit a statement to the Company
reconciling the differences, if any, between the estimated Fee
paid by the Company with respect to such Triarc Quarter and the
actual Fee payable by the Company with respect to such Triarc
Quarter. Such difference, if any, shall be added to or subtracted
from, as the case may be, the first monthly payment due following
the Company's receipt of such statement.
For example, for the Triarc Quarter beginning January 1, 1996
and ending March 31, 1996, Triarc will submit an estimate of the
Service Cost for such quarter to the Company by January 25, 1996.
The estimated Fee payable by the Company will be computed by
reference to the greater of the Company's EBITDA or 10% of its net
sales for the period of the four fiscal quarters ended December
31, 1995. The Company will pay one-third of the estimated Fee on
each of January 31, February 28 and March 31. Triarc will submit
a statement to the Company reconciling the actual fee with the
estimated Fee on or before May 15, 1996. The reconciling amount
will be added to or subtracted from, as the case may be, the
amount payable by the Company to Triarc on May 31, 1996.
The full amount of all costs to acquire or place in service
capital assets shall be billed by Triarc at the time it acquires
such capital assets. The Company shall advance to Triarc its
allocable share of such capital assets, computed in accordance
with the fraction described in Section 3 hereof. Such advances
shall be deemed repaid to the extent of the depreciation charged
to the profit and loss statement of Triarc in respect of such
capital assets.
6. Limitation on Liability. Triarc will use commercially
reasonable efforts, skill and judgment to discharge properly its
duties hereunder, but shall have no liability with respect to, and
shall not be obligated to indemnify or hold harmless the Company,
or the officers, directors, employees, agents or other
representatives of the Company from or against any cost, loss,
expense, damage or liability arising out of or otherwise in
respect of the performance of the Services, except any such cost,
loss, expense, damage or liability resulting from the gross
negligence, willful misfeasance, willful malfeasance or fraud of
Triarc or its officers, employees or agents.
7. Not Employees of the Company. Employees of Triarc
engaged in performing the Services shall under no circumstances be
considered to be employees of the Company.
8. Independent Contractor. In performing the Services,
Triarc shall be an independent contractor, and neither party
hereto shall be deemed to be an agent, partner or co-venturer of
the other due to the terms and provisions of this Agreement.
9. Entire Agreement; Waivers and Amendments. This
Agreement sets forth the entire understanding between the Company
and Triarc relating to the subject matter hereof. Except as
provided herein, this Agreement shall not be modified or amended,
and no provision hereof shall be waived, except by an instrument
in writing signed by both parties hereto, or in the case of a
waiver, by the party hereto against whom such waiver is sought to
be enforced.
10. Governing Law. This Agreement shall be governed in all
respects by the laws of the State of New York, without regard to
the conflict of laws principles thereof.
11. Notices. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered
personally, telegraphed, telexed, sent by facsimile transmission
or sent by certified, registered or overnight express mail,
postage prepaid. Any such notice shall be deemed given when so
delivered personally, telegraphed, telexed or sent by facsimile
transmission or, if mailed by overnight mail, the day after the
date of deposit with a reputable courier service, or if mailed by
non-overnight certified or registered mail, five days after the
date of deposit in the United States mails, as follows:
(i) if to the Company to:
Mistic Brands, Inc.
2525 Palmer Avenue
New Rochelle, NY 10801
Attention: President
Facsimile: (914) 637-0020
(ii) if to Triarc to:
Triarc Companies, Inc.
900 Third Avenue
New York, NY 10022
Attention: Executive Vice President
and General Counsel
Facsimile: (212) 230-3216
Any party may by notice given in accordance with this Section to
the other parties designate another address or person for receipt
of notices hereunder.
12. Headings. The headings contained in this Agreement are
for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
13. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF the parties hereto have executed this
Agreement effective as of the date first above written.
TRIARC COMPANIES, INC. MISTIC BRANDS, INC.
By: Brian L. Schorr By: Michael Weinstein
Name: Brian L. Schorr Name: Michael Weinstein
Title: Executive Vice Title: Chief Executive
President and Officer
General Counsel
<PAGE>
EXHIBIT J
AFFILIATE SUBORDINATION AGREEMENT
AFFILIATE SUBORDINATION AGREEMENT, dated as of August 9,
1995 (as amended, supplemented or otherwise modified from time
to time, this "Agreement") among TRIARC COMPANIES, INC., a
corporation organized under the laws of Delaware (the
"Guarantor"), MISTIC BRANDS, INC., a corporation organized under
the laws of Delaware (the "Borrower"), and THE CHASE MANHATTAN
BANK (NATIONAL ASSOCIATION), a national banking association, as
agent (in such capacity, together with its successors in such
capacity, the "Agent") for the benefit of each of the lenders
(the "Lenders") signatory to the Credit Agreement dated as of
August 9, 1995 (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement") among the Borrower,
the Agent and the Lenders.
W I T N E S S E T H :
WHEREAS, pursuant to the terms of the Credit Agreement and
the other Facility Documents, the Lenders have agreed to extend
credit to the Borrower upon the terms and subject to the
conditions set forth therein to be evidenced by the Notes issued
by the Borrower thereunder and the Letters of Credit issued
thereunder and to be guarantied by the Guarantor under the
Unconditional Guaranty; and
WHEREAS, it is a condition precedent to the obligation of
the Lenders to make their extensions of credit to the Borrower
under the Credit Agreement that the Guarantor shall have
executed and delivered this Agreement to the Agent to
subordinate certain obligations of the Borrower to the Guarantor
to the Senior Obligations.
NOW, THEREFORE, in consideration of the premises and to
induce the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective Loans and to
purchase Participating Interests in Letters of Credit issued
under the Credit Agreement, each of the Guarantor, the Borrower
and the Agent agree as follows:
ARTICLE 1. DEFINITIONS.
Capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Credit Agreement.
The following terms, as used herein shall have the following
meanings:
"Default" means any event which with the giving of notice
or lapse of time, or both would become an Event of Default.
"Event of Default" means any "Event of Default" under the
Credit Agreement, the Unconditional Guaranty or any other
Facility Document.
"Management Agreement" means the Management Agreement dated
as of the date hereof between the Borrower and the Guarantor, in
the form of Exhibit I, as the same may be amended or
supplemented from time to time.
"Management Fees" means all fees and other amounts payable
by the Borrower to the Guarantor in respect of "Service Costs"
under and as defined in the Management Agreement (including,
without limitation, fees due, amounts accrued, and overhead and
administrative costs billed by the Guarantor to the Borrower).
"Security Documents" means the Unconditional Guaranty, the
Security Agreement, the Trademark Security Agreement, the Pledge
Agreement, this Agreement and each other security document that
may from time to time be delivered to the Agent in connection
with the Credit Agreement.
"Senior Obligations" means the unpaid principal of and
interest on (including interest accruing on or after the filing
of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the
Borrower, whether or not a claim for post-filing or post-
petition interest is allowed in such proceeding), the Notes and
all other obligations and liabilities of any Obligor to the
Agent or any Lender, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with,
the Credit Agreement, any Note, any Letter of Credit, any
Interest Rate Protection Agreement to which a Lender is a party,
any other Facility Document and any other document made,
delivered or given in connection therewith or herewith, whether
on account of principal, interest, reimbursement obligations,
fees, indemnities, costs, expenses (including, without
limitation, all reasonable fees and disbursements of counsel to
the Agent or any Lender) or otherwise.
"Subordinated Obligations" means all obligations from time
to time owing by the Borrower to the Guarantor in respect of
Management Fees.
ARTICLE 2. REPRESENTATIONS AND WARRANTIES.
The Guarantor represents and warrants that:
Section 2.01. Incorporation, Good Standing and Due
Qualification. The Guarantor is duly incorporated, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation, has the corporate power and authority to
own its assets and to transact the business in which it is now
engaged and is duly qualified as a foreign corporation and in
good standing under the laws of each other jurisdiction in which
such qualification is required, except where the failure to
qualify could not reasonably be expected to have a material
adverse effect on the business, profits, Properties or condition
of the Guarantor.
Section 2.02. Corporate Power and Authority; No Conflicts.
The execution, delivery and performance by the Guarantor of this
Agreement have been duly authorized by all necessary corporate
action and do not and will not: (a) require any consent or
approval of its stockholders; (b) contravene its charter or by-
laws; (c) violate any provision of, or require any filing,
registration, consent or approval under, any law, rule or
regulation or any order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability
to the Guarantor or any of its Subsidiaries; (d) result in a
breach of or constitute a default or require any consent under
any indenture or loan or credit agreement or any other material
agreement, lease or instrument to which the Guarantor or any of
its Subsidiaries is a party or by which it or its Properties may
be bound or affected; (e) result in, or require, the creation or
imposition of any Lien (other than as created under the Security
Documents), upon or with respect to any of the Properties now
owned or hereafter acquired by the Guarantor or any of its
Subsidiaries; or (f) cause the Guarantor or any of its
Subsidiaries to be in default under any such law, rule,
regulation, order, writ, judgment, injunction, decree,
determination or award or any such indenture, agreement, lease
or instrument.
Section 2.03. Legally Enforceable Agreement. Each
Facility Document to which the Guarantor is a party is a legal,
valid and binding obligation of the Guarantor, enforceable
against the Guarantor in accordance with its terms, except to
the extent that such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting creditors' rights generally and general
principles of equity (regardless of whether such enforceability
is considered in a proceeding at law or in equity).
ARTICLE 3. SUBORDINATION PROVISIONS.
It is intended by the Lenders that the subordination
provisions contained in this Agreement shall benefit the Lenders
equally (in priority) and ratably in order that the Senior
Obligations rank equally in right of payment over the
Subordinated Obligations. To implement the foregoing (but
without limiting the generality thereof as it may apply to other
provisions of this Agreement), the Guarantor agrees as follows:
Section 3.01. Subordination. The Guarantor hereby agrees
that, except as and to the extent hereinafter provided, the
Subordinated Obligations are and shall be subordinate and
subject in right of payment to the prior payment in full of all
of the Senior Obligations, whether or not such Senior
Obligations have been voided, disallowed or subordinated
pursuant to Section 548 of the United States Bankruptcy Code or
any applicable state fraudulent conveyance laws, whether
asserted directly or under Section 544 of the United States
Bankruptcy Code. Without limiting the foregoing, the Guarantor
also hereby agrees that, (a) except as otherwise provided in
Section 3.02 of this Agreement, it will not ask, demand, sue
for, take or receive from the Borrower (other than directing the
Borrower to make payment directly to the holders of the Senior
Obligations for the purpose of causing the Senior Obligations to
be paid), by set-off or in any other manner, payment of the
whole or any part of the Subordinated Obligations, or any
security therefor, and (b) it will not accelerate all or any
portion of the Subordinated Obligations or otherwise implement
any remedy it may have in respect of the Subordinated
Obligations (provided that the Guarantor may accelerate the
Subordinated Obligations if all outstanding Senior Obligations
shall have been previously accelerated), in each case unless and
until all of the Senior Obligations shall have been fully,
finally and indefeasibly paid in cash, whether or not such
Senior Obligations have been voided, disallowed or subordinated
pursuant to Section 548 of the United States Bankruptcy Code or
any applicable state fraudulent conveyance laws, whether
asserted directly or under Section 544 of the United States
Bankruptcy Code. The Guarantor hereby irrevocably directs the
Borrower to make such prior payment. The Guarantor further
agrees that it will not institute against the Borrower any
bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United
States federal or state bankruptcy or similar law until such
time as the Senior Obligations have been fully, finally and
indefeasibly paid in cash.
Section 3.02. Certain Payments Permitted. So long as no
Default or Event of Default has occurred and is continuing (and
only to the extent not prohibited by the provisions of the
Facility Documents), the Guarantor may from time to time receive
from the Borrower payments of all accrued and unpaid
Subordinated Obligations. Nothing in this Agreement shall limit
the right of the Guarantor to receive payments of the
Subordinated Obligations so long as the Senior Obligations shall
have been indefeasibly paid in full.
Section 3.03. Distributions, etc. In furtherance of, and
to make effective, the subordination provided for herein, the
Guarantor further agrees as follows:
(a) In the event of any distribution, division or
application, partial or complete, voluntary or involuntary, by
operation of law or otherwise, of all or any part of the assets
of the Borrower or the proceeds thereof, to creditors of the
Borrower, or upon any indebtedness of the Borrower, by reason of
(1) the liquidation, dissolution or other winding up, partial or
complete, of the Borrower or the Borrower's business, (2) any
receivership, insolvency or bankruptcy proceeding, or assignment
for the benefit of creditors, or (3) any proceeding by or
against the Borrower for any relief under any bankruptcy or
insolvency law or laws relating to the relief of debtors,
readjustment of indebtedness, arrangements, reorganizations,
compositions or extensions, then and in any such event:
(i) any payment or distribution of any kind or
character, whether in cash, securities or other property
which but for this Agreement would be payable or
deliverable upon or with respect to any or all of the
Subordinated Obligations, shall instead be paid or
delivered directly to the Agent for application to the
Senior Obligations, whether then due or not due, until the
Senior Obligations shall have first been fully, finally and
indefeasibly paid in cash and satisfied; and
(ii) the Guarantor hereby irrevocably authorizes
and empowers the Agent to demand, sue for, collect and
receive every such payment or distribution and give
acquittance therefor, and to file and/or vote claims and
take such other proceedings, in the Agent's own name or in
the name of the Guarantor, or otherwise, as the Agent may
deem necessary or advisable for the enforcement of this
Agreement (including, without limitation, the filing of any
proof of claim in respect of the Subordinated Obligations
in any bankruptcy or insolvency proceeding of the
Borrower). In furtherance of the foregoing, the Guarantor
agrees duly and promptly to take such action as may be
reasonably requested by the Agent to assist in the
collection of the Subordinated Obligations for the account
of the Agent and/or to file appropriate proofs of claim in
respect of the Subordinated Obligations, and to execute and
deliver to the Agent on demand such powers of attorney,
proofs of claim, assignments of claim or other instruments
as may be reasonably requested by the Agent to enable the
Agent to enforce any and all claims upon or with respect to
the Subordinated Obligations, and to collect and receive
any and all payments or distributions which may be payable
or deliverable at any time upon or with respect to the
Subordinated Obligations.
(b) If any payment, distribution of security or
proceeds of any security are received by the Guarantor upon or
in respect of the Subordinated Obligations in contravention of
the provisions of this Article 3, the Guarantor will forthwith
deliver the same to the Agent in precisely the form received
(except for the endorsement or assignment of the Guarantor where
necessary), for application to the Senior Obligations, whether
then due or not due, and, until so delivered, the same shall be
held in trust by the Guarantor as property of the Agent. In the
event of the failure of the Guarantor to make any such
endorsement or assignment, the Agent, or any of its officers or
employees, are hereby irrevocably authorized to make the same.
(c) The Guarantor agrees that it will not transfer,
assign, pledge or encumber the Subordinated Obligations or any
part thereof or any instrument evidencing the same unless the
respective instrument of assignment specifically provides that
the assignee takes the Subordinated Obligations subject to the
provisions of this Agreement and such assignee executes and
delivers to the Agent an instrument in form and substance
satisfactory to the Agent pursuant to which such assignee agrees
to be bound by the provisions of this Agreement. From and after
the occurrence of any Default or Event of Default, and for so
long as the same shall be continuing, the Guarantor agrees that
it will not exchange, forgive, waive or cancel the Subordinated
Obligations or any part thereof or reduce the amount of the
Subordinated Obligations in whole or in part.
(d) Without limiting the effect of any of the other
provisions hereof, during the continuance of any Default or
Event of Default with respect to any Senior Obligation or any
default in the payment of any Senior Obligation, no payment
shall be made with respect to the Subordinated Obligations.
Section 3.04. Continuing Subordination, etc. The
subordination effected by this Agreement is a continuing
subordination, and the Guarantor hereby agrees that at any time
and from time to time, without prior notice to it:
(a) the time for the Borrower's performance of or
compliance with any of its obligations contained in the Credit
Agreement or any of the other Facility Documents may be extended
or such performance or compliance may be waived by the
applicable Lenders;
(b) any of the acts permitted under the Credit
Agreement or any of the other Facility Documents may be done;
(c) payment of any of the Senior Obligations or any
portion thereof may be extended; and
(d) any collateral security for the Senior
Obligations may be exchanged, sold, surrendered, released or
otherwise dealt with, in accordance with the terms of any of the
Facility Documents or any other present or future agreement
between the Borrower and the Lenders;
all without impairing or affecting the obligations of the
Guarantor hereunder.
Section 3.05. Waiver of Notice. The Guarantor hereby
unconditionally waives notice of the incurring of the Senior
Obligations or any part thereof in accordance with the terms of
the Facility Documents and reliance by any Lender upon the
subordination of the Subordinated Obligations to the Senior
Obligations.
Section 3.06. Application of Payments. Whenever any
payment or distribution shall be paid or delivered to the Agent
pursuant to the provisions of this Section 3 for application on
the Senior Obligations, such payment or distribution shall be
applied by the Agent to the repayment of the Senior Obligations
in accordance with the priorities set forth in the Credit
Agreement.
Section 3.07. Subrogation. Subject to the prior
indefeasible payment in full in cash of the Senior Obligations,
the Guarantor shall not be subrogated to the rights of the Agent
and the Lenders to receive payments or distributions in cash,
property or securities of the Borrower applicable to the Senior
Obligations until all amounts owing on the Senior Obligations
shall be paid in full, and as between and among the Borrower,
its creditors other than the Agent and the Lenders, and the
Guarantor, no such payment or distribution made to the Agent or
the Lenders by virtue of this Agreement which otherwise would
have been made to the Guarantor shall be deemed to be a payment
by the Borrower on account of the Senior Obligations, it being
understood that the provisions of this Section 3 are intended
solely for the purpose of defining the relative rights of the
Guarantor, the Agent and the Lenders. Nothing herein will
relieve the Borrower of its obligations to the Guarantor with
respect to the Subordinated Obligations.
Section 3.08. Certain Agreements. The Guarantor agrees
that:
(a) all holders of Senior Obligations, in determining
to acquire and retain Senior Obligations, have relied upon the
subordination of the Subordinated Obligations to the Senior
Obligations as provided herein;
(b) promptly upon the written request of the Agent,
the Guarantor shall execute and deliver to the Agent a written
instrument by which the Guarantor affirms and agrees that the
Subordinated Obligations is subordinated and junior in right of
payment to such Senior Obligations on the terms and conditions
provided herein;
(c) promptly upon the written request of the Agent,
the Guarantor shall take such other action as may be reasonably
requested by the Agent to effectuate the subordination provided
herein; and
(d) the Subordinated Obligations shall not at any
time be secured by any Lien or security interest on Property of
the Borrower.
ARTICLE 4. MISCELLANEOUS.
Section 4.01. Amendments and Waivers. Except as otherwise
expressly provided in this Agreement, any provision of this
Agreement may be amended or modified only by an instrument in
writing signed by the Guarantor, the Agent and the Required
Lenders, or by the Guarantor and the Agent acting with the
consent of the Required Lenders and any provision of this
Agreement may be waived by the Required Lenders or by the Agent
acting with the consent of the Required Lenders; provided that
no amendment, modification or waiver shall, unless by an
instrument signed by the Guarantor and all of the Lenders or by
the Agent acting with the consent of all of the Lenders:
(a) release the Guarantor from the subordination hereunder; or
(b) amend, waive or modify the definitions of Subordinated
Obligations or Senior Obligations.
Section 4.02. Expenses. The Guarantor shall reimburse the
Agent and each Lender for all reasonable out-of-pocket costs,
expenses and charges (including, without limitation, reasonable
fees and charges of external legal counsel for the Agent and
each Lender) in connection with the enforcement or preservation
of any rights or remedies during the existence of an Event of
Default (including, without limitation, in connection with any
restructuring or insolvency or bankruptcy proceeding) under this
Agreement.
Section 4.03. Survival. The obligations of the Guarantor
under Section 4.02 shall survive the repayment of the Loans and
the Letters of Credit and the termination of the Commitments.
Section 4.04. Successors and Assigns. This Agreement
shall be binding upon, and shall inure to the benefit of, the
Guarantor, the Borrower, the Agent, the Lenders and their
respective successors and assigns.
Section 4.05. Notices. Unless the party to be notified
otherwise notifies the other party in writing as provided in
this Section, and except as otherwise provided in this
Agreement, notices shall be given to the Agent in writing, by
telex, telecopy or other writing or by telephone, confirmed by
telex, telecopy or other writing, and to the Lenders, to the
Borrower and to the Guarantor by ordinary mail, hand delivery,
overnight courier or telecopier addressed to such party at its
address on the signature page of this Agreement. Notices shall
be effective: (a) if given by mail, 72 hours after deposit in
the mails with first class postage prepaid, addressed as
aforesaid; and (b) if given by telecopier, when confirmation of
delivery of the telecopy to the telecopier number as aforesaid
is transmitted; provided that notices to the Agent and the
Lenders shall be effective upon receipt.
Section 4.06. Headings. The headings and captions
hereunder are for convenience only and shall not affect the
interpretation or construction of this Agreement.
Section 4.07. Severability. The provisions of this
Agreement are intended to be severable. If for any reason any
provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction, such
provision shall, as to such jurisdiction, be ineffective to the
extent of such invalidity or unenforceability without in any
manner affecting the validity or enforceability thereof in any
other jurisdiction or the remaining provisions hereof in any
jurisdiction.
Section 4.08. Counterparts. This Agreement may be
executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing any such
counterpart.
SECTION 4.09. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK.
Section 4.10. Subject to the Credit Agreement. Any and
all rights granted to the Agent under this Agreement are to be
held and exercised by the Agent for the benefit of the Lenders,
pursuant to the provisions of the Credit Agreement. To the
extent set forth in the Facility Documents, each of the Lenders
shall be a beneficiary of the terms of this Agreement. Any and
all obligations under this Agreement of the parties to this
Agreement, and the rights granted to the Agent under this
Agreement, are created and granted subject to the terms of the
Credit Agreement.
Section 4.11. Term of Agreement. This Agreement shall be
and remain in full force and effect so long as any Obligation,
any Letter of Credit or any Commitment is outstanding.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
TRIARC COMPANIES, INC.
By:
Name:
Title:
Triarc Companies, Inc.
900 Third Avenue
New York, New York 10022
Attention: Executive Vice
President and General Counsel
Telecopier No.: (212) 230-
3216
MISTIC BRANDS, INC.
By:
Name:
Title:
Address for Notices:
Mistic Brands, Inc.
2525 Palmer Avenue
New Rochelle, NY 10801
Attention: Chief Financial
Officer
Telecopier No.: (914) 637-
0020
With a copy to:
Triarc Companies, Inc.
900 Third Avenue
New York, New York 10022
Attention: Executive Vice
President and General Counsel
Telecopier No.: (212) 230-
3216
AGENT:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By:
Name:
Title:
Address for Notices:
New York Agency
4 Chase Metrotech Center
13th Floor
Brooklyn, NY 11245
Attention: Lucy D'Orazio
Telecopier No.: (718) 242-
6909
with a copy to:
31 Mamaroneck Avenue
White Plains, NY 10601
Attention: Michael D. Anthony
Telecopier No.: (914) 328-
8373
<PAGE>
Exhibit 10.2
AMENDMENT NO. 6
TO
REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 6 ("Amendment No. 6") is entered
into as of August 3, 1995, by and among GRANITEVILLE COMPANY
("Graniteville"), a corporation organized under the laws of the
State of South Carolina, C.H. PATRICK & CO., INC. ("Patrick"), a
corporation organized under the laws of the State of South
Carolina (Graniteville and Patrick each a "Borrower" and,
jointly and severally, the "Borrowers"), the undersigned
financial institutions (jointly and severally, the "Lenders")
and THE CIT GROUP/COMMERCIAL SERVICES, INC. ("CIT"), a
corporation organized under the laws of the State of New York,
as agent for the Lenders (CIT in such capacity, the "Agent").
BACKGROUND
Borrowers, Lenders and Agent are parties to a
Revolving Credit, Term Loan and Security Agreement dated as of
April 23, 1993 (as amended, supplemented or otherwise modified
from time to time, the "Loan Agreement") pursuant to which
Lenders provide Borrowers with certain financial accommodations.
Borrowers have requested, among other things, that
Lenders (a) increase the Maximum Loan Amount, (b) increase the
Advance Rates and (c) decrease the Contract Rate, and Lenders
are willing to do so on the terms and conditions hereafter set
forth.
NOW, THEREFORE, in consideration of any loan or
advance or grant of credit heretofore or hereafter made to or
for the account of Borrowers by Lenders, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. Definitions. All capitalized terms not otherwise
defined herein shall have the meanings given to them in the Loan
Agreement.
2. Amendment to Loan Agreement. Subject to
satisfaction or waiver of the conditions precedent set forth in
Section 5 below, the Loan Agreement is hereby amended as
follows:
(a) Section 1.1 of the Loan Agreement is hereby
amended by deleting the date "March 1, 1992" appearing in the
last full line thereof and inserting "January 1, 1995" in its
place and stead.
(b) Section 1.2 of the Loan Agreement is hereby
amended as follows:
(i) the following defined terms are inserted in
the appropriate alphabetical order:
"Additional Term Loan Commitment Percentages"
shall mean the percentages set forth on Schedule
B to Amendment No. 6.
"Amendment to Mortgages" shall mean the First
Amendment to Master Mortgage and Deed to Secure
Debt with Uniform Commercial Code Security
Agreement and with Assignment of Leases, Rents
and Profits with respect to the Real Property
owned by Graniteville in Georgia and South
Carolina dated as of the Amendment No. 6
Effective Date together with all extensions,
renewals, amendments, supplements, modifications,
substitutions and replacements thereto and
thereof.
"Amended and Restated Note" shall mean
collectively, the Amended and Restated Revolving
Credit Note and the Amended and Restated Term
Note.
"Amended and Restated Revolving Credit Note"
shall mean, collectively, the promissory notes
dated as of the Amendment No. 6 Effective Date
referred to in Section 2.1(a) hereof.
"Amended and Restated Term Note" shall mean,
collectively, the promissory notes dated as of
the Amendment No. 6 Effective Date described in
Section 2.4 hereof.
"Amendment No. 6" shall mean Amendment No. 6 to
this Agreement.
"Amendment No. 6 Effective Date" shall mean the
date on which the conditions precedent set forth
in Section 5 of Amendment No. 6 are satisfied.
"Fee Letter" shall mean that certain letter dated
as of the Amendment No. 6 Effective Date between
Agent and Borrowers.
"Graniteville Holdings" shall mean Graniteville
Holdings, Inc., a Delaware corporation.
"GS Holdings" shall mean GS Holdings, Inc., a
Delaware corporation.
"GVT Holdings" shall mean GVT Holdings, Inc., a
Delaware corporation.
"Mill Risk Receivables" shall mean those
Receivables which have not been approved by CIT
under the Factoring Agreement(s).
"Mistic Acquisition" shall mean the acquisition
by Mistic Brands, Inc., a subsidiary of Triarc,
of substantially all of the assets, subject to
certain related liabilities, of the non-alcoholic
beverage business of Joseph Victori Wines, Inc.,
Best Flavors, Inc. and Nature's Own Beverage
Company.
"Original Triarc Loan" shall have the meaning set
forth in Section 7.5 of the Loan Agreement.
(ii) the following defined terms are hereby
amended in their entirety to provide as follows:
"Financial Covenants" shall mean the covenants
set forth in Sections 6.5 through 6.9 of the Loan
Agreement.
"Graniteville Sublimit" shall mean $130,000,000
less the outstanding amount of Revolving Advances
made to Patrick.
"Guarantors" shall mean (a) Graniteville with
respect to the Obligations of Patrick, (b)
Patrick with respect to the Obligations of
Graniteville, and (c) Triarc, Graniteville
International, GS Holdings, GVT Holdings and
Graniteville Holdings with respect to the
Obligations of Borrowers.
"Maximum Loan Amount" shall mean $216,000,000.
"Maximum Revolving Advance Amount" shall mean
$130,000,000.
"Revolving Interest Rate" shall mean an interest
rate per annum equal to (a) the sum of the
Chemical Rate plus one percent (1.00%) with
respect to Chemical Rate Loans, and (b) the sum
of the Eurodollar Rate plus two and three-
quarters percent (2.75%) with respect to
Eurodollar Rate Loans.
"Term" shall mean the Closing Date through August
1, 2000.
"Term Loan Rate" shall mean an interest rate per
annum equal to (a) the sum of the Chemical Rate
plus one and one-half percent (1.50%) with
respect to Chemical Rate Loans, and (b) the sum
of the Eurodollar Rate plus three and one-quarter
percent (3.25%) with respect to Eurodollar Rate
Loans; provided, however, at such time as
aggregate principal repayments of the Term Loan
from and after August 1, 1995 arising out of the
normal operations of Borrowers equal or exceed
$14,000,000, the interest rate per annum with
respect to Eurodollar Rate Loans shall be the sum
of the Eurodollar Rate plus three percent
(3.00%); provided, further, at such time as
aggregate principal repayments of the Term Loan
from and after August 1, 1995 arising out of the
normal operations of Borrowers equal or exceed
$29,000,000, the interest rate per annum with
respect to Eurodollar Rate Loans shall be the sum
of the Eurodollar Rate plus two and three-
quarters percent (2.75%).
"Triarc" shall mean Triarc Companies, Inc., a
Delaware corporation.
(iii) Sub-paragraph (j) of the definition of
Eligible Receivables is hereby amended by deleting the
parenthetical "(31 U.S.C. Sub-Section 203 et seq.)"
and inserting "(31 U.S.C. Sub-Section 3727 et seq. and
41 U.S.C. Sub-Section 15 et seq.)" in its place and
stead.
(iv) the definitions of "Facility Increase
Period" and "Maximum Inventory Advance Amount" are
hereby deleted.
(v) all references in the Loan Agreement and the
Other Documents to the Term Note, the Revolving Credit
Note and the Mortgages are hereby amended to be
references to the Amended and Restated Term Note,
Amended and Restated Revolving Credit Note and the
Amended and Restated Mortgages, respectively.
(c) Section 2.1(a)(II) of the Loan Agreement is
hereby amended in its entirety to provide as follows:
"(II) an amount equal to the sum of:
(i) for the period commencing on the
Amendment No. 6 Effective Date and continuing through
the date immediately preceding the first anniversary
of the Amendment No. 6 Effective Date, up to 95%, and
thereafter up to 90% (in each case subject to the
provisions of Section 2.1(b) hereof) ("Credit Approved
Receivables Advance Rate") of the net face amount of
Eligible Receivables which have been credit approved
by CIT under the Factoring Agreement(s), plus
(ii) for the period commencing on the
Amendment No. 6 Effective Date and continuing through
the date immediately preceding the first anniversary
of the Amendment No. 6 Effective Date up to 90%, and
thereafter up to 85% (in each case subject to the
provisions of Section 2.1(b) hereof) ("Mill Risk
Receivables Advance Rate") of the net face amount of
Eligible Receivables which have not been credit
approved by CIT under the Factoring Agreement(s),
(provided, however, in no event shall the sum of
outstanding Revolving Advances against Mill Risk
Receivables exceed $18,000,000 in the aggregate) plus
(iii) up to the lesser of (x) $42,000,000 or
(y) up to 65%, (subject to the provisions of Section
2.1(b) hereof) ("Inventory Advance Rate") of the value
of the Eligible Inventory (the Credit Approved
Receivables Advance Rate, Mill Risk Receivables
Advance Rate and Inventory Advance Rate shall be
referred to collectively as the "Advance Rates"),
minus
(iv) the aggregate amount of outstanding Letters
of Credit; minus
(v) the Excess Cash Flow Reserve; minus
(vi) such reserves as Agent may establish in its
reasonable discretion including, without limitation,
reserves established by CIT under the Factoring
Agreements (collectively, the "Reserves").
The sum of the amounts derived from Sections 2.1(a)(i)
plus (a)(ii) plus (a)(iii) minus (a)(v) minus (a)(vi) at any
time and from time to time shall be referred to as the "Formula
Amount". The Revolving Advances shall be evidenced by amended
and restated secured promissory notes substantially in the form
attached hereto as Exhibit 2.1(a)."
(d) Section 2.1(c)(II) of the Loan Agreement is
hereby amended in its entirety to provide as follows:
"(II) an amount equal to the sum of:
(i) for the period commencing on the
Amendment No. 6 Effective Date and continuing
through the date immediately preceding the first
anniversary of the Amendment No. 6 Effective
Date, up to 95%, and thereafter, up to 90% (in
each case subject to the provisions of Section
2.1(b) hereof) of the net face amount of Eligible
Receivables which have been credit approved by
CIT under the Graniteville Factoring Agreement,
plus
(ii) for the period commencing on the
Amendment No. 6 Effective Date and continuing
through the date immediately preceding the first
anniversary of the Amendment No. 6 Effective
Date, up to 90%, and thereafter, up to 85% (in
each case subject to the provisions of Section
2.1(b) hereof) of the net face amount of Eligible
Receivables which have not been credit approved
by CIT under the Graniteville Factoring Agreement
(provided, however, in no event shall the sum of
outstanding Revolving Advances against Mill Risk
Receivables of Graniteville and Patrick exceed
$18,000,000 in the aggregate), plus
(iii) up to 65% (subject to the provisions
of Section 2.1(b) hereof) of the value of
Eligible Inventory of Graniteville (provided,
however, in no event shall the sum of outstanding
Revolving Advances against Eligible Inventory of
Graniteville and of Patrick exceed $42,000,000,
minus
(iv) the aggregate amount of outstanding
Letters of Credit issued on behalf of
Graniteville, minus
(v) the portion of Excess Cash Flow Reserve
reasonably determined by Agent to be applicable
to Graniteville, minus
(vi) such Reserves as Agent may establish in
its reasonable discretion.
The sum of the amounts derived from Sections 2.1(c)(i)
plus (c)(ii) plus (c)(iii) minus (c)(v) minus (c)(vi) at any
time and from time to time shall be referred to as the
'Graniteville Formula Amount'."
(e) Section 2.1(d)(II) of the Loan Agreement is
hereby amended in its entirety to provide as follows:
"(II) an amount equal to the sum of:
(i) for the period commencing on the
Amendment No. 6 Effective Date and continuing through
the date immediately preceding the first anniversary
of the Amendment No. 6 Effective Date, up to 95%, and
thereafter, up to 90% (in each case subject to the
provisions of Section 2.1(b) hereof) of the net face
amount of Eligible Receivables which have been credit
approved by CIT under the Patrick Factoring
Agreement, plus
(ii) for the period commencing on the
Amendment No. 6 Effective Date and continuing through
the date immediately preceding the first anniversary
of the Amendment No. 6 Effective Date, up to 90%, and
thereafter, up to 85% (in each case subject to the
provisions of Section 2.1(b) hereof) of the net face
amount of Eligible Receivables which have not been
credit approved by CIT under the Patrick Factoring
Agreement (provided, however, in no event shall the
sum of outstanding Revolving Advances against Mill
Risk Receivables of Graniteville and Patrick exceed
$18,000,000 in the aggregate), plus
(iii) up to 65% (subject to the provisions of
Section 2.1(b) hereof) of the value of Eligible
Inventory of Patrick (provided, however, in no event
shall the sum of outstanding Revolving Advances
against Eligible Inventory of Graniteville and of
Patrick exceed $42,000,000, minus
(iv) the aggregate amount of outstanding
Letters of Credit issued on behalf of Patrick, minus
(v) the portion of Excess Cash Flow Reserve
reasonably determined by Agent to be applicable to
Patrick; minus
(vi) such Reserves as Agent may establish in
its reasonable discretion.
The sum of the amounts derived from Sections
2.1(d)(i) plus (d)(ii) plus (d)(iii) minus (d)(v) minus (d)(vi)
at any time and from time to time shall be referred to as the
'Patrick Formula Amount'."
(f) The second to last sentence of Section 2.2(b)
of the Loan Agreement is hereby amended in its entirety to
provide as follows:
"In no case, however, may Borrowers obtain
Eurodollar Rate Loans with respect to Revolving
Advances if the aggregate outstanding amount of such
Eurodollar Rate Loans would exceed seventy-five
percent (75%) of outstanding Revolving Advances.
With respect to the Term Loan, Borrowers shall
maintain as Chemical Rate Loans an amount
representing the principal amount of the next two (2)
quarterly payments which are due and payable."
(g) Section 2.4 of the Loan Agreement is hereby
amended in its entirety to provide as follows:
"2.4. Term Loan. (a) On the Closing Date,
CIT (which was the only Lender as of such date) made
a Term Loan to Borrowers in the principal amount of
$80,000,000 which, as of the Amendment No. 6
Effective Date, has an outstanding principal balance
of $55,000,000. Subject to the terms and conditions
of this Agreement, each Lender, severally and not
jointly, will make an additional term loan equal to
its Additional Term Loan Commitment Percentage of
$31,000,000 (the "Additional Term Loan") on the
Amendment No. 6 Effective Date which Additional Term
Loan shall be consolidated with the original Term
Loan. The Additional Term Loan shall be advanced on
the Amendment No. 6 Effective Date and the
consolidated Term Loan shall be, with respect to
principal, payable as follows, subject to
acceleration upon the occurrence of an Event of
Default under this Agreement or the termination of
this Agreement:
(i) on November 1, 1995, a principal
installment in an amount equal to $800,000;
(ii) on February 1, 1996, a principal
installment in an amount equal to $2,300,000; and
(iii) commencing on May 1, 1996 and
continuing on the first day of each August,
November, February and May thereafter, quarterly
principal installments each in an amount equal to
$3,100,000 until August 1, 2000 when the unpaid
principal balance of the Term Loan shall be due
and payable.
The Term Loan (following the consolidation of the
original Term Loan and the Additional Term Loan)
shall be evidenced by and subject to the terms and
conditions set forth in amended and restated
secured promissory notes substantially in the form
attached hereto as Exhibit 2.1(a).
(h) Section 2.4(b)(ii) of the Loan Agreement is
hereby amended by deleting the reference to "February 27, 1994"
in the fourth line thereof and inserting "December 31, 1995" in
its place and stead.
(i) A new Section 2.4(b)(iii) is hereby added
following Section 2.4(b)(ii) of the Loan Agreement which
provides as follows:
"In the event that the Mistic Acquisition is not
consummated on or before August 31, 1995,
Borrowers shall prepay Advances in an amount equal
to $35,000,000, which amount shall be applied
first to principal installments pro rata on the
Term Loan and which payments may not be reborrowed
and then to the remaining Advances in such order
as Agent may determine subject to Borrowers'
ability to reborrow Revolving Advances in
accordance with the terms hereof."
(j) Section 2.10(b) of the Loan Agreement is
hereby amended by deleting "(1983 Revision), International
Chamber of Commerce Publication No. 400" in the last sentence
thereof and inserting "(1993 Revision), International Chamber of
Commerce Publication No. 500" in its place and stead.
(k) Section 2.11(d) of the Loan Agreement is
hereby amended in its entirety to provide as follows:
"Each Lender shall to the extent of the percentage
amount equal to the product of such Lender's
Commitment Percentage times the aggregate amount of
all unreimbursed reimbursement obligations made with
respect to the Letters of Credit be deemed to have
irrevocably purchased an undivided participation in
each unreimbursed reimbursement obligation. In the
event that at the time a disbursement is made the
unpaid balance of Revolving Advances exceeds or would
exceed, with the making of such disbursement, the
lesser of (x) the Maximum Revolving Advance Amount
minus the aggregate amount of outstanding Letters of
Credit or (y) the Formula Amount minus the amount set
forth in Section 2.1(a)(iv), or the Advances
outstanding to Graniteville or Patrick would exceed
the lesser of (i) the Graniteville Sublimit or the
Patrick Sublimit, as the case may be, or (ii) the
Graniteville Formula Amount minus the aggregate
amount of outstanding Letters of Credit issued on
behalf of Graniteville or the Patrick Formula Amount
minus the aggregate amount of outstanding letters of
Credit issued on behalf of Patrick, as the case may
be,, and such disbursement is not reimbursed by
Borrower within two (2) Business Days, Agent shall
promptly notify each Lender and upon Agent's demand
each Lender shall pay to Agent such Lender's
proportionate share of such unreimbursed disbursement
together with such Lender's proportionate share of
Agent's unreimbursed costs and expenses relating to
such unreimbursed disbursement. Upon receipt by
Agent of a repayment from Borrower of any amount
disbursed by Agent for which Agent had already been
reimbursed by the Lenders, Agent shall deliver to
each of the Lenders that Lender's pro rata share of
such repayment. Each Lender's participation
commitment shall continue until the last to occur of
any of the following events: (A) Agent ceases to be
obligated to issue Letters of Credit hereunder, (B)
no Letter of Credit issued hereunder remains
outstanding and uncancelled, or (C) all Persons
(other than Borrower) have been fully reimbursed for
all payments made under or relating to Letters of
Credit."
(l) Section 2.9 of the Loan Agreement is hereby
amended by deleting "$7,500,000" and inserting "$5,000,000" in
its place and stead.
(m) The following subsections are hereby added to
Section 3.3 of the Loan Agreement following Section 3.3(c) which
provide as follows:
"(d) Commitment Fee. Upon the execution of
Amendment No. 6, Borrowers shall pay to each Lender a
commitment fee equal to the product of (i) .70% times
(ii) any increase in each Lender's Commitment Amount
pursuant to Amendment No. 6.
(e) Amendment Fee. Upon the execution of this
Amendment No. 6, Borrowers shall pay to each Lender
an amendment fee equal to the product of (i) one
quarter of one percent (.25%) times (ii) each
Lender's Commitment Amount prior to giving effect to
Amendment No. 6.
(f) Fee Letter. Upon the execution of Amendment
No. 6, Borrowers shall pay to Agent for its own
account the fees set forth in the Fee Letter."
(n) Section 3.4 of the Loan Agreement is hereby
amended by deleting "$500" and inserting "$750" in its place and
stead.
(o) Section 4.5 of the Loan Agreement is hereby
amended by adding "as amended as of the Amendment No. 6
Effective Date" after each reference to "Schedule 4.5".
(p) The second to last sentence of Section 5.4 of
the Loan Agreement is hereby amended in its entirety to provide
as follows:
"Federal, state and local income tax returns of
Graniteville and of Patrick have been examined and
reported upon by the appropriate taxing authority
or closed by applicable statute and satisfied for
all fiscal years prior to and including the fiscal
year ended March 3, 1985, except for returns filed
with the State of California where returns have
been examined and reported upon or closed by
statute for all years prior to and including the
fiscal year ended February 26, 1984.
(q) Section 5.5(a) of the Loan Agreement is hereby
amended by deleting "March 1, 1992" in the second line thereof
and inserting "January 1, 1995" in its place and stead.
(r) Section 5.5(b) of the Loan Agreement is hereby
amended by deleting "as of the Closing Date" in the second line
thereof and inserting "as of the Amendment No. 6 Effective
Date".
(s) Section 6.5 of the Loan Agreement is hereby
amended in its entirety to provide as follows:
"6.5 Net Worth. Cause to be maintained as
of the end of each fiscal quarter a Net Worth of not
less than the amount set forth below opposite such
fiscal quarter end:
Fiscal Quarter End Minimum Net Worth
July 2, 1995 $165,000,000
October 1, 1995 165,000,000
December 31, 1995 170,000,000
March 31, 1996 175,000,000
June 30, 1996 180,000,000
September 29, 1996 185,000,000
December 29, 1996 190,000,000
March 30, 1997 195,000,000
June 29, 1997 200,000,000
September 28, 1997 205,000,000
December 28, 1997 210,000,000
For each fiscal quarter end thereafter, the Minimum Net
Worth shall be increased by an amount equal to $5,000,000 for
such fiscal quarter end.
(t) Section 6.6 of the Loan Agreement is hereby
amended in its entirety to provide as follows:
"6.6 Current Ratio. Cause to be maintained as
of the end of each fiscal quarter a ratio of Current
Assets to Current Liabilities not less than the amount
set forth below opposite such fiscal quarter end:
Fiscal Quarter End Current Ratio
July 2, 1995 2.6 to 1.0
October 1, 1995 2.5 to 1.0
December 31, 1995 2.4 to 1.0
and each fiscal quarter
end thereafter
(u) Section 6.7 of the Loan Agreement is hereby
amended in its entirety to provide as follows:
"6.7 Indebtedness to Net Worth Ratio. Cause to
be maintained as of the end of each fiscal quarter a
ratio of Indebtedness of Borrowers on a Consolidated
Basis to Net Worth no greater than the ratio set forth
below opposite such fiscal quarter end:
Indebtedness to
Fiscal Quarter End Net Worth Ratio
July 2, 1995 1.67 to 1.00
October 1, 1995 1.64 to 1.00
December 31, 1995 1.87 to 1.00
March 31, 1996 1.80 to 1.00
June 30, 1996 1.70 to 1.00
September 29, 1996 1.63 to 1.00
December 29, 1996 1.55 to 1.00
March 30, 1997 1.48 to 1.00
June 29, 1997 1.39 to 1.00
September 28, 1997 1.33 to 1.00
December 28, 1997 1.26 to 1.00
and each fiscal quarter 1.25 to 1.00"
end thereafter
(v) Section 6.8 of the Loan Agreement is hereby
amended in its entirety to provide as follows:
"6.8 Working Capital. Cause to be maintained as
of the end of each fiscal quarter, Working Capital in
an amount not less than the amount set forth below
opposite such fiscal quarter end:
Fiscal Quarter End Minimum Working Capital
July 2, 1995 $109,300,000
October 1, 1995 110,300,000
December 31, 1995 112,100,000
March 31, 1996 116,700,000
June 30, 1996 117,000,000
September 29, 1996 117,100,000
December 29, 1996 117,400,000
March 30, 1997 117,400,000
June 29, 1997 117,700,000
September 28, 1997 117,700,000
December 28, 1997 117,900,000
and each fiscal quarter 120,000,000"
end thereafter
(w) Section 6.9 of the Loan Agreement is hereby amended
in its entirety to provide as follows:
"6.9. Interest Coverage. Cause for each four
quarter period ending at the fiscal quarter ends set
forth below the ratio of (i) Earnings Before Interest
and Income Taxes plus depreciation and amortization to
(ii) aggregate interest expense of Borrowers on a
Consolidated Basis to be greater than the ratio set
forth opposite such fiscal quarter end:
Fiscal Quarter End Interest Coverage Ratio
July 2, 1995 2.60 to 1.0
October 1, 1995 2.40 to 1.0
December 31, 1995 2.40 to 1.0
March 31, 1996 2.50 to 1.0
June 30, 1996 2.50 to 1.0
September 29, 1996 2.50 to 1.0
December 29, 1996 2.75 to 1.0
March 30, 1997 2.75 to 1.0
June 29, 1997 2.75 to 1.0
September 28, 1997 2.75 to 1.0
December 28, 1997 3.00 to 1.0
and each four 3.00 to 1.0
(4) quarter period
ending thereafter
In the event that the Mistic Acquisition is not consummated on
or before August 31, 1995 and a prepayment is made pursuant to
Section 2.4(b)(ii) hereof, then Borrowers and Lenders shall, in
good faith, negotiate any adjustments required to the Financial
Covenants as a result of such prepayment and in the event
Borrowers and Required Lenders cannot agree on such adjustments
by September 30, 1995, Agent shall in the exercise of its
reasonable business judgment determine the necessary adjustments
and reset the Financial Covenants in which event the consent of
Lenders or Borrowers shall not be required."
(x) Section 6.13 of the Loan Agreement is hereby
amended in its entirety to provide as follows:
"6.13 Interest Rate Protection. No later
than sixty (60) days from the Amendment No. 6
Effective Date, deliver to Agent evidence reasonably
satisfactory to Agent that Borrowers have purchased
interest rate protection for at least $108,000,000 of
the Advances covering a period of twenty four (24)
months from the date of purchase and providing for a
Eurodollar Rate cap of 9% per annum in the event that
(a) the 90 day Eurodollar Rate exceeds 9% or (b) the
Chemical Rate exceeds 12%."
(y) Section 7.5 of the Loan Agreement is hereby
amended in its entirety to provide as follows:
"7.5 Loans. Make advances, loans or extensions
of credit to any Person, including without limitation,
any Parent, Subsidiary or Affiliate except (a) the
extension of commercial trade credit in connection
with the sale of Inventory in the ordinary course of
its business; (b) loans to Triarc on the Closing Date
not to exceed $66,600,000 in the aggregate ("Original
Triarc Loan"); (c) accrued but unpaid interest on the
Original Triarc Loan evidenced by a note; (d) loans to
Triarc on the Amendment No. 6 Effective Date not to
exceed $36,000,000 in the aggregate evidenced by a
note charging interest at a rate per annum equal to
nine and one-half percent (9.50%) payable on a semi-
annual basis as follows: not less than forty percent
(40%) to be in cash and not more than sixty percent
(60%) to be in the form of additional promissory
notes ("Additional Triarc Loan"); provided, however,
to the extent that Triarc does not make scheduled
interest payments on the Additional Triarc Loan in
cash or property (additional promissory notes do not
constitute payment in cash or property) intercompany
interest between Graniteville and Triarc shall not be
reflected for purposes of the Tax Sharing Agreement;
(e) loans and advances to employees for travel,
entertainment and relocation expenses in the ordinary
course of business in an aggregate amount not to
exceed $200,000 at any time outstanding; (f) loans and
advances by Graniteville to Patrick and loans and
advances by Patrick to Graniteville; and (g) loans and
advances by Graniteville to Affiliates which together
with dividends paid by Graniteville to Affiliates in
accordance with Section 7.7(a) of this Agreement do
not exceed an aggregate amount equal to fifty percent
(50%) of the net income after taxes of Borrowers on a
Consolidated Basis cumulated from the beginning of the
first fiscal year commencing on or after December 20,
1994, provided, that (i) the outstanding principal
balance of the Term Loan is equal to or less than
$50,000,000 at the time of such loan or advance;
(ii) no Event of Default or Default exists or would
exist after giving effect to such loan or advance and
payments made in accordance with Section 7.7(a);
(iii) such loans or advances and payments made
pursuant to Section 7.7(a) are made no more than once
per fiscal year but not earlier than thirty (30) days
after delivery to Agent of the Audited Annual
Financial Statements delivered pursuant to Section 9.7
hereof, nor later than one hundred and eighty (180)
days after the end of the applicable fiscal year; and
(iv) Agent has received a certificate of the Chief
Financial Officer of Graniteville stating that after
giving effect to such loans or advances and payments
made pursuant to Section 7.7(a), Borrowers will each
have sufficient Undrawn Availability to meet each of
their respective obligations in the ordinary course of
business for the ninety (90) days following the date
of such loans or advances and payments made pursuant
to Section 7.7(a); provided, that with respect to
loans and advances permitted by subsections (b), (c),
(d), (f) and (g) such loans and advances are evidenced
by promissory notes which notes have been assigned to
Agent for the benefit of Lenders including, without
limitation, the notes representing interest pursuant
to (d) hereof."
(z) Section 7.6 of the Loan Agreement is hereby
amended in its entirety to provide as follows:
"7.6 Capital Expenditures. Contract for,
purchase or make any expenditure or commitments for
fixed or capital assets (including capitalized leases
and Operating Lease Obligations but excluding any
proceeds of insurance received by Borrowers used to
replace or repair fixed assets) in any fiscal year set
forth below in an amount in excess of the amount set
forth opposite such fiscal year end:
Fiscal Year End Capital
Expenditures
December 31, 1995 14,000,000
December 29, 1996 15,000,000
December 28, 1997 15,000,000
January 3, 1999 15,000,000
and each fiscal year
end thereafter
Notwithstanding the foregoing, unutilized capital
expenditures for any one fiscal year may be utilized
in the immediately following fiscal year after full
utilization of the above amounts of permitted capital
expenditures in such immediately following fiscal year
(i.e., the amounts set forth above without the
addition of the carryover amount); provided, however,
in no event shall capital expenditures exceed
$20,000,000 in any one fiscal year or $30,000,000 in
the aggregate in any two consecutive fiscal years."
(aa) Section 7.10(e) of the Loan Agreement is hereby
amended in its entirety to provide as follows:
"(e) Management Fees paid by Borrowers to
Triarc not to exceed $7,500,000 in the aggregate
during any fiscal year of Borrowers to be paid in
equal quarterly installments; provided, however, in
the event that (i) the outstanding principal amount of
the Term Loan plus the Maximum Revolving Advance
Amount is greater than $180,000,000 and an Event of
Default has occurred and is continuing, then no
payments shall be made with respect to the Management
Fees."
(ab) Section 7.13 the Loan Agreement is hereby amended
in its entirety to provide as follows:
"7.13 Fiscal Year and Accounting Changes. (a)
Change its fiscal year from a year ending on the
Sunday nearest the last day of December or (b) make
any significant change (i) in accounting treatment and
reporting practices except as required by GAAP,
provided if Graniteville must change its accounting
treatment of the notes representing the Original
Triarc Loan and the Additional Triarc Loan, then so
long as there is no cash flow impact from the change
in treatment of such notes Borrowers and Lenders
shall, in good faith, negotiate any adjustments
required to the Financial Covenants as a result of
such change and in the event Borrowers and Required
Lenders cannot agree on such adjustments within
fifteen (15) Business Days of Borrowers' notice to
Agent of such proposed change, Agent shall in the
exercise of its reasonable business judgment determine
the necessary adjustments and reset the Financial
Covenants in which event the consent of Lenders or
Borrowers shall not be required, or (ii) in tax
reporting treatment except as required by law,
applicable regulations or rulings."
(ac) The proviso in Section 13.1 of the Loan Agreement
is hereby amended in its entirety to provide as follows:
"provided, however, that Borrowers pay an early
termination fee in an amount equal to (x) 2% of the
amount of principal prepaid under the Term Loan if the
Termination Date occurs from the Amendment No. 6
Effective Date to and including the date immediately
preceding the first anniversary of the Amendment No. 6
Effective Date, (y) 1% of the amount of principal
prepaid under the Term Loan if the Termination Date
occurs from the first anniversary of the Amendment No.
6 Effective Date to and including the date immediately
preceding the second anniversary of the Amendment No.
Effective 6 Date, and (z) 1/2% of the amount of
principal prepaid under the Term Loan if the
Termination Date occurs from the second anniversary of
the Amendment No. 6 Effective Date to and including
the date immediately preceding the third anniversary
of the Amendment No. 6 Effective Date."
(ad) Exhibits 2.1(a), 2.4 and 5.5(b) are amended in
their entirety by Exhibits 1, 2 and 3 to Amendment No. 6.
3. Consent. The Lenders hereby consent to the
application of the net proceeds from the sale of the Unimproved
Land to outstanding Revolving Advances notwithstanding the
provisions of Section 2.4(b)(i) of the Loan Agreement.
4. Lender Acknowledgement. By its execution below, each
Lender hereby acknowledges (x) its Commitment Percentage and
Commitment Amount as set forth on Schedule A attached hereto and
(y) that in connection with the making of the Additional Term
Loan, the proceeds from the sale of approximately 10,500 acres
of Unimproved Land have been applied to reduce the outstanding
amount of Revolving Advances for purposes of determining
availability (such proceeds having previously been applied for
purposes of calculating interest on Revolving Advances).
5. Conditions of Effectiveness. The agreement of Lenders
to make the Advances requested to be made on the Amendment No. 6
Effective Date is subject to the satisfaction, or waiver by
Agent (and with respect to the condition set forth in (k) below,
the waiver by all Lenders), immediately prior to or concurrently
with the making of such Advances, of the following conditions
precedent:
(a) Amended and Restated Revolving Credit Note.
Agent shall have received the Amended and Restated Revolving
Credit Note duly executed and delivered by an authorized officer
of each Borrower;
(b) Amended and Restated Term Note. Agent shall have
received the Amended and Restated Term Note duly executed and
delivered by an authorized officer of each Borrower;
(c) Corporate Proceedings of Borrowers. Agent shall
have received a copy of the resolutions in form and substance
reasonably satisfactory to Agent, of the Board of Directors of
each Borrower authorizing (i) the execution, delivery and
performance of this Amendment No. 6, the Amended and Restated
Notes, the Amended and Restated Mortgages, and any Other
Documents;
(d) Collateral Examination. Agent shall have, at
Borrowers' expense, completed Collateral examinations and
received appraisals, the results of which shall be satisfactory
in form and substance to Agent, of the Real Property and
Equipment of each Borrower;
(e) Fees and Fee Letter. Agent shall have received a
duly executed Fee Letter and all fees payable to Agent and
Lenders;
(f) Insurance. Agent shall be reasonably satisfied
with respect to the adequacy of Borrowers' insurance coverages;
(g) Amendment to Mortgages. Agent shall have
received in form and substance reasonably satisfactory to
Lenders the Amendment to Mortgages duly executed by all parties
thereto;
(h) Title Insurance. Agent shall have received fully
paid endorsements to the existing title insurance policies
advancing the effective date (or binding commitments to issue
such endorsements, marked to Agent's reasonable satisfaction to
evidence the form of such endorsements to be delivered with
respect to the Amendment to Mortgages), in standard ALTA form
with respect to Real Property located in the United States and
issued by a title insurance company satisfactory to Agent, each,
together with the title insurance policies, in an amount equal
to not less than the fair market value of the Real Property
subject to the Amendment to Mortgages, insuring such Amendment
to Mortgages to create a valid Lien on the Real Property with no
exceptions which Agent shall not have approved in writing and no
survey exceptions;
(i) Environmental Reports. Agent shall have received
all environmental studies and reports (including Phase I
Environmental Reports) prepared by independent environmental
engineering firms satisfactory to Agent (for purposes hereof,
Clayton Environmental shall be satisfactory) of all Real
Property and all other real property owned by Borrowers all of
which shall be satisfactory to Agent and all assets of each
Borrower shall be in compliance in all material respects with
all federal, state and local regulations to the satisfaction of
Agent;
(j) No Adverse Material Change. Since May 28, 1995,
there shall not have occurred (i) any material adverse change
in: the business, financial condition, prospects or results of
operations of Borrowers taken as a whole or the existence or
value of any Collateral; or (ii) any event, condition or state
of facts which could reasonably be expected materially and
adversely to affect the business, financial condition or results
of operations of Borrowers taken as a whole;
(k) Undrawn Availability. After giving effect to the
$36,000,000 loan to Triarc, Borrowers shall have aggregate
Undrawn Availability of at least $10,000,000;
(l) Amendment(s) to Factoring Agreement(s). Agent
shall have received a copy of the Amendment(s) to the Factoring
Agreement(s) executed by each Borrower, in form and substance
reasonably satisfactory to Agent;
(m) INTENTIONALLY OMITTED;
(n) Assignment of Notes. Agent shall have received,
for the ratable benefit of Lenders, an assignment of the
promissory notes representing each of the Original Triarc Loan
and the Additional Triarc Loan;
(o) Reaffirmations. Agent shall have received
reaffirmations from each Guarantor and pledgor of each Guaranty
and Stock Pledge Agreement, respectively, in form and substance
satisfactory to Agent;
(p) Searches. Agent shall have received updated UCC,
judgment and tax lien searches in form and substance
satisfactory to Agent;
(q) Legal Opinions. Agent shall have received the
executed legal opinion of Borrowers' or Guarantors' counsel with
respect to Borrowers and Guarantors in form and substance
satisfactory to Lenders which shall cover such matters incident
to the transactions contemplated by Amendment No. 6, the Amended
and Restated Notes, the Amended and Restated Mortgages, the
Reaffirmations of Guarantees, the Reaffirmations to Stock Pledge
Agreements and related agreements as Agent may reasonably
require and each Borrower hereby authorizes and directs such
counsel to deliver such opinions to Agent and Lenders;
(r) Financial Condition Certificates. Agent shall
have received executed Officers Certificates satisfactory in
form and substance to Lenders, certifying the solvency of
Borrowers on a Consolidated Basis after giving effect to the
transactions contemplated by Amendment No. 6 and as to each
Borrower's financial resources and its ability to meet its
respective obligations and liabilities as they become due; to
the effect that as of the Amendment No. 6 Effective Date and
after giving effect to the transactions contemplated by
Amendment No. 6:
a. the assets of Borrowers on a
Consolidated Basis, at a fair valuation, exceed the total
liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities) of Borrowers;
b. current projections which are based on
underlying assumptions which provide a reasonable basis for the
projections and which reflect each Borrower's judgment based on
present circumstances, the most likely set of conditions and
each Borrower's most likely course of action for the period
projected, demonstrate that each Borrower will have sufficient
cash flow to enable it to pay its debts as they mature; and
c. neither Borrower has an unreasonably
small capital base with which to engage in its anticipated
business.
For purposes of this subsection (i), the "fair valuation" of the
assets of each Borrower shall be determined on the basis of the
amount which may be realized within a reasonable time, either
through collection or sale of such assets at market value,
conceiving the latter as the amount which could be obtained for
the property in question within such period by a capable and
diligent businessman from an interested buyer who is willing to
purchase under ordinary selling conditions; and
(s) Other. All corporate and other proceedings, and
all documents, instruments and other legal matters in connection
with the transactions contemplated herein shall be satisfactory
in form and substance to Agent, Lenders and their counsel.
6. Representations and Warranties. Borrowers hereby
represent and warrant as follows:
(a) This Amendment No. 6 and the Loan Agreement, as
amended hereby, constitute legal, valid and binding
obligations of Borrowers and are enforceable against
Borrowers in accordance with their respective terms.
(b) No Event of Default or Default has occurred and
is continuing or would exist after giving effect to this
Amendment No. 6.
(c) Borrowers have no defense, counterclaim or offset
with respect to the Obligations.
7. Effect on the Loan Agreement.
(a) Upon the effectiveness of Section 2 hereof, each
reference in the Loan Agreement to "this Agreement,"
"hereunder," "hereof," "herein" or words of like import shall
mean and be a reference to the Loan Agreement as amended hereby.
(b) Except as specifically amended herein, the Loan
Agreement, and all other documents, instruments and agreements
executed and/or delivered in connection therewith, shall remain
in full force and effect, and are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment No. 6 shall not operate as a waiver of any right,
power or remedy of Lender, nor constitute a waiver of any
provision of the Loan Agreement, or any other documents,
instruments or agreements executed and/or delivered under or in
connection therewith.
8. Governing Law. This Amendment No. 6 shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors and assigns and shall be governed by and
construed in accordance with the laws of the State of New York.
9. Headings. Section headings in this Amendment No. 6
are included herein for convenience of reference only and shall
not constitute a part of this Amendment No. 6 for any other
purpose.
10. Counterparts. This Amendment No. 6 may be executed by
the parties hereto in one or more counterparts, each of which
shall be deemed an original but all of which taken together
shall be deemed to constitute one and the same agreement. Any
signature delivered by a party by facsimile transmission shall
be deemed to be an original signature hereto.
IN WITNESS WHEREOF, this Amendment No. 6 has been duly
executed as of the day and year first written above.
GRANITEVILLE COMPANY
By: JOHN L. BARNES
------------------------
John L. Barnes
Its: Executive Vice President
C.H. PATRICK & CO., INC.
By: JOHN L. BARNES
------------------------
John L. Barnes
Its: Vice President
THE CIT GROUP/COMMERCIAL SERVICES,
INC., as Lender and as Agent
By: GORDON JONES
------------------------
Gordon Jones
Its: Vice President
BOT FINANCIAL CORP.
By: WILLIAM YORK, JR.
------------------------
William York, Jr.
Its: Senior Vice President
THE BANK OF NEW YORK
COMMERCIAL CORPORATION
By: DANIEL MURRAY
------------------------
Daniel Murray
Its: Vice President
FIRST UNION NATIONAL BANK OF
GEORGIA
By: WINSTON WILKINSON
------------------------
Winston Wilkinson
Its: Vice President
NATIONAL CANADA FINANCE CORP.
By: CHARLIE COLLIE
------------------------
Charlie Collie
Its: Vice President & Office Manager
By: DANIEL SHAW
------------------------
Daniel Shaw
Its: Assistant Vice President
NATWEST BANK, N.A.
By: DAVID MARIONE
------------------------
David Marione
Its: Vice President
SANWA BUSINESS CREDIT CORP.
By: PETER SKAVLA
------------------------
Peter Skavla
Its: Vice President
<PAGE>
EXHIBIT 99.1
CONTACT: John L. Cohlan Edward Falk
Triarc Companies, Inc. Joseph Victori Wines, Inc.
(212) 230-3095 (914) 637-0400
FOR IMMEDIATE
RELEASE
TRIARC COMPLETES ACQUISITION OF MISTIC BEVERAGES
NEW YORK, NEW YORK -- August 9, 1995 -- Triarc Companies, Inc.
(NYSE:TRY) announced today that it has completed the acquisition
of Mistic Beverages for an aggregate purchase price of
approximately $95 million. Mistic, a leader in the growing New
Age beverage segment, markets fruit drinks, ready-to-drink
brewed iced teas and naturally flavored sparkling waters under
the Mistic and Royal Mistic trademarks. Mistic had 1994 net
sales of approximately $130 million and earnings before
interest, taxes, depreciation and amortization (EBITDA) of
approximately $16 million. Triarc expects the acquisition to
enhance its earnings per share for fiscal 1995.
As previously announced, Michael F. Weinstein, former
President and Chief Operating Officer of A&W Brands, Inc., will
serve as Chief Executive Officer of Mistic, and Ernest Cavallo,
the current Chief Financial Officer of Mistic and former
Executive Vice President and Chief Financial Officer of A&W,
will serve as President and Chief Financial Officer of Mistic.
Mr. Weinstein has over 20 years experience in senior management
positions in the beverage industry, and Mr. Cavallo has over 30
years of experience in senior financial management positions,
including 10 years at A&W. Joe Umbach, Mistic's founder and
former Chairman and Chief Executive Officer, will continue to
provide consulting services to Mistic in the area of new product
development. Mistic will be part of Triarc's Beverage Group,
which is chaired by John C. Carson, President and Chief
Executive Officer of Triarc's Royal Crown Company, Inc.
subsidiary.
Financing for the Mistic acquisition was provided by The
Chase Manhattan Bank and CIT. The CIT financing was pursuant
to the credit facility provided to Graniteville Company and C.H.
Patrick & Co. Inc., which was increased by approximately $41
million. Proceeds from the refinancing are being used to
finance the Mistic acquisition and for general corporate
purposes. As previously announced, Triarc continues to pursue
strategic alternatives to maximize the value of its textile and
specialty chemical and liquefied petroleum gas subsidiaries.
Through its four core businesses, restaurants (Arby's,
Inc.), beverages (Royal Crown Company, Inc. and Mistic),
textiles (Graniteville Company) and liquefied petroleum gas
(National Propane Corporation), Triarc Companies, Inc.,
currently has annual revenues of more than $1 billion.
# # #
<PAGE>
Exhibit 2.1
ASSET PURCHASE AGREEMENT
by and among
MISTIC BRANDS, INC.
and
JOSEPH VICTORI WINES, INC.
BEST FLAVORS, INC.
NATURE'S OWN BEVERAGE COMPANY
and
JOSEPH UMBACH
_________________________
As of August 9, 1995
_________________________
<PAGE>
TABLE OF CONTENTS
Page
1. Purchase and Sale of Acquired Assets.. . . . . . . .
1.1 Purchase and Sale of Acquired Assets. . . . .
1.2 Excluded Assets . . . . . . . . . . . . . . .
2. Assumption of Liabilities. . . . . . . . . . . . . .
2.1 Assumption of Liabilities by the Buyer. . . .
2.2 Excluded Liabilities. . . . . . . . . . . . .
3. Consideration for the Purchase of the Assets . . . .
3.1 Purchase Price. . . . . . . . . . . . . . . .
3.2 Post-Closing Adjustment . . . . . . . . . . .
3.3 Delivery of the Note. . . . . . . . . . . . .
4. Closing. . . . . . . . . . . . . . . . . . . . . . .
5. Representations and Warranties of the Sellers. . . .
5.1 Due Incorporation and Authority . . . . . . .
5.2 Authority to Execute and Perform this
Agreement, the Consulting Agreement and the
Product and Royalty Agreement . . . . . . . .
5.3 Subsidiaries and Other Affiliates; Ownership. .
5.4 Qualification . . . . . . . . . . . . . . . . .
5.5 Charter Documents and Corporate Records . . .
5.6 Financial Statements. . . . . . . . . . . . .
5.7 No Material Adverse Change. . . . . . . . . .
5.8 Tax Matters . . . . . . . . . . . . . . . . . .
5.9 Compliance with Laws. . . . . . . . . . . . . .
5.10 No Breach. . . . . . . . . . . . . . . . . . .
5.11 Claims and Proceedings . . . . . . . . . . . .
5.12 Contracts. . . . . . . . . . . . . . . . . . .
5.13 Real Estate . . . . . . . . . . . . . . . .
5.14 Inventory and Supplies . . . . . . . . . . . .
5.15 Receivables. . . . . . . . . . . . . . . . . .
5.16 Tangible Property. . . . . . . . . . . . . . .
5.17 Intangible Property. . . . . . . . . . . . . .
5.18 Title to Properties. . . . . . . . . . . . . .
5.19 Accounts Payable . . . . . . . . . . . . . . .
5.20 No Undisclosed Non-alcoholic Beverage Non-
ordinary Course Business Liabilities. . . . .
5.21 Suppliers, Customers, Distributors and
Co-Packers. . . . . . . . . . . . . . . . . .
5.22 Employee Benefit Plans . . . . . . . . . . . .
5.23 Employee Relations . . . . . . . . . . . . . .
5.24 Environmental Liabilities. . . . . . . . . . .
5.25 Insurance. . . . . . . . . . . . . . . . . . .
5.26 Products. . . . . . . . . . . . . . . . . . .
5.27 Officers, Directors and Key Employees. . . . .
5.28 Operations of the Companies. . . . . . . . . .
5.29 Related Party Transactions . . . . . . . . . .
5.30 Banks, Brokers and Proxies . . . . . . . . . .
5.31 Premerger Notification . . . . . . . . . . . .
5.32 Full Disclosure. . . . . . . . . . . . . . . .
5.33 Entire Business. . . . . . . . . . . . . . . .
5.34 No Projection Representation . . . . . . . . .
6. Representations and Warranties of Mistic . . . . . .
6.1 Due Incorporation and Authority of Mistic . . .
6.2 Authority to Execute and Perform this Agree-
ment, the Consulting Agreement and the
Product and Royalty Agreement . . . . . . . .
6.3 Premerger Notification. . . . . . . . . . . . .
7. Covenants and Agreements . . . . . . . . . . . . . .
7.1 Conduct of Business . . . . . . . . . . . . . .
7.2 Corporate Examinations and Investigations . . .
7.3 Publicity . . . . . . . . . . . . . . . . . . .
7.4 Expenses. . . . . . . . . . . . . . . . . . . .
7.5 Indemnification of Brokerage. . . . . . . . . .
7.6 Related Parties . . . . . . . . . . . . . . . .
7.7 Employee Matters. . . . . . . . . . . . . . .
7.8 Trademarks, Service Marks, Corporate Names
and Trade Names . . . . . . . . . . . . . . .
7.9 Letters of Credit . . . . . . . . . . . . . .
7.10 Arkansas Litigation Cost . . . . . . . . . . .
7.11 Taxes. . . . . . . . . . . . . . . . . . . . .
7.12 Claims; Qualification. . . . . . . . . . . . .
7.13 Bulk Sales Law . . . . . . . . . . . . . . . .
7.15 Further Assurances . . . . . . . . . . . . . .
8. Conditions Precedent to the Obligation of the
Buyer to Close . . . . . . . . . . . . . . . . . . .
8.1 Representations and Covenants . . . . . . . . .
8.2 Necessary Consents. . . . . . . . . . . . . . .
8.3 Opinions of Counsel to the Sellers. . . . . . .
8.4 No Claims . . . . . . . . . . . . . . . . . . .
8.5 HSR Act Filing. . . . . . . . . . . . . . . . .
8.6 Consulting Agreement. . . . . . . . . . . . . .
8.7 Product and Royalty Agreement . . . . . . . . .
8.8 Financing . . . . . . . . . . . . . . . . . .
8.9 Employees. . . . . . . . . . . . . . . . . .
8.10 Bill of Sale . . . . . . . . . . . . . . . . .
8.11 Assignment of Intellectual Property. . . . . .
8.12 Assignment of Contracts. . . . . . . . . . . .
8.13 Lease Amendment. . . . . . . . . . . . . . . .
8.14 Release of Liens . . . . . . . . . . . . . . .
8.15 Release of Claims by Affiliates. . . . . . . .
8.16 Secretary Certificate. . . . . . . . . . . . .
8.17 Certified Charter Documents. . . . . . . . . .
9. Conditions Precedent to the Obligation of the
Sellers to Close . . . . . . . . . . . . . . . . . .
9.1 Representations and Covenants . . . . . . . . .
9.2 Opinion of Counsel to the Buyer . . . . . . . .
9.3 No Claims . . . . . . . . . . . . . . . . . . .
9.4 HSR Act Filing. . . . . . . . . . . . . . . . .
9.5 Product and Royalty Agreement . . . . . . . .
9.6 Instrument of Assumption. . . . . . . . . . .
9.7 Payment of Purchase Price . . . . . . . . . . .
10. Non-Competition by the Sellers . . . . . . . . . . .
10.1 Covenants Against Competition . . . . .
10.1.1 Non-Compete . . . . . . . . . . . . .
10.1.2 Confidential Information; Personal
Relationships. . . . . . . . . . . . . . .
10.1.3 Property of the Business. . . . . . .
10.1.4 Employees of the Business . . . . . .
10.2 Rights and Remedies Upon Breach. . . . . . . .
10.2.1 Specific Performance. . . . . . . . .
10.2.2 Accounting. . . . . . . . . . . . . .
10.2.3 Indemnification . . . . . . . . . . .
10.3 Severability of Covenants. . . . . . . . . . .
10.4 Blue-Pencilling. . . . . . . . . . . . . . . .
10.5 Enforceability in Jurisdictions. . . . . . . .
10.6 Non-Compete Payments . . . . . . . . . . . .
11. Survival . . . . . . . . . . . . . . . . . . . . . .
11.1 Survival of Representations and Warranties
of the Sellers After Closing . . . . . . . . . . . .
11.2 Survival of Representations and
Warranties of Mistic After Closing. . . . . .
12. General Indemnification. . . . . . . . . . . . . . .
12.1 Obligation of the Sellers to
Indemnify . . . . . . . . . . . . . . . . . .
12.2 Obligation of the Buyer to Indemnify.. . . . .
12.3 Notice and Opportunity to Defend . . . . . . .
12.3.1 Notice of Asserted Liability. . . . .
12.3.2 Opportunity to Defend . . . . . . . .
12.3.3 Disputes with Customers, Distri-
butors, Co-packers, Sales Agents or
Suppliers. . . . . . . . . . . . . . . . .
12.4 Limitations on Indemnification . . . . . . . .
12.5 Set-off Rights . . . . . . . . . . . . . . . .
13. [Intentionally Omitted.] . . . . . . . . . . . . . .
14. Miscellaneous. . . . . . . . . . . . . . . . . . . .
14.1 Certain Definitions . . . . . . . . . . . . . . . .
14.2 Consent to Jurisdiction; Service of Process. .
14.3 Notices. . . . . . . . . . . . . . . . . . . .
14.4 Entire Agreement . . . . . . . . . . . . . . .
14.5 Waivers and Amendments; Non-Contractual
Remedies; Preservation of Remedies. . . . . .
14.6 Governing Law. . . . . . . . . . . . . . . . .
14.7 Binding Effect; Assignment . . . . . . . . . .
14.8 Variations in Pronouns . . . . . . . . . . . .
14.9 Counterparts . . . . . . . . . . . . . . . . .
14.10 Exhibits and Schedules. . . . . . . . . . . .
14.11 Headings. . . . . . . . . . . . . . . . . . .
14.12 Severability of Provisions. . . . . . . . . .
14.13 Cooperation . . . . . . . . . . . . . . . . .
14.14 No Third Party Beneficiaries. . . . . . . . .
Exhibits
A: Form of Note
B: Severance Policy
C: Opinions of Counsel to the Sellers
D: Form of Consulting Agreement
E: Form of Product and Royalty Agreement
F: Opinion of Counsel to the Buyer
SCHEDULES
1.1 Tangible Property
5.4 Qualification
5.6 Financial Statements
5.8 Tax Matters
5.9 Permits
5.10 Required Consents
5.11 Claims and Proceedings
5.12 Contracts
5.13 Real Estate
5.14 Inventory and Supplies
5.15 Receivables
5.17 Intangible Property
5.18 Liens
5.19 Accounts Payable
5.21 Suppliers, Customers, Distributors and Co-Packers
5.22 Employee Benefit Plans
5.25 Insurance
5.26 Products
5.27 Officers, Directors and Key Employees
5.28 Operations of the Companies
5.29 Related Party Transactions
5.30 Bank Accounts
7.7 Transferred Employees
7.11 Method of Allocating Expenses
8.2 Necessary Consents
8.14 Release of Liens
14.13 Records
<PAGE>
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT made as of August 9,
1995, by and among MISTIC BRANDS, INC., a Delaware
corporation ("Mistic"), on the one hand, and JOSEPH VICTORI
WINES, INC., a New York corporation ("JVWNY"), BEST FLAVORS,
INC., a Nevada corporation ("Best Flavors"), NATURE'S OWN
BEVERAGE COMPANY, a Delaware corporation ("Nature's Own")
(JVWNY, Best Flavors and Nature's Own are referred to
collectively as the "Companies") and Joseph Umbach ("Umbach"
and, together with the Companies, collectively, the
"Sellers"), on the other hand.
The Sellers are engaged, among other things, in
the research, development, formulation, production,
marketing and sale of a wide variety of non-alcoholic
beverages (the "Business"). The term "Business" shall not
include the Sellers' alcoholic beverage business. Upon the
terms and conditions set forth herein, the Sellers desire to
sell and Mistic, or at Mistic's option, one or more
Affiliates (as defined in Section 14.1) or designees of
Mistic (Mistic or such Affiliates or designees, the
"Buyer"), desire to purchase all of the tangible and
intangible assets and operations of the Business, as the
same shall exist at the Closing (as defined in Section 1.1).
In consideration of the mutual promises, covenants
and agreements contained herein and for other good and
valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. Purchase and Sale of Acquired Assets.
1.1 Purchase and Sale of Acquired Assets.
Upon the terms and subject to the conditions set forth in
this Agreement, at the closing (the "Closing") of the trans-
actions contemplated hereby (the "Contemplated Trans-
actions"), the Sellers shall sell, transfer, convey, assign
and deliver to the Buyer, and the Buyer shall purchase and
acquire from the Sellers, free and clear of any and all
Liens (as defined in Section 14.1), all of the assets and
operations of the Sellers, of every type and description,
real and personal, tangible and intangible, known and
unknown, wherever located and whether or not reflected on
the books and records of the Sellers, as the same shall
exist on the date of the Closing (the "Closing Date"), other
than the Excluded Assets as set forth in Section 1.2 (col-
lectively, the "Acquired Assets"). Without limiting the
generality of the foregoing, the Acquired Assets shall
include, but shall not be limited to, all of the Sellers'
right, title and interest in and to the following items:
(a) Cash and Cash Equivalents and Bank
Accounts. All cash and cash equivalents, on hand, in the
Sellers' accounts or in transit relating to the Business, as
well as the bank accounts and other depositary accounts
relating to the Business;
(b) Accounts Receivable. All accounts
and notes receivable of the Sellers relating to the Busi-
ness, other than the accounts receivable from Nubian Shine,
Inc. ("Nubian") in the amount of $89,027.00 and S&D
Distributing ("S&D") in the amount of approximately $18,000;
(c) Inventory and Supplies. All
(i) inventory of finished goods, raw materials, work in
process, packaging items, promotional materials and similar
items, wherever located, (ii) stock in trade, merchandise,
goods, supplies and other products, (iii) office supplies
and similar materials, and (iv) all samples of the Sellers,
in each case relating to the Business;
(d) Tangible Property. All facilities,
machinery, accessories, computers and peripherals devices,
equipment, plant, furniture, furnishings, leasehold improve-
ments, fixtures, fixed assets, appliances, automobiles,
airplanes, boats and all other vehicles, structures, any
related capitalized items and other tangible property of the
Sellers, in each case relating to the Business and set forth
on Schedule 1.1 hereto (collectively, the "Tangible Prop-
erty");
(e) Leases and Permits. The Leases (as
defined in Section 5.13) and all other leasehold interests
and Permits (as defined in Section 5.9) relating to the
Business;
(f) Contracts and Agreements, etc. All
Contracts (as defined in Section 5.10) relating to the
Business, including, without limitation, the Contracts
listed on Schedule 5.12 hereof;
(g) Security Deposits, Bonds and Claims
Against Third Parties. All of the Sellers' security
deposits with third parties and all security bonds and all
claims against third parties, in each case relating to the
Business, including, without limitation, rights under any
manufacturer's or vendor's warranties and insurance claims
and proceeds;
(h) Prepaid Expenses, etc. All of the
Sellers' prepaid expenses and rentals relating to the Busi-
ness;
(i) Intellectual Property. All
patents, trademarks, copyrights, service marks, trade names,
trade secrets, know-how, processes, formulae, recipes,
ideas, technical production requirements, technologies,
blueprints, designs, and proprietary information utilized in
or incident to the Business, all applications for or
registrations of any of the foregoing, and all permits,
grants, and licenses or other rights running to or from the
Sellers relating to any of the foregoing (collectively, the
"Intellectual Property");
(j) Goodwill. All of the Sellers'
goodwill and going concern value relating to the Business
and all of the Acquired Assets; and
(k) Other Assets. All of the Sellers'
other intangible and tangible assets relating to the Busi-
ness, including, without limitation: all computer software
and electronic data, all supplier information, all customer
lists and customer correspondence, all sales records, all
research, statistical, production, marketing and promotional
materials, records, files, reports and other documents and
data, all distribution records, all business post office
boxes and business telephone listings, all research results
and other know-how, and all other materials, records, files
and data, in whatever form contained.
1.2 Excluded Assets. Notwithstanding any
other provision of this Agreement, the Sellers shall not
sell, assign or transfer to the Buyer, and the Buyer shall
not purchase from the Sellers, any of the following assets
(collectively, the "Excluded Assets"):
(a) This Agreement. All of the rights
of the Sellers under this Agreement and any documents
delivered or received in connection herewith;
(b) Corporate Records. (i) All corpo-
rate minute books, stock ledgers and other corporate books
and records of the Sellers relating solely to corporate
level activities and (ii) all books and records of the
Sellers not relating to the Business, the Acquired Assets or
the Assumed Liabilities; and
(c) Other Excluded Assets. All of the
rights and assets of the Sellers relating solely to the
alcoholic beverage business of the Sellers.
2. Assumption of Liabilities.
2.1 Assumption of Liabilities by the Buyer.
At the Closing, the Buyer shall assume and thereafter pay,
perform, satisfy and discharge the following obligations and
liabilities of the Companies existing at the Closing and
relating to the Business, other than Excluded Liabilities as
set forth in Section 2.2 (collectively, the "Assumed
Liabilities"):
(a) Liabilities Relating to the Busi-
ness. All of the liabilities and obligations of the Com-
panies relating to the Business existing at the Closing as a
result of the conduct of the Business prior thereto;
(b) Credit Agreement. All liabilities
and obligations of the Companies up to a maximum amount of
$7,000,000 for outstanding borrowings (the "Bank Debt")
under the Companies' General Loan and Security Agreement,
dated as of May 18, 1994, as amended by a letter agreement
dated April 28, 1995 (the "Credit Agreement") with The Bank
of New York (the "Bank"), exclusive of the Arkansas
Litigation Letter of Credit (as defined in Section 7.9);
(c) Arkansas Litigation Costs. 50% of
all liabilities and obligations (up to a maximum amount of
$2,250,000) (the "Buyer Arkansas Payment") relating to any
judgment or settlement amount, legal expenses and the cost
of the Arkansas Litigation Letter of Credit, including,
without limitation, renewal fees and/or the cost of
obtaining a new letter of credit to replace the Arkansas
Litigation Letter of Credit (collectively, the "Arkansas
Litigation Cost"), of the litigation entitled Raleigh Spring
Water d/b/a Clear Mountain Spring Water v. Joseph Victori
Wines, Inc. (the "Arkansas Litigation");
(d) Tax Liabilities. 50% of all
liabilities and obligations relating to (i) the Transaction
Sales Taxes (as defined in Section 14.1) up to a maximum
amount of $50,000 (the "Buyer Transaction Sales Tax
Payment") and (ii) any sales Taxes payable in connection
with the New York sales Tax audit set forth on Schedule 5.8
up to a maximum amount of $50,000 (the "Buyer Sales Tax
Audit Payment"); and
(e) Distributor and Co-packer Expenses.
Any and all liabilities or obligations for Losses (as
defined in Section 12.1) based upon, arising out of or
otherwise in respect of the Buyer's acts or omissions or
representations with respect to any distributor or co-packer
whose agreement is terminated or not renewed (unless the
Buyer has offered to renew the existing agreement on at
least as favorable economic terms as those in effect
immediately prior to expiration) after the Closing,
including, without limitation, any claim by a distributor or
co-packer terminated by the Buyer or not renewed (unless the
Buyer has offered to renew the existing agreement on at
least as favorable economic terms as those in effect
immediately prior to expiration) after the Closing that
alleges a violation of law or other liability from an act or
omission of the Companies with respect to the Business that
occurred prior to the Closing.
2.2 Excluded Liabilities. Anything in this
Agreement to the contrary notwithstanding, the Buyer shall
not, and shall not be deemed to, assume, perform, satisfy or
discharge, or otherwise be responsible for, and the Sellers
shall pay, perform, assume and discharge or otherwise be
responsible for, any and all of the following liabilities or
obligations relating to the Business (collectively, the
"Excluded Liabilities"):
(a) Costs. Any and all liabilities and
obligations in respect of costs or expenses incurred by any
of the Companies in connection with the Contemplated
Transactions;
(b) Affiliate Liabilities. Any and all
liabilities and obligations of any of the Companies to any
other Company, Umbach or any Affiliate of the Sellers
("Affiliate Liabilities");
(c) Tax Liabilities. Any and all
liabilities and obligations of the Sellers (including as
transferee or successor, by contract or otherwise) for any
Taxes, whether accrued before or after the Closing,
including, without limitation, (i) the Transaction Sales
Taxes (other than the Buyer Transaction Sales Tax Payment),
(ii) any Taxes payable in connection with any Tax audits
(other than the Buyer Sales Tax Audit Payment) and
(iii) Taxes imposed with respect to the Business or the
Acquired Assets for all taxable periods (or portions
thereof) ending on or prior to the Closing;
(d) Distributor, Co-packer and Sales
Brokers Expenses. Any and all liabilities or obligations
(including, without limitation, the Arkansas Litigation
Costs, other than the Buyer Arkansas Payment) for Losses
based upon, arising out of or otherwise in respect of the
Companies' acts or omissions or representations with respect
to any of the Companies' current or former distributors, co-
packers or sales brokers, including, without limitation,
distributors, co-packers or sales brokers of the Companies
whose agreements were terminated, not renewed or to whose
transfer the Companies objected or otherwise prohibited or
interfered with, in each case prior to the Closing,
including, without limitation, Nubian and S&D;
(e) Liability Relating to Non-
compliance with Laws. Any and all liabilities or
obligations for Losses based upon, arising out of or
otherwise in respect of the Sellers' acts or omissions or
representations with respect to any distributors or co-
packers, including, without limitation, any claim by a
distributor or co-packer alleging a violation of law,
including, without limitation, any claim that alleges a
failure of the Sellers to comply with franchise
relationship, registration and disclosure, business
opportunity laws and special industry statutes other than if
such Losses are based upon, arise out of or otherwise are in
respect of the Buyer's acts or omissions or representations
with respect to any distributors or co-packers whose
agreements are terminated or not renewed (unless the Buyer
has offered to renew the existing agreement on at least as
favorable economic terms as those in effect immediately
prior to expiration) after the Closing.
(f) Fees and Expenses. Any and all
liabilities or obligations of the Companies for fees and
expenses of lawyers, accountants, brokers and investment
bankers retained by the Sellers and any other costs or
expenses incurred by the Companies in connection with any
previously proposed Business Combinations (as defined in
Section 14.1) or public offerings involving the Companies or
any of their predecessors or Affiliates;
(g) Employee Obligations. Any and all
liabilities and obligations to or in respect of current or
former employees of the Companies, other than (i) the
liabilities and obligations which are assumed by the Buyer
pursuant to Section 7.7 with respect to Transferred
Employees (as defined in Section 7.7) and (ii) obligations
for severance up to a maximum amount of $8,250 per month
through June 30, 1996 payable to Michael Robbins, the
Companies' former Western division sales manager;
(h) Credit Agreement. Any and all
liabilities and obligations of the Companies in respect of
the Bank Debt in excess $7,000,000, excluding the Arkansas
Litigation Letter of Credit; and
(i) Other Excluded Liabilities. Any
and all liabilities and obligations that are related to the
Seller's alcoholic beverage business.
3. Consideration for the Purchase of the Assets.
3.1 Purchase Price. The purchase price for
the Acquired Assets shall consist of (i) $93,000,000,
payable at the Closing by wire transfer of immediately
available funds to an account or accounts specified in
writing by the Sellers two business days prior to the
Closing Date (subject to a post-closing adjustment as set
forth in Section 3.2 hereof), (ii) the Note (as defined in
Section 3.4) and (iii) the assumption by the Buyer of the
Assumed Liabilities (collectively, the "Purchase Price," and
as adjusted pursuant to Section 3.2, the "Adjusted Purchase
Price").
3.2 Post-Closing Adjustment.
(a) Within twenty (20) days after the
Closing Date, the Buyer shall prepare and deliver to the
Sellers a combined balance sheet (the "Wine Division Balance
Sheet") of the Companies relating to the Companies'
alcoholic beverage business as of July 31, 1995, a combined
income statement (the "Wine Division Income Statement") of
the Companies relating to the Companies' alcoholic beverage
business for the period from June 1, 1995 through July 31,
1995 and a statement (the "Adjustment Statement") setting
forth the Wine Division Net Equity (as defined in
Section 14.1) and Wine Division Net Profit or Loss (as
defined in Section 14.1), together with an Officer's
Certificate stating that the preparation of the Adjustment
Statement has been made in accordance with generally
accepted accounting principles.
(b) Within thirty (30) days after the
Sellers receive the Adjustment Statement, the Sellers shall
notify the Buyer in writing of any proposed modifications
the Sellers believe are required in order for the Adjustment
Statement fairly to reflect the Wine Division Net Equity and
the Wine Division Net Profit or Net Loss. If an agreement
cannot be reached as to any of such proposed modifications
within thirty (30) days after the Buyer receives written
notice of such proposed modifications, any party may notify
the other that such party requires that the item or items
being disputed be determined in accordance with the terms of
this Agreement by a nationally recognized firm of
independent public accountants mutually agreed upon by the
Buyer and the Sellers as promptly as practical. Upon
delivery to the Buyer and the Sellers of a statement in
writing setting forth the conclusions of the accounting
firm's opinion of the disputed item or items and the effect
of such conclusions on the Wine Division Net Equity and the
Wine Division Net Profit or Net Loss, such determinations
shall be final and binding upon the Buyer and the Sellers
with no further right of appeal. One-half of the fees of
such firm of accountants for making such determinations
shall be paid by each of the Buyer, on the one hand, and the
Sellers, on the other hand.
(c) In the absence of any notice of
proposed modifications from the Sellers within thirty (30)
days of the Sellers' receipt of the Adjustment Statement,
the Adjustment Statement shall be deemed accepted by the
Sellers and shall be considered final. Proposed
modifications shall be deemed accepted by the Buyer to the
extent that the Buyer does not notify the Sellers of a
disagreement within thirty (30) days after its receipt of
any notice of proposed modifications from the Sellers to the
Adjustment Statement.
(d) If and to the extent that the Wine
Division Net Equity is less than $1,408,000 plus the Wine
Division Net Profit, if any, and minus the Wine Division Net
Loss, if any, the Purchase Price shall be increased by such
amount and the Buyer shall pay in the aggregate to the
Sellers such amount within five (5) business days after the
Adjustment Amount is finally determined pursuant to this
Section 3.2 in cash by wire transfer of immediately
available funds. If and to the extent that the Wine
Division Net Equity is greater than $1,408,000 plus the Wine
Division Net Profit, if any, and minus the Wine Division Net
Loss, if any, the Purchase Price shall be reduced by such
amount and the Sellers shall jointly and severally pay to
the Buyer such amount within five (5) business days after
the Adjustment Amount is finally determined pursuant to this
Section 3.2 in cash by wire transfer of immediately
available funds.
3.3 Delivery of the Note. At the Closing,
the Buyer shall deliver to Umbach, on behalf of the Sellers,
a promissory note (the "Note"), dated the Closing Date, in
the form of Exhibit A, which Note shall provide for the
payment by the Buyer to Umbach, on behalf of the Sellers, of
eight quarterly installments of $125,000, payable beginning
three months after the Closing Date and every three months
thereafter until the eight installments have been paid and
which Note shall bear no interest.
4. Closing. The Closing shall take place at the
offices of LeBoeuf, Lamb, Greene & MacRae, 125 West 55th
Street, New York, New York 10022 on the date hereof.
5. Representations and Warranties of the
Sellers. The Sellers, jointly and severally, represent and
warrant to Mistic and the Buyer as follows:
5.1 Due Incorporation and Authority. Each
of the Companies is a corporation duly organized, validly
existing and in good standing under the laws of its juris-
diction of organization and has all requisite corporate
power and authority to own, lease and operate its properties
and to carry on its business as now being and heretofore
conducted.
5.2 Authority to Execute and Perform this
Agreement, the Consulting Agreement and the Product and
Royalty Agreement.
(a) Each of the Sellers has the full
legal right and power and all authority and approvals
required to execute and deliver this Agreement and to
perform fully such Seller's obligations hereunder,
including, without limitation, the power and authority to
convey the Acquired Assets, free and clear of any Liens
(other than Liens relating to the Bank Debt, which Liens
shall be released at the Closing concurrently with the
repayment of the Bank Debt). This Agreement has been duly
executed and delivered by each of the Sellers and (assuming
the due authorization, execution and delivery hereof by
Mistic) is a valid and binding obligation of each Seller
enforceable against such Seller in accordance with its
terms. The execution and delivery by each of the Sellers of
this Agreement, the consummation of the Contemplated
Transactions and the performance by each of the Sellers of
this Agreement in accordance with its terms will not
(i) conflict with or result in any breach or violation of
any of the terms and conditions of, or constitute (or with
notice or lapse of time or both constitute) a default under
the Articles of Incorporation or By-Laws (or similar
organizational documents) of any of the Companies or any
Laws or Orders (as each term is defined in Section 5.9) of
any Governmental Body (as defined in Section 5.9) applicable
to any of the Sellers, the Business or the Acquired Assets;
or (ii) result in the creation of any Lien on the Business
or any of the Acquired Assets.
(b) Umbach has the full legal right and
power and all authority and approvals required to execute
and deliver the Consulting Agreement (as defined in
Section 8.6) and the Product and Royalty Agreement (as
defined in Section 8.7) and to perform fully his obligations
thereunder. Each of the Consulting Agreement and the
Product and Royalty Agreement when executed and delivered by
Umbach at the Closing (and assuming the due authorization,
execution and delivery thereof by the Buyer) will be a valid
and binding obligation of Umbach enforceable against Umbach
in accordance with their respective terms. The execution
and delivery by Umbach of the Consulting Agreement and the
Product and Royalty Agreement and the performance by Umbach
of the Consulting Agreement and the Product and Royalty
Agreement in accordance with their respective terms will not
(i) conflict with or the result in any breach or violation
of any of the terms or conditions of, or constitute (or with
notice or lapse of time or both constitute) a default under
any Laws or Orders of any Governmental Body applicable to
any of the Sellers, the Business or the Acquired Assets; or
(ii) result in the creation of any Lien on the Business or
any of the Acquired Assets.
5.3 Subsidiaries and Other Affiliates;
Ownership. The Companies do not directly or indirectly own
any interest in any Person and Umbach does not directly or
indirectly own or have the power to vote shares of any
capital stock (other than the capital stock of the
Companies) or other ownership interests having ordinary
voting power to elect a majority of the directors of such
corporation or other Persons performing similar functions
for such entity, as the case may be. Mistic Beverage, Inc.,
a Delaware corporation (a former subsidiary of Umbach) was
merged into JVWNY on April 28, 1995; Best Flavors purchased
substantially all of the assets of Joseph Victori Wines,
Inc., a California corporation, on October 29, 1994; and LVJ
Sales Company, a Connecticut general partnership, ceased
operations in 1993 and its assets were distributed to its
partners. All of the business and operations of the Busi-
ness is now conducted solely by the Companies. All of the
issued and outstanding shares of common stock of the
Companies are owned by Umbach. Besides such common stock,
no other class of capital stock or other ownership interests
of any of the Companies is authorized or outstanding.
5.4 Qualification. Except as set forth on
Schedule 5.4, each of the Companies is duly qualified or
otherwise authorized as a foreign corporation to transact
business and is in good standing in each jurisdiction set
forth on Schedule 5.4, which are the only jurisdictions in
which such qualification or authorization is required by law
and in which the failure so to qualify or be authorized
could have a material adverse effect on the business,
condition (financial or otherwise), results of operations,
assets, liabilities or properties of the Business, taken as
a whole (collectively, the "Condition of the Business"). No
other jurisdiction has claimed, in writing or otherwise,
that any of the Companies are required to qualify or
otherwise be authorized as a foreign corporation therein
and, except as set forth on Schedule 5.4, none of the
Companies files franchise, income or other tax returns in
any other jurisdiction based upon the ownership or use of
property therein or the derivation of income therefrom.
None of the Companies owns or leases property in any
jurisdiction other than its respective jurisdiction of
organization and the jurisdictions set forth on Sched-
ule 5.4.
5.5 Charter Documents and Corporate Records.
The Sellers have heretofore delivered to the Buyer true and
complete copies of the Articles of Incorporation and By-
laws, or comparable instruments, of each of the Companies as
in effect on the date hereof. The minute books of each of
the Companies have been made available to the Buyer for its
inspection and they do not contain any material omissions or
misstatements. The stock books of each of the Companies
have been made available to the Buyer for its inspection and
they are true and complete.
5.6 Financial Statements. The combined
balance sheets of the Companies relating to the Business as
of December 31, 1993 and 1994 and the related combined
statements of income, stockholders' equity and partners'
capital, and cash flows for the years then ended, including
the footnotes thereto, certified by Grant Thorton LLP, the
Companies' independent certified public accountants ("GT"),
which are attached hereto on Schedule 5.6, fairly present
the combined financial position of the Companies relating to
the Business as at such dates and the combined results of
operations and combined cash flows of the Companies relating
to the Business for such respective periods, in each case in
accordance with generally accepted accounting principles
consistently applied ("GAAP") for the periods covered
thereby. (The foregoing combined financial statements of
the Companies relating to the Business as of December 31,
1994 and for the year then ended are sometimes herein called
the "Audited Financials.") The unaudited combined balance
sheets of the Companies relating to the Business, as of June
30, 1995, and the related combined statements of income,
stockholders' equity and partners' capital, and cash flows
for the period then ended, which are attached hereto on
Schedule 5.6, fairly present the combined financial position
of the Companies relating to the Business as at June 30,
1995 and for the six months then ended, in each case in
accordance with GAAP applied on a basis consistent with that
of the Audited Financials (subject to there being no
requirement of footnotes and to the normal year-end
adjustments described in Schedule 5.6) and with all interim
financial statements of the Companies heretofore delivered
to the Buyer on behalf of the Sellers. (The foregoing
unaudited combined financial statements of the Companies
relating to the Business, as of June 30, 1995 and for the
six months then ended are sometimes herein called the
"Interim Financials," the combined balance sheet included in
the Audited Financials is sometimes herein called the
"Balance Sheet," the combined balance sheet included in the
Interim Financials is sometimes herein called the "Interim
Balance Sheet" and December 31, 1994 is herein called the
"Balance Sheet Date.")
5.7 No Material Adverse Change. Since the
Balance Sheet Date, there has been no material adverse
change in the Condition of the Business, and none of the
Sellers Knows of any such change which is threatened, nor
has there been any damage, destruction, loss or other
occurrence which could have or has had a material adverse
effect on Condition of the Business, whether or not covered
by insurance.
5.8 Tax Matters. The Sellers have paid all
Taxes due and payable prior to the Closing and filed all
returns and reports required to be filed prior to the
Closing with respect to the Sellers (including any
predecessor entities) and the Business for which the Buyer
could be held liable or a claim made against the Acquired
Assets. Except as set forth on Schedule 5.8, there are no
audits or other proceedings by any Governmental Body pending
or, to the Knowledge of the Sellers, threatened, with
respect to Taxes of the Sellers (including any predecessor
entities) or the Business for which the Buyer could be held
liable or a claim made against the Acquired Assets. No
assessment of Taxes is proposed against the Sellers
(including any predecessor entities), the Business or the
Acquired Assets. Except as provided on Schedule 5.8, since
the Balance Sheet Date, the Sellers have not pledged,
transferred, or otherwise disposed of any Acquired Assets or
any assets that would otherwise constitute Acquired Assets
nor have they assumed any Assumed Liabilities or Liabilities
(as defined in Section 5.20) that would otherwise constitute
Assumed Liabilities to pay any Taxes. The Sellers are not
party to, and have no liability under (including liability
with respect to a predecessor entity), any indemnification,
allocation or sharing agreement with respect to Taxes.
5.9 Compliance with Laws.
(a) None of the Sellers is in violation
of any applicable order, judgment, injunction, award, decree
or writ (collectively, "Orders"), or any applicable law,
statute, code, ordinance, regulation or other requirement,
including, without limitation, any franchise, relationship,
registration and disclosure, and business opportunity laws
and special industry statutes, but excluding bulk sales laws
(collectively, "Laws"), of any government or political sub-
division thereof, whether federal, state, local or foreign,
or any agency or instrumentality of any such government or
political subdivision, or any court or arbitrator (each, a
"Governmental Body") which violation could have a material
adverse effect on the Condition of the Business, and none of
the Sellers has received notice that any such violation is
being or may be alleged. None of the Sellers has made any
illegal payment to officers or employees of any Governmental
Body, or made any illegal payment to customers, suppliers,
distributors or co-packers for the sharing of fees or
rebating of charges, or engaged in any other illegal
reciprocal practice, or made any illegal payment or given
any other illegal consideration to purchasing agents or
other representatives of customers in respect of sales made
or to be made by the Sellers.
(b) Except as set forth on
Schedule 5.9, each of the Companies has all licenses,
permits, orders or approvals of, and have made all
registrations with, all Governmental Bodies that are
required for the conduct of the Business (collectively,
"Permits"), except for those Permits the failure of which to
obtain would not have a material adverse effect on the
Condition of the Business. All Permits are listed on
Schedule 5.9 and are in full force and effect; no violations
are or have been recorded in respect of any Permit; and no
proceeding is pending or, to the Knowledge of the Sellers
threatened, to revoke or limit any Permit.
(c) Each of the Sellers and its Affili-
ates is, with respect to every product relating to the
Business manufactured, produced, sold, marketed, distributed
or under development at any time by or on behalf of any of
the Sellers and its Affiliates (each a "Product" and col-
lectively the "Products"), in compliance ("Product Compli-
ance") with the applicable provisions of the Federal Food,
Drug and Cosmetics Act, as amended, the applicable regula-
tions and requirements adopted by the FDA (as defined in
Section 14.1) pursuant to that Act, the applicable regula-
tions and requirements adopted by the USDA (as defined in
Section 14.1) and any applicable requirements established by
state and local authorities responsible for regulating food
products and establishments (collectively, "State Food
Authorities"), as well as with all terms and conditions
imposed in any Permits granted to the Sellers or their
Affiliates by the FDA, USDA or State Food Authorities,
including any applicable Good Manufacturing Practices,
requirements for use of food or color additives, labeling
requirements, testing requirements and protocols, shipping
requirements, record keeping and reporting requirements,
monitoring requirements, packaging or repackaging require-
ments, laboratory controls, storage and warehousing proced-
ures and shipping requirements, except where the failure to
be in Product Compliance would not have a material adverse
effect on the Condition of the Business. Except as set
forth on Schedule 5.9, none of the Sellers or their
Affiliates have received written notice of any failure to be
in Product Compliance or that the FDA, USDA or any State
Food Authority is alleging any failure to be in Product
Compliance.
(d) Except as set forth on
Schedule 5.9, none of the Sellers, their Affiliates, the
Products, or, to the Actual Knowledge (as defined in Section
14.1) of the Sellers, the co-packers manufacturing the
Products or the co-packers' facilities, is now subject (and
none has been subject during the previous four years) to any
adverse inspection, finding, recall, investigation, penalty
assessment, audit or other compliance or enforcement action
by the FDA, USDA, any State Food Authority or any other
authority having responsibility for the regulation of food
or beverage products.
(e) The Sellers and their Affiliates
have obtained all required approvals and authorizations
from, and have made all required applications and other
submissions to, the FDA, USDA, State Food Authorities and
any other authority having responsibility for the regulation
of food or beverage products, for their current and past
business activities relating to the Products, including any
approvals required for the marketing and sale of those
Products, the manufacture and distribution of the Products,
the food and color additives appearing in or otherwise used
in manufacturing the Products, the labeling of the Products
and the claims made regarding the content, benefits or
quality of the Products, except for those approvals,
authorizations, applications and other submissions of which
the failure to obtain would not have a material adverse
effect on the Condition of the Business. None of the
Sellers or their Affiliates have received any written notice
that any approvals, authorizations, applications or other
submissions have not been obtained or have been revoked or
that there is any challenge to any such approvals,
authorizations, applications or other submissions.
(f) None of the Sellers, their Affili-
ates or, to the Actual Knowledge of the Sellers, any third
party retained by the Sellers or their Affiliates has made
on behalf of the Sellers or their Affiliates any false
statements or material omissions in applications or other
submissions to the FDA, USDA, State Food Authorities or any
other authority having responsibility for the regulation of
food or beverage products, and none of the Sellers, their
Affiliates or, to the Actual Knowledge of the Sellers, third
parties retained by the Sellers or their Affiliates has made
or offered on behalf of the Sellers or their Affiliates any
payments, gratuities or other things of value that are
prohibited by any law or regulation to personnel of the FDA,
USDA, State Food Authority or other authority having
responsibility for the regulation of food or beverage prod-
ucts.
(g) The Sellers and their Affiliates
have not received any information or report from the FDA,
FDA personnel or other authority indicating that any of the
Products are unsafe for their intended use, and the Sellers
and their Affiliates are not aware of any facts that would
indicate that the FDA, USDA or any State Food Authority has
or will prohibit or materially restrict the manufacturing,
marketing, sale, license, or use in the United States of any
Product currently produced, marketed or under development by
the Sellers or their Affiliates, or the operation or use of
any facility currently used by the Sellers, their Affiliates
or, to the Actual Knowledge of the Sellers, their co-packers
to make or distribute any Product.
5.10 No Breach. The execution, delivery and
performance of this Agreement by the Sellers and the
Consulting Agreement and the Product and Royalty Agreement
by Umbach in accordance with their respective terms, and the
consummation of the Contemplated Transactions will not
(i) require the Sellers to obtain any consent, approval or
action of, or make any filing with or give any notice to,
any Person, except as set forth on Schedule 5.10 (the
"Required Consents"); (ii) if the Required Consents are
obtained, violate, conflict with or result in the breach of
any of the terms of, result in a modification of the effect
of, otherwise cause the termination of or give any other
contracting party the right to terminate, or any other right
or constitute (or with notice or lapse of time or both
constitute) a default (by way of substitution, novation or
otherwise) under, any written or oral contract, agreement,
indenture, note, bond, loan, instrument, lease, conditional
sale contract, mortgage, license, franchise, commitment or
other binding arrangement (collectively, the "Contracts") to
which any of the Sellers are a party or by or to which any
of them or any of their properties may be bound or subject,
which violation, conflict, breach, modification, termina-
tion, termination right or other right, or default could
have a material adverse effect on the Condition of the
Business, or result in the creation of any Lien upon the
properties of the Companies pursuant to the terms of any
such Contract; (iii) if the Required Consents are obtained,
violate any Order of any Governmental Body against, or
binding upon, the Companies or upon their respective
securities, properties or business; (iv) if the Required
Consents are obtained, violate any Laws of any Governmental
Body, which violation could have a material adverse effect
on the Condition of the Business; and (v) if the Required
Consents are obtained, violate or result in the revocation
or suspension of any Permit, which violation, revocation or
suspension could have a material adverse effect on the
Condition of the Business. Except as set forth on Schedule
5.10, none of the rights of the Companies under any of the
Contracts listed or described on Schedule 5.12 will be
subject to termination or modification as a result of the
Contemplated Transactions.
5.11 Claims and Proceedings. There are no
outstanding Orders of any Governmental Body against or
involving any of the Companies. Except as set forth on
Schedule 5.11 and Schedule 5.17(b), there are no actions,
suits, claims, or legal, administrative or arbitral
proceedings or investigations (collectively, "Claims")
(whether or not the defense thereof or liabilities in
respect thereof are covered by insurance) pending, or to the
Knowledge of any Seller, threatened, against or involving
any of the Sellers, the Business or any of the Acquired
Assets which, individually or in the aggregate, could, if
determined adversely, have a material adverse effect upon
the Contemplated Transactions or upon the Condition of the
Business. Except as set forth on Schedule 5.11 and Schedule
5.17(b), to the Actual Knowledge of any Seller, there is no
fact, event or circumstance that could reasonably be
expected to give rise to any Claim that would be required to
be set forth on Schedule 5.11 and Schedule 5.17(b) if it
were currently pending or threatened. All notices required
to have been given to any insurance company listed as
insuring against any Claim set forth on Schedule 5.11 have
been timely and duly given and no insurance company has
asserted, orally or in writing, that such Claim is not
covered by the applicable policy relating to such Claim.
Except as set forth on Schedule 5.11, there are no product
liability Claims against or involving any of the Companies
or any Product and no such Claims have been settled,
adjudicated or otherwise disposed of since July 1, 1992.
There are no Claims pending or, to the Knowledge of any
Seller, threatened that would give rise to any right of
indemnification on the part of any director or officer of
any of the Companies or the heirs, executors or
administrators of such director or officer, against the
Buyer, as successor to the Business.
5.12 Contracts.
(a) Except for Contracts otherwise set
forth on Schedule 5.13, Schedule 5.19 or Schedule 5.21,
Schedule 5.12 sets forth all of the following Contracts
which relate to the Business to which any of the Companies
are a party or by or to which any of them or any of their
properties may be bound or subject: (i) Contracts with any
current or former officer, director, shareholder, employee,
consultant, agent or other representative or with an entity
in which any of the foregoing has an interest;
(ii) Contracts with any labor union or association
representing any employee; (iii) Contracts with any Person
to sell, manufacture, distribute, bottle, blend, process,
pack, load or otherwise market any of the Products;
(iv) Contracts with any Person licensing or otherwise
granting any other rights to or otherwise in respect of any
of the Intellectual Property; (v) Contracts for the sale of
any properties other than in the ordinary course of business
or for the grant to any Person of any option or preferential
rights to purchase any properties; (vi) partnership or joint
venture agreements; (vii) Contracts under which any of the
Companies agree to indemnify any party; (viii) Contracts
which cannot be canceled without liability, premium or
penalty on less than 90 days' notice; (ix) Contracts with
customers, distributors, co-packers or suppliers for the
sharing of fees, the rebating of charges or other similar
arrangements; (x) Contracts containing covenants of any of
the Sellers not to compete in any line of business or with
any Person in any geographical area or covenants of any
other Person not to compete with any of the Companies in any
line of business or in any geographical area; (xi) Contracts
relating to the acquisition by any of the Companies of any
operating business or the capital stock of any other Person;
(xii) Contracts requiring the payment to any Person of an
override or similar commission or fee; (xiii) Contracts
relating to the borrowing of money; (xiv) options for the
purchase of any property for an aggregate purchase price in
excess of $50,000; (xv) Contracts pursuant to which any of
the Companies may hold or use any interest owned or claimed
by any of the Companies in or to any material property;
(xvi) management Contracts and other similar agreements with
any Person; and (xix) any other Contracts pursuant to the
terms of which there is either a current or future obliga-
tion or right of the Companies to make payments in excess of
$50,000 or receive payments in excess of $50,000. Schedule
5.12 also lists all Contracts currently in negotiation by
the Companies of a type which if entered into by the
Companies would be required to be listed on Schedule 5.12 or
on any other Schedule ("Proposed Contracts").
(b) There have been delivered to the
Buyer true and complete copies of (i) all of the Contracts
set forth on Schedule 5.12 or on any other Schedule,
together with all amendments, modifications, supplements or
side letters affecting the obligations of any party there-
under or, with respect to Contracts which are not in writ-
ing, Schedule 5.12 contains a description of the material
terms thereof (including, without limitation, the parties
thereto, the amount of consideration thereunder, any change
of control provisions and any termination provisions con-
tained therein or pertaining thereto) and (ii) the most
recent draft, letter of intent or term sheet (or if none
exist, a reasonably detailed written summary) embodying the
terms of all of the Proposed Contracts set forth on Sched-
ule 5.12. All of the Contracts referred to in the preceding
clause (i) are valid and binding upon the Companies in
accordance with their terms other than Contracts with
respect to which the non-validity of which would not have a
material adverse effect on the Condition of the Business.
None of the Companies is in default in any material respect
under any of such Contracts referred to in clause (i) above,
nor does any condition exist that with notice or lapse of
time or both would constitute such a material default
thereunder. Except as set forth on Schedule 5.12, to the
Actual Knowledge of the Sellers, none of the Companies' co-
packers or any of the Companies' 50 largest distributors is
in default under any such Contract referred to in clause (i)
above in any material respect nor does any condition exist
that with notice or lapse of time or both would constitute
such a material default thereunder.
5.13 Real Estate.
(a) None of the Companies own any real
property. Schedule 5.13 contains a true, correct and
complete schedule of all leases (the "Leases") under which
the Companies use or occupy or have the right to use or
occupy, now or in the future, real property, and the
Companies are not a party to any lease, sublease, license or
other agreement for the use or occupancy of any real
property other than the Leases. There exists no reciprocal
easement or operating agreements relating to the Leases
between the Companies and any third party and, to the
Knowledge of the Sellers, between the lessor thereunder and
any third party. The Companies are the sole lessees under
the Leases, and have not assigned, sublet, mortgaged or
otherwise encumbered in any respect whatsoever their
leasehold estate under the Leases except as expressly set
forth on Schedule 5.13.
(b) Each Lease is a valid and binding
obligation enforceable against the lessor thereunder in
accordance with its terms, and there is no default under any
Lease by any of the Companies or, to the Knowledge of the
Sellers, by any other party thereto, and, to the Knowledge
of the Sellers, no event has occurred that with the lapse of
time or the giving of notice or both would constitute a
default thereunder. No previous or current party to any
Lease has given written notice of or made a Claim against
any of the Companies with respect to any breach or default
thereunder which remains uncured or otherwise in existence
as of the date hereof. All rent and other sums and charges
payable by the Companies under or in respect of the Leases
are current. Upon the consummation of the Contemplated
Transactions, the Leases will continue to entitle the
Companies (as and to the extent therein provided) to the
use, occupancy and possession of the real property specified
in the Leases and for the purposes such property is now
being or is contemplated to be used by the Companies. The
Sellers have delivered to the Buyer true, correct and
complete copies of the Leases, together with all amendments,
modifications, supplements or side letters affecting the
obligations of any party thereunder.
(c) None of the rights of the Companies
under the Leases are subject to termination or modification
as a result of the consummation of the Contemplated Trans-
actions.
5.14 Inventory and Supplies. The inventory
of each of the Companies (including that reflected on the
Balance Sheet) is or was, prior to the sale thereof, in good
and merchantable condition, and suitable and usable or
salable in the ordinary course of business for the purposes
for which it is intended and none of such inventory is
obsolete, damaged, or defective, except as set forth on
Item (A) of Schedule 5.14 and subject to the reserve for
inventory write down set forth on the Balance Sheet or as a
result of the operation of the Business from the Balance
Sheet Date in the ordinary course of business in accordance
with past custom and practice of the Sellers. Except as set
forth on Schedule 5.14, all of the Companies' inventory is
held at the Companies' facilities. None of the Sellers
knows of any adverse condition affecting the supply of
materials available to the Companies.
5.15 Receivables. All accounts and notes
receivable reflected on the Balance Sheet, and all accounts
and notes receivable arising subsequent to the Balance Sheet
Date (i) have arisen in the ordinary course of business of
the Companies and (ii) subject only to a reserve for bad
debts computed in a manner consistent with past practice and
reasonably estimated to reflect the probable results of
collection, have been collected or are collectible in the
ordinary course of business of the Companies in the
aggregate recorded amounts thereof in accordance with their
terms. Schedule 5.15 lists any obligor which together with
all of its Affiliates owed accounts and notes receivable at
June 30, 1995 in an aggregate amount of $40,000 or more.
5.16 Tangible Property. The Tangible Prop-
erty is in good operating condition and repair, ordinary
wear and tear excepted, subject to continued repair and
replacement in accordance with past practice, and are suit-
able for their intended use. During the past three years,
there has not been any significant interruption of the
operations of the Companies due to inadequate maintenance of
the Tangible Property.
5.17 Intangible Property. Schedule 5.17
sets forth all the Intellectual Property utilized in or
incident to the Business that are material to the Business
as presently conducted or as being developed. Except as set
forth on Schedules 5.11 and 5.17, none of the Companies has
any notice of any adversely held patent, invention,
trademark, copyright, service mark or trade name of any
other Person or notice of any claim of any other Person
relating to any of the Intellectual Property, and none of
the Sellers Knows of any basis for any such charge or claim.
All Intellectual Property is protected against the use of
such Intellectual Property by other Persons, except where
the failure to protect would not have a material adverse
effect on the Condition of the Business. There is no
present or, to the Knowledge of the Sellers, threatened use
or encroachment of any Intellectual Property which could
have a material adverse effect on the Condition of the
Business.
5.18 Title to Properties. Each of the
Companies is the owner of all the right, title and interest
in and has good and marketable title to all of the
Intellectual Property. Each of the Companies has good and
marketable title to all of the other Acquired Assets.
Except for (i) Liens specifically described in the notes to
the Audited or Interim Financials, (ii) properties disposed
of, or subject to purchase or sales orders, in the ordinary
course of business since the Balance Sheet Date, (iii) Liens
securing taxes, assessments, governmental charges or levies,
or the claims of materialmen, carriers, landlords and like
Persons, each of which is not yet due and payable or is
being contested in good faith, so long as such contest does
not involve any substantial danger of the sale, forfeiture
or loss of any assets material to the Condition of the
Business or (iv) Liens disclosed on Schedule 5.18, the
Companies own the Acquired Assets free and clear of any
Lien.
5.19 Accounts Payable. Schedule 5.19 sets
forth a true and correct aged list of all accounts payable
of the Companies relating to the Business as of June 30,
1995 in excess of $40,000 to any one payee. All accounts
payable have arisen in the ordinary course of business of
the Companies. The Companies have, or are capable of
obtaining through existing borrowing channels, adequate
funds to pay all accounts payable that come due prior to the
Closing Date.
5.20 No Undisclosed Non-alcoholic Beverage
Non-ordinary Course Business Liabilities. Except as
otherwise fully and adequately reflected on the Balance
Sheet or Interim Balance Sheet, none of the Companies has,
except in the ordinary course of the Business, incurred any
direct or indirect indebtedness, liability, claim, loss,
damage, deficiency, obligation or responsibility, known or
unknown, fixed or unfixed, choate or inchoate, liquidated or
unliquidated, secured or unsecured, accrued, absolute,
contingent or otherwise, whether or not of a kind required
by GAAP to be set forth on a financial statement or in the
notes thereto, including, without limitation, indebtedness
for borrowed money, other than the working capital line
pursuant to the Credit Agreement (collectively,
"Liabilities").
5.21 Suppliers, Customers, Distributors and
Co-Packers. Schedule 5.21 lists, by dollar volume paid for
the ten largest suppliers, the ten largest customers, the 50
largest distributors and all co-packers of the Companies
relating to the Business. The relationships of the
Companies with such suppliers, customers, distributors and
co-packers are good commercial working relationships and,
except as set forth on Schedule 5.21, (i) no Person listed
on Schedule 5.21 within the last twelve months has
threatened in writing to cancel or otherwise terminate the
relationship of such Person with any of the Companies or
renegotiate any material term of its agreements with any of
the Companies or alleged in writing a material breach by any
of the Companies, or to the Actual Knowledge of the Sellers,
intends to cancel or otherwise terminate the relationship of
such Person with any of the Companies or renegotiate any
material term of its agreements with any of the Companies or
allege in writing a material breach by any of the Companies,
and (ii) no such Person has during the last twelve months
decreased materially or threatened in writing to decrease or
limit materially, or to the Actual Knowledge of the Sellers,
intends to modify materially its relationship with any of
the Companies or intends to decrease or limit materially,
its services or supplies to any of the Companies or its
usage or purchase of any of the Products.
5.22 Employee Benefit Plans.
(a) Schedule 5.22 identifies each
Employee Plan (as defined in Section 14.1). The Sellers
have furnished to the Buyer copies of the Employee Plans
(and, if applicable, related trust agreements) and all
amendments thereto and written interpretations thereof
together with the most recent annual reports (Form 5500
including, if applicable, Schedule B thereto) and the most
recent actuarial valuation report prepared in connection
with any Employee Plan. No Employee Plan is a Multiemployer
Plan (as defined in Section 14.1) or is otherwise subject to
Title IV of ERISA or Section 412 of the Code. The Sellers
have provided the Buyer with a complete list, as of the most
recent practicable date, of all current employees of the
Business along with their base salary.
(b) Neither the Sellers, nor any of
their ERISA Affiliates (as defined in Section 14.1) (i) is a
party to any collective bargaining agreement relating to any
current or former employees of the Business, (ii) has main-
tained, administered or contributed to any employee benefit
plan subject to Title IV of ERISA or Section 412 of the Code
within the immediately preceding five years, (iii) has
engaged in, or is a successor or parent corporation to an
entity that has engaged in, a transaction described in
Section 4069 or 4212(c) of ERISA or (iv) has incurred, or
reasonably expects to incur prior to the Closing Date,
(A) any liability under Title IV of ERISA arising in connec-
tion with the termination of, or a complete or partial
withdrawal from, any plan covered or previously covered by
Title IV of ERISA or (B) any liability under Section 4971,
4975 or 5000(a) of the Code that in either case could become
a liability of the Companies or the Buyer or any of its
ERISA Affiliates, and the assets of the Companies are not
now, nor will they after the passage of time be, subject to
any Lien imposed under Code Section 412(m) by reason of a
failure of any of the Sellers or their Affiliates to make
timely installments or other payments required under Code
Section 412.
(c) Each Employee Plan has been main-
tained in substantial compliance with its terms and with the
requirements prescribed by any and all applicable Laws and
Orders, including but not limited to ERISA and the Code.
(d) None of the Sellers has any current
or projected liability in respect of post-employment or
post-retirement health or medical or life insurance benefits
for retired, former or current employees of the Business,
except as required to avoid excise tax under Section 4980B
of the Code.
(e) There is no contract, plan or
arrangement (written or otherwise) covering any current or
former employee of the Business that, individually or col-
lectively, could give rise to the payment of any amount that
would not be deductible pursuant to the terms of Section
280G of the Code, and no current or former employee of the
Business will become entitled to any bonus, retirement,
severance, job security or similar benefit or enhanced such
benefit (including acceleration of vesting or exercise of an
incentive award) as a result of the Contemplated Trans-
actions.
5.23 Employee Relations. The Companies have
approximately 151 employees in the aggregate. No union
organizing efforts have been conducted within the last five
years or, to the Knowledge of the Sellers, are now being
conducted. None of the Companies has at any time during the
last five years had, nor, to the Knowledge of the Sellers,
are there now threatened, a strike, picket, work stoppage,
work slowdown or other labor trouble. Since July 1, 1995,
to the Knowledge of the Sellers, the Companies do not have
any liability for employee medical expenses in excess of an
amount equal to $25,000 per month.
5.24 Environmental Liabilities. Each of the
Companies (i) is and has been in compliance with all
applicable Environmental Laws (as defined in Section 14.1);
(ii) there is no civil, criminal or administrative judgment,
action, suit, demand, claim, hearing, notice of violation,
investigation, proceeding, notice or demand letter pending
or, to the Sellers' Knowledge, threatened against such
Company pursuant to Environmental Laws or principles of
common law relating to pollution, protection of the environ-
ment or health and safety which would reasonably be expected
to result in a fine, penalty or other obligation, cost or
expense; and (iii) there are no past or present events,
conditions, circumstances, activities, practices, incidents,
agreements, actions or plans which may prevent compliance
with Environmental Laws, or which have given rise to or may
give rise to liability under Environmental Laws or
principles of common law relating to pollution, protection
of the environment or health and safety.
5.25 Insurance. Schedule 5.25 sets forth a
list (specifying the insurer, describing each pending claim
thereunder of more than $25,000 and setting forth the
aggregate limit, if any, of the insurer's liability there-
under) of all policies or binders of fire, liability, prod-
uct liability, workmen's compensation, vehicular and other
insurance held by or on behalf of the Companies relating to
the Business. Such policies and binders are valid and
binding in accordance with their terms and are in full force
and effect. None of the Companies is in default with
respect to any material provision contained in any such
policy or binder or has failed to give any notice or present
any claim under any such policy or binder in due and timely
fashion. Except for claims set forth on Schedule 5.25,
there are no outstanding unpaid Claims under any such policy
or binder, and none of the Companies has received any notice
of cancellation or non-renewal of any such policy or binder.
There is no inaccuracy in any application for such policies
or binders, any failure to pay premiums when due or any
similar state of facts that might form the basis for
termination of any such insurance. Except as set forth on
Schedule 5.25, none of the Companies has received any writ-
ten notice from any of its insurance carriers that any
insurance premiums will be materially increased in the
future or that any insurance coverage listed on Schedule
5.25 will not be available in the future on substantially
the same terms as now in effect.
5.26 Products. Except as set forth on
Schedule 5.26, there are no statements, citations or deci-
sions by any Governmental Body specifically stating that any
Product is defective or unsafe or fails to meet any
standards promulgated by any such Governmental Body. Except
as set forth on Schedule 5.26, there have been no recalls
ordered by any such Governmental Body with respect to any
Product. Except as set forth on Schedule 5.26, to the
Knowledge of the Sellers, there is no (i) fact relating to
any Product that may impose upon the Companies a duty to
recall any Product or a duty to warn customers of a defect
in any Product, (ii) latent or overt design, manufacturing
or other defect in any Product or (iii) material liability
for warranty claims or returns with respect to any Product
not fully reflected on the Audited Financials or Interim
Financials.
5.27 Officers, Directors and Key Employees.
Schedule 5.27 sets forth (i) the name and total compensation
of each officer and director of each of the Companies,
(ii) the name and total compensation of each other employee,
consultant, agent or other representative of each of the
Companies whose current or committed annual rate of
compensation (including bonuses and commissions) exceeds
$50,000, (iii) all wage and salary increases, bonuses and
increases in any other direct or indirect compensation
received by such Persons since August 1, 1994 that were in
excess of the greater of 10% of such person's salary or
$15,000, (iv) any accrual for, or any commitment or
agreement by the Companies to pay, such increases, bonuses
or pay and (v) any payments or commitments to pay any
severance or termination pay to any such Persons.
5.28 Operations of the Companies.
(a) Except as set forth on Schedule
5.28, since the Balance Sheet Date, the Companies have not:
(i) declared or paid any dividends
or declared or made any other distributions of any kind to
their shareholders, other than combined cash distributions
to their shareholders from January 1, 1995 through July 31,
1995 in an amount not to exceed $4,750,000, in the aggre-
gate, and from August 1 through the Closing Date in an
amount not to exceed $280,000, in the aggregate, or made any
direct or indirect redemption, retirement, purchase or other
acquisition of any shares of its capital stock;
(ii) except for up to a maximum of
$7,000,000 of borrowings under the Credit Agreement,
incurred any indebtedness for borrowed money, exclusive of
the Arkansas Litigation Letter of Credit;
(iii) reduced their cash or short-
term investments or their equivalent, other than to meet
cash needs arising in the ordinary course of business,
consistent with past practices;
(iv) waived any material right
under any Contract or other agreement of the type required
to be set forth on any Schedule;
(v) made any change in their
accounting methods or practices or made any change in
depreciation or amortization policies or rates adopted by
them;
(vi) materially changed any of
their business policies, including, without limitation,
advertising, investment, manufacturing, marketing, distribu-
tion, pricing, purchasing, production, personnel, sales,
returns, budget or product acquisition policies;
(vii) made any loan or advance to
any of its shareholders, officers, directors, employees,
consultants, agents or other representatives (other than
travel advances made in the ordinary course of business), or
made any other loan or advance otherwise than in the
ordinary course of business;
(viii) hired any new employees with a
total annual compensation in excess of $60,000;
(ix) except for inventory or
equipment in the ordinary course of business, sold,
abandoned or made any other disposition of any of their
properties or made any acquisition of all or any part of the
properties, capital stock or Business of any other Person;
(x) paid, directly or indirectly,
any of its material Liabilities before the same became due
in accordance with its terms or otherwise than in the
ordinary course of business;
(xi) acquired any assets not used
solely in connection with the Business;
(xii) entered into any transactions
with Umbach or any of Umbach's Affiliates;
(xiii) terminated or failed to renew,
or received any written threat (that was not subsequently
withdrawn) to terminate or fail to renew, any Contract or
other agreement that is or was material to the Condition of
the Business;
(xiv) amended their Articles of
Incorporation or By-laws (or comparable instruments) or
merged with or into or consolidated with any other Person,
subdivided or in any way reclassified any shares of its
capital stock or changed or agreed to change in any manner
the rights of their outstanding capital stock or the charac-
ter of their business; or
(xv) engaged in any other material
transaction other than in the ordinary course of business.
(b) Since June 27, 1995, the Companies
have not: (i) without the prior written consent of Mistic
pledged, transferred, or otherwise disposed of any Acquired
Assets or any assets that would constitute Acquired Assets
nor have they assumed any Assumed Liabilities or Liabilities
that would constitute Assumed Liabilities to (x) pay any
Liabilities other than Assumed Liabilities or (y) purchase
any assets other than Acquired Assets; (ii) incurred or
committed to incur any sales, marketing or promotional
allowances outside of the ordinary course of business to
distributors or co-packers; (iii) entered into any
agreements or changed or waived the terms of any existing
agreements with distributors or co-packers without giving
advance notice to Mistic except as set forth on Schedule
5.28; (iv) managed their operations outside the ordinary
course of business without the prior written consent of
Mistic; (v) entered into any agreements requiring any
payment to be made or incurred as a result of any change of
control; (vi) incurred advertising and promotional expenses
or other financial commitments in excess of historical,
ordinary or current plan levels; and (vii) increased the
compensation of any employee or consultant, other than
annual raises consistent with historical practice. In
addition, since June 27, 1995, the Sellers have consulted
with Mistic and its Affiliates with respect to all critical
and/or significant commitments.
5.29 Related Party Transactions. Except as
set forth on Schedule 5.29, none of the officers, directors
or Affiliates of the Companies, nor Umbach or his Affili-
ates:
(i) owns, directly or indirectly, any
interest in (excepting less than 1% stock holdings for
investment purposes in securities of publicly held and
traded companies), or is an officer, director, employee or
consultant of, any Person which is, or is engaged in busi-
ness as, a competitor, lessor, lessee, supplier, distrib-
utor, co-packer, sales agent or customer of any of the
Companies;
(ii) owns, directly or indirectly, in
whole or in part, any property that any of the Companies use
in the conduct of the Business;
(iii) is a party to any Contract with any
of the Companies; or
(iv) has any cause of action or other
Claim whatsoever against, or owes any amount to, any of the
Companies.
5.30 Banks, Brokers and Proxies. Sched-
ule 5.30 sets forth (i) the name of each bank, trust com-
panies, securities or other broker or other financial
institution with which the Companies have an account, credit
line or safe deposit box or vault, or otherwise maintain
relations; (ii) the name of each Person authorized by the
Companies to draw thereon or to have access to any safe
deposit box or vault; (iii) the purpose of each such
account, safe deposit box or vault; and (iv) the names of
all Persons authorized by proxies, powers of attorney or
other instruments to act on behalf of any of the Companies
in matters concerning its Business or affairs.
5.31 Premerger Notification. The Sellers
have filed notification and report forms with respect to the
Contemplated Transactions in compliance with the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, and the rules and
regulations promulgated thereunder (the "HSR Act").
5.32 Full Disclosure. There is no fact or
facts Actually Known to any of the Sellers that the Sellers
have not disclosed to the Buyer in writing that materially
adversely affects or, so far as any of the Sellers can now
reasonably foresee, will materially adversely affect, the
Condition of the Business or the ability of the Sellers to
perform this Agreement or of Umbach to perform the
Consulting Agreement and the Product and Royalty Agreement
other than general industry trends and conditions.
5.33 Entire Business. Except for the
Excluded Assets, the consummation of the Contemplated Trans-
actions will convey to the Buyer all of the Sellers' right,
title and interest in and to all of their rights, assets and
properties used in the Business.
5.34 No Projection Representation. The
Buyer acknowledges that the Sellers are not making any
representation or warranty regarding the accuracy, cor-
rectness or completeness of any projected financial informa-
tion, data, forecasts or commentary regarding the Companies
and/or the Business which have been provided to the Buyer by
the Sellers in connection with the Contemplated Transactions
and that the Sellers shall not have any liability whatsoever
with respect to such projected financial information, data,
forecasts or commentary.
6. Representations and Warranties of Mistic.
Mistic represents and warrants to the Sellers as follows:
6.1 Due Incorporation and Authority of
Mistic. Mistic is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware, and has all requisite corporate power and
authority to own, lease and operate its properties and to
carry on its business as now being and as heretofore
conducted.
6.2 Authority to Execute and Perform this
Agreement, the Consulting Agreement and the Product and
Royalty Agreement. Mistic has the full legal right and
power and all authority and approvals required to execute
and deliver this Agreement, the Consulting Agreement and the
Product and Royalty Agreement and to perform fully its
obligations hereunder and thereunder. This Agreement has
been duly executed and delivered by Mistic and (assuming the
due authorization, execution and delivery hereof by the
Sellers) is a valid and binding obligation of Mistic
enforceable against Mistic in accordance with its terms.
Each of the Consulting Agreement and the Product and Royalty
Agreement when executed and delivered by Mistic at the
Closing (and assuming the due authorization, execution and
delivery thereof by Umbach) will be a valid and binding
obligation of Mistic enforceable against Mistic in accord-
ance with its terms. The execution and delivery by Mistic
of this Agreement, the Consulting Agreement and the Product
and Royalty Agreement, the consummation of the Contemplated
Transactions and the performance by Mistic of this
Agreement, the Consulting Agreement and the Product and
Royalty Agreement in accordance with their respective terms
will not (i) conflict with or result in any breach or
violation of any of the terms and conditions of, or
constitute (or with notice or lapse of time or both
constitute) a default under, the Certificate of
Incorporation or By-laws of Mistic, any Law or Order of any
Governmental Body applicable to Mistic, or any Contract to
which Mistic is a party or by or to which Mistic or any of
its properties is bound or subject; or (ii) result in the
creation of any Lien on any of the properties of Mistic.
6.3 Premerger Notification. Mistic and its
Affiliates have filed notification and report forms with
respect to the Contemplated Transactions in compliance with
the HSR Act.
7. Covenants and Agreements.
7.1 Conduct of Business. From the date
hereof through the Closing Date, each of the Sellers agrees
that it (i) shall cause each of the Companies to conduct the
Business in the ordinary course and, without the prior
written consent of the Buyer, not to undertake any of the
actions specified in Section 5.28; and (ii) shall conduct
the Business in such a manner so that the representations
and warranties contained in Article 5 shall continue to be
true and correct on and as of the Closing Date as if made on
and as of the Closing Date. The Sellers shall give the
Buyer prompt notice of any event, condition or circumstance
occurring from the date hereof through the Closing Date that
would constitute a violation or breach of any representation
or warranty, whether made as of the date hereof or as of the
Closing Date, or that would constitute a violation or breach
of any covenant of any Seller contained in this Agreement.
The Sellers agree that none of the Sellers will, nor will
any of the Sellers permit any of their Affiliates (or
authorize or permit any of their respective representatives)
to, take directly or indirectly any action to initiate,
assist, solicit, negotiate, encourage or accept any offer or
inquiry from any Person (a) to engage in any Business
Combination (as defined in Section 14.1), (b) to reach any
agreement or understanding (whether or not such agreement or
understanding is absolute, revokable, contingent or condi-
tional) for, or otherwise attempt to consummate, any Busi-
ness Combination or (c) to furnish or cause to be furnished
any information with respect to the Companies to any Person
(other than as contemplated hereby) who the Sellers or any
Affiliate or representative Knows or has reason to believe
is in the process of considering any Business Combination.
If any Seller or any such Affiliate or representative
receives from any Person any offer, inquiry or informational
request referred to above, such Seller will promptly advise
such Person, by written notice of the terms of this section
and will promptly, orally and in writing, advise the Buyer
of such offer, inquiry or request and deliver a copy of the
foregoing notice to the Buyer.
7.2 Corporate Examinations and Investiga-
tions. Prior to the Closing Date, the Sellers agree that
Mistic and its Affiliates and any Person who is considering
providing financing in connection with the Contemplated
Transactions shall be entitled, through their respective
officers, directors, employees, agents, counsel,
accountants, financial advisors, consultants and other
representatives, including, without limitation, Paul, Weiss,
Rifkind, Wharton & Garrison, Fish & Neave and Deloitte &
Touche LLP, the Buyer's independent certified public
accountants ("D&T") (collectively the "Representatives"), to
make such investigation of the properties, businesses and
operations of the Companies, and such examination of the
Acquired Assets, properties, contracts, books, records,
customers, suppliers and all such other information and data
concerning the Business, as they reasonably may request in
connection with such investigation. Any such investigation
and examination shall be conducted at reasonable times upon
prior notice and under reasonable circumstances, and the
Sellers shall cooperate fully therein. No investigation by
the Buyer or the Representatives shall diminish, obviate or
otherwise affect any of the representations, warranties,
covenants or agreements of the Sellers contained in this
Agreement. In order that the Buyer may have full
opportunity to make such physical, business, accounting and
legal review, examination or investigation as it may wish of
the affairs of the Companies, the Sellers shall make avail-
able and shall cause the Companies to make available to the
Representatives during such period all such information and
copies of such Documents concerning the affairs of the
Companies as such Representatives may reasonably request,
shall permit the Representatives access to the properties of
the Companies and all parts thereof and shall cause their
officers, employees, consultants, agents, accountants and
attorneys to cooperate fully with such Representatives in
connection with such review and examination.
7.3 Publicity. The parties agree that no
publicity release or announcement concerning this Agreement
or the Contemplated Transactions shall be made without
advance approval thereof by the Sellers and the Buyer,
unless required by applicable law or the rules and regula-
tions of any applicable stock exchange.
7.4 Expenses. The Buyer shall bear its own
expenses and Umbach shall bear the Sellers' expenses
incurred in connection with the preparation, execution and
performance of this Agreement and the Contemplated Trans-
actions, including, without limitation, all fees and
expenses of agents, representatives, counsel and
accountants, except as otherwise specifically provided
herein. Umbach shall timely pay any and all Transaction
Sales Taxes and shall timely file all returns and reports
thereto. Upon the payment by Umbach of the Transaction
Sales Taxes and receipt by the Buyer of evidence
satisfactory to the Buyer of such payment, the Buyer shall
promptly pay the Sellers the Buyer Transaction Sales Tax
Payment.
7.5 Indemnification of Brokerage. The
Sellers represent and warrant to the Buyer that, no broker,
finder, agent or similar intermediary (a "Broker") has acted
on behalf of any of the Sellers in connection with this
Agreement or the Contemplated Transactions, and that there
are no brokerage commissions, finder's fees or similar fees
or commissions payable in connection therewith based on any
agreement, arrangement or understanding with the Sellers, or
any action taken by the Sellers. Each of the Sellers
agrees, jointly and severally, to indemnify and save the
Buyer harmless from any Claim or demand for commission or
other compensation by any Broker claiming to have been
employed by or on behalf of the Sellers and to bear the cost
of legal expenses incurred in defending against any such
Claim. Mistic represents and warrants to the Sellers that
no Broker has acted on behalf of Mistic in connection with
this Agreement or the Contemplated Transactions, and that
there are no brokerage commissions, finders' fees or similar
fees or commissions payable in connection therewith based on
any agreement, arrangement or understanding with Mistic, or
any action taken by Mistic. Mistic agrees to indemnify and
save the Sellers harmless from any Claim or demand for
commission or other compensation by any Broker claiming to
have been employed by or on behalf of Mistic or the Buyer,
and to bear the cost of legal expenses incurred in defending
against any such Claim.
7.6 Related Parties. Umbach shall, prior to
the Closing, (a) pay or cause to be paid to the Companies,
all amounts owed to the Companies and reflected on the
Balance Sheet or borrowed from or owed to the Companies
since the Balance Sheet Date by Umbach or any Affiliate of
Umbach other than the Companies and other than up to a
maximum amount of $109,812.97, owed by Arthur Greenwald to
the Companies (the "Greenwald Debt"), which Greenwald Debt
shall be forgiven by the Sellers immediately prior to the
Closing, and (b) return or cause any Affiliate to return any
Acquired Assets in the possession of Umbach or any Affiliate
or, with Mistic's written consent, purchase such Acquired
Assets from the Companies at fair market value. Prior to
the Closing, any and all Affiliate Liabilities shall be
canceled. The Seller shall be permitted to pay Mr.
Greenwald immediately prior to the Closing an amount equal
to the income Tax obligations of Mr. Greenwald up to a
maximum amount of $40,187.03 with respect to the forgiveness
of the Greenwald Debt.
7.7 Employee Matters.
(a) Severance Policy. The Buyer agrees
to adopt a severance policy for the benefit of the employees
of the Companies who accept and commence employment with the
Buyer and its Affiliates (the "Transferred Employees") and
who are terminated by the Buyer without cause during the
twelve month period from the Closing Date (and in the case
of the eight Transferred Employees set forth on Schedule 7.7
(the "Key Employees"), who are terminated by the Buyer
without cause at any time) with terms substantially
consistent with those set forth on Exhibit B hereto.
Nothing herein shall prohibit the Buyer from terminating the
employment of any employee at any time. Except as required
by law and except for the Buyer's obligations with respect
to the severance policy described above, nothing contained
herein shall obligate the Buyer to adopt or continue any
employee benefit plan or arrangement after the Closing Date.
(b) The Sellers' Employee Benefit
Plans.
(i) Except as otherwise provided
in this Section 7.7, the Sellers shall retain all obliga-
tions and liabilities in respect of each employee or former
employee, including any beneficiary or dependent thereof,
who is not a Transferred Employee.
(ii) With respect to each Trans-
ferred Employee (including any beneficiary or dependent
thereof), the Sellers shall retain all liabilities and
obligations arising outside the ordinary course of business.
(c) WARN. The Sellers shall be jointly
and severally responsible for all obligations and liabil-
ities under the Workers Adjustment and Retraining Notifica-
tion Act of 1988, as amended, and each similar state law
("WARN"), with respect to employees of the Business by
reason of their severance or other termination of employment
on or prior to the Closing Date. The Buyer agrees that it
will not terminate any Transferred Employees on the Closing
Date but shall not be restricted from doing so after the
Closing Date.
(d) Third Party Beneficiaries. No
provision of this Section 7.7 shall create any third party
beneficiary rights in any current or former employee of any
of the Companies (including any beneficiary or dependent
thereof) in respect of continued employment or resumed
employment, and no provision of this Section 7.7 shall
create any rights in any such Persons in respect of any
benefits that may be provided, directly or indirectly, under
any employee benefit plan or arrangement.
7.8 Trademarks, Service Marks, Corporate
Names and Trade Names. From and after the Closing, the
Sellers and their Affiliates agree not to use any trade-
marks, service marks, corporate names, trade names or
otherwise any references to "Mistic," "Sunesta," or any of
the Companies' other trademarks, service marks, corporate
names and trade names included among the Acquired Assets and
any derivations thereof.
7.9 Letters of Credit. The Buyer agrees, at
its option, to keep outstanding the standby letter of credit
in the amount of $3,054,000 issued by the Bank pursuant to
the Credit Agreement in connection with the Arkansas Litiga-
tion (the "Arkansas Litigation Letter of Credit"), or obtain
a new letter of credit in the same face amount to replace
the Arkansas Litigation Letter of Credit, until the Arkansas
Litigation has been settled or a judgment has become final
and is not subject to further appeal.
7.10 Arkansas Litigation Cost. The Sellers
and Buyer agree that any and all amounts paid by the Buyer
for the Arkansas Litigation Cost in excess of the Buyer
Arkansas Payment and not immediately repaid by the Sellers
will bear interest at a rate of 9% per annum from the first
day following the date on which such repayment is due until
such repayment is received in full by the Buyer in immedi-
ately available funds, subject to Section 12.5.
7.11 Taxes.
(a) The Sellers will pay all Taxes due
and payable on or after the Closing and will file all
returns and reports required to be filed on or after the
Closing with respect to the Sellers (including any
predecessor entities) including, without limitation, Taxes
imposed with respect to the Business or the Acquired Assets
for all taxable periods (or portions thereof) ending on or
prior to the Closing, for which the Buyer could be held
liable or a claim made against the Acquired Assets.
(b) For purposes of this Agreement, the
net income of the Business for the period from August 1
through the Closing (the "Stub Tax Period") will be based on
(i) the dollar amount of the sales of the Business for the
Stub Tax Period multiplied by (ii) a margin that allocates
the expenses for the month of August to the Stub Tax Period
based on the procedures set forth on Schedule 7.11 and the
Sellers shall be liable for all Taxes imposed with respect
to the income of the Business for the Stub Period. The
Buyer shall deliver to the Sellers by September 30, 1995 a
statement setting forth the dollar amount of such sales and
such margin which statement shall be prepared by the
President of the Buyer in consultation with the Sellers' tax
advisers and such statement, after good faith consultation
and reasonable consideration of the Sellers' comments, shall
be final and binding upon the Buyer and the Sellers with no
further right of appeal. Both sides expect the President of
the Buyer to exercise his independent judgment.
(c) The Sellers shall pay any and all
Taxes with respect to the Sellers (including any predecessor
entities) including, without limitation, Taxes imposed with
respect to the Business or the Acquired Assets for all
taxable periods (or portion thereof) ending on or prior to
the Closing, imposed upon the Buyer based, in whole or in
part, upon the failure to comply with the bulk sales laws.
7.12 Claims; Qualification. Upon the
request in writing by the Buyer, the Sellers agree to assist
the Buyer in connection with any Claim that the Buyer
desires to bring against a third party, including, without
limitation, agreeing to become a party to such action, to
the extent it is required or desirable in connection with
the Claim. Upon the request in writing of the Buyer, the
Sellers agree to take all actions necessary to qualify the
Companies in any jurisdiction in connection with any Claim
that the Buyer wishes to bring in which any of the Companies
is to be a named party.
7.13 Bulk Sales Law. The Contemplated
Transactions shall be consummated without compliance with
bulk sales Laws. If by reason of any applicable bulk sales
Law, any Claims are asserted by creditors of the Sellers
relating to the Excluded Liabilities, such Claims shall be
the responsibility of the Sellers, and the Sellers shall
jointly and severally indemnify, defend and hold harmless
Mistic and the Buyer (and their respective directors,
officers, employees, Affiliates, successors and assigns)
from and against all Losses based upon, arising out of or
otherwise in respect of the failure to comply with such bulk
sales Laws.
7.14 Litigation Cooperation. The Sellers
agree that they will cooperate with the Buyer in connection
with any claims brought by distributors or co-packers of the
Company, including without limitation, being available to
take depositions and to be witness at trial, help in
preparation of any legal documentation and providing any
advice or support that the Buyer may request of the Sellers
in connection with such claims.
7.15 Further Assurances. Each of the
parties shall execute such Documents and take such further
actions as may be reasonably required or desirable to carry
out the provisions hereof and the Contemplated Transactions,
including, without limitation filing all UCC-3 termination
statements and all documents with the U.S. Patent and
Trademark Office necessary to release any Liens on the
Intellectual Property. Each such party shall use com-
mercially reasonable efforts to fulfill or obtain the
fulfillment of the conditions to the Closing set forth in
Articles 8 and 9.
Conditions Precedent to the Obligation of the
Buyer to Close. The obligation of the Buyer to enter into
and complete the Closing is subject, at the option of the
Buyer acting in accordance with the provisions of Article 13
with respect to termination of this Agreement, to the ful-
fillment on or prior to the Closing Date of the following
conditions, any one or more of which may be waived by it:
8.1 Representations and Covenants. The
representations and warranties of the Sellers contained in
this Agreement shall be true and correct on and as of the
Closing Date with the same force and effect as though made
on and as of the Closing Date. Each of the Sellers shall
have performed and complied with all covenants and agree-
ments required by this Agreement to be performed or complied
with by the Sellers on or prior to the Closing Date. Each
Seller shall have delivered to the Buyer a certificate,
dated the date of the Closing and signed by the Sellers, to
the foregoing effect.
8.2 Necessary Consents All consents listed
on Schedule 8.2 (the "Necessary Consents") shall have been
obtained and be in full force and effect, and the Buyer
shall have been furnished with evidence reasonably satis-
factory to it of the granting of the Necessary Consents.
8.3 Opinions of Counsel to the Sellers. The
Buyer shall have received the opinions of (i) Pryor,
Cashman, Sherman & Flynn, (ii) Lionel Sawyer & Collins, and
(iii) Cowan, Liebowitz, and Lotman, P.C., counsel to the
Sellers, dated the date of the Closing, addressed to the
Buyer, in the form of Exhibit C.
8.4 No Claims. No Claims shall be pending
or, to the knowledge of the Buyer or Knowledge of the
Sellers, threatened, before any Governmental Body to
restrain or prohibit, or to obtain damages or a discovery
order in respect of, this Agreement or the consummation of
the Contemplated Transactions or which has had or may have,
in the reasonable judgment of the Buyer, a materially
adverse effect on the Condition of the Business.
8.5 HSR Act Filing. Any Person required in
connection with the Contemplated Transactions to file a
notification and report form in compliance with the HSR Act
shall have filed such form and the applicable waiting period
with respect to each such form (including any extension
thereof by reason of a request for additional information)
shall have expired or been terminated.
8.6 Consulting Agreement. The consulting
agreement in the form of Exhibit D (the "Consulting
Agreement") shall have been executed and delivered by
Umbach.
8.7 Product and Royalty Agreement. The
product and royalty agreement in the form of Exhibit E (the
"Product and Royalty Agreement") shall have been executed
and delivered by Umbach.
8.8 Financing. The Buyer shall have
obtained financing necessary to pay the Purchase Price,
repay or refinance the Bank Debt and replace the Arkansas
Litigation Letter of Credit on terms and conditions that are
satisfactory to the Buyer in its sole discretion.
8.9 Employees. At the Closing, the Buyer
shall enter into satisfactory arrangements with
substantially all of the employees of the Business, other
than those employees agreed to by the Buyer, pursuant to
which such employees shall become employees of the Buyer and
shall cease to be employees of the Companies.
8.10 Bill of Sale. Each of the Sellers
shall have executed and delivered to the Buyer a Bill of
Sale in form and substance reasonably satisfactory to the
Buyer.
8.11 Assignment of Intellectual Property.
Each of the Sellers shall have executed and delivered to the
Buyer an Assignment of Intellectual Property in form and
substance reasonably satisfactory to the Buyer.
8.12 Assignment of Contracts. Each of the
Sellers shall have executed and delivered to the Buyer an
Assignment of Contracts substantially in form and substance
reasonably satisfactory of the Buyer.
8.13 Lease Amendment. JVWNY shall have
delivered to the Buyer the First Amendment of Lease executed
by Philip DeRaffele et al. d/b/a 2525 Palmer Associates and
JVWNY.
8.14 Release of Liens. Each of the Sellers
shall deliver to the Buyer evidence satisfactory to the
Buyer to cancel, terminate and extinguish all Liens on the
Assets set forth on Schedule 8.14.
8.15 Release of Claims by Affiliates. Each
of the shareholders, directors and Affiliates of the Com-
panies and Umbach and his Affiliates shall have executed
releases in form and substance reasonably satisfactory to
the Buyer releasing the Buyer from any and all causes of
actions or other claims whatsoever against the Buyer or the
Acquired Assets.
8.16 Secretary Certificate. Each of the
Companies shall have executed and delivered to Buyer a
certificate of its Secretary or Assistant Secretary, dated
the Closing Date, certifying (i) that the resolutions
adopted by the Board of Directors and Shareholders of the
Companies authorizing the execution, delivery and per-
formance of this Agreement by such Companies and the
consummation of the Contemplated Transactions, a copy of
which shall be attached to the certificate, were duly
adopted and are in full force and effect, (ii) the
incumbency of each person executing this Agreement or any
other document delivered pursuant to this Agreement on
behalf of the Sellers, and (iii) that the by-laws of the
Companies, a copy of which shall be attached to the
certificate, were duly adopted and are in full force and
effect.
8.17 Certified Charter Documents. Each of
the Companies shall have delivered to the Buyer true and
complete copies of the Articles of Incorporation of such
Company, certified by the Secretary of State or other
appropriate officials of its jurisdiction of organization.
9. Conditions Precedent to the Obligation of the
Sellers to Close. The obligation of the Sellers to enter
into and complete the Closing is subject, at the option of
the Sellers acting in accordance with the provisions of
Article 13 with respect to termination of this Agreement, to
the fulfillment on or prior to the Closing Date of the
following conditions, any one or more of which may be waived
by the Sellers:
9.1 Representations and Covenants. The
representations and warranties of Mistic contained in this
Agreement shall be true and correct on and as of the Closing
Date with the same force and effect as though made on and as
of the Closing Date. Mistic shall have performed and
complied with all covenants and agreements required by this
Agreement to be performed or complied with by them on or
prior to the Closing Date. Mistic shall have delivered to
the Sellers a certificate, dated the date of the Closing and
signed by an officer of Mistic and the Buyer, to the fore-
going effect.
9.2 Opinion of Counsel to the Buyer. The
Sellers shall have received the opinion of Paul, Weiss,
Rifkind, Wharton & Garrison, counsel to the Buyer, dated the
date of the Closing, addressed to the Sellers, in the form
of Exhibit F.
9.3 No Claims. No Claims shall be pending
or, to the knowledge of the Buyer or the Knowledge of the
Sellers, threatened, before any Governmental Body to
restrain or prohibit, or to obtain damages or a discovery
order in respect of, this Agreement or the consummation of
the Contemplated Transactions.
9.4 HSR Act Filing. Any Person required in
connection with the Contemplated Transactions to file a
notification and report form in compliance with the HSR Act
shall have filed such form and the applicable waiting period
with respect to each such form (including any extension
thereof by reason of a request for additional information)
shall have expired or been terminated.
9.5 Product and Royalty Agreement. The
Product and Royalty Agreement shall have been executed and
delivered by the Buyer.
9.6 Instrument of Assumption. The Buyer
shall have executed and delivered to the Sellers an instru-
ment of assumption with respect to the Assumed Liabilities
in form and substance reasonably satisfactory to the
Sellers.
9.7 Payment of Purchase Price. The Buyer
shall have paid the Purchase Price to the Sellers at the
Closing in accordance with Section 3.1 hereof.
10. Non-Competition by the Sellers.
10.1 Covenants Against Competition. Each of
the Sellers acknowledges that (i) the Buyer would not pur-
chase the Business but for the agreements and covenants
contained in this Article 10; (ii) Umbach is one of the
limited number of Persons who developed the Business;
(iii) the Business is conducted throughout the United States
and certain foreign jurisdictions; (iv) Umbach's work for
the Companies has given him and will continue to give him
trade secrets of and confidential information concerning the
Companies; (v) the agreements and covenants contained in
this Article 10 are essential to protect the business and
goodwill of the Business, which is being purchased by the
Buyer; and (vi) Umbach has means to support himself and his
dependents other than by engaging in the Business and the
provisions of this Article 10 will not impair such ability.
Accordingly, the Sellers covenant and agree as follows:
10.1.1 Non-Compete. For a period of
three years following the Closing (the "Restricted Period"),
the Sellers and their Affiliates shall not in the United
States or in any country where the Products are sold,
directly or indirectly, (i) engage in the Business or in the
development or sale of non-alcoholic beverage products,
ideas, formulations or recipes, other than pursuant to the
Consulting Agreement and the Product and Royalty Agreement;
(ii) enter the employ of, or render any services to, any
Person engaged in any non-alcoholic beverage business; or
(iii) become interested in any such Person in any capacity,
including, without limitation, as an individual, partner,
shareholder, officer, director, principal, agent, trustee or
consultant; provided, however, the Sellers and their
Affiliates, may own, directly or indirectly, solely as an
investment, securities of any Person traded on any national
securities exchange if none or the Sellers or their
Affiliates, is a controlling Person of, or a member of a
group which controls, such Person and does not, directly or
indirectly, own 1% or more of any class of securities of
such Person.
10.1.2 Confidential Information; Per-
sonal Relationships. The Sellers promise and agree that,
the Sellers and their Affiliates will not disclose to any
Person not employed by the Buyer or not engaged to render
services to the Buyer, and that the Sellers and their
Affiliates will not use for their benefit or for the benefit
of others, any confidential information of the Business (the
"Confidential Information"), including, without limitation,
"know-how," trade secrets, ideas, formulae, operational
methods, recipes, methods of manufacture, customer lists,
details of client or consultant contracts, product
development techniques or plans, technical production
requirements and other technical processes, designs and
design projects, inventions and research projects
(collectively, the "Special Information"), and pricing
policies, financial data, marketing and sales information,
marketing plans or strategies, business acquisition plans,
new personnel acquisition plans and other personnel data, -
and other proprietary information of the Business during the
Restricted Period and with respect to the Special
Information during the Restricted Period or any time there-
after; provided, however, that this provision shall not
preclude the Sellers and their Affiliates and Umbach's
family members from use or disclosure of information known
generally to the public (other than information known gen-
erally to the public as a result of a violation of this
Section 10.1.2 by the Sellers or the Affiliates or Umbach's
family members) any disclosure required by law or court
order. The Sellers shall have the express right to continue
to conduct the alcoholic beverage business of the Sellers
which may include the sale of fruit flavored alcoholic
beverages which may utilize "basic" or "component" flavors
used by the Companies prior to the Closing; provided,
however, no such activities shall utilize any Confidential
Information and to the extent that the "basic" or
"component" flavors utilize the Confidential Information,
the Sellers may not utilize them.
10.1.3 Property of the Business. All
memoranda, notes, lists, records and other Documents (and
all copies thereof), including such items stored in computer
memories, on microfiche or by any other means, made or
compiled by or on behalf of the Sellers, or made available
to the Sellers relating to the Business, are and shall be
the Property of the Buyer as of the Closing Date and shall
be delivered to the Buyer promptly after the Closing or at
any other time on request.
10.1.4 Employees of the Business.
Except as agreed to in writing by the Buyer, until the third
anniversary of the Closing Date, the Sellers shall not,
directly or indirectly, hire or solicit any employee of the
Business or encourage any such employee to leave such
employment.
10.2 Rights and Remedies Upon Breach. If
any of the Sellers breaches, or threatens to commit a breach
of, any of the provisions of Section 10.1 (the "Restrictive
Covenants"), the Buyer shall have the following rights and
remedies, each of which rights and remedies shall be
independent of the others and severally enforceable, and
each of which is in addition to, and not in lieu of, any
other rights and remedies available to the Buyer under law
or in equity:
10.2.1 Specific Performance. The right
and remedy to have the Restrictive Covenants specifically
enforced by any court of competent jurisdiction, it being
agreed that any breach or threatened breach of the Restric-
tive Covenants would cause irreparable injury to the Buyer,
and that money damages would not provide an adequate remedy
to the Buyer.
10.2.2 Accounting. The right and
remedy to require the Sellers to account for and pay over to
the Buyer all compensation, profits, monies, accruals,
increments and other benefits derived or received by the
Sellers as the result of any transactions constituting a
breach of the Restrictive Covenants.
10.2.3 Indemnification. The rights and
remedies set forth in Article 12.
10.3 Severability of Covenants. Each of the
Sellers acknowledges and agrees that the Restrictive
Covenants are reasonable and valid in geographical and
temporal scope and in all other respects. If any court
determines that any of the Restrictive Covenants, or any
part thereof, is invalid or unenforceable, the remainder of
the Restrictive Covenants shall not thereby be affected and
shall be given full effect, without regard to the invalid
portions.
10.4 Blue-Pencilling. If any court deter-
mines that any of the Restrictive Covenants, or any part
thereof, is unenforceable because of the duration or geo-
graphic scope of such provision, such court shall have the
power to reduce the duration or scope of such provision, as
the case may be, and, in its reduced form, such provision
shall then be enforceable.
10.5 Enforceability in Jurisdictions. The
Buyer and the Sellers intend to and hereby confer juris-
diction to enforce the Restrictive Covenants upon the courts
of any jurisdiction within the geographical scope of the
Restrictive Covenants. If the courts of any one or more of
such jurisdictions hold the Restrictive Covenants unenforce-
able by reason of the breadth of such scope or otherwise, it
is the intention of the Buyer and the Sellers that such
determination not bar or in any way affect the Buyer's right
to the relief provided above in the courts of any other
jurisdiction within the geographical scope of the Restric-
tive Covenants, as to breaches of the Restrictive Covenants
in such other respective jurisdictions, the Restrictive
Covenants as they relate to each jurisdiction being, for
this purpose, severable into diverse and independent
covenants.
10.6 Non-Compete Payments. Subject to
Section 12.5 hereof, in consideration for the Restrictive
Covenants, the Buyer shall pay the Sellers, by wire transfer
to an account or accounts designated in writing by the
Sellers, in the aggregate $3,000,000 in deferred payments
(the "Non-Compete Payments"), payable in the amount of
$900,000 in cash on each of the first through third
anniversary, and $300,000 in cash four months after the
third anniversary, of the Closing; provided, however, that
the Buyer may defer commencement of payment of the Non-
Compete Payments until the date in which the settlement or
judgment in the Arkansas Litigation becomes final and is not
subject to further appeal.
11. Survival.
11.1 Survival of Representations and War-
ranties of the Sellers After Closing. Notwithstanding any
right of Mistic and its Affiliates fully to investigate the
affairs of the Companies and notwithstanding any knowledge
of facts determined or determinable by Mistic and its Affil-
iates pursuant to such investigation or right of investiga-
tion, Mistic and its Affiliates have the right to rely fully
upon the representations, warranties, covenants and agree-
ments of the Sellers contained in this Agreement or in any
Documents delivered pursuant to this Agreement. All such
representations and warranties shall survive the execution
and delivery of this Agreement and the Closing hereunder and
shall continue in full force and effect for a period of two
years after the Closing Date; provided, however, that
(i) the representations and warranties of the Sellers
contained in Sections 5.1, 5.2, the first sentence of 5.18,
5.28(a)(i), 5.28(b)(i) and 5.29 shall continue in full force
and effect indefinitely, (ii) the representations and
warranties of the Sellers contained in Sections 5.3, 5.4,
5.24 and 5.33 shall continue in full force and effect for
three (3) years, (iii) the representations and warranties of
the Sellers contained in Section 5.20 shall continue in full
force and effect for a period of five years after the Clos-
ing Date, (iv) the representations and warranties of the
Sellers contained in Section 5.8 shall continue in full
force and effect for six months after any applicable statute
of limitations (taking into account any waiver or tolling
thereof) with respect to Claims which may arise thereunder
or relate thereto shall have run (the representations and
warranties referred to in clauses (i), (iii) and (iv) are
referred to collectively as the "Basket Exclusions" and the
representations and warranties referred to in clause
(ii) (other than the representations and warranties referred
to in Section 5.24) are referred to collectively as the
"Partial Basket Exclusions"), and (v) any covenants or
agreements contained herein or made pursuant hereto by the
Sellers shall survive until fully discharged. To the extent
any survival period specified herein exceeds an applicable
statute of limitation, the provisions of this Section 11.1
shall constitute a waiver by the Sellers of such statute of
limitation.
11.2 Survival of Representations and War-
ranties of Mistic After Closing. The Sellers have the right
to rely fully upon the representations, warranties,
covenants and agreements of Mistic contained in this Agree-
ment or in any Document delivered pursuant to this Agree-
ment. All such representations and warranties shall survive
the execution and delivery of this Agreement and the Closing
hereunder and shall continue in full force and effect for a
period of two years after the Closing Date; provided,
however, that (i) the representations and warranties of
Mistic contained in Sections 6.1 and 6.2 shall continue in
full force and effect indefinitely, and (ii) any covenants
or agreements contained herein or made pursuant hereto by
Mistic shall survive until fully discharged. To the extent
any survival period specified herein exceeds an applicable
statute of limitation, the provisions of this Section 11.2
shall constitute a waiver by Mistic of such statute of
limitation.
12. General Indemnification.
12.1 Obligation of the Sellers to Indemnify.
Subject to the limitations contained in Article 11, the
Sellers jointly and severally agree to indemnify, defend and
hold harmless Mistic and the Buyer (and their respective
directors, officers, employees, Affiliates, successors and
assigns) from and against all losses, liabilities, damages,
fines, deficiencies, demands, claims, actions, judgments or
causes of action, assessments, costs or expenses (including,
without limitation, interest, penalties and reasonable
attorneys' fees and disbursements, including, without
limitation, reasonable attorneys' fees and disbursements
incurred by the Indemnitee (as defined in Section 12.3.1) in
any action or proceeding between the Indemnitee and the
Indemnifying Party (as defined in Section 12.3.1) or between
the Indemnitee and any third party or otherwise) ("Losses")
based upon, arising out of or otherwise in respect of
(a) any inaccuracy in or any breach of any representation,
warranty, covenant or agreement of the Sellers contained in
this Agreement or in any Documents delivered pursuant to
this Agreement and (b) the Excluded Liabilities. Any
indemnification payments made pursuant to this Section 12.1
shall be deemed an adjustment to the Purchase Price and the
Adjusted Purchase Price, thereby reducing such Purchase
Price and Adjusted Purchase Price by the amount of such
indemnification payments. The Buyer acknowledges that it
will not be entitled to indemnification for liabilities
based upon, arising out of or otherwise in respect of any
breach of the representation of the Sellers contained in
Section 5.9 that none of the Sellers is in violation of
franchise relationship, registration and disclosure, and
business opportunity laws and special industry statutes, to
the extent that the Buyer is assuming such liabilities
pursuant to Section 2.1(e).
12.2 Obligation of the Buyer to Indemnify.
Subject to the limitations contained in Article 11, Mistic
and the Buyer agree to indemnify, defend and hold harmless
the Sellers (and the Companies' respective directors,
officers, employees, Affiliates, successors and assigns)
from and against all Losses based upon, arising out of or
otherwise in respect of (a) any inaccuracy in or any breach
of any representation, warranty, covenant or agreement of
Mistic and the Buyer contained in this Agreement or in any
Documents delivered pursuant to this Agreement, (b) the
Assumed Liabilities and (c) any liability relating to the
Business or the Acquired Assets that is incurred or accrues
after the Closing Date, other than as a result of
(i) actions taken by the Sellers or their Affiliates after
the Closing Date and (ii) any inaccuracy in or any breach of
any representation, warranty, covenant or agreement of the
Sellers contained in this Agreement or in any Documents
delivered pursuant to this Agreement.
12.3 Notice and Opportunity to Defend.
12.3.1 Notice of Asserted Liability.
Promptly after receipt by any party hereto (the "Indem-
nitee") of notice of any demand, claim or circumstances
which, with the lapse of time, would or might give rise to a
claim or the commencement (or threatened commencement) of
any action, proceeding or investigation (an "Asserted
Liability") that may result in a Loss, the Indemnitee shall
give written notice thereof (the "Claims Notice") to any
other party or parties obligated to provide indemnification
pursuant to Section 12.1 or 12.2 (the "Indemnifying Party").
The Claims Notice shall describe the Asserted Liability in
reasonable detail, and shall indicate the amount (estimated,
if necessary and to the extent feasible) of the Loss that
has been or may be suffered by the Indemnitee.
12.3.2 Opportunity to Defend. Subject
to the limitations set forth in this Section 12.3, the
Indemnifying Party may elect to compromise or defend, at its
own expense and by its own counsel, any Asserted Liability.
If the Indemnifying Party elects to compromise or defend
such Asserted Liability, it shall within 30 days (or sooner,
if the nature of the Asserted Liability so requires) notify
the Indemnitee of its intent to do so, and the Indemnitee
shall cooperate, at the expense of the Indemnifying Party,
in the compromise of, or defense against, such Asserted
Liability. If the Indemnifying Party elects not to compro-
mise or defend the Asserted Liability, fails to notify the
Indemnitee of its election as herein provided or contests
its obligation to indemnify under this Agreement, the Indem-
nitee may pay, compromise or defend such Asserted Liability.
Notwithstanding the foregoing, neither the Indemnifying
Party nor the Indemnitee may settle or compromise any claim
over the objection of the other; provided, however, that
consent to settlement or compromise shall not be unreason-
ably withheld or delayed. In any event, the Indemnitee and
the Indemnifying Party may participate, at their own
expense, in the defense of such Asserted Liability. If the
Indemnifying Party chooses to defend any claim, the Indem-
nitee shall make available to the Indemnifying Party any
books, records or other Documents within its control that
are necessary or appropriate for such defense.
12.3.3 Disputes with Customers, Distri-
butors, Co-packers, Sales Agents or Suppliers. Anything in
Section 12.3.2 to the contrary notwithstanding, in the case
of any Asserted Liability by any customers, distributors,
co-packers, sales agents or suppliers of any of the Com-
panies with respect to the Business in connection with which
Mistic or the Buyer may make a claim against the Sellers for
indemnification pursuant to Section 12.1, Mistic or the
Buyer shall give a Claims Notice with respect thereto but,
unless Mistic or the Buyer and the Indemnifying Party other-
wise agree, Mistic or the Buyer shall have the exclusive
right at its option to defend, at its own expense, any such
matter, subject to the duty of Mistic and the Buyer to
consult with the Indemnifying Party and its attorneys in
connection with such defense and provided that no such
matter shall be compromised or settled by the Buyer without
the prior written consent of the Indemnifying Party, which
consent shall not be unreasonably withheld or delayed. The
Indemnifying Party shall have the right to recommend in good
faith to the Buyer proposals to compromise or settle claims
brought by a customer, distributor, co-packer, sales agent
or supplier, and Mistic and the Buyer agree to present such
proposed compromises or settlements to such customer,
distributor, co-packer, sales agent or supplier. All
amounts required to be paid in connection with any such
Asserted Liability pursuant to the determination of any
Governmental Body, and all amounts required to be paid in
connection with any such compromise or settlement consented
to by the Indemnifying Party, shall be borne and paid by the
Indemnifying Party. The parties agree to cooperate fully
with one another in the defense, compromise or settlement of
any such Asserted Liability.
12.4 Limitations on Indemnification. The
indemnification provided for in Sections 12.1(a) and 12.2(a)
shall be subject to the following limitations:
(a) The Sellers shall not be obligated
to pay any amounts for indemnification under Section 12.1(a)
for Losses based upon, arising out of or otherwise in
respect of any inaccuracy in or any breach of any represen-
tation or warranty contained in Article 5 (other than as
provided in clauses (b), (c), (d) and (e) of this
Section 12.4) until the aggregate amounts for
indemnification of such Losses plus any Losses under the
Basket Exclusions, the Partial Basket Exclusions,
Section 5.24 plus amounts, if any, applied pursuant to
Section 12.4(b)(ii) equal $750,000 (the "Basket Amount"),
whereupon the Sellers shall be obligated to pay all such
amounts for indemnification in excess of the Basket Amount
and any such indemnification payment with respect thereto
shall be limited to $15,000,000 (the "Cap").
(b) The Sellers shall not be obligated
to pay any amounts for indemnification under Section 12.1(a)
for Losses based upon, arising out of or otherwise in
respect of any inaccuracy in or any breach of any
representation or warranty contained in Sections 5.14, 5.15
and 5.19 until the aggregate amounts for indemnification of
such Losses equal $200,000, whereupon the Sellers shall
apply all such amounts for indemnification (excluding the
first $200,000) against the Basket Amount set forth in
Section 12.4(a). Any such indemnification payment with
respect thereto shall be limited to the Cap set forth in
Section 12.4(a).
(c) The Sellers shall not be obligated
to pay any amounts for indemnification under Section 12.1(a)
for Losses based upon, arising out of or otherwise in
respect of any inaccuracy in or any breach of any represen-
tation or warranty contained in Section 5.24 until the
amount for indemnification for any Loss individually equals
$50,000 or the amounts for indemnification for all such
Losses in the aggregate equals $250,000, whereupon the
Sellers shall be obligated to pay all such amounts in excess
of the $50,000 and $250,000. Any such indemnification
payment with respect thereto shall be limited to the
Intermediate Cap set forth in Section 12.4(d).
(d) The Sellers shall not be obligated
to pay any amounts for indemnification under Section 12.1(a)
for Losses based upon, arising out of or otherwise in
respect of any inaccuracy in or any breach of any of the
Partial Basket Exclusions until the aggregate amounts for
indemnification of such Losses equal $200,000 (the "Partial
Basket Exclusion Amount"), whereupon the Sellers shall be
obligated to pay all such amounts for indemnification in
excess of the Partial Basket Exclusion Amount and any such
indemnification payment with respect thereto shall be
limited to $40,000,000 ("Intermediate Cap").
(e) The Buyer shall be entitled to
receive the full amount for indemnification under Section
12.1(a) for Losses based upon, arising out of or otherwise
in respect of any inaccuracy in or any breach of any of the
Basket Exclusions; provided, however, in no event shall the
Sellers have any liability for indemnification under this
Agreement in an aggregate amount in excess of the Adjusted
Purchase Price.
(f) The Sellers shall be entitled to
received the full amount for indemnification under Sec-
tion 12.2(a) for Losses based upon, arising of or otherwise
in respect of any inaccuracy in or breach of any represen-
tation or warranty contained in Article 6; provided,
however, in no event shall Mistic or the Buyer have any
liability for indemnification under this Agreement in an
aggregate amount in excess of the Adjusted Purchase Price.
12.5 Set-off Rights. The Sellers agree that
the Buyer shall have the right, but not the obligation, to
set-off against its payment obligations for the Non-Compete
Payments, payments under the Consulting Agreement and the
Product and Royalty Agreement (the "Royalty Payments"),
payments under the Note (the "Note Payments") and any of its
payment obligations after the Closing in connection with the
adjustment to the Purchase Price pursuant to Section 3.2
(together with the Non-Compete Payments, the Royalty
Payments and the Note Payments, the "Set-off Payments")
(i) the full amount of any Losses required to be paid by the
Sellers pursuant to Section 12.1 if such Losses are not
otherwise paid within 30 days after the Buyer has requested
payment and (ii) any of the Sellers' payment obligations
after the Closing in connection with the adjustment to the
Purchase Price pursuant to Section 3.2; provided, however,
that the Buyer shall be obligated to set-off, prior to
seeking any payment directly from the Sellers, against the
Set-Off Payments, any and all claims the Buyer may have
against the Sellers relating to the Arkansas Litigation
Costs, other than the Buyer Arkansas Payment. If the Buyer
elects to exercise its set-off rights hereunder, it will
give to the Sellers written notice of such election which
includes the amount to be set-off, and upon giving of such
notice the amount of obligations for the Non-Compete
Payments, the Royalty Payments and the Note Payments shall
automatically be reduced by the amount set forth in such
notice. In the event there is a final determination by a
court of competent jurisdiction that the Buyer was not
entitled to indemnification under this Article 12 with
respect to the set-off amount, the Buyer shall promptly
thereafter repay to the Sellers all such amounts which are
so determined to have been incorrectly set-off plus interest
at a rate of 9% per annum. For purposes of this
Section 12.5, a determination shall be final if any and all
appeals therefrom shall have been resolved or if 30 days
shall have passed from the rendering of such determination
(or of any determination on appeal therefrom) and no party
shall have commenced any such appeal therefrom.
13. [Intentionally Omitted.]
14. Miscellaneous.
14.1 Certain Definitions. (a) As used in
this Agreement, the following terms have the following
meanings:
(i) "Actual Knowledge" with respect to
the Sellers, means the knowledge of Umbach and any of the
other officers, directors or shareholders of the Companies,
after consultation with the Key Employees, but without any
other independent investigation; and "Actually Known" has a
correlative meaning.
(ii) "Affiliate" means, with respect to
any Person, any other Person controlling, controlled by or
under common control with, such Person or the parents,
spouse, siblings, siblings of spouse, children, or
beneficiaries of, such Person.
(iii) "Business Combination" means any
merger, consolidation or combination to which any of the
Sellers is a party, any sale, dividend, split,
recapitalization or other disposition of capital stock or
other equity interest of any of the Companies or any sale,
dividend or other disposition of all or substantially all of
the assets and properties of any of the Companies or any
significant financing or refinancing by any of the Com-
panies.
(iv) "Documents" means all documents,
Contracts, instruments, certificates, notices, consents,
affidavits, letters, telegrams, telexes, statements, sched-
ules (including Schedules to this Agreement), exhibits
(including Exhibits to this Agreement) and any other papers
whatsoever.
(v) "Employee Plan" means any employ-
ment, severance or similar contract or arrangement (whether
or not written) or any plan, policy, fund, program or con-
tract or arrangement (whether or not written) providing for
compensation, bonus, profit-sharing, stock option, or other
stock related rights or other forms of incentive or deferred
compensation, vacation benefits, insurance coverage (includ-
ing any self-insured arrangements) health or medical
benefits, disability benefits, worker's compensation, sup-
plemental unemployment benefits, severance benefits and
post-employment or retirement benefits (including compensa-
tion, pension, health, medical or life insurance or other
benefits), including, without limitation, each "employee
benefit plan" within the meaning of Section 3(3) of ERISA
that (1) is entered into, maintained, administered or
contributed to, as the case may be, by any of the Sellers or
their respective Affiliates and (2) covers any current or
former employee of the Business.
(vi) "Environmental Laws" means all
federal, state, local and foreign laws, regulations and
codes, as well as orders, decrees, judgments or injunctions
issued, promulgated, approved or entered thereunder relating
to pollution, protection of the environment or health and
safety.
(vii) "ERISA" means the Employee
Retirement Income Security Act of 1974, as amended and the
rules and regulations promulgated thereunder.
(viii) "ERISA Affiliate" with respect to
any entity, means any other entity which, together with such
entity, would be treated as a single employer under
Section 414 of the Code.
(ix) "FDA" means the U.S. Food & Drug
Administration.
(x) "Knowledge" with respect to the
Sellers, means the knowledge of Umbach and any of the other
officers, directors or shareholders of the Companies, after
reasonable investigation; and "Knows" has a correlative
meaning.
(xi) "Lien" means any lien, pledge,
mortgage, security interest, claim, lease, charge, option,
right of first refusal, easement, servitude, transfer
restriction under any shareholder or similar agreement,
encumbrance or any other restriction or limitation what-
soever.
(xii) "Multiemployer Plan" means each
Employee Plan that is a multiemployer plan, as defined in
Section 3(37) of ERISA.
(xiii) "Person" means any individual,
corporation, partnership, firm, joint venture, association,
joint-stock companies, trust, unincorporated organization,
Governmental Body or other entity.
(xiv) "Taxes" mean all federal, state,
county, local, foreign and other taxes of any kind
whatsoever (including, without limitation, income, profits,
premium, estimated, excise, sales, use, occupancy, gross
receipts, franchise, ad valorem, severance, capital levy,
production, transfer, license, stamp, environmental, with-
holding, employment, unemployment compensation, payroll
related and property taxes, import duties and other govern-
mental charges and assessments), whether or not measured in
whole or in part by net income, and including deficiencies,
interest, additions to tax or interest, and penalties with
respect thereto, and including expenses associated with
contesting any proposed adjustment related to any of the
foregoing.
(xv) "Transaction Sales Taxes" means any
transfer, sales or use Taxes payable in connection with the
sale and purchase of the Acquired Assets and/or the
consummation of the Contemplated Transactions.
(xvi) "USDA" means the U.S. Department of
Agriculture.
(xvii) "Wine Division Net Equity" means
(A) the sum of cash, accounts receivable, inventory and
fixed assets less (B) the sum of accounts payable and
accrued liabilities, in each case of the Companies relating
to the Companies' alcoholic beverage business as of the
July 31, 1995, as reflected on the Wine Division Balance
Sheet.
(xviii) "Wine Division Net Profit or Net
Loss" means the net profit or net loss of the Companies
relating to the Companies' alcoholic beverage business for
the period from June 1, 1995 through July 31, 1995, as
reflected on the Wine Division Income Statement.
(b) The following capitalized terms are
defined in the following Sections of this Agreement:
Term Section
Acquired Assets 1.1
Actual Knowledge 14.1(a)
Adjusted Purchase Price 3.1
Adjustment Statement 3.2(a)
Affiliate 14.1(a)
Affiliate Liabilities 2.2(b)
Agent 14.2(b)
Arkansas Litigation 2.1(c)
Arkansas Litigation Cost 2.1(c)
Arkansas Litigation Letter of Credit 7.9
Asserted Liability 12.3.1
Assumed Liabilities 2.1
Audited Financials 5.6
Balance Sheet 5.6
Balance Sheet Date 5.6
Bank 2.1(b)
Bank Debt 2.1(b)
Basket Amount 12.4(a)
Basket Exclusions 11.1
Best Flavors Preamble
Broker 7.5
Business Preamble
Business Combination 14.1(a)
Buyer Preamble
Buyer Arkansas Payment 2.1(c)
Buyer Sales Tax Audit Payment 2.1(d)
Buyer Transaction Sales Tax Payment 2.1(d)
Cap 12.4(a)
Claims 5.11
Claims Notice 12.3.1
Closing 1.1
Closing Date 1.1
Companies Preamble
Condition of the Business 5.4
Consulting Agreement 8.6
Confidential Information 10.1.2
Contemplated Transactions 1.1
Contracts 5.10
Credit Agreement 2.1(b)
D&T 7.2
Documents 14.1(a)
Employee Plan 14.1(a)
ERISA 14.1(a)
ERISA Affiliate 14.1(a)
Excess Amount 3.2(a)
Excluded Assets 1.2
Excluded Liabilities 2.2
Environmental Laws 14.1(a)
FDA 14.1(a)
Final Date 13.1(i)
GAAP 5.6
GT 5.6
Governmental Body 5.9(a)
Greenwald Debt 7.6
HSR Act 5.31
Indemnifying Party 12.3.1
Indemnitee 12.3.1
Intellectual Property 1.1(i)
Interim Balance Sheet 5.6
Interim Financials 5.6
Intermediate Cap 12.4(d)
JVWNY Preamble
Key Employees 7.7(a)
Knowledge 14.1(a)
Laws 5.9(a)
Leases 5.13(a)
Liabilities 5.20
Lien 14.1(a)
Losses 12.1
Mistic Preamble
Multiemployer Plan 14.1(a)
Nature's Own Preamble
Necessary Consents 8.2
Non-Compete Payments 10.6
Note 3.3
Note Payments 12.5
Nubian 1.1(b)
Orders 5.9(a)
Partial Basket Exclusion Amount 12.4(d)
Partial Basket Exclusions 11.1
Permits 5.9(b)
Person 14.1(a)
Product and Royalty Agreement 8.7
Product Compliance 5.9(c)
Products 5.9(c)
Proposed Contracts 5.12(a)
Purchase Price 3.1
Representatives 7.2
Required Consents 5.10
Restricted Period 10.1.1
Restrictive Covenants 10.2
Royalty Payments 12.5
S&D 1.1(b)
Sellers Preamble
Set-off Payments 12.5
Special Information 10.1.2
State Food Authorities 5.9
Stub Tax Period 7.11(b)
Tangible Property 1.1(d)
Taxes 14.1(a)
Transaction Sales Taxes 14.1(a)
Transferred Employees 7.7(a)
Umbach Preamble
USDA 14.1(a)
WARN 7.7(c)
Wine Division Balance Sheet 3.2(a)
Wine Division Income Statement 3.2(a)
Wine Division Net Equity 14.1(a)
Wine Division Net Profit or Net Loss 14.1(a)
14.2 Consent to Jurisdiction; Service of
Process.
(a) Any legal action, suit or
proceeding arising out of or relating to this Agreement or
the Contemplated Transactions may be instituted in any
federal court of the Southern District of New York or any
state court located in New York County, State of New York,
and each party agrees not to assert, by way of motion, as a
defense or otherwise, in any such action, suit or proceed-
ing, any claim that it is not subject personally to the
jurisdiction of such court, that the action, suit or pro-
ceeding is brought in an inconvenient forum, that the venue
of the action, suit or proceeding is improper or that this
Agreement, the Consulting Agreement, the Product and Royalty
Agreement or the subject matter hereof may not be enforced
in or by such court on jurisdictional grounds.
(b) Each Seller hereby appoints John P.
Napoli (the "Agent"), at the Agent's offices of Pryor,
Cashman, Sherman & Flynn, 410 Park Avenue, New York, New
York 10022, or his office at such other address in New York,
New York, as he hereafter furnishes to the other parties, as
such party's authorized agent to accept and acknowledge on
such party's behalf service of any and all process that may
be served in any such action, suit or proceeding. Any and
all service of process in any such action, suit or
proceeding shall be effective against any party if given
personally or by registered or certified mail, return
receipt requested, or by any other means of mail that
requires a signed receipt, postage prepaid, mailed to such
party as herein provided, or by personal service on the
Agent with a copy of such process mailed to such party by
first class mail or registered or certified mail, return
receipt requested, postage prepaid. The service of process
shall be deemed complete when mailed by registered or
certified mail or by any other means of mail that requires a
signed receipt, or if given by personal service when the
party or the Agent is personally served. Nothing herein
contained shall be deemed to affect the right of any party
to serve process in any manner permitted by law or to
commence legal proceedings or otherwise proceed against any
other party in any other jurisdiction.
14.3 Notices. Any notice or other communi-
cation required or permitted hereunder shall be in writing
and shall be delivered personally, telegraphed, telexed,
sent by facsimile transmission or sent by certified, regis-
tered or overnight express mail, postage prepaid. Any such
notice shall be deemed given when so delivered personally,
or if telegraphed, telexed or sent by facsimile transmission
on the date the receipt of the transmission is confirmed or,
if mailed by overnight mail, the business day after the date
of deposit with a reputable overnight courier service, or if
mailed by non-overnight certified or registered mail, five
days after the date of deposit in the United States mails,
as follows:
(i) if to Mistic or the Buyer to:
Mistic Brands, Inc.
2525 Palmer Avenue
New Rochelle, New York 10801
Attention: Ernest J. Cavallo
Facsimile: (914) 637-0020
with a copy to:
Triarc Companies, Inc.
900 Third Avenue
New York, NY 10022
Attention: Executive Vice
President and
General Counsel
Facsimile: (212) 230-3216
and to:
Paul, Weiss, Rifkind, Wharton &
Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Neale M. Albert, Esq.
Facsimile: (212) 757-3990
(ii) if to the Sellers to:
102 Overlook Drive
Greenwich, CT 06830
Attention: Joseph Umbach
Facsimile: (203) 869-2797
with a copy to:
Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
Attention: John P. Napoli, Esq.
Facsimile: (212) 326-0806
Any party may by notice given in accordance with this Sec-
tion to the other parties designate another address or
Person for receipt of notices hereunder.
14.4 Entire Agreement. This Agreement
(including the Exhibits and Schedules) and any collateral
agreements executed in connection with the consummation of
the Contemplated Transactions contain the entire agreement
among the parties with respect to the purchase of the
Acquired Assets and supersede all prior agreements, written
or oral, with respect thereto.
14.5 Waivers and Amendments; Non-Contractual
Remedies; Preservation of Remedies. This Agreement may be
amended, superseded, canceled, renewed or extended, and the
terms hereof may be waived, only by a written instrument
signed by Mistic or the Buyer and the Sellers or, in the
case of a waiver, by the party waiving compliance. No delay
on the part of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any such right,
power or privilege, nor any single or partial exercise of
any such right, power or privilege, preclude any further
exercise thereof or the exercise of any other such right,
power or privilege. The rights and remedies herein provided
are cumulative and are not exclusive of any rights or
remedies that any party may otherwise have at law or in
equity. The rights and remedies of any party based upon,
arising out of or otherwise in respect of any inaccuracy in
or breach of any representation, warranty, covenant or
agreement contained in this Agreement or any Documents
delivered pursuant to this Agreement shall in no way be
limited by the fact that the act, omission, occurrence or
other state of facts upon which any claim of any such
inaccuracy or breach is based may also be the subject matter
of any other representation, warranty, covenant or agreement
contained in this Agreement or any Documents delivered
pursuant to this Agreement (or in any other agreement
between the parties) as to which there is no inaccuracy or
breach.
14.6 Governing Law. This Agreement shall be
governed and construed in accordance with the laws of the
State of New York applicable to agreements made and to be
performed entirely within such State.
14.7 Binding Effect; Assignment. This
Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors and legal repre-
sentatives. This Agreement may not be assigned by the
Sellers. This Agreement may be assigned by Mistic in whole
or in part to one or more of its Affiliates or designees and
to any sources providing Mistic and/or the Buyer with the
financing to consummate the Contemplated Transactions.
14.8 Variations in Pronouns. All pronouns
and any variations thereof refer to the masculine, feminine
or neuter, singular or plural, as the context may require.
14.9 Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts,
each of which when so executed and delivered shall be an
original, but all such counterparts shall together consti-
tute one and the same instrument. Each counterpart may
consist of a number of copies hereof each signed by less
than all, but together signed by all of the parties hereto.
14.10 Exhibits and Schedules. The Exhibits
and Schedules are a part of this Agreement as if fully set
forth herein. All references herein to Sections, Exhibits
and Schedules shall be deemed references to such parts of
this Agreement, unless the context shall otherwise require.
14.11 Headings. The headings in this Agree-
ment are for reference only, and shall not affect the inter-
pretation of this Agreement.
14.12 Severability of Provisions. If any
provision or any portion of any provision of this Agreement,
or the application of any such provision or any portion
thereof to any Person or circumstance, shall be held invalid
or unenforceable, the remaining portion of such provision
and the remaining provisions of this Agreement, and the
application of such provision or portion of such provision
as is held invalid or unenforceable to Persons or
circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby.
14.13 Cooperation. The Buyer and the
Sellers shall cooperate fully with each other and their
respective counsel and accountants in connection with any
actions required to be taken as a part of their respective
obligations under this Agreement including but not limited
to the obtaining of all Necessary Consents. Each of the
Sellers and the Buyer shall take such actions, and shall
execute and deliver to the other party such further
documents as such party shall reasonably request to ensure,
complete and evidence the full and effective transfer of the
Acquired Assets to the Buyer or to otherwise consummate the
Contemplated Transactions, including all documents necessary
or desirable to record the transfer of the Intellectual
Property. In addition, the Buyer shall afford the Sellers
or their representatives, upon prior written notice, at
reasonable times, full access to all the books and records
of the Business relating to all periods prior to the Closing
Date in the possession of the Buyer that are necessary in
order to enable the Sellers to prepare their tax returns for
periods ending prior to the Closing Date or to respond to a
tax audit relating to a period ending on or prior to the
Closing Date or for any other legitimate business purpose
relating to such period. The Buyer shall cause their
employees to cooperate and assist the Sellers or their
representatives in locating information and responding to
any information requests issued by any Governmental Body.
The Buyer shall permit the Sellers or their representatives
to copy the records set forth on Schedule 14.13 relating to
periods ending on or prior to the Closing Date, at the
Sellers' expense and shall cause their employees to
cooperate and assist Sellers or their representatives in
locating information for copying. The Buyer agrees to
retain such records consistent with the past practice of the
Business for a five (5) year period after the Closing Date.
14.14 No Third Party Beneficiaries. This
Agreement shall not, and shall not be deemed to, confer any
rights or remedies upon any Person other than the Sellers,
Mistic and the Buyer and their respective successors and
permitted assigns.
IN WITNESS WHEREOF, the parties have executed this
Agreement on the date first above written.
MISTIC BRANDS, INC.
By:ERNEST J. CAVALLO
----------------------------
Name: Ernest J. Cavallo
Title: President and CFO
JOSEPH UMBACH
-------------------------------
JOSEPH UMBACH
JOSEPH VICTORI WINES, INC.
By:JOSEPH UMBACH
----------------------------
Name: Joseph Umbach
Title: President and CFO
BEST FLAVORS, INC.
By:JOSEPH UMBACH
----------------------------
Name: Joseph Umbach
Title: President and CFO
NATURE'S OWN BEVERAGE COMPANY
By:JOSEPH UMBACH
----------------------------
Name: Joseph Umbach
Title: President and CFO
<PAGE>
Exhibit A
PROMISSORY NOTE
$1,000,000.00 August 9, 1995
FOR VALUE RECEIVED, the undersigned, MISTIC
BRANDS, INC., a Delaware corporation ("Mistic"), hereby
promises to pay to the order of JOSEPH UMBACH, an individual
("Umbach"), the sum of One Million Dollars ($1,000,000.00)
payable in eight quarterly installments of $125,000.00 each,
beginning three months after the date hereof and continuing
every three months thereafter until the eight installments
have been paid. No interest shall accrue under this Note.
All amounts payable hereunder shall be payable in lawful
money of the United States of America by delivery of a check
to Umbach at 102 Overlook Drive, Greenwich, CT 06830 or at
such other place as Umbach shall designate in writing.
Any payments due to Umbach hereunder shall be
subject to a right (but not an obligation) of set-off by
Mistic pursuant to Section 12.5 of the Asset Purchase
Agreement ("Asset Purchase Agreement") made as of August 9,
1995, by and among Mistic, on the one hand, and Umbach,
Joseph Victori Wines, Inc., a New York corporation, Best
Flavors, Inc., a Nevada corporation, and Nature's Own
Beverage Company, a Delaware corporation, on the other hand.
If Mistic fails to pay any installment under this
Note when due and payable, such unpaid sum shall thereafter
bear interest at a rate equal to 9% per annum until such
amount has been paid in full.
If Mistic fails to pay any installment within
thirty days after it is due, Umbach may declare all unpaid
installments due and payable, except that Umbach shall not
be entitled to declare such installments due and payable if
Mistic has elected to pursue its right of set-off pursuant
to Section 12.5 of the Asset Purchase Agreement. In the
event of a final determination by a court of competent
jurisdiction that Mistic was not entitled to set-off such
amounts, Mistic shall have thirty days to repay the Sellers
all unpaid installments which are so determined to have been
incorrectly set-off plus the 9% interest referred to above.
If Mistic fails to pay such amounts within such thirty days,
Umbach shall be entitled to declare all unpaid installments
due and payable.
If Mistic voluntarily files for bankruptcy or is
involuntarily placed into bankruptcy by a creditor of
Mistic, all unpaid installments shall be immediately due and
payable.
This Note may only be amended or supplemented at
any time by the mutual written consent of Mistic and Umbach.
This Note shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and
permitted assigns.
IN WITNESS WHEREOF, this Note is executed as of
the date set forth above.
MISTIC BRANDS, INC.
By: _________________________
Name:
Title:
<PAGE>
Exhibit B
SEVERANCE PAYMENT SCHEDULE FOR
EMPLOYEES TERMINATED BY BUYER WITHOUT CAUSE
WITHIN 12 MONTHS FROM CLOSING
Group I
Vice Presidents, Directors and Sales and Brand Managers
reporting directly to the President (10 people) :
Less than one (1) year of service (2 people):
- four (4) weeks severance pay
Over one (1) year of service (8 people):
- eight (8) weeks severance pay plus
- two (2) weeks severance pay for each
year of service* and,
- if after twelve (12) weeks employee does
not have employment, severance pay will
continue until employment is found up to
a maximum of an additional twelve (12)
weeks provided employee has displayed a
good faith effort to seek employment.
Group II
All other employees (138 people):
Less than one (1) year of service:
- two (2) weeks severance pay
Over one (1) year of service:
- two (2) weeks severance pay plus
- two (2) weeks severance pay for each
year of service*.
_____
*1 week for each completed 6 months of service.
<PAGE>
Exhibit C
[LETTERHEAD OF PRYOR, CASHMAN, SHERMAN & FLYNN]
August 9, 1995
Mistic Brands, Inc.
2525 Palmer Avenue
New Rochelle, NY 10801
Re: Joseph Victori Wines, Inc., Best Flavors, Inc.,
Natures's Own Beverage Company and Joseph Umbach
Ladies and Gentlemen:
We have acted as counsel to Joseph Victori Wines, Inc.,
a New York corporation ("JVWNY"), Bet Flavors, Inc., a Nevada
corporation ("Best Flavors"), Nature's Own Beverage Company, a
Delaware corporation ("Nature's Own") (JVWNY, Best Flavors and
Nature's Own are collectively referred to as the "Companies") and
Joseph Umbach ("Umbach" and collectively with the Companies, the
"Sellers"), in connection with the transactions contemplated by
that certain Asset Purchase Agreement, dated as of the date
hereof (the "Purchase Agreement"), between the Sellers and Mistic
Brands, Inc., a Delaware corporation ("Mistic"). This opinion is
being delivered to you pursuant to Section 8.3 of the Purchase
Agreement. Capitalized terms not otherwise defined herein
shall have the respective meaning set forth in the Purchase
Agreement.
In connection with this opinion, we have examined
originals or copies certified or otherwise reproduced to our
satisfaction, of such records, documents or other instruments as
in our judgment are necessary or appropriate to enable us to
render the opinions hereinafter expressed, including, without
limitation, the following, each of which are dated as of the date
hereof (collectively, the "Documents");
(i) The Purchase Agreement;
(ii) The Consulting Agreement;
(iii) The Product and Royalty Agreement;
(iv) The Bill of Sale, Assignment and Transfer from
the Sellers to Mistic;
(v) The Assignment of Contracts between Mistic and the
Sellers;
(vi) The Assignments of Intellectual Property from the
Sellers to Mistic;
(vii) The Assignment of Leases from the Sellers to
Mistic; and
(viii) The Assumption Agreement between the Sellers and
Mistic.
In addition, we have examined such documents, corporate
records and other instruments as we have deemed necessary for the
purpose of rendering this opinion, including, without limitation,
the certificate of incorporation and the by-laws of each of the
Companies. In such examination, we have assumed the genuineness
of all signatures, the legal competence of the signers, the
authenticity of all documents submitted to us as originals and
the conformity with originals of all documents submitted to us a
certified, photostatic, reproduced or conformed copies. As to
any facts material to this opinion, we have, to the extent that
such facts were not independently established, relied upon
certificates of public officials and statements and certificates
of officers of the Companies and Umbach and upon the factual
matters contained in the representations and warranties of the
Sellers made in or pursuant to the Documents.
Based upon the foregoing, and subject to the
assumptions, exceptions and qualifications set forth herein, we
are of the opinion
that:
1. Each of the Companies (i) is a corporation validly
organized and existing in good standing under the laws of the
state of its incorporation and (ii) has the requisite corporate
power and authority to carry on the Business as it is now being
conducted and to own the properties used in the conduct of the
Business.
2. Each of the Companies is duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction set forth on Exhibit A.
3. Each of the Companies has the requisite corporate
power and authority to execute and deliver each of the Documents
to which it is a party and perform fully its obligations under
such Documents; Umbach has the requisite power and authority to
execute and deliver each of the Documents to which he is a party
and to perform fully his obligations under such Documents.
4. The execution, delivery and performance by each of
the Companies of each of the documents to which each Company is a
party have been duly authorized by all necessary corporate
action.
5. Each of the Documents to which each of the Sellers
is a party (assuming the valid authorization, execution and
delivery of each of the Documents by Mistic) is the valid and
binding obligation of each of the Sellers, enforceable against
them in accordance with the terms of the Documents.
6. the execution and delivery by each of the sellers
of the Purchase Agreement, the consummation of the Contemplated
Transactions and the performance by each of the Sellers of the
Purchase Agreement will not conflict with or result in any breach
or violation of any of the terms and conditions of, or default
under, the Articles of Incorporation or By-laws of any of the
Companies.
7. The execution, delivery and performance of the
Documents, and the consummation of the Contemplated Transactions
will not (i) require the Sellers to obtain any consent, approval
or action of, or make any filing with, or give any notice to, any
person, except the Required Consents set forth on Schedule 5.10;
(ii) if the Required consents are obtained, violate, conflict
with or result in the breach of any of the terms of, result in a
modification of the effect of, otherwise cause the termination of
or give any other contracting party the right to terminate or any
other right, or constitute (or with notice or lapse of time or
both constitute) a default (by way of substitution, novation or
otherwise) under any of the Contracts listed on Schedules
5.12 or 5.13 of the Purchase Agreement, which violation,
conflict, breach, modification, termination, termination right or
other right, or default could have a material adverse effect on
the Condition of the Business, or result in the creation of any
Lien upon the properties of the Companies pursuant to the terms
of any such Contract; (iii) if the Required consents are
obtained, to our knowledge, violate any Order of any Governmental
Body against, or binding upon, the Companies or upon their
respective securities, properties or business; (iv) if the
Required Consents are obtained, violate any laws of the States of
New York, Delaware and Nevada or of the federal laws of the
Untied States or any Governmental Body, which violation could
have a material adverse effect on the Condition of the Business;
or (v) if the Required Consents are obtained, violate or result
in the revocation or suspension of any Permit, which violation,
revocation or suspension could have a material adverse effect on
the Condition of the Business.
8. The instruments of conveyance and transfer of the
Acquired Assets delivered to Mistic at the Closing are in proper
form under New York, Nevada and Delaware law to fully convey the
interests purported to be conveyed thereunder.
9. To our knowledge, except as set forth on Schedules
5.11 and 5.17 of the Purchase Agreement, there are no Claims
pending or threatened by or against the Sellers that would
materially and adversely affect the consummation of the
Contemplated Transactions.
The foregoing opinions are subject to the following
assumptions, exceptions and qualifications:
(a) The enforceability of the documents may be: (i)
subject to bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws now or
hereafter in effect relating to or affecting creditors' rights or
remedies generally; and (ii) subject to general principles of
equity, including without limitation, the availability of
specific performance, regardless of whether considered in a
proceeding in equity or at law;
(b) We express no opinion with respect to: (i) the
enforceability of forum selection clauses in the federal courts
and (ii) the enforceability of clauses selecting forums outside
of the State of New York; (iii) the discretion of the court
before which any proceeding may be brought; (iv) the
enforceability of any choice of law provision and (v) rights to
indemnification and contribution which may be limited by
applicable law or equitable principles.
(c) We express no opinion with respect to the
ownership of the Trademarks and conveyance of good title to the
Trademarks or as to any pending or threatened Claims against that
Sellers which have or would have a material adverse effect on the
conveyance of the Trademarks.
We advise you that we are members only of the Bar of
the State of New York and the opinions expressed herein are
limited to the laws of the State of New York, the corporate laws
of the State of Delaware with respect to which laws we are
generally familiar, and the federal laws of the United States.
Our opinion is rendered only with respect to the laws, and the
rules, regulations and orders thereunder, which are currently in
effect. As members of the Bar of the State of New York, we do
not purport to be experts on the laws of any other state. We
have relied exclusively upon the legal opinion of Lionel,
Sawyer & Collins attached hereto as Exhibit B, with respect to
all opinions expressed herein with respect to the laws of the
State of Nevada. The opinion of Lionel, Sawyer & Collins is in
form and substance satisfactory to us and, in our opinion, you
are, and we are, justified in relying thereon.
This letter speaks only as of its date and applies only
to the matters specifically covered by this letter. We expressly
disclaim any obligation to supplement this opinion if any
applicable laws change after the date of this opinion, or if we
become aware of any facts that might change the opinions
expressed above after the date of this opinion.
This opinion letter is solely for your benefit in
connection with the consummation of the Contemplated Transactions
and may not be relied upon, quoted, used, circulated or referred
to, nor copies hereof delivered to, any other person, except for
any financial institutions which is providing financing to Mistic
or its Affiliates in connection with the consummation of the
Contemplated Transactions.
Very truly yours,
<PAGE>
Exhibit A
Foreign Qualifications
Joseph Victori Wines, Inc. (a New York corporation):
Alabama
California
Connecticut
Florida
New Jersey
Pennsylvania
Nature's Own Beverage Company (a Delaware corporation):
New York
Best Flavors, Inc. (a Nevada corporation):
None
<PAGE>
Exhibit B
<PAGE>
[LETTERHEAD OF LIONEL SAWYER & COLLINS]
August 9, 1995
Mistic Brands, Inc.
2525 Palmer Avenue
New Rochelle, New York 10801
Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022-4441
Ladies and Gentlemen:
We have acted as special counsel in the State of Nevada
to Best Flavors, Inc., a Nevada corporation ("Best Flavors") in
connection with that Asset Purchase Agreement (the "Purchase
Agreement"), dated as of august 9, 1995, among Mistic Beverage,
Inc., a Delaware corporation ("Mistic"), and Joseph Victori
Wines, Inc., a New York corporation, Best Flavors, Nature's Own
Beverage Company, a Delaware corporation, and Joseph Umbach
(collectively, the "Sellers"). This opinion is being furnished
to you at the request of Best Flavors in connection with Section
8.3 of the Purchase Agreement. Capitalized terms used herein
and not defined shall have the meanings given them in the
Purchase Agreement.
In rendering this opinion, we have reviewed copies of
the following documents (collectively, the "Documents"):
10. the Purchase Agreement;
11. the Bill of Sale, dated as of August 9, 1995, by
the Sellers in favor of Mistic;
12. that Assumption Agreement, dated as of August 9,
1995, among the Sellers and Mistic;
13. that Assignment and Assumption of Contracts, dated
as of August 9, 1995, among the Sellers and Mistic;
14. that U.S. Trademark Assignment, dated August 9,
1995, by Best Flavors in favor or Mistic; and
15. that Worldwide Trademark Assignment, dated August
9, 1995, by Best Flavors in favor of Mistic.
We have also examined originals or copies of such
corporate records and certificates of public officials as we have
deemed necessary or advisable for purposes of this opinion. We
have not reviewed, and express no opinion as to, any instrument
or agreement referred to or incorporated by reference in the
Documents.
We have assumed the authenticity of all documents
submitted to us as originals, the genuineness of all signatures,
the legal capacity of natural persons and the conformity to
originals of all copies of all documents submitted to us. We
have relied upon the certificates of all public officials and
corporate officers with respect to the accuracy of all matters
contained therein.
Based on the foregoing, and subject to the
qualifications and assumptions set forth herein, we are of the
opinion that:
1. Best Flavors is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Nevada, and has all requisite corporate power and authority to
execute and deliver the Documents and to perform fully its
obligations under the Documents.
2. The execution, delivery and performance by Best
Flavors of the Documents have been duly authorized by al
necessary corporate action.
3. A court of the State of Nevada will give effect to
the provisions of the Purchase Agreement and the Bill of Sale
providing that such documents will be governed by the laws of the
State of New York. The opinion expressed in this paragraph is
based on information you have supplied as to certain contacts
between the Sate of New York and the Contemplated Transactions,
including the following: (a) substantial negotiations relating to
such transactions have taken place in the State of New York, (b)
Best Flavors is executing and delivering the Purchase Agreement
and the Bill of Sale in the State of New York as part of the
Closing, (c) outside counsel representing many of the parties to
the Purchase Agreement and the Bill of Sale in connection with
the Contemplated Transactions have their offices in the State of
New York and negotiations in connection with such transactions
have taken place in certain of their offices, and (d) many of the
parties to the Purchase Agreement and the and the Bill of Sale
are located in the State of New York.
4. The execution, delivery and performance of the
Documents, and the consummation of the Contemplated Transactions,
will not (i) require Best Flavors to obtain any consent, approval
or action of, or make any filing with or give any notice to, any
Nevada Governmental Body, (ii) violate any law of the State of
Nevada, or (iii) conflict with or result in any breach or
violation of any of the terms and conditions of, or constitute
(or with notice or lapse of time or both constitute a default
under, the Articles of Incorporation or By-Laws of Best flavors.
Nothing herein shall be deemed an opinion as to the
laws of any jurisdiction other than the State of Nevada.
We express no opinion as to whether or not Best flavors
has all necessary permits and approvals to conduct its business.
This opinion is intended solely for the use of the
persons to whom they are addressed in connection with the
Contemplated Transactions and, any financial institution which is
providing financing to Mistic or its Affiliates in connection
with the consummation of the Contemplated Transactions and, any
financial institution which is providing financing to Mistic or
its Affiliates in connection with the consummation of the
Contemplated Transactions in connection with the provision of
such financing. It may not be relied upon by any other
person or for any other purpose, or reproduced or filed publicly
by any person, without the written consent of this firm.
Sincerely,
LIONEL SAWYER & COLLINS
<PAGE>
Exhibit D
CONSULTING AGREEMENT
CONSULTING AGREEMENT made as of August __, 1995,
by and between MISTIC BRANDS, INC., a Delaware corporation
("Mistic"), and JOSEPH UMBACH, an individual residing at 102
Overlook Drive, Greenwich, CT 06830 (the "Consultant").
Mistic is engaged in the research, development,
formulation, production, marketing and sale of a wide
variety of non-alcoholic beverages (the "Business"). Mistic
desires to engage the Consultant to provide, and the
Consultant desires to provide, the consulting services
described herein (the "Consulting Services") with respect to
the Business.
In consideration of the mutual promises, covenants
and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. Engagement of the Consultant. Mistic hereby
engages the Consultant to provide the Consulting Services
provided for in this Agreement during the Term (as defined
in Section 2), and the Consultant hereby accepts such
engagement.
2. Term of the Consulting Services. The term
(the "Term") of this Agreement shall commence on the date
hereof and shall continue for a period of six months.
3. The Consultant's Responsibilities.
(a) The Consultant shall provide to Mistic
during the Term such Consulting Services with respect to the
Business, in the greater New York metropolitan area, as is
now being conducted or during the Term may be conducted, as
shall be reasonably requested by Mistic, including, without
limitation: (i) advice and consultation in the development
of new products, product lines, product flavor extensions
and product enhancements; (ii) advice as to sources of raw
materials and supplies; (iii) advice with respect to trade
and other advertising and marketing; (iv) advice and
consultation concerning the recruitment of prospective
employees and the retention of current employees; (v) advice
and consultation regarding reducing operating expenses; and
(vi) advice and consultation in dealing with distributors,
co-packers, customers and suppliers.
(b) The Consultant shall be available to
provide the Consulting Services to Mistic during normal
business hours during the Term, as reasonably requested by
Mistic. Mistic acknowledges that the arrangement between
Mistic and the Consultant is a consulting arrangement, not
an employment arrangement, and that the Consultant will not
be providing the Consulting Services on a full-time basis.
(c) The Consultant acknowledges and agrees
that all control and authority with respect to all matters
relating to the Business shall remain with Mistic and that
all decisions with respect thereto shall be made by Mistic.
The Consultant shall not have access to Mistic's laboratory
without the prior consent of Mistic's Chief Executive
Officer or President, which consent may be withheld at their
sole discretion and which consent may be revoked at any
time. The Consultant shall have no authority to incur any
costs or expenses or to make any decisions regarding
expenditures of funds on behalf of Mistic or in any way to
bind Mistic to any obligation whatsoever without the prior
written consent of Mistic in accordance with Section 4(b).
The Consultant acknowledges and agrees that any
representation by the Consultant to any party to the
contrary shall be deemed to be a breach of this Agreement.
4. Consulting Fees and Reimbursements.
(a) The Consultant has agreed to provide the
Consulting Services provided for herein in order to induce
Mistic to (i) purchase the Business pursuant to an Asset
Purchase Agreement (the "Asset Purchase Agreement"), dated
as of August __, 1995, by and among Mistic, on the one hand,
and Joseph Victori Wines, Inc., a New York corporation
("JVWNY"), Best Flavors, Inc., a Nevada corporation ("Best
Flavors"), Nature's Own Beverage Company, a Delaware
corporation ("Nature's Own") (JVWNY, Best Flavors and
Nature's Own are referred to collectively as the
"Companies") and the Consultant, on the other hand, and (ii)
enter in the Product and Royalty Agreement, dated the date
hereof, by and between Mistic and the Consultant. The
Consultant agrees that he shall not be entitled to receive
any additional consulting fees or compensation for the
Consulting Services.
(b) Mistic shall pay or reimburse the
Consultant for all out of pocket expenses reasonably
incurred by the Consultant in performance of the Consulting
Services; provided that the incurrence of any expense
individually, or together with related expenses, that
exceeds $1,000 has been consented to by Mistic in writing in
advance. Such payment or reimbursement shall be made upon
presentation of customary and accurate documentation of such
expenses.
5. Restrictions on Other Employment.
(a) During the Term, the Consultant shall
not accept or render any full-time employment, except that
that Consultant may continue his employment with the
Companies.
(b) The Consultant acknowledges that: (i)
Mistic would not have purchased the Business pursuant to the
Asset Purchase Agreement but for the agreements and
covenants contained in this Agreement and in the Asset
Purchase Agreement (including without limitation, the non-
compete provisions contained therein); (ii) the Consultant
is one of a limited number of persons who developed the
Business prior to the closing contemplated by the Asset
Purchase Agreement; (iii) the agreements and covenants
contained in this Agreement and in the Asset Purchase
Agreement (including without limitation, the non-compete
provisions contained therein) are essential for an orderly
transition of the Business to Mistic; (iv) the Consultant
has the means and ability to support himself and his
dependents during the Term without needing to accept any
full time employment; and (v) the provisions of this
Agreement will not impair such ability.
6. Rights and Remedies upon Breach. If the
Consultant breaches, or threatens to commit a breach of, any
of the provisions of this Agreement, Mistic shall have the
following rights and remedies, each of which shall be
independent of the others and severally enforceable, and
each of which is in addition to, and not in lieu of, any
other rights and remedies available to Mistic under the
Asset Purchase Agreement and under law or in equity:
(a) Specific Performance. The right and
remedy to have the provisions of this Agreement specifically
enforced by any court of competent jurisdiction, it being
agreed that any breach or threatened breach of such
provisions would cause irreparable injury to Mistic, and
that money damages would not provide an adequate remedy to
Mistic.
(b) Accounting. The right and remedy to
require the Consultant to account for and pay over to Mistic
all compensation, profits, moneys, accruals, increments and
other benefits derived or received by the Consultant as a
result of any transactions constituting a breach of this
Agreement.
7. Nature of Relationship. The Consultant
agrees that: (i) he is an independent contractor; (ii) he
shall provide the Consulting Services in accordance with
such status; and (iii) he shall not hold himself out as an
employee, agent or representative of Mistic or any of its
affiliates, and shall have no authority to bind Mistic in
any respect.
8. Miscellaneous
8.1 Consent to Jurisdiction; Service of
Process. (a) Any legal action, suit or proceeding arising
out of or relating to this Agreement may be instituted in
any federal court of the Southern District of New York or
any state court located in New York County, State of New
York, and each party agrees not to assert, by way of motion,
as a defense or otherwise, in any such action, suit or
proceeding, any claim that it is not subject personally to
the jurisdiction of such court, that the action, suit or
proceeding is brought in an inconvenient forum, that the
venue of the action, suit or proceeding is improper or that
this Agreement or the subject matter hereof may not be
enforced in or by such court on jurisdictional grounds.
(b) Each party further irrevocably submits to the
jurisdiction of such court in any such action, suit or
proceeding. The Consultant hereby appoints John P. Napoli
(the "Agent"), at the Agent's offices of Pryor, Cashman,
Sherman & Flynn, 410 Park Avenue, New York, New York 10022,
or his office at such other address in New York, New York,
as he hereafter furnishes to the other parties, as such
party's authorized agent to accept and acknowledge on such
party's behalf service of any and all process that may be
served in any such action, suit or proceeding. Any and all
service of process and any other notice in any such action,
suit or proceeding shall be effective against any party if
given personally or by registered or certified mail, return
receipt requested, or by any other means of mail that
requires a signed receipt, postage prepaid, mailed to such
party as herein provided, or by personal service on the
Agent with a copy of such process mailed to such party by
first class mail or registered or certified mail, return
receipt requested, postage prepaid. The service of process
shall be deemed complete when mailed if by registered or
certified mail or by any other means of mail that requires a
signed receipt, or if given by personal service when the
party or the Agent is personally served. Nothing herein
contained shall be deemed to affect the right of any party
to serve process in any manner permitted by law or to
commence legal proceedings or otherwise proceed against any
other party in any other jurisdiction.
8.2 Notices. Any notice or other communication
required or permitted hereunder shall be in writing and
shall be delivered personally, telegraphed, telexed, sent by
facsimile transmission or sent by certified, registered or
overnight express mail, postage prepaid. Any such notice
shall be deemed given when so delivered personally, or if
telegraphed, telexed or sent by facsimile transmission on
the date the receipt of the transmission is confirmed or, if
mailed by overnight mail, the business day after the date of
deposit with a reputable overnight courier service, or if
mailed by non-overnight certified or registered mail, five
days after the date of deposit in the United States mails,
as follows:
(A) if to Mistic to:
Mistic Brands, Inc.
2525 Palmer Avenue
New Rochelle, New York 10801
Attention: Ernest J. Cavallo
Facsimile: (914) 637-0020
with a copy to:
Triarc Companies, Inc.
900 Third Avenue
New York, NY 10022
Attention: Executive Vice
President and
General Counsel
Facsimile: (212) 230-3216
(B) if to the Consultant to:
Joseph Umbach
102 Overlook Drive
Greenwich, CT 06830
Facsimile: (203) 869-2797
with a copy to:
Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
Attention: John P. Napoli
Facsimile: (212) 326-0806
Any party may by notice given in accordance with this Sec-
tion to the other parties designate another address or
Person for receipt of notices hereunder.
8.3 Entire Agreement. This Agreement, the Asset
Purchase Agreement and the Product and Royalty Agreement
made as of the date hereof, between Mistic and the
Consultant contain the entire agreement among the parties
with respect to the Consulting Services to be rendered to
Mistic and supersede all prior agreements, written or oral,
with respect thereto.
8.4 Waivers and Amendments; Non-Contractual
Remedies; Preservation of Remedies. This Agreement may be
amended, superseded, canceled, renewed or extended, and the
terms hereof may be waived, only by a written instrument
signed by Mistic and the Consultant or, in the case of a
waiver, by the party waiving compliance. No delay on the
part of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any such right,
power or privilege, nor any single or partial exercise of
any such right, power or privilege, preclude any further
exercise thereof or the exercise of any other such right,
power or privilege. The rights and remedies herein provided
are cumulative and are not exclusive of any rights or
remedies that any party may otherwise have at law or in
equity. The rights and remedies of any party based upon,
arising out of or otherwise in respect of any inaccuracy in
or breach of any representation, warranty, covenant or
agreement contained in this Agreement shall in no way be
limited by the fact that the act, omission, occurrence or
other state of facts upon which any claim of any such
inaccuracy or breach is based may also be the subject matter
of any other representation, warranty, covenant or agreement
contained in this Agreement as to which there is no
inaccuracy or breach.
8.5 Governing Law. This Agreement shall be
governed and construed in accordance with the laws of the
State of New York applicable to agreements made and to be
performed entirely within such State.
8.6 Binding Effect; Assignment. This Agreement
shall be binding upon and inure to the benefit of the
parties and their respective successors and legal repre-
sentatives. This Agreement may not be assigned by the
Consultant. This Agreement may be assigned by Mistic in
whole or in part (i) to Mistic's direct parent, (ii) to
Royal Crown Company, Inc., a Delaware corporation, (iii) to
any sources providing Mistic with the financing to
consummate the Contemplated Transactions (as defined in the
Asset Purchase Agreement) or (iv) in connection with a
transfer of all or substantially all of the Business, to one
or more of Mistic's affiliates or designees.
8.7 Counterparts. This Agreement may be executed
by the parties hereto in separate counterparts, each of
which when so executed and delivered shall be an original,
but all such counterparts shall together constitute one and
the same instrument. Each counterpart may consist of a
number of copies hereof each signed by less than all, but
together signed by all of the parties hereto.
8.8 Sections. All references herein to Sections
shall be deemed references to such parts of this Agreement,
unless the context shall otherwise require.
8.9 Headings. The headings in this Agreement are
for reference only, and shall not affect the interpretation
of this Agreement.
8.10 Severability of Provisions. If any
provision or any portion of any provision of this Agreement,
or the application of any such provision or any portion
thereof to any person or circumstance, shall be held invalid
or unenforceable, the remaining portion of such provision
and the remaining provisions of this Agreement, and the
application of such provision or portion of such provision
as is held invalid or unenforceable to persons or
circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby.
8.11 No Third Party Beneficiaries. This
Agreement shall not, and shall not be deemed to, confer any
rights or remedies upon any person other than Mistic and the
Consultant and their respective successors and permitted
assigns.
IN WITNESS WHEREOF, the parties have executed this
Agreement on the date first above written.
MISTIC BRANDS, INC.
By:___________________________
Name:
Title:
___________________________
Joseph Umbach
<PAGE>
Exhibit E
PRODUCT AND ROYALTY AGREEMENT
PRODUCT AND ROYALTY AGREEMENT made as of August 9,
1995 by and between MISTIC BRANDS, INC., a Delaware
corporation ("Mistic") and JOSEPH UMBACH, an individual
residing at 102 Overlook Drive, Greenwich, CT 06830
("Umbach").
Mistic is engaged in the research, development,
formulation, production, marketing and sale of a wide
variety of non-alcoholic beverages (the "Business"). Mistic
desires to engage Umbach to develop, and Umbach desires to
accept the engagement to develop, products, product lines,
product flavor extensions and product enhancements for the
Business, as is now being conducted or in the future may be
conducted (collectively, the "Products").
In consideration of the mutual promises, covenants
and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. Engagement of Umbach. Mistic hereby engages
Umbach to develop Products for Mistic during the Term (as
defined in Section 2) and Umbach hereby accept such
engagement. Mistic acknowledges that Umbach has no
obligation to develop any Products during the Term.
2. Term. The term (the "Term") of this
Agreement shall commence on the date hereof and shall
continue until the third anniversary of the date hereof.
Each three-month and twelve-month period commencing on the
date hereof during the Term shall constitute and hereafter
be referred to as a "Quarter" and an "Annual Period,"
respectively.
3. Qualified Products. Umbach shall be entitled
to receive Royalty Payments (as defined in Section 6) in
accordance with the terms of Section 6 with respect to the
Products set forth on Schedule A annexed hereto (the
"Schedule A Products") and any other Products (the "New
Products") for which Umbach has submitted a proposal (the
"Proposal") to Mistic and the Proposal has been approved by
Mistic in writing, in its sole discretion. The Schedule A
Products and the New Products are collectively referred to
herein as the "Qualified Products." Any product flavor
extensions under current Royal Mistic product lines shall
not be deemed to be a Qualified Product.
4. Proposals. Umbach may submit Proposals for
New Products to Mistic in writing. Each Proposal shall set
forth the specific details for the New Product, including,
without limitation, the (i) formulation, (ii) packaging,
(iii) labeling, (iv) trademarks, (v) positioning of the
proposed New Product and (vi) business rationale. Upon
Mistic's receipt of a Proposal, Mistic may request that
Umbach provide additional information concerning such
Proposal. Within 30 days after Mistic has received the
Proposal, or if Mistic has requested additional information,
within 30 days after Mistic has been furnished with the
requested information, Mistic will inform Umbach in writing
whether Mistic has approved such Product for distribution,
which approval may be withheld by Mistic in its sole
discretion. Mistic retains the right to refuse to
distribute any Products developed, discovered or conceived
by Umbach during the Term.
5. Mistic and RC Products. Umbach acknowledges
and agrees that Mistic, Royal Crown Company, Inc., a
Delaware corporation ("RC"), and their affiliates may now or
in the future be working on ideas which are the same as or
similar to a proposed New Product conceived by Umbach
hereunder and that the submission by Umbach of a Proposal
will not obligate Mistic to pay Royalty Payments on the
proposed New Product if the idea for such proposed New
Product was developed, discovered or conceived by Mistic, RC
or any of their affiliates prior to Mistic's receipt of the
Proposal for the proposed New Product.
6. Royalty Payments. During the Term, Mistic
shall pay to Umbach royalty payments of $.25 (the "Royalty
Payments") for each case of a Qualified Product sold and
shipped during the Term (less the number of such cases
returned to Mistic); provided that Umbach shall not be
entitled to receive any Royalty Payments with respect to any
Schedule A Product for any Annual Period if the threshold
(the "Threshold") for such Schedule A Product as set forth
on Schedule A attached hereto has not been met for such
Annual Period. In the case of any New Product, Mistic and
Umbach shall negotiate in good faith promptly after such New
Product has been approved by Mistic to decide the Threshold
which must be sold and shipped within each Annual Period of
the Term for Royalty Payments to become due on such New
Product. If Mistic and Umbach cannot agree upon the
Threshold for a New Product within 60 days after Mistic has
approved the New Product, then the Threshold for each twelve
month period thereafter shall be 250,000 cases and for any
shorter period shall be 250,000 cases multiplied by a
fraction, the numerator of which is the number of days in
such period and the denominator of which is 365.
7. Payment of Royalty Payments. Mistic shall,
within 60 days after the expiration of each Quarter (the
"Applicable Quarter") during the Term, provide Umbach with a
written statement (the "Statement") setting forth the number
of cases of each Qualified Product sold and shipped in the
Applicable Quarter (less the number of cases returned during
the Applicable Quarter). Unless Umbach objects in writing
to the Statement within 30 days after receipt thereof, the
Statement shall be deemed final and binding upon Umbach. If
Umbach objects to the Statement, Mistic and Umbach shall
negotiate in good faith to resolve the dispute. In the
event that they cannot resolve the dispute, the Statement
shall be reviewed by Mistic's independent certified public
accountants. Such accounting firm shall deliver to Mistic
and Umbach a statement in writing setting forth its
determination as to the number of cases of each Qualified
Product sold and shipped in the Applicable Quarter (less the
number of cases returned during the Applicable Quarter),
which determination shall be final and binding upon Mistic
and Umbach, unless objected to by Umbach within 15 days. If
such determination is objected to by Umbach, then the
Statement shall be reviewed by an independent certified
public accountanting firm jointly selected by Mistic and
Umbach. Such accounting firm shall deliver to Mistic and
Umbach a statement in writing setting forth its
determination as to the number of cases of each Qualified
Product sold and shipped in the Applicable Quarter (less the
number of cases returned during the Applicable Quarter).
Such determination shall be final and binding upon Mistic
and Umbach with no further right of appeal, absent
demonstrable error. One half of the fees of such firm of
accountants for making such determination shall be paid by
each of Mistic and Umbach. Mistic shall, within 10 days
after the expiration of the 30-day period or 10 days after
the dispute has been resolved by the parties or by the
accounting firm, pay to Umbach by check, the Royalty
Payments, if any, earned during such Applicable Quarter.
Royalty Payments, with respect to each Qualified Product,
shall be based on the amount of cases of such Qualified
Product that Mistic sold and shipped during the Applicable
Quarter (less the number of cases returned during the
Applicable Quarter); provided that in the first Quarter in
which the Threshold has been met for such Qualified Product,
Royalty Payments shall be made for all cases sold and
shipped during the Applicable Quarter and all previous
Quarters of that Annual Period (less the number of cases
returned during such period).
8. Non-competition. Umbach acknowledges that
(i) he is subject to an agreement not to compete with
Mistic, an agreement not to disclose confidential
information of the Business and certain other restrictive
covenants set forth in Article 10 of the Asset Purchase
Agreement (the "Asset Purchase Agreement"), dated as of
August 9, 1995, by and among Mistic, on the one hand, and
Umbach, Joseph Victori Wines, Inc., a New York corporation,
Best Flavors, Inc., a Nevada corporation, and Nature's Own
Beverage Company, a Delaware corporation (collectively, the
Sellers), on the other hand; (ii) any refusal by Mistic to
distribute any Product developed, discovered or conceived by
Umbach or any failure by Mistic and Umbach to agree upon a
Threshold for a New Product shall not relieve Umbach of his
obligations under the provisions of Article 10 of the Asset
Purchase Agreement or under the terms of this Agreement; and
(iii) subject to Section 12 below, all Products developed,
discovered or conceived during the Term by Umbach shall be
the property of Mistic and Umbach may not sell to any person
any rights to any of the Products either during the Term or
thereafter.
9. Umbach's Use of Mistic's Resources.
Beginning on the date hereof, Mistic shall provide Umbach
with office space (the "Office Space") at its New Rochelle
office. Umbach shall reimburse Mistic in advance for
Mistic's actual cost for the Office Space including
utilities and other miscellaneous expenses in an amount
equal to $1,500 per month on the first of every month.
Mistic may terminate any such rental arrangement with Umbach
for the Office Space for any reason or no reason at all upon
60 days prior written notice to Umbach. Upon the prior
written consent of Mistic, which Mistic may grant or deny in
whole or part in its sole discretion, Umbach may use
Mistic's staff, facilities and other research and
development resources in connection with the development of
new Products. Also, upon the prior written consent of
Mistic, which Mistic may grant or deny in whole or in part
in its sole discretion, Umbach may use Mistic's facilities
in connection with the development of new products in
connection with Umbach's alcoholic beverage business ("R&D
Resources") other than Mistic's secretarial services, word
processing equipment, phones, fax and other support services
(the "Support Services"), subject to Mistic's control
thereof and the non-interference by Umbach with the Business
as conducted by Mistic. Mistic may revoke Umbach's rights
to use the R&D Resources, in whole or in part, at any time
and in its sole discretion. Umbach acknowledges that he
shall at his sole expense pay for all Support Services and
that Mistic shall not be responsible for providing Umbach
with any Support Services.
10. Transitional Accounting Services. Mistic
shall provide Umbach with transitional accounting services
in order to separate out the financial records of the
Business from the financial records of the Sellers'
alcoholic beverage business. Mistic shall provide such
services until December 31, 1995, at a rate of $300 per
month. Umbach acknowledges that such transitional
accounting services will not require a significant amount of
time of any of Mistic's employees.
11. Reimbursement of Certain Expenses. Mistic
shall reimburse Umbach's cost of raw material as well as
development costs of packaging material, designs and
concepts (bottles, labels, caps, etc.) in connection with
Umbach's development of New Products; provided that Mistic
shall have approved all such costs in advance. Mistic
acknowledges that Umbach shall have no obligation to incur
any such expenses.
12. Ownership of Products. All Products
developed, discovered or conceived during the Term by
Umbach, whether or not (i) the Products are or become
Qualified Products, (ii) Umbach has submitted a Proposal to
Mistic for the Products and (iii) the Products are sold or
shipped during the Term, shall be Mistic's property;
provided, however, that (i) if Umbach conceives of an idea
for a Product which he has not presented to Mistic during
the Term and which he has not developed or begun to develop
in facilities owned by Mistic, then Umbach shall own the
rights to such Product, (ii) if Umbach presents a Proposal
to Mistic and Mistic rejects such Proposal, then Umbach
shall own the rights to such Product and (iii) if Umbach
presents a Proposal (a) before the first two years of the
Term, then if Mistic does not develop or begin to develop
such Product within the Term, Umbach shall own the rights to
such Product and (b) after the first two years of the Term,
then if Mistic does not develop or begin to develop such
Product within one year after Umbach has presented the
Proposal to Mistic, Umbach shall own the rights to such
Product; provided, further, that clauses (i), (ii) and (iii)
are subject to Section 8 hereof. Umbach shall execute all
appropriate documentation requested by Mistic to evidence
Mistic's ownership of the Products.
13. Right of Set-Off. Any Royalty Payments or
other amounts (including reimbursement of expenses) due
Umbach hereunder shall be subject to a right (but not an
obligation) of set-off by Mistic pursuant to Section 12.5 of
the Asset Purchase Agreement; provided, however, that Mistic
shall be obligated to set-off, prior to seeking any payment
directly from the Sellers, against the Set-Off Payments any
and all claims Mistic may have against the Sellers relating
to the Arkansas Litigation Costs, other than the Buyer
Arkansas Payment (as each such terms is defined in the Asset
Purchase Agreement).
14. Nature of Relationship. Umbach agrees that:
(i) he is an independent contractor; (ii) he shall develop
Products for Mistic in accordance with such status; and
(iii) he shall not hold himself out as an employee, agent or
representative of Mistic or any of its affiliates and shall
have no authority to bind Mistic in any respect.
15. Withholding. All compensation of Umbach by
Mistic provided for in this Agreement shall be subject to
deductions or amounts to be withheld as required by any
applicable laws and regulations.
16. Miscellaneous
16.1 Consent to Jurisdiction; Service of
Process. (a) Any legal action, suit or proceeding arising
out of or relating to this Agreement may be instituted in
any federal court of the Southern District of New York or
any state court located in New York County, State of New
York, and each party agrees not to assert, by way of motion,
as a defense or otherwise, in any such action, suit or
proceeding, any claim that it is not subject personally to
the jurisdiction of such court, that the action, suit or
proceeding is brought in an inconvenient forum, that the
venue of the action, suit or proceeding is improper or that
this Agreement or the subject matter hereof may not be
enforced in or by such court.
(b) Umbach hereby appoints John P. Napoli
Agent (the "Agent"), at the Agent's offices of Pryor,
Cashman, Sherman & Flynn, 410 Park Avenue, New York, New
York 10022, or his office at such other address in New York,
New York, as he hereafter furnishes to the other parties, as
such party's authorized agent to accept and acknowledge on
such party's behalf service of any and all process that may
be served in any such action, suit or proceeding. Any and
all service of process in any such action, suit or
proceeding shall be effective against any party if given
personally or by registered or certified mail, return
receipt requested, or by any other means of mail that
requires a signed receipt, postage prepaid, mailed to such
party as herein provided, or by personal service on the
Agent with a copy of such process mailed to such party by
first class mail or registered or certified mail, return
receipt requested, postage prepaid. The service of process
shall be deemed complete when mailed if by registered or
certified mail or by any other means of mail that requires a
signed receipt, or, if given by personal service when the
party or the Agent is personally served. Nothing herein
contained shall be deemed to affect the right of any party
to serve process in any manner permitted by law or to
commence legal proceedings or otherwise proceed against any
other party in any other jurisdiction.
16.2 Notices. Any notice or other communi-
cation required or permitted hereunder shall be in writing
and shall be delivered personally, telegraphed, telexed,
sent by facsimile transmission or sent by certified, regis-
tered or overnight express mail, postage prepaid. Any such
notice shall be deemed given when so delivered personally,
of if telegraphed, telexed or sent by facsimile
transmission, on the date the receipt of the transmission is
confirmed or, if mailed by overnight mail, the business day
after the date of deposit with a reputable overnight courier
service, or if mailed by non-overnight certified or
registered mail, five days after the date of deposit in the
United States mails, as follows:
(A) if to Mistic to:
Mistic Brands, Inc.
2525 Palmer Avenue
New Rochelle, NY 10801
Attention: Ernest J. Cavallo
Facsimile: (914) 637-0420
with a copy to:
Triarc Companies, Inc.
900 Third Avenue
New York, NY 10022
Attention: Executive Vice
President and
General Counsel
Facsimile: (212) 230-3216
(B) if to Umbach to:
Joseph Umbach
102 Overlook Drive
Greenwich, CT 06830
Facsimile: (203) 869-2797
with a copy to:
Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
Attention: John P. Napoli
Facsimile: (212) 326-0806
Any party may by notice given in accordance with this Sec-
tion to the other parties designate another address or
Person for receipt of notices hereunder.
16.3 Entire Agreement. This Agreement
(including Schedule A hereto) and the Asset Purchase
Agreement contain the entire agreement among the parties
with respect to the matters referenced herein and supersedes
all prior agreements, written or oral, with respect thereto.
16.4 Waivers and Amendments; Non-Contractual
Remedies; Preservation of Remedies. This Agreement may be
amended, superseded, canceled, renewed or extended, and the
terms hereof may be waived, only by a written instrument
signed by Mistic and Umbach or, in the case of a waiver, by
the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on
the part of any party of any such right, power or privilege,
nor any single or partial exercise of any such right, power
or privilege, preclude any further exercise thereof or the
exercise of any other such right, power or privilege. The
rights and remedies herein provided are cumulative and are
not exclusive of any rights or remedies that any party may
otherwise have at law or in equity. The rights and remedies
of any party based upon, arising out of or otherwise in
respect of any inaccuracy in or breach of any
representation, warranty, covenant or agreement contained in
this Agreement shall in no way be limited by the fact that
the act, omission, occurrence or other state of facts upon
which any claim of any such inaccuracy or breach is based
may also be the subject matter of any other representation,
warranty, covenant or agreement contained in this Agreement
as to which there is no inaccuracy or breach.
16.5 Governing Law. This Agreement shall be
governed and construed in accordance with the laws of the
State of New York applicable to agreements made and to be
performed entirely within such State.
16.6 Binding Effect; Assignment. This
Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors and legal repre-
sentatives. This Agreement may not be assigned by Umbach.
This Agreement may be assigned by Mistic in whole or in part
(i) to Mistic's direct parent, (ii) to RC, (iii) to any
sources providing Mistic with the financing to consummate
the Contemplated Transactions (as defined in the Asset
Purchase Agreement) or (iv) in connection with a transfer of
all or substantially all of the Business, to one or more of
Mistic's affiliates or designees.
16.7 Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts,
each of which when so executed and delivered shall be an
original, but all such counterparts shall together consti-
tute one and the same instrument. Each counterpart may
consist of a number of copies hereof each signed by less
than all, but together signed by all of the parties hereto.
16.8 Schedule and Sections. Schedule A is a
part of this Agreement as if fully set forth herein. All
references herein to Sections and Schedule A shall be deemed
references to such parts of this Agreement, unless the
context shall otherwise require.
16.9 Headings. The headings in this Agree-
ment are for reference only, and shall not affect the inter-
pretation of this Agreement.
16.10 Severability of Provisions. If any
provision or any portion of any provision of this Agreement,
or the application of any such provision or any portion
thereof to any person or circumstance, shall be held invalid
or unenforceable, the remaining portion of such provision
and the remaining provisions of this Agreement, and the
application of such provision or portion of such provision
as is held invalid or unenforceable to persons or
circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby.
16.11 No Third Party Beneficiaries. This
Agreement shall not, and shall not be deemed to, confer any
rights or remedies upon any person other than Umbach, Mistic
and their respective successors and permitted assigns.
IN WITNESS WHEREOF, the parties have executed this
Agreement on the date first above written.
MISTIC BRANDS, INC.
By:__________________________
Name:
Title:
___________________________
Joseph Umbach
<PAGE>
SCHEDULE A
PRODUCT THRESHOLD
(MINIMUM # OF
CASES PER YEAR) ANNUAL PERIOD
Sports Cap(1) 300,000 1, 2 and 3
Sunesta 750,000 1
1,000,000 2 and 3
Sun Valley Squeeze 250,000 1, 2 and 3
_______
(1) These products are (1) Clear (labelled "Mistic Sport Refresher")
flavors - Lemonade-Lime, Orange Mango, Fruit Punch and Raspberry-
Strawberry; and (2) Color (i.e.) Mistic Standard Flavors with
Sports Cap) - Lemon Tea, Fruit Punch, Kiwi Strawberry, Grape
Strawberry and Orange Banana (plus in each case, line (i.e.,
flavor) extensions but excluding any new groups of products with
a Sports Cap).
<PAGE>
Exhibit F
[LETTERHEAD OF PWRW&G]
(212) 373-3000 August __, 1995
Joseph Victori Wines, Inc.,
Best Flavors, Inc.,
Nature's Own Beverage Company, and
Joseph Umbach
2525 Palmer Avenue
New Rochelle, NY 10801
Ladies and Gentlemen:
We have acted as special counsel to Mistic Brands,
Inc., a Delaware corporation ("Mistic"), in connection with
the Asset Purchase Agreement made as of August __, 1995 (the
"Purchase Agreement), by and among Mistic, on the one hand,
and Joseph Victori Wines, Inc., a New York Corporation
("JVWNY"), Best Flavors, Inc., a Nevada corporation ("Best
Flavors"), Nature's Own Beverage Company, a Delaware
corporation ("Nature's Own") (JVWNY, Best Flavors and
Nature's Own are referred to collectively as the
"Companies") and Joseph Umbach ("Umbach," and together with
the Companies, collectively, the "Sellers"), on the other
hand. Capitalized terms used herein and not otherwise
defined have the respective meanings given those terms in
the Purchase Agreement. This opinion is being furnished to
you at the request of Mistic pursuant to Section 9.2 of the
Purchase Agreement.
In connection with this opinion, we have examined
originals, or copies certified or otherwise identified to
our satisfaction, of the following documents, each dated as
of the date hereof, unless otherwise specified
(collectively, the "Documents"):
1. The Purchase Agreement;
2. The Consulting Agreement;
3. The Product and Royalty Agreement; and
4. The Assumption Agreement between the Sellers
and Mistic.
In addition, we have examined: (i) such corporate
records of Mistic as we have considered appropriate,
including copies of the certificate of incorporation, and
bylaws of Mistic, certified as in effect on the date hereof
(collectively, the "Charter Documents"), and certified
copies of resolutions of the board of directors of Mistic
and (ii) such other certificates, agreements and documents
as we deemed relevant and necessary as a basis for the
opinions hereinafter expressed.
In our examination of the aforesaid documents, we
have assumed, without independent investigation, the
genuineness of all signatures, the enforceability against
each of the Sellers of the Documents to which each is a
party, the legal capacity of all natural persons who have
executed any of the Documents, the authenticity of all
documents submitted to us as originals, the conformity to
the original documents of all documents submitted to us as
certified, photostatic, reproduced or conformed copies of
valid existing agreements or other documents and the
authenticity of all such latter documents.
In expressing the opinions set forth herein, we
have relied upon the factual matters contained in the
representations and warranties of Mistic made in the
Documents and upon certificates of public officials and
officers of Mistic.
Based on the foregoing, and subject to the
assumptions, exceptions and qualifications set forth herein,
we are of the opinion that:
1. Mistic is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware, and has all requisite corporate power and
authority to execute and deliver the Documents and to
perform fully its obligations under the Documents.
2. The execution, delivery and performance by
Mistic of the Documents have been duly authorized by all
necessary corporate action.
3. Each of the Documents constitutes the legal,
valid and binding obligation of Mistic, enforceable against
Mistic in accordance with its terms.
4. The execution, delivery and performance of
the Documents by Mistic and the consummation of the
Contemplated Transactions will not (i) conflict with or
result in any breach or violation of any of the terms and
conditions of, or constitute (or with notice or lapse of
time or both constitute) a default under the Charter
Documents, any Law of the State of New York or the General
Corporation Laws of the State of Delaware or Order of any
Governmental Body to which we have knowledge applicable to
Mistic; or (ii) result in the creation of any Lien on any of
the properties of Mistic.
5. To our knowledge, there are no Claims pending
or threatened by or against Mistic which have or would have
a material adverse effect on the Contemplated Transactions
at law or in equity before any Governmental Body.
The foregoing opinions are subject to the
following assumptions, exceptions and qualifications:
(a) The enforceability of the Documents may be:
(i) subject to bankruptcy, insolvency, reorganization,
fraudulent conveyance or transfer, moratorium or similar
laws affecting creditors rights generally; and (ii) subject
to general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in
equity).
(b) We express no opinion with respect to:
(i) the enforceability of forum selection clauses in the
federal courts and (ii) the enforceability of clauses
selecting forums outside of the state of New York.
[(c) Do we need to carve out the noncompetition
sections of the Documents?]
Our opinions expressed above are limited to the
laws of the State of New York and the General Corporation
Law of the State of Delaware. Our opinions are rendered
only with respect to the laws, and the rules, regulations
and orders thereunder, which are currently in effect.
This letter is furnished by us solely for your
benefit in connection with the transactions referred to in
the Agreement and may not be circulated to, or relied upon
by, any other Person.
Very truly yours,
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
<PAGE>
Pursuant to Item 601 of Regulation S-K, the schedules to the
Asset Purchase Agreement are not being filed herewith since such
schedules do not contain information which is material to an
investment decision. The omitted schedules consist of the
following:
5.3 Outstanding Capital Stock of the Companies, indicating
Joseph Umbach's ownership thereof
5.4 A listing of the Companies' Qualifications to do Business
5.6 Certain Year-End Adjustments
5.8 Tax Matters
5.9 A listing of the Companies' Permits
5.10 A listing of Consents Required to Consummate the Acquisition
5.11 A listing of certain Claims and Proceedings related to the
Companies
5.12 A listing of certain material Contracts of the Companies
5.13 Real Estate Matters
5.14 Inventory and Supplies Matters
5.15 A listing of certain Accounts Receivables of the Companies
5.17 A listing of the Intangible Property of the Companies
5.18 A listing of certain Liens affecting the assets of the
Companies
5.19 A listing of certain Accounts Payable of the Companies
5.21 A listing of certain Suppliers, Vendors and Co-Packers of
the Companies
5.22 Employee Benefit Matters
5.25 Insurance Matters
5.26 Product Matters
5.27 A listing of the Companies' Directors, Officers and Key
Employees
5.28 Certain Matters Relating to the Operations of the Companies
5.30 A Listing of bank accounts of the Companies
7.7 Transferred Employee Matters
8.2 A listing of Consents necessary to consummate the
Acquisition
The Registrant will furnish supplementally a copy of any
omitted schedule to the Commission upon request.
<PAGE>
