<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)
ENVIRODYNE INDUSTRIES, INC.
---------------------------
(Name of Issuer)
Common Stock, par value $0.01 per share
---------------------------------------
(Title of Class of Securities)
294037205
--------------
(CUSIP Number)
Gordon E. Forth, Esq.
WOODS, OVIATT, GILMAN, STURMAN & CLARKE
44 Exchange Street
Rochester, New York 14614
(716) 454-5370
______________
(Name, Address and Telephone Number
of Person Authorized to Receive Notices
and Communications)
November 17, 1994
------------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D,
and is filing this schedule because of Rule 13d-1(b)(3) or (4), check
the following box [ ]
Check the following box if a fee is being paid with the statement [ ]
<PAGE> 2
SCHEDULE 13D
CUSIP NO. 294037205 Page 2 of 45 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
THE MALCOLM I. GLAZER TRUST
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Florida
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 4,189,298
OWNED BY
EACH 8 SHARED VOTING POWER
REPORTING PERSON
WITH - 0 -
9 SOLE DISPOSITIVE POWER
4,189,298
10 SHARED DISPOSITIVE POWER
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,189,298
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
31.0%
14 TYPE OF REPORTING PERSON
OO
154228 Page 2 of 45 Pages
<PAGE> 3
SCHEDULE 13D
CUSIP NO. 294037205 Page 3 of 45 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
MALCOLM I. GLAZER
S.S. NO. ###-##-####
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
PF, BK
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 4,189,298
OWNED BY
EACH 8 SHARED VOTING POWER
REPORTING PERSON
WITH - 0 -
9 SOLE DISPOSITIVE POWER
4,189,298
10 SHARED DISPOSITIVE POWER
- 0 -
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,189,298
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
31.0%
14 TYPE OF REPORTING PERSON
IN
154228 Page 3 of 45 Pages
<PAGE> 4
This Amendment No. 3 ("Amendment No. 3") amends and supplements the
statement ("Statement") to the Schedule 13D dated August 14, 1994, as amended
("Schedule 13D"), and filed on August 15, 1994 on behalf of The Malcolm Glazer
Trust ("Trust") and Malcolm I. Glazer relating to the common stock, par value
$.01 per share, of Envirodyne Industries, Inc. ("Envirodyne"). All capitalized
terms used herein and not otherwise defined herein have the meanings previously
ascribed to such terms in the Schedule 13D.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 3 of the Statement is hereby amended by deleting the last
paragraph thereof and inserting in place thereof the following paragraph:
On November 17, 1994 and November 18, 1994, the Trust paid an
aggregate of $12,790,162.41 in settling the purchases on those dates, including
commissions, discussed in Item 5(a) below. Of the $12,790,162.41 used to make
such purchases, $2,790,162.41 were obtained from the personal funds of Mr.
Glazer which were contributed to the Trust and $10,000,000.00 of such funds
were borrowed by the Trust from NationsBank, N.A. (the "Bank") pursuant to
advances under a Credit Agreement dated as of November 14, 1994 ("Credit
Agreement") among Mr. Glazer, the Trust and the Bank. The Credit Agreement
provides for advances to Mr. Glazer and the Trust under a revolving line in the
maximum principal amount of $10,000,000.00. Advances under the revolving line
are evidenced by a $10,000,000.00 Promissory Note dated November 14, 1994 (the
"Promissory Note") executed by Mr. Glazer and the Trust in favor of the Bank,
which is unsecured, and bear interest at the prime rate of interest announced
by the Bank from time to time. All principal amounts payable under the
Promissory Note are payable in full on October 31, 1995. A copy of the Credit
Agreement and the Promissory Note is attached hereto as Exhibit 9 and Exhibit
10, respectively.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 of the Statement is hereby amended by inserting the following
paragraph after the end thereof:
The waiting period under the Hart-Scott-Rodino Act commenced by Mr.
Glazer's filing on or about October 13, 1994 of a Notification and Report Form
for Certain Mergers and Acquisitions with the Federal Trade Commission and the
Department of Justice expired at 11:59 p.m. on November 11, 1994.
154228 Page 4 of 45 Pages
<PAGE> 5
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5(a) of the Statement is hereby amended by deleting the
penultimate paragraph thereof and adding to the end thereof the following:
On November 17, 1994, the Trust settled its purchase of 289,238 shares
of Common Stock pursuant to the letter agreement dated August 16, 1994. On
November 18, 1994, the Trust settled the purchase of (i) 1,100,299 shares
pursuant to the Securities Purchase Agreement dated as of October 12, 1994,
(ii) 995,698 shares pursuant to the letter agreement dated as of August 18,
1994, and (iii) 57,912 shares that were acquired on September 14, 1994, which
was not previously reported.
The Trust and Mr. Glazer are the beneficial owners of 4,189,289 shares
of Common Stock, which constitutes approximately 31.0 %of the outstanding
shares of Common Stock (based on the 13,500,000 shares of Common Stock reported
as outstanding in Envirodynes' Form 10-Q for the quarterly period ended June
30, 1994). Mr. Glazer's beneficial ownership arises as a result of being the
sole trustee of the Trust and during his lifetime, the sole beneficiary of the
Trust.
Item 5(b) of the Statement is hereby amended by deleting the last
paragraph thereof and inserting in place thereof the following:
As of November 17, 1994, the Trust acquired the power to vote or
direct the vote or to dispose or direct the disposition of the 289,238 shares
of Common Stock which settled on that day. As of November 18, 1994, the
Trust acquired the power to vote or direct the vote or to dispose or direct the
disposition of the 2,153,909 shares of Common Stock which settled on that day.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO THE SECURITIES OF THE ISSUER.
Item 6 of the Statement is hereby amended by inserting immediately
prior to the last paragraph thereof the following:
The Trust and Argosy entered into an Escrow Deposit Agreement dated as
of November 2, 1994 relating to the 289,238 shares of Common Stock that were
subject to the August 16, 1994 letter agreement and settled on November 17,
1994. A copy of the Escrow Deposit Agreement is attached hereto as Exhibit 11.
154228 Page 5 of 45 Pages
<PAGE> 6
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
Item 7 of the Statement is hereby amended by deleting Exhibit 3
attached to Amendment No. 1 to the Schedule 13D and replacing it with the
Exhibit 3 attached hereto and adding to the end of such Item the following:
Exhibit 9 - Credit Agreement dated November 14, 1994 among the
Trust, Malcolm Glazer and NationsBank, N.A.
Exhibit 10 - $10,000,000.00 Promissory Note dated November 14,
1994 executed BY the Trust and Malcolm Glazer in
favor of NationsBank, N.A.
Exhibit 11 - Escrow Deposit Agreement dated as of November 2, 1994
among the Trust, Wertheim Schroder & Co. Incorporated
and The Argosy Securities Group, Ltd.
154228 Page 6 of 45 Pages
<PAGE> 7
SIGNATURE PAGE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: November 21, 1994
THE MALCOLM I. GLAZER TRUST
By: S//MALCOLM I. GLAZER, AS TRUSTEE
---------------------------------
Malcolm I. Glazer, as Trustee
By Avram Glazer as Power of
Attorney
S//MALCOLM I. GLAZER
---------------------------------
Malcolm I. Glazer
By Avram Glazer as Power of
Attorney
154228 Page 7 of 45 Pages
<PAGE> 8
Exhibit 3
TRANSACTIONS IN THE SHARES SINCE AUGUST 15, 1994
<TABLE>
<CAPTION>
Number1 Price2
Purchaser Purchase Date of Shares Per Share
- --------- ------------- --------- ---------
<S> <C> <C> <C>
Malcolm I. Glazer 8/16/94 289,238 $5.165
as Trustee F/B/O
Malcolm I. Glazer
Trust U/A dated as
of March 23, 1990.
Malcolm I. Glazer 8/18/94 995,698 $5.125
as Trustee F/B/O
Malcolm I. Glazer
Trust U/A dated as
of March 23, 1990
Malcolm I. Glazer 9/14/94 57,912 $5.1875
as Trustee F/B/O
Malcolm I. Glazer
Trust U/A dated as
of March 23, 1990
</TABLE>
____________________
1 These shares were purchased in private transactions.
2 The purchase price includes broker's commissions.
154228 Page 8 of 45 Pages
<PAGE> 9
EXHIBIT INDEX
-------------
Exhibit No. Description
----------- ------------
Exhibit 9 - Credit Agreement dated November 14, 1994 among the
Trust, Malcolm Glazer and NationsBank, N.A.
Exhibit 10 - $10,000,000.00 Promissory Note dated November 14,
1994 executed BY the Trust and Malcolm Glazer in
favor of NationsBank, N.A.
Exhibit 11 - Escrow Deposit Agreement dated as of November 2, 1994
among the Trust, Wertheim Schroder & Co. Incorporated
and The Argosy Securities Group, Ltd.
<PAGE> 1
Exhibit 9
CREDIT AGREEMENT
This Credit Agreement ("Agreement") dated as of November ___, 1994,
by and between NationsBank, N.A., a national banking association ("Lender")
and the Borrowers described below:
In consideration of the financial accommodations described below and
the mutual covenants and agreements contained herein, and intending to be
legally bound hereby, Lender and Borrowers agree as follows:
I. DEFINITIONS AND REFERENCE TERMS. In addition to any other terms
defined herein, the following terms shall have the meaning set forth with
respect thereto:
A. BORROWERS. Malcolm I. Glazer and The Malcolm Glazer Trust.
B. BORROWERS' ADDRESS. 1482 South Ocean Boulevard, Palm Beach,
Florida 33480.
C. CREDIT. The Revolving Line of Credit described in Section 2
hereof, and any other loans and other financial accommodations made by Lender
to Borrowers in the future which specifically reference this Agreement.
D. FINANCING DOCUMENTS. This Agreement and the promissory note
or notes (the "Note") executed pursuant to Section 2 hereof and any and all
other documents, instruments, certificates and agreements executed and/or
delivered by Borrowers in connection therewith as the same may be amended,
modified, restated, substituted, extended or renewed at any time and from time
to time.
E. USE OF PROCEEDS. The proceeds of the Credit shall be used for
the Borrowers' business investments.
F. OTHER REFERENTIAL PROVISIONS. All accounting terms not
specifically defined or specified herein shall have the meanings generally
attributed to such terms under generally accepted accounting principles, as in
effect from time to time, consistently applied.
2. CREDIT FACILITY.
A. LINE OF CREDIT. Pursuant to the terms hereof, a revolving
line of credit is being extended by Lender to Borrowers. Pursuant to such
revolving line and all renewals, extensions or rearrangements thereof to
Borrowers by Lender (the
154228 Page 9 of 45 Pages
<PAGE> 2
"Line") under which the Borrowers may from time to time, and subject to the
sole discretion of the Lender, borrower, repay and re-borrow funds up to an
aggregate principal amount at any one time outstanding set forth in the Note
evidencing the Line with a maturity date, interest rate and payment obligations
as set forth in the Note.
B. CLEAN UP PERIOD. Borrowers shall maintain a zero (0) balance
on the Line for a period of at least thirty (30) consecutive days during the
term of the Line.
C. PROCEDURE FOR ADVANCES. (a) Each advance under the Line shall
be in an amount of not less than $25,000. The Borrowers shall give the Lender
notice of each proposed advance not later than 12:00 noon on the date of each
proposed advance.
(b) Each request for an advance shall be in writing and
signed by Malcolm I. Glazer or such other person as he may from time to time
designate in writing to the Lender as his authorized representative for such
purposes. Each such written request for advance shall (i) include Borrowers'
certification of compliance with all covenants applicable to the Credit,
including but not limited to the absence of any material adverse change in the
financial position or operations of Borrowers and (ii) set forth the principal
balance then outstanding under each of the Third Party Lines of Credit (as
hereinafter defined).
(c) In addition, each of the Borrowers hereby irrevocably
authorizes the Lender to make advances of the Line at any time and from time to
time, without further request from or notice to the Borrowers, to cover
principal of, and/or interest on, the Credit, fees, and/or Enforcement Costs,
prior to, on, or after the termination of this Agreement, regardless of whether
the aggregate amount of the advances of the Line which the Lender may make
hereunder exceeds the face amount of the Note. The Lender shall have no
obligation whatsoever to make any advance under this subsection 2C(c) and the
making of one or more advances under this subsection shall not obligate the
Lender to make other similar advances.
D. CONDITIONS OF LENDING. The obligation of the Lender to make
any advances under the Line hereunder is subject to the following conditions
precedent:
(i) Opinion of Counsel for the Borrowers. On the date
hereof, the Lender shall receive the favorable written opinion of counsel for
the Borrowers as to such matters as the Lender may require, dated as of the
date hereof, addressed to the Lender and satisfactory in all respects to the
Lender.
154228 Page 10 of 45 Pages
<PAGE> 3
(ii) Approval of Counsel for the Lender. All legal
matters incident to the Credit and all documents necessary in the opinion of
the Lender to make the Credit shall be satisfactory in all material respects to
counsel for the Lender.
(iii) Financing Documents. All of the Financing Documents
required by Lender shall be executed and delivered, all at the sole expense of
Borrowers.
(iv) Compliance. At the time of the making of each
advance hereunder (a) Borrowers shall have complied and shall then be in
compliance with all the terms, covenants and conditions of this Agreement, (b)
there shall exist no default and no event which, with the giving of notice or
the passage of time, or both, would constitute a default, (c) the
representations and warranties contained in this Agreement shall be true with
the same effect as though such representations and warranties had been made at
the time of the making of the advance and (d) there shall have occurred no
material adverse change in the financial position or business operations of
Borrowers as determined by Lender in its sole discretion.
3. REPRESENTATIONS AND WARRANTIES. Borrowers hereby represent and
warrant to Lender as follows:
A. AUTHORITY AND COMPLIANCE. Borrowers have full power and
authority to execute and deliver the Financing Documents and to incur and
perform the obligations provided therein, and have the power and authority to
own their property and to carry on business in each jurisdiction in which
Borrowers do business. No consent or approval of any public authority or other
third party is required as a condition to the validity of any Financing
Documents, (which have not been obtained) and Borrowers are in compliance with
all laws and regulatory requirements to which they are subject.
B. BINDING AGREEMENT. This Agreement and the other Financing
Documents executed by Borrowers constitute valid and legally binding
obligations of Borrowers, enforceable in accordance with their terms.
C. LITIGATION. There are no proceedings involving Borrowers
pending or, to the knowledge of Borrowers, threatened by or before any court or
governmental authority, agency or arbitration authority, except as disclosed to
Lender in writing prior to the date of this Agreement in an exhibit to the
opinion letter of Borrowers' counsel, which may materially adversely affect the
financial condition, operation or prospects of the Borrowers and are not
covered by insurance.
154228 Page 11 of 45 Pages
<PAGE> 4
D. NO CONFLICTING AGREEMENTS. There is no provision of any
existing agreement, mortgage, indenture or contract binding on Borrowers or
affecting Borrowers' property, which would conflict with or in any way prevent
the execution, delivery or carrying out of the terms of this Agreement and the
other Financing Documents.
E. OWNERSHIP OF ASSETS. Borrowers have good title to Borrowers'
assets, and the Borrowers' assets are free and clear of liens, except those
disclosed to Lender in the Borrowers' financial statement dated June 7, 1994 in
connection with certain non- recourse credit facilities identified in such
financial statement (collectively, the "Non-Recourse Debt").
F. TAXES. All income taxes and other taxes due and payable by
Borrowers have been paid or are being contested in good faith by appropriate
proceedings.
G. FINANCIAL STATEMENTS. The personal financial statements of
Borrowers heretofore delivered to Lender properly reflect Borrowers' financial
condition as of the date or dates thereof, and there has been no material
adverse change in Borrowers' financial condition or operations since the
financial statements dated June 7, 1994. To the best of Borrowers' knowledge,
all factual information furnished by Borrowers to Lender in connection with
this Agreement is and will be accurate and complete on the date as of which
such information is delivered to Lender and is not incomplete by the omission
of any material fact necessary to make such information not misleading.
H. ENVIRONMENTAL MATTERS. Borrowers are in compliance with all
Environmental Laws where failure to comply could have a material adverse effect
on Borrowers' financial condition or operations. Borrowers have not received
notice of any claim that Borrowers are not in compliance with any Environmental
Laws. Neither Borrowers, nor any of Borrowers' present assets or operations or
Borrowers' past assets or operations, is subject to any order, agreement,
proceeding or investigation by, with, or before any federal, state or local
governmental agency or other party respecting any Environmental Laws.
The term "Environmental Laws" means any federal, state or local statute, law,
ordinance, code, rule, regulation, order or decree regulating, relating to, or
imposing liability or standards of conduct concerning, any Hazardous Materials
or other hazardous or toxic substance, as now or at any time hereafter in
effect, including without limitation the Clean Air Act, 42 USC Section 7401 et
seq.; Federal Water Pollution Control Act, 33 USC Section 1251 et seq.; Solid
Waste Disposal Act, 42 USC Section 6901 et seq.; Comprehensive Environmental
Response, Compensation and Liability Act, 42 USC Section 9601 et seq.; National
Environmental Policy Act, 42 USCSection 4321 et seq.; regulations of the
Environmental Protection Agency and any
154228 Page 12 of 45 Pages
<PAGE> 5
applicable 1-al or state law, rule, regulation or rule of common law and any
judicial interpretation thereof relating primarily to the environment or
Hazardous Materials. The term "Hazardous Material" shall mean and include (a)
any asbestos, PCBs, or dioxins, or insulation or other material composed of or
containing asbestos, PCBs or dioxins, (b) oil, petroleum and any petroleum
product, and (c) any hazardous, toxic, or dangerous waste, substance, or
material defined as such in any Environmental Law.
I. MARGIN STOCK. None of the proceeds of the Credit will be used
for the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the Board of Governors of the Federal Reserve System).
Borrowers are not engaged in the business of extending credit for the purpose
of purchasing or carrying margin stock (within the meaning of Regulation U
issued by the Board of Governors of the Federal Reserve System).
J. TRUST. The Malcolm Glazer Trust is a revocable trust created
pursuant to an agreement dated March 23, 1990 which has not been modified or
revoked except for an Amendment dated July 23, 1993.
K. NO DEFAULT. Borrowers are not in default under any existing
indebtedness and the execution and delivery of the Financing Documents will not
cause a default under any of such indebtedness.
L. CONTINUATION OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made under this Agreement shall be deemed to be
made at and as of the date hereof and as of the date of any future advance
under any Credit.
4. AFFIRMATIVE COVENANTS. Until full payment and performance of all
obligations of Borrowers under the Financing Documents, Borrowers will, unless
Lender consents otherwise in writing (and without limiting any requirement of
any other Financing Document):
A. FINANCIAL STATEMENTS. Maintain a system of accounting
satisfactory to Lender and permit Lender's officers or authorized
representatives to visit and inspect Borrowers' books of account and other
records at such reasonable times and as often as Lender may desire, and pay the
reasonable fees and disbursements of any accountants or other agents of Lender
selected by Lender for the foregoing purposes. Unless written notice of
another location is given to Lender, Borrowers' books and records will be
located at Borrowers' address set forth above.
154228 Page 13 of 45 Pages
<PAGE> 6
In addition, Borrowers will:
1. Furnish to Lender annual financial statements of
Borrowers prepared by Borrowers within thirteen (13) months after the
date of the most recent financial statement provided to Lender, in
form and substance satisfactory to Lender, and including without
limitation a listing of all assets and liabilities, a listing of all
sources of income, a listing of the uses of income, the amount and
sources of contingent liabilities, identification of joint owners as
to listed assets, and an annual projection of sources and uses of
income. Such financial statements must be dated and signed by the
Borrowers, either prepared on the Lender's form or certified by the
Borrowers. Such certification shall include the following sentence:
"This financial statement is being submitted to NationsBank, N.A. for
the purpose of obtaining credit and constitutes the true and correct
statement of my/our financial condition".
2. Cause to be furnished to Lender within thirty (30)
days of filing complete, signed copies of the Borrowers' federal
income tax returns and of all related Schedule K-1's.
3. Furnish or cause to be furnished to Lender promptly
such additional information, reports and statements respecting the
business operations and financial condition of Borrowers, from time to
time, as Lender may reasonably request.
B. COMPLIANCE. Comply with all laws, regulations and
governmental requirements including, without limitation, Environmental Laws
applicable to Borrowers or to any of Borrowers' property, business operations
and transactions.
C. ADVERSE CONDITIONS OR EVENTS. Promptly advise Lender in
writing of (i) any condition, event or act which comes to Borrowers' attention
that would or might materially adversely affect Borrowers' financial condition
or operations, or Lender's rights under the Financing Documents; (ii) any
litigation filed by or against Borrowers; (iii) any default under the Financing
Documents; (iv) any default under any agreement, mortgage, indenture or
contract binding on Borrowers or affecting any of the Borrowers' property,
including but not limited to the Third Party Lines of Credit (as hereinafter
defined); (v) any and all enforcement, cleanup, remedial removal or other
governmental or regulatory actions instituted, completed or threatened pursuant
to any applicable federal, state or local laws, ordinances or regulations
relating to any Hazardous Materials affecting Borrowers' property or business
operations; and (vi) all claims made or threatened by any third party against
Borrowers relating to damages, contribution, cost recovery, compensation, loss
or
154228 Page 14 of 45 Pages
<PAGE> 7
injury resulting from any Hazardous Materials. Borrowers shall immediately
notify Lender of any remedial action taken by Borrowers with respect to
Borrowers' property.
D. TAXES AND OTHER OBLIGATIONS. Pay all of Borrowers' taxes and
other obligations as the same become due and payable, except to the extent
being contested in good faith by appropriate proceedings.
E. PARI PASSU TREATMENT. Insure that the Lender will be treated
on a pari passu basis with all other unsecured creditors of Borrowers,
including but not limited to the lenders of the Third Party Lines of Credit.
5. NEGATIVE COVENANTS. Until full payment and performance of all obligations
of Borrowers under the Financing Documents, Borrowers will not, without the
prior written consent of Lender (and without limiting any requirement of any
other Financing Document):
A. TRANSFER OF ASSETS. Sell, lease, assign or otherwise dispose
of or transfer any of the Borrowers' assets, except sales or other transfers of
assets for which fair value is paid or transfers between Malcolm I. Glazer and
the Malcolm Glazer Trust created pursuant to the agreement dated March 23,
1990.
B. LIENS (NEGATIVE PLEDGE). Grant, suffer or permit any
contractual or noncontractual lien on or security interest in Borrowers'
assets, except in favor of Lender and/or lenders of Third Party Lines of Credit
subject to pari passu treatment of the Lender and the lenders of the Third
Party Lines of Credit as required under paragraph 4E above, or fail to promptly
pay when due all lawful claims, whether for labor, materials or otherwise. The
foregoing notwithstanding, the Borrowers will not enter into any negative
pledge agreement with any other lender except those negative pledge agreements
in favor of the lenders of the Third Party Lines of Credit.
C. BORROWINGS. Create, incur, assume or become liable in any
manner for any indebtedness (for borrowed money, reimbursement obligations
under any letter of credit agreement, deferred payment for the purchase of
assets, lease payments, as surety or guarantor for the debt of another, or
otherwise) other than to Lender, which in the aggregate exceeds $100,000 with
the exception of the unsecured term line of credit from SunBank of Florida in
the maximum principal sum of $10,000,000 (the "SunBank Line of Credit"), the
unsecured short term line of credit from Manufacturers and Traders Trust
Company in the maximum principal sum of $10,000,000 (the "M&T Line of Credit;"
collectively, with the SunBank Line of Credit, the "Third Party Lines of
Credit") and the Non-Recourse Debt. The foregoing shall not be deemed to
154228 Page 15 of 45 Pages
<PAGE> 8
prohibit the Borrowers from entering into stock purchase agreements or other
contracts for the acquisition of assets.
D. OTHER COVENANTS. Violate or fail to comply with any covenants
or agreements regarding other indebtedness.
E. CHARACTER OF BUSINESS. Change the general character of
business conducted by Borrowers at the date hereof, or engage in any type of
business not reasonably related to Borrowers' business as presently conducted.
F. ENVIRONMENTAL LAW COMPLIANCE. Violate any Environmental Laws
and Borrowers will not use or permit any other party to use any Hazardous
Materials except such materials as are incidental~to Borrowers' normal course
of business, maintenance and repairs. Borrowers agree to permit Lender, its
agents, contractors and employees to enter and inspect Borrowers' premises at
any reasonable times upon three (3) days prior notice for the purpose of
conducting an environmental investigation and audit (including taking physical
samples) to ensure that Borrowers are complying with this covenant. Borrowers
shall provide Lender, its agents, contractors, employees and representatives
with access to and copies of any and all data and documents relating to or
dealing with any Hazardous Materials within five (5) days of the request
thereof.
6. DEFAULT. The occurrence of any of the following shall constitute a
default under this Agreement and under each of the other Financing Documents:
A. Borrowers shall fail to pay in full when due any principal,
interest, fee or other amount payable to Lender under any Financing Document or
any other obligation of Borrowers to Lender, whether at maturity or otherwise;
or
B. The discovery by Lender that any representation or warranty by
Borrowers in any Financing Document or in any financial statement, certificate,
report or opinion submitted to Lender in connection with the Credit was
incorrect or misleading in any material respect when made; or
C. Borrowers shall fail to timely and properly observe, keep or
perform any term, covenant, agreement or condition in any Financing Document;
or
D. A default shall occur under any of the Third Party Lines of
Credit; or
E. Any judgment against Borrowers or other levy or attachment
against any property of Borrowers in excess of $25,000 remains unpaid,
undischarged, not bonded or not dismissed for a period of thirty (30) days; or
154228 Page 16 of 45 Pages
<PAGE> 9
F. The death or legal incapacity of Malcolm I. Glazer; or
G. Any of the Borrowers (i) makes an assignment for the benefit
of creditors'; (ii) admits in writing its inability to pay or fails to pay its
debts generally as they become due; (iii) files a petition for relief under any
chapter of the Bankruptcy Code or any other bankruptcy or debtor relief law,
domestic or foreign, as now or hereafter in effect, or seeking the appointment
of a trustee, receiver, custodian, liquidator or similar official for Borrowers
or any of Borrowers' property; or any such action is commenced against
Borrowers and Borrowers admit, acquiesce in or do not contest diligently the
material allegations thereof, or the action results in entry of an order for
relief against Borrowers, or Borrowers do not obtain permanent dismissal and
discharge thereof before the earlier of trial thereon or sixty (60) days after
commencement of the action; or (iv) makes a transfer or incurs an obligation
which is fraudulent under any applicable law as to any creditor.
7. REMEDIES UPON DEFAULT. If an event of default shall occur:
A. Any indebtedness of Borrowers under any of the Financing
Documents shall, at Lender's option, without notice become immediately due and
payable without presentment, demand, protest or notice of dishonor, all of
which are hereby expressly waived by Borrowers;
B. The obligation, if any, of Lender to permit further borrowings
under any of the Financing Documents shall at Lender's option immediately cease
and terminate;
C. Lender shall have all rights, powers and remedies available
under each of the Financing Documents, or afforded by law. All rights, powers
and remedies of Lender in connection with each of the Financing Documents may
be exercised at any time by the Lender and from time to time after the
occurrence of any event of default, are cumulative and not exclusive, and shall
be in addition to any other rights, powers or remedies provided by law or
equity.
8. NOTICES. All notices, requests or demands which any party is required or
may desire to give to any other party under any provision of this Agreement
must be in writing delivered to each party at the following address:
Borrowers: Malcolm I. Glazer and/or The Malcolm Glazer
Trust 1482 South Ocean Boulevard
Palm Beach, Florida 33480
154228 Page 17 of 45 Pages
<PAGE> 10
Lender: NationsBank, N.A.
5550 Friendship Boulevard
Chevy Chase, Maryland 20815-7201
Attn: Jennifer Carey Bak
With Copies To: Avram Glazer
18 Stoney Clover Lane
Pittsford, N.Y. 14534
Gordon E. Forth, Esquire
Woods, Oviatt, Gilman, Sturman & Clarke
44 Exchange Street
Rochester, N.Y. 14614
or to such other address as any party may designate by written notice to all of
the parties. Each such notice, request and demand shall be deemed given or
made as follows:
A. If sent by hand delivery, upon delivery;
B. If sent by mail, upon the earlier of the date of receipt or
five (5) days after receipt in the U.S. Mail, first class postage prepaid.
9. MISCELLANEOUS. Borrowers and Lender further covenant and agree as follows,
without limiting any requirement of any other Financing Document except as
provided in paragraph 9.F of this Agreement:
A. EXPENSES. Borrowers agree to pay all out-of-pocket expenses
of Lender, including but not limited to all reasonable attorney's fees and
expenses, incurred in connection with the Financing Documents and the
enforcement and collection of the Credit.
B. CUMULATIVE RIGHTS AND NO WAIVER. Each and every right granted
to Lender under any Financing Document, or allowed it by law or equity shall be
cumulative of each other and may be exercised in addition to any and all other
rights of Lender, and no delay in exercising any right shall operate as a
waiver thereof, nor shall any single or partial exercise by Lender of any right
preclude any other or future exercise thereof or the exercise of any other
right. Borrowers expressly waive any presentment, demand, protest or other
notice of any kind, including but not limited to notice of intent to accelerate
and notice of acceleration. No notice to or demand on Borrowers in any case
shall, of itself, entitle Borrowers to any other or future notice or demand in
similar or other circumstances.
C. APPLICABLE LAW. This Agreement and the rights and obligations
of the parties hereunder shall be governed by and interpreted in accordance
with the laws of the State in which
154228 Page 18 of 45 Pages
<PAGE> 11
Lender is located as indicated by Lender's address in Section 8 of this
Agreement and applicable United Stated federal law.
D. AMENDMENT. No modification, consent, amendment or waiver of
any provision of this Agreement, nor consent to any departure by Borrowers
therefrom, shall be effective unless the same shall be in writing and signed by
an Assistant Vice President or higher level officer of Lender, and then shall
be effective only in the specific instance and for the purpose for which given.
This Agreement is binding upon Borrowers, Borrowers' heirs, personal
representatives, successors and assigns, and inures to the benefit of the
Lender, its successors and assigns; however, no assignment or other transfer of
Borrowers' rights or obligations hereunder shall be made or be effective
without Lender's prior written consent nor shall it relieve Borrowers of any
obligations hereunder. There is no third party beneficiary of this Agreement.
The obligations of Borrowers hereunder shall be joint and several.
E. DOCUMENTS. All documents, certificates and other items
required under this Agreement to be executed and/or delivered to Lender shall
be in form and content satisfactory to Lender and its counsel.
F. COMPLIANCE WITH USURY LAWS. All existing and future
agreements regarding the Credit are hereby limited so that in no event
(including prepayment, default, demand for payment, or acceleration) shall the
interest taken, reserved, contracted for, charged or received exceed the
maximum nonusurious amount permitted by applicable law (the "Maximum Amount");
any document possibly to the contrary shall be automatically reformed and the
interest payable automatically reduced to the Maximum Amount, without necessity
of execution of any amendment or new document; if Lender ever receives interest
in an amount which apart from this provision would exceed the Maximum Amount,
the excess shall, without penalty, be applied to principal due at maturity or
be refunded to the payor if the principal is paid in full; and all interest
paid or agreed to be paid shall be spread throughout the full term (including
extensions) of the debt so that the amount of interest does not exceed the
Maximum Amount.
G. PARTIAL INVALIDITY. A determination that any provision of any
Financing Document is unenforceable or invalid shall not affect the
enforceability or validity of any other provision and the determination that
the application of any provision of any Financing Document to any person or
circumstance is illegal or unenforceable shall not affect the enforceability or
validity of such provision as it may apply to other persons or circumstances.
H. SURVIVABILITY. All covenants, agreements, representations,
and warranties made herein or in the other Financing Documents shall survive
the making of the Credit and
154228 Page 19 of 45 Pages
<PAGE> 12
shall continue in full force and effect so long as the Credit is outstanding or
the obligation of the Lender to make any advances under the Line shall not have
expired.
10. WAIVER OF JURY TRIAL. BORROWERS WAIVE TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO WHICH LENDER MAY BE A PARTY, ARISING OUT OF OR IN CONNECTION WITH
OR IN ANY WAY PERTAINING TO THIS AGREEMENT OR THE LOAN DOCUMENTS. IT IS AGREED
AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL
CLAIMS AGAINST ALL PARTIES TO SUCH ACTION OR PROCEEDINGS, INCLUDING CLAIMS
AGAINST ANY PARTIES WHO ARE NOT PARTIES TO THIS AGREEMENT. THIS WAIVER IS
KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY BORROWERS.
THIS WRITTEN AGREEMENT AND THE OTHER FINANCING DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS# OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
WITNESS: LENDER:
NATIONSBANK, N.A.
_______________________ By: S//JENNIFER CAREY BAK
-------------------------
Jennifer Carey Bak
Vice President
WITNESS: BORROWERS:
_______________________ S//MALCOLM I. GLAZER
-------------------------
Malcolm I. Glazer,
by Avram Glazer pursuant to Power
of Attorney attached hereto and
made a part hereof
154228 Page 20 of 45 Pages
<PAGE> 13
THE MALCOLM GLAZER TRUST
________________________ S//MALCOLM I. GLAZER, TRUSTEE
-----------------------------
Malcolm I. Glazer, Trustee
by Avram Glazer pursuant to Power
of Attorney attached hereto and
made a part hereof
STATE/COMMONWEALTH OF ____________,
CITY/COUNTY OF _____________, TO WIT:
I HEREBY CERTIFY, that on this ___ day of ______________, 1994, before
me, the undersigned Notary Public of said State/Commonwealth, personally
appeared Jennifer Carey Bak, who acknowledged herself to be a vice president of
NationsBank, N.A., known to me (or satisfactorily proven) to be a person whose
name is subscribed to the within instrument, and acknowledged that she executed
the same for the purposes therein contained as the duly authorized vice
president of said Bank by signing the name of the Bank by herself as vice
president
WITNESS my hand and Notarial Seal.
______________________________
Notary Public
My Commission Expires:
154228 Page 21 of 45 Pages
<PAGE> 1
Exhibit 10
PROMISSORY NOTE
$10,000,000 Chevy Chase, Maryland
November 14, 1994
FOR VALUE RECEIVED, MALCOLM I. GLAZER, a resident of the State of
Florida and THE MALCOLM GLAZER TRUST, a trust created pursuant to agreement
dated March 23, 1990 (collectively, the "Borrowers"), jointly and severally
promise to pay to the order of NATIONSBANK, N.A. (the "Lender"), the principal
sum of TEN MILLION DOLLARS ($10,000,000) (the "Principal Sum"), or so much
thereof as has been or may be advanced or readvanced to or for the account of
the Borrowers pursuant to the terms and conditions of the Credit Agreement (as
hereinafter defined), together with interest thereon at the rate or rates
hereinafter provided, in accordance with the following:
1. Interest. Commencing as of the date hereof and continuing
until repayment in full of all sums due hereunder, the unpaid Principal Sum
shall bear interest at the fluctuating prime rate of interest established and
declared by the Lender from time to time (the "Prime Rate") per annum. The
Prime Rate does not necessarily represent the lowest rate of interest charged
by the Lender to Borrowers. The rate of interest charged under this Note shall
change immediately and contemporaneously with any change in the Prime Rate.
All interest payable under the terms
154228 Page 22 of 45 Pages
<PAGE> 2
of this Note shall be calculated on the basis of a 360-day year and the actual
number of days elapsed.
2. Payments and Maturity. The unpaid Principal Sum, together
with interest thereon at the rate or rates provided above, shall be payable as
follows:
(a) Interest only on the unpaid Principal Sum shall be due and
payable monthly, commencing December 1, 1994, and on the first day of each
month thereafter to maturity; and
(b) Unless sooner paid, the unpaid Principal Sum, together
with interest accrued and unpaid thereon, shall be due and payable in full on
October 1, 1995.
The fact that the balance hereunder may be reduced to zero from time
to time pursuant to the Credit Agreement will not affect the continuing
validity of this Note or the Credit Agreement; and the balance may be increased
to the Principal Sum after any such reduction to zero.
3. Default Interest. Upon the occurrence of an Event of Default
(as hereinafter defined), the unpaid Principal Sum shall bear interest
thereafter at a rate four percent (4%) per annum in excess of the then current
rate or rates of interest hereunder until such Event of Default is cured.
4. Late Charges. If the Borrowers shall fail to make any payment
under the terms of this Note within fifteen (15) days after the date such
payment is due, the Borrowers shall pay to the Lender on demand a late charge
equal to five percent (5%) of such payment.
154228 Page 23 of 45 Pages
<PAGE> 3
5. Application and Place of Payments. All payments, made on
account of this Note shall be applied first to the payment of any late charge
then due hereunder, second to the payment of accrued and unpaid interest then
due hereunder, and the remainder, if any, shall be applied to the unpaid
Principal Sum. All payments on account of this Note shall be paid in lawful
money of the United States of America in immediately available funds during
regular business hours of the Lender at its principal office in Bethesda,
Maryland or at such other times and places as the Lender may at any time and
from time to time designate in writing to the Borrowers.
6. Prepayment. The Borrowers may prepay the Principal Sum in
whole or in part without premium or penalty.
7. Credit Agreement and Other Financing Documents. This Note is
the "Note" described in a Credit Agreement of even date herewith by and between
the Borrowers and the Lender (as amended, modified, restated, substituted,
extended and renewed at any time and from time to time, the "Credit
Agreement"). The indebtedness evidenced by this Note is included within the
meaning of the term "Obligations" as defined in the Credit Agreement. The term
"Financing Documents" as used in this Note shall mean collectively this Note,
the Credit Agreement and any other instrument, agreement, or document
previously, simultaneously, or hereafter executed and delivered by the
Borrowers and/or any other person, singularly or jointly with any other person,
154228 Page 24 of 45 Pages
<PAGE> 4
evidencing, securing, guaranteeing, or in connection with the Principal Sum,
this Note and/or the Credit Agreement.
8. Events of Default. The occurrence of any one or more of the
following events shall constitute an event of default (individually, an "Event
of Default" and collectively, the "Events of Default") under the terms of this
Note:
(a) The failure of the Borrowers to pay to the Lender when
due any and all amounts payable by the Borrowers to the Lender under the terms
of this Note; or
(b) The occurrence of an event of default (as defined
therein) under the terms and conditions of any of the other Financing
Documents.
9. Remedies. Upon the occurrence of an Event of Default at the
option of the Lender, all amounts payable by the Borrowers to the Lender under
the terms of this Note shall immediately become due and payable by the
Borrowers to the Lender without notice to the Borrowers or any other person,
and the Lender shall have all of the rights, powers, and remedies available
under the terms of this Note, any of the other Financing Documents and all
applicable laws. The Borrowers and all endorsers, guarantors, and other
parties who may now or in the future be primarily or secondarily liable for the
payment of the indebtedness evidenced by this Note hereby severally waive
presentment, protest and demand, notice of protest, notice of demand and of
dishonor and non-payment of this Note and expressly agree that this Note or any
payment hereunder may be extended from time to time without
154228 Page 25 of 45 Pages
<PAGE> 5
in any way affecting the liability of the Borrowers, guarantors and endorsers.
10. Confessed Judgment. Upon the occurrence of an Event of
Default, the Borrowers hereby authorize any attorney designated by the Lender
or any clerk of any court of record to appear for the Borrowers in any court of
record and confess judgment without prior hearing against the Borrowers in
favor of the Lender for and in the amount of the unpaid Principal Sum, all
interest accrued and unpaid thereon, all other amounts payable by the Borrowers
to the Lender under the terms of this Note or any of the other Financing
Documents, costs of suit, and attorneys' fees of fifteen-percent (15%) of the
unpaid Principal Sum and interest then due hereunder. The Borrowers hereby
release, to the extent permitted by applicable law, all errors and all rights
of exemption, appeal, stay of execution, inquisition, and other rights to which
the Borrowers may otherwise be entitled under the laws of the United States of
America or of any state or possession of the United States of America now in
force and which may hereafter be enacted. The authority and power to appear
for and enter judgment against the Borrowers shall not be exhausted by one or
more exercises thereof or by any imperfect exercise thereof and shall not be
extinguished by any judgment entered pursuant thereto. Such authority may be
exercised on one or more occasions or from time to time in the same or
different jurisdictions as often as the Lender shall deem necessary or
154228 Page 26 of 45 Pages
<PAGE> 6
desirable, for all of which this Note shall be a sufficient warrant.
11. Expenses. The Borrowers promise to pay to the Lender on
demand by the Lender all costs and expenses incurred by the Lender in
connection with the collection and enforcement of this Note, including, without
limitation, reasonable attorneys' fees and expenses and all court costs.
12. Notices. Any notice, request, or demand to or upon the
Borrowers or the Lender shall be deemed to have been properly given or made
when delivered in accordance with Paragraph 8 of the Credit Agreement.
13. Miscellaneous. Each right, power, and remedy of the Lender as
provided for in this Note or any of the other Financing Documents, or now or
hereafter existing under any applicable law or otherwise shall be cumulative
and concurrent and shall be in addition to every other right, power, or remedy
provided for in this Note or any of the other Financing Documents or now or
hereafter existing under any applicable law, and the exercise or beginning of
the exercise by the Lender of any one or more of such rights, powers, or
remedies shall not preclude the simultaneous or later exercise by the Lender of
any or all such other rights, powers, or remedies. No failure or delay by the
Lender to insist upon the strict performance of any term, condition, covenant,
or agreement of this Note or any of the other Financing Documents, or to
exercise any right, power, or remedy consequent upon a breach thereof, shall
constitute a
154228 Page 27 of 45 Pages
<PAGE> 7
waiver of any such term, condition, covenant, or agreement or of any such
breach, or preclude the Lender from exercising any such right, power, or remedy
at a later time or times. By accepting payment after the due date of any
amount payable under the terms of this Note, the Lender shall not be deemed to
waive the right either to require prompt payment when due of all other amounts
payable under the terms of this Note or to declare an Event of Default for the
failure effect such prompt payment of any such other amount. No course of
dealing or conduct shall be effective to amend, modify, waive, release, or
change any provisions of this Note.
14. Partial Invalidity. In the event any provision of this Note
(or any part of any provision) is held by a court of competent jurisdiction to
be invalid, illegal, or unenforceable in any respect, such invalidity,
illegality, or unenforceability shall not affect any other provision (or
remaining part of the affected provision) of this Note; but this Note shall be
construed as if such invalid, illegal, or unenforceable provision (or part
thereof) had not been contained in this Note, but only to the extent it is
invalid, illegal, or unenforceable.
15. Captions. The captions herein set forth are for convenience
only and shall not be deemed to define, limit, or describe the scope or intent
of this Note.
16. Applicable Law. The Borrowers acknowledge and agree that this
Note shall be governed by the laws of the State of
154228 Page 28 of 45 Pages
<PAGE> 8
Maryland, even though for the convenience and at the request of the Borrowers,
this Note may be executed elsewhere.
17. Consent to Jurisdiction. The Borrowers irrevocably submit to
the jurisdiction of any state or federal court sitting in the State of Maryland
over any suit, action, or proceeding arising out of or relating to this Note or
any of the other Financing Documents. The Borrowers irrevocably waive, to the
fullest extent permitted by law, any objection that the Borrowers may now or
hereafter have to the laying of venue of any such suit, action, or proceeding
brought in any such court and any claim that- any such suit, action, or
proceeding brought in any such court has been brought in an inconvenient forum.
Final judgment in any such suit, action, or proceeding brought in any such
court shall be conclusive and binding upon the Borrowers and may be enforced in
any court in which the Borrowers are subject to jurisdiction by a suit upon
such judgment, provided that service of process is effected upon the Borrowers
as provided in this Note or as otherwise permitted by applicable law.
18. Service of Process. The Borrowers hereby irrevocably
designate and appoint Joel Glazer, 7701 Woodmont Avenue, Bethesda, Maryland
20814, as the Borrowers's authorized agent to receive on the Borrowers' behalf
service of any and all process that may be served in any suit, action, or
proceeding instituted in connection with this Note in any state or federal
court sitting in the State of Maryland. If such agent shall cease so to act,
the Borrowers shall irrevocably designate and appoint
154228 Page 29 of 45 Pages
<PAGE> 9
without delay another such agent in the State of Maryland satisfactory to the
Lender and shall promptly deliver to the Lender evidence in writing of such
agent's acceptance of such appointment and its agreement that such appointment
shall be irrevocable.
The Borrowers hereby consent to process being served in any suit,
action, or proceeding instituted in connection with this Note by serving a copy
thereof upon the agent hereinabove designated and appointed by the Borrowers as
the Borrowers' agent for service of process. The Borrowers irrevocably agree
that such service shall be deemed in every respect effective service of process
upon the Borrowers in any such suit, action or proceeding, and shall, to the
fullest extent permitted by law, be taken and held to be valid personal service
upon the Borrowers. Nothing in this Section shall affect the right of the
Lender to serve process in any manner otherwise permitted by law or limit the
right of the Lender otherwise to bring proceedings against the Borrowers in the
courts of any jurisdiction or jurisdictions.
19. WAIVER OF TRIAL BY JURY. THE BORROWERS HEREBY WAIVE TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO WHICH THE BORROWERS OR EITHER OF THEM, AND
THE LENDER MAY BE PARTIES, ARISING OUT OF OR IN ANY WAY PERTAINING TO (A) THIS
NOTE OR (B) THE FINANCING DOCUMENTS. IT IS AGREED AND UNDERSTOOD THAT THIS
WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES
TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT
PARTIES TO THIS NOTE.
154228 Page 30 of 45 Pages
<PAGE> 10
THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY THE
BORROWERS, AND THE BORROWERS HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT
OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY
JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. THE BORROWERS FURTHER
REPRESENT THAT THEY HAVE BEEN REPRESENTED IN THE SIGNING OF THIS NOTE AND IN
THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF THEIR OWN
FREE WILL, AND THAT THEY HAVE THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH
COUNSEL.
IN WITNESS WHEREOF, the Borrowers have caused this Note to be executed
under seal as of the date first written above.
WITNESS: THE MALCOLM GLAZER TRUST
__________________________
By: S//MALCOLM GLAZER, TRUSTEE
-----------------------------
MALCOLM I. GLAZER, TRUSTEE
by Avram Glazer, Pursuant to
Power of Attorney attached
hereto and made a part hereof
154228 Page 31 of 45 Pages
<PAGE> 1
Exhibit 11
ESCROW DEPOSIT AGREEMENT
November 2, 1994
Wertheim Schroder & Co. Incorporated
The Equitable Center
787 Seventh Avenue
New York, New York 10019-6016
Attention: Michael Dura, Managing Director
Re: Envirodyne Industries, Inc. ("Company")
Gentlemen:
Reference is hereby made to a letter agreement dated as of August 16,
1994 (the "Letter Agreement"), between THE MALCOLM I. GLAZER TRUST
("Purchaser") and The Argosy Securities Group, L.P. ("Seller") pursuant to
which Purchaser agreed to purchase from Seller and Seller agreed to sell to
Purchaser 577,738 shares of the Company's common stock, par value $0.01 per
share ("Original Shares"), at a net price of $5.165 per share on the terms and
conditions therein, as amended and modified hereby. On October 12, 1994 and as
permitted in the Letter Agreement, Seller sold 288,500 Original Shares (the
"Retained Shares") which have a net purchase price of $1,493,914. Seller and
Purchaser hereby agree to change the September 26, 1994 reference in the Letter
Agreement to 12:00 p.m. on November 18, 1994 (the "Notice Time"). Terms
defined in the Letter Agreement not otherwise defined herein have the meanings
assigned to them in the Letter Agreement. Purchaser and Seller desire to open
and maintain an escrow deposit account (the "Escrow Account") on the terms and
conditions contained herein with WERTHEIM SCHRODER & CO. INCORPORATED ("Escrow
Agent" or "you"). The Escrow Agent agrees to open an Escrow Account which
shall be governed by the terms and conditions of this letter agreement (the
"Agreement").
Accordingly, in consideration of the premises and the mutual covenants
and undertakings contained herein, the parties hereto, intending to be legally
bound hereby, agree as follows:
Section 1. Deposit.
(a) For a period commencing as of the date hereof and terminating
on the Termination Date (hereinafter defined in Section 5), you agree to act as
depository and escrow agent and to receive and disburse certain stock
certificates and undated stock powers executed in blank as described in Section
1(b)
154228 Page 32 of 45 Pages
<PAGE> 2
below, and income (including proceeds, if any on the sale of Retained Shares
and/or Zapata Shares as defined below in this Section 1(a)) and Distributions
(as defined below in this Section 1(a)), if any, thereon (collectively the
"Escrow Assets") all in accordance with the provisions of this Agreement.
Further, you agree to accept at any time after the date hereof any
distributions of cash or property ("Distributions") made with respect to the
Retained Shares or Zapata Shares (as defined in Section 1(b)) after the date
hereof other than ordinary cash dividends on the Zapata Shares, which dividends
shall be retained by and be the property of Purchaser.
(b) Simultaneously with the execution of this Agreement, Seller
has deposited or caused to be deposited with you in the Escrow Account, the
Escrow Documents identified on attached Schedule I (collectively "Seller's
Escrow Documents"), and Purchaser has deposited or caused to be deposited with
you the documents identified on attached Schedule II which documents include
1,000,000 shares of common stock, $.25 par value, of Zapata Corporation (the
"Zapata Shares"), ("Purchaser's Escrow Deposit"). The Escrow Agent hereby
acknowledges receipt of the Escrow Assets identified on Schedules I and II.
(c) So long as the net purchase price due Seller under the Letter
Agreement for the Retained Shares and Purchaser's obligation under Section 6
have not been paid in full, Seller shall be entitled to exercise all voting and
other consensual rights pertaining to Seller's Escrow Documents or any part
thereof for any purpose. Upon and after Seller's receipt of the net purchase
price for the Retained Shares and the discharge of all Purchaser's obligations
under Section 6, prior to the receipt of Seller's Termination Notice (as
defined in Section 3(c) below), the rights of Seller to exercise any voting or
other consensual rights which it would otherwise be entitled to exercise with
respect to the Retained Shares shall cease, and Seller shall be deemed to have
granted Purchaser an irrevocable proxy coupled with an interest to have the
sole right to exercise voting and other consensual rights with respect to the
Retained Shares.
(d) So long as the Zapata Shares have not been sold by the Escrow
Agent in accordance with Section 2, Purchaser shall be entitled to (i) exercise
all voting and other consensual rights pertaining to the Zapata Shares or any
part thereof for any purpose and (ii) to receive and retain all ordinary cash
and dividends made with respect to the Zapata Shares.
Section 2. Disbursements.
(a) Notwithstanding anything herein or elsewhere to the contrary,
upon receipt, prior to the date Seller gives Seller's Termination Notice, of a
written certificate executed by
154228 Page 33 of 45 Pages
<PAGE> 3
Purchaser that the expiration or earlier termination of the waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 ("HSR Act") has
occurred in respect of the purchase of the Retained Shares and a certificate
from Seller to the effect that Seller has received the net purchase price for
the Retained Shares and the amount, if any, owed under Section 6 ("Payment
Certificate"), the Escrow Agent shall immediately disburse (i) to Purchaser the
Escrow Assets (other than ordinary regular cash Distributions in respect of the
Retained Shares), and (ii) to Seller such ordinary regular cash Distributions.
(b) On or after the Notice Time, the following provisions shall
apply if the certificates required under Section 2(a) have not been delivered
to the Escrow Agent prior to such time:
(i) Upon receipt of a certificate executed by Seller having
attached thereto Seller's Termination Notice stating that no monies
are owed by Purchaser to Seller under Section 6, or a certificate
executed by Purchaser having attached thereto a Purchaser's
Termination Notice (as defined below in Section 3(f)) the Escrow Agent
shall promptly return (x) the Retained Shares and Distributions
thereon to Seller and (y) the Purchaser's Escrow Deposit and
Distributions thereon to Purchaser. Seller shall be under no
obligation to deliver the aforesaid certificate contemplated for
Seller.
(ii) Upon receipt of a certificate executed by Seller having
attached thereto Seller's Termination Notice and stating therein that
(u) Purchaser owes Seller monies under Section 6 that have not been
paid and (v) Seller has elected not to sell any Retained Shares, then
Escrow Agent shall (2) prior to the receipt of Purchaser's Termination
Notice, sell as many Zapata Shares as are necessary to satisfy the
amounts owned by Purchaser to Seller under Section 6, as evidenced by
such certificate and such additional amounts as may be so owed after
the date of such certificate through the last date on which a
sufficient number of Zapata Shares have been sold, as evidenced by a
Section 6 Certificate delivered by Seller to Escrow Agent and
Purchaser, (x) disburse to Seller from the net proceeds of such sales
the amount owed stated in the Seller's certificates to be owed to
Seller by Purchaser under Section 6, (y) disburse to Seller all
retained Shares and all Distributions thereon and (z) upon
disbursement in full of the amount stated to be so owed to Seller,
disburse any excess net proceeds from such sales together with the
remaining Purchaser's Escrow Deposit and Distributions thereto to
Purchaser. Seller shall be under no obligation to deliver the
aforesaid certificate.
(iii) Upon receipt of a certificate executed by Seller having
attached thereto Seller's Termination Notice and stating that (u)
Purchaser owes Seller monies under Section
154228 Page 34 of 45 Pages
<PAGE> 4
6 which have not been paid and/or (v) Seller has elected to sell a
specified number (which number can be expressed as a formula), of
Retained Shares, then Escrow Agent shall (2) first, sell such number
of Retained Shares, (x) second, sell Zapata Shares prior to the
receipt of Purchaser's Termination Notice if the per share price ("Per
Share Price") obtained for the Retained Shares sold, after reduction
for brokerage commission ("Net Per Shares Price"), is less than $5.165
(such price to be adjusted for stock splits, stock dividends and the
like) to the extent of such deficiency and to extent of the amount
owed by Purchaser to Seller under Section 6 as specified in such
certificate and/or may thereafter be specified in a Section 6
Certificate for amounts owed through the lst day on which a sufficient
number of Zapata Shares have been sold and (y) disburse (A) any unsold
Retainer Shares (and all Distributions thereon) to Seller, (B) the net
proceeds from the sale of the Retained Shares pursuant to (iii) (w)
above to Seller, and (C) upon disbursement in full of such amount to
Seller, the remaining Purchaser's Escrow Deposit and Distributions
thereon to Purchase. Seller shall be under no obligation to deliver
the aforesaid certificate.
(iv) Upon receipt of a certificate executed by Seller having attached
thereto Seller's Closing Notice and stating that the waiting period
under the HSR Act has expired or terminated and that the net purchase
price due under the Letter Agreement for the Retained Shares has not
been paid, then the Escrow Agent shall (y) sell as many of the Zapata
Shares as may be necessary such that after completion of such sales
the Net Per Share Price when multiplied by the number of Zapata Shares
so sold is at least equal to the sum of (A) the net purchase price due
for the Retained Shares (or such lesser amount as may be obtained by
the sale of all the Zapata Shares) and (B) such amount as may be owed
Seller under Section 6 below, as evidenced by the amount set forth in
the Seller's Closing Notice or in any thereafter delivered Section 6
Certificate (for amounts owed through the lst day on which a
sufficient number of Zapata Shares have been sold) and (z) disburse
(A) the net proceeds from such sales to Seller, (B) upon receipt of a
certificate executed by Seller stating that it has received payment in
full of the purchase price for the Retained Shares and amounts owed
under Section 6, the remaining Escrow Assets (which shall include,
without limitations, the Retained Shares to Purchaser).
Notwithstanding anything else in this Section 2, or any certificate or
instruction previously received to the contrary, upon receipt of a
Payment Certificate, the Escrow Agent shall immediately cease to sell
any remaining Zapata Shares and shall distribute any net proceeds
received after delivery of such Payment Certificate from the Zapata
Shares to Purchaser.
154228 Page 35 of 45 Pages
<PAGE> 5
(v) Upon receipt of a certificate executed by Purchaser on or
after the expiry of a period commencing on the Notice Time and ending
after the expiry of 90 days thereafter plus such additional number of
days at any time during which, through the action of Purchaser
(including the existence of black-out periods under the SLA referred
to in Section 2(c) below or the failure of any registration statement
referred to in the SLA to remain effective), the Zapata Shares (in the
case of Section 2(b)(ii) or 2(b)(iv) hereof) or either the Zapata
Shares or the Retained Shares in the case of Section 2(b)(iii) hereof
could not be sold (the "Sale Period") having attached thereto
Purchaser's Termination Notice (hereinafter defined in Section 3(f)),
stating therein that it has elected to terminate the Letter Agreement
and a certificate form Seller that no amounts are owed it under
Section 6, the Escrow Agent shall promptly return (x) the Retained
Shares and Distributions thereon to Seller and (y) the Purchaser's
Escrow Deposit and Distributions thereon, if any, to Purchaser.
Purchaser and Seller agree that (A) the Escrow Agent is
authorized to conduct such sales of the Retained Shares and the Zapata
Shares to satisfy Purchaser's obligation to Seller, (B) sales of the
Zapata Shares are for the account of Purchaser and are not being made
by Seller or the Escrow Agent who will have no responsibility with
respect thereto and sales of the Retained Shares are for the account
of Seller and are not being made by Purchaser or Escrow Agent who will
have no responsibility thereto. All sales of shares hereunder shall
be in unsolicited agency transactions. The Escrow Agent shall provide
a weekly report to Purchaser and Seller accounting for all sales of
Retained Shares and Zapata Shares. Seller shall be entitled to any
monies recognized as the result of markdowns made on all such sales of
Retained Shares and Zapata Shares, in accordance with markdown
procedures described under the Rules of Fair Practice of the NASD
by-laws.
(c) Notwithstanding any certificates or instructions to the
contrary, the parties hereto acknowledge and agree that the Zapata Shares are
subject to a Securities Liquidity Agreement dated as of December 19, 1990 among
Zapata and certain of its stockholders ("SLA") and that under the SLA the sale
of Zapata Shares may be prohibited during certain black-out periods. The
parties agree to observe at all times any such black-out periods of which
Escrow Agent receives notice and to not sell any Zapata Shares during such
period. Purchaser represents and warrants to Seller that: (i) to the best of
its knowledge, (x) it has provided Seller with a true and correct copy of the
SLA; and (y) there are no amendments to the SLA; (ii) the Zapata Shares are
owned by Purchaser, free and clear of all liens, claims and encumbrances
(collectively, "Liens" and are not subject to any
154228 Page 36 of 45 Pages
<PAGE> 6
restriction on transfer, whether by way of operation of law or otherwise (other
than pursuant to the SLA), or the exercise of any rights in respect thereof;
and (iii) that the sale of the Zapata Shares is covered by an effective Shelf
Registration Statement pursuant to the SLA. Purchaser agrees that (iv) until
the Termination Date, it will not, without Sellers' prior written consent,
permit the SLA to be amended in a manner which is adverse to Seller's rights
herein or in the Letter Agreement; and (v) it shall promptly upon request of
Seller or Escrow Agent deliver to them such number of copies of the prospectus
in respect of such Shelf Registration Statement as may be reasonably required
by them. Seller hereby represents and warrants to Purchaser that it owns the
Retained Shares, free and clear of all Liens.
(d) The trust impressed upon the Escrow Assets by reason of this
Agreement shall in all cases cease and all Escrow Assets shall be free of such
trust upon being disbursed in accordance with this Section 2.
(e) Purchaser and Seller shall each give the other copies of all
certificates, notices and instructions either shall give to the Escrow Agent
pursuant to this Agreement at the same time they are given to the Escrow Agent.
Section 3. Certain Covenants. (a) Purchaser and Seller agree
that they will not (i) sell or otherwise dispose of, or grant any option with
respect to, any of the Escrow Assets other than as provided in Section 2
hereof, (ii) create or permit to exist any lien or encumbrance upon or with
respect to any of the Escrow Assets, or (iii) take any action or permit any
action to be taken that would invalidate or restrict the transfers contemplated
under the Letter Agreement of any certificates or instruments representing or
evidencing any or all of Seller's Escrow Documents.
(b) Purchaser shall promptly forward to Seller copies of any
written confirmation which it receives from the Federal Trade Commission that
the waiting period under the HSR Act has terminated or expired.
(c) If Purchaser has not paid to Seller the net purchase price due
for the Retained Shares as of the Notice Time, then as of and after such time
(and not at any time before such time), Seller may:
(i) Elect at any time (unless the Letter Agreement has been
previously terminated) to terminate Purchaser's right to purchase the
Retained Shares under the Letter Agreement by giving Purchaser written
notice ("Seller's Termination Notice") thereof. In such event, Seller
shall determine the amount, if any, which may be owed to it under
Section 6
154228 Page 37 of 45 Pages
<PAGE> 7
below and set forth such amount in Seller's Termination Notice
together with wire instructions for payment of such amount by
Purchaser (including ABA account and routing numbers) and the number
of Retained Shares (as contemplated by Section 2(b)(iii) hereof), if
any, which it elects to have the Escrow Agent sell. In addition,
Seller shall attach to Seller's Termination Notice calculations and
documentation supporting the amount which Seller has determined
Purchaser to owe Seller under Section 6. Seller agrees not to deliver
a certificate to Escrow Agent with instructions to take the actions
contemplated under Sections 2(b)(ii) or (iii) unless it first complies
with the requirements of this Section 3(c)(i).
(ii) Elect, on or after the date on which it receives notice that the
HSR Act waiting period has expired or terminated, to close the
purchase and sales of the Retained Shares by giving written notice
("Seller's Closing Notice" thereof to Purchaser and stating therein
(x) the closing date, which shall be within two business days after
delivery of the Seller's Closing Notice, and (y) the amount owed to
Seller under Section 6 below. In addition, Seller shall attach to
Seller's Termination Notice calculations and documentation supporting
the amount which Seller has determined Purchaser to owe Seller under
Section 6. Seller agrees not to deliver a certificate to Escrow Agent
with instruction to take the actions contemplated under Section
2(b)(iv) unless it first complies with the requirement of this Section
3(c)(ii).
(d) Seller may only give one written notice (i.e., Seller's
Termination Notice or Seller's Closing Notice) as of or after the Notice Time
as to whether it has elected to proceed with the purchase and sale transaction,
or to terminate Purchaser's right to purchase Retained Shares, contemplated
under the Letter Agreement and may not give any such notice if Purchaser's
Termination Notice has been given. When given, any such notice by Seller shall
be irrevocable and shall bind Seller unless otherwise agreed in writing by
Seller and Purchaser.
(e) Immediately after Seller's receipt of payment in full of the
purchase price for the Retained Shares and the amounts owed Seller by Purchaser
under Section 6 if any (whether as a result of payments from Purchaser or
disbursements from Escrow Agent). Seller shall deliver a Payment Certificate
to the Escrow Agent to such effect.
(f) If the purchase and sale of the Retained Shares has not closed
or the disbursements otherwise contemplated by the applicable provisions of
Section 2 hereof have not occurred after the expiry of the Sale Period, then
Purchaser may terminate the Letter Agreement as of and after such date by
giving written
154228 Page 38 of 45 Pages
<PAGE> 8
notice ("Purchaser's Termination Notice") thereof to Seller. Purchaser shall
not deliver Purchaser's Termination Notice before the expiry of the Sale
Period. Simultaneously with giving such notice, Purchaser shall execute and
deliver to the Escrow Agent a certificate stating that actions which it has
taken in such regard. After receiving Purchaser's Termination Notice, Seller
shall advise Purchaser in writing of the amount, if any, which is owed pursuant
to Section 6. Immediately after Seller's receipt of payment in full of all
amounts owed Seller by Purchaser under Section 6, Seller shall execute and
deliver a certificate to the Escrow Agent to such effect.
Section 4. Tax Liability of Parties. All taxable income and
loss on sales of Retained Shares or Zapata Shares by the Escrow Agent shall be
for Seller's or Purchaser's account, respectively.
Section 5. Effect of Final Disbursements. Upon complete
distribution of the Escrow Assets, as provided for in Section 2, this Agreement
shall terminate (the date upon which such actions are completed being herein
referred to as the "Termination Date") and you will be relieved of any further
duties and responsibility in connection therewith.
Section 6. Purchaser's Payments. Purchaser has paid to
Seller today $57,500.00 representing all finance, escrow, and legal charges
related to this Agreement and the Letter Agreement through November 15, 1994.
Purchaser shall have no obligation to Seller whatsoever to reimburse, pay or
otherwise be liable to Seller (or any other party) for any such cost or expense
arising prior to or attributable to any time before November 15, 1994 whether
in connection with the sale of 288,500 of the Original Shares or otherwise.
Notwithstanding the immediately preceding sentence, Purchaser shall promptly
pay to Seller (a) all out-of-pocket costs and expenses of Seller (including,
without limitation, all legal fees and disbursements) arising from (i) any
dispute in respect of this Agreement or the Letter Agreement, whenever such
costs and expenses arise if Seller prevails in such dispute, and (ii) any
litigation involving any third party in connection with this Agreement, the
letter Agreement, Purchaser's purchaser of securities of the Company or the
transaction contemplated hereby or thereby and (b) all Seller's finance charges
and its actual out- of-pocket expense (including, without limitation,
reasonable fees and disbursements of counsel), reasonably and whenever incurred
by Seller after November 15, 1994 in connection with all other matters related
to this Agreement. On the first business day of each calendar week, commencing
on November 21, 1994, Purchaser shall pay to Seller an amount, in immediately
available funds, equal to Seller's finance charges (which are equal to the
Broker's Call Rate), with respect to each share held at any time in the Escrow
Account for and during the immediately preceding calendar week. The Broker's
154228 Page 39 of 45 Pages
<PAGE> 9
Call Rate shall be Seller's Broker's Call Rate in effect for the time in
respect of which payment hereunder is computed. Seller may at any time, and
shall at any time after November 15, 1994 if so requested to do so by
Purchaser, deliver to Purchaser and Escrow Agent a certificate (a "Section 6
Certificate") describing in reasonable detail amounts which may at the time be
owing Seller pursuant to this Section 6.
Section 7. Expenses of Escrow Agent. For your services as Escrow
Agent and depository under this Agreement, as compensation for all services
performed, Seller shall pay to you a fee of $5,000 ("Escrow Fee") at or about
the time of execution of this Agreement, Seller will reimburse you for actual
out-of-pocket expenses. Reimbursable expenses include, without limitation,
fees and disbursements of counsel reasonably incurred in connection with the
negotiation, execution, delivery, amendment (if any) and enforcement of this
Agreement and with the established and routing administration of the Escrow
Account. Such fees and expenses incurred to date will be paid upon execution
of this Agreement and all other subsequent expenses will be paid within five
days of the Termination Date. The brokerage commission for any shares of stock
sold pursuant to the terms hereof shall be $.05 per share, subject to
adjustments for stock splits, etc.
Section 8. Limitation of Liability.
(a) It is understood and agreed that you will have no duties
or responsibilities other than those set forth herein and will:
(i) Be under no duty to accept Escrow Documents or Escrow
Deposits from anyone other than Seller or Purchaser (or their agents) or to
give any receipt therefor except to Seller.
(ii) Be protected in acting upon any notice,
certificate, approval, consent or other paper reasonably
believed by you to be genuine, signed by the proper party
or parties and in accordance with the terms of this
Agreement and may, without limiting the generality of the
foregoing disregard any and all notices and warnings
given by any other person, except only orders, judgments or
decrees of any court (with which you are hereby
authorized to comply) notwithstanding that any such order,
judgment, or decree is subsequently reversed, modified,
annulled, set aside or vacated, or found to have been
entered without jurisdiction.
(iii) Be deemed conclusively to have given and delivered
any notice, request, claim, demand or
154228 Page 40 of 45 Pages
<PAGE> 10
other communication hereunder if the same is in writing and is given
(and, except as otherwise provided in this Agreement, shall be deemed
to have been duly delivered if so given) if delivered in person or
sent by fax, or sent by a reputable overnight courier service to the
respective parties as follows:
If to Purchaser:
Malcolm I. Glazer
1482 South Ocean Boulevard
Palm Beach, Florida 33480
With Copies to:
Woods, Oviatt, Gilman, Sturman
& Clarke
44 Exchange Street
Rochester, New York 1461
Attention: Mr. Gordon E. Forth, Esq.
and
Mr. Avram Glazer
18 Stoney Clover Lane
Pittsford, New York 14534
If to Seller:
The Argosy Securities Group
1125 Avenue of the Americas
22nd Floor
New York, New York 10019
Attention: Mr. Neal Thomas
With a copy to:
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022-4677
Attention: Mr. Laurence D. Weltman, Esq.
or such other address as any such party may have furnished to the other parties
in writing in accordance herewith, except that notices of change of address
shall only be effective upon receipt.
(b) The Escrow Agent, at its sole option, is authorized
to deposit the Escrow Assets, into court pursuant to
154228 Page 41 of 45 Pages
<PAGE> 11
any relevant statute and commence an action in interpleader, in order to obtain
a judicial determination as to the party legally entitled to receive the same.
(c) The Escrow Agent shall not be responsible or liable
to any person, whether or not a party to this Agreement, for any act or
omission of any kind so long as it has acted in good faith upon the
instructions herein contained or hereafter delivered to it, except that the
Escrow Agent shall be responsible and liable for acts or omissions resulting
from the Escrow Agent's willful misconduct or gross negligence. Nothing herein
contained shall be deemed to impose upon the Escrow Agent any duty to exercise
discretion, it being the intention hereof that the Escrow Agent shall not be
obligated to act except upon written instructions or directions.
(d) The Escrow Agent shall not be liable for any action
taken or omitted by it in good faith and believed by it to be authorized hereby
or within the rights or powers conferred upon it hereunder, and shall not be
liable for any mistake of fact or error of judgment or for any actions or
omissions of any kind unless caused by willful misconduct or gross negligence.
(e) The Escrow Agent may resign at any time upon prior
written notice to Purchaser and Seller. Seller and Purchaser, if they agree,
may remove the Escrow Agent at any time, upon prior written notice to the
Escrow Agent. In the case of the Escrow Agent's resignation, its only duty
until a successor escrow agent shall have been appointed and shall have
accepted such appointment shall be to hold and disburse the Escrow Assets in
accordance with the provisions contained in this Agreement.
Section 9. Notices to Parties. All notices, requests, claims,
demands and other communications hereunder to the Parties hereto shall be in
writing and shall be given (and, except as otherwise provided in this
Agreement, shall be deemed to have been duly delivered if so given), if
delivered in person, by fax, or sent by a reputable overnight courier service
to such party at the address set forth below or to such other address as such
party may have furnished to the other parties in writing in accordance
herewith, except that notices of change of address shall only be effective upon
receipt.
Section 10. Miscellaneous. This Agreement is a personal one
among the parties hereto and no party hereto may assign or attempt to assign
this Agreement or any interest or right herein without the consent of the other
parties hereto. Nothing in this Agreement is intended to or will confer upon
any person other than the parties hereto any legal or equitable right, remedy
or claim. This Agreement will be construed in accordance with the internal
laws of the State of new York without giving effect to the parties of conflict
of laws thereof. This Agreement may be
154228 Page 42 of 45 Pages
<PAGE> 12
amended or modified only by an instrument signed by Purchaser, the Escrow Agent
and Seller. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original. This Agreement may be executed by
facsimile signature transmitted to any other party by electronic transmission.
The parties shall be bound by a facsimile signature once transmitted to another
party. The later transmission of an originally executed copy of any such
document shall not invalidate any signature previously given by electronic
transmission. Except as specifically herein provided, the Letter Agreement
shall remain in full force and effect.
If the foregoing terms and conditions are satisfactory to you, please
so indicate by executing in the space provided below and returning two copies
of this letter to the undersigned.
Very truly yours,
Purchaser: THE MALCOLM GLAZER TRUST
Dated: November 2, 1994
By: S// MALCOLM I. GLAZER, TRUSTEE
---------------------------------
Malcolm I. Glazer, Trustee
1482 South Ocean Boulevard
Palm Beach, Florida 33480
Seller: THE ARGOSY SECURITIES GROUP, L.P.
Dated: November 2, 1994
By: S//NEAL THOMAS
---------------------------------
Name: Neal Thomas
Title: Chief Operating Officer
1125 Avenue of the Americas
22nd Floor
New York, New York 10019
Escrow Agent: WERTHEIM SCHRODER & CO.
INCORPORATED
Dated: November 2, 1994
By: S// MICHAEL DURA
---------------------------------
Name: Michael Dura
Title: Managing Director
The Equitable Center
787 Seventh Avenue
New York, New York 10019-60616
154228 Page 43 of 45 Pages
<PAGE> 13
SCHEDULE I
TO
ESCROW DEPOSIT AGREEMENT
Seller's 289,238 shares of Envirodyne Industries, Inc. common stock,
par value $0.01 per share, ("Retained Shares") are currently held in
uncertificated form and identified by computer entries on the books of Cede &
Company ("Financial Intermediary") indicating the Seller to be the beneficial
owner thereof. The Seller has notified the Financial Intermediary of the
establishment of the Escrow Account and requested that the Retained Shares be
registered on the books of the Financial Intermediary, at the Seller's expense,
in the name of the Escrow Agent. The Seller hereby authorizes the Financial
Intermediary to accept without question the Escrow Agent's exercise of any
rights with respect to the Retained Shares and shall have no liability to the
Seller in doing so. The Seller hereby acknowledges and agrees that the
Financial Intermediary may rely on the statements made and authorization given
hereby.
154228 Page 44 of 45 Pages
<PAGE> 14
SCHEDULE II
TO
ESCROW DEPOSIT AGREEMENT
1. The following share certificates aggregating 1,000,000 shares
of Zapata Corporation common stock, par value $0.25 per share:
(a) Certificate no. ZC3888 representing 500,000
Shares registered in the name of The Malcolm
Glazer Trust.
(b) Certificate No. ZC3880 representing 500,000
Shares registered in the name of The Malcolm
Glazer Trust.
2. Undated Stock Power executed in blank by Malcolm I. Glazer, as
Trustee for The Malcolm Glazer Trust U/A dated as of March 23, 1990 for
Certificate No. ZC3888 and Undated Stock Power executed in blank by Malcolm I.
Glazer, as trustee for The Malcolm I. Glazer Trust U/A dated as of March 23,
1990 for Certificate No. ZC3889.
154228 Page 45 of 45 Pages
