<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-K
(Mark One)
<TABLE>
<S> <C>
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
</TABLE>
OR
<TABLE>
<S> <C>
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER: 1-10064
</TABLE>
------------------------
DR PEPPER/SEVEN-UP COMPANIES, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 75-2233365
(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) No.)
8144 WALNUT HILL LANE, 75231-4372
DALLAS, TEXAS (Zip Code)
(Address of principal executive
offices)
</TABLE>
Registrant's telephone number, including area code: (214) 360-7000
------------------------
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
- --------------------------------------------------------- --------------------------------------------
<S> <C>
Common Stock, par value $.01 per share New York Stock Exchange
Rights to Purchase Preferred Stock New York Stock Exchange
</TABLE>
------------------------
Securities Registered Pursuant to Section 12(g) of the Act: None
------------------------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for at least the past 90 days. Yes _X_ No ____
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ____
The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of February 28, 1994 was $1.5 billion.
The number of shares of each class of common stock of the Registrant
outstanding as of February 28, 1994 was as follows: 60,962,170 shares of Common
Stock and no shares of Non-Voting Common Stock.
The following documents are incorporated by reference into this report:
Portions of the Company's Proxy Statement for the Annual Meeting of Shareholders
to be held on April 28, 1994, are incorporated by reference in Part III.
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<PAGE>
TABLE OF CONTENTS
FORM 10-K ANNUAL REPORT -- 1993
DR PEPPER/SEVEN-UP COMPANIES, INC.
<TABLE>
<CAPTION>
PAGE
-----
<S> <C> <C>
PART I
Item 1. Business....................................................................................... 3
Item 2. Properties..................................................................................... 6
Item 3. Legal Proceedings.............................................................................. 6
Item 4. Submission of Matters to a Vote of Security Holders............................................ 8
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters...................... 9
Item 6. Selected Financial Data........................................................................ 10
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.......... 11
Item 8. Financial Statements and Supplementary Data.................................................... 15
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure........... 15
PART III
Item 10. Directors and Executive Officers of the Registrant............................................. 16
Item 11. Executive Compensation......................................................................... 16
Item 12. Security Ownership of Certain Beneficial Owners and Management................................. 16
Item 13. Certain Relationships and Related Transactions................................................. 16
PART IV
Item 14. Exhibits, Financial Statements, Financial Statement Schedules and Reports on Form 8-K.......... 17
</TABLE>
2
<PAGE>
PART I
ITEM 1. BUSINESS
THE COMPANY
Dr Pepper/Seven-Up Companies, Inc., a Delaware corporation, is a holding
company organized in 1988 whose primary asset consists of all the common stock
of Dr Pepper/Seven-Up Corporation, a Delaware corporation ("DP/7UP"). Unless the
context requires otherwise, the "Company" means Dr Pepper/Seven-Up Inc.,
together with its direct and indirect subsidiaries, and the "Holding Company"
means Dr Pepper/Seven-Up Companies, Inc. As used in this document, the term "DR
PEPPER" refers only to the regular DR PEPPER product while the phrases "DR
PEPPER brand" and "DR PEPPER brands" refer to the line of products consisting of
DR PEPPER, Diet DR PEPPER, Caffeine Free DR PEPPER and Caffeine Free Diet DR
PEPPER. As used in this document, the term "7UP" refers only to the regular 7UP
product while the phrases "7UP brand" and "7UP brands" refer to the line of
products consisting of 7UP, Diet 7UP, CHERRY 7UP and Diet CHERRY 7UP.
The Holding Company was formed in 1988 to acquire Dr Pepper Company ("Dr
Pepper") and The Seven-Up Company ("Seven-Up") in a leveraged buyout transaction
sponsored by Prudential-Bache Interfunding, Inc., Prudential-Bache Capital
Partners I, L.P. and management. On October 28, 1992, as part of the 1992
Recapitalization (as hereinafter defined), Seven-Up merged with and into Dr
Pepper (the "Merger"). DP/7UP, the surviving company, is a direct operating
subsidiary of the Holding Company.
1993 PUBLIC OFFERING
In February 1993, the Company completed an initial public offering (the
"Offering") of 23,600,402 shares (including 2,022,089 shares sold by a selling
stockholder and certain selling warrantholders) of its Common Stock resulting in
net proceeds to the Company of approximately $305.9 million. The net proceeds
were used to redeem approximately $115.5 million of the accreted balance of the
Holding Company's Discount Notes (as hereinafter defined), reduce borrowings of
approximately $82.5 million under the Credit Agreement (as hereinafter defined)
and redeem all of the outstanding exchangeable Senior Preferred Stock of the
Holding Company.
1992 RECAPITALIZATION
On October 28, 1992, the Company completed a recapitalization transaction
(the "1992 Recapitalization") to reduce interest expense, retire preferred stock
and reduce associated dividend requirements and effect the Merger. As part of
the 1992 Recapitalization, the Company issued $656.5 million principal amount of
its 11 1/2% Senior Subordinated Discount Notes due 2002 (the "Discount Notes")
resulting in gross proceeds of $375.0 million. The Company also borrowed an
aggregate of $816.0 million under a credit agreement (the "Credit Agreement")
among DP/7UP (as the successor company in the Merger), the Holding Company, as
guarantor, and certain lenders and agents named therein, which borrowings
included (i) $775.0 million under a term loan facility (the "Term Loan
Facility"), and (ii) $41.0 million under a $100.0 million revolving credit
facility (the "Revolving Facility"). The proceeds of the borrowings and $169.9
million of cash on hand as of October 28, 1992, were used to effect the
retirement of certain indebtedness and preferred stock.
On December 28, 1993, the Company modified the Credit Agreement resulting in
a reduction in interest rates of approximately 1 1/2%. The amended credit line
is $675.0 million, consisting of a $525.0 million Term Loan Facility and a
$150.0 million Revolving Facility.
PRINCIPAL PRODUCTS
The Company, through DP/7UP, manufactures, markets, sells and distributes
soft drink concentrates, extracts (the basic flavoring ingredients for soft
drinks) and fountain syrups (concentrates or extracts with sweeteners and water
added) to licensed bottlers primarily in the United States. The principal
products of the Company are DR PEPPER, Diet DR PEPPER, Caffeine Free DR PEPPER,
3
<PAGE>
Caffeine Free Diet DR PEPPER, 7UP, Diet 7UP, CHERRY 7UP, Diet CHERRY 7UP,
WELCH's carbonated soft drinks and I.B.C. soft drinks. The Company is the third
largest soft drink concentrate manufacturer in the United States, with retail
sales of its products estimated to represent approximately 11.4%, or $5.6
billion, of the estimated $49.1 billion 1993 United States retail soft drink
industry.
DP/7UP is divided into five business units: Dr Pepper USA, Seven-Up USA,
Foodservice, Premier Beverages, and International. Each unit has its own selling
and marketing staff fully dedicated to expanding and enhancing its brands.
Soft drinks constitute one of the largest consumer food and beverage
categories in the United States. The industry is considered to be non-cyclical,
as sales volume has grown in each of the past ten years. The Company's business,
like the concentrate and extract segment of the soft drink industry overall, is
characterized by low fixed asset investment, low working capital requirements,
low labor intensity, and high gross margins, all of which enable the Company to
devote significant resources to the marketing support of its brands. A major
competitive advantage in the industry is strong trademark recognition.
Formulated in 1885, DR PEPPER is the oldest nationally distributed soft drink
brand in the United States. 7UP has been a market leader in the lemon-lime
category of the soft drink industry for more than 60 years.
In 1993, DR PEPPER brands accounted for an estimated 6.8% of the total
domestic soft drink market, up from 6.4% in 1992. Since 1986, DR PEPPER has been
the number one selling non-cola and, in 1993, became the fourth largest-selling
soft drink in the United States. The estimated share of the total domestic soft
drink market represented by DR PEPPER increased from 5.3% in 1992 to 5.6% in
1993.
7UP brands represented an estimated 3.9% of the total domestic soft drink
market in 1993, down from 4.0% in 1992. 7UP is a leader in the largest non-cola
soft drink flavor category, lemon-lime, which is estimated to have accounted for
12.1% of the total 1993 domestic soft drink market. 7UP ranked as the eighth
largest selling soft drink brand in 1993. 7UP is the second largest selling
sugared lemon-lime brand and represents 23.8% of sales in the lemon-lime
category. Diet 7UP is the number one diet lemon-lime soft drink with a 1993
share of 0.8% of the total domestic soft drink market and, in 1993, accounted
for approximately 6.6% of the lemon-lime category sales volume.
Dr Pepper USA represented 39.9% of the Company's 1993 net sales. Dr Pepper
USA's net sales were up 7.9% in 1993 with unit sales of combined DR PEPPER
brands growing at a significantly greater rate than the total domestic soft
drink industry. This unit sells DR PEPPER brand concentrates to bottlers for
further processing into bottle and can products that are distributed nationwide.
The Company has been able to affiliate its DR PEPPER brands with what management
believes are strong and aggressive bottlers.
Seven-Up USA represented 30.5% of the Company's 1993 net sales. Seven-Up
USA's net sales were up 3.4% in 1993 from 1992. This unit sells 7UP brand
extracts to bottlers for further processing into bottle and can products that
are distributed nationwide.
The Foodservice Division accounted for 19.5% of the Company's 1993 net sales
and was up 11.8% from 1992. This unit's brands, primarily DR PEPPER, have a
significant presence in the fountain/ foodservice channel of the soft drink
industry. The Company has been successful at securing foodservice distribution
alongside products of both The Coca-Cola Company ("Coke") and PepsiCo, Inc.
("Pepsi"). Company brands are served in over 120,000, or approximately 16.0%, of
the nation's foodservice outlets. Significant customers of the foodservice unit
include McDonald's, Burger King, Taco Bell, 7-Eleven, Hardee's and Wendy's.
The Company's Premier Beverages unit markets WELCH's carbonated soft drinks
and markets and sells I.B.C. Root Beer and Cream Soda. Together, these brands
represented 8.3% of the Company's 1993 net sales which were up 10.6% from 1992.
These additional products permit the Company to offer a broad line of
high-quality, non-cola options.
4
<PAGE>
The International unit accounted for 0.4% of the Company's net sales for
1993. At the end of 1993, the International unit had licensed bottlers to sell
DR PEPPER brand products in 19 countries. In 1986, Pepsi acquired the rights to
produce and market products under the 7UP trademark outside of the United States
and its territories and possessions. See "Financial Information About Foreign
and Domestic Operations and Export Sales".
SOURCES AND AVAILABILITY OF RAW MATERIALS
Substantially all of the raw materials used by the Company to manufacture
its products are of a generic nature and are available from alternative
suppliers. The Company does not anticipate any significant difficulties in
securing adequate supplies of raw materials at acceptable prices in the future.
TRADEMARKS
The trademarks under which the Company markets its soft drink products are
registered in the U.S. Patent and Trademark Office. Registered trademarks are
protected for 10 years and can be renewed indefinitely. The DR PEPPER trademark
is also registered in 90 countries. Other than its license agreements with
bottlers, the Company has no material existing trademark license agreements
permitting the use of its trademarks in advertising. Strong trademark
recognition is a major competitive advantage in the soft drink industry.
SEASONAL ASPECTS OF THE BUSINESS
The Company's business is seasonal, with the second and third quarters
accounting for the highest sales volume.
PRACTICES RELATING TO WORKING CAPITAL
The Company has significant amounts of long-term debt consisting of bank
borrowings and subordinated notes. Accordingly, the Company's financial position
is highly leveraged and interest payments are significant.
DEPENDENCE ON SINGLE OR FEW CUSTOMERS
During 1993, bottling companies owned by Pepsi accounted for 13.5% of the
Company's 1993 net sales. The license agreements with such bottling companies
are substantially similar to the Company's license agreements with its other
bottlers.
BACKLOG OF ORDERS
No material backlog of orders is maintained.
GOVERNMENT REGULATION
The production and marketing of beverages are subject to the rules and
regulations of the United States Food and Drug Administration ("FDA") and other
federal, state and local health agencies. The FDA also regulates the labeling of
containers.
COMPETITION
The soft drink business is highly competitive. The principal methods of
competition in the soft drink industry are advertising campaigns, promotions,
pricing, packaging and new product development. The Company competes not only
with other soft drink companies for consumer acceptance but also for shelf space
in supermarkets and for maximum marketing focus by the Company's licensed
bottlers, all of which also bottle other soft drink brands. The Company's soft
drink products compete generally with all liquid refreshments, with numerous
nationally-known soft drinks such as Coca-Cola and Pepsi-Cola, and with regional
producers and "private label" soft drink suppliers.
SPONSORED RESEARCH AND DEVELOPMENT
Research and development costs were relatively insignificant in years 1991,
1992 and 1993.
5
<PAGE>
COMPLIANCE WITH ENVIRONMENTAL LAWS AND REGULATIONS
Compliance with statutory requirements regarding environmental quality has
not had a material effect on the capital expenditures, earnings and competitive
position of the Company.
EMPLOYEES
As of December 31, 1993, the Company (through DP/7UP) employed 952 persons,
consisting of 340 individuals engaged in sales activities, 179 engaged in
administrative activities, 115 engaged in financial activities, 176 engaged in
production activities and 142 individuals engaged in marketing activities. No
Company employees are represented by a union and the Company considers its
employee relations to be good.
FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT SALES
Dr Pepper's foreign operations generated less than 1% of the Company's net
sales in years 1991, 1992 and 1993. Additionally, the Company does not expect
foreign operations to be significant in the immediate future.
Prior to the acquisition of Seven-Up in 1986, Philip Morris Incorporated
sold the international franchise operations of Seven-Up to Pepsi. Accordingly,
Pepsi holds the right to produce and sell soft drinks under the 7UP and certain
associated trademarks internationally. The terms of this sale prohibit Seven-Up
from distributing any of its soft drink products existing at the time of such
transaction (other than I.B.C. Root Beer), as well as any products developed
thereafter that are marketed under the 7UP trademark, outside of the United
States and its territories and possessions.
ITEM 2. PROPERTIES
The Company owns, through a wholly-owned subsidiary, a state-of-the-art
facility in Overland, Missouri, where it manufactures concentrates, extracts and
fountain syrups. This facility is the largest soft drink concentrate, extract
and syrup plant in the continental United States and produces over 150 different
flavor extracts, including concentrates and syrups for the domestic operations
of Cadbury Schweppes plc. The Company manufactures all of its concentrates,
extracts and fountain syrups in this facility. The Company does not own or lease
any other facilities for the manufacture of concentrates, extracts or fountain
syrups. The Company has developed a production contingency plan with another
concentrate manufacturer to produce certain of the Company's products in the
event that the Overland facility were rendered inoperative. The Overland
facility has substantial additional capacity available with minimal capital
expenditures required.
The Company leases its Dallas headquarters office building, which presently
covers approximately 175,000 square feet of space. Rental payments are currently
$329,000 per month, subject to escalation at stated intervals in the future. The
lease expires in 1998. The Company also leases a warehouse in Dallas covering
approximately 73,000 square feet of space. Rental payments approximate $21,000
per month. The Company believes that its headquarters, warehouse and production
facilities are sufficient to meet its needs.
ITEM 3. LEGAL PROCEEDINGS
CONTINGENCIES
(A) THE COCA-COLA COMPANY ("COKE") LITIGATION
On February 26, 1992, Seven-Up filed a lawsuit in the 116th Judicial
District Court, Dallas County, Texas (the "State Court Suit") against Coke
alleging, among other things, tortious interference with Seven-Up's existing
contractual relationships with those licensed 7UP bottlers who also bottle
products of Coke, and unfair competition. Coke has answered Seven-Up's complaint
and has denied the allegations contained therein. Subsequently, on July 22,
1992, Seven-Up filed a lawsuit against Coke in the United States District Court
for the Northern District of Texas alleging false advertising under Section 43
of the Lanham Act. These suits, which are presently in the preliminary stages of
discovery, request unspecified compensatory damages and punitive damages.
6
<PAGE>
On March 18, 1993, Coke filed counterclaims in the State Court Suit
alleging, among other things, that Seven-Up had tortiously interfered with
Coke's existing contractual relationships with those licensed bottlers of Coke
who are also licensed to bottle Sprite products. Additionally, Coke has alleged
that Seven-Up has unlawfully interfered with Coke's prospective formation of
contracts with certain licensed bottlers of Coke to distribute Sprite products.
Coke's counterclaim requests unspecified compensatory damages, punitive damages
and injunctive relief. DP/7UP intends to vigorously contest these allegations,
but is presently unable to predict the outcome of this lawsuit. The Company does
not expect that the resolution of this matter will have a material adverse
effect on the Company's operating results or financial condition.
(B) INTERNAL REVENUE SERVICE MATTER
The Internal Revenue Service has completed its examination of Federal income
tax returns of Dr Pepper and Seven-Up for the periods ended December 31, 1986,
December 31, 1987 and May 19, 1988, and of the Company for the period ended
December 31, 1988. The Company has been notified of proposed IRS adjustments
disallowing certain deductions, including substantially all amortization of
intangible assets related to the 1986 acquisitions of Dr Pepper and Seven-Up. If
the adjustments are sustained, in whole or in part, the Company's net operating
loss carryforwards for federal income tax purposes would be significantly
reduced or eliminated. The Company is vigorously contesting the proposed
adjustments. Management of the Company believes the ultimate resolution of the
proposed adjustments will not have a material adverse effect on the Company's
operating results or financial condition.
(C) SHAREHOLDER LITIGATION
On September 3, 1993, Adele Brem, a purported holder of shares of Common
Stock of the Company, filed a lawsuit relating to the adoption by the Company of
a Stockholders' Rights Plan (the "Rights Plan") in Delaware Chancery Court. The
complaint is filed individually on behalf of the plaintiff and purportedly on
behalf of all holders of Common Stock (other than the individual defendants),
and names the Company and each member of its Board of Directors as defendants.
In the complaint, the plaintiff alleges, among other things, that in
implementing the Rights Plan, the individual defendants have wrongfully misled
the shareholders and the investing community regarding the purpose and effect of
the Rights Plan, have violated their fiduciary duties owed to the plaintiffs and
the class, have not and are not exercising proper and independent business
judgment, have acted and are acting to the detriment of the Company and its
public shareholders for their own personal benefit and have pursued a course of
conduct designed to entrench themselves in their positions of control within the
Company. The plaintiff seeks a judgment ordering, among other things, that
defendants rescind the adoption of the Rights Plan, as well as unspecified
damages, attorney's fees and other relief.
On September 10, 1993, Terrence Pearman, a purported holder of shares of
Common Stock of the Company, filed a second lawsuit relating to the adoption by
the Company of the Rights Plan in Delaware Chancery Court against the Company
and each member of the Board of Directors. The complaint is filed individually
on behalf of the plaintiff and purportedly on behalf of all holders of Common
Stock, and makes substantially the same allegations and seeks substantially the
same relief as made and sought in the lawsuit brought by Adele Brem.
The Company believes that these lawsuits are without merit and that, among
other things, the individual defendants have not breached any fiduciary duties
in adopting the Rights Plan and that the Rights Plan is fair and in the best
interests of the Company and its shareholders.
(D) STEINER LITIGATION
Sidney J. Steiner, the landlord under the Company's former lease covering
its former headquarters facilities at 5523 East Mockingbird Lane, Dallas, Texas
and Harbord Midtown, a Texas partnership, filed suit against the Company in the
95th Judicial District Court, Dallas County, Texas, on May 25, 1988 in
connection with the Company's move of its corporate headquarters. The landlord
has alleged that the Company breached an oral agreement to lease space in a new
office building the
7
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landlord planned to construct on such premises. The landlord seeks to recover
$470,000 in architectural fees and other costs claimed to have been incurred as
a result of such agreement and the landlord claims to have suffered $24 million
in other damages as a result of the Company's alleged breach. Additionally, on
October 12, 1989, the landlord amended its complaint in this cause of action to
include allegations that the Company fraudulently misrepresented the existence
of asbestos in the Company's former headquarters facilities, which were
purchased by the landlord and leased back to the Company in 1985. The landlord
claims damages in excess of $4 million related to these new allegations.
The lawsuit was dismissed without prejudice pursuant to an Agreed Order
Granting Joint Motion for Non-Suit on May 18, 1992. Subsequent to filing the
lawsuit, Steiner sold the property and the claim in litigation to a third party,
who in turn later sold the property and the claim to another party, who became a
debtor in a bankruptcy proceeding. The trustee in bankruptcy sold the claim in
the lawsuit to Canco Properties ("Canco"), San Antonio, Texas, who refiled the
lawsuit on January 29, 1993. By letter dated September 21, 1993, Canco claimed
that additional discovery and investigation resulted in an increase in estimated
damages, and now estimates their damages to be over $31.5 million with punitive
damages in excess of $50 million in the aggregate. The court has set a trial
date of March 14, 1994.
On December 4, 1990, Steiner filed a claim with the American Arbitration
Association seeking compensation for damage allegedly caused by the Company to
its former corporate headquarters building during the Company's occupancy of
such building as tenant under a lease agreement with Steiner. This claim was
subsequently sold in the same manner as described in the immediately preceding
paragraph with respect to the litigation and is now owned by Canco. Canco
presently seeks damages in connection with this claim in the amount of
approximately $11.5 million as well as an unspecified amount of punitive damages
and attorneys' fees. An arbitration hearing with respect to this claim began on
November 8, 1993 in Dallas, Texas and is expected to conclude by the end of
March 1994, after which a decision by the arbitrator will be forthcoming.
The Company believes that the claim alleged in the lawsuit and arbitration
are without merit and intends to vigorously contest these allegations. The
decision of the arbitrator, however, is binding on the parties as to those
matters addressed in the arbitration.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of 1993, there were no matters submitted to a vote
of security holders through the solicitation of proxies or otherwise.
8
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's Common Stock began trading on the New York Stock Exchange
under the symbol "DPS" in February 1993. The high and low sales prices for the
Company's Common Stock for each quarterly period within the two most recent
fiscal years are as follows:
<TABLE>
<CAPTION>
HIGH LOW
------- -------
<S> <C> <C>
Quarter ended March 31, 1993...................................... $17 5/8 $14 3/4
Quarter ended June 30, 1993....................................... 18 1/4 14 1/4
Quarter ended September 30, 1993.................................. 21 17
Quarter ended December 31, 1993................................... 25 20
</TABLE>
The Company has not paid any dividends on its Common Stock and does not
intend to pay any such dividends in the foreseeable future. See "Liquidity and
Capital Resources" for a discussion of dividend payment restrictions.
APPROXIMATE NUMBER OF HOLDERS OF EACH CLASS OF COMMON EQUITY
The number of record holders of each class of the Company's Common Stock at
February 28, 1994 is as follows:
<TABLE>
<S> <C>
Common Stock................................................ 2,116
Non-voting Common Stock..................................... none
</TABLE>
9
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ITEM 6. SELECTED FINANCIAL DATA
The following table presents selected consolidated financial data of the
Company as of and for the years ended December 31, 1993, 1992, 1991, 1990 and
1989. This financial data was derived from the historical consolidated financial
statements of the Company. The financial data reflects the elimination of all
intercompany accounts, transactions and profits among the Holding Company, Dr
Pepper, Seven-Up and DP/7UP. The financial data set forth below should be read
in conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the historical consolidated financial statements
of the Company and the related notes thereto. See "Index to Consolidated
Financial Statements and Schedules".
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------------------
1993 1992 1991 1990 1989
--------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Operating Data:
Net sales.................................................. $ 707,378 658,718 600,941 540,368 513,694
Cost of sales.............................................. 115,981 126,002 118,757 109,857 116,025
Gross profit............................................. 591,397 532,716 482,184 430,511 397,669
Marketing expense.......................................... 362,484 329,706 302,192 264,147 240,291
General and administrative expense, including amortization
of intangible assets...................................... 45,893 42,424 41,776 43,111 43,699
Operating profit......................................... 183,020 160,586 138,216 123,253 113,679
Interest expense:
Cash interest expense.................................... 43,833 77,921 73,527 81,382 75,979
Non-cash interest expense................................ 41,727 72,324 74,430 65,099 72,984
Other expense (a).......................................... 1,249 18,937 9,120 8,744 6,624
Income (loss) before income taxes, extraordinary items
and cumulative effect of accounting change.............. 96,211 (8,596) (18,861) (31,972) (41,908)
Income taxes (benefit)..................................... 2,087 (182) 1,100 563 377
Extraordinary items:
Benefit from utilization of net operating loss
carryforward............................................ -- -- (1,022) -- --
Extinguishments of debt (b)(c)(d)........................ 16,199 56,934 18,566 -- --
Cumulative effect of accounting change (e)................. -- 74,800 -- -- --
Net income (loss)........................................ 77,925 (140,148) (37,505) (32,535) (42,285)
Preferred stock dividend requirements...................... -- 12,941 11,882 9,744 8,455
Net income (loss) attributable to outstanding common
stock................................................... 77,925 (153,089) (49,387) (42,279) (50,740)
Income (loss) before extraordinary items and cumulative
effect of accounting change per common
share (b)(c)(d)(e)(f)..................................... 1.46 (.60) (.90) (1.19) (1.43)
Other Data:
Depreciation............................................... $ 2,969 2,950 3,693 4,112 5,076
Amortization of intangible assets.......................... 15,077 15,112 15,155 15,142 15,350
Balance Sheet Data (at end of period):
Total assets............................................... $ 680,023 668,096 780,843 677,953 703,879
Long-term debt, less current portion....................... 790,540 1,091,956 1,081,622 1,031,989 1,049,000
Redeemable preferred stock................................. -- 96,792 83,851 71,969 62,225
Stockholders' deficit...................................... (420,104) (807,413) (657,090) (607,350) (565,025)
Working capital deficit.................................... (67,166) (102,223) (18,320) (18,891) (2,641)
<FN>
- ------------------------
(a) Other expense for the year ended December 31, 1992 includes $6,026 of costs
associated with the Company's withdrawal in July 1992 of its planned
initial public offering and related recapitalization transactions.
(b) In connection with the refinancing that occurred in 1991, an $18,566
extraordinary item -- debt restructuring charge was recorded in the year
ended December 31, 1991, consisting of consent payments to holders of the
13 3/4% Senior Subordinated Debentures due November 30, 2001 of Dr Pepper
(the "Dr Pepper Subordinated Debentures") ($8,175), the charge relating to
the interest rate increase on such debt ($5,360), and the write-off of the
unamortized balance of deferred debt issuance costs related to the credit
agreement of Dr Pepper ($5,031).
</TABLE>
10
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<TABLE>
<S> <C>
(c) In connection with the 1992 Recapitalization, a $56,934 extraordinary item
-- debt restructuring charge was recorded in the year ended December 31,
1992, consisting of premiums and fees in respect of the debt retirements
($32,270) and write-off of the unamortized balance of deferred debt
issuance costs related to the credit agreement of Seven-Up, the term loans
of Dr Pepper, the 11 1/2% Guaranteed Senior Secured Notes due 1996 of Dr
Pepper, the Dr Pepper Subordinated Debentures, the 12 5/8% Senior
Subordinated Notes due May 15, 1999 of Seven-Up and the 15 1/2% Senior
Subordinated Discount Notes due 1998 of the Holding Company ($24,664 in the
aggregate).
(d) In connection with the Offering, a $14.9 million extraordinary charge was
recorded in 1993 which included (i) a write-off of a portion of the
unamortized balance of deferred debt issuance costs related to the Credit
Agreement borrowings and the Discount Notes ($6.8 million) and (ii) the
premium related to the redemption of a portion of the Discount Notes ($8.1
million). In addition, a $2.0 million extraordinary charge was recorded in
1993 reflecting a write-off of a portion of the unamortized balance of
deferred debt issuance costs related to the Credit Agreement borrowings.
The write-off was the result of repayments of the Term Loan Facility in
advance of scheduled requirements. These extraordinary items were recorded
net of applicable taxes.
(e) The Company adopted in the fourth quarter of 1992 Statement 109 (as
hereinafter defined) relating to accounting for income taxes and applied
the provisions thereof retroactively effective January 1, 1992.
(f) Income (loss) before extraordinary items per common share for each of the
years ended December 31, 1989, 1990, 1991, 1992 and 1993 is based on the
weighted average number of common shares outstanding after giving
retroactive effect to the 1 for 5 reverse stock split effected on June 25,
1992. Except for the year ended December 31, 1993, shares issuable upon
exercise of stock options and deliverable upon the exercise of outstanding
warrants were antidilutive and were excluded from the calculation.
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS -- YEAR ENDED DECEMBER 31, 1993 COMPARED TO YEAR ENDED
DECEMBER 31, 1992
Net sales for the year ended December 31, 1993 increased 7.4% to $707.4
million compared to $658.7 million for the year ended December 31, 1992. All of
the Company's operating units recorded net sales increases in 1993 compared to
1992, except for the International Division which was unchanged. These sales
increases were primarily the result of volume increases for the Company's DR
PEPPER, Diet DR PEPPER, 7UP and I.B.C. brands over the comparable period in
1992, as well as price increases on DR PEPPER, 7UP and certain other products.
Cost of sales for 1993 decreased 8.0% to $116.0 million compared to $126.0
million in 1992. This decrease was primarily due to a decrease in sweetener
costs somewhat offset by an increase in concentrate and syrup sales volume.
Gross profit as a percentage of net sales increased from 80.9% in 1992 to 83.6%
in 1993.
Total operating expenses, which include marketing expense, general and
administrative expense and amortization of intangible assets, increased by 9.7%
to $408.4 million compared to $372.1 million in 1992. The increase was primarily
due to increased marketing expenses in response to improved sales volume. The
Company's general and administrative expenses increased 12.8% to $30.8 million
primarily as the result of higher legal costs. Excluding this increase, general
and administrative expenses as a percentage of net sales would have remained at
4.1%.
The American Institute of Certified Public Accountants has recently issued
Statement of Position ("SOP") 93-7 on Reporting on Advertising Costs. The SOP is
effective for years beginning after June 15, 1994. The Company's adoption of the
SOP is not expected to have a material effect on its operating results.
11
<PAGE>
As a result of the above factors, operating profit for the year ended
December 31, 1993 increased 14.0% to $183.0 million compared to $160.6 million
in 1992. Operating profit as a percentage of net sales increased to 25.9% in
1993 from 24.4% in 1992.
Interest expense for 1993 decreased 43.1% to $85.6 million compared to
$150.2 million in 1992. The decrease was due to the consummation of the 1992
Recapitalization and the Offering which together reduced outstanding borrowings
and resulted in lower interest rates on borrowings.
Income tax expense of $2.1 million for the year ended December 31, 1993
consists of current Federal tax expense of $1.1 million, current state tax
expense of $4.0 million and a deferred Federal tax benefit of $3.0 million.
In connection with the Offering, a $14.9 million extraordinary charge was
recorded in 1993 which included (i) a write-off of a portion of the unamortized
balance of deferred debt issuance costs related to the Credit Agreement
borrowings and the Discount Notes ($6.8 million) and (ii) the premium related to
the redemption of a portion of the Discount Notes ($8.1 million). In addition, a
$2.0 million extraordinary charge was recorded in 1993 reflecting a write-off of
a portion of the unamortized balance of deferred debt issuance costs related to
the Credit Agreement borrowings. The write-off was the result of repayments of
the Term Loan Facility in advance of scheduled requirements. These extraordinary
items were recorded net of applicable taxes.
See the following section "Results of Operations -- Year Ended December 31,
1992 Compared to Year Ended December 31, 1991" for a discussion of income taxes,
extraordinary item and cumulative effect of accounting change recorded in 1992.
As a result of the above factors, the Company earned $77.9 million of net
income in 1993 compared to a $140.1 million net loss incurred in 1992.
RESULTS OF OPERATIONS -- YEAR ENDED DECEMBER 31, 1992 COMPARED TO YEAR ENDED
DECEMBER 31, 1991
Net sales for the year ended December 31, 1992 increased 9.6% to $658.7
million compared to $600.9 million for the year ended December 31, 1991. All of
the Company's operating units recorded sales increases in 1992 compared to 1991.
These increases were primarily the result of volume increases for the Company's
DR PEPPER, Diet DR PEPPER, WELCH's, 7UP, Diet 7UP, CHERRY 7UP, Diet CHERRY 7UP,
and I.B.C. brands over the comparable period in 1991, as well as selected price
increases.
Cost of sales for 1992 increased 6.1% to $126.0 million compared to $118.8
million in 1991. This increase was primarily due to an increase in concentrate
and syrup sales volume. Gross profit as a percentage of net sales increased from
80.2% in 1991 to 80.9% in 1992.
Total operating expenses, which include marketing expense, general and
administrative expense and amortization of intangible assets, increased by 8.2%
to $372.1 million compared to $344.0 million in 1991. The increase was primarily
due to increased marketing expenses in response to improved sales volume.
General and administrative expenses as a percentage of net sales decreased to
4.1% in 1992 from 4.4% in 1991. The Company's general and administrative
expenses are comprised primarily of fixed costs. As sales volumes increase,
these expenses generally represent a declining percentage of net sales.
As a result of the above factors, operating profit for the year ended
December 31, 1992 increased 16.2% to $160.6 million compared to $138.2 million
in 1991. Operating profit as a percentage of net sales increased to 24.4% in
1992 from 23.0% in 1991.
Interest expense for 1992 increased 1.5% to $150.2 million compared to
$148.0 million in 1991. The increase was due to the higher accreted value of
certain subordinated debt and issuance of senior notes and term loans of Dr
Pepper in August 1991, somewhat offset by lower outstanding borrowings under the
credit agreement of Seven-Up and lower interest rates on the Company's floating
rate borrowings.
12
<PAGE>
Other expense for the year ended December 31, 1992 includes $6.0 million of
costs associated with the Company's withdrawal of its planned public offering in
July 1992.
Income tax expense for the year ended December 31, 1991 consists of state
and local taxes and includes a charge in lieu of taxes of $1.0 million which is
offset by utilization of net operating loss carryforwards.
In February 1992, the Financial Accounting Standards Board issued Statement
109, "Accounting for Income Taxes" ("Statement 109") which requires a change
from the deferred method of accounting for income taxes of APB Opinion 11 to the
asset and liability method of accounting for income taxes. Under the asset and
liability method of Statement 109, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. Under
Statement 109, the effect on deferred tax assets and liabilities of a change in
tax rates is recognized in income in the period that includes the enactment
date.
The Company adopted Statement 109 in the fourth quarter of 1992 and has
applied the provisions of Statement 109 retroactively to January 1, 1992. The
cumulative effect as of January 1, 1992 of the change in the method of
accounting for income taxes is a charge to earnings of $74.8 million and has
been reported separately in the 1992 consolidated statement of operations.
Financial statements for periods prior to January 1, 1992 have not been restated
for Statement 109.
Pursuant to the deferred method under APB Opinion 11, which was applied in
1991 and prior years, deferred income taxes are recognized for income and
expense items that are reported in different years for financial reporting
purposes and income tax purposes using the tax rate applicable for the year of
the calculation. Under the deferred method, deferred taxes are not adjusted for
subsequent changes in tax rates.
Income tax benefit of $182,000 for the year ended December 31, 1992 consists
of current state tax expense of $424,000 and a deferred Federal income tax
benefit of $606,000. The deferred income tax benefit includes a charge in lieu
of taxes resulting from initial recognition of acquired tax benefits of $1.1
million.
In connection with the 1992 Recapitalization, the Company recorded an
extraordinary charge of $56.9 million consisting of a write-off of the
unamortized balance of deferred debt issuance costs related to the debt
retirements ($24.6 million) and premiums and fees in respect of the debt
retirements ($32.3 million).
In connection with the refinancing that occurred in 1991, an $18.6 million
extraordinary charge was recorded representing incentive payments made to
holders of the Dr Pepper Subordinated Debentures ($8.2 million), write-off of
the unamortized balance of deferred debt issuance costs related to the credit
agreement of Dr Pepper ($5.0 million) and the present value (assuming a discount
rate of 12 3/4%) of the increase in the annual interest rate of the Dr Pepper
Subordinated Debentures from 13 1/4% to 13 3/4% ($5.4 million).
As a result of the above factors, the Company incurred a $140.1 million net
loss in 1992 as compared to a $37.5 million net loss incurred in 1991.
LIQUIDITY AND CAPITAL RESOURCES
The Company believes that cash provided by operations, together with
borrowings under the Revolving Facility, will be sufficient to fund its working
capital requirements, capital expenditures and principal, interest and dividend
requirements described below.
As a result of the consummation of the 1992 Recapitalization, the Holding
Company conducts its business through DP/7UP and the primary asset of the
Holding Company is the common stock of
13
<PAGE>
DP/7UP. The Holding Company has no material operations of its own. Accordingly,
the Holding Company is dependent on the cash flow of DP/7UP to meet its
obligations. The Holding Company has no material obligations other than those
under the Discount Notes and certain contingent obligations under the Holding
Company's guarantee of DP/7UP's obligations under the Credit Agreement.
Accordingly, the Holding Company is not expected to have any material need for
cash until interest on the Discount Notes becomes payable in cash on May 1,
1998. The Holding Company will be required to make sinking fund payments equal
to 25% of the then outstanding principal amount of the Discount Notes in each of
2000 and 2001. The Discount Notes will mature in 2002. The Credit Agreement
imposes significant restrictions on the payment of dividends and the making of
loans by DP/7UP to the Holding Company. The Credit Agreement does, however,
allow DP/7UP to pay dividends to the Holding Company in an amount necessary to
make cash interest payments on the Discount Notes, provided that such interest
payments are permitted to be made at such time in accordance with the
subordination provisions relating to the Discount Notes and so long as no
payment default or bankruptcy default then exists under the Credit Agreement
with respect to the Holding Company or DP/7UP. The Holding Company's access to
the cash flow of DP/7UP is further restricted because DP/7UP may not make any
dividend payments to the Holding Company unless all accumulated and unpaid
dividends on the outstanding shares of the $1.375 Senior Exchangeable Preferred
Stock of Dr Pepper (the "DP/7UP Preferred Stock") (and any DP/7UP preferred
stock that may be issued in the future) are paid in full. In addition, the
indenture governing the exchange debentures into which the DP/7UP Preferred
Stock is exchangeable will limit the payment of dividends and the making of
loans by DP/7UP to the Holding Company. The indenture governing the Discount
Notes also imposes limits on the payment of dividends by the Holding Company.
The operations of DP/7UP do not require significant outlays for capital
expenditures, and its working capital requirements have historically been funded
with internally generated funds. Marketing expenditures have historically been,
and are expected to remain, the principal recurring use of funds for the
foreseeable future. Such expenditures are, to an extent, controllable by
management and are generally based on a percentage of unit sales volume.
DP/7UP's other principal use of funds in the future will be the payment of
principal and interest under the Credit Agreement, the payment of dividends on
the outstanding shares of DP/7UP Preferred Stock and the payment of dividends to
the Holding Company for purposes of making principal and interest payments on
the Discount Notes.
During 1993, the Company used funds provided by operations to repay $123.6
million of the principal balance under the Term Loan Facility. This amount
satisfied the total required repayment for 1993 of $67.0 million with the
remaining $56.6 million applied prorata toward all future required repayments.
On December 28, 1993, the Company modified the Credit Agreement resulting in a
reduction in interest rates of approximately 1 1/2%. The amended credit line is
$675.0 million, consisting of a $525.0 million Term Loan Facility and a $150.0
million Revolving Facility. As of December 31, 1993, DP/7UP is required to repay
the principal of $525.0 million under the Term Loan Facility as follows: $85.0
million in 1994, $100.0 million in 1995, $110.0 million in 1996, and $115.0
million in each of 1997 and 1998. The Revolving Facility includes an amount for
letters of credit in an aggregate face amount of up to $15.0 million. At
December 31, 1993, the outstanding balance of revolving loans and the aggregate
face amount of letters of credit issued under the Revolving Facility were $49.0
million and $0.6 million, respectively. A total of $15.6 million of the
available credit under the Revolving Facility is reserved for use to repurchase
or redeem shares of DP/7UP Preferred Stock and, if not so used by September 1,
1994, is required to be used to repay borrowings under the Term Loan Facility.
The Revolving Facility will mature on the earlier to occur of (i) December 31,
1998 or (ii) the date on which there are no amounts outstanding under the Term
Loan Facility.
The Company has entered into interest rate swap and interest rate cap
agreements to satisfy certain terms of the Credit Agreement. At December 31,
1993, LIBOR-based interest rate swap agreements covered notional amounts of
$350.0 million and $300.0 million expiring on December 1, 1994 and December 1,
1995, respectively. The interest rate differential to be received or paid is
recognized as an adjustment to interest expense.
14
<PAGE>
The Company had working capital deficits of $67.2 million at December 31,
1993 and $102.2 million at December 31, 1992. The Company generally operates
with a working capital deficit due to its low inventory investment and because
it has a significant amount of accrued marketing expenses in current
liabilities. The deficit at December 31, 1992 was significantly impacted by the
use of cash on hand in connection with, and the increase in the current portion
of long-term debt as a result of, the consummation of the 1992 Recapitalization.
The deficit at December 31, 1993 was improved from the December 31, 1992 deficit
due to the recognition of the deferred tax asset and the net increase in other
working capital components as a result of the timing of cash receipts and
disbursements and the seasonal nature of the business. The Company does not
believe that such deficits will have a material adverse effect on the liquidity
or operations of the Company.
Capital expenditures totaled $1.9 million in 1992 and $3.8 million in 1993.
The Credit Agreement contains numerous financial and operating covenants and
prohibitions that impose limitations on the Company's liquidity, including the
satisfaction of certain financial ratios and limitations on the incurrence of
additional indebtedness. Through December 31, 1993, the Company has satisfied
all required financial ratios. The indenture governing the Discount Notes also
contains covenants that impose limitations on the Company's liquidity, including
a limitation on the incurrence of additional indebtedness. The ability of the
Company to meet its debt service requirements and to comply with the financial
covenants in the Credit Agreement and the indenture will be dependent upon
future performance, which is subject to financial, economic, competitive and
other factors affecting the Holding Company and DP/7UP, many of which are beyond
their control.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Item 14, "Index to Consolidated Financial Statements and Schedules",
included herein, for information required under Item 8.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There have been no disagreements with the registrant's accountants on
accounting or financial disclosure.
15
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information for this item is incorporated by reference to the Company's
Proxy Statement to be filed pursuant to Regulation 14A under the Securities
Exchange Act of 1934 in connection with the Holding Company's 1994 Annual
Meeting of Shareholders.
ITEM 11. EXECUTIVE COMPENSATION
The information for this item is incorporated by reference to the Company's
Proxy Statement to be filed pursuant to Regulation 14A under the Securities
Exchange Act of 1934 in connection with the Holding Company's 1994 Annual
Meeting of Shareholders.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information for this item is incorporated by reference to the Company's
Proxy Statement to be filed pursuant to Regulation 14A under the Securities
Exchange Act of 1934 in connection with the Holding Company's 1994 Annual
Meeting of Shareholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information for this item is incorporated by reference to the Company's
Proxy Statement to be filed pursuant to Regulation 14A under the Securities
Exchange Act of 1934 in connection with the Holding Company's 1994 Annual
Meeting of Shareholders.
16
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K
(a) 1. Financial Statements
See "Index to Financial Statements and Schedules" appearing after
the signature pages hereof.
2. Financial Statement Schedules
See "Index to Financial Statements and Schedules" appearing after
the signature pages hereof.
(b) Reports on Form 8-K
Not applicable
(c) Exhibits
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- -------------------------------------------------------------------------------------------
<S> <C>
3.1 Amended and Restated Certificate of Incorporation of the Registrant, as amended. (5)
3.2 Form of Amended and Restated Bylaws of the Registrant. (5)
10.6 Common Stock Registration Rights Agreement, dated as of May 19, 1988, by and among Hicks &
Haas Holdings, Ltd., DLJ Capital Corporation, Shearson Lehman Hutton Inc., Shearson Lehman
Brothers Capital Partners I, Prudential-Bache Interfunding Inc., Prudential-Bache Capital
Partners I, L.P., Citicorp Capital Investors Ltd., John R. Albers, Ira M. Rosenstein, The
John L. Kemmerer, Jr. Trust Dated 6/24/57, Cadbury Schweppes Inc., Bankers Trust Company
and Dr Pepper/Seven-Up Companies, Inc. (1)
10.6.1 Amendment to Common Stock Registration Rights Agreement, amending the Common Stock
Registration Rights Agreement, dated as of May 19, 1988. (5)
10.6.2 Form of Second Amendment to Common Stock Registration Rights Agreement, amending the Common
Stock Registration Rights Agreement, dated as of May 19, 1988. (5)
10.13 Commercial Lease, dated as of August 20, 1987, among The Seven-Up Company, Dr Pepper
Company and Walnut Glen Towers, Ltd. (1)
10.14 Dr Pepper Company Profit Sharing Plan, as amended, dated as of January 1, 1987. (1)
10.15 Restated Pension Plan of Dr Pepper/Seven-Up Corporation. (1)
10.16 Supplemental Pension Plan of Dr Pepper/Seven-Up Corporation. (1)
10.17 Supplemental Disability Plan of Dr Pepper/Seven-Up Corporation. (2)
10.18 Supplemental Death Benefit Plan of Dr Pepper/Seven-Up Corporation. (2)
10.21 Executive Severance Agreement for John R. Albers dated August 27, 1991. (3)
10.22 Executive Severance Agreement for Ira M. Rosenstein dated August 27, 1991. (3)
10.23 Letter Agreement dated as of November 9, 1989 for Charles P. Grier. (3)
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- -------------------------------------------------------------------------------------------
<S> <C>
10.24 Executive Severance Agreement dated as of August 27, 1991 for True H. Knowles. (3)
10.25 Executive Severance Agreement dated as of April 8, 1992 for Francis L. Mullin, III. (4)
10.31 Credit Agreement (including exhibits thereto) among The Seven-Up Company and Dr Pepper
Company (and their successor by merger Dr Pepper/Seven-Up Corporation), Dr Pepper/Seven-Up
Companies, Inc. and Bankers Trust Company, Barclays Bank PLC, Canadian Imperial Bank of
Commerce, Atlanta Agency, NationsBank of North Carolina, N.A., The Chase Manhattan Bank,
N.A., and The First National Bank of Chicago. (4)
10.31.1 First amendment, dated as of October 26, 1992, among Dr Pepper/Seven-Up Corporation, Dr
Pepper/Seven-Up Companies, Inc. and certain banks. (6)
10.31.2 Second amendment, dated as of November 5, 1992, among Dr Pepper/Seven-Up Corporation, Dr
Pepper/Seven-Up Companies, Inc. and certain banks. (6)
10.31.3 Third amendment, dated as of February 17, 1993, among Dr Pepper/Seven-Up Corporation, Dr
Pepper/Seven-Up Companies, Inc. and certain banks. (6)
10.31.4 Fourth amendment, dated as of March 4, 1993, among Dr Pepper/Seven-Up Corporation, Dr
Pepper/Seven-Up Companies, Inc. and certain banks. (6)
10.31.5 Fifth amendment, (including exhibits thereto) dated as of December 28, 1993, among Dr
Pepper/Seven-Up Corporation, Dr Pepper/Seven-Up Companies, Inc. and certain banks. (6)
10.32 Dr Pepper/Seven-Up Companies, Inc. Amended and Restated 1988 Stock Option Plan. (4)
10.33 Dr Pepper/Seven-Up Companies, Inc. Amended and Restated 1988 Non-Qualified Stock Option
Plan. (4)
10.34 Form of Tax Sharing Agreement, dated as of January 1, 1992, between Dr Pepper/Seven-Up
Companies, Inc. and Dr Pepper/Seven-Up Corporation. (4)
10.35 Indenture, dated as of October 28, 1992, between Dr Pepper/Seven-Up Companies, Inc. and
Bank One, Texas N.A., as trustee. (4)
10.36 Dr Pepper/Seven-Up Companies, Inc. 1993 Stock Ownership Plan. (5)
10.37 Dr Pepper/Seven-Up Companies, Inc. Employee Stock Purchase Plan. (5)
10.38 Dr Pepper/Seven-Up Companies, Inc. Deferred Compensation Plan for Non-Employee Directors.
(5)
10.39 Form of Dr Pepper/Seven-Up Companies, Inc. 1993 Performance Award Plan. (6)
10.40 Dr Pepper/Seven-Up Companies, Inc. Non-Qualified Stock Option Plan for Non-Employee
Directors. (5)
10.41 Employment Agreement, effective as of January 1, 1993, between Dr Pepper/ Seven-Up
Companies, Inc. and John R. Albers. (6)
10.42 Employment Agreement, effective as of January 1, 1993, between Dr Pepper/ Seven-Up
Companies, Inc. and Ira M. Rosenstein. (6)
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- -------------------------------------------------------------------------------------------
<S> <C>
22 Subsidiaries of Registrant. (6)
24.1 Consent of KPMG Peat Marwick, independent certified public accountants. (6)
<FN>
- ------------------------
(1) Incorporated herein by reference to Registration Statement No. 33-23174 of
the Company.
(2) Incorporated herein by reference to Registration Statement No. 33-9428 of
Dr Pepper Company.
(3) Incorporated herein by reference to the Registrant's Annual Report on Form
10-K for the year ended December 31, 1991.
(4) Incorporated herein by reference to the Registrant's Registration Statement
on Form S-1 (Registration No. 33-47397).
(5) Incorporated herein by reference to the Registrant's Registration Statement
on Form S-1 (Registration No. 33-55262).
(6) Filed herewith.
</TABLE>
19
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
DR PEPPER/SEVEN-UP COMPANIES, INC.
Date: March 16, 1994 By: /s/ JOHN R. ALBERS
--------------------------------------
John R. Albers
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------------------ ------------------------------------- ------------------
<C> <S> <C>
/s/ JOHN R. ALBERS Director, President and Chief
------------------------------------------- Executive Officer (Principal March 16, 1994
John R. Albers Executive Officer of the Registrant)
Director, Executive Vice President
/s/ IRA M. ROSENSTEIN and Chief Financial Officer
------------------------------------------- (Principal Financial Officer of the March 16, 1994
Ira M. Rosenstein Registrant)
/s/ MICHAEL R. BUITER Vice President -- Finance and
------------------------------------------- Treasurer (Principal Accounting March 16, 1994
Michael R. Buiter Officer of the Registrant)
/s/ THOMAS O. HICKS
------------------------------------------- Director March 16, 1994
Thomas O. Hicks
/s/ RICHARD G. MERRILL
------------------------------------------- Director March 16, 1994
Richard G. Merrill
/s/ W. W. CLEMENTS
------------------------------------------- Director March 16, 1994
W. W. Clements
/s/ WILLIAM E. WINTER
------------------------------------------- Director March 16, 1994
William E. Winter
/s/ MALCOLM CANDLISH
------------------------------------------- Director March 16, 1994
Malcolm Candlish
</TABLE>
20
<PAGE>
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Dr Pepper/Seven-Up Companies, Inc.:
Independent Auditors' Report............................................................................... 22
Consolidated Balance Sheets -- December 31, 1993 and 1992.................................................. 23
Consolidated Statements of Operations -- Three years ended December 31, 1993............................... 24
Consolidated Statements of Stockholders' Deficit -- Three years ended December 31, 1993.................... 25
Consolidated Statements of Cash Flows -- Three years ended December 31, 1993............................... 26
Notes to Consolidated Financial Statements................................................................. 27
Financial Statement Schedules:
III -- Condensed Financial Information........................................... 36
VII -- Guarantees of Securities of Other Issuers................................. 40
VIII -- Valuation and Qualifying Accounts......................................... 41
X -- Supplemental Income Statement Information................................. 42
</TABLE>
All other schedules are omitted as the required information is inapplicable
or presented in the consolidated financial statements or related notes.
21
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Dr Pepper/Seven-Up Companies, Inc.:
We have audited the consolidated financial statements of Dr Pepper/Seven-Up
Companies, Inc. and subsidiaries as listed in the accompanying index. In
connection with our audits of the consolidated financial statements, we also
have audited the financial statement schedules as listed in the accompanying
index. These consolidated financial statements and financial statement schedules
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements and financial
statement schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Dr
Pepper/Seven-Up Companies, Inc. and subsidiaries as of December 31, 1993 and
1992, and the results of their operations and their cash flows for each of the
years in the three-year period ended December 31, 1993, in conformity with
generally accepted accounting principles. Also, in our opinion, the related
financial statement schedules, when considered in relation to the basic
consolidated financial statements taken as a whole, present fairly, in all
material respects, the information set forth therein.
As discussed in note 4 to the consolidated financial statements, the Company
changed its method of accounting for income taxes in 1992.
KPMG Peat Marwick
Dallas, Texas
February 7, 1994
22
<PAGE>
DR PEPPER/SEVEN-UP COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1993 AND 1992
(IN THOUSANDS, EXCEPT SHARES AND PER SHARE DATA)
ASSETS
<TABLE>
<CAPTION>
1993 1992
----------- -----------
<S> <C> <C>
Current assets (note 3):
Accounts receivable, less allowance for doubtful accounts of $1,737 in 1993 and
$1,573 in 1992...................................................................... $ 70,255 $ 57,267
Inventories.......................................................................... 14,550 12,685
Prepaid advertising.................................................................. 16,872 16,748
Deferred income taxes (note 4)....................................................... 24,175 --
Other current assets................................................................. 1,608 1,140
----------- -----------
Total current assets............................................................... 127,460 87,840
----------- -----------
Property, plant and equipment, net (notes 2 and 3)..................................... 19,012 18,253
Intangible assets (note 3):
Franchises........................................................................... 459,988 459,988
Goodwill, formulas, trademarks and other............................................. 142,872 142,872
----------- -----------
602,860 602,860
Less accumulated amortization........................................................ 111,434 96,357
----------- -----------
Total intangible assets, net....................................................... 491,426 506,503
----------- -----------
Deferred debt issuance costs, less accumulated amortization of $8,711 in 1993 and
$1,508 in 1992 (note 9)............................................................... 31,313 42,979
Other assets........................................................................... 10,812 12,521
----------- -----------
Total assets....................................................................... $ 680,023 $ 668,096
----------- -----------
----------- -----------
</TABLE>
LIABILITIES AND STOCKHOLDERS' DEFICIT
<TABLE>
<CAPTION>
1993 1992
----------- -----------
<S> <C> <C>
Current liabilities:
Accounts payable..................................................................... $ 25,060 $ 21,112
Accrued marketing expenses........................................................... 67,026 77,810
Other accrued expenses............................................................... 17,266 15,708
Current portion of long-term debt (note 3)........................................... 85,274 75,433
----------- -----------
Total current liabilities.......................................................... 194,626 190,063
----------- -----------
Long-term debt, less current portion (note 3).......................................... 790,540 1,091,956
Deferred credits and other............................................................. 28,805 27,139
Deferred income taxes (note 4)......................................................... 86,156 69,559
Redeemable Senior Preferred Stock, at redemption value (note 9)........................ -- 96,792
Stockholders' deficit (notes 3 and 5):
Common stock, $.01 par value, authorized 145,000,000 shares, issued 60,796,377 shares
in 1993 and 38,530,119 shares in 1992............................................... 608 385
Additional paid-in capital........................................................... 406,728 96,012
Accumulated deficit.................................................................. (827,672) (904,005)
Foreign currency translation adjustment.............................................. 232 195
----------- -----------
(420,104) (807,413)
----------- -----------
Less treasury shares (148,152 in 1993 and 2,956,065 in 1992), at cost................ -- --
----------- -----------
Total stockholders' deficit........................................................ (420,104) (807,413)
----------- -----------
----------- -----------
Commitments and contingencies (notes 6, 7 and 10)......................................
----------- -----------
Total liabilities and stockholders' deficit........................................ $ 680,023 $ 668,096
----------- -----------
----------- -----------
</TABLE>
See accompanying notes to consolidated financial statements.
23
<PAGE>
DR PEPPER/SEVEN-UP COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE YEARS ENDED DECEMBER 31, 1993
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
Net sales (note 8)......................................................... $ 707,378 $ 658,718 $ 600,941
Cost of sales.............................................................. 115,981 126,002 118,757
----------- ----------- -----------
Gross profit........................................................... 591,397 532,716 482,184
----------- ----------- -----------
Operating expenses:
Marketing................................................................ 362,484 329,706 302,192
General and administrative............................................... 30,816 27,312 26,621
Amortization of intangible assets........................................ 15,077 15,112 15,155
----------- ----------- -----------
Total operating expenses............................................... 408,377 372,130 343,968
----------- ----------- -----------
Operating profit..................................................... 183,020 160,586 138,216
----------- ----------- -----------
Other income (expense):
Interest expense......................................................... (85,560) (150,245) (147,957)
Preferred stock dividends of subsidiaries................................ (1,744) (17,538) (12,294)
Recapitalization charge (note 9)......................................... -- (6,026) --
Other, net............................................................... 495 4,627 3,174
----------- ----------- -----------
Total other income (expense)........................................... (86,809) (169,182) (157,077)
----------- ----------- -----------
Income (loss) before income taxes, extraordinary items and cumulative
effect of accounting change............................................... 96,211 (8,596) (18,861)
Income tax expense (benefit) (note 4)...................................... 2,087 (182) 1,100
----------- ----------- -----------
Income (loss) before extraordinary items and cumulative effect of
accounting change..................................................... 94,124 (8,414) (19,961)
----------- ----------- -----------
Extraordinary items:
Benefit from utilization of net operating loss carryforwards (note 4).... -- -- (1,022)
Extinguishments of debt, less applicable income taxes (notes 4 and 9).... 16,199 56,934 18,566
Cumulative effect of accounting change (note 4)............................ -- 74,800 --
----------- ----------- -----------
Net income (loss)...................................................... 77,925 (140,148) (37,505)
Preferred stock dividend requirements...................................... -- 12,941 11,882
----------- ----------- -----------
Net income (loss) attributable to outstanding common stock............. $ 77,925 $ (153,089) $ (49,387)
----------- ----------- -----------
----------- ----------- -----------
Income (loss) per common share:
Income (loss) before extraordinary items and cumulative effect of
accounting change....................................................... $ 1.46 $ (.60) $ (.90)
Extraordinary items...................................................... (.25) (1.60) (.49)
Cumulative effect of accounting change................................... -- (2.11) --
----------- ----------- -----------
Net income (loss)...................................................... $ 1.21 $ (4.31) $ (1.39)
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
See accompanying notes to consolidated financial statements.
24
<PAGE>
DR PEPPER/SEVEN-UP COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
THREE YEARS ENDED DECEMBER 31, 1993
(IN THOUSANDS, EXCEPT SHARES)
<TABLE>
<CAPTION>
FOREIGN
ADDITIONAL CURRENCY TOTAL
NUMBER OF COMMON PAID-IN ACCUMULATED TRANSLATION TREASURY STOCKHOLDERS'
SHARES STOCK CAPITAL DEFICIT ADJUSTMENT SHARES DEFICIT
---------- ----- --------- ---------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1990.......................... 35,519,350 $385 $ 93,666 $(701,422 ) $ 121 (100 ) $ (607,350 )
Purchase of treasury stock, at cost................. (58,011) -- -- -- -- (290 ) (290 )
Senior Preferred Stock dividends.................... -- -- -- (11,882 ) -- -- (11,882 )
Other............................................... -- -- (28) (107 ) 72 -- (63 )
Net loss............................................ -- -- -- (37,505 ) -- -- (37,505 )
---------- ----- --------- ---------- ----- --- ------------
Balance, December 31, 1991.......................... 35,461,339 385 93,638 (750,916 ) 193 (390 ) (657,090 )
Stock sold to employees............................. 112,740 -- 292 -- -- 390 682
Senior Preferred Stock dividends.................... -- -- -- (12,941 ) -- -- (12,941 )
Reclassification of common stock warrants........... -- -- 11,085 -- -- -- 11,085
Repurchase of Dr Pepper Redeemable Preferred Stock
(note 9)........................................... -- -- (11,128) -- -- -- (11,128 )
Other............................................... (25) -- 2,125 -- 2 -- 2,127
Net loss............................................ -- -- -- (140,148 ) -- -- (140,148 )
---------- ----- --------- ---------- ----- --- ------------
Balance, December 31, 1992.......................... 35,574,054 385 96,012 (904,005 ) 195 -- (807,413 )
Issuance of common stock (note 9)................... 21,578,313 216 305,122 -- -- -- 305,338
Exercise of employee stock options, including tax
benefits........................................... 607,638 6 4,944 -- -- -- 4,950
Exercise of outstanding warrants.................... 2,807,895 -- -- -- -- -- --
Other............................................... 80,325 1 650 (1,592 ) 37 -- (904 )
Net income.......................................... -- -- -- 77,925 -- -- 77,925
---------- ----- --------- ---------- ----- --- ------------
Balance, December 31, 1993.......................... 60,648,225 $608 $ 406,728 $(827,672 ) $ 232 -- $ (420,104 )
---------- ----- --------- ---------- ----- --- ------------
---------- ----- --------- ---------- ----- --- ------------
</TABLE>
See accompanying notes to consolidated financial statements.
25
<PAGE>
DR PEPPER/SEVEN-UP COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE YEARS ENDED DECEMBER 31, 1993
(IN THOUSANDS)
<TABLE>
<CAPTION>
1993 1992 1991
------------- ------------- -------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss).................................................... $ 77,925 $ (140,148) $ (37,505)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation and amortization of intangibles, debt discounts and
deferred debt issuance costs...................................... 59,634 90,289 92,884
Debt restructuring charge.......................................... 8,844 24,664 10,391
Cumulative effect of accounting change............................. -- 74,800 --
Preferred stock dividends of subsidiary............................ -- 11,119 10,499
Other.............................................................. (1,438) 726 2,375
Changes in assets and liabilities:
Accounts receivable.............................................. (12,988) (6,565) (2,359)
Inventories...................................................... (1,865) (466) (1,585)
Prepaid advertising and other assets............................. 1,117 (7,068) (933)
Accounts payable and accrued expenses............................ (7,720) 7,823 6,497
------------- ------------- -------------
Net cash provided by operating activities...................... 123,509 55,174 80,264
------------- ------------- -------------
Cash flows from investing activities:
Capital expenditures................................................. (3,754) (1,861) (2,180)
Sales (purchases) of marketable securities with maturities less than
three months, net................................................... -- 31,166 (31,166)
Purchases of marketable securities................................... -- (312,108) (147,053)
Sales of marketable securities....................................... -- 366,733 92,428
Other................................................................ -- (2,000) 93
------------- ------------- -------------
Net cash provided by (used in) investing activities............ (3,754) 81,930 (87,878)
------------- ------------- -------------
Cash flows from financing activities:
Proceeds from long-term debt......................................... 831,000 1,266,001 315,800
Payments on long-term debt........................................... (1,156,960) (1,269,407) (313,117)
Proceeds from sale of common stock................................... 305,366 -- --
Issuance of preferred stock.......................................... -- -- 50,000
Repurchase of preferred stock........................................ (98,383) (120,744) --
Payments of refinancing costs........................................ (4,381) (53,149) (17,855)
Increase in cash overdraft........................................... 2,442 5,181 --
Other................................................................ 1,161 469 (290)
------------- ------------- -------------
Net cash provided by (used in) financing activities............ (119,755) (171,649) 34,538
Net increase (decrease) in cash and cash equivalents................... -- (34,545) 26,924
Cash and cash equivalents at beginning of year......................... -- 34,545 7,621
------------- ------------- -------------
Cash and cash equivalents at end of year............................... $ -- $ -- $ 34,545
------------- ------------- -------------
------------- ------------- -------------
</TABLE>
See accompanying notes to consolidated financial statements.
26
<PAGE>
DR PEPPER/SEVEN-UP COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Dr
Pepper/Seven-Up Companies, Inc. and subsidiaries ("Company"). All significant
intercompany balances and transactions have been eliminated in consolidation.
(B) INVENTORIES
Inventories are stated at the lower of cost or market. Cost is determined
using the first-in, first-out method. A summary of inventories at December 31,
1993 and 1992 follows (in thousands):
<TABLE>
<CAPTION>
1993 1992
--------- ---------
<S> <C> <C>
Finished products............................................ $ 5,362 $ 4,792
Raw materials and supplies................................... 9,188 7,893
--------- ---------
$ 14,550 $ 12,685
--------- ---------
--------- ---------
</TABLE>
(C) MARKETING AND ADVERTISING COSTS
Marketing costs include costs of advertising, marketing and promotional
programs. Prepaid advertising consists of various marketing, media and
advertising prepayments, materials in inventory and production costs of future
media advertising; these assets are expensed in the year used. Marketing costs,
other than prepayments, are expensed in the year incurred.
(D) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are recorded at cost. Depreciation is computed
by the straight-line method over the estimated useful lives ranging from 3 to 10
years. Maintenance and repairs are charged to operations as incurred and
expenditures for major renewals and improvements are capitalized.
(E) INTANGIBLE ASSETS
Franchises, goodwill, formulas, trademarks and other intangible assets are
being amortized over 40 years on a straight-line basis. The Company continually
reevaluates the recoverability of the carrying amount of these intangible assets
based on projected undiscounted operating cash flows.
(F) DEFERRED DEBT ISSUANCE COSTS
Deferred debt issuance costs are amortized using the effective interest
method over the life of the debt issue to which they relate.
(G) INCOME TAXES
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
(H) INCOME (LOSS) PER COMMON SHARE
Income (loss) per common share is based on the weighted average number of
common shares and share equivalents outstanding during the year (64,621,000 in
1993, 35,533,000 in 1992 and 35,468,000 in 1991). Shares issuable in 1992 and
1991 upon exercise of stock options and warrants were antidilutive and therefore
excluded from the calculation.
27
<PAGE>
DR PEPPER/SEVEN-UP COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1993
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(I) STATEMENTS OF CASH FLOWS
The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.
During 1993, 1992 and 1991, the Company paid interest of $43,926,000,
$85,203,000 and $75,844,000, respectively, and income taxes of $1,838,000,
$1,202,000 and $552,000, respectively.
(2) PROPERTY, PLANT AND EQUIPMENT
A summary of property, plant and equipment and accumulated depreciation at
December 31, 1993 and 1992 follows (in thousands):
<TABLE>
<CAPTION>
1993 1992
---------- ----------
<S> <C> <C>
Land....................................................... $ 1,106 $ 1,106
Buildings and improvements................................. 9,151 7,345
Machinery, equipment and furniture......................... 38,903 37,010
---------- ----------
49,160 45,461
---------- ----------
Accumulated depreciation................................... (30,148) (27,208)
---------- ----------
$ 19,012 $ 18,253
---------- ----------
---------- ----------
</TABLE>
Depreciation expense was $2,969,000 in 1993, $2,950,000 in 1992 and
$3,693,000 in 1991.
(3) LONG-TERM DEBT
Long-term debt at December 31, 1993 and 1992 consists of the following (in
thousands):
<TABLE>
<CAPTION>
1993 1992
----------- -------------
<S> <C> <C>
Credit Agreement.................................................. $ 574,000 $ 784,000
Discount Notes.................................................... 301,427 382,554
Other notes....................................................... 387 835
----------- -------------
875,814 1,167,389
Less current portion of long-term debt............................ 85,274 75,433
----------- -------------
$ 790,540 $ 1,091,956
----------- -------------
----------- -------------
</TABLE>
(A) CREDIT AGREEMENT
The Company's Credit Agreement provides for $525,000,000 of borrowings
available under a Term Loan Facility and $150,000,000 of borrowings available
under a Revolving Facility from a group of banks. Outstanding borrowings under
the Term Loan Facility and the Revolving Facility bear interest at the lead
bank's prime rate (6.0% at December 31, 1993) plus 1/4% per annum or the lead
banks' average Eurodollar Rate plus 1 1/4% per annum. The Term Loan Facility
requires semi-annual principal payments to maturity on December 31, 1998. The
Revolving Facility will mature on the earlier to occur of December 31, 1998 or
the date on which there are no amounts outstanding under the Term Loan Facility.
The Company must pay an annual commitment fee of 1/2% on the unused portion of
the Revolving Facility. Borrowings under the Credit Agreement are principally
secured by the Company's assets, including franchise contracts relating to
bottling arrangements. The carrying amount of the Credit Agreement at December
31, 1993 and 1992 approximates the fair value since the borrowings bear interest
at current market rates.
28
<PAGE>
DR PEPPER/SEVEN-UP COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1993
(3) LONG-TERM DEBT (CONTINUED)
The Credit Agreement contains certain restrictive covenants which require
the Company, among other things, to satisfy certain financial ratios and
restricts investments in and loans to affiliates, capital expenditures,
additional debt and payment of dividends, as defined.
The Company has entered into interest rate swap and interest rate cap
agreements to satisfy certain terms of the Credit Agreement. At December 31,
1993, LIBOR-based interest rate swap agreements covered notional amounts of
$350,000,000 and $300,000,000 expiring on December 1, 1994 and December 1, 1995,
respectively. The interest rate differential to be received or paid is
recognized as an adjustment to interest expense.
(B) DISCOUNT NOTES
The 11 1/2% Senior Subordinated Discount Notes (the "Discount Notes") had a
face amount of $462,231,000 at December 31, 1993, bear interest at a rate of
11.5% per annum and are redeemable at the option of the Company at redemption
prices declining annually from 104.3125% on November 1, 1997 to par on or after
November 1, 2000. Interest is payable semi-annually on the Discount Notes
beginning May 1, 1998. A mandatory sinking fund will retire 25% of the original
principal amount in each of the years 2000 and 2001, or 50% of the issue prior
to maturity. The Discount Notes mature on November 1, 2002 and are subordinate
to all outstanding borrowings under the Credit Agreement. The indenture
governing the Discount Notes contains covenants that impose limitations on the
Company's liquidity, including a limitation on the incurrence of additional
indebtedness. Based on the quoted market price for the issue, the estimated fair
value of the Discount Notes is $357,651,000 and $416,883,000 at December 31,
1993 and 1992, respectively.
Aggregate maturities of long-term debt for each of the five years subsequent
to December 31, 1993 follows: $85,274,000 in 1994; $100,067,000 in 1995;
$110,044,000 in 1996; $115,002,000 in 1997, and $164,000,000 in 1998.
(4) INCOME TAXES
The Company adopted Statement of Financial Accounting Standards No. 109
"Accounting for Income Taxes" (Statement 109) in the fourth quarter of 1992 and
applied the provisions of Statement 109 retroactively to January 1, 1992. The
cumulative effect of the change in accounting for income taxes of $74,800,000
was determined as of January 1, 1992 and is reported separately in the 1992
consolidated statement of operations. Financial statements for periods prior to
January 1, 1992 have not been restated to apply the provisions of Statement 109.
Income tax expense (benefit) attributable to income (loss) before
extraordinary items and cumulative effect of accounting change for the years
ended December 31, 1993 and 1992 consists of (in thousands):
<TABLE>
<CAPTION>
1993 1992
--------- ---------
<S> <C> <C>
Current:
Federal............................................................. $ 1,147 $ --
State............................................................... 3,999 424
Deferred.............................................................. (3,059) (606)
--------- ---------
$ 2,087 $ (182)
--------- ---------
--------- ---------
</TABLE>
For the year ended December 31, 1993, tax benefits of $3,789,000 and
$731,000 were allocated to additional paid-in capital and extraordinary item,
respectively. Deferred income tax benefit for the year ended December 31, 1993
includes a charge of $2,046,000 for adjustments to deferred tax assets
29
<PAGE>
DR PEPPER/SEVEN-UP COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1993
(4) INCOME TAXES (CONTINUED)
and liabilities for the increase in the U.S. federal income tax rate and a
benefit of $8,623,000 related to a decrease in the valuation allowance for
deferred tax assets. For the year ended December 31, 1992, tax benefits of
$818,000 and $1,148,000 were allocated to additional paid-in capital and
goodwill, respectively. Income tax expense for the year ended December 31, 1991
consists principally of a $1,022,000 charge in lieu of taxes and state income
taxes. The charge in lieu of taxes is offset by utilization of net operating
loss carryforwards.
Income tax expense (benefit) for the years ended December 31, 1993 and 1992
differed from the amount computed by applying the U.S. federal income tax rate
of 35%, and 34%, respectively, to income (loss) before income taxes,
extraordinary items and cumulative effect of accounting change as a result of
the following (in thousands):
<TABLE>
<CAPTION>
1993 1992
--------- ---------
<S> <C> <C>
Computed "expected" tax expense (benefit).............................. $ 33,674 $ (2,922)
Increase (reduction) in income taxes resulting from:
Benefit of net operating loss carryforwards and other deferred tax
assets.............................................................. (33,918) --
State income taxes, net of federal income taxes...................... 2,599 280
Other, net........................................................... (268) 2,460
--------- ---------
$ 2,087 $ (182)
--------- ---------
--------- ---------
</TABLE>
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at December 31,
1993 and 1992 are presented below (in thousands):
<TABLE>
<CAPTION>
1993 1992
----------- -----------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards.................................. $ 94,426 $ 109,768
Trademarks........................................................ 7,276 6,085
Other............................................................. 7,750 5,545
----------- -----------
Total gross deferred tax assets................................. 109,452 121,398
Less valuation allowance.......................................... (70,323) (93,313)
----------- -----------
Net deferred tax assets......................................... 39,129 28,085
----------- -----------
Deferred tax liabilities:
Franchises and other intangible assets............................ 97,212 93,407
Property and equipment............................................ 2,704 2,901
Other............................................................. 1,194 1,336
----------- -----------
Total gross deferred tax liabilities............................ 101,110 97,644
----------- -----------
Net deferred tax liability...................................... $ 61,981 $ 69,559
----------- -----------
----------- -----------
</TABLE>
The valuation allowance for deferred tax assets as of January 1, 1992 was
$76,117,000. The net change in the total valuation allowance for the years ended
December 31, 1993 and 1992 was a decrease of $22,990,000 and an increase of
$17,196,000, respectively.
If the Company subsequently were to recognize tax benefits related to the
December 31, 1993 valuation allowance for deferred tax assets, such benefits
would be allocated to intangible assets (approximately $42,047,000), and income
tax benefit (approximately $28,276,000).
30
<PAGE>
DR PEPPER/SEVEN-UP COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1993
(4) INCOME TAXES (CONTINUED)
As of December 31, 1993, the Company and its subsidiaries have approximately
$269,800,000 of federal income tax loss carryforwards (see note 10) which expire
in years 2001 through 2007. As a result of the Company's initial public offering
and the sale of the Company's common stock by a significant shareholder, the
Company is subject to an annual limitation of approximately $60,000,000 for
utilizing its federal income tax loss carryforwards.
(5) STOCKHOLDERS' DEFICIT
(A) SHAREHOLDER RIGHTS PLAN
In September 1993, the Company's Board of Directors adopted a Shareholder
Rights Plan pursuant to which purchase rights were issued to holders of its
common stock at the rate of one right for each share of common stock. The rights
will trade with the Company's common stock until exercisable. The rights become
exercisable only at the time a person or group acquires, or commences a public
tender offer for, a defined percentage of the Company's common stock. Once a
right becomes exercisable, the holders of the rights (other than the acquiring
person or group) may purchase the Company's common stock at 50% of its then
market price. The rights expire on September 13, 2003, unless earlier redeemed
by the Company at a price of $.01 per right.
(B) EMPLOYEE INCENTIVE PLANS
The Company sponsors certain employee incentive plans under which stock
options and stock awards may be granted to key officers and salaried employees
of the Company. Options granted under the plans are exercisable at such times
and in such amounts as determined by a committee selected by the Board of
Directors of the Company. No options granted under the plans are exercisable
more than ten years after the date of grant. At December 31, 1993, 2,630,000
shares were available for grant under the plans. Further information relating to
options is as follows (in thousands, except per share amounts):
<TABLE>
<CAPTION>
1993 1992 1991
-------------- -------------- -------------
<S> <C> <C> <C>
Outstanding at January 1...................... 7,078 6,926 1,786
Granted..................................... 1,204 229 5,171
Exercised................................... (608) -- --
Cancelled................................... (26) (77) (31)
-------------- -------------- -------------
Outstanding at December 31.................... 7,648 7,078 6,926
-------------- -------------- -------------
-------------- -------------- -------------
Exercisable at December 31.................... 4,641 3,034 255
-------------- -------------- -------------
-------------- -------------- -------------
Option price per share:
Exercised................................... $.05 - 10.17 -- --
Unexercised at December 31.................. $.05 - 20.75 $.05 - 10.17 $.05 - 2.29
-------------- -------------- -------------
-------------- -------------- -------------
</TABLE>
31
<PAGE>
DR PEPPER/SEVEN-UP COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1993
(6) PENSION BENEFITS
The Company has defined benefit pension plans covering substantially all of
its employees. The benefits are primarily based on years of service and the
employees' compensation during the last years of employment. Pension costs are
funded in amounts not less than minimum statutory funding requirements nor more
than the maximum amount that can be deducted for federal income tax purposes.
The Company also has a nonqualified unfunded defined benefit plan covering
certain executive employees. The following table sets forth the plans' funded
status and amounts recognized at December 31, 1993 and 1992 (in thousands):
<TABLE>
<CAPTION>
1993 1992
--------- ---------
<S> <C> <C>
Actuarial present value of accumulated benefit obligations,
including vested benefits of $35,048 in 1993 and $28,471 in
1992.............................................................. $ 37,902 $ 30,550
--------- ---------
--------- ---------
Projected benefit obligation for services rendered to date......... 52,646 42,196
Plan assets at fair value, primarily listed stocks and United
States government securities...................................... 26,753 22,224
--------- ---------
Projected benefit obligation in excess of plan assets.............. 25,893 19,972
Unrecognized net asset at adoption................................. 616 657
Unrecognized prior service costs................................... (3,202) (2,676)
Unrecognized net loss.............................................. (14,853) (11,250)
Adjustment required to recognize minimum liability................. 2,695 819
--------- ---------
Accrued pension liability...................................... $ 11,149 $ 7,522
--------- ---------
--------- ---------
</TABLE>
Net pension cost includes the following components (in thousands):
<TABLE>
<CAPTION>
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
Service cost............................................... $ 2,375 $ 1,897 $ 1,540
Interest cost.............................................. 3,676 3,082 2,628
Actual return on assets.................................... (1,799) (812) (1,387)
Net amortization and deferral.............................. 1,053 101 805
--------- --------- ---------
Net pension cost....................................... $ 5,305 $ 4,268 $ 3,586
--------- --------- ---------
--------- --------- ---------
</TABLE>
The assumptions used in computing the information above were as follows:
<TABLE>
<CAPTION>
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
Weighted average discount rate........................... 7.9% 8.25% 8.5%
Rate of increase in future compensation levels........... 5.5 5.5-8.0 5.5-8.0
Expected long-term rate of return on assets.............. 8.5 8.5 8.0
--
--
----------- -----------
----------- -----------
</TABLE>
(7) LEASE COMMITMENTS
The Company has operating leases principally for office space, automobiles
and computer equipment. Rent expense on operating leases was $6,490,000 in 1993,
$6,479,000 in 1992 and $6,434,000 in 1991. The future minimum rentals under
noncancellable operating leases in effect as of December 31, 1993 were
$7,037,000 in 1994; $6,025,000 in 1995; $5,094,000 in 1996; $4,376,000 in 1997
and $2,532,000 in 1998.
32
<PAGE>
DR PEPPER/SEVEN-UP COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1993
(8) RELATED PARTY AND MAJOR CUSTOMER TRANSACTIONS
In October 1993, a shareholder increased its ownership in the Company to
approximately 26% of the outstanding common stock. The Company currently
performs contract manufacturing for an affiliate of this shareholder. For the
years 1993, 1992 and 1991, the Company received $2,025,000, $1,724,000 and
$1,708,000, respectively, for such contract manufacturing services.
A director of the Company also serves as a director of a company engaged in
the business of bottling DR PEPPER brand and 7UP brand beverages. For the years
1993, 1992 and 1991, the Company had sales to the bottling company of
$56,300,000, $52,500,000 and $46,100,000.
Sales to PepsiCo, Inc. owned bottling operations accounted for 13.5%, 12.3%
and 11.9% of consolidated net sales in 1993, 1992 and 1991, respectively.
(9) RECAPITALIZATION TRANSACTIONS
During 1993, 1992 and 1991, the Company was involved in certain significant
recapitalization transactions that are described in more detail as follows:
(A) 1993 PUBLIC OFFERING
During early 1993, the Company completed an initial public offering of
21,578,313 shares of its common stock resulting in net proceeds to the Company
of approximately $305,300,000. The net proceeds were used to redeem $115,500,000
of the accreted balance of the Discount Notes, reduce borrowings of $82,500,000
under the Credit Agreement and redeem all of the Redeemable Senior Preferred
Stock. In connection with this transaction, the Company recognized an
extraordinary charge of $14,300,000 resulting from the write-off of deferred
debt issuance costs and the payment of premiums on the redemption of the
Discount Notes.
Supplementary income before extraordinary item per share for 1993, after
giving effect to the redemption of the Discount Notes and the Redeemable Senior
Preferred Stock and reduction in borrowings under the Credit Agreement as of the
beginning of the year, was $1.46.
(B) 1992 RECAPITALIZATION
In 1992, the Company completed a recapitalization transaction which included
the issuance of $656,509,000 principal amount (gross proceeds of $375,001,000)
of the Discount Notes and borrowings of $816,000,000 under the Credit Agreement.
The proceeds from the borrowings and approximately $169,900,000 of cash on hand
were used to effect the retirement of certain indebtedness and preferred stock.
In connection with this transaction, the Company recognized an extraordinary
charge of $56,934,000 for payment of call premiums and consents to former
bondholders and the write-off of the unamortized balance of deferred debt
issuance costs. Additionally, the Company incurred $44,752,000 of costs related
to the issuance of the Discount Notes and the Credit Agreement which is
reflected as deferred debt issuance costs in the consolidated balance sheets.
(C) OTHER TRANSACTIONS
During the second quarter of 1992, the Company pursued a recapitalization
plan which included an initial public offering of the Company's common stock. On
July 1, 1992, the Company announced that it had withdrawn its offering and a
charge of $6,026,000 was recorded in 1992 to reflect the costs associated with
this recapitalization effort.
During 1991, the Company completed a recapitalization transaction. In
connection with such transaction, the Company incurred an extraordinary charge
of $18,566,000 for consent payments paid
33
<PAGE>
DR PEPPER/SEVEN-UP COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1993
(9) RECAPITALIZATION TRANSACTIONS (CONTINUED)
to certain debenture holders, an increase in the annual interest rate on certain
indebtedness and the write-off of the unamortized balance of deferred debt
issuance costs related to the retirement of a previous credit agreement.
(10) CONTINGENCIES
(A) FORMER HEADQUARTERS
The Company is a defendant in an action alleging that the Company breached
an oral agreement to lease space in a new office building in connection with the
Company's move of its corporate headquarters. The plaintiff also alleges that
the Company fraudulently misrepresented the existence of asbestos in the
Company's former corporate headquarters building. The plaintiff claims to have
suffered over $31.5 million in actual damages with punitive damages in excess of
$50 million.
Additionally, the plaintiff filed a demand with the American Arbitration
Association requesting arbitration with respect to certain damage allegedly
caused by the Company to its former corporate headquarters building during the
Company's occupancy of such building as a tenant. The plaintiff seeks damages in
connection with this claim in the amount of approximately $11.5 million. The
arbitration hearing with respect to this claim is scheduled to resume in March
1994. The decision of the arbitrator will be binding on the parties.
Management of the Company intends to vigorously contest the plaintiff's
allegations and believes that the resolution of these matters will not have a
material adverse effect on the Company's financial condition or operating
results.
(B) INTERNAL REVENUE SERVICE MATTER
The Internal Revenue Service is currently in the process of examining Dr
Pepper Company's and The Seven-Up Company's federal income tax returns for the
periods ended December 31, 1986, December 31, 1987 and May 19, 1988, and the
Company's federal income tax return for the period ended December 31, 1988. The
Company has been notified of proposed IRS adjustments disallowing certain
deductions, including substantially all amortization of intangible assets
related to the 1986 acquisition. If the adjustments are sustained, in whole or
in part, the federal net operating loss carryforwards would be significantly
reduced or eliminated. The Company is vigorously contesting the proposed
adjustments. Management of the Company believes the ultimate resolution of the
proposed adjustments will not have a material adverse effect on the Company's
financial condition or operating results.
(C) OTHER LITIGATION
The Company's operating subsidiary, Dr Pepper/Seven-Up Corporation, is a
defendant in various other lawsuits arising out of the ordinary conduct of its
business. In the opinion of management, the resolution of these matters is not
expected to have a material adverse effect upon the Company's financial
condition or operating results.
34
<PAGE>
DR PEPPER/SEVEN-UP COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1993
(11) QUARTERLY FINANCIAL DATA (UNAUDITED)
<TABLE>
<CAPTION>
QUARTER
--------------------------------------------------
FIRST SECOND THIRD FOURTH
----------- ----------- ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
1993:
Net sales................................................... $ 170,782 $ 182,523 $ 186,921 $ 167,152
Gross profit................................................ 144,566 151,055 155,346 140,430
Operating profit............................................ 43,245 51,854 49,485 38,436
Income before extraordinary item............................ 18,012 30,271 24,294 21,547
Net income.................................................. 3,111 30,271 23,215 21,328
Income per common share:
Before extraordinary item................................. .31 .46 .37 .32
Net income................................................ $ .05 $ .46 $ .35 $ .32
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
<CAPTION>
QUARTER
--------------------------------------------------
FIRST SECOND THIRD FOURTH
----------- ----------- ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
1992:
Net sales................................................... $ 161,541 $ 173,971 $ 168,768 $ 154,438
Gross profit................................................ 131,363 138,941 135,155 127,257
Operating profit............................................ 37,818 46,506 42,978 33,284
Income (loss) before extraordinary items and cumulative
effect of accounting change................................ (3,301) (2,265) 85 (2,933)
Net income (loss)........................................... (78,101) (2,265) 85 (59,867)
Loss per common share:
Before extraordinary items and cumulative effect of
accounting change........................................ (.18) (.15) (.09) (.18)
Cumulative effect of accounting change.................... (2.11) -- -- --
Net loss.................................................. $ (2.29) $ (.15) $ (.09) $ (1.78)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
35
<PAGE>
SCHEDULE III
DR PEPPER/SEVEN-UP COMPANIES, INC. AND SUBSIDIARIES
CONDENSED BALANCE SHEETS
DECEMBER 31, 1993 AND 1992
(IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
1993 1992
------------ ------------
<S> <C> <C>
Other assets, principally deferred debt issuance costs, less accumulated amortization
of $159 in 1992 and $899 in 1993..................................................... $ 8,294 $ 12,566
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDERS' DEFICIT
Deficit investment in Dr Pepper/Seven-Up Corporation, at equity....................... 127,203 340,828
Long-term debt........................................................................ 301,427 382,554
Redeemable preferred stock............................................................ -- 96,792
Stockholders' deficit:
Common stock........................................................................ 608 385
Additional paid-in capital.......................................................... 406,728 96,012
Accumulated deficit................................................................. (827,672) (904,005)
------------ ------------
(420,336) (807,608)
Less treasury shares, at cost....................................................... -- --
------------ ------------
Total stockholders' deficit....................................................... (420,336) (807,608)
------------ ------------
Total liabilities and stockholders' deficit....................................... $ 8,294 $ 12,566
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to condensed financial statements.
36
<PAGE>
SCHEDULE III
DR PEPPER/SEVEN-UP COMPANIES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF OPERATIONS
THREE YEARS ENDED DECEMBER 31, 1993
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
1993 1992 1991
---------- ------------ ----------
<S> <C> <C> <C>
Equity in earnings of Dr Pepper/Seven-Up Corporation....................... $ 78,245 $ 33,012 $ 23,700
Other income (expense):
Interest expense......................................................... (35,126) (71,513) (68,019)
Other, net............................................................... (351) 343 1,802
---------- ------------ ----------
Total other income (expense)........................................... (35,477) (71,170) (66,217)
---------- ------------ ----------
Income (loss) before income taxes, extraordinary items and cumulative
effect of accounting change........................................... 42,768 (38,158) (42,517)
Income tax benefit......................................................... (51,356) (29,744) (22,556)
---------- ------------ ----------
Income (loss) before extraordinary items and cumulative effect of
accounting change..................................................... 94,124 (8,414) (19,961)
Extraordinary items:
Benefit from utilization of net operating loss carryforwards............. -- -- (1,022)
Extinguishments of debt, less applicable income taxes.................... 16,199 56,934 18,566
Cumulative effect of accounting change..................................... -- 74,800 --
---------- ------------ ----------
Net income (loss)...................................................... 77,925 (140,148) (37,505)
Preferred stock dividend requirements...................................... -- 12,941 11,882
---------- ------------ ----------
Net income (loss) attributable to outstanding common stock............. $ 77,925 $ (153,089) $ (49,387)
---------- ------------ ----------
---------- ------------ ----------
Loss per common share:
Income (loss) before extraordinary items and cumulative effect of
accounting change....................................................... $ 1.46 $ (.60) $ (.90)
Extraordinary items...................................................... (.25) (1.60) (.49)
Cumulative effect of accounting change................................... -- (2.11) --
---------- ------------ ----------
Net income (loss)...................................................... $ 1.21 $ (4.31) $ (1.39)
---------- ------------ ----------
---------- ------------ ----------
</TABLE>
See accompanying notes to condensed financial statements.
37
<PAGE>
SCHEDULE III
DR PEPPER/SEVEN-UP COMPANIES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
THREE YEARS ENDED DECEMBER 31, 1993
(IN THOUSANDS)
<TABLE>
<CAPTION>
1993 1992 1991
---------- ------------ ----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)........................................................ $ 77,925 $ (140,148) $ (37,505)
Amortization of debt discounts and deferred debt issuance costs.......... 35,126 65,302 68,019
Debt restructuring charge................................................ 3,790 6,104 --
Income taxes............................................................. (51,356) (31,411) (23,578)
Equity in undistributed (earnings) losses of Dr Pepper/Seven-Up
Corporation (73,125) 91,102 --
---------- ------------ ----------
Net cash provided by (used in) operating activities.................... (7,640) (9,051) 6,936
---------- ------------ ----------
Cash flows from investing activities:
Sales (purchases) of marketable securities with maturities less than
three months, net....................................................... -- 31,166 (31,166)
Purchases of marketable securities....................................... -- (312,108) (147,053)
Sales of marketable securities........................................... -- 366,733 92,428
(Increase) decrease in long-term note receivable from Dr Pepper/Seven-Up
Corporation............................................................. -- 6,501 (3,350)
---------- ------------ ----------
Net cash provided by (used in) investing activities.................... -- 92,292 (89,141)
---------- ------------ ----------
Cash flows from financing activities:
Proceeds from long-term debt............................................. -- 375,001 --
Payments on long-term debt............................................... (115,512) (543,738) --
Payments of refinancing costs............................................ -- (12,725) --
Proceeds from sale of common stock....................................... 305,366 -- --
Advances (to) from Dr Pepper/Seven-Up Corporation........................ (84,622) 97,633 --
Repurchase of preferred stock............................................ (98,383) -- --
Dividends paid by Dr Pepper in excess of net earnings.................... -- -- 78,866
Other.................................................................... 791 588 (290)
---------- ------------ ----------
Net cash provided by (used in) financing activities.................... 7,640 (83,241) 78,576
---------- ------------ ----------
Net decrease in cash and cash equivalents.................................. -- -- (3,629)
Cash and cash equivalents at beginning of year............................. -- -- 3,629
---------- ------------ ----------
Cash and cash equivalents at end of year................................... $ -- $ -- $ --
---------- ------------ ----------
---------- ------------ ----------
</TABLE>
See accompanying notes to condensed financial statements.
38
<PAGE>
SCHEDULE III
DR PEPPER/SEVEN-UP COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1993
(1) GENERAL
The accompanying condensed financial statements of Dr Pepper/Seven-Up
Companies, Inc. (Company) should be read in conjunction with the consolidated
financial statements of the Company included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1993.
(2) INVESTMENTS
The Company's investment in Dr Pepper/Seven-Up Corporation (DP/7UP) includes
cumulative advances from DP/7UP of $13,481,000 at December 31, 1993.
(3) OBLIGATIONS, GUARANTEES AND COMMITMENTS
As of December 31, 1993, the Company had long-term debt of $301,427,000 in
the form of 11 1/2% Senior Subordinated Discount Notes due 2002. In addition,
the Company has guaranteed the obligations under the DP/7UP Credit Agreement.
See note 3 to the consolidated financial statements regarding these obligations.
Also see notes 6, 7 and 10 to the consolidated financial statements of the
Company.
39
<PAGE>
SCHEDULE VII
DR PEPPER/SEVEN-UP COMPANIES, INC. AND SUBSIDIARIES
GUARANTEES OF SECURITIES OF OTHER ISSUERS
DECEMBER 31, 1993
<TABLE>
<CAPTION>
AMOUNT OWNED BY
NAME OF ISSUER OF PERSON OR AMOUNT IN TREASURY
SECURITIES GUARANTEED BY TITLE OF ISSUE OF TOTAL AMOUNT PERSONS FOR OF ISSUER OF
PERSON FOR WHICH EACH CLASS OF GUARANTEED AND WHICH STATEMENT SECURITIES NATURE OF
STATEMENT IS FILED SECURITIES GUARANTEED OUTSTANDING IS FILED GUARANTEED GUARANTEE
- ------------------------ --------------------- ---------------- ---------------- ------------------ ----------------
<S> <C> <C> <C> <C> <C>
Guarantee of
Dr Pepper/Seven-Up principal and
Corporation Credit Agreement $ 574,000,000 -- -- interest
<CAPTION>
NATURE OF ANY DEFAULT BY
ISSUER OF SECURITIES
NAME OF ISSUER OF GUARANTEED IN PRINCIPAL,
SECURITIES GUARANTEED BY INTEREST, SINKING FUND OR
PERSON FOR WHICH REDEMPTION PROVISIONS, OR
STATEMENT IS FILED PAYMENT OF DIVIDENDS
- ------------------------ --------------------------
<S> <C>
Dr Pepper/Seven-Up
Corporation None
</TABLE>
See accompanying independent auditors' report.
40
<PAGE>
SCHEDULE VIII
DR PEPPER/SEVEN-UP COMPANIES, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)
<TABLE>
<CAPTION>
BALANCE AT
BEGINNING CHARGED TO CHARGED TO BALANCE AT
OF COSTS AND OTHER END OF
DESCRIPTION PERIOD EXPENSES ACCOUNTS DEDUCTIONS PERIOD
- --------------------------------------------- ----------- ----------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1993:
Allowance for doubtful accounts............ $ 1,573 $ 274 $ -- $ 110 $ 1,737
----------- ----------- ----------- ------------- ------------
----------- ----------- ----------- ------------- ------------
Accumulated amortization of intangible
assets.................................... $ 96,357 $ 15,077 $ -- $ -- $ 111,434
----------- ----------- ----------- ------------- ------------
----------- ----------- ----------- ------------- ------------
Accumulated amortization of deferred debt
issuance costs............................ $ 1,508 $ 7,203 $ -- $ -- $ 8,711
----------- ----------- ----------- ------------- ------------
----------- ----------- ----------- ------------- ------------
Year ended December 31, 1992:
Allowance for doubtful accounts............ $ 1,466 $ 399 $ -- $ 292 $ 1,573
----------- ----------- ----------- ------------- ------------
----------- ----------- ----------- ------------- ------------
Accumulated amortization of intangible
assets.................................... $ 81,245 $ 15,112 $ -- $ -- $ 96,357
----------- ----------- ----------- ------------- ------------
----------- ----------- ----------- ------------- ------------
Accumulated amortization of deferred debt
issuance costs............................ $ 31,317 $ 8,484 $ -- $ 38,293(1) $ 1,508
----------- ----------- ----------- ------------- ------------
----------- ----------- ----------- ------------- ------------
Year ended December 31, 1991:
Allowance for doubtful accounts............ $ 1,764 $ 460 $ -- $ 758 $ 1,466
----------- ----------- ----------- ------------- ------------
----------- ----------- ----------- ------------- ------------
Accumulated amortization of intangible
assets.................................... $ 66,090 $ 15,155 $ -- $ -- $ 81,245
----------- ----------- ----------- ------------- ------------
----------- ----------- ----------- ------------- ------------
Accumulated amortization of deferred debt
issuance costs............................ $ 32,940 $ 7,412 $ -- $ 9,035(1) $ 31,317
----------- ----------- ----------- ------------- ------------
----------- ----------- ----------- ------------- ------------
<FN>
- ------------------------
(1) Represents write-off of the accumulated amortization of deferred debt
issuance costs in connection with extinguishments of debt.
</TABLE>
See accompanying independent auditors' report.
41
<PAGE>
SCHEDULE X
DR PEPPER/SEVEN-UP COMPANIES, INC. AND SUBSIDIARIES
SUPPLEMENTARY INCOME STATEMENT INFORMATION
CHARGED TO COSTS AND EXPENSES
THREE YEARS ENDED DECEMBER 31, 1993
(IN THOUSANDS)
<TABLE>
<CAPTION>
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
Amortization of intangible assets.......................................... $ 15,077 $ 15,112 $ 15,155
----------- ----------- -----------
----------- ----------- -----------
Amortization of deferred debt issuance costs............................... 7,203 8,484 7,412
----------- ----------- -----------
----------- ----------- -----------
Advertising and promotion.................................................. 300,035 271,675 247,893
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
42
<PAGE>
FIRST AMENDMENT TO CREDIT AGREEMENT
-----------------------------------
FIRST AMENDMENT (the "Amendment"), dated as of October 26, 1992, among DR
PEPPER COMPANY, a Delaware corportion ("Dr Pepper"), THE SEVEN-UP COMPANY, a
Delaware corporation ("Seven-Up") (and their successor by merger, "Dr
Pepper/Seven-Up Corporation"), DR PEPPER/SEVEN-UP COMPANIES, INC., a Delaware
corporation (the "Guarantor"), the Banks party hereto, BANKERS TRUST COMPANY,
NATIONSBANK OF NORTH CAROLINA, N.A. and THE CHASE MANHATTAN BANK, N.A., as
Managing Agents, the Co-Agents, the Lead Managers and BANKERS TRUST COMPANY, as
Administrative Agent. All capitalized terms used herein and not otherwise
defined shall have the respective meanings provided such terms in the Credit
Agreement referred to below.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Dr Pepper, Seven-Up, the Guarantor and the Banks are parties to a
Credit Agreement dated as of October 20, 1992 (the "Credit Agreement);
WHEREAS, the parties hereto wish to amend the Credit Agreement as herein
provided;
NOW, THEREFORE, it is agreed:
1. On the Amendment Effective Date (as defined below), the Credit
Agreement shall be amended by deleting each of Schedule VIII and XI thereto in
its entirety and by inserting in lieu thereof a new Schedule VIII and XI in the
form of Exhibits A and B hereto, respectively.
2. On the Amendment Effective Date, Exhibit G to the Credit Agreement
shall be amended by deleting each of Annex A, C, E, G and H thereto in its
entirety and by inserting in lieu thereof a new Annex A, C, E, G and H in the
form of Exhibits C, D, E, F and G hereto.
3. This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provision of the Credit
Agreement or any other Credit Document.
<PAGE>
4. This Amendment may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts shall be lodged with the Company and the Administrative Agent.
5. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF
NEW YORK.
6. This Amendment shall become effective on the date (the "Amendment
Effective Date") when the Company, the Guarantor and the Required Banks shall
have signed a copy hereof (whether the same or different copies) and shall have
delivered (including by way of telecopier) the same to the Administrative Agent
at its Notice Office.
7. From and after the Amendment Effective Date, all references in the
Credit Agreement and each of the Credit Documents to the Credit Agreement shall
be deemed to be references to such Credit Agreement as amended hereby.
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Amendment to be duly executed and delivered as of the date first above
written.
DR PEPPER COMPANY
By /s/
----------------------------
THE SEVEN-UP COMPANY
By /s/
----------------------------
DR PEPPER/SEVEN-UP COMPANIES, INC.
By /s/
----------------------------
-2-
<PAGE>
EXHIBIT B
---------
SCHEDULE XI - LITIGATION
1. Sidney J. Steiner, the landlord under the Dr Pepper/Seven-Up Companies,
Inc. (the "Company") former lease covering its former headquarters facilities in
Dallas, Texas and Harbord Midtown, a Texas partnership, filed suit against the
Company in the 95th Judicial District Court, Dallas County, Texas, on May 25,
1988 in connection with the Company's move of its corporate headquarters.
Plaintiffs allege that the Company breached an oral agreement to lease space in
a new office building the landlord planned to construct on such premises.
Plaintiffs seek to recover $470,000 in architectural fees and other costs
claimed to have been incurred as a result of such agreement and the landlord
claims to have suffered $24 million in other damages as a result of the
Company's alleged breach. Additionally, on October 12, 1989 Plaintiffs amended
the complaint to include allegations that the Company fraudulently
misrepresented the existence of asbestos in the Company's former headquarters
facilities, which were purchased by the landlord and leased back to the Company
in 1985. Plaintiffs claim damages of approximately $4 million related to these
new allegations.
2. On February 26, 1992, The Seven-UP Company ("Seven-Up") filed a lawsuit in
State District Court in Dallas County, Texas against The Coca-Cola Company
("Coke") alleging, among other things tortious interference with Seven-Up's
existing contractual relationships with those licensed 7UP bottlers who also
bottle products of Coke and unfair competition. Coke has answered Seven-Up's
complaint, and has denied the allegations contained therein. This suit, which
is presently in the preliminary stages of discovery, requests unspecified
compensatory damages and punitive damages.
3. On October 21, 1991, the Company and Harold A Honickman ("Honickman," and
together with the Company, the "Plaintiffs") filed suit in the United States
District Court for the District of Columbia against the Federal Trade Commission
("FTC"). Honickman is the owner of Pepsi-Cola Bottling Company of New York,
Inc. ("Pepsi-New York"), the licensed bottler of Pepsi products in the New York
metropolitan area. The suit originally arose from the FTC's denial of
Honickman's application to acquire the license to distribute 7UP products in the
Brooklyn, New York licensed territory (the "Brooklyn Territory"). Seven-Up
proposed to transfer the license to Pepsi-New York following the bankruptcy and
subsequent cessation of business operations by the bottler that previously held
the license to distribute 7UP products in the Brooklyn Territory. Honickman was
required to submit the proposed acquisition of such license to the FTC for
approval pursuant to the terms of a consent order (the "Consent Order") entered
into between the FTC and Honickman in connection with the settlement of a prior
dispute. The suit alleges, among other things, that the FTC's denial of
Honickman's application to acquire the license to distribute 7UP products in the
Brooklyn Territory was arbitrary and capricious under the Administrative
Procedure Act. Although the
<PAGE>
FTC denied Honickman's application to acquire the license for the Brooklyn
Territory, the FTC granted Honickman's application to allow distribution of 7UP
products in the Brooklyn Territory through Pepsi-New York on an interim basis
pending the outcome of the suit. On July 21, 1992, the Court affirmed the FTC's
motion for summary judgment and dismissed the suit. The plaintiffs have
appealed the Court's ruling. The District Court has enjoined the FTC from
terminating the distribution of 7UP products by Pepsi-New York in the Brooklyn
Territory on a Temporary basis during the pendency of the appeal.
4. The licensed bottler of 7UP products in the New Rochelle, New York Licensed
territory (the "New Rochelle Territory and together with the Brooklyn
Territory, the "Territories") ceased operations on October 18, 1991 and filed
for voluntary bankruptcy on June 5, 1992. On October 24, 1992, Honickman
applied to the FTC for, among other things, (i) a declaration that the Consent
Order does not require prior approval of Pepsi-New York's acquisition of the
license to distribute 7UP products in the New Rochelle Territory and
(ii) authorization to distribute 7UP products in the New Rochelle Territory
trough Pepsi-New York on a temporary basis pending the decision as to the
applicability of the Consent Order to this proposed license transfer. To date,
the FTC has not formally acted on that declaration request. In December 1991,
after amending the Brooklyn complaint, Plaintiffs requested relief from the
District Court by allowing New York Pepsi's interim distribution of 7UP Products
in the New Rochelle Territory on a temporary basis. The Court denied the
Plaintiff's request and, as a result, no authorized distribution of 7UP products
currently exists in that portion of the New Rochelle Territory lying in the
state of New York.
5. An individual holder ("Holder") of the Company's warrants has alleged that
the Company, through its representatives, has made certain misrepresentations
about the warrants, and has stated that he intends to file a class action suit.
In addition to the misrepresentations describe above, the allegations in this
potential lawsuit, would, according to the Holder, include a claim that a
"Triggering Event" occurred under the Warrant Agreement, dated October 1,
1988,between the Company and The First National Bank of Boston, thus entitling
warrantholders to exchange their warrants for shares of the Company's common
stock. The Company believes that these allegations, and any class action suit
that may arise therefrom, are meritless.
<PAGE>
EXHIBIT D
---------
ANNEX C -- INVENTORY AND EQUIPMENT LOCATIONS
Dr Pepper/Seven-Up Headquarters
8144 Walnut Hill Lane
Dallas, TX 75231
County: Dallas
Dr Pepper/Seven-Up
Product & Technical Center
8900 Page Avenue
St. Louis, MO 63114
County: St. Louis
Grader Street Warehouse
11095 Grader Street
Dallas, TX 75238
County: Dallas
Dr Pepper Eastern Region Office
5955 T.G. Lee Boulevard
Suit 435
Orlando, Fl 32822
County: Orange
Seven-Up Eastern Region Office
8850 Stanford Boulevard
Suite 2500
Columbia, MD 21045
County: Howard
Seven-Up Central Office
10985 Cody
Suite 115
Overland Park, KS 66210
County: Johnson
Dr Pepper Northern Region Office
901 Warrenville Road
Lisle, IL 60532-1359
County: DuPage
Dr Pepper Western Region Office
16955 Via Del Campo
Suite 210
San Diego, CA 92127
County: San Diego
Canada Dry Bottling Co.
2411 High Point Road
Greensboro, NC 27403
County: Guilford
<PAGE>
GTS
4749 Bennett Drive
Suite B
Livermore, CA 94550
County: Alameda
Rolling Mills, Inc.
3000 Shelby St.
Building 6
Indianapolis, IN 46227
County: Marion
La Grou Distribution
3514 South Kostner Avenue
Chicago, IL 60632-3818
County: Cook
J. Dall Thomas & Co., Inc.
1235 Sams Avenue
Harahan, LA 70121
Parish: Jefferson
Shasta Beverages, Inc.
301 South 29th Street
Phoenix, AZ 85034
County: Maricopa
Shasta Beverages, Inc.
14405 E. Artesia
La Mirada, CA 90638
County: Los Angeles
Texas Beverage Packers, Inc.
4238 Director Drive
San Antonio, TX 78219
County: Bexar
Shasta Beverages Inc.
6750 Moravia Park Drive
Baltimore, MD 21237
County: Baltimore City
Shasta Beverages Inc.
1165 Palmour Drive
Gainesville, GA 30501
County: Hall
Green Bay Seven-Up Bottling
920 Packerland Drive
Green Bay, WI 54303
County: Brown
<PAGE>
Shasta Beverages Inc.
4685 Groveport Road
Columbus, OH 43207
County: Franklin
Shasta Beverages, Inc.
9901 Widmer Road
Lenexa, KS 66215
County: Johnson
Pepsi-Cola Bottling Co.
2505 N.W. Pacific
Portland, OR 97232
County: Multnomah
Columbia Beverage Co.
4301 N. Broadway
Denver, CO 80216
County: Denver
Shasta Beverages, Inc.
2221 Hwy. 44W
Eustis, FL 32726
County: Lake
Capital Beverage Packers
2670 Land Avenue
Sacramento, CA 95851
County: Sacramento
Temple Bottling Co.
3414 Center Street
Temple, TX 76501
County: Bell
Seven-Up Bottling Company
555 McDonnell Blvd.
Hazelwood, MO 63042
County: St. Louis
Crystal Soda Water Company
425 Franklin Avenue
Scranton, PA 18503
County: Lackawanna
Kelley-Clarke, Aikane Div.
2688 Waiwai Loop
Honolulu, HI 96819
County: Honolulu
Detroit Warehouse Company
12885 Eaton Avenue
Detroit, MI 45227
County: Wayne
<PAGE>
A&M Warehouse
7015 S. 234th Street
Kent, WA 98032
County: King
Certified Warehouse & Transfer Company
430 N. Neil Armstrong Road
Salt Lake City, UT 84153
County: Salt Lake
Murphy Warehouse Company
701 24th Avenue S.E.
Minneapolis, MN 55414
County: Hennepin
Suhr Transport
#1 Huffman Court
Great Falls, MT 59404
County: Cascade
Rolling Mills, Inc.
P.O. Box 1826
Indianapolis, IN 46206
County: Marion
Rudis Wilhelm Warehouse Co.
12100 South East Jennifer Street
Warehouse #6
Clackamas, OR 97015
(Warehouse)
P.O. Box 22226
Milwaukie, OR 97222
(Office)
County: Clackamas
Graham Distribution Center
8970 Deerfield Drive
Olive Branch, MS 38654
County: DeSoto
Diamond Traffic Warehouse
7670 Canton Center Dr.
Baltimore, MD 21224
County: Baltimore City
<PAGE>
EXHIBIT E
---------
ANNEX E
DOMESTIC TRADEMARKS
REGISTRATIONS
- -------------
<TABLE>
<CAPTION>
SIGNIFICANT
MARKS REG. NO. CLASS RENEWAL STATUS MARKS
- ----- -------- ----- ------- ------ -----
<S> <C> <C> <C> <C> <C>
BIG TOP 1,191,310 32 03/02/2002 Registered
03/02/1982
BOOMER 763,206 32 01/14/2004 Renewed
01/14/1994
BOTTLE DESIGN 1,006,745 32 03/11/1995 Registered
03/11/1975
CENTURY II 1,446,886 42 07/07/2007 Registered
07/07/1987
CLOCK DIAL 1,227,490 16 02/15/2003 Registered
& Design 02/15/1983
CLOCK DIAL 418,485 32 08/24/2006 Renewed
(original #1) 08/24/1986
DIMENSION III 1,614,389 42 09/26/2000 Registered
09/18/1990
DOC 732,784 32 06/12/2002 Renewed
06/12/1982
DOCTOR 1,181,420 32 12/08/2001 Registered
12/08/1981
DR 1,181,419 32 12/08/2001 Registered
12/08/1981
DR PEPPER 50,668 32 08/29/2006 Renewed
(stylized) 08/29/1986
DR PEPPER 561,181 32 07/08/1992 Renewed YES
(print) 07/08/1972
DR PEPPER 312,774 32 05/08/1994 Renewed
(on tile) 05/08/1974
DR PEPPER 675,747 32 03/17/1999 Renewed
(bottle design) 03/17/1979
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SIGNIFICANT
MARKS REG. NO. CLASS RENEWAL STATUS MARKS
- ----- -------- ----- ------- ------ -----
<S> <C> <C> <C> <C> <C>
DR PEPPER 1,214,258 32 10/26/2002 Registered
(bottle design) 10/26/1982
DR PEPPER 1,257,777 32 11/15/2003 Registered
(red oval) 11/15/1983
DR PEPPER 1,406,982 30 08/26/2005 Registered
(Bubble gum) 08/26/1986
DR PEPPER 1,577,882 25 01/16/2000 Registered
(clothing) 01/16/1990
DR PEPPER 1,595,462 24 05/08/2000 Registered
(towels) 05/08/1990
DR PEPPER 422,552 32 07/30/2006 Renewed
GOOD FOR LIFE 07/30/1986
DR PEPPER 1,084,999 32 02/07/1998 Registered
LIGHT 02/07/1978
DR PEPPER 1,034,030 32 02/17/1996 Registered
The most original 02/17/1976
soft drink ever
HUSTLE 1,022,199 32 10/07/1995 Registered
10/07/1975
I.B.C. 0,392,962 32 01/20/2002 Renewed YES
1/20/1982
I.B.C 1,065,917 32 05/17/1997 Registered
05/17/1977
I'M A PEPPER 1,242,922 25 06/21/2003 Registered
(clothing) 06/21/1983
IT'S AS EASY 1,082,833 32 01/17/1998 Registered
AS I.B.C. 01/17/1978
IT'S AS SIMPLE 1,085,540 32 02/14/1998 Registered
AS I.B.C. 02/14/1978
PEPPER 810,205 32 06/21/2005 Renewed
06/21/1985
PEPPER-UP 956,577 32 04/03/1993 Registered
AT 10, 2 & 4 04/03/1973
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
MARKS REG. NO. CLASS RENEWAL STATUS MARKS
- ----- -------- ----- ------- ------ -----
<S> <C> <C> <C> <C> <C>
SALUTE 721,090 32 01/19/2002 Renewed
01/19/1982
SOCCER PEPPER 1,105,310 41 10/31/1998 Registered
10/31/1978
STILL THE 1,070,729 32 08/02/1997 Registered
BEST 08/02/1977
10, 2 & 4 685,236 32 07/17/1999 Renewed
encircled 07/17/1970
for carton
WACO 720,071 32 01/25/2002 Renewed
01/26/1982
BEAT 1,173,533 32 10/13/2001 Registered
19/13/1981
CHEER UP 617,562 32 12/13/1995 Renewed
12/13/1975
CHEER UP 340,923 32 11/24/1996 Renewed
11/24/1976
CHEER UP 151,791 30 02/14/2002 Renewed
(stylized) 02/14/1982
CHERRY 7UP 1,676,044 32 02/18/2002 Registered YES
02/19/1992
CHERRY UP 1,676,950 32 02/25/2002 Registered
02/25/1992
COUNTRY DRY 199,045 32 06/02/2005 Renewed
06/02/1985
DIET 7UP 1,170,483 32 09/22/2001 Registered YES
09/22/1981
DIXI and Design 1,049,793 32 10/05/1996 Registered
10/05/1976
DIXI COLA 950,438 32 01/09/1993 Registered
and Design 01/09/1973
DOUBLE SEVEN 363,988 32 11/17/1999 Renewed
01/17/1979
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
SIGNIFICANT
MARKS REG. NO. CLASS RENEWAL STATUS MARKS
- ----- -------- ----- ------- ------ -----
<S> <C> <C> <C> <C> <C>
FEELS SO GOOD 1,423,167 32 12/30/2006 Registered
COMING DOWN! 12/30/1986
FRESH UP WITH 822,451 32 01/17/2007 Renewed
7UP 01/17/1987
FRESH UP WITH 632,795 32 08/14/1996 Renewed
7UP & DESIGN 08/14/1976
HISPANIC HERITAGE 74/307215 35 Pending App. Filed
AWARDS (design) 08/24/1992
HISPANIC HERITAGE 74/284865 35 Pending App. Filed
AWARDS (words)* 08/24/1992
HOWDY 136,021 32 10/26/2000 Renewed
10/26/1980
HOWDY 807,320 32 04/19/2005 Renewed
04/19/1986
JUICEUP 1,409,753 32 09/16/2006 Registered
09/16/1986
LIKE 769,645 32 05/12/2004 Renewed
05/12/1984
LIKE 805,659 32 03/15/2006 Renewed
03/15/1986
MARBERT 1,390,180 32 04/15/2006 Renewed
04/15/1986
NOTHING DOES 677,395 32 04/21/1999 Renewed
IT LIKE 04/21/1979
SEVEN-UP!
ROWDY 1,490,426 32 05/31/2008 Registered
05/31/1988
7UP LOGO 1,168,622 32 09/08/2001 Registered
(1980) & 09/08/1981
LABEL DESIGN
7UP LOGO 1,558,341 32 09/26/2009 Registered YES
09/26/1989
7UP & DESIGN 331,345 32 01/07/1995 Renewed
01/07/1976
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
MARKS REG. NO. CLASS RENEWAL STATUS MARKS
- ----- -------- ----- ------- ------ -----
<S> <C> <C> <C> <C> <C>
7UP 801 ,421 32 01/04/2005 Renewed
01/04/1986
7-UP 1,576,040 32 02/18/2002 Registered YES
02/18/1992
7UP & DESIGN 595,639 32 09/21/1994 Registered
09/21/1974
7UP (stylized) 74/285170 21 Pending App. Filed
06/12/1992
SEVEN 1,144,446 32 12/23/2000 Registered
12/23/1980
SEVEN-UP 816,189 32 10/14/2006 Renewed YES
10/14/1986
SEVEN-UP 754,309 30 08/06/2003 Renewed
08/06/1983
SEVEN-UP 252,350 32 02/05/2009 Renewed
02/05/1989
SPOT 1,594,973 9,25,28 05/08/2000 Registered
05/08/1990
SUNBRELA 1,172,518 32 10/06/2001 Registered
10/06/1981
THE 7UP LEADER 778,531 38 10/13/2004 Renewed
10/13/1984
THE UNCOLA 1,001,831 32 01/14/1995 Registered
01/14/1975
*THE UNCOLA 74/285171 21 Pending App. Filed
06/12/1992
TWILIGHT 1,171,531 32 09/29/2001 Registered
09/29/1981
UNCOLA 1,002,985 30 01/28/1995 Registered
01/28/1975
UNCOLA 1,201,356 32 07/13/2002 Registered
07/13/1982
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
SIGNIFICANT
MARKS REG. NO. CLASS RENEWAL STATUS MARKS
- ----- -------- ----- ------- ------ -----
<S> <C> <C> <C> <C> <C>
YOU LIKE IT. 624,588 32 04/03/1996 Renewed
IT LIKES YOU. 04/13/1976
</TABLE>
*HISPANIC HERITAGE AWARDS (words) - Received Office Action 09/23/92. Examining
attorney refuses registration because "the proposed mark merely described the
services...mark is merely descriptive under the Trademark Act...thus, the
proposed mark....merely describes a characteristic or feature of its services,
namely conducting and sponsoring awards programs to recognize the achievement of
persons of Spanish or Latin American heritage.
*THE UNCOLA (stylized) - Received Office Action 09/25/92. Examining attorney
refused application because (a) identification of goods is unacceptable (e.g.,
"glasses") which may be amended to "drinking glasses"; (b) method of use clause
should be amended to "mark is applied to the goods"; and (c) prior registrations
of Nos. 1,001,831, 1,002,985 and 1,201,356 should be claimed. An answer to
office answer will be filed to correct these deficiencies.
6
<PAGE>
EXHIBIT F
---------
ANNEX G
PATENTS
REGISTRATION
PATENT NO. DESCRIPTION OF ITEM DATE
- ---------- ------------------- ------------
292,519 Vending machine or 10/27/87
similar article
280,773 Ornamental design for 09/24/85
bottle carrier
318,071 vending machine or 07/09/91
similar article
318,072 vending machine or 07/09/91
similar article
101,352 vending machine or 09/28/87
similar article
4,342,399 composite bottle 08/03/82
4,356,681 Method and Apparatus for 11/02/82
Heating containers Having
a Product Liquid Therein
<PAGE>
EXHIBIT
ANNEX H
COPYRIGHTS
<TABLE>
<CAPTION>
REG EXP.
TITLE REGISTRATION NO. DATE DATE
<S> <C> <C> <C>
ANTHROPOLOGY PA 432 142 10/23/89 10/12/2017
BACHELOR SR 82-701 05/08/87 05/08/2015
BAD CASE SR 85-655 10/01/87 10/01/2015
BASEBALL PA 523-973 01/27/92 01/27/2020
BE A PEPPER EU 847-992 12/05/77 12/05/2014
BE A PEPPER SR 54-311 07/18/84 07/18/2009
BE A PEPPER BOATS REVIEW PA 66-454 04/15/80 04/15/2008
BE A PEPPER BOATS REVIEW 2 PA 66-455 04/15/80 04/15/2008
BE A PEPPER EATING REVIEW PA 66-456 04/15/80 04/15/2008
BE A PEPPER ENGAGED COUPLE PA 5-191 03/30/78 03/30/2006
BE A PEPPER FOUNTAIN PA 5-190 03/30/78 03/30/2006
BE A PEPPER LITTLE LEAGUER PA 5-198 03/30/78 03/30/2006
BE A PEPPER - PABLO CRUISE SR 54-311 07/18/84 07/18/2012
BE A PEPPER PIED PIPER PA 5-195 03/30/78 03/30/2006
- CROSS COUNTRY
BE A PEPPER PIED PIPER PA 5-194 03/30/78 03/30/2006
- MAIN STREET
BE A PEPPER PEPPERETTES PA 152-306 02/10/82 02/10/2010
BE A PEPPER REVOLVING ROOM PA 152-307 02/10/82 02/10/2010
BE A PEPPER SOCCER PA 5-192 03/30/78 03/30/2006
BE A PEPPER SUPER STARS PA 5-193 03/30/78 03/30/2006
BE A PEPPER TRAINS REVIEW PA 66-453 04/15/80 04/15/2008
BE A PEPPER WHEELS REVIEW PA 66-457 04/15/80 04/15/2008
BE A PEPPER WHISTLING PA 115-121 08/21/84 08/21/2012
BE A PEPPER II GUS PA 50-946 12/11/78 12/11/2006
BE A PEPPER II ROOKIE PA 50-947 12/11/78 12/11/2006
BE A PEPPER II SPARKLES PA 50-945 12/11/78 12/11/2005
BE A PEPPER '81 PA 115-120 08/21/81 08/21/2009
BE A PEPPER '81 WHISTLING PA 115-122 08/21/81 08/21/2009
BE A PEPPER '82 SCOTT BAIO PA 152-309 12/07/81 12/07/2009
BE A PEPPER '82 RAY BOLGER PA 152-312 12/07/81 12/07/2009
BELLRINGER PA 290-896 05/22/84 05/22/2012
BILLIARDS PA 523-968 01/27/92 01/27/2020
BROTHERS PA 432-141 10/23/89 10/23/2018
BULL MOOSE PA 433-845 10/23/89 10/23/2018
CASE OF THE DR PEPPER A 343-819 02/06/72 02/06/2009
BOTTLING COMPANY OF DENVER
CASE OF DR PEPPER A 343-819 02/05/72 02/06/2009
BOTTLING COMPANY OF LITTLE ROCK
CASE OF DR PEPPER BOTTLING COMPANY A 343-820 02/07/72 02/07/2009
OF BALTIMORE
CASE OF RKO BOTTLERS OF A 343-817 02/06/72 02/06/2009
MEMPHIS, INC.
CASE: SOCCER PEPPER YOUTH SOCCER A 859-369 01/15/77 01/15/2014
COMPETITION
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
REG EXP.
TITLE REGISTRATION NO. DATE DATE
<S> <C> <C> <C>
CHARGE! GET GOIN' AGAIN! EP 237-521 09/25/67 09/26/2004
CHELLIST PA 338-320 09/18/87 09/18/2015
CHEMISTRY PA 361-579 03/03/88 03/03/2016
CHERUB'S KISS VA 86-671 08/31/81 08/31/2009
CHINA SHOP PA 553-927 02/03/92 02/03/2020
COLAPOLIS PA 317-038 11/24/86 11/24/2014
COLA WARS PA 317-037 11/24/86 11/24/2014
COMMUTER PA 553-020 01/27/92 01/27/2020
COMPUTER PA 345-468 09/18/87 09/18/2015
COOKIN WITH DR PEPPER A 800-346 10/22/65 10/22/2002
COUNTRY DUET SR 82-333 07/07/86 07/07/2014
CORPORATE EXECUTIVE PA 330-092 06/10/87 06/10/2015
COWBOY PA 523-969 01/27/92 01/27/2020
DAMSEL SR 82-049 06/08/87 06/08/2015
DAMSEL IN DISTRESS PA 329-287 06/10/87 06/10/2015
DATING PA 523-966 01/27/92 01/27/2020
DEEP SEA/UNDERWATER PA 553-928 02/03/92 02/03/2020
DETECTIVE PA 280-898 05/22/84 05/22/2012
DIGNITARIES PA 290-900 05/22/84 05/22/2012
DOCTOR DOCTOR SR 89-516 05/08/88 05/08/2016
DOCTOR'S ORDERS SR 101-474 03/04/88 03/04/2016
DINER PA 361-580 03/08/88 03/08/2016
DR PEPPER DOLLAR MAN TX 910-209 05/24/82 05/24/2010
DR PEPPER LITTLE MAN R 559-532 2/4/46;2/4/74; 02/04/2011
DROIDS PA 317-039 11/24/86 11/24/2014
FASHION PA 523-971 01/27/92 01/27/2020
GENIE PA 285-169 03/10/86 03/10/2014
GLOSSARY OF SOFT DRINK TX1840-356 12/31/85 12/31/2013
INDUSTRY TERMS
GODDESS AND GUYS PA 433-844 10/23/89 10/23/2017
GODDESS AND GUYS WITH TAG PA 432-144 10/23/89 10/23/2017
GODDESS IN GEAR PA 433-842 10/23/89 10/23/2017
GODDESS IN GYM PA 433-848 10/23/89 10/23/2017
GODZILLA PA 285-167 03/10/86 03/10/2014
GODZILLA TOO PA 317-041 11/24/86 11/24/2014
GOOD LOVIN' SR 84-386 10/01/87 10/01/2015
GOODBYE SUBURBIA PA 319-667 11/24/86 11/24/2014
ICE COLD SR 83-330 07/07/87 07/07/2015
INTERSECTION PA 553-925 02/03/92 02/03/2020
JUNGLEMAN PA 290-897 05/22/84 05/22/2012
JUST WHAT THE DR ORDERED SR 82-934 07/09/87 07/09/2015
LAST MEAL PA 290-895 05/22/84 05/22/2012
LIFE'S A BEACH PA 319-665 11/24/86 11/24/2014
LIKE NOTHIN' ELSE PA 523-970 01/27/92 01/27/2020
LITTLE RED PA 285-170 03/10/86 03/10/2014
LIVING IN THE PASSIN' LANE SR 82-818 07/06/87 07/06/2015
LUCCI, SUSAN PA 361-585 03/03/88 03/03/2016
LUCCI, SUSAN SR 90-237 03/07/88 03/07/2016
MARIE PA 290-899 05/22/84 05/22/2012
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
REG. EXP.
TITLE REGISTRATION NO. DATE DATE
<S> <C> <C> <C>
MOVIE PA 553-926 02/03/92 02/03/2020
NAUGHTON, DAVID PA 361-578 03/03/88 03/03/2016
NEATER HALF LITERS VA 108-324 04/05/80 04/05/2008
NEWS AND VIEWS R 548-035 1/15/46;01/15/73 01/15/2010
OUT OF THE ORDINARY TX 161-125 04/16/84 04/16/2012
PARTNERS IN PROFIT A 199-492 10/04/70 10/04/2007
PERKY R 559-531 2/4/46;02/04/74 02/04/2011
PHONE BOOTH PA 115-124 08/21/81 08/21/2009
PHONE CALL PA 523-972 01/27/92 01/27/2020
POOL PA 523-957 01/27/92 01/27/2020
QUEEN OF HEARTS PA 285-166 03/10/86 03/10/2014
QUENCH THAT THIRST PA 285-172 03/10/86 03/10/2014
ROMANTIC PA 433-846 10/23/89 10/23/2017
SAMURAI PA 285-168 03/10/86 03/10/2014
SAY GOODBYE SUBURBIA PA 319-667 11/24/88 11/24/2016
SEANCE PA 290-901 05/22/84 05/22/2012
SECOND COMING PA 523-974 01/27/92 01/27/2020
SEMI-CONFIRMED BACHELOR PA 330-094 06/10/87 06/10/2015
SHERIFF PA 361-575 03/03/88 03/03/2016
SHE'S A TEASE PA 319-666 11/24/86 11/24/2014
SILVER DOLLAR MAN R 664-110 8/31/49;6/6/77 06/06/2014
SINGER SR 83-884 06/12/87 06/12/2015
SLIM SINGLE SINGER PA 329-288 06/11/87 06/11/2015
SOCCER PEPPER YOUTH SOCCER A 859-369 04/14/77 04/14/2014
COMPETITION
SPACE COWBOY PA 317-040 11/24/86 11/24/2014
SPACE COWBOY PA 285-171 03/10/86 03/10/2014
STAIRCASE PA 553-929 02/03/92 02/03/2020
STARGAZERS PA 317-042 11/24/86 11/24/2014
STEPS PA 115-123 08/21/81 08/21/2009
STRONG SILENT TYPE PA 329-286 06/29/87 06/29/2015
SUGAR FREE DR PEPPER, PA 66-458 04/15/80 04/15/2008
IT TASTES FATTENING BUT IT'S NOT
- -SHOPPING REVIEW
SUGAR FREE DR PEPPER, PA 152-308 02/10/82 02/10/2010
IT TASTES FATTENING, BUT IT'S NOT-
BLACKOUT AFTER TASTE
SUGAR FREE DR PEPPER, IT TASTES PA 8-178 06/16/78 06/16/2006
FATTENING, BUT IT'S NOT - CARNIVAL
SUGAR FREE DR PEPPER, PA 50-948 12/11/78 12/11/2006
IT TASTES FATTENING BUT IT'S NOT - EXERCISE
SUGAR FREE DR PEPPER, PA 152-310 12/07/81 12/07/2009
IT TASTES FATTENING, BUT IT'S NOT - HORSE
SUGAR FREE DR PEPPER, PA 115-119 08/21/81 06/21/2009
IT TASTES FATTENING, BUT IT'S NOT - KANSAS
SUGAR FREE DR PEPPER, PA 152-311 12/07/81 12/07/2009
IT TASTES FATTENING, BUT IT'S NOT - SUNBATHING
SUGAR FREE DR PEPPER, PA 8-177 06/16/78 06/16/2006
IT TASTES FATTENING, BUT IT'S NOT - SWEET STREET
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
REG. EXP.
TITLE REGISTRATION NO. DATE DATE
<S> <C> <C> <C>
SURFER SR 81-811 06/11/87 06/11/2015
TRIM FIT FILLY PA 329-289 06/10/87 06/10/2015
TWIST A PEPPER PA 433-843 10/23/89 10/23/2017
TWIST-A-PEPPER II SR 108-150 11/06/89 11/06/2017
USED CAR PA 433-847 10/23/89 10/23/2017
WHO PA 432-143 10/23/89 10/23/2017
WORLD HAS A BACKWARDS PA 329-256 06/29/87 06/29/2015
MENTALITY
WORLD HAS A MONOTONOUS PA 333-308 07/01/87 07/01/2015
MENTALITY
WORLD HAS A RAINY DAY PA 333-309 07/01/87 07/01/2015
MENTALITY
WORLD HAS A TWO-DIMENSIONAL PA 333-310 07/01/87 07/01/2015
MENTALITY
3D PA 421-177 07/24/89 07/24/2017
7-UP BREAK I PA 331-622 07/13/87 07/13/2015
7-UP BREAK I/PLAY PA 331-591 07/13/87 07/13/2015
ALL DAY PROMO
7-UP BREAK II PA 336-306 07/16/87 07/16/2015
A HOTDOG AND THE UNCOLA KK 208-230 06/30/68 06/30/2005
ADDITION PA 523-085 01/27/92 01/27/2020
AIDA IS NO LADY, IT'S YOUR KK 205-920 03/01/68 03/01/2005
KEY TO SELLING FACE TO FACE
AN OUTSIDE CHANCE TO BEAT KK 187-712 05/01/65 05/01/2002
COMPETITION
ANSWER THE CALL OF THE WET KK 203-877 11/29/67 11/29/2004
AND WILD KING-SIZE SEVEN-UP
ALL PACKAGE AVAILABILITY KK 202-069 08/01/67 08/01/2004
INCREASES SALES
AT THE HEAD OF ITS CLASS, 08/01/68 08/01/2005
SEVEN-UP, THE UNCOLA
ATHLETE GOLD PA 416-894 03/09/89 03/09/2017
BACK-TO-SCHOOL MEANS BIGGER KK 189-841 09/01/65 09/01/2004
TOTAL SALES: SCHOOL DAYS
ARE SEVEN-UP SALES ACTION DAYS
BASEBALL PA 407-305 03/09/89 03/09/2017
BASKETBALL PA 331-601 07/13/87 07/13/2015
BASKETBALL PA 523-980 01/27/92 01/27/2020
BE A SANTA...TO EVERY ACCOUNT KK 184-582 12/01/64 12/01/2001
ON YOUR ROUTE
BIG TASTE AND NEW, DRINK KK 189-133 05/16/65 05/16/2002
SEVEN-UP WITH BLUE BURGER
BIG TASTE AND NEW, DRINK KK 187-151 03/26/65 03/26/2002
SEVEN-UP WITH BLUE BURGER
BITE INTO STOREWIDE SALES KK 179-127 03/02/64 03/02/2001
WITH SEVEN-UP WITH FESTIVE FOODS
BROWN BAG PA 331-617 07/10/87 07/10/2015
BUILD STRONGER SALES MUSCLE; KK 181-178 05/01/64 05/01/2001
VENDOR SALES ARE IMPULSE SALES
CASANOVA PENDRILL PA 434-180 10/13/89 10/13/2017
CASE THE PLACE FOR BIGGER KK 201-344 07/03/67 07/03/2004
SEVEN-UP SALES
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
REG. EXP.
TITLE REGISTRATION NO. DATE DATE
<S> <C> <C> <C>
CHEERS, THE MORE SEVEN-UP KK 198-139 12/01/66 12/01/2003
THE MERRIER
CHOOSE YOUR PICNIC KK 195-081 05/31/66 05/31/2003
PARTNERS, IT'S OPEN SEASON
FOR SEVEN-UP AND OUTDOOR
EATING
CHOOSE YOUR PICNIC KK 189-135 06/02/65 06/02/2004
PARTNERS, SEVEN-UP AND
PICNIC BASKET FOODS
CHRISTMAS PA 407-306 03/09/89 03/09/2017
COUNT THE UN-WORDS, WIN KK 210-081 01/29/69 01/29/2005
UN-OF-A-KIND PRIZES
COUNTDOWN TO CHRISTMAS PA 331-631 07/13/87 07/13/2015
COUNTDOWN TO CHRISTMAS VA 288-571 12/22/87 12/22/2015
CALENDAR
DANCE PA 407-310 03/09/89 03/09/2017
DIG THOSE HIDDEN ACCOUNTS KK 194-307 05/02/66 05/02/2003
DINER PA 331-615 07/10/87 07/10/2015
DON'T FORGET THE FORGOTTEN KK 198-851 02/13/67 02/13/2004
HOLIDAYS, CELEBRATE WITH
SEVEN-UP, WET AND WILD
DON'T FORGET THE FORGOTTEN KK 198-768 11/01/66 11/01/2003
HOLIDAYS! CALENDAR
DRINK SEVEN-UP FESTIVE KK 185-959 01/26/65 01/26/2002
SANDWICHES
EARLY TO BED, EARLY TO RISE, KK 203-605 11/01/67 11/01/2004
EARLY TO SELL EVERY SEVEN-UP
SIZE
EXTRA FACINGS MEAN BIGGER KK 190-754 10/01/65 10/01/2002
SEVEN-UP SALES
FACTORY LOVE PA 407-309 03/09/89 03/09/2017
FIRST DIET DRINK THAT KK 180-936 04/07/64 04/07/2001
REALLY QUENCHES; LIKE
FLAVOR COMES ON BIG, DRINK KK 189-134 05/13/65 05/13/2002
SEVEN-UP WITH A COUNTRY BOY
FOOTBALL PA 523-976 01/27/92 01/27/2020
FOR FLAVOR EXTRA, DRINK KK 189-132 06/15/65 06/15/2002
SEVEN-UP WITH A
BACON-EGGER
FOR REAL SALES ACTION, USE KK 189-149 07/01/65 07/01/2002
THE BIG C AND THE BIG THREE
FORTY-NINE WET AND WILD KK 199-174 02/01/67 02/01/2004
SELLING OPPORTUNITIES
FRESH UP FREDDY SAYS: KK 141-799 03/24/65 03/24/2002
RIGHT NOW, YOU'RE PROBABLY
ASKING YOURSELF, WHAT DOES
A BRONCO BUSTER DRINK TO
QUENCH HIS THIRST?
GALLERY PA 416-878 03/09/89 03/09/2017
GET A HOLIDAY HEAD-START KK 191-017 11/01/65 11/01/2002
WITH ADVANCE COMMITMENTS
NOW
GET AN EDGE ON COMPETITION, KK 205-041 02/01/68 02/01/2005
MORE SEVEN-UP AND LIKE
SALES
GET REAL ACTION, SEVEN-UP KK 185-300 11/03/64 11/03/2001
YOUR THIRST AWAY
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
REG. EXP.
TITLE REGISTRATION NO. DATE DATE
<S> <C> <C> <C>
GET REAL ACTION, SEVEN-UP KK 179-392 03/24/64 03/24/2001
YOUR THIRST AWAY
GET REAL ACTION, SEVEN-UP KK 181-407 06/25/64 06/25/2001
YOUR THIRST AWAY; ANY
THIRST YOU CAN GET,
SEVEN-UP CAN QUENCH
GET REAL ACTION, SEVEN-UP KK 181-315 04/29/64 04/29/2001
YOUR THIRST AWAY; ANY
THIRST YOU CAN GET,
SEVEN-UP CAN QUENCH
GET REAL ACTION, KK 181-411 06/16/64 06/16/2001
SEVEN-UP YOUR THIRST AWAY
GET REAL SALES ACTION, KK 178-246 01/02/64 01/02/2001
SEVEN-UP YOUR COMPETITION
AWAY
GIRLFRIEND/BIKE PA 331-621 07/10/87 07/10/2015
GIVE'EM THE INSIDE KK 195-935 08/01/66 08/01/2003
INFORMATION
GO AHEAD WITH PICNIC PARTNERS KK 194-842 06/01/66 06/01/2003
GOOD RESOLUTION FOR 1965, DRINK KK 199-275 12/25/64 12/25/2001
SEVEN-UP ON ALL RED-LETTER DAYS
GRADUATION PA 407-288 03/09/89 03/09/2017
GREAT IDEA TO STRETCH FEBRUARY KK 185-516 02/01/65 02/01/2002
SALES
GUARD PA 331-616 07/10/87 07/10/2015
GUARDIAN OF SEVEN-UP TOTAL KK 205-235 05/01/68 05/01/2005
AVAILABILITY
HAVE A WET AND WILD; KING SIZE KK 203-876 11/08/67 11/08/2004
SEVEN-UP
HIGH UP HOLIDAY SALES KK 191-510 12/01/65 12/01/2002
HOT PURSUIT PA 331-618 07/10/87 07/10/2015
HOW TO MAKE A TOM OF A COLLINS KK 200-910 05/20/67 05/20/2004
HOW TO MIX AND BE POPULAR, KK 199-277 03/20/67 03/20/2004
START WITH SEVEN-UP
HOW TO MUCK A MULE, WET AND WILD KK 201-793 08/01/67 08/01/2004
SEVEN-UP
HOWDY COLA RADIO ONE AND FOUR EU 946-822 07/07/66 07/07/2003
ICICLE PA 523-981 01/27/92 01/27/2020
I'LL BE SEEING YOU IN HAWAII KK 200-476 03/01/67 03/01/2004
WHEN YOU WIN THE SEVEN-UP
WET AND WILD SWEEPSTAKES
IT'S A BLAST. FEBRUARY SALES; KK 192-812 02/01/66 02/01/2003
SEVEN-UP WITH FESTIVE SNACKS
IT'S RAINING CLEAN SR 83-392 07/13/87 07/13/2015
IT'S THE CHRISTMAS THING TO DO, KK 185-299 12/01/64 12/01/2001
SEVEN-UP YOUR PARTY
IT'S TIME FOR PARTIES BY THE DOZEN KK 147-689 12/03/69 12/03/2006
KEEP PICNIC PARTNERS WORKING KK 189-408 08/01/55 08/01/2002
FOR YOU
LET IT RAIN SR 85-387 07/13/87 07/13/2015
LET'S EAT LIVELY, DRINK KK 189-657 08/14/65 08/14/2002
SEVEN-UP WITH BAR-B-CHICKEN
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
REG. EXP.
TITLE REGISTRATION NO. DATE DATE
<S> <C> <C> <C>
LET'S EAT, LIVELY, DRINK KK 191-224 10/21/65 10/21/2002
SEVEN-UP WITH BAR-B-CHICKEN
MAGIC CHRISTMAS PA 331-602 07/13/87 07/13/2015
MAN PA 331-600 07/13/87 07/13/2015
MANY HAPPY NO RETURNS; LIKE KK 195-082 06/09/66 06/09/2003
MAROONED PA 523-982 01/27/92 01/27/2020
MDA CAMP PA 331-619 07/10/87 07/10/2015
MEASURE UP AND '67 KK 198-691 01/02/76 01/02/2013
MEET AND BEAT COMPETITION BY KK 185-113 01/04/65 01/04/2002
DOING WHAT COMES NATURALLY
MERCHANDISING SEVEN-UP A 694-659 04/17/64 04/17/2001
MIX'EM MATCH'EM FESTIVE SNACKS KK 193-211 02/22/66 02/22/2003
WITH SEVEN-UP
MYSTERY WOMAN REV PA 407-304 03/09/89 03/09/2017
NO ROCK-STAR PA 421-009 07/24/89 07/24/2017
NEW LOOK, NEW TASTE, DRINK KK 193-222 09/21/65 09/21/2002
SEVEN-UP WITH A FANCY DAN HASH
NEW THEME, NEW MAGAZINE AD...WET KK 192-617 01/03/66 01/03/2003
WILD AND THEN SOME
NOVEMBER EARLY BIRDS FLY HIGH IN KK 198-924 11/01/66 11/01/2003
DECEMBER!
NOW THAT THE HOLIDAYS ARE OVER, KK 185-961 01/11/65 01/11/2002
WHAT HAVE YOU GOT TO LOOSE? LIKE
OIL CHANGE PA 565-937 05/14/92 05/14/2020
OUTDOOR CONCERT PA 331-603 07/13/87 07/13/2015
OUTSIDE FUN, SPARK INSIDE SALES KK 180-004 04/01/64 04/01/2001
PARENTS PA 331-620 07/10/87 07/10/2015
PENDULUM PA 407-308 03/09/89 03/09/2017
PLACING SEVEN-UP INSIDE A 694-658 03/06/64 03/06/2001
ADVERTISING
PLACING SEVEN-UP OUTSIDE A 694-657 01/29/64 01/29/2001
ADVERTISING
PLAY NOW FOR SEVEN-UP SALES KK 204-536 01/02/68 01/02/2005
ACTION '68
POT SHOTS PA 421-010 07/24/89 07/24/2017
POUR AFTER POUR PA 523-978 01/27/92 01/27/2020
POURING BOTTLE KK 210-736 04/01/69 04/01/2006
PUT ASSISTANT SALES MAKERS KK 200-303 04/01/67 04/01/2004
OUTSIDE EVERY SEVEN-UP OUTLET
RAIN ON ME SR 85-385 07/13/87 07/13/2015
REFRESHCAME SR 111-009 10/13/87 10/13/2015
SALES FLY HIGH WITH PICNIC KK 189-013 05/01/65 05/01/2002
PARTNERS
SAXOPHONE PA 523-979 01/27/92 01/27/2020
SELL THE BENEFITS OF SEVEN-UP KK 193-926 04/04/66 04/04/2003
SELLING SEVEN-UP TO THE A 903-216 02/01/67 02/01/2004
NEGRO MARKET
SELLING WITH SAMPLING A 694-660 04/17/64 04/17/2001
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
REG. EXP.
TITLE REGISTRATION NO. DATE DATE
<S> <C> <C> <C>
SET 'EM OFF NOW, FOR SUMMER-LONG KK 381-968 07/01/64 07/01/2001
SALES ACTION
SEVEN-UP BREAK SR 85-385 07/13/87 07/13/2015
SEVEN-UP BREAK/PROMO SR 85-384 07/13/87 07/13/2015
- -'SEVEN-UP COMMERCIAL; UNCOLA SONG EU 38-732 02/21/68 02/21/2005
SEVEN-UP GOES WHERE THE KK 200-304 05/01/67 05/01/2004
CUSTOMERS ARE, WITH VENDORS
AND COOLERS
SEVEN-UP HAS A DIE DRINK KK 185-730 11/17/64 11/17/2001
NAMED "LIKE
SEVEN-UP HAS A DIE DRINK KK 185-298 11/05/64 11/05/2001
NAMED LIKE
SEVEN-UP IN CANS KK 210-738 04/01/69 04/01/2006
SEVEN-UP IS THE MAN'S MIXER KK 197-149 03/25/65 03/25/2002
SEVEN-UP IS THE MAN'S MIXER KK 192-939 01/25/66 01/25/2003
SEVEN-UP IS THE MAN'S MIXER; KK 189-131 05/25/65 05/25/2002
FOR FLAVOR, THE BEST FRIEND
A GIN COLLINS EVER HAD
SEVEN-UP IS THE MAN'S MIXER; KK 191-225 10/20/65 10/20/2002
IT GUARANTEES ALL YOUR
HOLIDAY HIGH BALLS TO BE
HEARTY ONES
SEVEN-UP IS THE MAN'S MIXER; KK 190-065 08/20/65 08/20/2002
IT NEVER SMOTHERS THAT GOOD
WHISKEY FLAVOR
SEVEN-UP IS THE MAN'S MIXER; KK 189-655 07/25/65 07/25/2002
LINE UP WITH THE COOL MULE,
SEVEN-UP AND SMIRNOFF
SEVEN-UP MAKES HAPPENINGS HAPPEN! KK 242-432 09/01/67 09/01/2004
SEVEN-UP PRODUCTION MANUAL A 280-969 05/27/71 05/27/2008
SEVEN-UP, THE MAN'S MIXER; KK 185-297 12/17/64 12/17/2001
FOR THOSE WHO ENJOY THE
TASTE OF GOOD WHISKEY
SEVEN-UP, THE MAN'S MIXER; KK 196-007 07/20/66 07/20/2003
FORGET THAT NONSENSE ABOUT
JUMPING OVER THE NET
SEVEN-UP, THE MAN'S MIXER; KK 196-827 09/18/66 09/18/2003
GOOD DOG
SEVEN-UP, THE MAN'S MIXER; KK 194-081 04/01/66 04/01/2003
PLUCK DOWN THE SHOOT AND
SHOOT THE BREEZE WITH A
COUPLE OF GOOD FRIENDS,
SEVEN-UP AND SEAGRAM'S
SEVEN-UP, THE MAN'S MIXER; KK 194-900 05/24/66 05/24/2003
WHY YOU TOTALED YOUR CAR
SEVEN-UP, THE UNCOLA KK 203-314 11/20/67 11/20/2004
SEVEN-UP, WHERE THERE'S ACTION KK 185-958 02/23/65 02/23/2002
SEVEN-UP, WHERE THERE'S ACTION KK 191-226 10/25/65 10/25/2002
SEVEN-UP, WHERE THERE'S ACTION KK 387-152 03/18/65 03/18/2002
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
REG. EXP.
TITLE REGISTRATION NO. DATE DATE
<S> <C> <C> <C>
SEVEN-UP, WHERE THERE'S ACTION KK 187-150 03/25/65 03/25/2002
SEVEN-UP, WHERE THERE'S ACTION KK 186-949 02/02/65 02/02/2002
SEVEN-UP, WHERE THERE'S ACTION KK 190-066 08/25/65 08/25/2002
SEVEN-UP, WHERE THERE'S ACTION KK 191-223 09/25/65 09/25/2002
SEVEN-UP, WHERE THERE'S ACTION, KK 189-655 07/25/65 07/25/2002
SEVEN-UP IS A REAL NATURAL FOR
THE ACTION CROWD
SEVEN-UP, WHERE THERE'S ACTION, KK 189-654 06/29/65 06/29/2002
SEVEN-UP IS A REAL NATURAL FOR
THE ACTION CROWD
SEVEN-UP, WHERE THERE'S ACTION, KK 189-653 07/16/65 07/16/2002
SEVEN-UP TIME IS ANYTIME YOU SAY
SEVEN-UP YOUR HOLIDAY PARTY KK 191-861 11/20/65 11/20/2002
SKIING PA 407-307 03/09/69 03/09/2017
SPIN AND WIN SR 112-033 10/06/89 10/06/2017
SPIN AND WIN TX2724-033 10/06/89 10/06/2017
SPOKESGNOME SR 83-694 07/13/87 07/13/2015
SPOT LIGHT SWITCH PA 565-939 05/14/92 05/14/2020
SPOT SHAVE PA 565-938 05/14/92 05/14/2020
SPOT GRAPHICS GUIDELINES TX2603-465 06/23/89 06/23/2017
SPREAD THE WORD, SEVEN-UP IS KK 178-851 02/01/64 02/01/2001
PROFIT MAKING ACTION FOR
EVERY DEALER
STAKE YOUR CLAIMS NOW, WORK KK 183-893 11/02/64 11/02/2001
FOR ADVANCED COMMITMENTS ON
SPECIAL HOLIDAY DISPLAYS
STATUE OF LIBERTY KK 210-980 05/01/69 05/01/2006
STAY AS SLIM AS YOU LIKE; KK 194-546 05/08/66 05/08/2003
DIET DRINK BY SEVEN-UP
STAY AS SLIM AS YOU LIKE KK 194-017 03/20/66 03/20/2003
STAY AS SLIM AS YOU LIKE KK 194-795 04/17/66 04/17/2003
STAY AS SLIM AS YOU LIKE KK 196-307 07/24/66 07/24/2003
STAY AS SLIM AS YOU LIKE; KK 195-598 06/12/66 06/12/2003
LEMON-LIME DIET DRINK BY
SEVEN-UP
STAY AS SLIM AS YOU LIKE; KK 196-005 06/26/66 06/26/2003
LEMON-LIME DIET DRINK BY
SEVEN-UP
STAY AS SLIM AS YOU LIKE KK 192-940 01/30/66 01/30/2003
STAY AS SLIM AS YOU LIKE KK 192-959 01/27/66 01/27/2003
STAY AS SLIM AS YOU LIKE, KK 193-214 02/27/65 02/27/2002
YOU CAN COUNT THE CALORIES
IN LIKE
STORE PA 407-314 03/09/89 03/09/2017
SUMMER FUN PA 407-313 03/09/89 03/09/2017
SUMMERTIME SPECTACULAR, KK 195-407 07/01/66 07/01/2003
SEVEN-UP FLOAT
TEACHERS' LOUNGE PA 407-312 03/09/89 03/09/2017
THE BUTTERFLY KK 210-388 03/01/69 03/01/2006
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
REG. EXP.
TITLE REGISTRATION NO. DATE DATE
<S> <C> <C> <C>
THE DARING NEW LOOK; LIKE KK 200-728 04/24/67 04/24/2004
THE GREAT LIKE PEARL COLLECTION KK 198-852 02/20/67 02/20/2004
GOES ON SALE
THE HAND OFF PA 421-236 07/24/89 07/24/2017
THE HAND OFF/ABC VERSION PA 421-178 07/24/89 07/24/2017
THE MAN FROM UNCOLA KK 209-130 11/25/65 11/25/2002
THE MOBILE MARKET FOR BIGGER KK 207-019 07/01/68 07/01/2005
SEVEN-UP SALES
THE MORE SALES, SEVEN-UP AND KK 203-995 12/01/67 12/01/2004
LIKE, THE MERRIER
THE MORE THE MERRIER, SEVEN-UP KK 204-457 11/18/67 11/18/2004
MAKES GREAT CASE FOR A PARTY
THE MORE SEVEN-UP THE MERRIER KK 191-862 11/30/65 11/30/2004
THE MORE SEVEN-UP THE MERRIER KK 197-819 11/18/66 11/18/2003
THE NEXT SIP PA 523-975 01/27/92 01/27/2019
THE UNCOLA KK 205-925 03/17/68 03/17/2005
THE UNCOLA KK 207-492 08/01/68 08/01/2005
THE UNCOLA KK 207-493 07/01/68 07/01/2005
THE UNCOLA, SEVEN-UP KK 207-365 03/20/68 03/20/2005
THE UNCOLA SONG EU 38-732 02/21/68 02/21/2005
THE UNCOLA; THE UN AND ONLY KK 205-927 04/01/68 04/01/2005
THE UNCOLA; UN FOR THE ROAD KK 205-128 02/20/68 02/20/2005
THE UNCOLA; WE'RE # UN KK 205-683 03/25/68 03/25/2005
THE YOUTH MARKET, SICK'EM KK 196-362 09/01/66 09/01/2003
THERE'S GOLD IN COLD DRINK SALES KK 187-288 04/01/65 04/01/2002
THERE'S NO COLA LIKE THE UNCOLA KK 205-929 04/07/68 04/07/2005
THERMOMETER PA 523-977 01/27/92 01/27/2020
THRU SATURDAY ONLY, SAVE EIGHT KK 187-153 03/18/65 03/18/2002
CENTS ON A CARTON OF NEW LEMON-
LIME DIET DRINK MADE BY SEVEN-UP
TRUCKER PA 523-983 01/27/92 01/27/2020
TUNE IN, TURN ON, YOUR SELLING KK 05-921 03/01/68 03/01/2005
EFFORTS IN 1968 WITH SEVEN-UP
THE UN AND ONLY
TURN ON THE GOOD TASTE, DRINK KK 185-957 02/18/65 02/18/2002
SEVEN-UP WITH FRANK FRITTERS
TURN ON THE GOOD TASTE, DRINK KK 185-960 02/16/65 02/16/2002
SEVEN-UP WITH FRANK FRITTERS
TWENTY-ONE MORE FORGOTTEN HOLIDAYS KK 199-421 03/01/67 03/01/2004
IN MARCH
TWO BOTTLES FREE KK 193-097 02/15/66 02/15/2003
UN AND UN IS TOO KK 210-386 03/01/69 03/01/2006
UN IN THE SUN KK 210-387 03/01/69 03/01/2006
UNLIMITED BIG SALE OFFER; BUY KK 188-260 04/08/65 04/08/2002
ONE, BUY ONE HUNDRED, SAVE
TEN CENTS ON EVERY CARTON
USE THESE FACTS TO GET A BIGGER KK 187-312 03/01/65 03/01/2002
SEVEN-UP SALES
VISIT UN-DERLAND KK 210-737 04/01/69 04/01/2006
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
REG. EXP.
TITLE REGISTRATION NO. DATE DATE
<S> <C> <C> <C>
WAKE 'EM UP TO THE FACT, PROFIT, KK 197-228 10/03/66 10/03/2003
TURNOVER, DOLLARS
WATER'S FINE FOR FISHING, BUT A KK 154-104 09/02/67 09/02/2004
HIGHBALL NEEDS MELLOWING
SEVEN-UP
WELCOME ABOARD FOR PROFIT MAKING KK 200-912 06/05/67 06/05/2004
ADVENTURE
WEDDING PA 523-984 01/27/92 01/27/2020
WET AND WILD EU 961-356 10/12/66 10/12/2003
WET AND WILD KK 193-379 03/08/66 03/08/2003
WET AND WILD, BIG, WET, DRAGGED KK 200-727 05/08/67 05/08/2004
FRESH AND CRACKLING OUT OF THE
ICE
WET AND WILD, BRACING, CRISP, KK 196-308 08/09/66 08/09/2003
UNFORGETTABLE
WE AND WILD, BREAK CLEAN TO KK 193-878 03/22/66 03/22/2003
SEVEN-UP
WET AND WILD; CHILLING, KK 196-597 06/17/66 06/17/2003
THRILLING SEVEN-UP
WET AND WILD, CLEAR, CLEAN, KK 194-553 04/19/66 04/19/2003
FRESH, BRIGHT
WET AND WILD; CRISP AND CRACKLING, KK 196-004 06/23/66 06/23/2003
THAT'S SEVEN-UP
WET AND WILD, GO AHEAD, LACE KK 193-213 01/25/66 01/25/2003
INTO A SEVEN-UP, FULL GLASS
WET AND WILD, HERE IT COMES, KK 199-849 02/28/67 02/28/2004
BOLD, BRACING, SOAKING COLD,
SEVEN-UP
WET AND WILD, HOWL'S THIS FOR KK 201-795 07/31/67 07/31/2004
FOR OPENERS, SEVEN-UP
WET AND WILD, ICY, BRACING, KK 193-212 02/08/66 02/08/2003
CRISP SEVEN-UP
WET AND WILD, PULL THE CAP, KK 198-853 02/08/67 02/08/2004
BITE OFF A SWALLOW OF SEVEN-UP
WET AND WILD, RAISE IT HIGH, KK 200-726 05/22/66 05/22/2003
LIFT THE BRIGHT, CRACKLING TASTE
OF SEVEN-UP SO EVERYONE CAN SEE
WET AND WILD; TAKE A SHIVERY KK 195-596 06/28/66 06/28/2003
PLUNGE INTO A SEVEN-UP!
WET AND WILD THE MOMENT OF TRUTH KK 201-930 06/26/67 06/26/2004
WET AND WILD, THE RUGGED KK 203-929 07/17/67 07/17/2004
INDIVIDUALIST, BOLD, COLD
WET AND WILD, THE WAVE OF THE KK 202-788 08/14/67 08/14/2004
FUTURE
WET AND WILD, THIS IS THE TASTE KK 192-379 12/28/65 12/28/2002
THAT CUTS THROUGH
WET AND WILD, TIP SEVEN-UP KK 200-911 04/24/67 04/24/2004
RIGHT DOWN
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
REG. EXP.
TITLE REGISTRATION NO. DATE DATE
<S> <C> <C> <C>
WET AND WILD, YOU'VE NEVER SEEN KK 201-794 03/13/67 03/13/2004
ANYTHING LIKE THE TASTE OF
SEVEN-UP
WET AHD WILD. WHAT IS SEVEN-UP? KK 194-794 03/03/66 03/03/2003
WET IS BECAUSE YOU'RE THIRSTY, KK 203-874 11/13/67 11/13/2004
WILD IS BECAUSE YOU'RE YOU
WHAT GOES IN HERE, MUST COME KK 207-018 06/03/68 06/03/2005
OUT HERE
WHAT IS SEVEN-UP? KK 193-348 03/01/66 03/01/2003
WHAT'S AHEAD FOR LIKE? KK 195-599 07/05/66 07/05/2003
WHAT'S IN SEVEN-UP PROMOTION? KK 202-902 10/02/67 10/02/2004
WHEN HE PUT 'UM TOGETHER, WILL KK 182-436 08/03/64 08/03/2001
HE HAVE A PICTURE OF YOU?
WHEN THE COWS COME HOME, QUITO KK 195-079 06/01/66 06/01/2003
WIN THE WET AND WILD SWEEPSTAKES KK 200-913 05/30/67 05/30/2004
WINNER IN EVERY STRAW VOTE KK 181-316 06/02/64 06/02/2001
WORLD'S FAIR PREVIEW OF SEVEN-UP KK 179-393 02/25/64 02/25/2001
WITH FESTIVE FOODS
YOU CAN'T HAVE THE WET WITHOUT KK 202-786 10/04/67 10/04/2004
THE WILD
</TABLE>
The following periodicals entitled "SELLING, ADVERTISING, MERCHANDISING WITH
SEVEN-UP SAM, THE SEVEN-UP SALES MAKER" were registered as follows:
<TABLE>
<CAPTION>
Vol./Iss. Reg. No. Reg. Date Exp. Date
- --------- -------- --------- ---------
<S> <C> <C> <C>
9, 11 B 149-868 11/02/64 11/02/2001
9, 12 B 155-755 12/01/64 12/01/2001
10, 1 B 159-382 01/04/65 01/04/2002
10, 2 B 165-098 02/01/65 02/01/2002
10, 3 B 173-432 03/01/65 03/01/2002
10, 4 B 181-282 04/01/65 04/01/2002
10, 5 B 186-411 05/01/65 05/01/2002
10, 6 B 198-542 06/01/65 06/01/2002
10, 7 B 199-395 07/01/65 07/01/2002
10, 8 B 207-574 08/02/65 08/02/2002
10, 9 B 213-280 09/01/65 09/01/2002
Vol./Iss. Reg. No. Reg. Date Exp. Date
- --------- -------- --------- ---------
10, 10 B 218-839 10/05/65 10/05/2002
10. 11 B 228-488 11/01/65 11/01/2002
10, 12 B 234-295 12/01/65 12/01/2002
11, 2 B 253-691 02/01/66 02/01/2003
11, 3 B 252-212 03/01/66 03/01/2003
11, 4 B 259-973 04/01/66 04/01/2003
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Vol./Iss Reg. No. Reg. Data Exp. Date
- -------- -------- --------- ---------
<S> <C> <C> <C>
11, 5 B 267-993 05/01/66 05/01/2003
11, 6 B 274-123 06/01/66 06/01/2003
11, 7 B 280-632 07/01/66 07/01/2003
11, 8 B 291-415 08/01/66 08/01/2003
11, 9 B 302-527 09/01/66 09/01/2003
11, 10 B 299-741 10/03/66 10/03/2003
11. 11 B 307-748 11/01/66 11/01/2003
11, 12 B 312-942 12/01/66 12/01/2003
12, 1 B 321-599 01/01/67 01/01/2004
12, 2 B 326-088 02/01/67 02/01/2004
12, 3 B 333-740 03/01/67 03/01/2004
12, 4 B 342-039 04/01/67 04/01/2004
12, 5 B 342-038 05/01/67 05/01/2004
12, 6 B 351-164 06/01/67 06/01/2004
12, 7 B 357-418 07/03/67 07/03/2004
12, 8 B 365-877 08/01/67 08/01/2004
12, 9 B 370-473 09/01/67 09/01/2004
12, 10 B 378-971 10/02/67 10/02/2004
12, 11 B 385-492 11/01/67 11/01/2004
12, 12 B 390-162 12/01/67 12/01/2004
</TABLE>
The following periodicals entitled "SEVEN-UP SAM (a continuation of SELLING,
ADVERTISING AND MERCHANDISING WITH SEVEN-UP SAM) were registered as follows:
<TABLE>
<CAPTION>
Vol./Iss. Reg. No. Reg. Date Exp. Date
- -------- -------- --------- ---------
<S> <C> <C> <C>
13, 1 B 401-405 01/02/68 01/02/2005
13, 2 B 405-384 02/01/68 02/01/2005
13, 3 B 421-838 03/01/68 03/01/2005
13, 4 B 421-837 03/01/68 03/01/2005
13, 5 B 436-235 06/01/68 06/01/2005
13, 6 B 438-309 06/01/58 06/01/2005
13, 7 B 438-308 07/01/68 06/01/2005
13, 8 B 445-785 08/01/68 08/01/2005
13, 9 B 455-712 09/03/68 09/03/2005
13, 10 B 461-893 10/01/68 10/01/2005
13, 11 B 468-096 11/01/68 11/01/2005
</TABLE>
13
<PAGE>
The following periodicals entitled "THE SEVEN-UP SALES MARKER'S IDEABOOK" were
registered as follows:
<TABLE>
<CAPTION>
Vol./Iss. Reg. No. Reg. Date Exp. Date
- -------- -------- --------- ---------
<S> <C> <C> <C>
14, 2 B 487-085 02/03/69 02/03/2006
14, 3 B 490-492 03/03/69 03/03/2006
14, 4 B 547-671 04/01/69 04/01/2006
14, 5 B 547-672 05/01/69 05/01/2006
</TABLE>
The above periodical was continued under the title "THE SEVEN-UP SALES MAKER'S
IDEABOOK FROM SEVEN-UP SAM" and registered as follows:
<TABLE>
<CAPTION>
Vol./Iss. Reg No. Reg. Date Exp. Date
- -------- -------- --------- ---------
<S> <C> <C> <C>
14, 6 B 536-053 06/02/69 06/02/2006
14, 7 B 536-054 07/01/69 07/01/2006
14, 8 B 536-055 08/01/69 08/01/2006
14, 9 B 536-634 09/02/69 09/02/2006
14, 10 B 546-755 10/01/69 10/01/2006
14, 11 B 546-757 11/03/69 11/03/2006
14, 12 B 553-313 12/01/69 12/01/2006
15, 1 B 563-312 01/01/70 01/01/2007
15, 3 B 571-263 03/01/70 03/01/2007
15, 4 B 578-097 04/01/70 04/01/2007
</TABLE>
The title to the above periodical was changed to "SALES MAKER'S IDEABOOK" and
registered as follows:
<TABLE>
<CAPTION>
Vol./Iss. Reg. No Reg. Date Exp. Date
- -------- -------- --------- ---------
<S> <C> <C> <C>
15, 5 B 586-280 05/01/70 05/01/2007
15, 6 B 597-101 06/01/70 06/01/2007
15, 7 B 602-597 07/01/70 07/01/2007
15, 8 B 608-580 08/03/70 08/03/2007
15, 9 B 614-759 09/01/70 09/01/2007
15, 10 B 625-808 10/01/70 10/01/2007
15, 11 B 628-008 11/02/70 11/02/2007
15, 12 B 638-920 12/01/70 12/01/2007
16, 1 B 641-579 01/04/71 01/04/2008
16, 2 B 648-653 02/01/71 02/01/2008
16, 3 B 656-148 03/01/71 03/01/2008
16, 4 B 662-508 04/01/71 04/01/2008
16, 5 B 668-560 05/03/71 05/03/2008
16, 6 B 677-179 06/01/71 06/01/2008
16, 7 B 682-408 07/01/71 07/01/2008
16, 8 B 691-330 08/02/71 08/02/2008
16, 9 B 701-676 09/01/71 09/01/2008
16, 10 B 704-512 10/01/71 10/01/2008
</TABLE>
14
<PAGE>
The periodical entitled "THE SEVEN-UP LEADER" was registered as follows:
<TABLE>
<CAPTION>
Vol./Iss. Reg. No. Reg. Date Exp. Date
- -------- -------- --------- ---------
<S> <C> <C> <C>
10, 1 B 492-009 02/01/69 02/01/2006
10, 2 B 500-534 04/14/69 04/16/2006
10, 4 B 528-527 08/18/69 08/18/2006
10, 5 B 548-149 10/14/69 10/14/2006
10, 6 B 563-298 12/15/69 12/15/2006
11, 1 B 570-835 02/24/70 02/24/2007
11, 2 B 578-030 04/01/70 04/01/2007
11, 3 B 597-100 06/01/70 05/01/2007
11, 4 B 614-758 08/01/70 08/01/2007
11, 5 B 626-855 10/01/70 10/01/2007
11, 6 B 638-926 12/01/70 12/01/2007
12, 1 B 657-116 01/04/71 01/04/2008
12, 2 B 667-776 03/01/71 03/01/2008
12, 3 B 687-094 05/03/71 05/03/2008
12, 4 B 698-948 07/01/71 07/01/2008
</TABLE>
15
<PAGE>
Exhibit 10.31.2
SECOND AMENDMENT TO CREDIT AGREEMENT
SECOND AMENDMENT (the "Amendment"), dated as of November 5, 1992,
among DR PEPPER COMPANY, THE SEVEN-UP COMPANY, (and their successor by merger,
"DR PEPPER/SEVEN-UP CORPORATION", a Delaware corporation (the "Borrower")), DR
PEPPER/SEVEN-UP COMPANIES, INC., a Delaware corporation (the "Guarantor"), the
Banks party thereto (the "Existing Banks"), BANKERS TRUST COMPANY, NATIONSBANK
OF NORTH CAROLINA, N.A. and THE CHASE MANHATTAN BANK, N.A., as Managing Agents,
the Lead Managers, BANKERS TRUST COMPANY, as Administrative Agent, and each of
the lenders listed on Schedule A hereto (the "New Banks"). All capitalized
terms used herein and not otherwise defined shall have the respective meanings
provided such terms in the Credit Agreement referred to below.
W I T N E S S E T H :
WHEREAS, the Borrower, the Guarantor, the Existing Banks, the Managing
Agents, and the Administrative Agent are parties to a Credit Agreement dated as
of October 20, 1992 (the "Credit Agreement");
WHEREAS, the parties hereto wish to amend the Credit Agreement as
herein provided;
NOW, THEREFORE, it is agreed:
1. Each of the Existing Banks severally and not jointly hereby sells and
assigns to each of the New Banks without recourse and without representation or
warranty (other than as expressly provided herein), and each New Bank hereby
purchases and assumes from each of the Existing Banks, that interest in and to
each of the Existing Bank's rights and obligations under the Credit Agreement as
of the date hereof which in the aggregate represents such New Bank's Pro Rata
Share as set forth on Schedule B hereto (calculated after giving effect to this
Amendment), and such Pro Rata Share represents all of the outstanding rights and
obligations under the Credit Agreement that are being sold and assigned to each
New Bank, including, without limitation, (x) in the case of any assignment of
all or any portion of the Tranche A Term Loan Commitment (if not theretofore
terminated) and outstanding Tranche A Term Loans, all rights and obligations
with respect to the Pro Rata Share of such Tranche A Term Loan Commitment and
outstanding Tranche A Term Loans, (y) in
<PAGE>
the case of any assignment of all or any portion of the Tranche B Term Loan
Commitment (if not theretof ore terminated) and outstanding Tranche B Term
Loans, all rights and obligations with respect to the Pro Rata Share of such
Tranche B Term Loan Commitment and outstanding Tranche B Term Loans and (z) in
the case of any assignment of all or any portion of the Revolving Loan
Commitment, all rights and obligations with respect to the Pro Rata Share of the
Revolving Loans and Letters of Credit. After giving effect to this Amendment,
each of the New Bank's Revolving Loan Commitment, Tranche A Term Loan Commitment
and Tranche B Term Loan Commitment and the amount of outstanding Tranche A Term
Loans and Tranche B Term Loans owing to each of the New Banks will be as set
forth in Schedule C hereto.
2. In accordance with the requirements of Section 13.04(b) of the Credit
Agreement, on the Amendment Effective Date, (i) the Credit Agreement shall be
amended by deleting Schedule I thereto in its entirety and by inserting in lieu
thereof a new Schedule I in the form of Schedule C attached hereto and (ii) the
Company agrees that, promptly after the Amendment Effective Date, it will issue
appropriate Tranche A Term Notes, Tranche B Term Notes and Revolving Notes to
each Bank in conformity with the requirements of Section 1.05 of the Credit
Agreement.
3. On and after the Amendment Effective Date, Schedule X to the Credit
Agreement shall be amended by deleting such Schedule in its entirety and
inserting in lieu thereof a new Schedule X in the form of Schedule D hereto. For
purposes of Section 13.03 of the Credit Agreement, the address of each New Bank
shall be as set forth on Schedule D, or at such other address as the New Bank
may hereafter notify the other parties to the Credit Agreement in writing.
4. Each of the Existing Banks (i) represents and warrants that it is the
legal and beneficial owner of the interest being sold and assigned by them
hereunder and that such interest is free and clear of any adverse claim; (ii)
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
the Credit Agreement or the other Credit Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or the other Credit Documents or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Guarantor, the Borrower or any of
-2-
<PAGE>
their respective Subsidiaries or the performance or observance by the Credit
Parties of any of their obligations under the Credit Agreement or the other
Credit Documents to which they are a party or any other instrument or document
furnished pursuant thereto.
5. Each of the New Banks (i) confirms that it has received a copy of the
Credit Agreement and the other Credit Documents, together with copies of the
financial statements referred to therein and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Amendment; (ii) agrees that it will, independently
and without reliance upon the Administrative Agent, the Existing Banks or any
other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement; (iii) confirms that it is an
Eligible Transferee under Section 13.04(b) of the Credit Agreement; (iv)
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under the Credit Agreement and the other
Credit Documents as are delegated to the Administrative Agent by the terms
thereof, together with such powers as are reasonably incidental thereto; (v)
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Bank and (vi) agrees that it will promptly submit all
applicable forms required by the last sentence of Section 13.04(b).
6. Each of the Existing Banks, the New Banks and the Administrative Agent
hereby agrees that all amounts accrued with respect to the Commitments, the
Loans or the Letters of Credit prior to the delivery by such New Bank of the
amount referred to in clause (ii) of Section Il of this Amendment shall be for
the account of the Administrative Agent and the Existing Banks, respectively,
and that all such amounts accrued after the delivery of such amounts referred to
in clause (ii) of such Section 11 shall be for the account of such New Bank
based upon its Pro Rata Share.
7. In accordance with Section 13.04(b) of the Credit Agreement, on
and as of the date upon which each of the New Banks delivers the amounts
referred to in clause (ii) of Section 15 of this Amendment, each New Bank shall
become a "Bank" under, and for all purposes of, the Credit Agreement and the
other Credit Documents.
-3-
<PAGE>
8. On the Amendment Effective Date, Section Il of the Credit
Agreement shall be amended by deleting the definition of "Lead Managers" in its
entirety and inserting in lieu thereof a new definition to read as follows:
"'Lead Managers' shall mean Van Kampen Merritt Prime Rate
Income Trust, Midland Bank PLC and The Bank of Nova Scotia."
9. This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provision of the Credit
Agreement or any other Credit Document.
10. This Amendment may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts shall be lodged with the Credit Parties and the Agent.
11. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.
12. Subject to Section 13 of this Amendment, this Amendment shall
become effective on the date (the "Amendment Effective Date") when (i) each of
the Borrower, the Guarantor, the Administrative Agent, each Existing Bank and
each New Bank shall have signed a copy hereof (whether the same or different
copies) and shall have delivered (including by way of telecopier) the same to
the Administrative Agent at its Notice Office and (ii) each New Bank shall have
delivered to the Administrative Agent, for the accounts of the Existing Banks,
respectively, an amount equal to such New Bank's Pro Rata Share of the
outstanding Loans.
13. Notwithstanding Section 12 of this Amendment, if for any reason
any New Bank shall not have (i) signed a copy hereof and delivered the same to
the Administrative Agent at its Notice Office and (ii) delivered to the
Administrative Agent an amount equal to such New Bank's Pro Rata Share of the
outstanding Loans, in each case on or prior to November 5, 1992, then, if each
Existing Bank agrees, this Amendment shall become effective notwithstanding such
failure, provided that (x) Schedule C shall be modified to delete any such New
Bank and such New Bank's Pro Rata Share shall be reallocated among the Existing
Banks in such manner
-4-
<PAGE>
as the Existing Banks shall agree and (y) the signature pages of this Amendment
shall be deemed revised to delete such New Bank's name therefrom.
14. From and after the Amendment Effective Date, all references in
the Credit Agreement and each of the Credit Documents to the Credit Agreement
shall be deemed to be references to such Credit Agreement as amended hereby.
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Amendment to be duly executed and delivered as of the date
first above written.
DR PEPPER/SEVEN-UP CORPORATION
By_____________________________________
Title:
DR PEPPER/SEVEN-UP COMPANIES, INC.
By_____________________________________
Title:
MANAGING AGENTS:
BANKERS TRUST COMPANY,
Individually, as Managing Agent
and as Administrative Agent
By_____________________________________
Title:
NATIONSBANK OF NORTH
CAROLINA, N.A.,
Individually and as Managing Agent
By_____________________________________
Title:
-5-
<PAGE>
THE CHASE MANHATTAN BANK, N.A.,
Individually and as Managing Agent
By_____________________________________
Title:
CO-AGENTS:
BARCLAYS BANK PLC,
Individually and as Co-Agent
By_____________________________________
Title:
By_____________________________________
Title:
CANADIAN IMPERIAL BANK OF COMMERCE,
Individually and as Co-Agent
By_____________________________________
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
Individually and as Co-Agent
By_____________________________________
Title:
-6-
<PAGE>
LEAD MANAGERS:
VAN KAMPEN MERRITT PRIME RATE
INCOME TRUST
By_____________________________________
Title:
MIDLAND BANK PLC
By_____________________________________
Title:
THE BANK OF NOVA SCOTIA
By_____________________________________
Title:
OTHER BANKS:
HELLER FINANCIAL, INC.
By_____________________________________
Title:
U S WEST FINANCIAL SERVICES, INC.
By_____________________________________
Title:
-7-
<PAGE>
BANQUE PARIBAS, Houston Agency
By_____________________________________
Title:
By_____________________________________
Title:
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By_____________________________________
Title:
THE FIRST NATIONAL BANK OF BOSTON
By_____________________________________
Title:
WESTPAC BANKING CORPORATION
By_____________________________________
Title:
CREDIT LYONNAIS, New York Branch
By_____________________________________
Title:
PILGRIM PRIME RATE TRUST
By_____________________________________
Title:
-8-
<PAGE>
NATIONAL WESTMINSTER BANK, PLC
By_____________________________________
Title:
NATIONAL WESTMINSTER BANK, USA
By_____________________________________
Title:
THE CONNECTICUT NATIONAL BANK
By_____________________________________
Title:
PROTECTIVE LIFE INSURANCE COMPANY
By_____________________________________
Title:
-9-
<PAGE>
SCHEDULE A
to
Second Amendment
NEW BANKS
Van Kampen Merritt Prime Rate Income Trust
Midland Bank PLC
The Bank of Nova Scotia
Heller Financial, Inc.
U S WEST Financial Services, Inc.
Banque Paribas, Houston Agency
The Mitsubishi Trust and Banking Corporation
The First National Bank of Boston
Westpac Banking Corporation
Credit Lyonnais, New York Branch
Pilgrim Prime Rate Trust
National Westminster Bank, PLC
National Westminster Bank, USA
The Connecticut National Bank
Protective Life Insurance Company
<PAGE>
SCHEDULE B
to
Second Amendment
PRO RATA SHARE
--------------
<TABLE>
<CAPTION>
Tranche A Tranche B Revolving Loan
Bank Term Loans Term Loans Commitment
- ---- ---------- ---------- --------------
<S> <C> <C> <C>
Bankers Trust Company 15.7870% 7.6620% 15.7870%
Nationsbank of North 13.3583% 6.4832% 13.3583%
Carolina, N.A.
The Chase Manhattan 13.3583% 6.4832% 13.3583%
Bank, N.A.
Barclays Bank PLC 7.3919% 3.5876% 7.3919%
Canadian Imperial Bank 7.3919% 3.5876% 7.3919%
of Commerce
The First National 7.3919% 3.5876% 7.3919%
Bank of Chicago
Van Kampen Merritt 0.0000% 26.6667% 0.0000%
Prime Rate Income
Trust
Midland Bank PLC 5.4474% 0.0000% 5.4474%
The Bank of Nova 4.5136% 4.5136% 4.5136%
Scotia
Heller Financial, Inc. 4.0000% 4.0000% 4.0000%
U S WEST Capital 0.0000% 13.3333% 0.0000%
Corporation
Bangue Paribas, 1.3793% 0.0000% 1.3793%
Houston Agency
The Mitsubishi Trust 3.4286% 3.4286% 3.4286%
and Banking
Corporation
The First National 3.4483% 0.0000% 3.4483%
Bank of Boston
Westpac Banking 3.4483% 0.0000% 3.4483%
Corporation
Credit Lyonnais, 3.4483% 0.0000% 3.4483%
New York Branch
Pilgrim Prime Rate 0.0000% 10.0000% 0.0000%
Trust
National Westminster 2.0690% 0.0000% 2.0690%
Bank, PLC
</TABLE>
<PAGE>
SCHEDULE B
Page 2
<TABLE>
<S> <C> <C> <C>
National Westminster 1.3793% 0.0000% 1.3793%
Bank, USA
The Connecticut 2.7586% 0.0000% 2.7586%
National Bank
Protective Life 0.0000% 6.6667% 0.0000%
Insurance Company
------- ------ ------
100% 100% 100%
</TABLE>
<PAGE>
SCHEDULE C
to
Second Amendment
SCHEDULE I
COMMITMENTS
-----------
<TABLE>
<CAPTION>
Tranche A Tranche B Revolving Loan
Bank Term Loans Term Loans Commitment
- ---- ---------- ---------- --------------
<S> <C> <C> <C>
Bankers Trust Company $ 98,669,047 $11,493,012 $ 15,787,048
Nationsbank of North 83,489,196 9,724,858 13,358,271
Carolina, N.A.
The Chase Manhattan 83,489,196 9,724,858 13,358,271
Bank, N.A.
Barclays Bank PLC 46,199,555 5,381,345 7,391,929
Canadian Imperial Bank 46,199,555 5,381,345 7,391,929
of Commerce
The First National 46,199,555 5,381,345 7,391,929
Bank of Chicago
Van Kampen Merritt 0 40,000,000 0
Prime Rate Income
Trust
Midland Bank PLC 34,046,446 0 5,447,432
The Bank of Nova
Scotia 28,209,913 6,770,380 4,513,585
Heller Financial, Inc. 25,000,000 6,000,000 4,000,000
U S WEST Capital 0 20,000,000 0
Corporation
Banque Paribas, 8,620,690 0 1,379,310
Houston Agency
The Mitsubishi Trust 21,428,572 5,142,857 3,428,571
and Banking
Corporation
The First National 21,551,724 0 3,448,276
Bank of Boston
Westpac Banking 21,551,724 0 3,448,276
Corporation
Credit Lyonnais, 21,551,724 0 3,448,276
New York Branch
Pilgrim Prime Rate 0 15,000,000 0
Trust
</TABLE>
<PAGE>
SCHEDULE C
Page 2
<TABLE>
<S> <C> <C> <C>
National Westminster 12,931,034 0 2,068,966
Bank, PLC
National Westminster 8,620,690 0 1,379,310
Bank, USA
The Connecticut 17,241,379 0 2,758,621
National Bank
Protective Life 0 10,000,000 0
Insurance Company
------------ ------------ ------------
$625,000,000 $150,000,000 $100,000,000
</TABLE>
<PAGE>
SCHEDULE D
to
Second Amendment
SCHEDULE X
BANK ADDRESSES
Bankers Trust Company
130 Liberty Street
New York, New York 10006
Attn: Kenneth A. Lang
Tel: (212) 250-7418
Fax: (212) 250-7200
Nationsbank of North
Carolina, N.A.
Nations Bank Plaza
T-39
Charlotte, NC 28255
Attn: Thomas W. Bunn
Tel: (704) 386-7526
Fax: (704) 386-6432
The Chase Manhattan Bank, N.A.
1 Chase Manhattan Plaza
3rd Floor
New York, New York 10081
Attn: Thomas T. Daniels
Tel: (212) 552-1711
Fax: (212) 552-5189
Barclays Bank PLC
388 Market Street
Suite 1700
San Francisco, California 94111
Attn: John Biestman
Associate Director
Tel: (415) 765-4742
Fax: (415) 765-4760
<PAGE>
Page 2
Canadian Imperial Bank of
Commerce, Atlanta Agency
200 Galleria Parkway
Suite 650
Atlanta, Georgia 30339
Attn: Kathryn W. Sax
Tel: (404) 916-7009
Fax: (404) 850-0934
The First National Bank of
Chicago
One First National Plaza
Chicago, Illinois 60670
Attn: Donna Rae Green
Tel: (312) 732-6378
Fax: (312) 732-7655
Van Kampen Merritt Prime Rate
Income Trust
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Attn: Jeff Maillet
Tel: (708) 684-6438
Fax: (708) 684-6740/41
Midland Bank PLC
156 West 56th Street
5th Floor
New York, New York 10019
Attn: Gina Sidorsky
Tel: (212) 969-7235
Fax: (212) 969-7240
The Bank of Nova Scotia
55 Park Place
Suite 650
Atlanta, Georgia 30303
Attn: Shannon Law
Tel: (404) 581-0807
Fax: (404) 525-3833
<PAGE>
Page 3
Heller Financial, Inc.
500 West Monroe Street
Chicago, Illinois 60661
Attn: Michele Kovatchis
Tel: (312) 441-7177
Fax: (312) 441-7341
U S WEST Financial Services, Inc.
One Canterbury Green
Stamford, Connecticut 06901
Attn: David Erb
Tel: (203) 352-4056
Fax: (203) 352-4171
Banque Paribas, Houston Agency
212l San Jacinto Street
Suite 930
Dallas, Texas 75201
Attn: Jeffrey Edwards
Tel: (214) 969-0380
Fax: (214) 969-0260
The Mitsubishi Trust and Banking
Corporation
520 Madison Avenue
New York, New York 10022
Attn: Patricia Loret de Mola
Tel: (212) 891-8454
Fax: (212) 755-2349
The First National Bank of Boston
P.O. Box 2016 (01-06-06)
Boston, Massachusetts 02106
Attn: Charles M. Petersen
Tel: (617) 434-6949
Fax: (617) 434-8964
<PAGE>
Page 4
Westpac Banking Corporation
335 Madison Avenue
27th Floor
New York, New York l0017
Attn: Mr. Larry Creedon
Tel: (212) 551-2764
Fax: (212) 687-5176
Credit Lyonnais
Lincoln Plaza
500 North Akard
Suite 3210
Dallas, Texas 75201
Attn: Jeri Smith
Tel:
Fax:
Pilgrim Prime Rate Trust
10100 Santa Monica Boulevard
21st Floor
Los Angeles, California
90067-4112
Attn: Kathleen Lenarcic
Tel: (310) 551-5422
Fax: (310) 551-3001
National Westminster Bank, PLC
175 Water Street
Floor 26
New York, New York 10038
Attn: David Yewer
Tel: (212) 602-4306
Fax:
National Westminster Bank, USA
175 Water Street
Floor 28
New York, New York 10038
Attn: Phil Krall
Tel:
Fax:
<PAGE>
Page 5
The Connecticut National Bank
777 Main Street
Hartford, Connecticut 06115
Attn: Arlene Baker
Specialized Lending
Division
MSM 397
Tel:
Fax:
Protective Life Insurance Company
10 Universal City Plaza
Suite 240l
Universal City, CA 91608
Attn: Mark Okada
Tel: (818) 763-0433
Fax: (818) 763-9182
<PAGE>
EXHIBIT 10.31.3
THIRD AMENDMENT TO CREDIT AGREEMENT
THIRD AMENDMENT (the "Amendment") dated as of February 17, 1993, among
DR PEPPER/SEVEN-UP CORPORATION (the "Borrower"), DR PEPPER/SEVEN-UP COMPANIES,
INC., a Delaware corporation (the "Guarantor"), the Banks party to the Credit
Agreement described below, BANKERS TRUST COMPANY, NATIONSBANK OF NORTH CAROLINA,
N.A. and THE CHASE MANHATTAN BANK, N.A., as Managing Agents, the Lead Managers
and BANKERS TRUST COMPANY, as Administrative Agent. All capitalized terms used
herein and not otherwise defined shall have the respective meanings provided
such terms in the Credit Agreement referred to below.
W I T N E S S E T H :
WHEREAS, the Borrower, the Guarantor, the Banks, the Managing Agents,
the Lead Managers and the Administrative Agent are parties to a Credit Agreement
dated as of October 20, 1992 (the "Credit Agreement");
WHEREAS, the parties hereto wish to amend the Credit Agreement as
herein provided;
NOW, THEREFORE, it is agreed:
1. On and after the Amendment Effective Date, Section 11 of the
Credit Agreement shall be amended by deleting the definition of "Consolidated
EBITDA" in its entirety and inserting in lieu thereof a new definition to read
as follows:
"'Consolidated EBITDA' for any period shall mean consolidated EBIT,
adjusted by adding thereto (i) the amount of all amortization of
intangibles and depreciation that were deducted in arriving at consolidated
EBIT for such period and (ii) for purposes of Section 9.09 only, (x)
dividends accrued with respect to Seven-Up Senior Preferred Stock and
(y) fees and expenses not in excess of $6,026,000 associated with the
proposed equity offering by the Guarantor and the related refinancing of
certain outstanding Indebtedness of the Guarantor and its Subsidiaries, to
the extent accrued in the three fiscal quarters ended September 30, 1992."
<PAGE>
2. This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provision of the Credit
Agreement or any other Credit Document.
3. This Amendment may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts shall be lodged with the Credit Parties and the Agent.
4. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.
5. This Amendment shall become effective on the date (the "Amendment
Effective Date") when each of the Borrower, the Guarantor and the Required Banks
shall have signed a copy hereof (whether the same or different copies) and shall
have delivered (including by way of telecopier) the same to the Administrative
Agent at its Notice Office.
6. From and after the Amendment Effective Date, all references in
the Credit Agreement and each of the Credit Documents to the Credit Agreement
shall be deemed to be references to such Credit Agreement as amended hereby.
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Amendment to be duly executed and delivered as of the date
first above written.
DR PEPPER/SEVEN-UP CORPORATION
By_____________________________________
Title:
DR PEPPER/SEVEN-UP COMPANIES, INC.
By_____________________________________
Title:
-2-
<PAGE>
MANAGING AGENTS:
BANKERS TRUST COMPANY,
Individually, as Managing Agent
and as Administrative Agent
By_____________________________________
Title:
NATIONSBANK OF NORTH CAROLINA, N.A.,
Individually and as Managing Agent
By_____________________________________
Title:
THE CHASE MANHATTAN BANK, N.A.,
Individually and as Managing Agent
By_____________________________________
Title:
CO-AGENTS:
BARCLAYS BANK PLC,
Individually and as Co-Agent
By_____________________________________
Title:
By_____________________________________
Title:
-3-
<PAGE>
CANADIAN IMPERIAL BANK OF COMMERCE,
Individually and as Co-Agent
By_____________________________________
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
Individually and as Co-Agent
By_____________________________________
Title:
LEAD MANAGERS:
VAN KAMPEN MERRITT PRIME RATE
INCOME TRUST
By_____________________________________
Title:
MIDLAND BANK PLC
By_____________________________________
Title:
THE BANK OF NOVA SCOTIA
By_____________________________________
Title:
-4-
<PAGE>
OTHER BANKS:
HELLER FINANCIAL, INC.
By_____________________________________
Title:
U S WEST FINANCIAL SERVICES, INC.
By_____________________________________
Title:
BANQUE PARIBAS, Houston Agency
By_____________________________________
Title:
By_____________________________________
Title:
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By_____________________________________
Title:
THE FIRST NATIONAL BANK OF BOSTON
By_____________________________________
Title:
WESTPAC BANKING CORPORATION
By_____________________________________
Title:
-5-
<PAGE>
CREDIT LYONNAIS New York Branch
By_____________________________________
Title:
PILGRIM PRIME RATE TRUST
By_____________________________________
Title:
NATIONAL WESTMINSTER BANK PLC
By_____________________________________
Title:
NATIONAL WESTMINSTER BANK USA
By_____________________________________
Title:
THE CONNECTICUT NATIONAL BANK
By_____________________________________
Title:
PROTECTIVE LIFE INSURANCE COMPANY
By_____________________________________
Title:
ALLSTATE PRIME INCOME TRUST
By_____________________________________
Title:
-6-
<PAGE>
CAISSE NATIONALE DE CREDIT AGRICOLE
By_____________________________________
Title:
THE LONG-TERM CREDIT BANK OF JAPAN,
LIMITED, NEW YORK BRANCH
By_____________________________________
Title:
MERRILL LYNCH PRIME FUND, INC.
By_________________________________
Title:
MERRILL LYNCH PRIME RATE PORTFOLIO
By: Merrill Lynch Investment
Management, Inc.,
as Investment Adviser
By_____________________________________
Title:
THE BANK OF TOKYO TRUST COMPANY
By_____________________________________
Title:
THE BANK OF IRELAND, GRAND CAYMAN BRANCH
By_____________________________________
Title:
-7-
<PAGE>
RESTRUCTURED OBLIGATIONS BACKED BY
SENIOR ASSETS B.V.
By its Managing Director
ABN TRUSTCOMPANY (NEDERLAND) B.V.
By_____________________________________
Title:
STICHTING RESTRUCTURED OBLIGATIONS
BACKED BY SENIOR ASSETS 2 (ROSA2)
By its Managing Director
ABN TRUSTCOMPANY (NEDERLAND) B.V.
By_____________________________________
Title:
MC INTERNATIONAL INVESTMENT LIMITED
By_____________________________________
Title:
ABN-AMRO BANK, N.V.
By_____________________________________
Title:
By_____________________________________
Title:
BANK OF AMERICA NT&SA
By_____________________________________
Title:
-8-
<PAGE>
BANK OF MONTREAL
By_____________________________________
Title:
BANQUE FRANCAISE DU COMMERCE EXTERIEUR
By_____________________________________
Title:
EATON VANCE PRIME RATE RESERVES
By_____________________________________
Title:
PROSPECT STREET SENIOR PORTFOLIO, L.P.
By: Prospect Street Senior Loan Corp.,
as Managing General Partner
By_____________________________________
Title:
PEARL STREET L.P.
By_____________________________________
Title:
-9-
<PAGE>
FOURTH AMENDMENT TO CREDIT AGREEMENT
FOURTH AMENDMENT (the "Amendment") dated as of March 4, 1993, among DR
PEPPER/SEVEN-UP CORPORATION (the "Borrower"), DR PEPPER/SEVEN-UP COMPANIES,
INC., a Delaware corporation (the "Guarantor"), the Banks party to the Credit
Agreement described below, BANKERS TRUST COMPANY, NATIONSBANK OF NORTH CAROLINA,
N.A. and THE CHASE MANHATTAN BANK, N.A., as Managing Agents, the Lead Managers
and BANKERS TRUST COMPANY, as Administrative Agent. All capitalized terms used
herein and not otherwise defined shall have the respective meanings provided
such terms in the Credit Agreement referred to below.
W I T N E S S E T H :
WHEREAS, the Borrower, the Guarantor, the Banks, the Managing Agents,
the Lead Managers and the Administrative Agent are parties to a Credit Agreement
dated as of October 20, 1992 (the "Credit Agreement");
WHEREAS, the parties hereto wish to amend the Credit Agreement as
herein provided;
NOW, THEREFORE, it is agreed:
1. On and after the Amendment Effective Date, Section 4.01 of the
Credit Agreement shall be amended by deleting clause (v) of the
first sentence thereof in its entirety and inserting in lieu thereof a new
clause (v) to read: "(v) each voluntary prepayment of Term Loans pursuant to
this Section 4.01 shall be applied FIRST, to the extent any portion of any
Tranche A Term Loan Scheduled Repayment in the same calendar year then remains
unpaid, to reduce the remaining Tranche A Term Loan Scheduled Repayments to
occur in such calendar year in direct order of maturity and SECOND, after such
Tranche A Term Loan Scheduled Repayments shall have been reduced to zero, to the
Tranche A Term Loans and Tranche B Term Loans on a PRO RATA basis (based upon
the then outstanding principal amount of Tranche A Term Loans and Tranche B Term
Loans)".
2. The parties hereto hereby acknowledge that, in accordance with
the requirements of Section 13.04(b) of the Credit Agreement, as of February 5,
1993, (i) Schedule I to the Credit Agreement has been amended in the form of
Schedule
<PAGE>
A attached hereto and (ii) Schedule X to the Credit Agreement has been amended
in the form of Schedule B attached hereto.
3. This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provision of the Credit
Agreement or any other Credit Document.
4. This Amendment may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts shall be lodged with the Credit Parties and the Agent.
5. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.
6. This Amendment shall become effective on the date (the "Amendment
Effective Date") when each of the Borrower, the Guarantor and the Required Banks
shall have signed a copy hereof (whether the same or different copies) and shall
have delivered (including by way of telecopier) the same to the Administrative
Agent at its Notice Office.
7. From and after the Amendment Effective Date, all references in
the Credit Agreement and each of the Credit Documents to the Credit Agreement
shall be deemed to be references to such Credit Agreement as amended hereby.
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Amendment to be duly executed and delivered as of the date
first above written.
DR PEPPER/SEVEN-UP CORPORATION
By /s/
-------------------------------------
Title:
DR PEPPER/SEVEN-UP COMPANIES, INC.
By /s/
-------------------------------------
Title:
-2-
<PAGE>
MANAGING AGENTS:
BANKERS TRUST COMPANY,
Individually, as Managing Agent
and as Administrative Agent
By /s/ Mary Kay Coyle
-------------------------------------
Title: V. P.
NATIONSBANK OF NORTH CAROLINA, N.A.,
Individually and as Managing Agent
By_____________________________________
Title:
THE CHASE MANHATTAN BANK, N.A.,
Individually and as Managing Agent
By_____________________________________
Title:
CO-AGENTS:
BARCLAYS BANK PLC,
Individually and as Co-Agent
By_____________________________________
Title:
By_____________________________________
Title:
-3-
<PAGE>
MANAGING AGENTS:
BANKERS TRUST COMPANY,
Individually, as Managing Agent
and as Administrative Agent
By_____________________________________
Title:
NATIONSBANK OF NORTH CAROLINA, N.A.,
Individually and as Managing Agent
By /s/
-------------------------------------
Title: Senior Vice President
THE CHASE MANHATTAN BANK, N.A.,
Individually and as Managing Agent
By_____________________________________
Title:
CO-AGENTS:
BARCLAYS BANK PLC,
Individually and as Co-Agent
By_____________________________________
Title:
By_____________________________________
Title:
-3-
<PAGE>
MANAGING AGENTS:
BANKERS TRUST COMPANY,
Individually, as Managing Agent
and as Administrative Agent
By_____________________________________
Title:
NATIONSBANK OF NORTH CAROLINA, N.A.,
Individually and as Managing Agent
By_____________________________________
Title:
THE CHASE MANHATTAN BANK, N.A.,
Individually and as Managing Agent
By /s/
-------------------------------------
Title:
CO-AGENTS:
BARCLAYS BANK PLC,
Individually and as Co-Agent
By_____________________________________
Title:
By_____________________________________
Title:
-3-
<PAGE>
MANAGING AGENTS:
BANKERS TRUST COMPANY,
Individually, as Managing Agent
and as Administrative Agent
By_____________________________________
Title:
NATIONSBANK OF NORTH CAROLINA, N.A.,
Individually and as Managing Agent
By_____________________________________
Title:
THE CHASE MANHATTAN BANK, N.A.,
Individually and as Managing Agent
By_____________________________________
Title:
CO-AGENTS:
BARCLAYS BANK PLC,
Individually and as Co-Agent
By /s/
-------------------------------------
Title:
By /s/
-------------------------------------
Title: Associate Director
-3-
<PAGE>
CANADIAN IMPERIAL BANK OF COMMERCE,
Individually and as Co-Agent
By /s/
-------------------------------------
Title: Authorized Signatory
THE FIRST NATIONAL BANK OF CHICAGO,
Individually and as Co-Agent
By_____________________________________
Title:
LEAD MANAGERS:
VAN KAMPEN MERRITT PRIME RATE
INCOME TRUST
By_____________________________________
Title:
MIDLAND BANK PLC
By_____________________________________
Title:
THE BANK OF NOVA SCOTIA
By_____________________________________
Title:
-4-
<PAGE>
CANADIAN IMPERIAL BANK OF COMMERCE,
Individually and as Co-Agent
By_____________________________________
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
Individually and as Co-Agent
By /s/
-------------------------------------
Title: Vice President
LEAD MANAGERS:
VAN KAMPEN MERRITT PRIME RATE
INCOME TRUST
By_____________________________________
Title:
MIDLAND BANK PLC
By_____________________________________
Title:
THE BANK OF NOVA SCOTIA
By_____________________________________
Title:
-4-
<PAGE>
CANADIAN IMPERIAL BANK OF COMMERCE,
Individually and as Co-Agent
By_____________________________________
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
Individually and as Co-Agent
By_____________________________________
Title:
LEAD MANAGERS:
VAN KAMPEN MERRITT PRIME RATE
INCOME TRUST
By /s/
-------------------------------------
Title:
MIDLAND BANK PLC
By_____________________________________
Title:
THE BANK OF NOVA SCOTIA
By_____________________________________
Title:
-4-
<PAGE>
CANADIAN IMPERIAL BANK OF COMMERCE,
Individually and as Co-Agent
By_____________________________________
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
Individually and as Co-Agent
By_____________________________________
Title:
LEAD MANAGERS:
VAN KAMPEN MERRITT PRIME RATE
INCOME TRUST
By_____________________________________
Title:
MIDLAND BANK PLC
By /s/
-------------------------------------
Title: Director
THE BANK OF NOVA SCOTIA
By_____________________________________
Title:
-4-
<PAGE>
OTHER BANKS:
ABN-AMRO BANK, N.V.
By /s/
-------------------------------------
Title: Vice President
By /s/
-------------------------------------
Title: Vice President
ALLSTATE PRIME INCOME TRUST
By_____________________________________
Title:
BANK OF AMERICA NT&SA
By_____________________________________
Title:
THE BANK OF IRELAND, GRAND CAYMAN BRANCH
By_____________________________________
Title:
BANK OF MONTREAL
By_____________________________________
Title:
THE BANK OF TOKYO TRUST COMPANY
By_____________________________________
Title:
-5-
<PAGE>
OTHER BANKS:
ABN-AMRO BANK, N.V.
By_____________________________________
Title:
By_____________________________________
Title:
PRIME INCOME TRUST (f/k/a
ALLSTATE PRIME INCOME TRUST)
By /s/
-------------------------------------
Title:
BANK OF AMERICA NT&SA
By_____________________________________
Title:
THE BANK OF IRELAND, GRAND CAYMAN BRANCH
By_____________________________________
Title:
BANK OF MONTREAL
By_____________________________________
Title:
THE BANK OF TOKYO TRUST COMPANY
By_____________________________________
Title:
-5-
<PAGE>
OTHER BANKS:
ABN-AMRO BANK, N.V.
By_____________________________________
Title:
By_____________________________________
Title:
ALLSTATE PRIME INCOME TRUST
By_____________________________________
Title:
BANK OF AMERICA NT&SA
By /s/
-------------------------------------
Title: Vice President
THE BANK OF IRELAND, GRAND CAYMAN BRANCH
By_____________________________________
Title:
BANK OF MONTREAL
By_____________________________________
Title:
THE BANK OF TOKYO TRUST COMPANY
By_____________________________________
Title:
-5-
<PAGE>
OTHER BANKS:
ABN-AMRO BANK, N.V.
By_____________________________________
Title:
By_____________________________________
Title:
ALLSTATE PRIME INCOME TRUST
By_____________________________________
Title:
BANK OF AMERICA NT&SA
By_____________________________________
Title:
THE BANK OF IRELAND, GRAND CAYMAN BRANCH
By /s/
-------------------------------------
Title: Assistant Vice President
BANK OF MONTREAL
By_____________________________________
Title:
THE BANK OF TOKYO TRUST COMPANY
By_____________________________________
Title:
-5-
<PAGE>
OTHER BANKS:
ABN-AMRO BANK, N.V.
By_____________________________________
Title:
By_____________________________________
Title:
ALLSTATE PRIME INCOME TRUST
By_____________________________________
Title:
BANK OF AMERICA NT&SA
By_____________________________________
Title:
THE BANK OF IRELAND, GRAND CAYMAN BRANCH
By_____________________________________
Title:
BANK OF MONTREAL
By /s/ Daniel A. Brown
-------------------------------------
Title: Daniel A. Brown
Director
THE BANK OF TOKYO TRUST COMPANY
By_____________________________________
Title:
-5-
<PAGE>
BANQUE FRANCAISE DU COMMERCE EXTERIEUR
By /s/ Mark A. Harrington
-------------------------------------
Title: Mark A. Harrington
Vice President & Deputy Manager
By /s/ Bernard Fremont
-------------------------------------
Title: Bernard Fremont
First Vice President &
Regional Manager
BANQUE PARIBAS, Houston Agency
By_____________________________________
Title:
By_____________________________________
Title:
CAISSE NATIONALE DE CREDIT AGRICOLE
By_____________________________________
Title:
CREDIT LYONNAIS New York Branch
By_____________________________________
Title:
EATON VANCE PRIME RATE RESERVES
By_____________________________________
Title:
THE FIRST NATIONAL BANK OF BOSTON
By_____________________________________
Title:
-6-
<PAGE>
BANQUE FRANCAISE DU COMMERCE EXTERIEUR
By_____________________________________
Title:
By_____________________________________
Title:
BANQUE PARIBAS, Houston Agency
By /s/ Bruce A. Cauley
-------------------------------------
Title: BRUCE A. CAULEY
Deputy General Manager
By /s/ Jeffrey L. Edwards
-------------------------------------
Title: JEFFREY L. EDWARDS
Vice President
CAISSE NATIONALE DE CREDIT AGRICOLE
By_____________________________________
Title:
CREDIT LYONNAIS New York Branch
By_____________________________________
Title:
EATON VANCE PRIME RATE RESERVES
By_____________________________________
Title:
THE FIRST NATIONAL BANK OF BOSTON
By_____________________________________
Title:
-6-
<PAGE>
BANQUE FRANCAISE DU COMMERCE EXTERIEUR
By_____________________________________
Title:
By_____________________________________
Title:
BANQUE PARIBAS, Houston Agency
By_____________________________________
Title:
By_____________________________________
Title:
CAISSE NATIONALE DE CREDIT AGRICOLE
By /s/ David Bouhl
-------------------------------------
Title: DAVID BOUHL, V.P.
HEAD OF CORPORATE BANKING
CHICAGO
CREDIT LYONNAIS New York Branch
By_____________________________________
Title:
EATON VANCE PRIME RATE RESERVES
By_____________________________________
Title:
THE FIRST NATIONAL BANK OF BOSTON
By_____________________________________
Title:
-6-
<PAGE>
BANQUE FRANCAISE DU COMMERCE EXTERIEUR
By_____________________________________
Title:
By_____________________________________
Title:
BANQUE PARIBAS, Houston Agency
By_____________________________________
Title:
By_____________________________________
Title:
CAISSE NATIONALE DE CREDIT AGRICOLE
By_____________________________________
Title:
CREDIT LYONNAIS New York Branch
By /s/
-------------------------------------
Title: Senior Vice President
EATON VANCE PRIME RATE RESERVES
By_____________________________________
Title:
THE FIRST NATIONAL BANK OF BOSTON
By_____________________________________
Title:
-6-
<PAGE>
BANQUE FRANCAISE DU COMMERCE EXTERIEUR
By_____________________________________
Title:
By_____________________________________
Title:
BANQUE PARIBAS, Houston Agency
By_____________________________________
Title:
By_____________________________________
Title:
CAISSE NATIONALE DE CREDIT AGRICOLE
By_____________________________________
Title:
CREDIT LYONNAIS New York Branch
By_____________________________________
Title:
EATON VANCE PRIME RATE RESERVES
By /s/ Jeffrey S. Garner
-------------------------------------
Title: Jeffrey S. Garner
Vice President
THE FIRST NATIONAL BANK OF BOSTON
By_____________________________________
Title:
-6-
<PAGE>
HELLER FINANCIAL, INC.
By /s/
-------------------------------------
Title:
THE LONG-TERM CREDIT BANK OF JAPAN,
LIMITED, NEW YORK BRANCH
By_____________________________________
Title:
MC INTERNATIONAL INVESTMENT LIMITED
By_____________________________________
Title:
MERRILL LYNCH PRIME FUND, INC.
By_____________________________________
Title:
MERRILL LYNCH PRIME RATE PORTFOLIO
By: Merrill Lynch Investment
Management, Inc.,
as Investment Adviser
By_____________________________________
Title:
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By_____________________________________
Title:
-7-
<PAGE>
HELLER FINANCIAL, INC.
By_____________________________________
Title:
THE LONG-TERM CREDIT BANK OF JAPAN,
LIMITED, NEW YORK BRANCH
By /s/ Jay Shankar
-------------------------------------
Title: JAY SHANKAR
VICE PRESIDENT
MC INTERNATIONAL INVESTMENT LIMITED
By_____________________________________
Title:
MERRILL LYNCH PRIME FUND, INC.
By_____________________________________
Title:
MERRILL LYNCH PRIME RATE PORTFOLIO
By: Merrill Lynch Investment
Management, Inc.,
as Investment Adviser
By_____________________________________
Title:
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By_____________________________________
Title:
-7-
<PAGE>
HELLER FINANCIAL, INC.
By_____________________________________
Title:
THE LONG-TERM CREDIT BANK OF JAPAN,
LIMITED, NEW YORK BRANCH
By_____________________________________
Title:
MC INTERNATIONAL INVESTMENT LIMITED
By /s/
-------------------------------------
Title: Senior Vice President
MERRILL LYNCH PRIME FUND, INC.
By_____________________________________
Title:
MERRILL LYNCH PRIME RATE PORTFOLIO
By: Merrill Lynch Investment
Management, Inc.,
as Investment Adviser
By_____________________________________
Title:
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By_____________________________________
Title:
-7-
<PAGE>
HELLER FINANCIAL, INC.
By_____________________________________
Title:
THE LONG-TERM CREDIT BANK OF JAPAN,
LIMITED, NEW YORK BRANCH
By_____________________________________
Title:
MC INTERNATIONAL INVESTMENT LIMITED
By_____________________________________
Title:
MERRILL LYNCH PRIME FUND, INC.
By /s/ Anthony R. Clemente
-------------------------------------
Title: ANTHONY R. CLEMENTE
AUTHORIZED SIGNATORY
MERRILL LYNCH PRIME RATE PORTFOLIO
By: Merrill Lynch Investment
Management, Inc.,
as Investment Adviser
By /s/ Anthony R. Clemente
-------------------------------------
Title: ANTHONY R. CLEMENTE
AUTHORIZED SIGNATORY
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By_____________________________________
Title:
-7-
<PAGE>
HELLER FINANCIAL, INC.
By_____________________________________
Title:
THE LONG-TERM CREDIT BANK OF JAPAN,
LIMITED, NEW YORK BRANCH
By_____________________________________
Title:
MC INTERNATIONAL INVESTMENT LIMITED
By_____________________________________
Title:
MERRILL LYNCH PRIME FUND, INC.
By_____________________________________
Title:
MERRILL LYNCH PRIME RATE PORTFOLIO
By: Merrill Lynch Investment
Management, Inc.,
as Investment Adviser
By_____________________________________
Title:
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By /s/
-------------------------------------
Title: Senior Vice President
-7-
<PAGE>
NATIONAL WESTMINSTER BANK PLC
By /s/
-------------------------------------
Title: Vice President
NATIONAL WESTMINSTER BANK USA
By_____________________________________
Title:
PEARL STREET L.P.
By_____________________________________
Title:
PILGRIM PRIME RATE TRUST
By_____________________________________
Title:
PROSPECT STREET SENIOR PORTFOLIO, L.P.
By: Prospect Street Senior Loan Corp.,
as Managing General Partner
By_____________________________________
Title:
PROTECTIVE LIFE INSURANCE COMPANY
By_____________________________________
Title:
-8-
<PAGE>
NATIONAL WESTMINSTER BANK PLC
By_____________________________________
Title:
NATIONAL WESTMINSTER BANK USA
By /s/
-------------------------------------
Title: Assistant Vice President
PEARL STREET L.P.
By_____________________________________
Title:
PILGRIM PRIME RATE TRUST
By_____________________________________
Title:
PROSPECT STREET SENIOR PORTFOLIO, L.P.
By: Prospect Street Senior Loan Corp.,
as Managing General Partner
By_____________________________________
Title:
PROTECTIVE LIFE INSURANCE COMPANY
By_____________________________________
Title:
-8-
<PAGE>
RESTRUCTURED OBLIGATIONS BACKED BY
SENIOR ASSETS B.V.
By its Portfolio Advisor
CHANCELLOR SENIOR SECURED
MANAGEMENT, INC.
By /s/ C. E. Yanser
-------------------------------------
Title: Vice President
STICHTING RESTRUCTURED OBLIGATIONS
BACKED BY SENIOR ASSETS 2 (ROSA2)
By its Portfolio Manager
CHANCELLOR SENIOR SECURED
MANAGEMENT, INC.
By /s/ C. E. Janser
-------------------------------------
Title: Vice President
SHAWMUT BANK CONNECTICUT, N.A.
By_____________________________________
Title:
U S WEST FINANCIAL SERVICES, INC.
By_____________________________________
Title:
WESTPAC BANKING CORPORATION
By___________________________________
Title:
-9-
<PAGE>
RESTRUCTURED OBLIGATIONS BACKED BY
SENIOR ASSETS B.V.
By its Portfolio Advisor
CHANCELLOR SENIOR SECURED
MANAGEMENT, INC.
By_____________________________________
Title:
STICHTING RESTRUCTURED OBLIGATIONS
BACKED BY SENIOR ASSETS 2 (ROSA2)
By its Portfolio Manager
CHANCELLOR SENIOR SECURED
MANAGEMENT, INC.
By_____________________________________
Title:
SHAWMUT BANK CONNECTICUT, N.A.
By /s/
-------------------------------------
Title: V. P.
U S WEST FINANCIAL SERVICES, INC.
By_____________________________________
Title:
WESTPAC BANKING CORPORATION
By_____________________________________
Title:
-9-
<PAGE>
SCHEDULE A
to
Fourth Amendment
----------------
SCHEDULE I
----------
<TABLE>
<CAPTION>
COMMITMENTS
-----------
Tranche A Tranche B Revolving Loan
Bank Term Loans Term Loans Commitment
- ---- ---------- ---------- --------------
<S> <C> <C> <C>
ABN - AMRO Bank, N.V. 17,021,430.81 0.00 2,758,621.00
Allstate Prime Income
Trust 0.00 13,405,143.55 0.00
Bankers Trust Company 29,464,122.37 106,837.77 0.00
Bank of America NT&SA 21,276,788.76 0.00 3,448,276.00
The Bank of Ireland 3,852,052.75 0.00 689,655.17
Bank of Montreal 29,787,504.67 0.00 4,827,586.00
The Bank of Nova Scotia 21,052,198.64 584,147.28 3,769,095.21
The Bank of Tokyo Trust
Company 7,704,105.49 0.00 1,379,310.34
Banqeue Francaise du
Commerce Exterieur 5,957,501.13 0.00 965,517.00
Banque Paribas 12,640,320.82 0.00 1,379,310.00
Barclays Bank PLC 22,110,893.91 50,025.33 6,056,271.86
Canadian Imperial Bank
of Commerce 27,047,108.94 50,025.33 6,056,271.86
The Chase Manhattan Bank,
N.A. 25,264,029.63 4,558,783.68 7,821,492.91
Caisse Nationale
de Credit Agricole 11,556,158.23 0.00 2,886,157.52
Credit Lyonnais 19,260,263.59 0.00 3,448,276.00
Eaton Vance Prime
Rate Reserves 24,681,075.12 0.00 0.00
The First National
Bank of Boston 19,260,263.59 0.00 3,448,276.00
The First National
Bank of Chicago 7,682,560.23 50,025.33 13,404,333.86
Heller Financial, Inc. 22,341,905.91 5,362,057.42 4,000,000.00
</TABLE>
<PAGE>
SCHEDULE A
Page 2
<TABLE>
<CAPTION>
Tranche A Tranche B Revolving Loan
Bank Term Loans Term Loans Commitment
- ---- ---------- ---------- --------------
<S> <C> <C> <C>
The Long-Term Credit
Bank of Japan, Limited 15,408,210.97 0.00 2,758,620.69
MC International
Investment Limited 22,341,905.91 5,362,057.42 4,000,000.00
Merrill Lynch Prime
Fund, Inc. 4,936,215.02 18,767,200.97 0.00
Merrill Lynch Prime
Rate Portfolio 0.00 5,106,199.70 0.00
Midland Bank PLC 25,490,284.70 0.00 5,447,432.00
The Mitsubishi Trust
and Banking Corporation 19,150,205.58 4,596,049.09 3,428,571.00
National Westminster
Bank PLC 11,556,157.80 0.00 2,068,966.00
National Westminster
Bank USA 7,704,105.79 0.00 1,379,310.00
Nationsbank of
North Carolina, N.A. 25,264,029.63 90,402.50 7,821,492.91
Pearl Street L.P. 4,936,215.02 0.00 0.00
Pilgrim Prime Rate Trust 0.00 13,405,143.55 0.00
Prospect Street Senior
Portfolio, L.P. 13,821,402.07 0.00 0.00
Protective Life
Insurance Company 0.00 8,936,762.37 0.00
Restructured Obligations
Backed By Senior
Assets, B.V. 24,576,096.50 0.00 0.00
Stichting Restructured
Obligations Backed By
Senior Assets B.V. 11,404,869.88 0.00 0.00
Shawmut Bank Connecticut,
N.A. 24,737,400.74 0.00 3,308,880.67
U S West Financial
Services, Inc. 0.00 17,873,524.73 0.00
</TABLE>
<PAGE>
SCHEDULE A
Page 3
<TABLE>
<CAPTION>
Tranche A Tranche B Revolving Loan
Bank Term Loans Term Loans Commitment
- ---- ---------- ---------- --------------
<S> <C> <C> <C>
Van Kampen Merritt
Prime Rate Income Trust 0.00 35,747,049.46 0.00
Westpac Banking
Corporation 19,260,263.59 0.00 3,448,276.00
-------------- --------------- --------------
58,547,647.79 134,051,435.48 100,000,000.00
</TABLE>
<PAGE>
SCHEDULE B
to
Fourth Amendment
----------------
SCHEDULE X
----------
BANK ADDRESSES
BANKERS TRUST COMPANY
280 Park Avenue
New York, NY 10017
Tel: (212) 454-3061
Fax: (212) 454-3941
Mary Kay Coyle
14 East
Tel: (212) 454-3892
Fax: (212) 454-2942
THE CHASE MANHATTAN BANK, N.A.
1 Chase Manhattan Plaza
New York, New York 10081
Tel: (212) 552-2222
Thomas Daniels
Vice President
3rd Floor
Tel: (212) 552-1711
Fax: (212) 552-5189/0196
NATIONSBANK OF NORTH CAROLINA, N.A.
600 Peachtree Street, N.E.
21st Floor
Atlanta, Georgia 30308
Steve Foutch
Assistant Vice President
Tel: (404) 607-5547
Fax: (404) 607-6467
<PAGE>
SCHEDULE B
Page 2
BARCLAYS BANK PLC
388 Market Street
Suite 1700
San Francisco, CA 94111
Tel: (415) 765-4700
John Whitson
Senior Associate
Tel: (415) 765-4725
Fax: (415) 765-4760
CIBC, INC.
2 Paces West
2727 Paces Fairy Road
Suite 1200
Atlanta, Georgia 30339
Tel: (404) 319-4903
Kathryn Sax
Tel: (404) 319-4903
Fax: (404) 319-4954
THE FIRST NATIONAL BANK OF CHICAGO
One First National Plaza
Chicago, IL 60670
Tel: (312) 732-4000
Jeanette Ganousis
Vice President/Senior Corporate Banker
14th Floor, Suite 0088,
Tel: (312) 732-6066
Fax: (312) 732-5161
ABN AMRO BANK N.V.
3 River Way
Suite 1600
Houston, Texas 77056
Ronald Mahle
Tel: (713) 964-3350
Fax: (713) 629-7533
<PAGE>
SCHEDULE B
Page 3
ALLSTATE PRIME INCOME TRUST
Allstate Life Insurance Company
Allstate Plaza West
Department J2A
Northbrook, IL 60062
Ms. Mary Ann Hawley
Tel: (708) 402-2370
Fax: (708) 402-7230
BANK OF AMERICA NT&S
335 Madison Avenue
5th Floor
New York, New York
Mr. Daniel McCready
Tel: (212) 503-8367
Fax: (212) 503-7066
THE BANK OF IRELAND, GRAND CAYMAN BRANCH
640 Fifth Avenue
New York, New York 10019
Mr. Roger Burns
Tel: (212) 397-1712
Fax: (212) 586-7752
BANK OF MONTREAL
430 Park Avenue
16th Floor
New York, New York 10022
Mr. Daniel Brown
Tel: (312) 750-4358
Fax: (312) 750-4314
<PAGE>
SCHEDULE B
Page 4
THE BANK OF NOVA SCOTIA
1100 Louisiana
Suite 3000
Houston, Texas 77002
Tel: (713) 752-0900
Mr. Matt Harris
Tel: (713) 752-0900
Fax: (713) 752-2425
THE BANK OF TOKYO TRUST COMPANY
100 Broadway
5th Floor
New York, New York 10005
Ms. Adane Dessie
Tel: (212) 766-3483
Fax: (212) 227-1234
BANQUE FRANCAISE DU COMMERCE EXTERIEUR
333 Clay Street
Suite 4340
Houston, Texas 77002
Mr. Mark Harrington
Tel: (713) 759-9401
Fax: (713) 759-9908
BANQUE PARIBAS
2121 San Jacinto Street
Suite 930
Dallas, Texas 75201
Mr. Jeffrey Edwards
Tel: (214) 969-0380
Fax: (214) 969-0260
<PAGE>
SCHEDULE B
Page 5
CN CREDIT AGRICOLE
55 East Monroe Street
Suite 4700
Chicago, Illinois 60603-5702
Mr. Joseph M. Kunze
Tel: (312) 372-9200
Fax: (312) 372-2830
CHANCELLOR CAPITAL MANAGEMENT
153 E. 53rd Street
24th Floor
New York, NY 10022
Mr. Chris Jansen
Tel: (212) 891-6669
Fax: (212) 891-6619
CREDIT LYONNAIS, NEW YORK BRANCH
1301 Avenue of the Americas
New York, New York 10019
Mr. Jim Morris
Tel: (212) 261-7869
Fax: (212) 459-3176
EATON VANCE PRIME RATE RESERVES
24 Federal Street
Boston, Massachusetts 02100
Tel: (617) 482-8260
Mr. Jane Nelson
Fax: (617) 654-8404
<PAGE>
SCHEDULE B
Page 6
THE FIRST NATIONAL BANK OF BOSTON
US Lending - Nationa1
100 Federal Street
MS: 01-06-07
Boston, MA 02110
Tel: (617) 434-2200
Mr. Charles Petersen
Tel: (617) 434-6949
Fax: (617) 434-8964
HELLER FINANCIAL, INC.
500 West Monroe Street
Chicago, Illinois 60601
Tel: (312) 441-7000
Mr. Robert Rotering
Tel: (312) 441-7178
Fax: (312) 441-7357
THE LONG-TERM CREDIT BANK OF JAPAN, LIMITED, NEW YORK BRANCH
165 Broadway
49th Floor
New York, New York 10006
Mr. Jay Shankar
Tel: (212) 335-4525
Fax: (212) 608-2371
MERRILL LYNCH, PRIME FUND, INC.
MERRILL LYNCH PRIME RATE PORTFOLIO
800 Scudders Mill Road
Area 2C
Plainsboro, NJ 08536
Anthony Clemente
Tel: (609) 282-2092
Fax: (609) 282-2752
<PAGE>
SCHEDULE B
Page 7
MC INTERNATIONAL INVESTMENT LIMITED
c/o MIC Consulting Inc.
527 Madison Avenue
16th Floor
New York, New York 10022
Mr. Naomichi Komuro
Tel: (212) 644-1846
Fax: (212) 644-2926
MIDLAND BANK PLC
156 West 56th Street
Third Floor
New York, New York 10019
Tel: (212) 969-7000
Ms. Gina Sidorsky
Tel: (212) 969-7235
Fax: (212) 969-7240
THE MITSUBISHI TRUST AND BANKING
CORPORATION
520 Madison Avenue
New York, New York 10022
Tel: (212) 838-7700
Ms. Patricia Loret de Mola
Tel: (212) 891-8454
Fax: (212) 755-2349
NATWEST PLC
175 Water Street
New York, New York 10038
Mr. Ian Cressy
Tel: (212) 602-4346
Fax: (212) 602-4319/4313
<PAGE>
SCHEDULE B
Page 8
NATWEST USA
175 Water Street
New York, New York 10038
Mr. Phillip Krall
Tel: (212) 602-2665
Fax: (212) 602-2149
PEARL STREET, L.P.
c/o Goldman Sachs
85 Broad Street
27th Floor
New York, New York 10005
Mr. Ed Kearns
Tel: (212) 902-4109
Fax: (212) 357-0271
PILGRIM PRIME RATE TRUST
10100 Santa Monica Boulevard
21st Floor
Los Angeles, California 90067-4112
Tel: (310) 551-0833
Ms. Kathleen Lenarcic
Tel: (310) 551-5422
Fax: (310) 551-3001
PROSPECT STREET SENIOR PORTFOLIO
Exchange Place
37th F1oor
Boston, Massachusetts 02109
Ms. Pam Libby
Tel: (617) 742-0801
Fax: (617) 742-9415
<PAGE>
SCHEDULE B
Page 9
PROTECTIVE LIFE INSURANCE COMPANY
10 Universal City Plaza
Suite 2401
Universal City, CA 91608
Mr. Mark Okada
Tel: (818) 763-0433
Fax: (818) 763-9182
SHAWMUT BANK CONNECTICUT, N.A.
777 Main Street
MSM397-2874
Hartford, Connecticut 06115
Tel: (203) 728-2326
Mr. Manfred Eigenbrod
Tel: (203) 728-4531
Fax: (203) 728-4621
U S WEST FINANCIAL SERVICES, INC.
One Canterbury Green
210 Broad Street; 2nd Floor
Stamford, CT 06901
Tel: (203) 352-4000
Mr. David Erb
Tel: (203) 352-4056
Fax: (203) 352-4171
VAN KAMPEN MERRITT PRIME RATE INCOME TRUST
One Parkview Plaza
Oakbrook Terrace, IL 60181
Tel: (708) 684-6000
Mr. Jeff Maillet
Tel: (708) 684-6438
Fax: (708) 684-6740/41
<PAGE>
SCHEDULE B
Page 10
WESTPAC BANKING CORPORATION
3680 Texas Commerce Tower
600 Travis Street
Houston, Texas 77002-3005
Mr. Herbert May
Tel: (713) 224-0955
Fax: (713) 224-5358
<PAGE>
EXHIBIT 10.31.5
[CONFORMED COPY WITH
EXHIBITS F-3, K AND L
OF ANNEX B EACH
CONFORMED AS EXECUTED]
FIFTH AMENDMENT TO CREDIT AGREEMENT
FIFTH AMENDMENT ("Amendment"), dated as of December 28, 1993, among DR
PEPPER/SEVEN-UP CORPORATION, a Delaware corporation (the "Company"), DR
PEPPER/SEVEN-UP COMPANIES, INC., a Delaware corporation (the "Guarantor"), the
Banks party to the Original Credit Agreement described below (the "Existing
Banks"), BANKERS TRUST COMPANY, NATIONSBANK OF NORTH CAROLINA, N.A. and THE
CHASE MANHATTAN BANK, N.A., as Managing Agents, the Co-Agents, the Lead
Managers, and BANKERS TRUST COMPANY, as Administrative Agent, and each of the
lenders listed on Annex A hereto (the "New Banks"). All capitalized terms used
herein and not otherwise defined shall have the respective meanings provided
such terms in the Credit Agreement referred to below.
WITNESSETH:
WHEREAS, the Company, the Guarantor, the Existing Banks, the Managing
Agents and the Administrative Agent are parties to a Credit Agreement, dated as
of October 20, 1992, as amended by the First Amendment dated as of October 26,
1992, the Second Amendment dated as of November 5, 1992, the Third Amendment
dated as of February 17, 1993 and the Fourth Amendment dated as of March 4, 1993
(as so amended, the "Original Credit Agreement");
WHEREAS, the parties hereto wish to amend the Original Credit
Agreement as herein provided (as so amended, the "Credit Agreement");
NOW, THEREFORE, IT IS AGREED:
I. AMENDMENTS TO ORIGINAL CREDIT AGREEMENT.
1. ON AND AFTER THE FIFTH AMENDMENT EFFECTIVE DATE, SECTION 1 OF THE
ORIGINAL CREDIT AGREEMENT SHALL BE AMENDED BY DELETING SAID SECTION 1 IN ITS
ENTIRETY AND INSERTING IN LIEU THEREOF THE FOLLOWING NEW SECTION 1:
"Section 1. AMOUNT AND TERMS OF CREDIT.
1.01 THE COMMITMENTS. (a) Subject to and upon the terms and conditions
set forth herein, each Bank with a Term Loan Commitment severally agrees on the
Fifth Amendment Effective Date to make and/or, in the case of each Continuing
Bank with a
<PAGE>
Term Loan Commitment, to convert Original Term Loans made by such Continuing
Bank to the Company pursuant to the Original Credit Agreement and outstanding on
the Fifth Amendment Effective Date (but not that portion thereof, if any, which
exceeds the Term Loan Commitment of such Bank on the Fifth Amendment Effective
Date) into, a term loan hereunder (as so made or converted for each such Bank, a
"Term Loan" and, collectively, the "Term Loans") to the Company, which Term
Loans (i) shall be made or converted and initially maintained as a single
Borrowing of Base Rate Loans (subject to the option to convert such Term Loans
pursuant to Section 1.06) and (ii) shall equal for each Bank, in initial
aggregate principal amount, that amount which equals the Term Loan Commitment of
such Bank on such date (after giving effect to the occurrence of the Fifth
Amendment Effective Date, but before giving effect to any reductions thereto on
such date pursuant to Section 3.03(b)). Once repaid, Term Loans incurred
hereunder may not be reborrowed.
(b) Subject to and upon the terms and conditions set forth herein,
each Bank with a Revolving Loan Commitment severally agrees (A) in the case of
each Continuing Bank with a Revolving Loan Commitment, to convert, on the Fifth
Amendment Effective Date, Original Revolving Loans made by such Continuing Bank
to the Company pursuant to the Original Credit Agreement and outstanding on the
Fifth Amendment Effective Date in that aggregate principal amount as is equal to
the lesser of (x) the aggregate principal amount of such Original Revolving
Loans made by such Continuing Bank and so outstanding or (y) such Continuing
Bank's Percentage (immediately after giving effect to the occurrence of the
Fifth Amendment Effective Date) of the aggregate principal amount of Original
Revolving Loans made by all Existing Banks and outstanding on the Fifth
Amendment Effective Date and immediately before giving effect thereto, into a
Borrowing of Revolving Loans hereunder (as so converted, together with all
Revolving Loans made pursuant to the following clauses (B) and (C), the
"Revolving Loans" and each, a "Revolving Loan"), (B) in the case of each Bank
with a Revolving Loan Commitment, to make, on the Fifth Amendment Effective
Date, Revolving Loans to the Company in that amount as is equal to the
Percentage of such Bank (determined on the Fifth Amendment Effective Date and
after giving effect thereto) of the aggregate principal amount of Original
Revolving Loans made by the Existing Banks and outstanding on the Fifth
Amendment Effective Date, less, in the case of each Continuing Bank, the
aggregate principal amount of Revolving Loans to be made by it by way of
conversion on the Fifth Amendment Effective Date pursuant to preceding clause
(A), and (C) in the case of each Bank with a Revolving Loan Commitment, at any
time and from time to time on and after the Fifth Amendment Effective Date and
prior to the Revolving Loan Maturity Date, to make one or more additional
Revolving Loans to the Company, which Revolving Loans of such Bank:
(i) shall, at the option of the Company, be Base Rate Loans or
Eurodollar Rate Loans, PROVIDED that (A) except as otherwise specifically
provided in Section 1.10(b), all Revolving Loans comprising the same
Borrowing shall at all times be of the same Type and (B) no Eurodollar Rate
Loans may be incurred prior to the
-2-
<PAGE>
earlier of (1) the 60th day after the Fifth Amendment Effective Date or
such earlier date as may be agreed to by the Administrative Agent and (2)
that date (the "Syndication Date") upon which the Administrative Agent
determines in its sole discretion (and notifies the Company) that the
primary syndication (and the resultant addition of institutions as Banks
pursuant to Section 13.04) has been completed;
(ii) may be repaid and reborrowed in accordance with the provisions
hereof; and
(iii) shall not exceed at any time outstanding that aggregate
principal amount which, when added to the product of (x) such Bank's
Adjusted Percentage and (y) the sum of (I) the aggregate amount of all
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are
repaid with the proceeds of, and simultaneously with the incurrence of, the
respective incurrence of Revolving Loans) at such time and (II) the
aggregate principal amount of all Swingline Loans (exclusive of Swingline
Loans which are repaid with the proceeds of, and simultaneously with the
incurrence of, the respective incurrence of Revolving Loans) then
outstanding, equals the Revolving Loan Commitment of such Bank at such time
minus such Bank's Adjusted Percentage of the Blocked Commitment at such
time.
In addition to the foregoing requirements, the Total Unutilized Revolving Loan
Commitment on the Fifth Amendment Effective Date (after giving effect to all
Borrowings on such date) less the Blocked Commitment on such date shall be equal
to or greater than an amount equal to the Minimum Unutilized Revolving Loan
Commitment.
(c) Subject to and upon the terms and conditions herein set forth,
BTCo in its individual capacity agrees (A) to convert, on the Fifth Amendment
Effective Date, the Original Swingline Loans made by BTCo to the Company
pursuant to the Original Credit Agreement and outstanding on the Fifth Amendment
Effective Date into a Borrowing of Swingline Loans hereunder (as so converted,
together with all Swingline Loans made pursuant to the following clause (B), the
"Swingline Loans" and each, a "Swingline Loan") and (B) to make at any time and
from time to time after the Fifth Amendment Effective Date and prior to the
Swingline Expiry Date, one or more Swingline Loans to the Company, which
Swingline Loans:
(i) shall be made and maintained as Base Rate Loans;
(ii) may be repaid and reborrowed in accordance with the provisions
hereof;
(iii) shall not exceed in aggregate principal amount at any time
outstanding, when added to the aggregate principal amount of all Revolving
Loans made by Non-
-3-
<PAGE>
Defaulting Banks then outstanding and Letter of Credit Outstandings at such
time, an amount equal to the Adjusted Total Revolving Loan Commitment at
such time (after giving effect to any reductions to the Adjusted Total
Revolving Loan Commitment on such date) minus the Blocked Commitment at
such time; and
(iv) shall not exceed at any time outstanding the Maximum Swingline
Amount.
(d) On any Business Day, BTCo may, in its sole discretion, give notice
to the Banks that its outstanding Swingline Loans shall be funded with a
Borrowing of Revolving Loans (PROVIDED that such notice shall be deemed to have
been automatically given upon the occurrence of an Event of Default under
Section 10.05 or upon the exercise of any of the remedies provided in the last
paragraph of Section 10), in which case a Borrowing of Revolving Loans
constituting Base Rate Loans (each such Borrowing, a "Mandatory Borrowing")
shall be made on the immediately succeeding Business Day from all Banks with a
Revolving Loan Commitment (without giving effect to any termination thereof
pursuant to the last paragraph of Section 10) PRO RATA based on each Bank's
Adjusted Percentage (determined before giving effect to any termination of the
Revolving Loan Commitments pursuant to the last paragraph of Section 10), and
the proceeds thereof shall be applied directly to BTCo to repay BTCo for such
outstanding Swingline Loans. Each such Bank hereby irrevocably agrees to make
Revolving Loans upon one Business Day's notice pursuant to each Mandatory
Borrowing in the amount and in the manner specified in the preceding sentence
and on the date specified in writing by BTCo notwithstanding (i) the amount of
the Mandatory Borrowing may not comply with the minimum amount for Borrowings
otherwise required hereunder, (ii) whether any conditions specified in Sections
5 or 6 are then satisfied, (iii) whether a Default or an Event of Default then
exists, (iv) the date of such Mandatory Borrowing and (v) any reduction in the
Total Revolving Loan Commitment or the Adjusted Total Revolving Loan Commitment
after any such Swingline Loans were made. In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a proceeding
of the type referred to in Section 10.05 with respect to the Company), then each
such Bank hereby agrees that it shall forthwith purchase (as of the date the
Mandatory Borrowing would otherwise have occurred, but adjusted for any payments
received from the Company on or after such date and prior to such purchase) from
BTCo such participations in the outstanding Swingline Loans as shall be
necessary to cause such Banks to share in such Swingline Loans ratably based
upon their respective Adjusted Percentages (determined before giving effect to
any termination of the Revolving Loan Commitments pursuant to the last paragraph
of Section 10); PROVIDED, that (x) all interest payable on the Swingline Loans
shall be for the account of BTCo until the date as of which the respective
participation is required to be purchased and, to the extent attributable to the
purchased participation, shall be payable to the participant from and after such
date and (y) at the time any purchase of participations pursuant to this
sentence is act-
-4-
<PAGE>
ually made, the purchasing Bank shall be required to pay BTCo interest on the
principal amount of participation purchased for each day from and including the
day upon which the Mandatory Borrowing would otherwise have occurred to but
excluding the date of payment for such participation, at the overnight Federal
Funds Rate.
1.02 MINIMUM AMOUNT OF EACH BORROWING. (a) The aggregate principal
amount of each Borrowing of Term Loans shall not be less than $10,000,000 and,
if greater, shall be in an integral multiple of $1,000,000.
(b) The aggregate principal amount of each Borrowing of Revolving
Loans shall not be less than $2,000,000 and, if greater, shall be in an integral
multiple of $1,000,000; PROVIDED that Borrowings of Revolving Loans made as Base
Rate Loans may be made in integral multiples of $1,000,000; PROVIDED FURTHER
that Mandatory Borrowings shall be made in the amounts required by Section
1.01(d).
(c) The aggregate principal amount of each Borrowing of Swingline
Loans shall be in integral multiples of $1,000,000.
(d) More than one Borrowing may occur on the same date, but at no
time shall there be outstanding more than ten Borrowings of Eurodollar Rate
Loans.
1.03 NOTICE OF BORROWING. (a) Whenever the Company desires to make a
Borrowing hereunder (excluding Borrowings of Swingline Loans and Mandatory
Borrowings), it shall give the Administrative Agent at its Notice Office at
least one Business Day's prior notice of each Base Rate Loan and at least three
Business Days' prior notice of each Eurodollar Rate Loan to be made hereunder,
PROVIDED that any such notice shall be deemed to have been given on a certain
day only if given before 12:00 Noon (New York time) on such day. Each such
notice (each a "Notice of Borrowing"), except as otherwise expressly provided in
Section 1.10, shall be irrevocable and shall be given by the Company in the form
of Exhibit A, appropriately completed to specify the aggregate principal amount
of the Loans to be made pursuant to such Borrowing, the date of such Borrowing
(which shall be a Business Day), whether the Loans being made pursuant to such
Borrowing shall constitute Term Loans or Revolving Loans and whether the Loans
being made pursuant to such Borrowing are to be initially maintained as Base
Rate Loans or Eurodollar Rate Loans and, if Eurodollar Rate Loans, the initial
Interest Period to be applicable thereto. The Administrative Agent shall
promptly give each Bank which is required to make Loans of the Tranche specified
in the respective Notice of Borrowing, notice of such proposed Borrowing, of
such Bank's proportionate share thereof and of the other matters required by the
immediately preceding sentence to be specified in the Notice of Borrowing.
Whenever the Company desires to utilize the Blocked Commitment to make a
Borrowing of Revolving Loans to repurchase Dr Pepper Preferred Stock, the Notice
of
-5-
<PAGE>
Borrowing shall include a statement to such effect and the details of the terms
and conditions of such proposed purchase.
(b) (i) Whenever the Company desires to make a Borrowing of Swingline
Loans hereunder, it shall give BTCo not later than 12:00 noon (New York time) on
the date that a Swingline Loan is to be made, written notice or telephonic
notice promptly confirmed in writing of each Swingline Loan to be made
hereunder. Each such notice shall be irrevocable and specify in each case (A)
the date of Borrowing (which shall be a Business Day) and (B) the aggregate
principal amount of the Swingline Loans to be made pursuant to such Borrowing.
(ii) Without in any way limiting the obligation of the Company to
confirm in writing any telephonic notice of such Borrowing of Swingline Loans,
BTCo may act without liability upon the basis of telephonic notice of such
Borrowing, believed by BTCo in good faith to be from the Chief Financial
Officer, Vice President of Finance and Treasurer, Director of Treasury
Operations, Director of Corporate Planning, Manager of Finance or any Financial
Analyst of the Company (or from any other person designated in writing to the
Administrative Agent by any of the above listed officers of the Company as a
person entitled to give telephonic notices under this Agreement on behalf of the
Company), prior to receipt of written confirmation. In each such case, the
Company hereby waives the right to dispute BTCo's record of the terms of such
telephonic notice of such Borrowing of Swingline Loans; PROVIDED, HOWEVER, the
foregoing waiver shall not limit any rights of the Company to contest the amount
of such Borrowing of Swingline Loans actually received by the Company.
(iii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(d), with the Company irrevocably agreeing, by its incurrence of any
Swingline Loan, to the making of the Mandatory Borrowings as set forth in
Section 1.01(d).
1.04 DISBURSEMENT OF FUNDS. Except as otherwise specifically provided
in the immediately succeeding sentence, no later than 12:00 Noon (New York time)
on the date specified in each Notice of Borrowing (or (x) in the case of
Swingline Loans, no later than 2:00 P.M. (New York time) on the date specified
pursuant to Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings, not
later than 12:00 Noon (New York time) on the date specified in Section 1.01(d)),
each Bank with a Commitment of the respective Tranche will make available its
PRO RATA portion of each such Borrowing requested to be made on such date (or in
the case of Swingline Loans, BTCo shall make available the full amount thereof).
All such amounts shall be made available in Dollars and in immediately available
funds at the Payment Office of the Administrative Agent, and the Administrative
Agent will make available to the Company at the Payment Office the aggregate of
the amounts so made available by the Banks. Unless the Administrative Agent
shall have been notified by any Bank prior to the date of Borrowing that such
Bank does not intend to make available to
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the Administrative Agent such Bank's portion of any Borrowing to be made on such
date, the Administrative Agent may assume that such Bank has made such amount
available to the Administrative Agent on such date of Borrowing and the
Administrative Agent may, in reliance upon such assumption, make available to
the Company a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent by such Bank, the Administrative
Agent shall be entitled to recover such corresponding amount on demand from such
Bank. If such Bank does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent shall promptly
notify the Company and the Company shall immediately pay such corresponding
amount to the Administrative Agent. The Administrative Agent shall also be
entitled to recover on demand from such Bank or the Company, as the case may be,
interest on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to the
Company until the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to (i) if recovered from such
Bank, at the overnight Federal Funds Rate and (ii) if recovered from the
Company, the rate of interest applicable to the respective Borrowing, as
determined pursuant to Section 1.08. Nothing in this Section 1.04 shall be
deemed to relieve any Bank from its obligation to make Loans hereunder or to
prejudice any rights which the Company may have against any Bank as a result of
any failure by such Bank to make Loans hereunder.
1.05 NOTES. (a) The Company's obligation to pay the principal of, and
interest on, the Loans made by each Bank shall be evidenced (i) if Term Loans,
by a promissory note duly executed and delivered by the Company substantially in
the form of Exhibit B-1 with blanks appropriately completed in conformity
herewith (each a "Term Note" and, collectively, the "Term Notes"), (ii) if
Revolving Loans, by a promissory note duly executed and delivered by the Company
substantially in the form of Exhibit B-2, with blanks appropriately completed in
conformity herewith (each a "Revolving Note" and, collectively, the "Revolving
Notes"), and (iii) if Swingline Loans, by a promissory note duly executed and
delivered by the Company substantially in the form of Exhibit B-3, with blanks
appropriately completed in conformity herewith (the "Swingline Note").
(b) The Term Note issued to each Bank with a Term Loan Commitment
shall (i) be executed by the Company, (ii) be payable to the order of such Bank
and be dated the Fifth Amendment Effective Date, (iii) be in a stated principal
amount equal to the principal amount of Term Loans made by such Bank and be
payable in the principal amount of Term Loans evidenced thereby, (iv) mature on
the Final Maturity Date, (v) bear interest as provided in the appropriate clause
of Section 1.08 in respect of the Base Rate Loans and Eurodollar Rate Loans, as
the case may be, evidenced thereby, (vi) be subject to mandatory repayment as
provided in Section 4.02 and (vii) be entitled to the benefits of this Agreement
and the Guaranty and be secured by the Security Documents.
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<PAGE>
(c) The Revolving Note issued to each Bank with a Revolving Loan
Commitment shall (i) be executed by the Company, (ii) be payable to the order of
such Bank and be dated the Fifth Amendment Effective Date, (iii) be in a stated
principal amount equal to the Revolving Loan Commitment of such Bank and be
payable in the principal amount of the Revolving Loans evidenced thereby, (iv)
mature on the Revolving Loan Maturity Date, (v) bear interest as provided in the
appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Rate Loans, as the case may be, evidenced thereby, (vi) be subject to
mandatory repayment as provided in Section 4.02 and (vii) be entitled to the
benefits of this Agreement and the Guaranty and be secured by the Security
Documents.
(d) The Swingline Note issued to BTCo shall (i) be executed by the
Company, (ii) be payable to the order of BTCo and be dated the Fifth Amendment
Effective Date, (iii) be in a stated principal amount equal to the Maximum
Swingline Amount and be payable in the principal amount of the outstanding
Swingline Loans evidenced thereby, (iv) mature on the Swingline Expiry Date, (v)
bear interest as provided in the appropriate clause of Section 1.08 in respect
of the Base Rate Loans evidenced thereby and (vi) be entitled to the benefits of
this Agreement and the Guaranty and be secured by the Security Documents.
(e) Each Bank will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
or endorsement shall not affect the Company's obligations in respect of such
Loans.
1.06 CONVERSIONS. The Company shall have the option to convert, on any
Business Day occurring on or after the earlier of (i) the 60th day after the
Fifth Amendment Effective Date and (ii) the Syndication Date, all or a portion
equal to at least $10,000,000 in the case of a Borrowing of Term Loans and equal
to at least $2,000,000 in the case of a Borrowing of Revolving Loans of the
outstanding principal amount of such Loans made pursuant to one or more
Borrowings (so long as of the same Tranche) of one or more Types of Loans into a
Borrowing (of the same Tranche) of another Type of Loan; PROVIDED, that (w)
except as otherwise provided in Section 1.10(b), Eurodollar Rate Loans may be
converted into Loans of another Type only on the last day of an Interest Period
applicable to the Loans being converted and no such partial conversion of
Eurodollar Rate Loans shall reduce the outstanding principal amount of such
Eurodollar Rate Loans made pursuant to a single Borrowing to less than
$10,000,000 in the case of a Borrowing of Term Loans and to less than $2,000,000
in the case of a Borrowing of Revolving Loans, (x) Base Rate Loans may only be
converted into Eurodollar Rate Loans if no Default or Event of Default is in
existence on the date of the conversion, (y) no conversion pursuant to this
Section 1.06 shall result in a greater number of Borrowings than is permitted
under Section 1.02 and (z) Swingline Loans may not be converted pursuant to this
Section 1.06.
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<PAGE>
Each such conversion pursuant to this Section 1.06 shall be effected by the
Company by giving the Administrative Agent at its Notice Office prior to 12:00
Noon (New York time) at least three Business Days' prior notice (each a "Notice
of Conversion") specifying the Loans to be so converted, the Borrowing(s)
pursuant to which such Loans were made and, if to be converted into Eurodollar
Rate Loans, the Interest Period to be initially applicable thereto. The
Administrative Agent shall give each Bank prompt notice of any such proposed
conversion affecting any of its Loans. Upon any such conversion the proceeds
thereof will be deemed to be applied directly on the day of such conversion to
prepay the outstanding principal amount of the Loans being converted.
1.07 PRO RATA BORROWINGS. All Borrowings of Term Loans and Revolving
Loans under this Agreement shall be incurred from the Banks PRO RATA on the
basis of their Term Loan Commitments or Revolving Loan Commitments, as the case
may be; PROVIDED, that all Borrowings of Revolving Loans made pursuant to a
Mandatory Borrowing shall be incurred from the Banks PRO RATA on the basis of
their Adjusted Percentages. It is understood that no Bank shall be responsible
for any default by any other Bank of its obligation to make Loans hereunder and
that each Bank shall be obligated to make the Loans provided to be made by it
hereunder regardless of the failure of any other Bank to make its Loans
hereunder.
1.08 INTEREST. (a) The Company agrees to pay interest in respect of
the unpaid principal amount of each Base Rate Loan from the date the proceeds
thereof are made available to the Company until the maturity thereof (whether by
acceleration or otherwise) at a rate per annum which shall be equal to the sum
of the Applicable Margin plus the Base Rate in effect from time to time.
(b) The Company agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Rate Loan from the date the proceeds thereof
are made available to the Company until the maturity thereof (whether by
acceleration or otherwise) at a rate per annum which shall, during each Interest
Period applicable thereto, be equal to the sum of the Applicable Margin plus the
Quoted Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable hereunder
shall, in each case, bear interest at a rate per annum equal to the greater of
(x) the sum of (i) the Base Rate in effect from time to time, (ii) the
Applicable Margin for Base Rate Loans of such Tranche at such time and (iii) 2%
and (y) the rate which is 2% in excess of the rate then borne by such Loans, in
each case with such interest to be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each Base Rate Loan, quarterly in arrears on each Quarterly Payment
Date, (ii) in respect of each Eurodollar Rate Loan, on the last day of each
Interest Period applicable
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thereto and, in the case of an Interest Period in excess of three months, on
each date occurring at three month intervals after the first day of such
Interest Period and (iii) in respect of each Loan, on any repayment (except on
voluntary prepayments of Revolving Loans and Swingline Loans) (on the amount
repaid), at maturity (whether by acceleration or otherwise) and, after such
maturity, on demand.
(e) Upon each Interest Determination Date, the Administrative Agent
shall determine the Quoted Rate for each Interest Period applicable to
Eurodollar Rate Loans and shall promptly notify the Company and the Banks
thereof. Each such determination shall, absent manifest error, be final and
conclusive and binding on all parties hereto.
1.09 INTEREST PERIODS. At the time it gives any Notice of Borrowing
or Notice of Conversion in respect of the making of, or conversion into, any
Eurodollar Rate Loan (in the case of the initial interest Period applicable
thereto) or on the third Business Day prior to the expiration of an Interest
Period applicable to such Eurodollar Rate Loan (in the case of any subsequent
Interest Period), the Company shall have the right to elect, by giving the
Administrative Agent notice thereof, the interest period (each an "Interest
Period") applicable to such Eurodollar Rate Loan, which Interest Period shall,
at the option of the Company, be a one, two, three or six month period, PROVIDED
that:
(i) all Eurodollar Rate Loans comprising a Borrowing shall at all
times have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Rate Loan shall
commence on the date of Borrowing of such Loan (including the date of any
conversion thereto from a Loan of a different Type) and each Interest
Period occurring thereafter in respect of such Loan shall commence on the
day on which the next preceding Interest Period applicable thereto expires;
(iii) if any Interest Period relating to a Eurodollar Rate Loan begins
on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period, such Interest Period
shall end on the last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; PROVIDED, HOWEVER, that if any Interest Period for
a Eurodollar Rate Loan would otherwise expire on a day which is not a
Business Day but is a day of the month after which no further Business Day
occurs in such month, such Interest Period shall expire on the next
preceding Business Day;
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<PAGE>
(v) no Interest Period may be selected at any time when any Default
or Event of Default is then in existence;
(vi) no Interest Period in respect of any Borrowing of Term Loans
shall be selected which extends beyond any date upon which a mandatory
repayment of such Term Loans will be required to be made under
Section 4.02(b) if after giving effect to the selection of such Interest
Period the aggregate principal amount of such Term Loans which have
Interest Periods which will expire after such date will be in excess of the
aggregate principal amount of such Term Loans then outstanding less the
aggregate amount of such required prepayment; and
(vii) no Interest Period in respect of any Borrowing of any Tranche of
Loans shall be selected which extends beyond the respective Maturity Date
of such Tranche of Loans.
If upon the expiration of any Interest Period applicable to a
Borrowing of Eurodollar Rate Loans, the Company has failed to elect, or is not
permitted to elect, a new Interest Period to be applicable to such Eurodollar
Rate Loans as provided above, the Company shall be deemed to have elected to
convert such Eurodollar Rate Loans into Base Rate Loans effective as of the
expiration date of such current Interest Period.
1.10 INCREASED COSTS ILLEGALITY, ETC. (a) In the event that any Bank
shall have determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto but, with respect to
clause (i) below, may be made only by the Administrative Agent):
(i) on any Interest Determination Date that, by reason of any changes
arising after the date of this Agreement affecting the interbank Eurodollar
market, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the definition of
Quoted Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Rate Loan because of (x) any change since the Fifth
Amendment Effective Date in any applicable law or governmental rule,
regulation, order, guideline or request (whether or not having the force of
law) or in the interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation, order,
guideline or request, such as, for example, but not limited to: (A) a
change in the basis of taxation of payments to any Bank of the principal of
or interest on the Notes or any other amounts payable hereunder (except for
changes in the rate of tax on, or determined by reference to, the net
income or profits of such Bank imposed by the jurisdiction in which its
principal office or applicable
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<PAGE>
lending office is located) or (B) a change in official reserve requirements
(but, in all events, excluding reserves required under Regulation D to the
extent included in the computation of the Quoted Rate) and/or (y) other
circumstances affecting such Bank or the interbank Eurodollar market or the
position of such Bank in such market; or
(iii) at any time, that the making or continuance of any Eurodollar
Rate Loan has been made (x) unlawful by any law or governmental rule,
regulation or order, (y) impossible by compliance by any Bank in good faith
with any governmental request (whether or not having force of law) or (z)
impracticable as a result of a contingency occurring after the date of this
Agreement which materially and adversely affects the interbank Eurodollar
market;
then, and in any such event, such Bank (or the Administrative Agent, in the case
of clause (i) above) shall promptly give notice (by telephone confirmed in
writing) to the Company and, except in the case of clause (i) above, to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Banks). Thereafter (x) in
the case of clause (i) above, Eurodollar Rate Loans shall no longer be available
until such time as the Administrative Agent notifies the Company and the Banks
that the circumstances giving rise to such notice by the Administrative Agent no
longer exist, and any Notice of Borrowing or Notice of Conversion given by the
Company with respect to Eurodollar Rate Loans which have not yet been incurred
(including by way of conversion) shall be deemed rescinded by the Company, (y)
in the case of clause (ii) above, the Company shall pay to such Bank, upon
written demand therefor, such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Bank in its sole discretion shall determine) as shall be required to compensate
such Bank for such increased costs or reductions in amounts received or
receivable hereunder (a written notice as to the additional amounts owed to such
Bank, showing the basis for the calculation thereof, submitted to the Company by
such Bank shall, absent manifest error, be final and conclusive on and binding
on all the parties hereto) and (z) in the case of clause (iii) above, the
Company shall take one of the actions specified in Section 1.10(b) as promptly
as possible and, in any event, within the time period required by law.
(b) At any time that any Eurodollar Rate Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Company may (and
in the case of a Eurodollar Rate Loan affected by the circumstances described in
Section 1.10(a) (iii) shall) either (i) if the affected Eurodollar Rate Loan is
then being made initially or pursuant to a conversion, by giving the
Administrative Agent telephonic notice (confirmed in writing) on the same date
that the Company was notified by the affected Bank or the Administrative Agent
pursuant to Section 1.10(a)(ii) or (iii), cancel the respective Borrowing, or
(ii) if the affected Eurodollar Rate Loan is then outstanding, upon at least
three Business Days' writ-
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<PAGE>
ten notice to the Administrative Agent, require the affected Bank to convert
such Eurodollar Rate Loan into a Base Rate Loan; PROVIDED, that if more than one
Bank is affected at any time, then all affected Banks must be treated the same
pursuant to this Section 1.10(b).
(c) If, at any time after the Fifth Amendment Effective Date, any Bank
determines that the introduction of or any change in any applicable law or
governmental rule, regulation, order, guideline or request (whether or not
having the force of law) concerning capital adequacy, or any change in
interpretation or administration thereof by any governmental authority, central
bank or comparable agency, will have the effect of increasing the amount of
capital required or expected to be maintained by such Bank or any corporation
controlling such Bank based on the existence of such Bank's Commitments
hereunder or its obligations hereunder, then the Company shall pay to such Bank,
upon its written demand therefor, such additional amounts as shall be required
to compensate such Bank or such other corporation for the increased cost to such
Bank or such other corporation or the reduction in the rate of return to such
Bank or such other corporation as a result of such increase of capital. In
determining such additional amounts, each Bank will act reasonably and in good
faith and will use averaging and attribution methods which are reasonable;
PROVIDED, that such Bank's determination of compensation owing under this
Section 1.10(c) shall, absent manifest error, be final and conclusive and
binding on all the parties hereto. Each Bank, upon determining that any
additional amounts will be payable pursuant to this Section 1.10(c), will give
prompt written notice thereof to the Company, which notice shall show the basis
for calculation of such additional amounts, although the failure to give any
such notice shall not release or diminish any of the Company's obligations to
pay additional amounts pursuant to this Section 1.10(c).
1.11 COMPENSATION. The Company shall compensate each Bank, upon its
written request (which request shall set forth the basis for requesting such
compensation), for all reasonable losses, expenses and liabilities (including,
without limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Bank to
fund its Eurodollar Rate Loans) which such Bank may sustain: (i) if for any
reason (other than a default by such Bank or the Administrative Agent) a
Borrowing of, or conversion from or into, Eurodollar Rate Loans does not occur
on a date specified therefor in a Notice of Borrowing or Notice of Conversion
(whether or not withdrawn by the Company or deemed withdrawn pursuant to Section
1.10(a)); (ii) if any repayment (including any repayment made pursuant to
Section 4.02 or conversion (including without limitation any conversion to occur
on the Fifth Amendment Effective Date pursuant to Section 1.01(a) or (b)) of any
of its Eurodollar Rate Loans occurs on a date which is not the last day of an
Interest Period with respect thereto; (iii) if any prepayment of any of its
Eurodollar Rate Loans is not made on any date specified in a notice of
prepayment given by the Company; or (iv) as a consequence of (x) any other
default by the Company to repay its Loans when required by the terms of this
Agreement or any Note held by such Bank or (y) any election made pursuant to
Section 1.10(b).
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1.12 REPLACEMENT OF BANKS. If any Bank becomes a Defaulting Bank or
otherwise defaults in its obligations to make Loans or fund Unpaid Drawings, the
Company shall have the right, if no Event of Default then exists, to replace
such Bank (the "Replaced Bank") with one or more other Eligible Transferee or
Transferees, none of whom shall constitute a Defaulting Bank at the time of such
replacement, (collectively, the "Replacement Bank") reasonably acceptable to the
Administrative Agent, provided that (i) at the time of any replacement pursuant
to this Section 1. 12, the Replacement Bank shall enter into one or more
assignment agreements, in form and substance satisfactory to the Administrative
Agent, pursuant to which the Replacement Bank shall acquire all of the
Commitments and outstanding Loans of, and participations in Letters of Credit
by, the Replaced Bank and, in connection therewith, shall pay to (x) the
Replaced Bank in respect thereof an amount equal to the sum of (A) an amount
equal to the principal of, and all accrued interest on, all outstanding Loans of
the Replaced Bank, (B) an amount equal to all Unpaid Drawings that have been
funded by (and not reimbursed to) such Replaced Bank, together with all then
unpaid interest with respect thereto at such time and (C) an amount equal to all
accrued, but theretofore unpaid, Fees owing to the Replaced Bank pursuant to
Section 3.01 hereof and (y) the appropriate Issuing Bank an amount equal to such
Replaced Bank's Adjusted Percentage (for this purpose, determined as if the
adjustment described in clause (y) of the immediately succeeding sentence had
been made with respect to such Replaced Bank) of any Unpaid Drawing (which at
such time remains an Unpaid Drawing) to the extent such amount was not
theretofore funded by such Replaced Bank, and (ii) all obligations of the
Company owing to the Replaced Bank (other than those specifically described in
clause (i) above in respect of which the assignment purchase price has been, or
is concurrently being, paid) shall be paid in full to such Replaced Bank
concurrently with such replacement. Upon the execution of the respective
assignment documentation, the payment of amounts referred to in clauses (i) and
(ii) above and, if so requested by the Replacement Bank, delivery to the
Replacement Bank of the appropriate Note or Notes executed by the Company, (x)
the Replacement Bank shall become a Bank hereunder and the Replaced Bank shall
cease to constitute a Bank hereunder, except with respect to indemnification
provisions under this Agreement, which shall survive as to such Replaced Bank
and (y)the Adjusted Percentages of the Banks shall be automatically adjusted at
such time to give effect to such replacement (and to give effect to the
replacement of a Defaulting Bank with one or more Non-Defaulting Banks)."
2. ON AND AFTER THE FIFTH AMENDMENT EFFECTIVE DATE, SECTION 2.01(A)
OF THE ORIGINAL CREDIT AGREEMENT SHALL BE AMENDED BY INSERTING AT THE END
THEREOF A NEW SENTENCE TO READ: "IT IS HEREBY FURTHER ACKNOWLEDGED AND AGREED
THAT EACH ORIGINAL LETTER OF CREDIT SHALL ALSO CONSTITUTE A "LETTER OF CREDIT"
FOR PURPOSES OF THIS AGREEMENT."
3. ON AND AFTER THE FIFTH AMENDMENT EFFECTIVE DATE, SECTION 2.06 OF
THE ORIGINAL CREDIT AGREEMENT SHALL BE AMENDED BY DELETING THE PHRASE "THE DATE
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HEREOF" AT THE BEGINNING OF THE FIRST SENTENCE THEREOF AND INSERTING IN LIEU
THEREOF THE PHRASE "THE FIFTH AMENDMENT EFFECTIVE DATE".
4. ON AND AFTER THE FIFTH AMENDMENT EFFECTIVE DATE, SECTION 3 OF THE
ORIGINAL CREDIT AGREEMENT SHALL BE AMENDED BY DELETING SAID SECTION 3 IN ITS
ENTIRETY AND INSERTING IN LIEU THEREOF THE FOLLOWING NEW SECTION 3:
"Section 3. COMMITMENT COMMISSION: FEES: REDUCTIONS OF COMMITMENT.
3.01 FEES. (a) The Company agrees to pay to the Administrative Agent
for distribution to each Non-Defaulting Bank with a Revolving Loan Commitment a
commitment commission (the "Commitment Commission") for the period from the
Fifth Amendment Effective Date to and including the Revolving Loan Maturity Date
(or such earlier date as the Total Revolving Loan Commitment shall have been
terminated) computed at a rate for each day equal to 1/2 of 1% per annum on the
daily average Unutilized Revolving Loan Commitment of such Non-Defaulting Bank.
Accrued Revolving Loan Commitment Commission shall be due and payable quarterly
in arrears on each Quarterly Payment Date and on the Revolving Loan Maturity
Date or such earlier date upon which the Total Revolving Loan Commitment is
terminated.
(b) The Company agrees to pay to the Administrative Agent for
distribution to the Banks a fee in respect of each Letter of Credit issued
hereunder (the "Letter of Credit Fee"), for the period from and including the
date of issuance of such Letter of Credit to and including the termination of
such Letter of Credit, computed at a rate per annum of 1-1/4% on the average
daily Stated Amount of such Letter of Credit. Letter of Credit Fees shall be
distributed by the Administrative Agent to the Banks on the basis of their
respective Adjusted Percentages as in effect from time to time. Accrued Letter
of Credit Fees shall be due and payable quarterly in arrears on each Quarterly
Payment Date and on the first day after the termination of the Total Revolving
Loan Commitment on which no Letters of Credit remain outstanding.
(c) The Company agrees to pay to each Issuing Bank, for its own
account, a facing fee in respect of each Letter of Credit issued by such Issuing
Bank for its account hereunder (the "Facing Fee"), for the period from and
including the date of issuance of such Letter of Credit to and including the
termination of such Letter of Credit, computed at a rate equal to 1/4 of 1% per
annum of the daily average Stated Amount of such Letter of Credit. Accrued
Facing Fees shall be due and payable in arrears to each Issuing Bank in respect
of each Letter of Credit issued by it on each Quarterly Payment Date and the
first day after the termination of the Total Revolving Loan Commitment on which
no Letters of Credit remain outstanding.
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<PAGE>
(d) The Company hereby agrees to pay directly to each Issuing Bank
upon each issuance of, drawing under, and/or amendment of, a Letter of Credit
issued by such Issuing Bank such amount as shall at the time of such issuance,
drawing or amendment be the administrative charge which such Issuing Bank is
customarily charging for issuances of, drawings under or amendments of, letters
of credit issued by it or such alternative amounts as may have been agreed upon
in writing by the Company and such Issuing Bank.
(e) The Company shall pay to the Administrative Agent and each Bank,
for their respective accounts, such other fees as have been agreed to in writing
by the Company, the Administrative Agent and such Bank.
3.02 VOLUNTARY TERMINATION OF UNUTILIZED COMMITMENTS. The Company
shall have the right, without premium or penalty and upon at least one Business
Day's prior notice to the Administrative Agent at its Notice Office, which
notice the Administrative Agent shall promptly transmit to each of the Banks, to
terminate the Total Unutilized Revolving Loan Commitment, in whole or in part,
in integral multiples of $2,000,000 in the case of partial reductions to the
Total Unutilized Revolving Loan Commitment; PROVIDED, that (i) in no event may
(x) the Total Unutilized Revolving Loan Commitment be reduced to an amount below
the Blocked Commitment, if any, at such time, or (y) the Total Unutilized
Revolving Loan Commitment on the Fifth Amendment Effective Date (after giving
effect to all Borrowings on such date) less the Blocked Commitment on such date
be reduced to an amount below the Minimum Unutilized Revolving Loan Commitment,
(ii) each such reduction shall apply proportionately to permanently reduce the
Revolving Loan Commitment of each Bank with such a Commitment and (iii) the
reduction to the Total Unutilized Revolving Loan Commitment shall in no case be
in an amount which would cause the Revolving Loan Commitment of any Bank to be
reduced (as required by preceding clause (ii)) by an amount which exceeds the
remainder of (x) the Unutilized Revolving Loan Commitment of such Bank as in
effect immediately before giving effect to such reduction, minus (y) such Bank's
Adjusted Percentage of the sum of the aggregate principal amount of Swingline
Loans then outstanding and the amount of the Blocked Commitment at such time.
3.03 MANDATORY REDUCTION OF COMMITMENTS. (a) The Total Commitment (and
the Term Loan Commitment and the Revolving Loan Commitment of each Bank) shall
terminate on January 31, 1994, unless the Fifth Amendment Effective Date has
occurred on or before such date.
(b) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Term Loan Commitment (and the Term Loan
Commitment of each Bank) shall terminate in its entirety on the Fifth Amendment
Effective Date (after giving effect to the making of the Term Loans on such
date).
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(c) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Revolving Loan Commitment (and the Revolving
Loan Commitment of each Bank) shall terminate on the Revolving Loan Maturity
Date.
(d) Each reduction to the Total Term Loan Commitment and the Total
Revolving Loan Commitment pursuant to this Section 3.03 shall be applied
proportionately to reduce the Term Loan Commitment or the Revolving Loan
Commitment, as the case may be, of each Bank with such a Commitment."
4. ON AND AFTER THE FIFTH AMENDMENT EFFECTIVE DATE, SECTION 4
OF THE ORIGINAL CREDIT AGREEMENT SHALL BE AMENDED BY DELETING SAID SECTION 4 IN
ITS ENTIRETY AND INSERTING IN LIEU THEREOF THE FOLLOWING NEW SECTION 4:
"Section 4. PREPAYMENTS: PAYMENTS: TAXES.
4.01 VOLUNTARY PREPAYMENTS. The Company shall have the right to prepay
the Loans, without premium or penalty, in whole or in part from time to time on
the following terms and conditions:
(i) the Company shall give the Administrative Agent prior to 12:00
Noon (New York time) at its Notice Office (x) at least one Business Day's
prior written notice (or telephonic notice confirmed in writing) of its
intent to prepay Base Rate Loans (or same day notice in the case of
Swingline Loans provided such notice is given prior to 12:00 Noon (New York
time) on such Business Day) and (y) at least three Business Days' prior
written notice (or telephonic notice confirmed in writing) of its intent to
prepay Eurodollar Rate Loans, whether Term Loans or Revolving Loans shall
be prepaid, the amount of such prepayment and the Types of Loans to be
prepaid and, in the case of Eurodollar Rate Loans, the specific Borrowing
or Borrowings pursuant to which made, which notice the Administrative Agent
shall promptly transmit to each of the Banks;
(ii) each prepayment shall be in an aggregate principal amount of at
least $1,000,000, PROVIDED that if any partial prepayment of Eurodollar
Rate Loans made pursuant to any Borrowing shall reduce the outstanding
Loans made pursuant to such Borrowing to an amount less than $10,000,000 in
the case of a Borrowing of Term Loans and to less than $2,000,000 in the
case of a Borrowing of Revolving Loans, then such Borrowing may not be
continued as a Borrowing of Eurodollar Rate Loans and any election of an
Interest Period with respect thereto given by the Company shall have no
force or effect;
(iii) prepayments of Eurodollar Rate Loans made pursuant to this
Section 4.01 may only be made on the last day of an Interest Period
applicable thereto;
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(iv) each prepayment in respect of any Loans made pursuant to a
Borrowing shall be applied PRO RATA among such Loans; and
(v) each voluntary prepayment of Term Loans pursuant to this Section
4.01 shall be applied to the Term Loans on a pro rata basis (based upon the
then outstanding principal amount of Term Loans);
PROVIDED, that at the Company's election in connection with any prepayment
pursuant to this Section 4.01, any prepayment in respect of Revolving Loans
shall not be applied to any Revolving Loan of a Defaulting Bank. Each prepayment
of principal of Term Loans pursuant to this Section 4.01 shall be applied FIRST
to the extent any portion of any Term Loan Scheduled Repayment in the same
calendar year or the initial Term Loan Scheduled Repayment in the immediately
succeeding calendar year then remains unpaid, to reduce the remaining Term Loan
Scheduled Repayments to occur in such calendar year and the initial Term Loan
Scheduled Repayment in the immediately succeeding calendar year in direct order
of maturity and SECOND, after such Term Loan Scheduled Repayments shall have
been reduced to zero, to reduce all of the then remaining Term Loan Scheduled
Repayments PRO RATA based upon the then remaining amount of each such Term Loan
Scheduled Repayment after giving effect to all prior reductions thereto.
4.02 MANDATORY REPAYMENTS AND COMMITMENT REDUCTIONS. (a) (i) On any
day on which the sum of the aggregate outstanding principal amount of the
Revolving Loans made by Non-Defaulting Banks, Swingline Loans and the Letter of
Credit Outstandings exceeds the Adjusted Total Revolving Loan Commitment as then
in effect less the Blocked Commitment at such time, the Company shall prepay
principal of Swingline Loans and, after the Swingline Loans have been repaid in
full, Revolving Loans of Non-Defaulting Banks in an amount equal to such excess.
If, after giving effect to the prepayment of all outstanding Swingline Loans and
Revolving Loans of Non-Defaulting Banks, the sum of the Letter of Credit
Outstandings exceeds the Adjusted Total Revolving Loan Commitment as then in
effect less the Blocked Commitment at such time, the Company shall pay to the
Administrative Agent at the Payment Office on such date an amount of cash or
Cash Equivalents equal to the amount of such excess (up to a maximum amount
equal to the Letter of Credit Outstandings at such time), such cash or Cash
Equivalents to be held as security for all obligations of the Company to the
Non-Defaulting Banks hereunder in a cash collateral account to be established by
the Administrative Agent.
(ii) On any day on which the aggregate outstanding principal amount of
the Revolving Loans made by any Defaulting Bank exceeds the Revolving Loan
Commitment of such Defaulting Bank, the Company shall prepay principal of
Revolving Loans of such Defaulting Bank in an amount equal to such excess.
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<PAGE>
(b) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, the
Company shall be required to repay that principal amount of Term Loans, to the
extent then outstanding, as is set forth opposite such date (each such repayment
as the same may be reduced in amount as provided in Sections 4.01 and 4.02(c)
through (h), inclusive, a "Term Loan Scheduled Repayment," and each such date, a
"Term Loan Scheduled Repayment Date"):
<TABLE>
<CAPTION>
Term Loan
Scheduled Repayment Date Amount
------------------------ ------
<S> <C>
June 30, 1994 $42,500,000
December 31, 1994 $42,500,000
June 30, 1995 $47,500,000
December 31, 1995 $52,500,000
June 30, 1996 $52,500,000
December 31, 1996 $57,500,000
June 30, 1997 $57,500,000
December 31, 1997 $57,500,000
June 30, 1998 $57,500,000
December 31, 1998 $57,500,000
</TABLE>
(c) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date after the Effective Date
upon which the Guarantor or any of its Subsidiaries receives any proceeds from
any issuance or sale of its equity, an amount equal to 100% of the cash proceeds
of the respective issuance (net of underwriting discounts and commissions and
other reasonable costs associated therewith) shall be applied as a mandatory
repayment of principal of outstanding Term Loans; PROVIDED, HOWEVER, that (A)
cash proceeds received from the issuance of Guarantor Common Stock as a result
of the exercise of options by employees of the Guarantor ("Employee Option
Proceeds") shall not be required to be applied pursuant to this Section 4.02(c)
on the date of the receipt thereof (unless such date of receipt is also a date
specified in the following clause (x) or (y)) but instead shall be required to
be so applied on each of (x) each date during any fiscal year on which the
amount of such Employee Option Proceeds theretofore received in the respective
fiscal year less the aggregate amount of principal repayments made pursuant to
this Section 4.02(c) as a result of the receipt of Employee Option Proceeds
during such fiscal year equals or exceeds $2,500,000 and (y) the last day of the
respective fiscal year, with the principal amount of the repayments required on
each such date to equal the aggregate amount of Employee Option Proceeds
received on or before such date during the respective fiscal year less the
aggregate amount of principal repayments made pursuant to this Section 4.02(c)
as a result of the receipt of Employee Option Proceeds during such fiscal year
and (B) Employee Option Proceeds in an aggregate amount not in excess of
$1,250,000 shall not be required to be applied
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<PAGE>
pursuant to clause (A)(y) above on the last day of the fiscal year of the
Guarantor ended in December 1993. The amount of each principal repayment of
Term Loans made as required by this Section 4.02(c) shall be applied to reduce
the then remaining Term Loan Scheduled Repayments PRO RATA based upon the then
remaining amount of each Term Loan Scheduled Repayment after giving effect to
all prior reductions thereto.
(d) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date after the Effective Date
upon which the Guarantor or any of its Subsidiaries receives any proceeds from
any incurrence by the Guarantor or any of its Subsidiaries of Indebtedness for
borrowed money (other than (i) proceeds received from the Guarantor on or prior
to the Initial Borrowing Date from its issuance of the Guarantor Senior
Subordinated Notes and (ii) Indebtedness for borrowed money permitted by Section
9.05 as such Section is in effect on the Effective Date), an amount equal to the
cash proceeds of the respective incurrence (net of underwriting discounts and
commissions and other reasonable costs associated therewith) shall be applied as
a mandatory repayment of principal of outstanding Term Loans. The amount of each
principal repayment of Term Loans made as required by this Section 4.02(d) shall
be applied to reduce the then remaining Term Loan Scheduled Repayments PRO RATA
based upon the then remaining amount of each Term Loan Scheduled Repayment after
giving effect to all prior reductions thereto.
(e) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date after the Effective Date
upon which the Guarantor or any of its Subsidiaries receives proceeds from any
sale of assets (including capital stock and securities, but excluding (i) sales
of inventory in the ordinary course of business, (ii) sales of equipment in the
ordinary course of business the proceeds of which are used to purchase
replacement equipment within 180 days from the date of sale so long as the
aggregate amount of Net Sale Proceeds excluded pursuant to this clause (ii) in
any fiscal year does not exceed $2,500,000 and (iii) sales of assets in the
ordinary course of business (other than pursuant to subclause (ii) above so long
as the aggregate amount of Net Sale Proceeds from all such sales excluded
pursuant to this clause (iii) does not exceed in any one fiscal year $500,000)),
an amount equal to 100% of the Net Sale Proceeds therefrom shall be applied as a
mandatory repayment of principal of outstanding Term Loans. The amount of each
principal repayment of Term Loans made as required by this Section 4.02(e) shall
be applied to reduce the then remaining Term Loan Scheduled Repayments on the
same basis as is provided in the last sentence of Section 4.02(d).
(f) In addition to any other mandatory repayments pursuant to this
Section 4.02, on or prior to each Excess Cash Payment Date, an amount equal to
50% of the Excess Cash Flow for the relevant Excess Cash Flow Period shall be
applied as a mandatory repayment of principal of outstanding Term Loans. The
amount of each principal repayment of Term Loans made as required by this
Section 4.02(f) shall be applied to
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<PAGE>
reduce the then remaining Term Loan Scheduled Repayments on the same basis as is
provided in the last sentence of Section 4.02(d).
(g) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on September 1, 1994, an amount equal
to the Dr Pepper Preferred Stock Remaining Amount, if positive, on such date,
shall be applied as a mandatory repayment of principal of outstanding Term
Loans. The amount of each principal repayment of Term Loans made as required by
this Section 4.02(g) shall be applied to reduce the then remaining Term Loan
Scheduled Repayments on the same basis as is provided in the last sentence of
Section 4.02(d).
(h) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date after the Effective Date
upon which the Guarantor or any of its Subsidiaries incurs or assumes any
Permitted Acquired Debt, an amount equal to the principal amount of such
Permitted Acquired Debt shall be required to be applied as a mandatory repayment
of principal of outstanding Term Loans. The amount of each principal repayment
of Term Loans made as required by this Section 4.02(h) shall be applied to
reduce the then remaining Term Loan Scheduled Repayments on the same basis as is
provided in the last sentence of Section 4.02(d).
(i) With respect to each repayment of Loans required by this Section
4.02, the Company may designate the Types of Loans of the respective Tranche
which are to be repaid and, in the case of Eurodollar Rate Loans, the specific
Borrowing or Borrowings pursuant to which made, PROVIDED that: (i) repayments of
Eurodollar Rate Loans pursuant to this Section 4.02 may only be made on the last
day of an Interest Period applicable thereto unless all Eurodollar Rate Loans of
the respective Tranche with Interest Periods ending on such date of required
repayment and all Base Rate Loans of the respective Tranche have been paid in
full; (ii) if any repayment of Eurodollar Rate Loans made pursuant to a single
Borrowing shall reduce the outstanding Loans made pursuant to such Borrowing to
an amount less than $10,000,000 in the case of a Borrowing of Term Loans and to
less than $2,000,000 in the case of a Borrowing of Revolving Loans, such
Borrowing shall immediately be converted into Base Rate Loans; (iii) each
repayment of any Loans made pursuant to a Borrowing shall be applied PRO RATA
among such Loans; and (iv) notwithstanding the provisions of the preceding
clause (iii), no prepayment of Revolving Loans made pursuant to Section 4.02 (a)
(i) shall be applied to the Revolving Loans of any Defaulting Bank and
prepayments pursuant to Section 4.02 (a)(ii) shall only be applied to the
Revolving Loans of the respective Defaulting Bank. In the absence of a
designation by the Company as described in the preceding sentence, the
Administrative Agent shall, subject to the above, make such designation in its
sole discretion.
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<PAGE>
(j) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, all then outstanding Term Loans, Revolving Loans and Swingline
Loans shall be repaid in full on the Maturity Date for the respective Tranche of
Loans.
4.03 METHOD AND PLACE OF PAYMENT. Except as otherwise specifically
provided herein, all payments under this Agreement or any Note shall be made to
the Administrative Agent for the account of the Bank or Banks entitled thereto
not later than 12:00 Noon (New York time) on the date when due and shall be made
in Dollars in immediately available funds at the Payment Office of the
Administrative Agent. Whenever any payment to be made hereunder or under any
Note shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable at the applicable
rate during such extension.
4.04 NET PAYMENTS. (a) All payments made by the Guarantor or the
Company hereunder, or by the Company under any Note, will be made without
setoff, counterclaim or other defense. Except as provided in Sections 4.04(b)
and (c), all such payments will be made free and clear of, and without deduction
or withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding, except as provided in the
immediately succeeding sentence, any tax imposed on or measured by the net
income of a Bank pursuant to the laws of the jurisdiction or any political
subdivision or taxing authority thereof or therein in which the principal office
or applicable lending office of such Bank is located) and all interest,
penalties or similar liabilities with respect thereto (collectively, "Taxes").
If any amounts are payable in respect of Taxes pursuant to the preceding
sentence, then the Company shall reimburse each Bank, upon the written request
of such Bank, for taxes imposed on or measured by the net income of such Bank
pursuant to the laws of the jurisdiction or any political subdivision or taxing
authority thereof or therein in which the principal office or applicable lending
office of such Bank is located and for any withholding of income or similar
taxes imposed by the United States of America as such Bank shall determine are
payable by, or withheld from, such Bank in respect of such amounts so paid to or
on behalf of such Bank pursuant to the preceding sentence and in respect of any
amounts paid to or on behalf of such Bank pursuant to this sentence. If any
Taxes are so levied or imposed, the Company agrees to pay the full amount of
such Taxes, and such additional amounts as may be necessary so that every
payment of all amounts due under this Agreement or under any Note, after
withholding or deduction for or on account of any Taxes, will not be less than
the amount provided for herein or in such Note. The Company will furnish to the
Administrative Agent within 45 days after the date the payment of any Taxes is
due pursuant to applicable law certified copies of tax receipts evidencing such
payment by the Company. The Company agrees to
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<PAGE>
indemnify and hold harmless each Bank, and reimburse such Bank upon its written
request, for the amount of any Taxes so levied or imposed and paid by such Bank.
(b) Each Bank which is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes
agrees (i) in the case of any such Bank that is a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and which constitutes a Bank hereunder on the
Initial Borrowing Date, to provide to the Company and the Administrative Agent
on or prior to the Initial Borrowing Date two original signed copies of Internal
Revenue Service Form 4224 or Form 1001 certifying to such Bank's entitlement to
an exemption from United States withholding tax with respect to payments to be
made under this Agreement and under any Note, (ii) in the case of any such Bank
that is a "bank" within the meaning of Section 881(c)(3)(A) of the Code, that,
to the extent legally entitled to do so, (x) with respect to a Bank that is an
assignee or transferee of an interest under this Agreement pursuant to Section
13.04 hereof (unless the respective Bank was already a Bank hereunder
immediately prior to such assignment or transfer), upon the date of such
assignment or transfer to such Bank, and (y) with respect to any such Bank, from
time to time upon the reasonable written request of the Company or the
Administrative Agent after the Initial Borrowing Date, such Bank will provide to
the Company and the Administrative Agent two original signed copies of Internal
Revenue Service Form 4224 or Form 1001 (or any successor forms) certifying to
such Bank's entitlement to an exemption from, or reduction in, United States
withholding tax with respect to payments to be made under this Agreement and
under any Note, (iii) in the case of any such Bank (other than a Bank described
in clause (i) or (ii) above) which constitutes a Bank hereunder on the Initial
Borrowing Date, to provide to the Company and the Administrative Agent, on or
prior to the Initial Borrowing Date (x) a certificate substantially in the form
of Exhibit J hereto (any such certificate, a "Section 4.04(b)(iii)
Certificate") and (y)two accurate and complete original signed copies of
Internal Revenue Service Form W-8, certifying to such Bank's entitlement at the
date of such certificate (assuming compliance by the Company with Section 8.16)
to an exemption from U.S. withholding tax under the provisions of Section 881(c)
of the Code with respect to payments to be made under this Agreement and under
any Note and (iv) in the case of any such Bank (other than a Bank described in
clause (i) or (ii) above), to the extent legally entitled to do so, (x) with
respect to a Bank that is an assignee or transferee of an interest under this
Agreement pursuant to Section 13.04 hereof (unless the respective Bank was
already a Bank hereunder immediately prior to such assignment or transfer), upon
the date of such assignment or transfer to such Bank, and (y) with respect to
any such Bank, from time to time upon the reasonable written request of the
Company or the Administrative Agent after the Initial Borrowing Date, to provide
to the Company and the Administrative Agent such other forms as may be required
in order to establish the entitlement of such Bank to an exemption from
withholding with respect to payments under this Agreement and under any Note.
Notwithstanding anything to the contrary contained in Section 4.04(a), but
subject to the immediately succeeding sentence, the Company shall be entitled,
to the extent it is required to do so by law, to
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<PAGE>
deduct or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
fees or other amounts payable hereunder (without any obligation to pay the
respective Bank additional amounts with respect thereto) for the account of any
Bank which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for U.S. Federal income tax purposes and which has not
provided to the Company such forms required to be provided to the Company
pursuant to the first sentence of this Section 4.04(b). Notwithstanding
anything to the contrary contained in the preceding sentence, the Company agrees
to indemnify each Bank in the manner set forth in Section 4.04(a) in respect of
any amounts deducted or withheld by it as described in the immediately preceding
sentence as a result of any changes after the Effective Date in any applicable
law, treaty, governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of income or
similar Taxes.
(c) If the Company pays or becomes obligated to pay to a Bank any
additional amounts under Section 4.04(a), the Bank shall, upon the reasonable
request of the Company and subject to the overall policy considerations of such
Bank, designate a different office or transfer its rights, benefits and
obligations under this Agreement to an Affiliate if such designation or transfer
would reduce or eliminate such obligation to pay additional amounts and would
not, in the sole discretion of the Bank, be otherwise disadvantageous to the
Bank."
5. ON AND AFTER THE FIFTH AMENDMENT EFFECTIVE DATE, SECTION 5.10 OF
THE ORIGINAL CREDIT AGREEMENT SHALL BE AMENDED BY (I) DELETING THE PHRASE IN THE
FIRST PARENTHETICAL THEREIN "THE `SECURITY AGREEMENT'" AND INSERTING IN LIEU
THEREOF THE PHRASE "THE `COMPANY SECURITY AGREEMENT'" AND (II) DELETING EACH
REFERENCE IN SUCH SECTION TO "SECURITY AGREEMENT" AND INSERTING IN LIEU THEREOF
THE TERM "COMPANY SECURITY AGREEMENT".
6. ON AND AFTER THE FIFTH AMENDMENT EFFECTIVE DATE, SECTION 5.11 OF
THE ORIGINAL CREDIT AGREEMENT SHALL BE AMENDED BY DELETING THE PHRASE IN THE
FIRST PARENTHETICAL THEREIN "EACH A `MORTGAGED PROPERTY' AND COLLECTIVELY, THE
`MORTGAGED PROPERTIES'" AND INSERTING IN LIEU THEREOF THE PHRASE "TOGETHER WITH
THE ADDITIONAL MORTGAGED PROPERTY, EACH A `MORTGAGED PROPERTY' AND COLLECTIVELY,
THE `MORTGAGED PROPERTIES'".
7. ON AND AFTER THE FIFTH AMENDMENT EFFECTIVE DATE, SECTIONS 7.05,
7.08, 7.11, 7.14, 7.15 AND 7.22 OF THE ORIGINAL CREDIT AGREEMENT SHALL BE
AMENDED BY DELETING SUCH SECTIONS IN THEIR ENTIRETY AND INSERTING IN LIEU
THEREOF THE FOLLOWING NEW SECTIONS 7.05, 7.08, 7.11, 7.14, 7.15 AND 7.22,
RESPECTIVELY:
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"7.05 FINANCIAL STATEMENTS: FINANCIAL CONDITION: UNDISCLOSED
LIABILITIES: PROJECTIONS: ETC. (a)(i) The consolidated balance sheet of the
Guarantor and its Subsidiaries at December 31, 1992, December 31, 1991, December
31, 1990 and September 30, 1993 and the related consolidated statements of
earnings and cash flows and shareholders' equity of the Guarantor and its
Subsidiaries for the fiscal year or nine-month period ended on such dates, as
the case may be, copies of which have heretofore been furnished to the Banks
prior to the Fifth Amendment Effective Date, (ii) the consolidated balance sheet
of the Guarantor and its Subsidiaries as of the end of each fiscal month of the
Guarantor ended after September 30, 1993 and prior to the Fifth Amendment
Effective Date and the related consolidated statement of income and cash flows
of the Guarantor and its Subsidiaries for each such month, copies of which have
heretofore been furnished to the Banks prior to the Fifth Amendment Effective
Date and (iii) the PRO FORMA (after giving effect to the Fifth Amendment and the
other transactions contemplated hereby and thereby) consolidated balance sheet
of the Guarantor and its Subsidiaries at September 30, 1993, copies of which
have been furnished to the Banks prior to the Fifth Amendment Effective Date,
present fairly the consolidated financial condition of the Guarantor and its
Subsidiaries at the date of such balance sheets and the consolidated results of
the operations and the consolidated cash flows and shareholders' equity of the
Guarantor and its Subsidiaries for such fiscal year, nine-month period or fiscal
month, as the case may be (or, in the case of the PRO FORMA balance sheet,
presents a good faith estimate of the PRO FORMA consolidated financial condition
of the Guarantor and its Subsidiaries (after giving effect to the Fifth
Amendment and the other transactions contemplated hereby and thereby) at the
date thereof). All such financial statements (other than the PRO FORMA balance
sheet) have been prepared in accordance with generally accepted accounting
principles and practices consistently applied. Since September 30, 1993, there
has been no material adverse change in the business, property, assets, nature of
assets, liabilities, condition (financial or otherwise) or prospects of the
Guarantor or of the Company or of the Guarantor and its Subsidiaries taken as a
whole.
(b) On and as of the Fifth Amendment Effective Date, after giving
effect to the Fifth Amendment and to all Indebtedness (including the Loans)
being incurred or assumed and Liens created by the Guarantor and its
Subsidiaries in connection therewith, (a) the sum of the assets, at a fair
valuation, of each of the Guarantor and the Company and their respective
Subsidiaries will exceed its debts; (b) neither the Guarantor nor the Company
nor any of their respective Subsidiaries has incurred or intends to, or believes
that it will, incur debts beyond its ability to pay such debts as such debts
mature; and (c) each of the Guarantor and the Company and their respective
Subsidiaries will have sufficient capital with which to conduct its business.
For purposes of this Section 7.05(b) "debt" means any liability on a claim, and
"claim" means (i) right to payment, whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured or (ii) right to
an equitable remedy for breach of performance if such breach gives rise to a
payment, whether
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or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, disputed, undisputed, secured or unsecured.
(c) Except as fully reflected in the financial statements delivered
pursuant to Section 7.05(a), there were as of the Fifth Amendment Effective Date
no liabilities or obligations with respect to the Guarantor or any of its
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) which, either individually or in aggregate,
would be material to the Company or to the Guarantor or to the Guarantor and its
Subsidiaries taken as a whole. As of the Fifth Amendment Effective Date, the
Guarantor does not know of any basis for the assertion against the Guarantor or
any of its Subsidiaries of any liability or obligation of any nature whatsoever
that is not fully reflected in the financial statements delivered pursuant to
Section 7.05(a) which, either individually or in the aggregate, could be
material to the Company or to the Guarantor or to the Guarantor and its
Subsidiaries taken as a whole.
(d) On and as of the Fifth Amendment Effective Date, the financial
projections, dated November 12, 1993, previously delivered to the Managing
Agents and the Banks (the "Projections") have been prepared on a basis
consistent with the financial statements referred to in Section 7.05(a) (other
than as set forth in such Projections), and there are no statements or
conclusions in any of the Projections which are based upon or include
information known to the Guarantor or the Company to be misleading or which fail
to take into account material information regarding the matters reported
therein. On the Fifth Amendment Effective Date, each of the Guarantor and the
Company believed that the Projections were reasonable and attainable.
* * *
7.08 USE OF PROCEEDS: MARGIN REGULATIONS. (a) All proceeds of the Term
Loans incurred on the Fifth Amendment Effective Date shall be used by the
Company to repay, in part, the Original Term Loans outstanding on the Fifth
Amendment Effective Date.
(b)(i) Proceeds of Revolving Loans permitted to be incurred on the
Fifth Amendment Effective Date may be used by the Company (x) to repay, in part,
the Original Term Loans and Original Revolving Loans outstanding on the Fifth
Amendment Effective Date and (y) to pay fees and expenses in connection with the
Fifth Amendment and the transactions contemplated thereby, (ii) (x) proceeds of
Revolving Loans and Swingline Loans incurred after the Fifth Amendment Borrowing
Date shall be used for general corporate purposes, including to finance the
working capital needs of the Company (but not to pay Dividends or effect
Permitted Transactions except to the extent permitted below in clause (y) or
pursuant to Section 9.03), PROVIDED that proceeds of Revolving Loans and
Swingline Loans incurred after the Fifth Amendment Borrowing Date shall not be
used to
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<PAGE>
make payments in connection with the Transaction (including, without limitation,
in connection with the purchase of Dr Pepper Preferred Stock), except in
accordance with the following clause (iii) and (y) proceeds of Revolving Loans
may be used for Permitted Transactions provided that at the time of any
Borrowing which is to be used for a Permitted Transaction, the amount of such
proposed Borrowing does not exceed the greater of the Permitted Use Loan Amount
or the Permitted Use Amount at such time and (iii) proceeds of Revolving Loans
in an aggregate amount not to exceed the Blocked Commitment as from time to time
in effect may only be used (A) after the Initial Borrowing Date and on or prior
to August 31, 1994 to purchase or redeem, for cash, shares of Dr Pepper
Preferred Stock remaining outstanding after the Initial Borrowing Date for a
purchase price of $12.25 or less per share plus accumulated dividends, provided
that the purchase price may be increased to an amount in excess of $12.25 per
share plus accumulated dividends so long as the aggregate amount of the increase
in the purchase price for all such shares of Dr Pepper Preferred Stock does not
exceed at the time of payment therefor the Permitted Use Amount at such time and
(B) on September 1, 1994 to make the mandatory repayments of Term Loans, if any,
required pursuant to Section 4.02(i).
(c) No part of the proceeds of any Loan will be used to purchase or
carry any Margin Stock (other than the Dr Pepper Preferred Stock) or to extend
credit for the purpose of purchasing or carrying any Margin Stock (other than
the Dr Pepper Preferred Stock). At the time of each Credit Event, not more than
25% of the value of the assets of the Guarantor or of the Company subject to the
restrictions contained in Section 8 hereof constitute Margin Stock. Neither the
making of any Loan nor the use of the proceeds thereof nor the occurrence of any
other Credit Event will violate or be inconsistent with the provisions of
Regulation G, T, U or X of the Board of Governors of the Federal Reserve System.
* * *
7.11 THE SECURITY DOCUMENTS. (a) The provisions of each Security Agreement
are effective to create in favor of the Collateral Agent for the benefit of the
Secured Creditors a legal, valid and enforceable security interest in all the
Collateral described therein, and each Security Agreement creates a fully
perfected first lien on, and security interest in, all of the Collateral
described therein, subject to no other Liens other than Permitted Liens. The
recordation of each Security Agreement in the United States Patent and Trademark
Office together with filings on Form UCC-1 made pursuant to such Security
Agreement will be effective, under federal law, to perfect the security interest
granted to the Collateral Agent in the trademarks and patents covered by such
Security Agreement and the filing of each Security Agreement with the United
States Copyright Office together with filings on Form UCC-1 made pursuant to
such Security Agreement will be effective under federal law to perfect the
security interest granted to the Collateral Agent in the copyrights covered by
such Security Agreement. Each of the Credit Parties party to a Security
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<PAGE>
Agreement has good and merchantable title to all Collateral described in such
Security Agreement, free and clear of all Liens except those described above in
this clause (a).
(b) So long as the Collateral Agent, as Pledgee, is in possession of
such Pledged Securities, the security interests created in favor of such Pledgee
for the benefit of the Secured Creditors under the Pledge Agreements constitute
first perfected security interests in the Pledged Securities described in the
respective Pledge Agreements, subject to no security interests of any other
Person. No filings or recordings are required in order to perfect the security
interests created in the Pledged Securities under the Pledge Agreements.
(c) The Mortgages create, as security for the obligations purported to
be secured thereby, a valid and enforceable perfected security interest in and
Lien on all of the Mortgaged Properties in favor of the Collateral Agent (or
such other trustee as may be named therein) for the benefit of the Secured
Creditors, superior to and prior to the rights of all third persons (except that
the security interest created in the Mortgaged Properties may be subject to the
Permitted Encumbrances related thereto) and subject to no other Liens (other
than Liens permitted under Section 9.01). Schedule III contains a true and
complete list of each Real Property owned or leased by the Company or Waco on
the Fifth Amendment Effective Date (after giving effect to the Asset Transfer),
and the type of interest therein held by the Company or Waco, as the case may
be. Each of the Company and Waco has good and marketable title to the
respective Mortgaged Properties owned by it free and clear of all Liens except
those described in the first sentence of this subsection (c).
* * *
7. 14 CAPITALIZATION. On the Fifth Amendment Effective Date and after
giving effect to the Transaction, the authorized capital stock of (a) the
Guarantor shall consist of (i) 125,000,000 shares of common stock, $.01 par
value per share, of which not more than 61,500,000 shares of Guarantor Common
Stock shall be issued and outstanding (assuming the exercise of all outstanding
Warrants), (ii) 20,000,000 shares of Guarantor nonvoting common stock, $0.01 par
value per share, of which no shares shall be issued and outstanding and (iii)
2,000,000 shares of Guarantor Preferred Stock, $.01 par value per share, of
which no shares shall be issued and outstanding, (b) the Company shall consist
of (i) 1,000 shares of common stock, $.01 par value per share (the "Company
Common Stock"), of which 1,000 shares of Company Common Stock shall be issued
and outstanding and (ii) 10,000,000 shares of Dr Pepper Preferred Stock, $0.01
par value per share, liquidation preference $10 per share, of which 1,268,474
shares shall be issued and outstanding and (c) Waco shall consist of 1,000
shares of common stock, $1.00 par value per share, of which 1,000 shares shall
be issued and outstanding. Upon issuance thereof, all such outstanding shares
have been or shall be duly and validly issued, are or shall be fully
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paid and nonassessable and are or shall be free of preemptive rights. Neither
the Guarantor nor any of its Subsidiaries has outstanding any securities
convertible into or exchangeable for its capital stock or outstanding any rights
to subscribe for or to purchase, or any options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital stock
other than, in the case of the Guarantor only, pursuant to the Stock Option
Plans, the Rights Agreement and the Warrants, although, in accordance with the
terms of the Warrants, as a result of Section 9.03 as in effect on the date
hereof, no payments shall be required to be made in respect of the Warrants so
long as this Agreement is in effect.
7.15 SUBSIDIARIES. On the Fifth Amendment Effective Date, the
corporations listed on Schedule V are the only Subsidiaries of the Guarantor.
Schedule V correctly sets forth, as of the Fifth Amendment Effective Date, the
percentage ownership (direct and indirect) of the Guarantor in each class of
capital stock of each of its Subsidiaries and also identifies the direct owner
thereof. On the Fifth Amendment Effective Date, the Company has no Subsidiaries
except (i) Waco and (ii) Subsidiaries (other than Waco) with an aggregate
immaterial amount of assets and liabilities.
* * *
7.22 INDEBTEDNESS AND PREFERRED STOCK. Schedule VI sets forth a true
and complete list of all Indebtedness (other than (i) Guarantor Senior
Subordinated Notes, (ii) Loans, (iii) Letters of Credit and (iv) any
Indebtedness representing trade payables) and preferred stock of the Guarantor
and each of its Subsidiaries as of the Fifth Amendment Effective Date and which
is to remain outstanding after giving effect to the Fifth Amendment (the
"Existing Obligations"), in each case showing the aggregate principal amount (or
liquidation preference in the case of preferred stock) thereof (and the
aggregate amount of any undrawn commitments with respect thereto) and the name
of the respective borrower (or issuer) and any other entity which directly or
indirectly guaranteed such debt or preferred stock. For purposes of Section 5.27
and this Section 7.22, any Indebtedness in respect of Guarantor Discount Notes,
any Dr Pepper Senior Notes not tendered in the Dr Pepper Senior Note Tender
Offer, any Dr Pepper Subordinated Debentures and any Seven-Up Subordinated Notes
being redeemed in accordance with Sections 5.22, 5.23, 5.24 and 5.25,
notwithstanding the terms of their respective governing instruments, shall be
deemed to be not "outstanding" from and after the Initial Borrowing Date if all
of the matters with respect to respective Redemptions thereof specified in
Sections 5.22, 5.23, 5.24 and 5.25, respectively, shall have been satisfied at
or prior to the Initial Borrowing Date ("Retired Indebtedness")."
8. ON AND AFTER THE FIFTH AMENDMENT EFFECTIVE DATE, SECTION 8.14(b)
(iii) OF THE ORIGINAL CREDIT AGREEMENT SHALL BE AMENDED BY DELETING THE PHRASE
"TRANCHE A" APPEARING THEREIN.
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9. ON AND AFTER THE FIFTH AMENDMENT EFFECTIVE DATE, SECTION 9.01 OF
THE ORIGINAL CREDIT AGREEMENT SHALL BE AMENDED BY DELETING CLAUSES (ii), (iii),
(vi), (vii) AND (viii) APPEARING THEREIN IN THEIR ENTIRETY AND INSERTING IN LIEU
THEREOF THE FOLLOWING NEW CLAUSES (ii), (iii), (vi), (vii) AND (viii),
RESPECTIVELY:
"(ii) Liens in respect of property or assets of the Company or
Waco imposed by law, which were incurred in the ordinary course of
business and do not secure Indebtedness for borrowed money, such as
landlords', carriers', warehousemen's, materialmen's and mechanics'
liens and other similar Liens arising in the ordinary course of
business, and (x) which do not in the aggregate materially detract
from the value of the Company's or Waco's respective property or
assets or materially impair the use thereof in the operation of the
business of the Company or Waco, as the case may be or (y) which Liens
or the obligations secured thereby are being contested in good faith
by appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or assets subject to
any such Lien;
(iii) Liens of the Company or Waco in existence on the Fifth
Amendment Effective Date which are listed, and the property subject
thereto described, in Schedule VIII, but only to the respective date,
if any, set forth in such Schedule VIII for the removal and
termination of any such Liens;"
* * *
"(vi) Liens placed upon equipment or machinery of the Company or
Waco used in the ordinary course of the respective businesses of the
Company or Waco at the time of acquisition thereof by the Company or
Waco, as the case may be, to secure Indebtedness incurred to pay all
or a portion of the purchase price thereof PROVIDED that (x) the
aggregate principal amount of all Indebtedness secured by Liens
permitted by this clause (vi) does not exceed at any one time
outstanding $250,000 and (y) in all events, the Lien encumbering the
equipment or machinery so acquired does not encumber any other asset
of the Guarantor or any of its Subsidiaries;
(vii) leases or subleases granted by the Company or Waco to other
Persons in the ordinary course of business and not materially
interfering with the conduct of the business of the Company or Waco,
as the case may be;
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<PAGE>
(viii) Liens securing Indebtedness of the Company or Waco
evidenced by Capitalized Lease Obligations to the extent permitted by
Section 9.05(vi); PROVIDED that such Liens only serve to secure the
payment of Indebtedness arising under such Capitalized Lease
Obligation and the Lien encumbering the asset giving rise to the
Capitalized Lease Obligation does not encumber any other asset of the
Guarantor or any of its Subsidiaries;"
10. ON AND AFTER THE FIFTH AMENDMENT EFFECTIVE DATE, SECTION 9.02 OF
THE ORIGINAL CREDIT AGREEMENT SHALL BE AMENDED BY (i) DELETING CLAUSES (i),
(ii), (iii), (iv), (v), (vi) AND (x) APPEARING THEREIN IN THEIR ENTIRETY AND
INSERTING IN LIEU THEREOF THE FOLLOWING NEW CLAUSES (i), (ii), (iii), (iv), (v),
(vi) AND (x), RESPECTIVELY, (ii) DELETING THE WORD "AND" APPEARING AT THE END OF
CLAUSE (ix) APPEARING THEREIN, (iii) CHANGING THE PERIOD AT THE END OF CLAUSE
(x) TO A SEMI-COLON AND (iv) INSERTING NEW CLAUSES (xi) AND (xii) IMMEDIATELY AT
THE END OF THE FIRST SENTENCE OF SAID SECTION 9.02 AS FOLLOWS:
"(i) Capital Expenditures by the Company and Waco shall be
permitted to the extent not in violation of Section 9.08;
(ii) each of the Company and Waco may, in the ordinary course of
business, sell, lease or otherwise dispose of any assets which, in the
reasonable judgment of the Company or Waco, as the case may be, have
become uneconomic, obsolete or worn out;
(iii) each of the Company and Waco may lease (as lessee) real or
personal property to the extent permitted by Section 9.04 (so long as
such lease does not create Capitalized Lease Obligations);
(iv) each of the Company and Waco may make sales of inventory in
the ordinary course of business;
(v) each of the Company and Waco shall be permitted to sell
assets so long as (A) each such sale is for fair market value (as
determined in good faith by the Company) and (B) the Net Sale Proceeds
received for all such sales permitted by this clause (v) in any one
fiscal year shall not exceed $500,000;
(vi) notwithstanding subclause (v) hereof, each of the Company
and Waco shall be permitted to sell equipment in the ordinary course
of business so long as (A) the proceeds of any such sale are used to
purchase replacement equipment within 180 days from the date of such
sale or (B)
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100% of the Net Sale Proceeds shall be applied in accordance with
Section 4.02(g);"
* * *
"(xi) the Company may make investments expressly permitted by
Section 9.06(ix); and
(xii) the Asset Transfer shall be permitted, PROVIDED that at the
time of the consummation of the Asset Transfer, the Company shall have
(x) caused Waco to execute and deliver the Subsidiary Guaranty, the
Subsidiary Security Agreement, the Subsidiary Pledge Agreement and the
Additional Mortgage and each of the foregoing shall be in full force
and effect and (y) each of the Company and Waco shall have complied
with the provisions of Sections 8.14(e), (f) and (g) with respect to
the Asset Transfer, with all actions required by said Sections to be
taken to the satisfaction of the Administrative Agent prior to the
time when the Asset Transfer is consummated."
11. ON AND AFTER THE FIFTH AMENDMENT EFFECTIVE DATE, SECTION 9.03 OF
THE ORIGINAL CREDIT AGREEMENT SHALL BE AMENDED BY (i) DELETING THE WORD "AND"
APPEARING AT THE END OF CLAUSE (vii) CONTAINED THEREIN AND (ii) INSERTING THE
FOLLOWING IMMEDIATELY AT THE END OF CLAUSE (viii) OF SAID SECTION 9.03:
"and (ix) so long as there shall exist no Default or Event of Default
(both before and after giving effect to the payment thereof), the
Company may pay cash dividends to the Guarantor so long as all
proceeds thereof are immediately used by the Guarantor to repurchase
Guarantor Senior Subordinated Notes, PROVIDED, HOWEVER, that (a)
dividends paid pursuant to this clause (ix) shall not exceed an
aggregate amount of $60,000,000 and (b) the amount paid by the
Guarantor in connection with the repurchase of any Guarantor Senior
Subordinated Note shall not exceed (x) the product of (i) 125% and
(ii) the accredit amount of such Guarantor Senior Subordinated Note
plus (y) accrued and unpaid interest thereon through the repurchase
date."
12. ON AND AFTER THE FIFTH AMENDMENT EFFECTIVE DATE, SECTION 9.05 OF
THE ORIGINAL CREDIT AGREEMENT SHALL BE AMENDED BY DELETING CLAUSES (ii), (vi)
AND (x) OF SAID SECTION 9.05 IN THEIR ENTIRETY AND INSERTING IN LIEU THEREOF THE
FOLLOWING NEW CLAUSES (ii), (vi) AND (x), RESPECTIVELY:
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"(ii) Indebtedness of the Company and Waco existing on the
Effective Date shall be permitted to the extent the same is listed on
Schedule VI, PROVIDED that no refinancings or renewals of the
Indebtedness except as expressly set forth on Schedule VI shall be
permitted and, in any event, refinancings and renewals shall not be in
excess of the respective amounts set forth on Schedule VI;"
* * *
"(vi) Indebtedness of the Company and Waco evidenced by
Capitalized Lease Obligations to the extent permitted pursuant to
Section 9.08, provided that in no event shall the aggregate principal
amount of Capitalized Lease Obligations permitted by this Section
9.05(vi) exceed $5,000,000 at any time;"
* * *
"(x) Indebtedness of the Company or Waco not otherwise permitted
by this Section 9.05 in an amount not to exceed $2,500,000 in the
aggregate at any one time outstanding.
13. ON AND AFTER THE FIFTH AMENDMENT EFFECTIVE DATE, SECTION 9.06 OF
THE ORIGINAL CREDIT AGREEMENT SHALL BE AMENDED BY (i) DELETING CLAUSES (i),
(ii), (v), (vi) AND (vii) OF SAID SECTION 9.06 IN THEIR ENTIRETY AND INSERTING
IN LIEU THEREOF THE FOLLOWING NEW CLAUSES (i), (ii), (v), (vi) AND (vii),
RESPECTIVELY, (ii) DELETING THE WORD "AND" AT THE END OF CLAUSE (vii) APPEARING
THEREIN, (iii) CHANGING THE PERIOD AT THE END OF CLAUSE (viii) TO A SEMI-COLON
AND (iv) INSERTING NEW CLAUSES (ix), (x), (xi), (xii), (xiii) AND (xiv)
IMMEDIATELY AT THE END OF SAID SECTION 9.06 AS FOLLOWS:
"(i) each of the Company and Waco may acquire and hold accounts
receivable owing to it, if created or acquired in the ordinary course
of business and payable or dischargeable in accordance with customary
terms;
(ii) each of the Company and Waco may acquire and hold cash and
Cash Equivalents, PROVIDED that at any time at which any Revolving
Loans or Swingline Loans are outstanding, the aggregate amount of cash
and Cash Equivalents collectively held by the Company and Waco shall
not exceed $15,000,000 for any five consecutive Business Days;"
* * *
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<PAGE>
"(v) each of the Company and Waco may make or maintain travel,
relocation and other expense advances to employees for business
related activities of the Company or Waco, as the case may be, in the
ordinary course of business and consistent with past practice,
provided that in no event shall the aggregate principal amount of such
advances permitted pursuant to this clause (v) exceed $1,000,000 at
any time;
(vi) each of the Company and Waco may make Capital Expenditures
to the extent permitted by Section 9.08;
(vii) the Guarantor may acquire and hold cash and Cash
Equivalents in an aggregate principal amount of up to $2,500,000 at
any one time but only in contemplation of, and prior to, the payment
of operating expenses in the ordinary course of business, franchise
taxes and other similar costs and expenses in accordance with Section
9.03 and may acquire from the Company cash (x) to pay Dividends to
holders of Guarantor Common Stock in accordance with Section 9.03
(vi), (y) to pay cash interest owing with respect to the Guarantor
Senior Subordinated Notes in accordance with Section 9.03 (viii) and
(z) to repurchase Guarantor Senior Subordinated Notes in accordance
with Section 9.03 (ix);"
* * *
"(ix) the Special Purpose Subsidiary may invest in a single newly
formed company, which shall be a limited liability company organized
under the laws of the State of Delaware, in which the Special Purpose
Subsidiary shall own 50% of the equity interests thereof in an
aggregate amount not in excess of $5,000,000 at any one time
outstanding determined without giving effect to any write-downs or
write-offs in respect thereof, which company shall be established for
purposes of manufacturing and marketing a tea product;
(x) the Company may make investments pursuant to Section
9.06(ix), including the creation of the Special Purpose Subsidiary and
the contribution thereto of the amounts needed to effect such
investments, PROVIDED, that the maximum amount permitted to be
invested in the Special Purpose Subsidiary shall not exceed $5,000,000
at any time without giving effect to any write-downs or write-offs in
respect thereof;
(xi) the Asset Transfer pursuant to Section 9.02(xii) shall be
permitted;
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<PAGE>
(xii) the Company may make loans to Waco, so long as the
aggregate amount of such loans at any time outstanding pursuant to
this clause (xii) does not exceed $50,000,000, PROVIDED, that all
loans pursuant to this clause (xii) shall be evidenced by one or more
promissory notes in form and substance satisfactory to the
Administrative Agent which are pledged to the Collateral Agent for the
benefit of the Secured Creditors pursuant to the Company Pledge
Agreement;
(xiii) Waco may make loans to the Company, PROVIDED, that
such loans shall be evidenced by promissory notes in form and
substance satisfactory to the Administrative Agent, in each case
containing the Subordination Provisions and such promissory notes
shall be pledged to the Collateral Agent for the benefit of Secured
Creditors pursuant to the Subsidiary Pledge Agreement;
(xiv) the Company may make capital contributions to Waco, so
long as the aggregate amount of such capital contributions pursuant to
this clause (xiv) shall not exceed $50,000,000 at any one time
outstanding, without giving effect to any write-downs or write-offs
with respect thereto."
14. ON THE AFTER THE FIFTH AMENDMENT EFFECTIVE DATE, SECTION 9.07 OF
THE ORIGINAL CREDIT AGREEMENT SHALL BE AMENDED BY (i) DELETING THE WORD "AND"
APPEARING AT THE END OF CLAUSE (ii) CONTAINED THEREIN AND (ii) INSERTING THE
FOLLOWING IMMEDIATELY AT THE END OF CLAUSE (iii) OF SAID SECTION 9.07;
"and (iv) capital contributions made in accordance with Section
9.06(xiv) shall be permitted.
15. ON AND AFTER THE AMENDMENT EFFECTIVE DATE, SECTION 9.08 OF THE
ORIGINAL CREDIT AGREEMENT SHALL BE AMENDED BY DELETING SAID SECTION 9.08 IN ITS
ENTIRETY AND INSERTING THE FOLLOWING NEW SECTION 9.08 IN LIEU THEREOF:
"9.08 CAPITAL EXPENDITURES. The Guarantor will not, and will
not permit any of its Subsidiaries to, make any Capital Expenditures
(other than Capital Expenditures in connection with Permitted
Transactions made in compliance with Section 8. 14), except that the
Company and Waco may make such Capital Expenditures in aggregate
amounts, collectively, (i) during the period commencing on the Initial
Borrowing Date and ending on December 31, 1992, not in excess of
$2,000,000, (ii) during the fiscal year of the Company ending on
December 31, 1993, not in excess of $5,000,000 and (iii) during any
fiscal year of the Company ending thereafter, not in excess of
$8,000,000."
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<PAGE>
16. ON AND AFTER THE FIFTH AMENDMENT EFFECTIVE DATE, SECTION 9.13 OF
THE ORIGINAL CREDIT AGREEMENT SHALL BE AMENDED BY (i) DELETING SUBCLAUSE (z) OF
CLAUSE (i) THEREOF IN ITS ENTIRETY AND INSERTING IN LIEU THEREOF A NEW SUBCLAUSE
(z) TO READ "REPURCHASES OF GUARANTOR SENIOR SUBORDINATED NOTES IN ACCORDANCE
WITH THE REQUIREMENTS OF SECTION 9.03" AND (ii) INSERTING THE PHRASE "ASSET
TRANSFER DOCUMENT OR" IMMEDIATELY AFTER THE PHRASE "NEW," APPEARING IN CLAUSE
(iv) CONTAINED THEREIN.
17. ON AND AFTER THE FIFTH AMENDMENT EFFECTIVE DATE, SECTION 9.15 OF
THE ORIGINAL CREDIT AGREEMENT SHALL BE AMENDED BY DELETING SUBCLAUSE (v)
APPEARING IN CLAUSE (a) CONTAINED THEREIN IN ITS ENTIRETY AND INSERTING THE
FOLLOWING NEW CLAUSE (v) IN LIEU THEREOF:
"(v) upon the formation of (x) Waco in connection with
effecting the Asset Transfer, (y) the Special Purpose Subsidiary or
(z) any new Subsidiary as permitted by this Agreement in connection
with a Permitted Acquisition, each of Waco and the Special Purpose
Subsidiary may issue capital stock to the Company and such other newly
formed Subsidiary may issue capital stock to the Company or a
Subsidiary of the Company so long as the capital stock so issued is
immediately pledged to the Collateral Agent for the benefit of the
Secured Creditors under the Company Pledge Agreement or the respective
Additional Security Document."
18. ON AND AFTER THE FIFTH AMENDMENT EFFECTIVE DATE, SECTION 9.16 OF
THE ORIGINAL CREDIT AGREEMENT IS HEREBY AMENDED BY (i) DELETING THE PHRASE
"INITIAL BORROWING DATE" APPEARING THEREIN AND (ii) INSERTING THE PHRASE "FIFTH
AMENDMENT EFFECTIVE DATE, AFTER GIVING EFFECT TO THE ASSET TRANSFER," IN LIEU
THEREOF.
19. ON AND AFTER THE FIFTH AMENDMENT EFFECTIVE DATE, SECTION 10.08 OF
THE ORIGINAL CREDIT AGREEMENT SHALL BE AMENDED BY DELETING SAID SECTION 10.08 IN
ITS ENTIRETY AND INSERTING IN LIEU THEREOF THE FOLLOWING NEW SECTION 10.08:
"10.08. GUARANTIES. At any time after the execution and
delivery thereof, (a) any Guaranty or any provision thereof shall
cease to be in full force or effect as to the Guarantor or any
Subsidiary Guarantor, as the case may be, except to the extent the
Guarantor or such Subsidiary Guarantor is released from its
obligations under the respective Guaranty in accordance with the terms
of such Guaranty, or (b) the Guarantor, any Subsidiary Guarantor or
any Person acting by or on behalf of the Guarantor or any Subsidiary
Guarantor shall deny or disaffirm the Guarantor's or such Subsidiary
Guarantor's obligations under the respective Guaranty, or (c) the
Guarantor or any Subsidiary Guarantor shall default in the due
performance
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<PAGE>
or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to the respective Guaranty; or".
20. ON AND AFTER THE FIFTH AMENDMENT EFFECTIVE DATE, SECTION 10 OF
THE CREDIT AGREEMENT SHALL BE AMENDED BY (i) DELETING THE LANGUAGE APPEARING
AFTER SECTION 10.10 AND THROUGH THE END OF SAID SECTION 10 IN ITS ENTIRETY AND
(ii) INSERTING THE FOLLOWING IN LIEU THEREOF:
"then, and in any such event, and at any time thereafter, if any Event
of Default shall then be continuing, the Administrative Agent, upon
the written request of the Required Banks, shall by written notice to
the Company, take any or all of the following actions, without
prejudice to the rights of the Administrative Agent, the Collateral
Agent, the Managing Agents, any Bank or the holder of any Note to
enforce its claims against the Guarantor, any Subsidiary Guarantor or
any Subsidiary of the Guarantor (PROVIDED, that, if an Event of
Default specified in Section 10.05 shall occur with respect to the
Company, any Subsidiary Guarantor or the Guarantor, the result which
would occur upon the giving of written notice by the Administrative
Agent to the Company as specified in clauses (i) and (ii) below shall
occur automatically without the giving of any such notice): (i)
declare the Total Commitments terminated, whereupon all Commitments of
each Bank shall forthwith terminate immediately and any Fees shall
forthwith become due and payable without any other notice of any kind;
(ii) declare the principal of and any accrued interest in respect of
all Loans and the Notes and all Obligations owing hereunder and
thereunder to be, whereupon the same shall become, forthwith due and
payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Guarantor and its
Subsidiaries; (iii) terminate any Letter of Credit, which may be
terminated, in accordance with its terms; (iv) direct the Company to
pay (and the Company agrees that upon receipt of such notice, or upon
the occurrence of an Event of Default specified in Section 10.05 with
respect to the Company, any Subsidiary Guarantor or the Guarantor, it
will pay) to the Collateral Agent at the Payment Office such
additional amount of cash, to be held as security by the Collateral
Agent, as is equal to the aggregate Stated Amount of all Letters of
Credit then outstanding; and (v) enforce, as Collateral Agent, all of
the Liens and security interests created pursuant to the Security
Documents."
21. ON AND AFTER THE FIFTH AMENDMENT EFFECTIVE DATE, SECTION 11 OF
THE ORIGINAL CREDIT AGREEMENT SHALL BE AMENDED BY DELETING THE FOLLOWING
DEFINITIONS APPEARING THEREIN IN THEIR ENTIRETY:
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<PAGE>
"Additional Collateral"
"Additional Security Documents"
"Administrative Agent"
"Applicable Margin"
"Bank Default"
"Blocked Commitment"
"Commitment"
"Credit Documents"
"Credit Event"
"Documents"
"Employee Option Proceeds"
"Excess Cash Flow"
"Excess Cash Flow Period"
"Excess Cash Payment Date"
"Excess Proceeds Amount"
"Final Maturity Date"
"Guaranty"
"L/C Supportable Indebtedness"
"Leverage Reduction Discount"
"Mandatory Borrowing"
"Minimum Unutilized Revolving Loan Commitment"
"Note"
"Pledge Agreements
"Pro Forma Basis"
"Qualified Equity Offering"
"Reference Banks"
"Retention Percentage"
"Revolving Loan"
"Revolving Loan Maturity Date"
"Scheduled Repayments"
"Security Agreement"
"Security Agreement Collateral"
"Security Documents"
"Swingline Loan"
"Syndication Date"
"Term Loan"
"Term Loan Commitment"
"Total Term Loan Commitment"
"Total Tranche A Term Loan Commitment"
"Total Tranche B Term Loan Commitment"
"Tranche"
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<PAGE>
"Tranche A Term Loan"
"Tranche A Term Loan Commitment"
"Tranche A Term Loan Maturity Date"
"Tranche A Term Loan Scheduled Repayment"
"Tranche A Term Loan Scheduled Repayment Date"
"Tranche A Term Note"
"Tranche B Term Loan"
"Tranche B Term Loan Commitment"
"Tranche B Term Loan Scheduled Repayment"
"Tranche B Term Loan Scheduled Repayment Date"
"Tranche B Term Note"
22. ON AND AFTER THE FIFTH AMENDMENT EFFECTIVE DATE, SECTION 11 OF
THE CREDIT AGREEMENT SHALL BE AMENDED BY INSERTING THE FOLLOWING DEFINITIONS IN
APPROPRIATE ALPHABETICAL ORDER:
'Additional Collateral' shall mean all property (whether real or
personal) in which security interests are granted (or purport to be granted)
(and continue to be in effect at the time of determination) pursuant to Section
8. 14, including, without limitation, all assets, if any, transferred pursuant
to the Asset Transfer.
'Additional Mortgage' shall mean the mortgage entered into by Waco in
accordance with Section 8.14 with respect to the Real Property transferred to
Waco pursuant to the Asset Transfer, as modified, supplemented or amended from
time to time in accordance with the terms thereof.
'Additional Mortgaged Property' shall mean the Real Property subject
to the Additional Mortgage.
'Additional Security Documents' shall mean all mortgages, pledge
agreements, security agreements and other security documents entered into
pursuant to Section 8.14 with respect to Additional Collateral, including,
without limitation, the Additional Mortgage.
'Administrative Agent' shall mean BTCo in its capacity as
Administrative Agent for the Banks hereunder, provided that if BTCo shall resign
as a Managing Agent hereunder, the successor Managing Agent shall become the
replacement Administrative Agent.
'Applicable Margin' shall mean (A) in the case of Term Loans,
Revolving Loans and Swingline Loans which are Base Rate Loans, 1/4 of 1% less
the then applicable Leverage Reduction Discount, if any, and (B) in the case of
Term Loans and Revolving
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Loans which are Eurodollar Loans, 1-1/4% less the then applicable Leverage
Reduction Discount, if any.
'Asset Transfer' shall mean the transfer on or after the Fifth
Amendment Effective Date and on or prior to December 31, 1993 by the Company of
certain of its assets specified in the Transfer Agreement to Waco with an
aggregate book value not to exceed $40,000,000 pursuant to the Asset Transfer
Documents.
'Asset Transfer Documents' shall mean, collectively, (i) the Transfer
Agreement, dated as of December 28, 1993, between the Company and Waco; (ii) the
General Warranty Deed, dated as of December 28, 1993, between the Company and
Waco and (iii) any other documents or instruments entered into in connection
with the Asset Transfer, all of which documents pursuant to the preceding
clauses (i) through (ii) shall be reasonably satisfactory to the Administrative
Agent.
'Bank Default' shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing or to fund
its portion of any unreimbursed payment under Section 2.04(c) or (ii) a Bank
having notified in writing the Company and/or the Administrative Agent that it
does not intend to comply with its obligations under Section 1.01(a), 1.01(b) or
1.01(d) or Section 2, in either case as a result of any takeover of such Bank by
any regulatory authority or agency.
'Blocked Commitment' shall mean at any time a portion of the Total
Revolving Loan Commitment equal to the Dr Pepper Preferred Stock Remaining
Amount at such time which portion of the Total Revolving Loan Commitment shall
only be permitted to be used (x) after the Initial Borrowing Date, to purchase
or redeem, for cash, shares of Dr Pepper Preferred Stock (but not to pay
accumulated dividends thereon in connection with such purchase), provided that
the Blocked Commitment may not be used (and shall not be reduced) to the extent
of the portion of the purchase price for any share of Dr Pepper Preferred Stock
that exceeds $12.25, and (y) on September 1, 1994, to make the mandatory
repayments of Term Loans, if any, required pursuant to Section 4.02(g).
Notwithstanding anything to the contrary contained in preceding clause (x), to
the extent the amount per share paid in connection with any purchase or
redemption of Dr Pepper Preferred Stock effected in accordance with Section
9.03(iv) exceeds $12.25, Revolving Loans may be incurred and the proceeds
thereof used to pay the balance of the purchase or redemption price, provided
that such Revolving Loans shall not constitute the utilization of, or otherwise
reduce, the Blocked Commitment.
'Commitment' shall mean any of the commitments of any Bank, I.E.,
whether the Term Loan Commitment or Revolving Loan Commitment.
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`Continuing Bank' shall mean each Existing Bank with a Commitment
under the Credit Agreement (after giving effect to the Fifth Amendment) or
outstanding Term Loans pursuant to the Credit Agreement (after giving effect to
the Fifth Amendment).
`Credit Document' shall mean this Agreement and, after the execution
and delivery thereof, each Note, each Notice of Borrowing, each Letter of Credit
Request, each Guaranty, each Security Document and the Fifth Amendment.
`Credit Event' shall mean the making of any Loan or the issuance of
any Letter of Credit (including, without limitation, the assumption of the
Existing Letters of Credit on the Initial Borrowing Date and the making of the
Loans and the assumption of the Original Letters of Credit on the Fifth
Amendment Effective Date).
`Documents' shall mean the Credit Documents, the Asset Transfer
Documents and the Transaction Documents.
`Employee Option Proceeds' shall have the meaning provided in Section
4.02(c).
`Excess Cash Flow' shall mean, for any period, the remainder of (i)
the sum of (a) Adjusted Consolidated Net Income for such period and (b) the
decrease, if any, in Adjusted Working Capital from the first day to the last day
of such period, minus (ii) the sum of (a) the amount of cash consideration paid
in respect of Capital Expenditures (to the extent not financed with Indebtedness
but not in excess of the amounts permitted pursuant to Section 9.05 and
excluding all cash consideration paid in connection with Permitted Transactions)
made by the Company and its Subsidiaries on a consolidated basis during such
period, (b) the amount of permanent principal payments of Indebtedness for
borrowed money of the Guarantor or any of its Subsidiaries (other than (1)
payments made in respect of the Refinancing Transactions or of any Indebtedness
described in the definition of Refinancing Transactions, (2) payments made in
respect of repurchases of Guarantor Senior Subordinated Notes and (3) repayments
of Loans, PROVIDED that repayments of Loans shall be deducted in determining
Excess Cash Flow if such repayments were (x) required as a result of a Term Loan
Scheduled Repayment under Section 4.02(b) or (y) made as a voluntary prepayment
with internally generated funds (but in the case of a voluntary prepayment of
Revolving Loans, only to the extent accompanied by a voluntary reduction to the
Total Revolving Loan Commitment)) during such period, (c) the increase, if any,
in Adjusted Working Capital from the first day to the last day of such period,
(d) the amount of all cash dividends (but including only payments of regularly
accruing dividends) paid on the Dr Pepper Preferred Stock during such period and
(e) the up-front cash fees (to the extent not already deducted in determining
Adjusted Consolidated Net Income for such period) paid by the Company during
such period to obtain the interest rate protection required pursuant to Section
8. 11. In making the foregoing determinations under clauses
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(i)(b) and (ii)(c) of the immediately preceding sentence, the amount of the
Adjusted Working Capital acquired as a result of each Permitted Transaction
which occurred during the respective period for which Excess Cash Flow is being
determined shall have been deemed to have been acquired on the first day of such
period.
`Excess Cash Flow Period' shall mean with respect to the repayment
required on each Excess Cash Payment Date, the immediately preceding fiscal year
of the Guarantor.
`Excess Cash Payment Date' shall mean the date occurring 90 days after
the last day of each fiscal year of the Guarantor (beginning with its fiscal
year ended in 1994).
`Excess Proceeds Amount' shall mean an amount equal to zero on the
Initial Borrowing Date and INCREASED by (i) on the earlier of each Excess Cash
Payment Date and the date on which a mandatory prepayment is made pursuant to
Section 4.02(f), an amount, if positive, equal to the Excess Cash Flow for the
Excess Cash Flow Period relating to such Excess Cash Payment Date or mandatory
prepayment date, as the case may be, multiplied by the applicable Retention
Percentage and (ii) on the date of the issuance of any Guarantor Common Stock as
part of the consideration for a Permitted Transaction, the fair market value of
the Guarantor Common Stock issued in connection therewith.
`Existing Bank' shall have the meaning provided in the Recitals to the
Fifth Amendment.
`Fifth Amendment' shall mean the Fifth Amendment, dated as of December
28, 1993, to this Agreement.
`Fifth Amendment Effective Date' shall have the meaning provided in
Section III (1) of the Fifth Amendment.
`Final Maturity Date' shall mean December 31, 1998.
`Guaranty' shall mean and include (i) the guaranty of the Guarantor
contained in Section 14 and (ii) the Subsidiary Guaranty, if any, and each
additional guaranty executed and delivered pursuant to Section 8.14; PROVIDED
that after the date on which any of the foregoing agreements shall terminate in
accordance with its terms, such agreement shall cease to constitute a Guaranty
hereunder.
`L/C Supportable Indebtedness' shall mean (i) those obligations of the
Company (including obligations of the Company assumed pursuant to the Merger)
supported by Existing Letters of Credit or any replacements of Existing Letters
of Credit, (ii) obligations of the Company or Waco incurred in the ordinary
course of business with
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respect to workers compensation, surety bonds and other similar statutory
obligations and (iii) such other obligations of the Company or Waco as are
reasonably acceptable to the Issuing Bank and Managing Agents and otherwise
permitted to exist pursuant to the terms of this Agreement.
`Leverage Reduction Discount' shall mean initially zero and from and
after the first day of any Margin Reduction Period (the "Start Date") to and
including the last day of such Margin Reduction Period, (A) 1/4 of 1% if, but
only if, as of the last day of the most recent fiscal quarter ending immediately
prior to such Start Date (the "Test Date") all of the following conditions are
met: (x) Consolidated Indebtedness shall be less than $475,000,000, (y) the
ratio of Consolidated EBITDA to Consolidated Cash Interest Expense for the Test
Period last ended prior to such Test Date shall be greater than 5.0:1 and (z)
the ratio of Consolidated EBITDA to Consolidated Interest Expense for the Test
Period last ended prior to such Test Date shall be greater than 2.50:1 and (B)
with respect to Eurodollar Rate Loans only, 1/2 of 1% if, but only if, as of the
respective Test Date all of the following conditions are met: (x) Consolidated
Indebtedness shall be less than $237,500,000, (y) the ratio of Consolidated
EBITDA to Consolidated Cash Interest Expense for the Test Period last ended
prior to such Test Date shall be equal to or greater than 5.0:1 and (z) the
ratio of Consolidated EBITDA to Consolidated Interest Expense for the Test
Period last ended prior to such Test Date shall be greater than 3.0:1; PROVIDED
that the Leverage Reduction Discount shall be reduced to zero at all times
during which there shall exist a Default or Event of Default. It is understood
and agreed that the Leverage Reduction Discount as provided above shall in no
event be cumulative and, with respect to each Tranche of Loans, only the
Leverage Reduction Discount, if any, available for such Tranche of Loans
pursuant to one of clause (A) or (B) contained in this definition shall be
applicable at any time.
`Loan' shall mean each Term Loan, each Revolving Loan and each
Swingline Loan.
`Mandatory Borrowing' shall have the meaning provided in Section
1.01(d).
`Maturity Date' shall mean, with respect to any Tranche of Loans, the
respective Maturity Date applicable to such Tranche of Loans, i.e., the Final
Maturity Date, the Revolving Loan Maturity Date or the Swingline Expiry Date.
`Minimum Unutilized Revolving Loan Commitment' shall mean $35,000,000.
`Note' shall mean each Term Note, the Swingline Note and each
Revolving Note.
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`Original Credit Agreement' shall have the meaning provided in the
first Whereas clause of the Fifth Amendment.
`Original Letters of Credit' shall mean the "Letters of Credit" under,
and as defined in, the Original Credit Agreement, which were issued by BTCo and
which remain outstanding on the Fifth Amendment Effective Date.
`Original Revolving Loans' shall mean the "Revolving Loans" under, and
as defined in, the Original Credit Agreement.
`Original Swingline Loans' shall mean the "Swingline Loans" under, and
as defined in, the Original Credit Agreement.
`Original Term Loans' shall mean the "Term Loans" under, and as
defined in, the Original Credit Agreement.
`Pledge Agreements' shall mean each of the Guarantor Pledge Agreement,
the Company Pledge Agreement and the Subsidiary Pledge Agreement.
`Pro Forma Basis' shall mean, with respect to any Permitted
Transaction, the calculation of the consolidated results of the Guarantor and
its Subsidiaries otherwise determined in accordance with this Agreement as if
the respective Permitted Transaction (and all other Permitted Transactions
consummated during the respective Calculation Period or thereafter and prior to
the date of determination pursuant to Section 8.14) had been effected on the
first day of the respective Calculation Period; provided that all calculations
of the Consolidated Interest Expense (and of Consolidated Cash Interest Expense)
shall take into account the following assumptions:
(i) if Permitted Acquired Debt is incurred pursuant to the respective
Permitted Transaction (or was incurred in any other Permitted Transaction
which occurred during the relevant Calculation Period or thereafter and
prior to the date of determination), then all such Permitted Acquired Debt
shall be deemed to have been outstanding from the first day of the
respective Calculation Period (and the interest expense associated with
such Permitted Acquired Debt, determined at the actual rates applicable
thereto or which would have been applicable had such debt been outstanding
for the whole such period, shall be included in determining Consolidated
Interest Expense on such Pro Forma Basis) and all Loans repaid as a result
of such incurrence pursuant to Section 4.02(h) shall be deemed to have been
repaid in full on the first day of the respective Calculation Period (and
the interest expense associated with such Loans shall be deducted in
determining Consolidated Interest Expense on such Pro Forma Basis);
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(ii) all Indebtedness of the Person, or associated with the assets,
acquired pursuant to a Permitted Transaction which is repaid in full prior
to the consummation of the respective Permitted Transaction shall be deemed
to have been repaid in full on the first day of the respective Calculation
Period;
(iii) if, and to the extent, cash consideration is being paid in
connection with the respective Permitted Transaction, then it shall be
assumed that additional Loans (bearing interest at the average rate
actually applicable to outstanding Loans during the respective period or,
if shorter, during the period beginning on the Initial Borrowing Date, had
been applicable thereto) in an aggregate principal amount equal to the cash
consideration so paid, had been outstanding from the first day of the
respective Calculation Period; and
(iv) to the extent Consolidated Interest Expense is required to be
determined for periods which begin prior to the Initial Borrowing Date,
then the amount of Consolidated Interest Expense shall be determined by
taking the amount of Consolidated Interest Expense which has actually been
incurred for the period from the Initial Borrowing Date to the date of
determination and annualizing such amount to be reflective of the
Consolidated Interest Expense which would have occurred for a period of one
year, subject to adjustments for the items described in preceding clauses
(i) and (iii).
`Reference Banks' shall mean BTCo, NationsBank of North Carolina, N.A.
and The Chase Manhattan Bank, N.A.
Retention Percentage' shall mean, with respect to the Excess Cash
Flow for any Excess Cash Flow Period, the percentage of such Excess Cash Flow
which is permitted to be retained by the Company, with the Retention Percentage
being 50%.
`Revolving Loan' shall have the meaning provided in Section 1.01(b).
`Revolving Loan Maturity Date' shall mean the earlier of (i) the Final
Maturity Date and (ii) the date on which the Term Loans are repaid in full.
`Rights Agreement' shall mean the Rights Agreement dated as of
September 1, 1993 between the Guarantor and Bank One, Texas, S.A., as Rights
Agent, as in effect on the Fifth Amendment Effective Date.
`Security Agreements' shall mean each of the Company Security
Agreement and the Subsidiary Security Agreement.
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`Security Agreement Collateral' shall mean all "Collateral" as defined
in each of the Security Agreements.
`Security Documents' shall mean each Pledge Agreement, each Security
Agreement, each Mortgage and each Additional Security Document.
`Special Purpose Subsidiary' shall mean a Wholly-Owned Subsidiary of
the Company created after the Fifth Amendment Effective Date the sole purpose of
which is to acquire ownership of the equity interests described in Section
9.06(ix) and which shall engage in no other business and own no other assets
(other than nominal assets).
`Subordination Provisions' shall mean the Subordination Provisions
substantially in the form of Exhibit M as modified, supplemented or amended from
time to time.
`Subsidiary Guarantor' shall mean each Subsidiary which executes and
delivers a Subsidiary Guaranty.
`Subsidiary Guaranty' shall mean a guaranty in the form of Exhibit K,
as modified, supplemented or amended from time to time in accordance with the
terms thereof.
`Subsidiary Pledge Agreement' shall mean a Pledge Agreement
substantially in the form of Exhibit F-3, as modified, supplemented or amended
from time to time.
`Subsidiary Security Agreement' shall mean a Security Agreement
substantially in the form of Exhibit L, as modified, supplemented or amended
from time to time.
`Swingline Loan' shall have the meaning provided in Section 1.01(c).
`Syndication Date' shall have the meaning provided in Section 1
.01(b)(i).
`Term Loan' shall have the meaning provided in Section 1.01(a).
`Term Loan Commitment' shall mean, for each Bank, the amount set forth
opposite such Bank's name in Schedule I hereto directly below the column
entitled "Term Loan Commitment', as same may be (x) reduced from time to time
pursuant to Sections 3.03, 4.02 and/or 10 or (y) adjusted from time to time as a
result of assignments to or from such Bank pursuant to Sections 1.12 and/or
13.04.
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`Term Loan Scheduled Repayment' shall have the meaning provided in
Section 4.02(b).
`Term Loan Scheduled Repayment Date' shall have the meaning provided
in Section 4.02(b).
`Term Notes' shall have the meaning provided in Section 1.05(a).
`Total Term Loan Commitment' shall mean, at any time, the sum of the
Term Loan Commitments of each of the Banks.
`Tranche' shall mean the respective facility and commitments utilized
in making Loans hereunder, with there being three separate Tranches, I.E., Term
Loans, Revolving Loans and Swingline Loans.
`Waco' shall mean Waco Manufacturing Company, a Delaware
corporation and a Wholly-Owned Subsidiary of the Company.
23. ON AND AFTER THE FIFTH AMENDMENT EFFECTIVE DATE, THE ORIGINAL
CREDIT AGREEMENT SHALL BE AMENDED BY DELETING EACH REFERENCE TO "SCHEDULED
REPAYMENT" AND "SCHEDULED REPAYMENTS" AND INSERTING IN LIEU THEREOF THE
RESPECTIVE TERMS "TERM LOAN SCHEDULED REPAYMENT" AND "TERM LOAN SCHEDULED
REPAYMENTS."
24. ON AND AFTER THE FIFTH AMENDMENT EFFECTIVE DATE, THE ORIGINAL
CREDIT AGREEMENT SHALL BE AMENDED BY (i) DELETING SCHEDULES I, III, V, VI, VIII
AND X AND EXHIBITS A, B-1, B-2, B-3 AND B-4 IN THEIR ENTIRETY AND REPLACING
SUCH SCHEDULES AND EXHIBITS WITH SCHEDULES I, III, V, VI, VIII AND X AND
EXHIBITS A, B-1, B-2 AND B-3 ATTACHED TO ANNEX B TO THIS AMENDMENT AND (II)
ADDING NEW EXHIBITS F-3, K AND L IN THE FORM ATTACHED TO ANNEX B TO THIS
AMENDMENT.
II. ADDITION OF NEW BANKS: CONVERSION OF ORIGINAL LOANS OF CONTINUING BANKS:
TERMINATION OF COMMITMENTS OF NON-CONTINUING BANKS.
1. On and as of the occurrence of the Fifth Amendment Effective Date
in accordance with Section III hereof, each New Bank shall become a "Bank"
under, and for all purposes of, the Credit Agreement and the other Credit
Documents.
2. The parties hereto acknowledge that each Existing Bank has been
offered the opportunity to participate in the Credit Agreement, after the
occurrence of the Fifth Amendment Effective Date, as a Continuing Bank
thereunder, but that no Existing Bank is obligated to be a Continuing Bank. By
their execution and delivery hereof, the Credit
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Parties and the Required Banks (determined immediately before the occurrence of
the Fifth Amendment Effective Date) consent to the voluntary repayment by the
Company of all outstanding Loans and other Obligations owing to each Existing
Bank which has not elected to become a Continuing Bank (each such Bank a
"Non-Continuing Bank") and to the voluntary termination by the Company of the
Revolving Loan Commitment of each Non-Continuing Bank, in each case to be
effective on, and contemporaneously with the occurrence of, the Fifth Amendment
Effective Date, in each case in accordance with the provisions of following
Section 3.
3. Notwithstanding anything to the contrary contained in the Original
Credit Agreement or any Credit Document, the Credit Parties and each of the
Banks hereby agrees that on the Fifth Amendment Effective Date, (i) each
Continuing Bank with a Term Loan Commitment as set forth on Schedule I (after
giving effect to this Amendment) in excess of the Original Term Loans of such
Continuing Bank outstanding on the Fifth Amendment Effective Date shall make
additional Term Loans to the Company in an amount equal to such excess, (ii) in
the case of each Continuing Bank with a Term Loan Commitment as set forth on
Schedule I (after giving effect to this Amendment) in an amount less than the
Original Term Loans of such Continuing Bank outstanding on the Fifth Amendment
Effective Date, the Original Term Loans of such Continuing Bank shall be repaid
in an amount equal to the excess of such Original Term Loans over the Term Loan
Commitment of such Bank as set forth on such Schedule I, (iii) each New Bank
with a Term Loan Commitment as set forth on Schedule I (after giving effect to
this Amendment) shall make Term Loans to the Company in an amount equal to the
Term Loan Commitment of such New Bank, (iv) each Bank with a Revolving Loan
Commitment as set forth on Schedule I (after giving effect to this Amendment)
shall make (including by way of conversion) that principal amount of Revolving
Loans to the Company as is required by Section 1.01(b), provided that if the
Original Revolving Loans of any Continuing Bank outstanding on the Fifth
Amendment Effective Date (immediately before giving effect thereto) exceeds the
aggregate principal amount of Revolving Loans required to be made available by
such Bank on such date (after giving effect to the Fifth Amendment Effective
Date), then Original Revolving Loans of such Continuing Bank in an amount equal
to such excess shall be repaid on the Fifth Amendment Effective Date to such
Continuing Bank and (v) in the case of each Existing Bank with no Term Loan
Commitment or Revolving Loan Commitment, as the case may be, as set forth on
Schedule I (after giving effect to this Amendment), all of such Existing Bank's
Original Term Loans and/or Original Revolving Loans outstanding on the Fifth
Amendment Effective Date shall be repaid in full on such date, together with
interest thereon and all accrued Fees (and any other amounts) owing to such
Existing Bank, and the Revolving Loan Commitment of such Existing Bank shall be
terminated, effective upon the occurrence of the Fifth Amendment Effective Date.
Notwithstanding anything to the contrary contained in the Original Credit
Agreement, the Credit Agreement or any other Credit Document, the parties hereto
hereby consent to the repayments and reductions required above, and agree that
in the event that any Existing Bank shall fail to execute a
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counterpart of this Amendment prior to the occurrence of the Fifth Amendment
Effective Date, such Existing Bank shall be deemed to be a Non-Continuing Bank
and, concurrently with the occurrence of the Fifth Amendment Effective Date, the
Revolving Loan Commitment of such Existing Bank shall be terminated, all
Original Term Loans and Original Revolving Loans of such Existing Bank
outstanding on the Fifth Amendment Effective Date shall be repaid in full,
together with interest thereon and all accrued Fees (and any other amounts)
owing to such Existing Bank, and concurrently with the occurrence of the Fifth
Amendment Effective Date, such Existing Bank shall no longer constitute a "Bank"
under the Credit Agreement and the other Credit Documents, provided that all
indemnities of the Credit Parties under the Credit Documents for the benefit of
such Existing Bank shall survive in accordance with the terms thereof.
III. CONDITIONS PRECEDENT TO FIFTH AMENDMENT EFFECTIVE DATE.
1. This Amendment shall become effective on the date (the "Fifth
Amendment Effective Date") when each of the following conditions shall have been
met to the satisfaction of the Administrative Agent and the Required Banks
(determined both before and after giving effect to the occurrence of the Fifth
Amendment Effective Date):
(a) EXECUTION OF AGREEMENT: NOTES. On or prior to the Fifth Amendment
Effective Date (i) each of the Company, the Guarantor, the Required Banks
(determined immediately prior to the occurrence of the Fifth Amendment Effective
Date and without giving effect to this Amendment), each Continuing Bank and each
New Bank shall have signed a copy hereof (whether the same or different copies)
and shall have delivered (including by way of facsimile device) the same to the
Administrative Agent at its Notice Office and (ii) there shall have been
delivered to the Administrative Agent for the account of each Continuing Bank
and each New Bank the appropriate Term Note and/or Revolving Note, executed by
the Company, and to BTCo the Swingline Note executed by the Company, in each
case in the amount, maturity and as otherwise provided herein.
(b) OFFICER'S CERTIFICATE. On the Fifth Amendment Effective Date, the
Administrative Agent shall have received a certificate dated the Fifth Amendment
Effective Date signed on behalf of the Company by the President, any Executive
Vice President, any Senior Vice President, or any Vice President of the Company
stating that all of the conditions in Section III(1)(e), (f)(ii), (g), (j), (l)
and (m) of this Amendment have been satisfied on such date.
(c) OPINIONS OF COUNSEL. On the Fifth Amendment Effective Date, the
Administrative Agent shall have received (i) from each of Weil, Gotshal &
Manges, special counsel to the Company, and Nelson A Bangs, General Counsel of
the Company, an opinion addressed to the Managing Agents, the Administrative
Agent and each of the Banks
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and dated the Fifth Amendment Effective Date, covering the matters set forth in
Annex C-1 and C-2, respectively, to this Amendment and such other matters
incident to the transactions contemplated herein as the Administrative Agent may
reasonably request and (ii) from local counsel reasonably satisfactory to the
Administrative Agent and the Required Banks, opinions each of which shall be in
form and substance satisfactory to the Administrative Agent and the Required
Banks which shall cover the perfection and priority of the security interests
granted pursuant to the Security Agreement and the Mortgages and such other
matters incident to the transactions contemplated herein as any of the Managing
Agents may reasonably request.
(d) CORPORATE DOCUMENTS: PROCEEDINGS. (i) On the Fifth Amendment
Effective Date, the Administrative Agent shall have received a certificate,
dated the Fifth Amendment Effective Date, signed by the President, any Executive
Vice President, any Senior Vice President or any Vice President of the
Guarantor, the Company and Waco, and attested to by the Secretary or any
Assistant Secretary of the Guarantor, the Company and Waco, as the case may be,
in the form of Annex D hereto with appropriate insertions, together with copies
of the Certificate of Incorporation and By-Laws of the Guarantor, the Company
and Waco and the resolutions of the Guarantor, the Company and Waco referred to
in such certificate, and the foregoing shall be acceptable to the Administrative
Agent and the Required Banks.
(ii) All corporate and legal proceedings and all instruments and
agreements in connection with the transactions contemplated by this Agreement
and the other Documents shall be satisfactory in form and substance to the
Administrative Agent and the Required Banks, and the Administrative Agent shall
have received all information and copies of all documents and papers, including
records of corporate proceedings, governmental approvals, good standing
certificates and bring-down telegrams, if any, which the Administrative Agent
reasonably may have requested in connection therewith, such documents and papers
where appropriate to be certified by proper corporate or governmental
authorities.
(e) SUFFICIENT FUNDS: AVAILABLE COMMITMENT: WORKING CAPITAL FUNDS. On
the Fifth Amendment Effective Date, after giving effect to this Amendment
(including without limitation the payment of all fees and expenses in connection
therewith whether paid on or after the Fifth Amendment Effective Date) and the
incurrence of Loans pursuant to this Amendment, the excess of the Total
Unutilized Revolving Loan Commitment at such time over the Blocked Commitment at
such time shall be equal to or greater than the Minimum Unutilized Revolving
Loan Commitment.
(f) ADVERSE CHANGE. ETC. (i) On the Fifth Amendment Effective Date,
nothing shall have occurred (and the Banks shall have become aware of no facts
or conditions not previously known) which the Administrative Agent or the
Required Banks
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(determined as if the effectiveness of this Amendment and the Asset Transfer had
already occurred) shall determine has, or could have, a material adverse effect
on the rights or remedies of the Banks or the Administrative Agent, or on the
ability of the Guarantor, the Company or its Subsidiaries to perform their
obligations to the Banks or which has, or could have, a materially adverse
effect on the business, property, assets, nature of assets, liabilities,
condition (financial or otherwise) or prospects of the Guarantor or the Company
or of the Guarantor and its Subsidiaries taken as a whole.
(ii) On or prior to the Fifth Amendment Effective Date, all
necessary governmental (domestic and foreign) and third party approvals in
connection with this Amendment and the transactions contemplated by the Credit
Documents and otherwise referred to herein or therein shall have been obtained
and remain in effect, and all applicable waiting periods shall have expired
without any action being taken by any competent authority which restrains,
prevents or imposes materially adverse conditions upon the consummation of all
or any part of this Amendment or the other transactions contemplated by the
Credit Documents and otherwise referred to herein or therein. Additionally,
there shall not exist any judgment, order, injunction or other restraint issued
or filed or a hearing seeking injunctive relief or other restraint pending or
notified prohibiting or imposing materially adverse conditions upon all or any
part of this Amendment, the transactions contemplated by the Credit Documents or
the conversion and/or making of the Loans.
(g) LITIGATION. On the Fifth Amendment Effective Date, no
litigation by any entity (private or governmental) shall be pending or
threatened with respect to this Amendment or any documentation executed in
connection herewith or the transactions contemplated hereby, or with respect to
any material Indebtedness of the Guarantor or any of its Subsidiaries which is
outstanding after the consummation of this Amendment or which the Administrative
Agent or the Required Banks (determined as if the effectiveness of this
Amendment had already occurred) shall reasonably determine could have a
materially adverse effect on the business, property, assets, nature of assets,
liabilities, condition (financial or otherwise) or prospects of the Guarantor or
the Company or of the Guarantor and its Subsidiaries taken as a whole.
(h) REPAYMENT OF CERTAIN ORIGINAL LOANS: PAYMENT OF FEES. ETC. On
the Fifth Amendment Effective Date, the Original Term Loans and Original
Revolving Loans of each Existing Bank which are in excess of the Term Loans or
Revolving Loans, as the case may be, required to be made or maintained by such
Bank pursuant to Section 1.01 (after giving effect to this Amendment) shall have
been repaid in full in accordance with Section III hereof. Furthermore, on the
Fifth Amendment Effective Date, all interest and Fees accrued (and not
theretofore paid) under the Original Credit Agreement shall be paid in full, and
all other costs, fees and expenses owing to any of the Existing Banks or the
Administrative Agent under the Original Credit Agreement shall be paid to the
extent due.
-51-
<PAGE>
Furthermore, all costs, fees and expenses (including, without limitation, legal
fees and expenses) and other compensation contemplated hereby or otherwise
agreed and payable to the Continuing Banks, the New Banks or the Administrative
Agent shall have been paid to the extent due.
(i) BALANCE SHEETS. (i) At least two Business Days prior to the
Fifth Amendment Effective Date, the Banks shall have received unaudited PRO
FORMA consolidated balance sheets of the Guarantor and its Subsidiaries, in each
case as at a date not more than sixty days prior to the Fifth Amendment
Effective Date prepared in accordance with generally accepted accounting
principles except as specifically set forth in the notes to such balance sheets
(after giving effect to this Amendment, the related financing thereof and the
other transactions contemplated hereby and thereby), which PRO FORMA balance
sheets, together with the accounting practices and procedures to be utilized by
the Guarantor and its Subsidiaries, shall be in form and substance satisfactory
to the Administrative Agent and the Required Banks.
(ii) On the Fifth Amendment Effective Date, the Banks shall have
received the consolidated balance sheet of the Guarantor and its Subsidiaries as
of the end of each fiscal month of the Guarantor ended after September 30, 1993
and not less than 30 days prior to the Fifth Amendment Effective Date and the
related consolidated statement of income and statement of cash flows for each
such month, and for the elapsed portion of the fiscal year ended with the last
day of each such month, in each case setting forth comparative figures for the
corresponding month in the prior fiscal year, which financial statements shall
be prepared in accordance with generally accepted accounting principles and
practices consistently applied and shall be in form and substance satisfactory
to the Managing Agents and the Required Banks.
(j) NO DEFAULT: REPRESENTATIONS AND WARRANTIES. On the Fifth
Amendment Effective Date, and also after giving effect thereto, (i) there shall
exist no Default or Event of Default and (ii) all representations and warranties
contained in the Credit Agreement and in the other Credit Documents shall be
true and correct in all material respects.
(k) NOTICE OF BORROWING. The Administrative Agent shall have
received a Notice of Borrowing meeting the requirements of Section 1.03(a).
(l) EXISTING OBLIGATIONS. On the Fifth Amendment Effective Date,
and after giving effect to this Amendment and the other transactions
contemplated hereby, the Existing Obligations shall consist only of (i) the Dr
Pepper Preferred Stock, (ii) the Guarantor Preferred Stock, and (iii) additional
Indebtedness (which shall not be incurred in connection with, or in
contemplation of, the effectiveness of this Amendment) in an aggregate amount
not to exceed $150,000, the terms and conditions of such Indebtedness to be
satisfactory to the Managing Agents and the Required Banks. All of the Existing
-52-
<PAGE>
Obligations shall remain outstanding after the Effectiveness of this Amendment
and the financing therefor without any Defaults or Events of Default existing
thereunder or rising as a result of this Amendment and the other transactions
contemplated thereby and there shall not be any amendments or modifications to
the agreements and instruments governing or evidencing such Indebtedness other
than as requested or approved by the Managing Agents or the Required Banks.
(m) EMPLOYEE BENEFIT PLANS: SHAREHOLDERS' AGREEMENTS. MANAGEMENT
AGREEMENTS: EMPLOYMENT AGREEMENTS: COLLECTIVE BARGAINING AGREEMENTS: TAX SHARING
AGREEMENTS: AND DEBT AGREEMENTS. On the Fifth Amendment Effective Date, the
Banks shall have received true and correct copies, certified as true and
complete by an appropriate officer of the Guarantor, the Company or Waco, as the
case may be, of all amendments to, and any new, Employee Benefit Plans,
Shareholders' Agreements, Management Agreements, Employment Agreements,
Collective Bargaining Agreements, Tax Sharing Agreements and Debt Agreements not
previously delivered to the Administrative Agent, all of which shall be in form
and substance satisfactory to the Administrative Agent.
(n) SUBSIDIARY GUARANTY. On the Fifth Amendment Effective Date,
Waco shall have duly authorized, executed and delivered the Subsidiary Guaranty,
and the Subsidiary Guaranty shall be in full force and effect.
(o) PLEDGE AGREEMENTS. (i) On the Fifth Amendment Effective Date,
the Company shall have delivered to the Collateral Agent, as Pledgee, all the
Pledged Securities referred to in the Company Pledge Agreement then owned by the
Company, (x) endorsed in blank in the case of promissory notes constituting
Pledged Securities and (y) together with executed and undated stock powers, in
the case of capital stock constituting Pledged Securities.
(ii) On the Fifth Amendment Effective Date, Waco shall have duly
authorized, executed and delivered the Subsidiary Pledge Agreement and
shall have delivered to the Collateral Agent, as Pledgee, all the
Pledged Securities referred to therein then owned by Waco, (x)
endorsed in blank in the case of promissory notes constituting Pledged
Securities and (y) together with executed and undated stock powers, in
the case of capital stock constituting Pledged Securities.
(p) SUBSIDIARY SECURITY AGREEMENT. On the Fifth Amendment
Effective Date, Waco shall have duly authorized, executed and delivered the
Subsidiary Security Agreement covering all of the respective present and future
Security Agreement Collateral, together with:
(i) proper financing statements (Form UCC-1 or such other
financing statements or similar notices as shall be required by local
law) fully executed for
-53-
<PAGE>
filing under the appropriate filing offices of each jurisdiction as
may be necessary or, in the opinion of the Collateral Agent, desirable
to perfect the security interests purported to be created by the
Subsidiary Security Agreement;
(ii) copies of Requests for Information or Copies (Form UCC-11),
or equivalent reports, listing all effective financing statements or
similar notices that name Waco, or any division or other operating
unit of Waco, as debtor and that are filed in the jurisdictions
referred to in said clause (a), together with copies of such other
financing statements (none of which shall cover the Collateral except
to the extent evidencing Permitted Liens or for which the Collateral
Agent shall have received termination statements (Form UCC-3 or such
other termination statements as shall be required by local law) fully
executed for filing);
(iii) evidence of the completion of all other recordings and
filings of, or with respect to, the Subsidiary Security Agreement as
may be necessary or, in the opinion of the Collateral Agent, desirable
to perfect the security interests intended to be created by the
Subsidiary Security Agreement; and
(iv) evidence that all other actions necessary or, in the opinion
of the Collateral Agent, desirable to protect and enable the
Collateral Agent to perfect the security interests purported to be
created by the Subsidiary Security Agreement have been taken.
(q) ADDITIONAL MORTGAGE: TITLE INSURANCE: SURVEYS: ETC. In the
event that the Asset Transfer occurs on the Fifth Amendment Effective Date, on
the Fifth Amendment Date the Collateral Agent shall have received:
(i) a fully executed counterparts of the Additional Mortgage in
form and substance satisfactory to the Administrative Agent, which
Additional Mortgage shall cover such of the Real Property owned by
Waco as shall be listed in Part A of Schedule III, together with
evidence that counterparts of the Additional Mortgage have been
delivered to the title insurance company insuring the Lien of the
Additional Mortgage for recording in all places to the extent
necessary or desirable, in the judgment of the Administrative Agent,
effectively to create a valid and enforceable first priority lien on
the Additional Mortgaged Property in favor of the Collateral Agent (or
such other trustee as may be required or desired under local law) for
the benefit of the Secured Creditors;
(ii) mortgage title insurance policies ("Mortgage Policies") in
amounts satisfactory to the Administrative Agent assuring the
Collateral Agent that the Additional Mortgage is valid and enforceable
first priority mortgage lien on the Additional Mortgaged Property,
free and clear of all defects, encumbrances and
-54-
<PAGE>
other Liens except Permitted Encumbrances and the Mortgage Policies
shall be in form and substance satisfactory to the Administrative
Agent and shall include, as appropriate, an endorsement for future
advances under this Agreement and the Notes and for any other matter
that the Administrative Agent in its sole discretion may request,
shall not include an exception for mechanics' liens, and shall provide
for affirmative insurance and such reinsurance as the Administrative
Agent in its sole discretion may request;
(iii) a survey, in form and substance satisfactory to the
Administrative Agent, of the Additional Mortgaged Property, dated a
recent date acceptable to the Administrative Agent, certified by a
licensed professional surveyor; and
(r) CONSENT LETTER. On the Fifth Amendment Effective Date, the
Administrative Agent shall have received a letter from CT Corporation System,
presently located at 1633 Broadway, New York, New York 10019, indicating its
consent to its appointment by Waco as its agent to receive service of process as
specified in the Subsidiary Guaranty and the other Credit Documents in form and
substance satisfactory to the Administrative Agent.
(s) FUNDING BY NEW BANKS AND CONTINUING BANKS. On the Fifth
Amendment Effective Date, each New Bank and Continuing Bank shall have delivered
to the Administrative Agent for the account of the Company an amount equal to
(i) in the case of each New Bank, the Term Loans and/or Revolving Loans to be
made by such New Bank on the Fifth Amendment Effective Date and (ii) in the case
of each Continuing Bank, the amount by which the Term Loans or Revolving Loans
to be made and/or converted by such Continuing Bank on the Fifth Amendment
Effective Date exceed the amount of the Original Term Loans or Original
Revolving Loans, respectively, of such Continuing Bank outstanding on the Fifth
Amendment Effective Date. Notwithstanding anything to the contrary contained in
this clause (s), in satisfying the foregoing condition, unless the
Administrative Agent shall have been notified by any Bank prior to the
occurrence of the Fifth Amendment Effective Date that such Bank does not intend
to make available to the Administrative Agent such Bank's Loans required to be
made by it on such date, then the Administrative Agent may, in reliance on such
assumption, make available to the Company the corresponding amounts in
accordance with the provisions of Section 1.04 of the Credit Agreement, and the
making available by the Administrative Agent of such amounts shall satisfy the
condition contained in this clause (t).
2. Unless the Administrative Agent has received actual notice
from the Required Banks (determined as if the Fifth Amendment Effective Date had
occurred) that the conditions described in this Section III have not been met to
their satisfaction, upon the satisfaction of the condition described in clause
(a) above and upon the Administrative Agent's good faith determination that the
conditions described in clauses (b) through (t),
-55-
<PAGE>
inclusive, have been met, then the Fifth Amendment Effective Date shall be
deemed to have occurred, regardless of any subsequent determination that one or
more of the conditions thereto have not been met (although the occurrence of the
Fifth Amendment Effective Date shall not release the Company from any liability
for failure to satisfy one or more of the applicable conditions contained in
Section III of this Amendment). The Administrative Agent will give the Company,
each Existing Bank and each New Bank prompt written notice of the occurrence of
the Fifth Amendment Effective Date.
3. The occurrence of the Fifth Amendment Effective Date and the
acceptance of the benefits of the Loans made on such date shall constitute a
representation and warranty (including without limitation for purposes of
Section 10.02) by each Credit Party to each of the Banks that all the applicable
conditions specified in this Section III exist at that time.
4. Notwithstanding anything to the contrary contained above, if
the Fifth Amendment Effective Date does not occur on or prior to January 31,
1994, then it shall not thereafter occur (unless the Required Banks (determined
both before and after giving effect to this Amendment) agree in writing to an
extension of such date), and this Amendment shall cease to be of any further
force or effect and the Original Credit Agreement shall continue to be
effective, as the same may have been, or may thereafter be, amended, modified or
supplemented from time to time.
IV. GENERAL PROVISIONS
1. In the event of the resignation of any Managing Agent, other
than BTCo, on and as of the Fifth Amendment Effective Date, each of the parties
to the Credit Agreement hereby waives the delivery of any notice required
pursuant to Section 12 of the Credit Agreement in connection with such
resignation.
2. This Amendment is limited as specified and shall not
constitute a modification, acceptance or waiver of any other provision of the
Credit Agreement or any other Credit Document.
3. This Amendment may be executed in any number of counterparts
and by the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts shall be lodged with the Credit Parties and the Administrative
Agent.
-56-
<PAGE>
4. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.
5. From and after the Fifth Amendment Effective Date, all
references in the Credit Agreement and each of the Credit Documents to the
Credit Agreement shall be deemed to be references to such Credit Agreement as
amended hereby.
* * *
-57-
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Amendment to be duly executed and delivered as of the date
first above written.
DR PEPPER/SEVEN-UP CORPORATION
By /s/ Michael Buiter
------------------------------------------
Title: Vice President Finance
DR PEPPER/SEVEN-UP COMPANIES, INC.
By /s/ Michael Buiter
------------------------------------------
Title: Vice President Finance
BANKERS TRUST COMPANY,
Individually, as Managing Agent
and as Administrative Agent
By /s/ Mary Kay Coyle
------------------------------------------
Title: Vice President
EXISTING BANKS:
ABN-AMRO BANK, N.V.
By /s/ Ronald A. Mahle
------------------------------------------
Title: Vice President
By /s/ David P. On
------------------------------------------
Title: Vice President
BANK OF AMERICA NT&SA
By /s/ Daniel D. McCready
------------------------------------------
Title: Vice President
<PAGE>
THE BANK OF IRELAND, GRAND CAYMAN
BRANCH
By /s/ Roger M. Burns
------------------------------------------
Title: Vice President
BANK OF MONTREAL
By /s/ Daniel A. Brown
------------------------------------------
Title: Director
THE BANK OF NOVA SCOTIA
By /s/ A.S. Norsworthy
------------------------------------------
Title: Assistant Agent
THE BANK OF TOKYO TRUST COMPANY
By /s/ Victor Bulzacchelli
------------------------------------------
Title: Vice President
BANQUE PARIBAS, Houston Agency
By. /s/ Bruce A. Cauley
------------------------------------------
Title: Deputy General Manager
By /s/ Robert S. Bowers. II
------------------------------------------
Title: Assistant Vice President
<PAGE>
BARCLAYS BANK PLC
By /s/ John Giannone
------------------------------------------
Title: Director
CAISSE NATIONALE DE CREDIT AGRICOLE
By /s/ Dean Balice
------------------------------------------
Title: Senior Vice President, Branch Manager
THE CHASE MANHATTAN BANK, N.A.
By /s/ Thomas Daniels
------------------------------------------
Title: Vice President
CIBC INC.
By /s/ Roger Colden
------------------------------------------
Title: Vice President
CREDIT LYONNAIS New York Branch
By /s/ Frederick Haddad
------------------------------------------
Title: Senior Vice President
FIRST INTERSTATE BANK OF TEXAS, N.A.
By /s/ Connor J. Duffey
------------------------------------------
Title: Vice President
<PAGE>
THE FIRST NATIONAL BANK OF BOSTON
By /s/ Marilyn M. Fenollosa
---------------------------------
Title: Division Executive
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Jeanette Ganousis
---------------------------------
Title: Vice President
THE INDUSTRIAL BANK OF JAPAN,
LIMITED, NEW YORK BRANCH
By /s/ Tsuneki Hara
---------------------------------
Title: Joint General Manager
KREDIETBANK N.V.
By /s/ Tod R. Angus
---------------------------------
Title: Vice President
By /s/ Michael V. Curran
---------------------------------
Title: Vice President
THE LONG-TERM CREDIT BANK OF JAPAN,
LIMITED, NEW YORK BRANCH
By /s/ Mitsuo Matsunaga
---------------------------------
Title: Vice President
<PAGE>
MIDLAND BANK PLC
By /s/ Gina Sidorsky
---------------------------------
Title: Director
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By /s/ Patricia Loret De Mola
---------------------------------
Title: Senior Vice President
NATIONAL WESTMINSTER BANK USA
By /s/ Phillip Krall
---------------------------------
Title: Vice President
NATIONSBANK OF NORTH CAROLINA, N.A.
By /s/ Stephen K. Foutch
---------------------------------
Title: Vice President
SHAWMUT BANK CONNECTICUT, N.A.
By /s/ Philip S. Walker. Jr.
---------------------------------
Title: Assistant Vice President
SOCIETY NATIONAL BANK
By /s/ Janice M. Cook
---------------------------------
Title: Vice President
<PAGE>
NEW BANKS:
ALLIED IRISH BANKS
By /s/ N.C. Cullinane
---------------------------------
Title: Vice President
By /s/ W.J. Strickland
---------------------------------
Title: Senior Vice President
THE BANK OF NEW YORK
By /s/ Julie E. Brennan
---------------------------------
Title: Vice President
BANK OF SCOTLAND
By /s/ Elizabeth Wilson
---------------------------------
Title: Vice President and Branch Manager
CORESTATES BANK, N.A.
By /s/ Randal D. Southern
---------------------------------
Title: Vice President
<PAGE>
DRESDNER BANK A.G.
By /s/ T.L. Darby
---------------------------------
Title: Vice President
By /s/ Peter Becker
---------------------------------
Title: Vice President
THE FUJI BANK, LTD.
By /s/ Toyohiro Nakamura
---------------------------------
Title: Joint General Manager
THE NIPPON CREDIT BANK, LTD.
By /s/ Bernardo E. Correa-Henschke
---------------------------------
Title: Vice President & Manager
THE ROYAL BANK OF SCOTLAND plc
By /s/ David Dougan
---------------------------------
Title: Vice President
SOCIETE GENERALE
By /s/ Christopher J. Speltz
---------------------------------
Title: Vice President
<PAGE>
THE SUMITOMO BANK, LTD.
By /s/ H. Kobayashi
---------------------------------
Title: Joint General Manager
UNION BANK
By /s/ Patrick M. Cassidy
---------------------------------
Title: Vice President
WELLS FARGO BANK, N.A.
By /s/ Dana D. Cagle
---------------------------------
Title: Vice President
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK AND
CAYMAN ISLANDS BRANCHES
By /s/ Cynthia M. Neesin
---------------------------------
Title: Vice President
By /s/ Karen E. Hoplock
---------------------------------
Title: Associate
<PAGE>
A
<PAGE>
ANNEX A
to
FIFTH AMENDMENT
NEW BANKS
Allied Irish Bank
The Bank of New York
Bank of Scotland
CoreStates Bank Philadelphia
Dresdner Bank A.G.
The Fuji Bank, Ltd.
Nippon Credit Bank
The Royal Bank of Scotland plc
Societe Generale
Sumitomo Bank, Ltd.
Union Bank
Wells Fargo Bank, N.A.
Westdeutsche Landesbank
Girozentrale, New York
and Cayman Islands Branches
<PAGE>
ANNEX B
to
FIFTH AMENDMENT
SCHEDULES I, III, V, VI, VIII AND X
AND
EXHIBITS A, B-1, B-2, B-3, F-3, K and L
See attached
<PAGE>
SCHEDULE I
COMMITMENTS
-----------
<TABLE>
<CAPTION>
Revolving Loan
Bank Term Loans Commitment
---- ---------- ----------
<S> <C> <C>
Bankers Trust Company $23,333,333.33 $6,666,666.67
ABN Amro Bank N.V. 10,111,111.11 2,888,888.89
Allied Irish Banks 7,777,777.78 2,222,222.22
Bank of America National Trust 15,555,555.56 4,444,444.44
and Savings Association
The First National Bank of Boston 11,666,666.67 3,333,333.33
The Bank of Ireland, Grand 7,777,777.78 2,222,222.22
Cayman Branch
Bank of Montreal 19,444,444.44 5,555,555.56
- ------------------------------------------------------------------------------
The Bank of New York 11,666,666.67 3,333,333.33
- ------------------------------------------------------------------------------
The Bank of Nova Scotia 15,555,555.56 4,444,444.44
- -------------------------------------------------------------------------------
Bank of Scotland 9,333,333.33 2,666,666.67
The Bank of Tokyo Trust 11,666,666.67 3,333,333.33
Company
Banque Paribas 15,555,555.56 4,444,444.44
- ------------------------------------------------------------------------------
Barclays Bank plc 19,444,444.44 5,555,555.56
- ------------------------------------------------------------------------------
The Chase Manhattan Bank, N.A. 19,444,444.44 5,555,555.56
- ------------------------------------------------------------------------------
CIBC, Inc. 19,444,444.44 5,555,555.56
- ------------------------------------------------------------------------------
CoreStates Bank Philadelphia 9,333,333.33 2,666,666.67
Caisse Nationale de Credit 9,333,333.33 2,666,666.67
Agricole
Credit Lyonnais, New York 15,555,555.56 4,444,444.44
Branch
Dresdner Bank A.G. 11,666,666.67 3,333,333.33
The First National Bank of 19,444,444.44 5,555,555.56
Chicago
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
Page 2
BANKS TERM LOANS REVOLVING LOAN
COMMITMENT
<S> <C> <C>
First Interstate Bank of Texas, 9,333,333.33 2,666,666.67
N.A.
The Fuji Bank, Ltd. 15,555,555.56 4,444,444.44
The Industrial Bank of Japan, 15,555,555.56 4,444,444.44
Limited
Kredietbank N.V. 7,777,777.78 2,222,222.22
The Long-Term Credit Bank of 15,555,555.56 4,444,444.44
Japan, Limited, New York Branch
Midland Bank plc 19,444,444.44 5,555,555.56
The Mitsubishi Trust & Banking 11,666,666.67 3,333,333.33
Corp.
National Westminster Bank USA 19,444,444.44 5,555,555.56
NationsBank of North Carolina, 19,444,444.44 5,555,555.56
N.A.
The Nippon Credit Bank, Ltd. 11,666,666.67 3,333,333.33
The Royal Bank of Scotland plc 10,111,111.11 2,888,888.89
Shawmut Bank Connecticut, N.A. 19,444,444.44 5,555,555.56
Societe Generale 9,333,333.33 2,666,666.67
Society National Bank 11,666,666.67 3,333,333.33
The Sumitomo Bank, Ltd. 9,333,333.33 2,666,666.67
Union Bank 11,666,666.67 3,333,333.33
Wells Fargo Bank, N.A. 15,555,555.56 4,444,444.44
Westdeutsche Landesbank 9,333,333.33 2,666,666.67
Girozentrale, New York and
Cayman Islands Branches
--------------- ---------------
$525,000,000.00 $150,000,000.00
</TABLE>
<PAGE>
SCHEDULE III - REAL PROPERTY
PART A - MORTGAGED PROPERTIES
- -----------------------------
Dr Pepper/Seven-up
Product & Technical Center
8900 Page Avenue
St, Louis, MO 63114
PART B - OTHER PROPERTIES
- -------------------------
Dr Pepper/Seven-up Companies, Inc, Headquarters
8144 Walnut Hill Lane
Dallas, TX 75231
Grader Street Warehouse
11096 Grader Street
Dallas, TX 75238
Dr Pepper Eastern Region Office
5955 T.G, Lee Boulevard Suite 435
Orlando, FL 32822
Seven-Up Eastern Region Office
8850 Stanford Boulevard
Suite 2500
Columbia, MD 21045
Seven-Up Central Office
10985 Cody
Suite 115
Overland Park, KS 66210
Dr Pepper Northern Region Office
150 E. Wilson Bridge Road Suite 210
Worthington, OH 43085
Dr Pepper Western Region Office
16955 Via Del Campo Suite 210
San Diego, CA 92127
<PAGE>
SCHEDULE V
DR PEPPER/SEVEN-UP SUBSIDIARIES
<TABLE>
<CAPTION>
Shares
Owned Percentage
directly or of
indirectly Outstanding
by Dr Pepper/ Shares of
Jurisdiction of Shares Shares Seven-Up Capital
Subsidiary Incorporation Authorized Issued Corporation Stock Owned
- ---------- --------------- ---------- ------ ------------- ------------
<S> <C> <C> <C> <C> <C>
Dr Pepper/Seven-Up Texas 1,000 1,000 1,000 100%
Beverages Sales
Company
Dr Pepper FSC, Inc. U.S. Virgin Islands 1,000 1,000 1,000 100%
Dr Pepper Japan Company Texas 25,000 25,000 25,000 100%
Dr Pepper (Canada) Inc.(1) Ontario, Canada 1 1 1 100%
Waco Manufacturing Company Delaware 1,000 1,000 1,000 100%
121 Meramec Holding New York 200 200 200 100%
Company, Inc.(2)
- ---------------------------
<FN>
1 Dissolution filed 06/10/93. Pending final tax clearance.
2 Merged into The Seven-Up Company 10/08/92 in Delaware. Pending final tax
clearance in New York.
</TABLE>
<PAGE>
SCHEDULE VI
INDEBTEDNESS AND PREFERRED STOCK
BALANCES IN OTHER NOTES @ 11-30-93
<TABLE>
<CAPTION>
CURRENT(1) NON-CURRENT(2)
---------- --------------
<S> <C> <C> <C>
231104 Estate of $ 130,245.07 262104 Towns-SDI $ -0-
V. Towns-COV
231105 Davis-COV 130,245.04 262105 Davis-SDI -0-
231106 Scott-COV 45,969.08 262106 Scott-SDI -0-
231116 C Lindsey 33,333.60 262116 C Lindsey 66,671.67
231117 CR Lindsey 21,426.72 262111 CR Lindsey 46,424.56
231118 Estate of 11,905.84 262118 Mrs. Lindsey 25,798.52
Mrs. Crawford Lindsey
$ 373,125.35 262216 DEF INT-C LINDS (20,712.27)
$ 118,182.48
Dr Pepper $1.375 Senior Exchangeable Preferred Stock par value $0.01 per share,
liquidation preference $10.00 per share, 1,268,474 shares outstanding at
November 30, 1993.
<FN>
- --------------------------
1 Current indebtedness means all indebtedness due within one year of the
effective date of the note.
2 Non-current indebtedness means all indebtedness due beyond one year.
</TABLE>
<PAGE>
SCHEDULE VIII
CERTAIN CAPITALIZED LEASES
NONE
<PAGE>
SCHEDULE X
BANK ADDRESSES
Bankers Trust Company
130 Liberty Street
New York, New York 10006
Attn: Mary Kay Coyle
Tel: (212) 250-9094
Fax: (212) 250-7200
ABN AMRO BANK N.V.
3 River Way
Suite 1600
Houston, Texas 77056
Ronald A. Mahle
Tel: (713) 964-3350
Fax: (713) 629-7533
ALLIED IRISH BANK
405 Park Avenue
New York, NY 10022
Marcia Meeker
Tel: (212) 339-8018
Fax: (212) 339-8007
<PAGE>
SCHEDULE X
Page 2
BANK OF AMERICA NT&SA
335 Madison Avenue
5th Floor
New York, New York 10017
Daniel McCready
Tel: (212) 503-8367
Fax: (212) 503-7066
BANK OF MONTREAL
U.S. Corporate Banking
115 S. LaSalle Street
12th Floor
Chicago, Illinois 60603
Daniel Brown
Tel: (312) 750-4358
Fax: (312) 750-4314
Lisa Donoghue
Tel: (312) 750-3737
Fax: (312) 750-4314
THE BANK OF NEW YORK
One Wall Street
22nd Floor
New York, New York 10286
Steven Ross
Tel: (212) 635-1336
Fax: (212) 635-6434
Julie Brennan
Tel: (212) 635-6899
Fax: (212) 635-6434
with copy to:
<PAGE>
SCHEDULE X
Page 3
Elyse Levene, Esq.
15th Floor
THE BANK OF NOVA SCOTIA
600 Peachtree Street N.E.
Suite 2700
Atlanta, Georgia 30308
F.C.H. Ashby
Tel: (404) 877-1560
Fax: (404) 888-8998
with copy to:
THE BANK OF NOVA SCOTIA
1100 Louisiana
Suite 3000
Houston, Texas 77002
Matt Harris
Tel: (713) 752-0900
Fax: (713) 752-2425
THE BANK OF NOVA SCOTIA
Corporate Credit West
44 King Street, West
Toronto, Ontario
M5H 1H1 Canada
Larry Maloney
Tel: (416) 866-6161
<PAGE>
SCHEDULE X
Page 4
BANK OF SCOTLAND
2660 Citicorp Center
1200 Smith Street
Houston, TX 77002-4495
Richard Butler
Tel: (713) 651-1870
Fax: (713) 651-9714
BANQUE PARIBAS
Corporate Services
2121 San Jacinto Street
Suite 930
Dallas, Texas 75201
Robert Bowers
Tel: (214) 969-0380
Fax: (214) 969-0260
BARCLAYS BANK PLC
222 Broadway
New York, NY 10038
John Giannone
Tel: (212) 412-3276
Fax: (212) 412-7511
CAISSE NATIONALE DE CREDIT
AGRICOLE
55 East Monroe, Suite 4700
Chicago, IL 60603
Joseph M. Kunze
Tel: (312) 917-7426
Fax: (312) 372-3724
<PAGE>
SCHEDULE X
Page 5
THE CHASE MANHATTAN BANK, N.A.
1 Chase Manhattan Plaza
New York, New York 10081
Thomas Daniels
Vice President
5th Floor
Tel: (212) 552-1711
Fax: (212) 552-5189/0196
CIBC, INC.
425 Lexington Avenue
New York, NY 10017
Elizabeth Sinnott
Tel: (212) 856-3768
Fax: (212) 856-3599/3600
CORESTATES BANK PHILADELPHIA
FC 1-1-82-29
P.O. Box 7618
Philadelphia, PA 19101-7618
Randal Southern
Tel: (215) 973-3858
Fax: (215) 973-6745
CREDIT LYONNAIS, NEW YORK BRANCH
Credit Lyonnais Building
1301 Avenue of the Americas
New York, New York 10019
Frederick Haddad
Tel: (212) 261-7870
Fax: (212) 459-3170
<PAGE>
SCHEDULE X
Page 6
DRESDNER BANK A.G.
75 Wall Street
New York, NY 10005
Peter Becker
Tel: (212) 574-0202
Fax: (212) 574-0129
FIRST INTERSTATE BANK OF TEXAS, N.A.
1445 Ross Avenue
Suite 300
Dallas, Texas 75202
Connor Duffy
Tel: (214) 740-1561
Fax: (214) 740-1543
THE FIRST NATIONAL BANK OF BOSTON
100 Federal Street
Boston, MA 02110
Carol A. Harper
Tel: (617) 434-9086
Fax: (617) 434-8964
THE FIRST NATIONAL BANK OF CHICAGO
Corporate Banking
One First National Plaza
Mail Suite 0088
Chicago, IL 60670
Jeanette Ganousis
Vice President/Senior Corporate Banker
14th Floor, Suite 0088,
Tel: (312) 732-6066
Fax: (312) 732-5161
<PAGE>
SCHEDULE X
Page 7
THE FUJI BANK, LTD.
2 Houston Center - Suite 2800
909 Fannin
Houston, TX 77010
David Kelley
Tel: (713) 650-7850
Fax: (713) 759-0048/951-0590
THE INDUSTRIAL BANK OF JAPAN, LIMITED
245 Park Avenue
New York, New York 10167
Karel Pravec, Jr.
Tel: (212) 309-6568
Fax: (212) 682-2870
KREDIETBANK N.V.
Two Midtown Plaza, #1440
1360 Peachtree Street
Atlanta, GA 30309
Linda L. Stanley, V.P.
Tel: (404) 876-2556
Fax: (404) 876-3212
THE LONG-TERM CREDIT BANK OF JAPAN, LIMITED,
NEW YORK BRANCH
165 Broadway
49th Floor
New York, New York 10006
Mitsuo Matsunaga, V.P.
Tel: (212) 335-4576
Fax: (212) 608-2371
<PAGE>
SCHEDULE X
Page 8
MIDLAND BANK PLC
Merchant Banking Group
140 Broadway
New York, New York 10005-1185
Gina Sidorsky
Tel: (212) 658-2750
Fax: (212) 658-2586
THE MITSUBISHI TRUST AND BANKING
CORPORATION
520 Madison Avenue
New York, New York 10022
Patricia Loret de Mola
Tel: (212) 891-8454
Fax: (212) 755-2349
NATIONSBANK OF NORTH CAROLINA, N.A.
600 Peachtree Street, N.E.
21st Floor
Atlanta, Georgia 30308-2213
Stephen Foutch
Assistant Vice President
Tel: (404) 607-5547
Fax: (404) 607-6467
NATIONAL WESTMINSTER BANK USA
175 Water Street
New York, New York 10038-4924
Phillip Krall
Tel: (212) 602-2665
Fax: (212) 602-2149
<PAGE>
SCHEDULE X
Page 9
THE NIPPON CREDIT BANK, LTD.
550 South Hope Street
Suite 2500
Los Angeles, CA 90071
Barnardo Correa-Henschke
Tel: (213) 243-5720
Fax: (213) 892-0111
THE ROYAL BANK OF SCOTLAND plc
63 Wall Street - 16th Floor
New York, NY 10005
David Dougan
Tel: (212) 269-0938
Fax: (212) 269-8929
SHAWMUT BANK CONNECTICUT, N.A.
Specialized Lending
777 Main Street
MSM397-2874
Hartford, Connecticut 06115
Philip Walker
Tel: (203) 986-5366
Fax: (203) 986-4621
<PAGE>
SCHEDULE X
Page 10
SOCIETE GENERALE
Trammell Crow Center
Suite 4800
2001 Ross Avenue
Dallas, TX 75201
Christopher Speltz
Tel: (214) 979-2777
Fax: (214) 979-1104
SOCIETY NATIONAL BANK
127 Public Square, 6th Fl.
Cleveland, OH 44114-1306
Janice Cook, V.P.
Tel: (216) 689-3176
Fax: (216) 689-4981
THE SUMITOMO BANK, LTD.
NationsBank Center
Suite 1750
700 Louisiana
Houston, TX 77002
Tatsuo Ueda
Tel: (713) 238-8222
Fax: (713) 759-0020
with copy to:
The Sumitomo Bank, Ltd.
One World Trade Center
Suite 9651
New York, NY 10048
Andrea Wei, Esq.
<PAGE>
SCHEDULE X
Page 11
UNION BANK
445 South Figueroa Street
Los Angeles, CA 90071
Patrick Cassidy
Tel: (213) 236-4063
Fax: (213) 236-6701
WELLS FARGO CORPORATE SERVICES
500 North Akard
3535 Lincoln Plaza
Dallas, TX 75201
Dana Cagle
Tel: (214) 740-2820
Fax: (214) 740-2815
with copies to:
WELLS FARGO BANK, N.A.
420 Montgomery Street
9th Floor
San Francisco, CA 94163
Lupie Barajas
Tel: (415) 396-3705
Fax: (415) 989-4319
<PAGE>
SCHEDULE X
Page 12
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK AND CAYMAN ISLANDS BRANCHES
GENERAL NOTICES:
1211 Avenue of the Americas
New York, New York 10036
Attn: Cynthia M. Niesen
Tel: (212) 852-6168
Fax: (212) 852-6307
NOTICES OF BORROWING: NOTICES OF CONVERSION:
1211 Avenue of the Americas
New York, New York 10036
Attn: Cheryl Wilson
Tel: (212) 852-6000
Fax: (212) 852-6307
with copies to:
Cynthia M. Niesen
Tel: (212) 852-6168
Fax: (212) 852-6307
<PAGE>
EXHIBIT A
NOTICE OF BORROWING
[Date]
Bankers Trust Company, as
Administrative Agent for
the Banks party to the
Credit Agreement referred
to below
130 Liberty Street
New York, New York 10006
Attention: Kenneth A. Lang
Gentlemen:
The undersigned, Dr Pepper/Seven-Up Corporation (as
successor by merger to Dr Pepper Company and The Seven-Up Company, the
"Company"), refers to the Credit Agreement, dated as of October 20, 1992 (as
amended from time to time, the "Credit Agreement", the terms defined therein
being used herein as therein defined), among the Company, Dr Pepper/Seven-Up
Companies, Inc., various Banks from time to time party thereto, the Managing
Agents, the Co-Agents, the Lead Managers and you, as Administrative Agent for
such Banks, and hereby gives you notice, irrevocably, pursuant to Section 1.03
of the Credit Agreement, that the undersigned hereby requests a Borrowing under
the Credit Agreement, and in that connection sets forth below the information
relating to such Borrowing (the "Proposed Borrowing") as required by
Section 1.03 of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is , 19 . (1)
(ii) The aggregate principal amount of the Proposed Borrowing is $ .
- -----------------------------
(1) Shall be a Business Day at least one Business Day in the case of Base Rate
Loans and three Business Days in the case of Eurodollar Rate Loans, in each
case, after the date hereof.
<PAGE>
EXHIBIT A
Page 2
(iii) The Proposed Borrowing is to consist of [Term Loans] [Revolving
Loans].
(iv) The Loans to be made pursuant to the Proposed Borrowing shall be
initially maintained as [Base Rate Loans] [Eurodollar Rate Loans].2/
[(v) The initial Interest Period for the Proposed Borrowing is
months.]3/
[(vi) The Proposed Borrowing of Revolving Loans shall utilize the
Blocked Commitment to [repurchase or redeem Dr Pepper Preferred Stock] [make
mandatory repayments of Term Loans required pursuant to Section 4.02(g) of the
Credit Agreement].]4/
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Borrowing:
(A) the representations and warranties contained in the Credit
Agreement and the other Credit Documents are and will be true and correct in all
material respects, before and after giving effect to the Proposed Borrowing and
to the application of the proceeds thereof, as though made on such date; and
____________________________
2/ Eurodollar Rate Loans may not be incurred prior to the earlier of (x) the
60th day after the Fifth Amendment Effective Date or such earlier date as may be
agreed to by the Administrative Agent and (y) the Syndication Date.
3/ To be included for a Proposed Borrowing of Eurodollar Rate Loans.
4/ Include details of the terms and conditions of such proposed purchase. The
Blocked Commitment may only be utilized (x) after the Initial Borrowing Date, to
purchase or redeem, for cash, shares of Dr Pepper Preferred Stock (but not to
pay accumulated dividends thereon in connection with such purchase) provided
that the Blocked Commitment may not be used (and shall not be reduced) to the
extent of the portion of the purchase price for any share of Dr Pepper Preferred
Stock that exceeds $12.25, and (y) on September 1, 1994, to make mandatory
repayments of Term Loans, if any, required pursuant to Section 4.02(g) of the
Credit Agreement.
<PAGE>
EXHIBIT A
Page 3
(B) no Default or Event of Default has occurred and is continuing, or
would result from such Proposed Borrowing or from the application of the
proceeds thereof.
Very truly yours,
DR PEPPER/SEVEN-UP CORPORATION
By_______________________________________
Title:
<PAGE>
EXHIBIT B-1
-----------
TERM NOTE
$__________________ New York, New York
______ ____ , 1993
FOR VALUE RECEIVED, DR PEPPER/SEVEN-UP CORPORATION, a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of _____________________
(the "Bank"), in lawful money of the United States of America in immediately
available funds, at the office of Bankers Trust Company (the "Administrative
Agent") located at One Bankers Trust Plaza, New York, New York 10006 on the
Final Maturity Date (as defined in the Agreement referred to below) the
principal sum of _______________ DOLLARS or, if less, the then unpaid principal
amount of all Term Loans (as defined in the Agreement) made by the Bank pursuant
to the Agreement.
The Borrower promises also to pay interest on the unpaid principal amount
hereof in like money at said office from the date hereof until paid at the rates
and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Term Notes referred to in the Credit Agreement,
dated as of October 20, 1992, among the Borrower, Dr Pepper/ Seven-Up Companies,
Inc., various banks from time to time party thereto (including the Bank), the
Managing Agents, the Co-Agents, the Lead Managers and Bankers Trust Company, as
Administrative Agent (as from time to time in effect, the "Agreement"), and is
entitled to the benefits thereof. This Note is secured by the Security Documents
(as defined in the Agreement) and is entitled to the benefits of the Agreement
and the Guaranty (as defined in the Agreement). As provided in the Agreement,
this Note is subject to voluntary prepayment and mandatory repayment prior to
the Final Maturity Date, in whole or in part.
In case an Event of Default (as defined in the Agreement) shall occur and
be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of any
kind in connection with this Note.
This Note is secured, INTER ALIA, by a Deed of Trust, dated as of
December 28, 1993, and executed on December 28, 1993, by Waco Manufacturing
Company, as
<PAGE>
EXHIBIT B-1
Page 2
Trustor, in favor of Bankers Trust Company, as Collateral Agent, as Beneficiary,
pursuant to Mo. Rev. Stat. Section 443.055 (1991).
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW
OF THE STATE OF NEW YORK.
DR PEPPER/SEVEN-UP CORPORATION
By_______________________________________
Title:
<PAGE>
EXHIBIT B-2
-----------
REVOLVING NOTE
$__________ New York, New York
______ ____ , 1993
FOR VALUE RECEIVED, DR PEPPER/SEVEN-UP CORPORATION, a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of ____ (the
"Bank"), in lawful money of the United States of America in immediately
available funds, at the office of Bankers Trust Company (the "Administrative
Agent") located at One Bankers Trust Plaza, New York, New York 10006 on the
Revolving Loan Maturity Date (as defined in the Agreement referred to below) the
principal sum of ______________ DOLLARS or, if less, the then unpaid principal
amount of all Revolving Loans (as defined in the Agreement) made by the Bank
pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Revolving Notes referred to in the Credit
Agreement, dated as of October 20, 1992, among the Borrower, Dr Pepper/Seven-Up
Companies, Inc., various banks from time to time party thereto (including the
Bank), the Managing Agents, the Co-Agents, the Lead Managers and Bankers Trust
Company, as Administrative Agent (as from time to time in effect, the
"Agreement"), and is entitled to the benefits thereof. This Note is secured by
the Security Documents (as defined in the Agreement) and is entitled to the
benefits of the Agreement and the Guaranty (as defined in the Agreement). As
provided in the Agreement, this Note is subject to voluntary prepayment and
mandatory repayment prior to the Revolving Loan Maturity Date, in whole or in
part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
<PAGE>
EXHIBIT B-2
Page 2
This Note is secured, INTER ALIA, by a Deed of Trust, dated as of
December 28, 1993, and executed on December 28, 1993, by Waco Manufacturing
Company, as Trustor, in favor of Bankers Trust Company, as Collateral Agent, as
Beneficiary, pursuant to Mo. Rev. Stat. Section 443.055 (1991).
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW
OF THE STATE OF NEW YORK.
DR PEPPER/SEVEN-UP CORPORATION
By_________________________________
Title:
<PAGE>
EXHIBIT B-3
-----------
SWINGLINE NOTE
$________ New York, New York
______ ____ , 1993
FOR VALUE RECEIVED, DR PEPPER/SEVEN-UP CORPORATION, a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of BANKERS TRUST COMPANY
(the "Bank"), in lawful money of the United States of America in immediately
available funds, at the office of Bankers Trust Company (the "Administrative
Agent") located at One Bankers Trust Plaza, New York, New York 10006 on the
Swingline Expiry Date (as defined in the Agreement referred to below) the
principal sum of ___________________ or, if less, the then unpaid principal
amount of all Swingline Loans (as defined in the Agreement) made by the Bank
pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal amount
hereof in like money at said office from the date hereof until paid at the rates
and at the times provided in Section 1.08 of the Agreement.
This Note is the Swingline Note referred to in the Credit Agreement, dated
as of October 20, 1992, among the Borrower, Dr Pepper/Seven-Up Companies, Inc.,
various banks from time to time party thereto (including the Bank), the Managing
Agents, the Co-Agents, the Lead Managers and Bankers Trust Company, as
Administrative Agent (as from time to time in effect, the "Agreement"), and is
entitled to the benefits thereof. This Note is secured by the Security Documents
(as defined in the Agreement) and is entitled to the benefits of the Agreement
and the Guaranty (as defined in the Agreement). As provided in the Agreement,
this Note is subject to voluntary prepayment and mandatory repayment prior to
the Swingline Expiry Date, in whole or in part.
In case an Event of Default (as defined in the Agreement) shall occur and
be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of any
kind in connection with this Note.
This Note is secured, INTER ALIA, by a Deed of Trust, dated as of December
28, 1993, and executed on December 28, 1993, by Waco Manufacturing Company, as
Trustor, in favor of Bankers Trust Company, as Collateral Agent, as Beneficiary,
pursuant to Mo. Rev. Stat. Section 443.055 (1991).
<PAGE>
EXHIBIT B-3
Page 2
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW
OF THE STATE OF NEW YORK.
DR PEPPER/SEVEN-UP CORPORATION
By_______________________________________
Title:
<PAGE>
SUBSIDIARY PLEDGE AGREEMENT
PLEDGE AGREEMENT (this "Agreement"), dated as of December 28, 1993, made by
each of the undersigned (each, a "Pledgor" and collectively, the "Pledgors"), to
BANKERS TRUST COMPANY, as Collateral Agent (the "Pledgee") for the benefit of
(x) the Banks and the Managing Agents under, and any other lenders from time to
time party to, the Credit Agreement hereinafter referred to (such Banks, the
Managing Agents and other lenders, if any, are hereinafter called the "Bank
Creditors") and (y) if one or more Banks enter into one or more (i) interest
rate protection agreements (including, without limitation, interest rate swaps,
caps, floors, collars and similar agreements), (ii) foreign exchange contracts,
currency swap agreements or other similar agreements or arrangements designed to
protect against the fluctuations in currency values and/or (iii) other types of
hedging agreements from time to time (collectively, the "Interest Rate
Protection or Other Hedging Agreements"), with, or guaranteed by, Dr
Pepper/Seven-Up Corporation (as successor by merger to Dr Pepper Company and the
Seven-Up Company)(the "Borrower") or any of its Subsidiaries, any such Bank or
Banks (even if any such Bank subsequently ceases to be a Bank under the Credit
Agreement for any reason) so long as any such Bank participates in the extension
of such Interest Rate Protection or Other Hedging Agreements and their
subsequent assigns, if any (collectively, the "Other Creditors" and, together
with the Bank Creditors, are hereinafter called the "Secured Creditors").
Except as otherwise defined herein, terms used herein and defined in the Credit
Agreement shall be used herein as so defined.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrower, Dr Pepper/Seven-Up Companies, Inc., the financial
institutions (the "Banks") from time to time party thereto, Bankers Trust
Company, Nationsbank of North Carolina, N.A. and The Chase Manhattan Bank, N.A.,
as Managing Agents (together with any successor managing agent, the "Managing
Agents"), the Co-Agents, the Lead Managers and Bankers Trust Company, as
Administrative Agent (together with any successor administrative agent, the
"Administrative Agent"), have entered into a Credit Agreement, dated as of
October 20, 1992, providing for the making of Loans and the issuance of, and
participation in, Letters of Credit as contemplated therein (as used herein, the
term "Credit Agreement" means the Credit Agreement described above in this
paragraph, as the same may be amended, modified, extended, renewed, replaced,
restated or supplemented from time to time, and including any agreement
extending the maturity of, or restructuring (including, but not limited to, the
inclusion of additional
<PAGE>
borrowers thereunder that are Subsidiaries of the Borrower and whose obligations
are guaranteed by each Pledgor thereunder or any increase in the amount
borrowed) all or any portion of the Indebtedness under such agreement or any
successor agreements;
WHEREAS, the Borrower and its Subsidiaries may at any time and from
time to time enter into, or guaranty one or more Interest Rate Protection or
Other Hedging Agreements with one or more Other Creditors;
WHEREAS, each Pledgor is a direct or indirect Subsidiary of the
Borrower and, as such, will receive benefits from the above-described extensions
of credit;
WHEREAS, pursuant to the Subsidiary Guaranty, dated as of the date
hereof (as amended, modified or supplemented from time to time, the "Subsidiary
Guaranty"), each Pledgor has jointly and severally guaranteed to the Secured
Creditors the payment when due of all obligations and liabilities of the
Borrower under or with respect to the Credit Documents and one or more Interest
Rate Protection or Other Hedging Agreements with one or more Other Creditors;
WHEREAS, it is a condition to each of the above-described extensions
of credit that each Pledgor shall have executed and delivered this Agreement;
WHEREAS, each Pledgor desires to enter into this Agreement in order to
satisfy the condition described in the preceding paragraph;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Pledgor, the receipt and sufficiency of which are hereby
acknowledged, each Pledgor hereby makes the following representations and
warranties to the Pledgee for the benefit of the Secured Creditors and hereby
covenants and agrees with the Pledgee for the benefit of the Secured Creditors
as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by each Pledgor
for the benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of (x) the principal of and
interest on the Notes issued, and Loans made, under the Credit Agreement,
and all reimbursement obligations and Unpaid Drawings with respect to the
Letters of Credit under the Credit Agreement and (y) all other obligations
and indebtedness (including, without limitation, indemnities, Fees and
interest thereon) of the Borrower or such Pledgor to the Bank Creditors now
existing or hereafter incurred under, arising out of, or in connection with
the Credit Agreement, the Subsidiary Guaranty (except to the
-2-
<PAGE>
extent guaranteeing obligations pursuant to the Interest Rate Protection or
Other Hedging Agreements) and the other Credit Documents and the due
performance and compliance by the Borrower or such Pledgor with all of the
terms, conditions and agreements contained in the Credit Agreement, the
Subsidiary Guaranty (except to the extent guaranteeing obligations pursuant
to the Interest Rate Protection or Other Hedging Agreements) and the other
Credit Documents (all such principal, interest, obligations and liabilities
described in this clause (i) being herein collectively called the "Credit
Agreement Obligations");
(ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations and liabilities
owing by the Borrower or such Pledgor to the Other Creditors under, or with
respect to, any Interest Rate Protection or Other Hedging Agreement
(including, without limitation, any guarantees therefor by such Assignor
pursuant to the Subsidiary Guaranty), whether such Interest Rate Protection
or Other Hedging Agreement is now in existence or hereafter arising, and
the due performance and compliance by the Borrower or such Pledgor with all
of the terms, conditions and agreements contained therein (all such
obligations and liabilities described in this clause (ii) being herein
collectively called the "Other Obligations");
(iii) any and all sums advanced by the Pledgee in order to preserve
the Collateral (as hereinafter defined) or preserve its security interest
in the Collateral; and
(iv) in the event of any proceeding for the collection or enforcement
of any indebtedness, obligations, or liabilities referred to in clauses
(i), (ii) and (iii) above, after an Event of Default (as such term is
defined in the Security Agreement) shall have occurred and be continuing,
the reasonable expenses of retaking, holding, preparing for sale or lease,
selling or otherwise disposing of or realizing on the Collateral, or of any
exercise by such Pledgee of its rights hereunder, together with reasonable
attorneys' fees and court costs;
all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (iv) of this Section 1 being herein collectively called the
"Obligations," it being acknowledged and agreed that the "Obligations" shall
include extensions of credit of the types described above, whether outstanding
on the date of this Agreement or extended from time to time after the date of
this Agreement.
2. DEFINITION OF STOCK, NOTES, SECURITIES, ETC. As used herein, (i)
the term "Stock" shall mean all of the issued and outstanding shares of capital
stock at any time owned by each Pledgor of any corporation and (ii) the term
"Notes" shall mean (x) all promissory notes at any time issued to each Pledgor
by any of its Subsidiaries
-3-
<PAGE>
or Affiliates and (y) all other promissory notes from time to time issued to, or
held by, each Pledgor. As used herein, the term "Securities" shall mean all of
the Stock and Notes. Each Pledgor represents and warrants, as to the stock of
corporations and promissory notes owned by such Pledgor, that on the date hereof
(a) the Stock consists of the number and type of shares of the stock of the
corporations as described in Part I of Annex A hereto; (b) such Stock
constitutes that percentage of the issued and outstanding capital stock of the
issuing corporation as is set forth in Part I of Annex A hereto; (c) the Notes
consist of the promissory notes described in Part II of Annex A hereto; and (d)
such Pledgor is the holder of record and sole beneficial owner of the Stock and
the Notes and there exist no options or preemption rights in respect of any of
the Stock.
3. PLEDGE OF SECURITIES, ETC.
3.1. PLEDGE. To secure the Obligations and for the purposes set forth
in Section 1, each Pledgor (i) hereby grants to the Pledgee a security interest
in all of the Collateral, (ii) hereby pledges and deposits with the Pledgee the
Securities owned by such Pledgor on the date hereof, and delivers to the Pledgee
certificates therefor, duly endorsed in blank in the case of promissory notes
and accompanied by undated stock powers duly executed in blank by such Pledgor
(and accompanied by any transfer tax stamps required in connection with the
pledge of such Securities, with signatures appropriately guaranteed to the
extent required) in the case of capital stock, or such other instruments of
transfer as are acceptable to the Pledgee and (iii) hereby assigns, transfers,
hypothecates and sets over to the Pledgee all of such Pledgor's right, title and
interest in and to such Securities (and in and to the certificates or
instruments evidencing such Securities), to be held by the Pledgee, upon the
terms and conditions set forth in this Agreement.
3.2. SUBSEQUENTLY ACQUIRED SECURITIES. If any Pledgor shall acquire
(by purchase, stock dividend or otherwise) any additional Securities at any time
or from time to time after the date hereof, such Pledgor will promptly
thereafter pledge and deposit such Securities (or certificates or instruments
representing Securities) as security with the Pledgee and deliver to the Pledgee
certificates or instruments therefor, duly endorsed in blank in the case of
promissory notes, and accompanied by undated stock powers duly executed in blank
by such Pledgor (and accompanied by any transfer tax stamps required in
connection with the pledge of such Securities, with signatures appropriately
guaranteed to the extent required) in the case of capital stock, or such other
instruments of transfer as are acceptable to the Pledgee, and will promptly
thereafter deliver to the Pledgee a certificate executed by a principal
executive officer of such Pledgor describing such Securities and certifying that
the same has been duly pledged with the Pledgee hereunder.
3.3. UNCERTIFICATED SECURITIES. Notwithstanding anything to the
contrary contained in Sections 3.1 and 3.2, if any Securities (whether now owned
or hereafter acquired) are uncertificated securities, the respective Pledgor
shall promptly notify the
-4-
<PAGE>
Pledgee thereof, and shall promptly take all actions required to perfect the
security interest of the Pledgee under applicable law (including, in any event,
under Sections 8-313 and 8-321 of the New York Uniform Commercial Code if
applicable). Each Pledgor further agrees to take such actions as the Pledgee
deems necessary or desirable to effect the foregoing and to permit the Pledgee
to exercise any of its rights and remedies hereunder, and agrees to provide an
opinion of counsel reasonably satisfactory to the Pledgee with respect to any
such pledge of uncertificated Securities promptly upon request of the Pledgee.
3.4. DEFINITIONS OF PLEDGED STOCK: PLEDGED NOTES: PLEDGED SECURITIES
AND COLLATERAL. All Stock at any time pledged or required to be pledged
hereunder is hereinafter called the "Pledged Stock;" all Notes at any time
pledged or required to be pledged hereunder are hereinafter called the "Pledged
Notes;" all Pledged Stock and Pledged Notes together are called the "Pledged
Securities;" and the Pledged Securities, together with all proceeds thereof,
including any securities and moneys received and at the time held by the Pledgee
hereunder, are hereinafter called the "Collateral."
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee shall
have the right to appoint one or more sub-agents for the purpose of retaining
physical possession of the Pledged Securities, which may be held (in the
discretion of the Pledgee) in the name of the relevant Pledgor, endorsed or
assigned in blank or in favor of the Pledgee or any nominee or nominees of the
Pledgee or a sub-agent appointed by the Pledgee.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until there
shall have occurred and be continuing an Event of Default, each Pledgor shall be
entitled to vote any and all Pledged Securities owned by it, and to give
consents, waivers or ratifications in respect thereof, PROVIDED that no vote
shall be cast or any consent, waiver or ratification given or any action taken
which would violate, result in breach of any covenant contained in, or be
inconsistent with, any of the terms of this Agreement, the Credit Agreement, any
other Credit Document or any Interest Rate Protection or Other Hedging
Agreement, or which would have the effect of impairing the value of the
Collateral or any part thereof or the position or interests of the Pledgee or
any Secured Creditor. All such rights of such Pledgor to vote and to give
consents, waivers and ratifications shall cease in case an Event of Default has
occurred and is continuing, and Section 7 hereof shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until there shall
have occurred and be continuing an Event of Default, all cash dividends and
distributions payable in respect of the Pledged Stock and all payments in
respect of the Pledged Notes shall be paid to the relevant Pledgor. The Pledgee
shall be entitled to receive directly, and to retain as part of the Collateral:
-5-
<PAGE>
(a) all other or additional stock or securities (other than cash) paid
or distributed by way of dividend or otherwise, as the case may be, in
respect of the Pledged Stock;
(b) all other or additional stock or other securities paid or
distributed in respect of the Pledged Stock by way of stock-split,
spin-off, split-up, reclassification, combination of shares or similar
rearrangement; and
(c) all other or additional stock or other securities or property
(excluding cash) which may be paid in respect of the Collateral by reason
of any consolidation, merger, exchange of stock, conveyance of assets,
liquidation or similar corporate reorganization.
Nothing contained in this Section 6 shall limit or restrict in any way the
Pledgee's right to receive proceeds of the Collateral in any form in accordance
with Section 3 of this Agreement. All dividends, distributions or other
payments which are received by any Pledgor contrary to the provisions of this
Section 6 and Section 7 shall be received in trust for the benefit of the
Pledgee, shall be segregated from other property or funds of such Pledgor and
shall be forthwith paid over to the Pledgee as Collateral in the same form as so
received (with any necessary endorsement).
7. REMEDIES IN CASE OF EVENTS OF DEFAULT. If there shall have
occurred and be continuing an Event of Default, then and in every such case, the
Pledgee shall be entitled to exercise all of the rights, powers and remedies
(whether vested in it by this Agreement, any other Credit Document, any Interest
Rate Protection or Other Hedging Agreement or by law) for the protection and
enforcement of its rights in respect of the Collateral, and the Pledgee shall be
entitled to exercise all the rights and remedies of a secured party under the
Uniform Commercial Code and also shall be entitled, without limitation, to
exercise the following rights, which each Pledgor hereby agrees to be
commercially reasonable:
(a) to receive all amounts payable in respect of
the Collateral otherwise payable under Section 6 to such Pledgor;
(b) to transfer all or any part of the Collateral
into the Pledgee's name or the name of its nominee or nominees;
(c) to accelerate any Pledged Note which may be accelerated in
accordance with its terms, and take any other lawful action to collect upon
any Pledged Note;
(d) to vote all or any part of the Pledged Stock (whether or not
transferred into the name of the Pledgee) and give all consents, waivers
and ratifications in
-6-
<PAGE>
respect of the Collateral and otherwise act with respect thereto as though
it were the outright owner thereof (each Pledgor hereby irrevocably
constituting and appointing the Pledgee the proxy and attorney-in-fact of
such Pledgor, with full power of substitution to do so); and
(e) at any time or from time to time to sell, assign and deliver, or
grant options to purchase, all or any part of the Collateral, or any
interest therein, at any public or private sale, without demand of
performance, advertisement or notice of intention to sell or of the time or
place of sale or adjournment thereof or to redeem or otherwise (all of
which are hereby waived by such Pledgor), for cash, on credit or for other
property, for immediate or future delivery without any assumption of credit
risk, and for such price or prices and on such terms as the Pledgee in its
absolute discretion may determine, PROVIDED that at least 10 days' notice
of the time and place of any such sale shall be given to the relevant
Pledgor. The Pledgee shall not be obligated to make any such sale of
Collateral regardless of whether any such notice of sale has theretofore
been given. Each Pledgor hereby waives and releases to the fullest extent
permitted by law any right or equity of redemption with respect to the
Collateral, whether before or after sale hereunder, and all rights, if any,
of marshalling the Collateral and any other security for the Obligations or
otherwise. At any such sale, unless prohibited by applicable law, the
Pledgee on behalf of the Secured Creditors may bid for and purchase all or
any part of the Collateral so sold free from any such right or equity of
redemption. Neither the Pledgee nor any Secured Creditor shall be liable
for failure to collect or realize upon any or all of the Collateral or for
any delay in so doing nor shall any of them be under any obligation to take
any action whatsoever with regard thereto.
8. REMEDIES, ETC., CUMULATIVE. Each and every right, power and remedy
of the Pledgee provided for in this Agreement, the other Credit Documents, or
the Interest Rate Protection or Other Hedging Agreements, or now or hereafter
existing at law or in equity or by statute shall be cumulative and concurrent
and shall be in addition to every other such right, power or remedy. The
exercise or beginning of the exercise by the Pledgee or any Secured Creditor of
any one or more of the rights, powers or remedies provided for in this
Agreement, the other Credit Documents or the Interest Rate Protection or Other
Hedging Agreements or now or hereafter existing at law or in equity or by
statute or otherwise shall not preclude the simultaneous or later exercise by
the Pledgee or any Secured Creditor of all such other rights, powers or
remedies, and no failure or delay on the part of the Pledgee or any Secured
Creditor to exercise any such right, power or remedy shall operate as a waiver
thereof. No notice to or demand on any Pledgor in any case shall entitle it to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of any of the rights of the Pledgee or any Secured Creditor
to any other or further action in any circumstances without notice or demand.
-7-
<PAGE>
9. APPLICATION OF PROCEEDS. All moneys collected by the Pledgee upon
any sale or other disposition of the Collateral, together with all other moneys
received by the Pledgee hereunder, shall be applied to the payment of the
Obligations in the manner provided by Section 7.4 of the Subsidiary Security
Agreement.
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the
Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
11. INDEMNITY. Each Pledgor jointly and severally agrees to indemnify
and hold harmless the Pledgee and each Secured Creditor and their respective
successors, assigns, employees, agents and servants (individually an
"Indemnitee," and collectively the "Indemnitees") from and against any and all
claims, demands, losses, judgments and liabilities (including liabilities for
penalties) of whatsoever kind or nature, and to reimburse each Indemnitee for
all costs and expenses, including attorneys' fees, growing out of or resulting
from this Agreement or the exercise by any Indemnitee of any right or remedy
granted to it hereunder or under the other Credit Documents or the Interest Rate
Protection and Other Hedging Agreements. In no event shall any Indemnitee be
liable for any matter or thing in connection with this Agreement other than to
account for moneys actually received by it in accordance with the terms hereof.
If and to the extent that the obligations of the Pledgors under this Section 11
are unenforceable for any reason, each Pledgor hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under applicable law.
12. FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) Each Pledgor agrees
that it will join with the Pledgee in executing and, at its own expense, file
and refile under the Uniform Commercial Code or other applicable law such
financing statements, continuation statements and other documents in such
offices as the Pledgee may deem necessary or appropriate and wherever required
by law in order to perfect and preserve the Pledgee's security interest in the
Collateral and hereby authorizes the Pledgee to file financing statements and
amendments thereto relative to all or any part of the Collateral without the
signature of such Pledgor where permitted by law, and agrees to do such further
acts and things and to execute and deliver to the Pledgee such additional
conveyances, assignments, agreements and instruments as the Pledgee may
reasonably require or deem advisable to carry into effect the purposes of this
Agreement or to further assure and confirm unto the Pledgee its rights, powers
and remedies hereunder.
-8-
<PAGE>
(b) Each Pledgor hereby appoints the Pledgee as such Pledgor's
attorney-in-fact, with full authority in the place and stead of such Pledgor and
in the name of such Pledgor or otherwise, from time to time after the occurrence
and during the continuance of an Event of Default, in the Pledgee's discretion
to take any action and to execute any instrument which the Pledgee may
reasonably deem necessary or advisable to accomplish the purposes of this
Agreement.
13. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance with
this Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed that the obligations of the
Pledgee as holder of the Collateral and interests therein and with respect to
the disposition thereof, and otherwise under this Agreement, are only those
expressly set forth in this Agreement. By accepting the benefits hereof, each
Secured Creditor shall be deemed to have agreed to the terms and conditions set
forth in Article X of the Subsidiary Security Agreement, as the same may be
amended, supplemented or otherwise modified from time to time, which is
incorporated herein by reference in its entirety; PROVIDED that all references
therein to "this Agreement" shall be a reference to this Agreement, PROVIDED
FURTHER that all references therein to an "Assignor" shall be a reference to a
"Pledgor," and all references to 'Assignors" shall be a reference to "Pledgors"
and PROVIDED FURTHER that all references therein to the "Collateral Agent" shall
be a reference to the "Pledgee." The Pledgee shall act hereunder on the terms
and conditions set forth in said Article X.
14. TRANSFER BY THE PLEDGORS. No Pledgor will sell or otherwise
dispose of, grant any option with respect to, or mortgage, pledge or otherwise
encumber any of the Collateral or any interest therein (except as may be
permitted in accordance with the terms of the Credit Agreement).
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS. Each
Pledgor represents and warrants that (a) it is, or at the time when pledged
hereunder will be, the legal, record and beneficial owner of, and has (or will
have) good and marketable title to, all Securities pledged hereunder, subject to
no Lien (except the Lien created by this Agreement); (b) it has full corporate
power, authority and legal right to pledge all the Securities pursuant to this
Agreement; (c) this Agreement has been duly authorized, executed and delivered
by such Pledgor and constitutes a legal, valid and binding obligation of such
Pledgor enforceable in accordance with its terms except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency, reorganization or
other similar laws affecting creditors' rights generally and by general
equitable principles (regardless of whether the issue of enforceability is
considered in a proceeding in equity or at law); (d) except to the extent
already obtained, no consent of any other party (including, without limitation,
any stockholder or creditor of such Pledgor or any of its Subsidiaries) and no
consent, license, permit, approval or authorization of, exemption by, notice or
report to, or registration, filing or declaration with, any governmental
authority is required
-9-
<PAGE>
to be obtained by such Pledgor in connection with (i) the execution, delivery or
performance of this Agreement, (ii) the validity or enforceability of this
Agreement, (iii) the perfection or enforceability of the Pledgee's security
interest in the Collateral or (iv) the exercise by the Pledgee of any of its
rights or remedies provided herein; (e) the execution, delivery and performance
of this Agreement will not violate any provision of any applicable law or
regulation or of any order, judgment, writ, award or decree of any court,
arbitrator or governmental authority, domestic or foreign, applicable to such
Pledgor, or of the Certificate of Incorporation or By-Laws of such Pledgor or of
any securities issued by such Pledgor or any of its Subsidiaries, or of any
mortgage, indenture, lease, loan agreement, credit agreement or other contract,
agreement or instrument or undertaking to which such Pledgor or any of its
Subsidiaries is a party or which purports to be binding upon such Pledgor or any
of its Subsidiaries or upon any of their respective assets and will not result
in the creation or imposition of any lien or encumbrance on any of the assets of
such Pledgor or any of its Subsidiaries except as contemplated by this
Agreement; (f) all the shares of the Stock have been duly and validly issued,
are fully paid and non-assessable and are subject to no options to purchase or
similar rights; (g) to the best of its knowledge, each of the Pledged Notes
constitutes, or when executed by the obligor thereof will constitute, the legal,
valid and binding obligation of such obligor, enforceable in accordance with its
terms, except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
generally affecting creditors' rights and equitable principles (regardless of
whether enforcement is sought in equity or at law); and (h)the pledge,
assignment and delivery of the Securities pursuant to this Agreement creates a
valid and perfected first priority Lien in the Securities, and the proceeds
thereof, subject to no Lien or to any agreement purporting to grant to any third
party a Lien on the property or assets of such Pledgor which would include the
Securities. Each Pledgor covenants and agrees that it will defend the Pledgee's
right, title and security interest in and to the Securities and the proceeds
thereof against the claims and demands of all persons whomsoever; and each
Pledgor covenants and agrees that it will have like title to and right to pledge
any other property at any time hereafter pledged to the Pledgee as Collateral
hereunder and will likewise defend the right thereto and security interest
therein of the Pledgee and the Secured Creditors.
16. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of each
Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation: (a) any renewal,
extension, amendment or modification of or addition or supplement to or deletion
from the Credit Documents, the Interest Rate Protection or Other Hedging
Agreements or any other instrument or agreement referred to therein, or any
assignment or transfer of any thereof; (b) any waiver, consent, extension,
indulgence or other action or inaction under or in respect of any such agreement
or instrument including, without limitation, this Agreement; (c) any furnishing
of any additional security to the
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<PAGE>
Pledgee or its assignee or any acceptance thereof or any release of any security
by the Pledgee or its assignee; (d) any limitation on any party's liability or
obligations under any such instrument or agreement or any invalidity or
unenforceability, in whole or in part, of any such instrument or agreement or
any term thereof; or (e) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to such Pledgor or any Subsidiary of such Pledgor, or any action taken
with respect to this Agreement by any trustee or receiver, or by any court, in
any such proceeding, whether or not such Pledgor shall have notice or knowledge
of any of the foregoing.
17. REGISTRATION, ETC. (a) If there shall have occurred and be
continuing an Event of Default then, and in every such case, upon receipt by any
Pledgor from the Pledgee of a written request or requests that such Pledgor
cause any registration, qualification or compliance under any Federal or state
securities law or laws to be effected with respect to all or any part of the
Pledged Stock, such Pledgor as soon as practicable and at its expense will use
its best efforts to cause such registration to be effected (and be kept
effective) and will use its best efforts to cause such qualification and
compliance to be effected (and be kept effective) as may be so requested and as
would permit or facilitate the sale and distribution of such Pledged Stock,
including, without limitation, registration under the Securities Act of 1933, as
then in effect (or any similar statute then in effect), appropriate
qualifications under applicable blue sky or other state securities laws and
appropriate compliance with any other government requirements, PROVIDED that the
Pledgee shall furnish to such Pledgor such information regarding the Pledgee as
such Pledgor may request in writing and as shall be required in connection with
any such registration, qualification or compliance. Each Pledgor will cause the
Pledgee to be kept advised in writing as to the progress of each such
registration, qualification or compliance and as to the completion thereof, will
furnish to the Pledgee such number of prospectuses, offering circulars or other
documents incident thereto as the Pledgee from time to time may reasonably
request, and will indemnify the Pledgee and all others participating in the
distribution of such Pledged Stock against all claims, losses, damages and
liabilities caused by any untrue statement (or alleged untrue statement) of a
material fact contained therein (or in any related registration statement,
notification or the like) or by any omission (or alleged omission) to state
therein (or in any related registration statement, notification or the like) a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as the same may have been caused by an
untrue statement or omission based upon information furnished in writing to such
Pledgor by the Pledgee expressly for use therein.
(b) If at any time when the Pledgee shall determine to exercise its
right to sell all or any part of the Pledged Securities pursuant to Section 7,
and such Pledged Securities or the part thereof to be sold shall not, for any
reason whatsoever, be effectively registered under the Securities Act of 1933,
as then in effect, the Pledgee may, in its sole and absolute discretion, sell
such Pledged Securities or part thereof by private sale in such
-11-
<PAGE>
manner and under such circumstances as Pledgee may deem necessary or advisable
in order that such sale may legally be effected without such registration.
Without limiting the generality of the foregoing, in any such event the Pledgee,
in its sole and absolute discretion (i) may proceed to make such private sale
notwithstanding that a registration statement for the purpose of registering
such Pledged Securities or part thereof shall have been filed under such
Securities Act, (ii) may approach and negotiate with a single possible purchaser
to effect such sale, and (iii) may restrict such sale to a purchaser who will
represent and agree that such purchaser is purchasing for its own account, for
investment, and not with a view to the distribution or sale of such Pledged
Securities or part thereof. In the event of any such sale, the Pledgee shall
incur no responsibility or liability for selling all or any part of the Pledged
Securities at a price which the Pledgee, in its sole and absolute discretion,
may in good faith deem reasonable under the circumstances, notwithstanding the
possibility that a substantially higher price might be realized if the sale were
deferred until after registration as aforesaid.
18. TERMINATION; RELEASE. (a) After the Termination Date (as defined
below), this Agreement shall terminate, and the Pledgee, at the request and
expense of the respective Pledgor, will execute and deliver to such Pledgor a
proper instrument or instruments acknowledging the satisfaction and termination
of this Agreement, and will duly assign, transfer and deliver to such Pledgor
(without recourse and without any representation or warranty) such of the
Collateral as may be in the possession of the Pledgee and has not theretofore
been sold or otherwise applied or released pursuant to this Agreement, together
with any moneys at the time held by the Pledgee hereunder. As used in this
Agreement, "Termination Date" shall mean the date upon which the Total
Commitments and all Interest Rate Protection or Other Hedging Agreements have
been terminated, no Note under the Credit Agreement is outstanding (and all
Loans have been repaid in full), all Letters of Credit have been terminated and
all Obligations then owing have been paid in full.
(b) Notwithstanding anything to the contrary contained above, upon the
presentment of satisfactory evidence to the Pledgee in its sole discretion that
all obligations evidenced by any Pledged Note have been repaid in full, and that
any payments received by the respective Pledgor were permitted to be received by
such Pledgor pursuant to Section 6 hereof, the Pledgee shall, upon the request
and at the expense of such Pledgor, duly assign, transfer and deliver to such
Pledgor (without recourse and without any representation or warranty) such
Pledged Note if same is then in the possession of the Pledgee and has not
theretofore been sold or otherwise applied or released pursuant to this
Agreement.
(c) In the event that any part of the Collateral is sold in connection
with a sale permitted by Section 9.02 of the Credit Agreement or otherwise
released at the direction of the Required Banks (or all Banks if required by
Section 13.12(a)(ii) of the
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<PAGE>
Credit Agreement) and the proceeds of such sale or sales or from such release
are applied in accordance with the provisions of Section 4.02 of the Credit
Agreement, to the extent required to be so applied, the Pledgee, at the request
and expense of the respective Pledgor, will duly assign, transfer and deliver to
such Pledgor (without recourse and without any representation or warranty) such
of the Collateral as is then being (or has been) so sold or released and as may
be in the possession of the Pledgee and has not theretofore been released
pursuant to this Agreement.
(d) In the event that any Pledgor is released from its obligations
pursuant to the Subsidiary Guaranty in accordance with the terms thereof, then
such Pledgor shall cease to be a Pledgor hereunder and the Pledgee, at the
request and expense of the respective Pledgor, will execute and deliver to such
Pledgor a proper instrument or instruments acknowledging the satisfaction and
termination of the Agreement as to such Pledgor, and will duly assign, transfer
and deliver to such Pledgor (without recourse and without any representation or
warranty) such of the Collateral pledged by such Pledgor as may be in possession
of the Pledgee and has not theretofore been sold or otherwise applied or
released pursuant to this Agreement, together with any monies as such Pledgor at
the time held by the Pledgee hereunder.
(e) At any time that any Pledgor desires that Collateral be released
as provided in the foregoing sub-section (a), (b), (c) or (d), it shall deliver
to the Pledgee a certificate signed by its chief financial officer stating that
the release of the respective Collateral is permitted pursuant to such
subsection (a), (b), (c) or (d). If requested by the Pledgee (although the
Pledgee shall have no obligation to make any such request), such Pledgor shall
furnish appropriate legal opinions (from counsel acceptable to the Pledgee) to
the effect set forth in the immediately preceding sentence.
(e) The Pledgee shall have no liability whatsoever to any Secured
Creditor as the result of any release of Collateral by it as permitted by this
Section 18.
19. NOTICES ETC. All notices and other communications hereunder shall
be in writing and shall be delivered or mailed by first class mail, postage
prepaid, addressed as follows:
(a) if to any Pledgor, at its address set forth opposite its
signature below;
(b) if to the Pledgee, at:
Bankers Trust Company
130 Liberty Street
New York, New York 10006
Attention: Kenneth A. Lang
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<PAGE>
(c) if to any Bank Creditor, either (x) to the Administrative Agent,
at the address of the Administrative Agent specified in the Credit Agreement or
(y) at such address as such Bank Creditor shall have specified in the Credit
Agreement;
(d) if to any Other Creditor at such address as such Other Creditor
shall have specified in writing to the Pledgors and the Pledgee;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
20. WAIVER; AMENDMENT. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by each Pledgor and the Pledgee (with the written
consent of the Required Banks or, to the extent required by Section 13.
12(a)(ii) of the Credit Agreement with the consent of each of the Banks);
PROVIDED, HOWEVER, that any change, waiver, modification or variance affecting
the rights and benefits of a single Class (as defined below) of Secured
Creditors (and not all Secured Creditors in a like or similar manner) shall
require the written consent of the Requisite Creditors (as defined below) of
such affected Class. For the purpose of this Agreement, the term "Class" shall
mean each class of Secured Creditors, I.E., whether (y) the Bank Creditors as
holders of the Credit Agreement Obligations or (z) the Other Creditors as the
holders of the Other Obligations. For the purpose of this Agreement, the term
"Requisite Creditors" of any Class shall mean each of (x) with respect to the
Credit Agreement Obligations, the Required Banks and (y) with respect to the
Other Obligations, the holders of 51% of all obligations outstanding from time
to time under the Interest Rate Protection Agreements or Other Hedging
Agreements.
21. MISCELLANEOUS. This Agreement shall be binding upon the
successors and assigns of each Pledgor and shall inure to the benefit of and be
enforceable by the Pledgee and its successors and assigns. THIS AGREEMENT SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK. The headings in this Agreement are for purposes of reference
only and shall not limit or define the meaning hereof. This Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which shall constitute one instrument. In the event that any provision of
this Agreement shall prove to be invalid or unenforceable, such provision shall
be deemed to be severable from the other provisions of this Agreement which
shall remain binding on all parties hereto.
22. LIMITED OBLIGATIONS. It is the desire and intent of each Pledgor,
the Pledgee and the Secured Creditors that this Agreement shall be enforced
against each Pledgor to the fullest extent permissible under the laws and public
policies applied in each
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<PAGE>
jurisdiction in which enforcement is sought. If, however, and to the extent,
that the obligation of any Pledgor under this Agreement shall be adjudicated to
be invalid or unenforceable for any reason (including, without limitation,
because of any applicable state or federal law relating to fraudulent
conveyances or transfers), then the amount of the Obligations of such Pledgor
(but not the Obligations of any other Pledgor unless such other Pledgor or
Pledgors are individually subject to the circumstances covered by this Section
22) shall be deemed to be reduced and the effected Pledgor shall pay the maximum
amount of the Obligations which would be permissible under applicable law.
23. ADDITIONAL PLEDGORS. It is understood and agreed that any
Subsidiary of the Borrower which becomes a Subsidiary after the date hereof
shall automatically become a Pledgor hereunder by executing a counterpart hereof
and delivering same to the Administrative Agent.
* * *
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<PAGE>
IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused this
Agreement to be executed by their duly elected officers duly authorized as of
the date first above written.
Address: 8144 Walnut Hill Lane WACO MANUFACTURING COMPANY,
Dallas, Texas 75231-4372 as a Pledgor
Attention: Nelson A. Bangs
By /s/ Nelson A. Bangs
________________________________
Title: Vice President
BANKERS TRUST COMPANY,
as Pledgee
By /s/ Mary Kay Coyle
________________________________
Title: Vice President
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<PAGE>
ANNEX A
-------
Part I. PLEDGED STOCK
<TABLE>
<CAPTION>
Percentage of
Outstanding Shares of
Name of Issuing Corporation Type of Shares Number of Shares Capital Stock
- --------------------------- -------------- ---------------- --------------
<S> <C> <C> <C>
None
</TABLE>
Part II. PLEDGED NOTES
Principal
Lender Borrower Amount
- ----- -------- ---------
Waco Manufacturing Dr Pepper/Seven-Up Evidencing
Company Corporation Intercompany
Loans
<PAGE>
SUBSIDIARY GUARANTY
GUARANTY, dated as of December 28, 1993 (as amended, modified or
supplemented from time to time, the "Guaranty"), made by each of the undersigned
(each a "Guarantor" and collectively, the "Guarantors"). Except as otherwise
defined herein, terms used herein and defined in the Credit Agreement (as
defined below) shall be used herein as therein defined.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Dr Pepper/Seven-Up Corporation (as successor by merger to Dr
Pepper Company and The Seven-Up Company) (the "Borrower"), Dr Pepper/Seven-Up
Companies, Inc., the financial institutions (the "Banks") from time to time
party thereto, Bankers Trust Company, NationsBank of North Carolina, N.A. and
The Chase Manhattan Bank, N.A., as Managing Agents (together with any successor
managing agent, the "Managing Agents"), the Co-Agents named therein, the Lead
Managers named therein and Bankers Trust Company, as Administrative Agent
(together with any successor administrative agent, the "Administrative Agent"),
have entered into a Credit Agreement, dated as of October 20, 1992 (as amended,
modified or supplemented from time to time, the "Credit Agreement"), providing
for the making of Loans and the issuance of, and participation in, Letters of
Credit as contemplated therein (the Banks and the Managing Agents herein called
the "Bank Creditors");
WHEREAS, the Borrower and it Subsidiaries may from time to time be
party to, or guaranty, one or more (i) interest rate protection agreements
(including, without limitation, interest rate swaps, caps, floors, collars and
similar agreements), (ii) foreign exchange contracts, currency swap agreements
or other similar agreements or arrangements designed to protect against the
fluctuations in currency values and/or (iii) other types of hedging agreements
from time to time (collectively, the "Interest Rate Protection or Other Hedging
Agreements"), with any such Bank or Banks (even if such Bank subsequently ceases
to be a Bank under the Credit Agreement for any reason) so long as such Bank
participates in the extension of such Interest Rate Protection or Other Hedging
Agreements and their subsequent assigns, if any (collectively, the "Other
Creditors" and together with the Bank Creditors, are hereinafter called the
"Secured Creditors");
WHEREAS, each Guarantor is a wholly-owned direct or indirect
Subsidiary of the Borrower;
<PAGE>
WHEREAS, it is a condition to the making of Loans and the issuance of,
and participation in, Letters of Credit under the Credit Agreement and to the
Other Creditors entering into the Interest Rate Protection or Other Hedging
Agreements that each Guarantor shall have executed and delivered this Guaranty;
and
WHEREAS, each Guarantor will obtain benefits from the incurrence of
Loans by, and the issuance of Letters of Credit for the account of, the Borrower
under the Credit Agreement and the entering into of Interest Rate Protection or
Other Hedging Agreements and, accordingly, desires to execute this Guaranty in
order to satisfy the conditions described in the preceding paragraph and to
induce the Banks to make Loans to, and issue and participate in Letters of
Credit for the account of, the Borrower and Other Creditors to enter into
Interest Rate Protection or Other Hedging Agreements;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Guarantor, the receipt and sufficiency of which are hereby
acknowledged, each Guarantor hereby makes the following representations and
warranties to the Creditors and hereby covenants and agrees with each Creditor
as follows:
1. Each Guarantor, jointly and severally, irrevocably and
unconditionally guarantees: (i) the full and prompt payment when due (whether at
the stated maturity, by acceleration or otherwise) of (x) the principal of and
interest on the Notes issued by, and the Loans made to, the Borrower under the
Credit Agreement, and all reimbursement obligations and Unpaid Drawings with
respect to Letters of Credit issued under the Credit Agreement, and (y) all
other obligations and indebtedness (including, without limitation, indemnities,
Fees and interest thereon) now existing or hereafter incurred under, arising out
of or in connection with the Credit Agreement or any other Credit Document and
the due performance and compliance with the terms of the Credit Documents by the
Borrower (all such principal, interest, liabilities and obligations being herein
collectively called the "Credit Agreement Obligations"); and (ii) the full and
prompt payment when due (whether at the stated maturity, by acceleration or
otherwise) of all obligations and liabilities owing by the Borrower or any of
its Subsidiaries under any Interest Rate Protection or Other Hedging Agreement,
whether now in existence or hereafter arising, and the due performance and
compliance by the Borrower and each of its Subsidiaries with all terms,
conditions and agreements contained therein (all such obligations and
liabilities being herein collectively called the "Other Obligations", and
together with the Credit Agreement Obligations are herein collectively called
the "Guaranteed Obligations"), provided that the maximum amount payable by each
Guarantor hereunder shall at no time exceed the Maximum Amount (as hereinafter
defined) of such Guarantor. As used herein, "Maximum Amount" of any Guarantor
means an amount equal to 90% of the amount by which (i) the present fair
saleable value of such Guarantor's assets exceeds (ii) the total liabilities of
such Guarantor (including the maximum amount reasonably expected to come due in
respect of
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<PAGE>
contingent liabilities, other than contingent liabilities of such Guarantor
hereunder), in each case determined on the Initial Borrowing Date or on the day
any demand is made under this Guaranty, whichever date results in the higher
Maximum Amount. Each Guarantor understands, agrees and confirms that, subject
to the proviso in the second preceding sentence, the Creditors may enforce this
Guaranty up to the full amount of the Guaranteed Obligations against such
Guarantor without proceeding against the Borrower, against any security for the
Guaranteed Obligations, against any other Guarantor, or against any other
guarantor under any other guaranty covering the Guaranteed Obligations. All
payments by each Guarantor under this Guaranty shall be made on the same basis
as payments by the Borrower under Sections 4.03 and 4.04 of the Credit
Agreement. This Guaranty shall constitute a guaranty of payment, and not of
collection.
2. Additionally, each Guarantor, jointly and severally,
unconditionally and irrevocably, guarantees the payment of any and all
Guaranteed Obligations of the Borrower to the Creditors whether or not due or
payable by the Borrower upon the occurrence, in respect of the Borrower, of any
of the events specified in Section 9.05 of the Credit Agreement, and
unconditionally and irrevocably,jointly and severally, promises to pay such
Guaranteed Obligations to the Creditors, or order, on demand, in lawful money of
the United States.
3. The liability of each Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the indebtedness of the
Borrower whether executed by such Guarantor, any other Guarantor, any other
guarantor or by any other party, and the liability of each Guarantor hereunder
shall not be affected or impaired by (a) any direction as to application of
payment by the Borrower or by any other party, (b) any other continuing or other
guaranty, undertaking or maximum liability of a guarantor or of any other party
as to the indebtedness of the Borrower, (c) any payment on or in reduction of
any such other guaranty or undertaking, (d) any dissolution, termination or
increase, decrease or change in personnel by the Borrower or (e) any payment
made to any Creditor on the indebtedness which any Creditor repays the Borrower
pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and each Guarantor waives any
right to the deferral or modification of its obligations hereunder by reason of
any such proceeding.
4. The obligations of each Guarantor hereunder are independent of
the obligations of any other Guarantor, any other guarantor or the Borrower, and
a separate action or actions may be brought and prosecuted against each
Guarantor whether or not action is brought against any other Guarantor, any
other guarantor or the Borrower and whether or not any other Guarantor, any
other guarantor of the Borrower or the Borrower be joined in any such action or
actions. Each Guarantor waives, to the fullest extent permitted by law, the
benefit of any statute of limitations affecting its liability hereunder or the
enforcement thereof. Any payment by the Borrower or other circumstance which
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<PAGE>
operates to toll any statute of limitations as to the Borrower shall operate to
toll the statute of limitations as to each Guarantor.
5. Each Guarantor hereby waives notice of acceptance of this
Guaranty and notice of any liability to which it may apply, and waives
promptness, diligence, presentment, demand of payment, protest, notice of
dishonor or nonpayment of any such liabilities, suit or taking of other action
by the Administrative Agent or any other Creditor against, and any other notice
to, any party liable thereon (including such Guarantor or any other guarantor of
the Borrower).
6. Any Creditor may at any time and from time to time without the
consent of, or notice to, any Guarantor, without incurring responsibility to
such Guarantor, without impairing or releasing the obligations of such Guarantor
hereunder, upon or without any terms or conditions and in whole or in part;
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew or alter, any of the Guaranteed
Obligations, any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the guaranty herein made shall apply to
the Guaranteed Obligations as so changed, extended, renewed or altered;
(b) sell, exchange, release, surrender, realize upon or otherwise
deal with in any manner and in any order any property by whomsoever at any
time pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset
thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower or any Subsidiary of the
Borrower to creditors of the Borrower or such Subsidiary;
(e) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Creditors regardless of
what liabilities of the Borrower remain unpaid;
-4-
<PAGE>
(f) consent to or waive any breach of, or any act, omission or
default under, any of the Interest Rate Protection or Other Hedging
Agreements, the Credit Documents or any of the instruments or agreements
referred to therein, or otherwise amend, modify or supplement any of the
Interest Rate Protection Agreements, the Credit Documents or any of such
other instruments or agreements; and/or
(g) act or fail to act in any manner referred to in this Guaranty
which may deprive such Guarantor of its right to subrogation against the
Borrower to recover full indemnity for any payments made pursuant to this
Guaranty.
7. No invalidity, irregularity or unenforceability of all or any
part of the Guaranteed Obligations or of any security therefor shall affect,
impair or be a defense to this Guaranty, and this Guaranty shall be primary,
absolute and unconditional notwithstanding the occurrence of any event or the
existence of any other circumstances which might constitute a legal or equitable
discharge of a surety or guarantor except payment in full of the Guaranteed
Obligations.
8. This Guaranty is a continuing one and all liabilities to which it
applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. No failure or delay on the part of any
Creditor in exercising any right, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
expressly specified are cumulative and not exclusive of any rights or remedies
which any Creditor would otherwise have. No notice to or demand on any
Guarantor in any case shall entitle such Guarantor to any other further notice
or demand in similar or other circumstances or constitute a waiver of the rights
of any Creditor to any other or further action in any circumstances without
notice or demand. It is not necessary for any Creditor to inquire into the
capacity or powers of the Borrower or any of its Subsidiaries or the officers,
directors, partners or agents acting or purporting to act on its behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
9. Any indebtedness of the Borrower now or hereafter held by any
Guarantor is hereby subordinated to the indebtedness of the Borrower to the
Creditors; and such indebtedness of the Borrower to any Guarantor, if the
Administrative Agent, after an Event of Default has occurred, so requests, shall
be collected, enforced and received by such Guarantor as trustee for the
Creditors and be paid over to the Creditors on account of the indebtedness of
the Borrower to the Creditors, but without affecting or impairing in any manner
the liability of such Guarantor under the other provisions of this Guaranty.
Prior to the transfer by any Guarantor of any note or negotiable instrument
evidencing any
-5-
<PAGE>
indebtedness of the Borrower to such Guarantor, such Guarantor shall mark such
note or negotiable instrument with a legend that the same is subject to this
subordination.
10. (a) Each Guarantor waives any right (except as shall be required
by applicable statute and cannot be waived) to require the Creditors to: (i)
proceed against the Borrower, any other Guarantor, any other guarantor of the
Borrower or any other party; (ii) proceed against or exhaust any security held
from the Borrower, any other Guarantor, any other guarantor of the Borrower or
any other party; or (iii) pursue any other remedy in the Creditors' power
whatsoever. Each Guarantor waives any defense based on or arising out of any
defense of the Borrower, any other Guarantor, any other guarantor of the
Borrower or any other party other than payment in full of the Guaranteed
Obligations, including, without limitation, any defense based on or arising out
of the disability of the Borrower, any other Guarantor, any other guarantor of
the Borrower or any other party, or the unenforceability of the Guaranteed
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrower other than payment in full of the Guaranteed
Obligations. The Creditors may, at their election, foreclose on any security
held by the Administrative Agent, the Collateral Agent or the other Creditors by
one or more judicial or nonjudicial sales, whether or not every aspect of any
such sale is commercially reasonable (to the extent such sale is permitted by
applicable law), or exercise any other right or remedy the Creditors may have
against the Borrower or any other party, or any security, without affecting or
impairing in any way the liability of any Guarantor hereunder except to the
extent the Guaranteed Obligations have been paid in full. Each Guarantor waives
any defense arising out of any such election by the Creditors, even though such
election operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of such Guarantor against the Borrower or
any other party or any security.
(b) Each Guarantor waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
indebtedness. Each Guarantor assumes all responsibility for being and keeping
itself informed of the Borrower's financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that the Creditors shall have no duty
to advise any Guarantor of information known to them regarding such
circumstances or risks.
(c) Except as otherwise provided in clause (d) below, each Guarantor
hereby waives all rights of subrogation which it may at any time otherwise have
as a result of this Guaranty (whether contractual, under Section 509 of the
Bankruptcy Code, or otherwise) to the claims of the Creditors against the
Borrower and all contractual, statutory or common law rights of reimbursement,
contribution or indemnity from the borrower
-6-
<PAGE>
which it may at any time otherwise have as a result of this Guaranty. Each
Guarantor hereby further waives any right to enforce any other remedy which the
Creditors now have or may hereafter have against the Borrower, and any benefit
of, and any right to participate in, any security or collateral given to or for
the benefit of the Creditors to secure payment of the Guaranteed Obligations.
(d) Notwithstanding the provisions of the preceding clause (c), (i)
each Guarantor shall have and be entitled to (A) all rights of subrogation
otherwise provided by law in respect of any payment it may make or be obligated
to make under this Guaranty and (B) all claims (as defined in the Bankruptcy
Code) it would have against the Borrower in the absence of the preceding clause
(c), and to assert and enforce same, and (ii) the provisions of the preceding
clause (c) shall be of no further force and effect, in each case on and after,
but at no time prior to, the earlier of (I) the date (the "Subrogation Trigger
Date") which is one year and one day after the date on which all the Guaranteed
Obligations owing to any of the Creditors have been paid in full IF AND ONLY IF
(1) no Default or Event of Default of the type described in Section 10.05 of the
Credit Agreement with respect to the Borrower has existed at any time on and
after the date of this Guaranty to and including the Subrogation Trigger Date
and (2) the existence of such Guarantor's rights under this clause (d) would not
make such Guarantor a creditor (as defined in the Bankruptcy Code) of the
Borrower in any insolvency, bankruptcy, reorganization or similar proceeding
commenced on or prior to the Subrogation Trigger Date or (II) the effective date
of any amendment to Title 11 of the United States Code or of any decision of the
United States Supreme Court that in the sole opinion of the Administrative Agent
provides, in effect, that the status of such Guarantor as an insider creditor of
the Borrower will not cause transfers of an interest of the Borrower in property
(including payments or grants of security interests by the Borrower) to any
Creditor to be subject to avoidance as a preference for a longer period of time
than if the Guaranteed Obligations of the Borrower had not been guaranteed or
otherwise secured by such Guarantor or its assets.
11. The Creditors agree that this Guaranty may be enforced only by
the action of the Administrative Agent or the Collateral Agent, in each case
acting upon the instructions of the Required Banks and that no Creditor shall
have any right individually to seek to enforce or to enforce this Guaranty or to
realize upon the security to be granted by the Security Documents, it being
understood and agreed that such rights and remedies may be exercised by the
Administrative Agent or the Collateral Agent for the benefit of the Creditors
upon the terms of this Guaranty and the Security Documents. The Creditors
further agree that this Guaranty may not be enforced against any director,
officer or employee of any Guarantor.
12. In order to induce the Banks to make Loans to the Borrower, and
issue and participate in Letters of Credit for the account of the Borrower,
pursuant to the Credit Agreement, and in order to induce the Other Creditors to
execute, deliver and perform the
-7-
<PAGE>
Interest Rate Protection or Other Hedging Agreements, each Guarantor represents,
warrants and covenants that:
(a) Such Guarantor and each of its Subsidiaries (i) is a duly
organized and validly existing corporation and is in good standing under
the laws of the jurisdiction of its organization, and has the corporate
power and authority to own its property and assets and to transact the
business in which it is engaged and presently proposes to engage and (ii)
is duly qualified and is authorized to do business and is in good standing
in each jurisdiction where the ownership, leasing or operation of property
or the conduct of its business requires such qualifications except for
failures to be so qualified which, in the aggregate, would not have a
material adverse effect on the business, property, assets, nature of
assets, liabilities, condition (financial or otherwise) or prospects of
such Guarantor or of such Guarantor and its Subsidiaries taken as a whole.
(b) Such Guarantor has the corporate power and authority to execute,
deliver and carry out the terms and provisions of this Guaranty and has
taken all necessary corporate action to authorize the execution, delivery
and performance by it of this Guaranty. Such Guarantor has duly executed
and delivered this Guaranty, and this Guaranty constitutes the legal, valid
and binding obligation of such Guarantor enforceable in accordance with its
terms, except to the extent that the enforceability hereof may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally and by equitable principles
(regardless of whether enforcement is sought in equity or at law).
(c) Neither the execution, delivery or performance by such Guarantor
of this Guaranty, nor compliance by it with the terms and provisions
hereof: (i) will contravene any applicable provision of any law, statute,
rule or regulation, or any order, writ, injunction or decree of any court
or governmental instrumentality, (ii) will conflict or be inconsistent with
or result in any breach of, any of the terms, covenants, conditions or
provisions of, or constitute a default under, or (other than pursuant to
the Security Documents) result in the creation or imposition of (or the
obligation to create or impose) any Lien upon any of the property or assets
of such Guarantor or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, agreement or other instrument to which
such Guarantor or any of its Subsidiaries is a party or by which it or any
of its property or assets is bound or to which it may be subject or (iii)
will violate any provision of the Certificate of Incorporation or, By-Laws
of such Guarantor or any of its Subsidiaries.
-8-
<PAGE>
(d) No order, consent, approval, license, authorization or validation
of, or filing, recording or registration with, or exemption by, any
governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with, (i) the
execution, delivery and performance of this Guaranty or (ii) the legality,
validity, binding effect or enforceability of this Guaranty.
(e) There are no actions, suits or proceedings pending or threatened
(i) with respect to this Guaranty, (ii) with respect to any material
Indebtedness of such Guarantor or any of its Subsidiaries or (iii) that
could reasonably be expected to materially and adversely effect the
business, property, assets, nature of assets, liabilities, condition
(financial or otherwise) or prospects of such Guarantor or such Guarantor
and its Subsidiaries taken as a whole.
13. Each Guarantor covenants and agrees that on and after the date
hereof and until the termination of the Total Commitment and all Interest Rate
Protection or Other Hedging Agreements and when no Note remains outstanding and
all Guaranteed Obligations have been paid in full, such Guarantor shall take, or
refrain from taking, as the case may be, all actions that are necessary to be
taken or not taken so that no violation of any provision, covenant or agreement
contained in Section 8 or 9 of the Credit Agreement, and so that no Event of
Default, is caused by the actions of such Guarantor or any of its Subsidiaries.
14. The Guarantors hereby jointly and severally agree to pay all
reasonable out-of-pocket costs and expenses of each Creditor in connection with
the enforcement of this Guaranty and any amendment, waiver or consent relating
hereto (including, without limitation, the reasonable fees and disbursements of
counsel employed by any of the Creditors).
15. This Guaranty shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Creditors and their
successors and assigns to the extent permitted under the Credit Agreement.
16. Neither this Guaranty nor any provision hereof may be changed,
waived, discharged or terminated except with the written consent of the Required
Banks (or to the extent required by Section 13.12 of the Credit Agreement, with
the written consent of each Bank) and each Guarantor affected thereby (it being
understood that the addition or release of any Guarantor hereunder shall not
constitute a change, waiver, discharge or termination affecting any Guarantor
other than the Guarantor so added or released); PROVIDED, that any change,
waiver, modification or variance affecting the rights and benefits of a single
class (as defined below) of Creditors (and not all Creditors in a like or
similar manner) shall require the written consent of the Requisite Creditors (as
defined below) of such Class. For
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<PAGE>
the purpose of this Guaranty, the term "Class" shall mean each class of
Creditors, I.E., whether (i) the Bank Creditors as holders of the Credit
Agreement Obligations or (ii) the Other Creditors as holders of the Interest
Rate Protection or Other Hedging Obligations. For the purpose of this Guaranty,
the term "Requisite Creditors" of any Class shall mean each of (i) with respect
to the Credit Agreement Obligations, the Required Banks, and (ii) with respect
to the Other Obligations, the holders of at least a majority of all obligations
outstanding from time to time under the Interest Rate Protection or Other
Hedging Agreements.
17. Each Guarantor acknowledges that an executed (or conformed) copy
of each of the Credit Documents has been made available to its principal
executive officers and such officers are familiar with the contents thereof.
18. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Creditor Law) and not by way of limitation of any such rights, upon
the occurrence and during the continuance of an Event of Default (such term to
mean and include any "Event of Default" as defined in the Credit Agreement or
any payment default under any Interest Rate Protection or Other Hedging
Agreement continuing after any applicable grace period), each Creditor is hereby
authorized at any time or from time to time, without notice to any Guarantor or
to any other Person, any such notice being expressly waived, to set off and to
appropriate and apply any and all deposits (general or special) and any other
indebtedness at any time held or owing by such Creditor to or for the credit or
the account of such Guarantor, against and on account of the obligations and
liabilities of such Guarantor to such Creditor under this Guaranty, irrespective
of whether or not such Creditor shall have made any demand hereunder and
although said obligations, liabilities, deposits or claims, or any of them,
shall be contingent or unmatured. Each Creditor agrees to promptly notify the
relevant Guarantor after any such set off and application; PROVIDED, HOWEVER,
that the failure to give such notice shall not affect the validity of such set
off and application.
19. All notices, requests, demands or other communications pursuant
hereto shall be deemed to have been duly given or made when delivered to the
Person to which such notice, request, demand or other communication is required
or permitted to be given or made under this Guaranty, addressed to such party at
(i) in the case of any Bank Creditor, as provided in the Credit Agreement, (ii)
in the case of any Guarantor, at its address set forth opposite its signature
below and (iii) in the case of any Other Creditor, at such address as such
Interest Rate Protection Creditor shall have specified in writing to the
Guarantor; or in any case at such other address as any of the Persons listed
above may hereafter notify the others in writing.
20. If claim is ever made upon any Creditor for repayment or recovery
of any amount or amounts received in payment or on account of any of the
Guaranteed Obligations
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<PAGE>
and any of the aforesaid payees repays all or part of said amount by reason of
(i) any judgment, decree or order of any court or administrative body having
jurisdiction over such payee or any of its property or (ii) any settlement or
compromise of any such claim effected by such payee with any such claimant
(including the Borrower), then and in such event each Guarantor agrees that any
such judgment, decree, order, settlement or compromise shall be binding upon
such Guarantor, notwithstanding any revocation hereof or other instrument
evidencing any liability of the Borrower, and such Guarantor shall be and remain
liable to the aforesaid payees hereunder for the amount so repaid or recovered
to the same extent as if such amount had never originally been received by any
such payee.
21. (A) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE CREDITORS
AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS GUARANTY MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT
OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS GUARANTY, EACH GUARANTOR
HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY
AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH GUARANTOR
HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS CT CORPORATION SYSTEMS,
1633 BROADWAY, NEW YORK, NEW YORK 10019, AS ITS DESIGNEE, APPOINTEE AND AGENT TO
RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS
PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS
WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH
DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH
GUARANTOR AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK
CITY ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THE
AGENT FOR THE BANKS UNDER THIS AGREEMENT. EACH GUARANTOR FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO EACH GUARANTOR AT ITS ADDRESS SET FORTH
OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY OF THE CREDITORS TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST EACH GUARANTOR IN ANY OTHER
JURISDICTION.
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<PAGE>
(B) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID
ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTY OR
ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (A) ABOVE
AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY
SUCH COURT THAT SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
(C) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO
TRIAL BY JURY IN ANY COURT OR JURISDICTION, INCLUDING WITHOUT LIMITATION THOSE
REFERRED TO IN CLAUSE (A) ABOVE IN RESPECT OF THIS GUARANTY AND THE OTHER CREDIT
DOCUMENTS.
22. In the event that all of the capital stock of one or more
Guarantors is sold or otherwise disposed of or liquidated in compliance with the
requirements of Section 9.02 of the Credit Agreement (or such sale or other
disposition has been approved in writing by the Required Banks (or all Banks if
required by Section 13.12 of the Credit Agreement)) and the proceeds of such
sale, disposition or liquidation are applied in accordance with the provisions
of the Credit Agreement, to the extent applicable, such Guarantor shall be
released from this Guaranty and this Guaranty shall, as to each such Guarantor
or Guarantors, terminate, and have no further force or effect (it being
understood and agreed that the sale of one or more Persons that own, directly or
indirectly, all of the capital stock of any Guarantor shall be deemed to be a
sale of such Guarantor for the purposes of this Section 22).
23. This Guaranty may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Borrower and the Agent.
24. (a) It is the desire and intent of each Guarantor and the
Creditors that this Guaranty shall be enforced against each Guarantor to the
fullest extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. In furtherance of the foregoing, it
is noted that the obligations of each Guarantor have been limited as provided in
Section 1 hereof.
(b) If, however, and to the extent that, the obligations of any
Guarantor under this Guaranty shall be adjudicated to be invalid or
unenforceable for any reason
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<PAGE>
(including, without limitation because of any applicable state or federal law
relating to fraudulent conveyances or transfers), then the amount of the
Guaranteed Obligations of such Guarantor (but not the Guaranteed Obligations of
any other Guarantor unless such other Guarantor or Guarantors are individually
subject to the circumstances covered by this Section 24) shall be deemed to be
reduced and the affected Guarantor shall pay the maximum amount of the
Guaranteed Obligations which would be permissible under applicable law.
25. It is understood and agreed that any Subsidiary of the Borrower
which becomes a Subsidiary after the date hereof shall automatically become a
Guarantor hereunder by executing a counterpart hereof and delivering same to the
Administrative Agent.
26. All payments made by any Guarantor hereunder will be made without
setoff, counterclaim or other defense.
* * *
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<PAGE>
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
Address: WACO MANUFACTURING COMPANY
8144 Walnut Hill Lane
Dallas, Texas 75231-4372 By /s/ Nelson A. Bangs
Attn: Nelson A. Bangs -------------------------------------
Tel: (214) 360-7839 Title: Vice President
Fax: (214) 360-7981
Accepted and Agreed to:
BANKERS TRUST COMPANY,
as Administrative Agent
By /s/ Mary Kay Coyle
-------------------------------------
Title: Vice President
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<PAGE>
SUBSIDIARY
SECURITY AGREEMENT
between
CERTAIN SUBSIDIARIES OF
DR PEPPER/SEVEN-UP CORPORATION
and
BANKERS TRUST COMPANY,
as Collateral Agent
Dated as of December 28, 1993
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I SECURITY INTEREST . . . . . . . . . . . . . . . . . . . 3
1.1. Grant of Security Interests . . . . . . . . . . . . . . . . . 3
1.2. Power of Attorney . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES AND
COVENANTS. . . . . . . . . . . . . . . . . . . . . . . 4
2.1. Necessary Filings . . . . . . . . . . . . . . . . . . . . . . 4
2.2. No Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3. Other Financing Statements. . . . . . . . . . . . . . . . . . 4
2.4. Chief Executive Office; Records . . . . . . . . . . . . . . . 5
2.5. Location of Inventory and Equipment . . . . . . . . . . . . . 5
2.6. Recourse. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.7. Trade Names; Change of Name . . . . . . . . . . . . . . . . . 6
ARTICLE III SPECIAL PROVISIONS CONCERNING RECEIVABLES;
CONTRACT RIGHTS; INSTRUMENTS . . . . . . . . . . . . . 7
3.1. Additional Representations and Warranties . . . . . . . . . . 7
3.2. Maintenance of Records. . . . . . . . . . . . . . . . . . . . 7
3.3. Direction to Account Debtors; Contracting Parties; etc. . . . 8
3.4. Modification of Terms; etc. . . . . . . . . . . . . . . . . . 8
3.5. Collection. . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.6. Instruments . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.7. Further Actions . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE IV SPECIAL PROVISIONS CONCERNING MARKS . . . . . . . . . . 9
4.1. Additional Representations and Warranties . . . . . . . . . . 9
4.2. Licenses and Assignments. . . . . . . . . . . . . . . . . . . 10
4.3. Infringements . . . . . . . . . . . . . . . . . . . . . . . . 10
4.4. Preservation of Marks . . . . . . . . . . . . . . . . . . . . 10
(i)
<PAGE>
Page
----
4.5. Maintenance of Registration . . . . . . . . . . . . . . . . . 10
4.6. Future Registered Marks . . . . . . . . . . . . . . . . . . . 11
4.7. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE V SPECIAL PROVISIONS CONCERNING PATENTS AND
COPYRIGHTS. . . . . . . . . . . . . . . . . . . . . . 12
5.1. Additional Representations and Warranties . . . . . . . . . . 12
5.2. Licenses and Assignments. . . . . . . . . . . . . . . . . . . 12
5.3. Infringements . . . . . . . . . . . . . . . . . . . . . . . . 12
5.4. Maintenance of Patents. . . . . . . . . . . . . . . . . . . . 12
5.5. Prosecution of Patent Application . . . . . . . . . . . . . . 13
5.6. Other Patents and Copyrights. . . . . . . . . . . . . . . . . 13
5.7. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL. . . . . . . . . . 13
6.1. Protection of Collateral Agent's Security . . . . . . . . . . 13
6.2. Warehouse Receipts Non-negotiable . . . . . . . . . . . . . . 14
6.3. Further Actions . . . . . . . . . . . . . . . . . . . . . . . 14
6.4. Financing Statements. . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VII REMEDIES UPON OCCURRENCE OF EVENT OF
DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . 15
7.1. Remedies; Obtaining the Collateral Upon Default . . . . . . . 15
7.2. Remedies; Disposition of the Collateral. . . . . . . . . . . . 16
7.3. Waiver of Claims. . . . . . . . . . . . . . . . . . . . . . . 17
7.4. Application of Proceeds . . . . . . . . . . . . . . . . . . . 18
7.5. Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . 20
7.6. Discontinuance of Proceedings . . . . . . . . . . . . . . . . 21
ARTICLE VIII INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . 21
8.1. Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.2. Indemnity Obligations Secured by Collateral; Survival . . . . 23
ARTICLE IX DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE X THE COLLATERAL AGENT. . . . . . . . . . . . . . . . . . 29
(ii)
<PAGE>
Page
----
10.1. Appointment . . . . . . . . . . . . . . . . . . . . . . 29
10.2. Nature of Duties. . . . . . . . . . . . . . . . . . . . 30
10.3. Lack of Reliance on the Collateral Agent. . . . . . . . 30
10.4. Certain Rights of the Collateral Agent. . . . . . . . . 31
10.5. Reliance. . . . . . . . . . . . . . . . . . . . . . . . 32
10.6. Indemnification . . . . . . . . . . . . . . . . . . . . 32
10.7. The Collateral Agent in its Individual Capacity . . . . 32
10.8. Holders . . . . . . . . . . . . . . . . . . . . . . . . 33
10.9. Resignation by the Collateral Agent . . . . . . . . . . 33
10.10. Fees and Expenses of Collateral Agent . . . . . . . . . 34
ARTICLE XI MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 34
11.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . 34
11.2. Waiver; Amendment . . . . . . . . . . . . . . . . . . . 35
11.3. Obligations Absolute. . . . . . . . . . . . . . . . . . 35
11.4. Successors and Assigns. . . . . . . . . . . . . . . . . 36
11.5. Headings Descriptive. . . . . . . . . . . . . . . . . . 36
11.6. Severability. . . . . . . . . . . . . . . . . . . . . . 36
11.7. Governing Law . . . . . . . . . . . . . . . . . . . . . 36
11.8. Assignors' Duties . . . . . . . . . . . . . . . . . . . 36
11.9. Termination; Release. . . . . . . . . . . . . . . . . . 37
11.10. Counterparts. . . . . . . . . . . . . . . . . . . . . . 38
11.11. Limited Obligations . . . . . . . . . . . . . . . . . . 38
11.12 Additional Assignors. . . . . . . . . . . . . . . . . . 38
ANNEX A Schedule of Permitted Filings
ANNEX B Schedule of Chief Executive Offices and Record Locations
ANNEX C Schedule of Inventory and Equipment Locations
ANNEX D Schedule of Trade, Fictitious and Other Names
ANNEX E Schedule of Marks
ANNEX F Schedule of License Agreements and Assignments
ANNEX G Schedule of Patents and Applications
ANNEX H Schedule of Copyrights and Applications
(iii)
<PAGE>
SUBSIDIARY SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of December 28, 1993 (the "Agreement"),
among each Subsidiary of DR PEPPER/SEVEN-UP CORPORATION, a Delaware corporation
(as successor by merger to Dr Pepper Company and The Seven-Up Company) (the
"Borrower"), whose name appears on the signature pages hereto (each an
"Assignor" and collectively, the "Assignors") and BANKERS TRUST COMPANY, as
Collateral Agent (the "Collateral Agent") for the benefit of (x) the Banks and
the Managing Agents under, and any other lenders from time to time party to, the
Credit Agreement hereinafter referred to (such Banks, the Managing Agents and
other lenders, if any, are hereinafter called the "Bank Creditors") and (y) if
one or more Banks enter into one or more (i) interest rate protection agreements
(including, without limitation, interest rate swaps, caps, floors, collars and
similar agreements), (ii) foreign exchange contracts, currency swap agreements
or other similar agreements or arrangements designed to protect against the
fluctuations in currency values and/or (iii) other types of hedging agreements
from time to time (collectively, the "Interest Rate Protection or Other Hedging
Agreements") with, or guaranteed by, the Borrower or any of its Subsidiaries,
any such Bank or Banks (even if any such Bank subsequently ceases to be a Bank
under the Credit Agreement for any reason) so long as any such Bank participates
in the extension of such Interest Rate Protection or Other Hedging Agreements
and their subsequent assigns, if any (collectively, the "Other Creditors" and,
together with the Bank Creditors, are hereinafter called the "Secured
Creditors"). Except as otherwise defined herein, terms used herein and defined
in the Credit Agreement shall be used herein as so defined.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrower, Dr Pepper/Seven-Up Companies, Inc., the
financial institutions (the "Banks") from time to time party thereto, Bankers
Trust Company, Nationsbank of North Carolina, N.A. and The Chase Manhattan Bank,
N.A., as Managing Agents (together with any successor managing agent, the
"Managing Agents"), the Co-Agents named therein, the Lead Managers named therein
and Bankers Trust Company, as Administrative Agent (together with any successor
administrative agent, the "Administrative Agent"), have entered into a Credit
Agreement, dated as of October 20, 1992, providing for the making of Loans and
the issuance of, and participation in, Letters of Credit as contemplated therein
(as used herein, the term "Credit Agreement" means the Credit Agreement
described above in this paragraph, as the same may be amended, modified,
extended, renewed, replaced, restated or supplemented from time to time, and
including any agreement extending the maturity of, or restructuring (including,
but not limited to, the
<PAGE>
inclusion of additional borrowers thereunder that are Subsidiaries of the
Assignor and whose obligations are guaranteed by the Assignor thereunder or any
increase in the amount borrowed) all or any portion of the Indebtedness under
such agreement or any successor agreements;
WHEREAS, the Borrower and its Subsidiaries may at any time and from
time to time enter into, or guaranty, one or more Interest Rate Protection or
Other Hedging Agreements with one or more Other Creditors;
WHEREAS, each Assignor is a direct or indirect Wholly-Owned Subsidiary
of the Borrower and, as such, will receive benefits from the above-described
extensions of credit;
WHEREAS, each Assignor has entered into a guaranty dated as of the
date hereof (the "Subsidiary Guaranty") pursuant to which each such Assignor has
unconditionally guaranteed any and all obligations and liabilities of the
Borrower under, or with respect to, the Credit Documents and the Interest Rate
Protection or Other Hedging Agreements;
WHEREAS, it is a condition to each of the above-described extensions
of credit that each Assignor shall have executed and delivered this Agreement;
WHEREAS, each Assignor desires to enter into this Agreement in order
the satisfy the condition described in the preceding paragraph;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Assignor, the receipt and sufficiency of which are hereby
acknowledged, each Assignor hereby makes the following representations and
warranties to the Collateral Agent for the benefit of the Secured Creditors and
hereby covenants and agrees with the Collateral Agent for the benefit of the
Secured Creditors as follows:
ARTICLE I
SECURITY INTERESTS
1. 1. GRANT OF SECURITY INTERESTS. (a) As security for the prompt and
complete payment and performance when due of all of the Obligations, each
Assignor does hereby sell, assign and transfer unto the Collateral Agent, and
does hereby grant to the Collateral Agent for the benefit of the Secured
Creditors, a continuing security interest of first priority (subject to Liens
evidenced by Permitted Filings and other Liens permitted under Section
-2-
<PAGE>
9.01 of the Credit Agreement) in, all of the right, title and interest of such
Assignor in, to and under all of the following, whether now existing or
hereafter from time to time acquired: (i) each and every Receivable, (ii) all
Contracts, together with all Contract Rights arising thereunder, (iii) all
Inventory, (iv) the Cash Collateral Account established for such Assignor and
all monies, securities and instruments deposited or required to be deposited in
such Cash Collateral Account, (v) all Equipment, (vi) all Marks, together with
the registrations and right to all renewals thereof, and the goodwill of the
business of such Assignor symbolized by the Marks, (vii) all Patents and
Copyrights, and all reissues, renewals or extensions thereof, (viii) all
computer programs of such Assignor and all intellectual property rights therein
and all other proprietary information of such Assignor, including, but not
limited to, Trade Secrets, (ix) all other Goods, General Intangibles, Chattel
Paper, Documents and Instruments (other than the Pledged Securities), and (x)
all Proceeds and products of any and all of the foregoing (all of the above,
collectively, the "Collateral").
(b) The security interests of the Collateral Agent under this
Agreement extend to all Collateral of the kind which is the subject of this
Agreement which any Assignor may acquire at any time during the continuation of
this Agreement.
1.2. POWER OF ATTORNEY. Each Assignor hereby constitutes and appoints
the Collateral Agent its true and lawful attorney, irrevocably, with full power
after the occurrence of and during the continuance of an Event of Default (in
the name of such Assignor or otherwise), in the Collateral Agent's discretion,
to take any action and to execute any instrument which the Collateral Agent may
reasonably deem necessary or advisable to accomplish the purposes of this
Agreement, which appointment as attorney's is coupled with an interest.
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:
2.1. NECESSARY FILINGS. All filings, registrations and recordings
necessary or appropriate to create, preserve, protect and perfect the security
interest granted by such Assignor to the Collateral Agent hereby in respect of
the Collateral have been or shall have been accomplished and the security
interest granted to the Collateral Agent pursuant to this Agreement in and to
the Collateral constitutes or shall constitute a perfected security interest
therein prior to the rights of all other Persons therein and subject to no other
Liens (except
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<PAGE>
that the Collateral may be subject to the security interests evidenced by the
financing statements disclosed on Annex A hereto, but only to the respective
date, if any, set forth on Annex A (the "Permitted Filings") and to any other
Liens permitted under Section 9.01 of the Credit Agreement) and is or shall be
entitled to all the rights, priorities and benefits afforded by the Uniform
Commercial Code or other relevant law as enacted in any relevant jurisdiction to
perfected security interests.
2.2. NO LIENS. Such Assignor is, and as to Collateral acquired by it
from time to time after the date hereof such Assignor will be, the owner of all
Collateral free from any Lien, security interest, encumbrance or other right,
title or interest of any Person (other than Liens created hereby, Liens
permitted under Section 9.01 of the Credit Agreement or evidenced by the
Permitted Filings), and such Assignor shall defend the Collateral against all
claims and demands of all Persons at any time claiming the same or any interest
therein adverse to the Collateral Agent.
2.3. OTHER FINANCING STATEMENTS. As of the date hereof, there is no
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) on file or of record in any relevant jurisdiction
covering or purporting to cover any interest of any kind in the Collateral
except as disclosed in Annex A hereto and so long as the Total Commitments have
not been terminated or any Letter of Credit or Note remains outstanding or any
of the Obligations remain unpaid or any Interest Rate Protection or Other
Hedging Agreement remains in effect or any obligations are owed with respect
thereto, such Assignor will not execute or authorize to be filed in any public
office any financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) or statements relating to the
Collateral, except financing statements filed or to be filed in respect of and
covering the security interests granted hereby by such Assignor.
2.4. CHIEF EXECUTIVE OFFICE: RECORDS. The chief executive office of
such Assignor is located at the address set forth for each such Assignor on Part
I of Annex B hereto. Such Assignor will not move its chief executive office
except to such new location as such Assignor may establish in accordance with
the last sentence of this Section 2.4. The originals of all documents evidencing
all Receivables and Contract Rights and Trade Secrets of such Assignor and the
only original books of account and records of such Assignor relating thereto
are, and will continue to be, kept at such chief executive office, at such other
locations shown on Part II of Annex B hereto or at such new locations as such
Assignor may establish in accordance with the last sentence of this Section 2.4.
All Receivables and Contract Rights of such Assignor are, and will continue to
be, maintained at, and controlled and directed (including, without limitation,
for general accounting purposes) from, the office locations described above.
Such Assignor shall not establish new locations for such offices until (i) it
shall have given to the Collateral Agent not less than 30 days' prior written
notice of its intention so to do, clearly describing such new location and
providing such other information in connection therewith as the Collateral Agent
may
-4-
<PAGE>
reasonably request, (ii) with respect to such new location, it shall have taken
all action to maintain the security interest of the Collateral Agent in the
Collateral intended to be granted hereby at all times fully perfected and in
full force and effect and (iii) at the request of the Collateral Agent, it shall
have furnished an opinion of counsel acceptable to the Collateral Agent to the
effect that all financing or continuation statements and amendments or
supplements thereto have been filed in the appropriate filing office or offices,
and all other actions (including, without limitation, the payment of all filing
fees and taxes, if any, payable in connection with such filings) have been
taken, in order to perfect (and maintain the perfection and priority of) the
security interest granted hereby.
2.5. LOCATION OF INVENTORY AND EQUIPMENT. All Inventory and Equipment
held on the date hereof by such Assignor is located at one of the locations
shown on Annex C hereto. Such Assignor agrees that all Inventory and all
Equipment now held or subsequently acquired by it shall be kept at (or shall be
in transport to) any one of the locations shown on Annex C hereto, or such new
location as such Assignor may establish in accordance with the last sentence of
this Section 2.5. Such Assignor may establish a new location for Inventory and
Equipment only if (i) it shall have given to the Collateral Agent not less than
30 days' prior written notice of its intention so to do, clearly describing such
new location and providing such other information in connection therewith as the
Collateral Agent may reasonably request, (ii) with respect to such new location,
as promptly as practicable and in no event later than 30 days after the
establishment thereof, it shall have taken all action to maintain the security
interest of the Collateral Agent in the Collateral intended to be granted hereby
at all times fully perfected and in full force and effect and (iii) at the
request of the Collateral Agent, it shall have furnished an opinion of counsel
acceptable to the Collateral Agent to the effect that all financing or
continuation statements and amendments or supplements thereto have been filed in
the appropriate filing office or offices, and all other actions (including.
without limitation, the payment of all filing fees and taxes, if any, payable in
connection with such filings) have been taken, in order to perfect (and maintain
the perfection and priority of) the security interest granted hereby.
2.6. RECOURSE. This Agreement is made with full recourse to such
Assignor and pursuant to and upon all the warranties, representations,
covenants, and agreements on the part of such Assignor contained herein, in the
other Credit Documents, in the Interest Rate Protection or Other Hedging
Agreements and otherwise in writing in connection herewith or therewith.
2.7. TRADE NAMES; CHANGE OF NAME. Such Assignor does not have or
operate in any jurisdiction under, or in the preceding 12 months has not had or
has not operated in any jurisdiction under, any trade names, fictitious names or
other names (including, without limitation, any names of divisions or
operations) except its legal name and such other trade, fictitious or other
names as are listed on Annex D hereto. Such Assignor shall not change its legal
name or assume or operate in any jurisdiction under any trade, fictitious
-5-
<PAGE>
or other name except those names listed on Annex D hereto and new names
(including, without limitation, any names of divisions or operations)
established in accordance with the last sentence of this Section 2.7. Such
Assignor shall not assume or operate in any jurisdiction under any new trade,
fictitious or other name until (i) it shall have given to the Collateral Agent
not less than 30 days' prior written notice of its intention so to do, clearly
describing such new name and the jurisdictions in which such new name shall be
used and providing such other information in connection therewith as the
Collateral Agent may reasonably request, (ii) with respect to such new name, it
shall have taken all action to maintain the security interest of the Collateral
Agent in the Collateral intended to be granted hereby at all times fully
perfected and in full force and effect and (iii) at the request of the
Collateral Agent, it shall have furnished an opinion of counsel acceptable to
the Collateral Agent to the effect that all financing or continuation statements
and amendments or supplements thereto have been filed in the appropriate filing
office or offices, and all other actions (including, without limitation, the
payment of all filing fees and taxes, if any, payable in connection with such
filings) have been taken, in order to perfect (and maintain the perfection and
priority of) the security interest granted hereby.
ARTICLE III
SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS
3.1. ADDITIONAL REPRESENTATIONS AND WARRANTIES. As of the time when
each of its Receivables arises, each Assignor shall be deemed to have
represented and warranted that such Receivable, and all records, papers and
documents relating thereto (if any) are genuine and in all respects what they
purport to be, and that all papers and documents (if any) relating thereto
(i) will represent the genuine, legal, valid and binding obligation of the
account debtor evidencing indebtedness unpaid and owed by the respective account
debtor arising out of the performance of labor or services or the sale or lease
and delivery of the merchandise listed therein, or both, (ii) will be the only
original writings evidencing and embodying such obligation of the account debtor
named therein (other than copies created for general accounting purposes),
(iii) will evidence true and valid obligations, enforceable in accordance with
their respective terms and (iv) will be in compliance and will conform in all
material respects with all applicable federal, state and local laws and
applicable laws of any relevant foreign jurisdiction.
3.2. MAINTENANCE OF RECORDS. Each Assignor will keep and maintain at
its own and expense satisfactory and complete records of its Receivables and
Contracts cost including, but not limited to, the originals of all documentation
(including each Contract) with respect thereto, records of all payments
received, all credits granted thereon, all merchandise returned and all other
dealings therewith, and such Assignor will make the
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<PAGE>
same available on such Assignor's premises to the Collateral Agent for
inspection, at such Assignor's own cost and expense, at any and all reasonable
times upon demand. Upon the occurrence and during the continuance of an Event of
Default and upon the request of the Collateral Agent, each Assignor shall, at
its own cost and expense, deliver all tangible evidence of its Receivables and
Contract Rights (including, without limitation, all documents evidencing the
Receivables and all Contracts) and such books and records to the Collateral
Agent or to its representatives (copies of which evidence and books and records
may be retained by such Assignor). If the Collateral Agent so directs, each
Assignor shall legend, in form and manner reasonably satisfactory to the
Collateral Agent, the Receivables and the Contracts, as well as books, records
and documents of such Assignor evidencing or pertaining to such Receivables and
Contracts with an appropriate reference to the fact that such Receivables and
Contracts have been assigned to the Collateral Agent and that the Collateral
Agent has a security interest therein.
3.3. DIRECTION TO ACCOUNT DEBTORS; CONTRACTING PARTIES; ETC. Upon the
occurrence and during the continuance of an Event of Default, and if the
Collateral Agent so directs any Assignor, such Assignor agrees (x) to cause all
payments on account of the Receivables and Contracts to be made directly to the
Cash Collateral Account established for such Assignor, (y) that the Collateral
Agent may, at its option, directly notify the obligors with respect to any
Receivables and/or under any Contracts to make payments with respect thereto as
provided in preceding clause (x) and (y) that the Collateral Agent may enforce
collection of any such Receivables and Contracts and may adjust, settle or
compromise the amount of payment thereof, in the same manner and to the same
extent that such Assignor might have done. Without notice to or assent by any
Assignor, the Collateral Agent may apply any or all amounts then in, or
thereafter deposited in, the Cash Collateral Account in the manner provided in
Section 7.4 of this Agreement. The costs and expenses (including attorneys'
fees) of collection, whether incurred by such Assignor or the Collateral Agent,
shall be borne by such Assignor.
3.4. MODIFICATION OF TERMS; ETC. No Assignor shall rescind or cancel
any indebtedness evidenced by any' Receivable or under any Contract, or modify
any term thereof or make any adjustment with respect thereto, or extend or renew
the same, or compromise or settle any material dispute, claim, suit or legal
proceeding relating thereto, or sell any Receivable or Contract, or interest
therein, without the prior written consent of the Collateral Agent, except as
permitted by Section 3.5. Each Assignor will duly fulfill all obligations on its
part to be fulfilled under or in connection with the Receivables and Contracts
and will do nothing to impair the rights of the Collateral Agent in the
Receivables or Contracts.
3.5. COLLECTION. Each Assignor shall endeavor to cause to be collected
from the account debtor named in each of its Receivables or obligor under any
Contract, as and when due (including, without limitation, amounts which are
delinquent, such amounts to
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be collected in accordance with generally accepted lawful collection procedures)
any and all amounts owing under or on account of such Receivable or Contract,
and apply forthwith upon receipt thereof all such amounts as are so collected to
the outstanding balance of such Receivable or under such Contract, except that,
prior to the occurrence of an Event of Default, each Assignor may allow in the
ordinary course of business as adjustments to amounts owing under its
Receivables and Contracts (i) an extension or renewal of the time or times of
payment, or settlement for less than the total unpaid balance, which such
Assignor finds appropriate in accordance with sound business judgment and (ii) a
refund or credit due as a result of returned or damaged merchandise or
improperly performed services. The costs and expenses (including, without
limitation, attorneys' fees) of collection, whether incurred by such Assignor or
the Collateral Agent, shall be borne by such Assignor.
3.6. INSTRUMENTS. If an Assignor owns or acquires any Instrument
constituting Collateral, such Assignor will within ten days notify the
Collateral Agent thereof, and upon request by the Collateral Agent will promptly
deliver such Instrument to the Collateral Agent appropriately endorsed to the
order of the Collateral Agent as further security hereunder.
3.7. FURTHER ACTIONS. Each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such further
steps relating to its Receivables, Contracts, Instruments and other property or
rights covered by the security interest hereby granted, as the Collateral Agent
may reasonably require.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING MARKS
4.1. ADDITIONAL REPRESENTATIONS AND WARRANTIES. Each Assignor
represents and warrants that it is the true and lawful exclusive owner of the
Marks listed in Annex E hereto and that said listed Marks include all the United
States federal registrations or applications registered in the United States
Patent and Trademark Office and elsewhere throughout the world that such
Assignor now owns in connection with its business worldwide. Each Assignor
represents and warrants that it owns or is licensed to use all Marks that it
uses. Each Assignor further warrants that it is aware of no third party claim
that any aspect of such Assignor's present or contemplated business operations
infringes or will infringe any Mark. Each Assignor represents and warrants that
it is the owner of record of all United States and foreign trademark
registrations and applications listed in Annex E
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hereto and that said registrations are valid, subsisting. have not been canceled
and that such Assignor is not aware of any third-party claim that any of said
registrations is invalid or unenforceable. Each Assignor hereby grants to the
Collateral Agent an absolute power of attorney to sign, upon the occurrence and
during the continuance of an Event of Default, any document which may be
required by the United States Patent and Trademark Office or any equivalent
foreign government agency or office world-wide in order to effect an absolute
assignment of all right, title and interest in each Mark and associated
goodwill, and record the same.
4.2. LICENSES AND ASSIGNMENTS. Other than the license agreements
listed on Annex F hereto and any extensions or renewals thereof, each Assignor
hereby agrees not to divest itself of any right under any Mark absent prior
written approval of the Collateral Agent.
4.3. INFRINGEMENTS. Each Assignor agrees, promptly upon learning
thereof, to notify the Collateral Agent in writing of the name and address of,
and to furnish such pertinent information that may be available with respect to,
any party who, in any material respect, may be infringing or otherwise violating
any of such Assignor's rights in and to any Significant Mark, or with respect to
any party claiming that such Assignor's use of any Significant Mark violates in
any material respect any property right of that party. Each Assignor further
agrees, unless otherwise agreed by the Collateral Agent, diligently to prosecute
any Person infringing, in any material respect, any Significant Mark.
4.4. PRESERVATION OF MARKS. Each Assignor agrees to use its
Significant Marks in interstate or foreign commerce during the time in which
this Agreement is in effect, sufficiently to preserve such Marks as trademarks
or service marks registered under the laws of the United States.
4.5. MAINTENANCE OF REGISTRATION. Each Assignor shall, at its own
expense, diligently process all documents required by the Trademark Act of 1946,
15 U.S.C. Sections 1051 ET SEQ. to maintain trademark registration, including
but not limited to affidavits of use and applications for renewals of
registration in the United States Patent and Trademark Office for all of its
Significant Marks pursuant to 15 U.S.C. Sections 1058(a), 1059 and 1065, and
shall pay all fees and disbursements in connection therewith and shall not
abandon any such filing of affidavit of use or any such application of renewal
prior to the exhaustion of all administrative and judicial remedies without
prior written consent of the Collateral Agent. Each Assignor agrees to notify
the Collateral Agent (i) eight (8) months prior to the dates on which the
affidavits of use or the applications for renewal registration are due with
respect to any Significant Mark of the date that such affidavits of use or
renewal registrations are due, and (ii) thirty days prior to such date that any
such affidavit of use or renewal registration is due, that such affidavits of
use or the renewal is being processed or that such Mark will be abandoned.
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4.6. FUTURE REGISTERED MARKS. If any Mark registration issues
hereafter to any Assignor as a result of any application now or hereafter
pending before the United States Patent and Trademark Office, or any equivalent
foreign government agency or office elsewhere in the world within thirty (30)
days of receipt of such certificate such Assignor shall deliver a copy of such
certificate, and a grant of security in such mark to the Collateral Agent,
confirming the grant thereof hereunder, the form of such confirmatory grant to
be substantially the same as the form hereof.
4.7. REMEDIES. If an Event of Default shall occur and be continuing,
the Collateral Agent may, by written notice to the applicable Assignor, take any
or all of the following actions: (i) declare the entire right, title and
interest such the Assignor in and to each of the Marks, together with all
trademark rights and rights of protection to the same, vested, in which event
such rights, title and interest shall immediately vest, in the Collateral Agent
for the benefit of the Secured Creditors, in which case the Collateral Agent
shall be entitled to exercise the power of attorney referred to in Section 4.1
to execute, cause to be acknowledged and notarized and record said absolute
assignment with the applicable agency; (ii) take and use or sell the Marks and
the goodwill of such Assignor's business symbolized by the Marks and the right
to carry on the business and use the assets of such Assignor in connection with
which the Marks have been used; and (iii) direct such Assignor to refrain, in
which event such Assignor shall refrain, from using the Marks in any manner
whatsoever, directly or indirectly, and, if requested by the Collateral Agent,
change such Assignor's corporate name to eliminate therefrom any use of any Mark
and execute such other and further documents that the Collateral Agent may
request to further confirm this and to transfer ownership of the Marks and
registrations and any pending trademark application in the United States Patent
and Trademark Office or any equivalent government agency or office in any
foreign jurisdiction to the Collateral Agent. By its execution of this
Agreement, each Assignor hereby agrees that if an Event of Default shall occur
and be continuing and at the Collateral Agent's written request, that it will
refrain from using the Marks in any manner whatsoever, directly or indirectly,
and, if requested by the Collateral Agent, it will change its corporate name to
eliminate therefrom any use of any Mark and execute such other and further
documents that the Collateral Agent may request to further confirm this.
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS AND COPYRIGHTS
5.1. ADDITIONAL REPRESENTATIONS AND WARRANTIES. Each Assignor
represents and warrants that it is the true and lawful exclusive owner of all
rights in the Patents listed in Annex G hereto and in the Copyrights listed in
Annex H hereto, that said Patents include
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all the United States patents and applications for United States patents that
such Assignor now owns and that said Copyrights constitute all the United States
copyrights registered with the United States Copyright Office and applications
for United States copyrights that such Assignor now owns. Each Assignor
represents and warrants that it owns or is licensed to practice under all
Patents and Copyrights that it now uses or practices under. Each Assignor
further warrants that it is aware of no third party claim that any aspect of
such Assignor's present or contemplated business operations infringes or will
infringe any patent or any copyright. Each Assignor hereby grants to the
Collateral Agent an absolute power of attorney to sign, upon the occurrence and
during the continuance of any Event of Default, any document which may be
required by the United States Patent and Trademark Office or the United States
Copyright Office in order to effect an absolute assignment of all right, title
and interest in each Patent and Copyright, and record the same.
5.2. LICENSES AND ASSIGNMENTS. Other than the license agreements
listed on Annex F hereto and any extensions or renewals thereof, each Assignor
hereby agrees not to divest itself of any right under any Patent or Copyright
absent prior written approval of the Collateral Agent.
5.3. INFRINGEMENTS. Each Assignor agrees, promptly upon learning
thereof, to furnish the Collateral Agent in writing with all pertinent
information available to such Assignor with respect to any material
infringement or other material violation of such Assignor's rights in any
significant Patent or Copyright, or with respect to any claim that practice of
any significant Patent or Copyright materially violates any property right of
that party. Each Assignor further agrees, absent direction of the Collateral
Agent to the contrary, diligently to prosecute any Person infringing, in any
material respect, any significant Patent or Copyright.
5.4. MAINTENANCE OF PATENTS. At its own expense, each Assignor shall
make timely payment of all post-issuance fees required pursuant to 35 U.S.C.
Section 41 to maintain in force rights under each Patent.
5.5. PROSECUTION OF PATENT APPLICATION. At its own expense, each
Assignor shall diligently prosecute all applications for United States patents
listed in Annex G hereto and shall not abandon any such application prior to
exhaustion of all administrative and judicial remedies, absent written consent
of the Collateral Agent.
5.6. OTHER PATENTS AND COPYRIGHTS. Within 30 days of acquisition of a
United States Patent or Copyright, or of filing of an application for a United
States Patent or Copyright, the respective Assignor shall deliver to the
Collateral Agent a copy of said Patent or Copyright or such application, as the
case may be, with a grant of security as to such Patent or Copyright, as the
case may be, confirming the grant thereof hereunder, the form of such
confirmatory grant to be substantially the same as the form hereof.
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5.7. REMEDIES. If an Event of Default shall occur and be continuing,
the Collateral Agent may by written notice to the applicable Assignor, take any
or all of the following actions: (i) declare the entire right, title, and
interest of such Assignor in each of the Patents and Copyrights vested, in which
event such right, title, and interest shall immediately vest in the Collateral
Agent for the benefit of the Secured Creditors, in which case the Collateral
Agent shall be entitled to exercise the power of attorney referred to in Section
5.1 to execute, cause to be acknowledged and notarized and record said absolute
assignment with the applicable agency; (ii) take and practice or sell the
Patents and Copyrights; and (iii) direct such Assignor to refrain, in which
event such Assignor shall refrain, from practicing the Patents and Copyrights
directly or indirectly, and such Assignor shall execute such other and further
documents as the Collateral Agent may request further to confirm this and to
transfer ownership of the Patents and Copyrights to the Collateral Agent for the
benefit of the Secured Creditors.
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1. PROTECTION OF COLLATERAL AGENT'S SECURITY. Each Assignor will do
nothing to impair the rights of the Collateral Agent in the Collateral. Each
Assignor will at all times keep its Inventory and Equipment insured in favor of
the Collateral Agent, at such Assignor's own expense to the extent and in the
manner provided in the Credit Agreement; all policies or certificates (or
certified copies thereof) with respect to such insurance (and any other
insurance maintained by such Assignor) (i) shall be endorsed to the Collateral
Agent's satisfaction for the benefit of the Collateral Agent (including, without
limitation, by naming the Collateral Agent as loss payee), (ii) shall state that
such insurance policies shall not be canceled or revised without 30 days' prior
written notice thereof by the insurer to the Collateral Agent, (iii) shall
provide that the respective insurers irrevocably waive any and all rights of
subrogation with respect to the Collateral Agent and the Secured Creditors and
(iv) shall be deposited with the Collateral Agent. If an Assignor shall fail to
insure its Inventory and Equipment in accordance with the preceding sentence, or
if an Assignor shall fail to so endorse and deposit all policies or certificates
with respect thereto, the Collateral Agent shall have the right (but shall be
under no obligation) to procure such insurance and such Assignor agrees to
reimburse the Collateral Agent for all costs and expenses of procuring such
insurance. The Collateral Agent may apply any proceeds of such insurance in
accordance with Section 7.4. Each Assignor assumes all liability and
responsibility in connection with the Collateral acquired by it and the
liability of such Assignor to pay the Obligations shall in no way be affected or
diminished by reason of the fact that such Collateral may be lost, destroyed,
stolen, damaged or for any reason whatsoever unavailable to such Assignor.
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6.2. WAREHOUSE RECEIPTS NON-NEGOTIABLE. Each Assignor agrees that if
any warehouse receipt or receipt in the nature of a warehouse receipt is issued
with respect to any of its Inventory, such warehouse receipt or receipt in the
nature thereof shall not be "negotiable" (as such term is used in Section 7-104
of the Uniform Commercial Code as in effect in any relevant jurisdiction or
under other relevant law).
6.3. FURTHER ACTIONS. Each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such lists, descriptions and designations of its Collateral,
warehouse receipts, receipts in the nature of warehouse receipts, bills of
lading, documents of title, vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments and take
such further steps relating to the Collateral and other property or rights
covered by the security interest hereby granted, which the Collateral Agent
deems reasonably appropriate or advisable to perfect, preserve or protect its
security interest in the Collateral.
6.4. FINANCING STATEMENTS. Each Assignor agrees to execute and deliver
to the Collateral Agent such financing statements, in form acceptable to the
Collateral Agent, as the Collateral Agent may from time to time request or as
are necessary or desirable in the opinion of the Collateral Agent to establish
and maintain a valid, enforceable, first priority perfected security interest in
the Collateral as provided herein and the other rights and security contemplated
hereby all in accordance with the Uniform Commercial Code as enacted in any and
all relevant jurisdictions or any other relevant law. Each Assignor will pay any
applicable filing fees, recordation taxes and related expenses. Each Assignor
authorizes the Collateral Agent to file any such financing statements without
the signature of such Assignor where permitted by lab.
ARTICLE VII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
7.1. REMEDIES; OBTAINING THE COLLATERAL UPON DEFAULT. Each Assignor
agrees that, if any Event of Default shall have occurred and be continuing, then
and in every such case, subject to any mandatory requirements of applicable law
then in effect, the Collateral Agent, in addition to any rights now or hereafter
existing under applicable law, shall have all rights as a secured creditor under
the Uniform Commercial Code in all relevant jurisdictions and may also:
(a) personally, or by agents or attorneys, immediately retake
possession of the Collateral or any part thereof, from such Assignor or any
other Person who then has possession of any part thereof with or without
notice or process of law, and for that
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purpose may enter upon such Assignor's premises where any of the Collateral
is located and remove the same and use in connection with such removal any
and all services, supplies, aids and other facilities of such Assignor; and
(b) instruct the obligor or obligors on any agreement, instrument or
other obligation (including, without limitation, the Receivables and the
Contracts) constituting the Collateral to make any payment required by the
terms of such agreement, instrument or other obligation directly to the
Collateral Agent and may exercise any and all remedies of such Assignor in
respect of such Collateral; and
(c) withdraw all monies, securities and instruments in the Cash
Collateral Account for application to the Obligations in accordance with
Section 7.4; and
(d) sell, assign or otherwise liquidate, or direct such Assignor to
sell, assign or otherwise liquidate, any or all of the Collateral or any
part thereof, and take possession of the proceeds of any such sale or
liquidation; and
(e) take possession of the Collateral or any part thereof, by
directing such Assignor in writing to deliver the same to the Collateral
Agent at any place or places designated by the Collateral Agent, in which
event such Assignor shall at its own expense:
(i) forthwith cause the same to be moved to the place or
places so designated by the Collateral Agent and there delivered
to the Collateral Agent, and
(ii) store and keep any Collateral so delivered to the
Collateral Agent at such place or places pending further action
by the Collateral Agent as provided in Section 7.2, and
(iii) while the Collateral shall be so stored and kept,
provide such guards and maintenance services as shall be
necessary to protect the same and to preserve and maintain them
in good condition; and
(f) license or sublicense, whether on an exclusive or nonexclusive
basis, any Marks, Patents or Copyrights included in the Collateral for such
term and on such conditions and in such manner as the Collateral Agent
shall in its sole judgment determine;
it being understood that such Assignor's obligation so to deliver the
Collateral is of the essence of this Agreement and that, accordingly, upon
application to a court of equity
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having jurisdiction, the Collateral Agent shall be entitled to a decree
requiring specific performance by such Assignor of said obligation.
7.2. REMEDIES: DISPOSITION OF THE COLLATERAL. Any Collateral
repossessed by the Collateral Agent under or pursuant to Section 7.1 and any
other Collateral whether or not so repossessed by the Collateral Agent, may be
sold, assigned, leased or otherwise disposed of under one or more contracts or
as an entirety, and without the necessity of gathering at the place of sale the
property to be sold, and in general in such manner, at such time or times, at
such place or places and on such terms as the Collateral Agent may, in
compliance with any mandatory requirements of applicable law, determine to be
commercially reasonable. Any of the Collateral may be sold, leased or otherwise
disposed of, in the condition in which the same existed when taken by the
Collateral Agent or after any overhaul or repair which the Collateral Agent
shall determine to be commercially reasonable. Any such disposition which shall
be a private sale or other private proceedings permitted by such requirements
shall be made upon not less than 10 days' written notice to the relevant
Assignor specifying the time at which such disposition is to be made and the
intended sale price or other consideration therefor, and shall be subject, for
the 10 days after the giving of such notice, to the right of such Assignor or
any nominee of such Assignor to acquire the Collateral involved at a price or
for such other consideration at least equal to the intended sale price or other
consideration so specified. Any such disposition which shall be a public sale
permitted by such requirements shall be made upon not less than 10 days' written
notice to the relevant Assignor specifying the time and place of such sale and,
in the absence of applicable requirements of law, shall be by public auction
(which may, at the Collateral Agent's option, be subject to reserve), after
publication of notice of such auction not less than 10 days prior thereto in
two newspapers in general circulation in the City of New York. To the extent
permitted by any such requirement of law, the Collateral Agent and the Secured
Creditors may bid for and become the purchaser of the Collateral or any item
thereof, offered for sale in accordance with this Section without accountability
to any Assignor. If, under mandatory requirements of applicable law, the
Collateral Agent shall be required to make disposition of the Collateral within
a period of time which does not permit the giving of notice to any Assignor as
hereinabove specified, the Collateral Agent need give such Assignor only such
notice of disposition as shall be reasonably practicable in view of such
mandatory requirements of applicable law. Each Assignor agrees to do or cause to
be done all such other acts and things as may be reasonably necessary to make
such sale or sales of all or any portion of the Collateral valid and binding and
in compliance with any and all applicable laws, regulations, orders, writs,
injunctions, decrees or awards of any and all courts, arbitrators or
governmental instrumentalities, domestic or foreign, having jurisdiction over
any such sale or sales, all at such Assignor's expense.
7.3. WAIVER OF CLAIMS. Except as otherwise provided in this
Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY
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APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL
AGENT'S TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH SUCH ASSIGNOR
WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES
OR OF ANY STATE, and each Assignor hereby further waives, to the extent
permitted by law:
(a) all damages occasioned by such taking of possession except any
damages which are the direct result of the Collateral Agent's gross negligence
or willful misconduct;
(b) all other requirements as to the time, place and terms of sale or
other requirements with respect to the enforcement of the Collateral Agent's
rights hereunder; and
(c) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable law in
order to prevent or delay the enforcement of this Agreement or the absolute sale
of the Collateral or any portion thereof, and each Assignor, for itself and all
who may claim under it, insofar as it or they now or hereafter lawfully may,
hereby waives the benefit of all such laws.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of any Assignor therein and thereto, and
shall be a perpetual bar both at law and in equity against such Assignor and
against any and all Persons claiming or attempting to claim the Collateral so
sold, optioned or realized upon, or any part thereof, from, through and under
such Assignor.
7.4. APPLICATION OF PROCEEDS. (a) All moneys collected by the
Collateral Agent (or, to the extent the Subsidiary Pledge Agreement or any
Mortgage to which any Assignor is a party requires proceeds of Collateral under
such agreement to be applied in accordance with the provisions of this
Agreement, the Pledgee or Mortgagee under such other agreement) upon any sale or
other disposition of the Collateral, together with all other moneys received by
the Collateral Agent hereunder, shall be applied as follows:
(i) first, to the payment of all amounts owing the
Collateral Agent (or any other Indemnitee, in the case of clause (v) referenced
below) of the type described in clauses (iii), (iv) and (v) of the definition of
"Obligations";
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(ii) second, to the extent proceeds remain after the application
pursuant to the preceding clause (i), an amount equal to the
outstanding Primary Obligations shall be paid to the Secured Creditors
as provided in Section 7.4(e), with each Secured Creditor receiving an
amount equal to such outstanding Primary Obligations or, if the
proceeds are insufficient to pay in full all such Primary Obligations,
its Pro Rata Share of the amount remaining to be distributed;
(iii) third, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) and (ii), an amount equal to the
outstanding Secondary Obligations shall be paid to the Secured
Creditors as provided in Section 7.4(e), with each Secured Creditor
receiving an amount equal to its outstanding Secondary Obligations or,
if the proceeds are insufficient to pay in full all such Secondary
Obligations, its Pro Rata Share of the amount remaining to be
distributed; and
(iv) fourth, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) through (iii), inclusive, and
following the termination of this Agreement pursuant to Section
11.9(a) hereof, to the respective Assignor or to whomever may be
lawfully entitled to receive such surplus.
(b) For purposes of this Agreement (x) "Pro Rata Share" shall mean,
when calculating a Secured Creditor's portion of any distribution or amount,
that amount (expressed as a percentage) equal to a fraction the numerator of
which is the then unpaid amount of such Secured Creditor's Primary Obligations
or Secondary Obligations, as the case may be, and the denominator of which is
the then outstanding amount of all Primary Obligations or Secondary Obligations,
as the case may be, (y) "Primary Obligations" shall mean (i) in the case of the
Credit Agreement Obligations, all principal of, and interest on, all Loans, all
Unpaid Drawings theretofore made (together with all interest accrued thereon),
and the aggregate Stated Amounts of all Letters of Credit issued (or deemed
issued) under the Credit Agreement, and all Fees and (ii) in the case of the
Other Obligations, all amounts due under the Interest Rate Protection or Other
Hedging Agreements (other than indemnities, fees (including, without limitation,
attorneys' fees) and similar obligations and liabilities) and (z) "Secondary
Obligations" shall mean all Obligations other than Primary Obligations.
(c) When payments to Secured Creditors are based upon their respective
Pro Rata Shares, the amounts received by such Secured Creditors hereunder shall
be applied (for purposes of making determinations under this Section 7.4 only)
(i) first, to their Primary Obligations and (ii) second, to their Secondary
Obligations.
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(d) Each of the Secured Creditors agrees and acknowledges that if the
Bank Creditors are to receive a distribution on account of undrawn amounts with
respect to Letters of Credit issued (or deemed issued) under the Credit
Agreement (which shall only occur after all outstanding Loans and Unpaid
Drawings with respect to such Letters of Credit have been paid in full), such
amounts shall be paid to the Administrative Agent under the Credit Agreement and
held by it, for the equal and ratable benefit of the Bank Creditors, as cash
security for the repayment of Obligations owing to the Bank Creditors as such.
If any amounts are held as cash security pursuant to the immediately preceding
sentence, then upon the termination of all outstanding Letters of Credit, and
after the application of all such cash security to the repayment of all
Obligations owing to the Bank Creditors after giving effect to the termination
of all such Letters of Credit, if there remains any excess cash, such excess
cash shall be returned by the Administrative Agent to the Collateral Agent for
distribution in accordance with Section 7.4(a) hereof.
(e) Except as set forth in Section 7.4(d), all payments required to be
made hereunder shall be made (y) if to the Bank Creditors, to the Administrative
Agent under the Credit Agreement for the account of the Bank Creditors, and (z)
if to the Other Creditors, to the trustee, paying agent or other similar
representative (each a "Representative") for the Other Creditors or, in the
absence of such a Representative, directly to the Other Creditors.
(f) For purposes of applying payments received in accordance with this
Section 7.4, the Collateral Agent shall be entitled to rely upon (i) the
Administrative Agent under the Credit Agreement and (ii) the Representative for
the Other Creditors or, in the absence of such a Representative, upon the Other
Creditors for a determination (which the Administrative Agent, each
Representative for any Secured Creditors and the Secured Creditors agree (or
shall agree) to provide upon request of the Collateral Agent) of the outstanding
Primary Obligations and Secondary Obligations owed to the Bank Creditors or the
Other Creditors, as the case may be. Unless it has actual knowledge (including
by way of written notice from a Bank Creditor or an Other Creditor) to the
contrary, each Representative, in furnishing information pursuant to the
preceding sentence, and the Collateral Agent, in acting hereunder, shall be
entitled to assume that no Secondary Obligations are outstanding. Unless it has
actual knowledge (including by way of written notice from an Other Creditor) to
the contrary, the Collateral Agent, in acting hereunder, shall be entitled to
assume that no Interest Rate Protection or Other Hedging Agreements are in
existence.
(g) It is understood and agreed that each Assignor shall remain liable
to the extent of any deficiency between the amount of the proceeds of the
Collateral hereunder and the aggregate amount of the sums referred to in clauses
(i) through (iii), inclusive, of Section 7.4(a).
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7.5. REMEDIES CUMULATIVE. Each and every right, power and remedy hereby
specifically given to the Collateral Agent shall be in addition to every other
right, power and remedy specifically given under this Agreement, the Interest
Rate Protection or Other Hedging Agreements, the other Credit Documents or now
or hereafter existing at law or in equity, or by statute and each and every
right, power and remedy whether specifically herein given or otherwise existing
may be exercised from time to time or simultaneously and as often and in such
order as may be deemed expedient by the Collateral Agent. All such rights,
powers and remedies shall be cumulative and the exercise or the beginning of
exercise of one shall not be deemed a waiver of the right to exercise of any
other or others. No delay or omission of the Collateral Agent in the exercise of
any such right, power or remedy, renewal or extension of any of the Obligations
and no course of dealing between each Assignor and the Collateral Agent or any
holder of any of the Obligations shall impair any such right, power or remedy or
shall be construed to be a waiver of any Default or Event of Default or an
acquiescence therein. No notice to or demand on any Assignor in any case shall
entitle it to any other or further notice or demand in similar or other
circumstances or constitute a waiver of any of the rights of the Collateral
Agent to any other or further action in any circumstances without notice or
demand. In the event that the Collateral Agent shall bring any suit to enforce
any of its rights hereunder and shall be entitled to judgment, then in such suit
the Collateral Agent may recover reasonable expenses, including attorneys'
fees, and the amounts thereof shall be included in such judgment.
7.6. DISCONTINUANCE OF PROCEEDINGS. In case the Collateral Agent shall
have instituted any proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall
have been discontinued or abandoned for any reason or shall have been
determined adversely to the Collateral Agent, then and in every such case the
relevant Assignor, the Collateral Agent and each holder of any of the
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral subject to the security interest created under
this Agreement, and all rights, remedies and powers of the Collateral Agent
shall continue as if no such proceeding had been instituted.
ARTICLE VIII
INDEMNITY
8.1. INDEMNITY. (a) Each Assignor hereby jointly and severally agrees to
indemnify, reimburse and hold the Collateral Agent, each Secured Creditor and
their respective successors, assigns, employees, agents and servants
(hereinafter in this Section 8.1 referred to individually as "Indemnitee," and
collectively as "Indemnities") harmless from any and all liabilities,
obligations, damages, injuries, penalties, claims, demands,
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actions, suits, judgments and any and all costs, expenses or disbursements
(including reasonable attorneys' fees and expenses) (for the purposes of this
Section 8.1 the foregoing are collectively called "expenses") of whatsoever kind
and nature imposed on, asserted against or incurred by any of the Indemnities in
any way relating to or arising out of this Agreement, any Interest Rate
Protection or Other Hedging Agreement, any other Credit Document or any other
document executed in connection herewith and therewith or in any other way
connected with the administration of the transactions contemplated hereby and
thereby or the enforcement of any of the terms of, or the preservation of any
rights under any thereof, or in any way relating to or arising out of the
manufacture, ownership, ordering, purchase, delivery, control, acceptance,
lease, financing, possession, operation, condition, sale, return or other
disposition, or use of the Collateral (including, without limitation, latent or
other defects, whether or not discoverable), any contract claim or, to the
maximum extent permitted under applicable law, the violation of the laws of any
country, state or other governmental body or unit, or any tort (including,
without limitation, claims arising or imposed under the doctrine of strict
liability, or for or on account of injury to or the death of any Person
(including any Indemnitee), or property damage); provided that no Indemnitee
shall be indemnified pursuant to this Section 8.1(a) for expenses to the extent
caused by the gross negligence or willful misconduct of such Indemnitee. Each
Assignor agrees that upon written notice by any Indemnitee of the assertion of
such a liability, obligation, damage, injury, penalty, claim, demand, action,
suit or judgment, such Assignor shall assume full responsibility for the defense
thereof. Each Indemnitee agrees to use its best efforts to promptly notify such
Assignor of any such assertion of which such Indemnitee has knowledge.
(b) Without limiting the application of Section 8.1(a), each Assignor
hereby jointly and severally agrees to pay, or reimburse the Collateral Agent
for any and all fees, costs and expenses of whatever kind or nature incurred in
connection with the creation, preservation or protection of the Collateral
Agent's Liens on, and security interest in, the Collateral, including, without
limitation, all fees and taxes in connection with the recording or filing of
instruments and documents in public offices, payment or discharge of any taxes
or Liens upon or in respect of the Collateral, premiums for insurance with
respect to the Collateral and all other fees, costs and expenses in connection
with protecting, maintaining or preserving the Collateral and the Collateral
Agent's interest therein, whether through judicial proceedings or otherwise, or
in defending or prosecuting any actions, suits or proceedings arising out of or
relating to the Collateral.
(c) Without limiting the application of Section 8.1(a) or (b), each
Assignor hereby jointly and severally agrees to pay, indemnify and hold each
Indemnitee harmless from and against any loss, costs, damages and expenses which
such Indemnitee may suffer, expend or incur in consequence of or growing out of
any misrepresentation by any Assignor in this Agreement, any Interest Rate
Projection or Other Hedging Agreement, any other Credit Document or in any
writing contemplated by or made or delivered pursuant to or
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in connection with this Agreement, any Interest Rate Protection or Other Hedging
Agreement or any other Credit Document.
(d) If and to the extent that the obligations of any Assignor under this
Section 8.1 are unenforceable for any reason, such Assignor hereby agrees to
make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
8.2. INDEMNITY OBLIGATIONS SECURED BY COLLATERAL; SURVIVAL. Any amounts
paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all the
Notes issued under the Credit Agreement, the termination of all Interest Rate
Protection or Other Hedging Agreements and the payment of all other Obligations
and notwithstanding the discharge thereof.
ARTICLE IX
DEFINITIONS
The following terms shall have the meanings herein specified. Such
definitions shall be equally applicable to the singular and plural forms of the
terms defined.
"Administrative Agent" shall have the meaning provided in the first WHEREAS
clause of this Agreement.
"Agreement" shall mean this Security Agreement as the same may be
modified, supplemented or amended from time to time in accordance with its
terms.
"Assignor" shall have the meaning provided in the first paragraph of this
Agreement.
"Bank Creditor" shall have the meaning provided in the first paragraph of
this Agreement.
"Banks" shall have the meaning provided in the first WHEREAS clause of this
Agreement.
"Cash Collateral Account" shall mean a non-interest bearing cash collateral
account maintained with the Collateral Agent for the benefit of the Secured
Creditors.
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"Chattel Paper" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Class" shall have the meaning provided in Section 11.2.
"Collateral" shall have the meaning provided in Section 1.1(a) of this
Agreement.
"Collateral Agent" shall have the meaning provided in the first
paragraph of this Agreement.
"Contract Rights" shall mean all rights of any Assignor (including,
without limitation, all rights to payment) under each Contract.
"Contracts" shall mean all contracts between any Assignor and one or
more additional parties (including, without limitation, (i) each partnership
agreement to which such Assignor is a party and (ii) any Interest Rate
Protection or Other Hedging Agreements).
"Copyrights" shall mean any United States copyright which any Assignor
now or hereafter has registered with the United States Copyright Office, as well
as any application for a United States copyright registration now or hereafter
made with the United States Copyright Office by any Assignor.
"Credit Agreement" shall have the meaning provided in the first
WHEREAS clause of this Agreement.
"Credit Agreement Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.
"Default" shall mean any event which, with notice or lapse of time, or
both, would constitute an Event of Default.
"Documents" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.
"Equipment" shall mean any "equipment," as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event, shall include,
but shall not be limited to, all machinery, equipment, furnishings, movable
trade fixtures and vehicles now or hereafter owned by any Assignor and any and
all additions, substitutions and replacements of any of the foregoing, wherever
located, together with all attachments, components, parts, equipment and
accessories installed thereon or affixed thereto.
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"Event of Default" shall mean any Event of Default under, and as
defined in, the Credit Agreement and shall in any event, without limitation,
include any payment default on any of the Obligations after the expiration of
any applicable grace period.
"General Intangibles" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York and
shall in any event include all of any Assignor's claims, rights, powers,
privileges, authority, options, security interests, liens and remedies under any
partnership agreement to which any Assignor is a party or with respect to any
partnership of which any Assignor is a partner.
"Goods" shall have the meaning provided in the Uniform Commercial Code
as in effect on the date hereof in the State of New York.
"Indemnitee" shall have the meaning provided in Section 8.1 of this
Agreement.
"Instrument" shall have the meaning provided in Article 9 of the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Interest Rate Protection or Other Hedging Agreements" shall have the
meaning provided in the first paragraph of this Agreement.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof, wherever located, together
with all goods, supplies, incidentals, packaging materials, labels, materials
and any other items used or usable in manufacturing, processing. packaging or
shipping same; in all stages of production-- from raw materials through
work-in-process to finished goods -- and all products and proceeds of whatever
sort and wherever located and any portion thereof which may be returned,
rejected, reclaimed or repossessed by the Collateral Agent from any Assignor's
customers, and shall specifically include all "inventory" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York, now or hereafter owned by any Assignor.
"Managing Agents" shall have the meaning provided in the first WHEREAS
clause of this Agreement.
"Marks" shall mean any trademarks and service marks now held or
hereafter acquired by any Assignor, which are registered in the United States
Patent and Trademark Office or in any similar office or agency of the United
States or any foreign country, any state thereof or any political subdivision
thereof and any application for such trademarks and service marks, as well as
any unregistered marks used by any Assignor in the United States and elsewhere
and trade dress including logos, designs, trade names, company names, business
names, fictitious business names and other business identifiers in
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connection with which any of these registered or unregistered marks are used in
the United States or in any foreign country.
"Obligations" shall mean with respect to each Assignor: (i) (x) the
principal of and interest on the Notes issued, and Loans made, under the Credit
Agreement, and all reimbursement obligations and Unpaid Drawings with respect to
the Letters of Credit under the Credit Agreement and (y) all other obligations
and indebtedness (including, without limitation, indemnities, Fees and interest
thereon) of the Borrower or such Assignor to the Bank Creditors now existing or
hereafter incurred under, arising out of or in connection with the Credit
Agreement, the Subsidiary Guaranty (except to the extent guaranteeing
obligations pursuant to Interest Rate Protection or Other Hedging Agreements)
and the other Credit Documents, and the due performance and compliance by the
Borrower or such Assignor with all of the terms, conditions and agreements
contained in the Credit Agreement, the Subsidiary Guaranty (except to the extent
guaranteeing obligations pursuant to Interest Rate Protection or Other Hedging
Agreements) and the other Credit Documents (all such principal, interest,
obligations and liabilities being herein collectively called the "Credit
Agreement Obligations"); (ii) all obligations and liabilities owing by the
Borrower or such Assignor to the Other Creditors under, or with respect to, any
Interest Rate Protection or Other Hedging Agreement (including, without
limitation any guarantees therefor by such Assignor pursuant to the Subsidiary
Guaranty), whether such Interest Rate Protection or Other Hedging Agreement is
now in existence or hereafter arising, and the due performance and compliance by
the Borrower or such Assignor with all of the terms, conditions and agreements
contained therein (all such obligations and liabilities described in this clause
(ii) being herein collectively called the "Other Obligations"); (iii) any and
all sums advanced by the Collateral Agent in order to preserve the Collateral or
preserve its security interest in the Collateral; (iv) in the event of any
proceeding for the collection or enforcement of any indebtedness, obligations,
or liabilities of such Assignor referred to in clauses (i), (ii) and (iii),
after an Event of Default shall have occurred and be continuing, the reasonable
expenses of re-taking, holding, preparing for sale or lease, selling or
otherwise disposing of or realizing on the Collateral, or of any exercise by the
Collateral Agent of its rights hereunder, together with reasonable attorneys'
fees and court costs; and (v) all amounts paid by any Indemnitee as to which
such Indemnitee has the right to reimbursement under Section 8.1 of this
Agreement. It is acknowledged and agreed that the "Obligations" shall include
extensions of credit of the types described above, whether outstanding on the
date of this Agreement or extended from time to time after the date of this
Agreement.
"Other Creditors" shall have the meaning provided in the first
paragraph of this Agreement.
"Other Obligations" shall have the meaning provided in the definition
of "Obligations" in this Article IX.
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"Patents" shall mean any United States patent to which any Assignor
now or hereafter has title or license to use, as well as any application for a
United States patent now or hereafter made by any Assignor.
"Permitted Filings" shall have the meaning provided in Section 2.1 of
this Agreement.
"Primary Obligations" shall have the meaning provided in Section
7.4(b) of this Agreement.
"Pro Rata Share" shall have the meaning provided in Section 7.4(b) of
this Agreement.
"Proceeds" shall have the meaning provided in the Uniform Commercial
Code as in effect in the State of New York on the date hereof or under other
relevant law and, in any event, shall include, but not be limited to, (i) any
and all proceeds of any insurance, indemnity, warranty or guaranty payable to
the Collateral Agent or any Assignor from time to time with respect to any of
the Collateral, (ii) any and all payments (in any form whatsoever) made or due
and payable to any Assignor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any governmental authority (or any person acting
under color of governmental authority) and (iii) any and all other amounts from
time to time paid or payable under or in connection with any of the Collateral.
"Receivables" shall mean any "account" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event, shall include,
but shall not be limited to, all of such Assignor's rights to payment for goods
sold or leased or services performed by such Assignor, whether now in existence
or arising from time to time hereafter, including, without limitation, rights
evidenced by an account, note, contract, security' agreement, chattel paper, or
other evidence of indebtedness or security, together with (i) all security
pledged, assigned, hypothecated or granted to or held by such Assignor to secure
the foregoing, (ii) all of any Assignor's right, title and interest in and to
any goods, the sale of which gave rise thereto, (iii) all guarantees,
endorsements and indemnifications on, or of, any of the foregoing, (iv) all
powers of attorney for the execution of any evidence of indebtedness or security
or other writing in connection therewith, (v) all books, records, ledger cards,
and invoices relating thereto, (vi) all evidences of the filing of financing
statements and other statements and the registration of other instruments in
connection therewith and amendments thereto, notices to other creditors or
secured parties, and certificates from filing or other registration officers,
(vii) all credit information, reports and memoranda relating thereto, and (viii)
all other writings related in any way to the foregoing.
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"Representative" shall have the meaning provided in Section 7.4 of
this Agreement.
"Required Secured Creditors" shall mean (i) the Required Banks (or, to
the extent required by Section 13.12 of the Credit Agreement, all of the Banks)
under the Credit Agreement so long as any Credit Agreement Obligations remain
outstanding and (ii) in any situation not covered by preceding clause (i), the
holders of a majority of the outstanding principal amount of the Other
Obligations.
"Requisite Creditors" shall have the meaning provided in Section 11.2.
"Secondary Obligations" shall have the meaning provided in Section
7.4(b) of this Agreement.
"Secured Creditors" shall have the meaning provided in the first
paragraph of this Agreement.
"Significant Marks" shall mean those Marks which the parties hereto
have mutually' agreed to be material to the conduct of any Assignor's business
and which have been designated as a Significant Mark on Annex E hereto, and any
other Mark material to any Assignor.
"Subsidiary Guaranty" shall have the meaning provided in the fourth
WHEREAS clause of this Agreement.
"Termination Date" shall have the meaning provided in Section 11.9 of
this Agreement.
"Trade Secrets" shall mean any' know-how, technology, product
formulations, procedures and product and manufacturing specifications or
standards now or hereafter utilized in the manufacture, production and packaging
of the beverages including without limitation beverage bases heretofore or
hereafter sold under the Marks.
ARTICLE X
THE COLLATERAL AGENT
10.1. APPOINTMENT. The Secured Creditors, by their acceptance of the
benefits of this Agreement hereby irrevocably designate Bankers Trust Company,
as Collateral Agent, to act as specified herein. Each Secured Creditor hereby
irrevocably authorizes, and
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each holder of any Note by the acceptance of such Note and by the acceptance of
the benefits of this Agreement shall be deemed irrevocably to authorize, the
Collateral Agent to take such action on its behalf under the provisions of this
Agreement and any other instruments and agreements referred to herein and to
exercise such powers and to perform such duties hereunder as are specifically
delegated to or required of the Collateral Agent by the terms hereof and such
other powers as are reasonably incidental thereto. The Collateral Agent may
perform any of its duties hereunder or thereunder by or through its authorized
agents or employees.
10.2. NATURE OF DUTIES. (a) The Collateral Agent shall have no duties
or responsibilities except those expressly set forth in this Agreement. The
duties of the Collateral Agent shall be mechanical and administrative in nature;
the Collateral Agent shall not have by reason of this Agreement, any other
Credit Document or any Interest Rate Protection or Other Hedging Agreement a
fiduciary relationship in respect of any Secured Creditor; and nothing in this
Agreement, any other Credit Document or any Interest Rate Protection or Other
Hedging Agreement, expressed or implied, is intended to or shall be so construed
as to impose upon the Collateral Agent any obligations in respect of this
Agreement except as expressly set forth herein.
(b) The Collateral Agent shall not be responsible for insuring the
Collateral or for the payment of taxes, charges or assessments or discharging of
Liens upon the Collateral or otherwise as to the maintenance of the Collateral.
(c) The Collateral Agent shall not be required to ascertain or inquire
as to the performance by the Assignor of any' of the covenants or agreements
contained in this Agreement, any other Credit Document or any Interest Rate
Protection or Other Hedging Agreement.
(d) The Collateral Agent shall be under no obligation or duty to take
any action under this Agreement or any Credit Document if taking such action (i)
would subject the Collateral Agent to a tax in any jurisdiction where it is not
then subject to a tax or (ii) would require the Collateral Agent to qualify to
do business in any jurisdiction where it is not then so qualified, unless the
Collateral Agent receives security or indemnity satisfactory to it against such
tax (or equivalent liability), or any liability resulting from such
qualification, in each case as results from the taking of such action under this
Agreement or (iii) would subject the Collateral Agent to in personam
jurisdiction in any locations where it is not then so subject.
(e) Notwithstanding any other provision of this Agreement, neither the
Collateral Agent nor any of its officers, directors, employees, affiliates or
agents shall, in its individual capacity, be personally liable for any action
taken or omitted to be taken by it
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in accordance with this Agreement except for its own gross negligence or willful
misconduct.
10.3. LACK OF RELIANCE ON THE COLLATERAL AGENT. Independently and
without reliance upon the Collateral Agent, each Secured Creditor, to the extent
it deems appropriate, has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of each
Assignor and its Subsidiaries in connection with the making and the continuance
of the Obligations and the taking or not taking of any action in connection
therewith, and (ii) its own appraisal of the credit worthiness of each Assignor
and its Subsidiaries, and the Collateral Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any
Secured Creditor with any credit or other information with respect thereto,
whether coming into its possession before the extension of any Obligations or
the purchase of any Notes or at any time or times thereafter. The Collateral
Agent shall not be responsible in any manner whatsoever to any Secured Creditor
for the correctness of any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing delivered in
connection herewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of this
Agreement or the security interests granted hereunder or the financial condition
of each Assignor or any Subsidiary of such Assignor or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement, or the financial condition of the
Assignor or any Subsidiary of such Assignor, or the existence or possible
existence of any Default or Event of Default. The Collateral Agent makes no
representations as to the value or condition of the Collateral or any part
thereof, or as to the title of any Assignor thereto or as to the security
afforded by this Agreement.
10.4. CERTAIN RIGHTS OF THE COLLATERAL AGENT. (a) No Secured Creditor
shall have the right to cause the Collateral Agent to take any action with
respect to the Collateral, with only the Required Secured Creditors having the
right to direct the Collateral Agent to take any such action. If the Collateral
Agent shall request instructions from the Required Secured Creditors with
respect to any act or action (including failure to act) in connection with this
Agreement, the Collateral Agent shall be entitled to refrain from such act or
taking such action unless and until it shall have received instructions from the
Required Secured Creditors and to the extent requested, appropriate
indemnification in respect of actions to be taken, and the Collateral Agent
shall not incur liability to any Person by reason of so refraining. Without
limiting the foregoing, no Secured Creditor shall have any right of action
whatsoever against the Collateral Agent as a result of the Collateral Agent
acting or refraining from acting hereunder in accordance with the instructions
of the Required Secured Creditors.
(b) The Collateral Agent shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement at the request or
direction of any of the
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Secured Creditors, unless such Secured Creditors shall have offered to the
Collateral Agent reasonable security or indemnity against the costs, expenses
and liabilities that might be incurred by it in compliance with such request or
direction.
10.5. RELIANCE. The Collateral Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other document or telephone message signed, sent or made by
the proper Person or entity, and, with respect to all legal matters pertaining
to this Agreement and the other Security Documents and its duties thereunder and
hereunder, upon advice of counsel selected by it.
10.6. INDEMNIFICATION. To the extent the Collateral Agent is not
reimbursed and indemnified by the Assignors under this Agreement, the Secured
Creditors will reimburse and indemnify the Collateral Agent, in proportion to
their respective outstanding principal amounts (including, for this purpose, the
Stated Amount of outstanding Letters of Credit and any unreimbursed drawings in
respect of Letters of Credit, as well as any unpaid Primary Obligations in
respect of Interest Rate Protection or Other Hedging Agreements, as outstanding
principal) of Obligations, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against the Collateral Agent in performing its duties hereunder,
or in any way relating to or arising out of its actions as Collateral Agent in
respect of this Agreement except for those resulting solely from the Collateral
Agent's own gross negligence or willful misconduct. The indemnities set forth
in this Article X shall survive the repayment of all Obligations, with the
respective indemnification at such time to be based upon the outstanding
principal amounts (determined as described above) of Obligations at the time of
the respective occurrence upon which the claim against the Collateral Agent is
based or, if same is not reasonably determinable, based upon the outstanding
principal amounts (determined as described above) of Obligations as in effect
immediately prior to the termination of this Agreement. The indemnities set
forth in this Article X are in addition to any indemnities provided by the Banks
to the Collateral Agent pursuant to the Credit Agreement, with the effect being
that the Banks shall be responsible for indemnifying the Collateral Agent to the
extent the Collateral Agent does not receive payments pursuant to this Section
10.6 from the Secured Creditors (although in such event, and upon the payment in
full of all such amounts owing to the Collateral Agent, the respective Banks who
paid same shall be subrogated to the rights of the Collateral Agent to receive
payment from the Secured Creditors).
10.7. THE COLLATERAL AGENT IN ITS INDIVIDUAL CAPACITY. With respect
to its obligations as a lender under the Credit Agreement and any other Credit
Documents to which the Collateral Agent is a party, and to act as agent under
one or more of such Credit Documents, the Collateral Agent shall have the rights
and powers specified therein and
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herein for a "Bank", a "Managing Agent" or an "Administrative Agent", as the
case may be, and may exercise the same rights and powers as though it were not
performing the duties specified herein; and the terms "Banks," "Required Banks,"
"holders of Notes," or any similar terms shall, unless the context clearly
otherwise indicates, include the Collateral Agent in its individual capacity.
The Collateral Agent may accept deposits from, lend money to, and generally
engage in any kind of banking, trust or other business with any Assignor or any
Affiliate or Subsidiary of such Assignor as if it were not performing the duties
specified herein or in the other Credit Documents, and may accept fees and other
consideration from the Assignor for services in connection with the Credit
Agreement, the other Credit Documents and otherwise without having to account
for the same to the Secured Creditors.
10.8. HOLDERS. The Collateral Agent may deem and treat the payee of
any Note as the owner thereof for all purposes hereof unless and until written
notice of the assignment, transfer or endorsement thereof, as the case may be,
shall have been filed with the Collateral Agent. Any request, authority or
consent of any person or entity who, at the time of making such request or
giving such authority or consent, is the holder of any Note, shall be final and
conclusive and binding on any subsequent holder, transferee, assignee or
endorsee, as the case may be, of such Note or of any Note or Notes issued in
exchange therefor.
10.9. RESIGNATION BY THE COLLATERAL AGENT. (a) The Collateral Agent
may resign from the performance of all of its functions and duties under this
Agreement at any time by giving 15 Business Days' prior or written notice to the
Assignors and the Banks. Such resignation shall take effect upon the appointment
of a successor Collateral Agent pursuant to clause (b) or (c) below.
(b) If a successor Collateral Agent shall not have been appointed
within said 15 Business Day period by the Required Secured Creditors, the
Collateral Agent, with the consent of the Borrower, which consent shall not be
unreasonably withheld, shall then appoint a successor Collateral Agent who
shall serve as Collateral Agent hereunder or thereunder until such time, if any,
as the Required Secured Creditors appoint a successor Collateral Agent as
provided above.
(c) If no successor Collateral Agent has been appointed pursuant to
clause (b) above by the 15th Business Day after the date of such notice of
resignation was given by the Collateral Agent, as a result of a failure by the
Borrower to consent to the appointment of such a successor Collateral Agent, the
Required Secured Creditors shall then appoint a successor Collateral Agent who
shall serve as Collateral Agent hereunder or thereunder until such time, if any,
as the Required Secured Creditors appoint a successor Collateral Agent as
provided above.
-30-
<PAGE>
10.10. FEES AND EXPENSES OF COLLATERAL AGENT. (a) Each Assignor (by
its execution and delivery hereof) hereby jointly and severally agrees that it
shall pay to Bankers Trust Company as Collateral Agent, such fees as have been
separately agreed to in writing with Bankers Trust Company for acting as
Administrative Agent and as Collateral Agent hereunder. In the event a
successor Collateral Agent is at any time appointed pursuant to the preceding
Section 10.9, each Assignor hereby jointly and severally agrees to pay such
successor Collateral Agent such fees for acting as such as would customarily be
charged by such Collateral Agent for acting in such capacity in similar
situations. Absent manifest error, the determination by a successor Collateral
Agent of the fees owing to it shall be conclusive and binding upon each
Assignor.
(b) In addition, each Assignor hereby jointly and severally agrees to
pay all reasonable out-of-pocket costs and expenses of the Collateral Agent in
connection with this Agreement and any actions taken by the Collateral Agent
hereunder, and agrees to pay all costs and expenses of the Collateral Agent in
connection with the enforcement of this Agreement and the documents and
instruments referred to herein (including, without limitation, reasonable fees
and disbursements of counsel for the Collateral Agent).
ARTICLE XI
MISCELLANEOUS
11.1. NOTICES. Except as otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be deemed to have been duly given or made when delivered to the
party to which such notice, request, demand or other communication is required
or permitted to be given or made under this Agreement, addressed as follows:
(a) if to any Assignor to such Assignor at its address set forth
opposite its signature below;
(b) if to the Collateral Agent:
Bankers Trust Company
130 Liberty Street
New York, New York 10006
Attention: Kenneth A. Lang;
(c) if to any Bank Creditor, either (x) to the Administrative Agent,
at the address of the Administrative Agent specified in the Credit Agreement or
(y) at such address as such Bank Creditor shall have specified in the Credit
Agreement;
-31-
<PAGE>
(d) if to any Other Creditor, either (x) to the Representative for
the Other Creditors, at such address as such Representative may have provided to
the Assignor and the Collateral Agent from time to time, or (y) directly to the
Other Creditors at such address as the Other Creditors shall have specified in
writing to the Assignors and the Collateral Agent;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
11.2. WAIVER: AMENDMENT. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by each Assignor and the Collateral Agent (with
the written consent of the Required Secured Creditors); PROVIDED, HOWEVER, that
any change, waiver, modification or variance affecting the rights and benefits
of a single Class of Secured Creditors (and not all Secured Creditors in a like
or similar manner) shall require the written consent of the Requisite Creditors
of such affected Class. For the purpose of this Agreement, the term "Class"
shall mean each class of Secured Creditors, I.E., whether (y) the Bank Creditors
as holders of the Credit Agreement Obligations or (z) the Other Creditors as the
holders of the Other Obligations: and the term "Requisite Creditors" of any
Class shall mean each of (x) with respect to the Credit Agreement Obligations,
the Required Banks and (y) with respect to the Other Obligations, the holders of
51% of all obligations outstanding from time to time under the Interest Rate
Protection or Other Hedging Agreements.
11.3. OBLIGATIONS ABSOLUTE. The obligations of each Assignor hereunder
shall remain in full force and effect without regard to, and shall not be
impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of such Assignor; (b) any
exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement, any other Credit Document or
any Interest Rate Protection or Other Hedging Agreement except as specifically
set forth in a waiver granted pursuant to Section 11.2 hereof; or (c) any
amendment to or modification of any Credit Document or any Interest Rate
Protection or Other Hedging Agreement or any security for any of the
Obligations; whether or not such Assignor shall have notice or knowledge of any
of the foregoing.
11.4. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
each Assignor and its respective successors and assigns and shall inure to the
benefit of the Collateral Agent and each Secured Creditor and their respective
successors and assigns, provided that no Assignor may transfer or assign any or
all of its rights or obligations hereunder without the written consent of the
Required Secured Creditors. All agreements, statements, representations and
warranties made by each Assignor herein or in any certificate or other
instrument delivered by such Assignor or on its behalf under this Agreement
shall be considered to have been relied upon by the Secured Creditors and shall
-32-
<PAGE>
survive the execution and delivery of this Agreement, the other Credit
Documents and the Interest Rate Protection or Other Hedging Agreements
regardless of any investigation made by the Secured Creditors or on their
behalf.
11.5. HEADINGS DESCRIPTIVE. The headings of the several sections of
this Agreement are inserted for convenience only and shall not in any way affect
the meaning or construction of any provision of this Agreement.
11.6. SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11.7. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.
11.8. ASSIGNORS' DUTIES. It is expressly agreed, anything herein
contained to the contrary notwithstanding, that each Assignor shall remain
liable to perform all of the obligations, if any, assumed by it with respect to
the Collateral and the Collateral Agent shall not have any obligations or
liabilities with respect to any Collateral by reason of or arising out of this
Agreement, nor shall the Collateral Agent be required or obligated in any manner
to perform or fulfill any of the obligations of any Assignor under or with
respect to any Collateral.
11.9. TERMINATION: RELEASE. (a) After the Termination Date, this
Agreement shall terminate and the Collateral Agent, at the request and expense
of the respective Assignor, will execute and deliver to such Assignor a proper
instrument or instruments (including Uniform Commercial Code termination
statements on form UCC-3) acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to such Assignor (without
recourse and without any representation or warranty) such of the Collateral of
such Assignor as may be in the possession of the Collateral Agent and as has not
theretofore been sold or otherwise applied or released pursuant to this
Agreement. As used in this Agreement, "Termination Date" shall mean the date
upon which the Total Commitments and all Interest Rate Protection or Other
Hedging Agreements have been terminated, no Note under the Credit Agreement is
outstanding (and all Loans have been repaid in full), all Letters of Credit have
been terminated and all Obligations then owing have been paid in full.
-33-
<PAGE>
(b) In the event that any part of the Collateral is sold in connection
with a sale permitted by Section 9.02 of the Credit Agreement or otherwise
released at the direction of the Required Banks (or all Banks if required by
Section 13.12(a)(ii) of the Credit Agreement) and the proceeds of such sale or
sales or from such release are applied in accordance with the provisions of
Section 4.02 of the Credit Agreement, to the extent required to be so applied,
the Collateral Agent, at the request and expense of the relevant Assignor, will
duly assign, transfer and deliver to such Assignor (without recourse and without
any representation or warranty) such of the Collateral as is then being (or has
been) so sold or released and as may be in the possession of the Collateral
Agent and has not theretofore been released pursuant to this Agreement.
(c) In the event that any Assignor is released from its obligations
pursuant to the Subsidiary Guaranty in accordance with the terms thereof, then
such Person shall cease to be an Assignor hereunder and the Collateral Agent, at
the request and expense of the respective Person will execute and deliver to
such Person, a proper instrument or instruments acknowledging the satisfaction
and termination of this Agreement as to such Person, and will duly assign,
transfer and deliver to such Person (without recourse and without any
representation or warranty) such of the Collateral pledged by such Person as may
be in possession of the Collateral Agent and has not theretofore been sold or
otherwise applied or released pursuant to this Agreement, together with any
monies of such Person at the time held by the Collateral Agent hereunder.
(d) At any time that any Assignor desires that the Collateral Agent
take any action to acknowledge or give effect to any release of Collateral
pursuant to the foregoing Section 11.9(a), (b) or (c), it shall deliver to the
Collateral Agent a certificate signed by its chief financial officer stating
that the release of the respective Collateral is permitted pursuant to Section
11.9(a), (b) or (c). If requested by the Collateral Agent (although the
Collateral Agent shall have no obligation to make any such request), such
Assignor shall furnish appropriate legal opinions (from counsel acceptable to
the Collateral Agent) to the effect set forth in the immediately preceding
sentence. The Collateral Agent shall have no liability whatsoever to any Secured
Creditor as the result of any release of Collateral by it as permitted by this
Section 11.9.
11.10. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Collateral Agent.
11.11. LIMITED OBLIGATIONS. It is the desire and intent of each
Assignor, the Collateral Agent and the Secured Creditors that this Agreement
shall be enforced against each Assignor to the fullest extent permissible under
the laws and public policies applied
-34-
<PAGE>
in each jurisdiction in which enforcement is sought. If and to the extent, that
the Obligations of any Assignor under this Agreement shall be adjudicated to be
invalid or unenforceable for any reason (including, without limitation, because
of any applicable state or federal law relating to fraudulent conveyances or
transfers), then the amount of the Obligations of such Assignor (but not the
Obligations of any other Assignor unless such other Assignor or Assignors are
individually subject to the circumstances covered by this Section 11.11) shall
be deemed to be reduced in the affected Assignor shall pay the maximum amount of
the Obligations which would be permissible under applicable law.
11.12. ADDITIONAL ASSIGNORS. It is understood and agreed that any
Subsidiary of the Borrower which becomes a Subsidiary after the date hereof
shall automatically become an Assignor hereunder by executing a counterpart
hereof and delivering same to the Administrative Agent.
* * *
-35-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date first
above written.
WACO MANUFACTURING COMPANY
Address: 8144 Walnut Hill Lane
Dallas, Texas 75231-4372
Attention: Nelson A. Bangs
By /s/ Nelson A. Bangs
--------------------------------
Title: Vice President
BANKERS TRUST COMPANY,
as Collateral Agent
By /s/ Mary Kay Coyle
--------------------------------
Title: Vice President
-36-
<PAGE>
ANNEX A
to
Subsidiary
Security Agreement
------------------
SCHEDULE OF PERMITTED FILINGS
-----------------------------
<TABLE>
<CAPTION>
A. WACO MANUFACTURING COMPANY
State Jurisdiction Filing No. Filing Date Type Secured Party Collateral Description Permitted Lien
----- ------------ ---------- --------- ---- ------------- ---------------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Texas Sec. of State 08418 4/30/93 UCC-1 St. Louis Leasing Corp. Leased Equipment Yes
Texas Sec. of State 08419 4/30/93 UCC-1 St. Louis Leasing Corp. Leased Equipment Yes
Texas Sec. of State 107903 6/1/93 UCC-1 El Camino Resources, Leased Equipment Yes
Ltd.
Texas Sec. of State 114952 6/11/93 UCC-1 Digital Equipment Corp. Leased Equipment Yes
Texas Sec. of State 114953 6/11/93 UCC-1 Digital Equipment Corp. Leased Equipment Yes
Texas Sec. of State 122996 6/23/93 UCC-1 Xerox Corporation Leased Equipment Yes
Texas Sec. of State 248570 12/23/92 UCC-1 Xerox Corporation Leased Equipment Yes
Texas Sec. of State 248579 12/23/92 UCC-1 Xerox Corporation Leased Equipment Yes
</TABLE>
Permitted Filings set forth on Annex A to the Security Agreement between Dr
Pepper/Seven-Up Corporation and Bankers Trust Company, as Collateral Agent,
dated as of December 28, 1993, which relate to assets transferred pursuant to
the Asset Transfer (as defined in the Credit Agreement).
<PAGE>
ANNEX B
to
Subsidiary
Security Agreement
------------------
SCHEDULE OF CHIEF EXECUTIVE OFFICES AND RECORD LOCATIONS
---------------------------------------------------------
A. WACO MANUFACTURING COMPANY
A. CHIEF EXECUTIVE OFFICES
Location County
-------- ------
8144 Walnut Hill Lane Dallas
Dallas, Texas 75231-4372
B. RECORD LOCATIONS
Location County
-------- ------
8900 Page Avenue St. Louis
St. Louis, Missouri 63114
<PAGE>
ANNEX C
to
Subsidiary
Security Agreement
------------------
SCHEDULE OF INVENTORY AND EQUIPMENT LOCATIONS
A. WACO MANUFACTURING COMPANY
ADDRESS STATE COUNTY
- ------- ----- ------
Product & Technical Center Missouri St. Louis
8900 Page Avenue
St. Louis, Missouri 63114
Bender Warehouse Nevada Washoe
360 Parr Circle
Reno, Nevada 89512
Sea Breeze Fruit Flavors Inc. New Jersey Morris
441 Route 202
Towaco, New Jersey 07082
<PAGE>
ANNEX D
to
Subsidiary
Security Agreement
------------------
SCHEDULE OF TRADE. FICTITIOUS AND OTHER NAMES
A. WACO MANUFACTURING COMPANY
None
<PAGE>
ANNEX E
to
Subsidiary
Security Agreement
------------------
SCHEDULE OF MARKS
A. WACO MANUFACTURING COMPANY
None
<PAGE>
ANNEX F
to
Subsidiary
Security Agreement
------------------
SCHEDULE OF LICENSE AGREEMENTS AND ASSIGNMENTS
A. WACO MANUFACTURING COMPANY
Company Subject
- ------- -------
Welch Foods Inc. Master License Agreement dated February 10,
1988
Big Red Inc. Master License Agreement dated February 25,
1988
The Nutrasweet Company Supply Agreement dated January 5, 1993
Delta Woodside Industries Inc., Master License Agreement dated April 1, 1991
as successor to Nautilus
Acquisition Corporation
Cadbury Beverages Inc. Extract Production Agreement dated April 24,
1992
Joseph E. Seagram & Sons, Inc. Concentrate Production Agreement dated
August __, 1993 (Unexecuted)
<PAGE>
ANNEX G
to
Subsidiary
Security Agreement
------------------
SCHEDULE OF PATENTS AND APPLICATIONS
A. WACO MANUFACTURING COMPANY
Patent Number Date Issued
(Application) (Applied)
- ------------- -----------
None
<PAGE>
ANNEX H
to
Subsidiary
Security Agreement
------------------
SCHEDULE OF COPYRIGHTS AND APPLICATIONS
A. WACO MANUFACTURING COMPANY
None
<PAGE>
C
ANNEX C-1
to
FIFTH AMENDMENT
OPINION OF SPECIAL NEW YORK COUNSEL TO THE COMPANY
WEIL, GOTSHAL & MANGES
A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
767 FIFTH AVENUE-NEW YORK, N.Y. 10153-0119
(212) 310-8000
FAX: (212) 310-8007
CABLE: WEGOMA
TELEX: 423144 WGM UI
DALLAS
HOUSTON
MENLO PARK
(SILICON VALLEY)
MIAMI
WASHINGTON, D.C.
BRUSSELS
BUDAPEST
LONDON
PRAGUE
WARSAW
WRITER'S DIRECT LINE December 28, 1993
To each of the Managing Agents and
each of the Banks party to the Credit
Agreement referred to below
Re: Dr Pepper
---------
Ladies and Gentlemen:
We have acted as special counsel to Dr Pepper/Seven-Up Corporation, a
Delaware corporation (the "Company"), Dr Pepper/Seven-Up Companies, Inc., a
Delaware corporation (the "Guarantor"), and Waco Manufacturing Company, a
Delaware corporation ("Waco"), in connection with the preparation,
authorization, execution and delivery of, and the consummation of the
transactions contemplated by, the Fifth Amendment, dated as of December 28, 1993
(the "Amendment"), to the Credit Agreement, dated as of October 20, 1992 as
amended to the date hereof and by the Amendment (the "Credit Agreement"), among
the Company, the Guarantor, the financial institutions party thereto (the
"Banks"), Bankers Trust Company, Nationsbank of North Carolina, N.A. and The
Chase Manhattan Bank, N.A., as Managing Agents, the Co-Agents, the Lead
Managers, and Bankers Trust Company, as Administrative Agent. We have also
acted as special counsel to the Company in connection with the Asset Transfer.
Terms defined in the Credit Agreement and not otherwise defined herein are used
herein with the meanings as so defined.
In so acting, we have examined originals or copies, certified or
otherwise identified to our satisfaction, of (a) the Credit Agreement, (b) the
Revolving Notes, the Term Notes and the Swingline Note, each dated the date
hereof (collectively, the "Notes"), (c) the Subsidiary Security Agreement,
(d) the other Credit Documents, (e) the Subsidiary Pledge Agreement, (f) the
Subsidiary Guaranty, (g) the Asset Transfer Documents and (h) such corporate
records, agreements, documents and other instruments, and such certificates or
comparable documents of public
<PAGE>
Page 2
officials and of officers and representatives of the Guarantor, the Company and
Waco as we have deemed relevant and necessary as a basis for the opinions
hereinafter set forth. The Credit Agreement, the Notes, the Subsidiary Security
Agreement, the Subsidiary Pledge Agreement, and the Subsidiary Guaranty are
collectively referred to herein as the "Loan Documents".
In such examination, we have assumed the genuineness of all signatures
(other than as to the Guarantor, the Company and Waco), the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. As to all questions of
fact material to this opinion that have not been independently established, we
have relied upon certificates or comparable documents of public officials and
officers and representatives of the Guarantor, the Company and Waco and upon the
representations and warranties of each of the Guarantor, the Company and Waco
contained in the Loan Documents to which it is a party.
Based upon the foregoing, and subject to the qualifications stated
herein, we are of the opinion that:
1. Each of the Guarantor, the Company and Waco is a corporation duly
organized, validly existing and in good standing under the laws of the
respective jurisdiction of its incorporation and each has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted. The Guarantor is duly qualified
to transact business and is in good standing as a foreign corporation in the
state of Texas. The Company is duly qualified to transact business and is in
good standing as a foreign corporation in the states of Texas and Missouri.
Waco is duly qualified to transact business and is in good standing as a foreign
corporation in each jurisdiction where the character of its activities requires
such qualification, except where the failure of Waco to be so qualified would
not have a material adverse effect on the business, operations or financial
condition of Waco.
2. Each of the Guarantor, the Company and Waco has all requisite
corporate power and authority to execute
<PAGE>
Page 3
and deliver the Loan Documents and the Asset Transfer Documents to which it is a
party and to perform its obligations thereunder. The execution, delivery and
performance of the Loan Documents and the Asset Transfer Documents to which it
is a party by each of the Guarantor, the Company and Waco and the consummation
by each of the Guarantor, the Company and Waco of the transactions contemplated
thereby have been duly authorized by all necessary corporate action on the part
of each of the Guarantor, the Company and Waco. Each of the Loan Documents and
the Asset Transfer Documents to which the Guarantor, the Company or Waco is a
party has been duly and validly executed and delivered by it. Assuming the due
authorization, execution and delivery of the Loan Documents by each of the
parties thereto other than the Guarantor, the Company and Waco, each of the Loan
Documents constitutes the legal, valid and binding obligation of each of the
Guarantor, the Company and Waco enforceable against each of them in accordance
with its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity), and except to the extent that rights to
indemnification thereunder may be limited by federal or state securities laws or
public policy relating thereto, and subject to the qualification that (i)
certain remedial provisions of each of the Subsidiary Security Agreement and the
Subsidiary Pledge Agreement 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 affect the validity of the Subsidiary Security Agreement or the
Subsidiary Pledge Agreement and each of the Subsidiary Security Agreement and
the Subsidiary Pledge Agreement contains adequate provisions for enforcing
payment of the obligations and for the practical realization of the rights and
benefits afforded thereby, and (ii) we express no opinion as to the effect on
the Credit Agreement or the Notes of the laws of any jurisdiction other than the
States of New York and Texas, including laws which limit the rates of interest
legally chargeable or collectable. No opinion is expressed in this paragraph as
to the perfection or priority of any liens granted pursuant to the Subsidiary
Security Agreement or the Subsidiary Pledge Agreement.
<PAGE>
Page 4
3. The execution and delivery by each of the Guarantor, the Company
and Waco of the Loan Documents and the Asset Transfer Documents to which it is a
party and the consummation of the transactions contemplated thereby (including,
without limitation, the granting of a security interest under any Loan Document)
and compliance by each of the Guarantor, the Company and Waco with any
provisions thereof will not conflict with, constitute a default under or violate
(i) any New York, Texas, Delaware corporate or federal law or regulation (other
than federal and state securities or blue sky laws, as to which we express no
opinion, but including, without limitation, Regulations G, T, U and X of the
Board of Governors of the Federal Reserve System), (ii) any judgment, order,
writ, injunction or ruling of any court or governmental authority applicable to
the Guarantor, the Company or Waco, of which we are aware, (iii) any of the
terms, conditions or provisions of any of the agreements set forth on Schedule I
hereto (the "Material Agreements") or result in the creation or imposition of
(or the obligation to create or impose) any Lien (except pursuant to the
Security Documents) upon any of the property or assets of the Guarantor, the
Company or Waco pursuant to the terms of any such Material Agreement, or (iv)
any of the terms, conditions or provisions of the certificate of incorporation
or by-laws of the Guarantor, the Company and Waco.
4. No consent, approval, waiver, license, or authorization or other
action by or filing with any New York, Texas, Delaware corporate or federal
governmental authority is required in connection with (i) the execution and
delivery by each of the Guarantor, the Company and Waco of the Loan Documents to
which it is a party or the consummation by each of the Guarantor, the Company
and Waco of the transactions contemplated thereby, or (ii) the legality,
validity or enforceability thereof, except for federal and state securities or
blue sky laws, as to which we express no opinion. Upon the execution of the
Amendment by the Guarantor, the Company, the Required Banks, each Continuing
Bank and each New Bank, all consents needed to effect the Amendment in
accordance with the terms of the Original Credit Agreement will have been
obtained.
5. (a) Assuming the filing of the financing statements in the forms
attached hereto (the "Financing Statements") on Form UCC-1 in the offices in the
<PAGE>
Page 5
jurisdictions indicated on Schedule II hereto, the execution and delivery of the
Subsidiary Security Agreement creates, in favor of the Collateral Agent, a valid
and duly perfected lien on and a security interest in the Collateral (as such
term is defined in the Subsidiary Security Agreement) to the extent perfection
of a lien or security interest in the Collateral may be perfected by the filing
of a financing statement under the Uniform Commercial Code (the "UCC") in effect
in the State of Texas, as security for the Obligations, as defined in the
Subsidiary Security Agreement, and no other filings are necessary under the UCC.
(b) Assuming (i) delivery in the State of New York to and continued
possession by Bankers Trust Company (the "Pledgee") of the stock certificates
that represent the outstanding shares of stock of Waco (together with stock
powers, duly executed in blank with respect thereto), and (ii) that the Pledgee
was without notice of any adverse claim (as such term is used in Section 8-302
of the UCC in effect in the State of New York) prior to or on the date hereof
with respect to such stock, the Company Pledge Agreement creates, in favor of
the Collateral Agent, a valid and duly perfected lien on and security interest
in such stock, as security for the obligations, as defined in the Company Pledge
Agreement, which is subject to no prior lien or security interest. No opinion
is expressed in this paragraph as to the priority of the Collateral Agent's lien
on any dividends on, or other distributions in respect of, such stock.
(c) Assuming (i) delivery in the State of New York to and continued
possession by Bankers Trust Company (the "Pledgee") of the Pledged Notes (as
defined in the Company Security Agreement), and (ii) that the Pledgee was
without notice of any adverse claim (as such term is used in Section 8-302 of
the UCC in effect in the State of New York) prior to or on the date hereof with
respect to such Pledged Notes, the Company Pledge Agreement creates, in favor of
the Collateral Agent, a valid and duly perfected lien on and security interest
in such Pledged Notes, as security for the Obligations, as defined in the
Company Pledge Agreement, which is subject to no prior lien or security
interest. No opinion is expressed in this paragraph as to the priority of the
Collateral Agent's lien on any interest payments in connection with, or other
distributions in respect of, such Pledged Notes.
<PAGE>
Page 6
(d) Assuming (i) delivery in the State of New York to and
continued possession by Bankers Trust Company (the "Pledgee") of the Pledged
Note (as defined in the Subsidiary Pledge Agreement), and (ii) that the Pledgee
was without notice of any adverse claim (as such term is used in Section 8-302
of the UCC in effect in the State of New York) prior to or on the date hereof
with respect to such Pledged Note, the Subsidiary Pledge Agreement creates, in
favor of the Collateral Agent, a valid and duly perfected lien on and security
interest in such Pledged Note, as security for the Obligations, as defined in
the Subsidiary Pledge Agreement, which is subject to no prior lien or security
interest. No opinion is expressed in this paragraph as to the priority of the
Collateral Agent's lien on any interest payments in connection with, or other
distributions in respect of, such Note.
(e) The Company is the record owner of all of the issued and
outstanding Common Stock of Waco.
The opinions set forth in subparagraphs (a), (c) and (d) are subject
to the exception that with respect to any Assignor's (as such term is defined in
the Company or Subsidiary Security Agreement) rights in or title to the
Collateral, we express no opinion, and have assumed that such Assignor has title
to the Collateral.
The opinions set forth in subparagraphs (a), (b), (c) and (d) are
subject to the following exceptions:
(a) that with respect to (i) federal tax liens accorded priority
under law and (ii) liens created under Title IV of the Employee Retirement
Income Security Act of 1974 which are properly filed after the date hereof,
we express no opinion as to the relative priority of such liens and the
security interests created by the Company Pledge Agreement; and
(b) that with respect to any claims (including for taxes) in
favor of any state or any of its respective agencies, authorities,
municipalities or political subdivisions which claim is given lien status
and/or priority under any law of such state, we express no opinion as to
the relative priority of such liens and the security interests created by
the Company Pledge Agreement.
<PAGE>
Page 7
In addition, the opinions in subparagraphs (a), (b), (c) and (d) are
subject to (i) the limitations on perfection of security interests in proceeds
resulting from the operation of Section 9-306 of the UCC in effect in New York
and Texas; (ii) the limitations with respect to buyers in the ordinary course of
business imposed by Sections 9-307 and 9-308 of the UCC in effect in New York
and Texas; (iii) the limitations with respect to documents, instruments and
securities imposed by Sections 8-301 and 9-309 of the UCC in effect in New York
and Texas; (iv) the provisions of Section 9-204 of the UCC in effect in New York
and Texas relating to the time of attachment and perfection of a security
interest in the items of Collateral in which the Company does not now have
rights and of which it does not now have possession; and (v) Section 552 of
Title 11 of the United States Code (the "Bankruptcy Code") with respect to any
Collateral acquired by the Company subsequent to the commencement of any case
against or by the Company under the Bankruptcy Code.
We further assume that (a) all filings will be timely made and duly
filed as necessary (i) in the event of a change in the name, identity or
corporate structure of Waco, (ii) in the event of a change in location of the
Collateral, or the location of the principal office of Waco or the place where
Waco keeps its books and records, and (iii) to continue to maintain the
effectiveness of the original filings, and (b) any money, instruments, documents
or securities which may constitute part of the Pledged Securities are and will
remain in the Pledgee's possession.
6. Assuming that the representation made by Waco in Section 2.4 of
the Subsidiary Security Agreement with respect to the location of its chief
executive office is and remains true and correct, under the law of the States of
New York and Texas the perfection and priority of the security interests granted
by Waco in its Receivables, Contracts, General Intangibles (other than
uncertificated securities) and Contract Rights (all as defined in the Subsidiary
Security Agreement) are governed by the laws of the State of Texas to the extent
that said Receivables, Contracts, Contract Rights and General Intangibles
consist of "accounts" and "general intangibles" as described in the UCC of the
States of New York and Texas.
<PAGE>
Page 8
7. In connection with the making of the Loans pursuant to the Credit
Agreement and the granting of the Additional Mortgage to secure the Loans and
the other Obligations, real estate appraisals are not required to be obtained by
the Banks under Title XI of the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, 12 U.S.C. Sections 3310, 3331-3351, or the appraisal
regulation published by the Office of the Comptroller of the Currency, 12 CFR
34.43. In rendering the opinion set forth in this paragraph 7, we have been
advised and have relied upon the fact that, as a consequence of the execution
and delivery of the Additional Mortgage, the provisions of the Credit Agreement
would not have been more favorable than in the absence of the lien of the
Additional Mortgage, and that the Additional Mortgage has been obtained solely
through an abundance of caution.
We express no opinion herein as to Section 544(b) or 548 of the United
States Bankruptcy Code or any comparable provision of state law.
The opinions herein are limited to the laws of the State of New York,
the State of Texas, the corporate laws of the State of Delaware and the federal
laws of the United States, and we express no opinion as to the effect on the
matters covered by this opinion of the laws of any other jurisdiction.
This opinion is rendered solely for your benefit and for the benefit
of Eligible Transferees in connection with the transactions described above.
This opinion may not be used or relied upon by any other person and may not be
disclosed, quoted, filed with a governmental agency or otherwise referred to
(except as may otherwise be required by law) without our prior written consent.
Very truly yours,
Weil, Gotshal & Manges
<PAGE>
SCHEDULE I
MATERIAL AGREEMENTS
1. Indenture between Dr Pepper/Seven-Up Companies, Inc. and Bank One,
Texas, NA, dated October 28, 1992.
<PAGE>
SCHEDULE II
Jurisdiction Office
------------ ------
Texas Secretary of State;
County Clerk, Dallas
County
<PAGE>
ANNEX C-2
to
FIFTH AMENDMENT
Opinion of General Counsel to the Company
<PAGE>
Dr Pepper/Seven-Up Companies, Inc.
P.O. Box 655086, Dallas, Texas 75265-5086
8144 Walnut Hill Lane, Dallas, Texas 75231-4372 - 214/360-7000
NELSON A. BANGS
Vice President,
Secretary & General Counsel
December 28, 1993
To each of the Managing Agents and
each of the Bank's party to the Credit
Agreement referred to below
Ladies and Gentlemen:
I have acted as General Counsel to Dr Pepper/Seven-Up Corporation, a
Delaware corporation (the "Company"), Dr Pepper/Seven-Up Companies, Inc., a
Delaware corporation (the "Guarantor"), and Waco Manufacturing Company, a
Delaware corporation ("Waco"), in connection with the preparation,
authorization, execution and delivery of, and the consummation of the
transactions contemplated by, the Fifth Amendment, dated as of December 28, 1993
(the "Amendment") to the Credit Agreement, dated as of October 20, 1992 (as
amended to the date hereof and by the Amendment, the "Credit Agreement"), among
the Company, the Guarantor, the financial institutions party thereto
(the "Banks"), Bankers Trust Company, Nationsbank of North Carolina, N.A. and
The Chase Manhattan Bank, N.A., as Managing Agents, the Co-Agents, the Lead
Managers, and Bankers Trust Company, as Administrative Agent. I have also acted
as General Counsel to the Company in connection with the Asset Transfer. Terms
defined in the Credit Agreement and not otherwise defined herein are used herein
with the meanings as so defined.
In so acting, I have examined originals or copies, certified or otherwise
identified to my satisfaction, of (a) the Credit Agreement, (b) the Revolving
Notes, the Term Notes and the Swingline Note, each dated the date hereof
(collectively, the "Notes"), (c) the Subsidiary Security Agreement, (d) the
other Credit Documents, (e) the Subsidiary Pledge Agreement, (f) the Subsidiary
Guaranty, (g) the Asset Transfer Documents and (h) such corporate records,
agreements, documents and other instruments, and such certificates or comparable
documents of public officials and of officers and representatives of the
Guarantor, the Company and Waco as I have deemed relevant and necessary as a
basis for the opinion hereinafter set forth. The Credit Agreement, the Notes,
the Subsidiary Security Agreement, the Subsidiary Pledge Agreement and
the Subsidiary Guaranty are collectively referred to herein as the "Loan
Documents".
<PAGE>
In such examination, I have assumed the genuineness of all signatures, the
authenticity of all documents submitted to me as originals, the conformity to
original documents of all documents submitted to me as certified or photostatic
copies and the authenticity of the originals of such latter documents. As to
all questions of fact material to this opinion that have not been independently
established, I have (i) relied upon certificates or comparable documents of
public officials and officers and representatives of the Guarantor, the Company
and Waco and of the registrars and transfer agents for the capital stock of the
Guarantor and the Company and upon the representations and warranties of each of
the Guarantor, the Company and Waco contained in the Loan Documents to which it
is a party, and (ii) made the assumptions and relied upon the certificates or
comparable documents described in the preceding paragraph.
Based upon the foregoing, and subject to the qualifications stated herein,
I am of the opinion that:
1. The execution and delivery by each of the Guarantor, the Company and Waco
of the Loan Documents and the Asset Transfer Documents to which it is a party
and the consummation of the transactions contemplated thereby (including,
without limitation, the granting of a security interest under any Loan Document)
and compliance by each of the Guarantor, the Company and Waco with any
provisions thereof will not conflict with, constitute a default under or violate
any of the terms, conditions or provisions of any of the agreements set forth on
Schedule I hereto (the "Material Agreements") or any other document, agreement
or instrument to which the Guarantor or the Company is a party or by which it is
bound of which I am aware, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (except pursuant to the Security
Documents) upon any of the property or assets of the Guarantor, the Company or
Waco pursuant to the terms of any such Material Agreement or any such other
document, agreement or instrument of which I am aware.
2. To my knowledge after due inquiry, there is no litigation, proceeding or
governmental investigation pending or overtly threatened against the Guarantor
or any of its Subsidiaries that relates to any of the transactions contemplated
by the Loan Documents and the Asset Transfer Documents to which it is a party
or, except as set forth in Schedule XI to the Credit Agreement or as indicated
on Schedule II hereto (which litigation has previously been described in the
public filings of the Company), which, if adversely determined, would have a
material adverse effect on the business, assets or financial condition of the
Guarantor and its Subsidiaries, taken as a whole.
3. Neither the Guarantor nor any of its Subsidiaries is an "investment
company", as defined in the Investment Company Act of 1940, as amended.
4. Neither the Guarantor nor any of its Subsidiaries is a "holding company",
or a "subsidiary company" of a "holding company," within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
<PAGE>
5. On the Initial Borrowing Date and after giving effect to the Transaction,
the authorized capital stock of (a) the Guarantor will consist of (i) 125,000
shares of Common Stock, $.01 par value per share, of which not more than
61,500,000 shares shall be issued and outstanding (assuming the exercise of all
outstanding Warrants), (ii) 20,000,000 shares of Nonvoting Common Stock, par
value $.01 per share, of which no shares shall be issued and outstanding, and
(iii) 2,000,000 shares of Guarantor Preferred Stock, $.01 par value per share,
of which no shares shall be issued and outstanding, (b) the Company will consist
of 1,000 shares of Common Stock, $.01 par value per share, of which 1,000 shares
of Common Stock shall be issued and outstanding and (ii) 10,000,000 shares of
preferred stock, $.01 par value per share, of which 1,268,474 shares of Dr
Pepper Preferred Stock shall be issued and outstanding and (c) Waco will consist
of 1,000 shares of Common Stock, $1.00 par value per share, of which 1,000
shares shall be issued and outstanding. All of such outstanding shares of each
of the Guarantor's, the Company's and Waco's capital stock are duly authorized,
validly issued, fully paid and nonassessable, with no personal liability
attaching to the ownership thereof, and have not been issued in violation of any
preemptivet
rights.
6. To my knowledge after due inquiry, except for the Warrants or the options
granted pursuant to the Stock Option Plans or rights granted pursuant to the
Rights Agreement of the Guarantor, after giving effect to the Transaction, there
are no outstanding securities of the Guarantor or any of its Subsidiaries
convertible into or evidencing the right to purchase or subscribe for any shares
of capital stock of the Guarantor or any of its Subsidiaries, and there are no
outstanding or authorized options, warrants, calls, subscriptions, rights,
commitments or any other agreements of any character obligating the Guarantor or
any of its Subsidiaries to issue any shares of its capital stock or any
securities convertible into or evidencing the rights to purchase or subscribe
for any shares of such stock.
7. Waco has obtained or made all consents, approvals, waivers, licenses, or
authorizations or other actions or filings or registrations with all Missouri
governmental authorities which are required in connection with the Asset
Transfer, except such consents, approvals, waivers, licenses, authorizations or
other actions or filings the failure of which to obtain would not have a
material adverse effect on the business, assets or condition (financial or
otherwise) of Waco or the Guarantor and its Subsidiaries, taken as a whole.
The opinions herein are limited to the laws of the State of Texas, the
corporate laws of the State of Delaware and the federal laws of the United
States, and I express no opinion as to the effect on the matters covered by this
opinion of the laws of any other jurisdiction.
<PAGE>
This opinion is rendered solely for your benefit and for the benefit of
Eligible Transferees in connection with the transactions described above. This
opinion may not be used or relied upon by any other person and may not be
disclosed, quoted, filed with a governmental agency or otherwise referred to
(except as may otherwise be required by law) without my prior written consent.
Very Truly Yours,
/s/ Nelson A. Bangs
<PAGE>
SCHEDULE I
- - Common Stock Registration Rights Agreement, dated as of May 19, 1988, by
and among Hicks & Haas Holdings, Ltd., DLJ Capital Corporation, Shearson
Lehman Hutton Inc., Shearson Lehman Brothers Capital Partners I,
Prudential-Bache Interfunding Inc., Prudential-Bache Capital Partners I,
L.P., Citicorp Capital Investors Ltd., John R. Albers, Ira M. Rosenstein,
The John L. Kemmerer, Jr. Trust Dated 6/24/57, Cadbury Schweppes Inc.,
Bankers Trust Company and Dr Pepper/Seven-Up Companies, Inc.
- - Credit Agreement, dated as of October 20, 1992, among The Seven-Up Company
and Dr Pepper Company (and their successor by merger Dr Pepper/Seven-Up
Corporation), Dr Pepper/Seven-Up Companies, Inc., as Guarantor, Various
Banks, Bankers Trust Company, Nationsbank of North Carolina, N.A., and The
Chase Manhattan Bank, N.A., as Managing Agents, The Co-Agents, The Lead
Managers and Bankers Trust Company, as Administrative Agent.
- - Dr Pepper Bottler's License Agreement dated February 25, 1987, between Dr
Pepper Company and Coca-Cola Bottling Company of the Southwest, a Nevada
Corporation, d/b/a Dr Pepper Bottling Company of San Antonio.
- - Dr Pepper Bottler's License Agreement dated July 22, 1988, between Dr
Pepper Company and Great Plains Coca-Cola Bottling Company, an Oklahoma
Corporation, d/b/a Dr Pepper Bottling Company of Oklahoma City.
- - Dr Pepper Bottler's License Agreement dated September 29, 1988, between Dr
Pepper Company and Coca-Cola Bottling Company of Los Angeles, a Delaware
Corporation, d/b/a Dr Pepper Bottling Company of Los Angeles.
- - Dr Pepper Bottler's License Agreement dated January 24, 1989, between Dr
Pepper Company and Dr Pepper Bottling Company of Texas, a Texas
Corporation, d/b/a Dr Pepper Bottling Company of Houston.
- - Dr Pepper Bottler's License Agreement dated January 24, 1989, between
Dr Pepper Bottling Company of Texas, a Texas Corporation, d/b/a Dallas/Ft.
Worth Dr Pepper Bottling Company.
- - Seven-Up Franchise Agreement dated October 16, 1974, between The Seven-Up
Company and Seven-Up Bottling Company of San Francisco, San Francisco,
California.
- - Seven-Up Franchise Agreement dated June 7, 1993, between The Seven-Up
Company and Kemmerer Bottling Group, Inc., d/b/a Seven-Up Bottling Company,
Chicago, Illinois.
<PAGE>
- - Seven-Up Franchise Agreement dated November 6, 1987, between The Seven-Up
Company and Kemmerer Bottling Group, Inc. d/b/a Seven-Up Bottling Company,
Joliet, Illinois.
- - Seven-Up Franchise Agreement dated December 9, 1988, between The Seven-Up
Company and Mid-Continent Bottlers, Inc., d/b/a Seven-Up Bottling Company,
Des Moines, Iowa.
- - Seven-Up Franchise Agreement dated March 16, 1992, between The Seven-Up
Company and Seven-Up/RC Bottling Company of Southern California, Inc.,
d/b/a Seven-Up Bottling Company, Los Angeles, California.
- - Employment Agreement, dated as of August 2, 1993, between Dr
Pepper/Seven-Up Corporation and John R. Albers.
- - Employment Agreement, dated as of August 2, 1993, between Dr
Pepper/Seven-Up Corporation and Ira M. Rosenstein.
- - Tax Sharing Agreement, dated as of January 1, 1992, between Dr
Pepper/Seven-Up Companies, Inc. and Dr Pepper/Seven-Up Corporation.
- - Commercial Lease, dated as of August 20, 1987, among The Seven-Up Company,
Dr Pepper Company and Walnut Glen Towers, Ltd. (incorporated herein by
reference to the annual report on Form 10-K for the year ended December 31,
1987 of Seven-Up Holding Company and The Seven-Up Company (File No.
33-13546-01).
- - Dr Pepper Company Profit Sharing Plan, as amended, dated as of January 1,
1987.
- - Restated Pension Plan of Dr Pepper/Seven-Up Corporation.
- - Supplemental Pension Plan of Dr Pepper/Seven-Up Corporation.
- - Supplemental Disability Plan of Dr Pepper/Seven-Up Corporation.
- - Supplemental Death Benefit Plan of Dr Pepper/Seven-Up Corporation.
- - The Seven-Up Company Retirement Trust, effective as of November 12, 1986.
- - The Seven-Up Company Retirement Plan, effective as of November 12, 1986.
- - Executive Severance Agreement dated as of August 27, 1991 for John R.
Albers.
- - Executive Severance Agreement dated as of August 27, 1991 for Ira M.
Rosenstein.
- - Letter Agreement dated as of November 8, 1989 for Charles P.
<PAGE>
Grier.
- - Executive Severance Agreement dated as of August 27, 1991 for True H.
Knowles.
- - Executive Severance Agreement dated as of April 8, 1992 for Francis I.
Mullin, III.
- - 1992 Performance Award Plan of Dr Pepper/Seven-Up Companies, Inc.
- - Dr Pepper/Seven-Up Companies, Inc. 1988 Stock Option Plan.
- - Dr Pepper/Seven-Up Companies, Inc. 1988 Non-Qualified Stock Option Plan.
- - Amendment to Non-Qualified Stock Option Agreement under Dr Pepper/Seven-Up
Companies, Inc. 1988 Stock Option Plan.
- - Amendment to Non-Qualified Stock Option Agreement under Dr Pepper/Seven-Up
Companies, Inc. 1988 Non-Qualified Stock Option Plan.
- - Dr Pepper/Seven-Up Companies, Inc. Amended and Restated 1988 Stock Option
Plan.
- - Dr Pepper/Seven-Up Companies, Inc. Amended and Restated 1988 Non-Qualified
Stock Option Plan.
- - 1993 Stock Ownership Plan of Dr Pepper/Seven-Up Companies, Inc.
- - Non-Qualified Stock Option Agreement under Dr Pepper/Seven-Up Companies,
Inc. 1993 Stock Ownership Plan.
- - Dr Pepper/Seven-Up Companies, Inc. Performance Stock Award Agreement dated
October 27, 1993.
- - Stockholder Rights Plan of Dr Pepper/Seven-Up Companies, Inc., dated
September 1, 1993.
<PAGE>
SCHEDULE II
On May 17, 1993, Global Universal, Inc. and Triad/Dr Pepper Mexico filed
suit against the Guarantor and the Company in the District Court of Tarrant
County, Texas, 352nd Judicial District, alleging that Guarantor and the Company
breached an agreement pursuant to which Plaintiffs would be the exclusive
licensee and operator for DR PEPPER brand products in the country of Mexico.
Plaintiffs seek unspecified damages in an amount equal to their lost profits, as
well as exemplary damages. Guarantor and the Company have answered Plaintiffs'
complaint and have generally denied all allegations contained therein, but are
unable to express an opinion as to the outcome of this lawsuit at this time.
<PAGE>
ANNEX D
to
FIFTH AMENDMENT
[DR PEPPER/SEVEN-UP COMPANIES, INC.]
[DR PEPPER/SEVEN-UP CORPORATION]
[WACO MANUFACTURING COMPANY]
Officers' Certificate
I, the undersigned, [President/Executive Vice President/Senior Vice
President/Vice President] of [Dr Pepper/Seven-Up Companies, Inc.] [Dr
Pepper/Seven-Up Corporation] [Waco Manufacturing Company], a corporation
organized and existing under the laws of the State of Delaware (the "Company"),
do hereby certify that:
1. This Certificate is furnished pursuant to the Fifth Amendment,
dated as of December ____, 1993 (the "Fifth Amendment") to the Credit Agreement,
dated as of October 20, 1992, among Dr Pepper/Seven-Up Corporation (as successor
by merger to Dr Pepper Company and The Seven-Up Company), Dr Pepper/Seven-Up
Companies, Inc., various banks from time to time party thereto, Bankers Trust
Company, Nationsbank of North Carolina, N.A., and The Chase Manhattan Bank, N.A.
as Managing Agents, the Co-Agents, the Lead Managers and Bankers Trust Company,
as Administrative Agent (such Credit Agreement, as in effect on the date of this
Certificate after giving effect to the Fifth Amendment, being herein called the
"Credit Agreement"). Unless otherwise defined herein, capitalized terms used in
this Certificate shall have the meanings set forth in the Credit Agreement.
<PAGE>
Page 2
2. The following named individuals are elected officers of the
Company, each holds the office of the Company set forth opposite his name and
has held such office since __________, 19__.(1) The signature written opposite
the name and title of each such officer is his correct signature.
Name(2) Office Signature
____________________ ____________________ ____________________
____________________ ____________________ ____________________
____________________ ____________________ ____________________
____________________ ____________________ ____________________
3. Attached hereto as Exhibit A is a certified copy of the
Certificate of Incorporation of the Company as filed in the Office of the
Secretary of State of the State of Delaware on __________, 19__, together with
all amendments thereto adopted through the date hereof.
4. Attached hereto as Exhibit B is a true and correct copy of the
By-Laws of the Company which were duly adopted, are in full force and effect on
the date hereof, and have been in effect since ____________, 19____.
5. Attached hereto as Exhibit C is a true and correct copy of
resolutions which were duly adopted on _________, 1993 [by unanimous written
consent of the Board of Directors of the Company] [by a meeting of the Board of
Directors of the Company at which a quorum was present and acting throughout],
and said resolutions have not been rescinded, amended or modified. Except as
attached hereto as Exhibit C, no resolutions have been adopted by the Board of
Directors of the Company which deal with the execution, delivery or performance
of any of the Fifth Amendment or any other Credit Document to which the Company
is party.
________________________
(1) Insert a date prior to the time of any corporate action relating to the
Fifth Amendment or any other Credit Document.
(2) Include name, office and signature of each officer who will sign any Credit
Document, including the officer who will sign the certification at the end of
this Certificate.
<PAGE>
Page 3
[6. Attached hereto as Exhibit D are true and correct copies of all
Employee Benefit Plans of the Guarantor and its Subsidiaries required to be
delivered pursuant to Section III(1)(m) of the Fifth Amendment.
7. Attached hereto as Exhibit E are true and correct copies of all
Shareholders' Agreements with respect to the capital stock of the Guarantor and
its Subsidiaries required to be delivered pursuant to Section III(1)(m) of the
Fifth Amendment.
8. Attached hereto as Exhibit F are true and correct copies of all
Management Agreements of the Guarantor and its Subsidiaries required to be
delivered pursuant to Section III(1)(m) of the Fifth Amendment.
9. Attached hereto as Exhibit G are true and correct copies of all
Employment Agreements of the Guarantor and its Subsidiaries required to be
delivered pursuant to Section III(1)(m) of the Fifth Amendment.
10. Attached hereto as Exhibit H are true and correct copies of all
Collective Bargaining Agreements of the Guarantor and its Subsidiaries required
to be delivered pursuant to Section III(1)(m) of the Fifth Amendment.
11. Attached hereto as Exhibit I are true and correct copies of all
Tax Sharing Agreements entered into by the Guarantor or any of its Subsidiaries
required to be delivered pursuant to Section III(1)(m) of the Fifth Amendment.
12. Attached hereto as Exhibit J are true and correct copies of all
Debt Agreements of the Guarantor and its Subsidiaries required to be delivered
pursuant to Section III(1)(m) of the Fifth Amendment.
13. On the date hereof, all of the conditions in Sections III(1)(e),
(f)(ii), (g), (j), (l) and (m) of the Fifth Amendment have been satisfied.
14. On the date hereof, the representations and warranties contained
in the Credit Agreement and in the other Credit Documents are true and correct
in all material respects, both before and after giving effect to each Credit
Event to occur on the date hereof and the application of the proceeds thereof.
<PAGE>
Page 4
15. On the date hereof, no Default or Event of Default has occurred
and is continuing or would result from the Credit Events to occur on the date
hereof or from the application of the proceeds thereof.](3)
[6] [16]. There is no proceeding for the dissolution or liquidation of
the Company or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of
December, 1993.
________________________________
Name:
Title:
I, the undersigned, [Secretary/Assistant Secretary] of the Company, do hereby
certify that:
1. [Name of Person making above certifications] is the duly elected
and qualified [President/Executive Vice President/Senior Vice President/Vice
President] of the Company and the signature above is his genuine signature.
2. The certifications made by [name of Person making above
certifications] in Items 2, 3, 4, 5 and [6] [16] above are true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand this _____ day of
December, 1993.
________________________________
Name:
Title:
______________________________
(3) Insert items 6-15 only in the Certificate of Dr Pepper/Seven-Up Corporation.
<PAGE>
March 15, 1993
NAME
COMPANY
Dear NAME:
We are pleased to inform you of your selection to participate in the 1993
Performance Award Plan of Dr Pepper/Seven-Up Corporation (the "Corporation").
This Performance Award Plan (the "Plan") is designed to permit certain key
employees an opportunity to augment their annual base salary compensation
through cash bonus payments for assisting the Corporation in meeting and/or
exceeding certain specified annual objectives.
This is an annual Plan which will be operated only during the 1993 calendar
year. The Plan is not automatically renewable. This letter deals only with
arrangements with you for the performance period from January 1, 1993 through
December 31, 1993.
For achievement of the planned 1993 objectives of the Corporation, as described
below, you will earn a performance award bonus (hereinafter the "Bonus" or
"Bonuses") based upon the following criteria:
1. The basis upon which your Bonus, if any, under the Plan will be
determined will be the 1993 total planned Corporate operating profit
(the "Goal"), as follows:
% Achievement of 1993 Goal
--------------------------
90% 100% 110%
Percent of Base Salary* Earned
------------------------------
5% 10% 15%
*Determined as of December 31, 1993
2. Achievement levels are graduated upward by full percentage points to a
maximum of 110%. For example, achievement of 100.8% will be paid as
achievement of 100%.
All Bonuses under the Plan will be reviewed by the Chief Executive Officer of
the Corporation and evaluated on the following criteria: expense control, policy
management, and general professional presentation.
<PAGE>
PAGE TWO
PLAN RULES AND RESTRICTIONS:
The implementation and interpretation of the Plan and the decision to pay any
Bonuses thereunder shall be at the sole discretion of the Corporation. The
Corporation reserves the right to amend the Plan, including individual
objectives and payment schedules during the 1993 calendar year or at any time
prior to paying any Bonuses to participants under the Plan. The sole right to
cancel the Plan or any Bonuses thereunder is also reserved by The Corporation.
Any participant that enters the Plan after the first month of the calendar year,
whether through new hire or new job assignment, will have the Bonus payment
prorated from the date of entrance into the Plan. The specific conditions of
the Plan are as follows:
1. The final results of this Plan will be approved by the Chief Executive
Officer of The Corporation. Plan participants may not negotiate,
interpret, or contest such results.
2. Payment of all Bonuses will be made within 30 days of the date the
performance data is approved by the Chief Executive Officer of The
Corporation.
3. If you are transferred, change job titles or receive a new job assignment
within The Corporation during 1993, consideration will be given for the
payment of a prorated Bonus payment under the Plan based on the number of
months you held your previous position when compared to the achieved
results for that position for the full 1993 calendar year. If you are
assigned a new job which qualifies for participation in the Plan, you will
be notified at that time with confirmation in writing.
4. Termination of employment from The Corporation for any reason, other than
death or disability, prior to December 31, 1993, terminates an individual's
eligibility under the Plan and no payment will be made to said individual,
unless authorized by the Chief Executive Officer of The Corporation.
5. If you are disabled or otherwise require an approved leave of absence
during the year, Bonuses will be paid at the sole discretion of the Chief
Executive Officer of The Corporation.
6. In the case of your death, The Corporation will review your individual
circumstances for consideration of payment of any Bonus.
7. This Plan and its provisions must be held strictly confidential by you.
Except as provided in the immediately succeeding sentence, disclosure of
this Plan or any confidential information in connection therewith to
any person or firm shall result in the termination of your participation in
the Plan if The Corporation, in its sole discretion, deems such termination
necessary. You may discuss the Plan and your participation therein in
confidence with your immediate supervisor as well as The Corporation's
Director of Human Resources and his designated Plan Administrator.
<PAGE>
PAGE THREE
PLAN RULES AND RESTRICTIONS - CONTINUED
8. By signing this letter, you acknowledge (i) your understanding and
agreement to the provisions of this Plan and (ii) that any Bonus payments
thereunder are solely within the discretion of The Corporation.
9. Please return one copy of the signed letter to the Human Resources
Department for our records.
- ----------------------------------- ----------------------------------
John R. Albers Plan Participant
Chief Executive Officer
JRA: jea
<PAGE>
EXHIBIT 10.41
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of August 2, 1993, between Dr Pepper/Seven-Up
Corporation, a Delaware corporation (the "Company"), and John R. Albers, a
resident of Dallas, Texas (the "Employee")
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Company desires to employ the Employee as its President and
Chief Executive Officer, and the Employee desires to accept such employment, on
the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
contained hereinbelow, and other good and valuable considerations, the receipt
and sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. EMPLOYMENT. The Company hereby agrees to employ the Employee as its
President and Chief Executive Officer, and the Employee hereby agrees to accept
such employment and to perform the services specified herein upon the terms and
conditions hereinafter set forth.
2. TERM. The term of employment hereunder shall commence as of January 1,
1993, and continue until December 31, 1996, unless sooner terminated in
accordance with the provisions hereof.
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3. COMPENSATION.
3.1 BASE COMPENSATION. The Employee shall receive as compensation
for his services hereunder an annual salary of $659,250, which sum shall be
payable in equal bi-weekly installments (the "Base Compensation") during
the term hereof. The Employee's Base Compensation shall be reviewed at
least annually by the Board of Directors of the Company (the "Board of
Directors"), and the Employee shall be entitled to such increases in his
Base Compensation as the Board of Directors may determine based on his
performance and other relevant criteria.
3.2 BONUS. The Employee shall also be entitled to participate in any
bonus plan that the Company may establish. The Employee's benefits under
such bonus plan shall be commensurate with his position within the Company
vis-a-vis other members of senior management of the Company.
4. VACATION, INSURANCE, EXPENSES AND RELATED MATTERS. The Employee shall
be entitled to participate in any life and health insurance benefits which are
generally extended, from time to time, to the employees of the Company, to
reasonable vacations, consistent with the Company's policies, and to a Company
car, of a make and model commensurate with Company policy for senior management,
to be used in performing his duties for the Company. The Company shall pay the
dues of the Employee's country clubs and luncheon clubs; provided, however, that
the Employee shall
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provide an annual status of the country clubs and luncheon clubs of which he is
a member for the review and approval of the Compensation Committee of the Board
of Directors. Upon the submission of properly documented expense account
reports, the Company shall reimburse the Employee for legitimate expenses
incurred in the course of his employment, including insurance, gasoline,
maintenance and similar expenses incurred in connection with the use of a
Company car.
5. DUTIES. The Employee shall faithfully and diligently perform his
duties under this Agreement as prescribed, from time to time, by the Board of
Directors.
6. EXTENT OF SERVICE. The Employee shall devote substantially all of his
business time, attention and energy to the Company and shall not, during the
term of his employment, be actively engaged in any managerial or employment
capacity in any other business activity for gain, profit or other pecuniary
advantage which detracts significantly from the Employee's performance of his
duties and responsibilities to the Company.
7. TERMINATION.
7.1 DEATH OR DISABILITY. This Agreement shall terminate
automatically upon the death of Employee or when his employment ceases as a
result of "Termination by Disability". For purposes herein, Termination by
Disability shall be deemed to occur if, as a result of the Employee's
incapacity due to physical or mental illness, the Employee shall
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have been absent from his duties with the Company on a full-time basis for
two hundred seventy (270) consecutive days and within thirty (30) days
after a written Notice of Termination (as defined in Paragraph 7.4 herein)
has been given (which notice must follow the 270 consecutive days of
absence), the Employee shall not have returned to the full-time performance
of his duties. The termination shall be deemed to occur at the end of the
thirty (30) day period.
7.2 CAUSE. The Company may terminate the employment of Employee
under this Agreement for Cause. The Company shall have a "Cause" to
terminate the Employee's employment if (a) the Employee engages in a course
of conduct that constitutes gross mismanagement of the Company, (b) the
Employee engages in fraudulent activities or engages willfully in gross
misconduct materially and demonstrably injurious to the Company, or (c) the
Employee is convicted of a felony criminal offense. For purposes of this
Paragraph 7.2, no act, or failure to act, on the Employee's part shall be
considered "willful" unless done, or omitted to be done, by the Employee
not in good faith and without reasonable belief that the Employee's action
or omission was in the best interest of the Company. Notwithstanding the
foregoing, the Employee shall not be deemed to have been terminated for
Cause unless and until there shall have been delivered to him a copy of a
resolution duly adopted by the
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affirmative vote of not less than three-quarters of the members of the
Board of Directors in attendance at a meeting of the Board of Directors at
which a quorum was present and which meeting was called and held for the
purpose of considering the conduct of Employee (after reasonable notice to
the Employee and an opportunity for the Employee, together with his
counsel, to be heard before the Board of Directors), finding that in the
good faith opinion of the Board of Directors the Employee was guilty of
conduct set forth above in clauses (a) and (b) of the first sentence of
this Paragraph 7.2 and specifying the particulars thereof in detail;
provided, however, that the Employee, if a member of the Board of
Directors, shall not be included in the count to determine if a quorum is
present and shall not be permitted to vote on such matter.
7.3 TERMINATION BY EMPLOYEE FOR GOOD REASON. The Employee may
terminate his employment with the Company for "Good Reason" at any time,
and in such circumstances shall be entitled to the benefits provided for in
Paragraph 8.4 herein. For purposes of this Agreement, "Good Reason" shall
mean the occurrence of any one of the following events without the
Employee's express written consent:
(a) The assignment of the Employee to any duties substantially
inconsistent with his current position, duties, responsibilities or
status with the Company or
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a substantial reduction of his duties or responsibilities, as compared
with his current duties or responsibilities, or any removal of the
Employee from, or any failure to re-elect him to, the position he held
at the time of the execution of this Agreement, except in connection
with termination of his employment for Cause or Disability; provided,
however, that as long as the Employee remains Chief Executive Officer,
the Board may designate another individual as President and Chief
Operating Officer;
(b) A reduction by the Company in the amount of the Employee's
Base Compensation or a reduction in other employee perquisites as
compared to that to which he is entitled pursuant to Paragraph 4
herein; provided, however, that if the reduction in the amount of the
Employee's Base Compensation or the reduction in the other employee
perquisites is applicable to other key employees as well as the
Employee, then such reduction in Base Compensation or employee
perquisites shall not be considered Good Reason for purposes of this
Paragraph 7.3;
(c) Any action or lack of action by the Company which results in
(1) the failure by the Company to continue to provide the Employee
with substantially similar bonus opportunities under the bonus plan of
the
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Company in which he participates as of the date of the execution of
this Agreement or to provide the benefits the Employee enjoys under
the Company's benefit programs, such as any of the pension, profit
sharing, life insurance, medical, health and accident, or disability
plans, in which he participates as of the date of the execution of
this Agreement; (2) the failure by the Company to provide
substantially the same fringe benefits enjoyed by the Employee at the
time of the execution of this Agreement; or (3) the failure by the
Company to provide the Employee with the number of paid vacation days
to which he was entitled on the basis of years of service with the
Company in accordance with the Company's normal vacation policy in
effect at the time of the execution of this Agreement; provided,
however, that if the Company's action or inaction resulting in the
loss or reduction in benefits and opportunities described under (1),
(2) and (3) above is applicable to other key employees as well as the
Employee, then such loss or reduction in benefits or opportunities
shall not be considered Good Reason for purposes of this Paragraph
7.3;
(d) The relocation of the Employee's principal office to a
location more than thirty-five (35) miles
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from the location of such office immediately prior to the execution of
this Agreement;
(e) Requiring travel on the Company's business to an extent
substantially greater than the Employee's business travel obligations
immediately prior to the execution of this Agreement;
(f) Any failure of the Company to obtain the express written
assumption of the obligation to perform this Agreement by any
successor as contemplated by Paragraph 9.1 herein; or
(g) Any breach by the Company of any of the provisions of this
Agreement, any executive severance agreement between the Company and
the Employee, or any failure by the Company to carry out any of its
obligations hereunder.
7.4 NOTICE OF TERMINATION. Any termination of employment shall be
communicated by written notice of termination to the other party hereto.
For purposes of this Agreement, a "Notice of Termination" shall mean a
notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the
Employee's employment under the provision so indicated.
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7.5 DATE OF TERMINATION. "Date of Termination" shall mean (a) if the
Employee's employment is terminated under this Agreement as a result of
Termination by Disability, as of the date described in Paragraph 7.1
herein, (b) if the Employee terminates his employment, the date specified
in the Notice of Termination, and (c) if the Employee's employment is
terminated for any other reason, the date on which a Notice of Termination
is given, pursuant to Paragraph 10 herein; provided that, if within thirty
(30) days after any Notice of Termination is given, the party receiving
such Notice of Termination notifies the other party that a good faith
dispute exists concerning the termination, the Date of Termination shall be
the date on which the dispute is finally determined, either by mutual
written agreement of the parties or by a binding and final arbitration
award as provided in Paragraph 14 herein. Notwithstanding the pendency of
any such dispute or controversy, except in the event of a termination for
Cause pursuant to Paragraph 7.2 herein, the Company will continue to pay
the Employee his full compensation in effect when the notice giving rise to
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the dispute was given (including, but not limited to, Base Compensation and
payments under the bonus plan in which he participates) and continue the
Employee as a participant in all compensation, benefit and insurance plans
in which the Employee was participating when the notice giving rise to the
dispute was given, until the earlier of the date on which the dispute is
finally resolved in accordance with Paragraph 14 herein or twelve (12)
months from the date when the notice giving rise to the dispute was given.
Amounts paid under this Paragraph 7.5 shall be offset against and shall
reduce any other amounts due under this Agreement, including any
arbitration award under Paragraph 14 herein.
8. COMPENSATION DURING DISABILITY OR UPON TERMINATION OF EMPLOYMENT.
8.1 DISABILITY. During any period that the Employee fails to perform
his duties hereunder as a result of incapacity due to physical or mental
illness, he shall continue to receive his Compensation at a rate then in
effect until a Termination by Disability occurs as defined in Paragraph 7.1
herein. Thereafter, the Employee's benefits shall be determined in
accordance with the Company's Long Term Disability Benefits Plan, including
any supplemental plan for key executives in which the Employee participates
or any substitute plans then in effect, and the Company shall have no
further obligations to him under this Agreement.
8.2 DEATH. If the employment of Employee is terminated because of
his death prior to the expiration of the term of this Agreement, then his
estate, heirs or beneficiaries, shall not be entitled to any benefits
pursuant to this Agreement, but they shall be entitled to any benefits
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payable to them pursuant to the terms of applicable employee benefit plans
or insurance arrangements sponsored by the Company.
8.3 VOLUNTARY TERMINATION WITHOUT GOOD REASON OR TERMINATION FOR
CAUSE. In the event the Employee voluntarily ceases employment with the
Company without Good Reason prior to expiration of the term of this
Agreement or in the event his employment is terminated for Cause by the
Company prior to the expiration of the term of this Agreement, the Company
shall pay him Base Compensation through the Date of Termination at the rate
in effect at the time the Notice of Termination is given and the Company
shall have no further obligation to him under this Agreement; subject,
however, to the provisions of Paragraph 8.4(c) herein.
8.4 TERMINATION FOR GOOD REASON OR WITHOUT CAUSE. In the event the
Employee ceases employment for Good Reason prior to the expiration of the
term of this Agreement or in the event his employment is terminated without
Cause by the Company prior to the expiration of the term of this Agreement,
then the Employee shall be entitled to the following severance payments and
benefits from the Company:
(a) Severance Pay. Severance Pay in a lump sum on the
thirty-fifth day following the Date of Termination in the following
amount:
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(1) the Employee's Base Compensation through the Date of
Termination at the rate in effect at the time the Notice of
Termination is given; and
(2) in lieu of any further salary payments to the Employee
for periods subsequent to the Date of Termination, an amount
equal to the product of (i) the sum of the Employee's Base
Compensation at the rate in effect prior to any reduction of
Employee's Base Compensation without his consent, plus the amount
of his most recent bonus, multiplied by (ii) the number three
(3); and
(3) in lieu of shares of common stock ("Shares") issuable
upon exercise of options ("Options"), if any, granted to the
Employee under the Company's stock option plans (which Options
shall be cancelled upon the making of the payment referred to
below), the Employee shall receive an amount in cash equal to the
aggregate spread between the exercise prices of all Options held
by the Employee (whether or not then fully exercisable) and
either
(i) the final sales price of the Company's Shares as
quoted on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") (or as reported by any
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national securities exchange on which the Company's Shares
may then be listed) on the Date of Termination, or
(ii) if the Company's Shares are not then listed on any
national securities exchange or quoted on NASDAQ, then the
fair market value of the Shares as of the Date of
Termination as determined in good faith by the Company;
provided, however, that in the event the Employee submits to
the Company a written objection to the Company's
determination of the fair market value within ten (10) days
of Employee's receipt of written notice of the Company's
determination, the Company shall select an independent
valuation expert to determine the fair market value of any
Shares. The Company and the Employee hereby agree that the
independent valuation expert's determination of the fair
market value of the Shares shall be final and conclusive,
and the Company and the Employee shall share equally in the
payment of all expenses incurred by the valuation expert in
making its determination; provided, however, that
notwithstanding the foregoing, the Company shall not
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be required to pay any amount pursuant to this Section
8.4(a)(3)(ii) which exceeds those payments permitted to be
made by the Company to the Employee under (A) the indenture
governing the Company's 11-1/2% Senior Subordinated Discount
Notes Due 2002, or (B) the credit agreement, dated October
20, 1992, among Dr Pepper/Seven-Up Companies, Inc., as
guarantor, the Company, and certain lenders and agents named
therein, as such agreements may be amended from time to
time, until such time as such agreements are terminated or
amended to permit the full payment of the amount described
herein.
(b) EMPLOYEE BENEFITS. The Company shall maintain in full force
and effect, for the continued benefit of the Employee for three years
after the Date of Termination, all employee benefit plans and programs
or arrangements described on Exhibit "A", attached hereto and
incorporated fully herein by reference, in which the Employee was
entitled to participate immediately prior to the Date of Termination
(except those described in Paragraph 8.4(c) and (d) below), provided
that the Employee's continued participation is possible
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under the general terms and provisions of such plans and programs. In
the event that the Employee's continued participation in any such plan
or program is not possible, the Company shall arrange to provide the
Employee with benefits substantially equivalent to those which the
Employee is entitled to receive under such plans and programs. At the
end of the period of coverage, the Employee shall have the option to
have assigned to the Employee at no cost and with no apportionment of
prepaid premiums, any assignable insurance policy owned by the Company
and relating specifically to the Employee.
(c) RETIREMENT PLAN. The Employee shall not be entitled to any
benefits under the Dr Pepper/Seven-Up Companies Pension Plan and the
Dr Pepper Company Supplemental Pension Plan (or any successor plan) in
effect as of the Date of Termination (collectively, the "Plans") other
than the benefits earned pursuant to the specific terms of said Plans.
However, effective as of May 19, 1988, the Employee has been credited
with twenty-five (25) years of service or vesting service for all
purposes under the Dr Pepper Company Supplemental Pension Plan (the
"Supplemental Plan"), and the
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Employee's Date of Termination, whenever it might occur and for
whatever cause or reason it might occur, shall be deemed as occurring
on or after his Normal Retirement Date, as defined in the Supplemental
Plan (or any successor to such Supplemental Plan). To the extent this
provision varies from the terms of the Supplemental Plan it shall be
considered as an amendment to the Supplemental Plan which shall be
applicable only to the Employee.
(d) PROFIT SHARING PLAN. The Employee shall not be entitled to
any benefits under The Dr Pepper/Seven-Up Companies Profit Sharing
Plan in effect as of the Date of Termination (the "Profit Sharing
Plan") other than the benefits earned pursuant to the specific terms
of said Profit Sharing Plan.
(e) AUTOMOBILE. The Company shall enable the Employee to
purchase or continue to lease, as the case may be, the automobile, if
any, which the Company was providing for his use at the time the
Notice of Termination was given, at the value of, or upon the lease
terms for, such automobile at such time.
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(f) RESTRICTED STOCK. If the Employee owns any Shares that are
subject to restrictions imposed by the Company, then such restrictions
shall lapse as of the Date of Termination.
(g) MITIGATION. The Employee shall not be required to mitigate
the amount of any payment provided for in this Paragraph 8.4 by
seeking other employment or otherwise, nor shall the amount of any
payment provided for in this Paragraph 8.4 be reduced by any
compensation earned by the Employee as the result of employment by
another employer after the Date of Termination, or otherwise. The
Company's obligations to pay the Employee the compensation and make
the arrangements provided herein shall be absolute and unconditional
and shall not be affected by any circumstances including, without
limitation, any set-off (except as provided in Paragraphs 7.5 and
15.2) counterclaim, recoupment, defense or other right which the
Company may have. All amounts payable by the Company hereunder shall
be paid without notice and demand.
8.5 INDEMNIFICATION. The Employee shall be entitled throughout the
term of this Agreement and thereafter to indemnification by the Company in
respect of any actions or
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omissions as an employee, officer or director of the Company (or any
successor pursuant to Paragraph 9) or of any subsidiary of the Company to
the fullest extent permitted by law.
9. SUCCESSORS; BINDING AGREEMENT.
9.1 ASSUMPTION. This Agreement shall be binding on the successors
and assigns of the Company and the Company will require any successor to
expressly assume and agree to perform this Agreement in the same manner and
to the same extent that the Company would be required to perform it if no
such succession had taken place.
9.2 SUCCESSORS. This Agreement shall inure to the benefit of and be
enforceable by the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
the Employee should die while any amounts would still be payable to him
hereunder if the Employee had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the Employee's estate, heirs or beneficiaries, as
determined by his last will and testament or, if he has no last will and
testament in effect at his death, by the laws of intestate succession of
the State of Texas.
10. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when
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hand delivered or mailed by registered mail, return receipt requested, postage
prepaid, addressed to the respective addresses set forth below, provided that
all notices to the Company shall be directed to the attention of the Chairman of
the Compensation Committee of the Board of Directors, with a copy to the
Secretary of the Company, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notices of
change of address shall be effective only upon receipt.
COMPANY: Chairman of the Compensation Committee
of the Board of Directors
Dr Pepper/Seven-Up Corporation
P. O. Box 655086
Dallas, Texas 75265-5086
Vice President, Secretary & General Counsel
Dr Pepper/Seven-Up Corporation
P. O. Box 655086
Dallas, Texas 75265-5086
Employee: John R. Albers
5522 Harbor Town
Dallas, Texas 75287
11. AMENDMENT; WAIVER. No provisions of this Agreement may be modified,
waived or amended unless such waiver, modification or amendment is agreed to in
writing and signed by the Employee and such officer as may be specifically
designated by the Board of Directors, and such provisions shall be modified,
waived or amended only to the extent set forth in such writing.
12. VALIDITY. The invalidity or unenforceability of any provision of this
Agreement shall not effect the validity or
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enforceability of any other provision of this Agreement, which shall remain in
full force and effect.
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 will constitute one and the same instrument.
14. ARBITRATION. Any dispute, disagreement or other question arising from
this Agreement or the interpretation thereof shall be settled by arbitration in
accordance with the commercial rules then in effect of the American Arbitration
Association, except that the arbitrator(s) shall be selected in accordance with
the following procedure: such dispute, disagreement or other question shall be
referred to and decided by a single arbitrator if the parties can agree upon one
within fifteen (15) days after either of the parties shall notify the other, as
provided in Paragraph 7.5 of this Agreement, that it wishes to avail itself of
the provisions of this Paragraph 14; otherwise, such dispute, disagreement or
other question shall be referred to and decided by three arbitrators, one to be
appointed by the Company and one to be appointed by the Employee, each such
appointment to be made within ten (10) days after the expiration of the fifteen
(15) day period referred to above, and the third arbitrator to be appointed by
the first two arbitrators within twenty (20) days after the expiration of such
ten (10) day period. If the first two arbitrators cannot reach agreement on the
third arbitrator
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within said twenty (20) day period, the third arbitrator shall be an impartial
arbitrator appointed by the President of the American Arbitration Association
within thirty (30) days after the expiration of said twenty (20) day period.
Hearings of the arbitrator(s) shall be held in Dallas, Texas, unless the parties
agree otherwise. Judgment upon an award rendered by the arbitrator(s) may be
entered in any court of competent jurisdiction, including courts in the State of
Texas. Any award so rendered shall be final and binding upon the parties
hereto. Except as otherwise provided in Paragraph 15 below, all costs and
expenses of the arbitrator(s) shall be paid as determined by such arbitrator(s),
and all costs and expenses of experts, witnesses and other persons retained by
the parties shall be borne by them respectively.
15. INDEMNIFICATION FOR EXPENSES; ADVANCEMENT OF EXPENSES.
15.1 INDEMNIFICATION. The Company shall pay, and indemnify the
Employee against, all costs and expenses, including without limitation the
fees and expenses of attorneys, arbitrators, experts and witnesses,
incurred by or on behalf of the Employee in connection with any arbitration
or legal claim or proceeding arising from this Agreement or the
interpretation thereof, to the extent that the Employee is successful, on
the merits or otherwise, in any such claim or proceeding. If the Employee
is not wholly successful in such claim or proceeding but is successful,
on the merits or
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otherwise, as to one or more but less than all claims, issues or matters in
such claim or proceeding, then the Company shall indemnify the Employee
against all such costs and expenses incurred by him or on his behalf in
connection with each successfully resolved claim, issue or matter.
15.2 ADVANCE OF EXPENSES. The Company shall advance all such costs
and expenses incurred by or on behalf of the Employee in connection with
any such claim or proceeding referred to in Paragraph 15.1 above within
twenty (20) days after the receipt by the Company of a statement or
statements from the Employee requesting such advance or advances, whether
prior to or after final disposition of such claim or proceeding. Such
statement or statements shall reasonably evidence the costs and expenses
incurred by the Employee and shall be preceded or accompanied by an
undertaking by or on behalf of the Employee to repay any costs and expenses
advanced if it shall ultimately be determined that the Employee is not
entitled to be indemnified against such costs and expenses, and,
furthermore, if the Employee fails to repay any costs and expenses that are
advanced, then such amounts shall be offset against and shall reduce any
other amounts due under this Agreement.
16. INTEREST. The Company shall pay the Employee interest at a rate of
ten percent (10%) PER ANNUM on any benefits payable
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to the Employee hereunder not paid on the date provided for herein from such
date until the date of payment.
17. GENERAL CREDITOR. Nothing contained in this Agreement and no action
taken pursuant to the provisions of this Agreement shall create or be construed
to create a trust of any kind or a fiduciary relationship between the Company
and the Employee or any other person, nor shall any money or property of the
Company be segregated for the benefit of the Employee to satisfy the obligations
of the Company hereunder. To the extent that the Employee acquires a right to
receive payments hereunder, such rights shall be no greater than the right of
any general unsecured creditor of the Company. Except as expressly provided
herein, each payment shall be made in cash from the general assets of the
Company.
18. NO ASSIGNMENT. The right of the Employee or any other person to the
payment of amounts or other benefits under this Agreement shall not be assigned,
alienated, hypothecated, placed in trust, disposed of, transferred, pledged or
encumbered (except by will or by the laws of descent and distribution), and, to
the extent permitted by law, no such amount or payment shall in any way be
subject to any legal process to subject the same to the payments of any claim
against the Employee or any other person.
19. TAX WITHHOLDING. The Company will have the right to withhold from any
transfer or payment made to the Employee or to any other person hereunder,
whether such payment is to be made in
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cash or other property, all applicable Federal, state, city or other taxes or
foreign taxes as shall be required, in the determination of the Company,
pursuant to any statute or governmental regulation or ruling.
20. DISCLOSURE OF INFORMATION. The Employee hereby acknowledges that he
will have access to certain trade secrets and confidential information of the
Company and of corporations affiliated with the Company and that such
information constitutes valuable, special and unique property of the Company and
such other corporations. The Employee will not, during or after the term of his
employment hereunder, disclose any such trade secrets or confidential
information to any person or entity for any reason or purpose whatsoever,
including, without limitation, the disclosure of the terms and conditions of
this Agreement, except as may be required by law. If the Employee becomes
legally compelled to disclose any trade secrets or confidential information,
then the Employee will provide the Company prompt notice thereof so that the
Company may seek a protective order or other appropriate remedy and the Employee
will cooperate with the Company in that effort. If such protective order or
other remedy is not obtained, the Employee (a) will furnish only that portion of
the trade secrets or confidential information that the Employee is advised by
written opinion of counsel is legally required and (b) will exercise his best
effort to obtain reliable assurance
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that confidential treatment will be accorded such trade secrets or confidential
information.
21. AGREEMENT NOT TO COMPETE. Following the termination of his employment
with the Company, the Employee agrees that (a) during the first three years of
this Agreement, for the greater of the remainder of such first three years or
one (1) year and (b) after the third anniversary of this Agreement, for a period
of one (1) year, neither he nor any affiliate shall, either on his own behalf or
as a partner, officer, director, employee, agent or shareholder, engage in,
invest in (except as a holder of less than 5% of the outstanding capital stock
of any corporation with a class of equity security registered under the
Securities Act of 1934, as amended) or render services to any person or entity
engaged in the primary businesses in which the Company is then engaged and
situated within the United States of America ("Competitive Business"). Nothing
contained in this Section 21 or in Section 6 hereof shall be construed as
restricting the Employee's right to sell or otherwise dispose of any business or
investments owned or operated by the Employee as of the date hereof.
22. AGREEMENT NOT TO SOLICIT CLIENTS AND EMPLOYEES. Employee agrees that,
for a period of three (3) years following the termination of his employment with
the Company, neither he nor any affiliate shall, either alone or on behalf of
any business engaged in a Competitive Business, solicit or induce, or in
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any manner attempt to solicit or induce any person employed by, or an agent of,
the Company to terminate his contract or employment or agency, as the case may
be, with the Company.
23. INJUNCTIVE RELIEF. Notwithstanding the provisions of Section 14
herein, in the event of a breach or threatened breach by the Employee of the
provisions of this Agreement, the Company shall be entitled to an injunction to
prevent irreparable injury to the Company.
24. INTEGRATION. This Agreement represents the entire understanding and
agreement between the parties hereto with respect to the subject matter hereto,
and all other written or oral agreements relating to the subject matter hereof
are hereby superseded.
25. GOVERNING LAW. The terms and provisions of this Agreement, including
without limitation the provisions for arbitration under Section 14 hereof, shall
be construed in accordance with, and governed by, the laws of the State of
Texas.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above set forth.
DR PEPPER/SEVEN-UP CORPORATION
By: /s/
------------------------------------
Name:
Title:
EMPLOYEE
_______________________________________
John R. Albers
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EXHIBIT "A"
BENEFITS
Medical Plan
Dental Plan
Life Insurance
Accidental Death and Dismemberment Insurance
Cash Value Life Insurance
Retiree Insurance
Post-Retirement Death Benefit Plan
Post-Retirement Supplemental Death Benefit Plan
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EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of August 2, 1993, between Dr Pepper/Seven-Up
Corporation, a Delaware corporation (the "Company"), and Ira M. Rosenstein, a
resident of Dallas, Texas (the "Employee").
W I T N E S S E T H :
WHEREAS, the Company desires to employ the Employee as its Executive Vice
President and Chief Financial Officer, and the Employee desires to accept such
employment, on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
contained hereinbelow, and other good and valuable considerations, the receipt
and sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. EMPLOYMENT. The Company hereby agrees to employ the Employee as its
Executive Vice President and Chief Financial Officer, and the Employee hereby
agrees to accept such employment and to perform the services specified herein
upon the terms and conditions hereinafter set forth.
2. TERM. The term of employment hereunder shall commence as of
January 1, 1993, and continue until December 31, 1996, unless sooner terminated
in accordance with the provisions hereof.
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3. COMPENSATION.
3.1 BASE COMPENSATION. The Employee shall receive as compensation
for his services hereunder an annual salary of $375,600, which sum shall be
payable in equal bi-weekly installments (the "Base Compensation") during
the term hereof. The Employee's Base Compensation shall be reviewed at
least annually by the Board of Directors of the Company (the "Board of
Directors"), and the Employee shall be entitled to such increases in his
Base Compensation as the Board of Directors may determine based on his
performance and other relevant criteria.
3.2 BONUS. The Employee shall also be entitled to participate in any
bonus plan that the Company may establish. The Employee's benefits under
such bonus plan shall be commensurate with his position within the Company
vis-avis other members of senior management of the Company.
4. VACATION, INSURANCE, EXPENSES AND RELATED MATTERS. The Employee shall
be entitled to participate in any life and health insurance benefits which are
generally extended, from time to time, to the employees of the Company, to
reasonable vacations, consistent with the Company's policies, and to a Company
car, of a make and model commensurate with Company policy for senior management,
to be used in performing his duties for the Company. The Company shall pay the
dues of the Employee's country clubs and luncheon clubs; provided, however, that
the Employee shall
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provide an annual status of the country clubs and luncheon clubs of which he is
a member for the review and approval of the Compensation Committee of the Board
of Directors. Upon the submission of properly documented expense account
reports, the Company shall reimburse the Employee for legitimate expenses
incurred in the course of his employment, including insurance, gasoline,
maintenance and similar expenses incurred in connection with the use of a
Company car.
5. DUTIES. The Employee shall faithfully and diligently perform his
duties under this Agreement as prescribed, from time to time, by the Board of
Directors.
6. EXTENT OF SERVICE. The Employee shall devote substantially all of his
business time, attention and energy to the Company and shall not, during the
term of his employment, be actively engaged in any managerial or employment
capacity in any other business activity for gain, profit or other pecuniary
advantage which detracts significantly from the Employee's performance of his
duties and responsibilities to the Company.
7. TERMINATION.
7.1 DEATH OR DISABILITY. This Agreement shall terminate
automatically upon the death of Employee or when his employment ceases as a
result of "Termination by Disability". For purposes herein, Termination by
Disability shall be deemed to occur if, as a result of the Employee's
incapacity due to physical or mental illness, the Employee shall
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have been absent from his duties with the Company on a full-time basis for
two hundred seventy (270) consecutive days and within thirty (30) days
after a written Notice of Termination (as defined in Paragraph 7.4 herein)
has been given (which notice must follow the 270 consecutive days of
absence), the Employee shall not have returned to the full-time performance
of his duties. The termination shall be deemed to occur at the end of the
thirty (30) day period.
7.2 CAUSE. The Company may terminate the employment of Employee
under this Agreement for Cause. The Company shall have a "Cause" to
terminate the Employee's employment if (a) the Employee engages in a course
of conduct that constitutes gross mismanagement of the Company, (b) the
Employee engages in fraudulent activities or engages willfully in gross
misconduct materially and demonstrably injurious to the Company, or (c) the
Employee is convicted of a felony criminal offense. For purposes of this
Paragraph 7.2, no act, or failure to act, on the Employee's part shall be
considered "willful" unless done, or omitted to be done, by the Employee
not in good faith and without reasonable belief that the Employee's action
or omission was in the best interest of the Company. Notwithstanding the
foregoing, the Employee shall not be deemed to have been terminated for
Cause unless and until there shall have been delivered to him a copy of a
resolution duly adopted by the
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affirmative vote of not less than three-quarters of the members of the
Board of Directors in attendance at a meeting of the Board of Directors at
which a quorum was present and which meeting was called and held for the
purpose of considering the conduct of Employee (after reasonable notice to
the Employee and an opportunity for the Employee, together with his
counsel, to be heard before the Board of Directors), finding that in the
good faith opinion of the Board of Directors the Employee was guilty of
conduct set forth above in clauses (a) and (b) of the first sentence of
this Paragraph 7.2 and specifying the particulars thereof in detail;
provided, however, that the Employee, if a member of the Board of
Directors, shall not be included in the count to determine if a quorum is
present and shall not be permitted to vote on such matter.
7.3 Termination by Employee for Good Reason. The Employee may
terminate his employment with the Company for "Good Reason" at any time,
and in such circumstances shall be entitled to the benefits provided for in
Paragraph 8.4 herein. For purposes of this Agreement, "Good Reason" shall
mean the occurrence of any one of the following events without the
Employee's express written consent:
(a) The assignment of the Employee to any duties substantially
inconsistent with his current position, duties, responsibilities or
status with the Company or
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a substantial reduction of his duties or responsibilities, as compared
with his current duties or responsibilities, or any removal of the
Employee from, or any failure to re-elect him to, the position he held
at the time of the execution of this Agreement, except in connection
with termination of his employment for Cause or Disability;
(b) A reduction by the Company in the amount of the Employee's
Base Compensation or a reduction in other employee perquisites as
compared to that to which he is entitled pursuant to Paragraph 4
herein; provided, however, that if the reduction in the amount of the
Employee's Base Compensation or the reduction in the other employee
perquisites is applicable to other key employees as well as the
Employee, then such reduction in Base Compensation or employee
perquisites shall not be considered Good Reason for purposes of this
Paragraph 7.3;
(c) Any action or lack of action by the Company which results in
(1) the failure by the Company to continue to provide the Employee
with substantially similar bonus opportunities under the bonus plan of
the Company in which he participates as of the date of the execution
of this Agreement or to provide the benefits the Employee enjoys under
the Company's benefit
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programs, such as any of the pension, profit sharing, life insurance,
medical, health and accident, or disability plans, in which he
participates as of the date of the execution of this Agreement; (2)
the failure by the Company to provide substantially the same fringe
benefits enjoyed by the Employee at the time of the execution of this
Agreement; or (3) the failure by the Company to provide the Employee
with the number of paid vacation days to which he was entitled on the
basis of years of service with the Company in accordance with the
Company s normal vacation policy in effect at the time of the
execution of this Agreement; provided, however, that if the Company's
action or inaction resulting in the loss or reduction in benefits and
opportunities described under (1), (2) and (3) above is applicable to
other key employees as well as the Employee, then such loss or
reduction in benefits or opportunities shall not be considered Good
Reason for purposes of this Paragraph 7.3;
(d) The relocation of the Employee's principal office to a
location more than thirty-five (35) miles from the location of such
office immediately prior to the execution of this Agreement;
(e) Requiring travel on the Company's business to an extent
substantially greater than the Employee's
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business travel obligations immediately prior to the execution of this
Agreement;
(f) Any failure of the Company to obtain the express written
assumption of the obligation to perform this Agreement by any
successor as contemplated by Paragraph 9.1 herein; or
(g) Any breach by the Company of any of the provisions of this
Agreement, any executive severance agreement between the Company and
the Employee, or any failure by the Company to carry out any of its
obligations hereunder.
7.4 NOTICE OF TERMINATION. Any termination of employment shall be
communicated by written notice of termination to the other party hereto.
For purposes of this Agreement, a "Notice of Termination" shall mean a
notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the fact's
and circumstances claimed to provide a basis for termination of the
Employee's employment under the provision so indicated.
7.5 DATE OF TERMINATION. "Date of Termination" shall mean (a) if the
Employee's employment is terminated under this Agreement as a result of
Termination by Disability, as of the date described in Paragraph 7.1
herein, (b) if the Employee terminates his employment, the date specified
in
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the Notice of Termination, and (c) if the Employee's employment is
terminated for any other reason, the date on which a Notice of Termination
is given, pursuant to Paragraph 10 herein; provided that, if within thirty
(30) days after any Notice of Termination is given, the party receiving
such Notice of Termination notifies the other party that a good faith
dispute exists concerning the termination, the Date of Termination shall be
the date on which the dispute is finally determined, either by mutual
written agreement of the parties or by a binding and final arbitration
award as provided in Paragraph 14 herein. Notwithstanding the pendency of
any such dispute or controversy, except in the event of a termination for
Cause pursuant to Paragraph 7.2 herein, the Company will continue to pay
the Employee his full compensation in effect when the notice giving rise to
the dispute was given (including, but not limited to, Base Compensation and
payments under the bonus plan in which he participates) and continue the
Employee as a participant in all compensation, benefit and insurance plans
in which the Employee was participating when the notice giving rise to the
dispute was given, until the earlier of the date on which the dispute is
finally resolved in accordance with Paragraph 14 herein or twelve (12)
months from the date when the notice giving rise to the dispute was given.
Amounts paid under this Paragraph 7.5 shall be offset against and
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shall reduce any other amounts due under this Agreement, including any
arbitration award under Paragraph 14 herein.
8. COMPENSATION DURING DISABILITY OR UPON TERMINATION OF EMPLOYMENT.
8.1 DISABILITY. During any period that the Employee fails to perform
his duties hereunder as a result of incapacity due to physical or mental
illness, he shall continue to receive his Compensation at a rate then in
effect until a Termination by Disability occurs as defined in Paragraph 7.1
herein. Thereafter, the Employee's benefits shall be determined in
accordance with the Company's Long Term Disability Benefits Plan, including
any supplemental plan for key executives in which the Employee participates
or any substitute plans then in effect, and the Company shall have no
further obligations to him under this Agreement.
8.2 DEATH. If the employment of Employee is terminated because of
his death prior to the expiration of the term of this Agreement, then his
estate, heirs or beneficiaries, shall not be entitled to any benefits
pursuant to this Agreement, but they shall be entitled to any benefits
payable to them pursuant to the terms of applicable employee benefit plans
or insurance arrangements sponsored by the Company.
8.3 VOLUNTARY TERMINATION WITHOUT GOOD REASON OR TERMINATION FOR
CAUSE. In the event the Employee voluntarily
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ceases employment with the Company without Good Reason prior to expiration
of the term of this Agreement or in the event his employment is terminated
for Cause by the Company prior to the expiration of the term of this
Agreement, the Company shall pay him Base Compensation through the Date of
Termination at the rate in effect at the time the Notice of Termination is
given and the Company shall have no further obligation to him under this
Agreement; subject, however, to the provisions of Paragraph 8.4(c) herein.
8.4 TERMINATION FOR GOOD REASON OR WITHOUT CAUSE. In the event the
Employee ceases employment for Good Reason prior to the expiration of the
term of this Agreement or in the event his employment is terminated without
Cause by the Company prior to the expiration of the term of this Agreement,
then the Employee shall be entitled to the following severance payments and
benefits from the Company:
(a) SEVERANCE PAY. Severance Pay in a lump sum on the
thirty-fifth day following the Date of Termination in the following
amount:
(1) the Employee's Base Compensation through the Date of
Termination at the rate in effect at the time the Notice of
Termination is given; and
(2) in lieu of any further salary payments to the Employee
for periods subsequent to the Date of Termination, an amount
equal to the product of
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(i) the sum of the Employee's Base Compensation at the rate in
effect prior to any reduction of Employee's Base Compensation
without his consent, plus the amount of his most recent bonus,
multiplied by (ii) the number three (3); and
(3) in lieu of shares of common stock ("Shares") issuable
upon exercise of options ("Options"), if any, granted to the
Employee under the Company's stock option plans (which Options
shall be canceled upon the making of the payment referred to
below), the Employee shall receive an amount in cash equal to the
aggregate spread between the exercise prices of all Options held
by the Employee (whether or not then fully exercisable) and
either
(i) the final sales price of the Company's Shares as
quoted on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") (or as reported by any
national securities exchange on which the Company's Shares
may then be listed) on the Date of Termination, or
(ii) if the Company's Shares are not then listed on any
national securities exchange or quoted on NASDAQ, then the
fair
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market value of the Shares as of the Date of Termination as
determined in good faith by the Company; provided, however,
that in the event the Employee submits to the Company a
written objection to the Company's determination of the fair
market value within ten (10) days of Employee's receipt of
written notice of the Company's determination, the Company
shall select an independent valuation expert to determine
the fair market value of any Shares. The Company and the
Employee hereby agree that the independent valuation
expert's determination of the fair market value of the
Shares shall be final and conclusive, and the Company and
the Employee shall share equally in the payment of all
expenses incurred by the valuation expert in making its
determination; provided, however, that notwithstanding the
foregoing, the Company shall not be required to pay any
amount pursuant to this Section 8.4(a)(3)(ii) which exceeds
those payments permitted to be made by the Company to the
Employee under (A) the indenture governing the Company's
11-1/2% Senior Subordinated Discount Notes Due 2002, or
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(B) the credit agreement, dated October 20, 1992, among Dr
Pepper/Seven-Up Companies, Inc., as guarantor, the Company,
and certain lenders and agents named therein, as such
agreements may be amended from time to time, until such time
as such agreements are terminated or amended to permit the
full payment of the amount described herein.
(b) EMPLOYEE BENEFITS. The Company shall maintain in full
force and effect, for the continued benefit of the Employee for
three years after the Date of Termination, all employee benefit
plans and programs or arrangements described on Exhibit "A",
attached hereto and incorporated fully herein by reference, in
which the Employee was entitled to participate immediately prior
to the Date of Termination (except those described in Paragraph
8.4(c) and (d) below), provided that the Employee's continued
participation is possible under the general terms and provisions
of such plans and programs. In the event that the Employee's
continued participation in any such plan or program is not
possible, the Company shall arrange to provide the Employee with
benefits substantially equivalent to those which the Employee is
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entitled to receive under such plans and programs. At the end of
the period of coverage, the Employee shall have the option to
have assigned to the Employee at no cost and with no
apportionment of prepaid premiums, any assignable insurance
policy owned by the Company and relating specifically to the
Employee.
(c) RETIREMENT PLAN. The Employee shall not be entitled to
any benefits under the Dr Pepper/Seven-Up Companies Pension Plan
and the Dr Pepper Company Supplemental Pension Plan (or any
successor plan) in effect as of the Date of Termination
(collectively, the "Plans") other than the benefits earned
pursuant to the specific terms of said Plans. However, effective
as of May 19, 1988, the Employee has been credited with thirteen
(13) years of service or vesting service for all purposes under
the Dr Pepper Company Supplemental Pension Plan (the
"Supplemental Plan"), and all employment time performed by
Employee since May 19, 1988, to the present, and all employment
time hereafter performed by Employee, shall be credited as
additional service or vesting service according to the
Supplemental Plan provisions. To the extent this provision
varies from the terms of
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the Supplemental Plan it shall be considered as an amendment to
the Supplemental Plan which shall be applicable only to the
Employee.
(d) PROFIT SHARING PLAN. The Employee shall not be
entitled to any benefits under The Dr Pepper/Seven-Up Companies
Profit Sharing Plan in effect as of the Date of Termination (the
"Profit Sharing Plan") other than the benefits earned pursuant to
the specific terms of said Profit Sharing Plan.
(e) AUTOMOBILE. The Company shall enable the Employee to
purchase or continue to lease, as the case may be, the
automobile, if any, which the Company was providing for his use
at the time the Notice of Termination was given, at the value of,
or upon the lease terms for, such automobile at such time.
(f) RESTRICTED STOCK. If the Employee owns any Shares that
are subject to restrictions imposed by the Company, then such
restrictions shall lapse as of the Date of Termination.
(g) MITIGATION. The Employee shall not be required to
mitigate the amount of any payment provided for in this Paragraph
8.4 by seeking other employment or otherwise, nor shall the
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amount of any payment provided for in this Paragraph 8.4 be
reduced by any compensation earned by the Employee as the result
of employment by another employer after the Date of Termination,
or otherwise. The Company's obligations to pay the Employee the
compensation and make the arrangements provided herein shall be
absolute and unconditional and shall not be affected by any
circumstances including, without limitation, any set-off (except
as provided in Paragraphs 7.5 and 15.2) counterclaim, recoupment,
defense or other right which the Company may have. All amounts
payable by the Company hereunder shall be paid without notice and
demand.
8.5 INDEMNIFICATION. The Employee shall be entitled throughout the
term of this Agreement and thereafter to indemnification by the Company in
respect of any actions or omissions as an employee, officer or director of
the Company (or any successor pursuant to Paragraph 9) or of any subsidiary
of the Company to the fullest extent permitted by law.
9. SUCCESSORS; BINDING AGREEMENT.
9.1 ASSUMPTION. This Agreement shall be binding on the successors
and assigns of the Company and the Company will require any successor to
expressly assume and agree to perform this Agreement in the same manner and
to the same
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extent that the Company would be required to perform it if no such
succession had taken place.
9.2 SUCCESSORS. This Agreement shall inure to the benefit of and be
enforceable by the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
the Employee should die while any amounts would still be payable to him
hereunder if the Employee had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the Employee's estate, heirs or beneficiaries, as
determined by his last will and testament or, if he has no last will and
testament in effect at his death, by the laws of intestate succession of
the State of Texas.
10. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when hand delivered or mailed by registered mail,
return receipt requested, postage prepaid, addressed to the respective addresses
set forth below, provided that all notices to the Company shall be directed to
the attention of the Chairman of the Compensation Committee of the Board of
Directors, with a copy to the Secretary of the Company, or to such other address
as either party may have furnished to the other in writing in accordance
herewith, except
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that notices of change of address shall be effective only upon receipt.
COMPANY: Chairman of the Compensation Committee
of the Board of Directors
Dr Pepper/Seven-Up Corporation
P. O. Box 655086
Dallas, Texas 75265-5086
Vice President, Secretary & General Counsel
Dr Pepper/Seven-Up Corporation
P. O. Box 655086
Dallas, Texas 75265-5086
EMPLOYEE: Ira M. Rosenstein
3 Glenmeadow Court
Dallas, Texas 75225
11. AMENDMENT; WAIVER. No provisions of this Agreement may be modified,
waived or amended unless such waiver, modification or amendment is agreed to in
writing and signed by the Employee and such officer as may be specifically
designated by the Board of Directors, and such provisions shall be modified,
waived or amended only to the extent set forth in such writing.
12. VALIDITY. The invalidity or unenforceability of any provision of this
Agreement shall not effect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
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 will constitute one and the same instrument.
14. ARBITRATION. Any dispute, disagreement or other question arising from
this Agreement or the interpretation thereof
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shall be settled by arbitration in accordance with the commercial rules then in
effect of the American Arbitration Association, except that the arbitrator(s)
shall be selected in accordance with the following procedure: such dispute,
disagreement or other question shall be referred to and decided by a single
arbitrator if the parties can agree upon one within fifteen (15) days after
either of the parties shall notify the other, as provided in Paragraph 7.5 of
this Agreement, that it wishes to avail itself of the provisions of this
Paragraph 14; otherwise, such dispute, disagreement or other question shall be
referred to and decided by three arbitrators, one to be appointed by the Company
and one to be appointed by the Employee, each such appointment to be made within
ten (10) days after the expiration of the fifteen (15) day period referred to
above, and the third arbitrator to be appointed by the first two arbitrators
within twenty (20) days after the expiration of such ten (10) day period. If
the first two arbitrators cannot reach agreement on the third arbitrator within
said twenty (20) day period, the third arbitrator shall be an impartial
arbitrator appointed by the President of the American Arbitration Association
within thirty (30) days after the expiration of said twenty (20) day period.
Hearings of the arbitrator(s) shall be held in Dallas, Texas, unless the parties
agree otherwise. Judgment upon an award rendered by the arbitrator(s) may be
entered in any court of competent jurisdiction, including courts in the State of
Texas. Any award so
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rendered shall be final and binding upon the parties hereto. Except as otherwise
provided in Paragraph 15 below, all costs and expenses of the arbitrator(s)
shall be paid as determined by such arbitrator(s), and all costs and expenses of
experts, witnesses and other persons retained by the parties shall be borne by
them respectively.
15. INDEMNIFICATION FOR EXPENSES; ADVANCEMENT OF EXPENSES.
15.1 INDEMNIFICATION. The Company shall pay, and indemnify the
Employee against, all costs and expenses, including without limitation the
fees and expenses of attorneys, arbitrators, experts and witnesses,
incurred by or on behalf of the Employee in connection with any arbitration
or legal claim or proceeding arising from this Agreement or the
interpretation thereof, to the extent that the Employee is successful, on
the merits or otherwise, in any such claim or proceeding. If the Employee
is not wholly successful in such claim or proceeding but is successful, on
the merits or otherwise, as to one or more but less than all claims, issues
or matters in such claim or proceeding, then the Company shall indemnify
the Employee against all such costs and expenses incurred by him or on his
behalf in connection with each successfully resolved claim, issue or
matter.
15.2 ADVANCE OF EXPENSES. The Company shall advance all such costs
and expenses incurred by or on behalf of the Employee in connection with
any such claim or proceeding
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referred to in Paragraph 15.1 above within twenty (20) days after the
receipt by the Company of a statement or statements from the Employee
requesting such advance or advances, whether prior to or after final
disposition of such claim or proceeding. Such statement or statements
shall reasonably evidence the costs and expenses incurred by the Employee
and shall be preceded or accompanied by an undertaking by or on behalf of
the Employee to repay any costs and expenses advanced if it shall
ultimately be determined that the Employee is not entitled to be
indemnified against such costs and expenses, and, furthermore, if the
Employee fails to repay any costs and expenses that are advanced, then such
amounts shall be offset against and shall reduce any other amounts due
under this Agreement.
16. INTEREST. The Company shall pay the Employee interest at a rate of
ten percent (10%) PER ANNUM on any benefits payable to the Employee hereunder
not paid on the date provided for herein from such date until the date of
payment.
17. GENERAL CREDITOR. Nothing contained in this Agreement and no action
taken pursuant to the provisions of this Agreement shall create or be construed
to create a trust of any kind or a fiduciary relationship between the Company
and the Employee or any other person, nor shall any money or property of the
Company be segregated for the benefit of the Employee to satisfy the obligations
of the Company hereunder. To the extent that the
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Employee acquires a right to receive payments hereunder, such rights shall be no
greater than the right of any general unsecured creditor of the Company. Except
as expressly provided herein, each payment shall be made in cash from the
general assets of the Company.
18. NO ASSIGNMENT. The right of the Employee or any other person to the
payment of amounts or other benefits under this Agreement shall not be assigned,
alienated, hypothecated, placed in trust, disposed of, transferred, pledged or
encumbered (except by will or by the laws of descent and distribution), and, to
the extent permitted by law, no such amount or payment shall in any way be
subject to any legal process to subject the same to the payments of any claim
against the Employee or any other person.
19. TAX WITHHOLDING. The Company will have the right to withhold from any
transfer or payment made to the Employee or to any other person hereunder,
whether such payment is to be made in cash or other property, all applicable
Federal, state, city or other taxes or foreign taxes as shall be required, in
the determination of the Company, pursuant to any statute or governmental
regulation or ruling.
20. DISCLOSURE OF INFORMATION. The Employee hereby acknowledges that he
will have access to certain trade secrets and confidential information of the
Company and of corporations affiliated with the Company and that such
information constitutes valuable, special and unique property of the Company and
such other
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corporations. The Employee will not, during or after the term of his employment
hereunder, disclose any such trade secrets or confidential information to any
person or entity for any reason or purpose whatsoever, including, without
limitation, the disclosure of the terms and conditions of this Agreement, except
as may be required by law. If the Employee becomes legally compelled to
disclose any trade secrets or confidential information, then the Employee will
provide the Company prompt notice thereof so that the Company may seek a
protective order or other appropriate remedy and the Employee will cooperate
with the Company in that effort. If such protective order or other remedy is
not obtained, the Employee (a) will furnish only that portion of the trade
secrets or confidential information that the Employee is advised by written
opinion of counsel is legally required and (b) will exercise his best effort to
obtain reliable assurance that confidential treatment will be accorded such
trade secrets or confidential information.
21. AGREEMENT NOT TO COMPETE. Following the termination of his
employment with the Company, the Employee agrees that (a) during the first three
years of this Agreement, for the greater of the remainder of such first three
years or one (1) year and (b) after the third anniversary of this Agreement, for
a period of one (l) year, neither he nor any affiliate shall, either on his own
behalf or as a partner, officer, director, employee, agent or shareholder,
engage in, invest in (except as a
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holder of less than 5% of the outstanding capital stock of any corporation with
a class of equity security registered under the Securities Act of 1934, as
amended) or render services to any person or entity engaged in the primary
businesses in which the Company is then engaged and situated within the United
States of America ("Competitive Business"). Nothing contained in this Section
21 or in Section 6 hereof shall be construed as restricting the Employee's right
to sell or otherwise dispose of any business or investments owned or operated by
the Employee as of the date hereof.
22. AGREEMENT NOT TO SOLICIT CLIENTS AND EMPLOYEES. Employee agrees that,
for a period of three (3) years following the termination of his employment with
the Company, neither he nor any affiliate shall, either alone or on behalf of
any business engaged in a Competitive Business, solicit or induce, or in any
manner attempt to solicit or induce any person employed by, or an agent of, the
Company to terminate his contract or employment or agency, as the case may be,
with the Company.
23. INJUNCTIVE RELIEF. Notwithstanding the provisions of Section 14
herein, in the event of a breach or threatened breach by the Employee of the
provisions of this Agreement, the Company shall be entitled to an injunction to
prevent irreparable injury to the Company.
24. INTEGRATION. This Agreement represents the entire understanding and
agreement between the parties hereto with
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respect to the subject matter hereto, and all other written or oral agreements
relating to the subject matter hereof are hereby superseded.
25. GOVERNING LAW. The terms and provisions of this Agreement, including
without limitation the provisions for arbitration under Section 14 hereof, shall
be construed in accordance with, and governed by, the laws of the State of
Texas.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above set forth.
DR PEPPER/SEVEN-UP CORPORATION
By: /s/
------------------------------------
Name:
Title:
EMPLOYEE
/s/
------------------------------------
Ira M. Rosenstein
-26-
<PAGE>
EXHIBIT "A"
BENEFITS
Medical Plan
Dental Plan
Life Insurance
Accidental Death and Dismemberment Insurance
Cash Value Life Insurance
Retiree Insurance
Post-Retirement Death Benefit Plan
Post-Retirement Supplemental Death Benefit Plan
<PAGE>
EXHIBIT 22
DR PEPPER/SEVEN-UP COMPANIES, INC.
SUBSIDIARIES OF REGISTRANT
<TABLE>
<CAPTION>
NAME STATE OF INCORPORATION
---- ----------------------
<S> <C>
Dr Pepper/Seven-Up Corporation Delaware
</TABLE>
<PAGE>
EXHIBIT 24.1
The Board of Directors
Dr Pepper/Seven-Up Companies, Inc.
We consent to incorporation by reference in the registration statement (No.
33-69404) on Form S-8 of Dr Pepper/Seven-Up Companies, Inc. of our report dated
February 7, 1994, relating to the consolidated balance sheets of Dr
Pepper/Seven-Up Companies, Inc. and subsidiaries as of December 31, 1993 and
1992, and the related consolidated statements of operations, stockholders'
deficit and cash flows and related schedules for each of the years in the
three-year period ended December 31, 1993, which report appears in the December
31, 1993 annual report on Form 10-K of Dr Pepper/Seven-Up Companies, Inc.
KPMG Peat Marwick
Dallas, Texas
March 16, 1994
