SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1997Commission File Number 33-68956
SPECIALTY FOODS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 75-2488181
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
520 Lake Cook Road
Suite 550 60015
Deerfield, IL (Zip Code)
(Address of principal executive offices)
(847) 405-5300
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
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 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. ( X )
State the aggregate market value of voting stock held by non-
affiliates of the Registrant. No market presently exists for the
Registrant's Common Stock.
Number of shares of common stock outstanding as of March 18,
1998: 100 shares.
Documents incorporated by reference: None.
<PAGE> 1
TABLE OF CONTENTS
Page
PART I
Item 1. Business 3
Item 2. Properties 7
Item 3. Legal Proceedings 8
Item 4. Submission of Matters to a Vote of Security 8
Holders
PART II
Item 5. Market for the Registrant's Common Equity and 9
Related Stockholder Matters
Item 6. Selected Financial Data 9
Item 7. Management's Discussion and Analysis of 10
Financial Condition and Results of
Operations
Item 8. Financial Statements and Supplementary Data 13
Item 9. Changes In and Disagreements with Accountants 13
on Accounting and Financial Disclosure
PART III
Item 10. Directors and Executive Officers of the 14
Registrant
Item 11. Executive Compensation 17
Item 12. Security Ownership of Certain Beneficial Owners 31
and Management
Item 13. Certain Relationships and Related Transactions 33
PART IV
Item 14. Exhibits, Financial Statement Schedules and 36
Reports on Form 8-K
This Annual Report or Form 10-K contains forward-looking
statements within the meaning of the federal securities laws
which reflect the Company's expectations and are based on
currently available information. Actual results, performance,
achievements or other information may vary materially from such
statements and are subject to future known and unknown risks,
uncertainties and events, including, among other factors,
weather, economic and market conditions, cost and availability of
raw materials, competitive activities or other business
conditions.
<PAGE> 2
PART I
Item 1. Business
Specialty Foods Corporation (SFC), a Delaware corporation, is a
leading producer, marketer and distributor of retail bread,
cookies and other baked goods in the Midwestern and Western U.S.
The Company operates in two primary product groupings: bakery
operations and meat operations. The Company's bakery operations
include Metz Baking Company (Metz), Mother's Cake & Cookie Co.
(Mother's) and Andre-Boudin Bakeries, Inc. (Boudin). The
Company's meat operations consist of H&M Food Systems Company,
Inc. (H&M), a manufacturer and distributor of specialty meats and
meat-based prepared foods to restaurants and food manufacturers.
Specialty Foods Acquisition Corporation (SFAC) owns all of the
capital stock of SFC. SFAC, SFC and their subsidiaries,
including Metz, Mother's, Boudin and H&M, are referred to herein
as the Company.
Bakery Operations
The Company's bakery operations (bread, baked goods, cookies and
bakery cafes) provide the Company with leading regional positions
in multiple segments of the baking industry. The Company
operates one of the largest food distribution systems in the U.S.
with a network of more than 1,800 direct-store-delivery (DSD)
routes across 24 states.
Metz, established in 1922 and headquartered in Deerfield,
Illinois, is a leading retail bread company serving a 16 state
area of the Midwestern United States. Metz's product line
includes breads, buns, rolls and sweet goods. These products are
marketed by Metz under the Taystee, Holsum, Old Home, Master,
Country Hearth, Egekvist, D'Italiano, Pillsbury and Healthy
Choice brand names and numerous private labels. Metz distributes
its products through a company-owned direct-store-delivery (DSD)
system to retail grocers, club stores, mass merchants,
convenience stores and other outlets.
Mother's, founded in 1914 and based in Oakland, California, is
the second largest retail cookie producer and distributor in the
Western United States. Mother's products are marketed under the
Mother's, Mrs. Wheatley's, Bakery Wagon and Marie Lu brand names.
Mother's sells its cookie products primarily to retail grocers in
14 states through a DSD system that is primarily company-owned.
The company also sells nationally through club stores, mass
merchandisers and other outlets.
Boudin, which is based in San Francisco and was founded in the
Gold Rush of 1849, is a leading marketer of premium branded
specialty breads and bread-related products. Boudin sells most
of its products through 44 company owned and operated bakery
cafes in California (35), Chicago (7) and Dallas (2). The
company also distributes some of its products through its own
direct-mail catalog and a limited number of retail grocers.
Meat Operations
H&M, which is based in Fort Worth, Texas, is a leading producer
of specialty meats and meat-based prepared foods for restaurants
and food manufacturers. H&M's products range from pre-cooked
pepperoni, sausage and meat fillings to fully-prepared soups,
sauces, tacos and burritos.
<PAGE> 3
Acquisition Strategy
Following the recent divestitures, the Company plans to pursue
selective add-on acquisitions of bakery businesses which are
contiguous to its existing service areas and to build enterprise
value through the realization of significant cost synergies.
The Company's strategy is consistent with many of the other
larger companies in the baking industry. In recent years, the
retail bread segment has undergone substantial consolidation as
several regional competitors (most notably, Interstate Brands,
Earthgrains Company and Flowers Industries) have expanded their
businesses through the acquisition of small regional companies.
This consolidation is being driven by the large cost reduction
opportunities available through the combining of manufacturing,
distribution and administrative capabilities. The economics of
this consolidation have created significant value resulting in
sharply improved earnings and stock valuations for the major
consolidators.
Management believes that Metz is uniquely positioned to lead the
consolidation of the bread industry within and near its core
geography of the Midwestern U.S. The Company has identified
potential acquisition candidates with a range of synergy
opportunities that arise from a combination with Metz.
Divestitures
In 1997, the Company sold its Stella Foods, Inc. (Stella)
subsidiary, a leading producer of specialty and Italian cheeses
for $405 million (the "Stella Sale"). The Company also sold a
Midwestern bakery operation serving restaurant and institutional
accounts. The Company currently expects to utilize the proceeds
from these divestitures to make investments in its core bakery
businesses, including acquisitions. These divestitures have been
reported as discontinued operations in the accompanying financial
statements.
Financing Structure and 1993 Acquisition
SFC's financing structure at the date of this Report consists of
the following: $125 million Revolving Credit Facility at the
operating subsidiary level (Revolving Credit Facility); $175
million Term Loan Facility at the SFC level (Term Loan Facility);
$225 million of 10 1/4% Senior Notes due 2001 issued by SFC (10
1/4% Senior Notes); $150 million of 11 1/8% Senior Notes due 2002
issued by SFC (11 1/4% Senior Notes); and $200 million of 11 1/4%
Senior Subordinated Notes due 2003 at the SFC level (Senior
Subordinated Notes). The Company is also a party to an accounts
receivable securitization facility pursuant to which the accounts
receivable of the Company's operating subsidiaries are
transferred to a master trust (Accounts Receivable Facility).
The maximum amount of accounts receivable that could be sold to
the Accounts Receivable Facility is $75 million. The Revolving
Credit Facility, Term Loan Facility and Accounts Receivable
Facility were refinanced in March, 1998. The new Term Loan and
Revolving Credit Facilities have a final maturity date of January
31, 2000. The Accounts Receivable Facility also has a final
maturity date of January 31, 2000 and begins to amortize
on December 15, 1999. In addition, SFAC's
financing structure at the date of this Report consists of the
following: 13% Senior Secured Discount Debentures due 2005
issued by SFAC with an accreted value at December 31, 1997 of
$260.3 million (Senior Debentures); and 11% Senior Subordinated
Discount Debentures due 2006 issued by SFAC with an accreted
value at December 31, 1997 of $121 million (Subordinated
Debentures).
SFAC, SFC and each subsidiary of SFC is a separate corporate
entity. The assets of SFC are available first and foremost to
satisfy the claims of creditors of SFC and the assets of each
subsidiary of SFC are available first and foremost to satisfy the
claims of creditors of such subsidiary.
<PAGE> 4
SFAC and SFC were formed in June 1993 to acquire (the
Acquisition) the North American food businesses (the Acquired
Companies or the Predecessor Company) of Beledia N.V., a
subsidiary of Artal Group S.A.
Raw Materials
The Company is a major purchaser of flour, sugar, meat, other
agricultural products, vegetable oils, and plastic and paper for
packaging materials. Although the Company has some long-term
contracts, the bulk of such raw materials are purchased on the
open market or pursuant to short-term agreements. The prices
paid for food product raw materials generally reflect external
forces, among which weather conditions and commodity market
activities are most significant. Although the prices of the
principal raw materials used by the Company can be expected to
fluctuate as a result of government actions and/or market forces
(which would directly affect the cost of products and value of
inventories), such materials are generally in adequate supply and
available from numerous sources. Occasionally, and where
possible, the Company makes advance purchases of commodities
significant to its business in order to lock in what is perceived
to be favorable pricing and to protect itself from basic market
price fluctuations. The Company seeks to pass through increases
in the costs of commodity ingredients to its customers where
possible. The Company's ability to do so is dependent primarily
upon competitive conditions and pricing methodologies employed in
the various markets in which the Company conducts its business.
Trademarks, Patents and Licenses
The Company owns or licenses a number of trademarks and
tradenames which management believes provide significant value to
several of the Company's businesses because of their recognition
by customers and consumers. The Company owns or licenses a
number of patents, but such patents and licenses are not
considered material to the conduct of the Company's businesses,
and the Company does not believe that any of its businesses are
substantially dependent on patent protection.
Seasonality, Working Capital
The Company's businesses are moderately seasonal with higher
sales, operating profit and cash flows generally occurring in the
second, third and fourth quarters of the year. This seasonality
is due primarily to higher bread and cookie sales in the summer
and fall months, as well as the holiday season.
Customers, Sales and Backlog
No one customer accounts for more than 10% of the Company's net
sales. In general, the backlog of orders is not deemed to be
significant or material for an understanding of the Company's
businesses.
<PAGE> 5
Competition
The Company's products compete in highly competitive lines of
business. In particular, the Company's Bakery Operations face
intense competition as a result of continued overcapacity in the
industry. Competitors include national and numerous regional and
local companies. Some of the competitors have greater financial
and other resources than the Company, while others have lower
fixed costs and greater operating flexibility. The Company does
not encounter material foreign competition. Competition is based
primarily on price, quality, service and freshness.
Environmental Matters
The past and present business operations of the Company and the
past and present ownership and operation of real property by the
Company are subject to extensive and changing federal, state and
local environmental laws and regulations pertaining to the
discharge of materials into the environment, the handling and
disposition of wastes (including solid and hazardous wastes) or
otherwise relating to protection of the environment. Compliance
with federal, state and local environmental laws and regulations
is not expected to have a material impact on the Company's
capital expenditures, earnings or competitive position. No
assurance can be given, however, that additional environmental
issues relating to presently known matters or identified sites or
to other matters or sites will not require additional, currently
unanticipated investigation, assessment or expenditures.
Regulation
Public Health
The Company is subject to the Federal Food, Drug and Cosmetic Act
and regulations administered by the Food and Drug Administration
(FDA), or, with respect to meat products, the United States
Department of Agriculture (USDA). These comprehensive regulatory
schemes govern, among other things, the manufacture, composition,
ingredient labeling, packaging and safety of food. For example,
the FDA regulates manufacturing practices for food through its
current "good manufacturing practices" regulations, specifies the
"recipes," called standards of identity, for certain foods,
including many of the kinds of products marketed by the Company's
subsidiaries, and prescribes the format and content of certain
information required to appear on the labels of food products.
The Company has revised the labeling of its products to comply
with regulations promulgated by the FDA pursuant to the Nutrition
Labeling and Education Act of 1990. The Company also has revised
the labeling of its meat products to comply with similar
regulations adopted by the USDA. These regulations require
nutritional labeling on all foods that are a meaningful source of
nutrition, including many of the Company's products, and place
limitations on the use of certain terms while requiring the use
of other terms.
<PAGE> 6
The operations and the products of the Company's businesses also
are subject to state and local regulation through such measures
as licensing of plants, enforcement by state health agencies of
various state standards and inspection of the facilities.
Federal Trade Commission
The Company is subject to certain regulations by the Federal
Trade Commission (FTC). Advertising of the Company's businesses
is subject to regulation by the FTC pursuant to the Federal Trade
Commission Act and the regulations promulgated thereunder.
Employee Safety Regulations
The Company is subject to certain health and safety regulations
including regulations issued pursuant to the Occupational Safety
and Health Act. These regulations require the Company to comply
with certain manufacturing, health and safety standards to
protect its employees from accidents.
Employees
At December 31, 1997, the Company employed approximately 8,300
persons. Approximately 66% of the Company's labor force are or
will be covered by collective bargaining agreements upon
completion of current negotiations.
Item 2. Properties
The Company uses various owned and leased plants, warehouses, and
other facilities in its operations. These facilities are located
primarily in the Midwest, California and Texas. Management
believes that the facilities are suitable and adequate for the
conduct of the businesses. The following is a summary of
significant facilities that were operated as of December 31,
1997.
Number of Facilities
------------------------------------------------
Owned Leased Total
------- ------- ------
20 70 90
Substantially all of the Company's owned facilities are subject
to mortgages for the benefit of the lenders under the Revolving
Credit Facility.
<PAGE> 7
Item 3. Legal Proceedings
The Company is involved in litigation matters, including
employment and breach of contract matters, arising out of the
ordinary course of business. The Company does not believe that
any single matter, if adversely determined, would have a material
adverse effect on the Company's financial condition or results of
operations. However, if all or a majority of such matters were
adversely decided against the Company, such judgments could have
a material adverse effect on the Company's financial condition.
The Company does not believe at this time that there is a
reasonable possibility that all or a majority of such matters
will be decided against the Company. In addition, the Company is
party to other claims and litigation that arise in the normal
course of business. Management believes that the ultimate
outcome of these claims and litigation will not have a material
adverse effect on the Company's results of operations or
financial condition. However, there can be no assurance that the
outcome of the Company's litigation matters will not have a
material adverse effect on the Company's results of operations or
financial condition.
Item 4. Submission of Matters to a Vote of Security Holders
No matters have been submitted to a vote of stockholders of SFAC
since the filing by the Company of its last Report on Form 10-Q
in November, 1997.
<PAGE> 8
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
There is no public market for the Common Stock of SFC, all of
which is held by SFAC.
Certain of the Company's debt agreements contain covenants which
restrict or prohibit (with de minimus exceptions) SFC from paying
dividends or making other distributions to SFAC. Refer to
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" for additional discussion of such
restrictions.
Item 6. Selected Financial Data
The results of operations for 1993 include the results of
operations of the Predecessor Company for the period January 1,
1993 to August 16, 1993 and the results of operations of the
Company for the period August 17, 1993 to December 31, 1993.
(In millions, except per share data)
1997 1996 1995 1994 1993
------ ------ ------ ------ ------
Net Sales $920 $895 $893 $868 $924
---- ---- ---- ---- ----
Income (loss) from $(58) $(287) $(251) $(55) $(12)
continuing ---- ----- ----- ----- ----
operations (1) (2)
Income (loss) from $156 $(159) $(19) $35 $3
discontinued ---- ---- ---- ----- ----
operations (1) (2) (3)
Total Assets $528 $543 $998 $1,258 $1,304
---- ---- ---- ---- ----
Long-Term Debt $754 $835 $832 $802 $772
---- ---- ---- ---- ----
(1) In 1996, the loss from continuing operations included a
goodwill write-down of $203 million, while discontinued
operations included a goodwill write-down of $152 million.
Additionally, a restructuring charge further increased the
1996 loss from continuing operations by $12.2 million.
(2) In 1995, the loss from continuing operations included a
goodwill write-down of $204 million, while discontinued
operations included a goodwill write-down of $50 million.
(3) No interest expense is allocated to discontinued operations.
<PAGE> 9
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
This Annual Report or Form 10-K contains forward-looking
statements within the meaning of the federal securities laws
which reflect the Company's expectations and are based on
currently available information. Actual results, performance,
achievements or other information may vary materially from such
statements and are subject to future known and unknown risks and
uncertainties and events including those in the forepart and
elsewhere herein.
The following table sets forth, for the periods indicated, the
percentage of net sales represented by certain items in the
Company's statements of operations.
1997 1996 1995
---- ---- ----
Net sales 100.0% 100.0% 100.0%
Cost of sales 55.2 56.0 56.3
------ ------ ------
Gross profit 44.8 44.0 43.7
Operating expenses:
Selling, distribution, general and
administrative 40.5 39.4 36.7
Amortization of intangible assets 0.2 0.8 1.4
Restructuring charges - 1.4 -
Goodwill write-down - 22.8 22.8
------ ------ ------
Total operating expenses 40.7 64.4 60.9
------ ------ ------
Operating profit (loss) 4.1 (20.4) (17.2)
Interest expense 9.9 10.5 10.5
Other expenses, net 0.6 1.1 0.2
------ ------ ------
Loss from continuing operations (6.4)% (32.0)% (27.9)%
====== ====== ======
Shown below are the net sales of the Company's operating units
for 1996, 1995, and 1994, with percentage increases or decreases
based on comparisons to preceding years.
(In millions) % Change
------------- --------
1997 1996 1995 1997 vs. 1996 1996 vs. 1995
----- ----- ----- ------------- ------------
Bakery Operations $718 $706 $704 1.7% .3%
Meat Operations 202 189 189 6.9 -
----- ----- ----- ----- -----
$920 $895 $893 2.8% .2%
===== ===== ===== ===== =====
Results of Operations
1997 Compared to 1996
Consolidated net sales from continuing operations increased 2.8%
to $920 million in 1997 compared to $895 million in 1996. Net
sales of the Bakery Operations increased $12 million or 1.7%
principally due to increased cafe sales at Boudin's and an
additional week of sales due to the Company's fifty-three week
year. Net sales of the Meat Operations increased $13 million or
6.9% primarily due to volume gains.
The Company's gross profit margin increased to 44.8% in 1997 from
44.0% in 1996 primarily driven by margin gains at Metz due to
lower flour costs.
<PAGE> 10
Selling, distribution, general and administrative expenses
increased $20 million or 5.7% in 1997 to $372 million. Selling
expenses increased primarily due to increased store personnel for
Boudin's new cafes and increased promotional spending at
Mother's. Distribution expenses increased due to the
inflationary cost increases in the DSD systems at Metz and
Mother's. General and administrative expenses decreased
primarily due to a reduction in SFC corporate overhead expenses
and non-recurring 1996 severance expense related to former senior
executives of the Company.
Interest expense in 1997 decreased $3 million or 3.2% to $91
million from $94 million in 1996 principally due to the decreased
borrowing under the Revolving Credit Facility.
Other (income) expense, net was $5 million in 1997 compared to
$10 million in 1996. The decrease is primarily due to a decrease
in the loss on disposals of property, plant, and equipment.
As a result of the above factors and the goodwill write-off of
$203 million in 1996, net loss from continuing operations
decreased to $58 million in 1997 compared to $287 million in
1996.
The Company reports minimal state income tax and no federal
income tax due to its net operating loss position for tax
purposes.
The extraordinary loss of $6 million in 1997 resulted from the
write-off of deferred financing costs associated with certain
borrowings that were refinanced in the first quarter of 1998 and
which are more fully described in Note 12 to the accompanying
consolidated financial statements.
Because of the highly leveraged status of the Company, earnings
before interest, taxes, depreciation, and amortization ("EBITDA")
is an important performance measure used by the Company and its
stakeholders. The Company believes that EBITDA provides
additional information for determining its ability to meet future
debt service requirements. However, EBITDA is not indicative of
operating income or cash flow from operations as determined under
generally accepted accounting principles. The Company's EBITDA
from continuing operations in 1997 and 1996 is calculated as
follows:
(In thousands)
1997 1996
----- -----
Operating profit (loss) $38,119 $(182,858)
Goodwill write-down - 203,304
Property write-downs included
in restructuring charges - 7,200
Amortization 1,423 7,555
Depreciation 22,926 23,875
-------- --------
$62,468 $59,076
======== ========
1996 Compared to 1995
Consolidated net sales from continuing operations increased by $2
million to $895 million in 1996 compared to $893 million in 1995.
Excluding the impact of acquisitions and divestitures, net sales
increased by $35 million or 4% during the same period. Net sales
of the Bakery Operations increased $2 million principally due to
price increases in response to increased ingredient costs. Net
sales of the Meat Operations were evem with the prior year.
<PAGE> 11
The Company's gross profit margin increased slightly to 44.0% in
1996 from 43.7% in 1995 primarily due to improved margin business
of the Meat Operations, partially offset by record high flour
costs and an unfavorable mix shift to lower margin new cookie
products.
Selling, distribution, and general and administrative expenses
increased $24 million or 7.3% to $352 million in 1996. Selling
expenses increased due to costs associated with new product
introductions and expanded distribution of products at Mother's.
Distribution expenses increased primarily due to contractual wage
and fringe benefit increases for route sales representatives in
the DSD systems at Metz and Mother's. General and administrative
expenses increases are attributable to staff upgrades, wage and
fringe increases, and severance expenses associated with payments
to former senior executives of the Company.
Operating results in 1996 also reflect a write-down of goodwill
for $203 million and costs associated with a restructuring
program totaling $12 million. These charges are more fully
described in Notes 4 and 5, respectively, to the accompanying
consolidated financial statements.
Interest expense for 1996 was consistent with 1995.
Other expense, net increased to $10 million in 1996 compared to
$2 million in 1995. This increase is primarily due to the loss
on disposal of property, plant and equipment related to sale
leaseback transactions.
As a result of the above factors, net loss from continuing
operations increased to $287 million in 1996 compared to $251
million in 1995.
Liquidity and Capital Resources
The Company's Revolving Credit Facility, Term Loan Facility, and
Accounts Receivable Facility were refinanced in March 1998. See
Notes 8 and 12 to the attached financial statements.
Net cash used in operating activities totaled $81 million in
1997. The increase in net cash used in operating activities in
1997 was primarily attributable to the increased cash
requirements of discontinued operations, payment of accrued pre-
acquisition liabilities, restructuring payments, and reductions
in accounts payable and accruals. In 1996, cash used by
operating activities of $4 million was principally due to the
increased loss from continuing operations offset by net cash
provided by discontinued operations and a lower level of accounts
receivable due to increased funding under the accounts receivable
facility. In 1995, cash provided by operating activities of $5
million was driven by income from continuing operations offset by
working capital usages principally due to payments of pre-
acquisition liabilities.
Net cash provided by investing activities totaled $331 million in
1997. The activity in 1997 was primarily attributable to the net
proceeds from the divestiture of business units, offset by
capital expenditures. In 1996, cash provided by investing
activities of $54 million resulted from the net proceeds from the
sale of B&G Foods, Inc. and Burns & Ricker, Inc. and sale
leaseback transactions, offset by increased capital expenditures.
In 1995, cash used in investing activities of $26 million
resulted from capital expenditures and acquisitions.
Net cash used in financing activities amounted to $64 million in
1997 as a paydown of revolving credit borrowings and normal
payments on long-term debt were partially offset by an issuance
of redeemable preferred stock. In 1996, cash used by financing
activities of $3 million were primarily due to payments
<PAGE> 12
of long-term debt slightly offset by increased revolver
borrowings. In 1995, cash provided by financing activities of
$19 million reflects the impact of the issuance of $150 million
of 11 1/8% Senior Notes, the establishment of the $175 million
Term Loan Facility and borrowings under the Revolving Credit
Facility, offset by subsequent repayment of the Company's
original term loan facility and original revolving credit
facility.
Based upon the above, the net increase (decrease) in cash in
1997, 1996 and 1995 was $186 million, $46 million and ($3)
million, respectively.
As of December 31, 1997, the Company has a cash balance of $235
million and has no borrowings under its $125 million Revolving
Credit Facility. Outstanding letters of credit of $6 million as
of December 31, 1997 reduce available funds under the facility.
Management believes that these funds along with operating cash
flows should be adequate to fund the Company's acquisitions,
capital expenditures and short term obligations, although there
can be no assurances that cash flow will be adequate to meet such
obligations. The Company expects that by the year 2000 it will
be required to refinance a significant portion of its
indebtedness. Currently the Company has no specific refinancing
plans.
Year 2000 Issues
The Year 2000 issue is the result of computer programs being
written using two digits rather than four to define the
applicable year. The Company assessed and is implementing plans
to address "Year 2000" issues potentially affecting the operating
systems of its subsidiaries. Based on these plans, the Company
does not expect that the total dollar amount that it will spend
to remediate its Year 2000 issues will be material to the
Company's business, operations and financial condition. The
Company anticipates that the majority of its Year 2000
remediation efforts will be completed prior to December 31, 1998
and that the balance of its work will be completed in a timely
manner prior to December 31, 1999. The Company is not able to
determine, however, whether any of its suppliers, lenders or
service providers will need to make any such software
modifications or replacements or whether the failure to make such
software corrections will have an effect on the Company's
operations or financial condition.
Item 8. Financial Statements and Supplementary Data
See Index to Financial Information on page F-1.
Item 9. Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure
None.
<PAGE> 13
PART III
Item 10. Directors and Executive Officers of the Registrant
Directors
- ---------
The number of persons presently serving on the Board of Directors
of SFC is eleven. Set forth below are the names, ages, other
positions and offices held and a brief account of the business
experience for each director. All members of the Board of
Directors serve until a successor is elected.
Name Age Other Positions
- ------------ --- --------------
Robert B. Haas 50 Chairman of the Board of SFAC and
SFC since their organization and
Chairman of the Board of Haas Wheat
& Partners Incorporated, a private
investment firm, since 1992;
Chairman of the Board of Haas &
Partners Incorporated, a private
investment firm, since 1989. Mr.
Haas also is Chairman of the Board
of Playtex Products, Inc. and a
Director of Sybron International
Corporation.
Thomas J. Baldwin 39 Director of SFAC and SFC since May,
1996; Chief Executive Officer of
Christmas Corner, Inc. since
January, 1995 and President of PB
Ventures since July, 1994. Mr.
Baldwin was also Managing Director
of Invus Group Ltd. from 1990 until
February, 1995.
Lawrence S. 42 Director of SFAC and SFC since
Benjamin February, 1997; President and Chief
Executive Officer of SFAC and SFC
since January, 1997; and President
and Chief Executive Officer of
Stella (a former subsidiary of the
Company) from August, 1994 until
December, 1997. Mr. Benjamin held
various positions from 1986 through
August, 1994 with operating units of
Kraft General Foods, Inc., including
President of All American Gourmet
Company, Vice President of Kraft
Frozen Products Group and Vice
President and General Manager of the
Specialty Ingredients Unit of Kraft.
J. Taylor Crandall 44 Director of SFAC and SFC since
August, 1993; Vice President and
Chief Financial Officer of Keystone,
Inc. (Keystone) since October, 1986
and President, Director and sole
stockholder of Acadia MGP, Inc.
(managing general partner of Acadia
FW Partners, L.P., the sole general
partner of Acadia Partners, L.P.
(Acadia)) since March, 1992. Mr.
Crandall also is a Director of Bell
& Howell Holdings Company,
Physicians Reliance Network, Quaker
State, Signature Resort, Integrated
Orthopedics and Washington Mutual.
<PAGE> 14
Charles J. Delaney 38 Director of SFAC and SFC since
August, 1993 and President of UBS
Capital L.L.C. (UBS Capital) since
January, 1993. Mr. Delaney joined
the Union Bank of Switzerland in
May, 1989. Prior to becoming
President of UBS Capital, Mr.
Delaney held various management
positions with UBS' North American
operations. Mr. Delaney also is a
Director of Peoples Telephone
Company, Inc.
Jerry M. Meyer 57 Director of SFAC and SFC since June,
1996 and Chairman of the Board,
President and Chief Executive
Officer of Pinnacle Brands, Inc.
since 1991. Mr. Meyer also is a
Director of Century Capital
Financial, Inc. and City National
Bank in Kilgore and Longview, Texas.
Andrew J. Nathanson 40 Director of SFAC and SFC since
August, 1993 and Managing Director
of Donaldson, Lufkin & Jenrette
Securities Corporation since
January, 1991. Mr. Nathanson also
is a Director of Duane Reade Inc.
David G. Offensend 44 Director of SFAC and SFC since
August, 1993 and Founder of Evercore
Partners, LLC since October, 1995.
Mr. Offensend was also Managing
Director of Oak Hill Partners, Inc.
and its predecessor from April, 1990
to September, 1995; Vice President
and Director of Acadia MGP, Inc.
from March, 1992 to September, 1995;
and Vice President of Keystone from
March, 1992 to September, 1995.
Marc C. Particelli 43 Director of SFAC and SFC since
November, 1997 and Managing Director
of Oak Hill Partners, Inc. since
August, 1997. Mr. Particelli was
Principal of Odyssey Partners LP
from October, 1995 to August, 1997
and Senior Vice President of Booz
Allen & Hamilton Inc. prior to
October, 1995.
Anthony P. Scotto 51 Director of SFAC and SFC since
August, 1993 and Managing Director
of Oak Hill Partners, Inc. and its
predecessor since March, 1988. Mr.
Scotto also is a Director of Ivex
Packaging Corporation and Holophane
Corporation.
Douglas D. Wheat 47 Director of SFAC and SFC since
August, 1993 and President of Haas
Wheat since November, 1992;
President of Haas Wheat & Partners
Incorporated, a private investment
firm, since January, 1995. Mr.
Wheat was Co-Chairman of Grauer &
Wheat, Inc., a private investment
firm, from April, 1989 to October,
1992. Mr. Wheat also is a Director
of Playtex Products, Inc.
<PAGE> 15
Executive Officers
Set forth below are the names, ages, positions held and a brief
account of the business experience for each executive officer of
SFC and certain executive officers of the Company's subsidiaries
who may be deemed executive officers of SFC. No family
relationship exists among the identified executive officers.
Executive officers of SFAC are elected by and serve at the
discretion of the Board of Directors of SFC.
Name Age Other Positions
- --------------- --- ---------------
Lawrence S. 42 See Directors.
Benjamin
Robert B. Aiken 35 Vice President, Secretary and
General Counsel at SFAC and SFC
since February, 1997. Mr. Aiken was
Executive Vice President, Secretary
and General Counsel of Metz from
October, 1995 to February, 1997 and
Vice President and Chief Corporate
Counsel of SFAC and SFC from August,
1994 through October, 1995. Prior
to August, 1994, Mr. Aiken was in
private law practice.
David G. Barrows 40 President and Chief Executive
Officer of Boudin since August,
1995. Mr. Barrows was Vice
President of Marketing for Sizzler
International Inc. from August, 1992
until July, 1995. Mr. Barrows also
held various marketing positions
with Taco Bell Corp. (including
Manager of Strategic Marketing and
Director of National Program
Development) from 1989 until August,
1992.
William D. Day 43 President and Chief Executive
Officer of H&M since August, 1997.
Mr. Day held various positions with
Stella (a former subsidiary of the
Company), including Vice President
of Operations from January, 1995 to
August, 1997. Prior to 1995, Mr.
Day held various positions with
Kraft General Foods, Inc.
Robert L. Fishbune 42 Vice President and Chief Financial
Officer of SFAC and SFC since May,
1996. Mr. Fishbune was a Partner at
Coopers & Lybrand L.L.P. from 1988
until May, 1996.
Henry J. Metz 47 Chief Executive Officer of Metz
since August, 1993 and President of
Metz since February, 1983. Mr. Metz
was also Chief Operating Officer of
Metz from 1988 until August, 1993.
<PAGE> 16
Patrick J. O'Dea 36 President and Chief Executive
Officer of Mother's since April,
1997. Mr. O'Dea was Vice President
- Retail of Stella (a former
subsidiary of the Company) from 1995
to April, 1997. Prior to joining
Stella, Mr. O'Dea spent 12 years
with Procter & Gamble, most recently
as Director of Marketing for its
Snack Food Business.
John R. Reisenberg 53 Vice President of Human Resources of
SFAC and SFC since November, 1993.
Mr. Reisenberg held various
positions with Kraft Foods from 1969
through 1993, including Group Vice
President and General Manager -
Foodservice and Trademark Licensing
from 1987 to 1993 and Group Vice
President and Director - Human
Resources from 1981 to 1987.
Item 11. Executive Compensation
Summary Compensation Table
The following table shows compensation for the years ended
December 31, 1997, December 31, 1996 and December 31, 1995 of Mr.
Benjamin, the President and Chief Executive Officer of SFAC and
SFC (CEO), and each of the four most highly compensated executive
officers (excluding the CEO) of the Company (including its
operating subsidiaries). The Company has an annual bonus plan
and a long-term incentive plan pursuant to which executive
officers of the Company may participate.
<PAGE> 17
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
---------------------------------- ----------------------
Awards
-----------------------
Restricted Securities
Name and Other Annual Stock Underlying All Other
Principal Year Salary Bonus Compensation Awards Options/SARs Compensation
Position (1) ($) (1) ($) (1) (2) $ ($) (3) (#) (4) ($) (5)
- ----------- ---- ------- ---------- ------------- --------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Lawrence S. Benjamin 1997 560,000 1,015,000 164,000(10) - 1,300,000 6,000
President and 1996 320,000 72,000 - (10) - 50,000 1,000
Chief Executive 1995 283,000 257,000 157,000(10) - 50,000 197,000
Officer of
SFAC and SFC (6)
Robert B. Aiken 1997 265,000 316,000 97,000(11) - - 4,000
Vice President, 1996 166,000 56,000 -(11) - 35,000 -
Secretary and 1995 123,000 18,000 34,000(11) - 10,000 -
General Counsel of
SFAC and SFC (7)
Robert L. Fishbune 1997 350,000 298,000 119,000(12) - - 26,000
Vice President and 1996 191,000 150,000 88,000(12) - 100,000 54,000
Chief Financial 1995 - - - - - -
Officer of
SFAC and SFC (8)
Henry J. Metz 1997 334,000 251,000 -(13) - - 1,000
President and 1996 320,000 240,000 93,000(13) - 50,000 72,000
and Chief 1995 287,000 15,000 -(13) - 75,000 1,000
Executive
Officer of Metz
John R. Reisenberg 1997 238,000 149,000 57,000(14) - - 10,000
Vice President of 1996 204,000 105,000 62,000(14) - - 20,000
Human Resources 1995 183,000 16,000 45,000(14) - 25,000 26,000
of SFAC and SFC (9)
</TABLE>
(1) The table shows compensation received by the named executive
officers of the Company during 1995, 1996 and 1997.
(2) Bonus payments for 1997 include amounts that were paid to
Messrs. Benjamin, Aiken, Fishbune and Reisenberg pursuant to
Divestiture Award Agreements providing for the payment of
specified amounts upon the sale of Stella (the Stella
Divestiture Agreements). The remaining 1995, 1996 and 1997
payments include annual bonus awards for services rendered
in such years that were paid under the incentive bonus plan
of SFC and its subsidiaries (the Annual Bonus Plan). The
Annual Bonus Plan provides certain key employees of the
Company with annual cash awards based upon the financial
performance of the Company. This plan is administered by
the Compensation Committee of the Board of Directors. Under
the provisions of the Annual Bonus Plan, executive officers
have target incentive compensation of 50% to 75% of the
year's base salary. Mr. Benjamin's 1995 and 1996 awards
were based upon the Stella Annual Bonus Plan. $420,000 of
Mr. Benjamin's 1997 award was paid pursuant to the Stella
Annual Bonus Plan and the balance was paid pursuant to Mr.
Benjamin's Stella Divestiture Agreement. Mr. Aiken's 1995
and 1996 awards were paid pursuant to the SFC and Metz
Annual Bonus Plans, respectively, and his 1997 award was
paid pursuant to his Stella Divestiture Agreement. Mr.
Fishbune's 1996 award was based upon the SFC Annual Bonus
Plan and his 1997 award was paid pursuant to his Stella
Divestiture Agreement. Mr. Metz's 1995, 1996 and 1997
awards were all paid pursuant to the Metz Annual Bonus
Plans. Mr. Reisenberg's 1995 and 1996 awards were paid
pursuant to the SFC Annual Bonus Plan and his 1997 award was
paid pursuant to his Stella Divestiture Agreement. In 1997,
Messrs. Benjamin, Aiken, Fishbune and Reisenberg each
received seventy-five percent (75%) of the amounts owing to
them under the Stella Divestiture Agreements. The remaining
balances of $201,000, $100,000, $100,000 and $54,000 for
Messrs. Benjamin, Aiken, Fishbune and Reisenberg,
respectively, were paid in March, 1998.
(3) In 1995, SFAC sold shares of restricted stock to each of the
following named executive officers in the amounts set forth
opposite their respective names: Mr. Benjamin, 139,578
shares; Mr. Aiken, 20,000 shares; Mr. Metz, 125,000 shares
and
<PAGE> 18
Mr. Reisenberg, 100,000 shares. All such shares of
restricted stock were sold at a price of $.726703211 per
share. In 1996 and 1997, no shares of restricted stock were
sold to any of the named executive officers. In June, 1997,
Mr. Benjamin, Mr. Aiken, Mr. Metz and Mr. Reisenberg
reconveyed to SFAC 67,105; 8,000; 50,000 and 40,000 shares,
respectively, at the original sale price of $.726703211 per
share. Due to the fact that the Common Stock is not
publicly traded, it is not possible to calculate a precise
value for the restricted stock. SFAC has no present
intention to pay dividends on such shares. On each of
January 20, 1995, February 22, 1995, June 13, 1995, July 28,
1995, September 21, 1995, October 15, 1995, February 21,
1996, and May 15, 1996, the Board of Directors of SFAC
determined that a per share price of $.726703211 was not
greater than the fair market value of the Common Stock. On
August 14, 1996, the Board of Directors of SFAC determined
that a per share price of $.726703211 was equal to the fair
market value of the Common Stock. Accordingly, the dollar
value of the restricted stock awards made to each of the
named executive officers equals the consideration paid by
the named executive officers. As of December 31, 1997, the
aggregate number of shares of restricted stock and the value
therefor, net of consideration paid, for such shares held by
each executive officer named in the Summary Compensation
Table was as follows: Mr. Benjamin, 76,771 shares, $0; Mr.
Aiken, 44,231 shares, $0; Mr. Fishbune, 0 shares, $0; Mr.
Metz, 1,032,750 shares, $0; and Mr. Reisenberg, 116,188
shares, $0.
(4) In 1995, options were granted under the SFAC 1994 Stock
Option Plan (SFAC Stock Option Plan) and the SFAC 1994
Performance Stock Option Plan for Certain Employees (Stock
LTIP) in the following amounts: Mr. Benjamin, options for
50,000 shares under the Stock Option Plan and no options
under the Stock LTIP; Mr. Aiken, options for 20,000 shares
under the Stock Option Plan and no options under the Stock
LTIP; Mr. Metz, options for 75,000 shares under the Stock
Option Plan and no options under the Stock LTIP; and Mr.
Reisenberg, options for 25,000 shares under the Stock Option
Plan and no options under the Stock LTIP. In 1996, options
were granted under the SFAC Stock Option Plan in the
following amounts: Mr. Benjamin, options for 50,000 shares
under the Stock Option Plan and no options under the Stock
LTIP; Mr. Aiken, options for 35,000 shares under the Stock
Option Plan and no options under the Stock LTIP; Mr.
Fishbune, options for 100,000 shares under the Stock Option
Plan and no options under the Stock LTIP; Mr. Metz, options
for 50,000 shares under the Stock Option Plan and no options
under the Stock LTIP; and Mr. Reisenberg, no options under
the Stock Option Plan or the Stock LTIP. In 1997, options
for 300,000 shares were granted to Mr. Benjamin under the
Stock Option Plan and options for 1,000,000 shares were
granted to Mr. Benjamin under the terms of his Employment
Agreement. No other stock options were granted to any of
the named executive officers in 1997. See "Item 11
Executive Compensation - Stock Option and Long Term
Performance Related Incentive Plans" for a description of
the terms and conditions of the SFAC Stock Option Plan and
Stock LTIP.
(5) The amounts set forth for 1995 include life insurance
premiums on behalf of Messrs. Benjamin, Metz and Reisenberg
and reimbursement of $196,000 of moving and relocation
expenses to Mr. Benjamin and $26,000 of moving and
relocation expenses to Mr. Reisenberg. The amounts set
forth for 1996 include life insurance premiums on behalf of
Messrs. Benjamin, Fishbune, Metz and Reisenberg,
reimbursement of $53,000 of moving and relocation expenses
to Mr. Fishbune, reimbursement of $71,000 of moving and
relocation expenses to Mr. Metz, and personal financial
planning services for Messrs. Fishbune and Reisenberg. The
amounts set forth for 1997 include life insurance premiums
on behalf of Messrs. Benjamin, Aiken, Fishbune, Metz and
Reisenberg, personal financial planning services for Messrs.
Benjamin, Aiken, Fishbune and Reisenberg, and reimbursement
of $18,000 of moving and relocation expenses for Mr.
Fishbune.
(6) Mr. Benjamin served as the President and Chief Executive
Officer of Stella from August, 1994 to December, 1997.
Additionally, Mr. Benjamin assumed the duties of President
and Chief Executive Officer of SFAC and SFC in January,
1997.
(7) Mr. Aiken served as the Vice President and Chief Corporate
Counsel of SFC and SFAC from August, 1994 through October,
1995. In October, 1995, Mr. Aiken assumed the duties of
Executive Vice President, Secretary and General Counsel of
Metz and in February, 1997, Mr. Aiken was named Vice
President, Secretary and General Counsel of SFC and SFAC.
(8) Mr. Fishbune joined the Company in May 1996, and, therefore,
did not receive any compensation from the Company in 1995.
(9) Mr. Reisenberg has served as the Vice President - Human
Resources of the Company since January 1994.
(10) The amounts set forth for Mr. Benjamin in 1995 reflect
$144,000 of tax reimbursement payment made to Mr. Benjamin
in 1995 in connection with moving and relocation expenses.
No amounts are set forth for Mr. Benjamin in 1996 because
the dollar amount of perquisites and other personal benefits
received by Mr. Benjamin in 1996 falls below the reporting
threshold established by the SEC. Currently, disclosure is
required only when the aggregate value of perquisites and
other personal benefits exceeds the lesser of $50,000 or ten
percent of total salary and bonus. The amounts set forth
for Mr. Benjamin in 1997 reflect $83,000 of contributions
paid on Mr. Benjamin's behalf by SFC to a retirement account
maintained by Mr. Benjamin (the terms and conditions of
which are more fully described in this section under the
subheading "Executive Retirement Accounts Maintained by
Certain HQ Employees"), $68,000 of tax reimbursement
payments made to Mr. Benjamin in 1997, and a $13,000 car
allowance paid to Mr. Benjamin in 1997.
<PAGE> 19
(11) The amounts set forth for Mr. Aiken in 1995 reflect $22,000
of contributions paid on Mr. Aiken's behalf by SFC to a
retirement account maintained by Mr. Aiken (the terms and
conditions of which are more fully described in this section
under the subheading "Executive Retirement Accounts
Maintained by Certain HQ Employees") and $12,000 of tax
reimbursement payments made to Mr. Aiken in 1995. No amounts
are set forth for Mr. Aiken in 1996 because the dollar
amount of perquisites and other personal benefits received
by Mr. Aiken in 1996 falls below the reporting threshold
established by the SEC. Currently, disclosure is required
only when the aggregate value of perquisites and other
personal benefits exceeds the lesser of $50,000 or ten
percent of total salary and bonus. The amounts set forth
for Mr. Aiken in 1997 reflect $46,000 of contributions paid
on Mr. Aiken's behalf to a retirement account maintained by
Mr. Aiken, $39,000 of tax reimbursement payments made to Mr.
Aiken in 1997 and a $12,000 car allowance paid to Mr. Aiken
in 1997.
(12) The amounts set forth for Mr. Fishbune in 1996 reflect
$29,000 of contributions paid on Mr. Fishbune's behalf by
SFC to a retirement account maintained by Mr. Fishbune (the
terms and conditions of which are more fully described in
this section under the subheading "Executive Retirement
Accounts Maintained by Certain HQ Employees"), $23,000 of
tax reimbursement payments made to Mr. Fishbune in 1996, and
a $20,000 tax reimbursement payment made to Mr. Fishbune in
1996 in connection with moving and relocation expenses. The
amounts set forth for Mr. Fishbune in 1997 reflect $54,000
of contributions paid on Mr. Fishbune's behalf to a
retirement account maintained by Mr. Fishbune, $53,000 of
tax reimbursement payments made to Mr. Fishbune in 1997 and
a $13,000 car allowance paid to Mr. Fishbune in 1997.
(13) No amounts are set forth for Mr. Metz in 1995 or 1997
because the dollar amount of perquisites and other personal
benefits received by Mr. Metz in such years falls below the
reporting threshold established by the SEC. Currently,
disclosure is required only when the aggregate value of the
perquisites and other personal benefits exceeds the lesser
of $50,000 or ten percent of total salary and bonus for any
such year. The amounts set forth for Mr. Metz in 1996
reflect $54,000 of tax reimbursement payments in 1996 in
connection with moving and relocation expenses, and $39,000
for personal use of Metz's airplane.
(14) The amounts set forth for Mr. Reisenberg in 1995 reflect
$18,000 of contributions paid on Mr. Reisenberg's behalf by
SFC to a retirement account maintained by Mr. Reisenberg
(the terms and conditions of which are more fully described
in this section under the subheading "Executive Retirement
Accounts Maintained by Certain Headquarter (HQ) Employees"),
$14,000 of tax reimbursement payments made to Mr. Reisenberg
in 1995 and a $13,000 car allowance paid to Mr. Reisenberg
in 1995. The amounts set forth for Mr. Reisenberg in 1996
reflect $20,000 of contributions paid on Mr. Reisenberg's
behalf by SFC to a retirement account maintained by Mr.
Reisenberg, $29,000 of tax reimbursement payments made to
Mr. Reisenberg in 1996 and a $13,000 car allowance paid to
Mr. Reisenberg in 1996. The amounts set forth for Mr.
Reisenberg in 1997 reflect $21,000 of contributions paid on
Mr. Reisenberg's behalf to a retirement account maintained
by Mr. Reisenberg, $23,000 of tax reimbursement payments
made to Mr. Reisenberg in 1997 and a $13,000 car allowance
paid to Mr. Reisenberg in 1997.
<PAGE> 20
Options/SARs Grant Table
The following table sets forth individual grants of stock options
made to the named executive officers during the fiscal year ended
December 31, 1997. See "Option Repricings".
<TABLE>
<CAPTION>
Option/SAR Grants in Last Fiscal Year
-------------------------------------
Individual Grants Potential Realizable Value
---------------- Assumed Annual Rates of
Stock Price Appreciation
for Option Term (3)
--------------------------
Number of
Securities % of Total
Underlying Options/SARs
Options/SARs Granted to Exercise or
Granted Employees in Base Price Expiration
Name (#) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- ---- ------------ ------------ ----------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Lawrence S. 1,300,000 (1) 100% $0.021322 (2) (2) $917 $1,394
Benjamin
President and
Chief Executive
Officer of
SFAC and SFC
Robert B. Aiken - - - - - -
Vice President,
Secretary and
General Counsel of
SFAC and SFC
Robert L.Fishbune - - - - - -
Vice President and
Chief Financial
Officer of
SFAC and SFC
John R. Reisenberg - - - - - -
Vice President of
Human Resources of
SFAC and SFC
Henry J. Metz - - - - - -
President and
Chief Executive
Officer of Metz
</TABLE>
(1) Mr. Benjamin received the following grants of options to
purchase shares of SFAC Common Stock in 1997: options for
300,000 shares issued on October 25, 1997 pursuant to the
SFAC Stock Option Plan and options for 1,000,000 shares
issued pursuant to that certain Stock Option Agreement dated
as of October 27, 1997 between SFAC and Mr. Benjamin. These
options granted to Mr. Benjamin have an expiration date of
October 25, 2007 and October 27, 2007, respectively. See
"Section 11 Executive Compensation - Stock Option and Long
Term Performance Related Incentive Plans" for the terms and
conditions of the SFAC Stock Option Plan.
(2) All options were granted at an exercise price of $0.021322
per share of Common Stock which the Board of Directors of
SFAC determined to be the fair market value of the Common
Stock on the date of grant. Due to the fact that the Common
Stock is not publicly traded, it is not currently possible
to calculate a precise value for the Common Stock. On each
of October 28, 1997 and October 30, 1997, the Board of
Directors of SFAC determined that a per share price of
$0.021322 is not below the fair market value of the Common
Stock.
(3) These amounts represent certain assumed annual rates of
appreciation calculated from the exercise prices, as
required by the rules of the Securities and Exchange
Commission. Actual gains, if any, on stock option exercises
and Common Stock holdings are dependent on the future
performance of the Common Stock. There can be no assurance
that the amounts reflected in this table will be achieved.
<PAGE> 21
Aggregated Options/SARs Exercised In Last Fiscal Year And Year-
End Option/SAR Values
The following table sets forth for the named executive officers
aggregated information concerning each exercise of stock options
during the fiscal year ended December 31, 1997 and the fiscal
year-end value of unexercised, in-the-money options.
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
Fiscal Year-End (#) Fiscal Year-End ($)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized ($) Unexercisable(1) Unexercisable
- ---- --------------- ----------- --------------- -----------------
<S> <C> <C> <C> <C>
Lawrence S. 0 0 575,000/925,000 (2)
Benjamin President
and Chief
Executive
Officer of
SFAC and SFC
Robert B. Aiken 0 0 58,750/11,250 (2)
Aiken Vice President
and General Counsel
of SFAC and SFC
Robert L. Fishbune 0 0 75,000/25,000 (2)
Vice President
and Chief Financial
Officer of
SFAC and SFC
John R. Reisenberg 0 0 118,750/6,250 (2)
Reisenberg Vice
President of
Human Resources of
SFAC and SFC
Henry J. Metz 0 0 153,750/31,250 (2)
President and Chief
Executive Officer of
Metz
</TABLE>
(1) Options to purchase Common Stock.
(2) All of the options listed in this table have an exercise
price of $0.021322 per share of Common Stock. Due to the
fact that the Common Stock is not publicly traded, it is not
currently possible to calculate a precise value for the
Common Stock. In October 1997, the Board of Directors of
SFAC realized that certain previously granted stock options
had exercise prices which exceeded the fair market value of
the Common Stock. In view of the diminished value, the
Board of Directors of SFAC determined that adjusting the
exercise price of stock options previously awarded to
existing employees (including the named executive officers)
was in the best interests of the Company. On October 30,
1997, the Board of Directors of SFAC repriced the exercise
price of existing options from $0.726703211 to $0.021322 per
share of Common Stock, which the Board of Directors of SFAC
determined was not below the fair market value of the Common
Stock. See "Option Repricings".
<PAGE> 22
Options/SARs Repricing Table
The following table provides information concerning all
repricings of stock options of all executive officers since 1993
(when the Company became subject to the reporting requirements of
the Exchange Act). Effective January 1, 1994, SFAC adopted the
1994 Stock Option Plan (as may be amended and restated, the Stock
Option Plan). Historically, the exercise price per share of
incentive stock options equals or exceeds the fair market value
of the Common Stock on the date of grant. In October 1997, the
Board of Directors of SFAC realized that certain previously
granted stock options had exercise prices which exceeded the fair
market value of the Common Stock. In view of the diminished
value, the Board of Directors of SFAC determined that adjusting
the exercise price of stock options previously awarded to the
named executive officers was in the best interests of the
Company. On October 30, 1997, the Board of Directors of SFAC
repriced the exercise price of existing options from $0.726703211
to $0.021322 per share of Common Stock, which the Board of
Directors of SFAC determined was not below fair market value.
<TABLE>
<CAPTION>
Ten-Year Option/SAR Repricings
-----------------------------------------------------------------
Length of
Original
Market Option
Price of Exercise Term
Number of Stock at Price at Remianing
Options/SARs Time of Time of New at Date of
Repriced or Repricing or Repricing or Exercise Repricing or
Name Date Amended (#) Amendment Amendment Price Amendment
- ---- ---- ----------- ---------- ----------- -------- --------------
($) ($) ($)
<S> <C> <C> <C> <C> <C> <C>
Lawrence S. Benjamin 10/30/97 200,000 (1) (2) (1) (3)
President and
Chief Executive
Officer of
SFAC and SFC
Robert B. Aiken 10/30/97 70,000 (1) (2) (1) (4)
Vice President,
Secretary and
General Counsel of
SFAC and SFC
Robert L. Fishbune 10/30/97 100,000 (1) (2) (1) (5)
Vice President and
Chief Financial
Officer of
SFAC and SFC
Henry J. Metz 10/30/97 185,000 (1) (2) (1) (6)
President and
Chief Executive
Officer of Metz
John R. Reisenberg 10/30/97 125,000 (1) (2) (1) (7)
Vice President of
Human Resources for
SFAC and SFC
</TABLE>
(1) Due to the fact that the Common Stock is not publicly
traded, it is not currently possible to calculate a precise
value for the Common Stock. The new exercise price is
$0.021322 per share. The Board of Directors of SFAC
determined at the time of the option repricing that a per
share price of $0.021322 is not below the fair market value
of the Common Stock.
(2) The original exercise price for all of the outstanding
options at the time of the repricing was $0.726703211 per
share.
<PAGE> 23
(3) Of the 200,000 options held by Mr. Benjamin that were
repriced, 100,000 have a term expiring on 2/1/04, 50,000
have a term expiring on 2/1/05, and 50,000 have a term
expiring on 2/1/06.
(4) Of the 70,000 shares held by Mr. Aiken that were repriced,
25,000 have a term expiring on 2/1/04, 10,000 have a term
expiring on 2/1/05 and 35,000 have a term expiring on
2/1/06.
(5) All 100,000 options held by Mr. Fishbune that were repriced
have a term expiring on 2/1/06.
(6) Of the 185,000 options held by Mr. Metz that were repriced,
60,000 have a term expiring on 2/1/04, 75,000 have a term
expiring on 2/1/05 and 50,000 have a term expiring on
2/1/06.
(7) Of the 125,000 options held by Mr. Reisenberg that were
repriced, 100,000 have a term expiring on 2/1/04 and 25,000
have a term expiring on 2/1/05.
Long-Term Incentive Plans (LTIP) - Awards in Last Fiscal Year
The following table sets forth each award made to the named
executive officers under any long-term incentive plan during the
fiscal year ended December 31, 1997.
<TABLE>
<CAPTION>
Estimated Future Payouts
Under Nonstock
Price-Based Plans
-----------------
Performance or Other
Number of Shares, Period Until
Units or Maturation Threshold Target Maximum
Name Other Rights (#)(1) or Payout ($) ($) ($)
- ---- ------------------ ---------- --------- ------ -------
<S> <C> <C> <C> <C> <C>
Headquarters LTIP
- -----------------
Lawrence S. Benjamin 0 Units (2) 0 (5) (5)
President and
Chief Executive
Officer of
SFAC and SFC
Robert B. Aiken 0 Units (2) 0 (5) (5)
Vice President and
General Counsel of
SFAC and SFC
Robert L. Fishbune 0 Units (2) 0 (5) (5)
Vice President and
Chief Financial
Officer of
SFAC and SFC
John R. Reisenberg 0 Units (2) 0 (5) (5)
Vice President of
Human Resources of
SFAC and SFC
Mother's LTIP
- -------------
Lawrence S. Benjamin 3 Units (3) 0 (6) (6)
President and
Chief Executive
Officer of
SFAC and SFC
Metz LTIP
- ---------
Henry J. Metz 0 Units (4) 0 (7) (7)
President and
Chief
Executive
Officer of
Metz
</TABLE>
<PAGE> 24
(1) This column contains the number of performance units granted
to each of the named executive officers in 1997 under the
terms of the SFC Long Term Incentive Compensation Plan
(Headquarters LTIP), the Mother's Long-Term Incentive Plan
(Mother's LTIP) and the Metz Long-Term Incentive Plan (Metz
LTIP). Under the terms of the Headquarters LTIP, each
performance unit represents the right to receive 0.1% of the
ultimate cash award under the Headquarters LTIP. Under the
terms of the Mother's LTIP, each performance unit represents
the right to receive 1.0% of the Value Increase Amount (the
amount by which the total value of Mother's (as determined
in accordance with the Mother's LTIP) exceeds a threshold
amount). Under the terms of the Metz LTIP, each performance
unit represents the right to receive 0.1% of the ultimate
cash award under the Metz LTIP.
(2) Under the Headquarters LTIP, payment is conditional upon the
achievement by each of Metz and H&M of specified
consolidated EBITDA (income from operations, plus
depreciation of property, plant and equipment and
amortization of intangible assets) targets in fiscal 1998,
or earlier in the event of a change of control. The awards,
if and to the extent earned, will vest in two installments:
40% of the total award will vest for participants employed
by SFC or one of its subsidiaries on January 15, 1999, and
the remaining 60% will vest for participants in the employ
of SFC or one of its subsidiaries on January 15, 2000.
Payments of vested amounts will be made on March 31, 1999
and March 31, 2000. In the event of a change of control of
SFC, Metz or H&M, the portion of the LTI award related to
such subsidiary shall vest and be paid 90 days after such
change of control.
(3) Under the Mother's LTIP, the amount of payment is based upon
the total value of Mother's as determined on December 31,
2000, or earlier in the event of a change of control. The
awards, if and to the extent earned, will be paid on March
31, 2001 or within 90 days of an earlier change of control.
(4) Under the Metz LTIP, payment is conditional upon the
achievement by Metz of specified consolidated EBITDA targets
in fiscal 1998, or earlier in the event of a change of
control. The awards, if and to the extent earned, will vest
in two installments: 40% of the total award will vest for
participants employed by SFC or one of its subsidiaries on
January 15, 1999, and the remaining 60% will vest for
participants in the employ of SFC or one of its subsidiaries
on January 15, 2000. Payments of vested amounts will be
made on March 31, 1999 and March 31, 2000. In the event of
a change of control of Metz, the awards shall vest and be
paid 90 days after such change of control.
(5) Under the Headquarters LTIP, an aggregate award of up to
$5.7 million will be made available to all participants to
the extent the EBITDA of Metz and H&M for fiscal 1998
exceeds the 1998 EBITDA targets for Metz and H&M by 15%.
Awards will be pro-rated between 25% and 100% pay-outs based
upon the actual 1998 EBITDA of Metz and H&M to the extent
that such actual EBITDA equals exceeds the 1998 targets, but
is less than 115% of the 1998 targets.
(6) Under the Mother's LTIP, there is no target or maximum pay-
out amount. The amount of the payment is based upon the
Value Increase Amount on December 31, 2000, or earlier in
the event of a change of control. Under the terms of the
Mother's LTIP, Units representing up to 9.25% of the Value
Increase Amount may be issued to management employees of
Mother's and the CEO of the Company.
<PAGE> 25
(7) Under the Metz LTIP, an aggregate award of up to $13 million
will be made available to all participants to the extent the
EBITDA of Metz for fiscal 1998 exceeds the 1998 EBITDA
targets for Metz by 15%. Awards will be pro-rated between
25% and 100% pay-outs based upon the actual 1998 EBITDA of
Metz to the extent that such actual EBITDA equals or exceeds
the 1998 target, but is less than 115% of the 1998 target.
Metz-Mother's Cake & Cookie Company Consolidated Pension Plan for
Non-Union Employees
The following table indicates the estimated annual benefits
payable upon retirement to each of Mr. Metz and Mr. O'Dea for the
specified compensation and years of service classifications under
the Metz-Mother's Cake & Cookie Company Consolidated Pension Plan
for Non-Union Employees (Pension Plan), as of December 31, 1997,
assuming that Messrs. Metz and O'Dea remain in service with Metz
or Mother's until their retirement. Messrs. Metz and O'Dea are
the only named executive officers participating in the Pension
Plan.
Pension Plan Table For The Pension Plan
Annual Final
Average
Compensation Years of Service
- ------------- --------------------------------------------
15 20 25 30 35
-- -- -- -- --
125,000 $24,347 $32,962 $41,578 $50,193 $50,193
150,000 $29,765 $40,287 $50,809 $61,331 $61,331
175,000 $34,399 $47,033 $59,667 $72,301 $72,301
200,000 $38,443 $52,983 $67,523 $82,064 $82,064
225,000 $42,487 $58,933 $75,380 $91,826 $91,826
250,000 $44,240 $61,513 $78,786 $96,059 $96,059
300,000 $44,240 $61,513 $78,786 $96,059 $96,059
350,000 $44,240 $61,513 $78,786 $96,059 $96,059
400,000 $44,240 $61,513 $78,786 $96,059 $96,059
450,000 $44,240 $61,513 $78,786 $96,059 $96,059
500,000 $44,240 $61,513 $78,786 $96,059 $96,059
"Compensation" under the Pension Plan generally refers to total
annual cash compensation (up to $160,000 for 1997, as limited by
the Code section 401(a)(17)), including pre-tax salary deferrals,
but excluding certain specified items such as compensation
received under the Metz Long-Term Incentive Compensation Plan,
the Mother's Long-Term Incentive Compensation Plan, the Metz
Annual Bonus Incentive Plan and the Mother's Annual Bonus
Incentive Plan.
<PAGE> 26
Although the amount reported as annual compensation for Messrs.
Metz and O'Dea in the Summary Compensation table is $585,000 and
$518,000, respectively, the amount covered compensation under the
Plan in 1997 for each of them was $160,000 (as limited by Code
section 401(a)(171). As of December 31, 1997, Mr. Metz had
approximately 26 years of credited service under the Pension Plan
and Mr. O'Dea had less than one year of credited service under
the Pension Plan. Benefits are computed on a straight life
annuity basis and are not subject to deduction for Social
Security or other offset amounts.
Certain Employment Arrangements
Employment Agreement with Mr. Benjamin
SFAC and SFC entered into an Amended and Restated Executive
Employment Agreement with Mr. Benjamin effective January 1, 1997.
The Employment Agreement for Mr. Benjamin provides for the
initial term of employment to end December 31, 1999, which term
will automatically be renewed for additional one-year extension
periods unless the renewal is canceled by SFAC or SFC or Mr.
Benjamin upon six months' prior notice. The Employment Agreement
provides for an initial base salary of $560,000 and an annual
target bonus of 75% of base salary upon attainment by the Company
of specified EBITDA targets.
In 1997, Mr. Benjamin was granted options to purchase an
aggregate of 1,300,000 of Common Stock (300,000 shares pursuant
to the Stock Option Plan and 1,000,000 shares pursuant to a Stock
Option Agreement dated October 27, 1997). These options will
vest (and therefore become and remain exercisable) and will be
exercisable at a price of $0.021332 per share on the dates set
forth below: 325,000 shares vested by October 25, 1997; 75,000
shares vested by February 1, 1998; 250,000 shares vest by October
25, 1998; 75,000 shares vest by February 1, 1999; 250,000 shares
vest by October 25, 1999; 75,000 shares vest by February 1, 2000
and 250,000 shares vest by October 25, 2000. All of the
foregoing options expire on October 25, 2007.
In the event of termination of Mr. Benjamin's employment for any
reason, SFAC and SFC will have the right to repurchase all shares
of Common Stock and vested options held by Mr. Benjamin at the
time of termination. Options not vested will lapse upon
termination (except that upon Mr. Benjamin's death, disability,
termination without cause or voluntary termination with good
reason, options that would have vested within six months of the
date of termination are treated as vested). In the event of Mr.
Benjamin's death, disability, termination without cause or
voluntary termination for good reason, Mr. Benjamin will have the
right to put his shares of Common Stock to SFAC. In addition,
upon termination in such circumstances, SFAC and SFC will make
certain post-termination salary and bonus payments to such
executive (or his estate).
Mr. Benjamin's Employment Agreement also provides that Mr.
Benjamin may be entitled to receive, under certain circumstances,
payments to offset (at least in part) certain tax consequences to
him as a result of his exercise of stock options and/or his
termination in connection with a change of control of SFAC.
These payments are limited in some circumstances to the tax
savings actually realized by SFAC and in other circumstances by
various dollar amounts.
Mr. Benjamin has agreed to be bound by certain confidentiality,
non-competition and non-solicitation restrictions set forth in
his Employment Agreement.
<PAGE> 27
Employment Agreement with Mr. Fishbune
SFAC and SFC entered into an Executive Employment Agreement with
Mr. Fishbune effective May 13, 1996, as amended. The Employment
Agreement for Mr. Fishbune provides for the initial term of
employment to end December 31, 1999, which term will
automatically be renewed for additional one-year extension
periods unless the renewal is canceled by SFAC or SFC or Mr.
Fishbune upon six months' prior notice. The Employment Agreement
provides for a 1997 base salary of $365,000 and an annual target
bonus of 50% of base salary upon attainment by the Company of
specified EBITDA targets.
Pursuant to the Employment Agreement, Mr. Fishbune has been
granted options pursuant to the SFAC Stock Option Plan to
purchase 100,000 shares of Common Stock. These options will vest
(and therefore become and remain exercisable) over time so that
all such options will be vested by February 1, 1999. These
options, once vested, will be exercisable until February 1, 2006
at a price of $0.021332 per share.
Mr. Fishbune's Employment Agreement also provides that Mr.
Fishbune may be entitled to receive, under certain circumstances,
payments to offset (at least in part) certain tax consequences to
him as a result of his exercise of stock options and/or his
termination in connection with a change of control of SFAC or
SFC. These payments are limited in some circumstances to the tax
savings actually realized by SFAC or SFC and in other
circumstances by various dollar amounts.
Mr. Fishbune has agreed to be bound by certain confidentiality,
non-competition and non-solicitation restrictions set forth in
his Employment Agreement.
Employment Agreement with Mr. Aiken
SFAC and SFC entered into an Executive Employment Agreement with
Mr. Aiken effective March 1, 1997. The Employment Agreement for
Mr. Aiken provides for the initial term of employment to end
December 31, 1999, which term will automatically be renewed for
additional one-year extension periods unless the renewal is
canceled by SFAC or SFC or Mr. Aiken upon six months' prior
notice. The Employment Agreement provides for an initial base
salary of $275,000 and an annual target bonus of 50% of base
salary upon attainment by the Company of specified EBITDA
targets.
Mr. Aiken's Employment Agreement also provides that Mr. Aiken may
be entitled to receive, under certain circumstances, payments to
offset (at least in part) certain tax consequences to him as a
result of his exercise of stock options and/or his termination in
connection with a change of control of SFAC or SFC. These
payments are limited in some circumstances to the tax savings
actually realized by SFAC or SFC and in other circumstances by
various dollar amounts.
Mr. Aiken has agreed to be bound by certain confidentiality, non-
competition and non-solicitation restrictions set forth in his
Employment Agreement.
Employment Agreement with Mr. Reisenberg
SFAC and SFC entered into an Executive Employment Agreement with
Mr. Reisenberg effective January 1, 1994, as amended. The
Employment Agreement for Mr. Reisenberg provides for the initial
term of employment to end December 31, 1999, which term will
automatically be renewed for additional one-year extension
periods unless the renewal is canceled by SFAC or SFC or Mr.
Reisenberg upon six months' prior notice. The Employment
Agreement provides for an initial base salary of $250,000 and an
<PAGE> 28
annual target bonus of 50% of base salary upon attainment by the
Company of specified EBITDA targets.
Mr. Reisenberg's Employment Agreement also provides that Mr.
Reisenberg may be entitled to receive, under certain
circumstances, payments to offset (at least in part) certain tax
consequences to him as a result of his exercise of stock options
and/or his termination in connection with a change of control of
SFAC or SFC. These payments are limited in some circumstances to
the tax savings actually realized by SFAC or SFC and in other
circumstances by various dollar amounts.
Mr. Reisenberg has agreed to be bound by certain confidentiality,
non-competition and non-solicitation restrictions set forth in
his Employment Agreement.
Executive Retirement Accounts Maintained by Certain Headquarter
(HQ) Employees
Certain HQ employees, including Messrs. Benjamin, Aiken and
Fishbune have established retirement accounts into which they
contribute up to 15% of base pay (on an after-tax basis) to
annuity or money market funds. The Company provides certain
contributions to each employee's retirement account and
reimbursement for the tax impact incurred by participating
employees on all contributions made in connection with the plan.
Stock Option and Long Term Performance Related Incentive Plans
1994 Stock Option Plan
Effective January 1, 1994, SFAC adopted the 1994 Stock Option
Plan, which was amended and restated in February, 1995 (the Stock
Option Plan). An aggregate of 5,852,917 shares may be subject to
options granted under the Stock Option Plan. Options may be
granted to key employees (including officers and directors) and
consultants of SFAC and its operating subsidiaries. Options
granted under the Stock Option Plan may either be non-qualified
stock options (NQSOs) or incentive stock options (ISOs).
Generally, options for employees of the operating subsidiaries
will become eligible for grant in five installments during fiscal
years 1994-1998. The last four tranches will be granted only if
and to the extent 1994-1997 EBITDA targets are attained. The
Compensation Committee (the Committee) of the Board of Directors
of SFAC (the SFAC Board), which has been appointed by the SFAC
Board to administer the Stock Option Plan, has discretion to
establish and adjust targets and award levels.
The option term will generally be 10 years. The exercise price
per share of ISOs will equal or exceed the fair market value of
the Common Stock on the date of grant. The exercise price per
share of NQSOs may be below such fair market value.
Headquarters Long Term Incentive Compensation Plan
In 1997, the Company adopted the SFC Amended and Restated Long-
Term Incentive Compensation Plan (the Headquarters LTIP). The
payment of awards under the Headquarters LTIP is conditional on
the achievement of Metz and H&M of consolidated EBITDA in fiscal
1998 in excess of a specified 1998 consolidated EBITDA target for
each such subsidiary of the Company. The Committee (which has
been appointed by the Board of the Company to administer the
Headquarters LTIP) may, in its discretion, grant performance
under the Headquarters LTIP to Company employees. Up to 1,000
Metz performance units and 1,000 H&M performance units are
available for grants under the Plan. Each performance unit
represents the right to receive 0.1% of the ultimate cash award
pool for Metz and H&M, respectively.
<PAGE> 29
The maximum award pool under the Headquarters LTIP is $5.7
million; of which $4.4 million relates to Metz and $1.3 million
relates to H&M. The awards, if and to the extent earned, will
vest in two installments: 40% of the total award will vest for
participants employed by the Company or one of its subsidiaries
on January 15, 1999, and the remaining 60% will vest for
participants employed by the Company or one of its subsidiaries
on January 15, 2000. Payments of vested amounts will be made on
March 31, 1999 and March 31, 2000. In the event of a change of
control, the awards shall vest and be paid within 90 days.
Long-Term Incentive Plans of Metz and Mother's
The Company also adopted the Metz Long-Term Incentive
Compensation Plan in 1997.
The payment of awards under the Metz LTIP is conditional upon the
achievement by Metz of consolidated EBITDA in fiscal 1998 in
excess of a 1998 consolidated EBITDA target. The Committee
(which has been appointed by the Board of the Company to
administer the Metz LTIP) may, in its discretion, grant up to
1,000 performance units under the Metz LTIP to Metz employees.
Each performance unit represents the right to receive 0.1% of the
ultimate cash award pool of $13 million. The awards, if and to
the extent earned, will vest in two installments: 40% of the
total award will vest for participants employed by the Company or
one of its subsidiaries on January 15, 1999, and the remaining
60% will vest for participants in the employ of the Company or
one of its subsidiaries on January 15, 2000. Payments of vested
amounts will be made on March 31, 1999 and March 31, 2000. In
the event of a change of control of Metz, the awards shall vest
and be paid in 90 days.
Under the Mother's LTIP, the amount of any awards, if and to the
extent earned, that are paid will be based upon the amount by
which the total value of Mother's (as determined in accordance
with the Plan) exceeds a threshold amount (the Mother's Value
Increase Amount). The Committee (which has been appointed by the
Board of the Company to administer the Mother's LTIP) may, in its
discretion, grant up units under the Mother's LTIP to Mother's
management employees representing the right to receive up to an
aggregate of 6.25% of the Mother's Value Increase Amount. The
CEO of the Company also has the right to receive units equal to
another 3% of the Mother's Value Increase Amount. The award
amounts will be determined based upon the Mother's Value Increase
Amount on December 31, 2000, or earlier in the event of a change
of control. Such awards, if and to the extent earned, will be
paid on March 31, 2001, or earlier in the event of a change of
control.
Deferred Bonus Plans
Certain of the executive officers and other key employees of the
Company and its subsidiaries, including Messrs. Benjamin, Aiken,
Fishbune, Metz and Reisenberg, have entered into Deferred Bonus
Agreements with the Company. Under the terms of these Deferred
Bonus Agreements, an employee would be entitled to receive a
deferred bonus payment in an amount equal to the cumulative cash
bonus payments that such participant has received (or will
receive) under the Annual Bonus Plans of the Company and its
subsidiaries for the years 1994 through 1998. The amount
potentially payable to any participant will be reduced by any
amounts paid (or to be paid) under the Headquarters LTIP, Metz
LTIP or H&M LTIP. The payments, if and to the extent earned,
will vest in two installments: 40% of the total award will vest
for participants employed by the Company or one of its
subsidiaries on January 15, 1999, and the remaining 60% will vest
for participants employed by the Company or one of its
subsidiaries on January 15, 2000. Payments of vested amounts
will be made on March 31, 1999 and March 31, 2000. In the event
of a change of control, the awards shall vest and be paid within
90 days. Mr. Benjamin is also the recipient of a Supplemental
Deferred Bonus Plan pursuant to which he will receive a
supplemental deferred bonus award in the amount of $800,000 on
December 5, 1998 provided that he is employed by the Company or
one of its subsidiaries on that date.
<PAGE> 30
Divestiture Award Agreements
Certain of the executive officers and other key employees of the
Company and its subsidiaries, including Messrs. Aiken, Fishbune,
Metz and Reisenberg have entered into Divestiture Award
Agreements with the Company. Pursuant to these agreements, a
recipient will receive a percentage of the net cash proceeds
received by the Company (after deducting fees and expenses) upon
a sale of Metz or H&M at any time prior to June 30, 2000.
Messrs. Aiken and Fishbune have been granted the right to receive
0.1% of the net cash proceeds upon a sale of Metz or H&M, Mr.
Reisenberg has been granted the right to receive 0.05% of the net
cash proceeds upon a sale of Metz or H&M, and Mr. Metz has been
granted the right to receive 0.15% of the net cash proceeds
received upon a sale of Metz.
Compensation of Directors
Employees of SFAC, SFC or their subsidiaries do not receive any
additional compensation for services as a director or on
committees of the board of directors of SFAC, SFC or any of their
subsidiaries. Directors of SFAC, SFC or their subsidiaries are
reimbursed for reasonable out-of-pocket expenses incurred in
connection with attendance at Board of Directors and committee
meetings and are covered by director's liability insurance. Each
of Messrs. Baldwin and Meyer also receive directors fees of
$20,000 annually.
Compensation Committee Interlocks and Insider Participation In
Compensation Decisions
J. Taylor Crandall, Robert B. Haas and Anthony P. Scotto are all
of the members of the compensation committee of the Board of
Directors of each of SFAC and SFC (Compensation Committee).
Messrs. Crandall, Haas and Scotto own a beneficial interest in or
is (or was during a portion of the Company's 1997 fiscal year) an
executive officer of one or more of the entities that have
entered into financial advisory arrangements with SFC as
described below.
Mr. Haas is a controlling shareholder and Chairman of the Board
of Haas Wheat. Haas Wheat is a party to a financial advisory
agreement with SFC pursuant to which Haas Wheat has agreed to
provide certain financial advisory and other consulting services
to SFC for a five-year period in consideration for an annual fee
of $700,000.
J. Taylor Crandall is Vice President and Chief Financial Officer
of Keystone and is President, Director and Sole Stockholder of
Acadia MGP, Inc., the managing general partner of Acadia FW
Partners, L.P., the sole general partner of Acadia. Mr. Scotto
is a Managing Director of Oak Hill Partners, Inc. and its
predecessor. Each of Penobscot and Keystone have entered into
five-year financial advisory agreements with SFC, pursuant to
which they are paid annual fees, $200,000 per year in the case of
Penobscot and $100,000 per year in the case of Keystone.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
All of the capital stock of SFC is beneficially owned by SFAC.
The following table sets forth, as of March 18, 1998, certain
information regarding the beneficial ownership of voting
securities of SFAC by (i) each person known by the Company to be
the beneficial owner of more than 5% of the common stock of SFAC
(Common Stock), which is SFAC's only outstanding class of voting
securities, (ii) each of the directors and named executive
officers of SFC, and (iii) all executive officers and directors
of SFC.
<PAGE> 31
Name and Address of Number of Shares Percentage of Outstanding Shares
Beneficial Owner of Common Stock of Common Stock (a)
- ----------------- ---------------- ------------------------------
Acadia Partners, L.P. (b) 27,063,347 43.12%
201 Main Street
Fort Worth, Texas 76102
Keystone, Inc. (c) 9,358,502 14.91%
201 Main Street
Fort Worth, Texas 76102
Artal Luxembourg S.A. (d) 5,959,327 9.49%
Aandorenstraat 2
3300 Tienen, Belgium
Robert B. Haas (e) 5,881,496 9.37%
300 Crescent Court,
Suite 1700
Dallas, Texas 75201
UBS Capital LLC (f) 5,366,913 8.50%
299 Park Avenue
New York, New York 10171
DLJ Merchant Banking 3,815,712 6.08%
Partners, L.P. (g)
277 Park Avenue
New York, New York 10172
Thomas J. Baldwin -- --
J. Taylor Crandall (b) -- --
Charles J. Delaney -- --
Jerry M. Meyer -- --
Andrew J. Nathanson (g) -- --
David G. Offensend -- --
Marc C. Particelli -- --
Anthony P. Scotto (b) -- --
Douglas D. Wheat (h) 2,396,776 3.82%
Henry J. Metz 1,186,500 1.89%
Lawrence S. Benjamin 651,771 1.04%
Robert B. Aiken 102,981 *
Robert L. Fishbune 75,000 *
All directors and 10,294,524 17.25%
executive officers ========== ======
as a group (b)(g)
______________________
*Less than 1%.
<PAGE> 32
(a) This column reflects percentages of the aggregate number of
outstanding shares of Common Stock on March 18, 1998. The
holdings of all of the stockholders listed in this table may
be diluted by the exercise of options which, under
employment arrangements and stock option plans approved by
SFAC and SFC, may be granted to certain employees. The
Stock Option Plan makes available to certain operating
company employees and HQ Employees options to purchase
5,852,917 shares of Common Stock. See "Item 11-Executive
Compensation-Stock Option and Long Term Performance Related
Incentive Plans."
(b) Acadia's shares of Common Stock include shares owned by FWHY-
Coinvestments VII Partners, L.P. (FWHY), SFC Partners, L.P.
(SFCP) and SFC Partners II, L.P. (SFCII), parties related to
Acadia. Acadia's shares of Common Stock also include
3,467,002 shares of Common Stock issuable upon the exercise
of 8,775 Warrants issued by SFAC in favor of Acadia pursuant
to a Warrant Agreement dated June 27, 1997. See "Item 13 -
Certain Relationships and Related Transactions." The
general partner of Acadia is Acadia FW Partners, L.P.
(Acadia FW), the managing general partner of which is Acadia
MGP, Inc. (Acadia MGP), a corporation controlled by J.
Taylor Crandall. In addition, Mr. Crandall controls Group
31, Inc., the general partner of each of FWHY, SFCP and
SFCII. Therefore, Acadia FW and Acadia MGP may be deemed to
beneficially own the shares of Common Stock held by Acadia,
and Mr. Crandall may be deemed to beneficially own the
shares of Common Stock held by Acadia, SFCP, SFCII and FWHY.
Mr. Scotto is a limited partner of SFCII and disclaims
beneficial ownership of the shares of Common Stock held by
SFCII. The address of Acadia FW, Acadia MGP, FWHY, SFCP,
SFCII and Mr. Crandall is 201 Main Street, Fort Worth, Texas
76102.
(c) Keystone's shares of Common Stock include 3,467,002 shares
of Common Stock issuable upon the exercise of 8,775 Warrants
issued by SFAC in favor of Keystone pursuant to a Warrant
Agreement dated June 27, 1997. See "Item 13 - Certain
Relationships and Related Transactions." Keystone is
controlled by Robert M. Bass. As such, Mr. Bass may be
deemed to beneficially own the shares of Common Stock held
by Keystone. The address of Mr. Bass and Keystone is 201
Main Street, Fort Worth, Texas 76102.
(d) The parent entity of Artal Luxembourg S.A. is Artal Group
S.A., a Luxembourg company.
(e) Mr. Haas' shares of Common Stock include 101,011 shares
owned by HWP Specialty Subsidiary Partners, 25,253 shares
owned by HWP Specialty Subsidiary Partners II, and 1,000,000
shares owned by the Haas Family Long-Term Trust. Mr. Haas'
shares of Common Stock also include 770,445 shares of Common
Stock issuable upon the exercise of 1,950 Warrants issued by
SFAC in favor of Mr. Haas pursuant to a Warrant Agreement
dated September 19, 1997. See "Item 13 - Certain
Relationships and Related Transactions." The shares owned
by HWP Specialty Subsidiary Partners and HWP Specialty
Subsidiary Partners II also are beneficially owned by Mr.
Douglas Wheat.
(f) Union Bank of Switzerland, a publicly-owned Swiss Banking
Corporation, owns indirectly 100% of the capital stock of
UBS Capital LLC.
(g) The following entities hold shares of common stock: DLJ
Merchant Banking Partners, L.P. (DLJMBP); DLJ International
Partners, C.V. (DLJIP); DLJ Offshore Partners, C.V. (DLJOP);
DLJ Merchant Banking Funds, Inc. (DLJMBF); DLJ First ESC
L.L.C. (DLJESC), an "employee securities corporation" (as
defined in the Investment Company Act of 1940) formed to
hold securities of employees of DLJMBP, DLJIP, DLJOP, DLJMBF
and DLJESC); and Donaldson, Lufkin & Jenrette Securities
Corporation (collectively, the "DLJ Entities"). Except for
his allocable portion of the shares held by DLJESC, Mr.
Nathanson disclaims beneficial ownership of the shares of
Common Stock held by the DLJ Entities.
(h) Mr. Wheat's shares of Common Stock include 101,011 shares
owned by HWP Specialty Subsidiary Partners and 25,253 shares
owned by HWP Specialty Subsidiary Partners II, which also
are beneficially owned by Mr. Robert B. Haas.
Item 13. Certain Relationships and Related Transactions
Stockholders' Agreement
Simultaneously with the closing of the Acquisition, Haas Wheat,
Acadia, Keystone, UBS Capital, Artal Luxembourg S.A. and DLJMBP
(in some cases acting through affiliates) (collectively, with
certain of their affiliates, the Principal Stockholders) acquired
Common Stock of SFAC at a price of $0.726703211 per share. On
August 16, 1993, the Principal Stockholders entered into a
stockholders' agreement
<PAGE> 33
governing the relationships among such stockholders (the
Stockholders' Agreement). Subsequent transferees of the Common
Stock that are affiliates of the Principal Stockholders or
members of management have also agreed to be bound by the
Stockholders' Agreement. The Stockholders' Agreement imposes on
the parties thereto certain restrictions and conditions on the
transfer of Common Stock, subject to certain exceptions. The
Stockholders' Agreement provides the parties with the right to
participate in certain sales of Common Stock by other parties.
The parties to the Stockholders' Agreement were granted certain
preemptive rights with respect to issuance of Common Stock by
SFAC and the right, in certain circumstances, to have their
Common Stock registered for public sale under the Securities Act
of 1933. The Stockholders' Agreement also sets forth provisions
relating to corporate governance of SFAC. Pursuant to the
Stockholders' Agreement, Acadia has nominated three Directors,
Keystone has nominated two Directors, Haas Wheat has nominated
two Directors, and UBS Capital, Artal Belgium S.A. and DLJMBP
have each nominated one Director. Under certain conditions
Acadia and Keystone can increase the number of Directors they can
nominate.
Certain Transactions with Stockholders of SFAC
Certain of the Principal Stockholders and their affiliates were
paid financial advisory fees by the Company in 1997 pursuant to
financial advisory agreements with the Company (Financial
Advisory Agreements).
Haas Wheat, Penobscot and Keystone each entered into Financial
Advisory Agreements with SFC. SFC paid Haas Wheat an annual fee
of $700,000, Penobscot an annual fee of $200,000 and Keystone an
annual fee of $100,000. See "Item 11-Executive Compensation-
Compensation Committee Interlocks and Insider Participation in
Compensation Decisions."
In November, 1996, SF Leasing L.L.C. (of which Acadia and
Keystone each owns a 45% interest and Haas Wheat owns a 10%
interest) purchased from Metz and Stella all of the equipment at
three manufacturing facilities for the aggregate amount of
$18,380,000 (which price was based on the appraised value of such
equipment), and leased such equipment back to Metz and Stella in
a transaction that was deemed by the parties to be equivalent to
an arms length transaction. In December, 1997, SF Leasing,
L.L.C. resold to Stella all of the equipment at two of the
manufacturing facilities previously purchased from Stella by SF
Leasing, L.L.C. for aggregate consideration of $15,336,867. The
completion of this repurchase transaction was a condition to the
sale by the Company of Stella. The Board of Directors of the
Company determined that the foregoing transactions were on terms
no less favorable to the Company, Metz and Stella than could
otherwise have been obtained by the Company, Metz or Stella in a
transaction with an unaffiliated third party.
In 1996, the Company and Stella sold an insurance receivable
generated in connection with the fire at Stella's Lena, Wisconsin
facility to Acadia, Keystone and Haas Wheat in the aggregate face
amount and for the aggregate purchase price set forth opposite
their respective names: Acadia, face amount of $8,775,000,
purchase price of $8,643,375; Keystone, face amount of
$8,775,000, purchase price of $8,643,375; and Haas Wheat, face
amount of $1,950,000, purchase price of $1,920,750. In June,
1997, Acadia, Keystone and Haas Wheat agreed to convert their
interests in the Stella insurance receivable into equity
interests of SFAC (the Equity Conversion Transaction). In
consideration of the Equity Conversion Transaction, Acadia
received 8,750 shares of Series A Preferred Stock and Warrants to
purchase 3,467,002 shares of Common Stock, Keystone received
8,750 shares of Series A Preferred Stock and Warrants to purchase
3,467,002 shares of Common Stock, and Haas Wheat received 1,950
shares of Series A Preferred Stock and Warrants to purchase
770,445 shares of Common Stock. The Series A Preferred Stock has
a par value of $1,000 per share, a cumulative dividend rate of
16% per annum and a redemption date of August 16, 2006. The
Warrants have a term of ten years and provide
<PAGE> 34
that the Common Stock issuable thereunder shall have an exercise
price of $0.021332 per share. The Board of Directors of the
Company determined that the foregoing transactions were on terms
no less favorable to the Company and Stella than could otherwise
have been obtained by SFC or Stella in transactions with an
unaffiliated third party.
In June, 1997, the Company retained Donaldson, Lufkin & Jenrette
Securities Corporation (an affiliate of DLJMBP) to serve as the
Company's financial advisor in connection with its proposed sale
of Stella. In December, 1997, upon the completion of the sale of
Stella, the Company paid Donaldson, Lufkin & Jenrette Securities
Corporation $5.4 million as compensation for such financial
advisory services and $200,000 as reimbursement of related
expenses incurred by Donaldson, Lufkin & Jenrette Securities
Corporation. The Board of Directors of the Company determined
that the foregoing transaction was on terms no less favorable to
the Company than could otherwise have been obtained by the
Company in a transaction with an unaffiliated third party.
Tax Sharing Agreement
SFAC and SFC have entered into a tax sharing agreement pursuant
to which SFC agreed to pay to SFAC its pro rata share of SFAC's
consolidated income tax liability.
<PAGE> 35
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K
(a)(1) Financial Statements
Reference is made to the information set forth in Part II,
Item 8 of this Report, which information is incorporated
herein by reference.
(a)(2) Financial Statement Schedules
All schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange
Commission have been omitted because they are not required
under the related instructions, are not applicable, or the
information has been provided in the consolidated financial
statements or the notes thereto.
(b) Reports on Form 8-K
The following Reports on Form 8-K were filed by the Company
during the fourth quarter of 1997:
(1) November 12, 1997 - Announcement of sale of Stella
Foods, Inc.
(2) December 22, 1997 - Proforma financial information
relating to sale of Stella Foods, Inc.
(c) Exhibits
Exhibit
Number Description of Document
------- -----------------------
3.1 Certificate of Incorporation of SFC.
(Incorporated by reference to Exhibit 3.1 to
Amendment No. 2 to SFC's Registration
Statement on Form S-4, dated November 10, 1993
(SFC's 1993 Form S-4) (Registration No. 33-
68956).)
3.2 Amended and Restated By-Laws of SFC.
(Incorporated by reference to Exhibit 3.2 to
SFAC's Report on Form 10-K for the year ended
December 31, 1994.)
4.1 Indenture, dated as of August 16,
1993, between SFAC and United States Trust
Company of New York, as Trustee (Trustee)
governing the 13% Senior Secured Discount
Debentures due 2005 issued by SFAC.
(Incorporated by reference to Exhibit 4.1 to
SFAC's Registration Form S-4 (SFAC's 1993 Form
S-4) (Registration No. 33-68958).)
4.2 Amendment No. 1 to the Indenture
governing the 13% Senior Secured Discount
Debentures, dated as of October 28, 1994,
between SFAC and the Trustee. (Incorporated
by reference to Exhibit 10.49 to SFAC's Report
on Form 10-Q for the quarter ended September
30, 1994).
<PAGE> 36
4.3 Registration Rights Agreement, dated
as of August 16, 1993, among SFAC, SFC and the
purchasers named therein. (Incorporated by
reference to Exhibit 4.3 to SFC's 1993 Form S-
4 (Registration No. 33-68956).)
4.4 Form of 11% Senior Subordinated
Discount Debentures issued by SFAC.
(Incorporated by reference to Exhibit 10.27 to
SFAC's 1993 Form S-4 (Registration No. 33-
68958).)
4.5 Form of Amendment No. 1, dated as of
October 28, 1994, to the 11% Senior
Subordinated Discount Debentures issued by
SFAC. (Incorporated by reference to Exhibit
10.50 to SFAC's Report on Form 10-Q for the
Quarter ended September 30, 1994).
4.6 Indenture, dated as of August 16,
1993, between SFC and the Trustee governing
the 10 1/4% Senior Notes due 2001.
(Incorporated by reference to Exhibit 4.1 to
SFC's 1993 Form S-4 (Registration No. 33-
68956).)
4.7 Amendment No. 1 to the Indenture
governing the 10 1/4% Senior Notes, due 2001
dated as of October 28, 1994, between SFC and
the Trustee. (Incorporated by reference to
Exhibit 10.37 to SFC's Report on Form 10-Q for
the quarter ended September 30, 1994).
4.8 Indenture, dated as of August 16,
1993, between SFC and the Trustee governing
the 11 1/4% Senior Subordinated Notes due
2003. (Incorporated by reference to Exhibit
4.2 to SFC's 1993 Form S-4 (Registration No.
33-68956).)
4.9 Amendment No. 1 to the Indenture
governing the 11 1/4% Senior Subordinated
Notes due 2003, dated as of October 28, 1994,
between SFC and the Trustee. (Incorporated by
reference to Exhibit 10.38 to SFC's Report on
Form 10-Q for the quarter ended September 30,
1994.)
4.10 Indenture, dated as of July 17,
1995, between SFC and the Trustee governing
the 11 1/8% Senior Notes due 2002.
(Incorporated by reference to Exhibit to 4.6
SFC's Report on Form 10-Q for the quarter
ended June 30, 1995.)
4.11 Registration Rights Agreement, dated
as of July 17, 1995, among SFC and the initial
purchasers of the 11 1/8% Senior Notes due
2002 issued by SFC. (Incorporated by
reference to Exhibit 4.7 to SFC' Report on
Form 10-Q for the quarter ended June 30,
1995.)
10.1 Stock Purchase Agreement, dated as
of August 9, 1993, among the sellers party
thereto and SFC. (Incorporated by reference
to Exhibit 10.1 to SFC's 1993 Form S-4
(Registration No. 33-68956).)
10.2 Amendment No. 1, dated as of August
16, 1993, to the Stock Purchase Agreement
among the sellers party thereto and SFC.
(Incorporated by reference to Exhibit 10.2 to
SFC's 1993 Form S-4 (Registration No. 33-
68956).)
<PAGE> 37
10.4 Settlement Agreement, dated as of March
31, 1995, between SFC and Beledia N.V.
(Incorporated by reference to Exhibit 10.4 to
SFC's Registration Statement on Form S-4 dated
July 21, 1995 (SFC's 1995 Form S-4).)
10.5 Financial Advisory Agreement, dated
as of August 16, 1993, among SFAC, SFC and
Penobscot. (Incorporated by reference to
Exhibit 10.5 to SFC's 1993 Form S-4
(Registration No. 33-68756).)
10.6 Financial Advisory Agreement, dated
as of August 16, 1993, among SFAC, SFC and
Keystone. (Incorporated by reference to
Exhibit 10.6 to the SFC's 1993 Form S-4
(Registration No. 33-68956).)
10.7 Financial Advisory Agreement, dated as of
August 16, 1993, among SFAC, SFC and Haas
Wheat. (Incorporated by reference to Exhibit
10.7 to SFC's 1993 Form S-4 (Registration No.
33-68956).)
10.8 Financial Advisory Agreement, dated
as of August 16, 1993, among SFAC, SFC and UBS
Capital. (Incorporated by reference to
Exhibit 10.8 to SFC's 1993 Form S-4
(Registration No. 33-68956).)
10.9 Financing Commitment Fee Agreement,
dated as of August 16, 1993, among SFAC, SFC
and Acadia. (Incorporated by reference to
Exhibit 10.9 to SFC's 1993 Form S-4
(Registration No. 33-68956).)
10.10 Financing Commitment Fee
Agreement, dated as of August 16, 1993, among
SFAC, SFC and Keystone. (Incorporated by
reference to Exhibit 10.10 to SFC's 1993 Form
S-4 (Registration No. 33-68956).)
10.11 Financing Commitment Fee
Agreement, dated as of August 16, 1993, among
SFAC, SFC and UBS Capital. (Incorporated by
reference to Exhibit 10.11 to SFC's 1993 Form
S-4 (Registration No. 33-68956).)
10.12 Tax Sharing Agreement, dated as
of August 16, 1993, among SFAC, SFC and
certain subsidiaries of SFC. (Incorporated by
reference to Exhibit 10.12 to SFC's 1993 Form
S-4 (Registration No. 33-68956).)
10.13 Tax Sharing Agreement, dated as
of August 16, 1993, between SFAC and SFC.
(Incorporated by reference to Exhibit 10.13 to
SFC's 1993 Form S-4 (Registration No. 33-
68956).)
10.14 Corporate Services Agreement,
dated as of June 30, 1994, between SFAC and
SFC. (Incorporated by reference to Exhibit
10.14 to SFC's Report on Form 10-K for the
year ended December 31, 1994.)
10.15 Equity Investment Agreement dated as
of May 13, 1997 by and among SFAC, Acadia,
Keystone and Haas Wheat. (Incorporated by
reference to Exhibit 10.93 to SFAC's Report on
Form 10-Q for the Quarter ended June 30,
1997.)
<PAGE> 38
10.16* Term Loan Agreement, dated as of
March 16, 1998, among SFC, various financial
institutions, DLJ Capital Funding, Inc., as
syndication agent, and ABN Amro Bank N.V., as
administrative agent.
10.17* Revolving Credit Agreement, dated as
of March 16, 1998, among certain subsidiaries
of SFC, various financial institutions, DLJ
Capital Funding, Inc., as syndication agent,
and ABN Amro Bank N.V., as administrative
agent.
10.18 Pooling Agreement, dated as of
November 16, 1994, by and among Specialty
Foods Finance Corporation (SFFC), SFC, as
Master Servicer, and Chase Bank (Chase), as
Trustee (the Pooling Agreement).
(Incorporated by reference to Exhibit 10.22 to
SFC's Report on Form 10-K for the year ended
December 31, 1994.)
10.19 Series 1994-1 Supplement to the
Pooling Agreement, dated as of November 16,
1994, by and among SFFC, SFC, as Master
Servicer, and Chase, as Trustee.
(Incorporated by reference to Exhibit 10.23 to
SFC's Report on Form 10-K for the year ended
December 31, 1994.)
10.20 Series 1996-1 Supplement to the
Pooling Agreement, dated as of August 1, 1996,
by and among SFFC, SFC, as Master Servicer,
and Chase, as Trustee. (Incorporated by
reference to Exhibit 10.56 to SFC's Report on
Form 10-Q for the quarter ended September 28,
1996.)
10.21 Amendment No. 1 Series to 1996-1
Supplement, dated as of November 29, 1996, by
and among SFFC, SFC, as Master Servicer, and
Chase, as initial VFC Certificateholder, and
Chase, as Trustee. (Incorporated by reference
to Exhibit 10.25 to SFC's Report on Form 10-K
for the year ended December 31, 1996.)
10.22 Amendment No. 2 to Series 1996-1
Supplement, dated as of December 13, 1996, by
and among SFFC, SFC, as Master Servicer, and
Chase, as initial VFC Certificateholders, and
Chase, as Trustee. (Incorporated by reference
to Exhibit 10.26 to SFC's Report on Form 10-K
for the year ended December 31, 1996.)
10.23 Series 1997-1 Supplement to the
Pooling Agreement, dated as of January 31,
1997, by and among SFFC, SFC, as Master
Servicer, and Chase, as Trustee.
(Incorporated by reference to Exhibit 10.27 to
SFC's Report on Form 10-K for the year ended
December 31, 1996.)
10.24 Amended and Restated Receivables
Sales Agreement, dated as of November 16,
1994, by and among SFFC, SFC, as Master
Servicer, and certain subsidiaries to SFC.
(Incorporated by reference to Exhibit 10.24 to
SFC's Report on Form 10-K for the year ended
December 31, 1994.)
10.25 Servicing Agreement, dated as of
November 16, 1994, by and among SFFC, SFC, as
Master Servicer, and certain subsidiaries of
SFC. (Incorporated by reference to Exhibit
10.25 to SFC's Report on Form 10-K for the
year ended December 31, 1994.)
<PAGE> 39
10.26 Amendment No. 1 to SFC Master Trust
Pooling and Servicing Agreements, dated as of
December 16, 1996, by and among SFFC, SFC, as
Master Servicer, and Chase, as Trustee.
(Incorporated by reference to Exhibit 10.30 to
SFC's Report on Form 10-K for the year ended
December 31, 1996.)
10.27 Amendment No. 2 to SFC Master Trust
Pooling Agreement, dated as of December 27,
1996, by and among SFFC, SFC, as Master
Servicer, and Chase, as Trustee.
(Incorporated by reference to Exhibit 10.31 to
SFC's Report on Form 10-K for the year ended
December 31, 1996.)
10.28 Amendment No. 3 to SFC Master Trust
Pooling Agreement, dated as of February 24,
1997, by and among SFFC, SFC, as Master
Servicer, and Chase, as Trustee.
(Incorporated by reference to Exhibit 10.32 to
SFC's Report on Form 10-K for the year ended
December 31, 1996.)
10.29 Amendment No. 1 to Amended and
Restated Receivables Sale Agreement, dated as
of December 16, 1996, by and among SFFC, SFC,
as Master Servicer, and certain subsidiaries
of SFC. (Incorporated by reference to Exhibit
10.33 to SFC's Report on Form 10-K for the
year ended December 31, 1996.).
10.30 Amendment No. 2 to Amended and
Restated Receivables Sale Agreement, dated as
of December 27, 1996, by and among SFFC, SFC,
as Master Servicer, and certain subsidiaries
of SFC. (Incorporated by reference to Exhibit
10.34 to SFC's Report on Form 10-K for the
year ended December 31, 1996.)
10.31 Amendment No. 3 to Amended and
Restated Receivables Sale Agreement, dated as
of February 24, 1997, by and among SFFC, SFC,
as Master Servicer, and certain subsidiaries
of SFC. (Incorporated by reference to Exhibit
10.35 to SFC's Report on Form 10-K for the
year ended December 31, 1996.)
10.32 Amended and Restated Executive
Employment Agreement, dated as of January 1,
1997, among SFAC, SFC and Lawrence S.
Benjamin. (Incorporated by reference to
Exhibit 10.68 to SFC's Report on Form 10-K for
the year ended December 31, 1997.)
10.33 Executive Securities Purchase
Agreement, dated as of December 15, 1994,
among Lawrence S. Benjamin, SFAC and SFC.
(Incorporated by reference to Exhibit 10.47 to
SFC's Report on Form 10-K for the year ended
December 30, 1995.)
10.34 Stock Purchase Agreement, dated as
of June 15, 1995, between Lawrence S. Benjamin
and SFAC. (Incorporated by reference to
Exhibit 10.48 to SFC's Report on Form 10-K for
the year ended December 30, 1995.)
<PAGE> 40
10.35 Securities Purchase Agreement, dated
as of August 1, 1995, between Lawrence S.
Benjamin and SFAC. (Incorporated by reference
to Exhibit 10.49 to SFC's Report on Form 10-K
for the year ended December 30, 1995.)
10.36 Amendment to Securities Purchase
Agreement, dated as of January 2, 1996,
between Lawrence S. Benjamin and SFAC.
(Incorporated by reference to Exhibit 10.50 to
SFC's Report on Form 10-K for the year ended
December 30, 1995.)
10.37 Executive Employment Agreement,
dated as of May 31, 1996, among SFAC, SFC and
Robert L. Fishbune. (Incorporated by
reference to Exhibit 10.55 to SFC's Report on
Form 10-Q for the Quarter ended June 29,
1996.)
10.38* July 1997 Amendment to Executive
Employment Agreement, dated as of July 30,
1997, among SFAC, SFC and Robert L. Fishbune.
10.39 Executive Employment Agreement,
dated as of March 1, 1997, among SFAC, SFC and
Robert B. Aiken. (Incorporated by reference
to Exhibit 10.69 to SFC's Report on Form 10-K
for the year ended December 31, 1997.)
10.40 Stock Purchase Agreement dated as of
June 15, 1995, between Henry J. Metz and SFAC.
(Incorporated by reference to Exhibit 10.46 to
SFC's 1995 Form S-4 (Registration No. 33-
94836).)
10.41 Form of Executive Securities
Purchase Agreement among certain named
executive officers, respectively, and the
Principal Stockholders, SFAC and SFC (with
schedule showing differing material terms for
each such officer's agreement). (Incorporated
by reference to Exhibit 10.43 to SFC's Report
on Form 10-K for the year ended December 31,
1993.)
10.42* SFC Amended and Restated
Headquarters Long Term Incentive Compensation
Plan.
10.43* Metz Baking Company Amended and
Restated Long Term Incentive Compensation
Plan.
10.44* Mother's Cake & Cookie Co. Amended
and Restated Long Term Incentive Compensation
Plan.
10.45* Stock Option Agreement, dated as of
October 27, 1997, between SFAC and Lawrence S.
Benjamin.
10.46* Deferred Bonus Agreement, dated as
of October 27, 1997, between SFC and Lawrence
S. Benjamin.
10.47* Deferred Bonus Agreement, dated
December 21, 1997, between SFC and Lawrence S.
Benjamin.
<PAGE> 41
10.48* Deferred Bonus Agreement, dated July
15, 1997, between SFC and Robert L. Fishbune.
10.49* Deferred Bonus Agreement, dated July
15, 1997, between SFC and Robert B. Aiken.
10.50* Deferred Bonus Agreement, dated July
15, 1997, between Metz and Henry J. Metz.
10.51* Deferred Bonus Agreement, dated July
15, 1997, between SFC and John R. Reisenberg.
10.52* Divestiture Award Agreement, dated
October 27, 1997, between Stella Foods, Inc.
("Stella") and Lawrence S. Benjamin.
10.53* Divestiture Award Agreement, dated
July 15, 1997, between Stella and Robert L.
Fishbune.
10.54* Divestiture Award Agreement, dated
July 15, 1997, between Stella and Robert B.
Aiken.
10.55* Divestiture Award Agreement, dated
July 15, 1997 between Stella and John R.
Reisenberg.
10.56* Divestiture Award Agreement, dated
July 15, 1997, between Metz and Robert L.
Fishbune.
10.57* Divestiture Award Agreement, dated
July 15, 1997, between Metz and Robert B.
Aiken.
10.58* Divestiture Award Agreement, dated
July 15, 1997, between Metz and Henry J. Metz.
10.59* Divestiture Award Agreement, dated
July 15, 1997 between Metz and John R.
Reisenberg.
10.60* Divestiture Award Agreement, dated
October 27, 1997, between H&M Food Systems
Company, Inc. ("H&M") and Lawrence S.
Benjamin.
10.61* Divestiture Award Agreement, dated
July 15, 1997, between H&M and Robert L.
Fishbune.
10.62* Divestiture Award Agreement, dated
July 15, 1997, between H&M and Robert B.
Aiken.
10.63* Divestiture Award Agreement, dated
as of July 15, 1997, between H&M and John R.
Reisenberg.
10.64 Amended and Restated SFAC 1994
Stock Option Plan. (Incorporated by reference
to Exhibit 10.26 to SFC's Report on Form 10-K
for the year ended December 31, 1994.)
<PAGE> 42
10.65 Amended and Restated Metz
Baking Company Pension Plan for Non-Union
Employees. (Incorporated by reference to
Exhibit 10.39 to SFC's Report on Form 10-K for
the year ended December 31, 1994.)
10.66 Master Lease Agreement, dated as of
November 14, 1996, among SF Leasing L.L.C.,
Stella and Metz. (Incorporated by reference
to Exhibit 10.79 to SFC's Report on Form 10-K
for the year ended December 31, 1997.)
10.67* Bill of Sale, dated December 5,
1997, between SF Leasing L.L.C. and Stella.
10.68 Stock Purchase Agreement, dated as
of November 26, 1996, between SFC and B
Companies Acquisition Corporation.
(Incorporated by reference to Exhibit 10.80 to
SFC's Report on Form 10-K for the year ended
December 31, 1997.)
10.69 Stock Purchase Agreement, dated as
of November 7, 1997, by and among SFC, Saputo
Group Inc. and Saputo Acquisition, Inc.
(Incorporated by reference to Exhibit 10.82 to
SFC's Report on Form 8-K dated December 22,
1997.)
21.1* Subsidiaries of SFAC.
27* Financial Data Schedule.
- ---------------------
* Filed herewith.
<PAGE> 43
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.
SPECIALTY FOODS CORPORATION
By: /s/ LAWRENCE S. BENJAMIN
Lawrence S. Benjamin
President and Chief Executive
Officer
March 31, 1998
Pursuant to the requirements of the Securities Exchange of
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.
Signature and Title Capacity Date
- ---------------------- ---------------- -------
/s/ LAWRENCE S. BENJAMIN Principal Executive March 31, 1998
Lawrence S. Benjamin Officer and Director
President and Chief
Executive Officer
/s/ ROBERT L. FISHBUNE Principal Financial March 31, 1998
Robert L. Fishbune and Accounting
Vice President and Officer
Chief Financial
Officer
<PAGE> 44
Signature and Title Capacity Date
- -------------------- ------------- -----
/s/ ROBERT B. HAAS Chairman of the March 31, 1998
Robert B. Haas Board of Directors
/s/ THOMAS J. BALDWIN Director March 31, 1998
BALDWIN
Thomas J. Baldwin
/s/ J. TAYLOR CRANDALL Director March 31, 1998
J. Taylor Crandall
/s/ CHARLES J. DELANEY Director March 31, 1998
Charles J. Delaney
/s/ JERRY M. MEYER Director March 31, 1998
Jerry M. Meyer
/s/ ANDREW J. NATHANSON Director March 31, 1998
Andrew J. Nathanson
/s/ DAVID G. OFFENSEND Director March 31, 1998
David G. Offensend
/s/ MARC C. PARTICELLI Director March 31, 1998
Marc C. Particelli
/s/ ANTHONY P. SCOTTO Director March 31, 1998
Anthony P. Scotto
/s/ DOUGLAS D. WHEAT Director March 31, 1998
Douglas D. Wheat
<PAGE> 45
INDEX TO FINANCIAL INFORMATION
Page
----
Independent Auditors' Report F-2
Consolidated Balance Sheets -
December 31, 1997 and 1996 F-3
Consolidated Statements of Operations -
Years ended December 31, 1997, 1996, and 1995 F-4
Consolidated Statements of Changes in Stockholders'
Equity - Years ended December 31, 1997, 1996, and 1995 F-5
Consolidated Statements of Cash Flows -
Years ended December 31, 1997, 1996, and 1995 F-6
Notes to Financial Statements F-7 to F-22
All financial statement schedules are omitted as not applicable
or because the required information is presented in the
consolidated financial statements or related notes.
<PAGE> F-1
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
Specialty Foods Corporation:
We have audited the accompanying consolidated balance sheets of
Specialty Foods Corporation and Subsidiaries as of December 31,
1997 and 1996 and the related consolidated statements of
operations, changes in stockholders' equity, and cash flows for
each of the years in the three-year period ended December 31,
1997. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these consolidated financial
statements 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 Specialty Foods Corporation and Subsidiaries as of
December 31, 1997 and 1996 and the results of their operations
and their cash flows for each of the years in the three-year
period ended December 31, 1997 in conformity with generally
accepted accounting principles.
KPMG PEAT MARWICK LLP
Chicago, Illinois
March 13, 1998
<PAGE> F-2
SPECIALTY FOODS CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands)
December 31,
-------------------------
1997 1996
---- ----
Assets
Current assets:
Cash and cash equivalents $ 235,033 $ 49,146
Accounts receivable, net 19,163 24,063
Inventories 35,577 35,358
Net assets of discontinued operations - 196,274
Other current assets 7,400 13,251
-------- --------
Total current assets 297,173 318,092
Property, plant, and equipment, net 187,874 162,199
Intangible assets, net 19,434 20,049
Due from Specialty Foods Acquisition
Corporation - 10,999
Other noncurrent assets 23,491 31,892
-------- --------
Total assets $ 527,972 $ 543,231
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term debt $ 2,847 $ 3,543
Accounts payable 51,983 64,987
Accrued expenses 85,344 98,686
--------- --------
Total current liabilities 140,174 167,216
Long-term debt 753,581 834,983
Due to Specialty Foods Acquisition
Corporation 7,376 -
Other noncurrent liabilities 30,645 35,075
-------- --------
Total liabilities 931,776 1,037,274
-------- --------
Stockholder's equity:
Additional paid-in capital 275,000 275,000
Accumulated deficit (678,804) (769,043)
-------- --------
Total stockholders' equity (403,804) (494,043)
-------- --------
Total liabilities and
stockholders' equity $ 527,972 $ 543,231
======== ========
See accompanying notes to consolidated financial statements.
<PAGE> F-3
SPECIALTY FOODS CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except per share data)
Years ended December 31,
----------------------------------------
1997 1996 1995
---- ---- ----
Net sales $ 919,657 $ 894,921 $ 893,352
Cost of sales 507,820 502,460 503,257
-------- -------- --------
Gross profit 411,837 392,461 390,095
-------- -------- --------
Operating expenses:
Selling, distribution, general and
administrative expenses 372,295 352,260 327,860
Amortization of intangibles 1,423 7,555 12,859
Restructuring charges - 12,200 -
Goodwill write-down - 203,304 203,824
-------- -------- --------
373,718 575,319 544,543
-------- -------- --------
Operating profit (loss) 38,119 (182,858) (154,448)
Other:
Interest expense 90,875 93,578 93,644
Other expense, net 5,397 9,825 1,818
-------- -------- --------
Loss before income taxes (58,153) (286,261) (249,910)
Provision for income taxes 286 966 950
-------- -------- -------
Loss from continuing operations (58,439) (287,227) (250,860)
Discontinued operations:
Earnings (loss) 22,384 (144,809) (19,083)
Gain (loss) on disposal 133,130 (14,514) -
-------- -------- --------
155,514 (159,323) (19,083)
-------- -------- --------
Income (loss) before
extraordinary items 97,075 (446,550) (269,943)
Extraordinary items (5,714) - (18,279)
-------- -------- --------
Net income (loss) $ 91,361 $ (446,550) $ (288,222)
======== ======= ========
See accompanying notes to consolidated financial statements.
<PAGE> F-4
<TABLE>
SPECIALTY FOODS CORPORATION AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholder's Equity
(In thousands)
<CAPTION>
Common stock Additional Cumulative
------------- paid-in Accumulatedated translation
Shares Amount capital deficit adjustment
------ ------ --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1994 100 $ - $ 275,000 $ (30,231) $ (859)
Dividend to parent - - - (1,203) -
Cumulative translation adsjustment - - - - 22
Net loss - - - (288,222) -
----- ----- -------- -------- -----
Balance at December 31, 1995 100 - 275,000 (319,656) (837)
Dividend to parent - - - (2,837) -
Cumulative translation adjustment - - - - 837
Net loss - - - (446,550) -
----- ----- -------- -------- -----
Balance at December 31, 1996 100 - 275,000 (769,043) -
Dividend to parent - - - (1,122) -
Net income - - - 91,361 -
----- ----- -------- -------- -----
Balance at December 31, 1997 100 $ - $ 275,000 $ (678,804) $ -
===== ===== ======== ======== =====
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> F-5
SPECIALTY FOODS CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
Years ended December 31,
---------------------------------
1997 1996 1995
---- ---- ----
Cash flows from operating activities:
Loss from continuing operations $ (58,439) $ (287,227) $ (250,860)
Adjustments to reconcile to net cash
from continuing operating activities
Depreciation and amortization 24,349 31,430 36,150
Debt issuance cost amortization 5,511 5,472 6,895
Write-down of goodwill - 203,304 203,824
Restructuring - property write-down - 7,200 -
Loss on disposal of property, plant,
and equipment, net 1,485 5,924 623
Changes in assets and liabilities, net:
Accounts receivable 4,900 14,113 (10,232)
Inventories (219) (3,398) (6,265)
Prepaid expenses and other assets 2,442 (6,719) 1,343
Accounts payable (12,952) 8,026 13,237
Accrued expenses and other (15,667) 1,784 (21,616)
-------- -------- --------
Net cash provided (used) by continuing
operating activities (48,590) (20,091) (26,901)
Net cash provided (used) by discontinued
operations (32,848) 15,655 31,527
-------- -------- --------
Net cash provided (used) by
operating activities (81,438) (4,436) 4,626
Cash flows from investing activities:
Net proceeds from divestiture
of businesses 384,096 69,333 -
Capital expenditures (49,769) (28,178) (23,815)
Proceeds from sale leaseback, net - 13,370 -
Acquisition of businesses, net of cash - - (5,400)
Other (3,281) (698) 2,956
-------- -------- --------
Net cash provided (used) by
investing activities 331,046 53,827 (26,259)
Cash flows from financing activities:
Increase (decrease) in revolving credit (78,300) 5,700 22,600
Payments on long-term debt (3,799) (2,505) (374,109)
Proceeds from long-term debt - - 380,916
Payments of debt issuance costs - (3,738) (8,646)
Advance from Specialty Foods Acquisition
Corporation 19,500 - -
Other (1,122) (2,840) (2,045)
-------- -------- --------
Net cash provided (used) by
financing activities (63,721) (3,383) 18,716
Increase (decrease) in cash
and cash equivalents 185,887 46,008 (2,917)
Balance - beginning of year 49,146 3,138 6,055
-------- -------- --------
Balance - end of year $ 235,033 $ 49,146 $ 3,138
======== ======== ========
See accompanying notes to consolidated financial statements.
<PAGE> F-6
SPECIALTY FOODS CORPORATION
Notes to Financial Statements
(In Thousands)
(1) Company Background
Specialty Foods Acquisition Corporation (SFAC) and its
direct, wholly-owned subsidiary, Specialty Foods Corporation
(SFC), operate a diversified group of businesses within the
food industry segment. These specialty food businesses are
primarily engaged in the production and distribution of
breads, cookies, and pre-cooked meat products. The operating
companies of SFC consist of the following:
Bakery Operations
Metz Baking Company (Metz) - Metz is a leading retail baking
company serving the Midwestern United States. Metz's product
line includes breads, buns, rolls, and sweet goods.
Mother's Cake & Cookie Co. (Mother's) - Mother's is a
producer and distributor of branded cookie products. Mothers
sells its cookie products primarily to retail grocers in the
Western United States.
Andre-Boudin Bakeries, Inc. (Boudin) - Boudin is a chain of
44 bakery cafes and kiosks located in California, Dallas and the
greater Chicago area.
Meat Operations
H&M Food Systems Company, Inc. (H&M) - H&M is a producer of
specialty meats and meat-based prepared foods for restaurants and
food manufacturers.
During 1997 and 1996, the Company made the decision to divest
certain businesses as described in Note 3. The divested
businesses are reported as discontinued operations in the
consolidated financial statements.
(2) Summary of Significant Accounting Policies
Basis of Presentation
The Company's financial statements are presented on a
consolidated basis. All significant intercompany accounts
and transactions have been eliminated. Acquisitions recorded
as purchases are included in the Statement of Operations from
the date of acquisition.
<PAGE> F-7
Use of Estimates in the Preparation of Financial
Statements
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and related disclosures at
the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Reclassifications
Certain amounts included in the 1996 and 1995 financial
statements have been reclassified to conform to the manner in
which the 1997 financial statements have been presented.
Cash Equivalents
Cash equivalents represent investments in overnight bank
deposits and commercial paper with a maturity of less than
three months.
Inventories
Inventories are stated at the lower of cost or market. Cost
is determined principally by the first in, first out (FIFO)
method.
Property, Plant, and Equipment
Property, plant, and equipment are stated at cost.
Depreciation is provided by the straight-line method over the
assets' estimated useful lives or, in the case of leasehold
improvements, over the terms of the leases, if shorter, as
follows:
Years
-----
Buildings and improvements 7-40
Machinery and equipment 3-20
Office furniture and vehicles 3-10
Expenditures for maintenance, repairs, and minor replacements
are charged to current operations. Expenditures for major
replacements and betterment are capitalized.
The cost and related accumulated depreciation of property and
equipment retired or sold is eliminated from the property and
equipment accounts at the time of retirement or sale, and the
resulting gain or loss is reported in the statement of
operations.
<PAGE> F-8
Intangible Assets
Intangible assets, which consist primarily of the excess of
cost over fair value of net assets acquired, arose primarily
in connection with the formation of the Company and are
amortized on a straight-line basis over the periods of
expected benefit, which range from two to forty years. The
Company annually evaluates whether events and circumstances
have occurred that indicate that the remaining estimated
useful life of intangible assets may warrant revision or that
the remaining balance of intangible assets may not be
recoverable. When factors indicate that intangible assets
should be evaluated for possible impairment, the Company
assesses recoverability of intangible assets based on its
expectations concerning operating cash flows after interest
and capital expenditures. An impairment is recorded if the
discounted value of such cash flows is less than the recorded
value of the intangible assets. The Company utilizes a
discount rate which reflects its weighted average cost of
capital. Based on application of this methodology,
impairments were recorded in both 1996 and 1995 (see Note 4).
Deferred Debt Issuance Costs
Deferred debt issuance costs are being amortized by the
straight-line method over the terms of the related debt
agreements and are classified as other non-current assets.
Advertising Costs
Advertising costs are expensed as incurred.
(3) Discontinued Operations
During 1997 and 1996 the Company divested of:
Stella Foods, Inc. (Stella) - One of the largest specialty
cheese producers in the United States with distribution to retail
grocers, foodservice accounts, and commercial food processors.
The sale of Stella was completed on December 5, 1997 for $405
million.
Gai's Seattle French Baking Company (Gai's) - A restaurant
and institutional bakery operation serving the northwestern
United States. The sale of Gai's was completed on February 24,
1997.
San Francisco French Bread (SFFB) - A sourdough hearth bread
operation located in California. The sale of SFFB was completed
on March 31, 1997.
A restaurant and institutional bakery operated by Metz
located in Illinois. The sale of this bakery was completed on
August 23, 1997.
Bloch and Guggenheimer, Inc. (B&G)/Burns & Ricker, Inc.
(B&R) - Pickle, pepper, and specialty snack food businesses
operated under common management. The sale of the combined
business of B&R/B&G was completed on December 27, 1996.
<PAGE> F-9
These divestitures have been reported as discontinued
operations in the accompanying financial statements in
accordance with Accounting Principles Board Opinion No. 30.
Operating results for these businesses, including revenues of
$733,871, $1,144,269, and $1,111,297 for 1997, 1996, and
1995, respectively, as well as the applicable goodwill write-
downs of $152,360 and $49,570 in 1996 and 1995, respectively,
have been reclassified to discontinued operations. No
interest expense has been allocated to discontinued
operations.
The net gain on disposal of discontinued operations for 1997
consisted of the gain realized on the sale of Stella and
Gai's, an adjustment to the estimated loss on the disposal of
SFFB, and the loss realized on disposal of the Illinois
restaurant and institutional bakery. The net loss on
disposal of discontinued operations for 1996 consisted of the
realized loss on the sale of B&G/B&R, estimated loss on the
sale of SFFB, and the 1996 operating losses from the
measurement date through the disposal date of B&G/B&R, SFFB
and of Gai's.
Net assets of the discontinued operations as of December 31,
1996 consisted of the following:
1996
----
Accounts receivable, net of allowance $ 11,721
Inventories 93,748
Other current assets 15,439
Plant and equipment, net 150,944
Goodwill, net 22,882
Accounts payable (57,631)
Accrued expenses and other liabilities (40,829)
-------
$ 196,274
=======
(4) Goodwill Write-Down
As described under "Intangible Assets" in Note 2, "Summary of
Significant Accounting Policies", the Company annually
evaluates its intangible assets. Based on the Company's
goodwill assessment, write-downs of goodwill were recorded in
the fourth quarter of 1996 and 1995, which are presented in
the accompanying Consolidated Statements of Operations as
follows:
1996 1995
---- ----
Continuing operations $ 203,304 $ 203,824
Discontinued operations 152,360 49,570
-------- --------
$ 355,664 $ 253,394
======== ========
<PAGE> F-10
Since the formation of the Company in 1993, the operating
units have not achieved anticipated annual sales and
operating earnings targets. During 1995, certain conditions
in the Bakery Operations and Meat Operations prompted
management to write-down a portion of the goodwill related to
these operations. In 1996, lower than projected cash flows
at all operating units resulted in management lowering its
future expectations of operating profit and cash flows.
In determining the amounts of the goodwill write-downs, the
Company developed its best estimate of future operating cash
flows, after interest and capital expenditures, over the
remaining useful life of the goodwill. The Company's
estimates were based on recent historic financial trends and
then current market conditions. The goodwill of each
business was evaluated separately for impairment. Individual
business unit sales growth projections ranged from two to
five percent. Interest costs were allocated based on the
relative level of investment in each business. Each of the
Company's fixed-rate debt obligations were assumed to be
refinanced at existing interest rates. The Company
calculated the present value of estimated future cash flows
using a discount rate which represented its weighted average
cost of capital of 11.8% and 11.4% in 1996 and 1995,
respectively.
As of December 31, 1997, there is $18,555 of goodwill
remaining on the Company's balance sheet. Management
believes the Company's remaining goodwill and long-term
assets will be recovered over their useful lives. However,
any further significant declines in projected cash flows may
result in additional write-downs of other long-lived assets.
(5) Restructuring Charges
During the fourth quarter of 1996, management authorized and
committed the Company to undertake certain restructuring
moves principally involving the consolidation of several
manufacturing facilities. The restructuring charge of
$12,200 includes $7,200 for the write-down of plant and
facilities to net realizable value. The remaining portion of
the restructuring charge relates to termination benefits and
holding costs. Cash expenditures associated with these
liabilities were $1,444 for 1997. As of December 31, 1997,
there are $3,556 of remaining restructuring accruals which
are classified as current.
(6) Acquisition Liabilities
In connection with the formation of the Company, estimated
liabilities were recorded for the expected cash expenditures
to consolidate facilities, streamline operations, and settle
environmental, legal and tax matters. Cash expenditures
associated with these liabilities were $14,043, $10,593, and
$15,607 for 1997, 1996, and 1995, respectively. In December
1996, the Company reduced its estimate of the future cash
expenditures related to these acquisition liabilities and
credited $15,565 against goodwill. As of December 31, 1997,
there are $17,260 of remaining acquisition liabilities, of
which $7,582 is classified as current.
<PAGE> F-11
(7) Extraordinary Items
In the first quarter of 1998, the Company refinanced its
accounts receivable, revolver, and term loan financing
facilities. Due to this early extinguishment of debt, the
Company has written off deferred debt issuance costs related
to these facilities of $5,714 and has recorded it as an
extraordinary item. In 1995, two refinancings resulted in
the early extinguishment of debt. Accordingly, deferred debt
issuance costs totaling $18,279 were written off and recorded
as extraordinary items.
(8) Accounts Receivable
Specialty Foods Finance Corporation (SFFC), a wholly-owned
subsidiary of SFC, was established for the purpose of
acquiring substantially all of the trade accounts receivable
generated by the operating subsidiaries of SFC. Under the
terms of the Account Receivable Facility SFFC sells for cash
an undivided interest in eligible accounts receivable.
In February, 1998, the Company received a commitment to
refinance the Accounts Receivable Facility by March 31, 1998.
Under the terms of the new facility, the maximum amount of
eligible receivables that would be sold to the facility is
$75,000. The amount outstanding under this facility varies
based upon the level of eligible receivables and advance rate
factors. As of December 31, 1997, the amount outstanding
under the existing facility was $34,755. The discount on
receivables sold is included in other expense and totaled
$2,603, $2,440, and $2,303 in 1997, 1996, and 1995,
respectively.
Trade accounts receivable are reported net of the allowance
for doubtful accounts of $1,174 and $1,024 in 1997 and 1996,
respectively.
(9) Inventories
The components of inventories are as follows:
1997 1996
---- ----
Raw materials and packaging $ 14,026 $ 12,796
Work in progress 1,857 2,245
Finished goods 17,340 18,199
Other 2,767 2,580
-------- --------
35,990 35,820
Less obsolescence and other allowances (413) (462)
-------- --------
$ 35,577 $ 35,358
======== ========
<PAGE> F-12
(10) Property, Plant, and Equipment
The components of property, plant and equipment are as
follows:
1997 1996
---- ----
Land $ 11,567 $ 11,914
Buildings and improvements 84,620 77,912
Machinery and equipment 159,123 141,464
Office furniture and vehicles 31,665 29,627
Construction in progress 21,870 7,128
-------- --------
308,845 268,045
Less accumulated depreciation (120,971) (105,846)
-------- --------
$ 187,874 $ 162,199
======== ========
Depreciation expense of continuing operations was $22,926,
$23,875, and $23,291 in 1997, 1996, and 1995, respectively.
(11) Accrued Expenses
The components of accrued expenses are as follows:
1997 1996
---- ----
Accrued payroll $ 6,503 $ 5,377
Other taxes payable 4,121 5,131
Workers' compensation 10,038 11,882
Compensated absences 6,236 7,807
Accrued interest 21,518 21,843
Acquisition liabilities 7,582 19,079
Other 29,346 27,567
------- -------
$ 85,344 $ 98,686
======= =======
<PAGE> F-13
(12) Long-Term Debt
Long-term debt consists of the following:
1997 1996
---- ----
Revolving Credit Facility $ - $ 78,300
Term Loan Facility 173,750 174,250
10 1/4% Senior Notes due 2001 225,000 225,000
11 1/8% Senior Notes due 2002 150,000 150,000
11 1/4% Senior Subordinated Notes due 2003 200,000 200,000
Other 7,678 10,976
-------- --------
756,428 838,526
Less current portion (2,847) (3,543)
-------- --------
$ 753,581 $ 834,983
======== ========
During March 1998, the Company refinanced its Revolving
Credit Facility ("Revolver") and Term Loan Facility ("Term
Loan") with a new syndicate of financial institutions. Both
facilities mature on January 31, 2000. The amount available
under these facilities is the same as the previous facilities
which totaled $125,000 for the Revolver and $173,750 for the
Term Loan. Proceeds from these facilities can be used to
finance working capital requirements and are available for
other corporate purposes, including acquisitions.
The Revolver bears an interest rate of LIBOR plus 250 basis
points. The Revolver is secured by the assets of the
operating companies. Letters of credit reduce the amounts
available under the Revolver. As of December 31, 1997,
letters of credit totaled $6,341.
The Term Loan bears an interest rate of LIBOR plus 375 basis
points. The Term Loan is secured by the assets of SFC and a
pledge of the stock of each of the direct subsidiaries of
SFC. Annual Term Loan payments are $870 and $1,736 in 1998
and 1999, respectively.
Semi-annual interest payments are required through maturity
on the 10 1/4% Senior Notes and the 11 1/4% Senior
Subordinated Notes on each February 15 and each August 15.
Semi-annual interest payments are required through maturity
on the 11 1/8% Senior Notes on April 1 and October 1.
The 10 1/4% Senior Notes, the 11 1/4% Senior Subordinated
Notes, the 11 1/8% Senior Notes, and the 11% Senior
Subordinated Discount Debentures are unsecured.
Other long-term debt consists primarily of industrial
development bonds and miscellaneous notes payable with
interest rates ranging from 2.75% to 10.5% at December 31,
1997.
<PAGE> F-14
The provisions of the Term Loan and the Revolver contain
covenants which require the Company to maintain specified
leverage and interest coverage ratios. The Company also has
other limitations regarding capital expenditures, sales of
assets, loans and investments, encumbrances of assets and
assumption of additional indebtedness. In addition, the
agreements governing the Term Loan and the Revolver and the
indentures governing the Senior Notes and the Senior
Subordinated Notes contain certain restrictive covenants,
including, to the detriment of the holders of the Senior
Debentures and the Senior Subordinated Debentures, certain
covenants that restrict or prohibit (with de minimis
exceptions) SFC's ability to pay dividends or make other
distributions to SFAC. Specifically, as a result of the
Company's net losses and accumulated deficit, SFC's ability
to make distributions to SFAC under the indentures of the
Senior Notes and the Senior Subordinated Notes has been
impaired and these indentures will require modification
before any such distribution to SFAC can be made.
Aggregate maturities of debt are as follows:
1998 $ 2,847
1999 2,640
2000 173,776
2001 225,349
2002 150,247
Thereafter 201,569
--------
Total aggregate maturities $ 756,428
========
Cash paid for interest was $85,689, $89,571, and $87,584 for
the years ended December 31, 1997, 1996, and 1995,
respectively.
(13) Financial Instruments
Concentration of Credit Risk
The Company's exposure to credit loss in the event of
nonpayment of accounts receivable by customers is represented
in the amount of those receivables. The Company performs
ongoing credit evaluations of its customers' financial
condition and generally requires no collateral from those
customers. As of December 31, 1997, the Company does not
believe it has any significant concentration of credit risk
with respect to its trade accounts receivable.
<PAGE> F-15
Financial Instruments With Off-Balance-Sheet Risk
During September, 1995, the Company entered into interest
rate collar agreements to reduce its exposure to changes in
the cost of its variable rate borrowings. Under the
agreements, which became effective in October, 1995, and
terminate in October, 1998, the Company would receive
payments from the counterparties should the three-month LIBOR
exceed 7% and make payments to the counterparties should the
rate fall below 5.25%. The payments would be calculated
based upon a notional principal amount of $270,000. During
August, 1997, the Company terminated the floors on two of
these collar agreements, with notional principal amounts of
$170,000, and paid $66 upon termination. The net
differential of interest to be paid or received under the
remaining agreements is recognized as incurred. Off-balance-
sheet risk from the interest rate collar agreements at
December 31, 1997 includes the risk associated with changes
in market values and interest rates. The counterparties to
the agreements are major financial institutions.
Fair Value of Financial Instruments
The Company's financial instruments include long-term debt
and the interest rate collar agreement. The estimated fair
value and carrying amount of long term debt including current
maturities but excluding related party Senior Subordinated
Discount Debentures at December 31, 1997 are as follows:
Estimated
Carrying Fair
Amounts Values
--------- ---------
Financial liabilities:
Long-term debt, including
current maturities $ 756,428 $ 749,303
Interest rate collar agreements $ - $ (14)
The fair value of long-term debt and the interest rate collar
agreements have been determined based on quoted market prices
and market interest rates at December 31, 1997.
(14) Lease Commitments
The Company leases equipment and facilities under various
noncancelable operating leases. Future minimum lease
payments under all noncancelable operating leases are as
follows:
1998 $ 17,544
1999 15,717
2000 13,675
2001 10,714
2002 9,053
Thereafter 19,485
-------
Total minimum lease $ 86,188
=======
payments
Total rental expense for 1997, 1996, and 1995 was $20,756,
$17,999, and $13,726 respectively.
<PAGE> F-16
(15) Income Taxes
The provision for income taxes for 1997, 1996, and 1995
relate to state and Canadian income taxes payable. Since the
Company has no federal currently payable or deferred income
tax expense due to its net operating loss position, an
effective tax rate reconciliation is not presented.
The components of net deferred taxes are as follows:
1997 1996
---- ----
Deferred tax assets related to:
Accrued expenses and other liabilities $ 20,872 $ 20,020
Net operating losses and credits 55,258 55,672
Restructuring reserve 3,656 9,905
Other 2,169 994
-------- --------
Total deferred tax assets 81,955 86,591
Valuation allowance 59,388 60,918
-------- --------
Total net deferred tax asset 22,567 25,673
Deferred tax liabilities related to:
Depreciation 22,378 24,730
Inventories 189 943
-------- ---------
Total deferred tax liabilities $ 22,567 $ 25,673
-------- --------
Net deferred tax asset (liability) $ - $ -
======== ========
At December 31, 1997 the Company has federal tax operating
loss carryforwards of $138,000 including $16,000 of loss
carryforwards from predecessor companies, which are subject
to limitations that may substantially limit future
utilization. Also at December 31, 1997, the Company has
$87,000 of state net operating loss carryforwards and $3,000
of state tax credit carryforwards. Net operating loss and
credit carryforwards expire in varying amounts through the
year 2012.
Cash paid for income taxes was $123, $432 and $1,118 for
1997, 1996, and 1995, respectively.
(16) Litigation and Other Contingencies
Litigation
In the normal course of business activities, the Company is a
party to certain legal proceedings and claims. Although the
outcome of such matters cannot be determined with certainty,
it is management's opinion that the final outcome will not
have a material adverse effect on the Company's financial
position or results of operations.
<PAGE> F-17
Other
Various operating subsidiaries are self-insured or retain a
portion of losses with the respect to workers' compensation
claims. In connection with such, irrevocable letters of
credit or surety bonds aggregating $6,804 at December 31,
1997 were provided to state regulatory agencies or insurance
companies.
(17) Employee Benefits
Pension Benefits
Certain of the operating subsidiaries sponsor single-
employer, noncontributory, defined benefit pension plans.
The operating subsidiaries also participate in numerous multi-
employer, noncontributory, defined benefit pension plans.
Substantially all the Company's employees are covered by the
defined benefit or multi-employer plans.
Benefits for employees are based on various requirements
including length of service and average compensation.
Contributions are funded to the extent deductible for Federal
income tax purposes.
Pension expense for the single-employer defined benefit
pension plans was as follows:
1997 1996 1995
---- ---- ----
Service cost of benefits
earned during the year $ 1,914 $ 2,117 $ 1,678
Interest cost on the projected
benefit obligation 3,956 3,658 3,558
Actual return on plan assets (6,952) (6,729) (10,937)
Net amortization and deferral 1,297 2,021 6,888
------- ------- -------
Net periodic pension cost $ 215 $ 1,067 $ 1,187
======= ======= =======
<PAGE> F-18
The following tables set forth the funded status of the plans
and the amounts recognized in the consolidated balance
sheets:
1997 1996
---- ----
Actuarial present value of accumulated benefit
obligations, including vested benefits of
$52,331 and $45,270 at December 31, 1997
and 1996, respectively $ 53,490 $ 46,140
======== ========
Plan assets at fair value, primarily listed
stocks and corporate and government bonds $ 62,167 $ 57,396
Less actuarial present value of
projected benefit obligations (61,072) (54,218)
-------- --------
Excess of plan assets over projected benefit
obligations 1,095 3,178
Unrecognized prior service costs 1,561 995
Unrecognized net gain (11,241) (12,435)
Unrecognized transition asset (381) (489)
-------- --------
Accrued pension cost $ (8,966) $ (8,751)
======== ========
The significant actuarial assumptions used to determine the
obligations are:
1997 1996 1995
---- ---- ----
Range of weighted average 7.5% 7.5% 7.5%
discount rates
Range of increase in future 4.0% 4.0% 4.0% to 5.0%
compensation levels
Range of assumed long-term 9.0% 9.0% 8.0% to 9.0%
rates of return on assets
Certain of the operating subsidiaries also participate in
various multi-employer defined benefit pension plans on
behalf of employees pursuant to various collective bargaining
agreements. Contributions to these plans included in
continuing operations amounted to approximately $14,822,
$14,535, and $12,755 for the years ended December 31, 1997,
1996, and 1995, respectively.
The Company has various defined contribution plans which
cover non-bargaining-unit employees meeting eligibility
requirements. Contributions to these plans were
approximately $1,642, $1,416, and $1,457 for the years ended
December 31, 1997, 1995, and 1995, respectively.
<PAGE> F-19
Post-retirement Health Care Benefits
Components of the expense recognized for the years ended
December 31, 1997, 1996, and 1995 for the retiree health care
plan were as follows:
1997 1996 1995
---- ---- ----
Service costs $ 345 $ 446 $ 455
Interest cost on projected obligation 602 661 718
Net amortization and deferral (292) (832) (173)
------ ------ ------
Net retiree health care expense $ 655 $ 275 $ 1,000
------ ------ ------
The following table sets forth the amounts recognized in the
balance sheets at December 31, 1997 and 1996:
1997 1996
---- ----
Actuarial present value of accumulated
postretirement benefit obligation
Retirees $ 3,545 $ 4,113
Active eligible 1,345 2,015
Active ineligible 3,336 3,758
Unrecognized net gain 4,816 4,362
------ ------
Retiree health care liability recognized $ 13,042 $ 14,248
------ ------
The weighted average discount rate assumptions used to
determine the accumulated postretirement benefit obligation
for the retiree health care plan for 1997 and 1996 were 7.0%
and 7.57%, respectively.
The health care trend rate used to determine the pre-age 65
accumulated postretirement benefit obligation was 11% for
1997, decreasing to 6% by the year 2002 and beyond. A flat
6% rate per year is used for the post-age 65 obligation.
Increasing the assumed health care trend rate by 1% each year
would increase the accumulated postretirement benefit
obligation as of December 31, 1997 and 1996 approximately
$658 and $942, respectively, and the aggregate of the service
and interest cost components of 1997, 1996, and 1995 net
retiree healthcare expense approximately $98, $134, and $146,
respectively.
Long Term Incentive Compensation Plans
The Company has adopted long-term incentive compensation
plans for several of its businesses which provide for cash
awards upon the achievement of specified earnings or
enterprise values. Amounts related to long-term incentive
plans will be accrued when the related targets are achieved.
As of December 31, 1997, no amounts have been accrued.
<PAGE> F-20
(18) Related Party Transactions
Certain Transactions with Stockholders of and Affiliates
of Stockholders of SFC
Certain of SFAC's stockholders and their affiliates
previously entered into financial advisory arrangements (the
Financial Advisory Agreements) with SFAC's subsidiary, SFC.
Haas Wheat & Partners (Haas Wheat), an affiliate of Acadia
Partners, L.P. (Acadia), and Keystone, Inc. (Keystone) each
entered into such Financial Advisory Agreements. Under the
terms of the Financial Advisory Agreements, SFC pays Haas
Wheat an annual fee of $700 (a portion of which Haas Wheat is
obligated by agreement to remit to Acadia), the Acadia
affiliate an annual fee of $200, and Keystone an annual fee
of $100.
In November 1996, SF Leasing L.L.C. (of which Acadia and
Keystone each owns a 45% interest and Haas Wheat owns a 10%
interest) purchased from the Company all of the equipment at
a manufacturing facility for the aggregate amount of $3,222
(which price was based on the appraised value of such
equipment), and leased such equipment back to the Company.
In June, 1997, the Company retained Donaldson, Lufkin &
Jenrette Securities Corporation (an affiliate of DLJMBP,
which is a stockholder of the Company) to serve as the
Company's financial advisor in connection with its proposed
sale of Stella. In December, 1997, upon the completion of
the sale of Stella, the Company paid Donaldson, Lufkin &
Jenrette Securities Corporation $5,400 as compensation
for such financial advisory services and $200 as
reimbursement of related expenses incurred by Donaldson,
Lufkin & Jenrette Securities Corporation. The Board of Directors of the
Company determined that the foregoing transactions were on terms no
less favorable to the Company than could otherwise have been
obtained by the Company in a transaction with an unaffiliated
third party.
(19) Other Divestitures
On May 18, 1996, the Company sold its baking business in
North Vancouver, British Columbia for cash proceeds of
$1,500. The assets sold consisted primarily of accounts
receivable, equipment and customer routes. A loss of $4,500
($3,800 after taxes), resulted from the transaction and is
recorded in other expense. The 1996 revenues of this
business through the date of sale approximated $9,000.
In a separate transaction, on August 2, 1996, the Company sold
the building and land associated with the above business for
aggregate proceeds of $4,700, which approximated
the financial statement carrying value.
(20) Sale Leaseback Transactions
During 1996, the Company entered into several agreements for
the sale and leaseback of production equipment at four
bakeries for a net sales price of $13,194 (including the sale
and leaseback described in Note 19.) The leases are
classified as operating leases and, accordingly, the book
value of the equipment was removed from the balance sheet.
Net gains of $3,928 realized on the equipment sales at the
other facilities are being deferred and amortized to income
as rent expense adjustments over the lease term of 4 to 6 1/2
years.
In December 1997, the Company repurchased the equipment at
one of the bakeries for an aggregate purchase price of
$2,906. A net loss of $640 was realized on the repurchase of
the equipment which reduced the deferred gain account.
<PAGE> F-21
(21) Other Expense (Income)
Other expense (income) is comprised of the following:
1997 1996 1995
---- ---- ----
Loss on disposal of property,
plant and equipment $ 1,485 $ 5,924 $ 623
Discount on receivables sold 2,603 2,440 2,303
Other 1,309 1,461 (1,108)
------ ------ ------
$ 5,397 $ 9,825 $ 1,818
====== ====== ======
<PAGE> F-22
EXHIBIT 10.16
EXECUTION COPY
U.S. $173,750,000
TERM LOAN AGREEMENT,
dated as of March 16, 1998,
among
SPECIALTY FOODS CORPORATION,
as the Borrower,
VARIOUS FINANCIAL INSTITUTIONS,
as the Term Loan Lenders,
DLJ CAPITAL FUNDING, INC.,
as the Syndication Agent and
Collateral Agent for the Term Loan Lenders,
ABN AMRO BANK N.V.,
as the Administrative Agent for the Term Loan Lenders,
and
SUMMIT BANK,
as the Documentation Agent for the Term Loan Lenders.
ARRANGED BY
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
TABLE OF CONTENTS
SECTION PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1 Defined Terms 2
1.2 Use of Defined Terms 37
1.3 Cross-References 37
1.4 Accounting and Financial Determinations 37
ARTICLE II
TERM LOAN COMMITMENTS, BORROWING PROCEDURES AND TERM NOTES
2.1 Term Loan Commitments 38
2.2 Term Loan Lenders Not Permitted or Required to Make the
Term Loans 38
2.3 Borrowing Procedure 38
2.4 Continuation and Conversion Elections 39
2.5 Funding 39
2.6 Register; Term Notes 40
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
3.1 Repayments and Prepayments; Application 41
3.1.1 Repayments and Prepayments 41
3.1.2 Application 45
3.2 Interest Provisions 46
3.2.1 Rates 46
3.2.2 Post-Maturity Rates 46
3.2.3 Payment Dates 47
3.3 Fees 47
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
4.1 LIBO Rate Lending Unlawful 47
4.2 Deposits Unavailable 48
4.3 Increased LIBO Rate Loan Costs, etc. 48
4.4 Funding Losses 49
4.5 Increased Capital Costs 49
4.6 Taxes 50
4.7 Payments, Computations, etc. 53
4.8 Sharing of Payments 53
4.9 Setoff 54
4.10 Replacement of Term Loan Lenders 54
ARTICLE V
CONDITIONS TO TERM LOANS
5.1 Term Loans 55
5.1.1 Resolutions, etc. 55
5.1.2 Loan Documents 56
5.1.3 Payment of Outstanding Indebtedness, etc. 56
5.1.4 Borrower Closing Date Certificate 56
5.1.5 Borrowing Request, etc. 57
5.1.6 Borrower Pledge Agreement 57
5.1.7 Financial Information, etc. 58
5.1.8 Pro Forma Balance Sheet Certificates 58
5.1.9 Borrower Security Agreement 58
5.1.10 Closing Fees, Expenses, etc. 59
5.1.11 Conditions Precedent to Revolving Credit Agreement. 59
5.1.12 Perfection Certificate 59
5.1.13 Accounts 59
5.1.14 Establishment of Special Purpose Subsidiary,
Contribution and Deposit 60
5.1.15 Opinions of Counsel 60
5.1.16 Litigation 60
5.1.17 Material Adverse Change 60
5.1.18 Consents and Approvals, etc. 60
5.1.19 Insurance 61
5.1.20 Satisfactory Legal Form 61
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1 Organization, etc. 61
6.2 Due Authorization, Non-Contravention, etc. 61
6.3 Government Approval, Regulation, etc. 62
6.4 Validity, etc. 62
6.5 Financial Information 62
6.6 No Material Adverse Change 63
6.7 Litigation, Labor Controversies, etc. 63
6.8 Subsidiaries 63
6.9 Ownership of Properties 63
6.10 Taxes 63
6.11 Pension and Welfare Plans 63
6.12 Environmental Warranties 64
6.13 Intellectual Property 65
6.14 Regulations G, U and X 65
6.15 Solvency 66
6.16 Accuracy of Information 66
6.17 Seniority of the Obligations and Permitted
Indebtedness under the Subordinated Note Indenture 66
6.18 Special Purpose Subsidiary 67
6.19 Concentration and Deposit Accounts 67
ARTICLE VII
COVENANTS
7.1 Affirmative Covenants 67
7.1.1 Financial Information, Reports, Notices, etc. 68
7.1.2 Compliance with Laws, etc. 71
7.1.3 Maintenance of Properties 71
7.1.4 Insurance 72
7.1.5 Books and Records 72
7.1.6 Environmental Covenant 72
7.1.7 Additional Collateral 73
7.1.8 Rate Protection Agreements 76
7.1.9 Use of Proceeds 77
7.1.10 Independent Corporate Existence 77
7.1.11 Asset Sale Proceeds Contribution and Deposit 78
7.1.12 Establishment and Administration of Accounts 79
7.1.13 Special Purpose Subsidiary 81
7.2 Negative Covenants 82
7.2.1 Business Activities 83
7.2.2 Indebtedness 83
7.2.3 Guarantee Obligations 85
7.2.4 Liens 86
7.2.5 Financial Covenants 88
7.2.6 Investments 89
7.2.7 Restricted Payments, etc. 91
7.2.8 Capital Expenditures, etc. 93
7.2.9 Receivables Subsidiary 93
7.2.10 Take or Pay Contracts 93
7.2.11 Consolidation, Merger, etc. 93
7.2.12 Asset Dispositions, etc. 94
7.2.13 Optional Prepayments, Purchases and Modification of
Certain Agreements 96
7.2.14 Transactions with Affiliates 96
7.2.15 Sale and Leaseback 97
7.2.16 Stock of Subsidiaries 97
7.2.17 Accounting Changes 97
7.2.18 Negative Pledges, Restrictive Agreements, etc. 97
7.2.19 Holding Company Status 98
7.3 Negative Covenants of Special Purpose Subsidiary 98
7.3.1 Business Activities 98
7.3.2 Creation of Indebtedness; Guarantees 98
7.3.3 Subsidiaries 99
7.3.4 Issuance of Stock 99
7.3.5 Mergers 99
7.3.6 Other Activities 99
7.3.7 Insolvency 99
7.3.8 ERISA 99
7.3.9 Dividends 99
ARTICLE VIII
EVENTS OF DEFAULT
8.1 Listing of Events of Default 100
8.1.1 Non-Payment of Obligations 100
8.1.2 Breach of Warranty 100
8.1.3 Non-Performance of Certain Covenants and Obligations 100
8.1.4 Non-Performance of Other Covenants and Obligations 100
8.1.5 Default on Other Indebtedness 100
8.1.6 Judgments 101
8.1.7 Pension Plans 101
8.1.8 Change in Control 101
8.1.9 Bankruptcy, Insolvency, etc. 101
8.1.10 Impairment of Security, etc. 102
8.1.11 Revolving Credit Event of Default. 102
8.2 Action if Bankruptcy, etc. 102
8.3 Action if Other Event of Default 102
ARTICLE IX
THE AGENTS
9.1 Actions 103
9.2 Funding Reliance, etc. 104
9.3 Exculpation 104
9.4 Successor 105
9.5 Term Loans by each Agent and the Collateral Agent 106
9.6 Credit Decisions 106
9.7 Copies, etc. 106
9.8 The Syndication Agent, the Documentation Agent, the
Administrative Agent and the Collateral Agent 107
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 Waivers, Amendments, etc. 107
10.2 Notices 108
10.3 Payment of Costs and Expenses 108
10.4 Indemnification 109
10.5 Survival 111
10.6 Severability 111
10.7 Headings 111
10.8 Execution in Counterparts, Effectiveness, etc. 111
10.9 Governing Law; Entire Agreement 111
10.10 Successors and Assigns 112
10.11 Sale and Transfer of Term Loans; Participations in Term
Loans 112
10.11.1 Assignments 112
10.11.2 Participations 114
10.12 Other Transactions 115
10.13 Forum Selection and Consent to Jurisdiction 115
10.14 Waiver of Jury Trial 116
10.15 Confidentiality 116
10.16 Liens on Sold Assets 117
SCHEDULE I - Disclosure Schedule
SCHEDULE II - Term Loan Percentages
SCHEDULE III - Subsidiaries
EXHIBIT A - Form of Term Note
EXHIBIT B - Form of Borrowing Request
EXHIBIT C - Form of Continuation/Conversion Notice
EXHIBIT D - Form of Borrower Closing Date Certificate
EXHIBIT E - Form of Compliance Certificate
EXHIBIT F - Form of Borrower Pledge Agreement
EXHIBIT G - Form of Borrower Security Agreement
EXHIBIT H-1 - Form of Concentration Account Agreement
EXHIBIT H-2 - Form of Asset Sale Proceeds Account Agreement
EXHIBIT H-3 - Form of Collateral Account Agreement
EXHIBIT I - Form of Parent Agreement
EXHIBIT J - Form of Mortgage
EXHIBIT K - Form of Lender Assignment Agreement
EXHIBIT L-1 - Form of Opinion of New York Counsel to the
Parent and the Borrower
EXHIBIT L-2 - Form of Opinion of Secretary and General
Counsel of the Parent and the Borrower
EXHIBIT L-3 - Form of Opinion of Local Counsel to the Obligors
EXHIBIT M - Form of Exemption Certificate
EXHIBIT N - Form of Perfection Certificate
TERM LOAN AGREEMENT
THIS TERM LOAN AGREEMENT, dated as of March 16, 1998, is
among Specialty Foods Corporation, a Delaware corporation (the
"Borrower"), the various financial institutions as are or may
become parties hereto (collectively, the "Term Loan Lenders"),
DLJ Capital Funding, Inc. ("DLJ"), as syndication agent (the
"Syndication Agent"), and as collateral agent (the "Collateral
Agent"), for the Term Loan Lenders, ABN Amro Bank N.V. ("ABN"),
as administrative agent (the "Administrative Agent"), for the
Term Loan Lenders, and Summit Bank, as documentation agent (the
"Documentation Agent"), for the Term Loan Lenders (the
Syndication Agent and the Administrative Agent are sometimes
referred to herein as the "Agents" and each as an "Agent").
W I T N E S S E T H:
WHEREAS, the Borrower and its existing Subsidiaries (such
capitalized term, and other terms used herein, to have the
meanings provided in Section 1.1) are engaged in the business of
production and distribution of breads, buns, rolls, sweet goods,
cookies and other baked goods and pre-cooked meat and other food
products and operation of retail cafes;
WHEREAS, the Borrower is a party to a term loan agreement,
dated as of July 17, 1995 (as heretofore amended, modified or
otherwise supplemented, the "Existing Term Loan Agreement"),
among the Borrower, the various financial institutions parties
thereto, and The Chase Manhattan Bank (formerly doing business as
Chemical Bank), as the administrative agent for such financial
institutions;
WHEREAS, the Revolving Credit Borrowers are parties to a
revolving credit agreement, dated as of August 16, 1993 and
amended and restated as of July 17, 1995 (as heretofore amended,
modified or otherwise supplemented, the "Existing Revolving
Credit Agreement"), among the Revolving Credit Borrowers, the
various financial institutions parties thereto, and The Chase
Manhattan Bank (formerly doing business as Chemical Bank), as the
administrative agent for such financial institutions;
WHEREAS, the Borrower desires to refinance in full all
outstanding Indebtedness of the Borrower under the Existing Term
Loan Agreement and of the Revolving Credit Borrowers under the
Existing Revolving Credit Agreement;
WHEREAS, in order to consummate the Refinancing, and subject
to the terms of this Agreement (including Article V), the
Borrower desires to obtain from the Term Loan Lenders a Term Loan
Commitment pursuant to which Borrowings of Term Loans in a
maximum aggregate principal amount not to exceed $173,750,000
will be made to the Borrower on the Closing Date, with all the
proceeds of the Term Loans to be used to consummate the
Refinancing;
WHEREAS, concurrently with the execution of this Agreement,
the Agents, the Collateral Agent and the Revolving Credit Lenders
will enter into the Revolving Credit Agreement with the Revolving
Credit Borrowers, pursuant to which the Revolving Credit Lenders
will agree to make Revolving Credit Loans from time to time to,
and the Issuer will agree to issue Revolving Credit Letters of
Credit from time to time for the account of, the Revolving Credit
Borrowers, with a portion of the proceeds of the Revolving Credit
Loans to be used to consummate the Refinancing; and
WHEREAS, the Term Loan Lenders are willing, on the terms and
subject to the conditions hereinafter set forth (including
Article V), to extend such Term Loan Commitments and make such
Term Loans to the Borrower on the Closing Date;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 Defined Terms. The following terms (whether or
not underscored) when used in this Agreement, including its
preamble and recitals, shall, except where the context otherwise
requires, have the following meanings (such meanings to be
equally applicable to the singular and plural forms thereof):
"ABN" is defined in the preamble.
"Acadia" means Acadia Partners, L.P., a Delaware limited
partnership.
"Acquisition" means the purchase or acquisition (by
purchase, merger or other form of acquisition) of all or
substantially all the assets, or not less than 100% of the
Capital Stock, of one or more Persons engaged in, or any
operating division, operating unit or line of business located
within the United States constituting, the same or a similar or
related line of baking business to those engaged in by Metz and
its Subsidiaries.
"Administrative Agent" is defined in the preamble and
includes each other Person as shall have subsequently been
appointed as the successor Administrative Agent pursuant to
Section 9.4 and Section 10.4 of the Revolving Credit Agreement.
"Affiliate" of any Person means any other Person which,
directly or indirectly, controls, is controlled by or is under
common control with such Person (excluding any trustee under, or
any committee with responsibility for administering, any Plan).
A Person shall be deemed to be "controlled by" any other Person
if such other Person possesses, directly or indirectly, power (a)
to vote 10% or more of the securities (on a fully diluted basis)
having ordinary voting power for the election of directors or
managing general partners; or (b) to direct or cause the
direction of the management and policies of such Person whether
by contract or otherwise.
"Agents" is defined in the preamble.
"Agreed-Upon Procedures" means such review procedures as
performed by an Independent Auditor in accordance with any AICPA
guidelines on Reviews of Pro Forma Financial Information (AT 300)
and others to be reasonably specified by the Agents which will
include, without limitation, the following: (i) review of recent
audited or unaudited consolidated historical and pro forma
financial statements of the Borrower and its Subsidiaries and, if
available, the Person which is the subject of such Acquisition,
(ii) inquiries of appropriate financial and accounting officers
of the Borrower and its Subsidiaries as to the basis for
determining the Pro Forma Adjustments and that all significant
assumptions and effects of the transaction have been reflected in
the Pro Forma Adjustments and (iii) proving the arithmetic
accuracy of the application of such Pro Forma Adjustments to the
historical amounts set forth in the financial statements.
"Agreement" means, on any date, this Term Loan Agreement as
originally in effect on the Closing Date and as thereafter from
time to time amended, supplemented, amended and restated, or
otherwise modified and in effect on such date.
"Alternate Base Rate" means, for any day and with respect to
all Base Rate Loans, the higher of: (a) 0.50% per annum above
the latest Federal Funds Rate; and (b) the rate of interest in
effect for such day as most recently publicly announced or
established by the Administrative Agent in Chicago, Illinois, as
its "base rate." (The "base rate" is a rate set by the
Administrative Agent based upon various factors including the
Administrative Agent's costs and desired return, general economic
conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above or below
such announced rate.) Any change in the reference rate
established or announced by the Administrative Agent shall take
effect at the opening of business on the day of such
establishment or announcement.
"Applicable Term Loan Margin" means at all times during the
applicable periods in which the Borrower's Senior Secured
Leverage Ratio (determined by reference to the applicable
Compliance Certificate as set forth below) is as set forth in the
column entitled "Senior Secured Leverage Ratio": (a) with
respect to the unpaid principal amount of each Base Rate Loan,
the applicable percentage set forth below in the column entitled
"Applicable Term Loan Margin for Base Rate Loans" and (b) with
respect to the unpaid principal amount of each LIBO Rate Loan,
the applicable percentage set forth below in the column entitled
"Applicable Term Loan Margin for LIBO Rate Loans":
Applicable Term Loan Applicable Term Loan
Senior Secured Leverage Margin Margin
Ratio for Base Rate Loans for LIBO Rate Loans
--------------------- --------------------
Less than or equal to 2.50% 3.50%
2.0:1.0
Greater than 2.0:1.0 2.75% 3.75%
The Senior Secured Leverage Ratio used to compute the Applicable
Term Loan Margin shall be the Senior Secured Leverage Ratio set
forth in the Compliance Certificate most recently delivered by
the Borrower to the Administrative Agent pursuant to clause (g)
of Section 7.1.1. Changes in the Applicable Term Loan Margin
resulting from a change in the Senior Secured Leverage Ratio
shall become effective upon delivery by the Borrower to the
Administrative Agent of a new Compliance Certificate pursuant to
clause (g) of Section 7.1.1. If the Borrower shall fail to
deliver a Compliance Certificate within the number of days
required pursuant to clause (g) of Section 7.1.1 (without giving
effect to any grace period), the Applicable Term Loan Margin from
and including the first day after the date on which such
Compliance Certificate was required to be delivered to but not
including the date the Borrower delivers to the Administrative
Agent a Compliance Certificate shall conclusively equal the
highest Applicable Term Loan Margin set forth above.
"Arranger" means Donaldson, Lufkin & Jenrette Securities
Corporation.
"Asset Sale" means, with respect to the Parent, the Borrower
or any Subsidiary of the Borrower, the sale, transfer or other
disposition by any such Person to another Person (other than the
Borrower or any wholly owned Subsidiary of the Borrower) of any
property, business or assets, whether real or personal, tangible
or intangible, other than any such sale, transfer or other
disposition of property or assets of the type described in
clauses (a) or (b) of Section 7.2.12.
"Asset Sale Proceeds" is defined in the paragraph following
clause (c) of Section 7.2.12.
"Asset Sale Proceeds Account" means the account of the
Special Purpose Subsidiary at LaSalle National Bank at its office
at 135 South LaSalle Street, Chicago, Illinois, into which all
Asset Sale Proceeds shall be deposited and which account shall be
pledged and assigned to the Collateral Agent for the benefit of
the Revolving Credit Lenders.
"Asset Sale Proceeds Account Agreement" means the Asset Sale
Proceeds Account Agreement executed and delivered by the Special
Purpose Subsidiary pursuant to Section 5.1.13, substantially in
the form of Exhibit H-2 hereto, as amended, supplemented, amended
and restated or otherwise modified from time to time.
"Assignee Term Loan Lender" is defined in Section 10.11.1.
"Authorized Officer" means, relative to the Borrower and any
other Obligor, those of its officers whose signatures and
incumbency shall have been certified to the Administrative Agent,
the Collateral Agent and the Term Loan Lenders pursuant to
Section 5.1.1; provided, that no officer shall qualify as an
Authorized Officer unless such officer has the title of vice
president or above.
"Base Rate Loan" means a Loan bearing interest at a
fluctuating rate determined by reference to the Alternate Base
Rate.
"Borrower" is defined in the preamble.
"Borrower Closing Date Certificate" means the closing date
certificate executed and delivered by the Borrower pursuant to
Section 5.1.4, substantially in the form of Exhibit D hereto.
"Borrower Pledge Agreement" means the Pledge Agreement
executed and delivered by the Borrower pursuant to Section 5.1.6,
substantially in the form of Exhibit F hereto, as amended,
supplemented, amended and restated or otherwise modified.
"Borrower Security Agreement" means the Security Agreement
executed and delivered by the Borrower pursuant to Section 5.1.9,
substantially in the form of Exhibit G hereto, as amended,
supplemented, amended and restated or otherwise modified.
"Borrowing" means the Term Loans of the same type and, in
the case of LIBO Rate Loans, having the same Interest Period made
on the same Business Day and pursuant to the same Borrowing
Request in accordance with Section 2.1.
"Borrowing Request" means a Loan request and certificate
duly executed by an Authorized Officer of the Borrower,
substantially in the form of Exhibit B hereto.
"Boudin" means Andre-Boudin Bakeries, Inc., a California
corporation.
"Business Day" means (a) any day which is neither a Saturday
or Sunday nor a legal holiday on which banks are authorized or
required to be closed in Houston, Texas, Chicago, Illinois or New
York City, and (b) with respect to Borrowings of, Interest
Periods with respect to, payments of principal and interest in
respect of, and conversions of Base Rate Loans into, LIBO Rate
Loans, any day on which dealings in Dollars are carried on in the
London interbank market.
"Capital Expenditures" means, for any period, the sum,
without duplication, of (a) the aggregate amount of all
expenditures of the Borrower and its Subsidiaries for fixed or
capital assets made during such period which, in accordance with
GAAP, would be classified as capital expenditures; and (b) to the
extent not included in clause (a) above, the aggregate amount of
the principal component of all Capitalized Lease Liabilities
incurred during such period by the Borrower and its Subsidiaries.
"Capital Stock" means, with respect to any Person, (a) any
and all shares, interests, participations, rights or other
equivalents of or interests in (however designated) corporate or
capital stock, including, without limitation, shares of preferred
or preference stock of such Person, (b) all partnership interests
(whether general or limited) in such Person, (c) all membership
interests or limited liability company or partnership interests
in such Person, and (d) all other equity or ownership interests
in such Person of any other type.
"Capitalized Lease Liabilities" means, without duplication,
all monetary obligations of the Borrower or any of its
Subsidiaries under any leasing or similar arrangement which, in
accordance with GAAP, would be classified as capitalized leases,
and, for purposes of this Agreement and each other Loan Document,
the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP, and the stated
maturity thereof shall be the date of the last payment of rent or
any other amount due under such lease prior to the first date
upon which such lease may be terminated by the lessee without
payment of a penalty.
"Cash Equivalent Investment" means, at any time:
(a) any evidence of Indebtedness, maturing not more
than one year after such time, issued directly by the United
States of America or any agency thereof or guaranteed by the
United States of America or any agency thereof;
(b) commercial paper, maturing not more than nine
months from the date of issue, which is issued by (i) a
corporation (other than an Affiliate of any Obligor) organized
under the laws of any state of the United States or of the
District of Columbia and rated at least A-l by S&P or P-l by
Moody's, or (ii) any Lender (or its holding company);
(c) any time deposit, certificate of deposit or
bankers acceptance, maturing not more than one year after such
time, maintained with or issued by either (i) a commercial
banking institution (including U.S. branches of foreign banking
institutions) that is a member of the Federal Reserve System and
has a combined capital and surplus and undivided profits of not
less than $500,000,000, or (ii) any Lender;
(d) short-term tax-exempt securities rated not lower
than MIG-1/1+ by either Moody's or S&P with provisions for
liquidity or maturity accommodations of 183 days or less; or
(e) repurchase agreements with respect to any
securities referred to in clause (a) above entered into with any
entity referred to in clause (b) or (c) above or any other
financial institution whose unsecured long-term debt (or the
unsecured long-term debt of whose holding company) is rated at
least A or better by S&P or A-2 or better by Moody's and maturing
not more than thirty days after such time.
"Casualty Event" means the damage, destruction or
condemnation, as the case may be, of property of the Borrower or
any of its Subsidiaries.
"Casualty Proceeds" means, with respect to any Casualty
Event, the amount of any insurance proceeds or condemnation
awards received by the Borrower or any of its Subsidiaries in
connection therewith, but excluding any proceeds or awards
required to be paid to a creditor (other than the Lenders) which
holds a first-priority Lien permitted by Section 7.2.4 on the
property which is the subject of such Casualty Event.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response
Compensation Liability Information System List.
"Change in Control" means
(a) any Person or "group" (within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended) other than the Primary Investors (i) shall have acquired
beneficial ownership of a greater percentage of the Parent's
voting common stock than is then held by the Primary Investors;
or (ii) shall obtain the power (whether or not exercised) to
elect a majority of the Borrower's or the Parent's directors (for
purposes of this clause (a), and clause (b)(ii) below, any shares
of voting stock that are required to be voted for a nominee of
any Primary Investor shall be deemed to be held by such Primary
Investor for purposes of determining the voting power held by any
Person); or
(b) the Primary Investors shall cease to be able to
elect a majority of the Board of Directors of the Parent or,
through the Parent, the Borrower; or
(c) the Primary Investors shall cease to own legally
and beneficially at least 40% of each outstanding class of common
stock having ordinary voting power in the election of directors
of the Parent held by them on the Closing Date (as appropriately
adjusted to give effect to any stock dividends, subdivisions,
combinations and other similar combining or diluting events after
the Closing Date); or
(d) the Parent shall cease to own legally and
beneficially 100% of each class of Capital Stock of the Borrower,
free of Liens (other than the Lien created by the Parent Pledge
Agreement); or
(e) the Borrower shall cease to own legally and
beneficially 100% of each class of Capital Stock of the
Receivables Subsidiary, free of Liens (other than the Liens
created by the Borrower Pledge Agreement); or
(f) any Capital Stock of any Subsidiary of the
Borrower (other than (A) 20% of the common stock of Boudin
International, Inc. and (B) the common stock of Trocano) shall
cease to be owned by the Borrower or a Subsidiary Guarantor, free
of Liens (other than Liens created pursuant to the Pledge
Agreements) or the Collateral Agent shall cease to have a
perfected first priority security interest in any such Capital
Stock pursuant to a Pledge Agreement, in each case under this
clause (f) except to the extent permitted by Section 7.2.11 or
Section 7.2.12; or
(g) the Borrower shall own any Capital Stock in which
the Collateral Agent does not have a perfected first priority
security interest as security for the Obligations of the
Borrower; or
(h) a "change of control" as defined in the 1993
Senior Note Indenture, the 1995 Senior Note Indenture, the
Subordinated Note Indenture, the Parent Senior Debenture
Indenture or the Parent Securities Purchase Agreement shall
occur.
"Closing Date" means the date on which the Term Loans are
made in accordance with Section 5.1, not to be later than March
31, 1998.
"Code" means the Internal Revenue Code of 1986, and the
regulations thereunder, in each case as amended, reformed or
otherwise modified from time to time.
"Collateral" means all assets of the Obligors, now or
hereafter acquired, upon which a Lien is purported to be created
by any Security Document.
"Collateral Account" means the account of the Borrower at
LaSalle National Bank at its office at 135 South LaSalle Street,
Chicago, Illinois, into which all funds from the Concentration
Accounts of the Borrower or any of its Subsidiaries shall be
deposited on a daily basis, which account shall be pledged and
assigned to the Collateral Agent on behalf of the Term Loan
Lenders.
"Collateral Account Agreement" means the Collateral Account
Agreement executed and delivered by the Borrower pursuant to
Section 5.1.13, substantially in the form of Exhibit H-3 hereto,
as amended, supplemented, amended and restated or otherwise
modified from time to time.
"Collateral Agent" is defined in the preamble and includes
each other Person as shall have subsequently been appointed as
the successor Collateral Agent pursuant to Section 9.4 and
Section 10.4 of the Revolving Credit Agreement.
"Commitment" means, collectively, as to any Lender, such
Lender's Term Loan Commitment and Revolving Credit Commitment.
"Compliance Certificate" means a certificate duly completed
and executed by the chief financial or accounting Authorized
Officer of the Borrower, substantially in the form of Exhibit E
hereto, as amended, supplemented, amended and restated or
otherwise modified from time to time, together with such changes
thereto as the Agents may from time to time reasonably request
for the purpose of monitoring the Borrower's compliance with the
financial covenants contained herein.
"Concentration Account" means a demand, time, savings,
passbook or other account of the Borrower or any Subsidiary of
the Borrower established and maintained with a Concentration
Account Bank, and subject to a Concentration Account Agreement,
into which the Borrower or such Subsidiary of the Borrower
deposits all cash, checks, notes, drafts, bills of exchange,
money orders and other like instruments and proceeds of
Collateral, which account shall be pledged and assigned to the
Collateral Agent on behalf of the Term Loan Lenders.
"Concentration Account Agreement" means a Concentration
Account Agreement executed and delivered by the Borrower or the
relevant Subsidiary of the Borrower and each Concentration
Account Bank, pursuant to Section 5.1.13, substantially in the
form of Exhibit H-1 hereto, as such agreement may be amended,
modified or supplemented from time to time.
"Concentration Account Bank" means the Administrative Agent,
The Chase Manhattan Bank, New York, New York, or another bank,
savings and loan association, credit union or other similar
financial institution acceptable to the Collateral Agent that has
executed a Concentration Account Agreement.
"Consolidated EBITDA" means, for any period and as to any
Person, the sum (without duplication) of
(a) Consolidated Net Income, plus
(b) the amount deducted in determining Consolidated
Net Income representing non-cash charges, including depreciation
and amortization, plus
(c) the amount deducted in determining Consolidated
Net Income representing all federal, state and local income taxes
(whether paid in cash or deferred) of such Person and its
Subsidiaries, plus
(d) the amount deducted in determining Consolidated
Net Income representing Consolidated Interest Expense (including
deferred financing costs and other non-cash interest expenses) of
such Person and its Subsidiaries, minus
(e) an amount equal to the amount of Consolidated Non-
Cash Credits included in determining Consolidated Net Income.
"Consolidated Interest Expense" means, for any period and as
to any Person, the amount of interest expense (net of interest
income) of such Person and its consolidated Subsidiaries
determined on a consolidated basis in accordance with GAAP, for
such period on the aggregate principal amount of its
indebtedness, including the portion of any payments made in
respect of Capitalized Lease Liabilities allocable to interest
expense and any purchase discount adjustments or any interest or
other charges payable during such period to purchasers of
accounts receivable or participations therein or securities
secured thereby by the Receivables Subsidiary or a trust
established by the Receivables Subsidiary and, whether or not
included in interest expense, expenses associated with lease
obligations and sale-leaseback arrangements repurchased in the
1998 Fiscal Year pursuant to clause (i) of Section 7.2.8, but
excluding (to the extent included in the calculation of
Consolidated Interest Expense for such period) the amortization
of fees, costs and expenses paid by such Person in connection
with the Refinancing.
"Consolidated Net Income" means, for any period and as to
any Person, the aggregate net income of such Person and its
consolidated Subsidiaries determined on a consolidated basis in
accordance with GAAP for such period, excluding extraordinary
gains and extraordinary losses.
"Consolidated Non-Cash Credits" means, with respect to
determining Consolidated Net Income of any Person for any period
of determination, the amount of all non-cash credits (determined
in accordance with GAAP) which, in the aggregate, exceed
$2,500,000 and were included in the determination of Consolidated
Net Income for such Person for such period.
"Consolidated Total Debt" means, on any date, without
duplication, the outstanding principal amount of all Indebtedness
of any Person and its consolidated Subsidiaries of the type
referred to in clauses (a), (b) (other than undrawn trade letters
of credit and undrawn letters of credit in respect of workers'
compensation, insurance, performance and surety bonds and similar
obligations, in each case incurred in the ordinary course of
business), (c) or (e) of the definition of "Indebtedness" and any
Guarantee Obligation in respect of any of the foregoing.
"Consolidated Total Senior Secured Debt" means, on any date,
without duplication, the outstanding principal amount of all
secured Indebtedness (other than any Indebtedness that, by its
terms, is subordinate in right of payment to the payment in full
in cash of the Obligations) of any Person and its consolidated
Subsidiaries of the type referred to in clauses (a), (b) (other
than undrawn trade letters of credit and undrawn letters of
credit in respect of workers' compensation, insurance,
performance and surety bonds and similar obligations, in each
case incurred in the ordinary course of business), (c) or (e) of
the definition of "Indebtedness" and any Guarantee Obligation in
respect of any of the foregoing.
"Continuation/Conversion Notice" means a notice of
continuation or conversion and certificate duly executed by an
Authorized Officer of the Borrower, substantially in the form of
Exhibit C hereto.
"Controlled Foreign Subsidiary" means a subsidiary which is
a "controlled foreign corporation" (as defined in Section 957(a)
of the Code).
"Controlled Group" means all members of a controlled group
of corporations and all members of a controlled group of trades
or businesses (whether or not incorporated) under common control
which, together with the Borrower, its Subsidiaries or the
Revolving Credit Borrowers, are treated as a single employer
under Section 414(b) or 414(c) of the Code or Section 4001 of
ERISA.
"Covered Taxes" means any Taxes other than Taxes imposed
with respect to the Administrative Agent or any Term Loan Lender
by reason of a connection between the Administrative Agent or
such Term Loan Lender and the relevant taxing jurisdiction,
including, without limitation, a connection arising from such
Person being or having been a citizen or resident of such
jurisdiction, or having or having had a permanent establishment
or fixed place of business or being or having been engaged in
business therein, but excluding a connection arising solely from
such Person having executed, delivered, performed its obligations
or received any payment under, or enforced, this Agreement or any
Note. Taxes shall be considered Covered Taxes if such Taxes are
imposed on (i) the Administrative Agent solely by reason of a
connection between a Term Loan Lender (but not the Administrative
Agent) and the relevant taxing jurisdiction or (ii) a Term Loan
Lender solely by reason of a connection between the
Administrative Agent or any other Term Loan Lender (but not such
Term Loan Lender) and the relevant taxing jurisdiction.
"Default" means any Event of Default or any condition,
occurrence or event which, after notice or lapse of time or both,
would constitute an Event of Default.
"Deposit Account" means each demand, time, savings, passbook
or other account of the Borrower or any Subsidiary of the
Borrower identified as such in Item 6.19 of the Disclosure
Schedule maintained with a bank, savings and loan association,
credit union or other financial institution.
"Disclosure Schedule" means the Disclosure Schedule attached
hereto as Schedule I, as it may be amended, supplemented or
otherwise modified from time to time by the Borrower with the
written consent of the Required Term Loan Lenders.
"DLJ" is defined in the preamble.
"Dollar" and the sign "$" mean lawful money of the United
States.
"Documentation Agent" is defined in the preamble.
"Domestic Office" means, relative to any Term Loan Lender,
the office of such Term Loan Lender designated as such Term Loan
Lender's "Domestic Office" below its signature hereto or in a
Lender Assignment Agreement, or such other office of a Term Loan
Lender (or any successor or assign of such Term Loan Lender)
within the United States as may be designated from time to time
by notice from such Term Loan Lender, as the case may be, to each
other Person party hereto.
"Environmental Laws" means all applicable federal, state or
local statutes, laws, ordinances, codes, rules, regulations and
guidelines (including consent decrees and administrative orders)
relating to public health and safety and protection of the
environment.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import,
together with the regulations thereunder, in each case as in
effect from time to time. References to sections of ERISA also
refer to any successor sections.
"Event of Default" is defined in Section 8.1.
"Exchanged Bakery" is defined in clause (c) of Section
7.2.12.
"Exchanged Bakery Transaction" is defined in clause (c) of
Section 7.2.12.
"Existing Revolving Credit Agreement" is defined in the
third recital.
"Existing Term Loan Agreement" is defined in the second
recital.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to
(a) the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York;
or
(b) if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on
such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by it.
"Financing Documents" means, collectively, the Parent Senior
Debenture Documents, the Parent Subordinated Debenture Documents,
the 1993 Senior Note Documents, the 1995 Senior Note Documents,
the Subordinated Note Documents and the Receivables Purchase
Documents.
"First-Tier Holding Companies" means each of the
Subsidiaries of the Borrower listed on Part I of Item A of
Schedule III hereto and any other direct Subsidiary of the
Borrower that constitutes a "holding company" from time to time
acquired or created in accordance with clause (c) of Section
7.1.7.
"Fiscal Month" means any fiscal month of a Fiscal Year.
"Fiscal Quarter" means any fiscal quarter of a Fiscal Year.
"Fiscal Year" means any period of twelve consecutive
calendar months ending on December 31 of such calendar year.
"Foreign Subsidiary" means each of the Subsidiaries of the
Borrower listed on Item D of Schedule III hereto and any other
non-U.S. Subsidiary of the Borrower from time to time acquired or
created in accordance with clause (c) of Section 7.1.7.
"F.R.S. Board" means the Board of Governors of the Federal
Reserve System or any successor thereto.
"GAAP" is defined in Section 1.4.
"Governmental Approval" means any action, authorization,
consent, approval, license, lease, ruling, permit, tariff, rate,
certification, exemption, filing, variance, claim, order,
judgment, decree, publication, notices to, declarations of or
with or registration by or with any Regulatory Authority.
"Governmental Rule" means any statute, law, regulation,
ordinance, rule, judgment, order, decree, permit, concession,
grant, franchise, license, agreement, directive, guideline,
policy, requirement, or other governmental authorization
including any conditions thereof, restriction or any similar form
of published or otherwise known decision of or determination by,
or any interpretation or administration of any of the foregoing
by, any Regulatory Authority, whether now or hereafter in effect
(including any Environmental Law).
"Guarantee Obligation" means, as to any Person (the
"guaranteeing person"), any obligation of (a) the guaranteeing
person or (b) another Person (including, without limitation, any
bank under any letter of credit) to induce the creation of which
the guaranteeing person has issued a reimbursement,
counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases,
dividends or other obligations (the "primary obligations") of any
other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not contingent,
(i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any
such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain
the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of
the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Guarantee Obligation
shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed
to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which
such Guarantee Obligation is made and (b) the maximum amount for
which such guaranteeing person may be liable pursuant to the
terms of the instrument embodying such Guarantee Obligation,
unless such primary obligation and the maximum amount for which
such guaranteeing person may be liable are not stated or
determinable, in which case the amount of such Guarantee
Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the
Borrower in good faith.
"H&M" means H&M Food Systems Company, Inc., a Delaware
corporation.
"Haas Wheat" means Haas Wheat & Partners Incorporated, a
Delaware corporation.
"Hazardous Material" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource
Conservation and Recovery Act, as amended;
(c) any petroleum product; or
(d) any pollutant or contaminant or hazardous,
dangerous or toxic chemical, material or substance within the
meaning of any other applicable federal, state or local law,
regulation, ordinance or requirement (including consent decrees
and administrative orders) relating to or imposing liability or
standards of conduct concerning any hazardous, toxic or dangerous
waste, substance or material, all as amended or hereafter
amended.
"Hedging Obligations" means, with respect to any Person, all
liabilities of such Person under currency exchange agreements,
interest rate swap agreements, interest rate cap agreements and
interest rate collar agreements, and all other agreements or
arrangements designed to protect such Person against fluctuations
in interest rates or currency exchange rates.
"herein", "hereof", "hereto", "hereunder" and similar terms
contained in this Agreement or any other Loan Document refer to
this Agreement or such other Loan Document, as the case may be,
as a whole and not to any particular Section, paragraph or
provision of this Agreement or such other Loan Document.
"Holding Companies" means each of the Subsidiaries of the
Borrower listed in Item A of Schedule III hereto and any other
Subsidiary of the Borrower that constitutes a "holding company"
from time to time acquired or created in accordance with clause
(c) of Section 7.1.7.
"Impermissible Qualification" means, relative to the opinion
or certification of any independent public accountant as to any
financial statement of the Borrower any qualification or
exception to such opinion or certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination
of matters relevant to such financial statement; or
(c) which relates to the treatment or classification
of any item in such financial statement and which, as a condition
to its removal, would require an adjustment to such item the
effect of which would be to cause the Borrower to be in default
of any of its obligations under Section 7.2.5.
"Inactive Subsidiaries" means each of the Subsidiaries of
the Borrower listed on Item E of Schedule III hereto and any
other Subsidiary of the Borrower so designated by the Borrower
and consented to by the Syndication Agent from time to time.
"including" and "include" mean including without limiting
the generality of any description preceding such term, and, for
purposes of this Agreement and each other Loan Document, the
parties hereto agree that the rule of ejusdem generis shall not
be applicable to limit a general statement, which is followed by
or referable to an enumeration of specific matters, to matters
similar to the matters specifically mentioned.
"Indebtedness" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money
or for the deferred purchase price of property or services
(exclusive of deferred purchase price arrangements in the nature
of open or other accounts payable owed to suppliers on normal
terms in connection with the purchase of goods and services in
the ordinary course of business) and all obligations of such
Person evidenced by bonds, debentures, notes or other similar
instruments;
(b) all obligations, contingent or otherwise, relative
to the face amount of all letters of credit, whether or not
drawn, and banker's acceptances issued for the account of such
Person;
(c) all Capitalized Lease Liabilities;
(d) net liabilities of such Person under all Hedging
Obligations;
(e) whether or not so included as liabilities in
accordance with GAAP, all Indebtedness of the types referred to
in clauses (a) through (d) above (excluding prepaid interest
thereon) secured by a Lien on property owned or being purchased
by such Person (including Indebtedness arising under conditional
sales or other title retention agreements), whether or not such
Indebtedness shall have been assumed by such Person or is limited
in recourse; provided, however, that, to the extent such
Indebtedness is limited in recourse to the assets securing such
Indebtedness, the amount of such Indebtedness shall be limited to
the fair market value of such assets; and
(f) all Guarantee Obligations of such Person in
respect of any of the foregoing.
For all purposes of this Agreement, the Indebtedness of any
Person shall include the Indebtedness of any partnership or joint
venture in which such Person is a general partner or a joint
venturer (to the extent such Person is liable for such
Indebtedness).
"Indemnified Liabilities" is defined in Section 10.4.
"Indemnified Parties" is defined in Section 10.4.
"Independent Director" means a member of the Board of
Directors of the Special Purpose Subsidiary who (i) is not a
stockholder, director, officer or employee of the Parent or any
of its Subsidiaries or Affiliates and (ii) is not a Person
controlling any such prohibited stockholder, nor is such Person a
member of the immediate family of any such prohibited
stockholder, director, officer or employee. As used in this
definition of "Independent Director", the term "control" means
the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person,
whether through ownership of voting securities, by contract or
otherwise.
"Independent Auditor" means an internationally recognized
firm of independent certified public accountants constituting one
of the "Big Six" accounting firms or another internationally
recognized firm of independent certified public accountants
acceptable to the Required Term Loan Lenders and the Required
Revolving Credit Lenders.
"Intellectual Property" means, collectively, all
"Collateral" under and as defined in each Revolving Credit
Copyright Security Agreement, Revolving Credit Patent Security
Agreement and Revolving Credit Trademark Security Agreement.
"Interest Coverage Ratio" means, at the end of any Fiscal
Quarter, the ratio computed for the period consisting of such
Fiscal Quarter and each of the three immediately prior Fiscal
Quarters of:
(a) Consolidated EBITDA of the Borrower and its
Subsidiaries for all such Fiscal Quarters;
to
(b) the cash portion of Consolidated Interest Expense
of the Borrower and its Subsidiaries for all such Fiscal
Quarters;
provided that if, during any such period, the Borrower or any of
its Subsidiaries shall have made one or more acquisitions, the
Interest Coverage Ratio for such period shall be calculated on a
Pro Forma Basis as if each such acquisition had been made on the
first day of such period.
"Interest Period" means, relative to any LIBO Rate Loan, the
period beginning on (and including) the date on which such LIBO
Rate Loan is made or continued as, or converted into, a LIBO Rate
Loan pursuant to Section 2.3 or 2.4 and shall end on (but
exclude) the day which numerically corresponds to such date one,
three or six months thereafter (or, if such month has no
numerically corresponding day, on the last Business Day of such
month), as the Borrower may select in its relevant notice
pursuant to Section 2.3 or 2.4; provided, however, that
(a) the Borrower shall be permitted to select up to
five Interest Periods to be in effect at any one time for each
Term Loan;
(b) if such Interest Period would otherwise end on a
day which is not a Business Day, such Interest Period shall end
on the next following Business Day (unless such next following
Business Day is the first Business Day of a calendar month, in
which case such Interest Period shall end on the Business Day
next preceding such numerically corresponding day); and
(c) no Interest Period for any Term Loan may end later
than the Stated Maturity Date for such Term Loan.
"Investment" means, relative to any Person,
(a) any loan or advance made by such Person to any
other Person (excluding commission, travel, petty cash and
similar advances to officers and employees made in the ordinary
course of business);
(b) any Guarantee Obligation of such Person incurred
in connection with loans or advances described in clause (a); and
(c) any ownership or similar interest held by such
Person in any other Person.
The amount of any Investment shall be the original principal or
capital amount thereof less all returns of principal or equity
thereon and shall, if made by the transfer or exchange of
property other than cash, be deemed to have been made in an
original principal or capital amount equal to the fair market
value of such property at the time of such Investment.
"Investors" means, collectively, each Person who purchased
Parent Common Stock and Parent Subordinated Debentures pursuant
to the Parent Securities Purchase Agreement.
"Issuer" is defined in the Revolving Credit Agreement.
"Keystone" means Keystone, Inc., a Texas corporation.
"Lender Assignment Agreement" means a lender assignment
agreement substantially in the form of Exhibit K hereto.
"Lenders" means, collectively, the Term Loan Lenders and the
Revolving Credit Lenders.
"Leverage Ratio" means, at the end of any Fiscal Quarter,
the ratio of
(a) Consolidated Total Debt of the Borrower and its
Subsidiaries outstanding at such time less any cash maintained by
the Borrower and its Subsidiaries which is not restricted by the
terms of any account or agreement in its usage or application,
except as provided in Section 7.1.12;
to
(b) Consolidated EBITDA of the Borrower and its
Subsidiaries for the period of four consecutive Fiscal Quarters
most recently ended on or prior to such date;
provided that if, during any such period, the Borrower or any of
its Subsidiaries shall have made one or more Acquisitions, the
Leverage Ratio for such period shall be calculated on a Pro Forma
Basis as if each such Acquisition had been made on the first day
of such period.
"LIBO Rate" means, relative to any Interest Period for LIBO
Rate Loans, the rate of interest per annum determined by the
Administrative Agent to be the arithmetic mean (rounded upward to
the next 1/100th of 1%) of the rates of interest per annum at
which dollar deposits in the approximate amount of the Term Loan
to be made or continued as, or converted into, a LIBO Rate Loan
by the Administrative Agent and having a maturity comparable to
such Interest Period would be offered to the Administrative Agent
in the London interbank market at its request at approximately
11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period.
"LIBO Rate Loan" means a Term Loan bearing interest, at all
times during an Interest Period applicable to such Term Loan, at
a fixed rate of interest determined by reference to the LIBO Rate
(Reserve Adjusted).
"LIBO Rate (Reserve Adjusted)" means, relative to any Term
Loan to be made, continued or maintained as, or converted into, a
LIBO Rate Loan for any Interest Period, a rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) determined
pursuant to the following formula:
LIBO Rate = LIBO Rate
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for
LIBO Rate Loans will be adjusted automatically as to all LIBO
Rate Loans then outstanding as of the effective date of any
change in the LIBOR Reserve Percentage.
"LIBOR Office" means, relative to any Lender, the office of
such Lender designated as such on Schedule II hereto or
designated in the Lender Assignment Agreement pursuant to which
such Lender became a Lender hereunder or such other office of a
Lender as shall be so designated from time to time by notice from
such Lender to the Borrower and the Administrative Agent, which
shall be making or maintaining LIBO Rate Loans of such Lender
hereunder.
"LIBOR Reserve Percentage" means, relative to any Interest
Period for LIBO Rate Loans, the percentage (expressed as a
decimal, rounded upward to the next 1/100th of 1%) in effect on
such day (whether or not applicable to any Lender) under
regulations issued from time to time by the F.R.S. Board for
determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the F.R.S. Board).
"Lien" means any security interest, mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or otherwise), charge against or interest in property,
or any filing or recording of any instrument or document in
respect of the foregoing (other than liens arising from the
filing of "precautionary" UCC financing statements in connection
with obligations under leases that are not Capitalized Lease
Liabilities to the extent that such financing statements relate
solely to the property subject to such lease obligations and
where the debtor named on such financing statements is not the
legal or beneficial owner of the described property), to secure
payment of a debt or performance of an obligation or any other
priority or preferential treatment of any kind or nature
whatsoever that has the practical effect of creating a security
interest in property.
"Loan Documents" means, collectively, the Term Loan
Documents and the Revolving Credit Documents.
"Loans" means, collectively, the Term Loans and the
Revolving Credit Loans.
"Management" means, with respect to any Person, the
officers, directors and other employees, or former officers,
directors and other employees, of such Person.
"Management Agreements" means, collectively, the three
separate Financial Advisory Agreements, each dated as of August
16, 1993, between the Borrower (on the one hand) and Haas Wheat,
Keystone and Penobscot-MB Partners, an affiliate of Acadia (on
the other hand), respectively, as the same have been or may be
amended, supplemented or otherwise modified from time to time in
accordance with the provisions of Section 7.2.13.
"Marketable Securities" means, in connection with any Asset
Sale, any readily marketable equity or debt securities that are
received by the Borrower or any Subsidiary of the Borrower as
consideration for such Asset Sale and are (a) traded on the New
York Stock Exchange, the American Stock Exchange or the National
Association of Securities Dealers Automated Quotation National
Market System and (b) issued by a corporation that has
outstanding one or more issues of debt or preferred stock
securities that are rated investment grade by Moody's or Standard
& Poor's; provided, that in no event shall the excess of the
aggregate amount of securities of any one such corporation held
immediately following the consummation of any Asset Sale by the
Borrower and its Subsidiaries over 10 times the average daily
trading volume of such securities during the 20 trading days
immediately preceding the consummation of such Asset Sale be
deemed Marketable Securities.
"Material Adverse Effect" means a material adverse effect on
(a) the business, operations, assets, property or condition
(financial or otherwise) or prospects of the Borrower and its
Subsidiaries or the Revolving Credit Borrowers and their
respective Subsidiaries, in each case taken as a whole, (b) the
ability of the Borrower to perform its obligations under any Term
Loan Document to which it is a party, (c) the ability of the
Obligors (taken as a whole) to perform their respective
obligations under the Loan Documents, (d) the validity or
enforceability of this Agreement, any of the Term Notes or any
other Term Loan Document against any Obligor which is a party
hereto or thereto or the rights or remedies of the Arranger, the
Agents, the Collateral Agent or the Term Loan Lenders hereunder
or thereunder or (e) the validity or enforceability of the
Revolving Credit Agreement any of the Revolving Credit Notes or
any other Revolving Credit Document against any Revolving Credit
Obligor which is a party thereto or the rights or remedies of the
Arranger, the Agents, the Collateral Agent or the Revolving
Credit Lenders thereunder.
"Measurement Period" means, at any date, the period of four
consecutive Fiscal Quarters ended most recently prior to such
date.
"Metz" means Metz Baking Company, an Iowa corporation.
"Moody's" means Moody's Investors Service, Inc.
"Mortgage" means, collectively, each Mortgage or Deed of
Trust executed and delivered pursuant to the terms of this
Agreement, including Section 5.1.11 or Section 7.1.7,
substantially in the form of Exhibit J hereto, as amended,
supplemented, restated or otherwise modified from time to time in
accordance with its terms.
"Mother's" means Mother's Cake & Cookie Co., a California
corporation.
"Net Cash Proceeds" means (a) when used in respect of any
Asset Sale, the aggregate cash proceeds received by the Parent,
the Borrower or any Subsidiary of the Borrower in respect of such
Asset Sale (and any cash payments received in respect of
promissory notes or other non-cash consideration delivered to the
Parent, the Borrower or any Subsidiary of the Borrower in respect
of an Asset Sale), less (without duplication) (i) all legal,
title, recording and transfer tax expenses reasonably
attributable to such Asset Sale, (ii) the reasonable fees and
expenses (including legal fees, consulting fees, accounting fees
and brokers' and underwriters' commissions paid to third parties
which are not Affiliates or Subsidiaries of the Borrower)
incurred in connection with such Asset Sale, (iii) all federal,
state, local and foreign taxes reasonably attributable to such
Asset Sale, (iv) the aggregate amount of reserves required in the
Borrower's reasonable judgment to be maintained on the Borrower's
books in order to pay contingent liabilities incurred in respect
of such Asset Sale and (v) amounts required to be applied to the
repayment of Indebtedness secured by a Lien on the asset or
assets the subject of such Asset Sale; provided that amounts
deducted from the aggregate cash proceeds of any Asset Sale
pursuant to clause (iv) and not actually paid in liquidation of
such contingent liabilities shall be deemed to be Net Cash
Proceeds of such Asset Sale and shall be subject to mandatory
prepayment provisions of clause (c) of Section 3.1.1; and (b)
when used in respect of any incurrence of Indebtedness by, or the
issuance of any Capital Stock (or other equity interests) of, the
Parent, the Borrower or any Subsidiary of the Parent, the
Borrower or any other Subsidiary, the aggregate cash proceeds
received by the Parent, the Borrower or the relevant Subsidiary
of the Borrower from such incurrence or issuance (and any cash
payments received in respect of promissory notes or other non-
cash consideration delivered to the Parent, the Borrower or any
Subsidiary of the Borrower in respect of any such incurrence or
issuance), less (without duplication) the reasonable fees and
expenses (including legal fees, consulting fees, accounting fees
and brokers' and underwriters' commissions paid to third parties
which are not Affiliates or Subsidiaries of the Borrower)
incurred in connection with such incurrence or issuance.
"1993 Senior Note Documents" means, collectively, the
Securities Purchase Agreement, the 1993 Senior Notes and the 1993
Senior Note Indenture.
"1993 Senior Note Indenture" means the Indenture, dated as
of August 16, 1993, between the 1993 Senior Note Indenture
Trustee and the Borrower, as heretofore amended, pursuant to
which the 1993 Senior Notes were issued, as the same may be
amended, supplemented or otherwise modified from time to time in
accordance with Section 7.2.13.
"1993 Senior Note Indenture Trustee" means United States
Trust Company of New York in its capacity as trustee for the
holders of the 1993 Senior Notes under the 1993 Senior Note
Indenture, and any successor thereto as trustee under the 1993
Senior Note Indenture.
"1993 Senior Notes" means the 10-1/4% Series B Senior Notes
due 2001 of the Borrower, as the same may be amended,
supplemented or otherwise modified from time to time in
accordance with Section 7.2.13.
"1995 Senior Note Documents" means, collectively, the 1995
Senior Notes Purchase Agreement, the 1995 Senior Notes and the
1995 Senior Note Indenture.
"1995 Senior Note Indenture" means the Indenture, dated as
of July 17, 1995, between the 1995 Senior Note Indenture Trustee
and the Borrower pursuant to which the 1995 Senior Notes were
issued, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with Section 7.2.13.
"1995 Senior Note Indenture Trustee" means United States
Trust Company of New York in its capacity as trustee for the
holders of the 1995 Senior Notes under the 1995 Senior Note
Indenture, and any successor thereto as trustee under the 1995
Senior Note Indenture.
"1995 Senior Notes" means the 11-1/8% Series B Senior Notes
due 2002 of the Borrower, as the same may be amended,
supplemented or otherwise modified from time to time in
accordance with Section 7.2.13.
"1995 Senior Notes Purchase Agreement" means the Purchase
Agreement, dated as of July 17, 1995, among the Borrower and the
initial purchasers of the 1995 Senior Notes, as the same may be
amended, supplemented or otherwise modified from time to time in
accordance with Section 7.2.13.
"Non-U.S. Subsidiary" means a Subsidiary of the Borrower
that is not a U.S. Subsidiary.
"Non-U.S. Term Loan Lender" means any Term Loan Lender that
is not a U.S. Person.
"Note" means, collectively, the Term Notes and the Revolving
Credit Notes.
"Obligations" means, collectively, the Term Loan Obligations
and the Revolving Credit Obligations.
"Obligor" means, as the context may require, the Borrower,
the Parent, the Special Purpose Subsidiary, each Subsidiary of
the Borrower (other than the Receivables Subsidiary and any
Inactive Subsidiary) and any other Person (other than any Agent,
the Collateral Agent, the Documentation Agent, the Arranger or
any Lender) to the extent such Person is obligated under this
Agreement or any other Loan Document.
"Operating Company Leverage Ratio" means, at the end of any
Fiscal Quarter, the ratio of
(a) Consolidated Total Senior Secured Debt of the
Revolving Credit Borrowers and their respective Subsidiaries
outstanding at such time;
to
(b) Consolidated EBITDA of the Revolving Credit
Borrowers and their respective Subsidiaries for the period of
four consecutive Fiscal Quarters most recently ended on or prior
to such date;
provided that if, during any such period, any Revolving Credit
Borrower or any of its Subsidiaries shall have made one or more
Acquisitions, the Operating Company Leverage Ratio for such
period shall be calculated on a Pro Forma Basis as if each such
Acquisition had been made on the first day of such period.
"Operating Subsidiaries" means each of the direct and
indirect subsidiaries of the Borrower listed on Item C of
Schedule III hereto and each other Person which becomes a
Subsidiary of the Borrower (other than any Subsidiary of the
Borrower that is designated as a Holding Company) after the
Closing Date. Except as set forth on Item C of Schedule III
hereto, each Operating Subsidiary is, or will be, a wholly owned,
direct or indirect, Subsidiary of the Borrower.
"Organic Document" means, relative to any Obligor, as
applicable, its certificate of incorporation, by-laws,
certificate of partnership, partnership agreement, certificate of
formation, limited liability agreement and all shareholder
agreements, voting trusts and similar arrangements applicable to
any of such Obligor's partnership interests, limited liability
company interests or authorized shares of capital stock.
"Other Bakeries" is defined in clause (c) of Section 7.2.12.
"Parent" means Specialty Foods Acquisition Corporation, a
Delaware corporation, and the owner of all of the Capital Stock
of the Borrower.
"Parent Agreement" means the Agreement to be executed and
delivered by the Parent in favor of the Collateral Agent,
substantially in the form of Exhibit H hereto, as the same may be
amended, supplemented or otherwise modified from time to time.
"Parent Common Stock" means the common stock, par value
$0.01 per share, of the Parent.
"Parent Debenture Units" means, collectively, the debenture
units of the Parent sold pursuant to the Securities Purchase
Agreement, each of which originally consisted of one $1,000
principal amount of Parent Senior Debentures and 15 shares of
Parent Common Stock.
"Parent Securities Purchase Agreement" means the Purchase
Agreement, dated as of August 16, 1993, among the Parent and the
Investors, as the same has been or may be amended, supplemented
or otherwise modified from time to time in accordance with
Section 7.2.13.
"Parent Senior Debenture Documents" means, collectively, the
Parent Pledge Agreement, the Parent Senior Debentures and the
Parent Senior Debenture Indenture.
"Parent Senior Debenture Indenture" means the Indenture,
dated as of August 16, 1993, between the Parent Senior Debenture
Trustee and the Parent, as amended, pursuant to which the Parent
Senior Debentures were issued, as the same may be amended,
supplemented or otherwise modified from time to time in
accordance with Section 7.2.13.
"Parent Senior Debenture Trustee" means United States Trust
Company of New York in its capacity as trustee for the holders of
the Parent Senior Debentures under the Parent Senior Debenture
Indenture, and any successor thereto as trustee under the Parent
Senior Debenture Indenture.
"Parent Senior Debentures" means the 13% Senior Secured
Discount Debentures due 2005 of the Parent, as the same may be
amended, supplemented or otherwise modified from time to time in
accordance with Section 7.2.13.
"Parent Stockholders Agreements" means, collectively, (i)
the Stockholders Agreement, dated as of August 16, 1993, among
the Investors and the Parent and, (ii) the Stockholders
Agreement, dated as of August 16, 1993, between the Parent and
the holders of the Parent Debenture Units, in each case as the
same may be amended, supplemented or otherwise modified from time
to time.
"Parent Pledge Agreement" means the Pledge Agreement, dated
as of August 16, 1993, executed and delivered by the Parent in
favor of the Parent Senior Debenture Trustee, as the same may be
amended, supplemented or otherwise modified from time to time in
accordance with Section 7.2.13.
"Parent Subordinated Debenture Documents" means,
collectively, the reference to the Parent Securities Purchase
Agreement and the Parent Subordinated Debentures.
"Parent Subordinated Debentures" means the 11% Senior
Subordinated Discount Debentures due 2006 of the Parent, as the
same may be amended, supplemented or otherwise modified from time
to time in accordance with Section 7.2.13.
"Participant" is defined in Section 10.11.2.
"PBGC" means the Pension Benefit Guaranty Corporation and
any entity succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is
defined in Section 3(2) of ERISA, which is subject to Title IV of
ERISA (other than a multiemployer plan as defined in Section
4001(a)(3) of ERISA), and to which the Borrower or any of its
Subsidiaries or any corporation, trade or business that is, along
with the Borrower or any of its Subsidiaries, a member of a
Controlled Group, may have liability, including any liability by
reason of having been a substantial employer within the meaning
of Section 4063 of ERISA at any time during the preceding five
years, or by reason of being deemed to be a contributing sponsor
under Section 4069 of ERISA.
"Perfection Certificate" means the Perfection Certificate
executed and delivered by an Authorized Officer of the Borrower
pursuant to Section 5.1.12 or 7.1.7, substantially in the form of
Exhibit N hereto, as amended, supplemented, amended and restated
or otherwise modified from time to time.
"Person" means any natural person, corporation, limited
liability company, partnership, joint venture, joint stock
company, firm, association, trust or unincorporated organization,
government, governmental agency, court or any other legal entity,
whether acting in an individual, fiduciary or other capacity.
"Plan" means any Pension Plan or Welfare Plan.
"Pledge Agreements" mean, collectively, the Borrower Pledge
Agreement and the Revolving Credit Pledge Agreement.
"Pooling Agreement" means the SFC Master Trust Pooling
Agreement, dated as of November 16, 1994 by and among the
Receivables Subsidiary, the Borrower, in its capacity as Master
Servicer, and The Chase Manhattan Bank (formerly doing business
as Chemical Bank), not in its individual capacity but solely as
trustee for the SFC Master Trust created thereunder, and, from
and after the date on which a Replacement Receivables Purchase
Facility is effective, the pooling agreement executed and
delivered in connection therewith, in each case as amended,
supplemented or otherwise modified from time to time.
"Primary Investors" means, collectively, the Principals and
their respective Related Parties.
"Principals" means, collectively, Haas Wheat, Acadia and
Keystone.
"Pro Forma Adjustment" means, in connection with any
acquisition or sale of a Person or any of its businesses or
assets, (i) any related incurrence, repayment or refinancing of
Indebtedness and the application of proceeds therefrom, (ii)
projected, quantifiable, tangible changes in operating results
resulting from such acquisition or sale (including, without
limitation, cost savings resulting from head count reductions,
plant consolidations, the rationalization of distribution routes
and the like) or (iii) other similar and related transactions,
with each such acquisition, sale, event, change or other
transaction described in clauses (i), (ii) or (iii) above to be
calculated as if realized as of the first day of any such
applicable period of calculation.
"Pro Forma Basis" means, in respect of determining the
Leverage Ratio, the Senior Secured Leverage Ratio, the Operating
Company Leverage Ratio and the Interest Coverage Ratio and the
Consolidated EBITDA financial covenant contained in clause (e) of
Section 7.2.5, for any applicable period of calculation, that pro
forma effect shall be given to any acquisition or sale of a
Person or any of its businesses or assets, and, in connection
with any such acquisition or sale, pro forma effect shall also be
given to any Pro Forma Adjustment; provided, however, that such
Pro Forma Adjustment shall be calculated in accordance with (x)
Article 11 of Regulation S-X ("Regulation S-X") promulgated under
the Securities Act of 1933, as amended, and the Securities
Exchange Act of 1934, as amended, or (y) GAAP. Any term or
provision hereof to the contrary notwithstanding, before any Pro
Forma Adjustment shall be given effect for purposes of this
definition, the Borrower shall deliver to the Agents a
certificate executed by its chief financial or accounting
Authorized Officer certifying that such Pro Forma Adjustment has
been calculated in accordance with Regulation S-X or GAAP, as the
case may be, and shall include a calculation of such Pro Forma
Adjustment prepared in reasonable detail, together with
appropriate back up; provided, that, in the case of any Pro Forma
Adjustment which aggregates in excess of $5,000,000, the Borrower
shall cause to be delivered to the Agents a certificate from an
Independent Auditor certifying that with respect to such Pro
Forma Adjustment, (i) such Independent Auditor has performed the
Agreed-Upon Procedures and (ii) subject to usual and customary
exceptions and qualifications, in the course of performing such
Agreed-Upon Procedures nothing came to the attention of such
Independent Auditor which caused it to believe that management's
assumptions do not provide a reasonable basis for presenting the
significant effects attributable to the transaction, that the
related Pro Forma Adjustments do not give appropriate effect to
those assumptions, or that the pro forma financial statements do
not reflect the proper application of those Pro Forma Adjustments
to the historical financial statements. Furthermore, in
calculating the Interest Coverage Ratio, (i) interest on
outstanding Indebtedness determined on a fluctuating basis as of
the determination date and which will continue to be so
determined thereafter shall be deemed to have accrued at a fixed
rate per annum equal to the rate of interest on such Indebtedness
in effect on the determination date; (ii) if interest on any
Indebtedness actually incurred on the determination date may
optionally be determined at an interest rate based upon a factor
of a prime or similar rate, a eurocurrency interbank offered
rate, or other rates, then the interest rate in effect on the
determination date will be deemed to have been in effect during
the relevant period; and (iii) notwithstanding clause (i) above,
interest on Indebtedness determined on a fluctuating basis, to
the extent such interest is covered by agreements relating to
interest rate swaps or similar interest rate protection Hedging
Obligations, shall be deemed to accrue at the rate per annum
resulting after giving effect to the operation of such
agreements.
"Quarterly Payment Date" means the last day of each January,
April, July and October, or, if any such day is not a Business
Day, the next succeeding Business Day, commencing with July,
1998.
"Rate Protection Agreement" means, collectively, any
agreement in respect of Hedging Obligations entered into by the
Borrower or any of its Subsidiaries pursuant to the terms of this
Agreement or the Revolving Credit Agreement under which the
counterparty to such agreement is (or at the time such Rate
Protection Agreement was entered into, was) a Lender or an
Affiliate of a Lender.
"Receivables" means accounts receivable, including
"Receivables" as defined in the Pooling Agreement.
"Receivables Parent Note" means the "Parent Note", as such
term is defined in Section 8.3 of the Receivables Sale Agreement,
and from and after the date on which a Replacement Receivables
Purchase Facility is effective, the replacement note executed and
delivered in connection therewith, in each case as amended,
supplemented or otherwise modified from time to time.
"Receivables Purchase Documents" means, collectively, the
Pooling Agreement, each Supplement to the Pooling Agreement, the
Servicing Agreement, the Receivables Sale Agreement, the
Receivables Parent Note, the Receivables Subordinated Note, the
Insurance and Reimbursement Agreement and any related instruments
and agreements executed in connection therewith; provided that,
on and after the date, if any, on which the Receivables
Subsidiary shall have replaced or refinanced, in whole or in
part, the purchase facility arranged pursuant to the Receivables
Purchase Documents existing on the date hereof with a separate
facility in which ownership interests in, or notes, commercial
paper, certificates or other debt instruments secured by, the
Receivables shall be sold in one or more public offerings,
private placements or otherwise (such replacement facility, the
"Replacement Receivables Purchase Facility"), the terms and
conditions of which Replacement Receivables Purchase Facility (i)
shall be consented to by the Required Term Loan Lenders and the
Required Revolving Credit Lenders (which consent shall not be
unreasonably withheld and shall be deemed to be given if the
Borrower has not received an objection thereto in writing from
any Lender within 10 days of receipt by such Lender of a
description of the proposed Replacement Receivables Purchase
Facility) or (ii) shall contain terms (including as to initial
amortization) no less favorable to the Obligors party thereto in
all material respects than those contained in the then current
Receivables Purchase Documents (without regard to one-time
charges and fees). As used herein, the term "Receivables
Purchase Documents" shall be deemed to refer to and otherwise
include each of the operative agreements, instruments and related
documents entered into by, or delivered by or on behalf of, the
Receivables Subsidiary in connection with the creation of such
Replacement Receivables Purchase Facility.
"Receivables Sale Agreement" means the Amended and Restated
Receivables Sale Agreement, dated as of November 16, 1994, among
the Receivables Subsidiary, as buyer of Receivables thereunder,
the Borrower, as Master Servicer, and the Receivables Selling
Subsidiaries, as sellers of Receivables thereunder, and, from and
after the date on which a Replacement Receivables Purchase
Facility is effective, the receivables sale agreement executed
and delivered in connection therewith, in each case as amended,
supplemented or otherwise modified from time to time.
"Receivables Selling Subsidiaries" means each of the
Subsidiaries of the Borrower from time to time parties to the
Receivables Sale Agreement as a seller of Receivables thereunder.
"Receivables Subsidiary" means Specialty Foods Finance
Corporation, a Delaware corporation and a wholly-owned Subsidiary
of the Borrower, created to purchase and finance receivables of
the Receivables Selling Subsidiaries, or any other Subsidiary of
the Borrower designated as such by the Borrower, (a) that has
total assets at the time of such designation with a book value of
$100,000 or less and (b) with respect to which neither the
Borrower nor any other Subsidiary of the Borrower has any
obligation (i) to subscribe for additional shares of Capital
Stock or other equity interests therein (other than to finance
the purchase of additional accounts receivable of the Borrower
and its Subsidiaries) or (ii) to maintain or preserve such
Receivables Subsidiary's financial condition or to cause it to
achieve certain levels of operating results.
"Refinancing" means, collectively, (x) the refinancing and
replacement of the Existing Term Loan Agreement pursuant to this
Agreement and (y) the refinancing and replacement of the Existing
Revolving Credit Agreement pursuant to the Revolving Credit
Agreement, in each case including payment of related costs and
expenses.
"Register" is defined in clause (b)(i) of Section 2.6.
"Regulatory Authority" means any national, state or local
government, any political subdivision or any governmental, quasi-
governmental, judicial, public or statutory instrumentality,
authority, body or entity, other regulatory bureau, authority,
body or entity, foreign or domestic, including the Federal
Deposit Insurance Corporation, the Comptroller of the Currency,
the F.R.S. Board, any central bank or any comparable authority.
"Reimbursement Obligation" is defined in the Revolving
Credit Agreement.
"Related Fund" means, with respect to any Term Loan Lender
that is a fund that invests in loans, any other fund that invests
in loans and is managed by the same investment advisor or
investment manager as such Term Loan Lender.
"Related Party" means with respect to any Principal (a) any
controlling stockholder or partner, a direct or indirect 80% (or
more) owned Subsidiary, or spouse or immediate family member (in
the case of an individual) of such Principal, (b) any trust,
corporation, partnership or other entity, the controlling
beneficiaries, stockholders, partners or owners of which,
directly or indirectly, consist of such Principal and/ or such
other Persons referred to in the immediately preceding clause (a)
and/or in the succeeding clauses (d) and/or (e), (c) any partner
or stockholder of any Principal as of the Closing Date who
acquires any assets or voting stock of the Borrower or the Parent
pursuant to a general distribution by such Principal to each of
its partners or stockholders, (d) any officer or director of such
Principal or (e) any officer or director of Oak Hill Partners,
Inc. on the Closing Date.
"Related Property" is defined in the Pooling Agreement and
any similar property sold pursuant to any subsequent Pooling
Agreement.
"Release" means a "release", as such term is defined in
CERCLA.
"Replacement Notice" is defined in clause (a) of Section
4.10.
"Required Revolving Credit Lenders" is defined in the
Revolving Credit Agreement.
"Required Term Loan Lenders" means, at any time, (i) prior
to the Closing Date hereunder, Term Loan Lenders having more than
50% of the sum of the Term Loan Commitments and (ii) on and after
the Closing Date, Term Loan Lenders holding more than 50% of the
principal amount of the Term Loans then outstanding.
"Resource Conservation and Recovery Act" means the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq.,
as amended.
"Revolving Credit Agreement" means the Revolving Credit
Agreement, dated as of the date hereof, among the Revolving
Credit Borrowers, the Revolving Credit Lenders, the Agents and
the Collateral Agent, as the same may be amended, supplemented or
otherwise modified from time to time.
"Revolving Credit Borrowers" means each of the Subsidiaries
of the Borrower party to the Revolving Credit Agreement.
"Revolving Credit Borrowers Pledge Agreement" is defined in
the Revolving Credit Agreement.
"Revolving Credit Borrowers Security Agreement" is defined
in the Revolving Credit Agreement.
"Revolving Credit Copyright Security Agreements" means the
Copyright Security Agreements executed and delivered by each
Subsidiary (other than Foreign Subsidiaries, Inactive
Subsidiaries and Trocano) owning assets of the type included in
the "Collateral" described therein in favor of the Collateral
Agent, substantially in the form of Exhibit A to a Revolving
Credit Security Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.
"Revolving Credit Documents" means, collectively, the
Revolving Credit Agreement, the Revolving Credit Notes, each Rate
Protection Agreement under which the counterparty to such
agreement is (or at the time such Rate Protection Agreement was
entered into, was ) a Revolving Credit Lender or an Affiliate of
a Revolving Credit Lender relating to Hedging Obligations of any
Revolving Credit Borrower or any of its Subsidiaries, the SFC
Guaranty, the Parent Agreement, the Subsidiary Guaranty, the
Asset Sale Proceeds Account Agreement, the Revolving Credit
Letters of Credit, each Borrowing Request, each Issuance Request,
each Revolving Credit Security Documents and each other
agreement, document or instrument delivered in connection with
this Agreement or any other Revolving Credit Document, whether or
not specifically mentioned herein or therein.
"Revolving Credit Event of Default" means an "Event of
Default" under and as defined in the Revolving Credit Agreement.
"Revolving Credit Lenders" means each of the financial
institutions from time to time party to the Revolving Credit
Agreement.
"Revolving Credit Letters of Credit" means each of the
letters of credit issued from time to time by the Issuer for the
account of the respective Revolving Credit Borrowers pursuant to
the Revolving Credit Agreement.
"Revolving Credit Loan" is defined in the Revolving Credit
Agreement.
"Revolving Credit Mortgages" is defined in the Revolving
Credit Agreement.
"Revolving Credit Note" is defined in the Revolving Credit
Agreement.
"Revolving Credit Obligations" means all obligations
(monetary or otherwise) of any Revolving Credit Borrower and each
other Obligor arising under on in connection with the Revolving
Credit Agreement, the Revolving Credit Notes, each Revolving
Credit Letter of Credit, each other Revolving Credit Documents or
any other document made, delivered or given in connection
therewith.
"Revolving Credit Patent Security Agreements" means the
Patent Security Agreements executed and delivered by each
Subsidiary (other than the Foreign Subsidiaries, Inactive
Subsidiaries and Trocano) owning assets of the type included in
the "Collateral" described therein in favor of the Collateral
Agent, substantially in the form of Exhibit B to a Revolving
Credit Security Agreement, as the same may be amended,
supplemented or otherwise modified form time to time.
"Revolving Credit Pledge Agreement" means, as the context
may require, the Revolving Credit Borrowers Pledge Agreement
executed and delivered by each Revolving Credit Borrower in favor
of the Collateral Agent or the Subsidiary Pledge Agreement,
executed and delivered by each Subsidiary Pledgor in favor of the
Collateral Agent, substantially in the form of Exhibits J-1 and J-
2, respectively, to the Revolving Credit Agreement, as the same
may be amended, supplemented or otherwise modified from time to
time.
"Revolving Credit Security Agreement" means, as the context
may require, the Revolving Credit Borrowers Security Agreement
executed and delivered by each Revolving Credit Borrower in favor
of the Collateral Agent or the Subsidiary Security Agreement,
executed and delivered by each Subsidiary (other than the Foreign
Subsidiaries, Inactive Subsidiaries and Trocano) in favor of the
Collateral Agent, substantially in the form of Exhibits K-1 and K-
2, respectively, to the Revolving Credit Agreement, as the same
may be amended, supplemented or otherwise modified from time to
time.
"Revolving Credit Security Documents" means, collectively,
the Revolving Credit Pledge Agreements, the Revolving Credit
Security Agreements, the Revolving Credit Copyright Security
Agreements, the Revolving Credit Patent Security Agreements, the
Revolving Credit Security Agreements, the Revolving Credit Pledge
Agreement, the Revolving Credit Trademark Security Agreements and
the Revolving Credit Mortgages, and, from and after the execution
and delivery thereof, all other security documents executed and
delivered to the Collateral Agent granting a Lien on any asset or
assets of any Person to secure the Revolving Credit Obligations
or to secure any guarantee of any such Revolving Credit
Obligations.
"Revolving Credit Trademark Security Agreements" means the
Trademark Security Agreements executed and delivered by each
Subsidiary (other than the Foreign Subsidiaries, Inactive
Subsidiaries and Trocano) owning assets of the type included in
the "Collateral" described therein in favor of the Collateral
Agent, substantially in the form of Exhibit C to the Revolving
Credit Security Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.
"Revolving I Credit Loans" is defined in the Revolving
Credit Agreement.
"Revolving II Credit Loans" is defined in the Revolving
Credit Agreement.
"Revolving I Credit Commitment Amount" is defined in the
Revolving Credit Agreement.
"Revolving II Credit Commitment Amount" is defined in the
Revolving Credit Agreement.
"S&P" means Standard & Poor's Rating Services.
"SEC" means the Securities and Exchange Commission.
"Second-Tier Subsidiaries" means each of the Subsidiaries of
the First-Tier Holding Companies listed on Item B of Schedule III
hereto and any other direct Subsidiary of any First-Tier Holding
Company from time to time acquired or created in accordance with
clause (c) of Section 7.1.7.
"Securities" means any limited, general or other partnership
interest, or any stock, shares, voting trust certificates, bonds,
debentures, notes or other equity interests or evidences of
indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or any certificates of interest, shares, or
participations in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to,
purchase or acquire any of the foregoing, but shall not include
any evidence of the Obligations.
"Securities Purchase Agreement" means the Purchase
Agreement, dated as of August 16, 1993, among the Borrower, the
Parent and the respective purchasers of the 1993 Senior Notes,
the Subordinated Notes and the Parent Debenture Units, as the
same may be amended, supplemented or otherwise modified from time
to time in accordance with Section 7.2.13.
"Security Documents" means, collectively, the Revolving
Credit Security Documents and the Term Loan Security Documents.
"Senior Secured Leverage Ratio" means, at the end of any
Fiscal Quarter, the ratio of
(a) Consolidated Total Senior Secured Debt of the
Borrower and its Subsidiaries outstanding at such time;
to
(b) Consolidated EBITDA of the Borrower and its
Subsidiaries for the period of four consecutive Fiscal Quarters
most recently ended on or prior to such date;
provided that if, during any such period, the Borrower or any of
its Subsidiaries shall have made one or more Acquisitions, the
Senior Secured Leverage Ratio for such period shall be calculated
on a Pro Forma Basis as if each such Acquisition had been made on
the first day of such period.
"SFC Guaranty" is defined in the Revolving Credit Agreement.
"Sold Receivables" means, collectively, the Receivables and
the other Related Property of each Subsidiary from time to time
party to the Receivables Sale Agreement.
"Solvent" means, with respect to any Person and its
Subsidiaries on a particular date, that on such date (a) the fair
value of the property of such Person and its Subsidiaries on a
consolidated basis is greater than the total amount of
liabilities, including contingent liabilities, of such Person and
its Subsidiaries on a consolidated basis, (b) the present fair
salable value of the assets of such Person and its Subsidiaries
on a consolidated basis is not less than the amount that will be
required to pay the probable liability of such Person and its
Subsidiaries on a consolidated basis on its debts as they become
absolute and matured, (c) such Person does not intend to, and
does not believe that it or its Subsidiaries will, incur debts or
liabilities beyond the ability of such Person and its
Subsidiaries to pay as such debts and liabilities mature, and (d)
such Person and its Subsidiaries on a consolidated basis is not
engaged in business or a transaction, and such Person and its
Subsidiaries on a consolidated basis is not about to engage in
business or a transaction, for which the property of such Person
and its Subsidiaries on a consolidated basis would constitute an
unreasonably small capital. The amount of Guarantee Obligations
at any time shall be computed as the amount that, in light of all
the facts and circumstances existing at such time, can reasonably
be expected to become an actual or matured liability. For
purposes of this definition, (i) "fair value" means the amount at
which the aggregate assets of any entity would change hands
between a willing buyer and a willing seller, within a
commercially reasonable period of time, each having reasonable
knowledge of the relevant facts, neither being under any
compulsion to act, with equity to both and (ii) "present fair
saleable value" means the aggregate amount that may be realized
by an independent willing seller from an independent willing
buyer if an entity's assets are sold as an entity with reasonable
promptness in an arm's-length transaction under present
conditions for the sale of assets as an entity of the business
comprising such entity.
"Special Purpose Subsidiary" means the special purpose,
bankruptcy-remote Subsidiary of the Borrower that, from time to
time upon receipt thereof, deposits into the Asset Sale Proceeds
Account all Asset Sale Proceeds and other cash contributed by the
Borrower or any of its Subsidiaries.
"Stated Maturity Date" means, in the case of all Term Loans,
January 31, 2000 (or if such day is not a Business Day, the first
Business Day following such day).
"Stella Sale" is defined in clause (d) of Section 3.1.1.
"Subordinated Note Documents" means, collectively, the
Securities Purchase Agreement, the Subordinated Notes and the
Subordinated Note Indenture.
"Subordinated Note Indenture" means the Indenture, dated as
of August 16, 1993, between the Subordinated Note Indenture
Trustee and the Borrower pursuant to which the Subordinated Notes
were issued, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with Section
7.2.13.
"Subordinated Note Indenture Trustee" means United States
Trust Company of New York in its capacity as trustee for the
holders of the Subordinated Notes under the Subordinated Note
Indenture, and any successor thereto as trustee under the
Subordinated Note Indenture.
"Subordinated Notes" means the 11-1/4% Series B Senior
Subordinated Notes due 2003 of the Borrower, as the same may be
amended, supplemented or otherwise modified from time to time in
accordance with Section 7.2.13.
"Subsidiary" means, with respect to any Person, any
corporation, partnership or other business entity of which more
than 50% of the outstanding capital stock (or other ownership
interest) having ordinary voting power to elect a majority of the
board of directors, managers or other voting members of the
governing body of such entity (irrespective of whether at the
time capital stock (or other ownership interest) of any other
class or classes of such entity shall or might have voting power
upon the occurrence of any contingency) is at the time directly
or indirectly owned by such Person, by such Person and one or
more other Subsidiaries of such Person, or by one or more other
Subsidiaries of such Person. Unless the context otherwise
specifically requires, the term "Subsidiary" shall be a reference
to a Subsidiary of the Borrower.
"Subsidiary Guarantor" means any Subsidiary of the Borrower
(other than Inactive Subsidiaries and the Receivables Subsidiary)
which, at the time of determination, is a guarantor under the
Subsidiary Guaranty.
"Subsidiary Guaranty" is defined in the Revolving Credit
Agreement.
"Subsidiary Pledge Agreement" is defined in the Revolving
Credit Agreement.
"Subsidiary Pledgor" means each Subsidiary of the Borrower
which owns any Capital Stock of any other Subsidiary of the
Borrower (other than the Capital Stock of a Foreign Subsidiary or
Trocano) or other Person.
"Subsidiary Security Agreement" is defined in the Revolving
Credit Agreement.
"Syndication Agent" is defined in the preamble.
"Tax Sharing Agreements" means, collectively, (i) the Tax
Sharing Agreement, dated as of August 16, 1993, among the Parent
and the Borrower, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with Section
7.2.13 and (ii) the Tax Sharing Agreement, dated as of August 16,
1993 among the Parent, the Borrower and its Subsidiaries, in each
case as the same may be amended, supplemented or otherwise
modified from time to time in accordance with Section 7.2.13.
"Taxes" means any present or future income, excise, stamp or
franchise taxes and other taxes, fees, duties, withholdings or
other charges of any nature whatsoever imposed by (i) the United
States or any taxing authority or political subdivision thereof
or (ii) any other jurisdiction as a result of a connection
between the Borrower and such taxing jurisdiction, and in each
case any interest, additions to tax, penalties or additional
amounts payable with respect thereto.
"Term Loan" is defined in Section 2.1.
"Term Loan Commitment" is defined in Section 2.1.
"Term Loan Commitment Amount" means $173,750,000.
"Term Loan Commitment Termination Date" means the earliest
of
(a) March 31, 1998, if the Term Loans have not been
made on or prior to such date;
(b) the Closing Date (immediately after the making of
the Term Loans on such date); and
(c) the date on which any Term Loan Commitment
Termination Event occurs.
Upon the occurrence of any event described in clauses (b) or (c),
the Term Loan Commitment shall terminate automatically and
without any further action.
"Term Loan Commitment Termination Event" means
(a) the occurrence of any Event of Default described
in clauses (a) through (d) of Section 8.1.9 with respect to the
Borrower; or
(b) the occurrence and continuance of any other Event
of Default and either
(i) the declaration of the Term Loans to be due
and payable pursuant to Section 8.3, or
(ii) the giving of notice by the Administrative
Agent, acting at the direction of the Required Term Loan Lenders,
to the Borrower that the Term Loan Commitments have been
terminated.
"Term Loan Documents" means this Agreement, the Term Notes,
each Rate Protection Agreement under which the counterparty to
such agreement is (or at the time such Rate Protection Agreement
was entered into, was) a Term Loan Lender or an Affiliate of a
Term Loan Lender relating to Hedging Obligations of the Borrower
or any of its Subsidiaries, the Parent Agreement and the Term
Loan Security Documents and each other agreement, document or
instrument delivered in connection with this Agreement or any
other Term Loan Document, whether or not specifically mentioned
herein or therein.
"Term Loan Lenders" is defined in the preamble.
"Term Loan Obligations" means all obligations (monetary or
otherwise) of the Borrower and each other Obligor arising under
or in connection with this Agreement, the Term Notes, any Rate
Protection Agreement, each other Term Loan Document or any other
document made, delivered or given in connection therewith.
"Term Loan Percentage" means, relative to any Term Loan
Lender, the applicable percentage relating to the Term Loan
Commitment, as set forth in Schedule II hereto or set forth in
the Lender Assignment Agreement, as such percentage may be
adjusted from time to time pursuant to Lender Assignment
Agreement(s) executed by such Term Loan Lender and its Assignee
Term Loan Lender(s) and delivered pursuant to Section 10.11.
"Term Loan Security Documents" means, collectively, the
Borrower Pledge Agreement, the Borrower Security Agreement, each
Mortgage (if any), each Concentration Account Agreement, the
Collateral Account Agreement and, from and after the execution
and delivery thereof, all other security documents hereafter
delivered to the Agents and the Collateral Agent granting a Lien
on any asset or assets of any Person to secure the Term Loan
Obligations or to secure any guarantee of the Term Loan
Obligations.
"Term Note" means a promissory note of the Borrower payable
to the order of any Term Loan Lender, in the form of Exhibit A
hereto (as such promissory note may be amended, endorsed or
otherwise modified from time to time), evidencing the aggregate
Indebtedness of the Borrower to such Term Loan Lender resulting
from the outstanding Term Loans, and also means all other
promissory notes accepted from time to time in substitution
therefor or renewal thereof.
"Trocano" means A. Trocano Construction, Inc., a California
corporation.
"Type" means, relative to any Loan, the portion thereof, if
any, being maintained as a Base Rate Loan or a LIBO Rate Loan.
"U.C.C." means the Uniform Commercial Code as from time to
time in effect in the State of New York.
"United States" or "U.S." means the United States of
America, its fifty states and the District of Columbia.
"U.S. Person" means any Person that is a "United States
person" within the meaning of Section 7701(a)(30) of the Code (or
any applicable successor provision).
"U.S. Subsidiary" means any Subsidiary of the Borrower that
is incorporated or organized in order or under the laws of the
United States or any state thereof.
"Voting Stock" means, with respect to any Person, Capital
Stock of any class or kind ordinarily having the power to vote
for the election of directors, managers or other voting members
of the governing body of such Person.
"Welfare Plan" means a "welfare plan", as such term is
defined in section 3(1) of ERISA.
"Wholly-owned" means, with respect to any direct or indirect
Subsidiary, any Subsidiary all of the outstanding common stock
(or similar equity interest) of which (other than any director's
qualifying shares or investments by foreign nationals mandated by
applicable laws) is owned directly or indirectly by the Borrower.
Section 1.2 Use of Defined Terms. Unless otherwise
defined or the context otherwise requires, terms for which
meanings are provided in this Agreement shall have such meanings
when used in the Disclosure Schedule and in each Note, Borrowing
Request, Continuation/Conversion Notice, Loan Document, notice
and other communication delivered from time to time in connection
with this Agreement or any other Loan Document.
Section 1.3 Cross-References. Unless otherwise
specified, references in this Agreement and in each other Loan
Document to any Article or Section are references to such Article
or Section of this Agreement or such other Loan Document, as the
case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to
such clause of such Article, Section or definition.
Section 1.4 Accounting and Financial Determinations.
Unless otherwise specified, all accounting terms used herein or
in any other Loan Document shall be interpreted, and all
accounting determinations and computations hereunder or
thereunder (including under Sections 7.1.1 and 7.2.5) shall be
made, in accordance with, those generally accepted accounting
principles ("GAAP") applied in the preparation of the financial
projections referred to in Section 5.1.7 except that (i) the
monthly financial statements provided pursuant to clause (c) of
Section 7.1.1 shall only be consistent with GAAP in all material
respects and shall not be required to include footnotes and (ii)
the quarterly financial statements provided pursuant to clause
(b) of Section 7.1.1 shall only be required to include footnotes
to the extent such footnotes would be required to be included on
a Form 10-Q filed with the SEC. Unless otherwise expressly
provided, all financial covenants and defined financial terms
shall be computed on a consolidated basis for the Borrower and
its Subsidiaries, in each case without duplication. In the event
that any Second-Tier Subsidiary is merged or consolidated with or
into, or all or substantially all of the assets of any Second-
Tier Subsidiary are transferred to, any other Subsidiary, each
reference to such Second-Tier Subsidiary in this Section 7.1.1
will be replaced by a reference to another Subsidiary or deleted,
as mutually agreed by the Borrower and the Syndication Agent.
The Administrative Agent shall promptly notify each Lender of any
such replacement or deletion. In the event that a Second-Tier
Subsidiary of the Borrower assumes managerial responsibility for
one or more of the other Second-Tier Subsidiaries of the
Borrower, each reference to a Second-Tier Subsidiary in Section
7.1.1 shall be deemed a reference to all of such Second-Tier
Subsidiaries under such common managerial control, as mutually
agreed to by the Borrower and the Syndication Agent. The
Borrower shall promptly notify each Lender of any such
consolidation of reporting for any affected Second-Tier
Subsidiaries. If any preparation in the financial statements
referred to in Section 7.1.1 hereafter occasioned by the
promulgation of rules, regulations, pronouncements and opinions
by or required by the Financial Accounting Standards Board or the
American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) result in a change in
any results, amounts, calculations, ratios, standards or terms
found in this Agreement or any Loan Document from those which
would be derived or be applicable absent such changes, the
Borrower may reflect such changes in the financial statements and
certificates required to be delivered pursuant to Section 7.1.1,
but calculations of financial covenants shall be made without
giving effect to any such changes. Upon the request of the
Borrower or any Lender the parties hereto agree to enter into
negotiations in order to amend the financial covenants and other
terms of this Agreement if there occur any changes in GAAP that
have a material effect on the financial statements of the
Borrower and its Subsidiaries, so as to equitably reflect such
changes with the desired result that the criteria for evaluating
the Borrower's and its Subsidiaries' financial condition and such
other terms shall be the same in all material respects after such
changes as if the changes had not been made.
ARTICLE II
TERM LOAN COMMITMENTS, BORROWING PROCEDURES AND TERM NOTES
Section 2.1 Term Loan Commitments. On the terms and
subject to the conditions of this Agreement (including Article
V), in a single Borrowing occurring on a Business Day on or prior
to the Term Loan Commitment Termination Date, each Term Loan
Lender that has a Term Loan Commitment, will make loans (relative
to such Term Loan Lender, its "Term Loans") to the Borrower equal
to such Term Loan Lender's Term Loan Percentage of the aggregate
amount of the Borrowing of Term Loans requested by the Borrower
to be made on such day (with the commitment of each such Term
Loan Lender described herein referred to as its "Term Loan
Commitment"). No amounts paid or prepaid with respect to
Term Loans may be reborrowed.
Section 2.2 Term Loan Lenders Not Permitted or Required
to Make the Term Loans. No Term Loan Lender shall be permitted
or required to, and the Borrower shall not request any Term Loan
Lender to, make any Term Loan on the Closing Date if, after
giving effect thereto, the aggregate original principal amount of
all the Term Loans:
(a) of all Term Loan Lenders would exceed the Term
Loan Commitment Amount, or
(b) of such Term Loan Lender would exceed such
Lender's Term Loan Percentage of the Term Loan Commitment Amount.
Section 2.3 Borrowing Procedure. The Borrower shall give
the Administrative Agent irrevocable notice (which notice must be
received by the Administrative Agent prior to 10:00 a.m., New
York City time) not less than one Business Day prior to the
Closing Date (in the case of Base Rate Loans) or three Business
Days prior to the Closing Date (in the case of LIBO Rate Loans)
requesting that the Term Loan Lenders make the Term Loans on the
Closing Date and specifying (i) the aggregate principal amount of
the Term Loans to be borrowed, (ii) whether the Term Loans are to
be initially LIBO Rate Loans, Base Rate Loans or a combination
thereof, and (iii) if the Term Loans are to be entirely or partly
LIBO Rate Loans, the respective amounts of each such type of Term
Loan and the respective lengths of the initial Interest Periods
therefor. Upon receipt of such notice the Administrative Agent
shall promptly notify each Term Loan Lender thereof. Not later
than 11:00 a.m. New York City time, on the Closing Date each Term
Loan Lender shall deposit with the Administrative Agent same day
funds in an amount equal to such Term Loan Lender's Term Loan
Percentage of the Term Loans to be made on the Closing Date.
Such deposit will be made to an account which the Administrative
Agent shall specify by notice to the Term Loan Lenders. Subject
to the provisions of Section 9.2, the Administrative Agent shall
make such funds available to the Borrower by wire transfer to the
accounts the Borrower shall have specified in its Borrowing
Request. No Term Loan Lender's obligation to make any Term Loan
shall be affected by any other Term Loan Lender's failure to make
any Term Loan.
Section 2.4 Continuation and Conversion Elections. By
delivering a Continuation/Conversion Notice to the Administrative
Agent on or before 10:00 a.m., New York City time, on a Business
Day, the Borrower may from time to time irrevocably elect, on not
less than one Business Day's notice in the case of a continuation
of, or a conversion of LIBO Rate Loans into, Base Rate Loans, or
three Business Day's notice in the case of a continuation of LIBO
Rate Loans or a conversion of Base Rate Loans into LIBO Rate
Loans, and in either case not more than five Business Day's
notice, that all, or any portion in an aggregate minimum amount
of $5,000,000 and an integral multiple of $1,000,000, in the case
of LIBO Rate Loans, or an aggregate minimum amount of $1,000,000
and an integral multiple of $500,000, in the case of Base Rate
Loans, be, in the case of Base Rate Loans, converted into LIBO
Rate Loans or be, in the case of LIBO Rate Loans, converted into
Base Rate Loans or continued as LIBO Rate Loans (in the absence
of delivery of a Continuation/Conversion Notice with respect to
any LIBO Rate Loan at least three Business Days (but not more
than five Business Days) before the last day of the then current
Interest Period with respect thereto, such LIBO Rate Loan shall,
on such last day, automatically convert to a Base Rate Loan);
provided, however, that (x) each such conversion or continuation
shall be pro rated among the outstanding Term Loans of all Term
Loan Lenders that have made such Term Loans, and (y) no portion
of the outstanding principal amount of any Term Loans may, upon
the expiration of the applicable Interest Period, be continued
as, or be converted into, LIBO Rate Loans when any Default has
occurred and is continuing.
Section 2.5 Funding. Each Term Loan Lender may, if it so
elects, fulfill its obligation to make, continue or convert LIBO
Rate Loans hereunder by causing one of its foreign branches or
Affiliates (or an international banking facility created by such
Term Loan Lender) to make or maintain such LIBO Rate Loan;
provided, however, that such LIBO Rate Loan shall nonetheless be
deemed to have been made and to be held by such Term Loan Lender,
and the obligation of the Borrower to repay such LIBO Rate Loan
shall nevertheless be to such Term Loan Lender, which such Term
Loan Lender may credit to the account of such foreign branch,
Affiliate or international banking facility. In addition, the
Borrower hereby consents and agrees that, for purposes of any
determination to be made for purposes of Section 4.1, 4.2, 4.3 or
4.4, it shall be conclusively assumed that each Term Loan Lender
elected to fund all LIBO Rate Loans by purchasing Dollar deposits
in its LIBOR Office's interbank eurodollar market.
Notwithstanding anything herein to the contrary, each Term Loan
Lender, upon the occurrence of any event giving rise to the
operation of Section 4.1, 4.2, 4.3, 4.4, 4.5 or 4.6 with respect
to such Term Loan Lender, will use its best efforts to designate
another LIBOR Office for any Term Loans affected by such event,
provided, that such designation is made on such terms that such
Term Loan Lender and its LIBOR Office suffer no economic, legal
or regulatory disadvantage.
Section 2.6 Register; Term Notes.
(a) Each Term Loan Lender may maintain in accordance
with its usual practice an account or accounts evidencing the
Indebtedness of the Borrower to such Term Loan Lender resulting
from each Term Loan made by such Term Loan Lender, including the
amounts of principal and interest payable and paid to such Term
Loan Lender from time to time hereunder. In the case of a Term
Loan Lender that does not request, pursuant to clause (b)(ii)
below, execution and delivery of a Term Note evidencing the Term
Loans made by such Term Loan Lender to the Borrower, such account
or accounts shall, to the extent not inconsistent with the
notations made by the Administrative Agent in the Register, be
conclusive and binding on the Borrower absent manifest error;
provided, however, that the failure of any Term Loan Lender to
maintain such account or accounts shall not limit or otherwise
affect any Term Loan Obligations of the Borrower or any other
Obligor.
(b)(i) The Borrower hereby designates the
Administrative Agent to serve as the Borrower's agent, solely for
the purpose of this clause (b), to maintain a register (the
"Register") on which the Administrative Agent will record each
Term Loan Lender's Term Loan Commitment, the Term Loans made by
each Term Loan Lender and each repayment in respect of the
principal amount of the Term Loans of each Term Loan Lender and
annexed to which the Administrative Agent shall retain a copy of
each Lender Assignment Agreement delivered to the Administrative
Agent pursuant to Section 10.11.1. Failure to make any
recordation, or any error in such recordation, shall not affect
the Borrower's obligation in respect of such Term Loans. The
entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Administrative Agent and
the Term Loan Lenders shall treat each Person in whose name a
Term Loan (and as provided in clause (ii) the Term Note
evidencing such Term Loan, if any) is registered as the owner
thereof for all purposes of this Agreement, notwithstanding
notice or any provision herein to the contrary. A Term Loan
Lender's Term Loan Commitment and the Term Loans made pursuant
thereto may be assigned or otherwise transferred in whole or in
part only by registration of such assignment or transfer in the
Register. Any assignment or transfer of a Term Loan Lender's
Term Loan Commitment or the Term Loans made pursuant thereto
shall be registered in the Register only upon delivery to the
Administrative Agent of a Lender Assignment Agreement duly
executed by the Assignor thereof. No assignment or transfer of a
Term Loan Lender's Term Loan Commitment or the Term Loans made
pursuant thereto shall be effective unless such assignment or
transfer shall have been recorded in the Register by the
Administrative Agent as provided in this Section.
(ii) The Borrower agrees that, upon the request to the
Administrative Agent by any Term Loan Lender, the Borrower will
execute and deliver to such Term Loan Lender, as applicable, a
Term Note evidencing the Term Loans made by such Term Loan
Lender. The Borrower hereby irrevocably authorizes each Term
Loan Lender to make (or cause to be made) appropriate notations
on the grid attached to such Term Loan Lender's Term Notes (or on
any continuation of such grid), which notations, if made, shall
evidence, inter alia, the date of the outstanding principal
amount of, and the interest rate and Interest Period applicable
to the Term Loans evidenced thereby. Such notations shall, to
the extent not inconsistent with the notations made by the
Administrative Agent in the Register, be conclusive and binding
on the Borrower absent manifest error; provided, however, that
the failure of any Term Loan Lender to make any such notations
shall not limit or otherwise affect any Term Loan Obligations of
the Borrower or any other Obligor. The Term Loans evidenced by
any such Term Note and interest thereon shall at all times
(including after assignment pursuant to Section 10.11.1) be
represented by one or more Term Notes payable to the order of the
payee named therein and its registered assigns. Subject to the
provisions of Section 10.11.1, a Term Note and the obligation
evidenced thereby may be assigned or otherwise transferred in
whole or in part only by registration of such assignment or
transfer of such Term Note and the obligation evidenced thereby
in the Register (and each Term Note shall expressly so provide).
Any assignment or transfer of all or part of an obligation
evidenced by a Term Note shall be registered in the Register only
upon surrender for registration of assignment or transfer of the
Term Note evidencing such obligation, accompanied by a Lender
Assignment Agreement duly executed by the assignor thereof, and
thereupon, if requested by the assignee, one or more new Term
Notes shall be issued to the designated assignee and the old Term
Note shall be returned by the Administrative Agent to the
Borrower marked "exchanged." No assignment of a Term Note and
the obligation evidenced thereby shall be effective unless it
shall have been recorded in the Register by the Administrative
Agent as provided in this Section.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
Section 3.1 Repayments and Prepayments; Application.
Section 3.1.1 Repayments and Prepayments. The Borrower
shall repay in full the unpaid principal amount of each Term Loan
upon the Stated Maturity Date therefor. Prior thereto, payments
and prepayments of Term Loans shall or may be made as set forth
below.
(a) From time to time on any Business Day, the
Borrower may make a voluntary prepayment, in whole or in part, of
the outstanding principal amount of any Term Loans, provided,
however, that
(i)(x) any such voluntary prepayment of Term
Loans shall be made pro rata between Term Loans and Revolving II
Credit Loans of the same type and, if applicable, having the same
Interest Period of all Term Loan Lenders and Revolving Credit
Lenders that have made such Term Loans and Revolving II Credit
Loans and (y) any such prepayment of Term Loans shall be made pro
rata among the Term Loans of the same type and, if applicable,
having the same Interest Period of all Term Loan Lenders;
(ii) all such voluntary prepayments shall require
at least three Business Day's notice, but no more than five
Business Day's notice, in writing to the Administrative Agent;
(iii) all such voluntary partial prepayments
shall be, in the case of LIBO Rate Loans, in an aggregate minimum
amount of $5,000,000 and an integral multiple of $1,000,000 and,
in the case of Base Rate Loans, in an aggregate minimum amount of
$1,000,000 and an integral multiple of $500,000, or in the
aggregate principal amount of all Term Loans and Revolving II
Credit Loans of the type then outstanding; and
(iv) any such voluntary prepayment of Term Loans
made on or prior to the first anniversary of the Closing Date
shall be subject to the payment of a premium as set forth below:
(A) 2.0% of the principal amount of the Term
Loans prepaid pursuant to this clause (a) of this Section 3.1.1
on and subsequent to the Closing Date and prior to the six-month
anniversary of the Closing Date; and
(B) 1.0% of the principal amount of the Term
Loans prepaid pursuant to this clause (a) of this Section 3.1.1
on and subsequent to the six-month anniversary and prior to the
first anniversary of the Closing Date.
(b) Not later than three Business Days following the
receipt by the Parent, the Borrower or any Subsidiary of the
Borrower of Net Cash Proceeds from either (i) the issuance or
sale of any of its Capital Stock (or other equity interests)
(other than pursuant to an Excluded Equity Issuance, as defined
below) or (ii) the incurrence of any Indebtedness (other than
Excluded Indebtedness, as defined below, or Indebtedness
permitted to be incurred pursuant to Section 7.2.2), as the case
may be, the Borrower shall make a mandatory prepayment of the
Term Loans and Revolving II Credit Loans in an amount equal to
100% of such Net Cash Proceeds of such issuance or sale of
Capital Stock (or other equity interests) or such incurrence of
Indebtedness, as the case may be, to be applied as set forth in
Section 3.1.2.
For purposes of this clause (b), "Excluded Equity
Issuance" means (x) any issuance by the Parent of any of its
Capital Stock that does not constitute a Change in Control to the
extent that such issuance is made solely to the then current
shareholders of the Parent (and their respective Affiliates,
other than Persons becoming Affiliates because of such issuance
of Capital Stock of the Parent) and the Net Cash Proceeds of such
issuance are contributed by the Parent to the Borrower, (y) any
issuance by any Subsidiaries of the Borrower of additional shares
of its common stock to the Borrower or any Subsidiary of the
Borrower if such additional shares are immediately pledged by
such holder to the Collateral Agent pursuant to the Borrower
Pledge Agreement and (z) any issuance by the Parent to any
Management of the Parent, the Borrower and their Subsidiaries of
common stock of the Parent, or any option or other right to
purchase common stock of the Parent, pursuant to management
incentive programs approved by the Board of Directors of the
Parent from time to time provided that all such common stock so
issued, when aggregated with all such common stock issuable upon
the exercise of such options or other rights (whether or not
presently exercisable by the holders thereof), shall not exceed
15% of the common stock of the Parent (on a fully diluted basis);
and "Excluded Indebtedness" means any loans advanced to the
Parent by any existing stockholder of the Parent or any member of
the Management of the Borrower or the Parent, or any Affiliate
thereof.
(c) Not later than three Business Days following the
receipt by the Parent, the Borrower or any Subsidiary of the
Borrower of any Net Cash Proceeds constituting Asset Sale
Proceeds in excess of $250,000, the Borrower shall deliver to the
Administrative Agent a calculation of the amount of such Asset
Sale Proceeds and make a mandatory prepayment of the Term Loans
and Revolving II Credit Loans in an amount equal to 100% of the
excess of (i) the sum of (x) all such Asset Sale Proceeds
received from all Asset Sales plus (y) any Net Cash Proceeds
resulting from the Stella Sale which have not been applied
pursuant to clause (d) below, less (ii) $15,000,000, such excess
to be applied as set forth in Section 3.1.2; provided, however,
that no mandatory prepayment on account of Asset Sale Proceeds
shall be required under this clause (c) if the Borrower informs
the Agents in writing within one Business Day following the
receipt of such Asset Sale Proceeds of its, the Parent's or such
Subsidiary's good faith intention to apply such Asset Sale
Proceeds (A) to the replacement of the sold, conveyed or
transferred assets or property, (B) to the making of Investments
by the Borrower or its Subsidiaries which are permitted pursuant
to clause (h) of Section 7.2.6 or (C) to the making of Capital
Expenditures by the Borrower or its Subsidiaries which are
permitted pursuant to Section 7.2.8 and, in each case, such Asset
Sales Proceeds are applied as provided in such clauses (A), (B)
or (C) above within 360 days following the receipt of such Asset
Sale Proceeds, with the amount of such Asset Sale Proceeds unused
after such 360-day period being applied to the Term Loans and
Revolving II Credit Loans pursuant to Section 3.1.2. The
Borrower shall, and shall cause the Parent or any Subsidiary of
the Borrower to, immediately contribute or cause to be
contributed all Net Cash Proceeds constituting Asset Sale
Proceeds that are or may be required to be used to prepay the
Term Loans and Revolving II Credit Loans pursuant to this clause
(c) to the Special Purpose Subsidiary for deposit into the Asset
Sale Proceeds Account.
(d) On or prior to November 30, 1998, the Borrower
shall make (or shall otherwise cause to be made) a mandatory
prepayment to the Term Loans and Revolving II Credit Loans from
or in respect of Net Cash Proceeds received by the Borrower from
the sale of all the issued and outstanding Capital Stock of
Stella Holdings, Inc. (the "Stella Sale"), which prepayment shall
be in a sufficient amount such that the Borrower shall not be
required to offer to purchase any 1993 Senior Notes pursuant to
Section 4.10 of the 1993 Senior Note Indenture or any 1995 Senior
Notes pursuant to Section 4.10 of the 1995 Senior Note Indenture
or any Subordinated Notes pursuant to Section 4.10 of the
Subordinated Note Indenture with or in respect of any proceeds
resulting from the Stella Sale.
(e) Within 60 days following the receipt by the
Borrower or any of its Subsidiaries of any Casualty Proceeds in
excess of $1,000,000, the Borrower shall make a mandatory
prepayment of the Term Loans and Revolving II Credit Loans in an
amount equal to 100% of such Casualty Proceeds, to be applied as
set forth in Section 3.1.2; provided, that no mandatory
prepayment on account of Casualty Proceeds shall be required
under this clause if the Borrower informs the Agents no later
than 60 days following the occurrence of the Casualty Event
resulting in such Casualty Proceeds of its or its Subsidiary's
good faith intention to apply such Casualty Proceeds to the
rebuilding or replacement of the damaged, destroyed or condemned
assets or property and in fact uses such Casualty Proceeds to
rebuild or replace the damaged, destroyed or condemned assets or
property within 360 days following the receipt of such Casualty
Proceeds, with the amount of such Casualty Proceeds unused after
such 360 day period being applied to the Term Loans and Revolving
II Credit Loans as set forth in Section 3.1.2.
(f) On the Stated Maturity Date and on each Quarterly
Payment Date occurring during any period set forth below, the
Borrower shall make a scheduled repayment of the aggregate
outstanding principal amount, if any, of all Term Loans in an
amount equal to the amount set forth below opposite the Stated
Maturity Date or such Quarterly Payment Date, as applicable:
Amount of Required
Period Quarterly Principal Payment
------ ---------------------------
July 31, 1998 through (and including) $ 434,375
October31, 1999
Stated Maturity Date 171,143,750
(g) Immediately upon any acceleration of the Stated
Maturity Date of any Term Loans pursuant to Section 8.2 or
Section 8.3, the Borrower shall repay in full the aggregate
outstanding principal amount of all Term Loans.
Each prepayment of any Term Loans and Revolving II Credit Loans
made pursuant to this Section shall be without premium or
penalty, except as may be required by clause (a)(iv) of Section
3.1.1 or Section 4.4.
Section 3.1.2 Application. Amounts prepaid shall be
applied as set forth in this Section 3.1.2.
(a) Subject to clause (b) below, each prepayment or
repayment of the principal of Term Loans and Revolving II Credit
Loans shall be applied, to the extent of such prepayment or
repayment, first, to the principal amount thereof being
maintained as Base Rate Loans, and second, to the principal
amount thereof being maintained as LIBO Rate Loans; provided,
that mandatory prepayments of LIBO Rate Loans made pursuant to
clauses (b), (c), (d), and (e) of Section 3.1.1, if not made on
the last day of the Interest Period with respect thereto, shall,
at the Borrower's option, so long as no Default has occurred and
is continuing, be prepaid subject to the provisions of Section
4.4, or the amount required to be applied to the prepayment of
LIBO Rate Loans (after application to any Base Rate Loans) shall
be deposited with the Administrative Agent or another Lender as
cash collateral for such Term Loans and Revolving II Credit Loans
on terms reasonably satisfactory to the Administrative Agent (or
such Lender) and thereafter shall be applied in the order of the
Interest Periods next ending most closely to the date of receipt
of the proceeds in respect of which such prepayment is required
to be made and on the last day of each such Interest Period
(together with a payment of all interest that is due on the last
day of each such Interest Period pursuant to clause (d) of
Section 3.2.3). After such application, unless an Event of
Default shall have occurred and be continuing, any remaining
interest earned on such cash collateral shall be paid to the
Borrower.
(b) Each voluntary prepayment of Term Loans and
Revolving II Credit Loans and each mandatory prepayment of Term
Loans and Revolving II Credit Loans made pursuant to clauses (b),
(c), (d), and (e) of Section 3.1.1 shall be applied, to the
extent of such prepayment, pro rata to a prepayment of the
outstanding principal amount of all Term Loans and Revolving II
Credit Loans until all such Term Loans and Revolving II Credit
Loans have been paid in full, and, thereafter, to a reduction of
the Revolving II Credit Commitment Amount, and once all Term
Loans and Revolving II Credit Loans have been repaid in full and
the Revolving II Credit Commitment Amount reduced to zero, all
prepayments of Term Loans and Revolving II Credit Loans made
pursuant to clauses (b), (c), (d) and (e) of Section 3.1.1 shall
be applied to the repayment of any outstanding Revolving I Credit
Loans and to cash collateralize Reimbursement Obligations in
respect of Revolving Credit Letters of Credit.
(c ) With respect to any prepayment of Term Loans and
Revolving II Credit Loans made pursuant to clause (b) of Section
3.1.1, the Administrative Agent will as soon as is practicable
(but in any event no later than the date on which the Borrower
has provided such prepayment to the Administrative Agent) provide
notice of such prepayment to each Term Loan Lender and Revolving
Credit Lender having outstanding Revolving II Credit Loans prior
to the distribution of the funds from such prepayment, and each
Term Loan Lender and Revolving Credit Lender having outstanding
Revolving II Credit Loans will have the right to refuse any such
prepayment by giving written notice of such refusal to the
Administrative Agent within three Business Days after such Term
Loan Lender's and Revolving Credit Lender's receipt of notice
from the Administrative Agent of such prepayment (but in any
event no later than one day prior to the date on which such
prepayment is to be made), and the Borrower's obligation to
prepay such Term Loan Lender's Term Loans and Revolving Credit
Lender's Revolving II Credit Loans shall be discharged with the
Administrative Agent's delivery of such notice to the Borrower
and, to the extent received, the Administrative Agent shall
promptly return to the Borrower any amounts received in respect
of such Term Loan Lender's Term Loans and Revolving Credit
Lender's Revolving II Credit Loans.
Section 3.2 Interest Provisions. Interest on the
outstanding principal amount of Term Loans shall accrue and be
payable in accordance with this Section 3.2.
Section 3.2.1 Rates. Pursuant to an appropriately
delivered Borrowing Request or Continuation/Conversion Notice,
the Borrower may elect that Term Loans comprising a Borrowing
accrue interest at a rate per annum:
(a) on that portion maintained from time to time as a
Base Rate Loan, equal to the sum of the Alternate Base Rate from
time to time in effect plus the Applicable Term Loan Margin; and
(b) on that portion maintained as a LIBO Rate Loan,
during each Interest Period applicable thereto, equal to the sum
of the LIBO Rate (Reserve Adjusted) for such Interest Period plus
the Applicable Term Loan Margin.
All LIBO Rate Loans shall bear interest from and including
the first day of the applicable Interest Period to (but not
including) the last day of such Interest Period at the interest
rate determined as applicable to such LIBO Rate Loan.
Section 3.2.2 Post-Maturity Rates. Upon the occurrence and
continuance of (i) any Event of Default described in Section
8.1.1 or clauses (a) through (d) of Section 8.1.9 or (ii) any
other Event of Default which shall remain uncured for thirty days
(without giving effect to any grace period therefor), all Term
Loans shall bear, and the Borrower shall pay, but only to the
extent permitted by law, interest (after as well as before
judgment) thereon in arrears at a rate per annum equal to the
rate that would otherwise be applicable to such Term Loans
maintained as Base Rate Loans pursuant to Section 3.2.1 plus 5.0%
on the last day of each calendar month or, if such day is not a
Business Day, the next succeeding Business Day.
Section 3.2.3 Payment Dates. Interest accrued on each Term
Loan shall be payable, without duplication:
(a) on the Stated Maturity Date therefor;
(b) subject to the provisions of clause (a) of Section
3.1.2, on the date of any payment or prepayment, in whole or in
part, of principal outstanding on such Term Loan on the principal
amount so paid or prepaid;
(c) with respect to Base Rate Loans, on each Quarterly
Payment Date occurring after the Closing Date;
(d) with respect to LIBO Rate Loans, on the last day
of each applicable Interest Period (and, if such Interest Period
shall exceed three months, on the third-month anniversary of such
Interest Period);
(e) with respect to any Base Rate Loans converted into
LIBO Rate Loans on a day when interest would not otherwise have
been payable pursuant to clause (c), on the next Quarterly
Payment Date; and
(f) on that portion of any Term Loans the Stated
Maturity Date of which is accelerated pursuant to Section 8.2 or
Section 8.3, immediately upon such acceleration.
Interest accrued on Term Loans or other monetary Obligations
arising under this Agreement or any other Term Loan Document
after the date such amount is due and payable (whether on the
Stated Maturity Date, upon acceleration or otherwise) shall be
payable upon demand.
Section 3.3 Fees. The Borrower agrees to pay to the
Administrative Agent, for its own account, the annual
administration fees referred to in the letter agreement, dated
March 13, 1998, among the Borrower, the Revolving Credit
Borrowers and the Administrative Agent with respect thereto.
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
Section 4.1 LIBO Rate Lending Unlawful. If any Term Loan
Lender shall determine (which determination shall, upon notice
thereof to the Borrower and the Term Loan Lenders, be conclusive
and binding on the Borrower) that the introduction of or any
change in or in the interpretation of any law, in each case after
the date upon which such Term Loan Lender shall have become a
Term Loan Lender hereunder, makes it unlawful, or any central
bank or other Regulatory Authority asserts, after such date, that
it is unlawful, for such Term Loan Lender to make, continue or
maintain any Term Loan as, or to convert any Term Loan into, a
LIBO Rate Loan, the obligations of such Term Loan Lender to make,
continue, maintain or convert any such LIBO Rate Loan shall, upon
such determination, forthwith be suspended until such Term Loan
Lender shall notify the Administrative Agent that the
circumstances causing such suspension no longer exist, and all
outstanding LIBO Rate Loans of such Term Loan Lender shall
automatically convert into Base Rate Loans at the end of the then
current Interest Periods with respect thereto or sooner, if
required by such law or assertion. Each Term Loan Lender agrees
to promptly give notice to the Administrative Agent and the
Borrower when the circumstances causing such suspension cease to
exist.
Section 4.2 Deposits Unavailable. If the Administrative
Agent shall have determined that
(a) with respect to any proposed LIBO Rate Loan,
Dollar deposits in the relevant amount and for the relevant
Interest Period are not generally available in the relevant
market; or
(b) by reason of circumstances affecting the relevant
market, adequate means do not exist for ascertaining the interest
rate applicable hereunder to LIBO Rate Loans for the relevant
Interest Period;
then, upon notice from the Administrative Agent to the Borrower
and the Term Loan Lenders, the obligations of all Term Loan
Lenders under Section 2.3 and Section 2.4 to make or continue
after the relevant Interest Period any Term Loans as, or to
convert any Term Loans into, LIBO Rate Loans shall forthwith be
suspended until the Administrative Agent shall notify the
Borrower and the Term Loan Lenders that the circumstances causing
such suspension no longer exist.
Section 4.3 Increased LIBO Rate Loan Costs, etc. The
Borrower agrees to reimburse each Term Loan Lender for any
increase in the cost to such Term Loan Lender of, or any
reduction in the amount of any sum receivable by such Term Loan
Lender in respect of, making, continuing or maintaining (or of
its obligation to make, continue or maintain) any Term Loans as,
or of converting (or of its obligation to convert) any Term Loans
into, LIBO Rate Loans (except for any increase taken into account
in determining the LIBOR Reserve Percentage and except for
increased capital costs and Taxes which are governed by Sections
4.5 and 4.6, respectively) that arise in connection with any
change in, or the introduction, adoption, effectiveness,
interpretation, reinterpretation or phase-in after the date
hereof of, any law or regulation, directive, guideline, decision
or request (whether or not having the force of law) of any court,
central bank, regulator or other Regulatory Authority. Such Term
Loan Lender shall use all commercially reasonable efforts to
promptly notify the Administrative Agent and the Borrower in
writing within 90 days of the occurrence of any such event (which
notice shall in any event be delivered no later than 120 days
after the audited annual financial statements are reported for
the fiscal year of such Term Loan Lender ended following the
payment and performance in full of all Obligations, the
termination of all Commitments and the expiration of all
Revolving Credit Letters of Credit), such notice to state, in
reasonable detail, the reasons therefor and the additional amount
required fully to compensate such Term Loan Lender for such
increased cost or reduced amount. Such additional amounts shall
be payable by the Borrower directly to such Term Loan Lender
within five days of its receipt of such notice, and such notice
shall, in the absence of manifest error, be conclusive and
binding on the Borrower.
Section 4.4 Funding Losses. In the event any Term Loan
Lender shall incur any loss or expense (including any loss or
expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Term Loan Lender to
make, continue or maintain any portion of the principal amount of
any Term Loan as, or to convert any portion of the principal
amount of any Term Loan into, a LIBO Rate Loan) as a result of
(a) any conversion or repayment or prepayment of the
principal amount of any LIBO Rate Loans on a date other than the
scheduled last day of the Interest Period applicable thereto,
whether pursuant to Section 3.1 or otherwise;
(b) any Term Loans not being made as LIBO Rate Loans
in accordance with the Borrowing Request therefor; or
(c ) any Term Loans not being continued as, or
converted into, LIBO Rate Loans in accordance with the
Continuation/Conversion Notice therefor,
then, upon the written notice of such Term Loan Lender to the
Borrower (with a copy to the Administrative Agent) (which notice
such Term Loan Lender shall use all commercially reasonable
efforts to deliver to the Borrower within 90 days of the
occurrence of any such event and which notice shall in any event
be delivered no later than 120 days after the annual audited
financial statements are reported for the fiscal year of such
Term Loan Lender ended following the payment and performance in
full of all Obligations, the termination of all Commitments and
the expiration of all Revolving Credit Letters of Credit), the
Borrower shall, within five days of its receipt thereof, pay
directly to such Term Loan Lender such amount as will (in the
reasonable determination of such Term Loan Lender) reimburse such
Term Loan Lender for such loss or expense. Such written notice
(which shall include calculations in reasonable detail) shall, in
the absence of manifest error, be conclusive and binding on the
Borrower.
Section 4.5 Increased Capital Costs. If any change in, or
the introduction, adoption, effectiveness, interpretation,
reinterpretation or phase-in of, any law or regulation,
directive, guideline, decision or request (whether or not having
the force of law) of any court, central bank, regulator or other
Regulatory Authority, in each case occurring after the applicable
Term Loan Lender becomes a Term Loan Lender hereunder, affects or
would affect the amount of capital required or expected to be
maintained by any Term Loan Lender or any Person controlling such
Term Loan Lender, and such Term Loan Lender determines (in good
faith but in its sole and absolute discretion) that the rate of
return on its or such controlling Person's capital as a
consequence of the Term Loan Commitments or the Term Loans made
by such Term Loan Lender is reduced to a level below that which
such Term Loan Lender or such controlling Person could have
achieved but for the occurrence of any such circumstance, then,
in any such case upon notice from time to time by such Term Loan
Lender to the Borrower (which notice such Term Loan Lender shall
use all commercially reasonable efforts to deliver to the
Borrower within 90 days of the occurrence of any such event and
which notice shall in any event be delivered no later than 120
days after the annual audited financial statements are reported
for the fiscal year of such Term Loan Lender ended following the
payment and performance in full of all Obligations, the
termination of all Commitments and the expiration of all
Revolving Credit Letters of Credit), the Borrower shall
immediately pay directly to such Term Loan Lender additional
amounts sufficient to compensate such Term Loan Lender or such
controlling Person for such reduction in rate of return. A
statement of such Term Loan Lender as to any such additional
amount or amounts (including calculations thereof in reasonable
detail) shall be sent by such Term Loan Lender to the Borrower
and shall, in the absence of manifest error, be conclusive and
binding on the Borrower. In determining such amount, such Term
Loan Lender may use any method of averaging and attribution that
it (in its sole and absolute discretion) shall deem applicable.
Section 4.6 Taxes. (a) All payments by the Borrower of
principal of, and interest on, or other amounts in respect of,
the Term Loans and all other amounts payable hereunder (including
fees) and the Term Notes shall be made free and clear of and
without deduction for any Taxes, except to the extent that any
such withholdings or deductions are required by applicable law,
rule or regulations. In that event, the Borrower will
(i) pay directly to the relevant authority the
full amount of Taxes required to be so withheld or deducted;
(ii) promptly forward to the Administrative Agent
an official receipt or other documentation reasonably
satisfactory to the Administrative Agent evidencing such payment
to such authority; and
(iii) if such Taxes are Covered Taxes, pay to the
Administrative Agent for the account of the Term Loan Lenders
such additional amount or amounts as is necessary to ensure that
the net amount actually received by each Term Loan Lender will
equal the full amount such Term Loan Lender would have received
had no such withholding or deduction been required.
In addition, if the Borrower, any Term Loan Lender, or the
Administrative Agent is required by law at any time to pay any
Covered Tax on, or calculated by reference to, any sum received
or receivable by or on behalf of any Term Loan Lender or the
Administrative Agent under this Agreement or any Notes, then (i)
with respect solely to any such requirement with respect to a
Term Loan Lender or the Administrative Agent, any applicable Term
Loan Lender or the Administrative Agent shall, as promptly as
practicable following such Person having notice of such
requirement, give notice to the Borrower of such requirement and
(ii) the Borrower shall, promptly after having received such
notice, pay or procure the payment of such Covered Tax. If the
Borrower pays any such Covered Taxes as required by the
immediately preceding sentence, then the Borrower will promptly
forward to the Administrative Agent an official receipt or other
documentation reasonably satisfactory to the Administrative Agent
evidencing such payment of Covered Taxes to the relevant taxing
authority. Without prejudice to the preceding provisions, if the
Administrative Agent or any Term Loan Lender is required by law
to make any payment on account of Covered Taxes on or in relation
to any sum received under this Agreement or any Note, or any
liability for Covered Taxes in respect of any such sum is
imposed, levied or assessed against any Term Loan Lender or the
Administrative Agent, the Borrower will indemnify each such Term
Loan Lender and the Administrative Agent for the full amount of
Covered Taxes paid by such Term Loan Lender or the Administrative
Agent (as the case may be), whether or not such Covered Taxes
were correctly or legally asserted. Such indemnification shall
be made within 30 days of the demand of the Term Loan Lender or
the Administrative Agent therefor. In addition, if the Borrower
fails to remit to the Administrative Agent, for the account of
the respective Term Loan Lenders, the required receipts or other
required documentary evidence of its payment of any Taxes, the
Borrower shall indemnify the Administrative Agent and the Term
Loan Lenders for any incremental Taxes, interest or penalties
that may become payable by the Administrative Agent and any Term
Loan Lender as a result of any such failure. For purposes of
this Section 4.6, the transfer by the Administrative Agent or any
Term Loan Lender to or for the account of any Term Loan Lender of
any sum received from the Borrower on account of amounts required
to be paid by the Borrower hereunder in respect of Covered Taxes
imposed with respect to the recipient shall be deemed a payment
by the Borrower of such amounts.
(b) Each Term Loan Lender that is an original
signatory to this Agreement and the Administrative Agent hereby
severally (but not jointly) represent that, under applicable law
and treaties in effect as of the date of the Term Loans, no
United States federal income taxes will be required to be
withheld by the Administrative Agent or the Borrower with respect
to any payments to be made to such Person in respect of this
Agreement. Each Term Loan Lender that is an original signatory
hereto (and each Person which becomes a Term Loan Lender by
assignment, transfer or participation pursuant to Section 10.11
hereof) and the Administrative Agent (and each Person that
becomes the Administrative Agent by appointment pursuant to
Section 9.4 hereof), agrees severally (but not jointly) that, on
or prior to the date of the Term Loans (or on or prior to the
date of such assignment, transfer or appointment, as the case may
be) it will in each case deliver to the Borrower and the
Administrative Agent the following:
(i) in the case of a Person other than a Non-U.S.
Term Loan Lender, two copies of a statement certifying that such
Person is a U.S. Person, which statement shall contain the
address, if any, of such Person's office or place of business in
the United States, and shall be signed by an authorized officer
of such Person, together with two duly completed copies of United
States Internal Revenue Service Form W-9 (or applicable successor
form) (unless it establishes to the reasonable satisfaction of
the Administrative Agent and the Borrower that it is otherwise
eligible for an exemption from backup withholding tax or other
applicable withholding tax), or
(ii) in the case of a Non-U.S. Term Loan Lender,
either (A) two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224 (or applicable successor form)
certifying in each case that such Person is entitled to receive
payments under this Agreement and the Notes payable to it without
deduction or withholding of any United States federal income
taxes and two duly completed copies of United States Internal
Revenue Service Form W-8 or Form W-9 (or applicable successor
form) or (B) in the case of an assignee Term Loan Lender that is
not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code and that does not comply with the requirements of clause (i)
hereof, then a statement in the form of statement in
substantially the form of Exhibit M hereto (an "Exemption
Certificate") to the effect that such assignee Term Loan Lender
is eligible for a complete exemption from withholding of United
States withholding tax under Section 871(h) or Section 881(c) of
the Code and two duly completed and signed original copies of
Internal Revenue Service Form W-8.
Each Person who delivers to the Borrower and the Administrative
Agent a Form W-8, W-9, 1001 or 4224, or applicable successor
form, pursuant to this clause, further undertakes to deliver to
the Borrower and the Administrative Agent two further copies of
said Form W-8, W-9, 1001, 4224, or applicable successor form, or
other manner of certification, as the case may be, on or before
the date that any such form expires or becomes obsolete or after
the occurrence of any event requiring a change in the most recent
form previously delivered by it to the Borrower, and such
extensions or renewals thereof as may reasonably be requested by
the Borrower, certifying that such Person is entitled to receive
payments under this Agreement without deduction or withholding of
any United States federal income taxes, unless in any such case
any change in law, rule, regulation, treaty or directive, or in
the interpretation or application thereof (a "Law Change"), has
occurred prior to the date on which any such delivery would
otherwise be required, which Law Change renders any such form
inapplicable or which would prevent such Person from duly
completing and delivering any such form with respect to it.
The Borrower shall not be required to indemnify any Non-
U.S. Term Loan Lender, or pay any additional amounts to any Non-
U.S. Term Loan Lender, in respect of United States Federal
withholding tax pursuant to clause (a) above to the extent that
the obligation to pay such additional amounts would not have
arisen but for a failure by such Non-U.S. Term Loan Lender to
comply with this clause (b); provided, however, that this clause
(b) shall not limit the indemnity obligations of the Borrower to
the Administrative Agent.
Any Term Loan Lender claiming any indemnity payment or
additional amounts payable pursuant to this Section 4.6 shall
file any certificate or document reasonably requested in writing
by the Borrower if the making of such a filing would avoid the
need for or reduce the amount of any such indemnity payment or
additional amount which may thereafter accrue and would not, in
the determination of such Term Loan Lender, be otherwise
disadvantageous to such Term Loan Lender.
(c) The agreements in this Section shall survive the
termination of this Agreement and the payment of the Term Notes
and all other amounts payable hereunder.
Section 4.7 Payments, Computations, etc. Unless otherwise
expressly provided, all payments by the Borrower pursuant to this
Agreement, the Term Notes, or any other Term Loan Document shall
be made by the Borrower to the Administrative Agent for the pro
rata account of the Term Loan Lenders entitled to receive such
payment. All such payments required to be made to the
Administrative Agent shall be made, without setoff, deduction or
counterclaim, not later than 12:00 noon, New York City time, on
the date due, in same day or immediately available funds, to such
account as the Administrative Agent shall specify from time to
time by notice to the Borrower. Funds received after that time
shall be deemed to have been received by the Administrative Agent
on the next succeeding Business Day. The Administrative Agent
shall promptly remit on the day it has received (or is deemed to
have received under the preceding sentence) in same day funds to
each Term Loan Lender its share, if any, of such payments
received by the Administrative Agent for the account of such Term
Loan Lender. All interest (including interest on LIBO Rate
Loans) and fees shall be computed on the basis of the actual
number of days (including the first day but excluding the last
day) occurring during the period for which such interest or fee
is payable over a year comprised of 360 days (or, in the case of
interest on a Base Rate Loan (calculated at other than the
Federal Funds Rate), 365 days or, if appropriate, 366 days).
Whenever any payment to be made shall otherwise be due on a day
which is not a Business Day, such payment shall (except as
otherwise required by clause (c) of the definition of the term
"Interest Period") be made on the next succeeding Business Day
and such extension of time shall be included in computing
interest and fees, if any, in connection with such payment.
Section 4.8 Sharing of Payments. If any Term Loan Lender
shall obtain any payment or other recovery (whether voluntary,
involuntary, by application of setoff or otherwise) on account of
any Loan (other than pursuant to the terms of Section 4.3, 4.4,
4.5 or 4.6) in excess of its pro rata share of payments then or
therewith obtained by all Term Loan Lenders, such Term Loan
Lender shall purchase from the other Term Loan Lenders such
participations in Borrowings made by them as shall be necessary
to cause such purchasing Term Loan Lender to share the excess
payment or other recovery ratably with each of them; provided,
however, that if all or any portion of the excess payment or
other recovery is thereafter recovered from such purchasing Term
Loan Lender, the purchase shall be rescinded and each Term Loan
Lender which has sold a participation to the purchasing Term Loan
Lender shall repay to the purchasing Term Loan Lender the
purchase price to the ratable extent of such recovery together
with an amount equal to such selling Term Loan Lender's ratable
share (according to the proportion of
(a) the amount of such selling Term Loan Lender's
required repayment to the purchasing Term Loan Lender
to
(b) total amount so recovered from the purchasing Term
Loan Lender)
of any interest or other amount paid or payable by the purchasing
Term Loan Lender in respect of the total amount so recovered.
The Borrower agrees that any Term Loan Lender so purchasing a
participation from another Term Loan Lender pursuant to this
Section may, to the fullest extent permitted by law, exercise all
its rights of payment (including pursuant to Section 4.9) with
respect to such participation as fully as if such Term Loan
Lender were the direct creditor of the Borrower in the amount of
such participation. If under any applicable bankruptcy,
insolvency or other similar law, any Term Loan Lender receives a
secured claim in lieu of a setoff to which this Section applies,
such Term Loan Lender shall, to the extent practicable, exercise
its rights in respect of such secured claim in a manner
consistent with the rights of the Term Loan Lenders entitled
under this Section to share in the benefits of any recovery on
such secured claim.
Section 4.9 Setoff. Each Term Loan Lender shall, upon the
occurrence and during the continuance of any Event of Default
described in clauses (a) through (d) of Section 8.1.9 or, with
the consent of the Required Term Loan Lenders, upon the
occurrence and during the continuance of any other Event of
Default, have the right to appropriate and apply to the payment
of all Term Loan Obligations then due and payable to it (whether
as a result of stated maturity, acceleration or otherwise) and
after giving effect to the operation of Section 4.8, and (as
security for such Term Loan Obligations) the Borrower hereby
grants to each Term Loan Lender a continuing security interest
in, any and all balances, credits, deposits, accounts or moneys
of the Borrower then or thereafter maintained with such Term Loan
Lender; provided, however, that any such appropriation and
application shall be subject to the provisions of Section 4.8.
Each Term Loan Lender agrees promptly to notify the Borrower and
the Administrative Agent after any such setoff and application
made by such Term Loan Lender; provided, however, that the
failure to give such notice shall not affect the validity of such
setoff and application. The rights of each Term Loan Lender
under this Section are in addition to other rights and remedies
(including other rights of setoff under applicable law or
otherwise) which such Term Loan Lender may have.
Section 4.10 Replacement of Term Loan Lenders. Each Term
Loan Lender hereby severally agrees as set forth in this Section:
(a) If any Term Loan Lender (a "Subject Lender") makes
demand upon the Borrower for (or if the Borrower is otherwise
required to pay) amounts pursuant to Section 4.3, 4.5 or 4.6, or
gives notice pursuant to Section 4.1 requiring a conversion of
such Subject Lender's LIBO Rate Loans to Base Rate Loans, or if
such Subject Lender defaults in its obligation to fund Borrowings
hereunder, the Borrower may, within 90 days of receipt by the
Borrower of such demand or notice, or the occurrence of such
other event causing the Borrower to be required to pay such
compensation), or the occurrence of such default, as the case may
be, give notice (a "Replacement Notice") in writing to the
Syndication Agent and such Subject Lender of its intention to
replace such Subject Lender with a financial institution
designated in such Replacement Notice. If the Syndication Agent
shall, in the exercise of its reasonable discretion and within 30
days of its receipt of such Replacement Notice, notify the
Borrower and such Subject Lender in writing that the designated
financial institution is reasonably satisfactory to the
Syndication Agent, then such Subject Lender shall, subject to the
payment of any amounts due pursuant to Section 4.4, assign, in
accordance with Section 10.11.1, all of its Term Loan
Commitments, Term Loans, Term Notes and other rights and
obligations under this Agreement and all other Loan Documents to
such designated financial institution; provided, however, that
(i) such assignment shall be without recourse, representation or
warranty (other than that such Term Loan Lender owns the Term
Loan Commitments, Term Loans and Term Notes being assigned, free
and clear of any Liens) and shall be on terms and conditions
reasonably satisfactory to such Subject Lender and such
designated financial institution and (ii) the purchase price paid
by such designated financial institution shall be in the amount
of such Subject Lender's Loans, together with all accrued and
unpaid interest and fees in respect thereof, plus all other
amounts (other than the amounts demanded and unreimbursed under
Sections 4.3, 4.5 and 4.6, which shall be payable upon demand by
the Borrower), owing to such Subject Lender hereunder.
_
ARTICLE V
CONDITIONS TO TERM LOANS
Section 5.1 Term Loans. The obligations of the Term Loan
Lenders to make the Term Loans shall be subject to the prior or
concurrent satisfaction of each of the conditions precedent set
forth in this Section 5.1.
Section 5.1.1 Resolutions, etc. The Collateral Agent shall
have received from the Borrower and each other Obligor, as
applicable, (i) a copy of a good standing certificate, dated a
date reasonably close to the Closing Date, for each such Person
and (ii) a certificate, dated the date of the Term Loans and with
counterparts for each Term Loan Lender, duly executed and
delivered by such Person's Secretary or Assistant Secretary as to
(a) resolutions of each such Person's Board of
Directors then in full force and effect authorizing, to the
extent relevant, all aspects of the Refinancing occurring in
connection with the Term Loans applicable to such Person, and, in
the case of the Revolving Credit Borrowers, the credit extensions
to be made pursuant to the Revolving Credit Agreement and the
execution, delivery and performance of this Agreement, the Term
Notes, each other Loan Document to be executed by such Person and
the transactions contemplated hereby and thereby;
(b) the incumbency and signatures of those of its
officers or managing members authorized to act with respect to
this Agreement, the Term Notes and each other Loan Document to be
executed by such Person; and
(c) the full force and validity of each Organic
Document of such Person and copies thereof,
upon which certificates each Agent, the Collateral Agent and Term
Loan Lender may conclusively rely until it shall have received a
further certificate of the Secretary, Assistant Secretary or
other duly authorized representative of any such Person canceling
or amending the prior certificate of such Person.
Section 5.1.2 Loan Documents. The Collateral Agent shall
have received (i) this Agreement, executed and delivered by an
Authorized Officer of the Borrower, (ii) for the account of each
relevant Term Loan Lender requesting the same, a Term Note
conforming to the requirements hereof and executed and delivered
by an Authorized Officer of the Borrower, (iii) the Revolving
Credit Agreement, executed and delivered by an Authorized Officer
of each Revolving Credit Borrower, (iv) for the account of each
Revolving Credit Lender, a Revolving Credit Note conforming to
the requirements of the Revolving Credit Agreement and executed
and delivered by an Authorized Officer of each Revolving Credit
Borrower and (v) each other Loan Document, each executed and
delivered by an Authorized Officer of each Obligor party thereto.
Section 5.1.3 Payment of Outstanding Indebtedness, etc.
All Indebtedness identified in Item 7.2.2(b) ("Indebtedness to be
Paid") of the Disclosure Schedule, together with all interest,
all prepayment premiums and other amounts due and payable with
respect thereto, shall have been paid in full from the proceeds
of the Term Loans and the Revolving Credit Loans and the
commitments in respect of such Indebtedness shall have been
terminated, and all Liens securing payment of any such
Indebtedness have been released and the Collateral Agent shall
have received all Uniform Commercial Code Form UCC-3 termination
statements or other instruments as may be suitable or appropriate
in connection therewith.
Section 5.1.4 Borrower Closing Date Certificate. The
Collateral Agent shall have received, with counterparts for each
Agent and Term Loan Lender, the Borrower Closing Date
Certificate, dated as of the date hereof, appropriately completed
and duly executed and delivered by an Authorized Officer of the
Borrower, in which certificates the Borrower shall agree and
acknowledge that the statements made therein shall be deemed to
be true and correct representations and warranties of the
Borrower. All documents and agreements required to be appended
to the Borrower Closing Date Certificate shall be in form and
substance satisfactory to the Syndication Agent.
Section 5.1.5 Borrowing Request, etc. The Agents shall
have received a Borrowing Request as required by Section 2.3,
appropriately completed and duly executed and delivered by an
Authorized Officer of the Borrower.
Section 5.1.6 Borrower Pledge Agreement. The Collateral
Agent shall have received, with counterparts for each Term Loan
Lender,
(a) the Borrower Pledge Agreement, dated as of the
date hereof, duly executed and delivered by an Authorized Officer
of the Borrower, together with
(i) certificates evidencing all of the issued and
outstanding shares of Capital Stock of each Subsidiary of the
Borrower listed on Item A of Schedule III hereto, which
certificates shall be accompanied by undated stock powers duly
executed in blank; and
(ii) all Pledged Notes (as defined in the
Borrower Pledge Agreement), if any, evidencing Indebtedness
payable to the Borrower, duly endorsed to the order of the
Collateral Agent, together with Uniform Commercial Code Financing
Statements (or similar instruments) in respect of such Pledged
Notes executed by each payee of a Pledged Note to be filed in
such jurisdictions as the Collateral Agent may reasonably
request;
(b) the Collateral Agent and its counsel shall be
satisfied that
(i) the Lien granted to the Collateral Agent, for
the benefit of the Collateral Agent and the Term Loan Lenders, in
the collateral described above is a first priority (or local
equivalent thereof) security interest; and
(ii) no Lien exists on any of the collateral
described above other than the Lien created in favor of the
Collateral Agent, for the benefit of the Collateral Agent and the
Term Loan Lenders, pursuant to the Borrower Pledge Agreement;
provided, however, that the Borrower shall not be required to
pledge in excess of 65% of the outstanding voting stock of any
Non-U.S. Subsidiary. If any securities pledged pursuant to the
Borrower Pledge Agreement are uncertificated securities or are
held through a financial intermediary, the Collateral Agent shall
have received confirmation and evidence satisfactory to it that
appropriate book entries have been made in the relevant books or
records of a financial intermediary or the issuer of such
securities, as the case may be, or other appropriate steps have
been taken under applicable law resulting in the perfection of
the security interest granted in favor of the Collateral Agent in
such securities pursuant to the terms of the Borrower Pledge
Agreement.
Section 5.1.7 Financial Information, etc. The Collateral
Agent shall have received, with counterparts for each Agent and
Term Loan Lender (except, in the case of non-public information,
as any such Term Loan Lender shall have notified the Borrower and
the Agents in writing that such Term Loan Lender shall not be
furnished with such information),
(a) the audited consolidated financial statements
of the Parent and its Subsidiaries and the Borrower and its
Subsidiaries for each of the Fiscal Years ended December 31,
1994, December 31, 1995 and December 31, 1996;
(b) the unaudited consolidated and consolidating
financial statements of the Parent and its Subsidiaries and the
Borrower and its Subsidiaries for the Fiscal Year ended
December 31, 1997;
(c) if available, the unaudited consolidated
financial statements of the Parent and its Subsidiaries and the
Borrower and its Subsidiaries for each Fiscal Month ended after
the period for which financial statements were delivered pursuant
to clause (b) above and prior to the Closing Date; and
(d) pro forma opening consolidated balance sheets
of the Parent and its Subsidiaries and the Borrower and its
Subsidiaries, each as of December 31, 1997, giving effect to the
consummation of the Refinancing and the Stella Sale and
reflecting the proposed legal and capital structures as of the
Closing Date of the Parent and its Subsidiaries and the Borrower
and its Subsidiaries, which legal and capital structure shall be
satisfactory in all respects to the Arranger and the Syndication
Agent.
Section 5.1.8 Pro Forma Balance Sheet Certificates. The
Collateral Agent shall have received a certificate from the chief
financial or accounting Authorized Officer of each of the Parent
and the Borrower, each dated as of the date hereof, with respect
to delivery of the pro forma balance sheets described in clause
(d) of Section 5.1.7.
Section 5.1.9 Borrower Security Agreement. The Collateral
Agent shall have received, with counterparts for each Agent and
Term Loan Lender, executed counterparts of the Borrower Security
Agreement, dated as of the date hereof, duly executed by an
Authorized Officer of the Borrower, together with
(a) executed copies of Uniform Commercial Code
financing statements (Form UCC-1), naming the Borrower as a
debtor and the Collateral Agent as the secured party, or other
similar instruments or documents, to be filed under the Uniform
Commercial Code of all jurisdictions as may be necessary or, in
the opinion of the Collateral Agent, desirable to perfect the
security interests of the Collateral Agent pursuant to the
Borrower Security Agreement; and
(b) executed copies of proper Uniform Commercial Code
Form UCC-3 termination statements, if any, necessary to release
all Liens and other rights of any Person
(i) in any collateral described in the Borrower
Security Agreement previously granted by any Person, and
(ii) securing any of the Indebtedness identified
in Item 7.2.2(b) ("Indebtedness to be Paid") of the Disclosure
Schedule,
together with such other Uniform Commercial Code Form UCC-3
termination statements as the Collateral Agent may reasonably
request from the Borrower; and
(c) certified copies of Uniform Commercial Code
Requests for Information or Copies (Form UCC-11), or a similar
search report certified by a party acceptable to the Collateral
Agent, dated a date reasonably near to the date of the Term
Loans, listing all effective financing statements which name the
Borrower (under its present name and any previous names) as the
debtor and which are filed in the jurisdictions in which filings
were made pursuant to clause (a) above, together with copies of
such financing statements (none of which (other than those
described in clause (a), if such Form UCC-11 or search report, as
the case may be, is current enough to list such financing
statements described in clause (a)) shall cover any collateral
described in the Borrower Security Agreement).
Section 5.1.10 Closing Fees, Expenses, etc. The Agents and
the Arranger shall have received, each for its own respective
account, or, in the case of the Administrative Agent, for the
account of each Term Loan Lender, as the case may be, all fees,
costs and expenses due and payable pursuant to Sections 3.3 and
10.3, if then invoiced.
Section 5.1.11 Conditions Precedent to Revolving Credit
Agreement. The Collateral Agent shall have received evidence
that each of the conditions precedent to the execution, delivery
and effectiveness of the Revolving Credit Agreement and each
other Revolving Credit Document has been satisfied to the
reasonable satisfaction of the Syndication Agent.
Section 5.1.12 Perfection Certificate. The Collateral
Agent shall have received a Perfection Certificate, dated as of
the Closing Date, duly executed and delivered by an Authorized
Officer of the Borrower.
Section 5.1.13 Accounts. The Collateral Agent shall have
received copies of each Concentration Account Agreement, the
Asset Sale Proceeds Account Agreement and the Collateral Account
Agreement, each dated as of the date hereof, duly executed by the
Borrower , any Subsidiary of the Borrower or the Special Purpose
Subsidiary, as the case may be, together with evidence that Asset
Sale Proceeds Account has been established with the
Administrative Agent pursuant to the Asset Sale Proceeds Account
Agreement.
Section 5.1.14 Establishment of Special Purpose Subsidiary,
Contribution and Deposit. The Collateral Agent shall have
received (i) a certificate of incorporation of the Special
Purpose Subsidiary, certified by the Secretary of State of
Delaware on or prior to the Closing Date, (ii) a good standing
certificate for the Special Purpose Subsidiary issued by the
Secretary of State of Delaware, dated on or prior to the Closing
Date, and (iii) evidence satisfactory to it that (A) the Borrower
has transferred all funds on deposit in all Concentration
Accounts in excess of $5,000,000 to the Collateral Account, (B)
the Special Purpose Subsidiary received a cash contribution from
the Borrower of all funds on deposit in all Concentration
Accounts and the Collateral Account aggregating in excess of
$14,000,000 and (C) the Special Purpose Subsidiary deposited such
cash contribution into the Asset Sale Proceeds Account.
Section 5.1.15 Opinions of Counsel. The Collateral Agent
shall have received the following opinions, dated the date of the
Term Loans and addressed to the Agents, the Collateral Agent and
all Term Loan Lenders:
(a) the executed legal opinion of Paul, Weiss,
Rifkind, Wharton and Garrison, special New York counsel to the
Parent and the Borrower, substantially in the form of Exhibit L-1
hereto;
(b) the executed legal opinion of Robert Aiken, Vice
President and General Counsel of the Parent and the Borrower,
substantially in the form of Exhibit L-2 hereto; and
(c) the executed legal opinions of local counsel
(acceptable to the Collateral Agent) to the Obligors in each
jurisdiction which the Collateral Agent may reasonably request,
and substantially in the form of Exhibit L-3 hereto.
Each such legal opinion shall cover such other matters incident
to the transactions contemplated by this Agreement as the
Collateral Agent may reasonably require.
Section 5.1.16 Litigation. There shall exist no pending or
threatened material litigation, proceedings or investigations
which (x) contest the consummation of the Refinancing or
(y) could reasonably be expected to have a Material Adverse
Effect.
Section 5.1.17 Material Adverse Change. Except as set
forth in Item 6.6 ("Material Adverse Change") of the Disclosure
Schedule, since December 31, 1996, there has not occurred or
arisen any event or condition which has had or is reasonably
likely to have a Material Adverse Effect on the Parent, the
Borrower, their respective Subsidiaries or the consummation of
the Refinancing.
Section 5.1.18 Consents and Approvals, etc. All
governmental and third party approvals necessary or advisable in
connection with each aspect of the Refinancing and the continuing
operations of the Parent, the Borrower and their respective
Subsidiaries shall have been obtained and be in full force and
effect or waived, and all applicable waiting periods shall have
expired without any action being taken or threatened by any
competent authority which would restrain, prevent or otherwise
impose adverse conditions on any aspect of the Refinancing.
Section 5.1.19 Insurance. The Collateral Agent shall have
received satisfactory evidence of the existence of insurance in
compliance with Section 7.1.4 (including all endorsements
included therein), and the Collateral Agent shall be named
additional insured or loss payee, on behalf of the Lenders, in
respect of all proceeds payable in respect of such insurance,
pursuant to documentation reasonably satisfactory to the
Collateral Agent.
Section 5.1.20 Satisfactory Legal Form. All documents
executed or submitted pursuant hereto by or on behalf of the
Borrower or any of its Subsidiaries or any other Obligors shall
be reasonably satisfactory in form and substance to the
Collateral Agent and its counsel; the Collateral Agent and its
counsel shall have received all information, approvals, opinions,
documents or instruments as the Collateral Agent or its counsel
may reasonably request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Term Loan Lenders and the Agents and
the Collateral Agent to enter into this Agreement and to make
Term Loans hereunder, the Borrower represents and warrants unto
the Agents and the Collateral Agent and each Term Loan Lender as
set forth in this Article VI.
Section 6.1 Organization, etc. The Borrower and each of
its Subsidiaries (other than Inactive Subsidiaries) is a
corporation validly organized and existing and in good standing
under the laws of the state or jurisdiction of its incorporation
or organization, is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction where the
nature of its business requires such qualification, and has full
power and authority and holds all requisite governmental
licenses, permits and other approvals to enter into and perform
its Obligations under this Agreement and each other Loan Document
to which it is a party and to own and hold under lease its
property and to conduct its business substantially as currently
conducted by it.
Section 6.2 Due Authorization, Non-Contravention, etc. The
execution, delivery and performance by the Borrower of this
Agreement and each other Loan Document executed or to be executed
by it, the execution, delivery and performance by each other
Obligor of each Loan Document executed or to be executed by it
and the Borrower's and each such other Obligor's participation in
the consummation of all aspects of the Refinancing, and the
execution, delivery and performance by the Borrower and such
other Obligor of the agreements executed and delivered in
connection with the Refinancing are in each case within each such
Person's corporate powers, have been duly authorized by all
necessary corporate action, and do not
(a) contravene the Borrower's or any such Obligor's
Organic Documents;
(b) contravene any contractual restriction, law or
Governmental Approval or Governmental Rule or court decree or
order binding on or affecting the Borrower or any such Obligor,
where such contravention, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect; or
(c) result in, or require the creation or imposition
of, any Lien on any of the Borrower's or any other Obligor's
properties, except pursuant to the terms of a Loan Document.
Section 6.3 Government Approval, Regulation, etc. No
authorization or approval or other action by, and no notice to or
filing with, any Regulatory Authority or other Person (other than
those that have been, or on the Closing Date will be, duly
obtained or made and which are, or on the Closing Date will be,
in full force and effect) is required for the consummation of the
Refinancing and the due execution, delivery or performance by the
Borrower of this Agreement or the Term Notes or by the Borrower
or any other Obligor of any other Loan Document to which it is a
party, or the consummation of the Refinancing. Neither the
Borrower nor any other Obligor nor any of the Borrower's
Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "holding
company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
Section 6.4 Validity, etc. This Agreement constitutes, and
the Term Notes and each other Loan Document executed by the
Borrower will, on the due execution and delivery thereof,
constitute, the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with
their respective terms; and each other Loan Document executed
pursuant hereto by each other Obligor will, on the due execution
and delivery thereof by such Obligor, constitute the legal, valid
and binding obligation of such Obligor enforceable against such
Obligor in accordance with its terms (except, in any case above,
as such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent transfer, reorganization or similar laws
affecting creditors' rights generally and by principles of
equity).
Section 6.5 Financial Information. The financial
statements of the Borrower and its Subsidiaries furnished to the
Agents and each Term Loan Lender pursuant to clauses (a) and (b)
of Section 5.1.7 have been prepared in accordance with GAAP
consistently applied, and present fairly the consolidated
financial condition of the corporations covered thereby as at the
dates thereof and the results of their operations for the periods
then ended. All balance sheets, all statements of operations,
shareholders' equity and cash flow and all other financial
information of each of the Borrower and its Subsidiaries
furnished pursuant to Section 7.1.1 have been and will for
periods following the Closing Date be prepared in accordance with
GAAP consistently applied, and do or will present fairly the
consolidated financial condition of the corporations covered
thereby as at the dates thereof and the results of their
operations for the periods then ended, except that quarterly
financial statements need not include footnote disclosure and may
be subject to ordinary year-end adjustment. No Inactive
Subsidiary owns any material assets or any Capital Stock of any
Subsidiary of the Borrower (other than the Capital Stock of
another Inactive Subsidiary) or engages in any business or other
activities of any nature whatsoever. The fair market value of
all assets owned by Trocano does not exceed $500,000 in the
aggregate.
Section 6.6 No Material Adverse Change. Except as set
forth in Item 6.6 ("Material Adverse Effect") of the Disclosure
Schedule, since December 31, 1996, there has been no material
adverse change in the financial condition, operations, assets,
business or properties of the Borrower and its Subsidiaries and
the Revolving Credit Borrowers and their respective Subsidiaries,
in each case taken as a whole.
Section 6.7 Litigation, Labor Controversies, etc. There is
no pending or, to the knowledge of the Borrower, threatened
litigation, action, proceeding, or labor controversy (a)
affecting the Borrower or any of its Subsidiaries, or any of
their respective properties, businesses, assets or revenues,
which could reasonably be expected to have a Material Adverse
Effect, except as disclosed in Item 6.7 ("Litigation") of the
Disclosure Schedule or (b) which would adversely affect the
legality, validity or enforceability of this Agreement, any other
Loan Document or the Refinancing.
Section 6.8 Subsidiaries. The Borrower has no
Subsidiaries, except those Subsidiaries
(a) which are identified in Item 6.8 ("Existing
Subsidiaries") of the Disclosure Schedule; or
(b) which are permitted to have been organized or
acquired in accordance with Section 7.2.6 or 7.2.11.
Section 6.9 Ownership of Properties. The Borrower and each
of its Subsidiaries owns (a) in the case of owned real property,
good and marketable fee title to, and (b) in the case of owned
personal property, good and valid title to, or, in the case of
leased real or personal property, valid and enforceable leasehold
interests (as the case may be) in, all of its properties and
assets, real and personal, tangible and intangible, of any nature
whatsoever, free and clear in each case of all Liens or claims,
except for Liens permitted pursuant to Section 7.2.4.
Section 6.10 Taxes. The Borrower and each of its
Subsidiaries has filed all tax returns and reports required by
law to have been filed by it and has paid all taxes and
governmental charges thereby shown to be due and owing, except
any such taxes or charges which are being diligently contested in
good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its
books.
Section 6.11 Pension and Welfare Plans. During the twelve-
consecutive-month period prior to the date of the execution and
delivery of this Agreement or the Revolving Credit Agreement and
prior to the date of the making of any Term Loan hereunder or any
Revolving Credit Loan under the Revolving Credit Agreement, no
steps have been taken to terminate any Pension Plan, and no
contribution failure has occurred with respect to any Pension
Plan sufficient to give rise to a Lien under section 302(f) of
ERISA. No condition exists or event or transaction has occurred
with respect to any Pension Plan which might result in the
incurrence by the Borrower, any Subsidiary or any member of the
Controlled Group of any material liability, fine or penalty other
than such condition, event or transaction which would not
reasonably be expected to have a Material Adverse Effect. Except
as disclosed in Item 6.11 ("Employee Benefit Plans") of the
Disclosure Schedule, neither the Borrower, nor any Subsidiary nor
any member of the Controlled Group has any contingent liability
with respect to any post-retirement benefit under a Welfare Plan,
other than liability for continuation coverage described in Part
6 of Title I of ERISA.
Section 6.12 Environmental Warranties. Except as set forth
in Item 6.12 ("Environmental Matters") of the Disclosure
Schedule:
(a) since the 1993 Fiscal Year, all facilities and
property (including underlying groundwater) owned or leased by
the Borrower or any of its Subsidiaries have been, and continue
to be, and, at all times prior to the 1993 Fiscal Year, all
facilities and property (including underlying groundwater) owned
or leased by the Borrower or any of its Subsidiaries have been,
and continue to be, to the best knowledge of the Borrower, owned
or leased by the Borrower and its Subsidiaries in material
compliance with all Environmental Laws;
(b) since the 1993 Fiscal Year, there have been no
past, and there are no pending or threatened, and, at all times
prior to the 1993 Fiscal Year, there have been, to the best
knowledge of the Borrower, no past, and there are no pending or
threatened
(i) claims, complaints, notices or requests for
information received by the Borrower or any of its Subsidiaries
with respect to any alleged material violation of any
Environmental Law, or
(ii) complaints, notices or inquiries to the
Borrower or any of its Subsidiaries regarding potential material
liability under any Environmental Law;
(c) there have been no Releases of Hazardous Materials
at, on or under any property now or previously owned or leased by
the Borrower or any of its Subsidiaries that, singly or in the
aggregate, have, or may reasonably be expected to have, a
Material Adverse Effect;
(d) the Borrower and its Subsidiaries have been issued
and are in material compliance with Governmental Approvals and
Governmental Rules relating to environmental matters and
necessary or desirable for their businesses;
(e) no property now or previously owned or leased by
the Borrower or any of its Subsidiaries is listed or, to the
knowledge of the Borrower, proposed for listing (with respect to
owned property only) on the National Priorities List pursuant to
CERCLA, on the CERCLIS or on any similar state list of sites
requiring investigation or clean-up;
(f) there are no underground storage tanks, active or
abandoned, including petroleum storage tanks, on or under any
property now or previously owned or leased by the Borrower or any
of its Subsidiaries that, singly or in the aggregate, have, or
may reasonably be expected to have, a Material Adverse Effect;
(g) neither the Borrower nor any Subsidiary of the
Borrower has directly transported or directly arranged for the
transportation of any Hazardous Material to any location (i)
which is listed or proposed for listing on the National
Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar state list or (ii) which is the subject of federal, state
or local enforcement actions or other investigations which may
reasonably be expected to lead to material claims against the
Borrower or such Subsidiary thereof for any remedial work, damage
to natural resources or personal injury, including claims under
CERCLA;
(h) there are no polychlorinated biphenyls or friable
asbestos present at any property now or previously owned or
leased by the Borrower or any Subsidiary of the Borrower that,
singly or in the aggregate, have, or may reasonably be expected
to have, a Material Adverse Effect; and
(i) no conditions exist at, on or under any
property now or previously owned or leased by the Borrower or any
Subsidiary which, with the passage of time, or the giving of
notice or both, would give rise to material liability of the
Borrower or any Subsidiary under any Environmental Law that could
reasonably be expected to have a Material Adverse Effect.
Section 6.13 Intellectual Property. Each of the Borrower
and its Subsidiaries owns and possesses or licenses (as the case
may be) all such patents, patent rights, trademarks, trademark
rights, trade names, trade name rights, service marks, service
mark rights and copyrights necessary for the conduct of the
businesses of the Borrower and its Subsidiaries as now conducted
without, individually or in the aggregate, any infringement upon
rights of other Persons, in each case except as would not
reasonably be expected to result in a Material Adverse Effect and
there is no individual patent, patent right, trademark, trademark
right, trade name, trade name right, service mark, service mark
right or copyright the loss of which would result in a Material
Adverse Effect except as may be disclosed in Item 6.13
("Intellectual Property") of the Disclosure Schedule.
Section 6.14 Regulations G, U and X. Neither the Borrower
nor any of its Subsidiaries is engaged in the business of
extending credit for the purpose of purchasing or carrying margin
stock, and no proceeds of any Term Loans or Revolving Credit
Loans will be used to purchase or carry margin stock or otherwise
for a purpose which violates, or would be inconsistent with,
F.R.S. Board Regulation G, U or X. Terms for which meanings are
provided in F.R.S. Board Regulation G, U or X or any regulations
substituted therefor, as from time to time in effect, are used in
this Section with such meanings.
Section 6.15 Solvency. The Refinancing (including the
incurrence of the Term Loans hereunder and the Revolving Credit
Loans under the Revolving Credit Agreement and the application of
the proceeds of the Term Loans and Revolving Credit Loans) will
not involve or result in any fraudulent transfer or fraudulent
conveyance under the provisions of Section 548 of the Bankruptcy
Code (11 U.S.C. 101 et seq., as from time to time hereafter
amended, and any successor or similar statute) or any applicable
state law respecting fraudulent transfers or fraudulent
conveyances. On the Closing Date, after giving effect to the
Refinancing, the Borrower and its Subsidiaries and the Revolving
Credit Borrowers and their Subsidiaries, in each case taken as a
whole, are Solvent.
Section 6.16 Accuracy of Information. None of the factual
information heretofore or contemporaneously furnished by or on
behalf of the Borrower or any of its Subsidiaries in writing to
the Agents, the Arranger or any Lender for purposes of or in
connection with this Agreement or any transaction contemplated
hereby or thereby or with respect to the Refinancing, contains
any untrue statement of a material fact, and none of the other
factual information hereafter furnished in connection with this
Agreement or any other Loan Document by the Borrower or any other
Obligor to the Agents, the Arranger or any Lender will contain
any untrue statement of a material fact on the date as of which
such information is dated or certified and such factual
information delivered prior to the date of execution and delivery
of this Agreement (unless such information specifically relates
to a prior date) does not, and such factual information hereafter
furnished shall not on the date as of which such information is
dated or certified, omit to state any material fact, necessary to
make any information not misleading in light of the circumstances
under which such information is furnished.
Section 6.17 Seniority of the Obligations and Permitted
Indebtedness under the Subordinated Note Indenture. (a) Each
Subordinated Note Document (including the Subordinated Notes)
constitutes the legal, valid and binding obligation of the
Borrower enforceable against the Borrower in accordance with its
terms. The subordination provisions of such Subordinated Note
Document will be enforceable against the holders of the
Subordinated Notes by the holder of any "Senior Indebtedness" (as
defined in the Subordinated Note Indenture). All Obligations,
including those to pay principal of and interest (including post-
petition interest) on the Loans and Reimbursement Obligations,
and fees and expenses in connection therewith, constitute "Senior
Indebtedness" (as defined in the Subordinated Note Indenture) and
all such Obligations are entitled to the benefits of the
subordination created by such Subordinated Note Document. The
Borrower acknowledges that the Agents, the Documentation Agent,
the Issuer and each Lender is entering into this Agreement and/or
the Revolving Credit Agreement, as the case may be, and is
extending its respective Commitments, in reliance upon the
subordination provisions of such Subordinated Note Documents and
this Section 6.17.
(b) The Obligations hereunder and the other Loan Documents
constitute "Permitted Indebtedness" as defined in the
Subordinated Note Indenture.
Section 6.18 Special Purpose Subsidiary.
(a) The capital of the Special Purpose Subsidiary is
adequate for the business and undertakings of the Special Purpose
Subsidiary.
(b) Other than with respect to the ownership by the
Borrower of the Capital Stock of the Special Purpose Subsidiary
and the transfers of funds provided for in the Asset Sale
Proceeds Account Agreement, the Special Purpose Subsidiary is not
engaged in any business transactions with the Borrower or any of
its Subsidiaries or Affiliates.
(c) At least one director of the Special Purpose
Subsidiary shall be an Independent Director.
(d) The Special Purpose Subsidiary's funds and assets
are not, and will not be, commingled with the funds of any other
Person.
(e) The bylaws of the Special Purpose Subsidiary
require it to maintain (i) correct and complete minute books and
records of account, and (ii) minutes of the meetings and other
proceedings of its shareholders and board of directors.
(f) The shares of stock of the Special Purpose
Subsidiary which have been pledged pursuant to the Borrower
Pledge Agreement constitute all of the issued and outstanding
shares of the Special Purpose Subsidiary.
Section 6.19 Concentration and Deposit Accounts. Neither
the Borrower nor any of its Subsidiaries maintains any
Concentration Account with any financial institution other than a
Concentration Account Bank. Item 6.19 ("Concentration and
Deposit Accounts") of the Disclosure Schedule sets forth a
complete and accurate list of all Concentration Accounts and
Deposit Accounts of the Borrower and its Subsidiaries.
ARTICLE VII
COVENANTS
Section 7.1 Affirmative Covenants. The Borrower agrees
with the Agents, the Collateral Agent and each Lender that, until
all Obligations have been paid and performed in full, the
Commitments have terminated and the Revolving Credit Letters of
Credit have (x) expired and been returned to the Issuer or (y)
been cash collateralized to the reasonable satisfaction of the
Collateral Agent and the Issuer, the Borrower will perform the
obligations set forth in this Section 7.1.
Section 7.1.1 Financial Information, Reports, Notices, etc.
The Borrower will furnish, or will cause to be furnished, to each
Agent, the Collateral Agent and each Lender copies of the
following financial statements, reports, notices and information
(except, in the case of non-public information, as any such
Lender shall have notified the Borrower and the Administrative
Agent in writing that such Lender shall not be furnished with
such financial statements, reports, notices and information):
(a) as soon as available and in any event within 45
days after the end of each of the first three Fiscal Quarters of
each Fiscal Year of the Borrower, unaudited consolidated and
consolidating balance sheets of the Borrower and its Subsidiaries
(including the Special Purpose Subsidiary) as of the end of such
Fiscal Quarter, together with the related unaudited consolidated
and consolidating statements of operations, changes in
stockholder's equity and cash flow of the Borrower and its
Subsidiaries (including the Special Purpose Subsidiary) for such
Fiscal Quarter and for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal
Quarter, setting forth the comparative amounts for the
corresponding Fiscal Quarter and portion of the previous Fiscal
Year to the extent required to be included on financial
statements to be filed on a Form 10-Q filed with the SEC,
certified by the chief financial or accounting Authorized Officer
of the Borrower as being fairly stated in all material respects
(subject to normal year-end audit adjustments) and, in respect of
the consolidating financial statements, when considered in
conjunction with the related consolidated financial statements,
taken as a whole;
(b) as soon as available and in any event within
90 days after the end of each Fiscal Year of the Borrower, a copy
of the annual audited consolidated and unaudited consolidating
financial statements for such Fiscal Year for the Borrower and
its Subsidiaries (including the Special Purpose Subsidiary),
including therein a consolidated and consolidating balance sheet
of the Borrower and its Subsidiaries (including the Special
Purpose Subsidiary) as of the end of such Fiscal Year, together
with the related consolidated and consolidating statements of
operations, changes in stockholder's equity and cash flow of the
Borrower and its Subsidiaries (including the Special Purpose
Subsidiary) for such Fiscal Year, in each case (i) in respect of
the annual audited financial statements, as audited (without any
Impermissible Qualification) by KPMG Peat Marwick, or any other
internationally recognized firm of independent certified public
accountants constituting one of the "Big Six" accounting firms or
another internationally recognized firm of independent certified
public accountants acceptable to the Required Term Loan Lenders
and the Required Revolving Credit Lenders, together with a
certificate from such accountants as to whether, in making the
examination necessary for the signing of such annual report by
such accountants, they have not become aware of any Default that
has occurred and is continuing or, if in the opinion of such
accounting firm such a Default or Event of Default has occurred
and is continuing, a statement as to the nature thereof and (ii)
in respect of the annual unaudited consolidating financial
statements, certified by the chief financial or accounting
Authorized Officer of the Borrower as being fairly stated in all
materials respects (subject to normal year-end adjustments) when
considered in conjunction with the related consolidated financial
statements, taken as a whole;
(c) as soon as available and in any event within 45
days after the end of each month in each Fiscal Year of the
Borrower, the unaudited consolidated and consolidating balance
sheets of each of the Borrower and its Subsidiaries (including
the Special Purpose Subsidiary) and each Revolving Credit
Borrower and its consolidated Subsidiaries as at the end of such
month and the related unaudited (i) consolidated and
consolidating statements of operations of each of the Borrower
and its Subsidiaries (including the Special Purpose Subsidiary)
and each Revolving Credit Borrower and its consolidated
Subsidiaries for such month and the portion of the Fiscal Year
through the end of such month, and (ii) statements of changes in
stockholder's equity and cash flows of each of the Borrower and
its Subsidiaries (including the Special Purpose Subsidiary) and
each Revolving Credit Borrower and its consolidated Subsidiaries
for the portion of the Fiscal Year through the end of such month,
certified by the chief financial or accounting Authorized Officer
of the Borrower as being fairly stated in all material respects
(subject to normal year-end audit adjustments);
(d) concurrently with the delivery of the financial
statements referred to in clauses (a) and (b), a certificate
executed by the chief financial or accounting Authorized Officer
of the Borrower stating that, to the best of such Authorized
Officer's knowledge, each Obligor during such period has observed
or performed all of its covenants and other agreements, and
satisfied every condition, contained in the Loan Documents to
which it is a party to be observed, performed or satisfied by it,
and that such Authorized Officer has obtained no knowledge of any
Default or Event of Default except as specified in such
certificate;
(e)(i) not later than thirty days prior to the end of
each Fiscal Year of the Borrower, a copy of the projections by
the Borrower of the operating budget and cash flow budget of the
Borrower and its Subsidiaries (including the Special Purpose
Subsidiary) for the succeeding Fiscal Year, and (ii) not later
than fifteen days following the end of each Fiscal Year of the
Borrower, a copy of the consolidating projections by the Borrower
of the operating budget and cash flow budget of the Borrower and
its Subsidiaries (including the Special Purpose Subsidiary) for
the succeeding Fiscal Year, such projections and consolidating
projections to be accompanied by a certificate of the chief
financial or accounting Authorized Officer of the Borrower to the
effect that such projections and consolidating projections have
been prepared in good faith on the basis of reasonable
assumptions and that such Authorized Officer has no reason to
believe they are incorrect or misleading in any material respect;
(f) promptly upon consummating any Acquisition the
total consideration for which exceeds $10,000,000, a certificate
of the chief financial or accounting Authorized Officer of the
Borrower (i) certifying that the representations and warranties
set forth in Section 6.7 and Section 6.12 shall be true and
correct in all material respects after giving effect to any such
Acquisition on and as of the date of the Acquisition as if made
on and as of such date, (ii) certifying that no Default or Event
of Default has occurred and is continuing after giving effect to
any such transaction and (iii) demonstrating in reasonable detail
the computations and assumptions used to determine whether the
Borrower is in compliance with Section 7.2.5 and clause (h) of
Section 7.2.6 as of the end of the most recently ended Fiscal
Quarter prior to such Acquisition after giving pro forma effect
to the consummation of such Acquisition and any debt incurred or
committed to be incurred in connection with such purchase;
(g) together with the delivery of the financial
information required pursuant to clauses (a) and (b), a
Compliance Certificate, executed by the chief financial or
accounting Authorized Officer of the Borrower, showing (in
reasonable detail and with appropriate calculations and
computations in all respects reasonably satisfactory to the
Agents) compliance with the financial covenants set forth in
Section 7.2.5;
(h) as soon as possible and in any event within three
days after the Borrower or any of its Subsidiaries obtains
knowledge of the occurrence of a Default, a statement of the
chief executive, financial or accounting Authorized Officer of
the Borrower setting forth details of such Default and the action
which the Borrower has taken and proposes to take with respect
thereto;
(i) as soon as possible and in any event within three
Business Days after the Borrower or any of its Subsidiaries
obtains knowledge of (x) the occurrence of any material adverse
development with respect to any litigation, action, proceeding or
labor controversy of the type and materiality described in Item
6.7 ("Litigation") of the Disclosure Schedule, or (y) the
commencement of any litigation, action, proceeding or labor
controversy of the type and materiality described in Item 6.7
("Litigation") of the Disclosure Schedule, notice thereof and, to
the extent the Administrative Agent reasonably requests, copies
of all documentation relating thereto;
(j) promptly after the sending or filing thereof,
copies of all reports and registration statements which the
Borrower or any of its Subsidiaries files with the SEC or any
national securities exchange;
(k) immediately upon becoming aware of (i) the
institution of any steps by the Borrower, any Subsidiary of the
Borrower or any other Person to terminate any Pension Plan, (ii)
the failure to make a required contribution to any Pension Plan
if such failure is sufficient to give rise to a Lien under
Section 302(f) of ERISA, (iii) the taking of any action with
respect to a Pension Plan which could result in the requirement
that the Borrower furnish a bond or other security to the PBGC or
such Pension Plan, or (iv) the occurrence of any event with
respect to any Pension Plan which could result in the incurrence
by the Borrower or any Subsidiary of the Borrower of any material
liability, fine or penalty, notice thereof and copies of all
documentation relating thereto;
(l) promptly upon receipt thereof, copies of all
detailed management letters submitted to the Borrower by the
independent public accountants referred to in clause (b) in
connection with each audit made by such accountants of the books
of the Parent, the Borrower or any Subsidiary (including the
Special Purpose Subsidiary);
(m) copies of all material notices delivered or
received by any Obligor pursuant to any Management Agreement,
Parent Stockholders Agreement, Tax Sharing Agreement, Financing
Document or any Receivables Purchase Document;
(n) any development or event which would be likely to
have a Material Adverse Effect; and
(o) such other information respecting the condition or
operations, financial or otherwise, of the Parent or the Borrower
or any of its Subsidiaries (including the Special Purpose
Subsidiary) as any Lender through the Administrative Agent may
from time to time reasonably request (including information and
reports from the chief financial or accounting Authorized Officer
of the Borrower, in such detail as any Agent, the Collateral
Agent or any Lender through the Administrative Agent may
reasonably request, with respect to the terms of and information
provided pursuant to the Compliance Certificate).
Section 7.1.2 Compliance with Laws, etc. The Borrower
will, and will cause each of its Subsidiaries to, comply in all
material respects with all Governmental Approvals and
Governmental Rules of any Regulatory Authority except where the
failure to so comply could not reasonably be expected to have a
Material Adverse Effect, such compliance to include (without
limitation):
(a) the maintenance and preservation of the Borrower's
and its Subsidiaries' corporate existence and qualification as
foreign corporations, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect; and
(b) the payment, before the same become delinquent, of
all material taxes, assessments and governmental charges imposed
upon it or upon its property except to the extent being
diligently contested in good faith by appropriate proceedings and
for which adequate reserves in accordance with GAAP shall have
been set aside on its books.
Section 7.1.3 Maintenance of Properties. Except where the
failure to do so could not reasonably be expected to have a
Material Adverse Effect, the Borrower will, and will cause each
of its Subsidiaries to, maintain, preserve, protect and keep its
properties in good repair, working order and condition, and make
necessary and proper repairs, renewals and replacements so that
its business carried on in connection therewith may be properly
conducted at all times unless the Borrower determines in good
faith that the continued maintenance of any such property is no
longer economically desirable.
Section 7.1.4 Insurance. The Borrower will, and will
cause each of its Subsidiaries to, maintain or cause to be
maintained with responsible insurance companies insurance with
respect to its properties and business against such casualties
and contingencies and of such types and in such amounts as is
customary in the case of similar businesses and with such
provisions and endorsements as the Agents and the Collateral
Agent may reasonably request, and will, upon request of the
Agents and the Collateral Agent, furnish to the Agents and the
Collateral Agent and each Lender a certificate of the chief
financial or accounting Authorized Officer of the Borrower
setting forth the nature and extent of all insurance maintained
by the Borrower and its Subsidiaries in accordance with this
Section.
Section 7.1.5 Books and Records. The Borrower will, and
will cause each of its Subsidiaries to, keep books and records
which accurately reflect all of its business affairs and
transactions and permit the Agents and the Collateral Agent and
each Lender or any of their respective representatives, at
reasonable times and intervals, and, so long as no Default has
occurred and is continuing, upon reasonable prior notice, to
visit all of its offices, to discuss its financial matters with
its officers and, upon reasonable prior notice to the Borrower
and in the presence of one or more Authorized Officers of the
Borrower (whose attendance at such discussion cannot be
unreasonably refused), its independent public accountant (and the
Borrower hereby authorizes such independent public accountant to
discuss under such conditions the Borrower's financial matters
with each Lender or its representatives and to examine (and, at
the expense of the Borrower, photocopy extracts from) any of its
books or other corporate records. No Agent nor the Collateral
Agent nor any Lender shall have any responsibility for the
payment of any fees of such independent public accountant
incurred in connection with any Agent's, the Collateral Agent's
or any Lender's exercise of its rights pursuant to this Section.
Section 7.1.6 Environmental Covenant. The Borrower will,
and will cause each of its Subsidiaries to,
(a) use and operate all of its facilities and
properties in material compliance with all Environmental Laws,
keep all necessary permits, approvals, certificates, licenses and
other authorizations relating to environmental matters in effect
and remain in compliance therewith, and handle all Hazardous
Materials in material compliance with all applicable
Environmental Laws in each case except where the failure to
comply with the terms of this clause could not reasonably be
expected to have a Material Adverse Effect;
(b) promptly notify the Agents and the Collateral
Agent and provide copies upon receipt of all written claims,
complaints, notices or inquiries relating to the condition of its
facilities and properties in respect of, or as to compliance
with, Environmental Laws which relate to environmental matters
which would have, or would reasonably be expected to have, a
Material Adverse Effect, and promptly cure and have dismissed
with prejudice any material actions and proceedings relating to
compliance with Environmental Laws, except to the extent being
diligently contested in good faith by appropriate proceedings and
for which adequate reserves in accordance with GAAP have been set
aside on its books;
(c) provide such information and certifications which
the Agents and the Collateral Agent may reasonably request from
time to time to evidence compliance with this Section 7.1.6; and
(d) prior to acquiring any ownership or leasehold
interest in any bakery or production facility, processing or
packaging plant or facility or other parcel of real property
having a value as determined in good faith by the Collateral
Agent in excess of $15,000,000 in respect of which the Borrower
or the relevant Subsidiary has obtained a written environmental
assessment by an environmental consulting firm of recognized
standing (an "Environmental Assessment"), (i) provide the Agents
and the Collateral Agent with a complete copy of such
Environmental Assessment as soon as possible after the Borrower's
receipt thereof (but in no event less than five days prior to
such Acquisition) and (ii) if requested by any Agent or the
Collateral Agent, consult with and make the environmental
consulting firm available to consult with any Agent or Collateral
Agent concerning the results of such Environmental Assessment.
Section 7.1.7 Additional Collateral.
(a) If after the Closing Date, the Borrower acquires
any property (other than Sold Receivables but including, without
limitation, the Capital Stock of any Person) in which the
Collateral Agent does not have a first-perfected security
interest pursuant to the Security Documents, the Borrower shall
promptly notify the Agents and the Collateral Agent of such
acquisition and, upon the reasonable request of any Agent or the
Collateral Agent, shall execute and deliver to the Agents and the
Collateral Agent not later than 45 days following such request
such documents and instruments (including, without limitation,
security agreements and pledge agreements), and take such action
(including, without limitation, the filing of financing
statements under the U.C.C. in the relevant jurisdictions and the
delivery of stock certificates and instruments), as any Agent or
the Collateral Agent, may reasonably request in order to grant to
the Collateral Agent, as collateral security for the Term Loan
Obligations, a first perfected security interest in such property
of the Borrower, subject to the Liens permitted by Section 7.2.4.
(b) If after the Closing Date, any Subsidiary of the
Borrower (other than a Controlled Foreign Subsidiary) acquires
any property (other than Sold Receivables but including, without
limitation, the Capital Stock of any Person) in which the
Collateral Agent does not have a first-perfected security
interest pursuant to the Security Documents, the Borrower shall
promptly notify the Agents and the Collateral Agent of such
acquisition and, upon the reasonable request of any Agent or the
Collateral Agent, shall cause such Subsidiary to execute and
deliver to the Agents and the Collateral Agent not later than 45
days following such request such documents and instruments
(including, without limitation, security agreements and pledge
agreements) and take such action (including, without limitation,
the filing of financing statements under the U.C.C. in the
relevant jurisdictions and the delivery of stock certificates and
instruments) as any Agent may reasonably request in order to
grant to the Collateral Agent, as collateral security for the
Revolving Credit Obligations and such Subsidiary's obligations
under the Subsidiary Guaranty, a first perfected security
interest in such property of such Subsidiary, subject to the
Liens permitted by Section 7.2.4.
(c) If after the Closing Date, the Borrower or any of
its Subsidiaries acquires or creates any new Subsidiary, the
Borrower shall promptly notify the Agents and the Collateral
Agent of such acquisition or creation and, not later than 45 days
thereafter, shall, (i) if such Subsidiary is not a Controlled
Foreign Subsidiary, cause such new Subsidiary to execute and
deliver to the Agents and the Collateral Agent, with counterparts
for each Revolving Credit Lender, a Subsidiary Guaranty and, if
such new Subsidiary owns any Capital Stock of any other
Subsidiary or Person, the Revolving Credit Pledge Agreement in
order to pledge such Capital Stock and to execute and deliver to
the Collateral Agent a Revolving Credit Security Agreement and,
if applicable, a Revolving Credit Copyright Security Agreement, a
Revolving Credit Patent Security Agreement and/or a Revolving
Credit Trademark Security Agreement, (ii) if such Subsidiary is
not a Controlled Foreign Subsidiary, deliver to the Collateral
Agent, the Capital Stock of such new Subsidiary, or cause the
Subsidiary of the Borrower that owns such Capital Stock to
deliver such Capital Stock to the Collateral Agent, to be held by
it pursuant to the applicable Stock Agreement and (iii) if such
Subsidiary is a Controlled Foreign Subsidiary and is not itself
owned by a Controlled Foreign Subsidiary, deliver to the
Collateral Agent 65% of the Capital Stock of such new Subsidiary
or cause the Subsidiary of the Borrower that owns such Capital
Stock to deliver 65% of such Capital Stock to the Collateral
Agent to be held by it pursuant to the applicable Pledge
Agreement.
(d) As and when required from time to time pursuant to
clause (a) or (b) with respect to real properties required to be
mortgaged pursuant to clause (a) or (b) (the "Section 7.1.7
Properties"), the Borrower shall, and shall cause each of the
Subsidiaries of the Borrower required to mortgage a Section 7.1.7
Property to, execute and deliver to the Agents and the Collateral
Agent, for the benefit of the Term Loan Lenders or the Revolving
Credit Lenders, as the case may be, a mortgage or leasehold
mortgage (as appropriate), in form and substance substantially
identical to the Mortgage or Revolving Credit Mortgage, as the
case may be (with such changes thereto as are advised by local
counsel to the Collateral Agent as appropriate for the laws of
the relevant state) encumbering, as collateral security for the
Term Loan Obligations and the Revolving Credit Obligations (and
such Subsidiary's obligations under the Subsidiary Guaranty), as
the case may be, the relevant Section 7.1.7 Property and in
connection therewith, upon the reasonable request of any Agent or
the Collateral Agent, the Agents and the Collateral Agent shall
have received each of the following:
(i) Maps or plans of an as-built survey of the
sites of the property covered by each such mortgage or leasehold
mortgage certified to the Agents and the Collateral Agent and the
title insurance company (the "Title Insurance Company") referred
to in clause (ii) below in a manner reasonably satisfactory to
them, dated a date reasonably satisfactory to the Collateral
Agent and the Title Insurance Company by an independent
professional licensed land surveyor reasonably satisfactory to
the Collateral Agent and the Title Insurance Company, which maps
or plats and the surveys on which they are based shall be made in
accordance with the minimum Standard Detail Requirements for Land
Title Surveys jointly established and adopted by the American
Land Title Association and the American Congress on Surveying and
mapping in 1992 (and shall constitute a Class A survey
thereunder), and, without limiting the generality of the
foregoing, there shall be surveyed and shown on such maps, plats
or surveys the following: (A) the locations on such sites of all
the buildings, structures and other improvements and the
established building setback lines; (B) the lines of streets
abutting the sites and width thereof; (C) all access and other
easements appurtenant to the sites or necessary or desirable to
use the sites; (D) all roadways, paths, driveways, easements,
encroachments and overhanging projections and similar
encumbrances affecting the site, whether recorded, apparent from
a physical inspection of the sites or otherwise known to the
surveyor; (E) any encroachments on any adjoining property by the
building structures and improvements on the sites; and (F) if the
site is described as being on a filed map, a legend relating the
survey to said map.
(ii) With respect to each parcel covered by each
such mortgage or leasehold mortgage a mortgagee's title policy
(or policies) or marked up unconditional binder for such
insurance dated the date such mortgage or leasehold mortgage is
recorded; each such policy shall (A) be in an amount not less
than 110% and not greater than 125% of the fair market value (as
agreed upon by the Borrower and the Collateral Agent) of the
property covered by such policy; (B) be issued at ordinary rates;
(C) insure that such mortgage or leasehold mortgage insured
thereby creates a valid first mortgage Lien on such parcel free
and clear of all defects and encumbrances, except such as may be
approved by the Collateral Agent (such approval not to be
unreasonably withheld) and except for Liens permitted by Section
7.2.4; (D) name the Collateral Agent for the benefit of the
Revolving Credit Lenders as the insured thereunder; (E) be in the
form of ALTA Loan Policy - 1990; (F) contain such obtainable
endorsements and affirmative coverage as the Agents and the
Collateral Agent may reasonably request (provided that such
endorsements and affirmative coverage shall not include zoning or
usury endorsements); and (G) be issued by First American Title
Insurance Company, with coinsurers or reinsurers at the option of
and reasonably satisfactory to the Collateral Agent. In
addition, the Collateral Agent shall have received evidence
reasonably satisfactory to it that all premiums in respect of
each such policy, and all charges for mortgage recording taxes,
if any, have been paid.
(iii) With respect to any parcel of improved real
property encumbered by any such mortgage or leasehold mortgage
that is within a federally designated flood zone, if requested by
any Agent or the Collateral Agent, (A) a policy of flood
insurance which (1) covers such parcel, (2) is written in an
amount not less than the outstanding principal amount of the
indebtedness secured by such mortgage or leasehold mortgage which
is reasonably allocable to such real property or the maximum
limit of coverage made available with respect to the particular
type of property, whichever is less, and (3) has a term ending
not later than the maturity of the indebtedness secured by such
mortgage or leasehold mortgage and (B) confirmation that the
Subsidiary of the Borrower delivering such mortgage or leasehold
mortgage has received the notice required pursuant to Section
208(e)(3) of Regulation H of the Board.
(iv) To the extent required by applicable law,
with respect to each parcel of real property covered by any such
mortgage or leasehold mortgage, a valuation letter or appraisal
complying with the requirements of the Financial Institution
Reform, Recovery and Enforcement Act of 1989 and otherwise in
form and substance reasonably satisfactory to the Collateral
Agent.
(v) If requested by any Agent or the Collateral
Agent with respect to a leasehold mortgage, use best efforts to
obtain, as soon as reasonably practicable after such request, a
consent to such leasehold mortgage from the owner(s) of the
underlying real property and leases, if any, in form and
substance satisfactory to the Collateral Agent; provided that
such best efforts shall not include the payment of any
consideration other than payment of legal fees and expenses of
such owner(s).
(vi) If requested by the Agents and the
Collateral Agent, cause to be delivered to the Agents and the
Collateral Agent an opinion of counsel with respect to the
matters referred to above and satisfactory in all respects to the
Collateral Agent.
Section 7.1.8 Rate Protection Agreements. Within ninety
days following the Closing Date, the Administrative Agent shall
have received evidence satisfactory to it that the Borrower has
entered into interest rate swap, cap, collar or similar
agreements in form and substance satisfactory to the Syndication
Agent designed to protect the Borrower against fluctuations in
interest rates with respect to at least 50% of the aggregate
outstanding principal amount of the Term Loans for a period from
the date the initial interest rate protection arrangement was
obtained until the Stated Maturity Date, and in all respects
satisfactory to the Syndication Agent.\
Section 7.1.9 Use of Proceeds. The Borrower shall apply
the proceeds of the Term Loans.
(a) to pay a portion of the transaction costs and
expenses of the Refinancing (provided, that the aggregate amount
of such costs and expenses incurred by the Borrower and its
Subsidiaries shall not exceed $10,000,000); and
(b) to repay a portion of the Indebtedness identified
in Item 7.2.2(b) ("Indebtedness to be Paid") of the Disclosure
Schedule.
Section 7.1.10 Independent Corporate Existence. The
Borrower agrees for itself and each of its Subsidiaries
(including the Special Purpose Subsidiary), as follows:
(a) The Articles of Incorporation of the Special
Purpose Subsidiary shall at all times include provisions
requiring that (i) the Board of Directors of the Special Purpose
Subsidiary must at all times include at least one Independent
Director and (ii) any decision by the Special Purpose Subsidiary
to commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to the
Special Purpose Subsidiary or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part
of its property or consenting to any such relief or to the
appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it or the
making of a general assignment for the benefit of its creditors
shall require the approval of the Independent Director of the
Special Purpose Subsidiary, together with such other members of
the Board of Directors of the Special Purpose Subsidiary as
required by the Organic Documents of the Special Purpose
Subsidiary.
(b) The Board of Directors of the Special Purpose
Subsidiary shall at all times include at least one Independent
Director and the Special Purpose Subsidiary shall consult (as to
the satisfaction of the criteria set forth in the definition of
"Independent Director") with the Syndication Agent in selecting
any such Independent Director.
(c) The Borrower shall maintain, and shall cause each
of its Subsidiaries to maintain, books, records and accounts that
are separate from the books, records and accounts of the Parent
or any of its Subsidiaries (other than the Borrower and its
Subsidiaries) such that: (i) the revenues of the Borrower and its
Subsidiaries will be credited to the accounts of the Borrower and
its Subsidiaries only; (ii) all expenses incurred by the Borrower
and its Subsidiaries shall be paid only from the accounts of the
Borrower and its Subsidiaries (other than those paid by the
Parent and allocated to the Borrower in the manner set forth in
clause (g) of this Section); (iii) only officers and employees of
the Borrower and its Subsidiaries in their capacity as such shall
have the authority to make disbursements with respect to the
accounts of the Borrower and its Subsidiaries; (iv) there shall
occur no sharing of accounts or funds (other than cash deposits
with insurers) between the Borrower and its Subsidiaries, on the
one hand, and the Parent or any of its Subsidiaries (other than
the Borrower and its Subsidiaries), on the other hand; and (v)
all cash and funds of the Borrower and its Subsidiaries shall be
managed separately from the cash and funds (other than cash
deposits with insurers) of the Parent or any of its Subsidiaries
(other than the Borrower and its Subsidiaries), and there shall
not occur any commingling, including the investment purposes, of
funds or assets of the Borrower and its Subsidiaries with the
funds or assets of the Parent or any of its Subsidiaries (other
than the Borrower and its Subsidiaries).
(d) Each Form 10-Q and Form 10-K of the Parent and its
Subsidiaries that is filed with the Securities and Exchange
Commission (or any substitute or successor form) shall include a
note clearly stating that the Borrower and its Subsidiaries
(including the Special Purpose Subsidiary) are separate corporate
entities and that their respective assets and the assets of their
respective Subsidiaries are available first and foremost to
satisfy the claims of the creditors of the Borrower and such
Subsidiaries.
(e) All full-time employees of the Borrower and its
Subsidiaries in such capacity shall, as the need arises, identify
themselves as such and not as employees of the Parent or any of
its Subsidiaries (other than the Borrower and its Subsidiaries).
(f) All full-time employees, consultants and agents of
the Borrower and its Subsidiaries shall be compensated directly
from the bank accounts of the Borrower and such Subsidiaries for
services provided by such employees, consultants and agents and,
to the extent any employee, consultant or agent is also an
employee, consultant or agent of the Parent or any of its
Subsidiaries (other than the Borrower and its Borrower and its
Subsidiaries), the compensation of such employee, consultant or
agent shall be allocated in accordance with clause (g) of this
Section among the Borrower and its Subsidiaries, on the one hand,
and the Parent and any of its Subsidiaries (other than the
Borrower and its Subsidiaries), on the other hand, on a basis
which reasonably reflects the services rendered to the Borrower
and its Subsidiaries.
(g) All overhead expenses (including telephone and
other utility charges) for items shared by the Borrower and its
Subsidiaries, on the one hand, and the Parent or any of its
Subsidiaries (other than the Borrower and its Subsidiaries), on
the other hand, shall be allocated on the basis of actual use to
the extent practicable and, to the extent such allocation is not
practicable, on a basis reasonably related to actual use.
Section 7.1.11 Asset Sale Proceeds Contribution and
Deposit. Immediately upon receipt of Asset Sale Proceeds, the
Borrower shall contribute, and shall cause the Parent or the
relevant Subsidiary of the Borrower to contribute to the Borrower
and the Borrower shall in turn contribute, all such Asset Sale
Proceeds to the Special Purpose Subsidiary and, immediately upon
receipt thereof, cause the Special Purpose Subsidiary to deposit
the amount of such contribution into the Asset Sale Proceeds
Account.
Section 7.1.12 Establishment and Administration of
Accounts.
(a) The Borrower and its Subsidiaries shall establish
and maintain Concentration Accounts pursuant to Concentration
Account Agreements in the name of the Collateral Agent for the
benefit of the Term Loan Lenders with the Concentration Account
Banks. The Borrower and its Subsidiaries shall have the right to
collect and shall, promptly upon receipt thereof, deposit in its
respective Concentration Accounts all monies that constitute
cash, checks, notes, drafts, bills of exchange, money orders or
funds received by the Borrower or any of its Subsidiaries in the
ordinary course of business on deposit in any Deposit Account or
otherwise and that constitute proceeds of Collateral in precisely
the form in which received (but with any endorsements of the
Borrower or any of its Subsidiaries necessary for deposit or
collection). Any amounts which are required to be paid to the
Collateral Agent hereunder which are not proceeds of Collateral
shall be paid directly to the Collateral Agent and not deposited
in a Deposit Account. At the close of business on each Business
Day, the Borrower shall, and shall cause each of its Subsidiaries
to, transfer, or cause to be transferred, all funds on deposit in
all Deposit Accounts aggregating in excess of $1,500,000 to a
Concentration Account of the Borrower or such Subsidiary in
accordance with the terms of the Concentration Account
Agreements.
(b) At the close of business on each Business Day, the
Borrower shall, and shall cause each of its Subsidiaries to,
transfer all funds on deposit in all Concentration Accounts to
the Collateral Account in accordance with the terms of the
Concentration Account Agreements; provided, however, that the
Borrower and its Subsidiaries may continue until June 30, 1998 to
maintain Concentration Accounts which are not established with
the Administrative Agent so long as (i) the Borrower or such
Subsidiary has obtained an executed Concentration Account
Agreement with respect to such Concentration Accounts and (ii)
the aggregate amount of net cash held at any time in such
Concentration Accounts does not exceed $5,000,000. The
Collateral Account shall be subject to the terms of the
Collateral Account Agreement and shall be under the sole dominion
and control of the Collateral Agent, and the Collateral Agent
shall have the sole right of withdrawal over the Collateral
Account; provided, however, that so long as no Default of the
type described in clauses (a) through (d) of Section 8.1.9 or
any Event of Default shall have occurred and be continuing, the
Borrower may at any time withdraw funds on deposit in the
Collateral Account for use in any lawful manner not inconsistent
with this Agreement or any other Loan Document. Upon the
occurrence of any Default of the type described in clauses (a)
through (d) of Section 8.1.9 or any Event of Default, the
Borrower shall immediately give notice thereof to the
Administrative Agent and the Collateral Agent. Any term or
provision of this clause (b) to the contrary notwithstanding,
upon delivery of a certificate, certified by the chief financial
or accounting Authorized Officer of the Borrower, to the Agents
and the Collateral Agent in accordance with Section 3 of the
Collateral Account Agreement, the Borrower shall be permitted to
make withdrawals from the Collateral Account during the
continuance of any such Default or Event of Default solely for
(i) working capital purposes of the Borrower and its
Subsidiaries, (ii) maintenance Capital Expenditures in an
aggregate amount during the continuance of any such Default or
Event of Default not to exceed $2,500,000 or (iii) other purposes
as may be approved by the Collateral Agent.
(c) The Borrower shall cause the Special Purpose
Subsidiary to establish and maintain the Asset Sale Proceeds
Account pursuant to the Asset Sale Proceeds Account Agreement in
the name of the Collateral Agent for the benefit of the Revolving
Credit Lenders with the Collateral Agent. Promptly upon receipt
thereof, the Borrower shall contribute, and shall cause the
Parent or the relevant Subsidiary of the Borrower to contribute
to the Borrower and the Borrower shall in turn contribute to the
Special Purpose Subsidiary, and shall cause the Special Purpose
Subsidiary to deposit in the Asset Sale Proceeds Account, all
Asset Sale Proceeds received by the Parent, the Borrower and its
Subsidiaries. In addition, at any time (i) prior to June 30,
1998 that the aggregate amount on deposit in all Concentration
Accounts and the Collateral Account or (ii) thereafter, the
amount on deposit in the Collateral Account exceeds $14,000,000,
the Borrower shall transfer, or cause to be transferred, any such
excess amount to the Asset Sale Proceeds Account.
(d) The Asset Sale Proceeds Account shall be subject
to the terms of the Asset Sale Proceeds Account Agreement and
shall be under the sole dominion and control of the Collateral
Agent and the Collateral Agent shall have the sole right of
withdrawal over the Asset Sale Proceeds Account; provided,
however, that so long as no Default of the type described in
clauses (a) through (d) of Section 8.1.9 or any Event of Default
shall have occurred and be continuing, the Borrower may direct
the Special Purpose Subsidiary to withdraw and deliver to the
Borrower amounts on deposit in the Asset Sale Proceeds Account to
fund Acquisitions or Capital Expenditures by the Borrower or for
working capital purposes of the Borrower upon delivery of a
certificate to the Agents and the Collateral Agent in accordance
with Section 3 of the Asset Sale Proceeds Account Agreement
detailing the application of such amounts. Upon the occurrence
of any Default of the type described in clauses (a) through (d)
of Section 8.1.9 or any Event of Default, the Borrower shall
immediately give notice thereof to the Administrative Agent and
the Collateral Agent. Any term or provision of this clause (d)
to the contrary notwithstanding, upon delivery of a certificate,
certified by the chief financial or accounting Authorized Officer
of the Borrower, to the Agents and the Collateral Agent in
accordance with Section 3 of the Asset Sale Proceeds Account
Agreement, the Borrower shall be permitted to make withdrawals
from the Asset Sale Proceeds Account during the continuance of
any such Default or Event of Default solely for (i) working
capital purposes of the Borrower and its Subsidiaries, (ii)
maintenance Capital Expenditures in an aggregate amount during
the continuance of any such Default or Event of Default not to
exceed $2,500,000 or (iii) other purposes may be approved by the
Collateral Agent.
(e) The Borrower shall instruct the Administrative
Agent or other Concentration Account Bank to invest funds on
deposit in any Concentration Account, the Collateral Account and
the Asset Sale Proceeds Account at all times in Cash Equivalent
Investments. Pursuant to the Borrower Pledge Agreement, the
Borrower shall pledge and assign to the Collateral Agent and
grant to the Collateral Agent a security interest, for the
benefit of the Agents, the Collateral Agent and the Term Loan
Lenders, in each Concentration Account and the Collateral Account
and all funds from time to time deposited therein, including,
without limitation, all Cash Equivalent Investments. Pursuant to
a Subsidiary Pledge Agreement, the Borrower shall cause the
Special Purpose Subsidiary to pledge and assign to the Collateral
Agent and grant to the Collateral Agent a security interest, for
the benefit of the Agents, the Collateral Agent and the Revolving
Credit Lenders, in the Asset Sale Proceeds Account and all funds
from time to time deposited therein, including, without
limitation, all Cash Equivalent Investments.
(f) The Borrower agrees to pay any and all reasonable
fees, costs and expenses which any Agent incurs in connection
with establishing and maintaining the Collateral Account and the
Asset Sale Proceeds Account or any similar payment collection
mechanism for the Borrower, the Special Purpose Subsidiary and
its other Subsidiaries and depositing for collection any check or
item of payment received by and/or delivered to the
Administrative Agent on account of the Obligations.
Section 7.1.13 Special Purpose Subsidiary. The Borrower
agrees with the Agents, the Collateral Agent and each Lender
that, until all Obligations have been paid and performed in full,
the Commitments have terminated and the Revolving Credit Letters
of Credit have (x) expired or been returned to the Issuer or (y)
been cash collateralized to the reasonable satisfaction of the
Collateral Agent and the Issuer, the Borrower will, and will
cause the Special Purpose Subsidiary to, perform the obligations
set forth in this Section 7.1.13.
(a) The Special Purpose Subsidiary shall conduct its
business solely in its own name through its duly Authorized
Officers or agents so as not to mislead others as to the identity
of the entity with which those Authorized Officers or agents are
connected, and particularly will avoid the appearance of
conducting business on behalf of the Parent, the Borrower or any
Affiliate thereof or that the assets of the Special Purpose
Subsidiary[, other than funds on deposit in the Asset Sale
Proceeds Account,] are available to pay the creditors of the
Parent, the Borrower or any Affiliate thereof. Without limiting
the generality of the foregoing, all oral and written
communications, including, without limitation, letters, invoices,
purchase orders, contracts, statements and loan applications,
will be made solely in the name of the Special Purpose
Subsidiary.
(b) The Special Purpose Subsidiary shall maintain
corporate records and books of account separate from those of the
Parent, the Borrower and the Affiliates thereof at the address
designated herein for receipt of notices, unless the Special
Purpose Subsidiary shall otherwise advise the parties hereto in
writing.
(c) The Special Purpose Subsidiary shall obtain proper
authorization from its board of directors of all corporate
actions requiring such authorization. Meetings of the board of
directors will be held at least three times per annum and copies
of the minutes of each such board meeting shall be delivered to
the Agents within two weeks of such meeting.
(d) The Special Purpose Subsidiary shall obtain proper
authorization from its shareholders of all corporate action
requiring shareholder approval. Meetings of the shareholders of
the Special Purpose Subsidiary shall be held not less frequently
than one time per annum and copies of each such authorization and
the minutes of each such shareholder meeting shall be delivered
to Agents within two weeks of such authorization or meeting, as
the case may be.
(e) Although the organizational expenses of the
Special Purpose Subsidiary have been paid by the Borrower,
operating expenses and liabilities of the Special Purpose
Subsidiary shall be paid from its own funds.
(f) The annual financial statements of the Special
Purpose Subsidiary shall be prepared separately from those of the
Parent, the Borrower and any Affiliate thereof and shall disclose
the effects of the Special Purpose Subsidiary's transactions in
accordance with GAAP and that the assets of the Special Purpose
Subsidiary are available first and foremost for the benefit of
the Agents and the Lenders and will not be available to pay
creditors of the Parent, the Borrower or any Affiliate thereof.
(g) The resolutions, agreements and other instruments
of the Special Purpose Subsidiary underlying the transactions
described in the Loan Documents shall be continuously maintained
by the Special Purpose Subsidiary as official records of the
Special Purpose Subsidiary separately identified and held apart
from the records of the Parent, the Borrower and each Affiliate
thereof.
(h) The Special Purpose Subsidiary shall maintain an
arm's-length relationship with the Parent, the Borrower and the
Affiliates thereof and will not hold itself out as being liable
for the debts of the Parent, the Borrower or any Affiliate
thereof.
(i) The Special Purpose Subsidiary shall keep its
assets and its liabilities wholly separate from those of all
other entities, including, but not limited to the Parent, the
Borrower and the Affiliates thereof, except as contemplated by
the Asset Sale Proceeds Account Agreement or as permitted under
the Loan Documents.
Section 7.2 Negative Covenants. The Borrower agrees with
the Agents, the Collateral Agent and each Lender that, until all
Obligations have been paid and performed in full, the Commitments
have terminated and the Revolving Credit Letters of Credit have
(x) expired or been returned to the Issuer or (y) been cash
collateralized to the reasonable satisfaction of the Collateral
Agent and the Issuer, the Borrower will perform the obligations
set forth in this Section 7.2.
Section 7.2.1 Business Activities. The Borrower will not,
and will not permit any Subsidiary to, engage in any business
activity, except the business of production and distribution of
breads, buns, rolls, sweet goods, cookies and other baked goods
and pre-cooked meat and other food products and operation of
retail cafes and such activities as may be incidental, similar or
related thereto.
Section 7.2.2 Indebtedness. The Borrower will not, and
will not permit any of its Subsidiaries to, create, incur, assume
or suffer to exist or otherwise become or be liable in respect of
any Indebtedness, other than, without duplication, the following:
(a) Indebtedness in respect of the Term Loans and
other Obligations;
(b) until the Closing Date, Indebtedness identified in
Item 7.2.2(b) ("Indebtedness to be Paid") of the Disclosure
Schedule;
(c)(i) Indebtedness of the Revolving Credit Borrowers
under the Revolving Credit Agreement and the other Loan Documents
and (ii) Indebtedness of the Obligors (other than the Borrower
and the Revolving Credit Borrowers) under the Loan Documents;
(d) Indebtedness incurred by the Borrower or any of
its Subsidiaries that is represented by Capitalized Lease
Liabilities, mortgage financings or purchase money obligations
(but only to the extent otherwise permitted by Section 7.2.8 and
the 1993 Senior Note Indenture and the 1995 Senior Note
Indenture); provided, that the maximum aggregate amount of all
Indebtedness permitted under this clause (d) shall not exceed
$5,000,000 in aggregate principal amount at any time outstanding;
(e) Hedging Obligations of the Borrower or any of its
Subsidiaries under any Rate Protection Agreement in respect of
the Term Loans or Revolving II Credit Loans;
(f)(i) intercompany Indebtedness between or among the
Borrower and any of its wholly-owned U.S. Subsidiaries, which
Indebtedness (x) shall be evidenced by one or more promissory
notes in form and substance satisfactory to the Agents which
(except in the case of any such notes held by a Non-U.S.
Subsidiary) have been duly executed and delivered to (and
indorsed to the order of) the Collateral Agent in pledge pursuant
to a Pledge Agreement, and (y) shall not be forgiven or otherwise
discharged for any consideration other than payment (Dollar for
Dollar) in cash unless the Collateral Agent otherwise consents
and (ii) additional Indebtedness of the Foreign Subsidiaries and
Trocano in an aggregate principal amount at any time outstanding
not to exceed $1,000,000;
(g)(i) Indebtedness (including the 1993 Senior Notes,
the 1995 Senior Notes and the Subordinated Notes) outstanding on
the date hereof and listed on Item 7.2.2(g) ("Existing
Indebtedness") of the Disclosure Schedule and any (ii)
refinancings, refundings, renewals or extensions of such
Indebtedness; provided that (A) the principal amount of such new
Indebtedness does not exceed the principal amount of, plus
accrued and unpaid interest and premiums (if any) on, the
Indebtedness refinanced, refunded, renewed or extended (the
"Refinanced Indebtedness"), (B) any such Indebtedness incurred by
any Subsidiary (other than the Receivables Subsidiary) shall only
extend, refinance, renew, replace, defease or refund Refinanced
Indebtedness of one or more Subsidiaries (and, in the case of any
such Indebtedness which extends, refinances, increases, renews,
replaces, defeases or refunds Refinanced Indebtedness of the
Receivables Subsidiary, such Indebtedness is incurred by the
Receivables Subsidiary), (C) the weighted average life to
maturity of such new Indebtedness is the same as or longer than
that of the Refinanced Indebtedness and (D) if the Refinanced
Indebtedness is subordinated in right of payment to the Term
Loans or the Revolving Credit Obligations, as the case may be,
the new Indebtedness shall be subordinated in right of payment to
the Term Loans and the Revolving Credit Obligations on terms at
least as favorable to the Lenders as those contained in the
documentation governing the Refinanced Indebtedness;
(h) Indebtedness of a Person which becomes a
Subsidiary after the date hereof or is merged with or into a
Subsidiary after the date hereof, in an aggregate principal
amount for all Subsidiaries not to exceed $20,000,000 at any time
outstanding (exclusive of Indebtedness incurred under this
Agreement or under the Revolving Credit Agreement to refinance
any such Indebtedness of such Person); provided that (i) such
Indebtedness existed at the time such Person became or was merged
with or into a Subsidiary and was not created in anticipation
thereof, (ii) immediately after giving effect to the acquisition
of such Person by the Borrower or one of its Subsidiaries, no
Default shall have occurred and be continuing, (iii) such
Indebtedness is not revolving Indebtedness, (iv) the aggregate
collateral value of the assets, if any, securing such
Indebtedness, reasonably determined by the Borrower, is not in
excess of the principal amount of such Indebtedness and (v) the
covenants and events of default in the documentation governing
such Indebtedness are not more restrictive in any material
respect than the covenants and Events of Default hereunder;
(i) Indebtedness of the Borrower or any of its
Subsidiaries to the extent permitted as Guarantee Obligations
pursuant to Section 7.2.3;
(j) to the extent that the Receivables Subsidiary's
obligation to purchase or acquire Receivables under the
Receivables Sale Agreement is deemed to be an obligation to lend
money to Receivables Selling Subsidiaries, any Indebtedness of
the Receivables Selling Subsidiaries, under the Receivables
Purchase Documents;
(k) other unsecured Indebtedness of the Borrower
permitted to be incurred by paragraph (i) of Section 4.09 of the
1993 Senior Note Indenture (the content of which is listed on
Item 7.2.2(k) ("Permitted Additional Indebtedness") of the
Disclosure Schedule), as in effect on the Closing Date and
without giving effect to any modification or supplement thereto,
or to related definitions and ancillary provisions, or
termination thereof, after the Closing Date in an aggregate
amount at any time outstanding not to exceed $8,000,000; and
(l) unsecured Indebtedness of the Borrower or any of
its Subsidiaries incurred in the ordinary course of business
(including open accounts extended by suppliers on normal trade
terms in connection with purchases of goods and services, but
excluding Indebtedness incurred through the borrowing of money or
Guarantee Obligations).
Notwithstanding the foregoing, no Indebtedness otherwise
permitted by clauses (d), (h), or (k) shall be permitted to be
incurred if, both before and after giving effect to the
incurrence thereof, any Default shall have occurred and be
continuing.
Section 7.2.3 Guarantee Obligations. The Borrower will
not, and will not permit any of its Subsidiaries to, create,
incur, assume or suffer to exist or otherwise become or be liable
in respect of any Guarantee Obligation other than, without
duplication, the following:
(a) Guarantee Obligations in existence on the date
hereof listed on Item 7.2.3(a) ("Existing Guarantee Obligations")
of the Disclosure Schedule and any refinancings, refundings,
renewals or extensions thereof; provided that (i) the principal
amount of such new Guarantee Obligations does not exceed the
outstanding principal amount of the Guarantee Obligations
refinanced, refunded, renewed or extended (the "Refinanced
Guarantee Obligations"), (ii) any such new Guarantee Obligations
incurred by any Subsidiary of the Borrower shall only extend,
refinance, renew, replace, defease or refund Refinanced Guarantee
Obligations of such Subsidiary, (iii) the weighted average life
to maturity of such new Guarantee Obligations is the same as or
longer than that of the Refinanced Guarantee Obligations and (iv)
if the Refinanced Guarantee Obligation is subordinated in right
of payment to the Term Loans or the Revolving Credit Obligations,
as the case may be, the new Guarantee Obligation shall be
subordinated in right of payment to the Term Loans and the
Revolving Credit Obligations, as applicable, on terms at least as
favorable to the Lenders as those contained in the documentation
governing the Refinanced Guarantee Obligation;
(b) Guarantee Obligations in favor of the Collateral
Agent and the Lenders created by the Loan Documents;
(c) Guarantee Obligations in respect of Revolving
Credit Letters of Credit issued under the Revolving Credit
Agreement;
(d) Guarantee Obligations of a corporation which
becomes a Subsidiary or is merged with or into a Subsidiary after
the date hereof provided that (i) such Guarantee Obligations
existed at the time such corporation became or was merged with or
into a Subsidiary and were not created in anticipation thereof
and (ii) immediately after giving effect to the acquisition of
such corporation by the Borrower or one of its Subsidiaries no
Default shall have occurred and be continuing;
(e) Guarantee Obligations of the Borrower and the
Receivables Selling Subsidiaries created pursuant to the
Receivables Purchase Documents;
(f) Guarantee Obligations of the Borrower or the
Subsidiaries of the Borrower incurred after the Closing Date in
an aggregate amount not to exceed $5,000,000 at any one time
outstanding (other than as permitted by clause (g) below);
(g) Guarantee Obligations of the Borrower or of any
Subsidiary Guarantor in respect of any obligation of any other
Subsidiary Guarantor; and
(h) Guarantee Obligations of the Borrower in respect
of any obligations of any Subsidiary;
provided that, in the case of any Guarantee Obligation incurred
under clauses (d), (f) or (h), such Guarantee Obligation, when
added to the other Guarantee Obligations incurred under clauses
(d), (f) or (h), does not exceed $10,000,000 and (ii) such
Guarantee Obligation shall be permitted to be incurred only if,
both before and after giving effect to the incurrence thereof, no
Default shall have occurred and be continuing.
Section 7.2.4 Liens. The Borrower will not, and will not
permit any of its Subsidiaries to, create, incur, assume or
suffer to exist any Lien upon any of its property, revenues or
assets, whether now owned or hereafter acquired, except:
(a) Liens securing payment of the Obligations, granted
pursuant to any Loan Document;
(b) Liens granted to secure payment of Indebtedness of
the type permitted and described in clause (d) of Section 7.2.2
(and securing only those assets that are the subject of such
Capitalized Lease Liabilities);
(c) Liens for taxes, assessments or other governmental
charges or levies not at the time delinquent or thereafter
payable without penalty or being diligently contested in good
faith by appropriate proceedings and for which adequate reserves
in accordance with GAAP shall have been set aside on its books;
(d) Liens of carriers, warehousemen, mechanics,
materialmen and landlords incurred in the ordinary course of
business for sums not overdue for a period of not more than 60
days or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with
GAAP shall have been set aside on its books;
(e) Liens incurred in the ordinary course of business
in connection with workmen's compensation, unemployment insurance
or other forms of governmental insurance or benefits, or to
secure performance of tenders, statutory obligations, leases and
contracts (other than for borrowed money) entered into in the
ordinary course of business or to secure obligations on surety or
appeal bonds;
(f) Liens in existence on the date hereof listed on
Item 7.2.4(f) ("Existing Liens") of the Disclosure Schedule, and
replacement Liens securing any Refinanced Indebtedness permitted
by clause (g) of Section 7.2.2 or any Refinanced Guarantee
Obligation permitted by clause (a) of Section 7.2.3, provided
that no such Lien (or replacement Lien) is spread to cover any
additional property or assets after the Closing Date and that the
amount of Indebtedness or Guarantee Obligations (or Refinanced
Indebtedness or Refinanced Guarantee Obligations) secured thereby
is not increased;
(g) Liens securing Indebtedness of Subsidiaries of the
Borrower permitted by clause (d) of Section 7.2.2 incurred to
finance the acquisition of fixed or capital assets, provided that
(i) such Liens shall be created substantially simultaneously with
the acquisition of such fixed or capital assets, (ii) such Liens
do not at any time encumber any property other than the property
financed by such Indebtedness, (iii) the amount of Indebtedness
secured thereby is not increased and (iv) the principal amount of
Indebtedness secured by any such Lien shall at no time exceed
100% of the original purchase price of such property at the time
it was acquired;
(h) Liens on the property or assets of a Person which
becomes or is merged with or into a Subsidiary of the Borrower
after the date hereof securing Indebtedness permitted by clause
(h) of Section 7.2.2, provided that (A) such Liens existed at the
time such Person became or was merged with or into a Subsidiary
and were not created in anticipation thereof, (B) any such Lien
is not spread to cover any property or assets of such Person
after the time such Person becomes or is merged with or into a
Subsidiary, and (C) the amount of Indebtedness secured thereby is
not increased;
(i) Liens (not otherwise permitted hereunder) on
assets of the Subsidiary Guarantors which secure obligations not
exceeding $5,000,000 in aggregate amount at any time outstanding
and Liens (not otherwise permitted hereunder) on assets of the
Foreign Subsidiaries and Trocano securing Indebtedness permitted
by clause (f)(ii) of Section 7.2.2;
(j) Liens on Sold Receivables created pursuant to the
Receivables Purchase Documents;
(k) easements, rights of way, restrictions and other
similar charges or encumbrances which do not secure any
obligations or interfere in any material respect with the
ordinary conduct of business of the Borrower and its Subsidiaries
or the Revolving Credit Borrowers and their respective
Subsidiaries, in each case taken as a whole;
(l) any Lien arising pursuant to any order of
attachment, distraint or other legal process arising in
connection with court or arbitration proceedings so long as the
execution or other enforcement thereof is effectively stayed, the
claims secured thereby are being contested in good faith by
appropriate proceedings, adequate reserves have been established
with respect to such claims in accordance with GAAP and no
Default would occur as a result thereof; and
(m) Liens arising under licensing agreements entered
into by any Subsidiary of the Borrower in the ordinary course of
business for the use of Intellectual Property or other intangible
assets of such Subsidiary, and settlements, permissions, consents
to use, and other similar agreements concerning Intellectual
Property or judgements adjudicating rights in Intellectual
Property;
provided, however, that none of the Liens permitted by clauses
(i) or (j) of this Section 7.2.4 shall encumber any Collateral or
subject any Collateral to the terms thereof.
Section 7.2.5 Financial Covenants.
(a) Leverage Ratio. The Borrower will not permit the
Leverage Ratio as of the end of any Fiscal Quarter ending after
the Closing Date and occurring during any period set forth below
to be greater than the ratio set forth opposite such period:
Period Leverage Ratio
------ --------------
Closing Date to 12/31/98 9.50:1
1/1/99 to 3/31/99 9.25:1
4/1/99 to 6/30/99 9.00:1
7/1/99 and thereafter 8.75:1
(b) Senior Secured Leverage Ratio. The Borrower will
not permit the Senior Secured Leverage Ratio as of the end of any
Fiscal Quarter ending after the Closing Date and occurring during
any period set forth below to be greater than the ratio set forth
opposite such period:
Senior Secured
Period Leverage Ratio
------ --------------
Closing Date to 3.10:1
3/31/98
4/1/98 to 6/30/98 3.00:1
7/1/98 to 9/30/98 2.85:1
10/1/98 and thereafter 2.75:1
(c) Operating Company Leverage Ratio. The Borrower
will not permit the Operating Company Leverage Ratio as of the
end of any Fiscal Quarter ending after the Closing Date to be
greater than 1.25:1.
(d) Interest Coverage Ratio. The Borrower will not
permit the Interest Coverage Ratio as of the end of any Fiscal
Quarter ending after the Closing Date and occurring during any
period set forth below to be less than the ratio set forth
opposite such period:
Period Interest Coverage Ratio
------ -----------------------
Closing Date to 6/30/98 0.70:1
7/1/98 to 9/30/98 0.80:1
10/1/98 to 12/31/98 0.85:1
1/1/99 to 3/31/99 0.90:1
4/1/99 to 6/30/99 0.95:1
7/1/99 and thereafter 1.00:1
Section 7.2.6 Investments. The Borrower will not, and
will not permit any of its Subsidiaries to, make, incur, assume
or suffer to exist any Investment in any other Person, except:
(a) Investments existing on the Closing Date and
identified in Item 7.2.6(a) ("Ongoing Investments") of the
Disclosure Schedule and extensions, renewals, modifications or
restatements thereof, provided, however, that no such extension,
renewal, modification or restatement shall (i) increase the
amount of the original loan, advance or investment, or (ii)
adversely affect the interests of the Lenders with respect to
such original loan, advance or investment or the interests of the
Lenders under this Agreement or any other Loan Document in any
respect;
(b) Cash Equivalent Investments;
(c) without duplication, Investments by the Borrower
to the extent permitted as Indebtedness pursuant to Section
7.2.2;
(d) without duplication, Investments permitted as
Capital Expenditures pursuant to Section 7.2.8;
(e) Investments in the form of loans and advances to
officers, directors and other employees of the Borrower or its
Subsidiaries for (i) commissions and travel and entertainment
expenses in the ordinary course of business and (ii) relocation
expenses and other similar expenses in an aggregate amount for
the Borrower and its Subsidiaries not to exceed $5,000,000 in the
aggregate at any one time outstanding;
(f) as long as no Event of Default has occurred and is
continuing or would result therefrom, loans by the Borrower or
its Subsidiaries to any member of Management of Parent, the
Borrower or any of their respective Subsidiaries in connection
with management incentive plans or equity investments in the
Parent or purchases of Parent Subordinated Debentures approved by
the Board of Directors of the Borrower or the Parent in an
aggregate amount not to exceed $5,000,000 in the aggregate at any
one time outstanding;
(g) if in the reasonable judgment of the Borrower or
any of its Subsidiaries, any customer is deemed to be in a
reorganization or unable to make a timely cash payment on
Indebtedness or other obligations of such customer owing to it,
the Borrower and each of its Subsidiaries may invest in
securities issued by such customer or any affiliate thereof in
lieu of cash payment; provided that the Borrower or such
Subsidiary, as the case may be, has paid no new consideration
(other than forgiveness of Indebtedness or other obligations)
therefor;
(h) consummation of Acquisitions in any Fiscal Year of
the Borrower so long as (A) after giving effect to any such
Acquisition, (i) the Senior Secured Leverage Ratio is less than
or equal to 2.75:1, (ii) the Leverage Ratio calculated after
giving effect to such Acquisition is less than the Leverage Ratio
calculated prior to giving effect to such Acquisition on a pro
forma basis, (iii) the Borrower or the relevant Subsidiary shall
acquire (subject to Section 7.2.1) a majority controlling
interest in the Person in which such Investment was made or
increase any such controlling interest maintained by it in any
such Person and (iv) the chief financial or accounting Authorized
Officer of the Borrower shall have executed and delivered a
certificate to the Administrative Agent substantially in the form
of Exhibit E hereto (including a calculation of the financial
covenant ratios contained in Section 7.2.5 in reasonable detail)
certifying pro forma compliance with the covenants set forth in
Section 7.2.5 for the most recent full Fiscal Quarter immediately
preceding the date of such Acquisition and certifying that no
Default shall have occurred and be continuing on the date such
Investment is made, nor would a Default result from the making of
such Investment, and (B) the Person in which the Investment is
made (i) conducts the same, similar or related lines of business
to those conducted by Metz and (ii) issues a promissory note
(which shall not be subordinated) to the Borrower or the relevant
Subsidiary (which, in turn, shall issue a promissory note to the
Borrower, which also shall not be subordinated) in an amount
equal to the value of such Investment at such time (allowing for
amounts which must under the circumstances be invested as capital
contributions); provided, however, that (i) such note is fully
secured by all assets of the Person in which the Investment is
being made to the extent permitted by applicable law, (ii) such
note is pledged to the Collateral Agent on behalf of the Term
Loan Lenders pursuant to the Term Loan Security Documents and
(iii) such security interests securing such note, if any, are
collaterally assigned to the Collateral Agent on behalf of the
Term Loan Lenders; and
(i) in respect of Other Bakeries acquired by the
Borrower or any of its Subsidiaries pursuant to an Investment
constituting an Exchanged Bakery Transaction, the portion of such
Investment equal to the fair market value of the Exchanged Bakery
used as consideration by the Borrower or such Subsidiary, as the
case may be, in respect of such Exchanged Bakery Transaction;
provided that, no Investment shall be made under clauses (f),
(g), (h) or (i) of this Section 7.2.6 unless, after giving effect
thereto, (i) the representations and warranties set forth in
Section 6.7 and Section 6.12 shall be true and correct in all
material respects and (ii) no Default shall have occurred and be
continuing or would result therefrom.
Section7.2.7 Restricted Payments, etc. On and at all
times after the date hereof:
(a) the Borrower will not, and will not permit any of
its Subsidiaries to, declare, pay or make any dividend or make
any payment on account of, or set apart assets for a sinking or
other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any shares of any class of
Capital Stock of the Borrower or any Subsidiary (now or hereafter
outstanding), or make any other distribution in respect thereof,
either directly or indirectly, whether in cash or property or in
obligations of the Borrower or any Subsidiary or on any warrants,
options or other rights with respect to any shares of any class
of Capital Stock (now or hereafter outstanding) of the Borrower
or any Subsidiary (other than (i) dividends or distributions
payable in its Capital Stock or warrants to purchase its Capital
Stock or (ii) splits or reclassifications of its Capital Stock
into additional or other shares of its Capital Stock) or apply,
or permit any of its Subsidiaries to apply, any of its funds,
property or assets to the purchase, redemption, exchange, sinking
fund or other retirement of, or agree or permit any of its
Subsidiaries to purchase, redeem or exchange, any shares of any
class of Capital Stock (now or hereafter outstanding) of the
Borrower or any Subsidiary, or warrants, options or other rights
with respect to any shares of Capital Stock (now or hereafter
outstanding) of the Borrower or any Subsidiary; and
(b) the Borrower will not, and will not permit any of
its Subsidiaries to, (i) make any payment or prepayment of
principal of, or make any payment of interest on, any 1993 Senior
Note, 1995 Senior Note or Subordinated Note to any holder thereof
or trustee therefor prior to the stated, scheduled date for such
payment or prepayment set forth in the documents and instruments
memorializing such 1993 Senior Note, 1995 Senior Note or
Subordinated Note, or which would violate the subordination
provisions of such Subordinated Note, or (ii) redeem, purchase or
defease any 1993 Senior Note, 1995 Senior Note or Subordinated
Note (the foregoing prohibited acts referred to in clauses (a)
and (b) above are herein collectively referred to as "Restricted
Payments");
except that, so long as (A) both immediately prior to and after
giving effect to such Restricted Payment, no Default shall have
occurred and be continuing or would result therefrom, (B) after
giving effect to the making of such Restricted Payment, the
Borrower shall be in pro forma compliance with the covenants set
forth in Section 7.2.5 for the most recent full Fiscal Quarter
immediately preceding the date of the payment of such Restricted
Payment for which the relevant financial information has been
delivered pursuant to clauses (a) or (b) of Section 7.1.1, and
(C) the chief financial or accounting Authorized Officer of the
Borrower shall have delivered a certificate to the Agents in form
and substance satisfactory to the Syndication Agent (including a
calculation of the Borrower's compliance with the covenants set
forth in Section 7.2.5) certifying as to the accuracy of clauses
(A) and (B) above:
(i) the Borrower and its Subsidiaries may pay
dividends in additional shares of its Capital Stock, provided
that such Capital Stock does not by its terms require the
Borrower or such Subsidiary to make any Restricted Payments in
respect thereof other than in the form of the issuance of
additional shares of such Capital Stock;
(ii)(A) the Borrower may pay cash dividends to the
Parent (I) in amounts required for the Parent to pay when due
franchise taxes and other fees required to maintain its corporate
existence and (II) in an amount not to exceed $1,000,000 for each
Fiscal Year for the payment of out-of-pocket costs, expenses and
other amounts required to be paid by the Parent during such
Fiscal Year and (B) the Special Purpose Subsidiary may transfer
amounts from the Asset Sale Proceeds Account by way of cash
dividends or loans to the Borrower;
(iii) the Borrower may pay cash dividends to the
Parent in an aggregate amount not to exceed $3,000,000 (the
"Parent Dividend Limit"), provided that the proceeds of such
dividends shall be used within 30 days of receipt of such
dividends by the Parent to repurchase Capital Stock of the Parent
or Parent Subordinated Debentures from any member of Management
of the Parent, the Borrower or any of their respective
Subsidiaries or from the estate of a member of Management of the
Parent, the Borrower or any of their respective Subsidiaries and
provided, further, that the Parent Dividend Limit shall be
increased by the aggregate amount of cash proceeds of any
additional Capital Stock of the Parent or additional Parent
Subordinated Debentures which are issued to any member of the
Management of the Parent, the Borrower or any of their respective
Subsidiaries so long as such proceeds are simultaneously
contributed by the Parent to the capital of the Borrower; and
(iv) the Borrower may pay amounts due and payable to
the Parent under the Tax Sharing Agreements provided that such
amounts are paid out by the Parent to the appropriate taxing
authority within five Business Days of receipt of such amounts
from the Borrower,
Section 7.2.8 Capital Expenditures, etc. The Borrower will
not, and will not permit any of its Subsidiaries to, make or
commit to make Capital Expenditures in any Fiscal Year, except
Capital Expenditures which do not aggregate in any Fiscal Year in
excess of $45,000,000 plus an amount equal to the lesser of (x)
$5,000,000 and (y) 4% of revenues acquired from Investments made
pursuant to clause (h) of Section 7.2.6 (net of revenues
divested); provided, however, that (i) the amount of Capital
Expenditures permitted to be made in the 1998 Fiscal Year shall
not include Capital Expenditures made in respect of repurchase
obligations under lease and sale-leaseback arrangements in an
amount not to exceed $40,000,000, (ii) to the extent the amount
of Capital Expenditures permitted to be made in any Fiscal Year
pursuant to this Section (other than clause (i) above) exceeds
the aggregate amount of Capital Expenditures actually made during
such Fiscal Year, up to 100% of such excess amount may be carried
forward to (but only to) the next succeeding Fiscal Year (any
such amount to be certified by the Borrower to the Agents in the
Compliance Certificate delivered for the last Fiscal Quarter of
such Fiscal Year, and any such amount carried forward to a
succeeding Fiscal Year shall be deemed to be used after the
Borrower and its Subsidiaries use the amount of Capital
Expenditures permitted by this Section without giving effect to
such carry-forward) and (iii) the amount of Capital Expenditures
permitted to be made from Net Cash Proceeds of Asset Sales
pursuant to clause (A)(ii) of Section 7.2.12 (without duplication
of Investments permitted as Capital Expenditures pursuant to
clause (h) of Section 7.2.6) or Section 7.2.15 shall not be
included for purposes of calculating compliance with this Section
7.2.8.
Section 7.2.9 Receivables Subsidiary. The Borrower will
not, and will not permit any of its Subsidiaries to, permit the
Receivables Subsidiary to engage in any business (including,
without limitation, the incurrence of any Indebtedness or the
creation of any Lien on any of its assets) other than the
performance of its obligations under the Receivables Purchase
Documents and all actions reasonably incidental thereto.
Section 7.2.10 Take or Pay Contracts. The Borrower will
not, and will not permit any of its Subsidiaries to, enter into
or be a party to any arrangement for the purchase of materials,
supplies, other property or services if such arrangement by its
express terms requires that payment be made by the Borrower or
such Subsidiary regardless of whether such materials, supplies,
other property or services are delivered or furnished to it.
Section 7.2.11 Consolidation, Merger, etc. The Borrower
will not, and will not permit any of its Subsidiaries to,
liquidate or dissolve, consolidate with, or merge into or with,
any other corporation, or purchase or otherwise acquire all or
substantially all of the assets of any Person (or of any division
thereof) except
(a) any Holding Company or Inactive Subsidiary may be
liquidated or dissolved;
(b) any Holding Company may be merged or consolidated
with or into the Borrower or one of its wholly-owned Subsidiaries
which is a Subsidiary Guarantor;
(c) any Subsidiary Guarantor may be merged or
consolidated with or into one or more other Subsidiary
Guarantors; and
(d) the Borrower and its Subsidiaries may consummate
transactions permitted by clause (h) of Section 7.2.6.
Section 7.2.12 Asset Dispositions, etc. The Borrower will
not, and will not permit any of its Subsidiaries to, sell,
transfer, lease, contribute or otherwise convey, or grant
options, warrants or other rights with respect to, all or any
substantial part of its assets (including accounts receivable and
Capital Stock of Subsidiaries) to any Person, except
(a) such sale, transfer, lease, contribution or
conveyance of such assets is (i) in the ordinary course of its
business (and does not constitute a sale, transfer, lease,
contribution or other conveyance of all or a substantial part of
the assets of the Borrower and its Subsidiaries or any Revolving
Credit Borrower and its Subsidiaries, in each case, taken as a
whole) or is of obsolete or worn out property or is no longer
used or useful in the Borrower's or the relevant Subsidiary's
business or operations or (ii) permitted by Section 7.2.11, or
(iii) by any Subsidiary of the Borrower or the Borrower to the
Borrower or any Subsidiary Guarantor;
(b) the sale, transfer or discount of Receivables and
Related Property arising pursuant to the Receivables Purchase
Documents; or
(c) so long as no Default has occurred and is
continuing, (i) any sale of all or substantially all of the
assets or Capital Stock of Mother's, H&M or Boudin, (ii) any sale
of duplicative assets, divisions, operating units or lines of
business either owned by the Borrower or its Subsidiaries or
acquired in any Acquisition to the extent required by any
Regulatory Authority in connection with such Acquisition, (iii)
any sale by the Borrower or any of its Subsidiaries consisting of
the transfer of one or more bakeries to a Person other than the
Borrower or any of its Subsidiaries (such bakery or bakeries
being, an "Exchanged Bakery") pursuant to a transaction (an
"Exchanged Bakery Transaction") in which the Borrower or such
Subsidiary transferring such Exchanged Bakery receives
consideration therefor constituting, in whole or in substantial
part, one or more other bakeries (collectively, "Other
Bakeries"); provided, that (A) to the extent the Borrower or any
such Subsidiary receives cash or assets in addition to the Other
Bakeries in connection with any such Exchanged Bakery
Transaction, such cash or other assets shall, to the extent their
aggregate value exceeds $250,000, constitute Asset Sale Proceeds
and shall be subject to the terms of this Section 7.2.12, (B) to
the extent the Borrower or any such Subsidiary is required to
pay, as consideration for any Other Bakeries being acquired in
such Exchanged Bakery Transaction, additional consideration
(whether in the form of cash or otherwise) which additional
consideration shall be in addition to the Exchanged Bakery, such
additional consideration shall only be paid if and to the extent
permitted pursuant to Section 7.2.8 or clause (h) of Section
7.2.6 and (C) the Borrower's Board of Directors shall, prior to
the consummation of any Exchanged Bakery Transaction, adopted a
resolution confirming that the total consideration to be received
in connection with such Exchanged Bakery Transaction is at least
equal to the fair market value of such Exchanged Bakery, and (iv)
any sale of any other assets (or any division or operating unit
or line of business) of the Borrower or any Subsidiary of the
Borrower or the Capital Stock of any Subsidiary of the Borrower
from time to time in an aggregate amount not to exceed
$10,000,000; provided, however, that no term or provision of this
clause (c) shall permit the Borrower or any of its Subsidiaries
to sell any of the Capital Stock, or all or substantially all of
the assets, of Metz.
Any term or provision hereof to the contrary notwithstanding,
with respect to all Asset Sales of the type described in clause
(c) of this Section 7.2.12, (A) the aggregate Net Cash Proceeds
from all such Asset Sales in excess of $250,000 (collectively,
the "Asset Sale Proceeds") shall be deposited in the Asset Sale
Proceeds Account and shall be (i) used to consummate one or more
Acquisitions permitted under clause (h) of Section 7.2.6,
(ii) invested in Capital Expenditures or other long-term assets
of the Operating Subsidiaries or (iii) applied to prepay the Term
Loans or Revolving II Credit Loans as provided in clause (c) of
Section 3.1.1 or, to the extent required by Section 3.1 of the
Revolving Credit Agreement, to prepay the Revolving I Credit
Loans or cash collateralize Reimbursement Obligations in respect
of Revolving Credit Letters of Credit, in each case within 360
days of the consummation of any such Asset Sale; (B) the
consideration received in connection with each such Asset Sale
shall be at least equal to the fair market value of such assets
or Capital Stock (as determined by the Board of Directors of the
Borrower in good faith, or by a resolution of the Board of
Directors of the Borrower if the fair market value of such assets
or Capital Stock exceeds $5,000,000), and (C) at least 80% of the
consideration (including the assumption of existing indebtedness)
received in connection with each such sale or disposition shall
be received in cash or Cash Equivalent Investments at the time of
such sale or disposition; provided, however, that the amount of
(1) any liabilities (as shown on the Borrower's or such
Subsidiary's most recent balance sheet or in the notes thereto)
of the Borrower or such Subsidiary that are assumed by the
transferee of any such business or assets and (2) any notes or
other obligations of such transferee or Marketable Securities
received by the Borrower or any such Subsidiary from such
transferee that within 30 days of the consummation of the Asset
Sale are converted by the Borrower or such Subsidiary into cash
(to the extent of the cash received), shall be deemed to be cash
for purposes of this provision. The Borrower agrees to promptly
notify the Agents, the Collateral Agent and the Lenders of each
sale or other disposition by any such Subsidiary of any assets or
Capital Stock permitted pursuant to this clause (c), the Asset
Sale Proceeds received in respect of such sale or disposition and
each reinvestment of such Asset Sale Proceeds (together with a
description of the business, Capital Expenditures or other long-
term asset in which such Asset Sale Proceeds were so reinvested).
Section 7.2.13 Optional Prepayments, Purchases and
Modification of Certain Agreements. The Borrower will not, and
will not permit any of its Subsidiaries to, (a) make any optional
payment or prepayment of or redemption, defeasance or purchase of
any indebtedness (other than (i) the Loans, (ii) Indebtedness
permitted by clause (f) of Section 7.2.2, (iii) Indebtedness
permitted by clause (d) of Section 7.2.2 at such time as the
asset acquired with the proceeds of such Indebtedness is sold or
otherwise disposed of or (iv) Indebtedness permitted by clause
(g)(ii) of Section 7.2.2 consisting of any refinancings or
refundings thereof permitted by the terms of clause (g)(ii) of
Section 7.2.2 but only so long as the principal amount of the
Refinanced Indebtedness is not greater than the principal amount
of the refinancing or refunding Indebtedness or (b) amend, modify
or change, or consent or agree to any amendment, modification or
change to, any of the terms of (1) any Financing Document (other
than any such amendment, modification or change which would
extend the maturity or reduce the amount of any payment of
principal thereunder by the Parent, the Borrower or any of their
Subsidiaries or which would reduce the rate or extend the date
for payment of interest thereunder payable by the Parent, the
Borrower or any of their Subsidiaries) or (2) any Management
Agreement, Parent Stockholders Agreement or the Tax Sharing
Agreement or any schedules, exhibits or agreements related
thereto, in each case which would either increase the obligations
of the Parent, the Borrower or any of their Subsidiaries or would
adversely affect the rights or remedies of the Agents and the
Lenders hereunder or under any Loan Document, or (c) take any
action in violation of any applicable subordination provisions of
any Indebtedness or Guarantee Obligation or (d) (1) deliver any
notice to the trustee under the 1993 Senior Note Indenture or the
holders of the 1993 Senior Notes of its offer to purchase the
1993 Senior Notes in accordance with Section 3.09, 4.10 or 4.15
of the 1993 Senior Note Indenture or (2) deliver any notice to
the trustee under the 1995 Senior Note Indenture or the holders
of the 1995 Senior Notes of its offer to purchase the 1995 Senior
Notes in accordance with Section 3.09, 4.10 or 4.15 of the 1995
Senior Note Indenture or (e) deliver any notice to the trustee
under the Subordinated Note Indenture or the holders of the
Subordinated Notes of its offer to purchase the Subordinated
Notes in accordance with Section 3.09, 4.10 or 4.15 of the
Subordinated Note Indenture or (f) incur any obligation
(contractual or otherwise) to pay, or otherwise become liable for
the payment of, any fees, costs, expenses or other amounts
described in or due under or in connection with the Parent Pledge
Agreement (including, without limitation, any obligations
described in Section 12 thereof).
Section 7.2.14 Transactions with Affiliates. The Borrower
will not, and will not permit any of its Subsidiaries to, enter
into, or cause, suffer or permit to exist any arrangement or
contract with any of its other Affiliates unless such transaction
is (a) not otherwise prohibited under the Loan Documents and (b)
upon fair and reasonable terms no less favorable to the Borrower
or such Subsidiary, as the case may be, than it would obtain in a
comparable arm's length transaction with a Person which is not an
Affiliate; provided, however, that this Section 7.2.14 shall not
prohibit or restrict (i) any reasonable employment or consulting
agreement or arrangement entered into by the Borrower or any of
its Subsidiaries in the ordinary course of business, (ii)
transactions permitted by Section 7.2.7 and clauses (e) and (f)
of Section 7.2.6, (iii) as long as no Default or Event of Default
has occurred and is continuing or would result therefrom,
management fees payable pursuant to the Management Agreements in
an aggregate amount not to exceed $1,000,000 in any Fiscal Year,
(iv) the entering into or the performance by the Borrower and its
Subsidiaries of their obligations under the Tax Sharing
Agreements, (v) transactions among or between the Borrower and
Subsidiaries of the Borrower that are wholly owned, directly or
indirectly, by the Borrower and (vi) transactions contemplated by
the Receivables Purchase Documents.
Section 7.2.15 Sale and Leaseback. The Borrower will not,
and will not permit any of its Subsidiaries to, enter into any
agreement or arrangement with any other Person providing for the
leasing by the Borrower or any of its Subsidiaries of real or
personal property which has been or is to be sold or transferred
by the Borrower or any of its Subsidiaries to such other Person
or to any other Person to whom funds have been or are to be
advanced by such Person on the security of such property or
rental obligations of the Borrower or any of its Subsidiaries;
provided that, there shall be excluded from the operation of this
clause any sale-leaseback arrangements so long as (i) the
aggregate consideration received by the Borrower and its
Subsidiaries for all such sale-leaseback arrangements (including
such sale-leaseback arrangement) since the Closing Date pursuant
to this Section 7.2.15 does not exceed in the aggregate
$1,000,000 and (ii) the Net Cash Proceeds of such sale-leaseback
arrangement (but only if such Net Cash Proceeds, together with
the Net Cash Proceeds of any other sale leaseback arrangements
which are part of a series of related transactions with such sale-
leaseback arrangement, are in excess of $100,000) are deposited
in the Asset Sale Proceeds Account and are (x) invested in
Capital Expenditures or other long-term assets of the Operating
Subsidiaries reasonably related to the conduct of the same,
similar or related lines of business to those conducted by the
Operating Subsidiaries within 360 days of the effective date of
such sale-leaseback arrangement and/or (y) used to prepay the
Term Loans as provided in Section 3.1.1 or, to the extent
required by Section 3.1.1 of the Revolving Credit Agreement, to
prepay the Revolving Credit Loans or cash collateralize
Reimbursement Obligations in respect of Revolving Credit Letters
of Credit.
Section 7.2.16 Stock of Subsidiaries. The Borrower will
not permit any Subsidiary to issue any Capital Stock (whether for
value or otherwise) to any Person other than the Borrower or
another wholly-owned Subsidiary.
Section 7.2.17 Accounting Changes. The Borrower will not,
and will not permit any of its Subsidiaries to, change their
respective Fiscal Years from the period of twelve consecutive
calendar months ending on December 31.
Section 7.2.18 Negative Pledges, Restrictive Agreements,
etc. The Borrower will not, and will not permit any of its
Subsidiaries to, enter into with any Person any agreement, other
than (a) this Agreement and the other Loan Documents, (b) the
Financing Documents (other than the Receivables Purchase
Documents), (c) any Management Agreement, (d), any Parent
Shareholders Agreement, (e) any Tax Sharing Agreement, (f) the
Receivables Purchase Documents (provided that, except to the
extent provided in subsection 6.10 of the Receivable Sale
Agreement as in effect on the Closing Date and the comparable
provision, if any, of any subsequent Receivable Sale Agreement,
such prohibition or limitation shall only be effective against
the Sold Receivables), (g) any industrial revenue bonds, purchase
money mortgages or Capitalized Lease Liabilities permitted by
this Agreement and the other Loan Documents (in which cases under
this clause (g), any prohibition or limitation shall only be
effective against the assets financed thereby) or (h) any license
or other arrangement permitted by this Agreement and the other
Loan Documents concerning Intellectual Property or other
intangible assets (provided that any such prohibition or
limitation shall only be effective against such Intellectual
Property or assets), which prohibits or limits the ability of the
Borrower or any of its Subsidiaries to create, incur, assume or
suffer to exist any Lien upon any of its property, assets or
revenues, whether now owned or hereafter acquired.
Section 7.2.19 Holding Company Status. The Borrower will
not, and will not permit any of the Inactive Subsidiaries or the
Holding Companies to conduct, transact or otherwise engage in any
business or operations, incur, create, assume or suffer to exist
any Indebtedness or Guarantee Obligations or other liabilities or
obligations or Liens, or own, lease, manage or otherwise operate
any properties or assets, other than, in the case of the
Borrower, (a) the consummation of the Refinancing and
transactions incidental thereto, (b) the entering into and
performance of its obligations under the Financing Documents, any
Management Agreement, any Parent Shareholders Agreement, any Tax
Sharing Agreement, the Receivables Purchase Documents and the
Loan Documents to which it is a party, (c) ownership of its
Subsidiaries and the Receivables Subsidiary, (d) Indebtedness
expressly permitted to be incurred by the Borrower by Section
7.2.2 and Guarantee Obligations expressly permitted to be
incurred by the Borrower by Section 7.2.3 and (e) Liens expressly
permitted to be created by the Borrower pursuant to Section
7.2.4.
Section 7.3. Negative Covenants of Special Purpose
Subsidiary. The Borrower agrees with the Agents, the Collateral
Agent and each Lender that, until all Obligations have been paid
and performed in full, the Commitments have terminated and the
Revolving Credit Letters of Credit have (x) expired or been
returned to the Issuer or (y) been cash collateralized to the
reasonable satisfaction of the Collateral Agent and the Issuer,
the Borrower will, and will cause the Special Purpose Subsidiary
to, perform the obligations set forth in this Section 7.3.
Section 7.3.1 Business Activities. Except as otherwise
provided in this Agreement, the Special Purpose Subsidiary shall
not engage in any business activity other than entering into the
Asset Sale Proceeds Account Agreement and performing all of its
obligations thereunder.
Section 7.3.2 Creation of Indebtedness; Guarantees. The
Special Purpose Subsidiary shall not create, incur, assume or
suffer to exist any Indebtedness other than Indebtedness approved
in writing by all Lenders. Without the prior written consent of
the Lenders, the Special Purpose Subsidiary shall not assume,
guarantee, endorse or otherwise be or become directly or
contingently liable for the obligations of any Person by, among
other things, agreeing to purchase any obligation of another
Person, agreeing to advance funds to such Person or causing or
assisting such Person to maintain any amount of capital, in each
case, except as otherwise provided in this Agreement or any other
Loan Document.
Section 7.3.3 Subsidiaries. The Special Purpose Subsidiary
shall not form, or cause to be formed, any Subsidiaries.
Section 7.3.4 Issuance of Stock. The Special Purpose
Subsidiary shall not issue or allow the issuance of any shares of
its Capital Stock or rights, warrants or options in respect of
its Capital Stock, other than the shares of common stock which
have been pledged to the Lenders under the Borrower Pledge
Agreement.
Section 7.3.5 Mergers. The Special Purpose Subsidiary
shall not consolidate with or merge into any Person or transfer
all or any material portion of its assets to any Person or
liquidate or dissolve.
Section 7.3.6 Other Activities. The Special Purpose
Subsidiary shall not:
(a) sell, transfer, exchange or otherwise dispose of
any of its assets except as permitted under the Loan Documents
and under its Certificate of Incorporation; or
(b) engage in any business or activity other than as
contemplated by this Agreement and as permitted under its
Certificate of Incorporation.
Section 7.3.7 Insolvency. Neither the Parent, the
Borrower, the Special Purpose Subsidiary nor any other Subsidiary
of the Borrower shall commence with respect to the Special
Purpose Subsidiary any case, proceeding or other action (A) under
any existing or future law of any jurisdiction, domestic or
foreign, relating to the bankruptcy, insolvency, reorganization
or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, corporation or
other relief with respect to it or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for it or
for all or any substantial part of its assets, or make a general
assignment for the benefit of its creditors. Neither the Parent,
the Borrower, the Special Purpose Subsidiary nor any other
Subsidiary of the Borrower shall take any action in furtherance
of, or indicating the consent to, approval of, or acquiescence in
any of the acts set forth above. The Special Purpose Subsidiary
shall not admit in writing its inability to pay its debts.
Section 7.3.8 ERISA. The Special Purpose Subsidiary shall
not contribute or incur any obligation to contribute to, or incur
any liability in respect of, any Plan.
Section 7.3.9 Dividends. Except as expressly provided in
this Agreement or in any other Loan Document, the Special Purpose
Subsidiary shall not declare or make payment of (i) any dividend
or other distribution on or in respect of any shares of its
Capital Stock, or (ii) any payment on account of the purchase,
redemption, retirement or acquisition of any option, warrant or
other right to acquire shares of its Capital Stock unless (in
each case) at the time of such declaration or payment (and after
giving effect thereto) no amount payable by the Parent, the
Borrower or any Revolving Credit Borrower under any Loan Document
is then due and owing but unpaid.
ARTICLE VIII
EVENTS OF DEFAULT
Section 8.1 Listing of Events of Default. Each of the
following events or occurrences described in this Section 8.1
shall constitute an "Event of Default".
Section 1.1.1 Non-Payment of Obligations. The Borrower
shall default in the payment or prepayment when due of (a) any
principal of any Term Loan; or (b) any Obligor (including the
Borrower) shall default in the payment when due of any interest
or commitment fee with respect to the Term Loans or Term Loan
Commitments or of any other monetary Obligation and such default
shall continue unremedied for a period of three Business Days.
Section 8.1.2 Breach of Warranty. Any representation or
warranty of the Borrower or any other Obligor made or deemed to
be made hereunder or in any other Term Loan Document executed by
it or any other writing or certificate (including the Borrower
Closing Date Certificate) furnished by or on behalf of the
Borrower or any other Obligor to the Agents, the Collateral
Agent, the Arranger or any Term Loan Lender for the purposes of
or in connection with this Agreement or any such other Term Loan
Document (including any certificates delivered pursuant to
Article V), is or shall be incorrect in any material respect when
made or deemed to have been made.
Section 8.1.3 Non-Performance of Certain Covenants and
Obligations. The Borrower shall default in the due performance
and observance of any of its obligations under Section 7.1.7,
7.1.8, 7.1.9 or 7.2; or the Parent shall default in the due
performance and observance of any of its obligations under
Section 2 of the Parent Agreement.
Section 8.1.4 Non-Performance of Other Covenants and
Obligations. The Borrower or any other Obligor shall default in
the due performance and observance of any other agreement
contained herein or in any other Term Loan Document executed by
it, and such default shall continue unremedied for a period of
30 days after notice thereof shall have been given to the
Borrower by the any Agent, the Collateral Agent or any Term Loan
Lender.
Section 8.1.5 Default on Other Indebtedness. A default
shall occur (i) in the payment when due (subject to any
applicable grace period), whether by acceleration or otherwise,
of any Indebtedness (other than Indebtedness described in
Section 8.1.1) of the Borrower or any of its Subsidiaries having
a principal amount, individually or in the aggregate, in excess
of $5,000,000, or (ii) a default shall occur in the performance
or observance of any obligation or condition with respect to such
Indebtedness if the effect of such default is to accelerate the
maturity of any such Indebtedness or such default shall continue
unremedied for any applicable period of time sufficient to permit
the holder or holders of such Indebtedness, or any trustee or
agent for such holders, to cause or declare such Indebtedness to
become due and payable prior to its expressed maturity.
Section 8.1.6 Judgments. Any judgment or order for the
payment of money in excess of $5,000,000 (not covered by
insurance from a responsible insurance company that is not
denying its liability with respect thereto) shall be rendered
against the Borrower or any of its Subsidiaries and remain unpaid
and either (i) enforcement proceedings shall have been commenced
by any creditor upon such judgment or order, or (ii) there shall
be any period of 30 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect.
Section 8.1.7 Pension Plans. Any of the following events
shall occur with respect to any Pension Plan: (i) the
termination of any Pension Plan if, as a result of such
termination, the Borrower or any Subsidiary of the Borrower would
be required to make a contribution to such Pension Plan, or would
reasonably expect to incur a liability or obligation to such
Pension Plan, in excess of $1,000,000, or (ii) a contribution
failure occurs with respect to any Pension Plan sufficient to
give rise to a Lien under section 302(f) of ERISA in an amount in
excess of $1,000,000.
Section 8.1.8 Change in Control. Any Change in Control
shall occur.
Section 8.1.9 Bankruptcy, Insolvency, etc. The Borrower or
any of its Subsidiaries or any other Obligor shall
(a) apply for, approve, consent to, or acquiesce in,
the appointment of a trustee, receiver, sequestrator or other
custodian for the Borrower, any such Subsidiary or any other
Obligor or any property of any thereof, or make a general
assignment for the benefit of creditors;
(b) in the absence of such application, approval,
consent, acquiescence or assignment, permit or suffer to exist
the appointment of a trustee, receiver, sequestrator or other
custodian for the Borrower, any such Subsidiary or any other
Obligor or for a substantial part of the property of any thereof,
and (x) such trustee, receiver, sequestrator or other custodian
shall not be discharged within 60 days or (y) the Borrower, any
such Subsidiary or any other Obligor takes any action in
furtherance of such appointment, provided that the Borrower, each
such Subsidiary and each other Obligor hereby expressly
authorizes the Collateral Agent and each Lender to appear in any
court conducting any relevant proceeding during such 60-day
period to preserve, protect and defend their rights under the
Loan Documents;
(c) permit or suffer to exist the commencement of any
bankruptcy, reorganization, debt arrangement or other case or
proceeding under any bankruptcy or insolvency law, or any
dissolution, winding up or liquidation proceeding, in respect of
the Borrower or any of its Subsidiaries or any other Obligor,
and, if any such case or proceeding is not commenced by the
Borrower or such Subsidiary or such other Obligor, such case or
proceeding shall be consented to or acquiesced in by the Borrower
or such Subsidiary or such other Obligor (or the Borrower, any
such Subsidiary or any other Obligor shall take any action in
furtherance of any of the foregoing) or shall result in the entry
of an order for relief or shall remain for 60 days undismissed;
provided that the Borrower, each such Subsidiary and each other
Obligor hereby expressly authorizes the Collateral Agent and each
Lender to appear in any court conducting any such case or
proceeding during such 60-day period to preserve, protect and
defend their rights under the Loan Documents;
(d) take any action (corporate or otherwise)
authorizing any of the foregoing; or
(e) become insolvent or generally fail to pay, or
admit in writing its inability or unwillingness to pay, its debts
as they become due.
Section 8.1.10 Impairment of Security, etc. Any Term Loan
Security Document shall (except in accordance with its terms), in
whole or in part, cease to be effective or cease to be the
legally valid, binding and enforceable obligation of the Parent,
the Borrower or any other Obligor, as the case may be; the
Borrower, the Parent or any other Obligor shall, directly or
indirectly, contest in any manner such effectiveness, validity,
binding nature or enforceability; or, except as permitted under
any Term Loan Security Document, any Lien securing any Term Loan
Obligation shall, in whole or in part, cease to be a perfected
first priority Lien.
Section 8.1.11 Revolving Credit Event of Default. (i) Any
Revolving Credit Event of Default shall have occurred and be
continuing; or (ii) any "termination event" under and as defined
in the Receivables Sale Agreement as in effect on the Closing
Date, or any event entitling the Persons financing the
Receivables to stop funding the purchase of Receivables from all
sellers of Receivables under any subsequent Receivables Sale
Agreement, shall have occurred and be continuing.
Section 8.2 Action if Bankruptcy, etc. If any Event of
Default described in clauses (a) through (d) of Section 8.1.9
shall occur with respect to any Obligor, the Term Loan
Commitments (if not theretofore terminated) shall automatically
terminate and the outstanding principal amount of all outstanding
Term Loans and all other Term Loan Obligations shall
automatically be and become immediately due and payable, without
notice or demand.
Section 8.3 Action if Other Event of Default. If any Event
of Default (other than an Event of Default described in clauses
(a) through (d) of Section 8.1.9 with respect to any Obligor)
shall occur for any reason, whether voluntary or involuntary, and
be continuing, the Administrative Agent, upon the direction of
the Required Term Loan Lenders, shall by notice to the Borrower
declare all or any portion of the outstanding principal amount of
the Term Loans and other Obligations to be due and payable,
and/or declare the Term Loan Commitments (if not theretofore
terminated) to be terminated, whereupon the full unpaid amount of
such Term Loans and other Term Loan Obligations which shall be so
declared due and payable shall be and become immediately due and
payable, without further notice, demand or presentment, and/or,
as the case may be, the Term Loan Commitments shall terminate.
ARTICLE IX
THE AGENTS
Section 9.1 Actions. Each Term Loan Lender hereby appoints
DLJ as its Syndication Agent and Collateral Agent and ABN as its
Administrative Agent under and for purposes of this Agreement,
the Term Notes and each other Loan Document. Each Term Loan
Lender authorizes the Agents and the Collateral Agent to act on
behalf of such Term Loan Lender under this Agreement, the Term
Notes and each other Loan Document and, in the absence of other
written instructions from the Required Term Loan Lenders received
from time to time by the Agents and the Collateral Agent (with
respect to which each of the Agents and the Collateral Agent
agrees that it will comply, except as otherwise provided in this
Section or as otherwise advised by counsel), to exercise such
powers hereunder and thereunder as are specifically delegated to
or required of the Agents and the Collateral Agent by the terms
hereof and thereof, together with such powers as may be
reasonably incidental thereto. Each Term Loan Lender
acknowledges and consents to DLJ's acting as Syndication Agent
and Collateral Agent and ABN's acting as Administrative Agent for
the Revolving Credit Lenders under the Revolving Credit Agreement
and the other Revolving Credit Documents. Each Term Loan Lender
hereby indemnifies (which indemnity shall survive any termination
of this Agreement) the Agents and the Collateral Agent, ratably
in accordance with their respective Term Loans outstanding and
Term Loan Commitments (or, if no Term Loans or Term Loan
Commitments are at the time outstanding and in effect, then
ratably in accordance with the principal amount of Term Loans
held by such Term Loan Lender, and their respective Term Loan
Commitments as in effect in each case on the date of the
termination of this Agreement), from and against any and all
liabilities, obligations, losses, damages, claims, costs or
expenses of any kind or nature whatsoever which may at any time
be imposed on, incurred by, or asserted against, either of the
Agents or the Collateral Agent in any way relating to or arising
out of this Agreement, the Term Notes and any other Loan
Document, including reasonable attorneys' fees, and as to which
any Agent is not reimbursed by the Borrower or any other Obligor
(and without limiting the obligation of the Borrower or any other
Obligor to do so); provided, however, that no Term Loan Lender
shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, claims, costs or
expenses which are determined by a court of competent
jurisdiction in a final proceeding to have resulted solely from
such Agent's or the Collateral Agent's gross negligence or
willful misconduct. The Agents and the Collateral Agent shall
not be required to take any action hereunder, under the Term
Notes or under any other Loan Document, or to prosecute or defend
any suit in respect of this Agreement, the Term Notes or any
other Loan Document, unless it is indemnified hereunder to its
satisfaction; provided, however, that, notwithstanding the
foregoing, (i) no Agent or the Collateral Agent shall be
obligated to take any action which is inconsistent with the terms
of this Agreement or any Loan Document, (ii) no Agent or the
Collateral Agent shall be obligated to take any action which
exposes it to personal liability or which, in its judgment is
contrary to applicable law, and (iii) no Agent or Collateral
Agent shall have any right or be obligated or entitled to enforce
any right or remedy contained herein, in any Loan Document or
available at law or equity (other than the rights of set off)
except through the Collateral Agent who is hereby granted sole
and exclusive authority on behalf of the Agents with respect
thereto. If any indemnity in favor of either of the Agents or
the Collateral Agent shall be or become, in such Agent's or the
Collateral Agent's determination, inadequate, the Agents or the
Collateral Agent may call for additional indemnification from the
Term Loan Lenders and cease to do the acts indemnified against
hereunder until such additional indemnity is given.
Section 9.2 Funding Reliance, etc. Unless the
Administrative Agent shall have been notified by telephone,
confirmed in writing, by any Term Loan Lender by 5:00 p.m., New
York City time, on the day prior to a Borrowing that such Term
Loan Lender will not make available the amount which would
constitute its Term Loan Percentage of such Borrowing on the date
specified therefor, the Administrative Agent may assume that such
Term Loan Lender has made such amount available to the
Administrative Agent and, in reliance upon such assumption, make
available to the Borrower a corresponding amount. If and to the
extent that such Term Loan Lender shall not have made such amount
available to the Administrative Agent, such Term Loan Lender and
the Borrower severally agree to repay the Administrative Agent
forthwith on demand such corresponding amount together with
interest thereon, for each day from the date the Administrative
Agent made such amount available to the Borrower to the date such
amount is repaid to the Administrative Agent, at the interest
rate applicable at the time to Term Loans comprising such
Borrowing.
Section 9.3 Exculpation. None of the Agents, the
Collateral Agent or the Arranger nor any of their
respective directors, officers, employees or Agents shall be
liable to any Term Loan Lender for any action taken or omitted to
be taken by it under this Agreement or any other Term Loan
Document, or in connection herewith or therewith, except for its
own wilful misconduct or gross negligence, nor responsible for
any recitals or warranties herein or therein, nor for the
effectiveness, enforceability, sufficiency, validity or due
execution of this Agreement or any other Term Loan Document, nor
for the creation, perfection or priority of any Liens purported
to be created by any of the Term Loan Documents, or the validity,
genuineness, enforceability, existence, value or sufficiency of
any collateral security, nor to make any inquiry respecting the
performance by the Borrower of its obligations hereunder or under
any other Term Loan Document. Any such inquiry which may be made
by any Agent or Collateral Agent shall not obligate it to make
any further inquiry or to take any action. No Agent or the
Collateral Agent shall have any duties or responsibilities except
those specifically set forth in this Agreement and the other Loan
Documents and shall not by reason of the relationship established
herein be a trustee or fiduciary of any other Agent, the
Collateral Agent or any Lender. Unless it specifically agrees to
do so in writing, no Agent or the Collateral Agent shall be
obligated to initiate, conduct or supervise any litigation or
collection proceedings, whether in bankruptcy or otherwise, any
work-out or post-default negotiations or take any other similar
actions; provided, that, at the written request of the Required
Term Loan Lenders, the Administrative Agent shall be obligated to
foreclose upon or set off against the cash collateral deposited
with it under clause (b) of Section 3.1.2 in accordance with
Section 4.9. Each Agent and the Collateral Agent shall be
entitled to rely: (a) upon any certification, notice or other
communication (including any thereof by telephone, telex,
telegram or cable) believed by it to be genuine and correct and
to have been signed or sent by or on behalf of the proper Person
or Persons; and (b) upon advice and statements of legal counsel,
independent accountants and other experts selected by it in good
faith. As to the matters not expressly provided for by this
Agreement or any Term Loan Document, each Agent and Collateral
Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder in accordance with instructions
signed by the Required Term Loan Lenders; and such instructions
of the Required Term Loan Lenders and any action taken or failure
to act pursuant thereto shall be binding on all of the Term Loan
Lenders.
Section 9.4 Successor. The Administrative Agent, the
Syndication Agent and the Collateral Agent may resign as such at
any time upon at least 30 days' prior notice to the Borrower, the
Syndication Agent and all Term Loan Lenders and, in the case of
the Administrative Agent, the Collateral Agent, and in the case
of the Collateral Agent, the Administrative Agent. If the
Administrative Agent, the Syndication Agent or the Collateral
Agent at any time shall resign, the Required Term Loan Lenders
may, with the prior consent of the Borrower and the Syndication
Agent (which consents shall not be unreasonably withheld or
delayed), appoint another Lender as a successor Administrative
Agent or Collateral Agent which shall thereupon become the
Administrative Agent, Syndication Agent or the Collateral Agent
hereunder. If no successor Administrative Agent, Syndication
Agent or Collateral Agent shall have been so appointed by the
Required Term Loan Lenders, and shall have accepted such
appointment, within 30 days after the retiring Administrative
Agent's, Syndication Agent's or Collateral Agent's giving notice
of resignation, then the retiring Administrative Agent,
Syndication Agent or Collateral Agent may, on behalf of the Term
Loan Lenders, appoint a successor Administrative Agent or
Collateral Agent, which shall be one of the Lenders or a
commercial banking institution organized under the laws of the
United States or a United States branch or agency of a commercial
banking institution, and having a combined capital and surplus of
at least $500,000,000. Notwithstanding the foregoing, for so
long as ABN shall act as Administrative Agent, if no successor
Administrative Agent has been named and accepted its appointment
as Administrative Agent, then ABN shall be permitted to resign
and the Syndication Agent or the Collateral Agent shall succeed
to the responsibilities of ABN as Administrative Agent; provided,
that at no time during the period commencing with the
Administrative Agent tendering its notice of resignation and
ending at the time that a successor Administrative Agent is
named, may DLJ resign as either the Syndication Agent or
Collateral Agent. Upon the acceptance of any appointment as
Administrative Agent, Syndication Agent or Collateral Agent
hereunder by a successor Administrative Agent, Syndication Agent
or Collateral Agent, such successor Administrative Agent,
Syndication Agent or Collateral Agent shall be entitled to
receive from the retiring Administrative Agent, Syndication Agent
or Collateral Agent such documents of transfer and assignment as
such successor Administrative Agent, Syndication Agent or
Collateral Agent may reasonably request, and shall thereupon
succeed to and become vested with all rights, powers, privileges
and duties of the retiring Administrative Agent, Syndication
Agent or Collateral Agent, and the retiring Administrative Agent,
Syndication Agent or Collateral Agent shall be discharged from
its duties and obligations under this Agreement. After any
retiring Administrative Agent's, retiring Syndication Agent's or
Collateral Agent's resignation hereunder as the Administrative
Agent, Syndication Agent or Collateral Agent, the provisions of
(a) this Article IX shall inure to its benefit as to
any actions taken or omitted to be taken by the retiring
Administrative Agent, retiring Syndication Agent or retiring
Collateral Agent while it was the Administrative Agent, the
Syndication Agent or the Collateral Agent under this Agreement;
and
(b) Section 10.3 and Section 10.4 shall continue to
inure to its benefit.
Section 9.5 Term Loans by each Agent and the Collateral
Agent. Each Agent and the Collateral Agent shall have the same
rights and powers with respect to (x) the Term Loans made by it
or any of its Affiliates, and (y) the Term Notes held by it or
any of its Affiliates as any other Term Loan Lender and may
exercise the same as if it were not an Agent or the Collateral
Agent. Each Agent and the Collateral Agent and each of their
respective Affiliates may accept deposits from, lend money to,
and generally engage in any kind of business with the Borrower or
any Subsidiary or Affiliate of the Borrower as if such Agent or
Collateral Agent were not an Agent or Collateral Agent hereunder.
Section 9.6 Credit Decisions. Each Term Loan Lender
acknowledges that it has, independently of each Agent, the
Collateral Agent, the Documentation Agent, the Arranger and each
other Term Loan Lender, and based on such Term Loan Lender's
review of the financial information of the Borrower, this
Agreement, the other Loan Documents (the terms and provisions of
which being satisfactory to such Term Loan Lender) and such other
documents, information and investigations as such Term Loan
Lender has deemed appropriate, made its own credit decision to
extend its Term Loan Commitment. Each Term Loan Lender also
acknowledges that it will, independently of each Agent, the
Collateral Agent, the Arranger, the Documentation Agent and each
other Term Loan Lender, and based on such other documents,
information and investigations as it shall deem appropriate at
any time, continue to make its own credit decisions as to
exercising or not exercising from time to time any rights and
privileges available to it under this Agreement or any other Loan
Document.
Section 9.7 Copies, etc. Either Agent or the Collateral
Agent shall give prompt notice to each Term Loan Lender of each
notice or request required or permitted to be given to such Agent
or the Collateral Agent by the Borrower pursuant to the terms of
this Agreement (unless concurrently delivered to the Term Loan
Lenders by the Borrower). To the extent that either Agent or the
Collateral Agent receives any document or instrument or other
communication for distribution to the Term Loan Lenders, such
Agent or the Collateral Agent will distribute to each Term Loan
Lender each document or instrument received for its account and
copies of all other communications received by such Agent or the
Collateral Agent from the Borrower for distribution to the Term
Loan Lenders by such Agent or the Collateral Agent in accordance
with the terms of this Agreement (except, in the case of non-
public information, as any such Term Loan Lender shall have
notified the Borrower and such Agent or the Collateral Agent in
writing that such Term Loan Lender shall not be furnished with
such document or instrument). Except for notices, reports and
other documents and information expressly required to be
furnished to the Lenders by an Agent or the Collateral Agent
hereunder or under a Loan Document, no Agent or the Collateral
Agent shall have any duty or responsibility to provide any Agent
or the Collateral Agent or Lender with any credit or other
information concerning the affairs, financial condition or
business of the Borrower (or any of their Affiliates) which may
come into the possession of such Agent or the Collateral Agent or
any of their Affiliates.
Section 9.8 The Syndication Agent, the Documentation Agent,
the Administrative Agent and the Collateral Agent.
Notwithstanding anything else to the contrary contained in this
Agreement or any other Loan Document, the Agents, the Collateral
Agent and the Documentation Agent, in their respective capacities
as such, each in such capacity, shall have no duties or
responsibilities under this Agreement or any other Loan Document
nor any fiduciary relationship with any Term Loan Lender, and no
implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or
otherwise exist against either Agent, the Collateral Agent or the
Documentation Agent as applicable, in such capacity except as are
explicitly set forth herein or in the other Loan Documents.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1 Waivers, Amendments, etc. The provisions of
this Agreement and of each other Term Loan Document may from time
to time be amended, modified or waived, if such amendment,
modification or waiver is in writing and consented to by the
Borrower and each Obligor party thereto and by the Required Term
Loan Lenders; provided, however, that no such amendment,
modification or waiver which would:
(a) modify any requirement hereunder that any
particular action be taken by all the Term Loan Lenders or by the
Required Term Loan Lenders shall be effective unless consented to
by each Term Loan Lender;
(b) modify this Section 10.1, or clause (i) of Section
10.10, change the definition of "Required Term Loan Lenders",
increase any Term Loan Commitment Amount or the Term Loan
Percentage of any Term Loan Lender, release all or substantially
all of the Term Loan Collateral (except in each case as otherwise
specifically provided in this Agreement or applicable Term Loan
Security Document) or extend the Term Loan Commitment Termination
Date, shall be made without the consent of each Term Loan Lender
affected thereby;
(c) extend the due date for, or reduce the amount or
application of, any scheduled repayment or prepayment of
principal of or interest on any Term Loan or reduce the principal
amount of or rate of interest on any Term Loan, shall be made
without the consent of the holder of the Term Note evidencing
such Term Loan;
(d) affect adversely the interests, rights or
obligations of any Agent, the Collateral Agent or the Arranger
(in its capacity as Agent, the Collateral Agent or the Arranger),
unless consented to by such Agent, the Collateral Agent or the
Arranger, as the case may be;
(e) amend, modify or waive the provisions of clauses
(a)(i), (a)(iii), (b), (c), (d) or (e) of Section 3.1.1 or clause
(b) of Section 3.1.2 or effect any amendment, modification or
waiver that by its terms adversely affects the rights of
Revolving Credit Lenders differently from those of Term Loan
Lenders, without the consent of the holders of more than 50% of
the aggregate outstanding principal amount of Revolving II Credit
Loans, or, if no Revolving II Credit Loans are outstanding,
Revolving Credit Lenders holding more than 50% of the Revolving
II Credit Commitments; or
(f) amend, modify or waive the provisions of Section
7.1, 7.2, or 7.3 without the consent of the Required Revolving
Credit Lenders.
No failure or delay on the part of any Agent, the Collateral
Agent, any Term Loan Lender or the holder of any Term Note in
exercising any power or right under this Agreement or any other
Term Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any such power or right
preclude any other or further exercise thereof or the exercise of
any other power or right. No notice to or demand on the Borrower
in any case shall entitle it to any notice or demand in similar
or other circumstances. No waiver or approval by any Agent, the
Collateral Agent any Term Loan Lender or the holder of any Term
Note under this Agreement or any other Term Loan Document shall,
except as may be otherwise stated in such waiver or approval, be
applicable to subsequent transactions. No waiver or approval
hereunder shall require any similar or dissimilar waiver or
approval thereafter to be granted hereunder.
Section 10.2 Notices. All notices and other communications
provided to any party hereto under this Agreement or any other
Term Loan Document shall be in writing or by facsimile and
addressed, delivered or transmitted to such party at its address
or facsimile number set forth on Schedule II hereto or, in the
case of a Term Loan Lender that becomes a party hereto after the
date hereof, as set forth in the Lender Assignment Agreement
pursuant to which such Term Loan Lender becomes a Term Loan
Lender hereunder or at such other address or facsimile number as
may be designated by such party in a notice to the other parties.
Any notice, if mailed and properly addressed with postage prepaid
or if properly addressed and sent by pre-paid courier service,
shall be deemed given when received; any notice, if transmitted
by facsimile, shall be deemed given when transmitted (and
telephonic confirmation of receipt thereof has been received).
Section 10.3 Payment of Costs and Expenses. The Borrower
agrees to pay on demand all reasonable expenses of each of the
Agents and the Collateral Agent (including the reasonable fees
and out-of-pocket expenses of counsel to the Agents and the
Collateral Agent and of local or foreign counsel, if any, who may
be retained by counsel to the Agents and the Collateral Agent) in
connection with
(a) the syndication by the Syndication Agent and the
Arranger of the Term Loans, the negotiation, preparation,
execution and delivery of this Agreement and of each other Term
Loan Document, including schedules and exhibits, and any
amendments, waivers, consents, supplements or other modifications
to this Agreement or any other Term Loan Document as may from
time to time hereafter be required, whether or not the
transactions contemplated hereby are consummated;
(b) the filing, recording, refiling or rerecording of
each Mortgage, each Pledge Agreement and each Security Agreement
and/or any Uniform Commercial Code financing statements relating
thereto and all amendments, supplements and modifications to any
thereof and any and all other documents or instruments of further
assurance required to be filed or recorded or refiled or
rerecorded by the terms hereof or of such Mortgage, Pledge
Agreement or Security Agreement; and
(c) the preparation and review of the form of any
document or instrument relevant to this Agreement or any other
Term Loan Document.
The Borrower further agrees to pay, and to save the Agents, the
Collateral Agent and the Term Loan Lenders harmless from all
liability for, any stamp or other similar taxes which may be
payable in connection with the execution or delivery of this
Agreement, the Term Loans made hereunder or the issuance of the
Term Notes or any other Term Loan Documents. The Borrower also
agrees to reimburse each Agent, the Collateral Agent and each
Term Loan Lender upon demand for all reasonable out-of-pocket
expenses (including reasonable attorneys' fees and legal
expenses) incurred by such Agent, the Collateral Agent or such
Term Loan Lender in connection with (x) the negotiation of any
restructuring or "work-out", whether or not consummated, of any
Term Loan Obligations and (y) the enforcement of any Term Loan
Obligations.
Section 10.4 Indemnification. In consideration of the
execution and delivery of this Agreement by each Lender and the
extension of the Term Loan Commitments, the Borrower hereby, to
the fullest extent permitted under applicable law, indemnifies,
exonerates and holds each Agent, the Collateral Agent, the
Documentation Agent, the Arranger and each Term Loan Lender and
each of their respective Affiliates, and each of their respective
partners, officers, directors, trustees, employees and agents,
and each other Person controlling any of the foregoing within the
meaning of either Section 15 of the Securities Act of 1933, as
amended, or Section 20 of the Securities Exchange Act of 1934, as
amended (collectively, the "Indemnified Parties"), free and
harmless from and against any and all actions, causes of action,
suits, losses, costs, liabilities and damages, and expenses
actually incurred in connection therewith (irrespective of
whether any such Indemnified Party is a party to the action for
which indemnification hereunder is sought), including reasonable
attorneys' fees and disbursements (collectively, the "Indemnified
Liabilities"), incurred by the Indemnified Parties or any of them
as a result of, or arising out of, or relating to
(a) any transaction financed or to be financed in
whole or in part, directly or indirectly, with the proceeds of
any Term Loan;
(b) the entering into and performance of this
Agreement and any other Term Loan Document (other than expenses
incurred in the ordinary course of business) by any of the
Indemnified Parties (including any action brought by or on behalf
of the Borrower as the result of any determination by the
Required Term Loan Lenders pursuant to Article V not to make any
Term Loan hereunder);
(c) any investigation, litigation or proceeding
related to any acquisition or proposed acquisition by the
Borrower or any of its Subsidiaries of all or any portion of the
stock or assets of any Person, whether or not such Agent, the
Collateral Agent, the Documentation Agent, the Arranger or such
Term Loan Lender is party thereto;
(d) any investigation, litigation or proceeding
related to any environmental cleanup, audit, compliance or other
matter relating to the Borrower's or any of its Subsidiaries'
compliance with or liability under any Environmental Law or the
Release by the Borrower or any of its Subsidiaries of any
Hazardous Material; or
(e) the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission or release from, any real
property owned or operated by the Borrower or any Subsidiary
thereof of any Hazardous Material present on or under such
property in a manner giving rise to liability at or prior to the
time the Borrower or such Subsidiary owned or operated such
property (including any losses, liabilities, damages, injuries,
costs, expenses or claims asserted or arising under any
Environmental Law), regardless of whether caused by, or within
the control of, the Borrower or such Subsidiary,
except for any such Indemnified Liabilities arising for the
account of a particular Indemnified Party by reason of the
relevant Indemnified Party's gross negligence or willful
misconduct or any Hazardous Materials that are first
manufactured, emitted, generated, treated, released, stored or
disposed of on any real property of the Borrower or any of its
Subsidiaries or any violation of Environmental Law that first
occurs on or with respect to any real property of the Borrower or
any of its Subsidiaries after such real property is transferred
to any Indemnified Person or its successor by foreclosure sale,
deed in lieu of foreclosure, or similar transfer, except to the
extent such manufacture, emission, release, generation,
treatment, storage or disposal or violation is actually caused by
the Parent, the Borrower or any of the Borrower's Subsidiaries.
The Borrower and its permitted successors and assigns hereby
waive, release and agree not to make any claim, or bring any cost
recovery action against, any Agent, the Collateral Agent, the
Documentation Agent, the Arranger or any Term Loan Lender under
CERCLA or any state equivalent, or any similar law now existing
or hereafter enacted, except to the extent arising out of the
gross negligence or willful misconduct of any Indemnified Party.
It is expressly understood and agreed that to the extent that any
of such Persons is strictly liable under any Environmental Laws,
the Borrower's obligation to such Person under this indemnity
shall likewise be without regard to fault on the part of the
Borrower, to the extent permitted under applicable law, with
respect to the violation or condition which results in liability
of such Person. Notwithstanding anything to the contrary herein,
each Agent, the Collateral Agent, the Documentation Agent, the
Arranger and each Term Loan Lender shall be responsible for any
act or occurrence resulting from their own gross negligence or
willful misconduct with respect to any Hazardous Materials that
are first manufactured, emitted, generated, treated, released,
stored or disposed of on any real property of the Borrower or any
of its Subsidiaries or any violation of Environmental Law that
first occurs on or with respect to any such real property after
such real property is transferred to any Agent, Collateral Agent,
Documentation Agent, Arranger or Term Loan Lender to its
successor by foreclosure sale, deed in lieu of foreclosure, or
similar transfer, except to the extent such manufacture,
emission, release, generation, treatment, storage or disposal or
violation is actually caused by the Parent, the Borrower or any
of the Borrower's Subsidiaries. If and to the extent that the
foregoing undertaking may be unenforceable for any reason, the
Borrower hereby agrees to make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities
which is permissible under applicable law.
Section 10.5 Survival. The obligations of the Borrower
under Sections 4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and the
obligations of the Term Loan Lenders under Sections 4.8 and 9.1,
shall in each case survive any termination of this Agreement, the
payment in full of all Term Loan Obligations and the termination
of all Term Loan Commitments. The representations and warranties
made by the Borrower and each other Obligor in this Agreement and
in each other Term Loan Document shall survive the execution and
delivery of this Agreement and each such other Term Loan
Document.
Section 10.6 Severability. Any provision of this Agreement
or any other Term Loan Document which is prohibited or
unenforceable in any jurisdiction shall, as to such provision and
such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions of this Agreement or such Term Loan Document
or affecting the validity or enforceability of such provision in
any other jurisdiction.
Section 10.7 Headings. The various headings of this
Agreement and of each other Term Loan Document are inserted for
convenience only and shall not affect the meaning or
interpretation of this Agreement or such other Term Loan Document
or any provisions hereof or thereof.
Section 10.8 Execution in Counterparts, Effectiveness, etc.
This Agreement may be executed by the parties hereto in several
counterparts, each of which shall be deemed to be an original and
all of which shall constitute together but one and the same
agreement.
Section 10.9 Governing Law; Entire Agreement. THIS
AGREEMENT, THE TERM NOTES AND, EXCEPT TO THE EXTENT OTHERWISE
EXPRESSLY PROVIDED THEREIN, EACH OTHER TERM LOAN DOCUMENT SHALL
EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK. This Agreement, the Term
Notes and the other Term Loan Documents constitute the entire
understanding among the parties hereto with respect to the
subject matter hereof and supersede any prior agreements, written
or oral, with respect thereto.
Section 10.10 Successors and Assigns. This Agreement shall
be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns; provided,
however, that (i) the Borrower may not assign or transfer its
rights or obligations hereunder without the prior written consent
of each of the Agents, the Collateral Agent and all Term Loan
Lenders, and (ii) the rights of sale, assignment and transfer of
the Term Loan Lenders are subject to Section 10.11.
Section 10.11 Sale and Transfer of Term Loans;
Participations in Term Loans. Each Term Loan Lender may assign,
or sell participations in, its Term Loans, so long as each such
assignment or sale is made, on a pro rata basis with the
assignment, or sale of participations in, its Revolving II Credit
Commitments and Revolving II Credit Loans, to one or more other
Persons in accordance with this Section 10.11 and Section 11.11
of the Revolving Credit Agreement ; provided, that in the event
any Term Loan Lender (for purposes of this proviso, a "Selling
Lender") desires to sell a participation to any prospective
purchaser of any such participation which cannot purchase a
participation in unfunded Revolving II Credit Commitments (a
"Restricted Participant"), such Selling Lender shall not be
obligated pursuant this Section 10.11 to sell such Restricted
Participant a pro rata share of such Selling Lender's unfunded
Revolving II Credit Commitment so long as such Restricted
Participant is obligated to purchase a pro rata share of each
Revolving II Credit Loan as and when made by such Selling Lender
pursuant to its Revolving II Credit Commitment; provided,
further, that such Restricted Participant shall be obligated to
purchase its pro rata share of such unfunded Revolving II Credit
Commitment whenever it would otherwise be permitted to do so
(including, if applicable, upon the occurrence of an Event of
Default).
Section 10.11.1 Assignments. Any Term Loan Lender (the
"Assignor Term Loan Lender"),
(a) with the written consents of the Borrower and the
Syndication Agent (which consents shall not be unreasonably
delayed or withheld and which consent of the Syndication Agent
shall not be required in the case of assignments made by or to
DLJ or any of its Affiliates and which consent of the Borrower
shall not be required if a Default of the type described in
clauses (a) through (d) of Section 8.1.9 or an Event of Default
shall have occurred and be continuing), may at any time assign
and delegate to one or more commercial banks or other financial
institutions or funds which are regularly engaged in making,
purchasing or investing in loans or securities, and
(b) with notice to the Borrower and the Agents, but
without the consent of the Borrower or the Agents, may assign and
delegate to any of its Affiliates or Related Funds or to any
other Term Loan Lender or any other financial institution so long
as such assignment and delegation to such financial institution
is made within ten Business Days of the Closing Date
(each Person described in either of the foregoing clauses as
being the Person to whom such assignment and delegation is to be
made, being hereinafter referred to as an "Assignee Term Loan
Lender"), all or any fraction of such Term Loan Lender's total
Term Loans and Revolving II Credit Commitments in a minimum
aggregate amount of (i) $1,000,000 or (ii) the then remaining
amount of such Term Loan Lender's Term Loans and Revolving II
Credit Commitments; provided, however, that any such Assignee
Term Loan Lender will comply, if applicable, with the provisions
contained in Section 4.6 and the Borrower, each other Obligor and
the Agents shall be entitled to continue to deal solely and
directly with such Term Loan Lender in connection with the
interests so assigned and delegated to an Assignee Term Loan
Lender until
(c) written notice of such assignment and delegation,
together with payment instructions, addresses and related
information with respect to such Assignee Term Loan Lender, shall
have been given to the Borrower and the Agents by such Term Loan
Lender and such Assignee Term Loan Lender;
(d) such Assignee Term Loan Lender shall have executed
and delivered to the Borrower and the Agents a Lender Assignment
Agreement, accepted by the Agents;
(e) the processing fees described below shall have
been paid; and
(f) the Administrative Agent shall have registered
such assignment and delegation in the Register pursuant to clause
(b) of Section 2.6.
From and after the date that the Administrative Agent accepts
such Lender Assignment Agreement and such assignment and
delegation is registered in the Register pursuant to clause (b)
of Section 2.6, (x) the Assignee Term Loan Lender thereunder
shall be deemed automatically to have become a party hereto and
to the extent that rights and obligations hereunder have been
assigned and delegated to such Assignee Term Loan Lender in
connection with such Lender Assignment Agreement, shall have the
rights and obligations of a Term Loan Lender hereunder and under
the other Term Loan Documents, and (y) the Assignor Term Loan
Lender, to the extent that rights and obligations hereunder have
been assigned and delegated by it in connection with such Lender
Assignment Agreement, shall be released from its obligations
hereunder and under the other Term Loan Documents. Within ten
Business Days after its receipt of notice that the Administrative
Agent has received an executed Lender Assignment Agreement, and
upon request pursuant to Section 2.6, the Borrower shall execute
and deliver to the Administrative Agent (for delivery to the
relevant Assignee Term Loan Lender) new Term Notes evidencing
such Assignee Term Loan Lender's assigned Term Loans and, if the
Assignor Term Loan Lender has retained Term Loans hereunder,
replacement Term Notes in the principal amount of the Term Loans
retained by the Assignor Term Loan Lender hereunder (such Term
Notes to be in exchange for, but not in payment of, those Term
Notes then held by such Assignor Term Loan Lender). Each such
Term Note shall be dated the date of the predecessor Term Notes.
The Assignor Term Loan Lender shall mark the predecessor Term
Notes "exchanged" and deliver them to the Borrower. Accrued
interest on that part of the predecessor Term Notes evidenced by
the new Term Notes, and accrued fees, shall be paid as provided
in the Lender Assignment Agreement. Accrued interest on that
part of the predecessor Term Notes evidenced by the replacement
Term Notes shall be paid to the Assignor Term Loan Lender.
Accrued interest and accrued fees shall be paid at the same time
or times provided in the predecessor Term Notes and in this
Agreement. Such Assignor Term Loan Lender or such Assignee Term
Loan Lender must also pay a processing fee to the Administrative
Agent upon delivery of any Lender Assignment Agreement in
connection with the concurrent assignment of Term Loans and
Revolving II Credit Commitments in the amount of $1,500, unless
such assignment and delegation is by a Term Loan Lender to its
Affiliate or Related Fund or if such assignment and delegation
consists of a pledge by a Term Loan Lender to a Federal Reserve
Bank (or, in the case of a Term Loan Lender that is an investment
fund, to the trustee under the indenture to which such fund is a
party), as provided below or is otherwise consented to by the
Syndication Agent. Any attempted assignment and delegation not
made in accordance with this Section 10.11.1 shall be null and
void. Nothing contained in this Section 10.11.1 shall prevent or
prohibit any Term Loan Lender from pledging its rights (but not
its obligations to make Term Loans) under this Agreement and/or
its Term Loans and/or its Term Notes hereunder (i) to a Federal
Reserve Bank in support of borrowings made by such Term Loan
Lender from such Federal Reserve Bank, or (ii) in the case of a
Term Loan Lender that is an investment fund, to the trustee under
the indenture to which such fund is a party in support of its
obligations to such trustee, in either case without notice to or
consent of the Borrower or the Agents; provided, however, that
(A) such Term Loan Lender shall remain a "Term Loan Lender" under
this Agreement and shall continue to be bound by all the terms
and conditions set forth in this Agreement and the other Term
Loan Documents, and (B) any assignment by such trustee shall be
subject to the provisions of clause (a) of this Section 10.11.1.
Section 10.11.2 Participations. Any Term Loan Lender may
at any time sell to one or more commercial banks or other
financial institutions or funds which are regularly engaged in
making, purchasing or investing in loans or securities (each such
commercial bank and other financial institution or fund being
herein called a "Participant") participating interests in any of
its Term Loans, or other interests of such Term Loan Lender
hereunder; provided, however, that
(a) no participation contemplated in this Section
shall relieve such Term Loan Lender from its Term Loan
Commitments, or its other obligations hereunder or under any
other Term Loan Document;
(b) such Term Loan Lender shall remain solely
responsible for the performance of its Term Loan Commitments, and
such other obligations;
(c) the Borrower and each other Obligor and the Agents
shall continue to deal solely and directly with such Term Loan
Lender in connection with such Term Loan Lender's rights and
obligations under this Agreement and each of the other Term Loan
Documents;
(d) no Participant, unless such Participant is an
Affiliate of such Term Loan Lender, or is itself a Term Loan
Lender, shall be entitled to require such Term Loan Lender to
take or refrain from taking any action hereunder or under any
other Term Loan Document, except that such Term Loan Lender may
agree with any Participant that such Term Loan Lender will not,
without such Participant's consent, agree to any reduction in the
interest rate or amount of fees that such Participant is
otherwise entitled to, a decrease in the principal amount, or an
extension of the final Stated Maturity Date, of any Term Loan in
which such Participant has purchased a participating interest or
a release of all or substantially all of the Term Loan Collateral
under the Term Loan Documents, except as otherwise specifically
provided in a Term Loan Document; and
(e) the Borrower shall not be required to pay any
amount under Sections 4.3, 4.4, 4.5, 4.6, 10.3 and 10.4 that is
greater than the amount which it would have been required to pay
had no participating interest been sold.
The Borrower acknowledges and agrees, subject to clause (e)
above, that, to the fullest extent permitted under applicable
law, each Participant, for purposes of Sections 4.3, 4.4, 4.5,
4.6, 4.8, 4.9, 10.3 and 10.4, shall be considered a Term Loan
Lender.
Section 10.12 Other Transactions. Nothing contained herein
shall preclude any Agent, the Collateral Agent or any other Term
Loan Lender from engaging in any transaction, in addition to
those contemplated by this Agreement or any other Term Loan
Document, with the Borrower or any of its Affiliates in which the
Borrower or such Affiliate is not restricted hereby from engaging
with any other Person.
Section 10.13 Forum Selection and Consent to Jurisdiction.
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT OR ANY OTHER TERM LOAN DOCUMENT,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF THE AGENTS, THE COLLATERAL
AGENT, THE TERM LOAN LENDERS OR THE BORROWER RELATING THERETO
SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY (TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW) IN THE COURTS OF THE STATE OF NEW
YORK, NEW YORK COUNTY, OR IN THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY
SUIT SEEKING ENFORCEMENT AGAINST ANY TERM LOAN COLLATERAL OR
OTHER PROPERTY MAY BE BROUGHT, AT THE COLLATERAL AGENT'S OPTION,
IN THE COURTS OF ANY JURISDICTION WHERE SUCH TERM LOAN COLLATERAL
OR OTHER PROPERTY MAY BE FOUND. THE BORROWER HEREBY EXPRESSLY
AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK, NEW YORK COUNTY, AND OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY
AGREES TO BE BOUND BY ANY FINAL JUDGMENT RENDERED THEREBY IN
CONNECTION WITH SUCH LITIGATION. THE BORROWER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF
NEW YORK. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT
MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH
LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY
CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT THE BORROWER HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT
OF FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE BORROWER
HEREBY IRREVOCABLY WAIVES (TO THE EXTENT PERMITTED UNDER
APPLICABLE LAW) SUCH IMMUNITY IN RESPECT OF ITS TERM LOAN
OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER TERM LOAN
DOCUMENTS.
Section 10.14 Waiver of Jury Trial. THE AGENTS, THE
COLLATERAL AGENT, THE TERM LOAN LENDERS AND THE BORROWER HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER TERM LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN)
OR ACTIONS OF THE AGENTS, THE COLLATERAL AGENT, THE TERM LOAN
LENDERS OR THE BORROWER RELATING THERETO. THE BORROWER
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF
EACH OTHER TERM LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENTS, THE
COLLATERAL AGENT AND THE TERM LOAN LENDERS ENTERING INTO THIS
AGREEMENT AND EACH SUCH OTHER TERM LOAN DOCUMENT.
Section 10.15 Confidentiality. The Agents, the Collateral
Agent, the Arranger and the Term Loan Lenders shall hold all non-
public information obtained pursuant to or in connection with
this Agreement or obtained by them based on a review of the books
and records of the Borrower or any of its Subsidiaries in
accordance with their customary procedures for handling
confidential information of this nature, but may make disclosure
to any of their examiners, regulators (including, without
limitation, the National Association of Insurance Commissioners),
Affiliates, outside auditors, counsel and other professional
advisors in connection with this Agreement or as reasonably
required by any potential bona fide transferee, participant or
assignee, or in connection with the exercise of remedies under a
Term Loan Document, or as requested by any governmental agency or
representative thereof or pursuant to legal process; provided,
however, that
(a) unless specifically prohibited by applicable law
or court order, each Agent, the Collateral Agent, the Arranger
and each Term Loan Lender shall promptly notify the Borrower of
any request by any governmental agency or representative thereof
(other than any such request in connection with an examination of
the financial condition of such Agent, Collateral Agent, Arranger
and Term Loan Lender by such governmental agency) for disclosure
of any such non-public information and, where practicable, prior
to disclosure of such information;
(b) prior to any such disclosure pursuant to this
Section 10.15, each Agent, the Collateral Agent, the Arranger and
each Term Loan Lender shall require any such bona fide
transferee, participant and assignee receiving a disclosure of
non-public information to agree in writing
(i) to be bound by this Section 10.15; and
(ii) to require such Person to require any other
Person to whom such Person discloses such non-public information
to be similarly bound by this Section 10.15;
(c) disclosure may, with the consent of the Agents and
the Borrower, be made by any Term Loan Lender to any direct or
indirect contractual counter parties of such Term Loan Lender in
swap agreements or such contractual counterparties' professional
advisors; provided that such contractual counterparty or
professional advisor agrees in writing to keep such information
confidential to the same extent required of the Term Loan Lenders
hereunder;
(d) except as may be required by an order of a court
of competent jurisdiction and to the extent set forth therein, no
Term Loan Lender shall be obligated or required to return any
materials furnished by the Borrower or any Subsidiary; and
(e) such non-public information shall not be used for
any purpose other than the transactions contemplated by this
Agreement and the other Loan Documents.
Section 10.16 Liens on Sold Assets. The Collateral Agent
will execute and deliver to the Borrower, at the Borrower's sole
cost and expense, any releases, termination statements or other
documents reasonably necessary for (a) the release of the Liens
granted by the Security Documents on any property or other assets
sold, transferred or otherwise disposed of in a transaction
permitted by this Agreement and (b) if the property or other
assets sold, transferred or otherwise disposed of in a
transaction permitted by this Agreement consist of all the
Capital Stock of a Subsidiary, the release of such Subsidiary
from the Subsidiary Guaranty, Subsidiary Pledge Agreement and
Subsidiary Security Agreement if such Subsidiary is a party
thereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized as of the day and year first above written.
SPECIALTY FOODS CORPORATION
By:
Title:
DLJ CAPITAL FUNDING, INC.,
as the Syndication Agent,
Collateral Agent and as Term Loan
Lender
By:
Title:
ABN AMRO BANK N.V., as the
Administrative Agent
By:
Title:
SUMMIT BANK, as the Documentation
Agent
By:
Title:
_______________________________
/. Inactive.
/ Inactive.
Exhibit 10.17
U.S. $125,000,000
REVOLVING CREDIT AGREEMENT,
dated as of March 16, 1998,
among
CERTAIN SUBSIDIARIES OF
SPECIALTY FOODS CORPORATION,
as the Revolving Credit Borrowers,
VARIOUS FINANCIAL INSTITUTIONS,
as the Revolving Credit Lenders,
DLJ CAPITAL FUNDING, INC.,
as the Syndication Agent and
Collateral Agent for the Revolving Credit Lenders,
ABN AMRO BANK N.V.,
as the Administrative Agent for the Revolving Credit Lenders,
and
SUMMIT BANK,
as the Documentation Agent for the Revolving Credit Lenders.
ARRANGED BY
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
TABLE OF CONTENTS
SECTION PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms 2
1.2. Use of Defined Terms 17
1.3. Cross-References 17
1.4. Accounting and Financial Determinations 17
ARTICLE II
REVOLVING CREDIT COMMITMENTS,BORROWING PROCEDURES AND NOTES
2.1. Revolving Credit Commitments 17
2.1.1. Revolving I Credit Commitment 17
2.1.2. Revolving II Credit Commitment 18
2.1.3. Commitment to Issue Revolving Credit Letters of Credit 18
2.1.4. Revolving Credit Lenders Not Permitted or Required To
Make Revolving Credit Loans or Issue or Participate in
Revolving Credit Letters of Credit Under Certain
Circumstances 18
2.2. Reduction of Commitment Amounts 19
2.2.1. Optional 19
2.2.2. Mandatory 20
2.3. Borrowing Procedure 20
2.3.1. Revolving I Credit Loans and Revolving II Credit Loans 20
2.3.2. Swing Line Loans 21
2.4. Continuation and Conversion Elections 22
2.5. Funding 22
2.6. Register; Revolving Credit 23
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
3.1. Repayments and Prepayments 24
3.2. Interest Provisions 27
3.2.1. Rates 27
3.2.2. Post-Maturity Rates 27
3.2.3. Payment Dates 28
3.3. Fees 28
3.3.1. Commitment Fee 28
3.3.2. Other Fees 29
3.3.3. Revolving Credit Letter of Credit Fee 29
3.3.4. Revolving Credit Letter of Credit Issuing Fee 29
3.3.5. Revolving Credit Letter of Credit Administrative Fee 29
ARTICLE IV
REVOLVING CREDIT LETTERS OF CREDIT
4.1. Issuance Requests 30
4.2. Issuances and Extensions 31
4.3. Expenses 31
4.4. Other Revolving Credit Lenders' Participation 31
4.5. Disbursements 32
4.6. Reimbursement 33
4.7. Deemed Disbursements 33
4.8. Nature of Reimbursement Obligations 34
4.9. Increased Costs; Indemnity 35
ARTICLE V
CERTAIN LIBO RATE AND OTHER PROVISIONS
5.1. LIBO Rate Lending Unlawful 36
5.2. Deposits Unavailable 37
5.3. Increased LIBO Rate Loan Costs, etc. 37
5.4. Funding Losses 38
5.5. Increased Capital Costs 38
5.6. Taxes 39
5.7. Payments, Computations, etc. 42
5.8. Sharing of Payments. 42
5.9. Setoff 43
5.10. Replacement of Revolving Credit Lenders 44
ARTICLE VI
CONDITIONS PRECEDENT
6.1. Initial Revolving Credit Extension 45
6.1.1. Resolutions, etc. 45
6.1.2. Refinancing Consummated 45
6.1.3. Payment of Outstanding Indebtedness, etc. 45
6.1.4. Guaranty 46
6.1.5. Pledge Agreement 46
6.1.6. Security Agreement 46
6.1.7. Mortgages 47
6.1.8. Perfection Certificate 48
6.1.9. Opinions of Counsel 48
6.1.10. Issuance Request 48
6.1.11. Closing Fees, Expenses, etc. 48
6.2. All Revolving Credit Extensions 49
6.2.1. Compliance with Warranties, No Default, etc. 49
6.2.2. Credit Request 50
6.2.3. Satisfactory Legal Form 50
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
ARTICLE VIII
COVENANTS
8.1. Affirmative Covenants 51
8.1.1. Affirmative Covenants in Term Loan Agreement 51
8.1.2. Use of Proceeds 51
8.1.3. Additional Collateral 51
8.2. Negative Covenants 53
8.2.1. Negative Covenants in Term Loan Agreement 53
ARTICLE IX
EVENTS OF DEFAULT
9.1. Listing of Events of Default 54
9.1.1. Non-Payment of Obligations 54
9.1.2. Breach of Warranty 54
9.1.3. Non-Performance of Certain Covenants and Obligations 54
9.1.4. Non-Performance of Other Covenants and Obligations 54
9.1.5. Default on Other Indebtedness 54
9.1.6. Judgments 55
9.1.7. Pension Plans 55
9.1.8. Change in Control 55
9.1.9. Bankruptcy, Insolvency, etc. 55
9.1.10. Impairment of Security, etc. 56
9.1.11. Term Loan Agreement Event of Default 56
9.2. Action if Bankruptcy, etc. 56
9.3. Action if Other Event of Default 57
ARTICLE X
THE AGENTS
10.1. Actions 57
10.2. Funding Reliance, etc. 58
10.3. Exculpation 58
10.4. Successor 59
10.5. Revolving Credit Loans and Revolving Credit Letters of
Credit by each Agent and the Collateral Agent 60
10.6. Credit Decisions 60
10.7. Copies, etc. 61
10.8. The Syndication Agent, the Documentation Agent, the
Administrative Agent and the Collateral Agent 61
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1. Waivers, Amendments, etc. 62
11.2. Notices 63
11.3. Payment of Costs and Expenses 63
11.4. Indemnification 64
11.5. Survival 66
11.6. Severability 66
11.7. Headings 66
11.8. Execution in Counterparts, Effectiveness, etc. 66
11.9. Governing Law; Entire Agreement 66
11.10. Successors and Assigns 66
11.11. Sale and Transfer of Revolving Credit Loans and
Revolving Credit Commitments; Participations in Revolving
Credit Loans and Revolving Credit Commitments 67
11.11.1.Assignments 67
11.11.2.Participations 69
11.12. Other Transactions 70
11.13. Forum Selection and Consent to Jurisdiction 70
11.14. Waiver of Jury Trial 71
11.15. Confidentiality 72
11.16. Liens on Sold Assets 73
SCHEDULE I - Disclosure Schedule
SCHEDULE II - Revolving Credit Percentages
EXHIBIT A-1 - Form of Revolving I Credit Loan Note
EXHIBIT A-2 - Form of Revolving II Credit Loan Note
EXHIBIT B - Form of Swing Line Note
EXHIBIT C - Form of Irrevocable Standby Revolving Credit
Letter of Credit
EXHIBIT D - Form of Borrowing Request
EXHIBIT E - Form of Continuation/Conversion Notice
EXHIBIT F - Form of Issuance Request
EXHIBIT G - Form of Lender Assignment Agreement
EXHIBIT H - Form of Opinion of Counsel to the Revolving
Credit Borrowers
EXHIBIT I-1 - Form of SFC Guaranty
EXHIBIT I-2 - Form of Subsidiary Guaranty
EXHIBIT J-1 - Form of Revolving Credit Borrowers Pledge
Agreement
EXHIBIT J-2 - Form of Subsidiary Pledge Agreement
EXHIBIT K-1 - Form of Revolving Credit Borrowers Security
Agreement
EXHIBIT K-2 - Form of Subsidiary Security Agreement
EXHIBIT L - Form of Revolving Credit Mortgage
EXHIBIT M - Form of Exemption Certificate
EXHIBIT N - Form of Perfection Certificate
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT, dated as of March 16, 1998,
among each of the subsidiaries of Specialty Foods Corporation
signatory hereto (collectively, the "Revolving Credit
Borrowers"), the various financial institutions as are or may
become parties hereto (collectively, the "Revolving Credit
Lenders"), DLJ Capital Funding, Inc. ("DLJ"), as syndication
agent (the "Syndication Agent"), and as collateral agent (the
"Collateral Agent"), for the Revolving Credit Lenders, ABN Amro
Bank N.V. ("ABN"), as administrative agent (the "Administrative
Agent"), for the Revolving Credit Lenders and Summit Bank, as
documentation agent (the "Documentation Agent") for the Revolving
Credit Lenders (the Syndication Agent and the Administrative
Agent are sometimes referred to herein as the "Agents" and each
as an "Agent").
W I T N E S S E T H:
WHEREAS, the Revolving Credit Borrowers are engaged directly
and through their respective various Subsidiaries (such
capitalized term and other terms used herein, to have the
meanings provided in Section 1.1) in the business of production
and distribution of breads, buns, rolls, sweet goods, cookies and
other baked goods and pre-cooked meat and other food products and
operation of retail cafes;
WHEREAS, the Revolving Credit Borrowers are parties to a
revolving credit agreement, dated as of August 16, 1993, as
amended and restated as of July 17, 1995 (the "Existing Revolving
Credit Agreement"), among the Revolving Credit Borrowers, the
various financial institutions parties thereto, and The Chase
Manhattan Bank (formerly doing business as Chemical Bank), as the
administrative agent for such financial institutions;
WHEREAS, Specialty Foods Corporation, a Delaware corporation
(the "Term Loan Borrower"), and the indirect owner of all of the
capital stock of each Revolving Credit Borrower is a party to a
term loan agreement, dated as of July 17, 1995, as amended (the
"Existing Term Loan Agreement"), among the Term Loan Borrower,
the various financial institutions parties thereto, and The Chase
Manhattan Bank (formerly doing business as Chemical Bank), as the
administrative agent for such financial institutions;
WHEREAS, the Revolving Credit Borrowers desire to obtain
Revolving Credit Commitments from the Revolving Credit Lenders
pursuant to which
(a) Revolving I Credit Loans and Revolving II Credit
Loans will be made to the Revolving Credit Borrowers from
time to time prior to the applicable Revolving Credit
Commitment Termination Dates for such Revolving Credit
Commitments;
(b) Revolving Credit Letters of Credit will be issued
by the Issuers for the account of the Revolving Credit
Borrowers and under the several responsibilities of the
Revolving Credit Lenders from time to time prior to the
Revolving I Credit Commitment Termination Date; and
(c) Swing Line Loans in an aggregate outstanding
principal amount not to exceed $10,000,000 will be made to
the Revolving Credit Borrowers from time to time prior to
the Revolving I Credit Commitment Termination Date;
in maximum aggregate principal amount for Revolving I Credit
Loans, face amount for Revolving Credit Letters of Credit
outstanding at any one time and maximum aggregate principal
amount of Swing Line Loans outstanding at any one time not to
exceed in the aggregate $25,000,000 and in aggregate principal
amount for Revolving II Credit Loans not to exceed $100,000,000;
and
WHEREAS, concurrently with the execution of this Agreement,
the Agents, the Collateral Agent and the Term Loan Lenders will
enter into the Term Loan Agreement with the Term Loan Borrower,
pursuant to which the Term Loan Lenders will agree to make Term
Loans on the Closing Date to the Term Loan Borrower to refinance
in full all outstanding Indebtedness (as defined in the Term Loan
Agreement) of the Term Loan Borrower under the Existing Term Loan
Agreement;
WHEREAS, the Revolving Credit Lenders are willing, on the
terms and subject to the conditions hereinafter set forth
(including Article VI), to extend such Revolving Credit Loan
Commitments, make such Revolving Credit Loans to the Revolving
Credit Borrowers and issue and participate in such Revolving
Credit Letters of Credit; and
WHEREAS, the proceeds of such Revolving Credit Loans will be
used for general corporate purposes and working capital purposes
of the Revolving Credit Borrowers and their respective
Subsidiaries;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. Except where the context
otherwise requires, capitalized terms used in this Agreement
(whether or not underscored) shall have the meanings ascribed
thereto in the Term Loan Agreement as in effect on the date
hereof, and the following terms shall have the following meanings
(such meanings to be equally applicable to the singular and
plural forms thereof):
"ABN" is defined in the preamble.
"Administrative Agent" is defined in the preamble and
includes each other Person as shall have subsequently been
appointed as the successor Administrative Agent pursuant to
Section 10.4 and Section 9.4 of the Term Loan Agreement.
"Affiliate" of any Person means any other Person which,
directly or indirectly, controls, is controlled by or is under
common control with such Person (excluding any trustee under, or
any committee with responsibility for administering, any Plan).
With respect to any Revolving Credit Lender, a Person shall be
deemed to be "controlled by" another Person if such other Person
possesses, directly or indirectly, power to vote 51% or more of
the securities (on a fully diluted basis) having ordinary voting
power for the election of directors or managing general partners.
With respect to all other Persons, a Person shall be deemed to be
"controlled by" any other Person if such other Person possesses,
directly or indirectly, power
(a) to vote 10% or more of the securities (on a fully
diluted basis) having ordinary voting power for the election
of directors or managing general partners; or
(b) to direct or cause the direction of the management
and policies of such Person whether by contract or
otherwise.
"Agents" is defined in the preamble.
"Agreement" means, on any date, this Revolving Credit
Agreement as originally in effect on the Closing Date and as
thereafter from time to time amended, supplemented, amended and
restated, or otherwise modified and in effect on such date.
"Alternate Base Rate" means, for any day and with respect to
all Base Rate Loans, the higher of: (a) 0.50% per annum above the
latest Federal Funds Rate; and (b) the rate of interest in effect
for such day as most recently publicly announced or established
by the Administrative Agent in Chicago, Illinois, as its "base
rate." (The "base rate" is a rate set by the Administrative
Agent based upon various factors including the Administrative
Agent's costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some
loans, which may be priced at, above or below such announced
rate.) Any change in the reference rate established or announced
by the Administrative Agent shall take effect at the opening of
business on the day of such establishment or announcement.
"Applicable Revolving Loan Margin" means (a) in the case of
Base Rate Loans, 1.50% per annum and (b) in the case of LIBO Rate
Loans, 2.50% per annum.
"Assignee Revolving Credit Lender" is defined in Section
11.11.1.
"Authorized Officer" means, relative to any Revolving Credit
Borrower or any other Revolving Credit Obligor, those of its
officers whose signatures and incumbency shall have been
certified to the Administrative Agent, the Collateral Agent and
the Revolving Credit Lenders pursuant to Section 6.1.1; provided,
that no officer shall qualify as an Authorized Officer unless
such officer has the title of vice president or above.
"Base Rate Loan" means a Revolving Loan bearing interest at
a fluctuating rate determined by reference to the Alternate Base
Rate.
"Borrowing" means the Revolving Credit Loans of the same
type and, in the case of LIBO Rate Loans, having the same
Interest Period made by the relevant Revolving Credit Lenders or
the Swing Line Lender on the same Business Day and pursuant to
the same Borrowing Request in accordance with Section 2.1.
"Borrowing Request" means a Revolving Credit Loan request
and certificate duly executed by an Authorized Officer of any
Revolving Credit Borrower, substantially in the form of Exhibit D
hereto.
"Business Day" means (a) any day which is neither a Saturday
or Sunday nor a legal holiday on which banks are authorized or
required to be closed in Houston, Texas, Chicago, Illinois or New
York City, and (b) with respect to Borrowings of Interest Periods
with respect to, payments of principal and interest in respect
of, and conversions of Base Rate Loans into, LIBO Rate Loans, any
day on which dealings in Dollars are carried on in the London
interbank market.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response
Compensation Liability Information System List.
"Change in Control" shall have the meaning set forth in the
Term Loan Agreement, as in effect on the date hereof.
"Closing Date" means the date on which the initial Revolving
Credit Extensions are made in accordance with Section 6.1, not to
be later than March 31, 1998.
"Code" means the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time.
"Collateral Agent" is defined in the preamble and includes
each other Person as shall have subsequently been appointed as
the successor Collateral Agent pursuant to Section 10.4 and
Section 9.4 of the Term Loan Agreement.
"Continuation/Conversion Notice" means a notice of
continuation or conversion and certificate duly executed by an
Authorized Officer of any Revolving Credit Borrower,
substantially in the form of Exhibit E hereto.
"Controlled Group" means all members of a controlled group
of corporations and all members of a controlled group of trades
or businesses (whether or not incorporated) under common control
which, together with each Revolving Credit Borrower, its
Subsidiaries or the Term Loan Borrower, are treated as a single
employer under Section 414(b) or 414(c) of the Code or Section
4001 of ERISA.
"Covered Taxes" means any Taxes other than Taxes imposed
with respect to the Administrative Agent or any Revolving Credit
Lender by reason of a connection between the Administrative Agent
or such Revolving Credit Lender and the relevant taxing
jurisdiction, including without limitation, a connection arising
from such Person being or having been a citizen or resident of
such jurisdiction, or having or having had a permanent
establishment or fixed place of business or bing or having been
engaged in business therein, but excluding a connection arising
solely from such Person having executed, delivered, performed its
obligations or received any payment under, or enforced, this
Agreement or any Revolving Credit Note. Taxes shall be
considered Covered Taxes of such Taxes are imposed on (i) the
Administrative Agent solely by reason of a connection between a
Revolving Credit Lender (but not the Administrative Agent) and
the relevant taxing jurisdiction or (ii) a Revolving Credit
Lender solely by reason of a connection between the
Administrative Agent or any other Revolving Credit Lender (but
not such Revolving Credit Lender) and the relevant taxing
jurisdiction.
"Default" means any Event of Default or any condition,
occurrence or event which, after notice or lapse of time or both,
would constitute an Event of Default.
"Disbursement Date" is defined in Section 4.5.
"Disclosure Schedule" means the Disclosure Schedule attached
hereto as Schedule I, as it may be amended, supplemented or
otherwise modified from time to time by any Revolving Credit
Borrower with the written consent of the Required Revolving
Credit Lenders.
"DLJ" is defined in the preamble.
"Documentation Agent" is defined in the preamble.
"Dollar" and the sign "$" mean lawful money of the United
States.
"Domestic Office" means, relative to any Revolving Credit
Lender, the office of such Revolving Credit Lender designated as
such below its signature hereto or in a Lender Assignment
Agreement or such other office of a Revolving Credit Lender (or
any successor or assign of such Revolving Credit Lender) within
the United States as may be designated from time to time by
notice from such Revolving Credit Lender, as the case may be, to
each other Person party hereto.
"Environmental Laws" means all applicable federal, state or
local statutes, laws, ordinances, codes, rules, regulations and
guidelines (including consent decrees and administrative orders)
relating to public health and safety and protection of the
environment.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import,
together with the regulations thereunder, in each case as in
effect from time to time. References to sections of ERISA also
refer to any successor sections.
"Event of Default" is defined in Section 9.1.
"Existing Revolving Credit Agreement" is defined in the
second recital.
"Existing Term Loan Agreement" is defined in the third
recital.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to
(a) the weighted average of the rates on overnight
federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York; or
(b) if such rate is not so published for any day which
is a Business Day, the average of the quotations for such
day on such transactions received by the Administrative
Agent from three federal funds brokers of recognized
standing selected by it.
"F.R.S. Board" means the Board of Governors of the Federal
Reserve System or any successor thereto.
"GAAP" is defined in Section 1.4.
"Guaranties" means, collectively, the SFC Guaranty, the
Subsidiary Guaranty and each Guaranty executed and delivered
pursuant to Section 8.1.3, in each case, as amended,
supplemented, restated or otherwise modified from time to time.
"Hazardous Material" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource
Conservation and Recovery Act, as amended;
(c) any petroleum product; or
(d) any pollutant or contaminant or hazardous,
dangerous or toxic chemical, material or substance within
the meaning of any other applicable federal, state or local
law, regulation, ordinance or requirement (including consent
decrees and administrative orders) relating to or imposing
liability or standards of conduct concerning any hazardous,
toxic or dangerous waste, substance or material, all as
amended or hereafter amended.
"herein", "hereof", "hereto", "hereunder" and similar terms
contained in this Agreement or any other Revolving Credit
Document refer to this Agreement or such other Revolving Credit
Document, as the case may be, as a whole and not to any
particular Section, paragraph or provision of this Agreement or
such other Revolving Credit Document.
"including" means including without limiting the generality
of any description preceding such term, and, for purposes of this
Agreement and each other Revolving Credit Document, the parties
hereto agree that the rule of ejusdem generis shall not be
applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters, to matters
similar to the matters specifically mentioned.
"Indemnified Liabilities" is defined in Section 11.4.
"Indemnified Parties" is defined in Section 11.4.
"Interest Period" means, relative to any LIBO Rate Loans,
the period beginning on (and including) the date on which such
LIBO Rate Loan is made or continued as, or converted into, a LIBO
Rate Loan pursuant to Section 2.3 or 2.4 and ending on (but
excluding) the day which numerically corresponds to such date
one, two, three or six months thereafter (or, if such month has
no numerically corresponding day, on the last Business Day of
such month), as any Revolving Credit Borrower may select in its
relevant notice pursuant to Section 2.3 or 2.4; provided,
however, that
(a) Interest Periods in effect at any one time shall
not have expiration dates occurring on more than five
different dates;
(b) Interest Periods commencing on the same date for
Loans comprising part of the same Borrowing shall be of the
same duration;
(c) if such Interest Period would otherwise end on a
day which is not a Business Day, such Interest Period shall
end on the next following Business Day (unless, if such
Interest Period applies to LIBO Rate Loans, such next
following Business Day is the first Business Day of a
calendar month, in which case such Interest Period shall end
on the Business Day next preceding such numerically
corresponding day); and
(d) no Interest Period may end later than the Stated
Maturity Date for the applicable Revolving Loan.
"Issuance Request" means a request and certificate duly
executed by the chief executive, accounting or financial
Authorized Officer of any Revolving Credit Borrower, in
substantially the form of Exhibit F attached hereto (with such
changes thereto as may be agreed upon from time to time by the
Syndication Agent, the Issuer and the Revolving Credit Borrowers)
or a properly completed application for a Revolving Credit Letter
of Credit on the applicable Issuer's standard form, executed by
the chief executive, accounting or financial Authorized Officer
of any Revolving Credit Borrower.
"Issuer" means any affiliate, unit or agency of ABN in its
capacity as issuer of the Revolving Credit Letters of Credit, or
any other Revolving Credit Lender which has agreed to issue one
or more Revolving Credit Letters of Credit at the request of the
Administrative Agent (which shall, at any Revolving Credit
Borrower's request, notify the Revolving Credit Borrowers from
time to time of the identity of such other Revolving Credit
Lender).
"Lender Assignment Agreement" means a lender assignment
agreement substantially in the form of Exhibit G hereto.
"LIBO Rate" means, relative to any Interest Period for LIBO
Rate Loans, the rate of interest equal to the average (rounded
upwards, if necessary, to the nearest 1/100 of 1%) of the rates
per annum at which Dollar deposits in the approximate amount of
the Revolving Loan to be made as, or converted into, a LIBO Rate
Loan by the Administrative Agent and having a maturity comparable
to such Interest Period would be offered to the Administrative
Agent in the London interbank market at its request at
approximately 11:00 a.m.(London time) two Business Days prior to
the commencement of such Interest Period.
"LIBO Rate Loan" means a Loan bearing interest, at all times
during an Interest Period applicable to such Loan, at a fixed
rate of interest determined by reference to the LIBO Rate
(Reserve Adjusted).
"LIBO Rate (Reserve Adjusted)" means, relative to any Loan
to be made, continued or maintained as, or converted into, a LIBO
Rate Loan for any Interest Period, a rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) determined
pursuant to the following formula:
LIBO Rate = LIBO Rate
--------- ---------
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO
Rate Loans will be adjusted automatically as to all LIBO Rate
Loans then outstanding as of the Closing Date of any change in
the LIBOR Reserve Percentage.
"LIBOR Office" means, relative to any Revolving Credit
Lender, the office of such Revolving Credit Lender designated as
such on Schedule II hereto or designated in the Lender Assignment
Agreement or such other office of a Revolving Credit Lender (or
any successor or assign of such Revolving Credit Lender) as
designated from time to time by notice from such Revolving Credit
Lender to the Revolving Credit Borrowers and the Administrative
Agent, whether or not outside the United States, which shall be
making or maintaining LIBO Rate Loans of such Revolving Credit
Lender hereunder.
"LIBOR Reserve Percentage" means, relative to any Interest
Period for LIBO Rate Loans, the percentage (expressed as a
decimal, rounded upward to the next 1/100 of 1%) in effect on
such day (whether or not applicable to any Lender) under
regulations issued from time to time by the F.R.S. Board for
determining the maximum reserve requirement (including any
emergency supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently defined as
"Eurocurrency Liabilities" in Regulation D of the F.R.S. Board).
"Lien" means any security interest, mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or otherwise), charge against or interest in property,
or any filing or recording of any instrument or document in
respect to the foregoing (other than liens arising from the
filing of "precautionary" UCC financing statements in connection
with obligations under leases that are not Capitalized Lease
Liabilities to the extent that such financing statements relate
solely to the property subject to such lease obligations and
where the debtor named on such financing statements is not the
legal or beneficial owner of the described property), to secure
payment of a debt or performance of an obligation or other
priority or preferential arrangement of any kind or nature
whatsoever that has the practical effect of creating a security
interest in property.
"Organic Document" means, relative to any Revolving Credit
Obligor, its certificate of incorporation, its by-laws and all
shareholder agreements, voting trusts and similar arrangements
applicable to any of its authorized shares of capital stock.
"Participant" is defined in Section 11.11.
"PBGC" means the Pension Benefit Guaranty Corporation and
any entity succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is
defined in section 3(2) of ERISA, which is subject to Title IV of
ERISA (other than a multiemployer plan as defined in section
4001(a)(3) of ERISA), and to which any Revolving Credit Borrower
or any corporation, trade or business that is, along with any
Revolving Credit Borrower, a member of a Controlled Group, may
have liability, including any liability by reason of having been
a substantial employer within the meaning of section 4063 of
ERISA at any time during the preceding five years, or by reason
of being deemed to be a contributing sponsor under section 4069
of ERISA.
"Person" means any natural person, corporation, limited
liability company, partnership, joint venture, joint stock
company, firm, association, trust or unincorporated organization,
government, governmental agency, court or any other legal entity,
whether acting in an individual, fiduciary or other capacity.
"Perfection Certificate" means the Perfection Certificate
executed and delivered by an Authorized Officer of each Revolving
Credit Borrower pursuant to Section 6.1.8 or Section 7.1.7 of the
Term Loan Agreement, substantially in the form of Exhibit N
hereto, as amended, supplemented, amended and restated or
otherwise modified from time to time.
"Plan" means any Pension Plan or Welfare Plan.
"Pledge Agreements" means, collectively, the Revolving
Credit Borrowers Pledge Agreement, the Subsidiary Pledge
Agreement and each Pledge Agreement executed and delivered
pursuant to Section 8.1.3, in each case as amended, supplemented,
restated or otherwise modified from time to time.
"Quarterly Payment Date" means the last day of each January,
April, July and October, or, if any such day is not a Business
Day, the next succeeding Business Day, commencing with July,
1998.
"Refunded Swing Line Loans" is defined in clause (b) of
Section 2.3.2.
"Reimbursement Obligation" is defined in Section 4.6.
"Related Fund" means, with respect to any Revolving Credit
Lender that is a fund that invests in loans, any other fund that
invests in loans and is managed by the same investment advisor or
investment manager as such Revolving Credit Lender.
"Release" means a "release", as such term is defined in
CERCLA.
"Required Revolving Credit Lenders" means, at any time,
Revolving I Credit Lenders having more than 50% of the sum of the
Revolving I Credit Commitments and Revolving II Credit Lenders
having more than 50% of the sum of the Revolving II Credit
Commitments; provided, that in the event that the Revolving I
Credit Commitment or the Revolving II Credit Commitment is
terminated (pursuant to Section 9.2 or Section 9.3 or otherwise),
until such time as all Revolving I Credit Loans and Revolving II
Credit Loans, as the case may be, are paid in full, Revolving I
Credit Lenders having more than 50% of the outstanding principal
amount of all Revolving I Credit Loans and Revolving II Credit
Lenders having more than 50% of the outstanding principal amount
of all Revolving II Credit Loans, as applicable.
"Resource Conservation and Recovery Act" means the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq.,
as in effect from time to time.
"Revolving Credit Borrowers" is defined in the preamble.
"Revolving Credit Borrowers Pledge Agreement" is defined in
clause (a) of Section 6.1.5.
"Revolving Credit Borrowers Security Agreement" is defined
in clause (a) of Section 6.1.6.
"Revolving Credit Commitment" means a Revolving I Credit
Commitment, a Revolving II Credit Commitment or a Swing Line Loan
Commitment.
"Revolving Credit Commitment Amount" means a Revolving I
Credit Commitment Amount or a Revolving II Credit Commitment
Amount or a Swing Line Loan Commitment Amount.
"Revolving Credit Commitment Termination Date" means the
Revolving I Credit Commitment Termination Date or the Revolving
II Credit Commitment Termination Date.
"Revolving Credit Commitment Termination Event" means
(a) the occurrence of any Default described in clauses
(a) through (d) of Section 9.1.9 with respect to any
Revolving Credit Borrower; or
(b) the occurrence and continuance of any other Event
of Default and either
(i) the declaration of the Revolving Credit
Loans to be due and payable pursuant to Section 9.3, or
(ii) in the absence of such declaration, the
giving of notice by the Administrative Agent, acting at
the direction of the Required Revolving Credit Lenders,
to the Revolving Credit Borrowers that the Revolving
Credit Commitments have been terminated.
"Revolving Credit Documents" means this Agreement, the
Notes, each Pledge Agreement, each Security Agreement, each
Guaranty and each Revolving Credit Revolving Credit Mortgage.
"Revolving Credit Extension" means and includes
(a) the advancing of any Revolving I Credit Loans by
the Revolving Credit Lenders in connection with a Borrowing,
(b) the advancing of any Revolving II Credit Loans by
the Revolving Credit Lenders in connection with a Borrowing,
(c) the advancing of any Swing Line Loans by the Swing
Line Lender in connection with a Borrowing, and
(d) any issuance or extension by an Issuer of a
Revolving Credit Letter of Credit.
"Revolving Credit Lenders" is defined in the preamble.
"Revolving Credit Letter of Credit" is defined in Section
4.1.
"Revolving Credit Letter of Credit Commitment Amount" means,
on any date, a maximum amount of $25,000,000, as such amount may
be reduced from time to time pursuant to Section 2.2.
"Revolving Credit Letter of Credit Outstandings" means, at
any time, an amount equal to the sum of
(a) the then aggregate amount which is undrawn and
available under all issued and outstanding Revolving Credit
Letters of Credit,
plus
(b) the then aggregate amount of all unpaid and
outstanding Reimbursement Obligations.
"Revolving Credit Loan" means, as the context may require, a
Revolving I Credit Loan, a Revolving II Credit Loan, or a Swing
Line Loan, of any type.
"Revolving Credit Mortgages" means, collectively, each
Revolving Credit Mortgage executed and delivered pursuant to
Section 6.1.7 or 8.1.3, substantially in the form of Exhibit L
hereto, as amended, supplemented, restated or otherwise modified
from time to time.
"Revolving Credit Note" means, as the context may require, a
Revolving I Credit Note, a Revolving II Credit Note or a Swing
Line Note
"Revolving Credit Obligations" means all obligations
(monetary or otherwise) of the Revolving Credit Borrowers and
each other Revolving Credit Obligor arising under or in
connection with this Agreement, the Revolving Credit Notes and
each other Revolving Credit Document or any other document made,
delivered or given in connection therewith.
"Revolving Credit Obligor" means any Revolving Credit
Borrower, each Subsidiary of each Revolving Credit Borrower
(other than any Inactive Subsidiary), the Special Purpose
Subsidiary or any other Person (other than any Agent, the
Collateral Agent or any Revolving Credit Lender) obligated under,
or otherwise a party to, any Revolving Credit Document, and
"Revolving Credit Obligors" means all of such Persons,
collectively.
"Revolving Credit Percentage" means, relative to any
Revolving Credit Lender, the applicable percentage relating to
the Revolving I Credit Commitments or the Revolving II Credit
Commitments, as the case may be, for such Revolving Credit Lender
as set forth on Schedule II hereto or set forth in the Lender
Assignment Agreement, as such percentage may be adjusted from
time to time pursuant to Lender Assignment Agreement(s) executed
by such Revolving Credit Lender and its Assignee Revolving Credit
Lender(s) and delivered pursuant to Section 11.11. A Revolving
Credit Lender shall not have any Revolving Credit Commitment to
make Revolving I Credit Loans or Revolving II Credit Loans (as
the case may be) if its percentage under the respective column
heading is zero (0%). As used herein, "Revolving Credit
Percentage" as it relates to a Revolving I Credit Lender's
Percentage of Revolving Credit Letter of Credit Outstandings or
Swing Line Loans shall be equal to such Revolving I Credit
Lender's Percentage of Revolving I Credit Loans.
"Revolving I Credit Commitment" means, relative to any
Revolving Credit Lender, such Revolving Credit Lender's
obligation to make Revolving I Credit Loans pursuant to Section
2.1.2 and to issue (in the case of an Issuer) or participate in
(in the case of all Revolving Credit Lenders) Revolving Credit
Letters of Credit pursuant to Section 2.1.3.
"Revolving I Credit Commitment Amount" means, on any date,
$25,000,000, as such amount may be reduced from time to time
pursuant to Section 2.2.
"Revolving I Credit Commitment Availability" means, on any
date, the excess of
(a) the then Revolving I Credit Commitment Amount,
over
(b) the sum of
(i) the outstanding principal amount of all
Revolving I Credit Loans on such date,
plus
(ii) the Revolving Credit Letter of Credit
Outstandings on such date,
plus
(iii) the outstanding principal amount of
all Swing Line Loans on such date.
"Revolving I Credit Commitment Termination Date" means the
earliest of
(a) January 31, 2000;
(b) the date on which the Revolving I Credit
Commitment Amount is terminated in full or reduced to zero
pursuant to Section 2.2; and
(c) the date on which any Revolving Credit Commitment
Termination Event occurs.
Upon the occurrence of any event described in clause (b) or (c),
the Revolving I Credit Commitments shall terminate automatically
and without any further action.
"Revolving I Credit Lender" means any Revolving Credit
Lender having a Revolving I Credit Commitment.
"Revolving I Credit Loan" is defined in Section 2.1.2.
"Revolving I Credit Note" means a joint and several
promissory note of the Revolving Credit Borrowers payable to the
order of any Revolving Credit Lender, in the form of Exhibit A-1
hereto (as such promissory note may be amended, endorsed or
otherwise modified from time to time), evidencing the aggregate
Indebtedness of the Revolving Credit Borrower to such Revolving
Credit Lender resulting from outstanding Revolving I Credit
Loans, and also means all other promissory notes accepted from
time to time in substitution therefor or renewal thereof.
"Revolving II Credit Commitment" means, relative to any
Revolving Credit Lender, such Revolving Credit Lender's
obligation to make Revolving II Credit Loans pursuant to
Section 2.1.2.
"Revolving II Credit Commitment Amount" means, on any date,
$100,000,000, as such amount may be reduced from time to time
pursuant to Section 2.2.
"Revolving II Credit Commitment Availability" means, on any
date, the excess of
(a) the then Revolving II Credit Commitment Amount,
over
(b) the outstanding principal amount of all Revolving
II Credit Loans on such date.
"Revolving II Credit Commitment Termination Date" means the
earliest of
(a) the one year anniversary of the Closing Date;
(b) the date on which the Revolving II Credit
Commitment Amount is terminated in full or reduced to zero
pursuant to Section 2.2; and
(c) the date on which any Revolving Credit Commitment
Termination Event occurs.
Upon the occurrence of any event described in clause (b) or (c),
the Revolving II Credit Commitments shall terminate automatically
and without any further action.
"Revolving II Credit Lender" means any Revolving Credit
Lender having a Revolving II Credit Commitment.
"Revolving II Credit Loan" is defined in Section 2.1.2.
"Revolving II Credit Note" means a joint and several
promissory note of the Revolving Credit Borrowers payable to the
order of any Revolving Credit Lender, in the form of Exhibit A-2
hereto (as such promissory note may be amended, endorsed or
otherwise modified from time to time), evidencing the aggregate
Indebtedness of the Revolving Credit Borrower to such Revolving
Credit Lender resulting from outstanding Revolving II Credit
Loans, and also means all other promissory notes accepted from
time to time in substitution therefor or renewal thereof.
"Security Agreements" means, collectively, the Revolving
Credit Borrowers Security Agreement, the Subsidiary Security
Agreement and each Security Agreement executed and delivered from
time to time pursuant to Section 8.1.3, in each case as amended,
supplemented, restated or otherwise modified from time to time.
"SFC Guaranty" is defined in clause (a) of Section 6.1.4.
"Stated Amount" of each Revolving Credit Letter of Credit
means the total amount available to be drawn under such Revolving
Credit Letter of Credit upon the issuance thereof.
"Stated Expiry Date" is defined in Section 4.1.
"Stated Maturity Date" means
(a) in the case of any Revolving I Credit Loan,
January 31, 2000; and
(b) in the case of any Revolving II Credit Loan,
January 31, 2000.
"Subsidiary" means, with respect to any Person, any
corporation, partnership or other business entity of which more
than 50% of the outstanding capital stock (or other ownership
interest) having ordinary voting power to elect a majority of the
board of directors, managers or other voting members of the
governing body of such entity (irrespective of whether at the
time capital stock (or other ownership interest) of any other
class or classes of such entity shall or might have voting power
upon the occurrence of any contingency) is at the time directly
or indirectly owned by such Person, by such Person and one or
more other Subsidiaries of such Person, or by one or more other
Subsidiaries of such Person. Unless the context otherwise
specifically requires, the term "Subsidiary" shall be a reference
to a Subsidiary of any Revolving Credit Borrower.
"Subsidiary Guaranty" is defined in clause (b) of Section
6.1.4.
"Subsidiary Pledge Agreement" is defined in clause (b) of
Section 6.1.5.
"Subsidiary Security Agreement" is defined in clause (b) of
Section 6.1.6.
"Swing Line Lender" means, ABN, in its capacity as Swing
Line Lender hereunder.
"Swing Line Loan" is defined in clause (b) of Section 2.1.1.
"Swing Line Loan Commitment" is defined in clause (b) of
Section 2.1.1.
"Swing Line Loan Commitment Amount" means, on any date,
$10,000,000, as such amount may be reduced from time to time
pursuant to Section 2.2.
"Swing Line Note" means a joint and several promissory note
of the Borrowers payable to the Swing Line Lender, in the form of
Exhibit B hereto (as such promissory note may be amended,
endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrower to the Swing Line Lender
resulting from outstanding Swing Line Loans, and also means all
other promissory notes accepted from time to time in substitution
therefor or renewal thereof.
"Syndication Agent" is defined in the preamble.
"Taxes" means any present or future income, excise, stamp or
franchise taxes and other taxes, fees, duties, withholdings or
other charges of any nature whatsoever imposed by (i) the United
States or any taxing authority or political subdivision thereof
or (ii) any other jurisdiction as a result of a connection
between the Borrower and such taxing jurisdiction, and in each
case any interest, additions to tax, penalties or additional
amounts payable with respect thereto.
"Term Loan" is defined in the Term Loan Agreement.
"Term Loan Agreement" means the Term Loan Agreement, dated
as of the date hereof, among the Term Loan Borrower, the Term
Loan Lenders, the Agents and the Collateral Agent as the same
may be amended, supplemented or otherwise modified from time to
time.
"Term Loan Borrower" is defined in the third recital.
"Term Loan Lenders" means each of the financial institutions
from time to time party to the Term Loan Agreement.
"Type" means, relative to any Loan, the portion thereof, if
any, being maintained as a Base Rate Loan or a LIBO Rate Loan.
"United States" or "U.S." means the United States of
America, its fifty States and the District of Columbia.
"Welfare Plan" means a "welfare plan", as such term is
defined in section 3(1) of ERISA.
SECTION 1.2. Use of Defined Terms. Unless otherwise
defined or the context otherwise requires, terms for which
meanings are provided in this Agreement shall have such meanings
when used in the Disclosure Schedule and in each Revolving Credit
Note, Borrowing Request, Continuation/Conversion Notice,
Revolving Credit Document, notice and other communication
delivered from time to time in connection with this Agreement or
any other Revolving Credit Document.
SECTION 1.3 Cross-References. Unless otherwise specified,
references in this Agreement and in each other Revolving Credit
Document to any Article or Section are references to such Article
or Section of this Agreement or such other Revolving Credit
Document, as the case may be, and, unless otherwise specified,
references in any Article, Section or definition to any clause
are references to such clause of such Article, Section or
definition.
SECTION 1.4. Accounting and Financial Determinations.
Unless otherwise specified, all accounting terms used herein or
in any other Revolving Credit Document shall be interpreted, and
all accounting determinations and computations hereunder or
thereunder (including under Sections 7.1.1 and 7.2.5 of the Term
Loan Agreement) shall be made, in accordance with those generally
accepted accounting principles ("GAAP") applied in the
preparation of the financial projections referred to in Section
5.1.7 of the Term Loan Agreement, except as set forth in Section
1.4 of the Term Loan Agreement as in effect on the date hereof.
ARTICLE I
REVOLVING CREDIT COMMITMENTS, BORROWING PROCEDURES AND NOTES
SECTION 2.1. Revolving Credit Commitments. On the terms
and subject to the conditions of this Agreement (including
Article V), each Revolving Credit Lender and the Swing Line
Lender severally agrees as follows:
SECTION 2.1.1. Revolving I Credit Commitment. From time to
time on any Business Day occurring prior to the Revolving I
Credit Commitment Termination Date,
(a) each Revolving Credit Lender will make Revolving Credit
Loans (relative to such Revolving Credit Lender, its "Revolving I
Credit Loans") to each applicable Revolving Credit Borrower, on a
joint and several basis for all the Revolving Credit Borrowers,
equal to such Revolving Credit Lender's Revolving Credit
Percentage of the aggregate amount of the Borrowing of Revolving
I Credit Loans requested by such Revolving Credit Borrower to be
made on such day. On the terms and subject to the conditions
hereof, each Revolving Credit Borrower may from time to time
borrow, prepay and reborrow Revolving I Credit Loans.
(b) the Swing Line Lender will make a loan (a "Swing Line
Loans") to each applicable Revolving Credit Borrower, on a joint
and several basis for all the Revolving Credit Borrowers, equal
to the amount of the Swing Line Loan requested by the applicable
Revolving Credit Borrower to be made on such day. The commitment
of the Swing Line Lender described in this clause (b) is herein
referred to as its "Swing Line Loan Commitment". On the terms
and subject to the conditions hereof, each applicable Revolving
Credit Borrower may from time to time borrow, prepay and reborrow
Swing Line Loans.
SECTION 2.1.2. Revolving II Credit Commitment. From time
to time on any Business Day occurring prior to the Revolving II
Credit Commitment Termination Date, each Revolving Credit Lender
will make Revolving Credit Loans (relative to such Revolving
Credit Lender, its "Revolving II Credit Loans") to each
applicable Revolving Credit Borrower, on a joint and several
basis for all the Revolving Credit Borrowers, equal to such
Revolving Credit Lender's Revolving Credit Percentage of the
aggregate amount of the Borrowing of Revolving II Credit Loans
requested by such Revolving Credit Borrower to be made on such
day. On the terms and subject to the conditions hereof, each
Revolving Credit Borrower may from time to time borrow and prepay
Revolving II Credit Loans. No amounts paid or prepaid with
respect to Revolving II Credit Loans may be reborrowed.
SECTION 2.1.3. Commitment to Issue Revolving Credit Letters
of Credit. From time to time on any Business Day, each Issuer
will issue, and each Revolving Credit Lender with a Revolving I
Credit Commitment will participate in, the Revolving Credit
Letters of Credit, in accordance with Article IV.
SECTION 2.1.4. Revolving Credit Lenders Not Permitted or
Required To Make Revolving Credit Loans or Issue or Participate
in Revolving Credit Letters of Credit Under Certain
Circumstances. No Revolving Credit Lender shall be permitted or
required to
(a) make any Revolving I Credit Loan if, after giving
effect thereto, the aggregate outstanding principal amount of all
Revolving I Credit Loans
(i) of all Revolving Credit Lenders,
together with all Revolving Credit Letter of Credit
Outstandings and the outstanding principal amount of
all Swing Line Loans would exceed the Revolving I
Credit Commitment Amount, or
(ii) of such Revolving Credit Lender,
together with such Revolving Credit Lender's Revolving
Credit Percentage of all Revolving Credit Letter of
Credit Outstandings, would exceed such Revolving Credit
Lender's Revolving Credit Percentage of the Revolving I
Credit Commitment Amount; or
(b) make any Revolving II Credit Loan if, after giving
effect thereto, the aggregate outstanding principal amount of
all Revolving II Credit Loans
(i) of all Revolving Credit Lenders would
exceed the Revolving II Credit Commitment Amount, or
(ii) of such Revolving Credit Lender would
exceed such Revolving Credit Lender's Revolving Credit
Percentage of the Revolving II Credit Commitment
Amount; or
(c) issue (in the case of any Issuer) or participate
in (in the case of each Revolving Credit Lender) any Revolving
Credit Letter of Credit if, after giving effect thereto
(i) all Revolving Credit Letter of Credit
Outstandings together with the aggregate outstanding
principal amount of all Revolving I Credit Loans of all
Revolving Credit Lenders and the outstanding principal
amount of all Swing Line Loans would exceed the
Revolving I Credit Commitment Amount, or
(ii) such Revolving Credit Lender's
Revolving Credit Percentage of all Revolving Credit
Letter of Credit Outstandings together with the
aggregate outstanding principal amount of all Revolving
I Credit Loans of such Revolving Credit Lender would
exceed such Revolving Credit Lender's Revolving Credit
Percentage of the Revolving I Credit Commitment Amount.
(d) make any Swing Line Loan if, after giving effect
thereto, the aggregate outstanding principal amount of all Swing
Line Loans (i) would exceed the Swing Line Loan Commitment
Amount, or (ii) together with the aggregate outstanding principal
amount of all Revolving I Credit Loans of all Revolving Credit
Lenders and Revolving Credit Letter of Credit Outstandings would
exceed the Revolving I Credit Commitment Amount.
SECTION 2.2. Reduction of Commitment Amounts. The
Revolving Credit Commitment Amounts are subject to reduction from
time to time pursuant to this Section 2.2.
SECTION 2.2.1. Optional. Any Revolving Credit Borrower
may, from time to time on any Business Day occurring after the
time of the initial Borrowing hereunder, voluntarily reduce the
amount of either Revolving Credit Commitment Amount; provided,
however, that all such reductions shall require at least three
Business Days' prior notice to the Administrative Agent and be
permanent, and any partial reduction of the Revolving I Credit
Commitment Amount shall be in a minimum amount of $1,000,000 and
in an integral multiple of $500,000 and of the Revolving II
Credit Commitment Amount shall be in a minimum amount of
$5,000,000 and in an integral multiple of $1,000,000. Any such
reduction of the Revolving I Credit Commitment Amount which
reduces the Revolving I Credit Commitment Amount below the
Revolving Credit Letter of Credit Commitment Amount or the Swing
Line Loan Commitment Amount shall result in an automatic and
corresponding reduction of the Revolving Credit Letter of Credit
Commitment Amount or the Swing Line Loan Commitment Amount, as
the case may be, to an aggregate amount not in excess of the
Revolving I Credit Commitment Amount, as so reduced, without any
further action on the part of the Issuer or the Swing Line
Lender.
SECTION 2.2.2. Mandatory.
(a) On the Revolving I Credit Commitment Termination
Date, the Revolving I Credit Commitment Amount shall be zero, and
on the Revolving II Credit Loan Commitment Termination Date, the
Revolving II Credit Commitment Amount shall be zero.
(b) The Revolving II Credit Commitment Amount shall be
reduced from time to time as required under Section 3.1.1 of the
Term Loan Agreement as in effect on the date hereof.
SECTION 2.3. Borrowing Procedure. Revolving Credit Loans
(other than Swing Line Loans) shall be made by the Revolving
Credit Lenders in accordance with Section 2.3.1, and Swing Line
Loans shall be made by the Swing Line Lender in accordance with
Section 2.3.2.
SECTION 2.3.1. Revolving I Credit Loans and Revolving II
Credit Loans. By telephonic notice, promptly followed (by the
end of the Business Day on which such telephonic notice was
delivered) by the delivery of a confirming Borrowing Request to
the Administrative Agent on or before 10:00 a.m., New York City
time, on a Business Day, any Revolving Credit Borrower may from
time to time irrevocably request, on not less than one Business
Day's notice (in the case of Revolving I Credit Loans maintained
as Base Rate Loans) or three Business Days' notice (in the case
of Revolving I Credit Loans maintained as LIBO Rate Loans or
Revolving II Credit Loans maintained either as Base Rate Loans or
LIBO Rate Loans) nor more than five Business Days' notice (in the
case of any Revolving Credit Loans), that a Borrowing be made in
a minimum amount of $1,000,000 and an integral multiple of
$500,000, in the case of Revolving I Credit Loans, or in a
minimum amount of $5,000,000 and an integral multiple of
$1,000,000, in the case of Revolving II Credit Loans, or, in
either case, in the unused amount of the applicable Revolving
Credit Commitment. On the terms and subject to the conditions of
this Agreement, each Borrowing shall be comprised of the type of
Revolving Credit Loans, and shall be made on the Business Day,
specified in such Borrowing Request. On or before 11:00 a.m.
(New York City time) on such Business Day each Revolving Credit
Lender shall deposit with the Administrative Agent same day funds
in an amount equal to such Revolving Credit Lender's Revolving
Credit Percentage of the requested Borrowing. Such deposit will
be made to an account which the Administrative Agent (which may
be maintained with an Affiliate of the Administrative Agent)
shall specify from time to time by notice to the Revolving Credit
Lenders. Subject to Section 10.2, the Administrative Agent shall
make such funds available to the applicable Revolving Credit
Borrower by wire transfer to the accounts such Revolving Credit
Borrower shall have specified in its Borrowing Request. No
Revolving Credit Lender's obligation to make any Revolving Credit
Loan shall be affected by any other Revolving Credit Lender's
failure to make any Revolving Credit Loan.
SECTION 2.3.2. Swing Line Loans.
(a) By telephonic notice, promptly followed (by the
end of the Business Day on which such telephonic notice was
delivered) by the delivery of a confirming Borrowing Request, to
the Swing Line Lender and the Administrative Agent on or before
12:00 noon, New York City time, on the Business Day the proposed
Swing Line Loan is to be made, any Revolving Credit Borrower may
from time to time irrevocably request that a Swing Line Loan be
made by the Swing Line Lender in a minimum principal amount of
$100,000 or any larger integral multiple of $50,000. All Swing
Line Loans shall be made as Base Rate Loans and shall not be
entitled to be converted into LIBO Rate Loans. Upon receipt of
notice from the Administrative Agent confirming the amount of the
requested Borrowing, the proceeds of each Swing Line Loan shall
be made available by the Swing Line Lender, by 2:00 p.m., New
York City time, on the Business Day telephonic notice is received
by it as provided in this clause (a), to the applicable Revolving
Credit Borrower by wire transfer to the account such Revolving
Credit Borrower shall have specified in its notice therefor.
(b) If any Default shall occur and be continuing, each
Revolving Credit Lender with a Revolving I Credit Commitment
(other than the Swing Line Lender) irrevocably agrees that it
will, at the request of the Swing Line Lender and upon notice
from the Administrative Agent, make a Revolving I Credit Loan
(which shall initially be funded as a Base Rate Loan) in an
amount equal to such Revolving Credit Lender's Revolving Credit
Percentage of the aggregate principal amount of all such Swing
Line Loans then outstanding (such outstanding Swing Line Loans
hereinafter referred to as the "Refunded Swing Line Loans");
provided, that the Swing Line Lender shall not request, and no
Revolving Credit Lender shall make, any Refunded Swing Line Loan
if, after giving effect to the making of such Refunded Swing Line
Loan, the sum of all Refunded Swing Line Loans and Revolving I
Credit Loans made by such Revolving Credit Lender, plus such
Revolving Credit Lender's Revolving Credit Percentage of the
aggregate amount of all Revolving Credit Letter of Credit
Outstandings, would exceed such Revolving Credit Lender's
Revolving Credit Percentage of the then existing Revolving I Loan
Commitment Amount. On or before 11:00 a.m. (New York City time)
on the first Business Day following receipt by each Revolving
Credit Lender of a request to make Revolving I Credit Loans as
provided in the preceding sentence, each such Revolving Credit
Lender with a Revolving I Loan Commitment shall deposit in an
account specified by the Administrative Agent the amount so
requested in same day funds and such funds shall be transferred
to the Swing Line Lender by the Administrative Agent to repay the
Refunded Swing Line Loans. At the time the aforementioned
Revolving I Credit Lenders make the above referenced Revolving
Credit Loans, the Swing Line Lender shall be deemed to have made,
in consideration of the making of the Refunded Swing Line Loans,
a Revolving I Credit Loan in an amount equal to the Swing Line
Lender's Revolving Credit Percentage of the aggregate principal
amount of the Refunded Swing Line Loans. Upon the making (or
deemed making, in the case of the Swing Line Lender) of any
Revolving I Credit Loans pursuant to this clause (b), the amount
so funded shall become outstanding under such Revolving I Credit
Lender's Revolving I Credit Note and shall no longer be owed
under the Swing Line Note. All interest payable with respect to
any Revolving I Credit Loans made (or deemed made, in the case of
the Swing Line Lender) pursuant to this clause (b) shall be
appropriately adjusted to reflect the period of time during which
the Swing Line Lender had outstanding Swing Line Loans in respect
of which such Revolving I Credit Loans were made. Each Revolving
I Credit Lender's obligation to make the Revolving I Credit Loans
referred to in this clause (b) shall be absolute and
unconditional and shall not be affected by any circumstance,
including, without limitation, (i) any set-off, counterclaim,
recoupment, defense or other right which such Revolving I Credit
Lender may have against the Swing Line Lender, any Revolving
Credit Borrower or any other Person for any reason whatsoever;
(ii) the occurrence or continuance of any Default; (iii) any
adverse change in the condition (financial or otherwise) of any
Revolving Credit Borrower; (iv) the acceleration or maturity of
any Revolving Credit Loans or the termination of any Revolving
Credit Commitment after the making of any Swing Line Loan;
(v) any breach of this Agreement or any other Revolving Credit
Document by any Revolving Credit Borrower or any Revolving Credit
Lender; or (vi) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
SECTION 2.4. Continuation and Conversion Elections. By
telephonic notice, promptly followed (by the end of the Business
Day on which such telephonic notice was delivered) by the
delivery of a Continuation/Conversion Notice to the
Administrative Agent on or before 10:00 a.m., New York City time,
on a Business Day, any Revolving Credit Borrower may from time to
time irrevocably elect, on not less than one Business Day's
notice in the case of a continuation or conversion of LIBO Rate
Loans into Base Rate Loans, or three Business Day's notice in the
case of a continuation of LIBO Rate Loans or a conversion of Base
Rate Loans into LIBO Rate Loans, and in either case not more than
five Business Days' notice that all, or any portion in an
aggregate minimum amount of $1,000,000 and an integral multiple
of $500,000, of any Revolving I Credit Loans, or an aggregate
minimum amount of $5,000,000 and an integral multiple of
$1,000,000, of any Revolving II Credit Loans, be, in the case of
Base Rate Loans, converted into LIBO Rate Loans of either type
or, in the case of LIBO Rate Loans of either type, be converted
into a Base Rate Loan or a LIBO Rate Loan of the other type or
continued as a LIBO Rate Loan of such type (in the absence of
delivery of a Continuation/ Conversion Notice with respect to any
LIBO Rate Loan at least three Business Days before the last day
of the then current Interest Period with respect thereto, such
LIBO Rate Loan shall, on such last day, automatically convert to
a Base Rate Loan); provided, however, that (i) each such
conversion or continuation shall be pro rated among the
applicable outstanding Revolving I Credit Loans or
Revolving II Credit Loans, as the case may be, of all Revolving
Credit Lenders, and (ii) no portion of the outstanding principal
amount of any Revolving Credit Loans may be continued as, or be
converted into, LIBO Rate Loans when any Default has occurred and
is continuing.
SECTION 2.5. Funding. Each Revolving Credit Lender may, if
it so elects, fulfill its obligation to make, continue or convert
LIBO Rate Loans hereunder by causing one of its foreign branches
or Affiliates (or an international banking facility created by
such Revolving Credit Lender) to make or maintain such LIBO Rate
Loan; provided, however, that such LIBO Rate Loan shall
nonetheless be deemed to have been made and to be held by such
Revolving Credit Lender, and the obligation of each Revolving
Credit Borrower to repay such LIBO Rate Loan shall nevertheless
be to such Revolving Credit Lender for the account of such
foreign branch, Affiliate or international banking facility. In
addition, each Revolving Credit Borrower hereby consents and
agrees that, for purposes of any determination to be made for
purposes of Section 5.1, 5.2, 5.3 or 5.4, it shall be
conclusively assumed that each Revolving Credit Lender elected to
fund all LIBO Rate Loans by purchasing, as the case may be,
Dollar certificates of deposit in the U.S. or Dollar deposits in
its LIBOR Office's interbank eurodollar market.
SECTION 2.6. Register; Revolving Credit.
(a) Each Revolving Credit Lender may maintain in
accordance with its usual practice an account or accounts
evidencing the Indebtedness of the Revolving Credit Borrowers to
such Revolving Credit Lender resulting from each Revolving Credit
Loan made by such Revolving Credit Lender, including the amounts
of principal and interest payable and paid to such Revolving
Credit Lender from time to time hereunder. In the case of a
Revolving Credit Lender that does not request, pursuant to clause
(b)(ii) below, execution and delivery of a Revolving Credit Note
evidencing the Revolving Credit Loans made by such Revolving
Credit Lender to the Revolving Credit Borrowers, such account or
accounts shall, to the extent not inconsistent with the notations
made by the Administrative Agent in the Register, be conclusive
and binding on the Borrowers absent manifest error; provided,
however, that the failure of any Revolving Credit Lender to
maintain such account or accounts shall not limit or otherwise
affect any Revolving Credit Obligations of the Revolving Credit
Borrowers or any other Revolving Credit Obligor.
(b)(i) The Revolving Credit Borrowers hereby designate
the Administrative Agent to serve as the Revolving Credit
Borrowers' agent, solely for the purpose of this clause (b), to
maintain a register (the "Register") on which the Administrative
Agent will record each Revolving Credit Lender's Revolving Credit
Commitment, the Revolving Credit Loans made by each Revolving
Credit Lender and each repayment in respect of the principal
amount of the Revolving Credit Loans of each Revolving Credit
Lender and annexed to which the Administrative Agent shall retain
a copy of each Lender Assignment Agreement delivered to the
Administrative Agent pursuant to Section 11.11.1. Failure to
make any recordation, or any error in such recordation, shall not
affect the Revolving Credit Borrowers' obligation in respect of
such Revolving Credit Loans. The entries in the Register shall
be conclusive, in the absence of manifest error, and the
Revolving Credit Borrowers, the Administrative Agent and the
Revolving Credit Lenders shall treat each Person in whose name a
Revolving Credit Loan (and as provided in clause (ii) the
Revolving Credit Note evidencing such Revolving Credit Loan, if
any) is registered as the owner thereof for all purposes of this
Agreement, notwithstanding notice or any provision herein to the
contrary. Subject to the provisions of Section 11.11.1, a
Revolving Credit Lender's Revolving Credit Commitment and the
Revolving Credit Loans made pursuant thereto may be assigned or
otherwise transferred in whole or in part only by registration of
such assignment or transfer in the Register. Any assignment or
transfer of a Revolving Credit Lender's Revolving Credit Loan
Commitment or the Revolving Credit Loans made pursuant thereto
shall be registered in the Register only upon delivery to the
Administrative Agent of a Lender Assignment Agreement duly
executed by the Assignor thereof. No assignment or transfer of a
Revolving Credit Lender's Revolving Credit Commitment or the
Revolving Credit Loans made pursuant thereto shall be effective
unless such assignment or transfer shall have been recorded in
the Register by the Administrative Agent as provided in this
Section.
(b)(ii) The Revolving Credit Borrowers agree that,
upon the request to the Administrative Agent by any Revolving
Credit Lender, the Revolving Credit Borrowers will execute and
deliver to such Revolving Credit Lender, as applicable, a
Revolving Credit Note evidencing the Revolving Credit Loans made
by such Revolving Credit Lender. The Revolving Credit Borrowers
hereby irrevocably authorizes each Revolving Credit Lender to
make (or cause to be made) appropriate notations on the grid
attached to such Revolving Credit Lender's Revolving Credit Notes
(or on any continuation of such grid), which notations, if made,
shall evidence, inter alia, the date of the outstanding principal
amount of, and the interest rate and Interest Period applicable
to the Revolving Credit Loans evidenced thereby. Such notations
shall, to the extent not inconsistent with the notations made by
the Administrative Agent in the Register, be conclusive and
binding on the Revolving Credit Borrowers absent manifest error;
provided, however, that the failure of any Revolving Credit
Lender to make any such notations shall not limit or otherwise
affect any Revolving Credit Obligations of the Revolving Credit
Borrowers or any other Revolving Credit Obligor.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments. The Revolving
Credit Borrowers shall be jointly and severally obligated to
repay in full the unpaid principal amount of each Revolving
Credit Loan upon the Stated Maturity Date therefor. Prior
thereto, the Revolving Credit Borrowers jointly and severally
acknowledge, covenant and agree that any Revolving Credit
Borrower
(a) may, from time to time on any Business Day, make a
voluntary prepayment, in whole or in part, of the outstanding
principal amount of any
(i) Revolving Credit Loans (other than Swing
Line Loans); provided, however, that
(A) any such prepayment shall be
made pro rata among Revolving I Credit Loans or
Revolving II Credit Loans, as the case may be, of
the same type and, if applicable, having the same
Interest Period, of all Revolving Credit Lenders;
(B) no such prepayment of any LIBO
Rate Loan may be made on any day other than the
last day of the Interest Period for such LIBO Rate
Loan;
(C) all such voluntary prepayments
shall require, in the case of Revolving I Credit
Loans maintained as Base Rate Loans, at least one,
and in the case of Revolving I Credit Loans
maintained as LIBO Rate Loans and Revolving II
Credit Loans maintained either as Base Rate Loans
or LIBO Rate Loans, at least three but, in any
case, no more than five, Business Days' prior
written notice to the Administrative Agent; and
(D) all such voluntary partial
prepayments shall be, in the case of Revolving I
Credit Loans, in an aggregate minimum amount of
$1,000,000 and an integral multiple of $500,000,
and in the case of Revolving II Credit Loans, in
an aggregate minimum amount of $5,000,000 and an
integral multiple of $1,000,000;
(ii) Swing Line Loans, provided that
(A) all such voluntary prepayments
shall require prior telephonic notice to the Swing
Line Lender on or before 1:00 p.m., New York City
time, on the day of such prepayment (such notice
to be confirmed in writing by the applicable
Revolving Credit Borrower by the end of the
Business Day on which such telephonic notice was
delivered); and
(B) all such voluntary partial
prepayments shall be in an aggregate amount of
$100,000 and an integral multiple of $50,000 or in
the aggregate principal amount of all Swing Line
Loans then outstanding;
(b) shall, on each date when any reduction in any
Revolving I Credit Commitment Amount shall become effective,
including pursuant to Section 2.2, make a mandatory prepayment
(which shall be applied (or held for application, as the case may
be) by the Revolving Credit Lenders having Revolving I Credit
Commitments first, to the payment of the aggregate unpaid
principal amount of those Swing Line Loans then outstanding,
second, to the payment of the aggregate unpaid principal amount
of those Revolving I Credit Loans then outstanding, and, third,
to the payment of the then outstanding Revolving Credit Letter of
Credit Outstandings) equal to the excess, if any, of the
aggregate, outstanding principal amount of all Revolving I Credit
Loans and Revolving Credit Letter of Credit Outstandings over the
Revolving I Credit Loan Commitment Amount as so reduced;
(c) shall, on each date when any reduction in the
Revolving II Credit Commitment Amount shall become effective,
including pursuant to Section 2.2 (other than pursuant to clause
(a) of the definition of "Revolving II Credit Commitment
Termination Date"), make a mandatory prepayment (which shall be
applied (or held for application, as the case may be) by the
Revolving Credit Lenders having Revolving II Credit Commitments
to the payment of the aggregate unpaid principal amount of those
Revolving II Credit Loans then outstanding) equal to the excess,
if any, of the aggregate, outstanding principal amount of all
Revolving II Credit Loans over the Revolving II Credit Loan
Commitment Amount as so reduced;
provided, that mandatory prepayments of LIBO Rate Loans made
pursuant to clauses (b) and (c) of this Section 3.1, if not made
on the last day of the Interest Period with respect thereto,
shall, at any Revolving Credit Borrower's option, so long as no
Default has occurred and is continuing, be prepaid subject to the
provisions of Section 5.4, or the amount required to be applied
to the prepayment of LIBO Rate Loans (after application to any
Base Rate Loans) shall be deposited with the Administrative Agent
or another Revolving Credit Lender as cash collateral for such
Revolving I Credit Loans and Revolving II Credit Loans on terms
reasonably satisfactory to the Administrative Agent (or such
Revolving Credit Lender) and thereafter shall be applied in the
order of the Interest Periods next ending most closely to the
date of receipt of the proceeds in respect of which such
prepayment is required to be made and on the last day of each
such Interest Period (together with a payment of all interest
that is due on the last day of each such Interest Period pursuant
to clause (d) of Section 3.2.3). After such application, unless
an Event of Default shall have occurred and be continuing, any
remaining interest earned on such cash collateral shall be paid
to the applicable Revolving Credit Borrower;
(d) shall, on the Stated Maturity Date for the
Revolving Credit Loans, repay in full the aggregate outstanding
principal amount, if any, of all Revolving Credit Loans;
(e) shall, immediately upon any acceleration of the
Stated Maturity Date of any Revolving Credit Loans pursuant to
Section 9.2 or Section 9.3, repay all Revolving Credit Loans,
unless, pursuant to Section 9.3, only a portion of all Revolving
Credit Loans is so accelerated (in which case such portion shall
be repaid); and
(f) shall repay Revolving Credit Loans from time to
time as required under Sections 3.1.1 and 3.1.2 of the Term Loan
Agreement as in effect on the date hereof (it being understood by
the parties hereto that such provisions of the Term Loan
Agreement shall inure to the benefit of the Revolving Credit
Lenders as if the Revolving Credit Lenders were parties to the
Term Loan Agreement).
Each prepayment of any Revolving Credit Loans made pursuant to
this Section shall be without premium or penalty, except as may
be required by Section 5.4. No voluntary prepayment of principal
of any Revolving I Credit Loan or Swing Line Loan shall cause a
reduction in the Revolving I Credit Commitment Amount; any
prepayment of principal of any Revolving II Credit Loan shall, to
the extent of such prepayment, reduce the Revolving II Credit
Commitment Amount, and no mandatory reduction of the Revolving II
Credit Commitment Amount pursuant to clause (a) of the definition
of "Revolving II Credit Commitment Termination Date" shall
require that the then outstanding Revolving II Credit Loans be
repaid.
SECTION 3.2. Interest Provisions. Interest on the
outstanding principal amount of Revolving Credit Loans shall
accrue and be payable in accordance with this Section 3.2.
SECTION 3.2.1. Rates. Pursuant to an appropriately
delivered Borrowing Request or Continuation/Conversion Notice,
(a) any Revolving Credit Borrower may elect that
Revolving Credit Loans (other than Swing Line Loans) comprising a
Borrowing accrue interest at a rate per annum:
(i) on that portion maintained from time to
time as a Base Rate Loan, equal to the sum of the
Alternate Base Rate from time to time in effect plus
the Applicable Revolving Loan Margin; and
(ii) on that portion maintained as a LIBO
Rate Loan, during each Interest Period applicable
thereto, equal to the sum of the LIBO Rate (Reserve
Adjusted) for such Interest Period plus the Applicable
Revolving Loan Margin;
all LIBO Rate Loans shall bear interest from and including the
first day of the applicable Interest Period to (but not
including) the last day of such Interest Period at the interest
rate determined as applicable to such LIBO Rate Loan.
(b) each Swing Line Loan shall accrue interest on the
unpaid principal amount thereof for each day from and including
the day upon which such Swing Line Loan was made to but excluding
the date such Swing Line Loan is repaid at a rate per annum equal
to the sum of the then effective Alternate Base Rate plus the
Applicable Revolving Loan Margin minus the applicable commitment
fee rate per annum payable to any Revolving I Credit Lender
pursuant to Section 3.3.1 in respect of its Revolving I Credit
Commitment.
SECTION 3.2.2. Post-Maturity Rates. Upon the occurrence
and continuance of (i) any Event of Default described in Section
9.1.1 or clauses (a) through (d) of Section 9.1.9 or (ii) any
other Event of Default which shall remain uncured for thirty days
(without giving effect to any grace period therefor), all
Revolving Credit Loans shall bear, and the Revolving Credit
Borrowers shall be obligated, on a joint and several basis, to
pay, but only to the extent permitted by law, interest (after as
well as before judgment) thereon in arrears at a rate per annum
equal to the rate that would otherwise be applicable to such
Revolving Credit Loans maintained as Base Rate Loans pursuant to
Section 3.2.1 plus 5.0% on the last day of each calendar month
or, if such day is not a Business Day, the next succeeding
Business Day.
SECTION 3.2.3. Payment Dates. Interest accrued on each
Revolving Credit Loan shall be payable, without duplication:
(a) on the Stated Maturity Date therefor;
(b) subject to the proviso set forth in clause (c) of
Section 3.1, on the date of any optional or required payment or
prepayment, in whole or in part, of principal outstanding on such
Revolving Credit Loan to the extent of the unpaid interest
accrued through such date on the principal so paid or prepaid;
(c) with respect to Base Rate Loans, on each Quarterly
Payment Date occurring after the date of the initial Borrowing
hereunder;
(d) with respect to LIBO Rate Loans, on the last day
of each applicable Interest Period (and, if such Interest Period
shall exceed three months, on the date occurring three months
after the commencement of such Interest Period);
(e) with respect to any Base Rate Loans converted into
LIBO Rate Loans on a day when interest would not otherwise have
been payable pursuant to clause (c), on the next Quarterly
Payment Date; and
(f) on that portion of any Revolving Credit Loans the
Stated Maturity Date of which is accelerated pursuant to Section
9.2 or Section 9.3, immediately upon such acceleration.
Interest accrued on Revolving Credit Loans or other monetary
Revolving Credit Obligations arising under this Agreement or any
other Revolving Credit Document after the date such amount is due
and payable (whether on the Stated Maturity Date, upon
acceleration or otherwise) shall be payable upon demand.
SECTION 3.3. Fees. The Revolving Credit Borrowers, jointly
and severally, agree to pay the fees set forth in this Section
3.3. All such fees shall be non-refundable.
SECTION 3.3.1. Commitment Fee. The Revolving Credit
Borrowers, jointly and severally, agree to pay to the
Administrative Agent for the account of each Revolving Credit
Lender, for the period (including any portion thereof when any of
its Revolving Credit Commitments are suspended by reason of the
inability of the Revolving Credit Borrowers to satisfy any
condition of Article V) commencing on the Closing Date and
continuing through the final Revolving Credit Commitment
Termination Date, a commitment fee at the rate of 0.875% per
annum on such Revolving Credit Lender's Revolving Credit
Percentage of the sum of the average daily unused portion of each
Revolving Credit Commitment Amount. Such commitment fees shall
be payable by the Revolving Credit Borrowers in arrears on each
Quarterly Payment Date, commencing with the first such day
following the Closing Date, and on each Revolving Credit
Commitment Termination Date. The making of Swing Line Loans
shall not constitute usage of the Revolving I Credit Commitment
with respect to the calculation of commitment fees to be paid by
the Revolving Credit Borrowers to the Revolving Credit Lenders.
SECTION 3.3.2. Other Fees. The Revolving Credit Borrowers,
jointly and severally, agree to pay to the Administrative Agent
for its own account, the annual administration fees referred to
in the letter agreement, dated March 13, 1998, among the
Borrower, the Revolving Credit Borrowers and the Administrative
Agent with respect thereto.
SECTION 3.3.3. Revolving Credit Letter of Credit Fee. The
Revolving Credit Borrowers, jointly and severally, agree to pay
to the Administrative Agent, for the account of each Revolving
Credit Lender having a Revolving I Credit Commitment, a fee for
each Revolving Credit Letter of Credit for the period from and
including the date of the issuance of such Revolving Credit
Letter of Credit to (but not including) the date upon which such
Revolving Credit Letter of Credit expires, at a rate per annum
equal to the Applicable Revolving Loan Margin for Base Rate Loans
multiplied by the Stated Amount of the face amount of such
Revolving Credit Letter of Credit. Such fee shall be payable by
the Revolving Credit Borrowers in arrears on each Quarterly
Payment Date, and on the Revolving I Credit Commitment
Termination Date for any period then ending for which such fee
shall not theretofore have been paid, commencing on the first
such date after the issuance of such Revolving Credit Letter of
Credit.
SECTION 3.3.4. Revolving Credit Letter of Credit Issuing
Fee. The Revolving Credit Borrowers, jointly and severally,
agree to pay to the Administrative Agent, for the account of the
applicable Issuer, an issuing fee for each Revolving Credit
Letter of Credit for the period from and including the date of
issuance of such Revolving Credit Letter of Credit to (but not
including) the date upon which such Revolving Credit Letter of
Credit expires, of 0.25% per annum of the Stated Amount of such
Revolving Credit Letter of Credit. Such fee shall be payable by
the Revolving Credit Borrowers in arrears on each Quarterly
Payment Date and on the Revolving I Credit Commitment Termination
Date for any period then ending for which such fee shall not
theretofore have been paid, commencing on the first such date
after the issuance of such Revolving Credit Letter of Credit.
SECTION 3.3.5. Revolving Credit Letter of Credit
Administrative Fee. The Revolving Credit Borrowers, jointly and
severally, agree to pay to the Administrative Agent, for the
account of the applicable Issuer, the amounts set forth in
Section 4.3.
ARTICLE III
REVOLVING CREDIT LETTERS OF CREDIT
SECTION 4.1. Issuance Requests. By delivering to the
Administrative Agent and the applicable Issuer an Issuance
Request on or before 12:00 noon, New York City time, any
Revolving Credit Borrower may request, from time to time prior to
the Revolving I Credit Commitment Termination Date and on not
less than three nor more than ten Business Days' notice, that
such Issuer issue an irrevocable standby Revolving Credit Letter
of Credit in substantially the form of Exhibit C hereto, or in
such other form as may be requested by such Revolving Credit
Borrower and approved by such Issuer (each a "Revolving Credit
Letter of Credit"), in support of financial obligations of such
Revolving Credit Borrower incurred in such Revolving Credit
Borrower's ordinary course of business and which are described in
such Issuance Request. Upon receipt of an Issuance Request, the
Administrative Agent shall promptly notify the Revolving Credit
Lenders thereof. Each Revolving Credit Letter of Credit shall by
its terms:
(a) be issued in a Stated Amount which does not exceed
(or would not exceed) the then Revolving I Credit Commitment
Availability;
(b) be stated to expire on a date (its "Stated Expiry
Date") no later than the earlier to occur of (i) the Revolving I
Credit Loan Commitment Termination Date and (ii) one year from
the date of its issuance; provided that, notwithstanding the
terms of clause (ii) above, a Revolving Credit Letter of Credit
may, if required by the beneficiary thereof, contain "evergreen"
provisions pursuant to which the Stated Expiry Date shall be
automatically extended, unless notice to the contrary shall have
been given to the beneficiary by the Issuer or the account party
more than a specified period prior to the then existing Stated
Expiry Date; and
(c) on or prior to its Stated Expiry Date
(i) terminate immediately upon notice to the
Issuer thereof from the beneficiary thereunder that all
obligations covered thereby have been terminated, paid,
or otherwise satisfied in full,
(ii) reduce in part immediately and to the
extent the beneficiary thereunder has notified the
Issuer thereof that the obligations covered thereby
have been paid or otherwise satisfied in part, or
(iii) terminate 30 Business Days after
notice to the beneficiary thereunder from the Issuer
thereof that an Event of Default has occurred and is
continuing.
So long as no Default has occurred and is continuing, by delivery
to the applicable Issuer and the Administrative Agent of an
Issuance Request at least three but not more than ten Business
Days or such longer period as required by the terms of any
Revolving Credit Letter of Credit prior to the Stated Expiry Date
of any Revolving Credit Letter of Credit, the applicable
Revolving Credit Borrower may request such Issuer to extend the
Stated Expiry Date of such Revolving Credit Letter of Credit for
an additional period not to exceed the earlier of one year from
its date of extension and the Revolving I Credit Commitment
Termination Date.
SECTION 4.2. Issuances and Extensions. On the terms and
subject to the conditions of this Agreement (including Article
VI), the Issuer shall issue Revolving Credit Letters of Credit,
and extend the Stated Expiry Dates of outstanding Revolving
Credit Letters of Credit, in accordance with the Issuance
Requests made therefor. Each Issuer will make available the
original of each Revolving Credit Letter of Credit which it
issues in accordance with the Issuance Request therefor to the
beneficiary thereof (and will promptly provide each of the
Revolving Credit Lenders with a Revolving I Credit Commitment
with a copy of such Revolving Credit Letter of Credit) and will
notify the beneficiary under any Revolving Credit Letter of
Credit of any extension of the Stated Expiry Date thereof.
SECTION 4.3. Expenses. Each Revolving Credit Borrower
agrees to pay to the Administrative Agent for the account of the
applicable Issuer(s) all administrative expenses of such
Issuer(s) in connection with the issuance, maintenance,
modification (if any) and administration of each Revolving Credit
Letter of Credit issued by such Issuer(s) upon demand from time
to time.
SECTION 4.4. Other Revolving Credit Lenders' Participation.
Each Revolving Credit Letter of Credit issued pursuant to Section
4.2 shall, effective upon its issuance and without further
action, be issued on behalf of all Revolving Credit Lenders
(including the Issuer thereof) pro rata according to their
respective Revolving Credit Percentages of the Revolving I Credit
Commitment. Each Revolving Credit Lender shall, to the extent of
its Revolving Credit Percentage of the Revolving I Credit
Commitment, be deemed irrevocably to have participated in the
issuance of such Revolving Credit Letter of Credit and shall be
responsible to reimburse promptly the Issuer thereof for
Reimbursement Obligations which have not been reimbursed by the
Revolving Credit Borrowers in accordance with Section 4.5, or
which have been reimbursed by the Revolving Credit Borrowers but
must be returned, restored or disgorged by such Issuer for any
reason, and each Revolving Credit Lender shall, to the extent of
its Revolving Credit Percentage of the Revolving I Credit
Commitment Amount, be entitled to receive from the Administrative
Agent a ratable portion of the Revolving Credit Letter of Credit
fees received by the Administrative Agent pursuant to Section
3.3.3, with respect to each Revolving Credit Letter of Credit.
In the event that the Revolving Credit Borrowers shall fail to
reimburse any Issuer, or if for any reason Revolving I Credit
Loans shall not be made to fund any Reimbursement Obligation, all
as provided in Section 4.5 and in an amount equal to the amount
of any drawing honored by such Issuer under a Revolving Credit
Letter of Credit issued by it, or in the event such Issuer must
for any reason return or disgorge such reimbursement, such Issuer
shall promptly notify each Revolving Credit Lender with a
Revolving I Credit Commitment of the unreimbursed amount of such
drawing and of such Revolving Credit Lender's respective
participation therein. Each Revolving Credit Lender shall make
available to such Issuer, whether or not any Default shall have
occurred and be continuing, an amount equal to its respective
participation in same day or immediately available funds at the
office of such Issuer specified in such notice not later than
11:00 a.m., New York City time, on the Business Day (under the
laws of the jurisdiction of such Issuer) after the date notified
by such Issuer. In the event that any Revolving Credit Lender
fails to make available to such Issuer the amount of such
Revolving Credit Lender's participation in such Revolving Credit
Letter of Credit as provided herein, such Issuer shall be
entitled to recover such amount on demand from such Revolving
Credit Lender together with interest at the daily average Federal
Funds Rate for three Business Days (together with such other
compensatory amounts as may be required to be paid by such
Revolving Credit Lender to the Administrative Agent pursuant to
the Rules for Interbank Compensation of the council on
International Banking or the Clearinghouse Compensation
Committee, as the case may be, as in effect from time to time)
and thereafter at the Alternate Base Rate plus the Applicable
Revolving Loan Margin for Base Rate Loans. Nothing in this
Section shall be deemed to prejudice the right of any Revolving
Credit Lender to recover from any Issuer any amounts made
available by such Revolving Credit Lender to such Issuer pursuant
to this Section in the event that it is determined by a court of
competent jurisdiction that the payment with respect to a
Revolving Credit Letter of Credit by such Issuer in respect of
which payment was made by such Revolving Credit Lender
constituted gross negligence or wilful misconduct on the part of
such Issuer. Each Issuer shall distribute to each other
Revolving Credit Lender which has paid all amounts payable by it
under this Section with respect to any Revolving Credit Letter of
Credit issued by such Issuer such other Revolving Credit Lender's
Revolving Credit Percentage of the Revolving I Credit Commitment
Amount of all payments received by such Issuer from the Revolving
Credit Borrowers in reimbursement of drawings honored by such
Issuer under such Revolving Credit Letter of Credit when such
payments are received.
SECTION 4.5. Disbursements. Each Issuer will notify the
applicable Revolving Credit Borrower and the Administrative Agent
promptly of the presentment for payment of any Revolving Credit
Letter of Credit, together with notice of the date (a
"Disbursement Date") such payment shall be made. Subject to the
terms and provisions of such Revolving Credit Letter of Credit,
the applicable Issuer shall make such payment to the beneficiary
(or its designee) of such Revolving Credit Letter of Credit.
Prior to 12:00 noon, New York City time, on the Disbursement
Date, the Revolving Credit Borrowers will be obligated, on a
joint and several basis, to reimburse the applicable Issuer for
all amounts which it has disbursed under the Revolving Credit
Letter of Credit. To the extent the applicable Issuer is not
reimbursed in full in accordance with the third sentence of this
Section, the Revolving Credit Borrowers' Reimbursement Obligation
shall accrue interest at a fluctuating rate determined by
reference to the Alternate Base Rate plus the Applicable
Revolving Loan Margin for Base Rate Loans plus a margin of 5.0%
per annum, payable on demand. In the event the applicable Issuer
is not reimbursed by the Revolving Credit Borrowers on the
Disbursement Date, or if such Issuer must for any reason return
or disgorge such reimbursement, the Revolving Credit Lenders
(including such Issuer) shall, on the terms and subject to the
conditions of this Agreement, fund the Reimbursement Obligation
therefor by making, on the next Business Day, Revolving Credit
Loans which are Base Rate Loans as provided in Section 2.1.2 (the
Revolving Credit Borrowers being deemed to have given a timely
Borrowing Request therefor for such amount); provided, however,
for the purpose of determining the availability of the Revolving
I Credit Commitments to make Revolving I Credit Loans immediately
prior to giving effect to the application of the proceeds of such
Revolving Credit Loans, such Reimbursement Obligation shall be
deemed not to be outstanding at such time.
SECTION 4.6. Reimbursement. The Revolving Credit
Borrowers' obligations (a "Reimbursement Obligation") under
Section 4.5 to reimburse an Issuer with respect to each
Disbursement (including interest thereon), and each Revolving
Credit Lender's obligation to make participation payments in each
drawing which has not been reimbursed by the Revolving Credit
Borrowers, shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim, or
defense to payment which the Revolving Credit Borrowers may have
or have had against any Revolving Credit Lender or any
beneficiary of a Revolving Credit Letter of Credit, including any
defense based upon the occurrence of any Default, any draft,
demand or certificate or other document presented under a
Revolving Credit Letter of Credit proving to be forged,
fraudulent, invalid or insufficient, the failure of any
Disbursement to conform to the terms of the applicable Revolving
Credit Letter of Credit (if, in the applicable Issuer's good
faith opinion, such Disbursement is determined to be appropriate)
or any non-application or misapplication by the beneficiary of
the proceeds of such Disbursement, or the legality, validity,
form, regularity, or enforceability of such Revolving Credit
Letter of Credit; provided, however, that nothing herein shall
adversely affect the right of the Revolving Credit Borrowers to
commence any proceeding against the applicable Issuer for any
wrongful Disbursement made by such Issuer under a Revolving
Credit Letter of Credit as a result of acts or omissions
constituting gross negligence or willful misconduct on the part
of such Issuer.
SECTION 4.7. Deemed Disbursements. Upon the occurrence and
during the continuation of any Event of Default or the occurrence
of the Revolving I Credit Commitment Termination Date, an amount
equal to that portion of Revolving Credit Letter of Credit
Outstandings attributable to outstanding and undrawn Revolving
Credit Letters of Credit shall, at the election of the applicable
Issuer acting on instructions from the Required Revolving Credit
Lenders, and without demand upon or notice to any Revolving
Credit Borrower, be deemed to have been paid or disbursed by such
Issuer under such Revolving Credit Letters of Credit
(notwithstanding that such amount may not in fact have been so
paid or disbursed), and, upon notification by such Issuer to the
Administrative Agent and any Revolving Credit Borrower of its
obligations under this Section, such Revolving Credit Borrower
shall be immediately obligated to reimburse such Issuer the
amount deemed to have been so paid or disbursed by such Issuer.
Any amounts so received by such Issuer from any Revolving Credit
Borrower pursuant to this Section shall be held as collateral
security for the repayment of such Revolving Credit Borrower's
obligations in connection with the Revolving Credit Letters of
Credit issued by such Issuer. At any time when such Revolving
Credit Letters of Credit shall terminate and all Revolving Credit
Obligations of each Issuer are either terminated or paid or
reimbursed to such Issuer in full, the Revolving Credit
Obligations of the Revolving Credit Borrowers under this Section
shall be reduced accordingly (subject, however, to reinstatement
in the event any payment in respect of such Revolving Credit
Letters of Credit is recovered in any manner from such Issuer),
and such Issuer will return to the Revolving Credit Borrowers the
excess, if any, of
(a) the aggregate amount deposited by the Revolving
Credit Borrowers with such Issuer and not theretofore applied by
such Issuer to any Reimbursement Obligation
over
(b) the aggregate amount of all Reimbursement Obligations
to such Issuer pursuant to this Section, as so adjusted.
At such time when all Events of Default shall have been cured or
waived, each Issuer shall return to the Revolving Credit
Borrowers all amounts then on deposit with such Issuer pursuant
to this Section. All amounts on deposit pursuant to this Section
shall, until their application to any Reimbursement Obligation or
their return to any Revolving Credit Borrower, as the case may
be, bear interest at the daily average Federal Funds Rate from
time to time in effect (net of the costs of any reserve
requirements, in respect of amounts on deposit pursuant to this
Section, pursuant to F.R.S. Board Regulation D), which interest
shall be held by the applicable Issuer as additional collateral
security for the repayment of the Revolving Credit Obligations in
connection with the Revolving Credit Letters of Credit issued by
such Issuer.
SECTION 4.8. Nature of Reimbursement Obligations. The
Revolving Credit Borrowers shall assume all risks of the acts,
omissions, or misuse of any Revolving Credit Letter of Credit by
the beneficiary thereof. Neither any Issuer nor any Revolving
Credit Lender (except to the extent of its own gross negligence
or wilful misconduct) shall be responsible for:
(a) the form, validity, sufficiency, accuracy,
genuineness, or legal effect of any Revolving Credit Letter of
Credit or any document submitted by any party in connection with
the application for and issuance of a Revolving Credit Letter of
Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent, or
forged;
(b) the form, validity, sufficiency, accuracy,
genuineness, or legal effect of any instrument transferring or
assigning or purporting to transfer or assign a Revolving Credit
Letter of Credit or the rights or benefits thereunder or proceeds
thereof in whole or in part, which may prove to be invalid or
ineffective for any reason;
(c) failure of the beneficiary to comply fully with
conditions required in order to demand payment under a Revolving
Credit Letter of Credit;
(d) errors, omissions, interruptions, or delays in
transmission or delivery of any messages, by mail, cable,
telegraph, telex, or otherwise; or
(e) any loss or delay in the transmission or otherwise
of any document or draft required in order to make a Disbursement
under a Revolving Credit Letter of Credit or of the proceeds
thereof.
None of the foregoing shall affect, impair, or prevent the
vesting of any of the rights or powers granted any Issuer or any
Revolving Credit Lender hereunder. In furtherance and extension,
and not in limitation or derogation, of any of the foregoing, any
action taken or omitted to be taken by any Issuer in good faith
shall be binding (jointly and severally) upon each Revolving
Credit Borrower and shall not put such Issuer under any resulting
liability to any Revolving Credit Borrower.
SECTION 4.9. Increased Costs; Indemnity. If by reason of
(a) any change in applicable law, regulation, rule,
decree or regulatory requirement or any change in the
interpretation or application by any judicial or regulatory
authority of any law, regulation, rule, decree or regulatory
requirement, or
(b) compliance by any Issuer or any Revolving Credit
Lender with any direction, request or requirement (whether or not
having the force of law) of any governmental or monetary
authority, including Regulation D of the F.R.S. Board:
(i) any Issuer or any Revolving Credit
Lender shall be subject to any tax (other than taxes on
net income and franchises), levy, charge or withholding
of any nature or to any variation thereof or to any
penalty with respect to the maintenance or fulfillment
of its obligations under this Article IV, whether
directly or by such being imposed on or suffered by
such Issuer or any Revolving Credit Lender;
(ii) any reserve, deposit or similar
requirement is or shall be applicable, imposed or
modified in respect of any Revolving Credit Letters of
Credit issued by any Issuer or participations therein
purchased by any Revolving Credit Lender; or
(iii) there shall be imposed on any Issuer
or any Revolving Credit Lender any other condition
regarding this Article IV, any Revolving Credit Letter
of Credit or any participation therein;
and the result of the foregoing is directly or indirectly to
increase the cost to such Issuer or such Revolving Credit Lender
of issuing, making or maintaining any Revolving Credit Letter of
Credit or of purchasing or maintaining any participation therein,
or to reduce any amount receivable in respect thereof by such
Issuer or such Revolving Credit Lender, then and in any such case
such Issuer or such Revolving Credit Lender may, at any time
after the additional cost is incurred or the amount received is
reduced, notify the Revolving Credit Borrowers thereof, and the
Revolving Credit Borrowers shall pay on demand such amounts as
such Issuer or Revolving Credit Lender may specify to be
necessary to compensate such Issuer or Revolving Credit Lender
for such additional cost or reduced receipt, together with
interest on such amount from the date demanded until payment in
full thereof at a rate equal at all times to the Alternate Base
Rate plus the Applicable Revolving Loan Margin for Base Rate
Loans plus 5.0% per annum. The determination by such Issuer or
Revolving Credit Lender, as the case may be, of any amount due
pursuant to this Section, as set forth in a statement setting
forth the calculation thereof in reasonable detail, shall, in the
absence of manifest error, be final and conclusive and binding on
all of the parties hereto. In addition to amounts payable as
elsewhere provided in this Article IV, each Revolving Credit
Borrower hereby agrees to protect, indemnify, pay and save each
Issuer harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees and allocated costs of
internal counsel) which such Issuer may incur or be subject to as
a consequence, direct or indirect, of
(c) the issuance of the Revolving Credit Letters of
Credit, other than as a result of the gross negligence or wilful
misconduct of such Issuer as determined by a court of competent
jurisdiction, or
(d) the failure of such Issuer to honor a drawing
under any Revolving Credit Letter of Credit as a result of any
act or omission, whether rightful or wrongful, of any present or
future de jure or de facto government or governmental authority.
ARTICLE V
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 5.1. LIBO Rate Lending Unlawful. If any Revolving
Credit Lender shall determine (which determination shall, upon
notice thereof to any Revolving Credit Borrower and the Revolving
Credit Lenders, be conclusive and binding on the Revolving Credit
Borrowers) that the introduction of or any change in or in the
interpretation of any law, in each case after the date upon which
such Revolving Credit Lender shall have become a Revolving Credit
Lender hereunder, makes it unlawful, or any central bank or other
Regulatory Authority asserts, after such date, that it is
unlawful, for such Revolving Credit Lender to make, continue or
maintain any Revolving Credit as, or to convert any Revolving
Credit into, a LIBO Rate Loan, the obligations of such Revolving
Credit Lender to make, continue, maintain or convert any such
LIBO Rate Loan shall, upon such determination, forthwith be
suspended until such Revolving Credit Lender shall notify the
Administrative Agent that the circumstances causing such
suspension no longer exist, and all outstanding LIBO Rate Loans
of such Revolving Credit Lender shall automatically convert into
Base Rate Loans at the end of the then current Interest Periods
with respect thereto or sooner, if required by such law or
assertion. Each Revolving Credit Lender agrees to promptly give
notice to the Administrative Agent and each Revolving Credit
Borrower when the circumstances causing such suspension cease to
exist.
SECTION 5.2. Deposits Unavailable. If the Administrative
Agent shall have determined that
(a) with respect to any proposed LIBO Rate Loan,
Dollar deposits in the relevant amount and for the relevant
Interest Period are not generally available in the relevant
market; or
(b) by reason of circumstances affecting the relevant
market, adequate means do not exist for ascertaining the interest
rate applicable hereunder to LIBO Rate Loans for the relevant
Interest Period;
then, upon notice from the Administrative Agent to the Revolving
Credit Borrowers and the Revolving Credit Lenders, the
obligations of all Revolving Credit Lenders under Section 2.3 and
Section 2.4 to make or continue after the relevant Interest
Period any Revolving Credit Loans as, or to convert any Revolving
Credit Loans into, LIBO Rate Loans shall forthwith be suspended
until the Administrative Agent shall notify the Revolving Credit
Borrowers and the Revolving Credit Lenders that the circumstances
causing such suspension no longer exist.
SECTION 5.3. Increased LIBO Rate Loan Costs, etc. Each
Revolving Credit Borrower, jointly and severally, agrees to
reimburse each Revolving Credit Lender for any increase in the
cost to such Revolving Credit Lender of, or any reduction in the
amount of any sum receivable by such Revolving Credit Lender in
respect of, making, continuing or maintaining (or of its
obligation to make, continue or maintain) any Revolving Credit
Loans as, or of converting (or of its obligation to convert) any
Revolving Credit Loans into, LIBO Rate Loans (except for any
increase taken into account in determining the LIBOR Reserve
Percentage and except for increased capital costs and Taxes which
are governed by Sections 5.5 and 5.6, respectively) that arise in
connection with any change in, or the introduction, adoption,
effectiveness, interpretation, reinterpretation or phase-in after
the date hereof of, any law or regulation, directive, guideline,
decision or request (whether or not having the force of law) of
any court, central bank, regulator or other Regulatory Authority.
Such Revolving Credit Lender shall use all commercially
reasonable efforts to promptly notify the Administrative Agent
and the Revolving Credit Borrowers in writing within 90 days of
the occurrence of any such event (which notice shall in any event
be delivered no later than 120 days after the annual audited
financial statements are reported for the fiscal year of such
Revolving Credit Lender ended following the payment and
performance in full of all Obligations, the termination of all
Commitments and the expiration of all Revolving Credit Letters of
Credit), such notice to state, in reasonable detail, the reasons
therefor and the additional amount required fully to compensate
such Revolving Credit Lender for such increased cost or reduced
amount. Such additional amounts shall be payable by the
Revolving Credit Borrowers, and the Revolving Credit Borrowers
hereby acknowledge and agree that they are jointly and severally
liable to pay such additional amounts, directly to such Revolving
Credit Lender within five days of its receipt of such notice, and
such notice shall, in the absence of manifest error, be
conclusive and binding on the Revolving Credit Borrowers.
SECTION 5.4. Funding Losses. In the event any Revolving
Credit Lender shall incur any loss or expense (including any loss
or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by such Revolving Credit
Lender to make, continue or maintain any portion of the principal
amount of any Revolving Credit Loan as, or to convert any portion
of the principal amount of any Revolving Credit Loan into, a LIBO
Rate Loan) as a result of
(a) any conversion or repayment or prepayment of the
principal amount of any LIBO Rate Loans on a date other than the
scheduled last day of the Interest Period applicable thereto,
whether pursuant to Section 3.1 or otherwise;
(b) any Revolving Credit Loans not being made as LIBO
Rate Loans in accordance with the Borrowing Request therefor; or
(c) any Revolving Credit Loans not being continued as,
or converted into, LIBO Rate Loans in accordance with the
Continuation/Conversion Notice therefor,
then, upon the written notice of such Revolving Credit Lender to
the Revolving Credit Borrowers (with a copy to the Administrative
Agent) (which notice such Revolving Credit Lender shall use all
commercially reasonable efforts to deliver to the Revolving
Credit Borrowers within 90 days of the occurrence of any such
event and which notice shall in any event be delivered no later
than 120 days after the annual audited financial statements are
reported for the fiscal year of such Revolving Credit Lender
ended following the payment and performance in full of all
Obligations, the termination of all Commitments and the
expiration of all Revolving Credit Letters of Credit), the
Revolving Credit Borrowers shall, and the Revolving Credit
Borrowers hereby acknowledge and agree that they are jointly and
severally liable to pay, within five days of its receipt thereof,
pay directly to such Revolving Credit Lender such amount as will
(in the reasonable determination of such Revolving Credit Lender)
reimburse such Revolving Credit Lender for such loss or expense.
Such written notice (which shall include calculations in
reasonable detail) shall, in the absence of manifest error, be
conclusive and binding on the Revolving Credit Borrowers.
SECTION 5.5. Increased Capital Costs. If any change in, or
the introduction, adoption, effectiveness, interpretation,
reinterpretation or phase-in of, any law or regulation,
directive, guideline, decision or request (whether or not having
the force of law) of any court, central bank, regulator or other
Regulatory Authority, in each case occurring after the applicable
Revolving Credit Lender becomes a Revolving Credit Lender
hereunder, affects or would affect the amount of capital required
or expected to be maintained by any Revolving Credit Lender or
any Person controlling such Revolving Credit Lender, and such
Revolving Credit Lender determines (in good faith but in its sole
and absolute discretion) that the rate of return on its or such
controlling Person's capital as a consequence of the Revolving
Credit Commitments, issuance of the participation in Revolving
Credit Letters of Credit or the Revolving Credit Loans made by
such Revolving Credit Lender is reduced to a level below that
which such Revolving Credit Lender or such controlling Person
could have achieved but for the occurrence of any such
circumstance, then, in any such case upon notice from time to
time by such Revolving Credit Lender to the Revolving Credit
Borrowers (which notice such Revolving Credit Lender shall use
all commercially reasonable efforts to deliver to the Borrower
within 90 days of the occurrence of any such event and which
notice shall in any event be delivered no later than 120 days
after the annual audited financial statements are reported for
the fiscal year of such Revolving Credit Lender ended following
the payment and performance in full of all Obligations, the
termination of all Commitments and the expiration of all
Revolving Credit Letters of Credit), the Revolving Credit
Borrowers shall be jointly and severally obligated to immediately
pay directly to such Revolving Credit Lender additional amounts
sufficient to compensate such Revolving Credit Lender or such
controlling Person for such reduction in rate of return. A
statement of such Revolving Credit Lender as to any such
additional amount or amounts (including calculations thereof in
reasonable detail) shall be sent by such Revolving Credit Lender
to the Revolving Credit Borrowers and shall, in the absence of
manifest error, be conclusive and binding on the Revolving Credit
Borrowers. In determining such amount, such Revolving Credit
Lender may use any method of averaging and attribution that it
(in its sole and absolute discretion) shall deem applicable.
SECTION 5.6. Taxes.
(a) All payments by the Revolving Credit Borrowers of
principal of, and interest on, or other amounts in respect of,
the Revolving Credit Loans and all other amounts payable
hereunder (including fees) and the Revolving Credit Notes shall
be made free and clear of and without deduction for any Taxes,
except to the extent that any such withholdings or deductions are
required by applicable law, rule or regulations. In that event,
the Revolving Credit Borrowers shall be jointly and severally
obligated to
(i) pay directly to the relevant authority
the full amount of Taxes required to be so withheld or
deducted;
(ii) promptly forward to the Administrative
Agent an official receipt or other documentation
reasonably satisfactory to the Administrative Agent
evidencing such payment to such authority; and
(iii) if such Taxes are Covered Taxes, pay
to the Administrative Agent for the account of the
Revolving Credit Lenders such additional amount or
amounts as is necessary to ensure that the net amount
actually received by each Revolving Credit Lender will
equal the full amount such Revolving Credit Lender
would have received had no such withholding or
deduction been required.
In addition, if the Revolving Credit Borrowers, any Revolving
Credit Lender, or the Administrative Agent is required by law at
any time to pay any Covered Tax on, or calculated by reference
to, any sum received or receivable by or on behalf of any
Revolving Credit Lender or the Administrative Agent under this
Agreement or any Notes, then (i) with respect solely to any such
requirement with respect to a Revolving Credit Lender or the
Administrative Agent, any applicable Revolving Credit Lender or
the Administrative Agent shall, as promptly as practicable
following such Person having notice of such requirement, give
notice to the Revolving Credit Borrowers of such requirement and
(ii) the Revolving Credit Borrowers shall be jointly and
severally obligated, promptly after having received such notice,
to pay or procure the payment of such Covered Tax. If any the
Revolving Credit Borrower pays any such Covered Taxes as required
by the immediately preceding sentence, then such Revolving Credit
Borrower will promptly forward to the Administrative Agent an
official receipt or other documentation reasonably satisfactory
to the Administrative Agent evidencing such payment of Covered
Taxes to the relevant taxing authority. Without prejudice to the
preceding provisions, if the Administrative Agent or any
Revolving Credit Lender is required by law to make any payment on
account of Covered Taxes on or in relation to any sum received
under this Agreement or any Note, or any liability for Covered
Taxes in respect of any such sum is imposed, levied or assessed
against any Revolving Credit Lender or the Administrative Agent,
the Revolving Credit Borrowers will indemnify each such Revolving
Credit Lender and the Administrative Agent for the full amount of
Covered Taxes paid by such Revolving Credit Lender or the
Administrative Agent (as the case may be), whether or not such
Covered Taxes were correctly or legally asserted. Such
indemnification shall be made within 30 days of the demand of the
Revolving Credit Lender or the Administrative Agent therefor. In
addition, if any the Revolving Credit Borrower fails to remit to
the Administrative Agent, for the account of the respective
Revolving Credit Lenders, the required receipts or other required
documentary evidence of its payment of any Taxes, the Revolving
Credit Borrowers shall, jointly and severally, indemnify the
Administrative Agent and the Revolving Credit Lenders for any
incremental Taxes, interest or penalties that may become payable
by the Administrative Agent and any Revolving Credit Lender as a
result of any such failure. For purposes of this Section 5.6,
the transfer by the Administrative Agent or any Revolving Credit
Lender to or for the account of any Revolving Credit Lender of
any sum received from any Revolving Credit Borrower on account of
amounts required to be paid by the Revolving Credit Borrowers
hereunder in respect of Covered Taxes imposed with respect to the
recipient shall be deemed a payment by the Revolving Credit
Borrowers of such amounts.
(b) Each Revolving Credit Lender that is an original
signatory to this Agreement and the Administrative Agent hereby
severally (but not jointly) represent that, under applicable law
and treaties in effect as of the date of the Loans, no United
States federal income taxes will be required to be withheld by
the Administrative Agent or the Revolving Credit Borrowers with
respect to any payments to be made to such Person in respect of
this Agreement. Each Revolving Credit Lender that is an original
signatory hereto (and each Person which becomes a Revolving
Credit Lender by assignment, transfer or participation pursuant
to Section 11.11 hereof) and the Administrative Agent (and each
Person that becomes the Administrative Agent by appointment
pursuant to Section 10.4 hereof), agrees severally (but not
jointly) that, on or prior to the date of the Revolving Credit
Loans (or on or prior to the date of such assignment, transfer or
appointment, as the case may be) it will in each case deliver to
the Revolving Credit Borrowers and the Administrative Agent the
following:
(i) in the case of a Person other than a Non-
U.S. Revolving Credit Lender, two copies of a statement
certifying that such Person is a U.S. Person, which
statement shall contain the address, if any, of such
Person's office or place of business in the United
States, and shall be signed by an authorized officer of
such Person, together with two duly completed copies of
United States Internal Revenue Service Form W-9 (or
applicable successor form) (unless it establishes to
the reasonable satisfaction of the Administrative Agent
and the Revolving Credit Borrowers that it is otherwise
eligible for an exemption from backup withholding tax
or other applicable withholding tax), or
(ii) in the case of a Non-U.S. Revolving
Credit Lender, either (A) two duly completed copies of
United States Internal Revenue Service Form 1001 or
4224 (or applicable successor form) certifying in each
case that such Person is entitled to receive payments
under this Agreement and the Revolving Credit Notes
payable to it without deduction or withholding of any
United States federal income taxes and two duly
completed copies of United States Internal Revenue
Service Form W-8 or Form W-9 (or applicable successor
form) or (B) in the case of an assignee Revolving
Credit Lender that is not a "bank" within the meaning
of Section 881(c)(3)(A) of the Code and that does not
comply with the requirements of clause (i) hereof, then
a statement in the form of statement in substantially
the form of Exhibit M hereto (an "Exemption
Certificate") to the effect that such assignee
Revolving Credit Lender is eligible for a complete
exemption from withholding of United States withholding
tax under Section 871(h) or Section 881(c) of the Code
and two duly completed and signed original copies of
Internal Revenue Service Form W-8.
Each Person who delivers to the Revolving Credit Borrowers and
the Administrative Agent a Form W-8, W-9, 1001 or 4224, or
applicable successor form, pursuant to this clause, further
undertakes to deliver to the Revolving Credit Borrowers and the
Administrative Agent two further copies of said Form W-8, W-9,
1001, 4224, or applicable successor form, or other manner of
certification, as the case may be, on or before the date that any
such form expires or becomes obsolete or after the occurrence of
any event requiring a change in the most recent form previously
delivered by it to the Revolving Credit Borrowers, and such
extensions or renewals thereof as may reasonably be requested by
the Revolving Credit Borrowers, certifying that such Person is
entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income
taxes, unless in any such case any change in law, rule,
regulation, treaty or directive, or in the interpretation or
application thereof (a "Law Change"), has occurred prior to the
date on which any such delivery would otherwise be required,
which Law Change renders any such form inapplicable or which
would prevent such Person from duly completing and delivering any
such form with respect to it.
The Revolving Credit Borrowers shall not be required to indemnify
any Non-U.S. Revolving Credit Lender, or pay any additional
amounts to any Non-U.S. Revolving Credit Lender, in respect of
United States Federal withholding tax pursuant to clause (a)
above to the extent that the obligation to pay such additional
amounts would not have arisen but for a failure by such Non-U.S.
Revolving Credit Lender to comply with this clause (b); provided,
however, that this clause (b) shall not limit the indemnity
obligations of the Revolving Credit Borrowers to the
Administrative Agent.
Any Revolving Credit Lender claiming any indemnity payment or
additional amounts payable pursuant to this Section 5.6 shall
file any certificate or document reasonably requested in writing
by the Borrower if the making of such a filing would avoid the
need for or reduce the amount of any such indemnity payment or
additional amount which may thereafter accrue and would not, in
the determination of such Revolving Credit Lender, be otherwise
disadvantageous to such Revolving Credit Lender.
(c) The agreements in this Section shall survive the
termination of this Agreement and the payment of the Revolving
Credit Notes and all other amounts payable hereunder.
SECTION 5.7. Payments, Computations, etc. Unless otherwise
expressly provided, all payments by the Revolving Credit Loan
Borrowers pursuant to this Agreement, the Revolving Credit Notes,
or any other Revolving Credit Loan Document shall be made by the
Revolving Credit Borrowers to the Administrative Agent for the
pro rata account of the Revolving Credit Lenders entitled to
receive such payment. All such payments required to be made to
the Administrative Agent shall be made, without setoff, deduction
or counterclaim, not later than 12:00 noon, New York City time,
on the date due, in same day or immediately available funds, to
such account as the Administrative Agent shall specify from time
to time by notice to the Revolving Credit Borrowers. Funds
received after that time shall be deemed to have been received by
the Administrative Agent on the next succeeding Business Day.
The Administrative Agent shall promptly remit on the day it has
received (or is deemed to have received under the preceding
sentence) in same day funds to each Revolving Credit Lender its
share, if any, of such payments received by the Administrative
Agent for the account of such Revolving Credit Lender. All
interest (including interest on LIBO Rate Loans) and fees shall
be computed on the basis of the actual number of days (including
the first day but excluding the last day) occurring during the
period for which such interest or fee is payable over a year
comprised of 360 days (or, in the case of interest on a Base Rate
Loan (calculated at other than the Federal Funds Rate), 365 days
or, if appropriate, 366 days). Whenever any payment to be made
shall otherwise be due on a day which is not a Business Day, such
payment shall (except as otherwise required by clause (c) of the
definition of the term "Interest Period") be made on the next
succeeding Business Day and such extension of time shall be
included in computing interest and fees, if any, in connection
with such payment.
SECTION 5.8. Sharing of Payments. If any Revolving Credit
Lender shall obtain any payment or other recovery (whether
voluntary, involuntary, by application of setoff or otherwise) on
account of any Revolving Credit Loan (other than pursuant to the
terms of Section 5.3, 5.4, 5.5 or 5.6) in excess of its pro rata
share of payments then or therewith obtained by all Revolving
Credit Lenders, such Revolving Credit Lender shall purchase from
the other Revolving Credit Lenders such participations in
Borrowings made by them as shall be necessary to cause such
purchasing Revolving Credit Lender to share the excess payment or
other recovery ratably with each of them; provided, however, that
if all or any portion of the excess payment or other recovery is
thereafter recovered from such purchasing Revolving Credit
Lender, the purchase shall be rescinded and each Revolving Credit
Lender which has sold a participation to the purchasing Revolving
Credit Lender shall repay to the purchasing Revolving Credit
Lender the purchase price to the ratable extent of such recovery
together with an amount equal to such selling Revolving Credit
Lender's ratable share (according to the proportion of
(a) the amount of such selling Revolving Credit
Lender's required repayment to the purchasing Revolving Credit
Lender
to
(b) total amount so recovered from the purchasing
Revolving Credit Lender)
of any interest or other amount paid or payable by the purchasing
Revolving Credit Lender in respect of the total amount so
recovered. The Revolving Credit Borrowers agree that any
Revolving Credit Lender so purchasing a participation from
another Revolving Credit Lender pursuant to this Section may, to
the fullest extent permitted by law, exercise all its rights of
payment (including pursuant to Section 5.9) with respect to such
participation as fully as if such Revolving Credit Lender were
the direct creditor of the Revolving Credit Borrowers in the
amount of such participation. If under any applicable
bankruptcy, insolvency or other similar law, any Revolving Credit
Lender receives a secured claim in lieu of a setoff to which this
Section applies, such Revolving Credit Lender shall, to the
extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the
Revolving Credit Lenders entitled under this Section to share in
the benefits of any recovery on such secured claim.
SECTION 5.9. Setoff. Each Revolving Credit Lender shall,
upon the occurrence and during the continuance of any Event of
Default described in clauses (a) through (d) of Section 9.1.9,
or, with the consent of the Required Revolving Credit Lenders,
upon the occurrence and during the continuance of any other Event
of Default, have the right to appropriate and apply to the
payment of all Revolving Credit Obligations then due and payable
to it (whether as a result of stated maturity, acceleration or
otherwise) and after giving effect to the operation of Section
5.8, and (as security for such Revolving Credit Obligations) each
Revolving Credit Borrower hereby grants to each Revolving Credit
Lender a continuing security interest in, any and all balances,
credits, deposits, accounts or moneys of such Revolving Credit
Borrower then or thereafter maintained with such Revolving Credit
Lender; provided, however, that any such appropriation and
application shall be subject to the provisions of Section 5.8.
Each Revolving Credit Lender agrees promptly to notify the
Revolving Credit Borrowers and the Administrative Agent after any
such setoff and application made by such Revolving Credit Lender;
provided, however, that the failure to give such notice shall not
affect the validity of such setoff and application. The rights
of each Revolving Credit Lender under this Section are in
addition to other rights and remedies (including other rights of
setoff under applicable law or otherwise) which such Revolving
Credit Lender may have.
SECTION 5.10. Replacement of Revolving Credit Lenders.
Each Revolving Credit Lender hereby severally agrees as set forth
in this Section:
(a) If any Revolving Credit Lender (a "Subject
Lender") makes demand upon any Revolving Credit Borrower for (or
if any Revolving Credit Borrower is otherwise required to pay)
amounts pursuant to Section 5.3, 5.5 or 5.6, or gives notice
pursuant to Section 5.1 requiring a conversion of such Subject
Lender's LIBO Rate Loans to Base Rate Loans, or if such Subject
Lender defaults in its obligation to fund Borrowings hereunder,
such Revolving Credit Borrower may, within 90 days of receipt by
such Revolving Credit Borrower of such demand or notice, or the
occurrence of such other event causing such Revolving Credit
Borrower to be required to pay such compensation), or the
occurrence of such default, as the case may be, give notice (a
"Replacement Notice") in writing to the Syndication Agent and
such Subject Lender of its intention to replace such Subject
Lender with a financial institution designated in such
Replacement Notice. If the Syndication Agent shall, in the
exercise of its reasonable discretion and within 30 days of its
receipt of such Replacement Notice, notify the Revolving Credit
Borrowers and such Subject Lender in writing that the designated
financial institution is reasonably satisfactory to the
Syndication Agent, then such Subject Lender shall, subject to the
payment of any amounts due pursuant to Section 5.4, assign, in
accordance with Section 11.11.1, all of its Revolving Credit
Commitments, Revolving Credit Loans, Revolving Credit Notes and
other rights and obligations under this Agreement and all other
Revolving Credit Loan Documents to such designated financial
institution; provided, however, that (i) such assignment shall be
without recourse, representation or warranty (other than that
such Revolving Credit Lender owns the Revolving Credit
Commitments, Revolving Credit Loans and Revolving Credit Notes
being assigned, free and clear of any Liens) and shall be on
terms and conditions reasonably satisfactory to such Subject
Lender and such designated financial institution and (ii) the
purchase price paid by such designated financial institution
shall be in the amount of such Subject Lender's Revolving Credit
Loans, together with all accrued and unpaid interest and fees in
respect thereof, plus all other amounts (other than the amounts
demanded and unreimbursed under Sections 5.3, 5.5 and 5.6, which
shall be payable upon demand by the Revolving Credit Borrowers),
owing to such Subject Lender hereunder.
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.1. Initial Revolving Credit Extension. The
obligations of the Revolving Credit Lenders to make the initial
Revolving Credit Extension shall be subject to the prior or
concurrent satisfaction of each of the conditions precedent set
forth in this Section 6.1.
SECTION 6.1.1. Resolutions, etc. The Collateral Agent
shall have received from each Revolving Credit Obligor (i) a copy
of a good standing certificate, dated a date reasonably close to
the Closing Date, for each such Person and (ii) a certificate,
dated the Closing Date and with counterparts for each Revolving
Credit Lender, duly executed and delivered by such Person's
Secretary or Assistant Secretary as to
(a) resolutions of each such Person's Board of
Directors then in full force and effect authorizing the credit
extensions to be made pursuant to the Revolving Credit Agreement
and the execution, delivery and performance of this Agreement,
the Revolving Credit Notes and each other Revolving Credit
Document to be executed by such Person;
(b) the incumbency and signatures of those of its
officers or managing members authorized to act with respect to
this Agreement, the Revolving Credit Notes and each other
Revolving Credit Document to be executed by such Person; and
(c) the full force and validity of each Organic
Document of such Person and copies thereof,
upon which certificates each Agent, the Collateral Agent and each
Revolving Credit Lender may conclusively rely until it shall have
received a further certificate of the Secretary, Assistant
Secretary or other duly authorized representative of any such
Person canceling or amending the prior certificate of such
Person.
SECTION 6.1.2. Refinancing Consummated. Each of the
conditions precedent set forth in Section 5.1 of the Term Loan
Agreement to the obligations of the Term Loan Lenders to make the
Term Loans shall have been satisfied in full, and the Refinancing
shall have been consummated in accordance with the Term Loan
Agreement.
SECTION 6.1.3. Payment of Outstanding Indebtedness, etc.
All Indebtedness under the Existing Revolving Credit Agreement,
together with all interest, all prepayment premiums and other
amounts due and payable with respect thereto, shall have been
paid in full from proceeds of the Revolving II Credit Loans and
the Term Loans and the Commitments in respect of such
Indebtedness shall have been terminated in full, and all Liens
securing payment of any such Indebtedness have been released and
the Collateral Agent shall have received all Uniform Commercial
Code Form UCC-3 termination statements or other instruments as
may be suitable or appropriate in connection therewith.
SECTION 6.1.4. Guaranty. The Collateral Agent shall have
received, with counterparts for each Agent and Revolving Credit
Lender, executed counterparts of (a) the Guaranty, dated as of
the date hereof (the "SFC Guaranty"), substantially in the form
of Exhibit I-1 hereto and duly executed by the Term Loan Borrower
and (b) the Guaranty, dated as of the date hereof (the
"Subsidiary Guaranty"), substantially in the form of Exhibit I-2
hereto and duly executed by each Subsidiary Guarantor.
SECTION 6.1.5. Pledge Agreement. The Collateral Agent
shall have received, with executed counterparts for each Agent
and Revolving Credit Lender, of (a) the Pledge Agreement, dated
as of the date hereof (the "Revolving Credit Borrowers Pledge
Agreement"), substantially in the form of Exhibit J-1 hereto and
duly executed by each Revolving Credit Borrower and (b) the
Pledge Agreement, dated as of the date hereof (the "Subsidiary
Pledge Agreement"), substantially in the form of Exhibit J-2
hereto and duly executed by each Subsidiary of the Term Loan
Borrower (other than any Inactive Subsidiary and the Receivables
Subsidiary), together with the certificates, evidencing all of
the issued and outstanding shares of capital stock pledged
pursuant to the Pledge Agreements, which certificates shall in
each case be accompanied by undated stock powers duly executed in
blank, or, if any securities pledged pursuant to any Pledge
Agreement are uncertificated securities, or are held through a
financial intermediary, the Collateral Agent shall have received
confirmation and evidence satisfactory to it that appropriate
book entries have been made in the relevant books or records of a
financial intermediary or the issuer of such securities, as the
case may be, or other appropriate steps have been taken under
applicable law resulting in the perfection of the security
interest granted in favor of the Collateral Agent in such
securities pursuant to the terms of the applicable Revolving
Credit Pledge Agreement provided, however, that no Revolving
Credit Borrower shall be required to pledge in excess of 65% of
the outstanding voting stock of any Non-U.S. Subsidiary. If any
securities pledged pursuant to the Revolving Credit Borrowers
Pledge Agreement or any Subsidiary Pledge Agreement are
uncertificated securities or are held through a financial
intermediary, the Collateral Agent shall have received
confirmation and evidence satisfactory to it that appropriate
book entries have been made in the relevant books or records of a
financial intermediary or the issuer of such securities, as the
case may be, or other appropriate steps have been taken under
applicable law resulting in the perfection of the security
interest granted in favor of the Collateral Agent in such
securities pursuant to the terms of the Revolving Credit
Borrowers Pledge Agreement or such Subsidiary Pledge Agreement.
SECTION 6.1.6. Security Agreement. The Collateral Agent
shall have received, with counterparts for each Agent and
Revolving Credit Lender, executed counterparts of (a) the
Security Agreement, dated as of the date hereof (the "Revolving
Credit Borrowers Security Agreement"), substantially in the form
of Exhibit K-1 hereto and duly executed by each Revolving Credit
Borrower and (b) the Security Agreement, dated as of the date
hereof (the "Subsidiary Security Agreement"), substantially in
the form of Exhibit K-2 hereto and duly executed by each U.S.
Subsidiary of a Revolving Credit Borrower (other than any
Inactive Subsidiary), together with
(a) acknowledgment copies of properly filed Uniform
Commercial Code financing statements (Form UCC-1) or such other
evidence of filing as may be acceptable to the Collateral Agent,
naming each Revolving Credit Borrower and each of their
respective Subsidiaries (other than any Inactive Subsidiary) as
the debtors and the Collateral Agent as the secured party, or
other similar instruments or documents, filed under the Uniform
Commercial Code of all jurisdictions as may be necessary or, in
the opinion of the Collateral Agent, desirable to perfect the
security interest of the Collateral Agent pursuant to the
Security Agreement;
(b) executed copies of proper Uniform Commercial Code
Form UCC-3 termination statements, if any, necessary to release
all Liens and other rights of any Person
(i) in any collateral described in the
Security Agreement previously granted by any Person,
and
(ii) securing any of the Indebtedness
identified in Item 8.2.2(b) ("Indebtedness to be Paid")
of the Disclosure Schedule,
together with such other Uniform Commercial Code Form UCC-3
termination statements as the Collateral Agent may reasonably
request from such Revolving Credit Obligors; and
(c) certified copies of Uniform Commercial Code
Requests for Information or Copies (Form UCC-11), or a similar
search report certified by a party acceptable to the Collateral
Agent, dated a date reasonably near to the date of the initial
Borrowing, listing all effective financing statements which name
the Revolving Credit Borrower (under its present name and any
previous names) as the debtor and which are filed in the
jurisdictions in which filings were made pursuant to clause (a)
above, together with copies of such financing statements (none of
which (other than those described in clause (a), if such Form UCC-
11 or search report, as the case may be, is current enough to
list such financing statements described in clause (a)) shall
cover any collateral described in the Security Agreement).
SECTION 6.1.7. Mortgages. The Collateral Agent shall have
received, with counterparts for each Agent and Revolving Credit
Lender, executed counterparts of each Revolving Credit Mortgage,
dated as of the date hereof, duly executed by each Revolving
Credit Borrower and their respective Subsidiaries together with
(a) evidence of the completion (or satisfactory
arrangements for the completion) of all recordings and filings of
the Revolving Credit Mortgage as may be necessary or, in the
reasonable opinion of the Collateral Agent, desirable effectively
to create a valid, perfected first priority Lien against the
properties purported to be covered thereby;
(b) mortgagee's title insurance policies in favor of
the Collateral Agent and the Revolving Credit Lenders in amounts
and in form and substance and issued by insurers, reasonably
satisfactory to the Collateral Agent, with respect to the
property purported to be covered by the Revolving Credit
Mortgage, insuring that title to such property is marketable and
that the interests created by the Revolving Credit Mortgage
constitute valid first priority Liens thereon free and clear of
all defects and encumbrances, subject to the Liens permitted by
Section 7.2.4 of the Term Loan Agreement or as otherwise approved
by the Collateral Agent, and such policies shall also include a
revolving credit endorsement and such other endorsements as the
Collateral Agent shall reasonably request and shall be
accompanied by evidence of the payment in full of all premiums
thereon; and
(c) such other approvals, opinions, or documents as
the Collateral Agent may reasonably request.
SECTION 6.1.8. Perfection Certificate. The Collateral
Agent shall have received Perfection Certificates, dated the date
of the date hereof, duly executed and delivered by an Authorized
Officer of each Revolving Credit Borrower.
SECTION 6.1.9. Opinions of Counsel. The Collateral Agent
shall have received the following opinions, dated the Closing
Date and addressed to the Agents, the Collateral Agent and all
Revolving Credit Lenders:
(a) the executed legal opinion of Paul, Weiss,
Rifkind, Wharton and Garrison, special New York counsel to the
Term Loan Borrower and the Revolving Credit Borrowers,
substantially in the form of Exhibit F-1 hereto;
(b) the executed legal opinion of Robert Aiken, Vice
President and General Counsel of the Term Loan Borrower and the
Revolving Credit Borrowers, substantially in the form of Exhibit
F-2 hereto; and
(c) the executed legal opinions of local counsel
(acceptable to the Collateral Agent) to the Revolving Credit
Obligors in each jurisdiction which the Collateral Agent may
reasonably request, and substantially in the form of Exhibit F-3
hereto.
Each such legal opinion shall cover such other matters incident
to the transactions contemplated by this Agreement as the
Collateral Agent may reasonably require.
SECTION 6.1.10. Issuance Request. The Agents and the
Issuer shall have received one or more Issuance Requests, as
required by Section 4.1, appropriately completed and duly
executed and delivered by an Authorized Officer of the applicable
Revolving Credit Borrower.
SECTION 6.1.11. Closing Fees, Expenses, etc. The Agents
and the Arranger shall have received, each for its own account,
or, in the case of the Administrative Agent, for the account of
each Revolving Credit Lender, as the case may be, all fees, costs
and expenses due and payable pursuant to Sections 3.3 and 11.3,
if then invoiced.
SECTION 6.2. All Revolving Credit Extensions. The
obligation of each Revolving Credit Lender to make any Revolving
Credit Extension (including the initial Revolving Credit
Extension) shall be subject to the satisfaction of each of the
conditions precedent set forth in this Section 6.2.
SECTION 6.2.1. Compliance with Warranties, No Default, etc.
Both before and after giving effect to any Revolving Credit
Extension (but, if any Default of the nature referred to in
Section 9.1.5 shall have occurred with respect to any other
Indebtedness, without giving effect to the application, directly
or indirectly, of the proceeds of any Borrowing) the following
statements shall be true and correct:
(a) the representations and warranties set forth in
Article VI of the Term Loan Agreement as in effect on the date
hereof, unless the Required Revolving Credit Lenders shall
otherwise consent (excluding, however, those contained in Section
6.7 of the Term Loan Agreement as in effect on the date hereof,
unless the Required Revolving Credit Lenders shall otherwise
consent) shall be true and correct with the same effect as if
then made (unless stated to relate solely to an early date, in
which case such representations and warranties shall be true and
correct as of such earlier date);
(b) except as disclosed by any Revolving Credit
Borrower to the Syndication Agent and the Revolving Credit
Lenders pursuant to Section 6.7 of the Term Loan Agreement as in
effect on the date hereof, unless the Required Revolving Credit
Lenders shall otherwise consent
(i) no labor controversy, litigation,
arbitration or governmental investigation or proceeding
shall be pending or, to the knowledge of any Revolving
Credit Borrower, threatened against any Revolving
Credit Borrower or any of its Subsidiaries which could
reasonably be expected to materially adversely affect
the consolidated businesses, operations, assets,
revenues, properties or prospects of the Term Loan
Borrower, the Revolving Credit Borrowers or any of
their Subsidiaries or which purports to affect the
legality, validity or enforceability of this Agreement,
the Notes or any other Revolving Credit Document; and
(ii) no development shall have occurred in
any labor controversy, litigation, arbitration or
governmental investigation or proceeding disclosed
pursuant to Section 6.7 of the Term Loan Agreement as
in effect on the date hereof, unless the Required
Revolving Credit Lenders shall otherwise consent, which
could reasonably be expected to have a Material Adverse
Effect; and
(c) no Default shall have then occurred and be
continuing, and neither any Revolving Credit Borrower, any other
Revolving Credit Obligor, nor any of their respective
Subsidiaries are in material violation of any law or governmental
regulation or court order or decree.
SECTION 6.2.2. Credit Request. The Administrative Agent
shall have received a Borrowing Request or Issuance Request, as
the case may be, for such Revolving Credit Extension. Each of
the delivery of a Borrowing Request or an Issuance Request and
the acceptance by the applicable Revolving Credit Borrower of the
proceeds of the Borrowing or the issuance of the Revolving Credit
Letter of Credit, as applicable, shall constitute a
representation and warranty by each Revolving Credit Borrower
that on the date of such Borrowing (both immediately before and
after giving effect to such Borrowing and the application of the
proceeds thereof) or the issuance of the Revolving Credit Letter
of Credit, as applicable, the statements made in Section 6.2.1
are true and correct.
SECTION 6.2.3. Satisfactory Legal Form. All documents
executed or submitted pursuant hereto by or on behalf of any
Revolving Credit Borrower or any of its Subsidiaries or any other
Revolving Credit Obligors shall be satisfactory in form and
substance to the Collateral Agent and its counsel; the Collateral
Agent and its counsel shall have received all information,
approvals, opinions, documents or instruments as the Collateral
Agent or its counsel may reasonably request.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
In order to induce the Revolving Credit Lenders, the Agents
and the Collateral Agent to enter into this Agreement and to make
Revolving Credit Loans and issue Revolving Credit Letters of
Credit hereunder, the Revolving Credit Borrowers jointly and
severally hereby (i) represent and warrant to the Agents, the
Collateral Agent and each Revolving Credit Lender that each of
the representations and warranties set forth in Article VI of the
Term Loan Agreement as in effect the date hereof, unless the
Required Revolving Credit Lenders shall otherwise consent, is
true and correct on and as of the Closing Date and on the dates
and to the extent provided in Section 6.2 and (ii) agree that
such representations and warranties are by this reference deemed
incorporated herein mutatis mutandis, as if set forth at length
herein, notwithstanding the termination of the Term Loan
Agreement.
ARTICLE VIII
COVENANTS
SECTION 8.1. Affirmative Covenants. The Revolving Credit
Borrowers jointly and severally agree with the Agents and the
Collateral Agent and each Revolving Credit Lender that, until all
Revolving Credit Commitments have terminated and all Revolving
Credit Obligations have been paid and performed in full, each of
the Revolving Credit Borrowers will perform the obligations set
forth in this Section 8.1.
SECTION 8.1.1. Affirmative Covenants in Term Loan
Agreement. Each Revolving Credit Borrower hereby agrees (on a
joint and several basis with each of the other Revolving Credit
Borrowers) that, unless and until the Revolving Credit
Obligations have been paid and performed in full, the Revolving
Credit Commitments have terminated and the Revolving Credit
Letters of Credit have (x) expired or been returned to the
Issuers or (y) been cash collateralized to the reasonable
satisfaction of the Agents and the Issuer, such Revolving Credit
Borrower shall not, and shall not permit any of its Subsidiaries
to, take any action, and shall refrain from taking action, that
would result in a violation of the covenants of the Term Loan
Borrower contained in Section 7.1 of the Term Loan Agreement as
in effect on the date hereof, notwithstanding the termination of
the Term Loan Agreement, unless the Required Revolving Credit
Lenders shall otherwise consent. Each such agreement, covenant
and obligation contained in Section 7.1 of the Term Loan
Agreement and all other terms of the Term Loan Agreement and the
documents executed in connection therewith to which reference is
made therein, together with all related definitions and ancillary
provisions, each as in effect on the date hereof, is hereby
incorporated into this Agreement by reference as though
specifically set forth in this Section 8.1.1, and each such
agreement, covenant and obligation shall, for purposes hereof,
survive the termination of the Term Loan Agreement.
SECTION 8.1.2. Use of Proceeds. Each Revolving Credit
Borrower shall apply the proceeds of the Revolving Credit Loans
for general corporate and working capital purposes of such
Revolving Credit Borrower and its Subsidiaries.
SECTION 8.1.3. Additional Collateral.
(a) Upon any Person becoming, after the date hereof,
either a direct or indirect Subsidiary of any Revolving Credit
Borrower, or upon any Revolving Credit Borrower directly or
indirectly acquiring additional Capital Stock of any existing
Subsidiary having voting rights or contingent voting rights, such
Revolving Credit Borrower shall notify the Collateral Agent of
such acquisition, and, within 45 days thereafter, unless
otherwise agreed to among such Revolving Credit Borrower, the
Collateral Agent and the Required Revolving Credit Lenders,
(i) subject to the last sentence of this
Section, such Person shall, if it is a U.S. Subsidiary,
(i) execute and deliver to the Collateral Agent a copy
of (A) the Subsidiary Guaranty and (B) the Subsidiary
Security Agreement and (ii) to the extent such U.S.
Subsidiary is required to pledge stock of a Subsidiary
pursuant to clause (a)(ii) of this Section 8.1.3,
become a party to the Subsidiary Pledge Agreement, if
not already a party thereto as a pledgor, in a manner
satisfactory to the Collateral Agent;
(ii) subject to the last sentence of this
Section, such Revolving Credit Borrower and each U.S.
Subsidiary shall, pursuant to the Subsidiary Pledge
Agreement (as supplemented, if necessary, by a Foreign
Pledge Agreement), pledge to the Collateral Agent, for
its benefit and that of the Agents and the Revolving
Credit Lenders and the Issuers, all of the outstanding
shares of capital stock of (i) any Subsidiary owned
directly by the Borrower or such Subsidiary (provided,
that, subject to the last sentence of this Section, not
more than 65% of the capital stock of any non-U.S.
Subsidiary shall be so pledged), along with undated
stock powers for such certificates, executed in blank
(or, if any such shares of capital stock are
uncertificated, confirmation and evidence satisfactory
to the Collateral Agent that the security interest in
such uncertificated securities has been transferred to
and perfected by the Collateral Agent, for the benefit
of the Agents and the Revolving Credit Lenders and the
Issuers, in accordance with Section 9-115 of the U.C.C.
or any other similar or local or foreign law which may
be applicable); and
(iii) subject to the last sentence of this
Section, such Revolving Credit Borrower and each U.S.
Subsidiary shall, pursuant to the Subsidiary Pledge
Agreement, pledge to the Collateral Agent for its
benefit and that of the Agents and the Revolving Credit
Lenders and the Issuer, all intercompany notes
evidencing Indebtedness in favor of such Revolving
Credit Borrower or such U.S. Subsidiary (which shall,
unless the Collateral Agent shall otherwise agree, be
in the form of Exhibit A to the Subsidiary Pledge
Agreement), as the case may be;
together, in each case, with such opinions of legal counsel for
such Revolving Credit Borrower relating thereto, which legal
opinions shall be in form and substance reasonably satisfactory
to the Collateral Agent. Each Revolving Credit Borrower agrees
that if, as a result of a change in law after the date hereof,
(i) a non-U.S. Subsidiary of any Revolving Credit Borrower is
permitted to execute and deliver the Subsidiary Guaranty or
become a party to the Subsidiary Pledge Agreement as a pledgor or
(ii) any Revolving Credit Borrower or any Subsidiary thereof is
permitted to pledge more than 65% of the capital stock of any non-
U.S. Subsidiary or any intercompany Indebtedness of any direct
and indirect Subsidiary of any Revolving Credit Borrower
evidenced by a note or other instrument, in any such case without
material adverse tax consequences to such Revolving Credit
Borrower or such Subsidiary, then the provisions of clause (a)(i)
of this Section 8.1.3 shall thereafter apply to any non-U.S.
Subsidiary and/or (as the case may be) the provisions of clause
(a)(ii) of this Section 8.1.3 shall thereafter apply to 100% of
the capital stock of such non-U.S. Subsidiary.
(b) Each Revolving Credit Borrower shall, and shall
cause each of its U.S. Subsidiaries to, unless otherwise agreed
to by such Revolving Credit Borrower, the Collateral Agent and
the Required Revolving Credit Lenders, cause the Collateral
Agent, the Issuers and the Revolving Credit Lenders to have at
all times a first priority perfected security interest (subject
only to Liens and encumbrances permitted under Section 7.2.4 of
the Term Loan Agreement as in effect on the date hereof, unless
the Required Revolving Credit Lenders shall otherwise consent) in
all of the property (real and personal) hereafter acquired from
time to time by such Revolving Credit Borrower and such U.S.
Subsidiaries (other than the Receivables Subsidiary) to the
extent the same constitutes or would constitute "Collateral"
under each of the Security Agreements and under each of the
Revolving Credit Mortgages. Without limiting the generality of
the foregoing, each Revolving Credit Borrower shall, and shall
cause each of its U.S. Subsidiaries (other than the Receivables
Subsidiary) to, execute, deliver and/or file (as applicable) or
cause to be executed, delivered and/or filed (as applicable), the
Subsidiary Pledge Agreement, the Subsidiary Security Agreement,
Uniform Commercial Code (Form UCC-1) financing statements,
Uniform Commercial Code (Form UCC-3) termination statements, and
other documentation necessary to grant and perfect such security
interest, in each case in form and substance reasonably
satisfactory to the Collateral Agent together, in each case, with
such opinions of legal counsel for the applicable Revolving
Credit Borrower relating thereto, which legal opinions shall be
in form and substance reasonably satisfactory to the Collateral
Agent.
SECTION 8.2. Negative Covenants. The Revolving Credit
Borrowers jointly and severally agree with the Agents and the
Collateral Agent and each Revolving Credit Lender that, until all
Revolving Credit Commitments have terminated and all Revolving
Credit Obligations have been paid and performed in full, each of
the Revolving Credit Borrowers will perform the obligations set
forth in this Section 8.2.
SECTION 8.2.1. Negative Covenants in Term Loan Agreement.
Each Revolving Credit Borrower hereby agrees (on a joint and
several basis with each of the other Revolving Credit Borrowers)
that, unless and until the Revolving Credit Obligations have been
paid and performed in full, the Revolving Credit Commitments have
terminated and the Revolving Credit Letters of Credit have (x)
expired or been returned to the Issuers or (y) been cash
collateralized to the reasonable satisfaction of the Agents and
the Issuer, such Revolving Credit Borrower shall not, and shall
not permit any of its Subsidiaries to, take any action, and shall
refrain from taking action, that would result in a violation of
the covenants of the Term Loan Borrower contained in Sections 7.2
and 7.3 of the Term Loan Agreement, notwithstanding the
termination of the Term Loan Agreement as in effect on the date
hereof, unless the Required Revolving Credit Lenders shall
otherwise consent. Each such agreement, covenant and obligation
contained in Sections 7.2 and 7.3 of the Term Loan Agreement and
all other terms of the Term Loan Agreement and the documents
executed in connection therewith to which reference is made
therein, together with all related definitions and ancillary
provisions, each as in effect on the date hereof, is hereby
incorporated into this Agreement by reference as though
specifically set forth in this Section 8.2.1, and each such
agreement, covenant and obligation shall, for purposes hereof,
survive the termination of the Term Loan Agreement.
ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.1. Listing of Events of Default. Each of the
following events or occurrences described in this Section 9.1
shall constitute an "Event of Default".
SECTION 9.1.1. Non-Payment of Obligations. Any Revolving
Credit Borrower shall default in the payment or prepayment when
due of (a) any principal of any Revolving Credit Loan or any
Reimbursement Obligations or any deposit of cash for collateral
purposes pursuant to Section 4.5 or Section 4.7, as the case may
be, or (b) any Revolving Credit Obligor (including any Revolving
Credit Borrower) shall default in the payment when due of any
interest or commitment fee with respect to the Revolving Credit
Loans or Revolving Credit Commitments or of any other monetary
Revolving Credit Obligation and such default shall continue
unremedied for a period of three Business Days.
SECTION 9.1.2. Breach of Warranty. Any representation or
warranty of any Revolving Credit Borrower or any other Revolving
Credit Obligor made or deemed to be made hereunder or in any
other Revolving Credit Document executed by it or any other
writing or certificate (including the Borrower Closing Date
Certificate) furnished by or on behalf of any Revolving Credit
Borrower or any other Revolving Credit Obligor to the Agents, the
Collateral Agent, the Arranger or any Revolving Credit Lender for
the purposes of or in connection with this Agreement or any such
other Revolving Credit Document (including any certificates
delivered pursuant to Article VI), is or shall be incorrect in
any material respect when made or deemed to have been made.
SECTION 9.1.3. Non-Performance of Certain Covenants and
Obligations. Any Revolving Credit Borrower shall default in the
due performance and observance of any of its obligations under
Sections 8.1.2, 8.1.3 or 8.2.
SECTION 9.1.4. Non-Performance of Other Covenants and
Obligations. Any Revolving Credit Borrower or any other
Revolving Credit Obligor shall default in the due performance and
observance of any other agreement contained herein or in any
other Revolving Credit Document executed by it, and such default
shall continue unremedied for a period of 30 days after notice
thereof shall have been given to the Revolving Credit Borrowers
by any Agent, the Collateral Agent or any Revolving Credit
Lender.
SECTION 9.1.5. Default on Other Indebtedness. A default
shall occur (i) in the payment when due (subject to any
applicable grace period), whether by acceleration or otherwise,
of any Indebtedness (other than Indebtedness described in Section
9.1.1) of any Revolving Credit Borrower or any of its
Subsidiaries having a principal amount, individually or in the
aggregate, in excess of $5,000,000, or (ii) a default shall occur
in the performance or observance of any obligation or condition
with respect to such Indebtedness if the effect of such default
is to accelerate the maturity of any such Indebtedness or such
default shall continue unremedied for any applicable period of
time sufficient to permit the holder or holders of such
Indebtedness, or any trustee or agent for such holders, to cause
or declare such Indebtedness to become due and payable prior to
its expressed maturity.
SECTION 9.1.6. Judgments. Any judgment or order for the
payment of money in excess of $5,000,000 (not covered by
insurance from a responsible insurance company that is not
denying its liability with respect thereto) shall be rendered
against any Revolving Credit Borrower or any of its Subsidiaries
and remain unpaid and either (i) enforcement proceedings shall
have been commenced by any creditor upon such judgment or order,
or (ii) there shall be any period of 30 consecutive days during
which a stay of enforcement of such judgment or order, by reason
of a pending appeal or otherwise, shall not be in effect.
SECTION 9.1.7. Pension Plans. Any of the following events
shall occur with respect to any Pension Plan: (i) the
termination of any Pension Plan if, as a result of such
termination, any Revolving Credit Borrower would be required to
make a contribution to such Pension Plan, or would reasonably
expect to incur a liability or obligation to such Pension Plan,
in excess of $1,000,000, or (ii) a contribution failure occurs
with respect to any Pension Plan sufficient to give rise to a
Lien under section 302(f) of ERISA in an amount in excess of
$1,000,000.
SECTION 9.1.8. Change in Control. Any Change in Control
shall occur.
SECTION 9.1.9. Bankruptcy, Insolvency, etc. Any Revolving
Credit Borrower or any of its Subsidiaries or any other Revolving
Credit Obligor shall
(a) apply for, approve, consent to, or acquiesce in,
the appointment of a trustee, receiver, sequestrator or other
custodian for such Revolving Credit Borrower, any such Subsidiary
or any other Revolving Credit Obligor or any property of any
thereof, or make a general assignment for the benefit of
creditors;
(b) in the absence of such application, approval,
consent, acquiescence or assignment, permit or suffer to exist
the appointment of a trustee, receiver, sequestrator or other
custodian for such Revolving Credit Borrower, any such Subsidiary
or any other Revolving Credit Obligor or for a substantial part
of the property of any thereof, and (x) such trustee, receiver,
sequestrator or other custodian shall not be discharged within 60
days or (y) such Revolving Credit Borrower, any such Subsidiary
or any other Revolving Credit Obligor takes any action in
furtherance of such appointment; provided, that such Revolving
Credit Borrower, each such Subsidiary and each other Revolving
Credit Obligor hereby expressly authorizes the Collateral Agent
and each Lender to appear in any court conducting any relevant
proceeding during such 60-day period to preserve, protect and
defend their rights under the Loan Documents;
(c) permit or suffer to exist the commencement of any
bankruptcy, reorganization, debt arrangement or other case or
proceeding under any bankruptcy or insolvency law, or any
dissolution, winding up or liquidation proceeding, in respect of
such Revolving Credit Borrower or any of its Subsidiaries or any
other Revolving Credit Obligor (or any such Revolving Credit
Borrower, any such Subsidiary or any other Revolving Credit
Obligor shall take any action in furtherance of any of the
foregoing), and, if any such case or proceeding is not commenced
by such Revolving Credit Borrower or such Subsidiary or such
other Revolving Credit Obligor, such case or proceeding shall be
consented to or acquiesced in by such Revolving Credit Borrower
or such Subsidiary or such other Revolving Credit Obligor or
shall result in the entry of an order for relief or shall remain
for 60 days undismissed; provided that such Revolving Credit
Borrower, each such Subsidiary and each other Revolving Credit
Obligor hereby expressly authorizes the Collateral Agent and
each Revolving Credit Lender to appear in any court conducting
any such case or proceeding during such 60-day period to
preserve, protect and defend their rights under the Revolving
Credit Loan Documents; or
(d) take any action (corporate or otherwise)
authorizing any of the foregoing; or
(e) become insolvent or generally fail to pay, or
admit in writing its inability or unwillingness to pay, its
debts as they become due.
SECTION 9.1.10. Impairment of Security, etc. Any Revolving
Credit Security Document shall (except in accordance with its
terms), in whole or in part, cease to be effective or cease to be
the legally valid, binding and enforceable obligation any
Revolving Credit Borrower or any other Revolving Credit Obligor,
as the case may be; any Revolving Credit Borrower or any other
Revolving Credit Obligor shall, directly or indirectly, contest
in any manner such effectiveness, validity, binding nature or
enforceability; or, except as permitted under any Revolving
Credit Security Document, any Lien securing any Revolving Credit
Obligation shall, in whole or in part, cease to be a perfected
first priority Lien.
SECTION 9.1.11. Term Loan Agreement Event of Default. (i)
Any Event of Default under and as defined in the Term Loan
Agreement shall have occurred and be continuing; or (ii) any
"termination event" under and as defined in the Receivables Sale
Agreement as in effect on the date hereof, or any event entitling
the Persons financing the Receivables to stop funding the
purchase of Receivables from all sellers of Receivables under any
subsequent Receivables Sale Agreement, shall have occurred and be
continuing.
SECTION 9.2. Action if Bankruptcy, etc. If any Event of
Default described in clauses (a) through (d) of Section 9.1.9
shall occur with respect to any Revolving Credit Obligor, the
Revolving Credit Commitments (if not theretofore terminated)
shall automatically terminate and the outstanding principal
amount of all outstanding Revolving Credit Loans and all other
Revolving Credit Obligations shall automatically be and become
immediately due and payable, without notice or demand.
SECTION 9.3. Action if Other Event of Default. If any
Event of Default (other than an Event of Default described in
clauses (a) through (d) of Section 9.1.9 with respect to any
Revolving Credit Obligor) shall occur for any reason, whether
voluntary or involuntary, and be continuing, the Administrative
Agent, upon the direction of the Required Revolving Credit
Lenders, shall by notice to the Revolving Credit Borrowers
declare all or any portion of the outstanding principal amount of
the Revolving Credit Loans and other Revolving Credit Obligations
to be due and payable, and/or declare the Revolving Credit
Commitments (if not theretofore terminated) to be terminated,
whereupon the full unpaid amount of such Revolving Credit Loans
and other Revolving Credit Obligations which shall be so declared
due and payable shall be and become immediately due and payable,
without further notice, demand or presentment, and/or, as the
case may be, the Revolving Credit Commitments shall terminate.
ARTICLE X
THE AGENTS
SECTION 10.1. Actions. Each Revolving Credit Lender hereby
appoints DLJ as its Syndication Agent and Collateral Agent and
ABN as its Administrative Agent under and for purposes of this
Agreement, the Revolving Credit Notes and each other Loan
Document. Each Revolving Credit Lender authorizes the Agents and
the Collateral Agent to act on behalf of such Revolving Credit
Lender under this Agreement, the Revolving Credit Notes and each
other Loan Document and, in the absence of other written
instructions from the Required Revolving Credit Lenders received
from time to time by the Agents and the Collateral Agent (with
respect to which each of the Agents and the Collateral Agent
agrees that it will comply, except as otherwise provided in this
Section or as otherwise advised by counsel), to exercise such
powers hereunder and thereunder as are specifically delegated to
or required of the Agents and the Collateral Agent by the terms
hereof and thereof, together with such powers as may be
reasonably incidental thereto. Each Revolving Credit Lender
acknowledges and consents to DLJ's acting as Syndication Agent
and Collateral Agent and ABN's acting as Administrative Agent and
for the Term Loan Lenders under the Term Loan Agreement and the
other Revolving Credit Documents. Each Revolving Credit Lender
hereby indemnifies (which indemnity shall survive any termination
of this Agreement) the Agents and the Collateral Agent, ratably
in accordance with their respective Revolving Credit Loans
outstanding and Revolving Credit Commitments (or, if no Revolving
Credit Loans or Revolving Credit Commitments are at the time
outstanding and in effect, then ratably in accordance with the
principal amount of Revolving Credit Loans held by such Revolving
Credit Lender, and their respective Revolving Credit Commitments
as in effect in each case on the date of the termination of this
Agreement), from and against any and all liabilities,
obligations, losses, damages, claims, costs or expenses of any
kind or nature whatsoever which may at any time be imposed on,
incurred by, or asserted against, either of the Agents or the
Collateral Agent in any way relating to or arising out of this
Agreement, the Revolving Credit Notes and any other Loan
Document, including reasonable attorneys' fees, and as to which
any Agent is not reimbursed by the Revolving Credit Borrowers or
any other Revolving Credit Obligor (and without limiting the
obligation of the Revolving Credit Borrowers or any other
Revolving Credit Obligor to do so); provided, however, that no
Revolving Credit Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages,
claims, costs or expenses which are determined by a court of
competent jurisdiction in a final proceeding to have resulted
solely from such Agent's or the Collateral Agent's gross
negligence or willful misconduct. The Agents and the Collateral
Agent shall not be required to take any action hereunder, under
the Revolving Credit Notes or under any other Loan Document, or
to prosecute or defend any suit in respect of this Agreement, the
Revolving Credit Notes or any other Loan Document, unless it is
indemnified hereunder to its satisfaction; provided, however,
that, notwithstanding the foregoing, (i) no Agent or the
Collateral Agent shall be obligated to take any action which is
inconsistent with the terms of this Agreement or any Loan
Document, (ii) no Agent or the Collateral Agent shall be
obligated to take any action which exposes it to personal
liability or which, in its judgment is contrary to applicable
law, and (iii) no Agent or the Collateral Agent shall have any
right or be obligated or entitled to enforce any right or remedy
contained herein, in any Loan Document or available at law or
equity (other that the rights of set off) except through the
Collateral Agent who is hereby granted sole and exclusive
authority on behalf of the Agents with respect thereto. If any
indemnity in favor of either of the Agents or the Collateral
Agent shall be or become, in such Agent's or the Collateral
Agent's determination, inadequate, the Agents or the Collateral
Agent may call for additional indemnification from the Revolving
Credit Lenders and cease to do the acts indemnified against
hereunder until such additional indemnity is given.
SECTION 10.2. Funding Reliance, etc. Unless the
Administrative Agent shall have been notified by telephone,
confirmed in writing, by any Revolving Credit Lender by 5:00
p.m., New York City time, on the day prior to a Borrowing that
such Revolving Credit Lender will not make available the amount
which would constitute its Revolving Credit Percentage of such
Borrowing on the date specified therefor, the Administrative
Agent may assume that such Revolving Credit Lender has made such
amount available to the Administrative Agent and, in reliance
upon such assumption, make available to the Revolving Credit
Borrowers a corresponding amount. If and to the extent that such
Revolving Credit Lender shall not have made such amount available
to the Administrative Agent, such Revolving Credit Lender and the
Revolving Credit Borrowers severally agree to repay the
Administrative Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date
the Administrative Agent made such amount available to the
Revolving Credit Borrowers to the date such amount is repaid to
the Administrative Agent, at the interest rate applicable at the
time to Revolving Credit Loans comprising such Borrowing.
SECTION 10.3. Exculpation. None of the Agents, the
Collateral Agent or the Arranger nor any of their
respective directors, officers, employees or Agents shall be
liable to any Revolving Credit Lender for any action taken or
omitted to be taken by it under this Agreement or any other
Revolving Credit Document, or in connection herewith or
therewith, except for its own willful misconduct or gross
negligence, nor responsible for any recitals or warranties herein
or therein, nor for the effectiveness, enforceability,
sufficiency, validity or due execution of this Agreement or any
other Revolving Credit Document, nor for the creation,
attachment, perfection or priority of any Liens purported to be
created by any of the Revolving Credit Documents, or the
validity, genuineness, enforceability, existence, value or
sufficiency of any collateral security, nor to make any inquiry
respecting the performance by the Revolving Credit Borrowers of
their obligations hereunder or under any other Revolving Credit
Document. Any such inquiry which may be made by any Agent or the
Collateral Agent shall not obligate it to make any further
inquiry or to take any action. No Agent or the Collateral Agent
shall have any duties or responsibilities except those
specifically set forth in this Agreement and the other Revolving
Credit Documents and shall not by reason of the relationship
established herein be a trustee of fiduciary of any other Agent,
the Collateral Agent or any Lender. Unless it specifically
agrees to do so in writing, no Agent shall be obligated to
initiate, conduct or supervise any litigation or collection
proceedings, whether in bankruptcy or otherwise, any work-out or
post-default negotiations or take any other similar actions;
provided, that, at the written request of the Required Revolving
Credit Lenders, the Administrative Agent shall be obligated to
foreclose upon or set off against the cash collateral deposited
with it under clause (c) of Section 3.1 in accordance with
Section 5.9. Each Agent and the Collateral Agent shall be
entitled to rely: (a) upon any certification, notice or other
communication (including any thereof by telephone, telex,
telegram or cable) believed by it to be genuine and correct and
to have been signed or sent by or on behalf of the proper Person
or Persons; and (b) upon advice and statements of legal counsel,
independent accountants and other experts selected by it in good
faith. As to any matters not expressly provided for by this
Agreement or any Revolving Credit Document, each Agent and the
Collateral Agent shall in all cases be fully protected in acting,
or in refraining from acting, hereunder in accordance with
instructions signed by the Required Revolving Credit Lenders; and
such instructions of the Required Revolving Credit Lenders and
any action taken or failure to act pursuant thereto shall be
binding on all of the Revolving Credit Lenders.
SECTION 10.4. Successor. The Administrative Agent, the
Syndication Agent and the Collateral Agent may resign as such at
any time upon at least 30 days' prior notice to the Revolving
Credit Borrowers, the Syndication Agent, all Revolving Credit
Lenders and, in the case of the Administrative Agent, the
Collateral Agent, and, in the case of the Collateral Agent, the
Administrative Agent. If the Administrative Agent, the
Syndication Agent or the Collateral Agent at any time shall
resign, the Required Revolving Credit Lenders may, with the prior
consent of the Revolving Credit Borrowers and the Syndication
Agent (which consents shall not be unreasonably withheld or
delayed), appoint another Lender as a successor Administrative
Agent or the Collateral Agent which shall thereupon become the
Administrative Agent or the Collateral Agent hereunder. If no
successor Administrative Agent, Syndication Agent or Collateral
Agent shall have been so appointed by the Required Revolving
Credit Lenders, and shall have accepted such appointment, within
30 days after the retiring Administrative Agent's, Syndication
Agent's or Collateral Agent's giving notice of resignation, then
the retiring Administrative Agent, Syndication Agent or
Collateral Agent may, on behalf of the Revolving Credit Lenders,
appoint a successor Administrative Agent, Syndication Agent or
Collateral Agent, which shall be one of the Lenders or a
commercial banking institution organized under the laws of the
United States or a United States branch or agency of a commercial
banking institution, and having a combined capital and surplus of
at least $500,000,000. Notwithstanding the foregoing, for so
long as ABN shall act as Administrative Agent, if no successor
Administrative Agent has been named and accepted its appointment
as Administrative Agent, then ABN shall be permitted to resign
and the Syndication Agent or the Collateral Agent shall succeed
to the responsibilities of ABN as Administrative Agent; provided,
that at no time during the period commencing with the
Administrative Agent tendering its notice of resignation and
ending at the time that a successor Administrative Agent is
named, may DLJ resign as either the Syndication Agent or the
Collateral Agent. Upon the acceptance of any appointment as
Administrative Agent, Syndication Agent or Collateral Agent
hereunder by a successor Administrative Agent, Syndication Agent
or Collateral Agent, such successor Administrative Agent,
Syndication Agent or Collateral Agent shall be entitled to
receive from the retiring Administrative Agent, Syndication Agent
or Collateral Agent such documents of transfer and assignment as
such successor Administrative Agent, Syndication Agent or
Collateral Agent may reasonably request, and shall thereupon
succeed to and become vested with all rights, powers, privileges
and duties of the retiring Administrative Agent, Syndication
Agent or Collateral Agent, and the retiring Administrative Agent
or Collateral Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring
Administrative Agent's, Syndication Agent's or Collateral Agent's
resignation hereunder as the Administrative Agent, Syndication
Agent or Collateral Agent, the provisions of
(a) this Article X shall inure to its benefit as to
any actions taken or omitted to be taken by the retiring
Administrative Agent, retiring Syndication Agent or retiring
Collateral Agent while it was the Administrative Agent, the
Syndication Agent or the Collateral Agent under this Agreement;
and
(b) Section 11.3 and Section 11.4 shall continue to
inure to its benefit.
SECTION 10.5. Revolving Credit Loans and Revolving Credit
Letters of Credit by each Agent and the Collateral Agent. Each
Agent and the Collateral Agent and the Issuer shall have the
same rights and powers with respect to (x)(i) in the case of the
Agents and the Collateral Agent, the Revolving Credit Loans and
Revolving Credit Letters of Credit made by it or any of its
Affiliates and (ii) in the case of the Issuer, the Revolving
Credit Loans made by it or any of its Affiliates, and (y) the
Revolving Credit Notes held by it or any of its Affiliates as any
other Revolving Credit Lender and may exercise the same as if it
were not an Agent or the Collateral Agent. Each Agent and the
Collateral Agent and each of their respective Affiliates may
accept deposits from, lend money to, and generally engage in any
kind of business with the Revolving Credit Borrowers or any
Subsidiary or Affiliate of the Revolving Credit Borrowers as if
such Agent or Collateral Agent were not an Agent or Collateral
Agent hereunder.
SECTION 10.6. Credit Decisions. Each Revolving Credit
Lender acknowledges that it has, independently of each Agent, the
Collateral Agent, the Documentation Agent, the Arranger and each
other Revolving Credit Lender, and based on such Revolving Credit
Lender's review of the financial information of the Revolving
Credit Borrowers, this Agreement, the other Loan Documents (the
terms and provisions of which being satisfactory to such
Revolving Credit Lender) and such other documents, information
and investigations as such Revolving Credit Lender has deemed
appropriate, made its own credit decision to extend its Revolving
Credit Commitment. Each Revolving Credit Lender also
acknowledges that it will, independently of each Agent, the
Collateral Agent, the Documentation Agent, the Arranger and each
other Revolving Credit Lender, and based on such other documents,
information and investigations as it shall deem appropriate at
any time, continue to make its own credit decisions as to
exercising or not exercising from time to time any rights and
privileges available to it under this Agreement or any other Loan
Document.
SECTION 10.7. Copies, etc. Either Agent or the Collateral
Agent shall give prompt notice to each Revolving Credit Lender of
each notice or request required or permitted to be given to such
Agent or Collateral Agent by any Revolving Credit Borrower
pursuant to the terms of this Agreement (unless concurrently
delivered to the Revolving Credit Lenders by a Revolving Credit
Borrower). To the extent that either Agent or the Collateral
Agent receives any document or instrument or other communication
for distribution to the Revolving Credit Lenders, such Agent or
the Collateral Agent will distribute to each Revolving Credit
Lender each document or instrument received for its account and
copies of all other communications received by such Agent or the
Collateral Agent from any Revolving Credit Borrower for
distribution to the Revolving Credit Lenders by such Agent or
the Collateral Agent in accordance with the terms of this
Agreement (except, in the case of non-public information, as any
such Revolving Credit Lender shall have notified the Revolving
Credit Borrowers and such Agent or the Collateral Agent in
writing that such Revolving Credit Lender shall not be furnished
with such document or instrument). Except for notices, reports
and other documents and information expressly required to be
furnished to the Revolving Credit Lenders by an Agent or the
Collateral Agent hereunder or under a Loan Document, no Agent or
the Collateral Agent shall have any duty or responsibility to
provide any other Agent or the Collateral Agent or Revolving
Credit Lender with any credit or other information concerning the
affairs, financial condition or business of any Revolving Credit
Borrower (or any of their Affiliates) which may come into the
possession of such Agent or the Collateral Agent or any of their
Affiliates.
SECTION 10.8. The Syndication Agent, the Documentation
Agent, the Administrative Agent and the Collateral Agent.
Notwithstanding anything else to the contrary contained in this
Agreement or any other Loan Document, the Agents, the Collateral
Agent and the Documentation Agent, in their respective capacities
as such, each in such capacity, shall have no duties or
responsibilities under this Agreement or any other Loan Document
nor any fiduciary relationship with any Revolving Credit Lender,
and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or
otherwise exist against either Agent, the Collateral Agent or the
Documentation Agent, as applicable, in such capacity except as
are explicitly set forth herein or in the other Loan Documents.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1. Waivers, Amendments, etc. The provisions of
this Agreement and of each other Revolving Credit Document may
from time to time be amended, modified or waived, if such
amendment, modification or waiver is in writing and consented to
by each Revolving Credit Borrower (as to this Agreement and each
other Revolving Credit Document to which such Revolving Credit
Borrower is a party) and the Required Revolving Credit Lenders;
provided, however, that no such amendment, modification or waiver
which would:
(a) modify any requirement hereunder that any
particular action be taken by all the Revolving Credit Lenders or
by the Required Revolving Credit Lenders shall be effective
unless consented to by each Revolving Credit Lender;
(b) modify this Section 11.1, change the definition of
"Required Revolving Credit Lenders", increase any Revolving
Credit Commitment Amount or the Percentage of any Revolving
Credit Lender, reduce any fees described in Article III, release
all or substantially all collateral security, except as otherwise
specifically provided in any Revolving Credit Document or extend
any Revolving Credit Commitment Termination Date shall be made
without the consent of each Revolving Credit Lender and each
holder of a Revolving Credit Note affected thereby;
(c) extend the due date for, or reduce the amount or
application of, any scheduled repayment or prepayment of
principal of or interest on any Revolving Credit Loan (or reduce
the principal amount of or rate of interest on any Revolving
Credit Loan) shall be made without the consent of each affected
Revolving Credit Lender;
(d) affect adversely the interests, rights or
obligations of the Issuer qua the Issuer shall be made without
the consent of the Issuer;
(e) affect adversely the interests, rights or
obligations of the Swing Line Lender qua the Swing Line Lender
shall be made without the consent of the Swing Line Lender; or
(f) affect adversely the interests, rights or
obligations of any Agent, the Collateral Agent or Arranger (in
its capacity as Agent, the Collateral Agent or Arranger), unless
consented to by such Agent, the Collateral Agent or Arranger, as
the case may be.
No failure or delay on the part of any Agent, the Collateral
Agent, any Revolving Credit Lender or the holder of any Revolving
Credit Note in exercising any power or right under this Agreement
or any other Revolving Credit Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such
power or right preclude any other or further exercise thereof or
the exercise of any other power or right. No notice to or demand
on any Revolving Credit Borrower in any case shall entitle it to
any notice or demand in similar or other circumstances. No
waiver or approval by any Agent, the Collateral Agent, any
Revolving Credit Lender or the holder of any Revolving Credit
Note under this Agreement or any other Revolving Credit Document
shall, except as may be otherwise stated in such waiver or
approval, be applicable to subsequent transactions. No waiver or
approval hereunder shall require any similar or dissimilar waiver
or approval thereafter to be granted hereunder.
SECTION 11.2. Notices. All notices and other
communications provided to any party hereto under this Agreement
or any other Revolving Credit Document shall be in writing or by
facsimile and addressed, delivered or transmitted to such party
at its address or facsimile number set forth on Schedule II
hereto or, in the case of a Revolving Credit Lender that becomes
a party hereto after the date hereof, as set forth in the Lender
Assignment Agreement pursuant to which such Revolving Credit
Lender becomes a Revolving Credit Lender hereunder or at such
other address or facsimile number as may be designated by such
party in a notice to the other parties. Any notice, if mailed
and properly addressed with postage prepaid or if properly
addressed and sent by pre-paid courier service, shall be deemed
given when received; any notice, if transmitted by facsimile,
shall be deemed given when transmitted (and telephonic
confirmation of receipt thereof has been received).
SECTION 11.3. Payment of Costs and Expenses. The
Revolving Credit Borrowers jointly and severally agree to pay on
demand all reasonable expenses of the Agents and the Collateral
Agent (including the reasonable fees and out-of-pocket expenses
of counsel to the Agents and the Collateral Agent and of local
counsel, if any, who may be retained by counsel to the Agents and
the Collateral Agent) in connection with
(a) the syndication by the Syndication Agent and the
Arranger of the Revolving Credit Loans, the negotiation,
preparation, execution and delivery of this Agreement and of each
other Revolving Credit Document, including schedules and
exhibits, and any amendments, waivers, consents, supplements or
other modifications to this Agreement or any other Revolving
Credit Document as may from time to time hereafter be required,
whether or not the transactions contemplated hereby are
consummated,
(b) the filing, recording, re-filing or re-recording
of each Revolving Credit Mortgage, each Pledge Agreement and each
Security Agreement and/or any Uniform Commercial Code financing
statements relating thereto and all amendments, supplements and
modifications to any thereof and any and all other documents or
instruments of further assurance required to be filed or recorded
or re-filed or re-recorded by the terms hereof or of such
Revolving Credit Mortgage, Pledge Agreement or Security
Agreement, and
(c) the preparation and review of the form of any
document or instrument relevant to this Agreement or any other
Revolving Credit Document.
The Revolving Credit Borrowers further jointly and severally
agree to pay, and to save the Agents, the Collateral Agent and
the Revolving Credit Lenders harmless from all liability for, any
stamp or other taxes which may be payable in connection with the
execution or delivery of this Agreement, the Revolving Credit
Loans made hereunder, the issuance of the Notes, the issuance of
the Revolving Credit Letters of Credit, or any other Revolving
Credit Documents. The Revolving Credit Borrowers jointly and
severally also agree to reimburse each Agent, the Collateral
Agent and each Revolving Credit Lender upon demand for all
reasonable out-of-pocket expenses (including reasonable
attorneys' fees and legal expenses) incurred by such Agent, the
Collateral Agent or such Revolving Credit Lender in connection
with (x) the negotiation of any restructuring or "work-out",
whether or not consummated, of any Revolving Credit Obligations
and (y) the enforcement of any Revolving Credit Obligations.
SECTION 11.4. Indemnification. In consideration of the
execution and delivery of this Agreement by each Revolving Credit
Lender and the extension of the Revolving Credit Commitments, the
Revolving Credit Borrowers hereby jointly and severally
indemnify, exonerate and hold each Agent, the Collateral Agent,
the Documentation Agent, the Arranger, the Issuer and each
Revolving Credit Lender and each of their respective partners,
officers, directors, trustees, employees and agents, and each
other Person controlling any of the foregoing within the meaning
of either Section 15 of the Securities Act of 1933, as amended,
or Section 20 of the Securities Exchange Act of 1934, as amended
(collectively, the "Indemnified Parties") free and harmless from
and against any and all actions, causes of action, suits, losses,
costs, liabilities and damages, and expenses incurred in
connection therewith (irrespective of whether any such
Indemnified Party is a party to the action for which
indemnification hereunder is sought), including reasonable
attorneys' fees and disbursements (collectively, the "Indemnified
Liabilities"), incurred by the Indemnified Parties or any of them
as a result of, or arising out of, or relating to
(a) any transaction financed or to be financed in
whole or in part, directly or indirectly, with the proceeds of
any Revolving Credit Loan or the use of any Revolving Credit
Letter of Credit;
(b) the entering into and performance of this
Agreement and any other Revolving Credit Document by any of the
Indemnified Parties (including any action brought by or on behalf
of any Revolving Credit Borrower as the result of any
determination by the Required Revolving Credit Lenders pursuant
to Article VI not to make any Revolving Credit Extension);
(c) any investigation, litigation or proceeding
related to any acquisition or proposed acquisition by any
Revolving Credit Borrower or any of its Subsidiaries of all or
any portion of the stock or assets of any Person, whether or not
such Agent, such Documentation Agent, such Arranger or such
Revolving Credit Lender is party thereto;
(d) any investigation, litigation or proceeding
related to any environmental cleanup, audit, compliance or other
matter relating to any Borrowers' or any of its Subsidiaries
compliance with or liability under any Environmental Law or the
Release by any Revolving Credit Borrower or any of its
Subsidiaries of any Hazardous Material; or
(e) the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission, discharging or releases
from, any real property owned or operated by any Revolving Credit
Borrower or any Subsidiary thereof of any Hazardous Material
present on or under such property in a manner giving rise to
liability at or prior to the time any Revolving Credit Borrower
or any Subsidiary thereof owned or operated such property
(including any losses, liabilities, damages, injuries, costs,
expenses or claims asserted or arising under any Environmental
Law), regardless of whether caused by, or within the control of,
such Revolving Credit Borrower or such Subsidiary,
except for any such Indemnified Liabilities arising for the
account of a particular Indemnified Party by reason of the
relevant Indemnified Party's gross negligence or wilful
misconduct or any Hazardous Materials that are first
manufactured, emitted, generated, treated, released, stored or
disposed of on any real property of any Revolving Credit Borrower
or any of its Subsidiaries or any violation of Environmental Law
that first occurs on or with respect to any real property of such
Revolving Credit Borrower or any of its Subsidiaries after such
real property is transferred to any Indemnified Person or its
successor by foreclosure sale, deed in lieu of foreclosure, or
similar transfer, except to the extent such manufacture,
emission, release, generation, treatment, storage or disposal or
violation is actually caused by the Term Loan Borrower, any
Revolving Credit Borrower or any of such Revolving Credit
Borrower's Subsidiaries. Each Revolving Credit Borrower and its
permitted successors and assigns hereby waive, release and agree
not to make any claim, or bring any cost recovery action against,
any Agent, the Documentation Agent, the Arranger or any Revolving
Credit Lender under CERCLA or any state equivalent, or any
similar law now existing or hereafter enacted, except to the
extent arising out of the gross negligence or willful misconduct
of any Indemnified Party. It is expressly understood and agreed
that to the extent that any of such Persons is strictly liable
under any Environmental Laws, each Revolving Credit Borrower's
obligation to such Person under this indemnity shall likewise be
without regard to fault on the part of such Revolving Credit
Borrower, to the extent permitted under applicable law, with
respect to the violation or condition which results in liability
of such Person. Notwithstanding anything to the contrary herein,
each Agent, the Collateral Agent, the Documentation Agent, the
Arranger and each Revolving Credit Lender shall be responsible
for any act or occurrence resulting from their own gross
negligence or willful misconduct with respect to any Hazardous
Materials that are first manufactured, emitted, generated,
treated, released, stored or disposed of on any real property of
any Revolving Credit Borrower or any of its Subsidiaries or any
violation of Environmental Law that first occurs on or with
respect to any such real property after such real property is
transferred to any Agent, the Collateral Agent, Documentation
Agent, Arranger or Revolving Credit Lender to its successor by
foreclosure sale, deed in lieu of foreclosure, or similar
transfer, except to the extent such manufacture, emission,
release, generation, treatment, storage or disposal or violation
is actually caused by the Term Loan Borrower, such Revolving
Credit Borrower or any of such Revolving Credit Borrower's
Subsidiaries. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, each Revolving
Credit Borrower hereby agrees to make the maximum contribution to
the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
SECTION 11.5. Survival. The obligations of each Revolving
Credit Borrower under Sections 5.3, 5.4, 5.5, 5.6, 11.3 and 11.4,
and the obligations of the Revolving Credit Lenders under Section
4.8 and Section 10.1, shall in each case survive any termination
of this Agreement, the payment in full of all Revolving Credit
Obligations and the termination of all Revolving Credit
Commitments. The representations and warranties made by each
Revolving Credit Obligor in this Agreement and in each other
Revolving Credit Document shall survive the execution and
delivery of this Agreement and each such other Revolving Credit
Document.
SECTION 11.6. Severability. Any provision of this
Agreement or any other Revolving Credit Document which is
prohibited or unenforceable in any jurisdiction shall, as to such
provision and such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement or such Revolving Credit
Document or affecting the validity or enforceability of such
provision in any other jurisdiction.
SECTION 11.7. Headings. The various headings of this
Agreement and of each other Revolving Credit Document are
inserted for convenience only and shall not affect the meaning or
interpretation of this Agreement or such other Revolving Credit
Document or any provisions hereof or thereof.
SECTION 11.8. Execution in Counterparts, Effectiveness,
etc. This Agreement may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and
the same agreement. This Agreement shall become effective when
counterparts hereof executed on behalf of the Revolving Credit
Borrowers and each Revolving Credit Lender (or notice thereof
satisfactory to the Agents) shall have been received by the
Agents and notice thereof shall have been given by the Agents to
the Revolving Credit Borrowers and each Revolving Credit Lender.
SECTION 11.9. Governing Law; Entire Agreement. THIS
AGREEMENT, THE REVOLVING CREDIT NOTES AND EACH OTHER REVOLVING
CREDIT DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. This
Agreement, the Revolving Credit Notes and the other Revolving
Credit Documents constitute the entire understanding among the
parties hereto with respect to the subject matter hereof and
supersede any prior agreements, written or oral, with respect
thereto.
SECTION 11.10. Successors and Assigns. This Agreement
shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns;
provided, however, that (i) no Revolving Credit Borrower may
assign or transfer its rights or obligations hereunder without
the prior written consent of each of the Agents and all Revolving
Credit Lenders; and (ii) the rights of sale, assignment and
transfer of the Revolving Credit Lenders are subject to Section
11.11.
SECTION 11.11. Sale and Transfer of Revolving Credit Loans
and Revolving Credit Commitments; Participations in Revolving
Credit Loans and Revolving Credit Commitments. Each Revolving
Credit Lender may assign, or sell participations in, its
Revolving Credit Loans and Revolving Credit Commitments so long
as each such assignment or sale is made, in the case of Revolving
II Credit Commitments and Revolving II Credit Loans, on a pro
rata basis with the assignment, or sale of participations in, its
Term Loans, and, in the case of Revolving I Credit Loans and
Revolving II Credit Loans, respectively, on a pro rata basis with
the assignment, or sale of participations in, its Revolving I
Credit Commitments and Revolving II Credit Commitments, to one or
more other Persons in accordance with this Section 11.11 and
Section 10.11 of the Term Loan Agreement; provided, that in the
event any Revolving Credit Lender (for purposes of this proviso,
a "Selling Lender") desires to sell a participation to any
prospective purchaser of any such participation which cannot,
purchase a participation in unfunded Revolving II Credit
Commitments (a "Restricted Participant"), such Selling Lender
shall not be obligated pursuant this Section 11.11 to sell such
Restricted Participant a pro rata share of such Selling Lender's
unfunded Revolving II Credit Commitment so long as such
Restricted Participant is obligated to purchase a pro rata share
of each Revolving II Credit Loan as and when made by such Selling
Lender pursuant to its Revolving II Credit Commitment; provided,
further, that such Restricted Participant shall be obligated to
purchase its pro rata share of such unfunded Revolving II Credit
Commitment whenever it would otherwise be permitted to do so
(including, if applicable, upon the occurrence of an Event of
Default).
SECTION 11.1.1. Assignments. Any Revolving Credit Lender
(the "Assignor Revolving Credit Lender"),
(a) with the written consents of each Revolving Credit
Borrower and the Syndication Agent and (in the case of any
assignments or participations in Revolving Credit Letters of
Credit or Revolving Credit Commitments) the Issuer and the Swing
Line Lender, (which consents shall not be unreasonably delayed or
withheld and which consent of the Syndication Agent and the
Issuer and the Swing Line Lender shall not be required in the
case of assignments made by or to DLJ or any of its Affiliates
and which consent of such Revolving Credit Borrower shall not be
required if a Default of the type described in clauses (a)
through (d) of Section 9.1.9 or an Event of Default shall have
occurred and be continuing), may at any time assign and delegate
to one or more commercial banks or other financial institutions
or funds which are regularly engaged in making, purchasing or
investing in loans or securities, and
(b) with notice to each Revolving Credit Borrower and
the Agents, and (in the case of any assignments or participations
in Revolving Credit Letters of Credit or Revolving Credit
Commitments) the Issuer and the Swing Line Lender, but without
the consent of any Revolving Credit Borrower, the Agents, the
Issuer or the Swing Line Lender, may assign and delegate to any
of its Affiliates or Related Funds or to any other Revolving
Credit Lender or any other financial institution so long as such
assignment and delegation to such financial institution is made
within ten Business Days of the Closing Date
(each Person described in either of the foregoing clauses as
being the Person to whom such assignment and delegation is to be
made, being hereinafter referred to as an "Assignee Revolving
Credit Lender"), all or any fraction of such Revolving Credit
Lender's total Revolving Credit Loans, participations in
Revolving Credit Letters of Credit and Revolving Credit Letters
of Credit Outstandings with respect thereto and Revolving Credit
Commitments and total Term Loans in a minimum aggregate amount of
(i) $1,000,000 or (ii) the then remaining amount of such
Revolving Credit Lender's Revolving Credit Loans and Revolving
Credit Commitments and Term Loans; provided, however, that any
such Assignee Revolving Credit Lender will comply, if applicable,
with the provisions contained in Section 5.6 and each Revolving
Credit Borrower, each other Revolving Credit Obligor and the
Agents shall be entitled to continue to deal solely and directly
with such Revolving Credit Lender in connection with the
interests so assigned and delegated to an Assignee Revolving
Credit Lender until
(c) written notice of such assignment and delegation,
together with payment instructions, addresses and related
information with respect to such Assignee Revolving Credit
Lender, shall have been given to each Revolving Credit Borrower
and the Agents by such Revolving Credit Lender and such Assignee
Revolving Credit Lender;
(d) such Assignee Revolving Credit Lender shall have
executed and delivered to each Revolving Credit Borrower and the
Agents a Lender Assignment Agreement, accepted by the Agents;
(e) the processing fees described below shall have
been paid; and
(f) the Administrative Agent shall have registered
such assignment and delegation in the Register pursuant to clause
(b) of Section 2.6.
From and after the date that the Administrative Agent accepts
such Lender Assignment Agreement and such assignment and
delegation is registered in the Register pursuant to clause (b)
of Section 2.6, (x) the Assignee Revolving Credit Lender
thereunder shall be deemed automatically to have become a party
hereto and to the extent that rights and obligations hereunder
have been assigned and delegated to such Assignee Revolving
Credit Lender in connection with such Lender Assignment
Agreement, shall have the rights and obligations of a Revolving
Credit Lender hereunder and under the other Revolving Credit
Documents, and (y) the Assignor Revolving Credit Lender, to the
extent that rights and obligations hereunder have been assigned
and delegated by it in connection with such Lender Assignment
Agreement, shall be released from its obligations hereunder and
under the other Revolving Credit Documents. Within ten Business
Days after its receipt of notice that the Administrative Agent
has received an executed Lender Assignment Agreement, and upon
request pursuant to Section 2.6, the Revolving Credit Borrowers
shall execute and deliver to the Administrative Agent (for
delivery to the relevant Assignee Revolving Credit Lender) new
Revolving Credit Notes evidencing such Assignee Revolving Credit
Lender's assigned Revolving Credit Loans and Revolving Credit
Commitments and, if the Assignor Revolving Credit Lender has
retained Revolving Credit Loans and Revolving Credit Commitments
hereunder, replacement Revolving Credit Notes in the principal
amount of the Revolving Credit Loans and Revolving Credit
Commitments retained by the Assignor Revolving Credit Lender
hereunder (such Revolving Credit Notes to be in exchange for, but
not in payment of, those Revolving Credit Notes then held by such
Assignor Revolving Credit Lender). Each such Revolving Credit
Note shall be dated the date of the predecessor Revolving Credit
Notes. The Assignor Revolving Credit Lender shall mark the
predecessor Revolving Credit Notes "exchanged" and deliver them
to the Revolving Credit Borrowers. Accrued interest on that part
of the predecessor Revolving Credit Notes evidenced by the new
Revolving Credit Notes, and accrued fees, shall be paid as
provided in the Lender Assignment Agreement. Accrued interest on
that part of the predecessor Revolving Credit Notes evidenced by
the replacement Revolving Credit Notes shall be paid to the
Assignor Revolving Credit Lender. Accrued interest and accrued
fees shall be paid at the same time or times provided in the
predecessor Revolving Credit Notes and in this Agreement. Such
Assignor Revolving Credit Lender or such Assignee Revolving
Credit Lender must also pay a processing fee to the
Administrative Agent upon delivery of any Lender Assignment
Agreement in connection with the concurrent assignment of Term
Loans and Revolving II Credit Commitments in the amount of
$1,500, unless such assignment and delegation is by a Revolving
Credit Lender to its Affiliate or Related Fund or if such
assignment and delegation consists of a pledge by a Revolving
Credit Lender to a Federal Reserve Bank (or, in the case of a
Revolving Credit Lender that is an investment fund, to the
trustee under the indenture to which such fund is a party), as
provided below or is otherwise consented to by the Syndication
Agent. Any attempted assignment and delegation not made in
accordance with this Section 11.11.1 shall be null and void.
Nothing contained in this Section 11.11.1 shall prevent or
prohibit any Revolving Credit Lender from pledging its rights
(but not its obligations to make Revolving Credit Loans) under
this Agreement and/or its Revolving Credit Loans and/or its
Revolving Credit Notes hereunder (i) to a Federal Reserve Bank in
support of borrowings made by such Revolving Credit Lender from
such Federal Reserve Bank, or (ii) in the case of a Revolving
Credit Lender that is an investment fund, to the trustee under
the indenture to which such fund is a party in support of its
obligations to such trustee, in either case without notice to or
consent of the Revolving Credit Borrowers or the Agents;
provided, however, that (A) such Revolving Credit Lender shall
remain a "Revolving Credit Lender" under this Agreement and shall
continue to be bound be the terms and conditions set forth in
this Agreement and the other Revolving Credit Documents, and (B)
any assignment by such trustee shall be subject to the provisions
of clause (a) of this Section 11.11.1.
SECTION 11.11.2. Participations. Any Revolving Credit
Lender may at any time sell to one or more commercial banks or
other financial institutions or funds which are regularly engaged
in making, purchasing or investing in loans or securities (each
such commercial bank and other financial institution or fund
being herein called a "Participant") participating interests in
any of the Revolving Credit Loans, Revolving Credit Commitments,
participations in Revolving Credit Letters of Credit and
Revolving Credit Letters of Credit Outstandings or other
interests of such Revolving Credit Lender hereunder; provided,
however, that
(a) no participation contemplated in this
Section shall relieve such Revolving Credit Lender from its
Revolving Credit Commitments or its other obligations hereunder
or under any other Revolving Credit Document;
(b) such Revolving Credit Lender shall remain solely
responsible for the performance of its Revolving Credit
Commitments and such other obligations;
(c) each Revolving Credit Borrower and each other
Revolving Credit Obligor and the Agents shall continue to deal
solely and directly with such Revolving Credit Lender in
connection with such Revolving Credit Lender's rights and
obligations under this Agreement and each of the other Revolving
Credit Documents;
(d) no Participant, unless such Participant is an
Affiliate of such Revolving Credit Lender, or is itself a
Revolving Credit Lender, shall be entitled to require such
Revolving Credit Lender to take or refrain from taking any action
hereunder or under any other Revolving Credit Document, except
that such Revolving Credit Lender may agree with any Participant
that such Revolving Credit Lender will not, without such
Participant's consent, agree to (i) any reduction in the interest
rate or amount of fees that such Participant is otherwise
entitled to, (ii) a decrease in the principal amount, or an
extension of the final Stated Maturity Date, of any Revolving
Credit Loan in which such Participant has purchased a
participating interest or (iii) a release of all or substantially
all of the collateral security under the Revolving Credit
Documents or any Subsidiary Guarantor under any Subsidiary
Guaranty, if any, in each case except as otherwise specifically
provided in a Revolving Credit Document; and
(e) the Revolving Credit Borrowers shall not be
required to pay any amount under Sections 5.3, 5.4, 5.5, 5.6,
11.3 and 11.4 that is greater than the amount which it would have
been required to pay had no participating interest been sold.
Each Revolving Credit Borrower acknowledges and agrees, subject
to clause (e) above, that, to the fullest extent permitted under
applicable law, each Participant, for purposes of Sections 5.3,
5.4, 5.5, 5.6, 5.8, 5.9, 11.3 and 11.4, shall be considered a
Revolving Credit Lender.
SECTION 11.12. Other Transactions. Nothing contained
herein shall preclude any Agent, the Collateral Agent or any
other Revolving Credit Lender from engaging in any transaction,
in addition to those contemplated by this Agreement or any other
Revolving Credit Document, with any Revolving Credit Borrower or
any of their respective Affiliates in which such Revolving Credit
Borrower or such Affiliate is not restricted hereby from engaging
with any other Person.
SECTION 11.13. Forum Selection and Consent to Jurisdiction.
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT OR ANY OTHER REVOLVING CREDIT
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENTS, THE
COLLATERAL AGENT, THE REVOLVING CREDIT LENDERS OR THE REVOLVING
CREDIT BORROWERS SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY (TO
THE EXTENT PERMITTED UNDER APPLICABLE LAW) IN THE COURTS OF THE
STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK, NEW YORK COUNTY; PROVIDED,
HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY REVOLVING
CREDIT COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE
COLLATERAL AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE SUCH REVOLVING CREDIT COLLATERAL OR OTHER PROPERTY MAY BE
FOUND. EACH REVOLVING CREDIT BORROWER HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK, NEW YORK COUNTY, AND OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY
AGREES TO BE BOUND BY ANY FINAL JUDGMENT RENDERED THEREBY IN
CONNECTION WITH SUCH LITIGATION. EACH REVOLVING CREDIT BORROWER
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN
OR WITHOUT THE STATE OF NEW YORK. EACH REVOLVING CREDIT BORROWER
HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER
MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN
ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE
EXTENT THAT ANY REVOLVING CREDIT BORROWER HAS OR HEREAFTER MAY
ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE)
WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH REVOLVING CREDIT
BORROWER HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF
ITS REVOLVING CREDIT OBLIGATIONS UNDER THIS AGREEMENT AND THE
OTHER REVOLVING CREDIT DOCUMENTS.
SECTION 11.14. Waiver of Jury Trial. THE AGENTS, THE
COLLATERAL AGENT, THE REVOLVING CREDIT LENDERS AND EACH REVOLVING
CREDIT BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT OR ANY OTHER REVOLVING CREDIT
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENTS, THE
COLLATERAL AGENT, THE REVOLVING CREDIT LENDERS OR THE REVOLVING
CREDIT BORROWERS RELATING THERETO. EACH REVOLVING CREDIT
BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER
PROVISION OF EACH OTHER REVOLVING CREDIT DOCUMENT TO WHICH IT IS
A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
AGENTS, THE COLLATERAL AGENT, AND THE REVOLVING CREDIT LENDERS
ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER REVOLVING CREDIT
DOCUMENT.
SECTION 11.15. Confidentiality. The Agents, the Collateral
Agent, the Arranger and the Revolving Credit Lenders shall hold
all non-public information obtained pursuant to or in connection
with this Agreement or obtained by them based on a review of the
books and records of any Revolving Credit Borrower or any of its
Subsidiaries in accordance with their customary procedures for
handling confidential information of this nature, but may make
disclosure to any of their examiners, regulators (including,
without limitation, the National Association of Insurance
Commissioners), Affiliates, outside auditors, counsel and other
professional advisors in connection with this Agreement or as
reasonably required by any potential bona fide transferee,
participant or assignee, or in connection with the exercise of
remedies under a Revolving Credit Document, or as requested by
any governmental agency or representative thereof or pursuant to
legal process; provided, however, that
(a) unless specifically prohibited by applicable law or
court order, each Agent, the Collateral Agent, the Arranger and
each Revolving Credit Lender shall promptly notify each
Revolving Credit Borrower of any request by any governmental
agency or representative thereof (other than any such request in
connection with an examination of the financial condition of
such Agent, the Collateral Agent, Arranger and Revolving Credit
Lender by such governmental agency) for disclosure of any such
non-public information and, where practicable, prior to
disclosure of such information;
(b) prior to any such disclosure pursuant to this
Section 11.15, each Agent, the Collateral Agent, the Arranger
and each Revolving Credit Lender shall require any such bona
fide transferee, participant and assignee receiving a disclosure
of non-public information to agree in writing
(i) to be bound by this Section 11.15; and
(ii) to require such Person to require any
other Person to whom such Person discloses such non-
public information to be similarly bound by this
Section 11.15;
(c) disclosure may, with the consent of the
Syndication Agent and each Revolving Credit Borrower, be made by
any Revolving Credit Lender to any direct or indirect contractual
counter parties of such Revolving Credit Lender in swap
agreements or such contractual counterparties' professional
advisors; provided that such contractual counterparty or
professional advisor agrees in writing to keep such information
confidential to the same extent required of the Revolving Credit
Lenders hereunder; and
(d) except as may be required by an order of a court
of competent jurisdiction and to the extent set forth therein, no
Revolving Credit Lender shall be obligated or required to return
any materials furnished by any Revolving Credit Borrower or any
Subsidiary.
SECTION 11.16. Liens on Sold Assets. The Collateral Agent
will execute and deliver to the Revolving Credit Borrowers, at
the Revolving Credit Borrowers' sole cost and expense, any
releases, termination statements or other documents reasonably
necessary for (a) the release of the Liens granted by the
Security Documents on any property or other assets sold,
transferred or otherwise disposed of in a transaction permitted
by the Term Loan Agreement as in effect on the date hereof and
(b) if the property or other assets sold, transferred or
otherwise disposed of in a transaction permitted by the Term Loan
Agreement consists of all the Capital Stock of a Subsidiary, the
release of such Subsidiary from the Subsidiary Guaranty, the
Subsidiary Pledge Agreement and the Subsidiary Security Agreement
if such Subsidiary is a party thereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly
authorized as of the day and year first above written.
MOTHER'S CAKE & COOKIE CO.
By:
Name:
Title:
GWI, INC.
By:
Name:
Title:
METZ BAKING COMPANY
By:
Name:
Title:
SFFB HOLDINGS, INC.
By:
Name:
Title:
BELSEA HOLDINGS, INC.
By:
Name:
Title:
H&M FOOD SYSTEMS COMPANY, INC.
By:
Name:
Title:
DLJ CAPITAL FUNDING, INC.,
as the Syndication Agent, Collateral
Agent and as a Revolving Credit Lender
By:
Title:
ABN AMRO BANK N.V., as the Administrative
Agent and as a Revolving Credit Lender
By:
Title:
By:
Title:
SUMMIT BANK, as the Documentation Agent
and as a Revolving Credit Lender
By:
Title:
BANQUE PARIBAS, as a Revolving Credit Lender
By:
Title:
Exhibit 10.38
JULY 1997 AMENDMENT TO
EXECUTIVE EMPLOYMENT AGREEMENT
THIS JULY 1997 AMENDMENT TO EMPLOYMENT AGREEMENT (the
"Amendment"), entered into and effective as of July 30, 1997, by
and among SPECIALTY FOODS ACQUISITION CORPORATION, a Delaware
corporation ("SFAC"), SPECIALTY FOODS CORPORATION, a Delaware
corporation ("SFC") and ROBERT L. FISHBUNE (the "Executive") is
made to that certain Employment Agreement (the "Agreement"),
effective as of May 13, 1996, among SFAC, SFC and the Executive.
SFAC and SFC are each sometimes herein referred to individually
as an "Employer" and are sometimes referred to collectively as
the "Employers."
The Employers and the Executive wish to amend the Agreement to
reflect the terms set forth in this Amendment.
Accordingly, the Employers and the Executive hereby agree as
follows:
1. Defined terms used in this Amendment, but not defined
herein, shall have the meanings assigned to them in the
Agreement.
2. Section 2.1 of the Agreement is amended to read in its
entirety as follows:
2.1 The Term. The term of the Executive's employment
under this Agreement (the "Term") shall commence on May 13, 1996
(the "Effective Date") and shall, unless sooner terminated
pursuant to Section 2.3 hereof, end on December 31, 1999 or on
such later December 31 to which the Term is extended pursuant to
Section 2.2.
3. Section 2.2 of the Agreement is amended to read in its
entirety as follows:
2.2 Extension. On June 30 of the 1999 calendar year,
the then scheduled expiration date of the Term shall
automatically be extended, without any action required of either
the Executive or the Employers, for 12 additional months, unless
the Executive, on the one hand, or the Employers, on the other
hand, shall have given written notice of non-extension to the
other no later than such June 30. If such written notice of non-
extension is given, the Term shall end on the then-scheduled
termination date (taking into account any previous extensions
pursuant to this Section 2.2). By way of example, unless written
notice of non-extension is given by June 30, 1999, the otherwise
scheduled expiration date of December 31, 1999 shall be extended
to December 31, 2000.
4. Section 3.5.2 of the Agreement, which sets forth
certain obligations of Executive to purchase securities of the
Employers, is hereby deleted in its entirety. Each party
acknowledges that Executive has not made any of the security
purchases specified therein and shall have no obligation to make
such purchases.
5. Except for the Amendments set forth above, the
Agreement shall remain in full force and effect.
6. This Amendment is effective as of the date hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of July 30, 1997.
SPECIALTY FOODS ACQUISITION
CORPORATION
By: /s/ Lawrence S. Benjamin
Name: Lawrence S. Benjamin
Title: President & CEO
SPECIALTY FOODS CORPORATION
By: /s/ Lawrence S. Benjamin
Name: Lawrence S. Benjamin
Title: President & CEO
EXECUTIVE
/s/ Robert L. Fishbune
Robert L. Fishbune
Exhibit 10.42
SPECIALTY FOODS CORPORATION
H&M FOOD SYSTEMS COMPANY, INC.
METZ BAKING COMPANY
STELLA FOODS, INC.
AMENDED AND RESTATED
HEADQUARTERS
LONG TERM INCENTIVE COMPENSATION PLAN
Adopted at the February 17, 1994 Board of Directors' Meeting.
Amended and Restated as of February 22, 1995.
Further Amended and Restated as of July 11, 1997.
Section 1. Purpose. The purpose of this Plan is to
promote the interests of H&M Food Systems Company, Inc., Metz
Baking Company and Stella Foods, Inc., which are wholly owned
subsidiaries of Specialty Foods Corporation ("SFC"), by (a)
attracting, motivating and retaining executive personnel of
outstanding ability to the SFC Headquarters organization involved
in the management of such subsidiaries; (b) focusing the
attention of executive management of the SFC Headquarters
organization on achievement of the sustained long term results of
the subsidiaries; (c) fostering the attention of SFC Headquarters
management on overall corporate performance and thereby promoting
cooperation and teamwork among management of the operating units;
and (d) providing SFC Headquarters executives with a direct
economic interest in the attainment of demanding long term
business objectives of the subsidiaries.
Section 2. Definitions. As used in this Plan, the
following capitalized terms shall have the following meanings:
(a) "SFC Board of Directors" shall mean the board of
directors of SFC, as in effect from time to time.
(b) "Change of Control" shall mean, (i) with respect
to SFAC or SFC, a transaction pursuant to which a person or group
(as such term is used in Section 13(d)(3) of the Securities
Exchange Act of 1934), other than Acadia Partners, L.P.,
Keystone, Inc., HWP Specialty Partners, L.P. and their respective
"affiliates" (as such term is defined in Appendix 1 hereto) (such
person or group being a "Non-Affiliate"), acquires the collective
ability to designate directly or indirectly a majority of the
members of the board of directors of SFAC or SFC (whether by
contract or otherwise), and (ii) with respect to any of the
Subsidiaries, a transaction (including a sale, merger or other
similar transaction, but excluding any transaction among only
SFAC, SFC and/or their subsidiaries), (a) pursuant to which all
or substantially all the assets of such Subsidiary are sold to
Non-Affiliates, (b) pursuant to which Non-Affiliates acquire the
collective ability to designate directly or indirectly a majority
of the Board of Directors of such Subsidiary (whether by contract
or otherwise), or (c) which the Committee determines, in its
discretion, to constitute a Change of Control.
(c) "Committee" shall mean the committee appointed by
the SFC Board of Directors to administer the Plan.
(d) "Companies" shall mean any of SFAC, SFC, H&M, Metz
or Stella.
(e) "EBITDAF" shall mean, with respect to each
Subsidiary, the amount determined on a consolidated basis for
such Subsidiary (as reflected in the audited consolidated
financial statement of such Subsidiary for the Measuring Fiscal
Year) equal to (i) income from operations, plus (ii) depreciation
of its property, plant and equipment and amortization of
intangible assets, plus (iii) such Subsidiary's Operating
Financing Charges.
(f) "Effective Date" shall mean January 1, 1994.
(g) "Employee" shall mean an employee of any
Subsidiary, SFAC or SFC.
(h) "First Vesting Date" shall have the meaning
assigned in Section 9.
(i) "Fiscal Year" shall mean, with respect to any
Subsidiary, the calendar year ending December 31, whether or not
such period is the fiscal year of such Subsidiary.
(j) "H&M" shall mean H&M Food Systems Company, Inc., a
Delaware corporation.
(k) "H&M Award Pool" shall mean the award pool
established pursuant to Section 4(c).
(l) "H&M Performance Unit" shall mean each H&M
Performance Unit granted by the Committee to a Participant
pursuant to Section 7(a).
(m) "H&M Minimum EBITDAF Target" or "H&M MET" shall
mean with respect to a Measuring Fiscal Year of H&M, the H&M
Minimum EBITDAF Target specified for such Measuring Fiscal Year
in Section 4(b).
(n) "Maturity Date" shall mean December 31, 1998, or,
if earlier with respect to any Subsidiary, the date on which a
Change of Control of such Subsidiary occurs.
(o) "Measuring Fiscal Year" shall mean, with respect
to each Subsidiary, (i) if no Change of Control of such
Subsidiary occurs prior to December 31, 1998, Fiscal Year 1998,
or (ii) if a Change of Control of such Subsidiary occurs prior to
December 31, 1998, the most recent Fiscal Year preceding the
Fiscal Year in which the Change of Control for such Subsidiary
occurs.
(p) "Metz" shall mean Metz Baking Company, an Iowa
corporation.
(q) "Metz Award Pool" shall mean the award pool
established pursuant to Section 5(c).
(r) "Metz Performance Unit" shall mean each Metz
Performance Unit granted by the Committee to a Participant
pursuant to Section 7(a).
(s) "Metz Minimum EBITDAF Target" or "Metz MET" shall
mean, with respect to a Measuring Fiscal Year of Metz, the Metz
Minimum EBITDAF Target specified for such Measuring Fiscal Year
in Section 5(b).
(t) "Operating Financing Charges" shall mean, with
respect to any Subsidiary, the total expenses incurred by such
Subsidiary for the Measuring Fiscal Year which arise from off-
balance sheet financing techniques originated in 1995 and 1996
related to inventory financing transactions, sale-leaseback
transactions and the fleet leasing program utilized by the
Companies. The amount of the Operating Financing Charges shall
be reasonably determined by the Committee. The Companies
currently project that the amount of Operating Financing Charges
incurred by H&M, Metz and Stella will be $0, $5.8 million and
$5.8 million, respectively, in 1997 and will be $0, $7.3 million
and $7.4 million, respectively, in 1998.
(u) "Participant" shall mean an Employee designated by
the Committee to participate in the Plan pursuant to Section 3.
(v) "Participant's Total Award" shall be an amount
equal to the sum of such Participant's Total H&M Award, such
Participant's Total Metz Award and such Participant's Total
Stella Award.
(w) "Participant's Total H&M Award" has the meaning
assigned in Section 8(a).
(x) "Participant's Total Metz Award" has the meaning
assigned in Section 8(b).
(y) "Participant's Total Stella Award" has the meaning
assigned in Section 8(c).
(z) "Performance Cycle" shall mean, with respect to
each Subsidiary, the period commencing on the Effective Date and
ending on the Maturity Date of such Subsidiary.
(aa) "Performance Units" shall mean collectively the
H&M Performance Units, Metz Performance Units and Stella
Performance Units.
(bb) "Prior Plan" shall mean the SFAC Group Long Term
Incentive Compensation Plan adopted by the SFAC Board of
Directors on February 17, 1994, as the same was amended and
restated as of February 22, 1995.
(cc) "Plan" shall mean this Long Term Incentive
Compensation Plan, as amended from time to time.
(dd) "Second Vesting Date" shall have the meaning
assigned in Section 9.
(ee) "SFAC" shall mean Specialty Foods Acquisition
Corporation, a Delaware corporation.
(ff) "SFC" means Specialty Foods Corporation, a
Delaware corporation.
(gg) "Subsidiaries" shall mean H&M, Metz and Stella and
"Subsidiary" shall mean H&M, Metz or Stella, as the context
dictates.
(hh) "Stella" means Stella Foods, Inc., a Delaware
corporation.
(ii) "Stella Award Pool" shall mean the award pool
established pursuant to Section 6(c).
(jj) "Stella Performance Unit" shall mean each Stella
Performance Unit granted by the Committee to a Participant
pursuant to Section 7(a).
(kk) "Stella Minimum EBITDAF Target" or "Stella MET"
shall mean, with respect to a Measuring Fiscal Year of Stella,
the Stella Minimum EBITDAF Target specified for such Measuring
Fiscal Year in Section 6(b).
(ll) "Vesting Dates" has the meaning assigned in
Section 9.
Section 3. Eligibility. Participants in the Plan shall
be designated by the Committee and shall consist of those
Employees (whether or not employed on the Effective Date) who, in
the sole discretion of the Committee, have the potential to make
a significant impact on the financial results of the
Subsidiaries. The Committee's designation of a Participant and
the grant of Performance Units to the Participant shall be
evidenced by an instrument or instruments signed by or on behalf
of the Committee and delivered to each designated Participant.
Section 4. H&M Incentive Awards.
(a) General. The amount, if any, of payments to be
made under this Plan with respect to H&M Units shall be
conditioned upon meeting or exceeding the H&M Minimum EBITDAF
Target in the Measuring Fiscal Year and shall increase
incrementally as the EBITDAF of H&M for the Measuring Fiscal Year
exceeds such H&M Minimum EBITDAF Target (up to 115% of H&M
Minimum EBITDAF Target, as defined below).
(b) H&M Minimum EBITDAF Targets. The H&M Minimum
EBITDAF Targets are set forth below.
Fiscal Year H&M Minimum EBITDAF
Ended December 31 Targets1
(in Millions)
1997 $15.5
1998 $17.0
(c) Award Pool.
(i) If the H&M Minimum EBITDAF Target is not met or exceeded for
the Measuring Fiscal Year, there shall be no H&M Award Pool.
(ii) The H&M Award Pool for the Measuring Fiscal Year shall be as
set forth below:
EBITDAF for Measuring Amount of
Fiscal Year Award Pool
(in Millions)
100% of H&M MET $.325
103.75% of H&M MET .4875
107.5% of H&M MET .65
111.25% of H&M MET .975
115% or Greater of 1.3
H&M MET
In the event that the EBITDAF of H&M for the
Measuring Fiscal Year is more than one of the above listed levels
and less than the next greatest of such levels, the amount of the
H&M Award Pool shall be prorated between the applicable amounts
listed above. For example, if EBITDAF of H&M for a Measuring
Fiscal Year were 105.625% of H&M MET, the H&M Award Pool would be
$.56875 million. Alternatively, if EBITDAF of H&M for a
Measuring Fiscal Year were 109.375% of MET, the H&M Award Pool
would be $.8125 million. In cases in which proration produced
fractional numbers, such numbers were omitted from the table
above to avoid inaccuracies that could result from rounding off
such fractional numbers.
Section 5. Metz Incentive Awards.
(a) General. The amount, if any, of payments to be
made under this Plan with respect to Metz Units shall be
conditioned upon meeting exceeding the Metz Minimum EBITDAF
Target in the Measuring Fiscal Year and shall increase
incrementally as the EBITDAF of Metz for the Measuring Fiscal
Year exceeds such Metz Minimum EBITDAF Target (up to 115% of Metz
Minimum EBITDAF Target, as defined below).
(b) Metz Minimum EBITDAF Targets. The Metz Minimum
EBITDAF Targets are set forth below.
Fiscal Year Metz Minimum EBITDAF
Ended December 31 Targets2
(in Millions)
1997 $55.8
1998 $62.5
(c) Award Pool.
(i) If the Metz Minimum EBITDAF Target is not met or exceeded
for the Measuring Fiscal Year, there shall be no Metz Award Pool.
(ii) The Metz Award Pool for the Measuring Fiscal Year shall be
as set forth below:
EBITDAF for Measuring Amount of
Fiscal Year Award Pool
(in Millions)
100% of Metz MET $1.1
103.75% of Metz MET 1.65
107.5% of Metz MET 2.2
111.25% of Metz MET 3.3
115% or Greater of 4.4
Metz MET
In the event that the EBITDAF of Metz for the
Measuring Fiscal Year is more than one of the above listed levels
and less than the next greatest of such levels, the amount of the
Metz Award Pool shall be prorated between the applicable amounts
listed above. For example, if EBITDAF of Metz for a Measuring
Fiscal Year were 105.625% of Metz MET, the Metz Award Pool would
be $1.925 million. Alternatively, if EBITDAF for a Measuring
Fiscal Year were 109.375% of MET, the Metz Award Pool would be
$2.75 million. In cases in which proration produced fractional
numbers, such numbers were omitted from the table above to avoid
inaccuracies that could result from rounding off such fractional
numbers.
Section 6. Stella Incentive Awards.
(a) General. The amount, if any, of payments to be
made under this Plan with respect to Stella Units shall be
conditioned upon exceeding the Stella Minimum EBITDAF Target in
the Measuring Fiscal Year and shall increase incrementally as the
EBITDAF of Stella for the Measuring Fiscal Year exceeds such
Stella Minimum EBITDAF Target (up to 115% of Stella Minimum
EBITDAF Target, as defined below).
(b) Stella Minimum EBITDAF Targets. The Stella
Minimum EBITDAF Targets are set forth below.
Fiscal Year Stella Minimum EBITDAF
Ended December 31 Targets3
(in Millions)
1997 $58.0
1998 $62.0
(c) Award Pool.
(i) If the Stella Minimum EBITDAF Target is not met or exceeded
for the Measuring Fiscal Year, there shall be no Stella Award
Pool.
(ii) The Stella Award Pool for the Measuring Fiscal Year shall be
as set forth below:
EBITDAF for Measuring Amount of
Fiscal Year Award Pool
(in Millions)
100% of Stella MET $1.075
103.75% of Stella MET 1.7875
107.5% of Stella MET 2.15
111.25% of Stella MET 3.225
115% or Greater of 4.3
Stella MET
In the event that the EBITDAF of Stella for the
Measuring Fiscal Year is more than one of the above listed levels
and less than the next greatest of such levels, the amount of the
Stella Award Pool shall be prorated between the applicable
amounts listed above. For example, if EBITDAF of Stella for a
Measuring Fiscal Year were 105.625% of Stella MET, the Stella
Award Pool would be $1.96875 million. Alternatively, if EBITDAF
for a Measuring Fiscal Year were 109.375% of MET, the Stella
Award Pool would be $2.6875 million. In cases in which proration
produced fractional numbers, such numbers were omitted from the
table above to avoid inaccuracies that could result from rounding
off such fractional numbers.
Section 7. Performance Units.
(a) Subject to the terms of the Plan, the Committee
may grant up to 3,000 Performance Units to Participants prior to
the conclusion of the Performance Cycles. All such Performance
Units shall be designated as "H&M Performance Units," "Metz
Performance Units" or "Stella Performance Units." Of the 3,000
Performance Units which may be granted, up to 1,000 Performance
Units may be designated as "H&M Performance Units;" up to 1,000
Performance Units may be designated as "Metz Performance Units;"
and up to 1,000 Performance Units may be designated as "Stella
Performance Units." Performance Units of a Subsidiary previously
granted to Participants which have been forfeited due to
termination of employment, other than by reason of death or
disability, before the Maturity Date of such Subsidiary, may be
regranted to other Participants. Regardless of the number of
Performance Units actually granted, (x) each H&M Performance Unit
represents the right to receive 0.1% of the H&M Award Pool, (y)
each Metz Performance Unit represents the right to receive 0.1%
of the Metz Award Pool, and (z) each Stella Performance Unit
represents the right to receive 0.1% of the Stella Award Pool.
(b) In the discretion of the Committee, Performance
Units may be granted to Participants during or following any
Fiscal Year in the respective Performance Cycle, whether or not
the H&M MET, Metz MET or Stella MET (as applicable) for such
Fiscal Year was attained.
(c) Except for the maximum aggregate number of 3,000
Performance Units available for grants under the Plan, there is
no minimum or maximum number of Performance Units that may be
granted to a Participant or that may or must be granted in any
Fiscal Year.
Section 8. Amount of Incentive Awards.
(a) If the H&M Minimum EBITDAF Target for H&M's
Measuring Fiscal Year is met or exceeded, each Participant who is
(or is deemed to be pursuant to Section 10 to be) in the employ
of one of the Companies on one or both of the Vesting Dates shall
be entitled to payments from H&M in an aggregate amount equal to
the product of (i) 0.1%, times (ii) the number of such
Participant's H&M Performance Units, times (iii) the H&M Award
Pool (such aggregate payment being referred to as the
"Participant's Total H&M Award"). All such payments shall vest
and be made in accordance with the provisions of Section 7.
(b) If the Metz Minimum EBITDAF Target for Metz's
Measuring Fiscal Year is met or exceeded, each Participant who is
(or is deemed pursuant to Section 10 to be) in the employ of one
of the Companies on one or both of the Vesting Dates shall be
entitled to payments from Metz in an aggregate amount equal to
the product of (i) 0.1%, times (ii) the number of such
Participant's Metz Performance Units, times (iii) the Metz Award
Pool (such aggregate payment being referred to as the
"Participant's Total Metz Award"). All such payments shall vest
in accordance with the provisions of Section 9.
(c) If the Stella Minimum EBITDAF Target for Stella's
Measuring Fiscal Year is met or exceeded, each Participant who is
(or is deemed pursuant to Section 10 to be) in the employ of one
of the Companies on one or both of the Vesting Dates shall be
entitled to payments from Metz in an aggregate amount equal to
the product of (i) 0.1%, times (ii) the number of such
Participants Metz Performance Units, times (iii) the Metz Award
Pool (such aggregate payment being referred to as the
"Participant's Total Metz Award"). All such payments shall vest
in accordance with the provisions of Section 9.
Section 9. Time and Form of Award Payments.
(a) A Participant shall be entitled to receive 40% of
such Participant's Total Award if he or she is (or is deemed
pursuant to Section 8) to be in the employ of the Companies on
January 15, 1999 (the "First Vesting Date"). Such Participant
shall be entitled to receive the remaining 60% of such
Participant's Total Award if he or she is (or is deemed pursuant
to Section 8 to be) in the employ of the Companies on January 15,
2000 (the "Second Vesting Date"). The First Vesting Date and the
Second Vesting Date are referred to herein as the "Vesting
Dates".
(b) Awards payable under the Plan shall be paid by the
respective Subsidiary to Participants in two annual installments.
The first such installment (equal to 40% of each Participant's
Total Award), which shall be paid by the Subsidiaries to those
Participants in (or deemed pursuant to Section 8 to be in) the
employ of the Companies on the First Vesting Date, shall be paid
on the earlier of (x) the date occurring not later than 30 days
after the date of the opinion of the Companies' independent
auditors certifying the financial results for the 1998 Fiscal
Year and (y) March 31, 1999. The second installment (equal to
60% of each Participant's Total Award) shall be paid by the
Subsidiaries to those Participants in (or deemed pursuant to
Section 8 to be in) the employ of the Companies on the Second
Vesting Date on March 31, 2000.
Notwithstanding the provisions of Sections 9(a) and (b)
to the contrary, in the event that a Change of Control of any
Subsidiary occurs after the end of the first fiscal year of the
Performance Cycle of such Subsidiary and prior to December 31,
1998, a Participant shall be entitled to receive 100% of the
Participant's Total Award for such Subsidiary if he or she is (or
is deemed pursuant to Section 8 to be) in the employ of the
Companies on the date immediately prior to the Change of Control
of such Subsidiary. In the event of a Change of Control of a
Subsidiary, all awards payable under the Plan with respect to
such Subsidiary shall be paid by such Subsidiary in lump-sum
amounts within 90 days of the Change of Control.
Section 10. Termination of Employment.
(a) Death and Disability. If, prior to the Second
Vesting Date, a Participant dies or becomes disabled (as defined
in Section 22(e)(3) of the Internal Revenue Code of 1986, as
amended), such Participant will be deemed (for purposes of the
Plan only) to be employed by the Companies on the respective
Maturity Dates of each of the Subsidiaries, as well as both the
First Vesting Date and the Second Vesting Date for such
Subsidiary. Awards otherwise payable under the Plan by the
Subsidiaries to such Participant (or his beneficiary) shall be
paid in accordance with the terms of the Plan.
(b) Other Terminations. A Participant whose
employment with the Companies terminates prior to the First
Vesting Date (for any reason other than death or disability)
shall forfeit all of his or her rights to receive an award
payment under the Plan. A Participant whose employment with the
Companies terminates after the First Vesting Date but prior to
the Second Vesting Date (for any reason other than death or
disability) shall forfeit all of his or her rights to receive an
award payment pursuant to the second installment under the Plan.
Section 11. Administration. The Plan shall be
administered by the Committee. The Committee shall have full
power and authority to interpret and to construe the Plan, and
all such interpretations as well as all determinations made by
the Committee pursuant to the powers vested in it hereunder shall
be conclusive and binding on all persons having any interest in
the Plan. No member of the Committee shall be liable for any
action or determination made in good faith with respect to the
Plan. Notwithstanding anything to the contrary contained herein,
the Board of Directors may, in its sole discretion, at any time
and from time to time, resolve to administer the Plan. In the
event of the foregoing, the term "Committee" as used herein shall
mean the Board of Directors.
Section 12. Adjustments. In the event of (x) any
acquisition, divestiture or other corporate transaction of any
kind involving any Subsidiary, or (y) any extraordinary
transaction or event which materially affects the EBITDAF "run
rate" of any Subsidiary which the Committee, in its reasonable
discretion, determines to be of such a kind or nature as to make
appropriate an amendment or adjustment to the Plan or any
Performance Units granted thereunder in order to effectuate the
intent and purposes of the Plan, the Committee may, in its
discretion, make such amendment or adjustment. Without limiting
the generality of the foregoing, the Committee, in its
discretion, may, in connection with any such corporate
transaction (a) cancel or not cancel Performance Units granted to
Employees who no longer qualify as Participants as a result of
such transaction, (b) grant new Performance Units to any such
person, (c) reduce or increase any of the Award Pools, (d) reduce
or increase any of the Minimum EBITDAF Targets, the Maximum
EBITDAF Targets, and/or (e) amend any other term or provision of
the Plan, all as it deems appropriate to effectuate the intent
and purposes of the Plan.
Section 13. Amendments and Termination. The Board of
Directors may amend or terminate the Plan at any time. No such
amendment or termination shall materially and adversely impair
the rights of any Participant hereunder without the written
consent of Participants who, as of the time of such amendment or
termination, have been granted at least 75% of all Performance
Units granted under the Plan which remain outstanding at such
time; provided, however, that nothing contained herein shall
limit or restrict the discretionary powers granted to the
Committee in Sections 1 through 11 hereof.
Section 14. Miscellaneous.
(a) No Right to Awards or Continued Employment. No
Employee shall have any claim or right to be granted an award
under the Plan. Neither this Plan nor any action taken hereunder
shall be construed as giving any Employee any right to be
retained in the employ of any of the Companies or any of their
subsidiaries thereof.
(b) Unfunded Plan. This Plan shall be unfunded.
Neither the Companies, shall be required to establish any special
or separate fund or to make any other segregation of assets to
assure the payment of any award under the Plan.
(c) Taxes. The Companies shall have the right to
deduct from all awards paid under the Plan any federal, state or
local taxes required by law to be withheld with respect to such
payments.
(d) Prior Plan. This plan supersedes in its entirety
the Prior Plan, which is terminated and shall be of no further
force or effect.
(e) Nontransferability. No award made hereunder may
be assigned, pledged or transferred, except, in the event of
death of a Participant, by will or the laws of descent and
distribution, and any attempt to assign, pledge or transfer such
rights shall be void.
(f) Relationship to Other Benefits. No payment under
the Plan shall be taken into account in determining any benefits
to which a Participant may be entitled under any pension, profit
sharing, group insurance or other benefit plan of the Companies.
(g) Governing Law. This Plan shall be governed by,
and construed in accordance with, the laws of the State of
Illinois applicable to agreements made and to be performed
entirely within such State (without regard to any conflict of law
provisions that might indicate the applicability of any other
laws).
Section 15. Effective Date. Subject to the approval of
the Committee, this Plan shall become effective as of June 30,
1997.
APPENDIX 1
DEFINITION OF AFFILIATE
In respect of Acadia Partners, L.P., Keystone, Inc. and HWP
Specialty Partners, L.P. (each a "Stockholder"), "affiliates"
shall mean:
(i) In all cases, any person or entity controlling, controlled
by, or under common control with such Stockholder, including a
general partner of such Stockholders which is a partnership and
to the extent not otherwise described in this clause (i),
coinvestment entities established by any such Stockholder on or
prior to November 15, 1993 and controlled by such Stockholder,
any officer, employee, partner or director of such Stockholder or
of the general partner of such Stockholder (or of the general
partner of any general partner of any such Stockholder) or any
combination of the foregoing;
(ii) any trust, corporation, partnership or other entity,
controlled by persons described in clause (i);
(iii) any stockholder or partner or partner of a Stockholder
which receives shares of the Company pursuant to a general
distribution by such Stockholders;
(iv) with respect to an individual Stockholder or an individual
affiliate thereof, the spouse or children of such stockholder or
affiliate or a trust established for the benefit of any of the
foregoing which trust is controlled by such stockholder or
affiliate or the estate of such Stockholder or affiliate; and
(v) Robert B. Haas and Douglas D. Wheat.
_______________________________
1 Includes a service charge from Stella in the amount of $1.4
million per annum to reflect an estimate of the costs of services
provided by Stella to H&M.
2 Includes the add-back of Operating Financing Charges estimated
to be $5.8 million in 1997 and $7.3 million in 1998. See
definitions of "EBITDAF" and "Operating Financing Charges".
3 Includes the add-back of Operating Financing Charges estimated
to be $5.8 million in 1997 and $7.4 million in 1998. See
definitions of "EBITDAF" and "Operating Financing Charges".
Exhibit 10.43
METZ BAKING COMPANY
AMENDED AND RESTATED
LONG TERM INCENTIVE COMPENSATION PLAN
Adopted at the February 17, 1994 Board of Directors' Meeting.
Amended and Restated as of February 22, 1995.
Further Amended and Restated as of July 11, 1997.
Section 1. Purpose. The purpose of this Plan is to
promote the interests of Metz Baking Company, a wholly-owned
subsidiary of Specialty Foods Acquisition Corporation by (a)
attracting, motivating and retaining executive personnel of
outstanding ability; (b) focusing the attention of executive
management on achievement of sustained long term results; (c)
fostering management's attention on overall corporate performance
and thereby promoting cooperation and teamwork among management
of the operating units; and (d) providing executives with a
direct economic interest in the attainment of demanding long term
business objectives.
Section 2. Definitions. As used in this Plan, the
following capitalized terms shall have the following meanings:
(a) "Award Pool" shall mean the award pool established
pursuant to Section 4(c).
(b) "SFAC Board of Directors" shall mean the board of
directors of SFAC, as in effect from time to time.
(c) "Change of Control" shall mean, (i) with respect
to SFAC or SFC, a transaction pursuant to which a person or group
(as such term is used in Section 13(d)(3) of the Securities
Exchange Act of 1934), other than Acadia Partners, L.P.,
Keystone, Inc., HWP Specialty Partners, L.P. and their respective
"affiliates" (as such term is defined in Appendix 1 hereto) (such
person or group being a "Non-Affiliate"), acquires the collective
ability to designate directly or indirectly a majority of the
members of the board of directors of SFAC or SFC (whether by
contract or otherwise), and (ii) with respect to the Company, a
transaction (including a sale, merger or other similar
transaction, but excluding any transaction among only SFAC, SFC
and/or their subsidiaries), (a) pursuant to which all or
substantially all the assets of the Company are sold to Non-
Affiliates, (b) pursuant to which Non-Affiliates acquire the
collective ability to designate directly or indirectly a majority
of the Board of Directors of the Company, Metz Holdings, Inc. or
MBC Holdings, Inc. (whether by contract or otherwise), or (c)
which the Committee determines, in its discretion, to constitute
a Change of Control.
(d) "Committee" shall mean the committee appointed by
the SFAC Board of Directors to administer the Plan.
(e) "Company" shall mean Metz Baking Company and the
other related subsidiaries of MBC Holdings, Inc., a Delaware
corporation.
(f) "EBITDAF" shall mean the amount determined on a
consolidated basis for the Metz Group (as reflected in the
audited consolidated financial statements of the Metz Group for
the Measuring Fiscal Year (as defined below)) equal to the Metz
Group's (i) income from operations, plus (ii) depreciation of its
property, plant and equipment and amortization of intangible
assets, plus (iii) Operating Financing Charges (as defined
below).
(g) "Effective Date" shall mean January 1, 1994.
(h) "Employee" shall mean an employee of the Company,
SFAC or SFC.
(i) "First Vesting Date" shall have the meaning
assigned in Section 5.
(j) "Fiscal Year" shall mean the calendar year ending
December 31, whether or not such period is the fiscal year of the
Metz Group.
(k) "Maturity Date" shall mean December 31, 1998, or,
if earlier, the date on which a Change of Control occurs.
(l) "Measuring Fiscal Year" shall mean (i) if no
Change of Control occurs prior to December 31, 1998, Fiscal Year
1998, or (ii) if a Change of Control occurs prior to December 31,
1998, the most recent Fiscal Year preceding the Fiscal Year in
which the Change of Control occurs.
(m) "Metz Group" shall mean MBC Holdings, Inc., Metz
Holdings, Inc., Metz Baking Company and any of their
subsidiaries.
(n) "Minimum EBITDAF Target" or "MET" shall mean, with
respect to a Measuring Fiscal Year, the Minimum EBITDAF Target
specified for such Measuring Fiscal Year in Section 4(b).
(o) "Operating Financing Charges" means the total
expenses incurred by the Metz Group for the Measuring Fiscal Year
which arise from off-balance sheet financing techniques
originated in 1995 and 1996 related to inventory financing
transactions, sale-leaseback transactions and fleet leasing
program utilized by the Company. The amount of the Operating
Financing Charges shall be reasonably determined by the
Committee. The Company currently projects that the amount of
Operating Financing Charges incurred in 1997 will be $5.8 million
and in 1998 will be $7.3 million.
(p) "Participant" shall mean an Employee designated by
the Committee to participate in the Plan pursuant to Section 3.
(q) "Participant's Total Award" has the meaning
assigned in Section 4(e).
(r) "Performance Cycle" shall mean the period
commencing on the Effective Date and ending on the Maturity Date.
(s) "Performance Unit" shall mean each performance
unit granted by the Committee to a Participant pursuant to
Section 4(d).
(t) "Prior Plan" shall mean the Metz Group Long Term
Incentive Compensation Plan adopted by the SFAC Board of
Directors on February 17, 1994, as the same was amended and
restated as of February 22, 1995.
(u) "Plan" shall mean this Metz Long Term Incentive
Compensation Plan, as amended from time to time.
(v) "Second Vesting Date" has the meaning assigned in
Section 5.
(w) "SFAC" shall mean Specialty Foods Acquisition
Corporation, a Delaware corporation.
(x) "SFC" means Specialty Foods Corporation, a
Delaware corporation.
(y) "Vesting Dates" has the meaning assigned in
Section 5.
Section 3. Eligibility. Participants in the Plan shall
be designated by the Committee and shall consist of those
Employees (whether or not employed on the Effective Date) who, in
the sole discretion of the Committee, have the potential to make
a significant impact on the financial results of the Company.
The Committee's designation of a Participant and the grant of
Performance Units to the Participant shall be evidenced by an
instrument or instruments signed by or on behalf of the Committee
and delivered to each designated Participant.
Section 4. Incentive Awards.
(a) General. The amount, if any, of payments under
this Plan shall be conditioned upon exceeding the Minimum EBITDAF
Target in the Measuring Fiscal Year and shall increase
incrementally as the EBITDAF for the Measuring Fiscal Year
exceeds such Minimum EBITDAF Target (up to 115% of MET, as
defined below).
(b) Minimum EBITDAF Targets. The Minimum EBITDAF
Targets ("MET") are set forth below.
Fiscal Year Minimum EBITDAF
Ended December 31 Targets*
(in Millions)
1997 $55.8
1998 $62.5
(c) Award Pool.
(i) If the Minimum EBITDAF Target is not met or exceeded for the
Measuring Fiscal Year, there shall be no Award Pool.
(ii) The Award Pool for the Measuring Fiscal Year shall be as set
forth below:
EBITDAF for Measuring Amount of
Fiscal Year Award Pool
(in Millions)
100% of MET $3.25
103.75% of MET 4.875
107.5% of MET 6.5
111.25% of MET 9.75
115% or Greater of 13.0
MET
In the event that the EBITDAF for the Measuring
Fiscal Year is more than one of the above listed levels and less
than the next greatest of such levels, the amount of the Award
Pool shall be prorated between the applicable amounts listed
above. For example, if
_____________________________
* Includes the add-back of Operating Financing Charges
estimated to be $5.8 million in 1997 and $7.4 million in 1998.
See definitions of "EBITDAF" and "Operating Financing Charges".
EBITDAF for a Measuring Fiscal Year were 105.625% of MET, the
Award Pool would be $5.6875 million. Alternatively, if EBITDAF
for a Measuring Fiscal Year were 109.375% of MET, the Award Pool
would be $8.125 million. In cases in which proration produced
fractional numbers, such numbers were omitted from the table
above to avoid inaccuracies that could result from rounding off
of such fractional numbers.
(d) Performance Units.
(i) Subject to the terms of the Plan, the Committee may grant up
to 1,000 Performance Units to Participants during the Performance
Cycle. Performance Units previously granted to Participants
which have been forfeited due to termination of employment, other
than by reason of death or disability, before the Maturity Date,
may be regranted to other Participants. Regardless of the number
of Performance Units actually granted, each Performance Unit
represents the right to receive 0.1% of the Award Pool.
(ii) In the discretion of the Committee, Performance Units may be
granted to Participants during or following any Fiscal Year in
the Performance Cycle, whether or not the Minimum EBITDAF Target
for such Fiscal Year was attained.
(iii) Except for the maximum aggregate number of 1,000
Performance Units available for grants under the Plan, there is
no minimum or maximum number of Performance Units that may be
granted to a Participant or that may or must be granted in any
Fiscal Year.
(e) Amount of Incentive Award. If the Minimum EBITDAF
Target for the Measuring Fiscal Year is met or exceeded, each
Participant who is (or is deemed to be pursuant to Section 6 to
be) in the employ of the Company on both of the Vesting Dates
shall be entitled to aggregate payments in an amount equal to the
product of (i) 0.1%, times (ii) the number of such Participant's
Performance Units, times (iii) the Award Pool (such aggregate
payment being referred to as the "Participant's Total Award").
All such payments shall vest and be made in accordance with the
provisions of Section 5.
Section 5. Time and Form of Award Payments.
(a) A Participant shall be entitled to receive 40% of
such Participant's Total Award if he or she is (or is deemed
pursuant to Section 6 to be) in the employ of the Company on
January 15, 1999 (the "First Vesting Date"). Such Participant
shall be entitled to receive the remaining 60% of such
Participant's Total Award if he or she is (or is deemed pursuant
to Section 6 to be) to be in the employ of the Company on January
15, 2000 (the "Second Vesting Date"). The First Vesting Date and
the Second Vesting Date are referred to herein as the "Vesting
Dates".
(b) Awards payable under the Plan shall be paid by the
Company to Participants in two annual installments. The first
such installment (equal to 40% of each Participant's Total
Award), which shall be paid to those Participants in (or deemed
pursuant to Section 6 to be in) the employ of the Company on the
First Vesting Date, shall be paid on the earlier of (x) the date
occurring 30 days after the date of the opinion of the Company's
independent auditors certifying the financial results for the
1998 Fiscal Year, and (y) March 31, 1999. The second installment
(equal to 60% of each Participant's Total Award) shall be paid to
those Participants in (or deemed pursuant to Section 6 to be in)
the employ of the Company on the Second Vesting Date on March 31,
2000.
Notwithstanding the provisions of Sections 5(a) and (b)
to the contrary, in the event that a Change of Control occurs
after the end of the first fiscal year of the Performance Cycle
and prior to December 31, 1998, a Participant shall be entitled
to receive 100% of such Participant's Total Award if he or she is
(or is deemed pursuant to Section 6) to be in the employ of the
Company on the date immediately prior to the date the Change of
Control occurs. In the event of a Change of Control, all awards
payable under the Plan shall be paid by the Company in lump-sum
amounts within 90 days of the Change of Control.
Section 6. Termination of Employment.
(a) Death and Disability. If, prior to the Second
Vesting Date, a Participant dies or becomes disabled (as defined
in Section 22(e)(3) of the Internal Revenue Code of 1986, as
amended), such Participant will be deemed (for purposes of the
Plan only) to be employed by the Company on the Maturity Date and
both the First Vesting Date and the Second Vesting Date. Awards
otherwise payable under the Plan to such Participant (or his
beneficiary) shall be paid in accordance with the terms of the
Plan.
(b) Other Terminations. A Participant whose
employment with the Company terminates prior to the First Vesting
Date (for any reason other than death or disability) shall
forfeit all of his or her rights to receive an award payment
under the Plan. A Participant whose employment with the Company
terminates after the First Vesting Date but prior to the Second
Vesting Date (for any reason other than death or disability)
shall forfeit all of his or her rights to receive an award
payment pursuant to the second installment under the Plan.
Section 7. Administration. The Plan shall be
administered by the Committee. The Committee shall have full
power and authority to interpret and to construe the Plan, and
all such interpretations as well as all determinations made by
the Committee pursuant to the powers vested in it hereunder shall
be conclusive and binding on all persons having any interest in
the Plan. No member of the Committee shall be liable for any
action or determination made in good faith with respect to the
Plan. Notwithstanding anything to the contrary contained herein,
the Board of Directors may, in its sole discretion, at any time
and from time to time, resolve to administer the Plan. In the
event of the foregoing, the term "Committee" as used herein shall
mean the Board of Directors.
Section 8. Adjustments. In the event of (x) any
acquisition, divestiture or other corporate transaction of any
kind involving the Company, or (y) any extraordinary transaction
or event which materially affects the EBITDAF "run rate" of the
Company which the Committee, in its reasonable discretion,
determines to be of such a kind or nature as to make appropriate
an amendment or adjustment to the Plan or any Performance Units
granted thereunder in order to effectuate the intent and purposes
of the Plan, the Committee may, in its discretion, make such
amendment or adjustment. Without limiting the generality of the
foregoing, the Committee, in its discretion, may, in connection
with any such corporate transaction (a) cancel or not cancel
Performance Units granted to Employees who no longer qualify as
Participants as a result of such transaction, (b) grant new
Performance Units to any such person, (c) reduce or increase the
Award Pool, (d) reduce or increase the Minimum EBITDAF Targets,
the Maximum EBITDAF Targets, and/or (e) amend any other term or
provision of the Plan, all as it deems appropriate to effectuate
the intent and purposes of the Plan.
Section 9. Amendments and Termination. The Board of
Directors may amend or terminate the Plan at any time. No such
amendment or termination shall materially and adversely impair
the rights of any Participant hereunder without the written
consent of Participants who, as of the time of such amendment or
termination, have been granted at least 75% of all Performance
Units granted under the Plan which remain outstanding at such
time; provided, however, that nothing contained herein shall
limit or restrict the discretionary powers granted to the
Committee in Sections 1 through 9 hereof.
Section 10. Miscellaneous.
(a) No Right to Awards or Continued Employment. No
Employee shall have any claim or right to be granted an award
under the Plan. Neither this Plan nor any action taken hereunder
shall be construed as giving any Employee any right to be
retained in the employ of the Company, SFC or any subsidiary
thereof.
(b) Unfunded Plan. This Plan shall be unfunded.
Neither the Company, SFAC, SFC or any of their subsidiaries
thereof shall be required to establish any special or separate
fund or to make any other segregation of assets to assure the
payment of any award under the Plan.
(c) Taxes. The Company shall have the right to deduct
from all awards paid under the Plan any federal, state or local
taxes required by law to be withheld with respect to such
payments.
(d) Prior Plan. This plan supersedes in its entirety
the Prior Plan, which is terminated and shall be of no further
force or effect.
(e) Nontransferability. No award made hereunder may
be assigned, pledged or transferred, except, in the event of
death of a Participant, by will or the laws of descent and
distribution, and any attempt to assign, pledge or transfer such
rights shall be void.
(f) Relationship to Other Benefits. No payment under
the Plan shall be taken into account in determining any benefits
to which a Participant may be entitled under any pension, profit
sharing, group insurance or other benefit plan of the Company.
(g) Governing Law. This Plan shall be governed by,
and construed in accordance with, the laws of the State of
Illinois applicable to agreements made and to be performed
entirely within such State (without regard to any conflict of law
provisions that might indicate the applicability of any other
laws).
Section 11. Effective Date. Subject to the approval of
the Committee, this Plan shall become effective as of June 30,
1997.
APPENDIX 1
DEFINITION OF AFFILIATE
In respect of Acadia Partners, L.P., Keystone, Inc. and HWP
Specialty Partners, L.P. (each a "Stockholder"), "affiliates"
shall mean:
(i) In all cases, any person or entity controlling, controlled
by, or under common control with such Stockholder, including a
general partner of such Stockholders which is a partnership and
to the extent not otherwise described in this clause (i),
coinvestment entities established by any such Stockholder on or
prior to November 15, 1993 and controlled by such Stockholder,
any officer, employee, partner or director of such Stockholder or
of the general partner of such Stockholder (or of the general
partner of any general partner of any such Stockholder) or any
combination of the foregoing;
(ii) any trust, corporation, partnership or other entity,
controlled by persons described in clause (i);
(iii) any stockholder or partner or partner of a Stockholder
which receives shares of the Company pursuant to a general
distribution by such Stockholders;
(iv) with respect to an individual Stockholder or an individual
affiliate thereof, the spouse or children of such stockholder or
affiliate or a trust established for the benefit of any of the
foregoing which trust is controlled by such stockholder or
affiliate or the estate of such Stockholder or affiliate; and
(v) Robert B. Haas and Douglas D. Wheat.
Exhibit 10.44
MOTHER'S CAKE & COOKIE CO.
SUPPLEMENTAL
LONG TERM INCENTIVE PLAN
Adopted as of December 20, 1997.
Section 1. Purpose. The purpose of the Mother's Cake &
Cookie Co. Supplemental Long Term Incentive Plan is to promote
the interests of Mother's Cake & Cookie Co. and Specialty Foods
Corporation, its parent corporation, by attracting, incenting and
rewarding certain key executives of Mother's Cake & Cookie Co.
to: (a) create economic value; (b) focus management's attention
on overall corporate performance and thereby promoting
cooperation and teamwork among management; and (c) provide
executives with a direct economic interest in the attainment of
long term business objectives.
Section 2. Definitions. As used in this Plan,
capitalized terms shall have the meanings set forth below:
(a) "Board of Directors" shall mean the board of
directors of SFC, as in place from time to time.
(b) "Change of Control" shall mean, with respect to
Holdings or the Company, a transaction pursuant to which a person
or group (as such term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934), other than SFC, acquires (x)
the collective ability to designate, directly or indirectly, a
majority of the members of the board of directors of the Company
(whether by contract or otherwise), or (y) all or substantially
all the assets of the Company.
(c) "Change of Control Payment" shall mean a payment
to be made to a Participant in accordance with Section 4(a).
(d) "Company" shall mean Mother's Cake & Cookie Co., a
California corporation and its subsidiaries.
(e) "Effective Date" shall mean October 31, 1997.
(f) "EBITDA" shall mean the amount determined on a
consolidated basis for Holdings and the Company (as reflected on
the consolidated financial statements of Holdings and the
Company) for the Measuring Fiscal Year equal to the consolidated
(i) income from operations, plus (ii) depreciation of its
property, plant and equipment and amortization of intangible
assets of Holdings and the Company.
(g) "Employee" shall mean an employee of the Company.
(h) "Fair Market Value" shall mean:
(i) In the event of a potential Change of Control Payment, the
aggregate net cash proceeds received by Holdings, the Company
and/or SFC (and its subsidiaries) (after deducting all
transaction fees and expenses incurred by Holdings, the Company
and/or SFC in connection with such Change of Control); and
(ii) In the event of a potential Terminal Value Payment, the Fair
Market Value of Holdings and the Company, as of the Terminal
Value Measurement Date, as determined by multiplying the EBITDA
of the Measuring Fiscal Year by a factor of nine (9). By way of
example, if the EBITDA of the Measuring Fiscal Year equaled $18.0
million, the Fair Market Value would equal $162.0 million.
(i) "Fiscal Year" shall mean the calendar year ending
December 31, whether or not such period is the fiscal year end of
Holdings and the Company.
(j) "Holdings" shall mean MCC-DSD Holdings, Inc., a
Delaware corporation and the parent corporation of the Company.
(k) "Measuring Fiscal Year" shall mean the Fiscal Year
of Holdings and the Company ending December, 2000.
(l) "Participant" shall mean an Employee designated by
the Board of Directors to participate in the Plan.
(m) "Participant Award" shall mean an award granted by
the Board of Directors to a Participant pursuant to Section 3 of
a specified Participation Rate, as evidenced by the issuance of a
Participant Award Agreement by the Company in favor of the
Participant.
(n) "Participant Award Agreement" shall mean an
agreement in the form of Exhibit A.
(o) "Participation Rate" shall mean, with respect to
any Participant, the percentage of the Value Increase Amount
awarded to such Participant pursuant to his or her Participant
Award.
(p) "Plan" shall mean the Mother's Cake & Cookie Co.
Supplemental Long Term Incentive Plan, as may be amended from
time to time.
(q) "SFC" shall mean Specialty Foods Corporation, the
parent corporation of Holdings and the Company.
(r) "Terminal Value Measuring Date" shall mean
December 31, 2000.
(s) "Terminal Value Payment" shall mean a payment to
be made to a Participant in accordance with Section 4(a).
(t) "Threshold Value" shall mean an amount equal to
$100 million.
(u) "Value Increase Amount" shall mean:
(i) In determining the amount of a Change of Control Payment, an
amount equal to the Fair Market Value as determined in connection
with such Change of Control minus the Threshold Value; or
(ii) In determining the amount of a Terminal Value Payment, an
amount equal to the Fair Market Value as determined at the
Terminal Value Measurement Date minus the Threshold Value.
Section 3. Eligibility. Participants in the Plan shall
be designated by the Board of Directors and shall consist of
those Employees (whether or not employed on the Effective Date)
who, in the sole discretion of the Board of Directors, have the
potential to make a significant impact on the financial results
of Holdings and the Company. The Board of Directors' designation
of an Employee as a Participant and the grant of a Participation
Award to a Participant shall be evidenced by an instrument or
instruments in the form of the Participant Award Agreement.
Participation Awards previously granted to Participants which
have been forfeited pursuant to Section 6 due to termination of
employment may be regranted to other Participants. There is no
minimum or maximum number of Participant Awards that may be
granted to a Participant.
Section 4. Awards.
(a) Change of Control Payment. In the event of a
Change of Control, each Participant that has received a
Participant Award shall become entitled to receive an amount
equal to such Participant's Participation Rate multiplied by the
Value Increase Amount (as determined in connection with such
Change of Control). Such amounts shall be paid in accordance
with Section 5(a).
(b) Terminal Value Payment. In the event that a
Change of Control has not occurred prior to the Terminal Value
Measurement Date, each Participant that has received a
Participant Award shall become entitled to receive an amount
equal to such Participant's Participation Rate multiplied by the
Value Increase Amount (as determined as of the Terminal Value
Measurement Date). Such amounts shall be paid in accordance with
Section 5(b).
(c) Example. Exhibit B-1 contains an example of a
calculation of a hypothetical Participant's Award following a
Change of Control. Exhibit B-2 contains an example of a
calculation of a hypothetical Participant's Award upon the
occurrence of the Terminal Value Measurement Date.
Section 5. Time and Form of Award Payments.
(a) Timing of Payment; Change in Control. Awards
payable under the Plan as a result of a Change in Control shall
be paid to Participants by the Company no later than ninety (90)
days following the occurrence of such Change of Control.
(b) Timing of Payment; Terminal Value Measurement
Date. Awards payable under the Plan as a result of the
occurrence of the Terminal Value Measurement Date shall be paid
to Participants by the Company in one installment to be paid no
later than March 31, 2001.
(c) Eligibility. Except as set forth in Section 6
below, a Participant must be an Employee at the time a payment is
due in order to receive such payment.
(d) Method of Payment. All awards shall be paid in
cash, without interest thereon.
(e) Participants shall be entitled to not more than
one payment under this Plan. Upon a Change of Control Payment or
Terminal Value Payment, this Plan shall terminate and shall be of
no further force or effect.
Section 6. Termination of Employment.
(a) Change of Control. To receive a Change of Control
Payment, a Participant must remain employed by the Company
through the occurrence of a Change of Control and for a period of
ninety (90) days thereafter, unless following such Change of
Control but prior to the end of such ninety (90) day period, the
Participant dies or becomes disabled (as defined in Section
22(e)(3) of the Internal Revenue Code of 1986, as amended) or is
terminated by the Company or its successor for any reason other
than cause, in which case such Participant (or his beneficiary)
shall be paid in accordance with the terms of the Plan.
(b) Terminal Value Payment. To receive a Terminal
Value Payment, a Participant must remain employed by the Company
through March 31, 2001, unless following the Terminal Value
Measurement Date but prior to March 31, 2001, the Participant
dies or becomes disabled (as defined in Section 22(e)(3) of the
Internal Revenue Code of 1986, as amended) or is terminated by
the Company or its successor in interest for any reason other
than cause, in which case such Participant (or his beneficiary)
shall be paid in accordance with the terms of the Plan.
Section 7. Administration. The Plan shall be
administered by the Board of Directors. The Board may establish
rules and regulations for the administration of the Plan, impose
conditions with respect to competitive employment or other
activities with respect to any such awards, and establish the
written form to be used to evidence such awards. The Board of
Directors shall have full authority to construe and interpret the
terms and provisions of the Plan, to adopt, alter, waive and
repeal such administrative rules, guidelines and practices
governing the Plan and to perform all acts, including delegation
of its responsibilities, as it shall, from time to time, deem
advisable, and to otherwise supervise the administration of the
Plan. All such rules, regulations and interpretations relating
to the Plan which are adopted by the Board of Directors shall be
conclusive and binding on all parties. The Board of Directors
may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or in any Award granted hereunder, in
the manner and to the extent it shall deem necessary to carry the
Plan into effect. No member of the Board of Directors or any
person or committee to whom responsibilities are delegated, shall
be liable for any action or determination made in good faith with
respect to the Plan.
Section 8. Adjustments. In the event of any
acquisition, divestiture or other corporate transaction of any
kind involving the Company or its subsidiaries (which does not
constitute a Change of Control) which the Committee, in its sole
discretion, reasonably determines to be of such a kind or nature
as to make appropriate an amendment or adjustment to the Plan or
any Participation Awards granted thereunder in order to
effectuate the intent and purposes of the Plan, the Committee
may, in its sole discretion, make such amendment or adjustment.
Section 9. Amendments and Termination. The Board of
Directors may amend or terminate the Plan at any time; provided,
however, that, except as set forth in Section 8, no such
amendment or termination shall materially and adversely impair
the rights of any Participant hereunder without the written
consent of Participants who, as of the time of such amendment or
termination, hold the right to receive at least 66% of the total
amounts which may then be payable pursuant to all of the
Participant Awards which remain outstanding at such time;
provided, however, that nothing contained herein shall limit or
restrict the discretionary powers granted to the Board of
Directors in Sections 1 through 8 hereof.
Section 10. Miscellaneous.
(a) No Right to Awards or Continued Employment. No
Employee shall have any claim or right to be granted an award
under the Plan. Neither this Plan nor any action taken hereunder
shall be construed as giving any Employee any right to be
retained in the employ of the Company or any subsidiary or
affiliate thereof. Each Employee acknowledges that he or she is
an "at-will" employee of the Company. Each Employee further
acknowledges that nothing contained herein shall alter such "at-
will" employment status.
(b) No Rights of a Stockholder. The receipt of
Participant Awards by a Participant shall not entitle the
Participant to vote, to receive dividends or distributions, to
audit or review the Company's books and records, or to otherwise
act as a stockholder of the Company.
(c) Unfunded Plan. The Company shall not be required
to establish any special or separate fund or to make any other
segregation of assets to assure the payment of any award under
the Plan.
(d) Taxes/Other Deductions. The Company shall have
the right to deduct from all awards paid under the Plan any
federal, state or local taxes required by law to be withheld with
respect to such payments. In addition, the Company shall have
the right to deduct from all awards paid under the Plan to a
Participant any amounts owed by such Participants to the
arbitrator pursuant to the provisions of Section 2(h).
(e) Relationship to Other Benefits. No payment under
the Plan shall be taken into account in determining any benefits
to which a Participant may be entitled under any bonus, pension,
profit sharing, group insurance or other compensation or benefit
plan, program or arrangement of the Company or any of its
affiliations.
(f) Nontransferability. No award made hereunder may
be assigned, pledged or transferred, except, in the event of
death of a Participant, by will or the laws of descent and
distribution, and any attempt to assign, pledge or transfer such
rights shall be void. Any payments required under the Plan
during a Participant's lifetime shall be made only to the
Participant. In the event any conflicting demands are made upon
the Company with respect to any payments due as a result of this
Plan, provided that the Company shall not have received prior
written notice that said conflicting demands have been finally
settled by court adjudication, arbitration, joint order or
otherwise, the Company may pay to the Participant any and all
amounts it determines to be due hereunder and thereupon the
Company shall be fully relieved and discharged of any further
duties or liabilities under the Plan with respect to such
payment.
(g) Governing Law/Jurisdiction. This Plan shall be
governed by, and construed in accordance with, the laws of the
State of Illinois applicable to agreements made and to be
performed entirely within such State (without regard to any
conflict of law provisions that might indicate the applicability
of any other laws). SFC, the Company and each Participant who is
granted a Participant Award (as a condition to such grant) hereby
irrevocably and unconditionally consents to submit to the
exclusive jurisdiction of the courts of the State of Illinois and
of the United States of America located in the City of Chicago
for any actions, suits or proceedings arising out of or relating
to the Plan and agrees not to commence any action, suit or
proceeding relating hereto except in such courts. The parties
hereby irrevocably and unconditionally waive any objection to the
laying of venue of any action, suit or proceeding arising under
the Plan in the courts of the State of Illinois or the United
States of America located in the City of Chicago, and hereby
further irrevocably and unconditionally waive and agree not to
plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an
inconvenient forum.
(h) Expenses. The Company shall bear all expenses
incurred in connection with the administration of the Plan, but
shall not be responsible for taxes or other expenses incurred by
the Participants.
Section 11. Effective Date. Subject to the approval of
the Board of Directors, this Plan shall become effective as of
December 20, 1997.
EXHIBIT A
Date of Grant:
Participant:
Participation Rate:
Control Number:
MOTHER'S CAKE & COOKIE CO.
SUPPLEMENTAL LONG TERM INCENTIVE PLAN
PARTICIPATION AWARD AGREEMENT dated as of _______, 1997 by and
between MOTHER'S CAKE & COOKIE CO., a California corporation (the
"Company"), and ______________________ (the "Participant").
All words and phrases not otherwise expressly defined herein
shall have the same meanings as are ascribed to such words and
phrases in the Mother's Cake & Cookie Co. Supplemental Long Term
Incentive Plan (the "Plan").
The Board of Directors have determined that the objectives
of the Plan will be furthered by granting to the Participant
Participation Units in the Plan.
In consideration of the foregoing and of the mutual
undertakings set forth in this Agreement, the Company and the
Participant agree as follows:
Section 1 Grant of Participation Unit. Subject to the
provisions of the Plan and this Agreement, the Company hereby
grants to the Participant a Participation Rate under the Plan
equal to __% of the Value Increase Amount.
Section 2 Plan Provisions to Prevail. This Agreement shall
be subject to all of the terms and provisions of the Plan, which
are incorporated hereby and made a part hereof. In the event
there is any inconsistency between the provisions of this
Agreement and the Plan, the provisions of the Plan shall govern.
Section 3 Participant's Acknowledgments. The Participant
agrees and acknowledges that he has received and read a copy of
the Plan, and accepts this grant upon all of the terms thereof,
including, without limitation, the provisions of Section 10(b)
and (c) no member of the Board of Directors shall be liable for
any action or determination made in good faith with respect to
the Plan or any award thereunder.
Section 4 Non-Transferability. No grant to the Participant
under the Plan shall be assignable or transferable by the
Participant (whether by operation of law or otherwise and whether
voluntarily or involuntarily), other than by will or by the laws
of descent and distribution. During the lifetime of the
Participant, all rights granted to the Participant under the Plan
shall be exercisable only by the Participant.
Section 5 Notices. Any notice to be given to SFC hereunder
shall be in writing and shall be addressed to Specialty Foods
Corporation, 25 Tri-State International Office Center, Suite 250,
Lincolnshire, IL 60069, Attention: Vice President, Human
Resources or at such other address as SFC may hereafter designate
to the Participant by notice as provided herein. Any notice to
be given to the Participant hereunder shall be addressed to the
Participant at the address of the Participant's principal place
of employment or at such other address as the Participant may
hereafter designate to SFC by notice as provided herein. Notices
hereunder shall be deemed to have been duly given when received
by personal delivery or by registered or certified mail to the
party entitled to receive the same.
Section 6 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and
the successors and assigns of the Company and, to the extent set
forth in the Plan, the heirs and personal representatives of the
Participant.
Section 7 Modifications to Agreement. This Agreement may
not be altered, modified, changed or discharged, except by a
writing signed by or on behalf of both the Company and the
Participant.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date and year first above written.
MOTHER'S CAKE & COOKIE CO.,
a California corporation
By:
___________________________
Name: John R. Reisenberg
Title: Vice President
Agreed to and Accepted:
________________________
Participant
EXHIBIT B - 1
EXAMPLE OF CHANGE OF CONTROL PAYMENT
Assumptions:
Gross Proceeds Received by SFC: $185.0 MM
Transaction Fees and Expenses: $5.0 MM
Participant has a Participation Rate equal to: .15% of Value
Increase Amount.
Calculations:
1. Net Proceeds: ($185.0 MM - $5.0 MM) = $180 MM
2. Value Increase Amount: ($180.0 MM - $100.0 MM) = $80.0 MM
3. Participant Award: $80.0 MM x .15% = $120,000
Participant will receive the entire award of $120,000 within
ninety (90) days of Change of Control.
EXHIBIT B - 2
EXAMPLE OF TERMINAL VALUE PAYMENT
Assumptions:
EBITDA from Measuring Fiscal $20.0 MM
Year:
Threshold Value: $100.0 MM
Participant has a Participation Rate equal to: .15% of Value
Increase Amount.
Calculations:
1. EBITDA from Measuring Fiscal Year: $20.0 MM
2. Threshold Value: $100.0 MM
3. Value Increase Amount: ($20.0 MM x 9) - 100.0 MM = $80.0
MM
4. Participant Award: 80.0 MM x .15% = $120,000
Participant will receive the entire award of $120,000 on March
31, 2001.
Exhibit 10.45
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT, dated as of October 27, 1997 is made
by and between SPECIALTY FOODS ACQUISITION CORPORATION, a
Delaware corporation (the "Company"), and LAWRENCE S. BENJAMIN
(the "Optionee").
WHEREAS, the Company, Specialty Foods Corporation, a Delaware
corporation and a wholly-owned subsidiary of the Company ("SFC"),
and the Optionee entered into an Amended and Restated Executive
Employment Agreement effective as of January 1, 1997 (the
"Employment Agreement"); and
WHEREAS, the Company desires to grant certain options to the
Optionee to purchase shares of common stock, $.01 par value, of
the Company (the "Common Stock") in order to provide for the
Optionee an incentive (i) to remain in the employ of the Company
and its subsidiaries, and (ii) to maintain and enhance the
Company's long-term performance and profitability;
NOW, THEREFORE, in consideration of the foregoing and of the
mutual undertakings set forth in this Stock Option Agreement, the
Company and the Optionee agree as follows:
Section 1. Grant of Option. The Company hereby grants
to the Optionee options (hereinafter referred to collectively and
individually as the "Option") to purchase one million (1,000,000)
shares of Common Stock of the Company, at a purchase price equal
to $0.021332 per share.
Section 3. Exercisability.
(a) Subject to the Employment Agreement, the Option granted
herein shall be exercisable as follows:
Number of Shares Cumulative Number of
as to which Option Shares as to which
On or After becomes Exercisable Option
becomes Exercisable
October 25, 1997 250,000 250,000
October 25, 1998 250,000 500,000
October 25, 1999 250,000 750,000
October 25, 2000 250,000 1,000,000
(b) The Option shall remain exercisable, whether
prior to or following termination of employment, in accordance
with, and subject to, the applicable provisions of the Employment
Agreement.
Section 4. Method of Option Exercise. The Option may be
exercised in its entirety by giving to the Company written notice
of exercise. Full payment of the purchase price shall be made on
the date of such notice (the "Option Exercise Date") by certified
or official bank check or personal check (subject to collection)
payable to the Company. As soon as practicable after it receives
payment of the purchase price, the Company shall deliver to the
Optionee a certificate or certificates for the shares of Common
Stock so purchased.
Section 5. Withholding Tax Requirements. Whenever
shares of Common Stock are to be delivered upon exercise of the
Option, the Company may require as a condition of delivery that
the Optionee remit to the Company an amount sufficient to satisfy
all federal, state and other governmental withholding tax
requirements related thereto, if any. The Company may satisfy
the requirements of the preceding sentence by deducting from the
number of shares otherwise deliverable to the Optionee, a number
of shares having a fair market value equal to the amount required
to satisfy all federal, state and other governmental withholding
tax requirements related thereto, if any.
Section 6. Adjustments Upon Changes in Capitalization.
In the event of any increase or decrease, after the date of this
Stock Option Agreement, in the number of issued shares of Common
Stock resulting from the subdivision or combination of shares of
Common Stock or other capital adjustments, or the payment of a
stock dividend, the Board shall proportionately adjust the number
of shares subject to the Option, the purchase price set forth in
Section 2, and any and all other appropriate matters; provided,
however, that any Option to purchase fractional shares resulting
from any such adjustment shall be rounded up to the next higher
share.
Section 7. Restrictions.
(a) Notwithstanding any other provision of this
Stock Option Agreement, if the Board shall at any time determines
that any Consent (as hereinafter defined) is necessary or
desirable as a condition of, or in connection with, the issuance
or transfer of shares of Common Stock to the Optionee or the
taking of any other action in connection with this Stock Option
Agreement, then such action shall not be taken, in whole or in
part, unless and until such Consent shall have been effected or
obtained to the full satisfaction of the Board; provided,
however, that (i) the Board shall make a good faith effort to
obtain any Consent described in clauses (ii) and (iii) of Section
7(b), and (ii) the obtaining of Consents described in clause (i)
of Section 7(b) shall be governed by the Stockholders Agreement
(as hereinafter defined).
(b) For purposes of this Section 7, the term
"Consent" means (i) any and all listings, registrations or
qualifications in respect thereof upon any securities exchange or
under any federal, state or local law, rule or regulation, (ii)
any and all written agreements and representations by the
Optionee with respect to the disposition of shares of Common
Stock, or with respect to any other matter, which the Board shall
deem necessary or desirable to comply with the terms of any such
listing, registration or qualification or to obtain an exemption
from the requirement that any such listing, qualification or
registration be made, and (iii) any and all consents, clearances
and approvals by any governmental or other regulatory bodies in
respect of any action taken or to be taken under this Stock
Option Agreement, other than Consents described in clause (i)
above.
Section 8. Right of Discharge Reserved. Nothing in this
Stock Option Agreement shall confer upon the Optionee the right
to continue in the employ or service of the Company or any of its
subsidiaries, or affect any right which the Company or any of its
subsidiaries may have to terminate the employment or service of
the Optionee.
Section 9. No Rights as a Stockholder. Neither the
Optionee nor any person succeeding to the Optionee's rights
hereunder shall have any rights as a stockholder with respect to
any shares subject to the Option until the date of the issuance
of a stock certificate to him for such shares. Except for
adjustments made pursuant to Section 6, no adjustment shall be
made for dividends, distributions or other rights (whether
ordinary or extraordinary, and whether in cash, securities or
other property) for which the record date is prior to the date
such stock certificate is issued.
Section 10. Nature of Payments. Any and all issuances of
shares of Common Stock hereunder shall constitute a special
incentive payment to the Optionee. Such issuances and payments
shall not, unless otherwise determined by the Board, be taken
into account in computing the amount of salary or compensation of
the Optionee for the purposes of determining any pension,
retirement, death or other benefits under (i) any pension,
retirement, life insurance or other benefit plan of the Company
or any subsidiary, or (ii) an agreement between the Company or
any subsidiary, on the one hand, and the Optionee, on the other
hand.
Section 11. Definition of Subsidiary. The term
"subsidiary" as used in this Stock Option Agreement shall have
the meaning ascribed to such term in the Employment Agreement.
Section 12. Release of Board Members. By entering into
this Stock Option Agreement, the Optionee agrees that no member
of the Board of Directors of the Company, SFC, or of any
subsidiary or affiliate thereof shall be liable for any action or
determination made in good faith with respect to this Stock
Option Agreement.
Section 13. Section Headings. The section headings
contained herein are for the purposes of convenience only and are
not intended to define or limit the contents of said Sections.
Section 14. Notices. Any notice to be provided hereunder
shall be addressed and given in the manner set forth in the
Employment Agreement.
Section 15. Other Payments or Awards. Nothing contained
in this Stock Option Agreement shall be deemed in any way to
limit or restrict the Company, any subsidiary or the Board from
making any award or payment to the Optionee under any other plan,
arrangement or understanding, whether now existing or hereafter
in effect.
Section 16. Limitations on Transferability.
(a) No right granted to the Optionee under this
Stock Option Agreement shall be assignable or transferable by the
Optionee (whether by operation of law or otherwise and whether
voluntarily or involuntarily), other than by will or by the laws
of descent and distribution. During the lifetime of the
Optionee, all rights granted to the Optionee under this Stock
Option Agreement shall be exercisable only by the Optionee or by
the Optionee's guardian or legal representative.
(b) The shares obtained by the Optionee as a
result of the exercise of the Option will be subject to that
certain Stockholders Agreement dated as of August 16, 1993, as
amended by Amendment dated as of August 19, 1994 and as may be
further amended from time to time (the "Stockholders Agreement"),
by and among the Corporation, the Purchasers and the Investors
(as those terms are defined therein), and upon exercise, and as a
condition to the Corporation's obligation to issue certificates,
the Optionee, or his guardian or legal representative, shall
agree to be bound by the terms thereof by executing and
delivering an Acknowledgment and Agreement in form and substance
acceptable to the Company. In connection with any proposed
amendments to the Stockholders Agreement, the Company agrees to
provide the Optionee with copies of all materials provided to
Investors (as defined in the Stockholders Agreement) when and in
the form such materials are so provided.
Section 17. Board Determinations. The Board shall have
the plenary authority (a) to construe, interpret and implement
this Stock Option Agreement, and (b) to make all determinations
necessary or advisable in administering this Stock Option
Agreement.
Section 18. Successors and Assigns. This Stock Option
Agreement shall be binding upon and inure to the benefit of the
parties hereto and the successors and assigns of the Company and,
to the extent set forth in Section 16, the heirs and personal
representatives of the Optionee.
Section 19. Governing Law. This Agreement shall be
governed by the laws of the State of Delaware applicable to
agreements made and to be performed entirely within such state.
Section 20. Modifications to Stock Option Agreement.
This Stock Option Agreement may not be altered, modified, changed
or discharged, except by a writing signed by or on behalf of both
the Company and the Optionee.
IN WITNESS WHEREOF, the parties hereto have executed this
Stock Option Agreement as of the date first above written.
SPECIALTY FOODS ACQUISITION
CORPORATION
By: /s/ Robert B. Aiken
Name: Robert B. Aiken
Title: Vice President
/s/ Lawrence S. Benjamin
LAWRENCE S. BENJAMIN
Exhibit 10.46
October 27, 1997
Mr. Lawrence S. Benjamin
787 E. Illinois Road
Lake Forest, Illinois 60045
Dear Larry:
We are pleased to inform you that you are eligible to
participate in a deferred bonus plan that has been adopted by
Specialty Foods Corporation (the "Company"). Under this plan,
you will receive bonus payments in consideration for your
continued employment by the Company or any affiliate or
subsidiary of the Company (collectively, the "SFC Companies").
The terms and conditions of this bonus are set forth below:
1. Deferred Bonus Payment.
(a) Subject to the provisions of Section 2, you are
eligible to receive a one-time bonus (the "Deferred Bonus") in an
amount equal to the sum of:
(i) The aggregate gross amount of cash payments which you have
already received from the SFC Companies for annual bonus payments
covering the fiscal years 1994 through 1996 (the "Retroactive
Bonus"). You and the Company agree that the amount of the
Retroactive Bonus which you have received equals $538,757.00 and
consists of the payments set forth on Exhibit A hereto; and
(ii) The aggregate gross amount of cash payments which you
receive from the SFC Companies for annual bonus payments covering
the fiscal years 1997 and 1998 (the "Future Bonus"). The amount
of the Future Bonus shall be reasonably determined by the Company
in a manner consistent with the calculation of the Retroactive
Bonus (as set forth herein). In no event shall any payments made
to you (x) for base salary, (y) under the Long Term Incentive
Compensation Plan of any of the SFC Companies dated July 11, 1997
(the "LTI Plans"), or (z) under the Divestiture Award Bonus Plans
dated October 22, 1997 be included in calculating the amount of
the Deferred Bonus. Notwithstanding the foregoing, any amounts
paid to you under the 1997 Stella Bonus Plan shall be included in
calculating the amount of the Deferred Bonus.
(b) The amount of the Deferred Bonus payable to you
shall be reduced by the amount of any payments made to you under
the LTI Plans. In the event that payments made to you under the
LTI Plans exceed the amount of the Deferred Bonus, no amounts of
Deferred Bonus shall be payable to you hereunder.
(c) The Deferred Bonus (as reduced by the LTI Plan
payments pursuant to clause (b)) shall be paid as follows:
(i) Forty percent (40%) of such amount shall be paid on the
earliest of (x) the date occurring ninety (90) days after a
Change in Control of the Company (as defined in the SFC LTI
Plan), (y) the date of which the first installment is paid under
the LTI Plan, and (z) March 31, 1999 (the "First Payment"); and
(ii) The remaining sixty percent (60%) of such amount shall be
paid on the earliest of (x) the date occurring ninety (90) days
after a Change in Control of the Company (as defined in the SFC
LTI Plan), (y) the date on which the second installment is paid
under the LTI Plans, and (z) March 31, 2000 (the "Second
Payment").
2. Conditions. The payment of all or any part of the
Deferred Bonus potentially payable to you hereunder is expressly
conditioned upon the satisfaction of the following conditions:
(a) To earn the right to receive the First Payment,
you must remain employed by the Company through January 15, 1999,
unless prior to such date you are Terminated without Cause or you
Voluntarily Terminate with Good Reason (as each such term is
defined in your Employment Agreement in effect with SFC on the
date hereof); and
(b) To earn the right to receive the Second Payment,
you must remain employed by the Company through January 15, 2000
unless prior to such date you are Terminated without Cause or
Voluntarily Terminate with Good Reason prior to such date.
3. Continued Employment. This Agreement is not a contract
of employment. Nothing expressed or implied in this Agreement
shall create any right or duty of your continued employment by
the Company or its successor.
4. Unfunded Plan. The Company's obligations under this
Agreement shall be unfunded. Neither the Company or any of its
subsidiaries shall be required to establish any special or
separate fund or to make any other segregation of assets to
assure the payment of any award under this Agreement.
5. Successors Bound. The rights and obligations of the
Company hereunder shall inure to the benefit of and be binding
upon the successors of the Company.
6. Assignment. You shall not assign any rights or
benefits granted to you by the terms of this Agreement or
encumber in any way your interests herein; provided, however,
that in the event of your death, any payments then due and owing
will be made when due to the legal representative of your estate.
7. Notices and Other Documents. All payments, requests,
notices and the like may be made to you by mailing the same to
you at the address set forth below or at such other address as
you may file in writing with the Company for that purpose.
Notices, requests and the like sent by you to the Company shall
be sufficient if mailed to Specialty Foods Corporation, 25 Tri-
State International Office Center, Suite 250, Lincolnshire,
Illinois 60069, Attention: Vice President, Human Resources, or
to such other address as the Company may furnish to you for this
purpose from time to time in writing.
8. Employment Taxes. All payments made under this
Agreement shall be subject to withholding tax, other employment
taxes and other withholds and deductions as required by
applicable law or regulation, as in effect from time to time.
9. Effect of Agreement. This Agreement shall have a term
expiring on June 30, 2000, at which time it shall expire and be
of no further force or effect, except to the extent that rights
of payment have accrued to you hereunder prior to such date.
10. Governing Law/Jurisdiction. The substantive law (and
not the law of conflicts) of the State of Illinois will govern
all questions concerning the construction, validity and
interpretation of this Agreement and the performance of the
obligations imposed by this Agreement. The parties hereby waive
their rights to request or demand a trial by jury in the event
controversy arises under this Agreement.
If the foregoing correctly sets forth your understanding of
the Agreement between us, please sign both copies of this
Agreement in the place indicated below and return one copy to us.
Very truly yours,
SPECIALTY FOODS CORPORATION
By: /s/ Robert B. Aiken
Name: Robert B. Aiken
Title: Vice President
Agreed to this 27th day of October, 1997
/s/ Lawrence S. Benjamin
Lawrence S. Benjamin
EXHIBIT A
Deferred Bonus Plan
Lawrence S. Benjamin
Year Earned Bonus Paid
1994 $137,500
1995 257,257
1996 144,000(1)
Total $538,757
______________________
(1) Includes $72,000 of Deferred Bonus payable 1/15/98.
Exhibit 10.47
December 21, 1997
Mr. Lawrence S. Benjamin
787 E. Illinois Road
Lake Forest, Illinois 60045
Dear Larry:
We are pleased to inform you that you are eligible to
participate in a special bonus plan that has been adopted by
Specialty Foods Corporation (the "Company"). The Compensation
Committee of the Board of Directors of the Company has authorized
this plan in light of your substantial contributions as the
President & Chief Executive Officer of the Company in the past
year, including your substantial role in the sale by the Company
of its Stella Foods subsidiary. Under this plan, you will
receive a special one-time bonus payment from the Company. The
terms and conditions of this bonus are set forth below:
1. Bonus Payment. Subject to the provisions of Section 2,
you are eligible to receive a one-time bonus (the "Special
Bonus") in an amount equal to Eight Hundred Thousand Dollars
($800,000). This Special Bonus payment will be made to you on
December 1, 1998.
2. Conditions. The payment of the Special Bonus is
expressly conditioned upon your continued employment by the
Company (or its parent or one of its subsidiaries) through
December 1, 1998, unless prior to such date you die, are
terminated as a result of a Disability Termination, are
Terminated without Cause, or you Voluntarily Terminate with Good
Reason (as each such term is defined in your Employment Agreement
in effect with the Company on the date hereof).
3. Continued Employment. This Agreement is not a contract
of employment. Nothing expressed or implied in this Agreement
shall create any right or duty of your continued employment by
the Company or its successor.
4. Unfunded Plan. The Company's obligations under this
Agreement shall be unfunded. None of the Company or any of its
subsidiaries shall be required to establish any special or
separate fund or to make any other segregation of assets to
assure the payment of any award under this Agreement.
5. Successors Bound. The rights and obligations of the
Company hereunder shall inure to the benefit of and be binding
upon the successors of the Company.
6. Assignment. You shall not assign any rights or
benefits granted to you by the terms of this Agreement or
encumber in any way your interests herein; provided, however,
that in the event of your death, any payments then due and owing
will be made when due to the legal representative of your estate.
7. Notices and Other Documents. All payments, requests,
notices and the like may be made to you by mailing the same to
you at the address set forth below or at such other address as
you may file in writing with the Company for that purpose.
Notices, requests and the like sent by you to the Company shall
be sufficient if mailed to Specialty Foods Corporation, 520 Lake
Cook Road, Suite 550, Deerfield, Illinois 60015, Attention:
Vice President, Human Resources, or to such other address as the
Company may furnish to you for this purpose from time to time in
writing.
8. Employment Taxes. All payments made under this
Agreement shall be subject to withholding tax, other employment
taxes and other withholds and deductions as required by
applicable law or regulation, as in effect from time to time.
9. Governing Law/Jurisdiction. The substantive law (and
not the law of conflicts) of the State of Illinois will govern
all questions concerning the construction, validity and
interpretation of this Agreement and the performance of the
obligations imposed by this Agreement. The parties hereby waive
their rights to request or demand a trial by jury in the event
controversy arises under this Agreement.
If the foregoing correctly sets forth your understanding of
the Agreement between us, please sign both copies of this
Agreement in the place indicated below and return one copy to us.
Very truly yours,
SPECIALTY FOODS CORPORATION
By: /s/ Robert B. Aiken
Name: Robert B. Aiken
Title: Vice President
Agreed to this 21st day of December, 1997
/s/ Lawrence S. Benjamin
Lawrence S. Benjamin
Exhibit 10.48
July 15, 1997
Mr. Robert L. Fishbune
c/o Specialty Foods Corporation
25 Tri-State International Office Center
Suite 250
Lincolnshire, Illinois 60069
Dear Bob:
We are pleased to inform you that you are eligible to
participate in a deferred bonus plan that has been adopted by
Specialty Foods Corporation (the "Company"). Under this plan,
you will receive bonus payments in consideration for your
continued employment by the Company or any affiliate or
subsidiary of the Company (collectively, the "SFC Companies").
The terms and conditions of this bonus are set forth below:
1. Deferred Bonus Payment.
(a) Subject to the provisions of Section 2, you are
eligible to receive a one-time bonus (the "Deferred Bonus") in an
amount equal to the sum of:
(i) The aggregate gross amount of cash payments which you have
already received from the SFC Companies for annual bonus payments
covering the fiscal years 1994 through 1996 (the "Retroactive
Bonus"). You and the Company agree that the amount of the
Retroactive Bonus which you have received equals $224,233.00 and
consists of the payments set forth on Exhibit A hereto; and
(ii) The aggregate gross amount of cash payments which you
receive from the SFC Companies for annual bonus payments covering
the fiscal years 1997 and 1998 (the "Future Bonus"). The amount
of the Future Bonus shall be reasonably determined by the Company
in a manner consistent with the calculation of the Retroactive
Bonus (as set forth herein). In no event shall any payments made
to you (x) for base salary, (y) under the Long Term Incentive
Compensation Plan of any of the SFC Companies dated July 11, 1997
(the "LTI Plans"), or (z) under the Divestiture Award Bonus Plan
dated July 15, 1997 be included in calculating the amount of the
Deferred Bonus.
(b) The amount of the Deferred Bonus payable to you
shall be reduced by the amount of any payments made to you under
the LTI Plans. In the event that payments made to you under the
LTI Plans exceed the amount of the Deferred Bonus, no amounts of
Deferred Bonus shall be payable to you hereunder.
(c) The Deferred Bonus (as reduced by the LTI Plan
payments pursuant to clause (b)) shall be paid as follows:
(i) Forty percent (40%) of such amount shall be paid on the
earliest of (x) the date occurring ninety (90) days after a
Change in Control of the Company (as defined in the SFC LTI
Plan), (y) the date of which the first installment is paid under
the LTI Plans, and (z) March 31, 1999 (the "First Payment"); and
(ii) The remaining sixty percent (60%) of such amount shall be
paid on the earliest of (x) the date occurring ninety (90) days
after a Change in Control of the Company (as defined in the SFC
LTI Plan), (y) the date on which the second installment is paid
under the LTI Plans, and (z) March 31, 2000 (the "Second
Payment").
2. Conditions. The payment of all or any part of the
Deferred Bonus potentially payable to you hereunder is expressly
conditioned upon the satisfaction of the following conditions:
(a) To earn the right to receive the First Payment,
you must remain employed by the Company through January 15, 1999,
unless (i) you are terminated by the Company prior to such date
for other than cause or (ii) you are terminated by the Company
(other than for cause) or resign following a Change of Control;
and
(b) To earn the right to receive the Second Payment,
you must remain employed by the Company through January 15, 2000,
unless (i) you are terminated by the Company prior to such date
for other than cause or (ii) you are terminated by the Company
(other than for cause) or resign following a Change of Control.
For purposes of this Agreement, "Cause" shall mean (i)
your continued failure to substantially perform your employment
duties (other than as a result of incapacity due to physical or
mental disability), (ii) your gross negligence or dishonesty,
(iii) your repeated violation of any reasonable rule or
regulation of the Company after written notice, or (iv) your
arrest or conviction for the commission of any felony or other
crime involving dishonesty or moral turpitude.
3. Continued Employment. This Agreement is not a contract
of employment. Nothing expressed or implied in this Agreement
shall create any right or duty of your continued employment by
the Company or its successor. The Company reserves all rights to
cause your employment to be terminated at any time with or
without cause.
4. Unfunded Plan. The Company's obligations under this
Agreement shall be unfunded. Neither the Company or any of its
subsidiaries shall be required to establish any special or
separate fund or to make any other segregation of assets to
assure the payment of any award under this Agreement.
5. Successors Bound. The rights and obligations of the
Company hereunder shall inure to the benefit of and be binding
upon the successors of the Company.
6. Assignment. You shall not assign any rights or
benefits granted to you by the terms of this Agreement or
encumber in any way your interests herein; provided, however,
that in the event of your death, any payments then due and owing
will be made when due to the legal representative of your estate.
7. Notices and Other Documents. All payments, requests,
notices and the like may be made to you by mailing the same to
you at the address set forth below or at such other address as
you may file in writing with the Company for that purpose.
Notices, requests and the like sent by you to the Company shall
be sufficient if mailed to Specialty Foods Corporation, 25 Tri-
State International Office Center, Suite 250, Lincolnshire,
Illinois 60069, Attention: Vice President, Human Resources, or
to such other address as the Company may furnish to you for this
purpose from time to time in writing.
8. Employment Taxes. All payments made under this
Agreement shall be subject to withholding tax, other employment
taxes and other withholds and deductions as required by
applicable law or regulation, as in effect from time to time.
9. Effect of Agreement. This Agreement shall have a term
expiring on June 30, 2000, at which time it shall expire and be
of no further force or effect, except to the extent that rights
of payment have accrued to you hereunder prior to such date.
10. Governing Law/Jurisdiction. The substantive law (and
not the law of conflicts) of the State of Illinois will govern
all questions concerning the construction, validity and
interpretation of this Agreement and the performance of the
obligations imposed by this Agreement. The parties hereby waive
their rights to request or demand a trial by jury in the event
controversy arises under this Agreement.
If the foregoing correctly sets forth your understanding of
the Agreement between us, please sign both copies of this
Agreement in the place indicated below and return one copy to us.
Very truly yours,
SPECIALTY FOODS CORPORATION
By: /s/ Lawrence S. Benjamin
Name: Lawrence S. Benjamin
Title: President & CEO
Agreed to this 15th day of July, 1997
/s/ Robert L. Fishbune
Robert L. Fishbune
EXHIBIT A
Deferred Bonus Plan
Robert Fishbune
Year Earned Bonus Paid
1994 $ 0
1995 0
1996 224,233 (1)
Total $224,233
(1) Includes full 1997 bonus payment plus retention bonus due under
the terms and conditions of the Special Bonus Plan.
Exhibit 10.49
July 15, 1997
Mr. Robert B. Aiken
c/o Specialty Foods Corporation
25 Tri-State International Office Center
Suite 250
Lincolnshire, Illinois 60069
Dear Bob:
We are pleased to inform you that you are eligible to
participate in a deferred bonus plan that has been adopted by
Specialty Foods Corporation (the "Company"). Under this plan,
you will receive bonus payments in consideration for your
continued employment by the Company or any affiliate or
subsidiary of the Company (collectively, the "SFC Companies").
The terms and conditions of this bonus are set forth below:
1. Deferred Bonus Payment.
(a) Subject to the provisions of Section 2, you are
eligible to receive a one-time bonus (the "Deferred Bonus") in an
amount equal to the sum of:
(i) The aggregate gross amount of cash payments which you have
already received from the SFC Companies for annual bonus payments
covering the fiscal years 1994 through 1996 (the "Retroactive
Bonus"). You and the Company agree that the amount of the
Retroactive Bonus which you have received equals $185,349.00 and
consists of the payments set forth on Exhibit A hereto; and
(ii) The aggregate gross amount of cash payments which you
receive from the SFC Companies for annual bonus payments covering
the fiscal years 1997 and 1998 (the "Future Bonus"). The amount
of the Future Bonus shall be reasonably determined by the Company
in a manner consistent with the calculation of the Retroactive
Bonus (as set forth herein). In no event shall any payments made
to you (x) for base salary, (y) under the Long Term Incentive
Compensation Plan of any of the SFC Companies dated July 11, 1997
(the "LTI Plans"), or (z) under the Divestiture Award Bonus Plan
dated July 15, 1997 be included in calculating the amount of the
Deferred Bonus.
(b) The amount of the Deferred Bonus payable to you
shall be reduced by the amount of any payments made to you under
the LTI Plans. In the event that payments made to you under the
LTI Plans exceed the amount of the Deferred Bonus, no amounts of
Deferred Bonus shall be payable to you hereunder.
(c) The Deferred Bonus (as reduced by the LTI Plan
payments pursuant to clause (b)) shall be paid as follows:
(i) Forty percent (40%) of such amount shall be paid on the
earliest of (x) the date occurring ninety (90) days after a
Change in Control of the Company (as defined in the SFC LTI
Plan), (y) the date of which the first installment is paid under
the LTI Plan, and (z) March 31, 1999 (the "First Payment"); and
(ii) The remaining sixty percent (60%) of such amount shall be
paid on the earliest of (x) the date occurring ninety (90) days
after a Change in Control of the Company (as defined in the SFC
LTI Plan), (y) the date on which the second installment is paid
under the LTI Plans, and (z) March 31, 2000 (the "Second
Payment").
2. Conditions. The payment of all or any part of the
Deferred Bonus potentially payable to you hereunder is expressly
conditioned upon the satisfaction of the following conditions:
(a) To earn the right to receive the First Payment,
you must remain employed by the Company through January 15, 1999,
unless (i) you are terminated by the Company prior to such date
for other than cause or (ii) you are terminated by the Company
(other than for cause) or resign following a Change of control;
and
(b) To earn the right to receive the Second Payment,
you must remain employed by the Company through January 15, 2000,
unless (i) you are terminated by the Company prior to such date
for other than cause or (ii) you are terminated by the Company
(other than for cause) or resign following a Change of Control.
For purposes of this Agreement, "Cause" shall mean (i)
your continued failure to substantially perform your employment
duties (other than as a result of incapacity due to physical or
mental disability), (ii) your gross negligence or dishonesty,
(iii) your repeated violation of any reasonable rule or
regulation of the Company after written notice, or (iv) your
arrest or conviction for the commission of any felony or other
crime involving dishonesty or moral turpitude.
3. Continued Employment. This Agreement is not a contract
of employment. Nothing expressed or implied in this Agreement
shall create any right or duty of your continued employment by
the Company or its successor. The Company reserves all rights to
cause your employment to be terminated at any time with or
without cause.
4. Unfunded Plan. The Company's obligations under this
Agreement shall be unfunded. Neither the Company or any of its
subsidiaries shall be required to establish any special or
separate fund or to make any other segregation of assets to
assure the payment of any award under this Agreement.
5. Successors Bound. The rights and obligations of the
Company hereunder shall inure to the benefit of and be binding
upon the successors of the Company.
6. Assignment. You shall not assign any rights or
benefits granted to you by the terms of this Agreement or
encumber in any way your interests herein; provided, however,
that in the event of your death, any payments then due and owing
will be made when due to the legal representative of your estate.
7. Notices and Other Documents. All payments, requests,
notices and the like may be made to you by mailing the same to
you at the address set forth below or at such other address as
you may file in writing with the Company for that purpose.
Notices, requests and the like sent by you to the Company shall
be sufficient if mailed to Specialty Foods Corporation, 25 Tri-
State International Office Center, Suite 250, Lincolnshire,
Illinois 60069, Attention: Vice President, Human Resources, or
to such other address as the Company may furnish to you for this
purpose from time to time in writing.
8. Employment Taxes. All payments made under this
Agreement shall be subject to withholding tax, other employment
taxes and other withholds and deductions as required by
applicable law or regulation, as in effect from time to time.
9. Effect of Agreement. This Agreement shall have a term
expiring on June 30, 2000, at which time it shall expire and be
of no further force or effect, except to the extent that rights
of payment have accrued to you hereunder prior to such date.
10. Governing Law/Jurisdiction. The substantive law (and
not the law of conflicts) of the State of Illinois will govern
all questions concerning the construction, validity and
interpretation of this Agreement and the performance of the
obligations imposed by this Agreement. The parties hereby waive
their rights to request or demand a trial by jury in the event
controversy arises under this Agreement.
If the foregoing correctly sets forth your understanding of
the Agreement between us, please sign both copies of this
Agreement in the place indicated below and return one copy to us.
Very truly yours,
SPECIALTY FOODS CORPORATION
By: /s/ Lawrence S. Benjamin
Name: Lawrence S. Benjamin
Title: President & CEO
Agreed to this 15th day of July, 1997
/s/ Robert B. Aiken
Robert B. Aiken
EXHIBIT A
Deferred Bonus Plan
Robert Aiken
Year Earned Bonus Paid
1994 $ 28,750
1995 9,216
1996 147,383 (1)
Total $185,349
(1) Includes full 1997 bonus payment plus retention bonus due under
the terms and conditions of the Special Bonus Plan.
Exhibit 10.50
July 15, 1997
Mr. Henry J. Metz
c/o Metz Baking Company
520 Lake Cook Road
Suite 520
Deerfield, Illinois 60015
Dear Henry:
We are pleased to inform you that you are eligible to
participate in a deferred bonus plan that has been adopted by
Metz Baking Company (the "Company"). Under this plan, you will
receive bonus payments in consideration for your continued
employment by the Company, Specialty Foods Corporation ("SFC") or
any affiliate or subsidiary of the Company or SFC (collectively,
the "SFC Companies"). The terms and conditions of this bonus are
set forth below:
1. Deferred Bonus Payment.
(a) Subject to the provisions of Section 2, you are
eligible to receive a one-time bonus (the "Deferred Bonus") in an
amount equal to the sum of:
(i) The aggregate gross amount of cash payments which you have
already received from the SFC Companies for annual bonus payments
covering the fiscal years 1994 through 1996 (the "Retroactive
Bonus"). You and the Company agree that the amount of the
Retroactive Bonus which you have received equals $399,192.00 and
consists of the payments set forth on Exhibit A hereto; and
(ii) The aggregate gross amount of cash payments which you
receive from the SFC Companies for annual bonus payments covering
the fiscal years 1997 and 1998 (the "Future Bonus"). The amount
of the Future Bonus shall be reasonably determined by the Company
in a manner consistent with the calculation of the Retroactive
Bonus (as set forth herein). In no event shall any payments made
to you (x) for base salary, (y) under the Long Term Incentive
Compensation Plan of any of the SFC Companies dated July 11, 1997
(the "LTI Plans"), or (z) under the Divestiture Award Bonus Plan
dated July 15, 1997 be included in calculating the amount of the
Deferred Bonus.
(b) The amount of the Deferred Bonus payable to you
shall be reduced by the amount of any payments made to you under
the LTI Plans. In the event that payments made to you under the
LTI Plans exceed the amount of the Deferred Bonus, no amounts of
Deferred Bonus shall be payable to you hereunder.
(c) The Deferred Bonus (as reduced by the LTI Plan
payments pursuant to clause (b)) shall be paid as follows:
(i) Forty percent (40%) of such amount shall be paid on the
earlier of (x) the date of which the first installment is paid
under the LTI Plans, and (y) March 31, 1999 (the "First
Payment"); and
(ii) Sixty percent (60%) of such amount shall be paid on the
earlier of (x) the date on which the second installment is paid
under the LTI Plans, and (y) March 31, 2000 (the "Second
Payment").
2. Conditions. The payment of all or any part of the
Deferred Bonus potentially payable to you hereunder is expressly
conditioned upon the satisfaction of the following conditions:
(a) To earn the right to receive the First Payment,
you must remain employed by the Company through January 15, 1999,
unless you are terminated by the Company prior to such date for
other than cause; and
(b) To earn the right to receive the Second Payment,
you must remain employed by the Company through January 15, 2000,
unless you are terminated by the Company prior to such date for
other than cause.
For purposes of this Agreement, "Cause" shall mean (i)
your continued failure to substantially perform your employment
duties (other than as a result of incapacity due to physical or
mental disability), (ii) your gross negligence or dishonesty,
(iii) your repeated violation of any reasonable rule or
regulation of the Company after written notice, or (iv) your
arrest or conviction for the commission of any felony or other
crime involving dishonesty or moral turpitude.
3. Continued Employment. This Agreement is not a contract
of employment. Nothing expressed or implied in this Agreement
shall create any right or duty of your continued employment by
the Company or its successor. The Company reserves all rights to
cause your employment to be terminated at any time with or
without cause.
4. Unfunded Plan. The Company's obligations under this
Agreement shall be unfunded. Neither the Company, SFC or any of
their subsidiaries shall be required to establish any special or
separate fund or to make any other segregation of assets to
assure the payment of any award under this Agreement.
5. Successors Bound. The rights and obligations of the
Company hereunder shall inure to the benefit of and be binding
upon the successors of the Company.
6. Assignment. You shall not assign any rights or
benefits granted to you by the terms of this Agreement or
encumber in any way your interests herein; provided, however,
that in the event of your death, any payments then due and owing
will be made when due to the legal representative of your estate.
7. Notices and Other Documents. All payments, requests,
notices and the like may be made to you by mailing the same to
you at the address set forth below or at such other address as
you may file in writing with the Company for that purpose.
Notices, requests and the like sent by you to the Company shall
be sufficient if mailed to Metz Baking Company, 520 Lake Cook
Road, Suite 520, Deerfield, Illinois 60015, Attention: Vice
President, Human Resources, or to such other address as the
Company may furnish to you for this purpose from time to time in
writing.
8. Employment Taxes. All payments made under this
Agreement shall be subject to withholding tax, other employment
taxes and other withholds and deductions as required by
applicable law or regulation, as in effect from time to time.
9. Effect of Agreement. This Agreement shall have a term
expiring on June 30, 2000, at which time it shall expire and be
of no further force or effect, except to the extent that rights
of payment have accrued to you hereunder prior to such date.
10. Governing Law/Jurisdiction. The substantive law (and
not the law of conflicts) of the State of Illinois will govern
all questions concerning the construction, validity and
interpretation of this Agreement and the performance of the
obligations imposed by this Agreement. The parties hereby waive
their rights to request or demand a trial by jury in the event
controversy arises under this Agreement.
If the foregoing correctly sets forth your understanding of
the Agreement between us, please sign both copies of this
Agreement in the place indicated below and return one copy to us.
Very truly yours,
METZ BAKING COMPANY
By: /s/ Lawrence S. Benjamin
Name: Lawrence S. Benjamin
Title: Vice President
Agreed to this 15th day of July, 1997
/s/ Henry J. Metz ______
Henry J. Metz
EXHIBIT A
Deferred Bonus Plan
Henry J. Metz
Year Earned Bonus Paid
1994 $143,892
1995 15,300
1996 240,000
Total $399,192
Exhibit 10.51
July 15, 1997
Mr. John R. Reisenberg
c/o Specialty Foods Corporation
25 Tri-State International Office Center
Suite 250
Lincolnshire, Illinois 60069
Dear Jack:
We are pleased to inform you that you are eligible to
participate in a deferred bonus plan that has been adopted by
Specialty Foods Corporation (the "Company"). Under this plan,
you will receive bonus payments in consideration for your
continued employment by the Company or any affiliate or
subsidiary of the Company (collectively, the "SFC Companies").
The terms and conditions of this bonus are set forth below:
1. Deferred Bonus Payment.
(a) Subject to the provisions of Section 2, you are
eligible to receive a one-time bonus (the "Deferred Bonus") in an
amount equal to the sum of:
(i) The aggregate gross amount of cash
payments which you have already received
from the SFC Companies for annual bonus
payments covering the fiscal years 1994
through 1996 (the "Retroactive Bonus").
You and the Company agree that the
amount of the Retroactive Bonus which
you have received equals $254,720.00 and
consists of the payments set forth on
Exhibit A hereto; and
(ii) The aggregate gross amount of cash
payments which you receive from the SFC
Companies for annual bonus payments
covering the fiscal years 1997 and 1998
(the "Future Bonus"). The amount of the
Future Bonus shall be reasonably
determined by the Company in a manner
consistent with the calculation of the
Retroactive Bonus (as set forth herein).
In no event shall any payments made to
you (x) for base salary, (y) under the
Long Term Incentive Compensation Plan of
any of the SFC Companies dated July 11,
1997 (the "LTI Plans"), or (z) under the
Divestiture Award Bonus Plan dated July
15, 1997 be included in calculating the
amount of the Deferred Bonus.
(b) The amount of the Deferred Bonus payable to you
shall be reduced by the amount of any payments made to you under
the LTI Plans. In the event that payments made to you under the
LTI Plans exceed the amount of the Deferred Bonus, no amounts of
Deferred Bonus shall be payable to you hereunder.
(c) The Deferred Bonus (as reduced by the LTI Plan
payments pursuant to clause (b)) shall be paid as follows:
(i) Forty percent (40%) of such amount shall
be paid on the earliest of (x) the date
occurring ninety (90) days after a
Change in Control of the Company (as
defined in the SFC LTI Plan), (y) the
date of which the first installment is
paid under the LTI Plan, and (z) March
31, 1999 (the "First Payment"); and
(ii) The remaining sixty percent (60%) of
such amount shall be paid on the
earliest of (x) the date occurring
ninety (90) days after a Change in
Control of the Company (as defined in
the SFC LTI Plan), (y) the date on which
the second installment is paid under the
LTI Plans, and (z) March 31, 2000 (the
"Second Payment").
2. Conditions. The payment of all or any part of the
Deferred Bonus potentially payable to you hereunder is expressly
conditioned upon the satisfaction of the following conditions:
(a) To earn the right to receive the First Payment,
you must remain employed by the Company through January 15, 1999,
unless (i) you are terminated by the Company prior to such date
for other than cause or (ii) you are terminated by the Company
(other than for cause) or resign following a Change of Control;
and
(b) To earn the right to receive the Second Payment,
you must remain employed by the Company through January 15, 2000,
unless (i) you are terminated by the Company prior to such date
for other than cause or (ii) you are terminated by the Company
(other than for cause) or resign following a Change of Control.
For purposes of this Agreement, "Cause" shall mean (i)
your continued failure to substantially perform your employment
duties (other than as a result of incapacity due to physical or
mental disability), (ii) your gross negligence or dishonesty,
(iii) your repeated violation of any reasonable rule or
regulation of the Company after written notice, or (iv) your
arrest or conviction for the commission of any felony or other
crime involving dishonesty or moral turpitude.
3. Continued Employment. This Agreement is not a contract
of employment. Nothing expressed or implied in this Agreement
shall create any right or duty of your continued employment by
the Company or its successor. The Company reserves all rights to
cause your employment to be terminated at any time with or
without cause.
4. Unfunded Plan. The Company's obligations under this
Agreement shall be unfunded. Neither the Company or any of its
subsidiaries shall be required to establish any special or
separate fund or to make any other segregation of assets to
assure the payment of any award under this Agreement.
5. Successors Bound. The rights and obligations of the
Company hereunder shall inure to the benefit of and be binding
upon the successors of the Company.
6. Assignment. You shall not assign any rights or
benefits granted to you by the terms of this Agreement or
encumber in any way your interests herein; provided, however,
that in the event of your death, any payments then due and owing
will be made when due to the legal representative of your estate.
7. Notices and Other Documents. All payments, requests,
notices and the like may be made to you by mailing the same to
you at the address set forth below or at such other address as
you may file in writing with the Company for that purpose.
Notices, requests and the like sent by you to the Company shall
be sufficient if mailed to Specialty Foods Corporation, 25 Tri-
State International Office Center, Suite 250, Lincolnshire,
Illinois 60069, Attention: Vice President, Human Resources, or
to such other address as the Company may furnish to you for this
purpose from time to time in writing.
8. Employment Taxes. All payments made under this
Agreement shall be subject to withholding tax, other employment
taxes and other withholds and deductions as required by
applicable law or regulation, as in effect from time to time.
9. Effect of Agreement. This Agreement shall have a term
expiring on June 30, 2000, at which time it shall expire and be
of no further force or effect, except to the extent that rights
of payment have accrued to you hereunder prior to such date.
10. Governing Law/Jurisdiction. The substantive law (and
not the law of conflicts) of the State of Illinois will govern
all questions concerning the construction, validity and
interpretation of this Agreement and the performance of the
obligations imposed by this Agreement. The parties hereby waive
their rights to request or demand a trial by jury in the event
controversy arises under this Agreement.
If the foregoing correctly sets forth your understanding of
the Agreement between us, please sign both copies of this
Agreement in the place indicated below and return one copy to us.
Very truly yours,
SPECIALTY FOODS CORPORATION
By: /s/ Lawrence S. Benjamin
Name: Lawrence S. Benjamin
Title: President & CEO
Agreed to this 15 day of July, 1997
/s/ John R. Reisenberg
John R. Reisenberg
EXHIBIT A
Deferred Bonus Plan
John R. Reisenberg
Year Earned Bonus Paid
- ----------- ----------
1994 $59,500
1995 15,987
1996 179,233(1)
Total $254,720
(1)Includes full 1997 bonus payment plus retention bonus due
under the terms and conditions of the Special Bonus Plan.
Exhibit 10.52
October 27, 1997
Mr. Lawrence S. Benjamin
787 E. Illinois Road
Lake Forest, Illinois 60045
Dear Larry:
Stella Foods, Inc. (the "Company") is pleased to inform you
that you are eligible to receive the bonus payments specified in
this letter upon a sale in the next three years (the "Sale") of
the stock or substantially all of the assets of the Company to a
purchaser (the "Purchaser"), subject to the terms and conditions
set forth below:
1. Bonus and Payment Related to Purchase Price. Subject
to the provisions of Section 2, you are eligible to receive a one-
time bonus (the "Sale Bonus") in an amount equal to .20% of the
Purchase Consideration. For purposes of this Agreement,
"Purchase Consideration" shall mean the aggregate net cash
proceeds received by the Company or Specialty Foods Corporation
("SFC") (after deducting all transaction fees and expenses
incurred by the Company, SFC and/or their respective affiliates
in connection with the Sale). By way of example, if the Purchase
Consideration equaled $500,000,000, your Sale Bonus would be $1
million. The entire Sale Bonus will be paid to you within ninety
(90) days of the completion of the Sale.
2. Conditions. The payment of all or any part of the Sale
Bonus potentially payable to you hereunder is expressly
conditioned upon the satisfaction of the following conditions:
(a) You must remain employed by SFC or one of its
subsidiaries through the date occurring ninety (90) days after
the date the Sale is completed (unless you die, are terminated as
a result of a Disability Termination, are Terminated without
Cause or Voluntarily Terminate with Good Reason (as each such
term is defined in your Employment Agreement in effect with SFC
on the date hereof) after the Sale but prior to the date ninety
(90) days after the Sale); and
(b) The Sale must be completed within three (3) years
of the date of this Agreement.
3. Continued Employment. This Agreement is not a contract
of employment. Nothing expressed or implied in this Agreement
shall create any right or duty of your continued employment by
the Company, SFC or their successors.
4. Unfunded Plan. The Company's obligations under this
Agreement shall be unfunded. Neither the Company, SFC or any of
their subsidiaries shall be required to establish any special or
separate fund or to make any other segregation of assets to
assure the payment of any award under this Agreement.
5. Successors Bound. The rights and obligations of the
Company hereunder shall inure to the benefit of and be binding
upon the successors of the Company.
6. Assignment. You shall not assign any rights or
benefits granted to you by the terms of this Agreement or
encumber in any way your interests herein; provided, however,
that in the event of your death, any payments then due and owing
will be made when due to the legal representative of your estate.
7. Notices and Other Documents. All payments, requests,
notices and the like may be made to you by mailing the same to
you at the address set forth below or at such other address as
you may file in writing with the Company for that purpose.
Notices, requests and the like sent by you to the Company shall
be sufficient if mailed to Specialty Foods Corporation, 25 Tri-
State International Office Center, Suite 250, Lincolnshire,
Illinois 60069, Attention: Vice President, Human Resources, or
to such other address as the Company may furnish to you for this
purpose from time to time in writing.
8. Employment Taxes. All payments made under this
Agreement shall be subject to withholding tax, other employment
taxes and other withholds and deductions as required by
applicable law or regulation, as in effect from time to time.
9. Effect of Agreement. This Agreement shall have a term
expiring on October 25, 2000, at which time it shall expire and
be of no further force or effect, except to the extent that
rights of payment have accrued to you hereunder prior to such
date. Notwithstanding the foregoing, you shall only have the
right to collect amounts hereunder on one occasion in connection
with the Sale of the stock or substantially all the assets of the
Company while the Company is owned by SFC. Once such a Sale
occurs, you shall have no further right to collect additional
amounts hereunder upon any subsequent sale.
10. Governing Law/Jurisdiction. The substantive law (and
not the law of conflicts) of the State of Illinois will govern
all questions concerning the construction, validity and
interpretation of this Agreement and the performance of the
obligations imposed by this Agreement. The parties hereby waive
their rights to request or demand a trial by jury in the event
controversy arises under this Agreement.
If the foregoing correctly sets forth your understanding of
the Agreement between us, please sign both copies of this
Agreement in the place indicated below and return one copy to us.
Very truly yours,
STELLA FOODS, INC.
By: /s/ Robert B. Aiken
Name: Robert B. Aiken
Title: Vice President
Agreed to this 27th day of October, 1997
/s/ Lawrence S. Benjamin
Lawrence S. Benjamin
Exhibit 10.53
July 15, 1997
Mr. Robert L. Fishbune
c/o Specialty Foods Corporation
25 Tri-State International Office Center
Suite 250
Lincolnshire, Illinois 60069
Green Bay, Wisconsin 54304-9024
Dear Bob:
Stella Foods, Inc. (the "Company") is pleased to inform you
that you are eligible to receive the bonus payments specified in
this letter upon a sale in the next three years (the "Sale") of
the stock or substantially all of the assets of the Company to a
purchaser (the "Purchaser"), subject to the terms and conditions
set forth below:
1. Bonus and Payment Related to Purchase Price. Subject
to the provisions of Section 2, you are eligible to receive a one-
time bonus (the "Sale Bonus") in an amount equal to .10% of the
Purchase Consideration. For purposes of this Agreement,
"Purchase Consideration" shall mean the aggregate net cash
proceeds received by the Company or Specialty Foods Corporation
("SFC") (after deducting all fees and expenses incurred by the
Company, SFC and/or their respective affiliates in connection
with the Sale). By way of example, if the Purchase Consideration
equaled $500,000,000, your Sale Bonus would be $500,000. The
Sale Bonus shall be paid to you within three (3) months of the
completion of the Sale.
2. Conditions. The payment of all or any part of the Sale
Bonus potentially payable to you hereunder is expressly
conditioned upon the satisfaction of the following conditions:
(a) Your continued employment with the Company or SFC
through the date the Sale is completed;
(b) The absence of any material deficiencies in the
performance of your duties and cooperation during the Sale
process as determined by the SFC Board of Directors in its sole
discretion. The factors considered in assessing whether your
performance and cooperation in the Sale process have been
materially deficient include (i) your continued focus on your
regular job responsibilities, (ii) your maintenance of the
confidentiality of non-public information, and (iii) your
positive attitude and cooperativeness;
(c) Your continued employment with the Company (or its
successor) or SFC until three months (3) months after the date
the Sale is completed, unless you are terminated after the Sale
for other than Cause;
(d) Your execution and delivery of agreements prepared
by SFC waiving all claims which you have had or may have against
the Company, SFC and/or their respective affiliates other than
any rights granted to you pursuant to any annual bonus plan, long-
term incentive plan, stock option plan, deferred bonus plan,
written employment contract, written severance agreement or other
formal written compensation plan between you and the Company, SFC
and/or their respective affiliates; and
(e) The closing of the Sale being consummated within
three (3) years of the date of this Agreement.
For purposes of this Agreement, "Cause" shall mean (i)
your continued failure to substantially perform your employment
duties (other than as a result of incapacity due to physical or
mental disability), (ii) your gross negligence or dishonesty,
(iii) your repeated violation of any reasonable rule or
regulation of the Company after written notice; or (iv) your
arrest or conviction for the commission of any felony or other
crime involving dishonesty or moral turpitude.
3. Continued Employment. This Agreement is not a contract
of employment. Nothing expressed or implied in this Agreement
shall create any right or duty of your continued employment by
the Company or its successor. The Company reserves all rights to
cause your employment to be terminated at any time with or
without cause.
4. Unfunded Plan. The Company's obligations under this
Agreement shall be unfunded. Neither the Company, SFC or any of
their subsidiaries shall be required to establish any special or
separate fund or to make any other segregation of assets to
assure the payment of any award under this Agreement.
5. Successors Bound. The rights and obligations of the
Company hereunder shall inure to the benefit of and be binding
upon the successors of the Company.
6. Assignment. You shall not assign any rights or
benefits granted to you by the terms of this Agreement or
encumber in any way your interests herein; provided, however,
that in the event of your death, any payments then due and owing
will be made when due to the legal representative of your estate.
7. Notices and Other Documents. All payments, requests,
notices and the like may be made to you by mailing the same to
you at the address set forth below or at such other address as
you may file in writing with the Company for that purpose.
Notices, requests and the like sent by you to the Company shall
be sufficient if mailed to Specialty Foods Corporation, 25 Tri-
State International Office Center, Suite 250, Lincolnshire,
Illinois 60069, Attention: Vice President, Human Resources, or
to such other address as the Company may furnish to you for this
purpose from time to time in writing.
8. Employment Taxes. All payments made under this
Agreement shall be subject to withholding tax, other employment
taxes and other withholds and deductions as required by
applicable law or regulation, as in effect from time to time.
9. Effect of Agreement. This Agreement shall have a term
expiring on June 30, 2000, at which time it shall expire and be
of no further force or effect, except to the extent that rights
of payment have accrued to you hereunder prior to such date.
Notwithstanding the foregoing, you shall only have the right to
collect amounts hereunder on one occasion in connection with the
Sale of the stock or substantially all the assets of the Company
while the Company is owned by SFC. Once such a Sale occurs, you
shall have no further right to collect additional amounts
hereunder upon any subsequent sale.
10. Governing Law/Jurisdiction. The substantive law (and
not the law of conflicts) of the State of Illinois will govern
all questions concerning the construction, validity and
interpretation of this Agreement and the performance of the
obligations imposed by this Agreement. The parties hereby waive
their rights to request or demand a trial by jury in the event
controversy arises under this Agreement.
If the foregoing correctly sets forth your understanding of
the Agreement between us, please sign both copies of this
Agreement in the place indicated below and return one copy to us.
Very truly yours,
STELLA FOODS, INC.
By: /s/ Lawrence S. Benjamin
Name: Lawrence S. Benjamin
Title: President & CEO
Agreed to this 15th day of July, 1997
/s/ Robert L. Fishbune ______
Robert L. Fishbune
Exhibit 10.54
July 15, 1997
Mr. Robert B. Aiken
c/o Specialty Foods Corporation
25 Tri-State International Office Center
Suite 250
Lincolnshire, Illinois 60069
Green Bay, Wisconsin 54304-9024
Dear Bob:
Stella Foods, Inc. (the "Company") is pleased to inform you
that you are eligible to receive the bonus payments specified in
this letter upon a sale in the next three years (the "Sale") of
the stock or substantially all of the assets of the Company to a
purchaser (the "Purchaser"), subject to the terms and conditions
set forth below:
1. Bonus and Payment Related to Purchase Price. Subject
to the provisions of Section 2, you are eligible to receive a one-
time bonus (the "Sale Bonus") in an amount equal to .10% of the
Purchase Consideration. For purposes of this Agreement,
"Purchase Consideration" shall mean the aggregate net cash
proceeds received by the Company or Specialty Foods Corporation
("SFC") (after deducting all fees and expenses incurred by the
Company, SFC and/or their respective affiliates in connection
with the Sale). By way of example, if the Purchase Consideration
equaled $500,000,000, your Sale Bonus would be $500,000. The
Sale Bonus shall be paid to you within three (3) months of the
completion of the Sale.
2. Conditions. The payment of all or any part of the Sale
Bonus potentially payable to you hereunder is expressly
conditioned upon the satisfaction of the following conditions:
(a) Your continued employment with the Company or SFC
through the date the Sale is completed;
(b) The absence of any material deficiencies in the
performance of your duties and cooperation during the Sale
process as determined by the SFC Board of Directors in its sole
discretion. The factors considered in assessing whether your
performance and cooperation in the Sale process have been
materially deficient include (i) your continued focus on your
regular job responsibilities, (ii) your maintenance of the
confidentiality of non-public information, and (iii) your
positive attitude and cooperativeness;
(c) Your continued employment with the Company (or its
successor) or SFC until three months (3) months after the date
the Sale is completed, unless you are terminated after the Sale
for other than Cause;
(d) Your execution and delivery of agreements prepared
by SFC waiving all claims which you have had or may have against
the Company, SFC and/or their respective affiliates other than
any rights granted to you pursuant to any annual bonus plan, long-
term incentive plan, stock option plan, deferred bonus plan,
written employment contract, written severance agreement or other
formal written compensation plan between you and the Company, SFC
and/or their respective affiliates; and
(e) The closing of the Sale being consummated within
three (3) years of the date of this Agreement.
For purposes of this Agreement, "Cause" shall mean (i)
your continued failure to substantially perform your employment
duties (other than as a result of incapacity due to physical or
mental disability), (ii) your gross negligence or dishonesty,
(iii) your repeated violation of any reasonable rule or
regulation of the Company after written notice; or (iv) your
arrest or conviction for the commission of any felony or other
crime involving dishonesty or moral turpitude.
3. Continued Employment. This Agreement is not a contract
of employment. Nothing expressed or implied in this Agreement
shall create any right or duty of your continued employment by
the Company or its successor. The Company reserves all rights to
cause your employment to be terminated at any time with or
without cause.
4. Unfunded Plan. The Company's obligations under this
Agreement shall be unfunded. Neither the Company, SFC or any of
their subsidiaries shall be required to establish any special or
separate fund or to make any other segregation of assets to
assure the payment of any award under this Agreement.
5. Successors Bound. The rights and obligations of the
Company hereunder shall inure to the benefit of and be binding
upon the successors of the Company.
6. Assignment. You shall not assign any rights or
benefits granted to you by the terms of this Agreement or
encumber in any way your interests herein; provided, however,
that in the event of your death, any payments then due and owing
will be made when due to the legal representative of your estate.
7. Notices and Other Documents. All payments, requests,
notices and the like may be made to you by mailing the same to
you at the address set forth below or at such other address as
you may file in writing with the Company for that purpose.
Notices, requests and the like sent by you to the Company shall
be sufficient if mailed to Specialty Foods Corporation, 25 Tri-
State International Office Center, Suite 250, Lincolnshire,
Illinois 60069, Attention: Vice President, Human Resources, or
to such other address as the Company may furnish to you for this
purpose from time to time in writing.
8. Employment Taxes. All payments made under this
Agreement shall be subject to withholding tax, other employment
taxes and other withholds and deductions as required by
applicable law or regulation, as in effect from time to time.
9. Effect of Agreement. This Agreement shall have a term
expiring on June 30, 2000, at which time it shall expire and be
of no further force or effect, except to the extent that rights
of payment have accrued to you hereunder prior to such date.
Notwithstanding the foregoing, you shall only have the right to
collect amounts hereunder on one occasion in connection with the
Sale of the stock or substantially all the assets of the Company
while the Company is owned by SFC. Once such a Sale occurs, you
shall have no further right to collect additional amounts
hereunder upon any subsequent sale.
10. Governing Law/Jurisdiction. The substantive law (and
not the law of conflicts) of the State of Illinois will govern
all questions concerning the construction, validity and
interpretation of this Agreement and the performance of the
obligations imposed by this Agreement. The parties hereby waive
their rights to request or demand a trial by jury in the event
controversy arises under this Agreement.
If the foregoing correctly sets forth your understanding of
the Agreement between us, please sign both copies of this
Agreement in the place indicated below and return one copy to us.
Very truly yours,
STELLA FOODS, INC.
By: /s/ Lawrence S. Benjamin
Name: Lawrence S. Benjamin
Title: President & CEO
Agreed to this 15th day of July, 1997
/s/ Robert B. Aiken
Robert B. Aiken
Exhibit 10.55
July 15, 1997
Mr. John R. Reisenberg
c/o Specialty Foods Corporation
25 Tri-State International Office Center
Suite 250
Lincolnshire, Illinois 60069
Green Bay, Wisconsin 54304-9024
Dear Jack:
Stella Foods, Inc. (the "Company") is pleased to inform you
that you are eligible to receive the bonus payments specified in
this letter upon a sale in the next three years (the "Sale") of
the stock or substantially all of the assets of the Company to a
purchaser (the "Purchaser"), subject to the terms and conditions
set forth below:
1. Bonus and Payment Related to Purchase Price. Subject
to the provisions of Section 2, you are eligible to receive a one-
time bonus (the "Sale Bonus") in an amount equal to .05% of the
Purchase Consideration. For purposes of this Agreement,
"Purchase Consideration" shall mean the aggregate net cash
proceeds received by the Company or Specialty Foods Corporation
("SFC") (after deducting all fees and expenses incurred by the
Company, SFC and/or their respective affiliates in connection
with the Sale). By way of example, if the Purchase Consideration
equaled $500,000,000, your Sale Bonus would be $250,000. The
Sale Bonus shall be paid to you within three (3) months of the
completion of the Sale.
2. Conditions. The payment of all or any part of the Sale
Bonus potentially payable to you hereunder is expressly
conditioned upon the satisfaction of the following conditions:
(a) Your continued employment with the Company or SFC
through the date the Sale is completed;
(b) The absence of any material deficiencies in the
performance of your duties and cooperation during the Sale
process as determined by the SFC Board of Directors in its sole
discretion. The factors considered in assessing whether your
performance and cooperation in the Sale process have been
materially deficient include (i) your continued focus on your
regular job responsibilities, (ii) your maintenance of the
confidentiality of non-public information, and (iii) your
positive attitude and cooperativeness;
(c) Your continued employment with the Company (or its
successor) or SFC until three months (3) months after the date
the Sale is completed, unless you are terminated after the Sale
for other than Cause;
(d) Your execution and delivery of agreements prepared
by SFC waiving all claims which you have had or may have against
the Company, SFC and/or their respective affiliates other than
any rights granted to you pursuant to any annual bonus plan, long-
term incentive plan, stock option plan, deferred bonus plan,
written employment contract, written severance agreement or other
formal written compensation plan between you and the Company, SFC
and/or their respective affiliates; and
(e) The closing of the Sale being consummated within
three (3) years of the date of this Agreement.
For purposes of this Agreement, "Cause" shall mean (i)
your continued failure to substantially perform your employment
duties (other than as a result of incapacity due to physical or
mental disability), (ii) your gross negligence or dishonesty,
(iii) your repeated violation of any reasonable rule or
regulation of the Company after written notice; or (iv) your
arrest or conviction for the commission of any felony or other
crime involving dishonesty or moral turpitude.
3. Continued Employment. This Agreement is not a contract
of employment. Nothing expressed or implied in this Agreement
shall create any right or duty of your continued employment by
the Company or its successor. The Company reserves all rights to
cause your employment to be terminated at any time with or
without cause.
4. Unfunded Plan. The Company's obligations under this
Agreement shall be unfunded. Neither the Company, SFC or any of
their subsidiaries shall be required to establish any special or
separate fund or to make any other segregation of assets to
assure the payment of any award under this Agreement.
5. Successors Bound. The rights and obligations of the
Company hereunder shall inure to the benefit of and be binding
upon the successors of the Company.
6. Assignment. You shall not assign any rights or
benefits granted to you by the terms of this Agreement or
encumber in any way your interests herein; provided, however,
that in the event of your death, any payments then due and owing
will be made when due to the legal representative of your estate.
7. Notices and Other Documents. All payments, requests,
notices and the like may be made to you by mailing the same to
you at the address set forth below or at such other address as
you may file in writing with the Company for that purpose.
Notices, requests and the like sent by you to the Company shall
be sufficient if mailed to Specialty Foods Corporation, 25 Tri-
State International Office Center, Suite 250, Lincolnshire,
Illinois 60069, Attention: Vice President, Human Resources, or
to such other address as the Company may furnish to you for this
purpose from time to time in writing.
8. Employment Taxes. All payments made under this
Agreement shall be subject to withholding tax, other employment
taxes and other withholds and deductions as required by
applicable law or regulation, as in effect from time to time.
9. Effect of Agreement. This Agreement shall have a term
expiring on June 30, 2000, at which time it shall expire and be
of no further force or effect, except to the extent that rights
of payment have accrued to you hereunder prior to such date.
Notwithstanding the foregoing, you shall only have the right to
collect amounts hereunder on one occasion in connection with the
Sale of the stock or substantially all the assets of the Company
while the Company is owned by SFC. Once such a Sale occurs, you
shall have no further right to collect additional amounts
hereunder upon any subsequent sale.
10. Governing Law/Jurisdiction. The substantive law (and
not the law of conflicts) of the State of Illinois will govern
all questions concerning the construction, validity and
interpretation of this Agreement and the performance of the
obligations imposed by this Agreement. The parties hereby waive
their rights to request or demand a trial by jury in the event
controversy arises under this Agreement.
If the foregoing correctly sets forth your understanding of
the Agreement between us, please sign both copies of this
Agreement in the place indicated below and return one copy to us.
Very truly yours,
STELLA FOODS, INC.
By: /s/ LAWRENCE S. BENJAMIN
Name: Lawrence S. Benjamin
Title: President & CEO
Agreed to this 15th day of July, 1997
______
/s/ JOHN R. REISENBERG
John R. Reisenberg
Exhibit 10.56
July 15, 1997
Mr. Robert L. Fishbune
c/o Specialty Foods Corporation
25 Tri-State International Office Center
Suite 250
Lincolnshire, Illinois 60069
Dear Bob:
Metz Baking Company (the "Company") is pleased to inform you
that you are eligible to receive the bonus payments specified in
this letter upon a sale in the next three years (the "Sale") of
the stock or substantially all of the assets of the Company to a
purchaser (the "Purchaser"), subject to the terms and conditions
set forth below:
1. Bonus and Payment Related to Purchase Price. Subject
to the provisions of Section 2, you are eligible to receive a one-
time bonus (the "Sale Bonus") in an amount equal to .10% of the
Purchase Consideration. For purposes of this Agreement,
"Purchase Consideration" shall mean the aggregate net cash
proceeds received by the Company or Specialty Foods Corporation
("SFC") (after deducting all fees and expenses incurred by the
Company, SFC and/or their respective affiliates in connection
with the Sale). By way of example, if the Purchase Consideration
equaled $400,000,000, your Sale Bonus would be $400,000.00. The
Sale Bonus shall be paid to you within three (3) months of the
completion of the Sale.
2. Conditions. The payment of all or any part of the Sale
Bonus potentially payable to you hereunder is expressly
conditioned upon the satisfaction of the following conditions:
(a) Your continued employment with the Company through
the date the Sale is completed;
(b) The absence of any material deficiencies in the
performance of your duties and cooperation during the Sale
process as determined by the SFC Board of Directors in its sole
discretion. The factors considered in assessing whether your
performance and cooperation in the Sale process have been
materially deficient include (i) your continued focus on your
regular job responsibilities, (ii) your maintenance of the
confidentiality of non-public information, and (iii) your
positive attitude and cooperativeness;
(c) Your continued employment with the Company (or its
successor) or SFC until three (3) months after the date the Sale
is completed, unless you are terminated after the Sale for other
than Cause;
(d) Your execution and delivery of agreements prepared
by SFC waiving all claims which you have had or may have against
the Company, SFC and/or their respective affiliates other than
any rights granted to you pursuant to any annual bonus plan, long-
term incentive plan, stock option plan, deferred bonus plan,
written employment contract, written severance agreement or other
formal written compensation plan between you and the Company, SFC
and/or their respective affiliates; and
(e) The closing of the Sale being consummated within
three (3) years of the date of this Agreement.
For purposes of this Agreement, "Cause" shall mean (i)
your continued failure to substantially perform your employment
duties (other than as a result of incapacity due to physical or
mental disability), (ii) your gross negligence or dishonesty,
(iii) your repeated violation of any reasonable rule or
regulation of the Company after written notice; or (iv) your
arrest or conviction for the commission of any felony or other
crime involving dishonesty or moral turpitude.
3. Continued Employment. This Agreement is not a contract
of employment. Nothing expressed or implied in this Agreement
shall create any right or duty of your continued employment by
the Company or its successor. The Company reserves all rights to
cause your employment to be terminated at any time with or
without cause.
4. Unfunded Plan. The Company's obligations under this
Agreement shall be unfunded. Neither the Company, SFC or any of
their subsidiaries shall be required to establish any special or
separate fund or to make any other segregation of assets to
assure the payment of any award under this Agreement.
5. Successors Bound. The rights and obligations of the
Company hereunder shall inure to the benefit of and be binding
upon the successors of the Company.
6. Assignment. You shall not assign any rights or
benefits granted to you by the terms of this Agreement or
encumber in any way your interests herein; provided, however,
that in the event of your death, any payments then due and owing
will be made when due to the legal representative of your estate.
7. Notices and Other Documents. All payments, requests,
notices and the like may be made to you by mailing the same to
you at the address set forth below or at such other address as
you may file in writing with the Company for that purpose.
Notices, requests and the like sent by you to the Company shall
be sufficient if mailed to Specialty Foods Corporation, 25 Tri-
State International Office Center, Suite 250, Lincolnshire,
Illinois 60069, Attention: Vice President, Human Resources, or
to such other address as the Company may furnish to you for this
purpose from time to time in writing.
8. Employment Taxes. All payments made under this
Agreement shall be subject to withholding tax, other employment
taxes and other withholds and deductions as required by
applicable law or regulation, as in effect from time to time.
9. Effect of Agreement. This Agreement shall have a term
expiring on June 30, 2000, at which time it shall expire and be
of no further force or effect, except to the extent that rights
of payment have accrued to you hereunder prior to such date.
Notwithstanding the foregoing, you shall only have the right to
collect amounts hereunder on one occasion in connection with the
Sale of the stock or substantially all the assets of the Company
while the Company is owned by SFC. Once such a Sale occurs, you
shall have no further right to collect additional amounts
hereunder upon any subsequent sale.
10. Governing Law/Jurisdiction. The substantive law (and
not the law of conflicts) of the State of Illinois will govern
all questions concerning the construction, validity and
interpretation of this Agreement and the performance of the
obligations imposed by this Agreement. The parties hereby waive
their rights to request or demand a trial by jury in the event
controversy arises under this Agreement.
If the foregoing correctly sets forth your understanding of
the Agreement between us, please sign both copies of this
Agreement in the place indicated below and return one copy to us.
Very truly yours,
METZ BAKING COMPANY
By: /s/ Lawrence S. Benjamin
Name: Lawrence S. Benjamin
Title: Vice President
Agreed to this 15th day of July, 1997
/s/ Robert L. Fishbune
Robert L. Fishbune
Exhibit 10.57
July 15, 1997
Mr. Robert B. Aiken
c/o Specialty Foods Corporation
25 Tri-State International Office Center
Suite 250
Lincolnshire, Illinois 60069
Dear Bob:
Metz Baking Company (the "Company") is pleased to inform you
that you are eligible to receive the bonus payments specified in
this letter upon a sale in the next three years (the "Sale") of
the stock or substantially all of the assets of the Company to a
purchaser (the "Purchaser"), subject to the terms and conditions
set forth below:
1. Bonus and Payment Related to Purchase Price. Subject
to the provisions of Section 2, you are eligible to receive a one-
time bonus (the "Sale Bonus") in an amount equal to .10% of the
Purchase Consideration. For purposes of this Agreement,
"Purchase Consideration" shall mean the aggregate net cash
proceeds received by the Company or Specialty Foods Corporation
("SFC") (after deducting all fees and expenses incurred by the
Company, SFC and/or their respective affiliates in connection
with the Sale). By way of example, if the Purchase Consideration
equaled $400,000,000, your Sale Bonus would be $400,000.00. The
Sale Bonus shall be paid to you within three (3) months of the
completion of the Sale.
2. Conditions. The payment of all or any part of the Sale
Bonus potentially payable to you hereunder is expressly
conditioned upon the satisfaction of the following conditions:
(a) Your continued employment with the Company through
the date the Sale is completed;
(b) The absence of any material deficiencies in the
performance of your duties and cooperation during the Sale
process as determined by the SFC Board of Directors in its sole
discretion. The factors considered in assessing whether your
performance and cooperation in the Sale process have been
materially deficient include (i) your continued focus on your
regular job responsibilities, (ii) your maintenance of the
confidentiality of non-public information, and (iii) your
positive attitude and cooperativeness;
(c) Your continued employment with the Company (or its
successor) or SFC until three (3) months after the date the Sale
is completed, unless you are terminated after the Sale for other
than Cause;
(d) Your execution and delivery of agreements prepared
by SFC waiving all claims which you have had or may have against
the Company, SFC and/or their respective affiliates other than
any rights granted to you pursuant to any annual bonus plan, long-
term incentive plan, stock option plan, deferred bonus plan,
written employment contract, written severance agreement or other
formal written compensation plan between you and the Company, SFC
and/or their respective affiliates; and
(e) The closing of the Sale being consummated within
three (3) years of the date of this Agreement.
For purposes of this Agreement, "Cause" shall mean (i)
your continued failure to substantially perform your employment
duties (other than as a result of incapacity due to physical or
mental disability), (ii) your gross negligence or dishonesty,
(iii) your repeated violation of any reasonable rule or
regulation of the Company after written notice; or (iv) your
arrest or conviction for the commission of any felony or other
crime involving dishonesty or moral turpitude.
3. Continued Employment. This Agreement is not a contract
of employment. Nothing expressed or implied in this Agreement
shall create any right or duty of your continued employment by
the Company or its successor. The Company reserves all rights to
cause your employment to be terminated at any time with or
without cause.
4. Unfunded Plan. The Company's obligations under this
Agreement shall be unfunded. Neither the Company, SFC or any of
their subsidiaries shall be required to establish any special or
separate fund or to make any other segregation of assets to
assure the payment of any award under this Agreement.
5. Successors Bound. The rights and obligations of the
Company hereunder shall inure to the benefit of and be binding
upon the successors of the Company.
6. Assignment. You shall not assign any rights or
benefits granted to you by the terms of this Agreement or
encumber in any way your interests herein; provided, however,
that in the event of your death, any payments then due and owing
will be made when due to the legal representative of your estate.
7. Notices and Other Documents. All payments, requests,
notices and the like may be made to you by mailing the same to
you at the address set forth below or at such other address as
you may file in writing with the Company for that purpose.
Notices, requests and the like sent by you to the Company shall
be sufficient if mailed to Specialty Foods Corporation, 25 Tri-
State International Office Center, Suite 250, Lincolnshire,
Illinois 60069, Attention: Vice President, Human Resources, or
to such other address as the Company may furnish to you for this
purpose from time to time in writing.
8. Employment Taxes. All payments made under this
Agreement shall be subject to withholding tax, other employment
taxes and other withholds and deductions as required by
applicable law or regulation, as in effect from time to time.
9. Effect of Agreement. This Agreement shall have a term
expiring on June 30, 2000, at which time it shall expire and be
of no further force or effect, except to the extent that rights
of payment have accrued to you hereunder prior to such date.
Notwithstanding the foregoing, you shall only have the right to
collect amounts hereunder on one occasion in connection with the
Sale of the stock or substantially all the assets of the Company
while the Company is owned by SFC. Once such a Sale occurs, you
shall have no further right to collect additional amounts
hereunder upon any subsequent sale.
10. Governing Law/Jurisdiction. The substantive law (and
not the law of conflicts) of the State of Illinois will govern
all questions concerning the construction, validity and
interpretation of this Agreement and the performance of the
obligations imposed by this Agreement. The parties hereby waive
their rights to request or demand a trial by jury in the event
controversy arises under this Agreement.
If the foregoing correctly sets forth your understanding of
the Agreement between us, please sign both copies of this
Agreement in the place indicated below and return one copy to us.
Very truly yours,
METZ BAKING COMPANY
By: /s/ Lawrence S. Benjamin
Name: Lawrence S. Benjamin
Title: Vice President
Agreed to this 30th day of July, 1997
/s/ Robert B. Aiken
Robert B. Aiken
Exhibit 10.58
July 15, 1997
Mr. Henry J. Metz
c/o Metz Baking Company
520 Lake Cook Road
Suite 520
Deerfield, Illinois 60015
Dear Henry:
Metz Baking Company (the "Company") is pleased to inform you
that you are eligible to receive the bonus payments specified in
this letter upon a sale in the next three years (the "Sale") of
the stock or substantially all of the assets of the Company to a
purchaser (the "Purchaser"), subject to the terms and conditions
set forth below:
1. Bonus and Payment Related to Purchase Price. Subject
to the provisions of Section 2, you are eligible to receive a one-
time bonus (the "Sale Bonus") in an amount equal to .15% of the
Purchase Consideration. For purposes of this Agreement,
"Purchase Consideration" shall mean the aggregate net cash
proceeds received by the Company or Specialty Foods Corporation
("SFC") (after deducting all fees and expenses incurred by the
Company, SFC and/or their respective affiliates in connection
with the Sale). By way of example, if the Purchase Consideration
equaled $400,000,000, your Sale Bonus would be $600,000.00. The
Sale Bonus shall be paid to you within six (6) months of the
completion of the Sale.
2. Conditions. The payment of all or any part of the Sale
Bonus potentially payable to you hereunder is expressly
conditioned upon the satisfaction of the following conditions:
(a) Your continued employment with the Company through
the date the Sale is completed;
(b) The absence of any material deficiencies in the
performance of your duties and cooperation during the Sale
process as determined by the SFC Board of Directors in its sole
discretion. The factors considered in assessing whether your
performance and cooperation in the Sale process have been
materially deficient include (i) your continued focus on your
regular job responsibilities, (ii) your maintenance of the
confidentiality of non-public information, and (iii) your
positive attitude and cooperativeness;
(c) Your continued employment with the Company (or its
successor) or SFC until six (6) months after the date the Sale is
completed, unless you are terminated after the Sale for other
than Cause;
(d) Your execution and delivery of agreements prepared
by SFC waiving all claims which you have had or may have against
the Company, SFC and/or their respective affiliates other than
any rights granted to you pursuant to any annual bonus plan, long-
term incentive plan, stock option plan, deferred bonus plan,
written employment contract, written severance agreement or other
formal written compensation plan between you and the Company, SFC
and/or their respective affiliates; and
(e) The closing of the Sale being consummated within
three (3) years of the date of this Agreement.
For purposes of this Agreement, "Cause" shall mean (i)
your continued failure to substantially perform your employment
duties (other than as a result of incapacity due to physical or
mental disability), (ii) your gross negligence or dishonesty,
(iii) your repeated violation of any reasonable rule or
regulation of the Company after written notice; or (iv) your
arrest or conviction for the commission of any felony or other
crime involving dishonesty or moral turpitude.
3. Continued Employment. This Agreement is not a contract
of employment. Nothing expressed or implied in this Agreement
shall create any right or duty of your continued employment by
the Company or its successor. The Company reserves all rights to
cause your employment to be terminated at any time with or
without cause.
4. Unfunded Plan. The Company's obligations under this
Agreement shall be unfunded. Neither the Company, SFC or any of
their subsidiaries shall be required to establish any special or
separate fund or to make any other segregation of assets to
assure the payment of any award under this Agreement.
5. Successors Bound. The rights and obligations of the
Company hereunder shall inure to the benefit of and be binding
upon the successors of the Company.
6. Assignment. You shall not assign any rights or
benefits granted to you by the terms of this Agreement or
encumber in any way your interests herein; provided, however,
that in the event of your death, any payments then due and owing
will be made when due to the legal representative of your estate.
7. Notices and Other Documents. All payments, requests,
notices and the like may be made to you by mailing the same to
you at the address set forth below or at such other address as
you may file in writing with the Company for that purpose.
Notices, requests and the like sent by you to the Company shall
be sufficient if mailed to Specialty Foods Corporation, 25 Tri-
State International Office Center, Suite 250, Lincolnshire,
Illinois 60069, Attention: Vice President, Human Resources, or
to such other address as the Company may furnish to you for this
purpose from time to time in writing.
8. Employment Taxes. All payments made under this
Agreement shall be subject to withholding tax, other employment
taxes and other withholds and deductions as required by
applicable law or regulation, as in effect from time to time.
9. Effect of Agreement. This Agreement shall have a term
expiring on June 30, 2000, at which time it shall expire and be
of no further force or effect, except to the extent that rights
of payment have accrued to you hereunder prior to such date.
Notwithstanding the foregoing, you shall only have the right to
collect amounts hereunder on one occasion in connection with the
Sale of the stock or substantially all the assets of the Company
while the Company is owned by SFC. Once such a Sale occurs, you
shall have no further right to collect additional amounts
hereunder upon any subsequent sale.
10. Governing Law/Jurisdiction. The substantive law (and
not the law of conflicts) of the State of Illinois will govern
all questions concerning the construction, validity and
interpretation of this Agreement and the performance of the
obligations imposed by this Agreement. The parties hereby waive
their rights to request or demand a trial by jury in the event
controversy arises under this Agreement.
If the foregoing correctly sets forth your understanding of
the Agreement between us, please sign both copies of this
Agreement in the place indicated below and return one copy to us.
Very truly yours,
METZ BAKING COMPANY
By: /s/ Lawrence S. Benjamin
Name: Lawrence S. Benjamin
Title: Vice President
Agreed to this 15th day of July, 1997
/s/ Henry J. Metz
Henry J. Metz
Exhibit 10.59
July 15, 1997
Mr. John R. Reisenberg
c/o Specialty Foods Corporation
25 Tri-State International Office Center
Suite 250
Lincolnshire, Illinois 60069
Dear Jack:
Metz Baking Company (the "Company") is pleased to inform you
that you are eligible to receive the bonus payments specified in
this letter upon a sale in the next three years (the "Sale") of
the stock or substantially all of the assets of the Company to a
purchaser (the "Purchaser"), subject to the terms and conditions
set forth below:
1. Bonus and Payment Related to Purchase Price. Subject
to the provisions of Section 2, you are eligible to receive a one-
time bonus (the "Sale Bonus") in an amount equal to .05% of the
Purchase Consideration. For purposes of this Agreement,
"Purchase Consideration" shall mean the aggregate net cash
proceeds received by the Company or Specialty Foods Corporation
("SFC") (after deducting all fees and expenses incurred by the
Company, SFC and/or their respective affiliates in connection
with the Sale). By way of example, if the Purchase Consideration
equaled $400,000,000, your Sale Bonus would be $200,000.00. The
Sale Bonus shall be paid to you within three (3) months of the
completion of the Sale.
2. Conditions. The payment of all or any part of the Sale
Bonus potentially payable to you hereunder is expressly
conditioned upon the satisfaction of the following conditions:
(a) Your continued employment with the Company through
the date the Sale is completed;
(b) The absence of any material deficiencies in the
performance of your duties and cooperation during the Sale
process as determined by the SFC Board of Directors in its sole
discretion. The factors considered in assessing whether your
performance and cooperation in the Sale process have been
materially deficient include (i) your continued focus on your
regular job responsibilities, (ii) your maintenance of the
confidentiality of non-public information, and (iii) your
positive attitude and cooperativeness;
(c) Your continued employment with the Company (or its
successor) or SFC until three (3) months after the date the Sale
is completed, unless you are terminated after the Sale for other
than Cause;
(d) Your execution and delivery of agreements prepared
by SFC waiving all claims which you have had or may have against
the Company, SFC and/or their respective affiliates other than
any rights granted to you pursuant to any annual bonus plan, long-
term incentive plan, stock option plan, deferred bonus plan,
written employment contract, written severance agreement or other
formal written compensation plan between you and the Company, SFC
and/or their respective affiliates; and
(e) The closing of the Sale being consummated within
three (3) years of the date of this Agreement.
For purposes of this Agreement, "Cause" shall mean (i)
your continued failure to substantially perform your employment
duties (other than as a result of incapacity due to physical or
mental disability), (ii) your gross negligence or dishonesty,
(iii) your repeated violation of any reasonable rule or
regulation of the Company after written notice; or (iv) your
arrest or conviction for the commission of any felony or other
crime involving dishonesty or moral turpitude.
3. Continued Employment. This Agreement is not a contract
of employment. Nothing expressed or implied in this Agreement
shall create any right or duty of your continued employment by
the Company or its successor. The Company reserves all rights to
cause your employment to be terminated at any time with or
without cause.
4. Unfunded Plan. The Company's obligations under this
Agreement shall be unfunded. Neither the Company, SFC or any of
their subsidiaries shall be required to establish any special or
separate fund or to make any other segregation of assets to
assure the payment of any award under this Agreement.
5. Successors Bound. The rights and obligations of the
Company hereunder shall inure to the benefit of and be binding
upon the successors of the Company.
6. Assignment. You shall not assign any rights or
benefits granted to you by the terms of this Agreement or
encumber in any way your interests herein; provided, however,
that in the event of your death, any payments then due and owing
will be made when due to the legal representative of your estate.
7. Notices and Other Documents. All payments, requests,
notices and the like may be made to you by mailing the same to
you at the address set forth below or at such other address as
you may file in writing with the Company for that purpose.
Notices, requests and the like sent by you to the Company shall
be sufficient if mailed to Specialty Foods Corporation, 25 Tri-
State International Office Center, Suite 250, Lincolnshire,
Illinois 60069, Attention: Vice President, Human Resources, or
to such other address as the Company may furnish to you for this
purpose from time to time in writing.
8. Employment Taxes. All payments made under this
Agreement shall be subject to withholding tax, other employment
taxes and other withholds and deductions as required by
applicable law or regulation, as in effect from time to time.
9. Effect of Agreement. This Agreement shall have a term
expiring on June 30, 2000, at which time it shall expire and be
of no further force or effect, except to the extent that rights
of payment have accrued to you hereunder prior to such date.
Notwithstanding the foregoing, you shall only have the right to
collect amounts hereunder on one occasion in connection with the
Sale of the stock or substantially all the assets of the Company
while the Company is owned by SFC. Once such a Sale occurs, you
shall have no further right to collect additional amounts
hereunder upon any subsequent sale.
10. Governing Law/Jurisdiction. The substantive law (and
not the law of conflicts) of the State of Illinois will govern
all questions concerning the construction, validity and
interpretation of this Agreement and the performance of the
obligations imposed by this Agreement. The parties hereby waive
their rights to request or demand a trial by jury in the event
controversy arises under this Agreement.
If the foregoing correctly sets forth your understanding of
the Agreement between us, please sign both copies of this
Agreement in the place indicated below and return one copy to us.
Very truly yours,
METZ BAKING COMPANY
By: /s/ LAWRENCE S. BENJAMIN
Name: Lawrence S. Benjamin
Title: Vice President
Agreed to this 15 day of July, 1997
/s/ JOHN R. REISENBERG
John R. Reisenberg
Exhibit 10.60
October 27, 1997
Mr. Lawrence S. Benjamin
787 E. Illinois Road
Lake Forest, Illinois 60045
Dear Larry:
H&M Food Systems Company, Inc. (the "Company") is pleased to
inform you that you are eligible to receive the bonus payments
specified in this letter upon a sale in the next three years (the
"Sale") of the stock or substantially all of the assets of the
Company to a purchaser (the "Purchaser"), subject to the terms
and conditions set forth below:
1. Bonus and Payment Related to Purchase Price. Subject
to the provisions of Section 2, you are eligible to receive a one-
time bonus (the "Sale Bonus") in an amount equal to .40% of the
Purchase Consideration. For purposes of this Agreement,
"Purchase Consideration" shall mean the aggregate net cash
proceeds received by the Company or Specialty Foods Corporation
("SFC") (after deducting all transaction fees and expenses
incurred by the Company, SFC and/or their respective affiliates
in connection with the Sale). By way of example, if the Purchase
Consideration equaled $100,000,000, your Sale Bonus would be
$400,000.00. The Sale Bonus will be paid to you in two equal
installments of .20% of the Purchase Consideration. The first
installment (the "First Installment") will be paid to you within
ninety (90) days of the completion of the Sale and the second
installment (the "Second Installment") will be paid to you on the
first anniversary of the completion of the Sale.
2. Conditions. The payment of all or any part of the Sale
Bonus potentially payable to you hereunder is expressly
conditioned upon the satisfaction of the following conditions:
(a) To receive the First Installment, you must remain
employed by SFC or one of its subsidiaries through the date
occurring ninety (90) days after the date the Sale is completed
(unless you die, are terminated as a result of a Disability
Termination, are Terminated without Cause or Voluntarily
Terminate with Good Reason (as each such term is defined in your
Employment Agreement in effect with SFC on the date hereof) after
the Sale but prior to the date ninety (90) days after the Sale);
(b) To receive the Second Installment, you must remain
employed by SFC or one of its subsidiaries through the first
anniversary of the date the Sale is completed (unless you die,
are terminated as a result of a Disability Termination, are
Terminated without Cause or you Voluntarily Terminate with Good
Reason after the Sale but prior to the first anniversary of the
Sale date); and
(c) To receive either the First Installment or the
Second Installment, the Sale must be completed within three (3)
years of the date of this Agreement.
3. Continued Employment. This Agreement is not a contract
of employment. Nothing expressed or implied in this Agreement
shall create any right or duty of your continued employment by
the Company, SFC or their successors.
4. Unfunded Plan. The Company's obligations under this
Agreement shall be unfunded. Neither the Company, SFC or any of
their subsidiaries shall be required to establish any special or
separate fund or to make any other segregation of assets to
assure the payment of any award under this Agreement.
5. Successors Bound. The rights and obligations of the
Company hereunder shall inure to the benefit of and be binding
upon the successors of the Company.
6. Assignment. You shall not assign any rights or
benefits granted to you by the terms of this Agreement or
encumber in any way your interests herein; provided, however,
that in the event of your death, any payments then due and owing
will be made when due to the legal representative of your estate.
7. Notices and Other Documents. All payments, requests,
notices and the like may be made to you by mailing the same to
you at the address set forth below or at such other address as
you may file in writing with the Company for that purpose.
Notices, requests and the like sent by you to the Company shall
be sufficient if mailed to Specialty Foods Corporation, 25 Tri-
State International Office Center, Suite 250, Lincolnshire,
Illinois 60069, Attention: Vice President, Human Resources, or
to such other address as the Company may furnish to you for this
purpose from time to time in writing.
8. Employment Taxes. All payments made under this
Agreement shall be subject to withholding tax, other employment
taxes and other withholds and deductions as required by
applicable law or regulation, as in effect from time to time.
9. Effect of Agreement. This Agreement shall have a term
expiring on October 25, 2000, at which time it shall expire and
be of no further force or effect, except to the extent that
rights of payment have accrued to you hereunder prior to such
date. Notwithstanding the foregoing, you shall only have the
right to collect amounts hereunder in connection with the Sale of
the stock or substantially all the assets of the Company while
the Company is owned by SFC. Once such a Sale occurs, you shall
have no further right to collect additional amounts hereunder
upon any subsequent sale.
10. Governing Law/Jurisdiction. The substantive law (and
not the law of conflicts) of the State of Illinois will govern
all questions concerning the construction, validity and
interpretation of this Agreement and the performance of the
obligations imposed by this Agreement. The parties hereby waive
their rights to request or demand a trial by jury in the event
controversy arises under this Agreement.
If the foregoing correctly sets forth your understanding of
the Agreement between us, please sign both copies of this
Agreement in the place indicated below and return one copy to us.
Very truly yours,
H&M FOOD SYSTEMS COMPANY, INC.
By: /s/ Robert B. Aiken
Name: Robert B. Aiken
Title: Vice President
Agreed to this 27th day of October, 1997
/s/ Lawrence S. Benjamin
Lawrence S. Benjamin
Exhibit 10.61
July 15, 1997
Mr. Robert L. Fishbune
c/o Specialty Foods Corporation
25 Tri-State International Office Center
Suite 250
Lincolnshire, Illinois 60069
Dear Bob:
H&M Food Systems Company, Inc. (the "Company") is pleased to
inform you that you are eligible to receive the bonus payments
specified in this letter upon a sale in the next three years (the
"Sale") of the stock or substantially all of the assets of the
Company to a purchaser (the "Purchaser"), subject to the terms
and conditions set forth below:
1. Bonus and Payment Related to Purchase Price. Subject
to the provisions of Section 2, you are eligible to receive a one-
time bonus (the "Sale Bonus") in an amount equal to .10% of the
Purchase Consideration. For purposes of this Agreement,
"Purchase Consideration" shall mean the aggregate net cash
proceeds received by the Company or Specialty Foods Corporation
("SFC") (after deducting all fees and expenses incurred by the
Company, SFC and/or their respective affiliates in connection
with the Sale). By way of example, if the Purchase Consideration
equaled $100,000,000, your Sale Bonus would be $100,000.00. The
Sale Bonus shall be paid to you within three (3) months of the
completion of the Sale.
2. Conditions. The payment of all or any part of the Sale
Bonus potentially payable to you hereunder is expressly
conditioned upon the satisfaction of the following conditions:
(a) Your continued employment with the Company or SFC
through the date the Sale is completed;
(b) The absence of any material deficiencies in the
performance of your duties and cooperation during the Sale
process as determined by the SFC Board of Directors in its sole
discretion. The factors considered in assessing whether your
performance and cooperation in the Sale process have been
materially deficient include (i) your continued focus on your
regular job responsibilities, (ii) your maintenance of the
confidentiality of non-public information, and (iii) your
positive attitude and cooperativeness;
(c) Your continued employment with the Company (or its
successor) or SFC until three (3) months after the date the Sale
is completed, unless you are terminated after the Sale for other
than Cause;
(d) Your execution and delivery of agreements prepared
by SFC waiving all claims which you have had or may have against
the Company, SFC and/or their respective affiliates other than
any rights granted to you pursuant to any annual bonus plan, long-
term incentive plan, stock option plan, deferred bonus plan,
written employment contract, written severance agreement or other
formal written compensation plan between you and the Company, SFC
and/or their respective affiliates; and
(e) The closing of the Sale being consummated within
three (3) years of the date of this Agreement.
For purposes of this Agreement, "Cause" shall mean (i)
your continued failure to substantially perform your employment
duties (other than as a result of incapacity due to physical or
mental disability), (ii) your gross negligence or dishonesty,
(iii) your repeated violation of any reasonable rule or
regulation of the Company after written notice; or (iv) your
arrest or conviction for the commission of any felony or other
crime involving dishonesty or moral turpitude.
3. Continued Employment. This Agreement is not a contract
of employment. Nothing expressed or implied in this Agreement
shall create any right or duty of your continued employment by
the Company or its successor. The Company reserves all rights to
cause your employment to be terminated at any time with or
without cause.
4. Unfunded Plan. The Company's obligations under this
Agreement shall be unfunded. Neither the Company, SFC or any of
their subsidiaries shall be required to establish any special or
separate fund or to make any other segregation of assets to
assure the payment of any award under this Agreement.
5. Successors Bound. The rights and obligations of the
Company hereunder shall inure to the benefit of and be binding
upon the successors of the Company.
6. Assignment. You shall not assign any rights or
benefits granted to you by the terms of this Agreement or
encumber in any way your interests herein; provided, however,
that in the event of your death, any payments then due and owing
will be made when due to the legal representative of your estate.
7. Notices and Other Documents. All payments, requests,
notices and the like may be made to you by mailing the same to
you at the address set forth below or at such other address as
you may file in writing with the Company for that purpose.
Notices, requests and the like sent by you to the Company shall
be sufficient if mailed to Specialty Foods Corporation, 25 Tri-
State International Office Center, Suite 250, Lincolnshire,
Illinois 60069, Attention: Vice President, Human Resources, or
to such other address as the Company may furnish to you for this
purpose from time to time in writing.
8. Employment Taxes. All payments made under this
Agreement shall be subject to withholding tax, other employment
taxes and other withholds and deductions as required by
applicable law or regulation, as in effect from time to time.
9. Effect of Agreement. This Agreement shall have a term
expiring on June 30, 2000, at which time it shall expire and be
of no further force or effect, except to the extent that rights
of payment have accrued to you hereunder prior to such date.
Notwithstanding the foregoing, you shall only have the right to
collect amounts hereunder on one occasion in connection with the
Sale of the stock or substantially all the assets of the Company
while the Company is owned by SFC. Once such a Sale occurs, you
shall have no further right to collect additional amounts
hereunder upon any subsequent sale.
10. Governing Law/Jurisdiction. The substantive law (and
not the law of conflicts) of the State of Illinois will govern
all questions concerning the construction, validity and
interpretation of this Agreement and the performance of the
obligations imposed by this Agreement. The parties hereby waive
their rights to request or demand a trial by jury in the event
controversy arises under this Agreement.
If the foregoing correctly sets forth your understanding of
the Agreement between us, please sign both copies of this
Agreement in the place indicated below and return one copy to us.
Very truly yours,
H&M FOOD SYSTEMS COMPANY, INC.
By: /s/ Lawrence S. Benjamin
Name: Lawrence S. Benjamin
Title: Vice President
Agreed to this 15th day of July, 1997
/s/ Robert L. Fishbune
Robert L. Fishbune
Exhibit 10.62
July 15, 1997
Mr. Robert B. Aiken
c/o Specialty Foods Corporation
25 Tri-State International Office Center
Suite 250
Lincolnshire, Illinois 60069
Dear Bob:
H&M Food Systems Company, Inc. (the "Company") is pleased to
inform you that you are eligible to receive the bonus payments
specified in this letter upon a sale in the next three years (the
"Sale") of the stock or substantially all of the assets of the
Company to a purchaser (the "Purchaser"), subject to the terms
and conditions set forth below:
1. Bonus and Payment Related to Purchase Price. Subject
to the provisions of Section 2, you are eligible to receive a one-
time bonus (the "Sale Bonus") in an amount equal to .10% of the
Purchase Consideration. For purposes of this Agreement,
"Purchase Consideration" shall mean the aggregate net cash
proceeds received by the Company or Specialty Foods Corporation
("SFC") (after deducting all fees and expenses incurred by the
Company, SFC and/or their respective affiliates in connection
with the Sale). By way of example, if the Purchase Consideration
equaled $100,000,000, your Sale Bonus would be $100,000.00. The
Sale Bonus shall be paid to you within three (3) months of the
completion of the Sale.
2. Conditions. The payment of all or any part of the Sale
Bonus potentially payable to you hereunder is expressly
conditioned upon the satisfaction of the following conditions:
(a) Your continued employment with the Company or SFC
through the date the Sale is completed;
(b) The absence of any material deficiencies in the
performance of your duties and cooperation during the Sale
process as determined by the SFC Board of Directors in its sole
discretion. The factors considered in assessing whether your
performance and cooperation in the Sale process have been
materially deficient include (i) your continued focus on your
regular job responsibilities, (ii) your maintenance of the
confidentiality of non-public information, and (iii) your
positive attitude and cooperativeness;
(c) Your continued employment with the Company (or its
successor) or SFC until three (3) months after the date the Sale
is completed, unless you are terminated after the Sale for other
than Cause;
(d) Your execution and delivery of agreements prepared
by SFC waiving all claims which you have had or may have against
the Company, SFC and/or their respective affiliates other than
any rights granted to you pursuant to any annual bonus plan, long-
term incentive plan, stock option plan, deferred bonus plan,
written employment contract, written severance agreement or other
formal written compensation plan between you and the Company, SFC
and/or their respective affiliates; and
(e) The closing of the Sale being consummated within
three (3) years of the date of this Agreement.
For purposes of this Agreement, "Cause" shall mean (i)
your continued failure to substantially perform your employment
duties (other than as a result of incapacity due to physical or
mental disability), (ii) your gross negligence or dishonesty,
(iii) your repeated violation of any reasonable rule or
regulation of the Company after written notice; or (iv) your
arrest or conviction for the commission of any felony or other
crime involving dishonesty or moral turpitude.
3. Continued Employment. This Agreement is not a contract
of employment. Nothing expressed or implied in this Agreement
shall create any right or duty of your continued employment by
the Company or its successor. The Company reserves all rights to
cause your employment to be terminated at any time with or
without cause.
4. Unfunded Plan. The Company's obligations under this
Agreement shall be unfunded. Neither the Company, SFC or any of
their subsidiaries shall be required to establish any special or
separate fund or to make any other segregation of assets to
assure the payment of any award under this Agreement.
5. Successors Bound. The rights and obligations of the
Company hereunder shall inure to the benefit of and be binding
upon the successors of the Company.
6. Assignment. You shall not assign any rights or
benefits granted to you by the terms of this Agreement or
encumber in any way your interests herein; provided, however,
that in the event of your death, any payments then due and owing
will be made when due to the legal representative of your estate.
7. Notices and Other Documents. All payments, requests,
notices and the like may be made to you by mailing the same to
you at the address set forth below or at such other address as
you may file in writing with the Company for that purpose.
Notices, requests and the like sent by you to the Company shall
be sufficient if mailed to Specialty Foods Corporation, 25 Tri-
State International Office Center, Suite 250, Lincolnshire,
Illinois 60069, Attention: Vice President, Human Resources, or
to such other address as the Company may furnish to you for this
purpose from time to time in writing.
8. Employment Taxes. All payments made under this
Agreement shall be subject to withholding tax, other employment
taxes and other withholds and deductions as required by
applicable law or regulation, as in effect from time to time.
9. Effect of Agreement. This Agreement shall have a term
expiring on June 30, 2000, at which time it shall expire and be
of no further force or effect, except to the extent that rights
of payment have accrued to you hereunder prior to such date.
Notwithstanding the foregoing, you shall only have the right to
collect amounts hereunder on one occasion in connection with the
Sale of the stock or substantially all the assets of the Company
while the Company is owned by SFC. Once such a Sale occurs, you
shall have no further right to collect additional amounts
hereunder upon any subsequent sale.
10. Governing Law/Jurisdiction. The substantive law (and
not the law of conflicts) of the State of Illinois will govern
all questions concerning the construction, validity and
interpretation of this Agreement and the performance of the
obligations imposed by this Agreement. The parties hereby waive
their rights to request or demand a trial by jury in the event
controversy arises under this Agreement.
If the foregoing correctly sets forth your understanding of
the Agreement between us, please sign both copies of this
Agreement in the place indicated below and return one copy to us.
Very truly yours,
H&M FOOD SYSTEMS COMPANY, INC.
By: /s/ Lawrence S. Benjamin
Name: Lawrence S. Benjamin
Title: Vice President
Agreed to this 15th day of July, 1997
/s/ Robert B. Aiken
Robert B. Aiken
Exhibit 10.63
July 15, 1997
Mr. John R. Reisenberg
c/o Specialty Foods Corporation
25 Tri-State International Office Center
Suite 250
Lincolnshire, Illinois 60069
Dear Jack:
H&M Food Systems Company, Inc. (the "Company") is pleased to
inform you that you are eligible to receive the bonus payments
specified in this letter upon a sale in the next three years (the
"Sale") of the stock or substantially all of the assets of the
Company to a purchaser (the "Purchaser"), subject to the terms
and conditions set forth below:
1. Bonus and Payment Related to Purchase Price. Subject
to the provisions of Section 2, you are eligible to receive a one-
time bonus (the "Sale Bonus") in an amount equal to .05% of the
Purchase Consideration. For purposes of this Agreement,
"Purchase Consideration" shall mean the aggregate net cash
proceeds received by the Company or Specialty Foods Corporation
("SFC") (after deducting all fees and expenses incurred by the
Company, SFC and/or their respective affiliates in connection
with the Sale). By way of example, if the Purchase Consideration
equaled $100,000,000, your Sale Bonus would be $50,000.00. The
Sale Bonus shall be paid to you within three (3) months of the
completion of the Sale.
2. Conditions. The payment of all or any part of the Sale
Bonus potentially payable to you hereunder is expressly
conditioned upon the satisfaction of the following conditions:
(a) Your continued employment with the Company or SFC
through the date the Sale is completed;
(b) The absence of any material deficiencies in the
performance of your duties and cooperation during the Sale
process as determined by the SFC Board of Directors in its sole
discretion. The factors considered in assessing whether your
performance and cooperation in the Sale process have been
materially deficient include (i) your continued focus on your
regular job responsibilities, (ii) your maintenance of the
confidentiality of non-public information, and (iii) your
positive attitude and cooperativeness;
(c) Your continued employment with the Company (or its
successor) or SFC until three (3) months after the date the Sale
is completed, unless you are terminated after the Sale for other
than Cause;
(d) Your execution and delivery of agreements prepared
by SFC waiving all claims which you have had or may have against
the Company, SFC and/or their respective affiliates other than
any rights granted to you pursuant to any annual bonus plan, long-
term incentive plan, stock option plan, deferred bonus plan,
written employment contract, written severance agreement or other
formal written compensation plan between you and the Company, SFC
and/or their respective affiliates; and
(e) The closing of the Sale being consummated within
three (3) years of the date of this Agreement.
For purposes of this Agreement, "Cause" shall mean (i)
your continued failure to substantially perform your employment
duties (other than as a result of incapacity due to physical or
mental disability), (ii) your gross negligence or dishonesty,
(iii) your repeated violation of any reasonable rule or
regulation of the Company after written notice; or (iv) your
arrest or conviction for the commission of any felony or other
crime involving dishonesty or moral turpitude.
3. Continued Employment. This Agreement is not a contract
of employment. Nothing expressed or implied in this Agreement
shall create any right or duty of your continued employment by
the Company or its successor. The Company reserves all rights to
cause your employment to be terminated at any time with or
without cause.
4. Unfunded Plan. The Company's obligations under this
Agreement shall be unfunded. Neither the Company, SFC or any of
their subsidiaries shall be required to establish any special or
separate fund or to make any other segregation of assets to
assure the payment of any award under this Agreement.
5. Successors Bound. The rights and obligations of the
Company hereunder shall inure to the benefit of and be binding
upon the successors of the Company.
6. Assignment. You shall not assign any rights or
benefits granted to you by the terms of this Agreement or
encumber in any way your interests herein; provided, however,
that in the event of your death, any payments then due and owing
will be made when due to the legal representative of your estate.
7. Notices and Other Documents. All payments, requests,
notices and the like may be made to you by mailing the same to
you at the address set forth below or at such other address as
you may file in writing with the Company for that purpose.
Notices, requests and the like sent by you to the Company shall
be sufficient if mailed to Specialty Foods Corporation, 25 Tri-
State International Office Center, Suite 250, Lincolnshire,
Illinois 60069, Attention: Vice President, Human Resources, or
to such other address as the Company may furnish to you for this
purpose from time to time in writing.
8. Employment Taxes. All payments made under this
Agreement shall be subject to withholding tax, other employment
taxes and other withholds and deductions as required by
applicable law or regulation, as in effect from time to time.
9. Effect of Agreement. This Agreement shall have a term
expiring on June 30, 2000, at which time it shall expire and be
of no further force or effect, except to the extent that rights
of payment have accrued to you hereunder prior to such date.
Notwithstanding the foregoing, you shall only have the right to
collect amounts hereunder on one occasion in connection with the
Sale of the stock or substantially all the assets of the Company
while the Company is owned by SFC. Once such a Sale occurs, you
shall have no further right to collect additional amounts
hereunder upon any subsequent sale.
10. Governing Law/Jurisdiction. The substantive law (and
not the law of conflicts) of the State of Illinois will govern
all questions concerning the construction, validity and
interpretation of this Agreement and the performance of the
obligations imposed by this Agreement. The parties hereby waive
their rights to request or demand a trial by jury in the event
controversy arises under this Agreement.
If the foregoing correctly sets forth your understanding of
the Agreement between us, please sign both copies of this
Agreement in the place indicated below and return one copy to us.
Very truly yours,
H&M FOOD SYSTEMS COMPANY, INC.
By: /s/ LAWRENCE S. BENJAMIN
Name: Lawrence S. Benjamin
Title: Vice President
Agreed to this 15 day of July, 1997
/s/ JOHN R. REISENBERG
John R. Reisenberg
Exhibit 10.67
BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS: SF Leasing L.L.C.
("Seller") for and in consideration of the sum of Fifteen Million
Three Hundred Thirty Six Thousand Eight Hundred Sixty Five and
75/100 Dollars ($15,336,865.75) plus sales taxes in the amount of
$0 Dollars (exempt) (if exemption from sales tax is claimed, an
exemption certificate must be furnished herewith), paid by Stella
Foods, Inc. (together with its successors and assigns, the
"Buyer") receipt of which is acknowledged, hereby grants, sells,
assigns, transfers and delivers to Buyer the equipment (the
"Equipment") described in Schedules No. 1 and No. 2 and Annex A
to Schedules No. 1 and No. 2, dated November 14, 1996, to the
Master Lease Agreement, dated as of November 14, 1996, among
Seller, as lessor, and Buyer and Metz Baking Company,
collectively as lessees (said Schedules and related Master Lease
Agreement, as amended, supplemented or otherwise modified, being
collectively referred to herein as the "Lease"), to have and to
hold the Equipment unto Buyer and its successors with permitted
assigns, to and for its and their proper use and benefit,
forever, along with whatever claims and rights Seller may have
against the manufacturer and/or supplier of the Equipment (the
"Supplier"), including but not limited to all warranties and
representations.
Buyer is purchasing the Equipment in its AS IS WHERE IS
CONDITION in accordance with the exercise of its early purchase
option under Section XXII of the Lease. Seller represents and
warrants to Buyer that Buyer will acquire by the terms of this
Bill of Sale all of Seller's right, title and interest in the
Equipment free and clear of any lien or encumbrance created by,
through or under Seller.
Seller hereby covenants with Buyer and its successors and
permitted assigns that, from time to time after the date hereof,
Seller will execute and deliver to Buyer such instruments of
transfer, conveyance, assignment and delivery as may reasonably
be requested by Buyer in order to vest in Buyer all of Seller's
right, title or interest in or to, any of the Equipment.
IN WITNESS WHEREOF, Seller has executed this Bill of Sale
this 5th day of December, 1997.
SELLER:
SF Leasing L.L.C.
By: /s/ Douglas D. Wheat
Name: Douglas D. Wheat
Title: President
Exhibit 21.1
SUBSIDIARIES OF SPECIALTY FOODS ACQUISITION CORPORATION
Name State of
Incorporation
Specialty Foods Acquisition Corporation Delaware
Specialty Foods Finance Corporation Delaware
Specialty Foods Corporation Delaware
MBC Holdings, Inc. Delaware
Metz Holdings, Inc. Delaware
Metz Baking Company Iowa
Metz Baking Company Delaware
WFB Holdings, Inc. Delaware
Pacific Coast Baking Company,Inc. Delaware
SFFB Holdings, Inc. Delaware
SanFran FB, Inc. California
Andre-Boudin Bakeries, Inc. California
Fisherman's Wharf French Bread
Bakeries, Inc. California
Boudin International, Inc. California
Laura Todd of America California
Steve's Drayage California
A. Trocano Construction,Inc. California
Gelsi, Inc. California
SanFran SB Holdings, Inc. California
PBI Holdings, Inc. California
San Francisco Bay Area
Equipment & Supply California
San Francisco Baking Cultures California
SFSC, Inc. Delaware
Larraburu Bakery California
Belsea Holdings, Inc. Delaware
GSFBC Holdings, Inc. Washington
LANG Holdings, Inc. Washington
GBC Holdings, Inc. Washington
OFBC Holdings, Inc. Washington
SEM Holdings, Inc. Washington
Former VB Holdings, Ltd. British Columbia
TBP Holdings, Inc. California
B.P. Bar, Inc. California
GWI Holdings, Inc. Delaware
GWI, Inc. Delaware
MCC-DSD Holdings, Inc. Delaware
Mother's Cake & Cookie Co. California
HMFS Holdings, Inc. Delaware
H&M Food Systems Company, Inc. Delaware
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 235,033
<SECURITIES> 0
<RECEIVABLES> 20,337
<ALLOWANCES> 1,174
<INVENTORY> 35,577
<CURRENT-ASSETS> 297,173
<PP&E> 308,845
<DEPRECIATION> 120,971
<TOTAL-ASSETS> 527,972
<CURRENT-LIABILITIES> 140,174
<BONDS> 748,250
0
0
<COMMON> 0
<OTHER-SE> (403,804)
<TOTAL-LIABILITY-AND-EQUITY> 527,972
<SALES> 919,657
<TOTAL-REVENUES> 919,657
<CGS> 507,820
<TOTAL-COSTS> 373,718
<OTHER-EXPENSES> 5,397
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 90,875
<INCOME-PRETAX> (58,153)
<INCOME-TAX> 286
<INCOME-CONTINUING> (58,439)
<DISCONTINUED> 155,514
<EXTRAORDINARY> (5,714)
<CHANGES> 0
<NET-INCOME> 91,361
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
