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EXHIBIT 10.2
FINANCIAL ADVISORY AGREEMENT
THIS FINANCIAL ADVISORY AGREEMENT (this "Agreement") is made and
entered into as of November 1, 1996, between International Home Foods, Inc.
(the "Company"), a Delaware corporation, and ▇▇▇▇▇, Muse & Co. Partners, L.P.,
a Texas limited partnership (together with its successors, "HMCo.").
WHEREAS, certain affiliates of HMCo., including Hicks, Muse, ▇▇▇▇ &
▇▇▇▇▇ Equity Fund III, L.P. ("HMTF") are simultaneously with the execution of
this Agreement, acquiring all or a portion of the common stock of the Company
(the "Acquisition");
WHEREAS, HMCo. has rendered, financial advisory services in connection
with the negotiation of the Acquisition and the debt and equity financing
transactions related thereto (collectively with the Acquisition, the
"Transaction"); and
WHEREAS, the Company has requested that HMCo. render financial
advisory, investment banking, and other similar services to the Company with
respect to any future proposals for a tender offer, acquisition, sale, merger,
exchange offer, recapitalization, restructuring, or other similar transaction
directly or indirectly involving the Company, or any of its subsidiaries, and
any other person or entity (collectively, "Add-on Transactions");
NOW, THEREFORE, in consideration of the services rendered and to be
rendered by HMCo. and to evidence the obligations of the Company to HMCo. and
the mutual covenants herein contained, the Company and HMCo. hereby agree as
follows:
1. Retention.
(a) The Company hereby acknowledges that it has retained
HMCo. for the benefit of the Company, and HMCo. acknowledges that it has acted,
as financial advisor to the Company in connection with the Transaction.
(b) The Company acknowledges that it has retained HMCo.
as the exclusive financial advisor in connection with any Add-on Transactions
that may be consummated during the term of this Agreement, and that the Company
will not retain any other person or entity to provide such services in
connection with any such Add-on Transaction without the prior written consent
of HMCo. HMCO. agrees that it shall provide such financial advisory, investment
banking, and other similar services in connection with any such Add-on
Transaction as may be requested from time to time by the board of directors of
the Company.
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2. Term. The term of this Agreement shall continue until the
earlier to occur of (i) the tenth anniversary of the date hereof or (ii) the
date on which HMTF and its affiliates cease to own beneficially, directly or
indirectly, any securities of the Company or its successors.
3. Compensation.
(a) As compensation for HMCo.'s services as financial
advisor to the Company in connection with the Transaction, the Company hereby
irrevocably agrees to pay to HMCo. a cash fee of $19,125,000 to be paid at the
closing of the Transaction. The parties hereto agree that the compensation due
pursuant to this Section 3(a) shall be allocated among the segments of the
financing for the Transaction in proportion to the dollar amount of each such
segment.
(b) As compensation for HMCo.'s financial advisory,
investment banking, and other similar services rendered in connection with any
Add-on Transaction pursuant to Section 1(b) hereof, the Company shall pay to
HMCo., at the closing of any such Add-on Transaction, a cash fee in the amount
of 1.5% of the Transaction Value of such Add-on Transaction. As used herein,
the term "Transaction Value" means the total value of the Add-on Transaction,
including, without limitation, the aggregate amount of the funds required to
complete the Add-on Transaction (excluding any fees payable pursuant to this
Section 3(b)) including the amount of any indebtedness, preferred stock or
similar items assumed (or remaining outstanding).
4. Reimbursement of Expenses. In addition to the compensation to
be paid pursuant to Section 3 hereof, the Company agrees to reimburse HMCo.,
promptly following demand therefor, together with invoices or reasonably
detailed descriptions thereof, for all reasonable disbursements and
out-of-pocket expenses (including fees and disbursements of counsel) incurred
by HMCo. (i) as financial advisor to the Company in connection with the
Transaction or (ii) in connection with the performance by it of the services
contemplated by Section 1(b) hereof.
5. Indemnification. The Company shall indemnify and hold
harmless each of HMCo., its affiliates, and their respective directors,
officers, controlling persons (within the meaning of Section 15 of the
Securities Act of 1933 or Section 20(a) of the Securities Exchange Act of
1934), if any, agents and employees (HMCo., its affiliates, and such other
specified persons being collectively referred to as "Indemnified Persons" and
individually as an "Indemnified Person") from and against any and all claims,
liabilities, losses, damages and expenses incurred by any Indemnified Person
(including those resulting from the negligence of the Indemnified Person and
fees and disbursements of the respective Indemnified Person's counsel) which
(A) are related to or arise out of (i) actions taken or omitted to be taken
(including any untrue statements made or any statements omitted to be made) by
the Company or (ii) actions taken or omitted to be taken by an Indemnified
Person with the Company's consent or in conformity with the Company's
instructions or the Company's actions or omissions or (B) are otherwise related
to or arise out of HMCo.'s engagement, and will reimburse each Indemnified
Person for all costs and expenses, including fees of any Indemnified Person's
counsel, as they are incurred, in connection with investigating, preparing for,
defending, or appealing any action, formal or informal claim, investigation,
inquiry or other
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proceeding, whether or not in connection with pending or threatened litigation,
caused by or arising out of or in connection with HMCo.'s acting pursuant to
the engagement, whether or not any Indemnified Person is named as a party
thereto and whether or not any liability results therefrom. The Company will
not however, be responsible for any claims, liabilities, losses, damages, or
expenses pursuant to clause (B) of the preceding sentence that have resulted
primarily from HMCo.'s bad faith, gross negligence or willful misconduct. The
Company also agrees that neither HMCo. nor any other Indemnified ▇▇▇▇▇▇ shall
have any liability to the Company for or in connection with such engagement
except for any such liability for claims, liabilities, losses, damages, or
expenses incurred by the Company that have resulted primarily from HMCo.'s bad
faith, gross negligence or willful misconduct. The Company further agrees that
it will not, without the prior written consent of HMCo., settle or compromise
or consent to the entry of any judgment in any pending or threatened claim,
action, suit or proceeding in respect of which indemnification may be sought
hereunder (whether or not any Indemnified Person is an actual or potential
party to such claim, action, suit or proceeding) unless such settlement,
compromise or consent includes an unconditional release of HMCo. and each other
Indemnified Person hereunder from all liability arising out of such claim,
action, suit or proceeding. THE COMPANY HEREBY ACKNOWLEDGES THAT THE FOREGOING
INDEMNITY SHALL BE APPLICABLE TO ANY CLAIMS, LIABILITIES, LOSSES, DAMAGES, OR
EXPENSES THAT HAVE RESULTED FROM OR ARE ALLEGED TO HAVE RESULTED FROM THE
ACTIVE OR PASSIVE OR THE SOLE, JOINT OR CONCURRENT ORDINARY NEGLIGENCE OF HMCO.
OR ANY OTHER INDEMNIFIED PERSON.
The foregoing right to indemnity shall be in addition to any rights
that HMCo. and/or any other Indemnified Person may have at common law or
otherwise and shall remain in full force and effect following the completion or
any termination of the engagement. The Company hereby consents to personal
jurisdiction and to service and venue in any court in which any claim which is
subject to this agreement is brought against HMCo. or any other Indemnified
Person.
It is understood that, in connection with HMCo.'s engagement, HMCo.
may also be engaged to act for the Company in one or more additional
capacities, and that the terms of this engagement or any such additional
engagement may be embodied in one or more separate written agreements. This
indemnification shall apply to the engagement specified in the first paragraph
hereof as well as to any such additional engagement(s) (whether written or
oral) and any modification of said engagement or such additional engagement(s)
and shall remain in full force and effect following the completion or
termination of said engagement or such additional engagements.
The Company further understands that if HMCo. is asked to furnish the
Company a financial opinion letter or act for the Company in any other formal
capacity, such further action may be subject to a separate agreement containing
provisions and terms to be mutually agreed upon.
6. Confidential Information. In connection with the performance
of the services hereunder, HMCo. agrees not to divulge any confidential
information, secret processes or trade secrets disclosed by the Company to it
solely in its capacity as a financial advisor, unless the Company consents to
the divulging thereof or such information, secret processes, or trade secrets
are publicly available or otherwise available to HMCo. without restriction or
breach of any
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confidentiality agreement or unless required by any governmental authority or
in response to any valid legal process.
7. Governing Law. This Agreement shall be construed,
interpreted, and enforced in accordance with the laws of the State of Texas,
excluding any choice-of-law provisions thereof.
8. Assignment. This Agreement and all provisions contained
herein shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns; provided, however, neither this
Agreement nor any of the rights, interests, or obligations hereunder shall be
assigned (other than with respect to the rights and obligations of HMCo., which
may be assigned to any one or more of its principals or affiliates) by any of
the parties without the prior written consent of the other parties.
9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and the signature of any
party to any counterpart shall be deemed a signature to, and may be appended
to, any other counterpart.
10. Other Understanding. All discussions, understandings, and
agreements theretofore made between any of the parties hereto with respect to
the subject matter hereof are merged in this Agreement, which alone fully and
completely expresses the Agreement of the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
▇▇▇▇▇, MUSE & CO. PARTNERS, L.P.,
its General Partner
By: HM PARTNERS INC., its General
Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title:
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INTERNATIONAL HOME FOODS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Vice President and
Assistant Secretary
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