FIFTH AMENDMENT, CONSENT AND WAIVER, dated as of December 3, 1997
(this "Amendment"), to:
(a) the Term Loan Agreement, dated as of July 17,
1995, as amended (the "Term Loan Agreement" and, as amended
hereby and as from time to time further amended, supplemented or
otherwise modified, the "Term Loan Agreement"), among SPECIALTY
FOODS CORPORATION, a Delaware corporation (the "Term Loan
Borrower"), the several banks and other financial institutions
from time to time parties thereto (the "Term Loan Lenders"), and
THE CHASE MANHATTAN BANK, a New York banking corporation, as
administrative agent for the Term Loan Lenders (the
"Administrative Agent"); and
(b) the Revolving Credit Agreement dated as of August
16, 1993 and amended and restated as of July 17, 1995, as amended
(the "Revolving Credit Agreement" and, as amended hereby and as
from time to time further amended, supplemented or otherwise
modified, the "Revolving Credit Agreement"), among each of the
subsidiaries of SPECIALTY FOODS CORPORATION signatory thereto
(collectively, the "Revolving Credit Borrowers"), the several
banks and other financial institutions from time to time parties
thereto (collectively, the "Revolving Credit Lenders") and the
Administrative Agent.
W I T N E S S E T H :
WHEREAS, the Term Loan Borrower, the Revolving Credit
Borrowers, the Administrative Agent and the Lenders wish to amend
and waive certain terms of the Term Loan Agreement and the Fourth
Amendment (as defined in the Term Loan Agreement) in the manner
provided for herein; and
WHEREAS, the Term Loan Borrower and the Revolving
Credit Borrowers have requested the Administrative Agent and the
Lenders to consent to certain amendments, modifications and
supplements to the Receivables Purchase Documents as provided for
herein;
NOW THEREFORE, in consideration of the premises
contained herein, the parties hereto agree as follows:
SECTION I. Definitions.
1. Defined Terms. Unless otherwise defined in this
Amendment, terms which are defined in the Term Loan Agreement or
the Revolving Credit Agreement and used herein are so used as so
defined. Unless otherwise indicated, all Section, subsection and
Schedule references are to the Term Loan Agreement.
SECTION II. Amendments and Waivers under Term Loan Agreement.
1. Amendments to Subsection 1.1. Subsection 1.1 of
the Term Loan Agreement is hereby amended by adding thereto the
following definitions, each in its proper alphabetical order:
"Collateral Investment Account II": as defined in
Collateral Investment Agreement II."
"Collateral Investment Agreement II": a Collateral
Investment Agreement executed and delivered by the Term Loan
Borrower and the Administrative Agent in connection with the
Fifth Amendment, in substantially the form attached to the
Fifth Amendment as Exhibit E thereto, pursuant to which the
Term Loan Borrower shall (a) deposit on the date on which
the Term Loan Borrower and its Subsidiaries shall have (i)
received the Asset Sale Proceeds from the Stella Sale and
(ii) reduced the outstanding Revolving Credit Loans and
Swing Line Loans (but not the Revolving Credit Commitments)
to zero as required by Section III of the Fifth Amendment,
an amount equal to 100% of the sum of (x) the Term Loan
Obligations then outstanding and (y) the L/C Obligations
then outstanding in a collateral investment account
("Collateral Investment Account II") and (b) grant a
security interest in the cash and investments and
reinvestments from time to time in Collateral Investment
Account II to the Administrative Agent for the ratable
benefit of the Term Loan Lenders and the Revolving Credit
Lenders."
"Fifth Amendment": the Fifth Amendment, Consent
and Waiver, dated as of December 3, 1997, to this Agreement
and the Revolving Credit Agreement."
"Fifth Amendment Effective Date": as defined in
the Fifth Amendment."
2. Limited Waiver of Subsection 6.6(e). (a) The
Administrative Agent, the Term Loan Lenders and the Revolving
Credit Lenders hereby waive, only with respect to the proposed
sale of the Capital Stock of Stella Holdings, Inc. and its
subsidiaries as described in Schedule 2.2 to this Amendment (the
"Stella Sale") and not otherwise, the provisions of subsection
6.6(e) of the Term Loan Agreement, to the extent (and only to the
extent) any such sale would not be permitted under subsection
6.6(e)(ii) of the Term Loan Agreement. For the avoidance of
doubt, the Stella Sale shall, if consummated, be included in the
calculation of the "Applicable Asset Sale Percentages" for
purposes of the proviso to subsection 6.6(e)(ii) of the Term Loan
Agreement from and after the date thereof for purposes of
determining availability of the "40%" referred to therein for any
subsequent sale of all or substantially all of the assets or
Capital Stock of any Subsidiary (or any division or operating
unit or line of business thereof).
(b) The Administrative Agent, the Term Loan Lenders
and the Revolving Credit Lenders hereby waive, only with respect
to the sale by H & M Food Systems Company, Inc. of the items
listed on Exhibit A hereto (the "Meat Line") and not otherwise
and only to the extent that the book value of the Meat Line at
the time of sale does not exceed $200,000, compliance by the Term
Loan Borrower with subsection 6.6(e) of the Term Loan Agreement
(including the provision therein requiring that at least 80% of
the consideration received in connection with such sale be
received in cash or Cash Equivalents).
SECTION III. Temporary Waiver under Fourth Amendment.
1. The Administrative Agent, the Term Loan Lenders and
the Revolving Credit Lenders hereby waive, during the period
commencing on the Fifth Amendment Effective Date to but not
including March 31, 1998 but not thereafter (the "Waiver
Period"), compliance with the requirement of Section V(a) of the
Fourth Amendment that any prepayments and commitment reductions
required pursuant thereto be made within three Business Days
after the receipt of the related Asset Sale Proceeds, provided
that the Term Loan Borrower shall (i) on the date it receives
such Asset Sale Proceeds (A) execute and deliver Collateral
Investment Agreement II to the Administrative Agent and pursuant
thereto deposit in Collateral Investment Account II to the
Administrative Agent an amount equal to 100% of the sum of (x)
the Term Loan Obligations then outstanding and (y) the L/C
Obligations then outstanding and (B) reduce the then outstanding
principal amount of the Revolving Credit Loans and Swing Line
Loans (but not the Revolving Credit Commitments) to zero and (ii)
if and to the extent that any Revolving Credit Borrower requests
any Letter of Credit to be issued or increased, on the date of
such issuance or increase, deposit in Collateral Investment
Account II an amount equal to 100% of the amount of such new
Letter of Credit or such increase, as the case may be. At the
end of the Waiver Period the Borrower shall make all prepayments
and commitment reductions that would have been required before or
during such Waiver Period as required by Section V(a) of the
Fourth Amendment but for this Section III.1.
2. The Revolving Credit Borrowers hereby irrevocably
agree that they shall not request, and agree that the Revolving
Credit Lenders shall not extend, any Revolving Credit Loans or
Swing Line Loans during the Waiver Period.
3. Notwithstanding anything to the contrary contained
in the Term Loan Agreement, the Revolving Credit Agreement, the
Third Amendment, the Fourth Amendment or herein, any (i) release
of collateral from Collateral Investment Account II or (ii)
amendment, waiver or other modification of the provisions of
Section III.2 hereof shall not be effective without the approval
of the Supermajority Lenders.
4. The Term Loan Borrower hereby agrees that (a)
nothing in this Section III shall affect or postpone any
obligation it may have to prepay the Term Loans or to reduce the
Revolving Credit Commitments with any Asset Sale Proceeds as
required by Section V(b) of the Fourth Amendment (other than the
temporary waiver with respect to Asset Sale Proceeds from the
Stella Sale) and (b) notwithstanding anything to the contrary
contained in the Term Loan Agreement, the Third Amendment or the
Fourth Amendment, it shall not consummate any Acquisitions during
the Waiver Period in excess of $10,000,000 in the aggregate.
5. Notwithstanding anything to the contrary contained
in the Term Loan Agreement, the Third Amendment, the Fourth
Amendment or herein, any Asset Sale Proceeds remaining after the
Term Loan Borrower has complied with the requirements of this
Section III shall not be subject to the provisions of Section
IV(a)(ii) of the Third Amendment to the extent, but only to the
extent, that such Section IV(a)(ii) would require such Asset Sale
Proceeds to be deposited in the Collateral Investment Account.
6. Failure by the Term Loan Borrower to comply with
any of the provisions of this Section III shall constitute an
Event of Default under the Term Loan Agreement and the Revolving
Credit Agreement.
SECTION IV. Consent to Amendment of Receivables Purchase
Documents.
The Lenders hereby consent to the amendments,
modifications and supplements to the Receivables Purchase
Documents pursuant to each of:
(a) Amendment No. 4, substantially in the form of
Exhibit B hereto, to the Pooling Agreement, dated as of
November 16, 1994 (as amended, the "Pooling Agreement"),
among Specialty Foods Finance Corporation, a Delaware
corporation (the "Company"), Specialty Foods Corporation, a
Delaware corporation, as master servicer (the "Master
Servicer"), and The Chase Manhattan Bank, as trustee (in
such capacity, the "Trustee");
(b) Amendment No. 4, substantially in the form of
Exhibit C hereto, to the Amended and Restated Receivables
Sale Agreement, dated as of November 16, 1994 (as amended,
the "Receivables Sale Agreement"), among the Company, the
Master Servicer, each of the subsidiaries of the Master
Servicer from time to time party thereto (each a "Seller")
(collectively, the "Receivables Amendments");
(c) the Servicing Agreement, dated as of November 16,
1994 (as amended, the "Servicing Agreement"), among the
Company, the Master Servicer, each of the subsidiaries of
the Master Servicer from time to time party thereto (each a
"Servicer") and the Trustee (collectively with (a) and (b)
above, the "Receivables Amendments");
in connection with the Stella Sale, upon the execution and
delivery of the Receivables Amendments effecting such amendments,
modifications and supplements substantially in the form attached
hereto as Exhibits B and C, with the effect that the Receivables
Purchase Documents for all purposes of the Term Loan Agreement
and the Revolving Credit Agreement shall thereafter be deemed to
include such amendments, modifications and supplements.
SECTION V. Miscellaneous Provisions.
1. Consent to Amendment. Each Lender hereby consents
to the agreements, amendments, consents and waivers provided for
herein.
2. Conditions Precedent. This Amendment shall become
effective on and as of the date first written above (the "Fifth
Amendment Effective Date"), provided that each of the conditions
precedent set forth below shall have been waived by or fulfilled
to the satisfaction of the Administrative Agent on or prior to
such date:
(a) Amendment. The Administrative Agent shall have
received counterparts of this Amendment, duly executed by
the Term Loan Borrower, the Revolving Credit Borrowers and
the Administrative Agent, and consented to by the Required
Lenders.
(b) Amendment Documents. The Administrative Agent
shall have received each of the following (together with
this Amendment, the "Amendment Documents"):
(1) Consents to Security Documents and
Guarantees. A Consent, with a counterpart for each
Lender, substantially in the form attached hereto as
Exhibit D, from each party to any Security Document
acknowledging and consenting to the execution, delivery
and performance of this Amendment and the transactions
contemplated hereby, in each case, executed and
delivered by a duly authorized officer of such party;
and
(2) Collateral Investment Agreement II.
Collateral Investment Agreement II, substantially in
the form of Exhibit E to this Amendment, duly executed
and delivered by the Term Loan Borrower.
(c) Calculation Certificate. The Administrative Agent
shall have received the certificate of a Responsible Officer
(as described in the definition of Applicable Asset Sale
Percentage) setting forth in reasonable detail the
calculations and assumptions used in determining the
Applicable Asset Sale Percentage after giving effect to the
Stella Sale.
(d) Corporate Proceedings of the Borrowers. The
Administrative Agent shall have received a copy of the
resolutions, in form and substance reasonably satisfactory
to the Administrative Agent, of the Board of Directors of
(A) the Term Loan Borrower and (B) each of the Revolving
Credit Borrowers authorizing or confirming the execution,
delivery and performance of the Amendment Documents to which
it is a party certified by the Secretary or an Assistant
Secretary of such Term Loan Borrower or Revolving Credit
Borrower as of the Fifth Amendment Effective Date and each
such certificate shall state that the resolutions thereby
certified have not been amended, modified, revoked or
rescinded as of the date of such certificate.
(e) Stella Sale. The Administrative Agent shall have
received evidence satisfactory to it that the Stella Sale
has been consummated for a price yielding (i) aggregate cash
proceeds to the Borrower of approximately $405.0 million
(subject to customary adjustments) and (ii) Net Cash
Proceeds sufficient to (A) repay the aggregate then
outstanding principal amount of the Revolving Credit Loans
and (B) deposit in the Collateral Investment Account II an
amount equal to 100% of the sum of (x) the Term Loan
Obligations then outstanding and (y) the L/C Obligations
then outstanding.
(f) Amendment of Receivables Purchase Documents. The
Administrative Agent shall have received certified copies of
amendments to the Receivables Purchase Documents in
substantially the form attached hereto as Exhibits A and B
along with satisfactory evidence of the due authorization
and valid execution of the same.
(g) No Default or Event of Default. On and as of the
Fifth Amendment Effective Date and after giving effect to
this Amendment, no Default or Event of Default shall have
occurred and be continuing except to the extent and only to
the extent waived herein.
(h) Representations and Warranties. The
representations and warranties made by the (A) Term Loan
Borrower in the Term Loan Agreement and (B) the Revolving
Credit Borrowers in the Revolving Credit Agreement, after
giving effect to this Amendment and the transactions
contemplated hereby, shall be true and correct in all
material respects on and as of the Fifth Amendment Effective
Date as if made on such date, except where such
representations and warranties relate to an earlier date in
which case such representations and warranties shall be true
and correct in all material respects as of such earlier date
and except to the extent and only to the extent waived
herein; provided that all references to the Term Loan
Agreement and the Revolving Credit Agreement in such
representations and warranties shall be and are deemed to
mean this Amendment as well as the Term Loan Agreement and
Revolving Credit Agreement as amended hereby.
(i) Certificate. The Administrative Agent shall have
received a Certificate of a Responsible Officer of (i) the
Term Loan Borrower and (ii) each of the Revolving Credit
Borrowers certifying the matters referred to in paragraphs
(g) and (h) above.
(j) Other. The Administrative Agent shall have
received copies of opinions, certificates, or agreements as
shall reasonably be requested by the Administrative Agent or
the Required Lenders.
3. Covenant to Cancel Outstanding Letters of Credit.
As soon as practicable following the Stella Sale, the Term Loan
Borrower shall cause all outstanding Letters of Credit issued
pursuant to the Revolving Credit Agreement for which Stella
Holdings, Inc. or any of its Subsidiaries is account party to be
cancelled and the originals thereof, marked "Cancelled," to be
delivered to the Administrative Agent on behalf of the respective
Issuing Banks.
4. Continuing Effect; No Other Amendments; No Waiver.
Except as expressly amended hereby, all of the terms and
provisions of the Term Loan Agreement and the Revolving Credit
Agreement are and shall remain in full force and effect, and no
provision of such agreements is waived hereby except as and only
to the extent expressly set forth herein.
5. Expenses. The Term Loan Borrower and the Revolving
Credit Borrowers agree to reimburse the Administrative Agent for
all its reasonable costs and out-of-pocket expenses incurred in
connection with the preparation and delivery of this Amendment,
including, without limitation, the reasonable fees and
disbursements of counsel to such Administrative Agent.
6. Counterparts and Execution. (a) This Amendment may
be executed in any number of counterparts by the parties hereto,
each of which counterparts when so executed shall be an original,
but all counterparts taken together shall constitute one and the
same instrument.
(b) Any Lender which executes and delivers to the
Administrative Agent this Amendment (and, prior to the Fifth
Amendment Effective Date, does not withdraw its delivery thereof)
shall be treated as having executed and delivered this Fifth
Amendment as the holder of all Term Loans and Revolving Credit
Commitments held of record by it on the date of its delivery to
the Administrative Agent of this Amendment and held of record by
it thereafter and on or prior to the Fifth Amendment Effective
Date, and such execution and delivery shall be binding upon any
Assignee from it of any such Term Loans or Revolving Credit
Commitments.
7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
8. Release of Revolving Credit Borrower. Upon the
Fifth Amendment Effective Date, Stella Holdings, Inc. shall be
released as a Revolving Credit Borrower without any further
action being required.
* * *
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed and delivered by their respective duly
authorized officers as of the date first above written.
SPECIALTY FOODS CORPORATION,
as Term Loan Borrower
BY:
Name:
Title:
BELSEA HOLDINGS INC.,
as Revolving Credit Borrower
BY:
Name:
Title:
H & M FOOD SYSTEMS COMPANY, INC.,
as Revolving Credit Borrower
BY:
Name:
Title:
▇▇▇▇ HOLDINGS, INC., as Revolving
Credit Borrower
BY:
Name:
Title:
MOTHER'S CAKE AND COOKIE CO.,
as Revolving Credit Borrower
BY:
Name:
Title:
SFFB HOLDINGS, INC.,
as Revolving Credit Borrower
BY:
Name:
Title:
STELLA HOLDINGS, INC., formerly
known as Stella Foods, Inc., as
Revolving
Credit Borrower
BY:
Name:
Title:
TBP HOLDINGS, INC., as
Revolving Credit Borrower
BY:
Name:
Title:
CONSENTED TO:
THE CHASE MANHATTAN BANK, as
Administrative Agent and as a
Lender
BY:
Name:
Title:
ABN AMRO Bank N.V.
By: ABN AMRO North America, Inc.,
as agent
BY:
Name:
Title:
BY:
Name:
Title:
NATEXIS BANQUE BFCE
BY:
Name:
Title:
BY:
Name:
Title:
BANQUE PARIBAS
BY:
Name:
Title:
BY:
Name:
Title:
CREDIT AGRICOLE INDOSUEZ
(formerly known as Caisse Nationale
de Credit Agricole)
BY:
Name:
Title:
BY:
Name:
Title:
CIBC, INC.
BY:
Name:
Title:
COMPAGNIE FINANCIERE DE CIC ET DE
L'UNION EUROPEENNE
BY:
Name:
Title:
BY:
Name:
Title:
COOPERATIVE CENTRALE RAIFFISEN -
BOERENLEENBANK B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH
BY:
Name:
Title:
BY:
Name:
Title:
DLJ CAPITAL FUNDING, INC.
BY:
Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON
BY:
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS, L.P.
BY:
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ DEBT STRATEGIES
PORTFOLIO
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Asset Management,
L.P.,
as Investment Advisor
BY:
Name:
Title:
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ &
▇▇▇▇▇ INCORPORATED
BY:
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ PRIME RATE PORTFOLIO
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Asset Management,
L.P.,
as Investment Advisor
BY:
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ SENIOR FLOATING RATE
FUND, INC.
BY:
Name:
Title:
PAMCO CAYMAN LTD.
BY:
Name:
Title:
PARIBAS CAPITAL FUNDING LLC
BY:
Name:
Title:
BY:
Name:
Title:
SENIOR DEBT PORTFOLIO
By: Boston Management and Research
as Investment Advisor
BY:
Name:
Title:
SENIOR HIGH INCOME PORTFOLIO, INC.
BY:
Name:
Title:
SOCIETE GENERALE, SOUTHWEST
AGENCY
BY:
Name:
Title:
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL PRIME
RATE INCOME TRUST
BY:
Name:
Title:
▇▇▇▇▇ FARGO BANK, N.A.
BY:
Name:
Title:
Schedule 2.2
Subsidiaries of Stella Holdings, Inc.
Stella Foods, Inc.
Stella Cheese Company, Inc.
BC Acquisitions, Inc.
BM Acquisitions, Inc.
Stella Foods East, Inc.
Frigo Foods, Inc.
Frigo Cheese Corporation
EXHIBIT E
TO
FIFTH AMENDMENT
[FORM OF COLLATERAL INVESTMENT AGREEMENT II]
COLLATERAL INVESTMENT AGREEMENT II dated as of December
__, 1997, between SPECIALTY FOODS CORPORATION, a Delaware
corporation (the "Term Loan Borrower"), and THE CHASE MANHATTAN
BANK, a New York banking corporation, as administrative agent
(the "Administrative Agent") for the Term Loan Lenders and the
Revolving Credit Lenders.
W I T N E S S E T H:
WHEREAS, the Term Loan Borrower, the Revolving Credit
Borrowers, the Administrative Agent, the Term Loan Lenders and
the Revolving Credit Lenders have entered into the Fifth
Amendment, Consent and Waiver, dated as of December 3, 1997 (the
"Fifth Amendment"), to:
(a) the Term Loan Agreement, dated as of July 17,
1995, (as amended and as the same may be further amended,
supplemented or otherwise modified from time to time, the
"Term Loan Agreement") among the Term Loan Borrower, the
several banks and other financial institutions from time to
time parties thereto (the "Term Loan Lenders"), and the
Administrative Agent; and
(b) the Revolving Credit Agreement dated as of
August 16, 1993 and amended and restated as of July 17,
1995, (as amended and as the same may be further amended,
supplemented or otherwise modified from time to time, the
"Revolving Credit Agreement"), among each of the
subsidiaries of Specialty Foods Corporation signatory
thereto (collectively, the "Revolving Credit Borrowers"),
the several banks and other financial institutions from time
to time parties thereto (collectively, the "Revolving Credit
Lenders") and the Administrative Agent.
WHEREAS, it is a condition precedent to the
effectiveness of the Fifth Amendment that the Term Loan Borrower
shall have executed and delivered to the Administrative Agent
this Agreement.
NOW, THEREFORE, in consideration of the premises and to
induce the Administrative Agent and the Lenders to enter into the
Fifth Amendment and to induce the Lenders to make their
respective Loans to the Term Loan Borrower, the Term Loan
Borrower hereby agrees with the Administrative Agent, for the
ratable benefit of the Term Loan Lenders and the Revolving Credit
Lenders, as follows:
I. Defined Terms. (a) Unless otherwise defined in
this Agreement, terms which are defined in the Term Loan
Agreement, the Revolving Credit Agreement and the Fifth Amendment
and used herein are so used as so defined. Unless otherwise
indicated, all Section, subsection and Schedule references are to
the Term Loan Agreement, as amended.
The following terms shall have the following
meanings:
"Agreement": this Collateral Investment Agreement II,
as the same may be amended, modified or otherwise supplemented
from time to time.
"Code": the Uniform Commercial Code from time to time
in effect in the State of New York.
"Collateral": the collective reference to the
Collateral Investments and the Collateral Investment Account.
"Collateral Investments ": the collective reference
to:
(i) all cash, instruments, securities and funds
deposited from time to time in the Collateral Investment
Account, including, any subaccounts or linked deposit
accounts);
(ii) all Permitted Investments of funds in the
Collateral Investment Account and all instruments and
securities evidencing such Permitted Investments; and
(iii) all interest, dividends, cash, instruments,
securities and other property received in respect of, or as
proceeds of, or in substitution or exchange for, any of the
foregoing.
"Collateral Investment Account II ": account no. 323-
517080 established at the office of The Chase Manhattan Bank at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, designated "The Chase
Manhattan Bank?Specialty Foods Corporation Collateral Investment
Account II."
"Obligations ": the Term Loan Obligations and the
obligations of the Borrower under the Borrower Guarantee.
"Permitted Investments": all investments and
reinvestments in Cash Equivalents.
The words "hereof," "herein" and "hereunder" and words
of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and section and paragraph references are to this
Agreement unless otherwise specified.
The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such
terms.
2. Grant of Security Interest2. As collateral
security for the prompt and complete payment and performance when
due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations, the Term Loan Borrower hereby
grants to the Administrative Agent, for the ratable benefit of
the Term Loan Lenders and the Revolving Credit Lenders, a
security interest in the Collateral.
3. Maintenance of Collateral Investment Account3. The
Collateral Investment Account shall be maintained until the
Obligations have been paid and performed in full.
The Collateral shall be subject to the exclusive
dominion and control of the Administrative Agent, which shall
hold the Collateral Investment and administer the Collateral
Investment Account subject to the terms and conditions of this
Agreement. The Term Loan Borrower shall have no right of
withdrawal from the Collateral Investment Account nor any other
right or power with respect to the Collateral, except as
expressly provided herein.
4. Deposit of Funds. Upon execution and delivery of
this Agreement, the Term Loan Borrower shall on any date after
the Fifth Amendment Effective Date on which amounts are
contemplated to be deposited in the Collateral Investment Account
under Section 3 of the Fifth Amendment, deposit such amounts in
the Collateral Investment Account. The Term Loan Borrowers and
the Administrative Agent agree that (i) the Collateral Investment
Account will constitute a "securities account" under Article 8 of
the Uniform Commercial Code as in effect in the State of New York
on the date hereof, (ii) each Collateral Investment constitutes a
"financial asset" as defined in Section 8-102 of the Uniform
Commercial Code as in effect in the State of New York on the date
hereof and (iii) the "securities intermediary's jurisdiction"
(within the meaning of Article 8) will be the State of New York.
5. Representation and Warranty. The Term Loan
Borrower represents and warrants to the Administrative Agent that
(i) this Agreement creates in favor of the Administrative Agent a
legal, valid and enforceable security interest in the Collateral
and (ii) when the financing statements in appropriate form are
filed in the offices specified on Schedule 1 hereto, the security
interest created pursuant to this Agreement constitutes a fully
perfected, legal, valid and enforceable first priority security
interest in the Collateral, subject to no other liens whatsoever,
except as affected by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair
dealing.
6. Covenants. The Term Loan Borrower covenants and
agrees with the Administrative Agent that:
The Term Loan Borrower will not sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with
respect to, the Collateral, except in connection with investments
and reinvestments in Permitted Investments or create, incur or
permit to exist any Lien or option in favor of, or any claim of
any Person with respect to, any of the Collateral, or any
interest therein, except for the security interest created by
this Agreement.
The Term Loan Borrower will maintain the security
interest created by this Agreement as a first, perfected security
interest and defend the right, title and interest of the
Administrative Agent and the Lenders in and to the Collateral
against the claims and demands of all Persons whomsoever. At any
time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of the Term Loan
Borrower, the Term Loan Borrower will promptly and duly execute
and deliver such further instruments and documents and take such
further actions as the Administrative Agent reasonably may
request for the purposes of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein
granted, including, without limitation, of financing statements
under the Code.
7. Investment of Collateral Investments. Collected
funds on deposit in the Collateral Investment Account shall be
invested and reinvested by the Administrative Agent at the
direction of the Term Loan Borrower from time to time in
Permitted Investments. All investments shall be made in the name
of the Administrative Agent or a nominee of the Administrative
Agent and in a manner, determined by the Administrative Agent in
its sole discretion, that preserves the Administrative Agent's
perfected, first priority security interest in such investments.
The Administrative Agent shall have no obligation to
invest collected funds during the first night after their
collection, unless the funds are received before 1:00 p.m. New
York City time.
The Administrative Agent shall have no responsibility
to the Term Loan Borrower for any loss or liability arising in
respect of such investments of the Collateral Investments
(including, without limitation, as a result of the liquidation of
any thereof before maturity), except to the extent that such loss
or liability arises from the Administrative Agent's gross
negligence or willful misconduct.
The Term Loan Borrower will pay or reimburse the
Administrative Agent for any and all liabilities and reasonable
costs and expenses of the Administrative Agent incurred in
connection with this Agreement, the maintenance and operation of
the Collateral Investment Account and the investment of the
Collateral Investments, including, without limitation, any
investment, brokerage or placement commissions and fees incurred
by the Administrative Agent in connection with the investment or
reinvestment of Collateral Investment, and any investment charges
or other fees of The Chase Manhattan Bank in connection with
maintenance of the Collateral Investment Account.
8. Termination; Remedies. Upon the earlier to occur
of (i) March 31, 1998 and (ii) the occurrence of an Event of
Default, the Administrative Agent may, without notice of any
kind, except for notices required by law which may not be waived,
apply the Collateral, after deducting all reasonable costs and
expenses of every kind incurred in respect thereof or incidental
to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Administrative
Agent and the Lenders hereunder, including, without limitation,
reasonable attorneys' fees and disbursements of counsel to the
Administrative Agent, to the payment in whole or in part of the
Obligations, in such order as is required by the Term Loan
Agreement and the Revolving Credit Agreement, or, absent such
requirement, as the Administrative Agent in its sole discretion
may elect, and only after such application and after the payment
by the Administrative Agent of any other amount required by any
provision of law, including, without limitation, Section
9-504(1)(c) of the Code, need the Administrative Agent account
for the surplus, if any, to the Term Loan Borrower. In addition
to the rights, powers and remedies granted to it under this
Agreement and in any other agreement securing, evidencing or
relating to the Obligations, the Administrative Agent shall have
all the rights, powers and remedies available at law, including,
without limitation, the rights and remedies of a secured party
under the Code. To the extent permitted by law, the Term Loan
Borrower waives presentment, demand, protest and all notices of
any kind and all claims, damages and demands it may acquire
against the Administrative Agent or any Lender arising out of the
exercise by them of any rights hereunder.
The Term Loan Borrower shall remain liable for any
deficiency if the proceeds of any sale or other disposition of
the Collateral are insufficient to pay the Obligations and the
fees and disbursements of any attorneys employed by the
Administrative Agent or any Lender to collect such deficiency.
9. Administrative Agent's Appointment as Attorney-in-
Fact. The Term Loan Borrower hereby irrevocably constitutes and
appoints the Administrative Agent and any officer or agent of the
Administrative Agent, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and
authority in the place and stead of the Term Loan Borrower and in
the name of the Term Loan Borrower or in the Administrative
Agent's own name, from time to time in the Administrative Agent's
discretion, for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute
any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Agreement,
including, without limitation, any financing statements,
endorsements, assignments or other instruments of transfer. The
Administrative Agent agrees with the Term Loan Borrower that it
shall not exercise any rights or powers under this paragraph
prior to the earlier of (i) March 31, 1998 or (ii) the occurrence
of an Event of Default (it being agreed that any other Person
shall not be required to inquire as to the Administrative Agent's
compliance with its agreements in this sentence).
The Term Loan Borrower hereby ratifies all that said
attorneys shall lawfully do or cause to be done pursuant to the
power of attorney granted in this paragraph 9. All powers,
authorizations and agencies contained in this Agreement are
coupled with an interest and are irrevocable until this Agreement
is terminated and the security interests created hereby are
released.
10. Duty of Administrative Agent. The Administrative
Agent's sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under
Section 9-207 of the Code or otherwise, shall be to comply with
the specific duties and responsibilities set forth herein. The
powers conferred on the Administrative Agent in this Agreement
are solely for the protection of the Administrative Agent's and
the Lenders' interests in the Collateral and shall not impose any
duty upon the Administrative Agent or any Lender to exercise any
such powers. Neither the Administrative Agent nor any Lender nor
its or their directors, officers, employees or agents shall be
liable for any action lawfully taken or omitted to be taken by
any of them under or in connection with the Collateral or this
Agreement, except for its or their gross negligence or willful
misconduct.
11. Execution of Financing Statements. Pursuant to
Section 9-402 of the Code, the Term Loan Borrower authorizes the
Administrative Agent to file financing statements with respect to
the Collateral without the signature of the Term Loan Borrower in
such form and in such filing offices as the Administrative Agent
reasonably determines appropriate to perfect the security
interests of the Administrative Agent under this Agreement. A
carbon, photographic or other reproduction of this Agreement
shall be sufficient as a financing statement for filing in any
jurisdiction.
12. Authority of Administrative Agent. The Term Loan
Borrower acknowledges that the rights and responsibilities of the
Administrative Agent under this Agreement with respect to any
action taken by the Administrative Agent or the exercise or non-
exercise by the Administrative Agent of any option, right,
request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the
Administrative Agent and the Lenders, be governed by the Term
Loan Agreement and by such other agreements with respect thereto
as may exist from time to time among them, but, as between the
Administrative Agent and the Term Loan Borrower, the
Administrative Agent shall be conclusively presumed to be acting
as agent for the Lenders with full and valid authority so to act
or refrain from acting, and the Term Loan Borrower shall not be
under any obligation, or entitlement, to make any inquiry
respecting such authority.
13. Notices. All notices, requests and demands to or
upon the Administrative Agent or the Term Loan Borrower to be
effective shall be in writing (or by telex, fax or similar
electronic transfer confirmed in writing) and shall be deemed to
have been duly given or made when delivered by hand or if given
by mail, when deposited in the mails by certified mail, return
receipt requested, or if by telex, fax or similar electronic
transfer, when sent and receipt has been confirmed, addressed to
the Administrative Agent or the Term Loan Borrower at its address
or transmission number for notices provided in subsection 9.2 of
the Term Loan Agreement. The Administrative Agent and the Term
Loan Borrower may change their addresses and transmission numbers
for notices by notice in the manner provided in this paragraph.
14. Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
15. Amendments in Writing; No Waiver; Cumulative
Remedies. None of the terms or provisions of this Agreement may
be waived, amended, supplemented or otherwise modified except by
a written instrument executed by the Term Loan Borrower and the
Administrative Agent, provided that any provision of this
Agreement may be waived by the Administrative Agent and the
Lenders in a letter or agreement executed by the Administrative
Agent or by telex or facsimile transmission from the
Administrative Agent.
Neither the Administrative Agent nor any Lender shall
by any act (except by a written instrument pursuant to this
paragraph 15 hereof), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default or in any breach of
any of the terms and conditions hereof. No failure to exercise,
nor any delay in exercising, on the part of the Administrative
Agent or any Lender, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise
of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Administrative Agent
or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy
which the Administrative Agent or such Lender would otherwise
have on any future occasion.
The rights and remedies herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.
16. Section Headings. The section headings used in
this Agreement are for convenience of reference only and are not
to affect the construction hereof or be taken into consideration
in the interpretation hereof.
17. Successors and Assigns. This Agreement shall be
binding upon the successors and assigns of the Term Loan Borrower
and shall inure to the benefit of the Administrative Agent and
the Lenders and their successors and assigns.
18. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEWYORK.
* * *
IN WITNESS WHEREOF, the Term Loan Borrower and the
Administrative Agent have caused this Collateral Investment
Agreement to be duly executed and delivered as of the date first
above written.
THE CHASE MANHATTAN BANK, as
Administrative Agent
By:___________________________
Name:
Title:
SPECIALTY FOODS CORPORATION
By:___________________________
Name:
Title:
Schedule 1
to Collateral
Investment Agreement
UCC Filing Jurisdictions
Specialty Foods Corporation
Illinois, Secretary of State
New York, Secretary of State
New York, New York County