FIFTH AMENDMENT
This Fifth Amendment (this "Amendment") is entered into as of May 31,
1999 by and among Xxxxxx May Holdings, Inc., a Delaware corporation
("Holdings"), Xxxxxxxxx Xxxxx Corporation, an Illinois corporation, as
successor by merger to FMCAN Acquisition Corp. (the "Company"), and the
persons named on the signature pages hereof (the "Purchasers"), and amends
the Securities Purchase Agreement entered into as of October 30, 1991 among
Holdings, the Company and the Purchasers (as amended by the First Amendment
thereto dated as of September 18, 1992, the Second Amendment thereto dated as
of August 12, 1994, the Third Amendment thereto dated as of July 2, 1997, and
the Fourth Amendment thereto dated as of October 31, 1998 and as otherwise
amended, modified and supplemented prior to the date hereof, the "Securities
Purchase Agreement"). All capitalized terms used herein and not otherwise
defined shall have the respective meanings provided such terms in the
Securities Purchase Agreement.
RECITALS
A. The Company intends to enter into an Asset Purchase Agreement (as
may be amended, modified or supplemented from time to time, the "Xxxxx Xxxxxx
Asset Purchase Agreement") with Nestle Canada Inc. ("Nestle") pursuant to
which the Company, or one or more of its subsidiaries (together "Acquisition
Co."), will acquire substantially all of the assets used in Nestle's Xxxxx
Xxxxxx retail business for approximately $62.0 million (Cdn.) (the "Xxxxx
Xxxxxx Acquisition").
B. Concurrently with the Xxxxx Xxxxxx Acquisition, the Company
intends to issue up to an additional $40,000,000 in principal amount of its
10 1/4% Series A Senior Secured Notes due 2004 ("Additional Notes") initially
in transactions that comply with Rule 144A and other available exemptions
under the Securities Act (the "Additional Offering"); the Company intends to
subsequently exchange (the "Additional Exchange") the Additional Notes for
substantially identical Company 10 1/4% Series B Senior Secured Notes due
2004 that the Company will have registered with the Securities and Exchange
Commission (the "Additional Exchange Notes"); and the Additional Exchange
Notes will be identical to the Original Exchange Notes (as defined below).
C. The net proceeds of the Additional Offering will be used, together
with other cash available to the Company, (i) to fund the Xxxxx Xxxxxx
Acquisition and (ii) for fees, costs and expenses incurred in connection with
the Xxxxx Xxxxxx Acquisition and the Additional Offering.
D. On July 2, 1997, the Company issued $100,000,000 in principal
amount of its 10 1/4% Series A Senior Secured Notes due 2004 (the "1997
Notes") pursuant to the Indenture.
E. On November 13, 1997, the holders of the 1997 Notes exchanged the
1997 Notes for substantially identical Company 10 1/4% Series B Senior
Secured Notes due 2004 that
the Company registered with the Securities and Exchange Commission (the "1997
Exchange Notes").
F. On December 7, 1998, the Company issued an additional $30,000,000
in principal amount of its 10 1/4% Series A Senior Secured Notes due 2004
(the "1998 Notes", and together with the 1997 Notes, the "Original Notes")
pursuant to the Indenture.
G. On April 20, 1999, the holders of the 1998 Notes exchanged the
1998 Notes for substantially identical Company 10 1/4% Series B Senior
Secured Notes due 2004 that the Company registered with the Securities and
Exchange Commission (the "1998 Exchange Notes", and together with the 1997
Exchange Notes, the "Original Exchange Notes").
H. The Original Notes were secured by, and the Original Exchange
Notes currently are secured by, (i) security interests in certain of the
Company's and its subsidiaries' equipment, fixtures and general intangibles,
including trademarks, and mortgages on certain of the Company's owned real
property, and the proceeds of the foregoing, and (ii) a security interest in
and a pledge of all of the capital stock of the Company's current and future
subsidiaries (collectively, the "Original Indenture Collateral").
I. The Additional Notes (and, upon the completion of the Additional
Exchange, the Additional Exchange Notes) also will be secured by the Original
Indenture Collateral.
J. In addition, upon the consummation of the Xxxxx Xxxxxx
Acquisition, the Original Exchange Notes and the Additional Notes (and, upon
the completion of the Additional Exchange, the Additional Exchange Notes)
also will be secured by (i) security interests in certain of Xxxxx Xxxxxx'x
equipment, fixtures and general intangibles, including trademarks, and the
proceeds of the foregoing, and (ii) a security interest in and a pledge of
all of the capital stock of Acquisition Co.
K. Concurrently with the Additional Offering, the Company is
soliciting the consent of the holders of the Original Exchange Notes to
certain amendments to the Indenture in order to permit, among other things,
the sale of the Additional Notes; and the Company intends to pay a reasonable
consent fee to all holders that grant their consent to such amendment of the
Indenture.
L. Concurrently with the Xxxxx Xxxxxx Acquisition and the Additional
Offering, the Company may amend its Credit Facility to increase the aggregate
amount which the Company may borrow from time to time thereunder from
$20,000,000 to $25,000,000 (the "Second Amendment to Credit Facility").
M. Whether or not the Company amends the Credit Facility to increase
the maximum amount available thereunder, the Company will cause Acquisition
Co., upon the consummation of the Xxxxx Xxxxxx Acquisition, to grant, as
additional security under the Credit Facility, a security interest in Xxxxx
Xxxxxx'x accounts, raw materials and finished goods inventory.
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NOW, THEREFORE, in consideration of the premises and the agreements
contained herein, the undersigned hereby agree as follows:
1. Section 1 of the Securities Purchase Agreement is hereby amended
by amending and restating the definitions of "Additional Exchange,"
"Additional Exchange Notes," "Additional Notes," "Additional Offering,"
"Original Exchange Notes" and "Original Notes," in their entirety as follows:
"Additional Exchange" has the meaning ascribed to such term in Recital B
of the Fifth Amendment.
"Additional Exchange Notes" has the meaning ascribed to such term in
Recital B of the Fifth Amendment.
"Additional Notes" has the meaning ascribed to such term in Recital B of
the Fifth Amendment.
"Additional Offering" has the meaning ascribed to such term in Recital B
of the Fifth Amendment.
"Original Exchange Notes" has the meaning ascribed to such term in
Recital G of the Fifth Amendment.
"Original Notes" has the meaning ascribed to such term in Recital F of
the Fifth Amendment.
2. Section 1 of the Securities Purchase Agreement is hereby further
amended by adding the following definitions:
"Fifth Amendment" means the Fifth Amendment to this Agreement, dated as
of May 31, 1999.
"Xxxxx Xxxxxx Acquisition" has the meaning ascribed to such term in
Recital A of the Fifth Amendment .
"Xxxxx Xxxxxx Asset Purchase Agreement" has the meaning ascribed to such
term in Recital A of the Fifth Amendment.
"1997 Exchange Notes" has the meaning ascribed to such term in Recital E
of the Fifth Amendment.
"1998 Exchange Notes" has the meaning ascribed to such term in Recital G
of the Fifth Amendment.
"1997 Notes" has the meaning ascribed to such term in Recital D of the
Fifth Amendment.
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"1998 Notes" has the meaning ascribed to such term in Recital F of the
Fifth Amendment.
3. Section 1 of the Securities Purchase Agreement is hereby further
amended by amending and restating the definition of "EBITDA" set forth
therein in its entirety as follows:
"EBITDA" means, for any period, Consolidated Net Income for such period
(a) PLUS all amounts deducted in determining such Consolidated Net
Income on account of (i) Consolidated Interest Expense, (ii) taxes based
on or measured by income, (iii) depreciation expense, (iv) amortization
expense (including, without limitation, amortization expense related to
the write-up in the Book Value of any assets due to goodwill or
unallocated purchase price and other amortization or depreciation
arising out of the transactions related to Holdings' acquisition of the
Company, to the extent such adjustments are made pursuant to APB Nos. 16
and 17 and are deducted in determining Consolidated Net Income for such
period), (v) all Management Fees accrued during such period, (vi) the
non-cash portion of expenses under the SAR Agreements and any Permitted
Stock Option Plan, (vii) non-capital expenditures made in connection
with the SFG Acquisition and the consolidation of the SFG Entities'
operations into the Company's operations (provided that such non-capital
expenditures are not in excess of the amounts therefor described in that
certain Memorandum dated September 11, 1998 (the "SFG Acquisition
Memorandum") from Xxxx X. Max and Xxx X. Xxxxxxxx to Xxxx X. Xxxxxx XX,
Xxxxxx X. Xxxxx, Xxxxxxx X. Xxxxx III and Xxxxxxx X. Xxxxx) and (viii)
non-capital expenditures made in connection with the Xxxxx Xxxxxx
Acquisition and the consolidation of the Xxxxx Xxxxxx business into the
Company's operations (provided that such non-capital expenditures are
not in excess of the amounts therefor described in that certain
Memorandum dated May 7, 1999 (the "LS Acquisition Memorandum") from Xxxx
X. Max and Xxx X. Xxxxxxxx to Xxxx X. Xxxxxx XX, Xxxxxx X. Xxxxx,
Xxxxxxx X. Xxxxx III, Xxxxxxx Xxxxx and Xxxxx Xxxxxx), (b) MINUS all
Management Fees paid or (to the extent all covenants restricting the
payment of Management Fees will be satisfied) to be paid with respect to
such period, all as determined for Holdings and its Subsidiaries on a
consolidated basis in accordance with GAAP.
4. Section 1 of the Securities Purchase Agreement is hereby further
amended by amending and restating the definition of "Fixed Charges" set forth
therein in its entirety as follows:
"Fixed Charges" shall mean, for any period, without duplication,
Consolidated Interest Expense for such period, (a) PLUS (i) scheduled
payments of principal of all Indebtedness for borrowed money of Holdings
and its Subsidiaries during such period, (ii) capital expenditures made
during such period (reduced by the aggregate amount of Net Cash Proceeds
received by the Company and its Subsidiaries during such period in
respect of sales of capital assets), and (iii) payments actually paid in
cash with respect to such period with respect to the SAR Agreements, or
notes issued pursuant thereto, and preferred stock, (b) MINUS all
capital expenditures made in connection with the SFG Acquisition and the
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consolidation of the SFG Entities' operations into the Company's
operations (provided that such capital expenditures are not in excess of
the amounts therefor described in the SFG Acquisition Memorandum), (c)
MINUS all capital expenditures made in connection with the Xxxxx Xxxxxx
Acquisition and the consolidation of the Xxxxx Xxxxxx business into the
Company's operations (provided that such capital expenditures are not in
excess of the amounts therefor described in the LS Acquisition
Memorandum), all as determined for Holdings and its Subsidiaries on a
consolidated basis in accordance with GAAP.
5. Section 7.1 of the Securities Purchase Agreement is hereby amended
by amending and restating clause (i) thereof as follows:
"(i) any wholly-owned Subsidiary of FMCAN may make distributions to
FMCAN or to any other wholly-owned subsidiary of FMCAN and FMCAN may
make distributions to Holdings;"
6. Section 7.6 of the Securities Purchase Agreement is hereby amended
by amending and restating the last sentence thereto as follows:
"Notwithstanding the foregoing, there shall be excluded from the
prohibition on Investments under this Section 7.6 the consummation of
(i) the SFG Acquisition and the transactions contemplated by the SFG
Stock Purchase Agreement and (ii) the Xxxxx Xxxxxx Acquisition and the
transactions contemplated by the Xxxxx Xxxxxx Asset Purchase Agreement."
7. Effective as of the Effective Date (as hereinafter defined), in
consideration of the representations, warranties, covenants and agreements of
Holdings and the Company set forth in this Amendment, the Purchasers hereby
(a) consent to each of the following:
(i) the consummation of the Xxxxx Xxxxxx Acquisition and the
execution, delivery and performance by the Company of the
Xxxxx Xxxxxx Asset Purchase Agreement;
(ii) the consummation of the Additional Offering of the
Additional Notes, the amendment of the Indenture required in
connection therewith and the granting of the additional
security interests contemplated by the Additional Offering
(including the incurrence of indebtedness, the granting of
security interests, the creation of Liens and the payment of
fees and expenses related thereto (including the consent
fees paid in connection with the solicitation of the holders
of the Original Exchange Notes)) and the subsequently
contemplated Additional Exchange Offer; and
(iii) the execution, delivery and performance of, and the
consummation of the transactions contemplated by, the Second
Amendment to Credit Facility (including the incurrence of
indebtedness, the granting of security interests, the
creation of Liens and the payment of fees and expenses
related thereto); and
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(b) waive any Event of Default under the provisions of the
Securities Purchase Agreement that would be deemed to result exclusively
from such execution, delivery, performance and consummation of the
transactions described in clause (a) of this paragraph 7.
8. To induce the Purchasers to enter into this Amendment, Holdings
and the Company, jointly and severally, represent and warrant to each
Purchaser that the following statements are true, correct and complete as of
the date hereof:
(a) Each of Holdings and the Company has all requisite corporate
power and authority to enter into this Amendment and to perform its
obligations under the Securities Purchase Agreement as amended by this
Amendment (the "Amended Agreement").
(b) The execution and delivery of this Amendment has been duly
authorized by all necessary corporate action by Holdings and the Company.
(c) The execution and delivery by each of Holdings and the
Company of this Amendment and the performance by Holdings and the
Company of their respective obligations under the Amended Agreement do
not and will not (i) violate any provision of any law, rule or
regulation applicable to Holdings, the Company or any of their
respective Subsidiaries, the organizational documents of Holdings, the
Company or any of their respective Subsidiaries or any order, judgment
or decree of any court or any agency or government binding on Holdings,
the Company or any of their respective Subsidiaries, (ii) conflict with,
result in a breach of, or constitute a default under, any contractual
obligation of Holdings, the Company or any of their respective
Subsidiaries, (iii) result in or require the creation or imposition of
any Lien upon any of their properties or assets (other than Liens
created pursuant to the Senior Financing Documents or the Indenture), or
(iv) require any approval of stockholders or any approval or consent of
any Person under any contractual obligation of Holdings, the Company or
any of their respective Subsidiaries, except approvals and consents
which have been obtained on or before the Effective Date.
(d) This Amendment and the Amended Agreement are the legally
valid and binding obligations of each of Holdings and the Company
enforceable against such entity in accordance with their respective
terms.
(e) No event has occurred and is continuing which would
constitute an Event of Default.
9. This Amendment will become effective upon the consummation of the
Xxxxx Xxxxxx Acquisition and the Additional Offering (the "Effective Date").
10. Except as specifically amended by this Amendment, the Securities
Purchase Agreement shall remain in full force and effect and is hereby
ratified and confirmed. The execution, delivery and performance of this
Amendment shall not, except as expressly
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provided herein, constitute a waiver of any provisions of, or operate as a
waiver of any right, power or remedy of the Purchasers under, the Securities
Purchase Agreement.
11. This Amendment may be executed in any number of counterparts and
by the different parties hereto in separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of
which together shall constitute one and the same instrument.
12. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK.
[signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have executed this Fifth
Amendment to the Securities Purchase Agreement as of the date first above
written.
XXXXXX MAY HOLDINGS, INC.
By: /s/ Xxx X. Xxxxxxxx
Its: President, Chief Operating
Officer
XXXXXXXXX XXXXX CORPORATION
By: /s/ Xxx X. Xxxxxxxx
Its: President, Chief Operating
Officer
TCW SPECIAL PLACEMENTS FUND III
By: TCW Capital
Its: Managing General Partner
By: TCW Asset Management Company
Its: Managing General Partner
By: /s/ Xxxxx Xxxxxx
Its: Vice President
TCW CAPITAL, as Investment Manager
pursuant to an Investment Management
Agreement dated as of June 19, 1989
By: TCW Asset Management Company
Its: Managing General Partner
By: /s/ Xxxxx Xxxxxx
Its: Vice President
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TCW CAPITAL, as Investment Manager
pursuant to an Investment Management
Agreement dated as of April 18, 1990
By: TCW Asset Management Company
Its: Managing General Partner
By: /s/ Xxxxx Xxxxxx
Its: Vice President
MEZZANINE CAPITAL
By: TCW Asset Management Company
Its: Managing General Partner
By: /s/ Xxxxx Xxxxxx
Its: Vice President
JZ EQUITY PARTNERS PLC
(f/k/a MCIT (EXISTING POOL) LIMITED)
By: /s/ Xxxxx X. Xxxxxx
Its: Director
WCT INVESTMENT PTE. LTD
By: /s/ Xxxxx X. Xxxxxx
Its: Director
JORDAN INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxx
Its: President, Chief Operating Officer
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