ASSIGNMENT AND ASSUMPTION AGREEMENT
Assignment and Assumption Agreement (the "Agreement"), dated as of
March 12, 1998, by and between SF Holdings Group, Inc., a Delaware corporation
("SF Holdings"), and The Xxxxx Group, Inc., a Delaware corporation ("Xxxxx").
WHEREAS, SF Holdings is a party to that certain Second Restated
Management Services Agreement (the "Management Agreement"), dated as of March
12, 1998, as amended by Amendment No. 1 thereto dated as of March 12, 1998, by
and among Sweetheart Holdings Inc., a Delaware corporation ("Holdings"),
Sweetheart Cup Company Inc., a Delaware corporation ("Cup" and together with
Holdings, the "Company"), American Industrial Partners Management Company, Inc.
and SF Holdings; and
WHEREAS, SF Holdings desires to assign to Xxxxx, and Xxxxx desires to
assume, substantially all of the rights and obligations of SF Holdings under
the Management Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
1. Capitalized terms used but not defined herein shall
have the meanings ascribed to them in the Management Agreement.
2. SF Holdings hereby assigns to Xxxxx, and Xxxxx agrees to assume,
substantially all of the obligations of SF Holdings under the Management
Agreement; provided, however, that the obligations of SF Holdings pursuant to
Section 2 of the Management Agreement shall be assigned as follows:
a. During the term of the Management Agreement, Xxxxx shall
provide general management services to the Company and, subject to the
direction of the Board of Directors of the Company, shall have
authority, responsibility and control over all of the business
operations of the Company, including, without limitation, the
following: (i) implementing the business plan of the Company; (ii)
acquiring and disposing of assets; (iii) entering into contracts,
agreements and other commitments for, and on behalf of, the Company;
(iv) hiring, determining the compensation of, and terminating
employees of the Company other than the Chief Executive Officer, Chief
Financial Officer and Chief Operating Officer of each of Holdings and
of Cup; and (v) taking all other actions associated with management of
the day-to-day operations of the business of the Company. In addition,
Xxxxx shall provide financial and other corporate advisory services to
the Company. All of the services to be provided pursuant to this
Section 2(a)
shall be performed by the qualified officers, employees or agents of
Xxxxx as the Company may reasonably request from time to time, and
Xxxxx shall at all times direct, monitor and supervise the performance
of such services by such officers, employees or agents.
b. During the term of the Management Agreement, SF Holdings
shall provide certain financial and other corporate advisory services
to the Company. All of the services to be provided pursuant to this
Section 2(b) shall be performed by the qualified officers, employees
or agents of SF Holdings as the Company may reasonably request from
time to time, and SF Holdings shall at all times direct, monitor and
supervise the performance of such services by such officers, employees
or agents.
3. SF Holdings assigns to Xxxxx, and Xxxxx shall be entitled to
receive, substantially all of the rights and benefits of SF Holdings under the
Management Agreement; provided, however, that the rights of SF Holdings
pursuant to Section 3 of the Management Agreement shall be assigned as follows:
SF Holdings shall receive from the Company Management Fees of $200,000
per annum. Xxxxx shall receive from the Company Management Fees of
$725,000 in respect of the period from the date of the Management
Agreement to the first anniversary thereof; $910,000 in respect of the
period from the first anniversary of the date of the Management
Agreement to the second anniversary of the date of the Management
Agreement; (iii) $1,095,000 in respect of the period from the second
anniversary of the date of the Management Agreement to the third
anniversary of the date of the Management Agreement; and (iv)
$1,650,000 thereafter, in respect of each period ending on the next
following anniversary of the date of the Management Agreement during
the term of the Management Agreement.
4. In consideration of the assignment by SF Holdings of substantially
all of its rights under the Management Agreement, upon the execution of this
Agreement, Xxxxx shall pay SF Holdings $7,000,000 by wire transfer of
immediately available funds.
5. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their successors and permitted
assigns.
6. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to any choice or
conflict of law provision or rule (whether in the State of New York or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York.
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7. This Agreement may be executed in two or more
counterparts, each of which taken together shall constitute a
fully-executed original instrument.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed as of the day and year first above written.
SF HOLDINGS GROUP, INC.
By:/s/ Xxxx Xxxxxxx
________________________
Name: Xxxx Xxxxxxx
Title: Chief financial Officer
THE XXXXX GROUP, INC.
By:/s/ Xxxxxx X. Xxxxxxxx
________________________
Name: Xxxxxx X. Xxxxxxxx
Title: Secretary
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