EXHIBIT 10.3
[CONFORMED COPY]
X.X. Xxxxx Finance Company
000 Xxxxx Xxxxxx - 00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
May 3, 2001
X. X. Xxxxx Company
X.X. Xxx 00
Xxxxxxxxxx, XX 00000-0000
Re: Guarantee Facility Agreement
Ladies and Gentlemen:
In connection with the corporate restructuring of the United States
operations of X.X. Xxxxx Company ("Heinz") effective today, X.X. Xxxxx Finance
Company ("Heinz Finance") has agreed to assume as co-obligor the responsibility
to pay certain third party obligations (collectively, the "Co-Obligations")
owed by Heinz as set forth in the Public Debt Co-Obligation Agreement and the
Commercial Paper Co-Obligation Agreement, both dated the date hereof and both
between Heinz and Heinz Finance (together, the "Co-Obligation Agreements"). We
understand that Heinz will remain as an obligor with respect to the
Co-Obligations and retain the responsibility to pay the applicable creditors if
Heinz Finance fails to pay.
We expect that future creditors of Heinz Finance will require
guarantees or other forms of credit support with respect to obligations issued
or owed to them by Heinz Finance. Heinz has agreed to provide such guarantees
and credit support. Each such obligation entered into on or after the date
hereof by Heinz Finance is
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referred to individually as a "Third Party Obligation" and collectively as the
"Third Party Obligations" and such creditors are referred to as the "Covered
Parties" and each as a "Covered Party."
Accordingly, Heinz Finance and Heinz agree as follows:
1. Guarantee. Heinz hereby guarantees the due, prompt and full
performance by Heinz Finance of all Third Party Obligations, provided Heinz
Finance provides the Covered Party with a certificate (a "Coverage
Certificate") in substantially the form of Exhibit A or, if required, Heinz
provides the Covered Party with a separate guarantee (a "Guarantee"). The
guarantee provided by this agreement is a guarantee of payment and not of
collection and, to the fullest extent permitted by law, Heinz hereby waives all
defenses to enforcement of, or payment by it under, this guarantee.
2. Schedule. Heinz Finance shall maintain a schedule of the amounts
and creditors covered by the Co-Obligations and the Third Party Obligations.
Heinz Finance may provide a Coverage Certificate to Covered Parties with a copy
to Heinz. If a separate Guarantee is required, Heinz will provide a copy of the
Guarantee to Heinz Finance.
3. Rights. Any Covered Party receiving a Coverage Certificate shall
have a direct claim against Heinz under this guarantee if Heinz Finance fails
to meet its obligations under the applicable Third Party Obligation. In the
case of a separate Guarantee, the terms of the Guarantee shall govern the
rights and obligations of Heinz and the applicable creditor.
4. Fees. Heinz Finance shall pay a fee to Heinz in consideration for
this guarantee facility. The fee shall be payable within 10 days of the
beginning of each of Heinz Finance's fiscal quarters with respect to the
immediately preceding fiscal quarter.
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The fees shall be equal to 1/10 of 1% (.001) per year multiplied by the sum of
(a) the highest balance at any time during Heinz Finance's immediately
preceding fiscal quarter of the amount of the Co-Obligations assumed by Heinz
Finance under the Co-Obligation Agreements, and (b) the highest balance at any
time during Heinz Finance's immediately preceding fiscal quarter of the amount
of outstanding Third Party Obligations.
The provisions of this agreement and the guarantee contained herein
shall be governed by the laws of the Commonwealth of Pennsylvania applicable to
contracts made and to be performed therein. Please sign below on the enclosed
copy of this letter to signify agreement with the foregoing and return such
originally signed copy to the undersigned.
Very truly yours,
X. X. XXXXX FINANCE COMPANY
By: /s/ Xxxxxxx X. Xxxxx, Xx.
Name: Xxxxxxx X. Xxxxx, Xx.
Title: Treasurer
AGREED AS OF MAY 3, 2001:
X. X. XXXXX COMPANY
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Executive Vice President and Chief Financial Officer
