CONSENT AND AMENDMENT NO. 4
TO
LOAN AGREEMENT
CONSENT AND AMENDMENT NO. 4 dated as of November 1, 1998 among
SWEETHEART CUP COMPANY INC. ("Borrower"), SWEETHEART HOLDINGS INC. ("Parent"),
the financial institutions listed on the signature pages hereof (each a "Lender"
and collectively, the "Lenders") and BANKAMERICA BUSINESS CREDIT, INC., as agent
(the "Agent").
WHEREAS, the Borrower, the Parent, the Agent and the Lenders are
parties to a certain Amended and Restated Loan and Security Agreement, dated as
of October 24, 1997 (the "Loan Agreement"), pursuant to which the Lenders have
agreed, subject to the terms and conditions therein set forth, to provide
certain financial accommodations to the Borrower; and
WHEREAS, the Borrower and the Parent desire that the Lenders waive
compliance with certain provisions of the Loan Agreement, and the Lenders are
willing, subject to the terms and conditions hereinafter set forth, to waive
such compliance;
NOW, THEREFORE, the Borrowers and the Lenders hereby agree as follows:
SECTION 1. CAPITALIZED TERMS. Capitalized terms used but not defined
herein shall have the respective meanings set forth in the Loan Agreement.
SECTION 2. CONSENT. Lenders hereby consent to Borrower's and Parent's
changing their fiscal accounting periods as set forth in Exhibit A hereto.
SECTION 3. AMENDMENTS
(a) The definitions of "Adjusted Net Earnings from Operations" set
forth in Section 1.1 of the Loan Agreement is hereby amended by deleting clause
"(g)" thereof and substituting the following therefor:
"(g) non-cash gain or non-cash loss arising from (i)
extraordinary items, as determined in accordance with GAAP, and
any non-recurring transaction or (ii) from any increase or
decrease in calculating the termination liability for the
Lily-Tulip , Inc. Salary Retirement Plan resulting from a change
in the interest rate reset annually by the PBGC in determining
the amounts necessary to annuitize such liability."
(b) Sections 7.2(b) and (f) of the Loan Agreement are hereby amended by
deleting the reference to "month" each time it appears in such sections and
substituting therefore the phrase "fiscal month".
(c) Section 9.26 of the Agreement is hereby amended by deleting the
table set forth therein and substituting the following therefor:
"Fiscal Quarter Year Ratio
Third 1998 .38/1
Fourth 1998 .70/1
First 1999 .55/1
Second 1999 .52/1
Third 1999 .66/1
Fourth 1999 .67/1
First 2000 .69/1
Second 2000 .70/1
Third 2000 .73/1
Fourth 2000 .76/1"
(d) The Applicable Margin with respect to all Base Rate Revolving Loans
and LIBOR Revolving Loans is hereby deemed increased by one quarter of one
percent (.25%) effective as of the date hereof ; provided, however, that if the
certificate required to be delivered pursuant to Section 7.2(e) with respect to
Borrower's second Fiscal Quarter of 1999 indicates compliance with Section 9.26,
than such increase shall be deemed rescinded effective as of the date of
delivery of such certificate.
SECTION 4. EFFECTIVENESS. The consent and amendment made herein shall
become effective when the Lenders (or Majority Lenders) shall have duly executed
and delivered this Agreement and counterparts hereof shall have been duly
executed and delivered to the Agent by the Borrower and the Parent.
SECTION 5. COUNTERPARTS AND GOVERNING LAW. This Agreement may be
executed in counterparts, each of which shall be an original, and all of which,
taken together, shall constitute a single instrument. This Agreement shall be
governed by, and construed in accordance with the law of the State of New York.
SECTION 6. REFERENCES TO LOAN AGREEMENT. From and after the
effectiveness of this Agreement and the waivers and agreements contemplated
hereby, all references in the Loan Agreement to "this Agreement", "hereof",
"herein", and similar terms shall mean and refer to the Loan Agreement as
certain provisions thereof are waived or supplemented by this Agreement, and all
references in other documents to the Loan agreement shall mean such agreement as
certain provisions thereof are waived or supplemented by this Agreement.
SECTION 7. INVALIDITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
all applicable laws and regulations. If, however, any provision of this
Agreement shall be prohibited by or invalid under any such law or regulation, it
shall be deemed modified to conform to the minimum requirements of such law or
regulation, or if for any reason it is not deemed so modified, it shall be
ineffective and valid only to the extent of such prohibition or invalidity
without the remainder thereof or any of the remaining provisions of this
Agreement being prohibited or invalid.
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SECTION 8. RATIFICATION AND CONFIRMATION. The Loan Agreement is hereby
ratified and confirmed and, except as herein otherwise agreed, remains
unmodified and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
SWEETHEART HOLDINGS INC.
By: /s/Xxxxx X. Xxxxxxx
-----------------------
Title: Vice President and Treasurer
SWEETHEART CUP COMPANY INC.
By: /s/ Xxxxx X. Xxxxxxx
-----------------------
Title: Vice President and Treasurer
BANKAMERICA BUSINESS CREDIT, INC.,
Individually and as Agent
By: /s/ Xxx Xxxxxxx
-----------------------
Title: Senior Account Executive
XXXXXXX NATIONAL LIFE
INSURANCE COMPANY
By: PPM FINANCE, INC.
By: /s/ Xxxxxx Xxxxxxxxx
----------------------------
Title: Senior Managing Director
CONGRESS FINANCIAL CORPORATION
By: /s/ Xxxxx Last
-----------------------
Title: First Vice President
MELLON BANK, N.A.
By:
-----------------------
Title:
TRANSAMERICA BUSINESS CREDIT
CORPORATION
By: /s/ Xxxxxxx Xxxxx
---------------------
Title: Senior Vice President
