NINTH AMENDMENT, WAIVER AND CONSENT
NINTH AMENDMENT, WAIVER AND CONSENT dated as of August 24,
1995 (this "Amendment"), among FLAGSTAR CORPORATION, a Delaware corporation
formerly known as TW Services, Inc. ("Flagstar"), TWS FUNDING, INC., a Delaware
corporation ("Funding"), and each financial institution executing this Amendment
as a "Lender" (each, a "Lender").
PRELIMINARY STATEMENTS:
1. Flagstar, Funding, the Lenders and the Co-Agents and
Managing Agent referred to therein have entered into an Amended and Restated
Credit Agreement dated as of October 26, 1992 (as amended to date, the "Credit
Agreement"; the terms defined therein being used herein as therein defined
unless otherwise defined herein).
2. In accordance with Section 5.02(e)(viii) of the Credit
Agreement, Canteen Holdings, Inc. proposes to sell its direct and indirect
Subsidiaries listed on Schedule A hereto (the "IM Parks Subsidiaries") pursuant
to a Stock Purchase Agreement dated July 14, 1995, the principal terms of which
are described on the attached Schedule B (the "IM Parks Transaction").
3. Denny's Holdings, Inc. proposes to sell its direct and
indirect Subsidiaries listed on Schedule C hereto (the "Proficient Food
Subsidiaries") pursuant to a Stock Purchase Agreement dated July 7, 1995, the
principal terms of which are described on the attached Schedule D (the
"Proficient Food Transaction" and collectively with the IM Parks Transaction,
the "Transactions"). In anticipation of the Proficient Food Transaction, the
Borrowers have requested the amendment of Section 5.02(e) of the Credit
Agreement.
4. The Borrowers have requested that the Lenders agree (a) to
clarify the application of proceeds of the Transactions to the Obligations under
the Loan Documents and (b) waive, at the election of the Lenders, the required
reduction of the Working Capital Facility.
5. The Borrowers have requested that the Lenders agree (a) to
permit the Borrowers, following the reduction of the Working Capital Facility
pursuant to Section 2.04(b) of the Credit Agreement to the extent such reduction
has not been waived hereunder by the Lenders, to apply the proceeds of the
Proficient Food Transaction and the IM Parks Transaction to either prepay Funded
Debt or to make additional Cash Capital Expenditures and (b) to adjust the
financial covenants to allow the Borrowers to apply the proceeds of the
Proficient Food Transaction and the IM Parks Transaction to make additional
Capital Expenditures.
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6. The Lenders have expressed their willingness to grant the
Borrowers' request as set forth above on the terms and conditions set forth
below.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, the parties hereto hereby
agree as follows:
SECTION 1. Consent to IM Parks Transaction . (a) The Lenders
hereby agree that the condition set forth in Section 5.02(e)(viii)(i) of the
Credit Agreement shall be satisfied if Flagstar shall have returned to the
Issuing Banks for cancellation all Letters of Credit set forth on Schedule E
hereto other than the Letter of Credit marked with an asterisk on Schedule E
(the "NY Letter of Credit"), provided that within 60 days after the consummation
of the IM Parks Transaction, the Borrowers shall have returned to the applicable
Issuing Bank for cancellation the NY Letter of Credit or shall have deposited
cash collateral with such Issuing Bank in an amount equal to the Available
Amount of the NY Letter of Credit.
(b) The Lenders hereby agree that the conditions set forth in Section
5.02(e)(viii)(ii) of the Credit Agreement shall be satisfied if the IM Parks
Transaction is consummated upon substantially the terms described in the
attached Schedule B.
(c) The Lenders hereby agree that the condition set forth in Section
5.02(e)(viii)(iii) of the Credit Agreement shall be satisfied if, as a result of
the closing of the IM Parks Transaction, the Working Capital Facility is reduced
by an amount equal to the Net Proceeds (as defined below) from such Transaction
less the IM Parks Extension Amount (as defined below).
SECTION 2. Consent to Proficient Food Transaction . (a) The
Lenders hereby agree that the condition set forth in Section 5.02(e)(ix)(i) of
the Credit Agreement (as amended hereby) shall be satisfied if Flagstar shall
have returned to the Issuing Banks for cancellation all Letters of Credit set
forth on Schedule F hereto.
(b) The Lenders hereby agree that the conditions set forth in Section
5.02(e)(ix)(ii) of the Credit Agreement (as amended hereby) shall be satisfied
if the Proficient Food Transaction is consummated upon substantially the terms
described in the attached Schedule D.
(c) The Lenders hereby agree that the condition set forth in Section
5.02(e)(ix)(iii) of the Credit Agreement (as amended hereby) shall be satisfied
if, as a result of the closing of the Proficient Food Transaction, the Working
Capital Facility is reduced by an amount equal to the Net Proceeds (as defined
below) from such Transaction less the PFC Extension Amount (as defined below).
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SECTION 3. Amendments to the Credit Agreement. The Credit
Agreement is, effective as of the date hereof and subject to the satisfaction of
the conditions precedent set forth in Section 5 hereof, hereby amended as
follows:
(a) The definition of "Adjusted Cash Capital Expenditures" in
Section 1.01 is amended in full as follows:
"Adjusted Cash Capital Expenditures" means, for any period,
Cash Capital Expenditures less, for each of the Rolling Periods ending
on the last day of the fiscal quarters set forth below, an amount equal
to the sum of (i) the amount set forth opposite such fiscal quarter:
Fiscal Quarter Ended ................................. Amount
September 30, 1995 ................................... $125,000,000
December 31, 1995 .................................... 110,000,000
March 31, 1996 ....................................... 65,000,000
plus (ii) for each of the Rolling Periods ending September 30, 1995
through March 31, 1996, an amount equal to the Available Cash Proceeds
from any Permitted Sale Transactions consummated prior to the end of
the applicable Rolling Period less the aggregate amount used by the
Borrowers to prepay, redeem, purchase, defease or otherwise satisfy
Funded Debt in reliance on Section 5.02(n)(i)(G) prior to the end of
the applicable Rolling Period less the aggregate amount of prepayments
of Advances required to be made pursuant to Section 2.05(b)(ii) prior
to the end of the applicable Rolling Period less the aggregate amount
of cash paid to the Managing Agent for deposit in the Funding Cash
Collateral Account pursuant to Section 2.05(b)(vi) prior to the end of
the applicable Rolling Period.
(b) The following new defined terms are added to Section 1.01 to
be inserted therein in alphabetical order:
"Available Cash Proceeds" means (i) with respect to the
disposition of IM Parks, Inc. and its Subsidiaries permitted by Section
5.02(e)(viii), $93,000,000 and (ii) with respect to disposition of the
Proficient Food Companies permitted by Section 5.02(e)(ix),
$118,000,000.
"Permitted Sale Transactions" means (i) the disposition of IM
Parks, Inc. and its Subsidiaries permitted by Section 5.02(e)(viii) and
(ii) the disposition of the Proficient Food Companies permitted by
Section 5.02(e)(ix).
"Proficient Food Companies" means Proficient Food Company,
TWS 200 Corp. and DFC Trucking Co.
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(c) Section 5.02(e) is amended by deleting from the end of clause (vii)
thereof the word "and", adding to the end of clause (viii) thereof the word
"and" and adding a new clause (ix) thereto to read as follows:
"(ix) disposition of the Proficient Food Companies on or before
December 31, 1995, provided that (i) on or prior to the date of
disposition of the Proficient Food Companies, Funding shall have
returned to the Issuing Banks for cancellation, or shall have made
other arrangements satisfactory to the requisite Lenders in respect of,
the Letters of Credit issued in support of obligations of any of the
Proficient Food Companies, (ii) any such disposition shall be for an
amount not less than fair market value and on other terms and
conditions reasonable and customary in similar transactions, in each
case as determined in the reasonable judgment of the Required Lenders
and (iii) the Net Cash Proceeds of such dispositions are used to prepay
Advances in accordance with Section 2.05;"
(d) Section 5.02(e) is further amended by deleting from the proviso
clause at the end thereof the phrase "clauses (iv), (v) and (viii)" and
substituting therefor the phrase "clauses (iv), (v), (viii) and (ix)".
(e) Section 5.02(n) is amended by deleting the word "and" at the end of
clause (i)(E) thereof and substituting a comma therefor, adding the word "and"
at the end of clause (i)(F) thereof and adding a new clause (i)(G) to read as
follows:
"(G) prepayments, redemptions, purchases, defeasances or other
satisfactions of Funded Debt, in an aggregate principal amount not to
exceed the Available Cash Proceeds from any Permitted Sale Transactions
consummated prior to such satisfaction of Funded Debt, provided that,
both before and after giving effect to any transaction permitted by
this clause (G), no Default shall have occurred and be continuing."
(f) Section 5.04(d) is amended by adding to the end thereof the
following:
"provided, further, that the amount set opposite the Fiscal Year Ending
In December 1995 shall be (i) increased by an amount equal to the
Available Cash Proceeds from any Permitted Sale Transaction consummated
prior to the end of such Fiscal Year and (ii) reduced by the sum of (A)
an amount equal to the amount used to prepay, redeem, purchase, defease
or otherwise satisfy Funded Debt in reliance on Sections 5.02(n)(i)(G)
prior to the end of such Fiscal Year, (B) the aggregate amount of
prepayments of Advances required to be made pursuant to Section
2.05(b)(ii) prior to the end of such Fiscal Year and (C) the aggregate
amount of cash paid to the Managing Agent for deposit in the Funding
Cash Collateral Account pursuant to Section 2.05(b)(vi) prior to the
end of such Fiscal Year."
SECTION 4. Extension of Working Capital Commitments.
(a) Definitions. As used in this Section 4, the following terms are defined
as follows:
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"Extension Amount" means, with respect to a Permitted Sale
Transaction, either the IM Parks Extension Amount or the PFC Extension
Amount, as the context may require.
"IM Parks Elected Commitment Reduction Waiver" of a Lender
means an amount equal to (i) the amount of such Lender's Required
Commitment Reduction in respect of the IM Parks Transaction multiplied
by (ii) such Lender's Waiver Percentage.
"IM Parks Extension Amount" means the aggregate amount of the
IM Parks Elected Commitment Reduction Waivers.
"Net Proceeds" means with respect to (i) the Proficient Food
Transaction, $90,000,000 and (ii) the IM Parks Transaction,
$79,000,000.
"PFC Elected Commitment Reduction Waiver" of a Lender means an
amount equal to (i) the amount of such Lender's Required Commitment
Reduction in respect of the Proficient Food Transaction multiplied by
(ii) such Lender's Waiver Percentage.
"PFC Extension Amount" means the aggregate amount of the PFC
Elected Commitment Reduction Waivers.
"Required Commitment Reduction" of a Lender means with respect
to a Permitted Sale Transaction the amount of the Net Proceeds from
such Permitted Sale Transaction that would be applied to reduce such
Lender's Commitment, determined by pro rating such Net Proceeds by
reference to such Lender's Working Capital Commitment as a percentage
of the Working Capital Facility on the date hereof.
"Waiver Percentage" of a Lender means the percentage of such
Lender's aggregate Required Commitment Reductions in respect of the
Permitted Sale Transactions that such Lender elects to waive as
indicated on such Lender's signature page hereof.
(b) Determination of IM Parks and PFC Elected Commitment
Reduction Waivers. (i) On or before August 24, 1995, each Lender that
elects a Waiver Percentage shall deliver to the Managing Agent a copy
of its signature page to this Amendment, duly executed by such Lender
and specifying in the space provided on such page opposite the name of
such Lender the Waiver Percentage.
(ii) Promptly upon receipt of the signature pages as
contemplated by clause (i) above, the Managing Agent shall notify the
Borrowers of the PFC Extension Amount and the IM Parks Extension
Amount, and shall promptly notify each Lender that has a Waiver
Percentage of the amounts of its IM Parks Elected Commitment Reduction
Waiver and its PFC Elected Commitment Reduction Waiver. Promptly after
the consummation of each Permitted Sale Transaction, the Managing Agent
shall
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notify each such Lender of its Working Capital Commitment after giving
effect to this Amendment, and shall notify the Lenders and the
Borrowers of the amount of the Working Capital Facility after giving
effect to this Amendment.
(c) Extension of Working Capital Commitments. (i) Subject to
the satisfaction of the conditions precedent set forth in Section 5(b) hereof,
each Lender that has a Waiver Percentage hereby waives Section 2.04(b) of the
Credit Agreement to the extent of the amount of such Lender's PFC Elected
Commitment Reduction Waiver, whereupon (A) that portion of the Working Capital
Facility equal to the PFC Extension Amount that would otherwise be reduced by
application of the Net Cash Proceeds of the Proficient Food Transaction shall
instead remain outstanding and (B) the amount of the Working Capital Facility
shall be reduced by the amount of the difference, if any, between the Net
Proceeds from the Proficient Food Transaction and the PFC Extension Amount.
(ii) Subject to the satisfaction of the conditions precedent
set forth in Section 5(c) hereof, each Lender that has a Waiver Percentage
hereby waives Section 2.04(b) of the Credit Agreement to the extent of the
amount of such Lender's IM Parks Elected Commitment Reduction Waiver, whereupon
(A) that portion of the Working Capital Facility equal to the IM Parks Extension
Amount that would otherwise be reduced by application of the Net Cash Proceeds
of the IM Parks Transaction shall instead remain outstanding, and (B) the amount
of the Working Capital Facility shall be reduced by the amount of the
difference, if any, between the Net Proceeds from the IM Parks Transaction and
the IM Parks Extension Amount.
SECTION 5. Conditions of Effectiveness. (a) This Amendment
shall become effective when, and only when (i) the Managing Agent shall have
received counterparts of this Amendment executed by Flagstar, Funding and the
Required Lenders or, as to any of the Lenders, advice satisfactory to the
Managing Agent that such Lenders have executed this Amendment, (ii) the Managing
Agent shall have received the Consent attached hereto, signed by each Subsidiary
of Flagstar and (iii) the Managing Agent shall have received a certificate,
dated the date of receipt thereof by the Managing Agent, in form and substance
satisfactory to the Managing Agent, signed by a duly authorized officer of each
Loan Party, stating that:
(A) The representations and warranties contained in each Loan
Document and in Section 6 hereof are correct on and as of the date of
such certificate as though made on and as of such date, and
(B) No event has occurred and is continuing that constitutes a
Default.
(b) Section 4(c)(i) shall become effective on and as of the
date on or prior to December 31, 1995 when, in addition to the conditions set
forth in clause (a) above, (i) the Proficient Food Transaction shall have been
consummated and (ii) Flagstar shall have paid to the Managing Agent, in
accordance with Section 2.10 of the Credit Agreement and for the account of each
Lender who elected a Waiver Percentage, an extension fee equal to 0.125% of such
Lender's PFC Elected Commitment Reduction Waiver.
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(c) Section 4(c)(ii) shall become effective on and as of the
date on or prior to December 31, 1995 when, in addition to the conditions set
forth in clause (a) above, (i) the IM Parks Transaction shall have been
consummated and (ii) Flagstar shall have paid to the Managing Agent, in
accordance with Section 2.10 of the Credit Agreement and for the account of each
Lender who elected a Waiver Percentage, an extension fee equal to 0.125% of such
Lender's IM Parks Elected Commitment Reduction Waiver.
SECTION 6. Representations and Warranties. Flagstar
represents and warrants as follows:
(a) The execution, delivery and performance by each Loan Party
of this Amendment and the Credit Agreement, as amended hereby, and the
consummation of the transactions contemplated hereby and thereby are
within such Loan Party's corporate powers, have been duly authorized by
all necessary corporate action and do not (i) contravene such Loan
Party's charter or by-laws, (ii) violate any law (including, without
limitation, the Securities Exchange Act of 1934, as amended), rule,
regulation (including, without limitation, Regulation X of the Board of
Governors of the Federal Reserve System, as in effect from time to
time), order, writ, judgment, injunction, decree, determination or
award applicable to any Loan Party, (iii) conflict with or result in
the breach of, or constitute a default under, any contract, loan
agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting any Loan Party, any of its
Subsidiaries or any of their properties or (iv) result in or require
the creation or imposition of any Lien (other than Liens created by or
permitted under the Loan Documents) upon or with respect to any of the
properties of any Loan Party or any of its Subsidiaries except, as to
(ii) and (iii) above, as would not, and would not be reasonably likely
to, have a Material Adverse Effect.
(b) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
or any other third party is required for the due execution, delivery,
recordation, filing or performance by any Loan Party of this Amendment
or the Credit Agreement, as amended hereby, or for the consummation of
the transactions contemplated hereby and thereby, except where the
failure to obtain, take, give or make such authorizations, approvals,
actions, notices or filings would not, and would not be reasonably
likely to, have a Material Adverse Effect.
(c) This Amendment and the Consent have been duly executed and
delivered by each Loan Party party thereto. Assuming that (i) this
Amendment is duly executed and delivered by, and is within the power
and authority of, the Required Lenders and (ii) the Credit Agreement
has been duly executed and delivered by, and is within the power and
authority of the Managing Agent, the Co-Agents and the Lenders, this
Amendment and the Credit Agreement, as amended hereby, are the legal,
valid and binding obligation of each Loan Party party thereto,
enforceable against such Loan Party in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or
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other similar laws affecting creditors' rights generally and subject to
general principles of equity (regardless of whether considered in a
proceeding in equity or at law).
SECTION 7. Reference to and Effect on the Loan Documents. (a)
Upon the effectiveness hereof, on and after the date hereof each reference in
the Credit Agreement to "this Agreement", "hereunder", "hereof" or words of like
import referring to the Credit Agreement and each reference in the other Loan
Documents to the Credit Agreement, "thereunder", "thereof" or words of like
import referring to the Credit Agreement, shall mean and be a reference to the
Credit Agreement as amended hereby.
(b) Except as specifically amended above, the Credit Agreement
is and shall continue to be in full force and effect and is hereby in all
respects ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of any Lender or Co-Agent or the Agent under any of
the Loan Documents, nor constitute a waiver of any provision of any of the Loan
Documents.
SECTION 8. Governing Law. This Amendment shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 9. Execution in Counterparts. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same agreement. Delivery of an executed counterpart of a signature
page to this Amendment by telecopier shall be effective as delivery of a
manually executed counterpart of this Amendment, Waiver and Consent.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
Borrowers
FLAGSTAR CORPORATION
By
Title: Vice President and Treasurer
TWS FUNDING, INC.
By
Title: Treasurer
Lenders
Waiver Percentage: _____% of the [Print or type name of institution]
Aggregate Required Commitment
Reductions
By
Title:
CONSENT
Dated as of August 24, 1995
The undersigned, each a Guarantor under the Amended and Restated
Guaranty dated as of November 16, 1992 (as amended to date, the "Guaranty") and
a Grantor under the Amended and Restated Security Agreement dated as of November
16, 1992 (as amended to date, the "Security Agreement") in favor of the Managing
Agent for the Lenders parties to the Credit Agreement referred to in the
foregoing Ninth Amendment, Waiver and Consent (the "Amendment") hereby consents
to said Amendment and hereby confirms and agrees that (i) each of the Guaranty
and the Security Agreement is, and shall continue to be, except as otherwise
specifically provided in said Amendment, in full force and effect and is hereby
ratified and confirmed in all respects except that, upon the effectiveness of,
and on and after the date of, the Amendment, each reference in each of the
Guaranty and the Security Agreement to the Credit Agreement, "thereunder",
"thereof" or words of like import shall mean and be a reference to the Credit
Agreement as amended by said Ninth Amendment and (ii) the Security Agreement and
all of the Collateral described therein do, and shall continue to, secure the
payment of all of the Obligations (as defined therein).
Subsidiaries
SIGNIFICANT SUBSIDIARIES
CANTEEN HOLDINGS, INC.
DENNY'S HOLDINGS, INC.
SPARTAN HOLDINGS, INC.
By
President or Vice President of each of
the corporations listed above
CANTEEN SUBSIDIARY GROUP
CANTEEN MANAGEMENT SERVICES, INC.
IM PARKS, INC.
IM STADIUM, INC.
TW RECREATIONAL SERVICES, INC.
VOLUME SERVICES, INC. (A KANSAS CORPORATION)
VOLUME SERVICES, INC. (A DELAWARE CORPORATION)
By
Vice President or Treasurer of each
of the corporations listed above
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DENNY'S SUBSIDIARY GROUP
CB DEVELOPMENT #6, INC.
C-B-R DEVELOPMENT CO., INC.
DANNY'S DO NUTS #10, INC.
DENNY'S, INC.
DENNY'S MANAGEMENT, INC.
DFC TRUCKING CO.
XXXXX PACKING COMPANY, INC.
EL POLLO LOCO, INC.
By
President or Vice President of each of
the corporations listed above
DENNY'S RESTAURANTS OF IDAHO, INC.
By
Title: Assistant Treasurer
XXXXXX XXXXXX ENTERPRISES #362, INC.
XXXXXX XXXXXX ENTERPRISES #607, INC.
LA MIRADA ENTERPRISES NO. 1, INC.
LA MIRADA ENTERPRISES NO. 5, INC.
LA MIRADA ENTERPRISES NO. 6, INC.
LA MIRADA ENTERPRISES NO. 7, INC.
LA MIRADA ENTERPRISES NO. 8, INC.
LA MIRADA ENTERPRISES NO. 9, INC.
LA MIRADA ENTERPRISES NO. 14, INC.
PORTIONTROL FOODS, INC.
PROFICIENT FOOD COMPANY
By
President or Vice President of each of
the corporations listed above
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TWS 200 CORP.
TWS 300 CORP.
TWS 500 CORP.
TWS 600 CORP.
TWS 700 CORP.
TWS 800 CORP.
WDH SERVICES, INC.
By
President or Vice President of each of
the corporations listed above
CB DEVELOPMENT #9, LTD.
DENNY'S OF CANADA LTD.
DENNY'S RESTAURANTS OF CANADA, LTD.
By
Title: Vice President
SPARTAN SUBSIDIARY GROUP
QUINCY'S RESTAURANTS, INC.
FLAGSTAR ENTERPRISES, INC.
FLAGSTAR SYSTEMS, INC.
SPARTAN REALTY, INC.
By
Treasurer of each of the
corporations listed above
SPARTAN MANAGEMENT, INC.
By
Title: Treasurer
ADDITIONAL GUARANTOR:
AMS HOLDINGS, INC.
By
Title: President or Vice President
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SCHEDULE A
SUBJECT IM PARKS SUBSIDIARIES
Class Stock Number
of Certif. of
Subsidiary Stockholder Stock No.(s) Shares
IM Parks, Inc. Canteen Holdings, Inc. Common 1 100
TW Recreational IM Parks, Inc. Common 8 700
Services., Inc.
SCHEDULE B
TW RECREATIONAL SERVICES, INC.
TERM SHEET
The following is a brief summary of the terms of the Stock
Purchase Agreement dated July 14, 1995 among Canteen Holdings, Inc.
("Seller"), Flagstar Corporation ("Flagstar"), Flagstar Companies, Inc.
("Flagstar Parent"), Amfac Parks, Inc. ("Buyer") and Northbrook
Corporation ("Northbrook").
(Bullet) Stock Sale. Seller to sell to Buyer all of the issued and
outstanding shares of IM Parks, Inc. ("IMP"). TW Recreational
Services, Inc. ("TWRS") is a wholly owned subsidiary of IMP.
TWRS and IMP are referred to as the TWRS Group.
(Bullet) Purchase Price. The purchase price is $110,000,000 subject to
adjustment relating to the Net Asset Value as described below.
Buyer shall pay Seller $110,000,000 in immediately available
funds on the closing date.
(Bullet) Net Asset Value Adjustment. The purchase price shall be
increased by the amount, if any, by which the Net Asset Value
as of the closing date exceeds $33,000,000 or reduced by the
amount, if any, by which $33,000,000 exceeds the Net Asset
Value as of the closing date. Net Asset Value means the amount
by which the aggregate book value of the assets of the TWRS
Group exceeds the aggregate book value of liabilities of the
TWRS Group, determined on a consolidated basis in accordance
with GAAP consistently applied, subject to certain specified
adjustments. Deloitte & Touche shall resolve any dispute
regarding the Net Asset Value as of the closing date. The
purchase price adjustment shall be paid within 5 business days
of its determination.
(Bullet) Section 338 Elections. Flagstar Parent and Buyer have agreed
to make timely Section 338(h)(10) elections. The federal and
state income tax liabilities resulting from the Section
338(h)(10) elections shall be the responsibility of
Flagstar Parent or its subsidiaries, as applicable, and
not the responsibility of Buyer or the TWRS Group.
(Bullet) Financing Contingency. In addition to standard conditions to
the Buyer's closing obligations, Buyer's obligations shall be
subject to Bank of America not having refused to fund loans
contemplated by a commitment as a result of any failure of any
condition precedent which was beyond reasonable control of
Buyer at Northbrook to prevent and as long as Buyer has used
its reasonable best efforts to secure appropriate financing
from Bank of America. In addition, Seller may terminate the
agreement at any time after September 15, 1995 if Buyer has not
entered into a definitive agreement with Bank of America by
such date to provide appropriate funding for the transaction.
(Bullet) Representations, Warranties and Covenants. The Agreement
contains representations, warranties and covenants which are
customary in transactions of this nature, including
representations regarding title to properties, financial
statements and compliance with laws and covenants regarding
operation of the business prior to closing, non-competition
and certain transitional support and services to be provided by
Flagstar.
(Bullet) Indemnification by Flagstar. Flagstar indemnifies the TWRS
Group and Buyer against liabilities relating to (i) breach of
any representations relating to the capitalization of IMP and
TWRS; (ii) breach of any covenant relating to the Section
338(h)(10) elections and any federal and state income tax
liability (for states which compute tax on a unitary basis) for
all periods up to and including the closing date; (iii) certain
environmental matters; (iv) certain undisclosed claims relating
to the conduct of the business prior to the closing; (v)
certain obligations to pay costs and fees in connection with
that certain Noncompetition Agreement dated April 26, 1994
among Flagstar, Compass Group PLC, Canteen Corporation and
certain others; (vi) breach of certain other specified
representations and warranties, some of which are only to the
knowledge of TWRS management; (vii) certain liabilities
relating to certain former operations and properties of the
TWRS Group, including but not limited to Spaceport USA; and
(viii) certain liabilities relating to the termination of
certain employment agreements. Flagstar's indemnification
obligations under subparagraphs (i), (ii) and (v) shall
terminate upon the expiration of all applicable limitation
periods. Flagstar's indemnification obligations with respect to
the TWRS Group operations and properties at Spaceport USA shall
terminate as of the third anniversary of the closing date.
Flagstar's indemnification obligations under subparagraphs
(iii), (iv), (vi), (vii) (other than with respect to the TWRS
Group operations and properties at Spaceport USA) and (viii)
above shall terminate upon the first anniversary of the closing
date. The first $3,000,000 of any indemnifiable environmental
liabilities shall be borne equally by Buyer and Flagstar.
Flagstar obligations under subparagraph (iv) only relate to
uninsured obligations in excess of $2,000,000 in the aggregate.
Other than with respect to the TWRS Group operations and
properties at Spaceport USA, Flagstar shall have no obligation
under subparagraphs (vi) and (vii) until the amount of
otherwise indemnifiable obligations thereunder exceeds
$1,000,000. In addition, Flagstar's obligations under
subparagraphs (iii), (iv), (vi) and (vii) are subject to a
$50,000 threshold amount with respect to each obligation.
(Bullet) Continuing Letter of Credit. Scotia has issued a letter of
credit in the amount of $17,277,103 with respect to certain
insurance obligations of Flagstar and its direct and indirect
subsidiaries, of which $1,911,104 is attributable to
obligations of the TWRS Group. Flagstar has agreed to provide
at closing a letter of credit in the amount of $600,000 through
December 31, 1996. In addition, Flagstar will provide at
closing a letter of credit for the portion of the insurance
obligations attributable to the Spaceport USA operations
(approximately $1,000,000) and Buyer shall provide at closing
substitute collateral for the remaining balance.
SCHEDULE C
SUBJECT PROFICIENT FOOD SUBSIDIARIES
Class Stock Number
of Certif. of
Subsidiary Stockholder Stock No.(s) Shares
TWS 200 Corp. Denny's Holdings, Inc. Common 3 100
Proficient Food TWS 200 Corp. Common 2 50
Company
DFC Trucking Co. Proficient Food Company Common 1 50,000
SCHEDULE D
PROFICIENT FOOD COMPANY
TERM SHEET
The following is a brief summary of the terms of the Stock
Purchase Agreement dated July 7, 1995 (the "Purchase Agreement") among
Xxxxx'x Holdings, Inc. ("Seller"), Flagstar Corporation ("Flagstar"),
Flagstar Companies, Inc. ("Flagstar Parent"), Proficient Acquisition
Corp. ("Buyer") and Meadowbrook Meat Company, Inc. ("MBM").
(Bullet) Stock Sale. Seller to sell to Buyer all of the issued and
outstanding shares of TWS 200 Corp. ("TWS"). Proficient Food
Company ("PFC") is a wholly owned subsidiary of TWS. DFC
Trucking Co. is a wholly owned subsidiary of PFC and together
with PFC and TWS are referred to as the PFC Group.
(Bullet) Purchase Price. The purchase price is $122,500,000 subject to
adjustment relating to the Net Asset Value. Buyer shall pay
Seller $122,500,000 in immediately available funds on the
closing date.
(Bullet) Net Asset Value Adjustment The purchase price shall be
increased by the amount, if any, by which the Net Asset Value
as of the closing date exceeds $44,750,000 or reduced by the
amount, if any, by which $44,750,000 exceeds the Net Asset
Value as of the closing date. Net Asset Value means the amount
by which the aggregate book value of the assets of the PFC
Group exceeds the aggregate book value of liabilities of the
PFC Group, determined on a consolidated basis in accordance
with GAAP consistently applied, subject to certain specified
adjustments. Buyer has exercised its option under the Purchase
Agreement to require Flagstar affiliates other than the PFC
Group to retain or assume certain self insured workers
compensation liabilities relating to the PFC Group.
Accordingly, such liabilities shall be excluded from the
calculation of the Net Asset Value as of the closing date.
Coopers and Xxxxxxx shall resolve any dispute regarding the Net
Asset Value as of the closing date. The purchase price
adjustment shall be paid within 5 business days of its
determination.
(Bullet) Section 338 Elections. Flagstar Parent and Buyer have agreed
to make timely Section 338(h)(10) elections and corresponding
elections under state, local and foreign tax law where
applicable. The federal and state income tax liabilities
resulting from these elections shall be the responsibility
of Flagstar Parent or its subsidiaries, as applicable,
and not the responsibility of Buyer or the PFC Group.
(Bullet) Representations, Warranties and Covenants. The Agreement
contains representations, warranties and covenants which
are customary in transactions of this nature, including
representations regarding title to properties, financial
statements and compliance with laws and covenants regarding
operation of the business prior to closing,
non-competition and certain transitional support and
services to be provided by Flagstar.
(Bullet) Indemnification by Flagstar. Flagstar indemnifies the PFC
Group and Buyer against liabilities relating to (i) breach of
certain representations relating to the capitalization of the
members of the PFC Group, enforceability of the Purchase
Agreement or certain obligations to related parties; (ii)
breach of any covenant in the Purchase Agreement relating to
the Section 338(h)(10) and corresponding elections and any
federal and state income tax liability (for states which
compute tax on a unitary basis) for all periods up to and
including the closing date; (iii) the termination or attempted
termination by PFC of that certain Distribution Agreement dated
April 26, 1994 between PFC and Canteen Corporation; (iv)
obligations of businesses of Flagstar not sold to Buyer; (v)
certain environmental matters; and (vi) certain undisclosed
claims relating to the conduct of business prior to the
closing. Flagstar's indemnification obligations under
subparagraph (i) shall not expire. Flagstar's indemnification
obligations under subparagraphs (ii), (iii) and (iv) terminate
ten (10) days after the expiration of all applicable limitation
periods. Flagstar's indemnifications and obligations under
subparagraph (v) and (vi) terminate upon the first anniversary
of the closing date. The closing date balance sheet shall
reflect a reserve for environmental matters. Flagstar shall
have no obligation under subparagraph (v) above until the
amount of otherwise indemnifiable environmental obligations
exceed the amount of the reserve. In addition, Flagstar's
obligations relating to environmental and undisclosed claims
are subject to a $100,000 threshold amount with respect to each
obligation and a $8,000,000 basket such that Flagstar's
indemnification obligations with respect to such claims only
apply to the extent aggregate claims exceed the $8,000,000
basket.
(Bullet) Distribution Agreements. Denny's, Hardee's, Quincy's and El
Pollo Loco will each enter into eight (8) year distribution
agreements with either PFC or MBM, subject to renewal at the
end of such term, on business terms and provisions
negotiated by each of the concepts. Pursuant to such
distribution agreements, PFC (which currently is the supplier
for Denny's and El Pollo Loco) or MBM (which currently is the
supplier for Hardee's and Quincy's), as the case may be, will
continue to provide food and beverage distribution and
related services to Flagstar's restaurant concepts.
8
SCHEDULE E TO NINTH AMENDMENT, WAIVER AND CONSENT
Estimated letters of credit to be returned upon the sale of TW Recreational
Services, Inc. ("TWRS")
Issued by: Issued to: Description Amount
ScotiaBank CNA Surety bonds $2,300,000
ScotiaBank CNA Workers compensation, general 720,000(1)
liability and auto liability
insurance
Citibank NY St. Dept. of Parks Obligations related to
contract at Gideon 300,000
Xxxxxx Hotel
ESTIMATED TOTAL $3,320,000
(1) Estimated TWRS allocation of gross letter of credit of $34,640,000 which
secures certain insurance obligations of Flagstar and its subsidiaries.
SCHEDULE F TO NINTH AMENDMENT, WAIVER AND CONSENT
Estimated letters of credit to be returned upon the sale of TWS 200 Corp. and
Subsidiaries
Issued by: Issued to: Description Amount
CitiBank Chubb Surety bonds $294,750(1)
ScotiaBank CNA Surety bonds 37,200(2)
ScotiaBank CNA General liability and auto 455,000(3)
liability insurance
ESTIMATED TOTAL $786,950
(1) Estimated TWS 200 Corp. allocation of gross letter of credit of $7,675,000
which secures certain bond obligations of Flagstar and its subsidiaries
(other than bonds related to TW Recreational Services, Inc.
(2) Estimated TWS 200 Corp. allocation of gross letter of credit of $5,000,000
which secures certain bond obligations of Flagstar and its subsidiaries
(other than bonds related to TW Recreational Services, Inc.
(3) Estimated TWS 200 Corp. allocation of gross letter of credit of $34,640,000
which secures certain insurance obligations of Flagstar and its
subsidiaries.
