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EXHIBIT 10.1
AMENDMENT AND WAIVER
This Amendment and Waiver, dated as of April 26, 2005 among
PERFORMANCE
FOOD GROUP COMPANY, a Tennessee
corporation, (the "Borrower"), the Lenders party
to the Credit Agreement referenced below
(the "Lenders") and WACHOVIA BANK,
NATIONAL ASSOCIATION, as administrative
agent (the "Administrative Agent"), for
the Lenders.
STATEMENT OF PURPOSE:
The Lenders agreed to extend certain credit facilities to the
Borrower
pursuant to an Amended and Restated Credit
Agreement dated as of April 28, 2003
by and among the Borrower, the Lenders and
the Administrative Agent (as amended
by a First Amendment dated as of September
15, 2004 and as thereafter amended,
restated, supplemented, or otherwise
modified from time to time, the "Credit
Agreement").
The Borrower desires to (i) sell all of the capital stock of
certain of
its Wholly-Owned Subsidiaries which
comprise the Borrower's Fresh Cut produce
segment, which consists of Fresh
International Corp., Fresh Advantage, Inc.,
Redi-Cut Foods, Inc. and K.C. Salad
Holdings, Inc. (collectively, the
"Subsidiary Disposition") for an aggregate
sale price of approximately
$855,000,000 and (ii) utilize a portion of
the proceeds of the Subsidiary
Disposition (the "Subsidiary Disposition
Proceeds") to pay a cash dividend to
the shareholders of the Borrower and/or to
repurchase certain of the issued and
outstanding capital stock of the Borrower
(the "Dividend/Stock Repurchase").
Section 10.5 of the Credit Agreement prohibits the Borrower or
any
Subsidiary from merging, consolidating or
entering into any similar combination
with another Person except the Borrower or
another Wholly-Owned Subsidiary or
except in connection with a permitted
acquisition. Further, Section 10.6(e) of
the Credit Agreement prohibits the sale of
assets by the Borrower or any
Subsidiary if the value of all such sales
during any consecutive twelve (12)
month period exceeds 15% of the Borrower's
Consolidated Assets. In addition,
Section 10.7(c) of the Credit Agreement
prohibits the payment of dividends or
stock repurchases in an aggregate amount in
excess of $100,000,000 during the
term of the Credit Agreement. Also, Section
10.11 of the Credit Agreement
prohibits the amendment, modification,
redemption, repurchase, prepayment,
cancellation or forgiveness of any Debt in
excess of $50,000,000. Finally, the
Borrower has also requested that certain of
the Subsidiary Disposition Proceeds
be temporarily invested by the Borrower in
certain investments which are
currently not permitted pursuant to the
terms of Section 10.4(b) of the Credit
Agreement (the "Sale Proceeds
Investment").
Accordingly, the Borrower has requested that the Administrative
Agent
and the Required Lenders (i) consent to the
Subsidiary Disposition, the
Dividend/Stock Repurchase and the Sale
Proceeds Investment and (ii) waive any
violation of the terms of Section 10.4(b),
10.5, 10.6(e), 10.7(c) or 10.11 of
the Credit Agreement, in each case, to the
extent such violations are caused
solely by the consummation of the
Subsidiary Disposition, the Dividend/Stock
Repurchase or the Sale Proceeds
Investment.
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The Administrative Agent and the Required Lenders are willing,
solely
upon the terms and conditions set forth
below, to consent to the foregoing
transactions and to waive any such
violation of the terms of the Credit
Agreement to the extent set forth
herein.
NOW, THEREFORE, for good and valuable consideration, the receipt
and
adequacy of which are hereby acknowledged,
the Borrower, the Administrative
Agent and the Required Lenders hereby agree
as follows:
1. Capitalized Terms. All capitalized undefined terms used in
this
Amendment and Waiver (including, without
limitation, in the statement of purpose
hereto) shall have the meanings assigned
thereto in the Credit Agreement.
2.
Consent. The Administrative Agent and the Required Lenders
hereby
consent to:
(a) The Subsidiary Disposition; provided that the Subsidiary
Disposition Proceeds are used solely (i) to consummate the
Dividend/Stock Repurchase, (ii) to make the Sale Proceeds
Investment,
(iii) to pay the Obligations, (iv) to pay (A) the Senior Notes and
(B)
to pay the outstanding balance of (I) the Carrollton Payroll
Development Authority Industrial Development Revenue Bonds (KMB
Produce, Inc. Project), Series 1999, in the original principal
amount
of $9,000,000 and (II) the Tax-Exempt Multi-Modal Industrial
Development Revenue Bonds (K.C. Salad Real Estate, L.L.C.
Project),
Series 1999, in the original principal amount of $7,000,000, (v) to
pay
any fees, expenses or taxes incurred by the Borrower in connection
with
the Subsidiary Disposition, and (vi) for purposes otherwise
permitted
pursuant to the terms of the Credit Agreement;
(b) The Dividend/Stock Repurchase; provided that the aggregate
amount
of Subsidiary Disposition Proceeds used for this purpose shall
not
exceed $500,000,000; and
(c) The Sale Proceeds Investment; provided that (i) Subsidiary
Disposition Proceeds so invested shall be invested only in the
investments permitted pursuant to Section 10.4(b) of the Credit
Agreement or in the investments more particularly described on
Annex A
attached hereto (the "Permitted Temporary Investments"), (ii)
the
aggregate amount of Subsidiary Disposition Proceeds invested in
Permitted Temporary Investments shall not exceed $700,000,000 as of
any
date of determination, and (iii) Subsidiary Disposition Proceeds
may be
invested in Permitted Temporary Investments for a period not to
exceed
nine (9) months following the date of the consummation of the
Subsidiary Disposition.
3. Waiver. The Administrative Agent and the Required Lenders
hereby
waive (i) any and all violations of the
covenants made by the Borrower in
Sections 10.4(b), 10.6(e), 10.7(c) and
10.11 of the Credit Agreement and (ii)
any and all Defaults or Events of Default
caused thereby, in each instance, with
respect to clauses (i) and (ii) of this
Paragraph 3, solely to the extent that
such violation, Default or Event of Default
results from the consummation of the
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Subsidiary Disposition, the Dividend/Stock
Repurchase or the Sale Proceeds
Investment in accordance with the terms of
this Amendment and Waiver.
4. Amendments. The Credit Agreement is hereby amended as
follows:
(a) Section 1.1 of the Credit Agreement is hereby amended by
adding, in
alphabetical order, a new definition "Fresh Cuts Disposition"
as
follows:
"Fresh Cuts Disposition" means the sale of the Borrower's Fresh
Cut
produce segment consisting of Fresh
International Corp., Fresh Advantage, Inc.,
Redi-Cut Foods, Inc. and K.C. Salad
Holdings, Inc. in a transaction approved by
the Required Lenders.
(b) Section 1.1 of the Credit Agreement, definition of "EBITDA"
is
hereby amended by deleting the existing text of said definition and
by
substituting the following in lieu thereof:
"EBITDA" means, for any period, the sum of the following determined
on
a Consolidated basis, without duplication,
for the Borrower and its Subsidiaries
in accordance with GAAP: (a) Net Income for
such period plus (b) the sum of the
following to the extent deducted in
determining Net Income: (i) income and
franchise taxes, (ii) the sum of (A)
Interest Expense and (B) losses on the sale
of receivables in connection with the
Receivables Purchase Facility, (iii)
amortization and depreciation, (iv)
non-cash expenses related to the
transactions contemplated by this
Agreement, (v) non-cash losses on sales of
assets, (vi) non-cash expenses in
connection with the impairment of intangible
assets in accordance with SFAS 141 and SFAS
142, and (vii) any and all write
offs, write
