Exhibit 10.4
Execution Version
Receivables SALE AND DIstribution AGREEMENT
dated as of April 14, 2023
among
THe Originators identified on the signature pages hereto,
each as Originators
and
Flowers Foods, Inc.
Table of Contents
Page
ARTICLE I | DEFINITIONS; CONSTRUCTION | 1 | |
SECTION 1.01. | Certain Definitions | 1 | |
SECTION 1.02. | Master Framework Agreement | 3 | |
SECTION 1.03. | Interpretation and Construction | 3 | |
SECTION 1.04. | Use of Historical Data | 4 | |
ARTICLE II | PURCHASES, DISTRIBUTIONS AND SALES | 4 | |
SECTION 2.01. | General Terms; Intent of the Parties | 4 | |
SECTION 2.02. | Purchase Price | 7 | |
SECTION 2.03. | Payments and Computations, Etc. | 8 | |
ARTICLE III | CLOSING PROCEDURES | 9 | |
SECTION 3.01. | Conditions to Closing | 9 | |
ARTICLE IV | REPRESENTATIONS AND WARRANTIES | 9 | |
SECTION 4.01. | General Representations and Warranties | 9 | |
SECTION 4.02. | Representations and Warranties of each Originator With Respect to Sale of Receivables | 9 | |
ARTICLE V | PURCHASE TERMINATION EVENTS | 10 | |
SECTION 5.01. | Consequences of a Purchase Termination Event/Event of Default | 10 | |
ARTICLE VI | MISCELLANEOUS | 10 | |
SECTION 6.01. | Indemnities | 10 | |
SECTION 6.02. | Holidays | 12 | |
SECTION 6.03. | Records | 12 | |
SECTION 6.04. | Amendments and Waivers | 12 | |
SECTION 6.05. | Term of Agreement | 12 | |
SECTION 6.06. | No Implied Waiver; Cumulative Remedies | 12 | |
SECTION 6.07. | No Discharge | 13 | |
SECTION 6.08. | Notices | 13 | |
SECTION 6.09. | Severability | 13 | |
SECTION 6.10. | Governing Law; Submission to Jurisdiction | 13 | |
SECTION 6.11. | Prior Understandings | 13 | |
SECTION 6.12. | Survival | 13 | |
SECTION 6.13. | Counterparts | 14 |
Table of Contents
(continued)
Page
SECTION 6.14. | Set-Off | 14 |
SECTION 6.15. | Counterparts | 14 |
SECTION 6.16. | Confidentiality | 14 |
SECTION 6.17. | Payments Set Aside | 14 |
SECTION 6.18. | Waiver of Jury Trial | 15 |
(ii)
List of Schedules and Exhibits
Schedule I | Credit and Collection Policy |
Schedule II | Primary Originators |
Schedule III | Secondary Originators |
Schedule IV | Tertiary Originators |
Schedule V | Quaternary Originators |
(iii)
RECEIVABLES SALE AND DISTRIBUTION AGREEMENT
RECEIVABLES SALE AND DISTRIBUTION AGREEMENT, dated as of April 14, 2023 (as amended, supplemented or otherwise modified and in effect from time to time, this “Agreement”), among Flowers Foods, Inc., a Georgia corporation (the “Flowers”) and each of the Primary Originators, Secondary Originators, Tertiary Originators and Quaternary Originators signatory hereto.
RECITALS
WHEREAS, certain of the Originators generate Receivables and related rights and interests in the ordinary course of their businesses;
WHEREAS, each Originator wishes to sell and/or distribute such Receivables to Flowers directly or through one or more parent companies, and Flowers wishes to purchase and/or receive distributions of such Receivables from the applicable Primary Originator, pursuant to and in accordance with the terms hereof;
NOW, THEREFORE, the parties hereto hereby agree as follows:
DEFINITIONS; CONSTRUCTION
“Agreement” has the meaning specified in the preamble to this Agreement.
“Back-Up Security Interest” has the meaning specified in Section 2.01(e)(ii).
“Confidential Information” has the meaning specified in Section 6.16.
“Credit and Collection Policy” means each of (i) the credit, collection, enforcement and other policies and practices of the Originators relating to Receivables existing on the date hereof and (ii) any other credit, collection, enforcement and other policy and practice of any Originator which is a Subsidiary of any Originator that is as restrictive or more restrictive than the policy referred to in clause (i), as each such policy may be modified from time to time in compliance with the Master Framework Agreement.
“Deemed Collections” has the meaning specified in Section 2.03.
“Dilution Factors” means credits, cancellations, debt forgiveness, billing adjustments, cash discounts, retropricing, warranties, allowances, Disputes, rebates, charge backs, returned or repossessed goods, and other allowances, adjustments and deductions (including, without limitation, any special or other discounts or any reconciliations and any set-off in respect of any claim by any Person, whether such claim arises out of the same or a related transaction or an unrelated transaction) that are given by an Originator or any of its Affiliates to an Obligor, other than (a) payment in cash of the Face Amount of a Receivable by an Obligor or (b) a reduction of the Face Amount of a Receivable as the result of the related Obligor’s inability to pay such Receivable.
“Discount Percentage” means a percentage calculated to provide Flowers with a reasonable return on its investment in the Receivables and that represents the fair market value thereof after taking account of (i) the time value of money based upon the anticipated dates of collection of the Receivables and cost to Flowers of financing its investment in the Receivables during such period and (ii) the risk of nonpayment by the related Obligor.
“Distribute” means to distribute, dividend or otherwise convey assets as a return on equity to a Parent. The terms “Distributes” and “Distribution” shall have correlative meanings.
“Flowers” has the meaning specified in the preamble to this Agreement.
“Master Framework Agreement” means the Master Framework Agreement, dated as of the date hereof, among Flowers, the Originators, the “Buyer Funding Parties” party thereto and Coöperatieve Rabobank U.A., New York Branch.
“Originator” means each or any Primary Originator, Secondary Originator, Tertiary Originator or Quaternary Originator together with each of the subsidiaries of Flowers that hereafter becomes a party hereto by executing a Joinder Agreement and satisfying the conditions of Section 6.19 hereof.
“Parent” means, with respect to any Primary Originator, Secondary Originator, Tertiary Originator, or Quaternary Originator, the owner of the Equity Interests of such Primary Originator, Secondary Originator, Tertiary Originator or Quaternary Originator.
“Primary Originator” means each entity identified as such on Schedule II hereto.
“Purchase Price” means, with respect to Receivables purchased by a Transferee pursuant to Section 2.01, an amount equal to the aggregate face amount of such Receivables so purchased times the difference of 100% minus the Discount Percentage.
“Purchase Termination Date” means the earlier to occur of (a) the date Flowers gives notice to the Originators under Section 5.01 that this Agreement is terminated and (b) the Facility Expiration Date.
“Purchase Termination Event” means any “Event of Default” under, and as defined in, the Master Framework Agreement.
2
“Purchased Assets” means, with respect to an Originator, the property conveyed by it pursuant to Section 2.01(a), (b), (c) or (d), as applicable.
“Quaternary Originator” means each entity identified as such on Schedule V hereto.
“Receivables Pool” means, with respect to an Originator, the Receivables conveyed by it pursuant to this Agreement.
“Repurchase Price” has the meaning specified in Section 2.04.
“Secondary Originator” means each entity identified as such on Schedule III.
“Termination Agreement” means the Omnibus Termination, Release and Sale Agreement, dated the date hereof, among the Originators party thereto, Flowers, Rabobank, Flowers Finance II, LLC and the other parties thereto.
“Tertiary Originator” means each entity identified as such on Schedule IV hereto.
“Transferee” means, with respect to a Primary Originator, Flowers, and with respect to any other Originator, its Parent.
3
PURCHASES, DISTRIBUTIONS AND SALES
4
5
(ii) In the event that, contrary to the mutual intent of the parties, any conveyance of Purchased Assets is not characterized as a sale and/or Distribution, the applicable Originator shall, effective as of the date hereof, be deemed to have granted (and such Originator hereby does grant) (in addition to and not in substitution of the grant under Section 2.01(e) below) to the applicable Transferee a first priority security interest (“Back-Up Security Interest”) in and to any and all present and future Receivables and other Purchased Assets of such Originator and the proceeds thereof to secure the repayment on demand of all amounts paid to such Originator hereunder. This Agreement shall be deemed to be a security agreement. With respect to such grant of a security interest, any Transferee may at its option exercise from time to time any and all rights and remedies available to it hereunder, under the UCC or otherwise. Each Originator agrees that at least ten (10) Business Days shall be reasonable prior notice to such Originator of the date of any public or private sale or other disposition of all or any of the Purchased Assets conveyed by it.
6
7
8
CLOSING PROCEDURES
REPRESENTATIONS AND WARRANTIES
9
PURCHASE TERMINATION EVENTS
MISCELLANEOUS
10
11
provided that nothing in this Section 6.01 shall be deemed to provide indemnity to Flowers or the Indemnified Parties for credit losses due to Defaulted Receivables.
12
13
14
[Signature Pages to Follow]
15
IN WITNESS WHEREOF, the parties hereto, by their duly authorized signatories, have executed and delivered this Agreement as of the date first above written.
FLOWERS FOODS, INC. | ||
| ||
| ||
By: | /s/ R. Steve Kinsey | |
| Name: | R. Steve Kinsey |
| Title: | Chief Financial Officer and Chief |
|
| Accounting Officer |
[Signature Page to Receivables Sale Agreement]
Mesa Organic Baking Co., Inc. | Originators:
Tuscaloosa Organic Baking Co., LLC |
C&G Holdings Inc. | Flowers Baking Co. of Villa Rica, LLC |
Dave’s Killer Bread, Inc. | Flowers Foods Specialty Group, LLC |
Derst Baking Company, LLC | Flowers Specialty Snack Sales, Inc. |
Flowers Baking Co. of Bardstown, LLC | Franklin Baking Company, LLC |
Flowers Baking Co. of Batesville, LLC | Holsum Bakery, Inc. |
Flowers Baking Co. of Baton Rouge, LLC | Lepage Bakeries Park Street, LLC |
Flowers Baking Co. of Birmingham, LLC | Lepage Bakeries Brattleboro, LLC |
Flowers Baking Co. of Bradenton, LLC | Flowers Baking Co. of Lakeland, Inc. |
Flowers Baking Co. of California, LLC | Tasty Baking Company |
Flowers Baking Co. of Denton, LLC | Flowers Bakeries Sales of Alabama, LLC |
Flowers Baking Co. of Denver, LLC | Flowers Bakeries Sales of Desert Southwest, LLC |
Flowers Baking Co. of El Paso, LLC | Flowers Bakeries Sales of Florida, LLC |
Flowers Baking Co. of Florida, LLC | Flowers Bakeries Sales of Georgia, LLC |
Flowers Baking Co. of Henderson, LLC | Flowers Bakeries Sales of Louisiana, LLC |
Flowers Baking Co. of Houston, LLC | Flowers Bakeries Sales of Mid Atlantic, LLC |
Flowers Baking Co. of Jacksonville, LLC | Flowers Bakeries Sales of Midwest, LLC |
Flowers Baking Co. of Jamestown, LLC | Flowers Bakeries Sales of NE Metro North, LLC |
Flowers Baking Co. of Lafayette, LLC | Flowers Bakeries Sales of NE Metro South, LLC |
Flowers Baking Co. of Lenexa, LLC | Flowers Bakeries Sales of New England, LLC |
Lynchburg Organic Baking Co., LLC | Flowers Bakeries Sales of NorCal, LLC |
Flowers Baking Co. of Miami, LLC | Flowers Bakeries Sales of North Texas, LLC |
Flowers Baking Co. of Modesto, LLC | Flowers Bakeries Sales of SoCal, LLC |
Flowers Baking Co. of Morristown, LLC | Flowers Bakeries Sales of South Texas, LLC |
[Signature Page to Receivables Sale Agreement]
Flowers Baking Co. of New Orleans, LLC | Flowers Bakeries Sales of Tennessee, LLC |
Flowers Baking Co. of Norfolk, LLC | Tasty Baking Sales, LLC |
Flowers Baking Co. of Ohio, LLC | Flowers Bakeries Sales, LLC |
Flowers Baking Co. of Oxford, Inc. | Holsum Holdings, LLC |
Flowers Baking Co. of Portland, LLC | DKB Organic Bakeries, LLC |
Flowers Baking Co. of San Antonio, LLC | Flowers Baking Co. of Tyler, LLC |
Flowers Baking Co. of Texas, LLC | Flowers Bakeries Sales of Utah, LLC |
Flowers Baking Co. of Thomasville, LLC |
|
By: |
/s/ J.T. Rieck |
Name: J.T. Rieck |
Title: Secretary and Treasurer |
Flowers Bakeries, LLC | |
|
|
By: | /s/ J.T. Rieck |
Name: J.T. Rieck | |
Title: Treasurer |
[Signature Page to Receivables Sale Agreement]
SCHEDULE I
to Receivables Sale and
Distribution Agreement
CREDIT AND COLLECTION POLICY
(See attached.)
I-1
4854-0637-7303, v.7
SCHEDULE II
LIST OF PRIMARY ORIGINATORS
II-1
SCHEDULE III
to Receivables Sale and
Distribution Agreement
LIST OF SECONDARY ORIGINATORS
III-1
III-2
SCHEDULE IV
to Receivables Sale and
Distribution Agreement
LIST OF TERTIARY ORIGINATORS
IV-1
SCHEDULE V
to Receivables Sale and
Distribution Agreement
LIST OF quaternary ORIGINATORS
Quaternary Subsidiaries
A. Directly under C&G Holdings Inc.
B. Directly under Flowers Baking Co. of New Orleans, LLC
C. Directly under Flowers Baking Co. of Tyler, LLC
V-1