1
EXHIBIT 10.9
FIRST AMENDMENT TO
TRANSACTION ADVISORY AGREEMENT
THIS FIRST AMENDMENT TO TRANSACTION ADVISORY AGREEMENT is made
effective as of March 31, 1998, by and between KRG Capital Partners, L.L.C., a
Colorado limited liability company ("KRG"), White Cap Industries, Corp., a
California corporation ("WCI"), and White Cap Industries, Inc., a Delaware
corporation ("WCII").
BACKGROUND
KRG, WCI and WCII have previously entered into that certain Transaction
Advisory Agreement dated October 24, 1997 (the "Initial Agreement").
KRG, WCI and WCII desire to amend certain provisions of the Initial
Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
respective agreements hereinafter set forth and the mutual benefits to be
derived herefrom, KRG and the Company hereby agree as follows:
Section 3 (Compensation) of the Initial Agreement is hereby amended in
its entirety effective as of the date of the Initial Agreement as follows:
3. COMPENSATION
WCI and WCII jointly and severally agree to pay to KRG as compensation
for services to be rendered by KRG hereunder in connection with add-on
acquisitions a success fee equal to $200,000 (the "Base Transaction Fee"),
payable upon the first closing in each year of this agreement (measured from the
date of the Initial Agreement) of any add-on acquisitions of contractor supply
businesses. In addition to the Base Transaction Fee, the Company agrees to pay
to KRG, as compensation for services rendered to the Company with respect to the
consummation of any acquisition which transaction closes after the date hereof,
an additional transaction closing fee (the "Transaction Closing Fee") equal to:
(i) $50,000 for any transaction where the aggregate Transaction Value is $20
million or less, provided such fee may be adjusted upward if the Board of
Directors determines such transaction presented unusual complexities, and (ii)
an amount to be agreed upon by the parties hereto and approved by the Board of
Directors, but in no event less than $50,000, for any transaction where the
aggregate Transaction Value exceeds $20 million. "Transaction Value" shall mean
the aggregate of cash and non-cash consideration paid to the sellers of the
company or business being acquired and the value of all interest bearing debt
assumed by WCI or WCII. Any non-cash consideration shall be valued at fair
market value and the value of any equity securities issued shall be fair market
value on the date of issuance assuming such equity securities are fully vested
on such date. KRG may, in its sole discretion, agree to payment by WCI and WCII
of the Base Transaction Fee or Transaction Closing Fees in installments. The
amounts and timing of the installment payments shall be as agreed upon by KRG,
WCI and WCII. Notwithstanding the foregoing, in the event of a termination of
this agreement pursuant to Section 4 (including any deemed or effective
2
termination as a result of KRG no longer being the primary provider of services
described in clause 2 above following a sale of WCI or WCII or other change in
control event) the success fee described above shall be deemed fully earned
for the period described in Section 4.
IN WITNESS WHEREOF, the parties hereto have duly executed this First
Amendment to Transaction Advisory Agreement as of the date written above.
KRG CAPITAL PARTNERS, L.L.C.
By: /s/ XXXX X. XXXX
---------------------------------
Xxxx X. Xxxx
Managing Director
WHITE CAP INDUSTRIES, CORP.
By: /s/ XXXXXXX XXXXXX
---------------------------------
Xxxxxxx Xxxxxx
President
WHITE CAP INDUSTRIES, INC.
By: /s/ XXXXXXX XXXXXX
---------------------------------
Xxxxxxx Xxxxxx
President
-2-
