EXHIBIT 10(A)
AMENDMENT NO. 8
TO
REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT
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THIS AMENDMENT NO. 8 ("Amendment") is entered into as of January
13, 1998, by and between Lincoln Snacks Company, a Delaware corporation,
having its principal place of business at 0 Xxxx Xxxxx Xxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000 ("Borrower") and BNY Financial Corporation, as
successor in interest to The Bank of New York Commercial Corporation,
having offices at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000
("Lender").
BACKGROUND
Borrower and Lender are parties to a Revolving Credit, Term Loan
and Security Agreement dated December 3, 1993, as amended by Amendment
No. 1 to Revolving Credit, Term Loan and Security Agreement dated as of
March 24, 1994, Amendment No. 2 to Revolving Credit, Term Loan and
Security Agreement dated as of September 14, 1994, Amendment No. 3 to
Revolving Credit and Term Loan Security Agreement dated as of March 31,
1995, Amendment No. 4 to Revolving Credit, Term Loan and Security
Agreement dated as of June 29, 1995, Amendment No. 5 to Revolving
Credit, Term Loan and Security Agreement dated as of November 7, 1995,
Amendment No. 6 to Revolving Credit, Term Loan and Security Agreement
dated as of May 8, 1996 and Amendment No. 7 to Revolving Credit, Term
Loan and Security Agreement dated as of October 8, 1996 (as further
amended, restated, supplemented or otherwise modified from time to time,
the "Loan Agreement") pursuant to which Lender provided Borrower with
certain financial accommodations.
Borrower has requested that Lender amend the Loan Agreement and
Lender is willing to do so on the terms and conditions hereafter set
forth.
NOW, THEREFORE, in consideration of any loan or advance or grant
of credit heretofore or hereafter made to or for the account of Borrower
by Lender, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Definitions. All capitalized terms not otherwise defined
herein shall have the meanings given to them in the Loan Agreement.
2. Amendment to Loan Agreement. Subject to satisfaction of the
conditions precedent set forth in Section 3 below, the Loan Agreement is
hereby amended as follows:
(a) The following defined term in Section 1.2 of the Loan
Agreement is hereby amended in its entirety to provide as follows:
"Applicable Margin" shall mean (i) for Domestic Rate
Loans one quarter of one percent (.25%) and (ii) for
Eurodollar Rate Loans one and one-half percent
(1.50%), in each case subject to Section 3.1(b)
hereof.
"Applicable Margin Reduction Requirement" shall mean
the compliance by Borrower with each of the following
conditions: (x) no Event of Default shall have
occurred and be continuing, (y) Tangible Net Worth of
Borrower at June 30, 1998 is equal to or greater than
$7,500,000, less the amount of any stock repurchase
permitted pursuant to Section 7.7 of this Agreement
after the effective date of Amendment No. 8, and (z)
EBITDA for the period July 1, 1997 to June 30, 1998 is
equal to or greater than $1,500,000.
"Maximum Loan Amount" shall mean $4,000,000.
"Maximum Revolving Advance Amount" shall mean
$4,000,000.
"Original Owner" shall mean Xxxx, shareholders of Xxxx
or management of Borrower.
"Term" shall mean the Closing Date through December 2,
2000 as the same may be extended in accordance with
the provisions of Section 13.1.
(b) The following defined term is inserted in the
appropriate alphabetical order to provide as follows:
"Amendment No. 8" shall mean Amendment No. 8 to
Revolving Credit, Term Loan and Security Agreement
dated as of January 13, 1998 by an between Borrower
and Lender.
(c) Section 2.1(a)(y)(ii) of the Loan Agreement is hereby
amended by deleting "$1,500,000" in the proviso contained therein and
inserting "$2,000,000" in its place and stead.
(d) Section 2.11 of the Loan Agreement is hereby amended
by (i) deleting "$750,000" and inserting "$500,000" in its place and
stead; and (ii) deleting "$300,000" and inserting "$150,000" in its
place and stead.
(e) Section 3.1(b) of the Loan Agreement is hereby amended
in its entirety to provide as follows:
"(b) The Applicable Margin shall be reduced by (i) one
quarter of one percent (.25%) with respect to Domestic
Rate Loans, and (ii) one half of one percent (.50%)
with respect to Eurodollar Rate Loans, in each case
effective five (5) Business Days following receipt by
Lender of the June 30, 1998 audited financial
statements in the event the Applicable Margin
Reduction Requirement has occurred."
(f) Section 3.2(b) of the Loan Agreement is hereby amended
by (i) deleting "one-half of one percent (.50%)" and inserting "three-eighths
of one percent (.375%)" in its place and stead; and (ii) adding
the following at the end of the first sentence thereof:
"; provided, however, that if the Applicable Margin is
reduced pursuant to Section 3.1(b) hereof, then the
fee payable under this Section 3.2(b) shall be reduced
to one-quarter of one percent (.25%)."
(g) Section 3.3(a) of the Loan Agreement is hereby amended
by deleting "$1,000" and inserting "$500" in its place and stead.
(h) Section 3.3(b) of the Loan Agreement is hereby amended
in its entirety to provide as follows:
"(b) Collateral Monitoring Fee. Borrower shall pay to
Lender on the first day of each month following any
month in which Lender performs any collateral
monitoring - namely any field examination, collateral
analysis or other business analysis the need for which
is to be determined by Lender in good faith and which
monitoring is undertaken by Lender or for Lender's
benefit - a collateral monitoring fee in an amount
equal to Lender's then standard collateral monitoring
fee (which as of the effectiveness of Amendment No. 8
is $750 per day) for each person performing such
monitoring, plus all reasonable out-of-pocket costs
and disbursements incurred by Lender in the
performance of such examination or analysis. Lender
shall not perform more than one (1) audit in any year
unless there are no outstanding Advances during the
twelve (12) month period ended the month preceding the
next scheduled audit (which would be in June 1998), in
which event no audit will be required unless any
Default or Event of Default shall thereafter occur or
any Advances shall thereafter be outstanding."
(i) Section 7.1(a) of the Loan Agreement is hereby amended
by adding the following at the end thereof:
"; provided, however, that Borrower may finance an
acquisition of the assets or stock of any Person
(other than Borrower), subject to obtaining the prior
written consent of Lender to such acquisition, by
utilizing all cash available to Borrower plus, without
duplication, fifty percent (50%) of Undrawn
Availability."
(j) Section 7.7 of the Loan Agreement is hereby amended by
adding the following at the end thereof:
"; provided, however, so long as no Default or Event
of Default exists or would exist after giving effect
thereto, Borrower may purchase, redeem or otherwise
retire any common or preferred stock by utilizing all
cash available to Borrower plus, without duplication,
fifty percent (50%) of Undrawn Availability."
(k) Section 9.2 of the Loan Agreement is hereby amended by
(i) deleting "and" in the third line thereof and inserting a comma in
its place and stead, and (ii) adding at the end of the first sentence
thereof the following:
", and (d) a monthly borrowing base certificate in
substantially the form of Exhibit 9.2 hereto."
(l) Exhibit 9.2 attached to this Amendment shall be
Exhibit 9.2 to the Loan Agreement.
(m) Section 13.1 is hereby amended in its entirety to
provide as follows:
Term. This Agreement, which shall inure to the
benefit of and shall be binding upon the respective
successors and permitted assigns of each of Borrower
and Lender, shall become effective on the date hereof
and shall continue in full force and effect until
December 2, 2000 unless sooner terminated as herein
provided. The Term shall be automatically extended
for successive periods of one (1) year each unless
terminated by either party at the end of such initial
Term or any successive Term by giving the other party
ninety (90) days prior written notice. Borrower may
terminate this Agreement at any time upon ninety (90)
days' prior written notice upon payment in full of the
Obligations. In the event the Obligations are prepaid
in full prior to the last day of the Term (the date of
such prepayment hereinafter referred to as the
"Prepayment Date") Borrower shall pay an early
termination fee in an amount equal to (x) 1.2% of the
amount repaid if the Prepayment Date occurs to and
including December 1, 1998, (y) .8% of the amount
repaid if the Payment Date occurs from December 2,
1998 to and including December 1, 1999 and (z) .3% of
the amount repaid if the Prepayment Date occurs from
December 2, 1999 to and including December 1, 2000.
3. Conditions of Effectiveness. This Amendment shall become
effective (including, without limitation, the reduction in the
Applicable Margin) upon receipt by Lender of (x) four (4) copies of this
Amendment executed by Borrower, and (y) an extension fee of $2,500
(which may be charged to Borrower's account).
4. Representations and Warranties. Borrower hereby represents
and warrants as follows:
(a) This Amendment and the Loan Agreement, as amended
hereby, constitute legal, valid and binding obligations of Borrower and
are enforceable against Borrower in accordance with their respective
terms.
(b) No Event of Default has occurred and is continuing or
would exist after giving effect to this Amendment.
(c) Borrower has no defense, counterclaim or offset with
respect to the Loan Agreement or the Obligations thereunder.
5. Effect on the Loan Agreement.
(a) Upon the effectiveness of Section 2 hereof, each
reference in the Loan Agreement to "this Agreement," "hereunder,"
"hereof," or words of like import shall mean and be a reference to the
Loan Agreement as amended hereby.
(b) Except as specifically amended herein, the Loan
Agreement, and all other documents, instruments and agreements executed
and/or delivered in connection therewith, shall remain in full force and
effect, and are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or remedy of
Lender, nor constitute a waiver of any provision of the Loan Agreement,
or any other documents, instruments or agreements executed and/or
delivered under or in connection therewith.
6. Governing Law. This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors and assigns and shall be governed by and construed in
accordance with the laws of the State of New York.
7. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part
of this Amendment for any other purpose.
8. Counterparts. This Amendment may be executed by the parties
hereto in two or more counterparts, each of which shall be deemed an
original and which taken together shall be deemed to constitute one and
the same agreement.
IN WITNESS WHEREOF, this Amendment No. 8 has been duly executed as
of the day and year first written above.
LINCOLN SNACKS COMPANY
By: /s/ Xxxxxxxx X. Crabs
Name: Xxxxxxxx X. Crabs
Title: Chief Financial Officer
BNY FINANCIAL CORPORATION
By: /s/ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title: Vice President
EXHIBIT 9.2
Description: Monthly Reports of Assigned Accounts, Credit
Adjustment Reports and Accounts Receivable Reports
