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EXHIBIT 10.2
FIRST AMENDMENT TO AMENDED
AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (the
"Amendment"), dated as of June 30, 1998, is entered into by and among RICHMONT
MARKETING SPECIALISTS INC., a corporation duly organized and validly existing
under the laws of the State of Delaware ("Borrower"), each of the banks or other
lending institutions which are signatories hereto (each such bank or other
lending institution individually, a "Bank" and, collectively, the "Banks"), and
THE CHASE MANHATTAN BANK, individually as a Bank and as agent for itself and the
other Banks (in its capacity as agent, together with its successors in such
capacity, the "Agent").
RECITALS:
Borrower, Banks and Agent have entered into that certain Amended and
Restated Credit Agreement dated as of December 18, 1998 (as modified by two
letter agreements, one dated March 31, 1998 and the other dated July 17, 1998,
the "Agreement"). Borrower, Banks and Agent now desire to amend the Agreement as
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree, effective as of the date hereof
(unless otherwise indicated), as follows:
ARTICLE 1
Definitions
Section 1.1 Definitions. Capitalized terms used in this Amendment, to the
extent not otherwise defined herein, shall have the same meanings as in the
Agreement, as amended hereby.
ARTICLE 2
Amendments
Section 2.1 Amendment to Section 1.1. Section 1.1 of the Agreement is
amended as follows:
(a) The phrase "eighty percent (80%)" set forth in Subsection (b)(i)
of the definition of the term "Borrowing Base" in Section 1.1 of the
Agreement is amended to read "fifty percent (50%)"; and
(b) The definition of the term "Closing Date" in Section 1.1 of the
Agreement is amended in its entirety to read as follows:
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT - Page 1
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"Closing Date" means December 19, 1997; provided that for
purposes of Section 10.1, the term Closing Date shall mean January
1, 1998 and for purposes of Section 7.14, the term Closing Date
shall mean July 31, 1998.
Section 2.2 Amendment to Section 3.2. The table set forth in Section 3.2
of the Agreement is amended in its entirety to read as follows:
===================================================================
Interest Base Margin Libor Commitment
Coverage Ratio Margin Fee
===================================================================
<1.50:1 0.750% 2.50% 0.5625%
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>=1.50:1 <= 2.50:1 0.500% 2.25% 0.500%
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>2.50:1 <= 3.00:1 0.250% 2.00% 0.375%
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>3.00:1 <= 3.50:1 0.000% 1.75% 0.250%
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>3.50:1 <= 3.75:1 0.000% 1.50% 0.250%
-------------------------------------------------------------------
>3.75:1 <= 4.00:1 0.000% 1.25% 0.250%
-------------------------------------------------------------------
>4.00:1 0.000% 1.00% 0.250%
===================================================================
In addition, the phrases "one-half percent (.50%)"(with reference to the
Base Margin), "two and one-quarter percent (2.25%)"(with reference to the Libor
Rate Margin) and "one-half percent (.50%)"(with reference to the Commitment Fee
Rate) in the last sentence of Section 3.2 are amended to mean "three-quarters of
one percent (.75%)," "two and one-half percent (2.50%)" and .5625%,
respectively. For purposes of Section 3.2, July 31, 1998 shall be deemed an
"Adjustment Date" and as of July 31, 1998 the Base Margin shall be equal to
.75%, the Libor Rate Margin shall equal 2.50% and the Commitment Fee Rate shall
equal .5625%, all until subsequently adjusted in accordance with the applicable
definitions thereof for the Fiscal Quarter ending September 30, 1998.
Section 2.3 Amendment to Section 7.14. Section 7.14 of the Agreement is
amended to add the following thereto:
As of July 31, 1998, Schedule 7.14 identifies (a) the general and
limited partners of MS Acquisition Limited and Richmont Capital Partners
I, L.P. and the amount of each such partner's contributions to each such
partnership or each such partner's percentage ownership in each such
partnership, as applicable and (b) all owners of record of the voting
capital stock of MSSC Acquisition Corp.
Section 2.4 Amendment to Article 7. Article 7 of the Agreement is also
amended to add the following Section 7.26:
Section 7.26 Year 2000. No Default or Material Adverse Effect could
reasonably be expected to occur as a result of the failure of equipment
containing
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT - Page 2
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embedded microchips, computer hardware or computer software owned,
licensed or leased by the Borrower and its Subsidiaries to function in the
case of dates or time periods occurring after December 31, 1999 at least
as effectively as in the case of dates or time periods occurring prior to
January 1, 2000 (a "Year 2000 Problem"). The cost to the Borrower and the
Subsidiaries of preventing a Year 2000 Problem is not reasonably expected
to result in a Default or a Material Adverse Effect. The computer and
management information systems of the Borrower and the Subsidiaries with
any upgrading, replacement or reprogramming contemplated to occur prior to
December 31, 1999 are reasonably expected to be sufficient to permit the
Borrower to conduct its business without Material Adverse Effect.
Section 2.5 Amendment to Subsection 8.1(e). Subsection 8.1(e) of the
Agreement is amended to replace the phrase "ten (10) Business Days" in each such
place it appears with "eighteen (18) days."
Section 2.6 Amendment to Subsection 8.10(b). Subsection 8.10(b) of the
Agreement is amended to add the following sentence to the end thereof:
Notwithstanding any of the foregoing, if a Subsidiary is created or
acquired and has assets at the date of creation or acquisition totaling
less than One Million Dollars ($1,000,000) in book value (herein, each an
"Excluded Subsidiary"), then Borrower shall not be required to comply with
this clause (b); provided, however, in no event shall the aggregate book
value of the assets of all Excluded Subsidiaries exceed Three Million
Dollars ($3,000,000). If the book value of the assets of an Excluded
Subsidiary increases after its creation or acquisition to an amount equal
to or exceeding One Million Dollars ($1,000,000), Borrower will comply
with the first sentence of this Subsection 8.10(b) with respect to such
Subsidiary. If the book value of the assets of all Excluded Subsidiaries
exceed Three Million Dollars ($3,000,000), then Borrower will comply with
the first sentence of this Subsection 8.10(b) with respect to one or more
of such Excluded Subsidiaries so that the total book value of the assets
of all Excluded Subsidiaries is equal to or less than Three Million
Dollars ($3,000,000). If Borrower complies with the first sentence of this
Subsection 8.10(b) with respect to a Subsidiary, such Subsidiary shall no
longer be an Excluded Subsidiary.
Section 2.7 Amendment to Article 8. Article 8 is also amended by adding
the following Section 8.12:
8.12 Pledge of Deposit. Borrower shall deposit with Agent on or
before July 31, 1998 One Million Five Hundred Thousand Dollars
($1,500,000) in immediately available funds to be held in an interest
bearing account (the "Deposit") and the Borrower agrees that it shall not
withdraw the Deposit or any part thereof, except as provided below,
without the consent of the Agent, notwithstanding anything in the Borrower
Security Agreement to the contrary. Borrower confirms that the Deposit is
a "Deposit Account" and "Collateral" as both such terms are defined in,
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT - Page 3
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and is subject to the terms of, the Borrower Security Agreement. As long
as the Deposit is held by the Agent as Collateral, the term "Libor Rate
Margin" as used in and for purposes of Section 2.7(c) only shall be equal
to 1.00% per annum. Within five (5) days after the Borrower's request,
Agent agrees to release the Deposit as Collateral and allow the Borrower
to withdraw the Deposit or any part thereof at its discretion, if the
Borrower has delivered a Compliance Certificate pursuant to subsection 8.1
(d) that reflects that the ratio of the Operating Cash Flow to Debt
Service calculated as of the last day of the Fiscal Quarter for which such
Compliance Certificate is delivered is 1.0 to 1.0 or greater.
Section 2.8 Amendment to Subsection 9.1(b). Subsection 9.1(b) of the
Agreement is amended in its entirety to read as follows:
(b) Debt described on Schedule 9.1 hereto and any extensions,
renewals, restructures or refinancings of such existing Debt so long as
(i) the principal amount of such Debt after such renewal, extension,
restructure or refinancing shall not exceed the principal amount of such
Debt which was outstanding immediately prior to such renewal, extension,
restructure or refinancing; provided that Borrower may, in connection with
the restructure of the terms thereof, increase the amount of existing Debt
in each Fiscal Year by an aggregate amount that does not exceed Seven
Hundred Fifty Thousand Dollars ($750,000) in any Fiscal Year if, as of the
date of each increase, no Default exists or would result therefrom, (ii)
such Debt shall not be secured by any assets other than assets securing
such Debt, if any, prior to such renewal, extension or refinancing; and
(iii) to the extent any such Debt is subordinated to the Obligations, such
Debt must be subordinated to the Obligations on substantially the same
terms; provided, however, that any Debt described on Schedule 9.1 which is
secured by a Lien on Receivables must be repaid (and the Lien securing the
payment thereof released) on or before September 30, 1998;
Section 2.9 Amendment to Subsection 9.1(h). Subsection 9.1(h) of the
Agreement is amended in its entirety to read as follows:
(h) Debt of Borrower (i) under Hedging Agreements and (ii) incurred
to finance the acquisition of Borrower's common stock in a transaction
permitted by clauses (iii) or (iv) of Section 9.4, provided that all such
Debt shall at all times be unsecured;
Section 2.10 Amendment to Subsection 9.1(k). The amount "Five Hundred
Thousand Dollars ($500,000)" set out in clause (i) of Subsection 9.1(k) of the
Agreement is amended to read "Two Million Dollars ($2,000,000).
Section 2.11 Amendment to Subsection 9.2(a). Subsection 9.2(a) of the
Agreement is amended to replace the date "July 31, 1998" set out therein with
"September 30, 1998."
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT - Page 4
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Section 2.12 Amendment to Subsection 9.2(g). The reference to Section 10.4
in clause (g) of Section 9.2 is amended to mean Section 10.3.
Section 2.13 Amendment to Section 9.4. The date "March 31, 1999" in clause
(iv) of Section 9.4 is amended to mean "December 31, 2000" and the amount "Ten
Million Dollars ($10,000,000)" in clause (iv) of Section 9.4 is amended to mean
Twelve Million Dollars ($12,000,000).
Section 2.14 Amendment to Section 9.5. Clause (b) of Section 9.5 is
amended in its entirety to read as follows:
(b) Borrower and the Subsidiaries may own stock of the Subsidiaries
existing on the Closing Date and Borrower may repurchase it own stock in
accordance with the restrictions set forth in Section 9.4 (iii) and
Section 9.4 (iv);
Section 2.15 Amendment to Section 9.7. Clause (a) of Section 9.7 is
amended in its entirety to read as follows:
(a) Borrower and the Subsidiaries may enter into transactions with
each other to the extent not otherwise prohibited hereby and may enter
into transactions specifically permitted hereby, including without
limitation, the transactions permitted by Section 9.4 (iii), Section 9.4
(iv) and Section 9.11,
Section 2.16 Amendment to Section 9.8. Clause (e) of Section 9.8 of the
Agreement is amended in its entirety to read as follows:
(e) the disposition of assets (other than Receivables), in addition
to those set forth in clauses (a) through (d) above if all the following
conditions are satisfied: (i) the aggregate sale price of the assets
disposed of in the Fiscal Year ending December 31, 1998, does not exceed
Two Million Dollars ($2,000,000) and in any following Fiscal Year does not
exceed One Million Dollars ($1,000,000); (ii) no Default exists or would
result therefrom; (iii) the consideration received is at least equal to
the fair market value of such assets and is not required to be utilized to
purchase the Senior Subordinated Notes in accordance with the Indenture;
(iv) any and all proceeds arising as a result of the disposition of assets
(other than Receivables) made pursuant to this clause (e) of Section 9.8
must be payable directly to a Lockbox Account; and (v) the amount of the
Obligations which constitutes Senior Indebtedness under the Indenture
shall not be reduced as a result of Section 4.03 (b) (i) of the Indenture
unless the aggregate amount of the Commitments is reduced by an amount
equal to the amount by which such Senior Obligations have been reduced.
Borrower agrees to deliver to Agent, simultaneously with the Compliance
Certificate delivered pursuant to Section 8.1 (d) as of the end of each
Fiscal Quarter, a listing of all assets disposed of during such Fiscal
Quarter if the aggregate amount of the assets disposed of during such
Fiscal Quarter equaled or exceeded One Million Dollars ($1,000,000).
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT - Page 5
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Section 2.17 Amendment to Section 9.11. Section 9.11 of the Agreement is
amended in its entirety to read as follows:
Section 9.11 Prepayment of Debt. Borrower will not, and will not
permit any Subsidiary to prepay, optionally redeem or repurchase any Debt
other than the Obligations; provided that (a) Borrower may prepay the Debt
required to be prepaid pursuant to Section 9.1(a); (b) Borrower may prepay
up to an aggregate amount of Five Million Dollars ($5,000,000) of Debt
during the term of this Agreement (other than the Debt described in the
foregoing clause (a)) if (i) no Default exists or would result therefrom,
(ii) the average daily balances of the sum of Borrower's and the
Subsidiaries' cash, cash equivalents and the Borrowing Availability for
the thirty (30) day period prior to the date of the prepayment and
calculated as if the prepayment had occurred on the first (1st) day of
such period, shall equal or exceed Four Million Dollars ($4,000,000),
(iii) Borrower shall have provided Agent evidence of its compliance with
clause (ii) preceding on the date of the proposed prepayment; and (iv) the
amount of the Restructuring Prepayment Amount relating to such Debt, if
any, calculated in respect of such prepayment shall not exceed $750,000,
with the term "Restructuring Prepayment Amount" meaning, with respect to
any Debt outstanding at any time that has been restructured, as of the
date of determination, the excess of, if any, (a) the aggregate net
present value of each installment payable in respect of such Debt after it
has been restructured less the aggregate amount of payments, expenditures
and other associated costs which could reasonably be expected to have been
made or incurred (prior to giving effect to such restructuring) from and
after the date of such restructuring to the original final maturity of
such Debt (prior to giving effect to such restructuring) but will no
longer be required to be made or incurred as a result of such
restructuring, including, without limitation, employment and shareholder
compensation and benefits, over (b) the aggregate net present value of
each installment payable in respect of such Debt immediately before it has
been restructured; provided, that the net present value of any payment
hereunder shall be determined by the Borrower using a discount rate
determined by the Borrower to be reasonable at the date of such
determination.
Section 2.18 Amendment to Section 10.1. Section 10.1 of the Agreement is
amended in its entirety to read as follows:
Section 10.1 Debt Service Ratio. Borrower shall not permit the ratio
of the Operating Cash Flow to Debt Service calculated as of the last day
of each Fiscal Quarter during the periods set forth below to be less than
the ratio set forth below for such period:
====================================================================
Period Amount
====================================================================
July 1, 1998 through September 30, 1998 0.75 to 1.00
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October 1, 1998 through December 31, 1998 1.00 to 1.00
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January 1, 1999 through Termination Date 1.25 to 1.00
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FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT - Page 6
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The phrase "Operating Cash Flow" means, as of any Fiscal Quarter end and
for the four (4) Fiscal Quarter period (or portion thereof since July 1,
1998) then ending (the "Subject Period"), the total of the following
calculated without duplication: (A), on a pro forma basis, the Target
Operating Cash Flow for each Prior Target or, as applicable, the Target
Operating Cash Flow attributable to the assets acquired from such Prior
Target, for any portion of such Subject Period occurring prior to the date
of the acquisition of such Prior Target or the related assets plus (B) the
total of the following for Borrower and the Subsidiaries calculated on a
consolidated basis without duplication for the Subject Period: (a) Net
Income; plus (b) amortization and depreciation expense deducted in
determining Net Income; minus (c) the sum of (i) all Capital Expenditures
minus (ii) the Capital Expenditures made in the Subject Period in
connection with any of the following matters (the following matters,
herein the "Excluded Capital Expenditures"); provided that the aggregate
amount of Excluded Capital Expenditures subtracted pursuant to this clause
(ii) or subtracted pursuant to clause (ii)(B) of Section 10.2 shall never
exceed, in each case, an amount equal to Seven Million Six Hundred Fifty
Thousand Dollars ($7,650,000):
=====================================================================
Excluded Capital Expenditures Amount
=====================================================================
PeopleSoft $1,300,000
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PeopleSoft Installation Costs 1,900,000
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Required Computer Upgrades
(upgrade & install field computers) 1,600,000
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Imaging System 500,000
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Data Warehouse 250,000
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Communications (Local Area Network
& Wide Area Network, and Voice
upgrades) 650,000
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Required Software Upgrades
(compliance costs) 500,000
---------------------------------------------------------------------
Office Move 950,000
TOTAL $7,650,000
=====================================================================
The phrase "Debt Service" means, as of any Fiscal Quarter end, the
aggregate amount of the amortization on the Borrower's and the
Subsidiaries' Debt scheduled for: (a) if calculated as of September 30,
1998, the period from September 30, 1998 through December 31, 1998; (b) if
calculated as of December 31, 1998, the period from December 31, 1998
through June 30, 1999; (c) if calculated as of March 31, 1999, the period
from March 31, 1999 through December 31, 1999; and (d) if calculated as of
any other Fiscal Quarter end, the four (4) Fiscal Quarter period following
such Fiscal Quarter end.
Section 2.19 Amendment to Section 10.2. Section 10.2 of the Agreement is
amended in its entirety to read as follows:
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT - Page 7
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Section 10.2 Interest Coverage. Borrower shall not permit the ratio
of (a) the sum of the (i) EBITDA of Borrower minus (ii) the sum of (A)
Capital Expenditures minus (B) Excluded Capital Expenditures (as defined
in Section 10.1) to (b) the sum of cash interest expense minus cash
interest income, all calculated for the four (4) Fiscal Quarter period (or
portion thereof since July 1, 1998) ending on the last day of each Fiscal
Quarter to be less than (i) 1.50 to 1.00 as of each Fiscal Quarter end
prior to January 1, 2000 after, but not including, the Fiscal Quarter
ending on June 30, 1998; (ii) 1.75 to 1.00 as of each Fiscal Quarter end
after January 1, 2000 but prior to January 1, 2001; and (iii) 2.00 to 1.00
as of each Fiscal Quarter end after January 1, 2001.
Section 2.20 Amendment to Section 10.3. The table in Section 10.3 of the
Credit Agreement is amended in its entirety to read as follows:
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Period Amount
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Closing Date through December 31, 1997 $1,000,000
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January 1, 1998 through December 31, 1998 $9,000,000
---------------------------------------------------------------------
January 1, 1999 through December 31, 1999 $6,000,000
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Each Fiscal Year thereafter $5,000,000
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Section 2.21 Amendment to Section 11.1. Clause (n) of Section 11.1 of the
Agreement is deleted and clause (m) of Section 11.2 of the Agreement is amended
in its entirety to read as follows:
(m) A Change of Control shall occur. As used in this clause (m), the
following terms have the following meanings:
"Capital Stock" of any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or
other equivalents of or interests in (however designated) equity of
such Person, including any Preferred Stock, but excluding any debt
securities convertible into such equity.
"Change of Control" means the occurrence of any of the
following events:
(i) the Permitted Holders either (x) cease to be the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act), directly or indirectly, of at least 35% of
the aggregate of the total voting power of the Voting Stock of
the Borrower, whether as a result of issuance of securities of
the Borrower, any merger, consolidation, liquidation or
dissolution of the Borrower, any direct or indirect transfer
of securities by any Permitted Holder or otherwise, or (y) do
not have the right or ability by voting power, contract or
otherwise to elect or designate for election a majority of the
Board of Directors (for purposes of this clause (i), the
Permitted
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Holders shall be deemed to own beneficially any Voting Stock
of an entity (the "specified entity") held by any other entity
(the "parent entity") so long as the Permitted Holders
beneficially own (as so defined), directly or indirectly, in
the aggregate a majority of the voting power of the Voting
Stock of the parent entity);
(ii) (x) any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act), other than one or more
Permitted Holders, is or becomes the beneficial owner (as
defined in clause (i) above, except that such person shall be
deemed to have "beneficial ownership" of all shares that any
such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time),
directly or indirectly, of more than 35% of the total voting
power of the Voting Stock of the Borrower and (y) the
Permitted Holders "beneficially own" (as defined in clause (i)
above), directly or indirectly, in the aggregate a lesser
percentage of the total voting power of the Voting Stock of
the Borrower than such other Person and do not have the right
or ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors
(for the purposes of this clause (ii), such other Person shall
be deemed to own beneficially any Voting Stock of a specified
corporation held by a parent corporation, if such other person
"beneficially owns" (as defined in this clause (ii)), directly
or indirectly, more than 35% of the voting power of the Voting
Stock of such parent corporation and the Permitted Holders
"beneficially own" (as defined in clause (i) above), directly
or indirectly, in the aggregate a lesser percentage of the
voting power of the Voting Stock of such parent corporation
and do not have the right or ability by voting power, contract
or otherwise to elect or designate for election a majority of
the board of directors of such parent corporation); or
(iii) during any period of two consecutive years,
individuals who at the beginning of such period constituted
the Board of Directors (together with any new directors whose
election by such Board of Directors or whose nomination for
election by the shareholders of the Borrower was approved by a
vote of a majority of the directors of the Borrower then still
in office who were either directors at the beginning of such
period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a
majority of the Board of Directors then in office.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT - Page 9
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"Management Stockholders" means Xxxxxx X. Xxxxxxxx, Xxxx X.
Xxxxxx and Xxxxx X. Xxxxxx.
"Permitted Holders" means Richmont Enterprises LLC, a Delaware
limited liability company controlled by certain Affiliates of
Richmont Capital Partners I, L.P., a Delaware limited partnership,
JR Investment Corp., a Delaware corporation (including Xxxx X.
Xxxxxx and the other current stockholders of JR Investment Corp.),
MS Acquisition Limited, a Delaware limited partnership, the
Management Stockholders and any of their respective Affiliates
(including any Person owned or controlled by any such Person, any
member of any such Person's family, any trust for the benefit of any
such Person (or a member of his family) or any Person owned or
controlled by any of the foregoing) and any Person acting in the
capacity of an underwriter in connection with a public or private
offering of the Borrower's Capital Stock.
"Preferred Stock", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however
designated) which is preferred as to the payment of dividends, or as
to the distribution of assets upon any voluntary or involuntary
liquidation or dissolution of such corporation, over shares of
Capital Stock of any other class of such corporation.
"Voting Stock" of a Person means all classes of Capital Stock
of such Person then outstanding that normally entitle the holders of
such interests to participate in the management or to elect those
participating in the management of such Person.
Section 2.22 Amendment to Exhibit B. Exhibit B to the Credit Agreement is
amended in its entirety to read as set forth on Exhibit B hereto.
Section 2.23 Amendment to Schedules. Schedule 7.14 of the Credit Agreement
is amended in its entirety to read as set forth on Schedule 7.14 hereto.
Schedule 9.1 is amended to add the information set forth on Schedule 9.1 hereto.
ARTICLE 3
Reinstatement of Commitments, Ratifications, Representations and Warranties
Section 3.1 Reinstatements of Commitments. Pursuant to that certain Waiver
Letter (herein so called) dated as of March 31, 1998 among Borrower, the
Obligated Parties, Agent and the Banks, the Agent and the Banks waived the
Existing Defaults, as defined therein. As a condition to the waiver of the
Existing Defaults, the Borrower agreed not to request that the Banks make any
Loan or issue any Letter of Credit under the Agreement and notwithstanding
anything in the Agreement to the contrary, the Banks were not obligated to make
any such Loans or issue any Letters of Credit until Borrower, the Obligated
Parties, Agent and the Banks executed and
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT - Page 10
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delivered to Agent an effective agreement on the terms set forth in the
paragraph numbered 1. of the Waiver Letter. The Banks and the Agent agree that
notwithstanding anything in the Waiver Letter to the contrary, this Amendment
satisfies the requirements of the paragraph numbered 1. of the Waiver Letter and
effective as of July 31, 1998, the Borrower may request that the Banks make
Loans and issue Letters of Credit in accordance with the Agreement and the Banks
shall be obligated to make such Loans or issue such Letters of Credit subject to
the terms of, and otherwise in accordance with the Agreement.
Section 3.2 Ratifications. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Agreement and except as expressly modified and superseded by this
Amendment, the terms and provisions of the Agreement and the other Loan
Documents are ratified and confirmed and shall continue in full force and
effect. Borrowers, Agent and the Banks agree that the Agreement as amended
hereby and the other Loan Documents shall continue to be legal, valid, binding
and enforceable in accordance with their respective terms.
Section 3.3 Representations and Warranties. Borrower represents and
warrants that as of July 31, 1998 there are no claims or offsets against or
defenses or counterclaims to its obligations under any of the Loan Documents. TO
INDUCE THE BANKS AND AGENT TO ENTER INTO THIS AMENDMENT BORROWER WAIVES TO THE
EXTENT PERMITTED BY APPLICABLE LAW ANY AND ALL SUCH CLAIMS, OFFSETS, DEFENSES OR
COUNTERCLAIMS, WHETHER KNOWN OR UNKNOWN, ARISING PRIOR TO THE JULY 31, 1998 AND
RELATING TO THE TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY. Borrower hereby represents and warrants to Agent and the Banks that (a)
the execution, delivery and performance of this Amendment have been authorized
by all requisite corporate action on the part of Borrower and each Obligated
Party and will not violate the articles of incorporation or bylaws of Borrower
or any Obligated Party, (b) after giving effect to this Amendment, the
representations and warranties contained in the Agreement, as amended hereby,
and any other Loan Document are true and correct on and as of the date hereof as
though made on and as of the date hereof except to the extent those
representations and warranties expressly relate solely to another date, (c)
after giving effect to this Amendment, no Default has occurred and is
continuing, (d) after giving effect to this Amendment, Borrower and each
Obligated Party is in full compliance with all covenants and agreements
contained in the Agreement, as amended hereby, and the other Loan Documents, and
(e) the Articles of Incorporation and Bylaws of Borrower have not been amended
or otherwise modified since December 18, 1997.
ARTICLE 4
Miscellaneous
Section 4.1 Survival of Representations and Warranties. All
representations and warranties made in this Amendment shall survive the
execution and delivery of this Amendment and the other Loan Documents, and no
investigation by Agent or any Bank or any closing shall affect the
representations and warranties or the right of Agent or any Bank to rely upon
them.
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT - Page 11
12
Section 4.2 Reference to Agreement. Each of the Loan Documents, including
the Agreement and any and all other agreements, instruments or documents now or
hereafter executed and delivered pursuant to the terms hereof or pursuant to the
terms of the Agreement as amended hereby, are hereby amended so that any
reference in such Loan Documents to the Agreement shall mean a reference to the
Agreement as amended hereby.
Section 4.3 Expenses of Lender. As provided in the Agreement, Borrower
agrees to pay on demand all costs and expenses incurred by Agent and the Banks
in connection with the preparation, negotiation, and execution of this
Amendment, including without limitation the costs and fees of Agent's legal
counsel.
Section 4.4 Severability. Any provision of this Amendment held by a court
of competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
Section 4.5 Applicable Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York and the
applicable laws of the United States of America.
Section 4.6 Successors and Assigns. This Amendment is binding upon and
shall inure to the benefit of Agent, the Banks and Borrower and their respective
successors and assigns, except Borrower may not assign or transfer any of its
rights or obligations hereunder without the prior written consent of the Agent
and the Banks.
Section 4.7 Counterparts. This Amendment may be executed in one or more
counterparts and on telecopy counterparts, each of which when so executed shall
be deemed to be an original, but all of which when taken together shall
constitute one and the same agreement.
Section 4.8 Effect of Waiver. No consent or waiver, express or implied, by
Agent or the Banks to or for any breach of or deviation from any covenant,
condition or duty by Borrower or any Obligated Party shall be deemed a consent
or waiver to or of any other breach of the same or any other covenant, condition
or duty.
Section 4.9 Headings. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.
Section 4.10 ENTIRE AGREEMENT. THIS AMENDMENT EMBODIES THE FINAL, ENTIRE
AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THIS AMENDMENT, AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE
PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT - Page 12
13
Executed as of the date first written above.
BORROWER:
RICHMONT MARKETING SPECIALISTS INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Xxxxxxx X. Xxxxxx
Vice President
BANKS:
THE CHASE MANHATTAN BANK,
individually as a Bank and as the Agent
By: /s/ Xxxxxx Xxxxx XxXxxxxx
------------------------------------
Xxxxxx Xxxxx XxXxxxxx
Vice President
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT - Page 13
14
Each Obligated Party hereby consents and agrees to this Amendment and
agrees that each Loan Document to which it is a party shall remain in full force
and effect and shall continue to be its legal, valid and binding obligation
enforceable against it in accordance with its terms. Each Obligated Party hereby
represents and warrants that as of July 31, 1998 there are no claims or offsets
against or defenses or counterclaims to its obligations under any of the Loan
Documents. TO INDUCE THE BANKS AND AGENT TO ENTER INTO THIS AMENDMENT EACH
OBLIGATED PARTY WAIVES ANY AND ALL SUCH CLAIMS, OFFSETS, DEFENSES OR
COUNTERCLAIMS, WHETHER KNOWN OR UNKNOWN, ARISING PRIOR TO THE JULY 31, 1998 AND
RELATING TO THE TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.
MSSC CAROLINA, INC.
MARKETING SPECIALISTS SALES
COMPANY (individually and as successor
by merger to Ferro & Associates, Tower Marketing,
Inc., T-Bar Brokerage, Inc. and TNT
Convenience Stores, Inc.)
BROMAR, INC. (individually and as successor
in interest by merger to Xxxx Xxxxxxx & Associates, Inc.,
Batestas & Co. and Service Assets Corp.)
BROKERAGE SERVICES, INC.
CUMBERLAND FOOD BROKERS, INC.
CENTURY FOOD BROKERS OF HICKORY, INC.
ULTIMATE FOOD SALES, INC.
MEATMASTER BROKERAGE, INC.
EAST COAST FOOD BROKERAGE, INC.
ATLAS MARKETING COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------
Xxxxxxx X. Xxxxxx
Vice President and Treasurer
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT - Page 14
15
Schedule 7.14
to
Richmont Marketing Specialists Inc.
Amended and Restated Credit Agreement
List of Subsidiaries; List of Shareholders
A. Richmont Marketing Specialists Inc.
1. Richmont Marketing Specialists Inc.
Principal Address: 0000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxx
00000
Location of Books and Records: 0000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxx
00000
Authorized Stock: 1,000,000
Issued and Outstanding Stock: 137,635, owned as follows:
Stockholders Number of Shares
------------ ----------------
Xxxxxx X. Xxxxxxxx 25,842
Xxxxxxx X. Xxxx 16,826
Xxxx X. Xxxxxx 6,193
Xxxxx X. Xxxxxx 6,193
MS Acquisition Limited 82,581
Richmont Marketing Specialists Inc. and its stockholders are parties to a
Company and Stockholders Agreement dated as of October 7, 1997, which
imposes certain restrictions upon the sale or transfer of the capital
stock of Richmont Marketing Specialists Inc.
Xxxxxx X. Xxxxxxxx, Xxxxxxx X. Xxxx, Xxxxx X. Xxxxxx and Xxxx X. Xxxxxx
have entered into an Amended and Restated Warrant Agreement with Xxxxxxx
X. Xxxxxxxx dated as of October 7, 1997, pursuant to which Xxxxxxxx may
purchase shares of Richmont Marketing Specialists Inc. from such
stockholders.
B. Wholly-owned Subsidiaries of Richmont Marketing Specialists Inc.
1. Marketing Specialists Sales Company
Principal Address: 0000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxx
00000
Location of Books and Records: 0000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxx
00000
Authorized Stock: 10,000,000
Issued and Outstanding Stock: 137,635
SCHEDULE 7.14 - Page 1 of 5
16
Marketing Specialists Sales Company is not party to any agreement
providing for options, rights, rights of conversion, redemption,
purchase or repurchase, rights of first refusal and similar rights
relating to its Capital Stock except the following:
(a) Potential equitable claim arising from lien on 100 shares of
stock of Marketing Specialists Sales Company, a Florida
corporation and former subsidiary of Marketing Specialists
Sales Company, a Texas corporation ("MSSC"), which was merged
into MSSC effective as of December 31, 1997, which shares were
evidenced, prior to such merger, by Share Certificate No. 3
issued in the name of MSSC;
(b) A first lien security interest held by Xxxxxxx Xxxxxxx in
9,333 shares of common stock of MSSC issued and held in
treasury and a second lien security interest in 3,112 shares
of common stock of MSSC issued and held in treasury pursuant
to a Pledge Agreement dated June 15, 1995; and
(c) A first lien security interest held by Xxxxxx X. Xxxxxx in
3,112 shares of common stock of MSSC issued and held in
treasury (being the same 3,112 shares of treasury stock
subject to a second lien security interest in favor of Xxxxxxx
Xxxxxxx pursuant to a Pledge Agreement dated June 15, 1995) by
virtue of a Collateral Assignment Agreement dated September
27, 1994, referenced in that certain Agreement dated June 15,
1995 between H. Xxxxxxx Xxxxxxx and Marketing Specialists
Sales Company.
2. MSSC Carolina, Inc.
Principal Address: 0000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxx
00000
Location of Books and Records: 0000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxx
00000
Authorized Stock: 1,000 shares of Common Stock, $0.01
par value per share
Issued and Outstanding Stock: 1,000 shares of Common Stock
MSSC Carolina, Inc. is not party to any agreement providing for
options, rights, rights of conversion, redemption, purchase or
repurchase, rights of first refusal and similar rights relating to
its Capital Stock.
C. Wholly-owned Subsidiaries of Marketing Specialists Sales Company
1. Bromar, Inc., a California corporation
Principal Address: 000 X. Xxxxxxx Xxxxxx, Xxxxxx, XX
00000
Location of Books and Records: 0000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxx
00000
Authorized Stock: 2,000,000 shares of Common Stock, no
par value
Issued and Outstanding Stock: 1,000 shares of Common Stock
SCHEDULE 7.14 - Page 2 of 5
17
Bromar, Inc. is not party to any agreement providing for options,
rights, rights of conversion, redemption, purchase or repurchase,
rights of first refusal and similar rights relating to its Capital
Stock.
D. Wholly-owned Subsidiaries of Bromar, Inc.
1. Brokerage Services, Inc., a California corporation
Principal Address: 0000 X. Xxxxx Xxx., Xxxxx Xxx,
Xxxxxxxxxx 00000
Location of Books and Records: 0000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxx
00000
Authorized Stock: 1,000 shares of Common Stock, no par
value
Issued and Outstanding Stock: 100 shares of Common Stock
Brokerage Services, Inc. is not party to any agreement providing for
options, rights, rights of conversion, redemption, purchase or
repurchase, rights of first refusal and similar rights relating to
its capital stock.
E. Wholly-owned Subsidiaries of MSSC Carolina, Inc.
1. Atlas Marketing Company
Principal Address: 0000 Xxxx Xxxxxx Xxxx.
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Location of Books and Record: same
Authorized Stock: 10,000,00, $0.01 par value
Issued and Outstanding Stock: 2,039,266.54
F. Wholly-owned Subsidiaries of Atlas Marketing Company, Inc.
1. Century Food Brokers of Hickory, Inc.
Principal Address: 0000 0xx Xxxxxx XX, Xxxxxxx
Xxxxx Xxxxxxxx 00000
Location of Books and Records: 0000 Xxxx Xxxxxx Xxxx.
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Authorized Stock: 10,000,00, $0.01 par value
Issued and Outstanding Stock: 200
Century Food Brokers of Hickory, Inc. is not party to any agreement
providing for options, rights, rights of conversion, redemption,
purchase or repurchase, rights of first refusal and similar rights
relating to its capital stock.
2. East Coast Food Brokerage, Inc.
Principal Address: 0000 Xxxxx Xxxx Xxxxx, Xxxxxxxxx
Xxxxx Xxxxxxxx 00000
Location of Books and Records: 0000 Xxxx Xxxxxx Xxxx.
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
SCHEDULE 7.14 - Page 3 of 5
18
Authorized Stock: 5,000 shares of Common Stock, no
par value
Issued and Outstanding Stock: 1,000
East Coast Food Brokerage, Inc. is not party to any agreement
providing for options, rights, rights of conversion, redemption,
purchase or repurchase, rights of first refusal and similar rights
relating to its capital stock.
3. Ultimate Food Sales, Inc.
Principal Address: 000 X. Xxxxx Xxxxxx, Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx 00000
Location of Books and Records: 0000 Xxxx Xxxxxx Xxxx.
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Authorized Stock: 1,000 shares of Common Stock, $1.00
par value
Issued and Outstanding Stock: 1,000 shares of common Stock
Ultimate Food Sales, Inc. is not part to any agreement providing for
options, rights, rights of conversion, redemption, purchase or
repurchase, rights of first refusal and similar rights relating to
its capital stock.
4. Cumberland Food Brokers, Inc.
Principal Address: 0000 Xxxx Xxxxxx Xxxx.
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Location of Books and Record: same
Authorized Stock: 100,000 shares of Common Stock,
$1.00 par value
Issued and Outstanding Stock: 1,000 shares
Cumberland Food Brokers, Inc. is not party to any agreement
providing for options, rights, rights of conversion, redemption,
purchase or repurchase, rights of refusal and similar rights
relating to its capital stock.
5. Meatmaster Brokerage, Inc.
Principal Address: 00000 Xxxxxxx Xxxx, Xxxxx 0
Xxxxxxx, Xxxxxxxx 00000
Location of Books and Records: 0000 Xxxx Xxxxxx Xxxx.
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Authorized Stock: 4,000 shares, Class A $1.00 par
value common stock (voting) 1,000
shares, Class B $1.00 par value
common stock
Issued and Outstanding Stock: 500 shares of Class A
Meatmaster Brokerage Inc. is not party to any agreement providing
for options, rights, rights of conversion, redemption, purchase or
repurchase, rights of first refusal and similar rights relating to
its capital stock
SCHEDULE 7.14 - Page 4 of 5
19
G. MS Acquisition Limited L.P. partnership interests:
Partner Partnership Interest Partnership Interest
------- -------------------- --------------------
MSSC Acquisition Corporation general partner 1% general partner
Richmont Capital Partners I, L.P. limited partner 99% limited partner
H. Richmont Capital Partners I, L.P. partnership capital contributions:
Partnership Capital
Partner Partnership Interest Contributions
------- -------------------- -------------
JR Investment Corp. general and managing partner $10,000 as general and
managing partner
New Arrow Corp. general partner $100,000,000 as
general partner
Xxxxxxx X. Xxxxxx Class A limited partner $10,000 Class A limited
partner
$500 Class B limited
Xxx Xxxxxxxx Class B limited partner partner
I. MSSC Acquisition Corp. voting capital stock:
Owner of Record
---------------
Richmont Capital Partners I, L.P.
SCHEDULE 7.14 - Page 5 of 5
20
Schedule 9.1
to
First Amendment
to
Amended and Restated
Credit Agreement
Debt
1. Deferred Compensation Plan dated December 31, 1990 between Adams,
Beckman, Xxxxxxxx, Inc. d/b/a ABP/Watt, Inc. and Xxxxxx X. Xxxxx payable
monthly, with a net present value of $127,444.92 (as 4/1/98).
2. Deferred Compensation Plan dated December 31, 1990 between Adams,
Beckman, Xxxxxxxx, Inc. d/b/a ABP/Watt, Inc. and Xxxxx Xxxxxxx payable monthly,
with a net present value of $151,684.31 (as 4/1/98).
SCHEDULE 9.1 - Solo Page
