EXHIBIT 4.2
FIRST AMENDMENT TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
(this "Amendment") is made as of July 31, 2002, by and between AMERICAN NATIONAL
BANK AND TRUST COMPANY OF CHICAGO (the "Lender"), VITA FOOD PRODUCTS, INC., a
Nevada corporation ("Vita"), and VIRGINIA HONEY COMPANY, INC., a Virginia
corporation ("Virginia Honey") (Vita and Virginia Honey are collectively
hereinafter referred to as the "Borrowers" and each individually a "Borrower").
W I T N E S S E T H:
WHEREAS, Borrowers and Lender entered into an Amended and Restated Loan
and Security Agreement dated as of August 15, 2001 (the "Credit Agreement"); and
WHEREAS, Borrowers have requested certain modifications to the Credit
Agreement; and
WHEREAS, Lender is willing to grant such modifications on the terms and
conditions contained herein;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which is acknowledged by the parties hereto, it is hereby agreed
as follows:
1. The recitals hereinabove contained shall form a part of this
Amendment and this Amendment shall be construed in the light thereof. All
capitalized terms contained herein and not otherwise defined shall have the same
meaning as contained in the Credit Agreement.
2. Section 1.4 of the Credit Agreement is deleted in its entirety and
replaced with the following:
1.4 "Adjusted EBITDA" means, with respect to the Borrowers for
any period, the consolidated net income (or loss) of the Borrowers on a
consolidated basis for such period, excluding (a) any gains from Asset
Sales, (b) any extraordinary gains and (c) any gains from discontinued
operations, plus, to the extent deducted in determining such
consolidated net income, (i) interest expense (including but not limited
to imputed interest on capitalized leases), (ii) income tax expense,
(iii) depreciation and (iv) amortization for such period.
3. Section 1.7 of the Credit Agreement is deleted in its entirety and
replaced with the following:
1.7 "Applicable Margin" means: (a) with respect to Prime Rate
Loans and with respect to LIBOR Rate Loans, the applicable LIBOR margin
or Prime Rate margin in effect from time to time, determined based upon
the applicable
ratio of Funded Debt to Adjusted EBITDA then in effect pursuant to the
appropriate column under the table below:
Revolving
Funded Debt to LIBOR Revolving Prime Term LIBOR Term Prime
Adjusted EBITDA Margin Rate Margin Margin Rate Margin
---------------- ---------- --------------- ----------- ------------
Greater than 2.90 to 1.0 2.65% -.10% 3.10% .20%
(LEVEL III)
2.40 to 1.0 or greater,
but less than or equal to 2.40% -.35% 2.75% -.05%
2.90 to 1.0 (LEVEL II)
Less than 2.40 to 1.0 2.15% -.60% 2.45% -.30%
(LEVEL I)
The Applicable Margin shall be adjusted from time to time upon delivery
to the Lender of the annual and semiannual financial statements required
to be delivered pursuant to Sections 10.1(D) (i) and (ii) hereof
accompanied by a written calculation of the Funded Debt to Adjusted
EBITDA Ratio certified by a chief financial officer as of the end of the
fiscal period for which such financial statements are delivered. If such
calculation indicates that the Applicable Margin shall increase or
decrease, then one (1) Business Day after the date of delivery of such
financial statements and written calculation the Applicable Margin shall
be adjusted in accordance therewith; provided, however, that if
Borrowers shall fail to deliver any such financial statements for any
such fiscal period by the date required pursuant to Sections 10.1(D) (i)
and (ii), then, effective as of the first Business Day following the end
of the fiscal period for which such financial statements were to have
been delivered, and continuing through the date which is one (1)
Business Day after the date (if ever) when such financial statements and
such written calculation are finally delivered, the Applicable Margin
shall be conclusively presumed to equal the highest Applicable Margin
specified in the pricing table set forth above. Notwithstanding anything
to the contrary above, Subject to Sections 2.5 and 2.10 below, until at
least April 1, 2003, the Applicable Margin shall be fixed at the Level
II margins.
4. Section 1.61 of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
1.61 "Revolving Loan Commitment" shall mean (i) $7,000,000 from and
including August 1 up to and including January 31 of each calendar year,
and (ii) $5,000,000 from and including February 1 up to and including
July 31 of each calendar year.
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5. Section 1.63 of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
1.63 "Revolving Loan Termination Date" shall mean July 31, 2004.
6. Section 4.2(C) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
(C) Prepayments. Subject to Section 2.12, Borrowers may from
time to time voluntarily prepay the Term Loan in whole or in part;
provided that the Borrowers shall give the Lender notice thereof not
later than 11:00 A.M., Chicago time, on the day of such prepayment
(which shall be a Business Day), specifying the date and amount of
prepayment. Concurrently with the receipt by the Borrowers of the
aggregate cash proceeds received by the Borrowers from any Asset Sale,
Borrowers shall make prepayments of the Term Loan in the amount of such
proceeds. All prepayments of the Term Loan shall be applied in the
inverse order of maturity to the remaining installments thereof, and no
prepayments shall reduce the dollar amount of fixed principal
installments required to be paid, until such Term Loan is paid in full.
7. Section 10.3(A) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
(A) Maintain a minimum Tangible Net Worth, as determined at the end of
each month to be less than the minimum amount specified for such month:
Testing Period Minimum Amount
-------------- ---------------
June 2002 through December 2002 ($1,000,000)
January 2003 through December 2003 ($ 600,000)
January 2004 and thereafter $ 100,000
8. Effective as of the twelve-month period ending on September 30, 2003,
Section 10.3(B) of the Credit Agreement is hereby deleted in its entirety and
replaced with the following:
(B) Not permit the ratio of (i) Adjusted EBITDA for the previous
twelve months (minus, for such period (1) all internally funded Capital
Expenditures, (2) dividends and distributions, and (3) the amount of
taxes actually paid in cash) to (ii) Total Debt Service for the previous
twelve months to be less than 1.15 to 1.00, as tested at the end of each
month.
9. Section 10.3(C) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
(C) Not make more than $1,400,000 of Capital Expenditures in any
fiscal year.
10. The Revolving Note is amended and restated in its entirety by the
Replacement Revolving Note, a copy of which is attached hereto as Schedule 1,
and all references to the
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Revolving Note contained in the Credit Agreement shall mean and be references to
said Replacement Revolving Note.
11. Borrower agrees to execute and deliver to Lender this Amendment, the
Replacement Revolving Note, and such additional documents, including financing
statements, as may be necessary to effectuate the purpose of this Amendment.
12. Borrower shall pay to Lender the reasonable legal fees and expenses
of counsel incurred in connection with the preparation of this Amendment and
related documentation.
13. Borrower expressly acknowledges and agrees that all collateral,
security interests, liens, pledges, and mortgages heretofore, under this
Amendment, or hereafter granted to Lender, including, without limitation, such
collateral, security interests, liens, pledges and mortgages granted under the
Credit Agreement, and all other supplements to the Credit Agreement, extend to
and cover all of the obligations of Borrower to Lender, now existing or
hereafter arising including, without limitation, those arising in connection
with the Credit Agreement, as amended by this Amendment, upon the terms set
forth in such agreements, all of which security interests, liens, pledges, and
mortgages are hereby ratified, reaffirmed, confirmed and approved.
14. Borrower represents and warrants to Lender that (i) it has all
necessary power and authority to execute and deliver this Amendment and perform
its obligations hereunder, (ii) this Amendment and the Credit Agreement, as
amended hereby, constitute the legal, valid and binding obligations of Borrower
and are enforceable against Borrower in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency or other similar laws of
general application affecting the enforcement of creditors' rights or by general
principles of equity limiting the availability of equitable remedies, and (iii)
all representations and warranties of Borrower contained in the Credit
Agreement, as amended, and all other agreements, instruments and other writings
relating thereto, are true, correct and complete as of the date hereof.
15. The parties hereto acknowledge and agree that the terms and
provisions of this Amendment amend, add to and constitute a part of the Credit
Agreement. Except as expressly modified and amended by the terms of this
Amendment, all of the other terms and conditions of the Credit Agreement and all
documents executed in connection therewith or referred to or incorporated
therein remain in full force and effect and are hereby ratified, reaffirmed,
confirmed and approved.
16. If there is an express conflict between the terms of this Amendment
and the terms of the Credit Agreement, or any of the other agreements or
documents executed in connection therewith or referred to or incorporated
therein, the terms of this Amendment shall govern and control.
17. This Amendment may be executed in one or more counterparts, each of
which shall be deemed to be an original.
18. This Amendment was executed and delivered in Chicago, Illinois and
shall be governed by and construed in accordance with the internal laws (without
regard to conflicts of law provisions) of the State of Illinois.
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IN WITNESS WHEREOF, this First Amendment to Amended and Restated Loan
and Security Agreement has been duly executed as of the day and year specified
at the beginning hereof.
VITA FOOD PRODUCTS, INC., a Nevada
corporation
By:
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Name:
------------------------------------
Title:
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VIRGINIA HONEY COMPANY, INC., a Virginia
corporation
By:
--------------------------------------
Name:
------------------------------------
Title:
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AMERICAN NATIONAL BANK AND TRUST
COMPANY OF CHICAGO
By:
--------------------------------------
Name:
------------------------------------
Title:
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SCHEDULE 1
REPLACEMENT REVOLVING NOTE
$7,000,000 as of July 31, 0000
Xxxxxxx, Xxxxxxxx
FOR VALUE RECEIVED, VITA FOOD PRODUCTS, INC., a Nevada corporation and
VIRGINIA HONEY COMPANY, INC., a Virginia corporation (collectively the
"Borrowers" and each individually a "Borrower"), jointly and severally, hereby
promise to pay to the order of AMERICAN NATIONAL BANK AND TRUST COMPANY OF
CHICAGO ("Lender"), the principal sum of up to SEVEN MILLION DOLLARS
($7,000,000), or so much thereof as is outstanding on the date this Replacement
Revolving Note (this "Note") becomes due, together with interest thereon and any
other charges applicable thereto, all as set forth more fully in the Loan
Agreement referred to below.
1. This Note is delivered by Borrowers to Lender pursuant to and in
accordance with that certain Amended and Restated Loan and Security Agreement
dated as of August 15, 2001 (as the same is being amended by that certain First
Amendment to Amended and Restated Loan and Security Agreement dated as of July
31, 2002, and as it may be further amended, restated, modified or supplemented
and in effect from time to time, the "Loan Agreement") by and among Borrowers
and Lender and to evidence a Revolving Loan (this term and all other capitalized
terms used but not otherwise defined herein shall have the meanings ascribed to
them in the Loan Agreement) made by Lender to Borrowers in the principal amount
of this Note. Reference is hereby made to the Loan Agreement, the terms and
conditions of which are incorporated herein by reference as fully and with the
same effect as if set forth herein at length.
2. Interest shall accrue on the outstanding principal balance of the
Revolving Loan at the rates and upon the terms set forth in the Loan Agreement.
All payments of principal and interest due under this Note shall be made in
accordance with the applicable provisions of the Loan Agreement.
3. This Note is entitled to the benefit of certain collateral security,
all as more fully set forth in the Loan Agreement.
4. No holder hereof shall, by any act of omission or commission, be
deemed to waive any of its rights, remedies or powers hereunder or otherwise
unless such waiver is in writing and signed by the holder hereof, and then only
to the extent specifically set forth therein. The rights, remedies and powers of
the holder hereof, as provided in this Note, in the Loan Agreement and in the
other Ancillary Agreements are cumulative and concurrent, and may be pursued
singly, successively or together against either Borrower and any other security
given at any time to secure the repayment hereof, all at the sole discretion of
the holder hereof. If any suit or action is instituted or attorneys are employed
to collect this Note or any part thereof, Borrowers jointly and severally
promise and agree to pay all costs of collection, including, without limitation,
reasonable attorneys' fees, fees of expert witnesses and court costs.
5. Each Borrower hereby (i) waives presentment and demand for payment,
notices of nonpayment and of dishonor, protest of dishonor, and notice of
protest; (ii) waives any and all notices in connection with the delivery and
acceptance hereof and all other notices in connection with the performance,
default, or enforcement of the payment hereof or hereunder; (iii) waives any and
all lack of diligence and delays in the enforcement of the payment hereof; (iv)
agrees that the liability of each Borrower shall be unconditional and without
regard to the liability of any other person or entity for the payment hereof,
and shall not in any manner be affected by any indulgence or forbearance granted
or consented to by Lender with respect hereto; (v) consents to any and all
extensions of time, renewals, waivers, or modifications that may be granted by
Lender with respect to the payment or other provisions hereof, and to the
release of any security at any time given for the payment hereof, or any part
thereof, with or without substitution, and to the release of any person or
entity liable for the payment hereof; and (vi) consents to the addition of any
and all other makers, endorsers, guarantors, and other obligors for the payment
hereof, and to the acceptance of any and all other security for the payment
hereof, and agrees that the addition of any such makers, endorsers or other
obligors, or security shall not affect the liability of either Borrower for all
or any part of the obligations evidenced hereby.
6. The Revolving Loan evidenced by this Note is a business loan which
comes within the purview of Section 205/4, paragraph (1)(c) of Chapter 815 of
the Illinois Compiled Statutes, as amended. Borrowers agree that the obligation
evidenced by this Note is an exempted transaction under the Truth In Lending
Act, 15 U.S.C., Section 1601, et seq.
7. Time is of the essence hereof.
8. This Note is governed and controlled as to validity, enforcement,
interpretation, construction, effect and in all other respects by the statutes,
laws and decisions of the State of Illinois without regard to its conflicts of
law provisions. This Note may not be changed or amended orally but only by an
instrument in writing signed by the party against whom enforcement of the change
or amendment is sought.
9. The obligations and liabilities of each Borrower under this Note
shall be binding upon and enforceable against each Borrower and its successors
and assigns. This Note shall inure to the benefit of and may be enforced by
Lender, its successors and assigns.
10. In the event that any provision of this Note is deemed to be invalid
by reason of the operation of law, or by reason of the interpretation placed
thereon by any administrative agency or any court, Borrowers and Lender shall
negotiate an equitable adjustment in the provisions of the same in order to
effect, to the maximum extent permitted by law, the purpose of this Note and the
validity and enforceability of the remaining provisions, or portions or
applications thereof, shall not be affected thereby and shall remain in full
force and effect.
11. This Note amends, extends, re-evidences and restates the obligations
and loan balances contained in that certain Revolving Note dated as of August
15, 2001, in the original principal amount of $7,000,000, payable by the
Borrowers to the order of the Lender. Nothing contained herein shall be
construed as a novation of the foregoing obligation, all of which is
re-evidenced and restated hereby.
IN WITNESS WHEREOF, Borrowers have executed this Replacement Revolving
Note as of the day and year first written above.
VITA FOOD PRODUCTS, INC., a Nevada
corporation
By:
--------------------------------
Name:
------------------------------
Title:
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VIRGINIA HONEY COMPANY, INC., a
Virginia corporation
By:
--------------------------------
Name:
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Title:
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