O'M&M
DRAFT
08/04/97
CFP GROUP, INC.
CFP HOLDINGS, INC.
FIRST AMENDMENT
TO AMENDED AND RESTATED CREDIT AGREEMENT
This FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
(this "Amendment") is dated as of August __, 1997 and entered into by and among
CFP Holdings, Inc., a Delaware corporation ("Company"), CFP Group, Inc., a
Delaware corporation ("Parent"), the financial institutions listed on the
signature pages hereof ("Lenders"), Nationsbank of Texas, N.A., as
administrative agent for Lenders (in such capacity "Administrative Agent"), and
Fleet National Bank, as documentation agent (in such capacity, "Documentation
Agent"), and, for purposes of Section 3 hereof, the Credit Support Parties (as
defined in Section 3 hereof) listed on the signature pages hereof, and is made
with reference to that certain Amended and Restated Credit Agreement dated as of
May 15, 1997 (the "Credit Agreement"), by and among Company, Parent, Lenders,
Administrative Agent, Arranging Agent and Syndication Agent, and Documentation
Agent. Capitalized terms used herein without definition shall have the same
meanings herein as set forth in the Credit Agreement.
RECITALS
WHEREAS, Company and Lenders desire to amend the Credit
Agreement to adjust the financial covenants set forth therein, and make certain
other amendments as set forth below;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
Section 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1 Amendments to Section 1: Provisions Relating to Defined
Terms
Subsection 1.1 of the Credit Agreement is hereby amended by
deleting each of the definitions of "Consolidated Interest Expense" and "Fiscal
Year" therefrom in their entirety and substituting the following therefor:
"Consolidated Interest Expense" means, for any period, total
interest expense (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest and Operating Lease payments to
the extent not deducted in calculating Consolidated Net Income) of Parent and
its Subsidiaries on a consolidated basis with respect to all outstanding
1
Indebtedness of Parent and its Subsidiaries, including, without limitation, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and net costs under Interest Rate
Agreements, but excluding, however, to the extent included herein, (i) any
amounts referred to in subsec tion 2.3 payable to Administrative Agent and
Lenders on or before the Closing Date, and (ii) for any period prior to April 1,
1998, to the extent not included in clause (i) and to the extent paid or accrued
on or prior to June 30, 1997, any such interest expense arising out of non-cash
deferred financing charges in an amount not exceeding $1,300,000 in the
aggregate.
"Fiscal Year" means the fiscal year of Parent and its
Subsidiaries ending on March 31 except that, in the case of Quality Foods, L.P.,
QF Management and QF Acquisition for any period prior to the Closing Date,
"Fiscal Year" means the fiscal year of such Persons ending on December 31 of
each calendar year. For purposes of this Agreement, any particular Fiscal Year
shall be designated by reference to the calendar year in which such Fiscal Year
ends.
1.2 Amendments to Section 3: Letters of Credit
Subsection 3.1A(ii) of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting the following therefor:
"(ii) any Revolving Letter of Credit if, after giving effect to
such issuance, the Revolving Letter of Credit Usage (excluding the
Maximum Exposure Under IRB Reimbursement Agreement) would exceed
$3,000,000;"
1.3 Amendments to Section 7: Company's Negative Covenants
A. Indebtedness. Subsection 7.1(iii) of the Credit Agreement is
hereby amended by deleting the reference to "$2,000,000" in the third line
thereof and substituting "$3,000,000" therefor.
B. Minimum Interest Coverage Ratio.
Subsection 7.6A of the Credit Agreement is hereby amended by
deleting the table set forth therein in its entirety and substituting the
following therefor:
Minimum Interest
Approximate Date Coverage Ratio
================== ================
March 31, 1997 1.15:1.00
------------------ ----------------
June 30, 1997 1.25:1.00
------------------ ----------------
September 30, 1997 1.25:1.00
------------------ ----------------
December 31, 1997 1.30:1.00
------------------ ----------------
March 31, 1998 1.30:1.00
------------------ ----------------
2
Minimum Interest
Approximate Date Coverage Ratio
==================== ================
June 30, 1998 1.55:1.00
------------------ ----------------
September 30, 1998 1.55:1.00
------------------ ----------------
December 31, 1998 1.70:1.00
------------------ ----------------
March 31, 1999 1.70:1.00
------------------ ----------------
June 30, 1999 1.70:1.00
------------------ ----------------
September 30, 1999 1.70:1.00
------------------ ----------------
December 31, 1999 1.90:1.00
------------------ ----------------
March 31, 2000 1.90:1.00
------------------ ----------------
June 30, 2000 1.90:1.00
------------------ ----------------
September 30, 2000 1.90:1.00
------------------ ----------------
December 31, 2000 2.00:1.00
------------------ ----------------
March 31, 2001 2.00:1.00
------------------ ----------------
June 30, 2001 2.00:1.00
------------------ ----------------
September 30, 2001 2.00:1.00
------------------ ----------------
December 31, 2001
and each Fiscal Quarter's
end thereafter 2.00:1.00
====================== ================
C. Minimum Fixed Charge Coverage Ratio.
(i) Subsection 7.6B of the Credit Agreement is hereby amended
by inserting the parenthetical "(excluding Consolidated Capital Expenditures
financed with Capital Leases)" following the words "Consolidated Capital
Expenditures" in the second line thereof.
(ii) Subsection 7.6B of the Credit Agreement is hereby further
amended by deleting the table set forth therein in its entirety and substituting
the following therefor:
Minimum Fixed
Charge Coverage
Approximate Date Ratio
================== =================
March 31, 1997 N/A
------------------ -----------------
June 30, 1997 1.00:1.00
------------------ -----------------
3
Minimum Fixed
Charge Coverage
Approximate Date Ratio
==================== =================
September 30, 1997 1.00:1.00
------------------ -----------------
December 31, 1997 1.00:1.00
------------------ -----------------
March 31, 1998 1.00:1.00
------------------ -----------------
June 30, 1998 1.10:1.00
------------------ -----------------
September 30, 1998 1.10:1.00
------------------ -----------------
December 31, 1998 1.20:1.00
------------------ -----------------
March 31, 1999 1.20:1.00
------------------ -----------------
June 30, 1999 1.20:1.00
------------------ -----------------
September 30, 1999 1.20:1.00
------------------ -----------------
December 31, 1999 1.30:1.00
------------------ -----------------
March 31, 2000 1.30:1.00
------------------ -----------------
June 30, 2000 1.30:1.00
------------------ -----------------
September 30, 2000 1.30:1.00
------------------ -----------------
December 31, 2000 1.40:1.00
------------------ -----------------
March 31, 2001 1.40:1.00
------------------ -----------------
June 30, 2001 1.40:1.00
------------------ -----------------
September 30, 2001 1.40:1.00
------------------ -----------------
December 31, 2001
and each Fiscal Quarter's 1.40:1.00
end thereafter
====================== =================
D. Maximum Leverage Ratio.
Subsection 7.6C of the Credit Agreement is hereby amended by
deleting the table set forth therein in its entirety and substituting the
following therefor:
4
Maximum Leverage
Approximate Date Ratio
================== =================
December 31, 1997 6.75:1.00
------------------ -----------------
March 31, 1998 6.75:1.00
------------------ -----------------
June 30, 1998 5.75:1.00
------------------ -----------------
September 30, 1998 5.75:1.00
------------------ -----------------
December 31, 1998 5.00:1.00
------------------ -----------------
March 31, 1999 5.00:1.00
------------------ -----------------
June 30, 1999 5.00:1.00
------------------ -----------------
September 30, 1999 5.00:1.00
------------------ -----------------
December 31, 1999 4.25:1.00
------------------ -----------------
March 31, 2000 4.25:1.00
------------------ -----------------
June 30, 2000 4.25:1.00
------------------ -----------------
September 30, 2000 4.25:1.00
------------------ -----------------
December 31, 2000 3.50:1.00
------------------ -----------------
March 31, 2001 3.50:1.00
------------------ -----------------
June 30, 2001 3.50:1.00
------------------ -----------------
September 30, 2001 3.50:1.00
------------------ -----------------
December 31, 2001
and each Fiscal Quarter's 3.00:1.00
end thereafter
==================== =================
E. Minimum Consolidated Adjusted EBITDA.
Subsection 7.6D of the Credit Agreement is hereby amended by
deleting it in its entirety (including the table set forth therein) and
substituting the following therefor:
"D. Minimum Consolidated Adjusted EBITDA. Parent shall not
permit Consolidated Adjusted EBITDA for any period commencing on January 1, 1997
and ending at the end of the Fiscal Quarter ending on or about the date set
forth below (except with respect to the Fiscal Quarter ending March 31, 1998
which shall be based on the period commencing April 1, 1997) to be less than the
correlative amount indicated:"
5
Minimum Consolidated
Approximate Date Adjusted EBITDA
================== ======================
March 31, 1997 $4,300,000
------------------ ----------------------
June 30, 1997 $9,000,000
------------------ ----------------------
September 30, 1997 $14,300,000
------------------ ----------------------
December 31, 1997 $20,000,000
------------------ ----------------------
March 31, 1998 $20,500,000
================== =======================
F. Consolidated Capital Expenditures. Subsection 7.8 of the
Credit Agreement is hereby amended by deleting the first clause thereto and
substituting therefor "Parent shall not permit its Subsidiaries to, make or
incur Consolidated Capital Expenditures in an aggregate amount in excess of
$4,500,000 for the Fiscal Year ending March 31, 1998 and $5,000,000 for any
Fiscal Year thereafter;"
Section 2. CONDITIONS TO EFFECTIVENESS
Section 1 of this Amendment shall become effective upon the
date hereof (the "First Amendment Effective Date"); provided that if the
following conditions subsequent are not satisfied on or before August 11, 1997
then Section 1 of this Amendment will be deemed never to have been effective:
A. Each of Company and Parent shall deliver to Lenders (or to
Administra tive Agent for Lenders with sufficient originally executed copies,
where appropriate, for each Lender and its counsel) the following, each, unless
otherwise noted, dated the First Amendment Effective Date:
(i) Certified copies of any amendments made to its
Certificate of Incorporation on or after December 30, 1996 (the "Prior
Delivery Date"), certified as of the First Amendment Effective Date by
its corporate secretary or an assistant secretary as being the only
amendments thereto since the Prior Delivery Date (or, if there have
been no such amendments since the Prior Delivery Date, a certificate of
its corporate secretary or an assistant secretary to that effect),
together with a good standing certificate from the Secretary of State
of the State of Delaware, dated a recent date prior to the First
Amendment Effective Date;
(ii) Copies of any amendments made to its Bylaws on or
after the Prior Delivery Date, certified as of the First Amendment
Effective Date by its corporate secretary or an assistant secretary as
being the only amendments thereto since the Prior Delivery Date (or, if
there have been no such amendments since the Prior Delivery Date, a
certificate of its corporate secretary or an assistant secretary to
that effect);
6
(iii) Resolutions of its Board of Directors approving
and authorizing the execution, delivery, and performance of this
Amendment and the performance of the Amended Agreement (as hereinafter
defined), certified as of the First Amendment Effective Date by its
corporate secretary or an assistant secretary as being in full force
and effect without modification or amendment; and
(iv) Signature and incumbency certificates of its
officers executing this Amendment.
B. Lenders and their respective counsel shall have received
originally executed copies of one or more favorable written opinions of
X'Xxxxxxxx, Graev & Karabell LLP, counsel for Company, in form and substance
reasonably satisfactory to Administrative Agent and its counsel, dated as of the
First Amendment Effective Date, with respect to the enforceability of this
Amendment and the Amended Agreement (as hereinafter defined) and as to such
other matters as Administrative Agent acting on behalf of Lenders may reasonably
request.
C. Administrative Agent shall have received from Company, for
distribution to each Lender in proportion to that Lender's Pro Rata Share, an
amendment fee in an amount equal to 0.25% of the sum of (x) the original
principal amount of Term Loans of such Lender and (y) the Revolving Loan
Commitment of such Lender.
D. Company, Parent, Credit Support Parties and Lenders shall
have executed a counterpart of this Amendment and Administrative Agent and
Company shall have received written or telephonic notification of such execution
and authorization of delivery thereof.
E. All corporate and other proceedings taken or to be taken in
connection with the transactions contemplated hereby and all documents
incidental thereto not previously found acceptable by Administrative Agent,
acting on behalf of Lenders, and its counsel shall be satisfactory in form and
substance to Administrative Agent and such counsel, and Administrative Agent and
such counsel shall have received all such counterpart originals or certified
copies of such documents as Administrative Agent may reasonably request.
Section 3. ACKNOWLEDGEMENT AND CONSENT
Company is a party to the Borrower Pledge Agreement, the
Borrower Security Agreement and the Collateral Account Agreement, in each case,
as amended through the First Amendment Effective Date, pursuant to which Company
has created Liens in favor of Administrative Agent on certain Collateral to
secure the Obligations. Parent is a party to the Parent Guaranty, the Parent
Pledge Agreement and the Parent Security Agreement, in each case, as amended
through the First Amendment Effective Date, pursuant to which Parent has (i)
guarantied the Obligations and (ii) created Liens in favor of Administrative
Agent on certain Collateral to secure the Obligations. Q.F. Acquisition is a
party to the Subsidiary Guaranty, the Subsidiary Pledge Agreement, the
Subsidiary Security Agreement, the Subsidiary Trademark Security Agreement, the
Subsidiary Patent Security Agreement, and the Mortgages in each case, as amended
through the First Amendment Effective Date, pursuant to which Q.F. Acquisition
has (i) guarantied the Obligations and (ii) created Liens in favor of
Administrative Agent on certain Collateral to secure the Obligations. Custom
Foods is a party to the Subsidiary Guaranty, the
7
Subsidiary Pledge Agreement, the Subsidiary Security Agreement, the Subsidiary
Trademark Security Agreement and the Subsidiary Patent Security Agreement, in
each case, as amended through the First Amendment Effective Date, pursuant to
which Custom Foods has (i) guarantied the Obligations and (ii) created Liens in
favor of Administrative Agent on certain Collateral to secure the Obligations.
Company, Parent, Q.F. Acquisition and Custom Foods are collectively referred to
herein as the "Credit Support Parties", and the Subsidiary Guaranty, the
Subsidiary Pledge Agreement, the Subsidiary Security Agreement, the Subsidiary
Trademark Security Agreement, the Subsidiary Patent Security Agreement, the
Parent Guaranty, the Parent Pledge Agreement, the Parent Security Agreement, the
Collateral Account Agreement, the Mortgages, the Borrower Security Agreement and
the Borrower Pledge Agreement are collectively referred to herein as the "Credit
Support Documents".
Each Credit Support Party hereby acknowledges that it has
reviewed the terms and provisions of the Credit Agreement and this Amendment and
consents to the amendment of the Credit Agreement effected pursuant to this
Amendment. Each Credit Support Party hereby confirms that each Credit Support
Document to which it is a party or otherwise bound and all Collateral encumbered
thereby will continue to guaranty or secure, as the case may be, to the fullest
extent possible the payment and performance of all "Obligations," "Guarantied
Obligations" and "Secured Obligations," as the case may be (in each case as such
terms are defined in the applicable Credit Support Document), including without
limitation the payment and performance of all such "Obligations," "Guarantied
Obligations" or "Secured Obligations," as the case may be, in respect of the
Obligations of Company now or hereafter existing under or in respect of the
Amended Agreement and the Notes defined therein.
Each Credit Support Party acknowledges and agrees that any of
the Credit Support Documents to which it is a party or otherwise bound shall
continue in full force and effect and that all of its obligations thereunder
shall be valid and enforceable and shall not be impaired or limited by the
execution or effectiveness of this Amendment. Each Credit Support Party
represents and warrants that all representations and warranties contained in the
Amended Agreement and the Credit Support Documents to which it is a party or
otherwise bound are true, correct and complete in all material respects on and
as of the First Amendment Effective Date to the same extent as though made on
and as of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects on and as of such earlier date.
Each Credit Support Party (other than Company) acknowledges and
agrees that (i) notwithstanding the conditions to effectiveness set forth in
this Amendment, such Credit Support Party is not required by the terms of the
Credit Agreement or any other Loan Document to consent to the amendments to the
Credit Agreement effected pursuant to this Amendment and (ii) nothing in the
Credit Agreement, this Amendment or any other Loan Document shall be deemed to
require the consent of such Credit Support Party to any future amendments to the
Credit Agreement.
8
Section 4. COMPANY'S AND PARENT'S
REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to
amend the Credit Agreement in the manner provided herein, Company and Parent
represent and warrant to each Lender that the following statements are true,
correct and complete:
A. Corporate Power and Authority. Company and Parent have all
requisite corporate power and authority to enter into this Amendment and to
carry out the transactions contemplated by, and perform their respective
obligations under, the Credit Agreement as amended by this Amendment (the
"Amended Agreement").
B. Authorization of Agreements. The execution and delivery of
this Amendment and the performance of the Amended Agreement have been duly
authorized by all necessary corporate action on the part of Company and Parent.
C. No Conflict. The execution and delivery by Company and
Parent of this Amendment and the performance by Company and Parent of the
Amended Agreement do not and will not (i) violate any provision of any law or
any governmental rule or regulation applicable to Parent or any of its
Subsidiaries, the Certificate or Articles of Incorporation or Bylaws of Parent
or any of its Subsidiaries or any order, judgment or decree of any court or
other agency of government binding on Parent or any of its Subsidiaries, (ii)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any Contractual Obligation of Parent or any of its
Subsidiaries, (iii) result in or require the creation or imposition of any Lien
upon any of the properties or assets of Parent or any of its Subsidiaries, or
(iv) require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of Parent or any of its Subsidiaries.
D. Governmental Consents. The execution and delivery by Company
and Parent of this Amendment and the performance by Company and Parent of the
Amended Agreement do not and will not require any registration with, consent or
approval of, or notice to, or other action to, with or by, any federal, state or
other governmental authority or regulatory body.
E. Binding Obligation. This Amendment and the Amended Agreement
have been duly executed and delivered by Company and Parent and are the legally
valid and binding obligations of each of Company and Parent, enforceable against
each of Company and Parent in accordance with their respective terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability.
F. Incorporation of Representations and Warranties From Credit
Agreement. The representations and warranties contained in Section 5 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the First Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.
9
G. Absence of Default. No event has occurred and is continuing
or will result from the consummation of the transactions contemplated by this
Amendment that would constitute an Event of Default or a Potential Event of
Default.
Section 5. MISCELLANEOUS
A. Reference to and Effect on the Credit Agreement and the
Other Loan Documents.
(i) On and after the First Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import referring to the Credit Agreement, and each
reference in the other Loan Documents to the "Credit Agreement", "thereunder",
"thereof" or words of like import referring to the Credit Agreement shall mean
and be a reference to the Amended Agreement.
(ii) Except as specifically amended by this Amendment, the
Credit Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this Amendment
shall not, except as expressly provided herein, constitute a waiver of any
provision of, or operate as a waiver of any right, power or remedy of
Administrative Agent or any Lender under, the Credit Agreement or any of the
other Loan Documents.
B. Fees and Expenses. Company acknowledges that in addition to
the fees contemplated by Section 2.C hereof, all costs, fees and expenses as
described in subsection 10.2 of the Credit Agreement incurred by Administrative
Agent and its counsel with respect to this Amendment and the documents and
transactions contemplated hereby shall be for the account of Company.
C. Headings. Section and subsection 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 or be given any substantive effect.
D. Applicable Law. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. Counterparts. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple
10
separate counterparts and attached to a single counterpart so that all signature
pages are physically attached to the same document.
[Remainder of page intentionally left blank]
11
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
CFP HOLDINGS, INC.
By:______________________________________
Name:
Title:
CFP GROUP, INC.
By:______________________________________
Name:
Title:
Q.F. ACQUISITION CORP., (for purposes of
Section 3 only) as a Credit Support Party
By:______________________________________
Name:
Title:
CUSTOM FOOD PRODUCTS, INC., (for purposes
of Section 3 only) as a Credit Support
Party
By:______________________________________
Name:
Title:
S-1
NATIONSBANK OF TEXAS, N.A., individually
and as Administrative Agent
By:______________________________________
Name:
Title:
FLEET NATIONAL BANK, individually and as
Documentation Agent
By:______________________________________
Name:
Title:
S-2
