Exhibit 10.1
WAIVER AND AMENDMENT NO. 3
TO THIRD AMENDED AND RESTATED
REVOLVING CREDIT AND SECURITY AGREEMENT
THIS WAIVER AND AMENDMENT NO. 3 (this "Agreement") is entered into as
of March 26, 2004, by and among SPAR MARKETING FORCE, INC. ("SMF"), SPAR, INC.
("SPAR"), SPAR/BURGOYNE RETAIL SERVICES, INC ("SBRS"), SPAR GROUP, INC. ("SGI"),
SPAR INCENTIVE MARKETING, INC. ("SIM"), SPAR TRADEMARKS, INC. ("STM"), SPAR
MARKETING, INC. (DE) ("SMIDE"), SPAR MARKETING, INC. (NV) ("SMINV"), SPAR
ACQUISITION, INC. ("SAI"), SPAR TECHNOLOGY GROUP, INC. ("STG"), SPAR/PIA RETAIL
SERVICES, INC. ("Pia Retail"), RETAIL RESOURCES, INC. ("Retail"), PIVOTAL FIELD
SERVICES, INC. ("Pivotal Field"), PIA MERCHANDISING CO., INC. ("PIA"), PACIFIC
INDOOR DISPLAY CO. ("Pacific"), PIVOTAL SALES COMPANY ("Pivotal"), SPAR ALL
STORE MARKETING SERVICES, INC., ("SAS") (each a "Borrower" and collectively
"Borrowers") and WEBSTER BUSINESS CREDIT CORPORATION (formerly known as
Whitehall Business Credit Corporation) ("Lender").
BACKGROUND
The Borrowers and Lender are parties to that certain Third Amended and
Restated Revolving Credit and Security Agreement dated January 24, 2003 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Loan Agreement") pursuant to which Lender provides the Borrowers with certain
financial accommodations.
Borrowers have violated certain financial covenants and have requested
Lender waive the resulting Events of Default and Lender is willing to do so in
connection with making certain amendments to the Loan Agreement.
NOW, THEREFORE, in consideration of any loan or advance or grant of
credit heretofore or hereafter made to or for the account of Borrowers 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 or amended herein
shall have the meanings given to them in the Loan Agreement.
2. Waiver. Subject to the satisfaction of Section 4 below, Lender hereby waives
the Event of Default which has occurred as a result Borrowers' non-compliance
with Section 12(p) and Section 12(r) with respect to the fiscal quarter ending
December 31, 2003 due to Borrowers' failure to maintain the requisite Fixed
Charge Coverage Ratio and EBITDA level for the four fiscal quarters then ended.
3. Amendment. Subject to the satisfaction of Section 4 below, the Loan Agreement
is hereby amended as follows:
(a) Section 1(A) is amended by amending the definition of "Revolving
Interest Rate" in its entirety to provide as follows:
"Revolving Interest Rate" shall mean an
interest rate per annum equal to (a) the
sum of the Alternate Base Rate plus
one-half percent (0.50%) with respect to
Domestic Rate Loans and (b) the sum of the
Eurodollar Rate plus three percent (3.00%)
with respect to Eurodollar Rate Loans.
(b) Section 12(n)(ii) of the Loan Agreement is hereby amended by
deleting "$500,000" and inserting "$100,000" in its place and stead.
(c) Section 12(n)(v)(E) is amended in its entirety to provide as
follows:
"(E) loans made by SGI to SPG pursuant to
the SPG Loan Agreement, provided, however,
that the initial amount of SPG Loans under
the SPG Loan Agreement shall not exceed
$2,300,000, provided, further, that
commencing March 26, 2004 and continuing
through June 25, 2004, the outstanding
principal amount of SPG Loans shall not
exceed $2,000,000 and thereafter shall not
exceed the higher of $1,000,000 or the
amount of SPG Loans outstanding at the close
of business on June 25, 2004, and"
4. Conditions of Effectiveness. This Agreement shall become effective as of the
date hereof, provided that the following conditions shall have been satisfied:
Lender shall have received (i) four (4) copies of this Agreement executed by the
Borrowers, and, (ii) payment of a waiver fee in the sum of $25,000 which fee
shall be charged by Lender to Borrowers' loan account as a Revolving Advance.
5. Representations, Warranties and Covenants. Each of the Borrowers hereby
represents, warrants and covenants as follows:
(a) This Agreement and the Loan Agreement constitute legal,
valid and binding obligations of each of the Borrowers and are enforceable
against each of the Borrowers in accordance with their respective terms.
(b) Upon the effectiveness of this Agreement, each of the
Borrowers hereby reaffirms all covenants, representations and warranties made in
the Loan Agreement to the extent the same are not amended hereby and agrees that
all such covenants, representations and warranties shall be deemed to have been
remade as of the effective date of this Agreement.
(c) No Borrower has any defense, counterclaim or offset with
respect to the Loan Agreement or the Obligations.
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6. Effect on the Loan Agreement.
(a) 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.
(b) Except as set forth in Section 2 hereof, the execution,
delivery and effectiveness of this Agreement 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.
7. Governing Law. This Agreement 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
(other than those conflict of law rules that would defer to the substantive law
of another jurisdiction).
8. Headings. Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.
9. Counterparts; Facsimile Signatures. This Agreement may be executed by the
parties hereto in one or more counterparts of the entire document or of the
signature pages hereto, each of which shall be deemed an original and all of
which taken together shall constitute one and the same agreement. Any signature
received by facsimile transmission shall be deemed an original signature hereto.
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and year
first written above.
SPAR MARKETING FORCE, INC.
SPAR, INC.
SPAR/BURGOYNE RETAIL SERVICES, INC.
SPAR GROUP, INC.
SPAR INCENTIVE MARKETING, INC.
SPAR TRADEMARKS, INC.
SPAR MARKETING, INC. (DE)
SPAR MARKETING, INC. (NV)
SPAR ACQUISITION, INC.
SPAR TECHNOLOGY GROUP, INC.
SPAR/PIA RETAIL SERVICES, INC.
RETAIL RESOURCES, INC.
PIVOTAL FIELD SERVICES, INC.
PIA MERCHANDISING CO., INC.
PACIFIC INDOOR DISPLAY CO.
PIVOTAL SALES COMPANY
SPAR GROUP, INC.
SPAR ALL STORE MARKETING SERVICES, INC.
By:
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Name: Charles Cimitile
Title: Chief Financial Officer of
each of the foregoing
entities
WEBSTER BUSINESS CREDIT CORPORATION
By:
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Name:
Its:
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