EXHIBIT 2.09
FIRST AMENDMENT TO
LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (the
"Amendment") is dated as of August 1, 1996 among LASALLE NATIONAL BANK
(the "Lender") and ATLANTIC BEVERAGE COMPANY, INC. ("ABC"), CARLTON
FOODS CORP. ("Carlton"), and PREFCO CORP. (formerly known as ABEV
Acquisition Corp.) ("Prefco," together with Carlton and ABC collectively
referred to herein as the "Borrowers").
RECITALS:
A. Pursuant to and in accordance with the terms of that
certain Loan and Security Agreement, dated as of March 15, 1996, among the
Lender and the Borrowers (the "Original Loan Agreement"), the Lender agreed to
make a term loan and revolving loans to the Borrowers. All initially capitalized
terms not otherwise defined in this Amendment shall have the meaning ascribed to
such terms in the Original Loan Agreement. The Original Loan Agreement as the
same is amended and modified by the terms and conditions of this Amendment is
referred to herein as the "Loan Agreement."
B. The Borrowers have requested that the Lender make
additional term loans and increase the amount of the Revolving Credit
Commitment. The Lender has agreed to make such additional term loans and to
increase the Revolving Credit Commitment on the terms and conditions herein set
forth.
AGREEMENTS:
NOW THEREFORE, in consideration of the mutual conditions and
agreements set forth in this Amendment, and for good and valuable consideration,
the receipt of which is hereby acknowledged, the Borrowers and the Lender hereby
agree as follows:
1. DEFINITIONS.
Section 1.1 of the Loan Agreement is amended as follows:
(A) The following definitions are hereby added to Section 1.1
in alphabetical order:
"AFFILIATE PARTY" shall mean any wholly owned
subsidiary of ABC (including, without limitation, Richards and Grogan's)
which becomes a party to this Agreement and the other Loan Documents
after the Closing Date in accordance with and pursuant to the terms of
Section 8.3 hereof.
"AFFILIATE PARTY ACQUISITION" shall mean any
acquisition (including, without limitation, the Grogan's Merger and the
Richards Acquisition) by an Affiliate Party of the business of another
party as a going concern (whether consummated by a purchase of the
business assets of such other party, a merger, a stock purchase or
otherwise) if (a) such acquisition is approved by the Lender, and (b)
the Borrowers and the applicable Affiliate
Party otherwise comply with the conditions and requirements set forth in
Section 8.3 hereof with respect to such acquisition.
"AFFILIATE PARTY ACQUISITION DOCUMENTS" shall mean
all of the agreements, instruments, and documents evidencing or executed
in connection with any Affiliate Party Acquisition, all of which must be
in form and substance satisfactory to the Lender.
"AFFILIATE PARTY BORROWING BASE" shall mean, with
respect to any Affiliate Party, at any time of determination, an amount
equal to the sum of (i) eighty percent (80%) of the actual amount (after
deduction of such Eligibility Reserves as the Lender deems proper and
necessary) of Eligible Receivables of such Affiliate Party, plus (ii)
fifty percent (50%) in the case of branded food products and sixty
percent (60%) in the case of unbranded food products, of the value
(after the deduction of such Eligibility Reserves as the Lender deems
proper and necessary) of Eligible Inventory of such Affiliate Party
(which Eligible Inventory shall be valued at the lower of cost,
determined on first-in first-out basis, or market value) but not to
exceed $2,500,000 less the amount of Eligible Inventory of all Borrowers
other than such Affiliate Party included in the Total Borrowing Base at
such time; provided; however; that as a condition to the Lender's
approval of any Affiliate Party Acquisition, Lender shall have
discretion to modify the foregoing.
"AMENDMENT FEE" shall have the meaning ascribed to
it in Section 2.11.
"CONSULTING AGREEMENT" shall mean that certain
Consulting Agreement, dated as of March 15, 1996, by and between
Sterling Advisors L.P., ABC and Elfman Venture Partners, Inc., as in
effect on March 15, 1996.
"GROGAN'S" shall mean Grogan's Merger Corp., a
Delaware corporation and a wholly owned subsidiary of ABC. Upon
confirmation of the Grogan's Merger, Grogan's Merger Corp. will change
its name to Grogan's Farm, Inc.
"GROGAN'S INITIAL PAYMENT AMOUNT" shall mean an
amount equal to (a) $170,769.23, divided by (b) the number of whole
calendar months between the Grogan Initial Payment Date and March 1,
1997.
"GROGAN'S INITIAL PAYMENT DATE" shall have the
meaning ascribed to it in Section 2.1(b).
"GROGAN'S MERGER" shall mean (a) the merger of
Grogan's Sausage, Inc. and Grogan's Farm, Inc. into Grogan's Merger
Corp., and (b) the acquisition by Grogan's Merger Corp. of the Grogan's
Property from Bobby and Betty Grogan, if (i) such merger and acquisition
are approved by the Lender, and (ii) the Borrowers and Grogan's
otherwise comply with the conditions and requirements set forth in
Section 8.3 hereof with respect to such merger and acquisition.
"GROGAN'S MERGER NOTE" means the promissory note in
the original principal amount of $500,000 executed by Grogan's and
payable to and for the benefit of Bobby and Betty Grogan, residents of
the Commonwealth of Kentucky, in connection with the Grogan's Merger,
incurred on terms and conditions approved by the Lender and which is
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subordinated, in a manner approved by the Lender, as to right and time
of payment of principal and interest thereon to any and all of the
Obligations.
"GROGAN'S MORTGAGE" means a mortgage or other
document required by the Commonwealth of Kentucky creating a
first-priority security interest in favor of the Lender with respect to
the Grogan's Property, which shall be in form and substance satisfactory
to Lender and otherwise comply in all respects with any requirements or
regulations imposed by the Commonwealth of Kentucky, as the same has
been or may be amended, modified, extended, and renewed from time to
time.
"GROGAN'S PROPERTY" means that certain real property
located at U.S. Highway 51, Route 2, Arlington, Kentucky 42021.
"GROGAN'S SUBORDINATION" shall mean a subordination
agreement between Bobby and Betty Grogan, residents of the Commonwealth
of Kentucky, as "Junior Creditor," and the Lender, in form and substance
satisfactory to the Lender.
"GROGAN'S TERM LOAN" shall have the meaning ascribed
to it in Section 2.1(a)(iii).
"GROGAN'S TERM NOTE" shall have the meaning ascribed
to it in Section 2.1(b).
"INITIAL TERM LOAN" shall have the meaning ascribed
to it in Section 2.1(a)(i).
"INITIAL TERM NOTE" shall have the meaning ascribed
to it in Section 2.1(b).
"MORTGAGES" shall mean the Richards Mortgage, the
Grogan's Mortgage, and any other Real Property Security Document given
to the Lender from time to time to secure the payment and performance of
the Obligations, as the same have been or may be amended, modified,
extended, and renewed from time to time.
"ORIGINAL TRANSACTION" shall mean, collectively, the
merger of Carlton Foods, Inc. with and into Carlton pursuant to the
terms of that certain Agreement and Plan of Merger dated as of January
25, 1996 among ABC, Carlton and Carlton Foods, Inc. and the acquisition
by Acquisition Corp. of all of the common stock of Prefco, Inc. pursuant
to that certain Stock Purchase Agreement dated as of January 23, 1996
among ABC, Acquisition Corp., Allen Pauly and Franklin Roth.
"ORIGINAL TRANSACTION DOCUMENTS" shall mean all of
the agreements, instruments, and documents evidencing or executed in
connection with the Original Transaction.
"RICHARDS" shall mean Richards Cajun Foods Corp., a
Delaware corporation and a wholly owned subsidiary of ABC.
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"RICHARDS ACQUISITION" shall mean the acquisition by
Richards of certain of the assets of J.L. Richard, a resident of the
State of Louisiana, in his individual capacity and doing business as
"Richards Cajun Country Processors" if (a) such acquisition is approved
by the Lender, and (b) the Borrowers and Richards otherwise comply with
the conditions and requirements set forth in Section 8.3 hereof with
respect to such acquisition.
"RICHARDS ACQUISITION NOTE" means the promissory
note in the original principal amount of $850,000 executed by Richards
and ABC and payable to and for the benefit of J.L. Richard, a resident
of the State of Louisiana, in connection with the Richards Acquisition,
incurred on terms and conditions approved by the Lender and which is
subordinated, in a manner approved by the Lender, as to right and time
of payment of principal and interest thereon to any and all of the
Obligations.
"RICHARDS INITIAL PAYMENT AMOUNT" shall mean an
amount equal to (a) $129,230.77, divided by (b) the number of whole
calendar months between the Richards Initial Payment Date and March 1,
1997.
"RICHARDS INITIAL PAYMENT DATE" shall have the
meaning ascribed to it in Section 2.1(b).
"RICHARDS MORTGAGE" means a mortgage or other
document required by the State of Louisiana creating a first-priority
security interest in favor of the Lender with respect to the Richards
Property, which shall be in form and substance satisfactory to Lender
and otherwise comply in all respects with any requirements or
regulations imposed by the State of Louisiana, as the same has been or
may be amended, modified, extended, and renewed from time to time.
"RICHARDS TERM LOAN" shall have the meaning ascribed
to it in Section 2.1(a)(ii).
"RICHARDS TERM NOTE" shall have the meaning ascribed
to it in Section 2.1(b).
"RICHARDS PROPERTY" means that certain real property
commonly known as 1325 East Ebey Street, Church Point, Louisiana.
"RICHARDS SUBORDINATION" shall mean a subordination
agreement between J.L. Richard, a resident of the State of Louisiana, in
his individual capacity and doing business as "Richards Cajun Country
Processors," as "Junior Creditor," and the Lender, in form and substance
satisfactory to the Lender.
(B) The definition of the term "ABC Borrowing Base" is hereby
amended by deleting the language "Prefco and Carlton" contained on the last line
thereof and substituting the language "Prefco, Carlton and all Affiliate
Parties" therefor.
(C) The definition of the term "Acquisition" is hereby deleted
in its entirety and the following is substituted therefor:
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"ACQUISITION" shall mean, collectively, the
Original Transaction and any and
all Affiliate Party Acquisitions.
(D) The definition of the term "Acquisition Documents" is
hereby deleted in its entirety and the following is substituted therefor:
"ACQUISITION DOCUMENTS" shall mean,
collectively, the Original Transaction Documents and
any and all Affiliate Party Acquisition Documents.
(E) Exhibit A attached to the Original Loan Agreement is
hereby deleted in its entirety and Exhibit A attached hereto and made a part
hereof is hereby substituted therefor. As a result, the reference to Exhibit A
contained in the definition of the term "Borrowing Base Certificate" and any
other provision of the Loan Agreement shall be deemed to refer to Exhibit A
attached hereto.
(F) The definition of the term "Business Day" is hereby
amended by deleting the language "and Illinois" contained on the second line
thereof and substituting the language ", Illinois, and any State which is the
principal place of business for any Affiliate Party" therefor.
(G) The definition of the term "Carlton Borrowing Base" is
hereby amended by deleting the language "Prefco and ABC" contained on the
penultimate line thereof and substituting the language "Prefco, ABC and all
Affiliate Parties" therefor.
(H) The definition of the term "Closing Date" is hereby
amended by adding the word "Initial" prior to the word "Term" contained on the
second line thereof.
(I) The definition of the term "Eligible Receivables" is
hereby amended by deleting the language "Prefco or Carlton" contained on the
second line of subparagraph (i) thereof and substituting the language "Prefco,
Carlton, or any Affiliate Party" therefor.
(J) The definition of the term "Funding Date" is hereby
deleted in its entirety and the following is substituted therefor:
"FUNDING DATE" means the date any advance of
a Term Loan or any Revolving Loan is to be made
hereunder.
(K) The definition of the term "Loan" is hereby deleted in its
entirety and the following is substituted therefor:
"LOAN" shall mean any advance of a Term
Loan or a Revolving Loan.
(L) The definition of the term "Loan Documents" is hereby
amended by adding the language ", as the same has been or may be amended,
modified, extended, and renewed from time to time" to the end thereof.
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(M) The definition of the term "Notes" is hereby amended by
adding the language ", as the same has been or may be amended, modified,
extended, and renewed from time to time" to the end thereof.
(N) The definition of the term "Pledge Agreement" is hereby
amended by adding the language ", as the same has been or may be amended,
modified, extended, and renewed from time to time" to the end thereof.
(O) The definition of the term "Prefco Borrowing Base" is
hereby amended by deleting the language "Carlton and ABC" contained on the
penultimate line thereof and substituting the language "Carlton, ABC and all
Affiliate Parties" therefor.
(P) The definition of the term "Restricted Junior Payment" is
hereby amended by deleting clause (iii) thereof in its entirety and substituting
the language, "(iii) any prepayment of principal of any Subordinated
Indebtedness," therefor.
(Q) The definition of the term "Revolving Credit Commitment"
is hereby deleted in its entirety and the following is substituted therefor:
"REVOLVING CREDIT COMMITMENT" shall mean
$6,500,000, as such amount may be (i) reduced from
time to time pursuant to Section 2.3(b) or Section
9.2 of this Agreement, and (ii) increased by up to a
maximum of $1,000,000.00 as follows:
(a) the Revolving Credit Commitment shall be
increased by $500,000.00 upon consummation of the
Richards Acquisition if the Grogan's Merger has not
theretofore been consummated; provided, however, if
the Richards Acquisition is consummated subsequent to
the consummation of the Grogan's Merger, the
Revolving Credit Commitment shall only be increased
by $250,000.00 upon consummation of the Richards
Acquisition; and
(b) the Revolving Credit Commitment shall be
increased by $750,000.00 upon consummation of the
Grogan's Merger if the Richards Acquisition has not
theretofore been consummated; provided, however, if
the Grogan's Merger is consummated subsequent to the
consummation of the Richards Acquisition, the
Revolving Credit Commitment shall only be increased
by $500,000.00 upon consummation of the Grogan's
Merger.
Notwithstanding the foregoing, if the
Grogan's Merger does not occur by August 30, 1996,
the Lender shall have discretion to modify the amount
of the increase in the Revolving Credit Commitment
described in clause (b) above.
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(R) The definition of the term "Term Loan" is hereby deleted
in its entirety and the following is substituted therefor:
"TERM LOAN" shall collectively mean the
Initial Term Loan, the Richards Term Loan and the
Grogan's Term Loan.
(S) The definition of the term "Term Note" is hereby deleted
in its entirety and the following is substituted therefor:
"TERM NOTE" shall collectively mean the
Initial Term Note, the Richards Term Note and the
Grogan's Term Note.
(T) The definition of the term "Total Borrowing Base" is
hereby amended by adding the following language to the end thereof "plus (iv)
the Affiliate Party Borrowing Base of each Affiliate Party."
(U) The definition of the term "Trademark Security Agreement"
is hereby amended by adding the language ", as the same has been or may be
amended, modified, extended, and renewed from time to time" to the end thereof.
(V) The definition of the term "UCC" is hereby amended by
deleting the language "or Illinois" contained on the second line thereof and
substituting the language ", Illinois, or any State which is the principal place
of business for any Affiliate Party" therefor.
2. AMOUNT AND FUNDING OF TERM LOAN AND
REVOLVING CREDIT COMMITMENT.
(A) The amount of the Term Loan is hereby increased to
$7,725,000. As a result of and in connection with the foregoing, Section 2.1 of
the Loan Agreement is hereby deleted in its entirety and the following is hereby
substituted therefor:
2.1 THE TERM LOAN.
(A) AMOUNT OF TERM LOAN. Subject to
the terms and conditions of this Agreement and in reliance upon the
representations and warranties of the Borrowers herein set forth, the
Lender hereby agrees to make to the Borrowers a term loan (the "Term
Loan") in an amount equal to $7,725,000, which shall be funded as
follows:
(i) the Lender shall make
$4,500,000 of the proceeds of the Term Loan (the "Initial Term Loan")
available to the Borrowers on the Closing Date upon satisfaction of the
applicable conditions set forth in Sections 8.1 and 8.2 hereof, by
transferring same day funds equal to such amount to an account
designated in writing by the Borrowers;
(ii) the Lender shall make
$1,400,000 of the proceeds of the Term Loan (the "Richards Term Loan")
available to Richards upon satisfaction of the applicable conditions set
forth in Sections 8.2 and 2.1(c) hereof, by transferring same day funds
equal to such amount to an account designated in writing by Richards;
and
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(iii) the Lender shall make
$1,825,000 of the proceeds of the Term Loan (the "Grogan's Term Loan")
available to Grogan's upon satisfaction of the applicable conditions set
forth in Sections 8.2 and 2.1(c) hereof, by transferring same day funds
equal to such amount to an account designated in writing by Grogan's.
Each advance of the Term Loan shall
initially be made as a Base Rate Loan.
(B) TERM NOTE. The Borrowers shall
execute and deliver to Lender (i) a promissory note, substantially in
the form of Exhibit D attached hereto and made a part hereof (as the
same has been or may be amended, modified, extended, and renewed from
time to time, the "Initial Term Note"), to evidence the Initial Term
Loan, (ii) a promissory note, substantially in the form of Exhibit J
attached hereto and made a part hereof (as the same has been or may be
amended, modified, extended, and renewed from time to time, the
"Richards Term Note"), to evidence the Richards Term Loan, and (iii) a
promissory note, substantially in the form of Exhibit K attached hereto
and made a part hereof (as the same has been or may be amended,
modified, extended, and renewed from time to time, the "Grogan's Term
Note"), to evidence the Grogan's Term Loan. The principal amount of the
Initial Term Note shall be payable in sixty (60) consecutive monthly
installments payable on the last Business Day of each successive
calendar month commencing on March 31, 1996 with installments payable
through and including February 28, 1997 in the amount of $66,666.67,
thereafter installments payable through and including February 28, 1998
in the amount of $70,833.34, thereafter installments payable through and
including February 28, 1999 in the amount of $75,000, thereafter
installments payable through and including February 29, 2000 in the
amount of $83,333.34, thereafter installments through and including
February 1, 2001 in an amount of $79,166.67 with a final installment of
any and all principal remaining on March 15, 2001. The principal amount
of the Richards Term Note shall be payable in consecutive monthly
installments payable on the last Business Day of each successive
calendar month commencing on the last Business Day of the calendar month
in which the Richards Term Loan is advanced (the "Richards Initial
Payment Date") in accordance with the following schedule:
PERIOD MONTHLY PAYMENT
Richards Initial Payment Date through Richards Initial Payment Amount
February 28, 1997
March 1, 1997 through February 28, 1998 $23,333.33
March 1, 1998 through February 28, 1999 $25,128.21
March 1, 1999 through February 28, 2000 $26,923.08
March 1, 2000 through February 28, 2001 $30,512.83
with a final installment of any and all principal remaining on March 15, 2001.
The principal amount of the Grogan's Term Note shall be payable in consecutive
monthly installments payable on the last Business Day of each successive
calendar month commencing on the last Business Day of the calendar month in
which the Grogan's Term Loan is advanced (the "Grogan's Initial Payment Date")
in accordance with the following schedule:
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PERIOD MONTHLY PAYMENT
Grogan's Initial Payment Date through Grogan's Initial Payment Amount
February 28, 1997
March 1, 1997 through February 28, 1998 $30,833.33
March 1, 1998 through February 28, 1999 $33,205.13
March 1, 1999 through February 28, 2000 $35,576.92
March 1, 2000 through February 28, 2001 $40,320.51
with a final installment of any and all principal remaining on March 15, 2001,
or such other schedule as shall be mutually satisfactory to the Lender and the
Borrowers.
(C) CONDITIONS TO FUNDING OF RICHARDS TERM LOAN
AND GROGAN'S TERM LOAN; RESTRICTIONS ON USE. Notwithstanding any
provision in this Agreement to the contrary:
(i) the Lender shall not be required to
fund any portion of the Richards Term Loan until such time as (A) the
Richards Acquisition is approved by the Lender, (B) the Borrowers and
Richards otherwise comply with the conditions and requirements set forth
in Section 8.3 hereof with respect to the Richards Acquisition, (C) ABC
shall have contributed at least $820,000.00 to the common stock equity
of Richards, Richards has applied the entire amount of such proceeds to
the consummation of the Richards Acquisition, and the Borrowers shall
have provided evidence satisfactory to the Lender of the same, and (D)
the Borrowers shall have paid the applicable portion of the Amendment
Fee due in accordance with the terms of Section 2.11 hereof;
(ii) the Lender shall not be required to
fund any portion of the Grogan's Term Loan until such time as (A) the
Grogan's Merger is approved by the Lender, (B) the Borrowers and
Grogan's otherwise comply with the conditions and requirements set forth
in Section 8.3 hereof with respect to the Grogan's Merger, and (C) the
Borrowers shall have paid the applicable portion of the Amendment Fee
due in accordance with the terms of Section 2.11 hereof;
(iii) the proceeds of the Richards Term
Loan may only be used by Richards to pay amounts due and owing by
Richards (including, without limitation, fees, costs and expenses) in
connection with the Richards Acquisition; and
(iv) the proceeds of the Grogan's Term
Loan may only be used by Grogan's to pay amounts due and owing by
Grogan's (including, without limitation, fees, costs and expenses) in
connection with the Grogan's Merger.
Any request by any Borrower for the Lender
to fund either the Richards Term Loan or the Grogan's Term Loan shall be
deemed a representation, warranty and covenant by the Borrowers that the
proceeds of such requested advance shall solely be used for the purposes
permitted by the terms of this subparagraph (c).
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(D) OUTSIDE FUNDING DATE FOR RICHARDS TERM LOAN
AND GROGAN'S TERM LOAN. Notwithstanding any provision in this Agreement
or any of the other Loan Documents to the contrary, the Borrowers shall
have no right to receive, and the Lender shall have no obligation to
advance, any portion of the Richards Term Loan or the Grogan's Term Loan
unless all conditions precedent to the applicable Loan are fulfilled and
a request made for the funding thereof no later than August 30, 1996.
(B) Exhibit J and Exhibit K attached hereto and made a part
hereof are hereby added to the Loan Agreement as Exhibit J and Exhibit K,
respectively. As a result, the reference to Exhibits J or K contained in Section
2.1 or any other provision of the Loan Agreement shall be deemed to refer to
Exhibits J or K, as the case may be, attached hereto.
(C) Section 2.2(b)(i) is hereby amended by adding the word
"Initial" prior to the word "Term" contained on the penultimate line thereof.
(D) Section 2.2(c) is hereby amended as follows:
(i) the language ", as the same has been or may
be amended, modified, extended, and renewed from time to time" is hereby
added after the phrase "promissory note" contained on the second line
thereof;
(ii) the reference to "$6,500,000" contained on
the fifth line thereof is hereby deleted and "$7,500,000" is substituted
therefor; and
(iii) the word "Initial" is hereby added prior to
the word "Term" on the sixth line thereof.
(E) Section 2.3(a) is hereby amended by adding the following
language to the end thereof:
If no Event of Default exists at the time of any
prepayment of the Term Loan made by the Borrowers
pursuant to this Section 2.3(a), then such prepayment
shall be applied against each of the Term Notes on a
PRO RATA basis. If any Event of Default exists at the
time of any prepayment of the Term Loan made by the
Borrowers pursuant to this Section 2.3(a), then the
Lender shall apply such prepayment against the Term
Notes in whatever manner as the Lender, in its sole
discretion, shall elect.
(F) Section 2.3(b) is hereby amended by adding the following
language to the end thereof:
Notwithstanding any provision in this Agreement to
the contrary, (i) if no Event of Default exists at
the time any Designated Prepayment is to be made,
then such prepayment shall be applied against each
installment of the Term Notes in the inverse order of
maturity on a PRO RATA basis in proportion to the
amount that the outstanding principal amount of each
such Term Note bears to the total outstanding
principal amount of all the Term Notes; and (ii) if
any Event of Default exists at
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the time any Designated Prepayment is to be made,
then the Lender shall apply such Designated
Prepayment against the Term Notes in whatever
manner as the Lender, in its sole discretion,
shall elect.
(G) Section 2.3(d) is hereby amended by deleting the language
"`Carlton Borrowing Base' and `Prefco Borrowing Base'" contained on the sixth
and seventh line thereof and substituting the language "`Carlton Borrowing
Base,' `Prefco Borrowing Base' and each `Affiliate Party Borrowing Base'"
therefor.
(H) Section 2.5(b) is hereby deleted in its entirety and
the following is substituted therefor:
(b) If the Borrowers shall repay the
Obligations in full and terminate the Revolving
Credit Commitment prior to March 14, 2000, the
Borrowers shall pay to the Lender an early
termination fee in an amount equal to (i) 1% of the
aggregate amount prepaid and terminated if such
prepayment and termination occurs before March 14,
1998 and (ii) 0.5% of the aggregate amount prepaid
and terminated if such prepayment and termination
occurs on March 14, 1998 or any time thereafter until
March 14, 2000. No amounts will be due under this
subsection (b) if the Borrowers shall repay the
Obligations after March 14, 2000.
(I) Section 2.7(e) is hereby amended as follows:
(i) the language "(which shall be applied
against the interest due on each Term Note on a PRO RATA basis)" is
added after the words "Term Loan" contained on the 18th and 19th lines
thereof; and
(ii) the language "(which shall be applied
against each Term Note on a PRO RATA basis)" is added after the words
"Term Loan" contained on the twenty-fourth line thereof.
(J) Section 2.11 is hereby amended by adding the following
language to the end thereof:
In addition to the Closing Fee, the Borrowers agree
to pay to the Lender an "Amendment Fee" as follows:
(a) if (i) the Richards Term Loan is
advanced in accordance with the terms hereof, the
Borrowers shall pay to the Lender a fee equal to
$14,000.00, such portion of the Amendment Fee being
due and payable prior to or concurrently with the
funding of the Richards Term Loan; or (ii) the
Richards Term Loan is not advanced in accordance with
the terms hereof for any reason (other than a failure
by the Lender to comply with the terms hereof), the
Borrowers shall pay to the Lender a fee equal to
$3,500.00, such portion of the Amendment Fee being
due and payable on September 5, 1996;
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(b) if (i) the Grogan's Term Loan is
advanced in accordance with the terms hereof, the
Borrowers shall pay to the Lender a fee equal to
$18,250.00, such portion of the Amendment Fee being
due and payable prior to or concurrently with the
funding of the Grogan's Term Loan; or (ii) the
Grogan's Term Loan is not advanced in accordance with
the terms hereof for any reason (other than a failure
by the Lender to comply with the terms hereof), the
Borrowers shall pay to the Lender a fee equal to
$4,625.50, such portion of the Amendment Fee being
due and payable on September 5, 1996; and
(c) if (i) the Revolving Credit Commitment
is increased in accordance with definition of the
term "Revolving Credit Commitment" as a result of the
Grogan's Merger or the Richards Acquisition, the
Borrowers shall pay to the Lender a fee equal to 1.0%
of each such increase, such portion of the Amendment
Fee being due and payable prior to or concurrent with
any such increase; or (ii) the Revolving Credit
Commitment is not so increased by the entire
$1,000,000.00 maximum increase available under the
definition of "Revolving Credit Commitment," for any
reason (other than a failure by the Lender to comply
with the terms hereof), the Borrowers shall pay to
the Lender a fee equal to 0.25% of the difference
between (A) $1,000,000.00 and (B) the amount of any
increase that has occurred in accordance with the
definition of the term "Revolving Credit Commitment",
such portion of the Amendment Fee being due and
payable on September 5, 1996.
Any failure by the Borrowers to timely pay any
portion of the Amendment Fee when the same is due in
accordance with the terms hereof shall constitute an
Event of Default. Notwithstanding any provision in
this Section 2.11 to the contrary, if either the
Richards Acquisition or the Grogan's Merger is
consummated after September 5, 1996, the Borrowers
shall receive a credit in an amount equal to any
Amendment Fee the Borrowers have previously paid to
the Lender pursuant to clause (ii) of paragraphs (a),
(b) and/or (c), as the case may be, against any fee
subsequently required to be paid to Lender in
connection with the applicable transaction. The
Lender acknowledges and agrees that the Borrowers may
pay any portion of the Amendment Fee from the
proceeds of a Revolving or any Term Loan.
3. MODIFICATION OF REPRESENTATIONS AND
WARRANTIES.
The representations and warranties made in Article VI of the
Loan Agreement are hereby modified as follows:
(A) Section 6.2 is hereby amended by adding the language
"recording of the Richards Mortgage (if the Richards Term Loan has been made),
recording of the Grogan's Mortgage (if the Grogan's Term Loan has been made),
recording of any other Mortgages," after the word "upon" contained on the third
line thereof.
-12-
(B) Section 6.6(b) is hereby amended by deleting the word
"Acquisition" contained on the penultimate line thereof and substituting the
term "Original Transaction" therefor.
4. AMENDMENTS TO COVENANTS.
The covenants of the Borrowers set forth in Article VII of the
Original Loan Agreement are amended as follows:
(A) Section 7.13 is hereby amended by deleting the language
"existing on the Closing Date and reflected in the PRO FORMA" contained on the
penultimate and last line thereof and substituting "shown on Schedule 7.13
attached hereto and made a part hereof" therefor.
(B) Schedule 7.13 attached hereto and made a part hereof is
hereby added to the Loan Agreement as Schedule 7.13. As a result, the reference
to Schedule 7.13 contained in Section 7.13 or any other provision of the Loan
Agreement shall be deemed to refer to Schedule 7.13 attached hereto.
(C) Clause (b) of Section 7.15 is hereby amended by
deleting the semi-colon at the end of such clause and adding the
following: "or would result from the making of such payment;"
(D) Section 7.20 is hereby amended by deleting the language
"acquire the assets of Star Foods Processing, Inc. on terms and conditions
satisfactory to the Lender" contained on the second and third line thereof and
by substituting the language "in connection with any Affiliate Party
Acquisition" therefor.
(E) Section 7.21 is hereby amended by deleting the language
"the acquisition of the assets of Star Foods Processing, Inc. on terms and
conditions satisfactory to the Lender" and substituting the language, "and any
Affiliate Party Acquisition" therefor.
(F) Schedule 7.23 attached to the Original Loan Agreement is
hereby deleted in its entirety and Schedule 7.23 attached hereto and made a part
hereof is hereby substituted therefor. As a result, the reference to Schedule
7.23 contained in Section 7.23 or any other provision of the Loan Agreement
shall be deemed to refer to Schedule 7.23 attached hereto.
(G) The following is hereby added to the end of Article VII as
a new Section 7.31:
7.31 Accounting and MIS System. Each of the
Borrowers shall be required to put in place (and
thereafter maintain in place) an integrated MIS and
accounting system so that the Borrowers' MIS and
accounting services are of a type and quality used by
other businesses comparable in size to the Borrowers.
The Borrowers hereby represent and warrant to the
Lender that, as of August 1, 1996, ABC and Carlton
has such MIS and accounting system in place. With
respect to Prefco and each Affiliate Party, such
system shall be required to be in place no
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later than (a) November 1, 1996 with
respect to Prefco, and (b) one hundred twenty
(120) days after the consummation of the
applicable Affiliate Party Acquisition with
respect to each Affiliate Party. Lender shall
be entitled to have such consultants or
experts that the Lender deems necessary or
appropriate verify the Borrowers' compliance
with the foregoing terms of this Section 7.31
and the Borrowers hereby agree to permit such
consultants and experts access to the
Borrowers offices for purposes of such
verification.
5. CONDITIONS TO BECOMING AN AFFILIATE PARTY.
Article VIII is amended as follows:
(A) The following is hereby added to the end of Article VIII
as a new Section 8.3:
8.3 Conditions for Becoming an Affiliate
Party. Notwithstanding any provision in this
Agreement or any of the other Loan Documents to the
contrary, a Person shall only constitute an
"Affiliate Party" if the following conditions have
been satisfied:
(a) Such Person shall have executed
a joinder to this Agreement and the other Loan
Documents which shall be in the form of Exhibit L
attached hereto and made a part hereof.
(b) Such Person shall have executed
an endorsement to each of the Notes which shall be in
the form of Exhibit M attached hereto and made a part
hereof.
(c) All proceedings taken in
connection with the execution of the applicable
Affiliate Party Acquisition Documents and all
documents and papers relating thereto shall be
satisfactory to the Lender. The Lender shall have
received copies of such documents and papers as the
Lender may reasonably request in connection
therewith, all in form and substance satisfactory to
the Lender.
(d) The acquisition by such Person
shall have been approved by the Lender and
consummated in compliance with the applicable
Affiliate Party Acquisition Documents and all
applicable state and federal laws
(e) The Borrowers shall provide to
the Lender updated and corrected Schedules in form
and substance satisfactory to the Lender which shall
be substituted for the Schedules attached to this
Agreement.
(f) The Lender shall have received
all items on the list attached hereto and made a part
hereof as Exhibit N, such items to
-14-
be in form and substance satisfactory to the Lender,
and to be executed by all parties thereto
when the nature of such items so requires.
(g) The Borrowers shall have
executed such other documents or instruments required
by the Lender and complied with any other conditions
or requirements imposed by the Lender in connection
with the applicable transaction.
(h) The Lender shall have received a
Certificate and Agreement in the form of Exhibit O
attached hereto and made a part hereof.
(i) The Lender shall have received a
certificate signed by the chairman, vice chairman, or
chief executive officer and the chief financial
officer or treasurer of each Borrower (i) reaffirming
and remaking each of the representations and
warranties made in Article VI of this Agreement,
which representations and warranties shall be deemed
to be remade as of the date thereof, subject only to
the fact that the same shall be deemed to be modified
by substitute Schedules provided by the Borrowers in
accordance with the terms of subsection (e) hereof,
and (ii) certifying that the conditions specified in
this Section 8.3 have been fulfilled.
Notwithstanding any provision in this Agreement or
any of the other Loan Documents to the contrary, the
Lender shall have sole and absolute discretion to
determine whether to approve the addition of an
Affiliate Party or any Affiliate Party Acquisition
and, consequently, may require the satisfaction of
additional conditions or modify any of the foregoing
conditions as the Lender shall deem necessary or
appropriate, all in the sole and absolute discretion
of the Lender.
(B) Exhibit L, Exhibit M, Exhibit N and Exhibit O attached
hereto and made a part hereof are hereby added to the Loan Agreement as Exhibit
L, Exhibit M, Exhibit N and Exhibit O, respectively. As a result, the reference
to Exhibits L, M, N or O contained in Section 8.3 or any other provision of the
Loan Agreement shall be deemed to refer to Exhibits L, M, N or O, as the case
may be, attached hereto.
6. AMENDMENT TO EVENTS OF DEFAULT.
Section 9.1(e) of the Original Loan Agreement is hereby
amended by deleting the language "and the Seller Note" and substituting the
language "the Seller Note, the Richards Acquisition Note and the Grogan's Merger
Note" therefor.
7. EFFECTIVENESS OF THIS AMENDMENT.
The Lender and the Borrowers agree that the terms of this
Amendment shall not be effective (and the Lender shall have no obligations under
this Amendment) unless and until all of the following conditions have either
been fulfilled in a manner satisfactory to the Lender or waived in writing by
the Lender:
-15-
(A) The Lender shall have received all items on the List of
Closing Documents attached hereto and made a part hereof as Exhibit P, such
items to be in form and substance satisfactory to the Lender, and to be executed
by all parties thereto when the nature of such items so requires.
(B) The Borrowers shall have paid to the Lender the balance of
the Closing Fee equal to $35,000. The balance of the Closing Fee shall be fully
earned and non-refundable on the date hereof, regardless of whether the Richards
Term Loan or the Grogan's Term Loan is ever funded.
(C) The Borrowers shall have paid to the Lender all costs and
expenses incurred as of the date hereof in connection with this Agreement and
the other documents and instruments executed in connection herewith or
contemplated by the terms hereof (collectively, the "Amendment Documents") or
otherwise in connection with the Loan which the Borrowers are obligated to pay
pursuant to the terms of Section 12.7 of the Loan Agreement.
(D) All proceedings taken in connection with the execution of
this Amendment, all other Amendment Documents, and all documents and papers
relating thereto shall be satisfactory to the Lender. The Lender shall have
received copies of such documents and papers as the Lender may reasonably
request in connection therewith, all in form and substance satisfactory to the
Lender.
(E) The Lender shall have received a certificate dated as of
the date hereof and signed by the chairman, vice chairman or chief executive
officer and the chief financial officer or treasurer of each Borrower certifying
that the conditions specified in this Section 7 have been fulfilled.
8. REPRESENTATIONS AND WARRANTIES.
To induce the Lender to amend the Loan Agreement and to
consider making future Loans thereunder, Borrower represents and warrants to the
Lender that:
(A) There are no Defaults or Events of Default with respect to
any Borrower under the Loan Agreement or any of the other Loan Documents.
(B) Except as otherwise expressly set forth herein or in the
other Amendment Documents, none of the Loan Documents have been heretofore
amended, modified, changed, supplemented, renewed, replaced, or terminated and
none of the Borrowers' obligations under any of the Loan Documents has been
changed, terminated, forgiven or modified in any way.
(C) The PRO FORMA balance sheet provided by the Borrowers in
accordance with the requirements of Exhibit P presents fairly and accurately in
all material respects the Borrowers' financial condition as at such date as if
the transactions contemplated by the Richards Acquisition have occurred on such
date, the Richards Term Loan had been funded as of such date, and the Revolving
Credit Commitment has been increased in accordance with the terms hereof as of
such date.
-16-
(D) On the date hereof, the representations and warranties set
forth in the Loan Agreement (as modified by this Amendment) and in all other
Loan Documents are true and correct with the same effect as though such
representations and warranties had been made on the date hereof (except to the
extent that the same are specifically made as of an earlier date).
9. INDEMNITY.
The Borrowers agree to reimburse the Lender for any costs and
expenses (including, without limitation, reasonable attorneys' and paralegals'
fees and expenses) incurred by the Lender in defending any suit brought against
it by any Borrower or any other Person in connection with the transactions
contemplated by this Amendment and the other Amendment Documents. All of the
foregoing fees, costs and expenses shall be part of the Obligations, payable
upon demand, and secured by the Collateral.
10. MISCELLANEOUS.
(A) This Amendment may be executed in any number of
counterparts, and by the Lender and each of the Borrowers in separate
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same agreement.
(B) The captions contained in this Amendment are for
convenience only, are without substantive meaning and should not be construed to
modify, enlarge, or restrict any provision.
(C) All obligations of the Borrowers under this Amendment
shall be joint and several obligations of the Borrowers. Each Borrower shall be
liable for the full amount of the Obligations with the rights of contribution
and reimbursement against the other Borrowers under Section 12.13 of the Loan
Agreement.
(D) Any reference in the Loan Agreement to the term
"Agreement," "Note," "Loan Documents," or any other term used to describe any
one or more of the Loan Documents shall be deemed to refer to the applicable
documents as the same are modified by the terms of this Amendment and the other
Amendment Documents. Any provision in any of the Loan Documents which have been
rendered inconsistent with any other provision of Loan Documents as a result of
the amendments and modifications effectuated by this Amendment shall be deemed
amended and modified so as to be consistent with the terms and conditions of
this Amendment.
(E) Except to the extent that the Loan Agreement is expressly
amended and modified by the terms of this Amendment, the Loan Agreement is and
shall remain unmodified and in full force and effect.
-17-
IN WITNESS WHEREOF, the parties have entered into this
Agreement on the date first above written.
ATLANTIC BEVERAGE COMPANY, INC.
By:
Name:
Title:
PREFCO CORP.
By:
Name:
Title:
CARLTON FOODS CORP.
By:
Name:
Title:
LASALLE NATIONAL BANK
By:
Name:
Title:
-18-
EXHIBIT A
BORROWING BASE CERTIFICATE
EXHIBIT J
FORM OF RICHARDS TERM NOTE
US $1,400,000 Dated: August 1, 1996
FOR VALUE RECEIVED, the undersigned, ATLANTIC BEVERAGE
COMPANY, INC., a Delaware corporation, CARLTON FOODS CORP., a Delaware
corporation and PREFCO CORP. (formerly known as ABEV Acquisition Corp.), a
Delaware corporation (collectively referred to herein as the "Borrowers"),
jointly and severally hereby promise to pay to the order of LaSalle National
Bank (the "Lender") the principal amount of One Million Four Hundred Thousand
and 00/100 Dollars ($1,400,000). Capitalized terms used herein have the meanings
specified for such terms in the Loan Agreement (as defined below).
The principal amount of this Richards Term Note ("Term Note")
shall be payable in consecutive monthly installments payable on the last
Business Day of each successive calendar month commencing on the last Business
Day of the calendar month in which the Richards Term Loan is advanced (the
"Richards Initial Payment Date") in accordance with the following schedule:
PERIOD MONTHLY PAYMENT
Richards Initial Payment Date Richards Initial Payment Amount
through February 28, 1997
March 1, 1997 through February 28, 1998 $23,333.33
March 1, 1998 through February 28, 1999 $25,128.21
March 1, 1999 through February 28, 2000 $26,923.08
March 1, 2000 through February 28, 2001 $30,512.83
with a final installment of any and all principal remaining on March 15, 2001.
As used herein, the term "Richards Initial Payment Amount" shall mean an amount
equal to (a) $129,230.77, divided by (b) the number of whole calendar months
between the Richards Initial Payment Date and March 1, 1997.
The Borrowers, jointly and severally, promise to pay interest
on the unpaid principal amount of this Term Note from the Funding Date with
respect hereto until such principal amount is paid in full, at such interest
rates, and payable at such times, as are specified in the Loan Agreement.
Both principal and interest are payable in lawful money of the
United States of America to LaSalle National Bank, at 120 South LaSalle Street,
Chicago, Illinois 60603, in same day funds. All payments made on account of
principal hereof shall be recorded by the
Lender and, prior to any transfer hereof, endorsed on the grid attached
hereto which is part of this Term Note.
This Term Note is one of the Term Notes referred to in, and is
entitled to the benefits of, the Loan and Security Agreement dated as of March
15, 1996 (as amended by the First Amendment to Loan and Security Agreement,
bearing the date herewith, and all further amendments, modifications, changes,
supplements, renewals or replacements, the "Loan Agreement") by and between the
Borrowers and the Lender. The Loan Agreement, among other things, contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events and also for prepayments on account of principal hereof prior to
the maturity hereof upon the terms and conditions therein specified.
IN WITNESS WHEREOF, the undersigned have executed this Term
Note.
ATLANTIC BEVERAGE COMPANY, INC.
By:
Merrick M. Elfman
Vice Chairman
CARLTON FOODS CORP.
By:
Merrick M. Elfman
Chairman
PREFCO CORP.
By:
Merrick M. Elfman
Chairman
[ADD SIGNATURE BLOCK FOR EACH ADDITIONAL AFFILIATE PARTY]
-2-
EXHIBIT K
FORM OF GROGAN'S TERM NOTE
US $1,850,000 Dated:
FOR VALUE RECEIVED, the undersigned, ATLANTIC BEVERAGE
COMPANY, INC., a Delaware corporation, CARLTON FOODS CORP., a Delaware
corporation and PREFCO CORP. (formerly known as ABEV Acquisition Corp.), a
Delaware corporation (collectively referred to herein as the "Borrowers"),
jointly and severally hereby promise to pay to the order of LaSalle National
Bank (the "Lender") the principal amount of One Million Eight Hundred Fifty
Thousand and 00/100 Dollars ($1,850,000). Capitalized terms used herein have the
meanings specified for such terms in the Loan Agreement (as defined below).
The principal amount of this Grogan's Term Note ("Term Note")
shall be payable in consecutive monthly installments payable on the last
Business Day of each successive calendar month commencing on the last Business
Day of the calendar month in which the Grogan's Term Loan is advanced (the
"Grogan's Initial Payment Date") in accordance with the following schedule:
PERIOD MONTHLY PAYMENT
Grogan's Initial Payment Date through Grogan's Initial Payment Amount
February 28, 1997
March 1, 1997 through February 28, 1998 $30,833.33
March 1, 1998 through February 28, 1999 $33,205.13
March 1, 1999 through February 28, 2000 $35,576.92
March 1, 2000 through February 28, 2001 $40,320.51
with a final installment of any and all principal remaining on March 15, 2001.
As used herein the term "Grogan's Initial Payment Amount" shall mean an amount
equal to (a) $170,769.23, divided by (b) the number of whole calendar months
between the Grogan Initial Payment Date and March 1, 1997.
The Borrowers, jointly and severally, promise to pay interest
on the unpaid principal amount of this Term Note from the Funding Date with
respect hereto until such principal amount is paid in full, at such interest
rates, and payable at such times, as are specified in the Loan Agreement.
Both principal and interest are payable in lawful money of the
United States of America to LaSalle National Bank, at 120 South LaSalle Street,
Chicago, Illinois 60603, in same day funds. All payments made on account of
principal hereof shall be recorded by the
Lender and, prior to any transfer hereof, endorsed on the grid attached
hereto which is part of this Term Note.
This Term Note is one of the Term Notes referred to in, and is
entitled to the benefits of, the Loan and Security Agreement dated as of March
15, 1996 (as amended by the First Amendment to Loan and Security Agreement,
bearing the date herewith, and all further amendments, modifications, changes,
supplements, renewals or replacements, the "Loan Agreement") by and between the
Borrowers and the Lender. The Loan Agreement, among other things, contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events and also for prepayments on account of principal hereof prior to
the maturity hereof upon the terms and conditions therein specified.
IN WITNESS WHEREOF, the undersigned have executed this Term
Note.
ATLANTIC BEVERAGE COMPANY, INC.
By:
Merrick M. Elfman
Vice Chairman
CARLTON FOODS CORP.
By:
Merrick M. Elfman
Chairman
PREFCO CORP.
By:
Merrick M. Elfman
Chairman
[ADD SIGNATURE BLOCK FOR EACH ADDITIONAL AFFILIATE PARTY]
-2-
EXHIBIT L
FORM OF JOINDER BY AFFILIATE PARTY
The undersigned hereby joins in that certain Loan and Security
Agreement, dated as of March 15, 1996, among LaSalle National Bank and Atlantic
Beverage Company, Inc., Prefco Corp. (formerly known as ABEV Acquisition Corp.)
and Carlton Foods Corp. (as the same has been or may be amended, modified,
extended, and renewed from time to time, the "Loan Agreement") for purposes of
becoming a party thereto as one of the "Borrowers" therein (including, without
limitation, for purposes of granting a security interest in the Property of the
undersigned in accordance with the terms of Section 4.1 of the Loan Agreement)
and agrees to abide by and comply with the terms and conditions of the Loan
Agreement. All initially capitalized terms not otherwise defined in this
Amendment shall have the meaning ascribed to such terms in the Loan Agreement.
The obligations of the undersigned under the Loan Agreement
shall be the joint and several with the obligations of all of the Borrowers,
regardless of whether such obligations arose or accrued heretofore or shall
arise or accrue hereafter. The undersigned acknowledges and agrees that each
Borrower shall be liable for the full amount of the Obligations with the rights
of contribution and reimbursement against the other Borrowers under Section
12.13 of the Loan Agreement.
Any and all references in the Loan Agreement or any other Loan
Documents to the "Borrowers," whether jointly or severally, shall be deemed to
refer to ABC, Prefco, Carlton, [ADD REFERENCE TO ANY OTHER BORROWERS ADDED
PREVIOUSLY] and/or the undersigned, as the case may be.
IN WITNESS WHEREOF, the undersigned has executed this Joinder
as of this _____ day of ----------------------------, -----.
-------------------------------------,
a Delaware corporation
By:
Name:
Title:
EXHIBIT M
FORM OF ENDORSEMENT
FOR VALUE RECEIVED, the undersigned Endorser,
_______________________________, a Delaware corporation, hereby unconditionally
promises to pay to Lender, or Lender's order, in lawful money of the United
States of America, all amounts due when the same become due and payable under
this [DESCRIBE NOTE].
The undersigned Endorser may prepay its obligations, in whole
or in part, under this Endorsement at any time, subject to Section 2.5 of the
Loan Agreement. Any such partial prepayment shall be applied to the installments
due under the [DESCRIBE NOTE] in the order set forth in the Loan Agreement.
This Endorsement is subject to the provisions of the Loan
Agreement and any of the other Loan Documents applicable to the Endorser, the
terms of which are incorporated by reference, as fully as if set forth herein.
IN WITNESS WHEREOF, the undersigned Endorser has duly executed
this Endorsement as of the _____ day of __________________________, _____.
-------------------------------------,
a Delaware corporation
By:
Name:
Title:
EXHIBIT N
LIST OF CLOSING ITEMS FOR AFFILIATE PARTY ACQUISITION
A. LOAN DOCUMENTS
1. [ADDITIONAL PROMISSORY NOTE]
2. Endorsement to each Note executed by [AFFILIATE PARTY]
3. Joinder to Loan Agreement executed by [AFFILIATE PARTY]
4. A Notice of Borrowing and Disbursement Directions with respect to any
additional Term Loan or Revolving Loan to be made on the date
of the related Affiliate Party Acquisition executed by ABC. [IF
APPLICABLE]
5. Applications for and copies of the following Letters of Credit
[IF APPLICABLE]:
[AFFILIATE PARTY CREDITORS]
B. OTHER SECURITY AND GUARANTY DOCUMENTS
1. Vehicle titles covering all owned vehicles of [AFFILIATE PARTY] with
appropriate documentation duly executed in order to have the Lender's
lien notated thereon.
2. Stock certificates relating to the issued and outstanding shares of
[AFFILIATE PARTY], and stock powers relating to those certificates,
undated and duly endorsed in blank.
C. REAL ESTATE COLLATERAL DOCUMENTS
1. Mortgages for all real property owned by [AFFILIATE PARTY].
2. ALTA Surveys of properties in item 8 above certified to the Lender.
3. Title insurance policies for properties in item 8 above.
4. Copies of any structural or engineering reports for properties in item
8 above.
5. Landlord waivers for all properties leased by [AFFILIATE PARTY].
D. CORPORATE DOCUMENTS
1. Certificate or Articles of Incorporation for each Affiliate Party and
the applicable seller under the terms of the related Affiliate
Party Acquisition ("Seller"), as amended, modified or
supplemented to the date such Affiliate Party Acquisition is
consummated (the "Consummation Date"), certified to be true,
correct and complete by the Secretary of State of such entity's state
of incorporation as of a recent date prior to the Consummation Date,
together with a good standing certificate from the
Secretary of State of such entity's state of incorporation and a good
standing certificate from the Secretaries of State (or the equivalent
thereof) of each other State in which each is qualified to
transact business, each to be dated a recent date prior to the
Consummation Date.
2. A certificate of the Secretary or Assistant Secretary of each Borrower
dated the Consummation Date certifying (a) the names and true
signatures of the incumbent officers of such Borrower
authorized to sign the Loan Documents, (b) the bylaws of each
Borrower as in effect on the date of such certification, (c)
that attached thereto is a true and complete copy of the
resolutions of such Borrower's Board of Directors approving and
authorizing the execution, delivery and performance of the Loan
Documents (and the Affiliate Party Acquisition Documents with
respect to [AFFILIATE PARTY] and any other Borrower that is a
party thereto) executed by such Borrower, (d) in the case of
any Affiliate Party being acquired by merger that attached
thereto is a true and complete copy of the resolutions of such
Borrower's Board of Directors approving and authorizing any
merger which accomplishes the related Affiliate Party
Acquisition and (e) that there have been no changes in the
Certificate of Incorporation of such Borrower since the date of
the most recent certification thereof by the Secretary of State
of such Borrower's state of incorporation.
3. A certificate of the Secretary or Assistant Secretary of Seller dated
the Consummation Date certifying (a) the By-laws of such entity as in
effect on the date of such certification, and (b) that there have been
no changes in the Certificate or Articles of Incorporation of such
entity since the date of the most recent certification thereof by the
Secretary of State of such entity's state of incorporation together
with the resolutions of such entity's Board of Directors approving and
authorizing the execution, delivery and performance of the Affiliate
Party Acquisition Documents executed by such entity and approving and
authorizing the [AFFILIATE PARTY] merger if one is involved in the
transaction.
4. If [AFFILIATE PARTY] is acquired through merger, a copy of the
Certificate of Merger filed with the Secretary of State of [AFFILIATE
PARTY]'s state of incorporation, evidencing the merger in the form
filed with the Secretary of State of [AFFILIATE PARTY]'s state of
incorporation.
5. If [AFFILIATE PARTY] is acquired through merger, a copy of the
Certificate of Merger filed with the Secretary of State of Seller's
state of incorporation, evidencing the merger in the form filed with
the Secretary of State of Seller's state of incorporation.
6. A Certificate of the Secretary or Assistant Secretary of Seller or a
letter from Seller if the Seller is an individual or group of
individuals dated the Consummation Date, certifying that (a)
the applicable Affiliate Party Acquisition Documents (including,
without limitation, the [AFFILIATE PARTY] Acquisition Note) are in
full force and effect and no material term or condition thereof has
been amended, from the form thereof delivered to the Lender, or waived,
except as disclosed to the Lender or its counsel prior to the
Consummation Date, (b) it and, to the best of its knowledge, the
other parties thereto have performed or complied in all material
respects with all agreements and conditions contained in the
applicable Affiliate Party Acquisition
-2-
Documents and any agreements or documents referred to therein
required to be performed or complied with by each of them on or
before the requested funding on the Consummation Date, and (c)
subject to the foregoing, neither it nor, to the best of its
knowledge, such other parties are in default in the performance
or compliance with any of the material terms or provisions thereof
(except to the extent that performance thereof or compliance
therewith or default has been waived with the prior written consent
of the Lender).
7. A Financial Condition Certificate dated the Consummation Date, signed
by the chief executive officer of each Borrower certifying, among other
things, that such Borrower is Solvent on the Consummation Date after
giving effect to any new funding under the Loan Agreement, any issuance
of any [AFFILIATE PARTY] Acquisition Note and any capital contribution
noted in item 25 below as any of the foregoing are required by the
Affiliate Party Acquisition Documents and consummating the [AFFILIATE
PARTY] Acquisition.
E. SUBORDINATED DEBT DOCUMENTS
1. Subordination Agreement covering the [AFFILIATE PARTY] Acquisition
Note.
F. OPINIONS
1. Opinion of Thomas D. Wippman, counsel to Borrowers addressed to the
Lender.
2. If real property is owned by Affiliate Party, an opinion of local
counsel [IN THE CASE OF RICHARDS, JIM WATSON RE: LOUISIANA
LAW].
G. ENVIRONMENTAL DOCUMENTS
1. [ENVIRONMENTAL DOCUMENTS; IN THE CASE OF RICHARDS, TO INCLUDE EVIDENCE
SATISFACTORY TO LENDER THAT REMEDIATION HAS BEEN COMPLETED AT
RICHARDS SITE.]
H. MISCELLANEOUS
1. Lender Loss Payable Endorsement(s) relating to casualty insurance
policies covering the Collateral obtained in the related Affiliate
Party Acquisition or other satisfactory evidence that such endorsements
are effective (with copies of certificates of insurance attached).
2. If an equity contribution is being made, evidence satisfactory to the
Lender that the shareholders of ABC have contributed at least $[EQUITY
CONTRIBUTION] to Borrowers' common stock equity and the Borrowers have
applied the entire amount of such proceeds to the consummation of the
[AFFILIATE PARTY] Acquisition.
3. Certified copies of the PRO FORMA balance sheets of Borrowers as of the
Consummation Date, after giving effect to the Affiliate Party
Acquisition, together with current projected balance sheets and
forecasts of income, earnings and cash flow through 2000; which will be
attached to financial condition certificates.
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4. Payoff Letters, [TOGETHER WITH ALL RELEASE AND TERMINATION
DOCUMENTATION CONTEMPLATED THEREIN] from each Person who has or had a
security interest in any of the property being acquired in the
applicable Affiliate Party Acquisition.
5. A Certificate executed and delivered by the president or chief
operating officer and by the chief financial officer or treasurer of
each Borrower, certifying that, after giving effect to new funding
under the Loan Agreement, any issuance of any [AFFILIATE PARTY]
Acquisition Note and any capital contribution referred to in item 25
above as any of the foregoing are required by the Affiliate Party
Acquisition Documents and the consummation of any [AFFILIATE PARTY]
Acquisition, no Event of Default or Default exists or would occur as a
result therefrom.
6. Lock Box and Blocked Account Agreement with the [AFFILIATE PARTY'S]
local bank.
7. [BAILEE LETTER, IF APPLICABLE]
8. A copy of all Employment Agreements for chief executives of
[AFFILIATE PARTY].
I. UCC LIEN, TAX AND JUDGMENT SEARCHES AND FILINGS
1. UCC lien, tax lien and judgment searches in the following offices,
where applicable against [AFFILIATE PARTY] and appropriate
Seller:
a. County Clerk [COUNTIES IN WHICH [AFFILIATE PARTY]
AND SELLER CONDUCT BUSINESS] [ONLY SEARCH ON
COUNTY LEVEL IF FILING AT COUNTY LEVEL IS
REQUIRED BY THE LAWS OF THE APPROPRIATE STATE]
b. Secretary of State [STATES IN WHICH [AFFILIATE PARTY]
AND SELLER CONDUCT BUSINESS]
c. [OTHER OFFICES AS REQUIRED BY STATE LAWS OF THE
STATES IN WHICH [AFFILIATE PARTY] AND SELLER CONDUCT
BUSINESS]
2. UCC-1 Financing Statements filed against [AFFILIATE PARTY] in the
following offices, together with acknowledgement copies or other
evidence of filing:
a. County Clerk [COUNTIES IN WHICH [AFFILIATE PARTY]
WILL CONDUCT BUSINESS] [ONLY FILE ON COUNTY
LEVEL IF REQUIRED BY THE LAWS OF THE
APPROPRIATE STATES]
b. Secretary of State
[STATES IN WHICH [AFFILIATE PARTY] WILL
CONDUCT BUSINESS]
c. [OTHER OFFICES AS REQUIRED BY STATE LAWS OF THE
STATE IN WHICH [AFFILIATE PARTY] WILL CONDUCT
BUSINESS]
3. UCC-1 Financing Statements filed against [AFFILIATE PARTY] and Seller
for the following vehicle license numbers at the appropriate department
of motor vehicles in the state of such entity's place of business if so
required by such state's applicable laws:
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[LICENSE NUMBERS]
4. Post-Closing UCC Lien Searches against [AFFILIATE PARTY] and Seller in
the jurisdictions listed in item 32 and 33 above.
J. ACQUISITION DOCUMENTS
1. Amendment to Tax Sharing Agreement to take account of Affiliate Party
Acquisition.
K. FURTHER MISCELLANEOUS
1. [POST-CLOSING UNDERTAKING LETTER.]
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EXHIBIT O
FORM OF CERTIFICATE AND AGREEMENT
In connection with that certain Loan and Security Agreement,
dated as of March 15, 1996, among LaSalle National Bank ("Lender") and Atlantic
Beverage Company, Inc., Prefco Corp. (formerly known as ABEV Acquisition Corp.)
and Carlton Foods Corp. (as the same has been or may be amended, modified,
extended, and renewed from time to time, the "Loan Agreement") and in order to
induce Lender to (i) permit [NAME OF NEW AFFILIATE PARTY] ("New Affiliate
Party") to become an "Affiliate Party" (as such term is defined in the Loan
Agreement), and (ii) consent to [DESCRIBE APPLICABLE AFFILIATE PARTY
ACQUISITION] (the "New Affiliate Party Acquisition"), the undersigned hereby
represents, warrants, covenants and agrees as follows (all initially capitalized
terms not otherwise defined herein shall have the meaning ascribed to such terms
in the Loan Agreement):
1. New Affiliate Party has delivered to the Lender unaudited
balance sheets and the related statements of income and operations, shareholders
equity and cash flow for the fiscal year ended ____________________ and interim
statements prepared to date for the fiscal year to end ____________________ for
[name of acquired operations] (the "Financial Statements"). All of the Financial
Statements have been prepared in accordance with GAAP and present accurately and
fairly in all material respects the financial position of [name of acquired
operations] as at the dates thereof and its results of operations for the
periods then ended. Since ________________, there has been no event or
circumstance which is likely to have a material adverse affect on the financial
condition or operations of the businesses of such entities. The Financial
Statements present fairly and accurately in all material respects the financial
condition of [name of acquired operations] as at such dates. The pro forma
balance sheet provided by the Borrowers in accordance with the requirements of
Exhibit N to the Loan Agreement presents fairly and accurately in all material
respects the Borrowers' financial condition as at such date as if the New
Affiliate Party Acquisition has occurred on such date.
2. As of the date hereof, no shareholder of ABC owns more than
five percent (5%) of the issued and outstanding shares of stock in ABC except as
set forth on Schedule 2 attached hereto and incorporated herein by this
reference. Each of Carlton's, Prefco's and all Affiliate Parties' authorized
capital stock and the number of shares validly issued and outstanding are set
forth on Schedule 2 attached hereto and such issued shares are all fully paid
and non-assessable, and all of the outstanding stock of Carlton, Prefco and each
Affiliate Party are owned beneficially and of record by ABC.
3. Each Borrower and New Affiliate Party is Solvent prior to
and after giving effect to the transactions contemplated by the New Affiliate
Party Acquisition.
4. After giving effect to the transactions contemplated by the
New Affiliate Party Acquisition, New Affiliate Party has no Debt, except (a) the
Obligations, (b) Debt described on Annex 1 attached hereto, and (c) trade
payables and other contractual obligations arising in the ordinary course of
business.
5. There are no Defaults or Events of Default with
respect to any Borrower under the Loan Agreement or any of the other
Loan Documents.
6. On the date hereof, the representations and warranties set
forth in the Loan Agreement and in all other Loan Documents are true and correct
with the same effect as though such representations and warranties had been made
on the date hereof (except to the extent that the same are specifically made as
of an earlier date), subject only to the fact that the same shall be deemed to
be modified by substitute Schedules provided by the Borrowers in accordance with
the terms of Section 8.3 of the Loan Agreement and in form and substance
satisfactory to the Lender.
7. The Borrowers agree to reimburse the Lender for any costs
and expenses (including, without limitation, reasonable attorneys' and
paralegals' fees and expenses) incurred by the Lender in defending any suit
brought against it by any Borrower or any other Person in connection with the
New Affiliate Party Acquisition or the documents executed by New Affiliate Party
in connection therewith. All of the foregoing fees, costs and expenses shall be
part of the Obligations, payable upon demand, and secured by the Collateral.
IN WITNESS WHEREOF, the undersigned have executed this
Certificate and Agreement as of this _____ day of ________________________,
_____.
ATLANTIC BEVERAGE COMPANY, INC.
By:
Merrick M. Elfman
Vice Chairman
CARLTON FOODS CORP.
By:
Merrick M. Elfman
Chairman
PREFCO CORP.
By:
Merrick M. Elfman
Chairman
[ADD SIGNATURE BLOCK FOR EACH ADDITIONAL AFFILIATE PARTY]
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EXHIBIT P
LIST OF CLOSING ITEMS FOR AMENDMENT
A. LOAN DOCUMENTS
1. First Amendment to Loan and Security Agreement.
2 Substitute Revolving Credit Note.
B. OTHER SECURITY AND GUARANTY DOCUMENTS
1. Amendment to Stock Pledge Agreement, executed by ABC in favor of the
Lender.
C. OPINIONS
1. Opinion of Thomas D. Wippman, counsel to Borrowers addressed to the
Lender.
D. MISCELLANEOUS
1. A certificate of the Secretary or Assistant Secretary of each Borrower
dated currently certifying (a) the names and true signatures of
the incumbent officers of such Borrower authorized to sign the
Loan Documents, (b) the bylaws of each Borrower as in effect on
the date of such certification, (c) that attached thereto is a
true and complete copy of the resolutions of such Borrower's
Board of Directors approving and authorizing the execution,
delivery and performance of the Loan Documents executed by such
Borrower, and (d) that there have been no changes in the
Certificate of Incorporation of such Borrower since the date of
the most recent certification thereof by the Secretary of State
of such Borrower's state of incorporation.
2. Blocked Account Agreement with Citizens Bank of Maryland and the
related Custody Account Agreement.
3. A revised statement from the Borrowers setting forth the sources and
uses of funds of the Borrowers after taking into account the Richards
Acquisition and the Grogan's Merger.
4. Certified copies of the PRO FORMA balance sheets of Borrowers as of the
date of this Amendment, after giving effect to the Richards Acquisition
and the Grogan Merger, together with current projected balance sheets
and forecasts of income, earnings and cash flow through 2000; which
will be attached to financial condition certificates.
SCHEDULE 7.13
PERMITTED DEBT
SCHEDULE 7.23
EXISTING DEPOSIT ACCOUNTS