EXHIBIT 4.7
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FRI-MRD CORPORATION
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FIRST AMENDMENT
Dated as of June 9, 1998
to
Note Agreement
Dated August 12, 1997
___________________________________
Re: Up to $75,000,000 15.0% Senior Discount Notes
Due January 24, 2002
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FIRST AMENDMENT TO NOTE AGREEMENT
First Amendment, dated as of June 9, 1998 (the "First Amendment"), to
the Note Agreement, dated as of August 12, 1997 (the "Original Note Agreement"),
among FRI-MRD Corporation, a Delaware corporation (the "Company"), and each of
the purchasers listed on Schedule A attached to the Note Agreement
(collectively, the "Noteholders").
RECITALS:
A. The Company and the Noteholders have entered into the Original
Note Agreement pursuant to which the Company has issued $75,000,000 of its 15.0%
Senior Discount Notes due January 24, 2002 (the "Notes").
B. In connection with the Original Note Agreement, the Company and
the Noteholders have entered into a Letter Agreement, dated August 12, 1997 (the
"Letter Agreement").
C. On January 14, 1998, the Company entered into a Joinder Agreement
with each of the purchasers listed therein.
D. The Company and the Noteholders party hereto desire to amend the
Original Note Agreement as set forth herein and the Noteholders party hereto own
not less than 50% of the Accreted Value of the Notes outstanding.
E. Capitalized terms used herein shall have the respective meanings
ascribed thereto in the Original Note Agreement unless herein defined.
NOW, THEREFORE, the Company and the Noteholders party hereto do hereby
agree as follows:
1. Amendments. Upon effectiveness of this agreement in accor-
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dance with the terms of Section 5 hereof:
(a) Section 5.5(1) of the Original Note Agreement shall be and
is hereby amended by adding after the word "Notes" at the end thereof the
phrase "and the Secured Discount Notes."
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(b) Section 5.5(2) of the Original Note Agreement shall be and
is hereby amended in its entirety to read as follows:
"(2) Indebtedness under the Credit Agreement not to exceed the Maximum
Amount outstanding at any one time;"
(c) Section 5.5(3) of the Original Note Agreement shall be and
is hereby amended by adding at the end thereof the phrase "and Indebtedness
of KKR and its subsidiaries existing upon the consummation of the
transactions contemplated by the Merger Agreement and the Stock Purchase
Agreement".
(d) Section 5.5(10) of the Original Note Agreement shall be and
is hereby amended by replacing the number "$75,000,000" with the number
"$99,000,000" and by adding after the phrase "amount of Notes" the phrase
"and Secured Discount Notes".
(e) Section 5.5(11) of the Original Note Agreement shall be and
is hereby amended by adding the phrase "refinancing" immediately following
the phrase "in connection with the renewal, expansion".
(f) Section 5.8 of the Original Note Agreement shall be and is
hereby amended by adding after subsection (iii):
"(iv) any Subsidiary may merge or consolidate with or into KKR."
(g) Section 5.9(iv) of the Original Note Agreement shall be and
is hereby amended by adding after the phrase "under the Notes" the phrase
", the Secured Discount Note Agreement and the Secured Discount Notes".
(h) Section 5.9(v) of the Original Note Agreement shall be and
is hereby amended by adding after the phrase "Value Creation Units Plan"
the phrase ", including payments made in connection with the termination or
amendment of such plan".
(i) Section 5.9 of the Original Note Agreement shall be and is
hereby amended by removing the word "or" at the end of subsection (x),
replacing "(xi)" with "(xii)" and by adding after subsection (x):
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"(xi) consummation of the transactions contemplated by the Merger
Agreement and the Stock Purchase Agreement, or"
(j) Sections 6.3 and 6.4 of the Original Note Agreement shall be
and are hereby amended by replacing the word "principal" with the words
"Accreted Value" in the first sentence thereof.
(k) Section 8.1 of the Original Note Agreement shall be and is
hereby amended by adding the following definitions thereto:
"Excess EBITDA" means, on any date, the amount, if any, by which the
product of six (6) times the consolidated EBITDA of the Company and
its Subsidiaries, on a pro forma basis for the most recent fiscal year
of the Company ending on or prior to such date exceeds the sum of the
accreted Indebtedness outstanding on such date under the Notes and the
Secured Discount Notes and funded Indebtedness outstanding on such
date under the Credit Agreement."
"KKR" shall mean Xxx Xxx Roo, Inc.
"Maximum Amount" on any date shall mean, if such date is (a) on or
prior to December 31, 1999, $55,000,000, or (b) during any fiscal year
thereafter, the sum of (A) $35,000,000 and (B) the Excess EBITDA;
provided, that the Maximum Amount shall in no event exceed
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$55,000,000.
"Merger Agreement" means the Agreement and Plan of Merger, dated as of
June 9, 1998, by and among FRI, FRI-Sub, Inc. and KKR.
"Secured Discount Note Agreement" shall mean the FRI-MRD Corporation
Note Agreement, dated as of June 9, 1998, Re: $24,000,000 14.0% Senior
Secured Discount Notes due January 24, 2002.
"Secured Discount Notes" shall mean the Indebtedness evidenced by the
14.0% Senior Secured Discount Notes due January 24, 2002 issued under
the Secured Discount Note Agreement.
"Stock Purchase Agreement" means the Stock Purchase Agreement, dated
as of June 9, 1998, between the Company and KKR."
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(l) The definition of "Permitted Lien" in Section 8.1 of the
Original Note Agreement shall be and is hereby amended by (i) replacing
"and (xvii)" with "(xvii) Liens securing Indebtedness outstanding under the
Secured Discount Notes; and (xviii)", (ii) adding the phrase ",
refinancing" immediately prior to the phrase "or refundings" and (iii)
adding the phrase "and Liens existing upon the assets of KKR, The Hamlet
Group, Inc., and each of their subsidiaries, which Liens are in existence
on the date hereof or which Liens are incurred in the ordinary course of
business consistent with past practice on or prior to the closing of, and
were not created in connection with or anticipation of, the transactions
contemplated by the Merger Agreement and the Stock Purchase Agreement" to
the end of subsection (i) thereof.
(m) The definition of "EBITDA" in Section 8.1 of the Original
Note Agreement shall be and is hereby amended by adding the phrase "(i)
opening costs," immediately prior to existing subsection (i) and by
increasing each existing subsection by one.
(n) The definition of "Credit Agreement" in Section 8.1 of the
Original Note Agreement shall be and is hereby amended by adding the phrase
",refinancing" immediately following the phrase "any refunding".
2. Letter Agreement Waivers. The Noteholders party hereto consent to
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a waiver of subsection (iii) of the Letter Agreement to permit the ownership and
operation directly or indirectly by the Company of Color Me Mine, Inc. and
Arrosto Coffee Company, Inc.
3. Representations and Warranties of the Company. To induce the
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Noteholders to execute and deliver this First Amendment, the Company represents
and warrants to the Noteholders that:
(a) this First Amendment has been duly authorized, executed and
delivered by the Company and this First Amendment constitutes the legal,
valid and binding obligation, contract and agreement of the Company
enforceable against it in accordance with its terms, except as enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws or equitable principles relating to or limiting creditors'
rights generally;
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(b) the execution, delivery and performance by the Company of
this First Amendment (i) has been duly authorized by all necessary action
of the Company and, if required, shareholder action, (ii) does not require
the consent or approval of any governmental or regulatory body or agency,
and (iii) will not (A) violate (l) any provision of law, statute, rule or
regulation or its constituent documents, (2) any order of any court or any
rule, regulation or order of any other agency or government binding upon
it, or (3) any provision of any material indenture, agreement or other
instrument to which it is a party or by which its properties or assets are
or may be bound, or (B) result in a breach or constitute (alone or with due
notice or lapse of time or both) a default under any indenture, agreement
or other instrument referred to in clause (iii)(A)(3) of this Section 3(b);
(c) as of the date hereof and after giving effect to this First
Amendment, no Default or Event of Default has occurred which is continuing;
and
(d) all representations set forth in the form of certificate
attached as Exhibit B to the Original Note Agreement, as amended hereby,
are true and correct as of the date hereof.
4. Representations and Warranties of the Noteholders. Each of the
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Noteholders party hereto represents and warrants to the Company that:
(a) this First Amendment has been duly authorized, executed and
delivered by such Noteholder and this First Amendment constitutes the
legal, valid and binding obligation, contract and agreement of such
Noteholder enforceable against it in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws or equitable principles relating to or limiting
creditors' rights generally; and
(b) Such Noteholder is the holder of the aggregate Accreted
Value of Notes set forth under its name on the execution pages hereof (or
such owner's duly designated proxy).
5. Conditions to Effectiveness of this First Amendment. This First
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Amendment shall not become effective until, and shall become effective when the
following conditions shall have been satisfied:
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(a) executed counterparts of this First Amendment, duly executed
by the Company and the registered holders of at least 50% of the
outstanding principal of the Notes, shall have been delivered to the
Company and the Noteholders; and
(b) the transactions contemplated by the Agreement and Plan of
Merger, dated as of June 9, 1998, by and among FRI, FRI-Sub, Inc. and KKR
shall have been consummated.
6. Miscellaneous.
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(a) This First Amendment shall be construed in connection with
and as part of the Original Note Agreement, and except as modified and
expressly amended by this First Amendment, all terms, conditions and
covenants contained in the Original Note Agreement and the Notes are hereby
ratified and shall be and remain in full force and effect.
(b) Any and all notices, requests, certificates and other
instruments executed and delivered after the execution and delivery of this
First Amendment may refer to the Original Note Agreement without making
specific reference to this First Amendment but nevertheless all such
references shall include this First Amendment unless the context otherwise
requires.
(c) The descriptive headings of the various Sections or parts of
this First Amendment are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
(d) This First Amendment shall be governed by and construed in
accordance with the law of the State of New York including, without
limitation, Sections 5-1401 of the New York General Obligations Law.
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(e) The execution hereof by you shall constitute a contract
between us for the uses and purposes herein above set forth, and this First
Amendment may be executed in any number of counterparts, each executed
counterpart constituting an original, but all together only one agreement.
FRI-MRD CORPORATION
By: /s/ X. X. Xxxxxxx, Xx.
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Name: X. X. Xxxxxxx, Xx.
Title: President
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Accepted and Agreed to:
THE XXXXX & XXXXXXXXXX MASTER
RETIREMENT TRUST
By: XxxXxx-Xxxxxxx Financial Corporation
Its: Investment Advisor
By: /s/ Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxxxx
Title: Director
Aggregate Accreted Value:
of Notes Held: $1,200,000
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XXX XXXXXXXX XXXXX, XX BEHALF
OF ITS STRATEGIC INCOME FUND
SERIES
By: XxxXxx-Xxxxxxx Financial Corporation
Its: Investment Advisor
By: /s/ Xxxxx Xxxxxxxxx
----------------------------
Name: Xxxxx Xxxxxxxxx
Title: Director
Aggregate Accreted Value:
of Notes Held: $320,000
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HIGHBRIDGE CAPITAL CORPORATION
By: XxxXxx-Xxxxxxx Financial Corporation
Its: Investment Advisor
By: /s/ Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxxxx
Title: Director
Aggregate Accreted Value:
of Notes Held: $450,000
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00
XXX XXXXXXXX XXXXX, XX BEHALF
OF ITS HIGH YIELD CORPORATE
BOND FUND SERIES
By: XxxXxx-Xxxxxxx Financial Corporation
Its: Investment Advisor
By: /s/ Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxxxx
Title: Director
Aggregate Accreted Value:
of Notes Held: $45,850,000
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MAINSTAY VP SERIES FUND, INC., ON
BEHALF OF HIGH YIELD CORPORATE
BOND PORTFOLIO
By: XxxXxx-Xxxxxxx Financial Corporation
Its: Investment Advisor
By: /s/ Xxxxx Xxxxxxxxx
----------------------------
Name: Xxxxx Xxxxxxxxx
Title: Director
Aggregate Accreted Value:
of Notes Held: $
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POLICE OFFICERS PENSION SYSTEM
OF THE CITY OF HOUSTON
By: XxxXxx-Xxxxxxx Financial Corporation
Its: Investment Advisor
By: /s/ Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxxxx
Title: Director
Aggregate Accreted Value:
of Notes Held: $1,100,000
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VULCAN MATERIALS COMPANY HIGH
YIELD ACCOUNT
By: XxxXxx-Xxxxxxx Financial Corporation
Its: Investment Advisor
By: /s/ Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxxxx
Title: Director
Aggregate Accreted Value:
of Notes Held: $180,000
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