MERKERT AMERICAN CORP, S-1/A, 1998-12-10

MERKERT AMERICAN CORP
S-1/A, 1998-12-10
GROCERIES, GENERAL LINE

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 10, 1998
REGISTRATION STATEMENT NO. 333-53419

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- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

--------------

AMENDMENT NO. 6 TO
FORM S-1
REGISTRATION STATEMENT

UNDER
THE SECURITIES ACT OF 1933

--------------
MERKERT AMERICAN CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 5141-02 04-3411833
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
INCORPORATION OR
ORGANIZATION)

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490 TURNPIKE STREET
CANTON, MASSACHUSETTS 02021
(781) 828-4800
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICE)

JAMES L. MONROE
PRESIDENT
MERKERT AMERICAN CORPORATION
490 TURNPIKE STREET
CANTON, MASSACHUSETTS 02021
(781) 828-4800
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)

--------------
COPIES TO:

ROBERT EVANS III, ESQ.
STUART M. CABLE, P.C. SHEARMAN & STERLING
GOODWIN, PROCTER & HOAR LLP 599 LEXINGTON AVENUE
EXCHANGE PLACE NEW YORK, NEW YORK 10022-6069
BOSTON, MASSACHUSETTS 02109-2881 (212) 848-4000
(617) 570-1000

--------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act Registration Statement number of the earlier
effective Registration Statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
Registration Statement number of the earlier effective Registration Statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
Registration Statement number of the earlier effective Registration Statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

CALCULATION OF REGISTRATION FEE
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- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED PROPOSED
TITLE OF EACH CLASS OF AMOUNT MAXIMUM MAXIMUM AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE AGGREGATE REGISTRATION FEE
REGISTERED REGISTERED PER SHARE OFFERING PRICE (1) (2)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$0.01 per share....... 5,060,000 $16.00 $80,960,000 $22,507
- ------------------------------------------------------------------------------------------------------
</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 of the Securities Act of 1933, as amended.
(2) Previously paid in connection with the filing of this Registration
Statement on May 22, 1998 and the filing of Amendment No. 3 to this
Registration Statement on July 20, 1998 by the payment of an aggregate
amount of $42,916.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.

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<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TOBUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION

PRELIMINARY PROSPECTUS DATED DECEMBER 10, 1998

4,400,000 SHARES
Merkert American Corporation
[LOGO OF MERKERT AMERICAN CORPORATION APPEARS HERE]

COMMON STOCK

All of the 4,400,000 shares of Common Stock offered hereby (the "Offering")
are being sold by Merkert American Corporation (the "Company"). Prior to the
Offering, there has been no public market for the Common Stock. It is currently
estimated that the initial public offering price will be between $14.00 and
$16.00 per share. For a discussion relating to factors to be considered in
determining the initial public offering price, see "Underwriting." The Common
Stock has been approved for listing on the Nasdaq National Market, subject to
notice of issuance, under the symbol "MERK."

SEE "RISK FACTORS" BEGINNING ON PAGE 11 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

------------

<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) COMPANY(2)
-------- ------------ -----------
<S> <C> <C> <C>
Per Share................................. $ $ $
Total(3).................................. $ $ $
</TABLE>
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(1) The Company has agreed to indemnify the several Underwriters against
certain liabilities, including certain liabilities under the Securities Act
of 1933, as amended. See "Underwriting."
(2) Before deducting expenses payable by the Company, estimated at $2,500,000.
(3) The Company has granted the Underwriters a 30-day option to purchase up to
an additional 660,000 shares of Common Stock to cover over-allotments, if
any. If such option is exercised in full, the total Price to Public,
Underwriting Discount and Proceeds to Company will be $ , $ and $ ,
respectively. See "Underwriting."

------------

The shares of Common Stock are offered by the several Underwriters, subject
to prior sale, when, as and if issued to and accepted by them, subject to
approval of certain legal matters by counsel for the Underwriters and certain
other conditions. The Underwriters reserve the right to withdraw, cancel or
modify such offer and to reject orders in whole or in part. It is expected that
delivery of the shares of Common Stock will be made in Boston, Massachusetts on
or about , 1998.

Wheat First Union
Cleary Gull Reiland & McDevitt Inc.
Scott & Stringfellow, Inc.

The date of this Prospectus is , 1998.
<PAGE>

[Map of United States showing territory covered by the Company and the
location of the Company's facilities]

CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SUCH TRANSACTIONS MAY INCLUDE STABILIZING, THE PURCHASE OF COMMON STOCK TO
COVER SYNDICATE SHORT POSITIONS AND THE IMPOSITION OF PENALTY BIDS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
<PAGE>

PROSPECTUS SUMMARY

Unless the context otherwise requires, all references to the "Company" herein
mean Merkert American Corporation, a Delaware corporation, together with
Merkert Enterprises, Inc., a Massachusetts corporation ("Merkert"), and Rogers-
American Company, Inc., a North Carolina corporation ("Rogers"), after
consummation of the Combination (as defined herein). References to the
Company's business prior to the Combination mean the business of each of
Merkert and Rogers, including each of their respective subsidiaries. Prior to
May 29, 1998, the Company operated under the name Monroe, Inc. See "The
Combination."

The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information and financial statements and
related notes appearing elsewhere in this Prospectus. Unless otherwise
indicated, all share, per share and financial information in this Prospectus
(a) has been adjusted to give effect to the Combination, (b) assumes payment
prior to the consummation of the Combination and the Offering of a stock
dividend of 729.9074 shares of Common Stock and 186.50 shares of Restricted
Common Stock (as defined herein) in respect of each issued and outstanding
share of Common Stock, (c) assumes an initial public offering price of $15.00
per share, (d) assumes no exercise of the Underwriters' over-allotment option
and (e) does not include shares issuable upon exercise of outstanding options
or reserved for issuance pursuant to the Company's stock option and incentive
plan. See "The Combination," "Management--1998 Stock Option and Incentive
Plan," and "Underwriting."

THE COMPANY

The Company was organized in March 1998 to create a leading food brokerage
firm providing outsourced sales, merchandising and marketing services to
manufacturers, suppliers and producers of food products and consumer goods
("Manufacturers"). The Company acts as an independent sales and marketing
representative, selling grocery and consumer products on behalf of
Manufacturers and coordinating the execution of Manufacturers' marketing
programs with retailers and wholesalers ("Retailers"). The Company's principal
source of revenues is commissions that it receives from Manufacturers. The
Company's other activities include managing private label programs on behalf of
selected Retailers.

The Company has long-standing relationships with many of its Manufacturers,
including Dean Foods/Birds Eye (41 years), H.J. Heinz (24 years), Minute Maid
(44 years), Ocean Spray (29 years) and Pillsbury (19 years). Key Retailer
relationships include C&S Wholesale Grocers, Inc., Food Lion Supermarkets,
Hannaford Brothers, Kroger, Publix Supermarkets, Royal Ahold (including Stop &
Shop, Bi-Lo and Giant Food), Safeway, Wakefern (Shop Rite) and Winn-Dixie. The
Company represents more than 750 Manufacturers and more than 70,000 food and
non-food stock-keeping units ("SKUs"), and does business with key Retailers in
22 states.

Since 1994, Rogers and Merkert have acquired and integrated 21 companies,
successfully adding coverage of new geographic markets and expanding
representation of Manufacturers' product offerings within existing markets. The
Company's strategic acquisition plan includes the selection, acquisition and
management of businesses in brokerage market segments, including the retail
food brokerage, food service brokerage and private label brokerage market
segments.

The Company will be the first publicly held food broker in the United States.
The Company is the only food broker with comprehensive geographic coverage of
the eastern United States and the capability to provide service to that
region's largest Retailers. The eastern United States is the most highly
concentrated retail store region in the United States and represents
approximately 43% of national food store sales. The Company has 30 offices
servicing Retailers in 22 states. In 1997, the Company had pro forma combined
revenue of approximately $230.4 million and pro forma combined net income of
approximately $0.1 million.

Simultaneously with the consummation of the Offering, the Company will
purchase in separate transactions (collectively, the "Combination") all of the
issued and outstanding capital stock of Merkert and Rogers. To date, the
Company has conducted operations only in connection with the Offering and the
Combination. See "Certain Transactions--Organization of the Company" and "The
Combination."

3
<PAGE>

INDUSTRY OVERVIEW

The Company estimates, based on information published by industry sources,
that the food brokerage industry in the United States had annual commission
revenues of approximately $6 billion in 1997. A portion of such revenues were
earned in connection with retail merchandising activities. According to
industry sources, the retail merchandising industry in the United States had
annual revenues of approximately $11.7 billion (exclusive of retail
merchandising revenues in the food brokerage industry) in 1997. Food brokers
serve Manufacturers, Retailers and food service providers. Retail food brokers
represent approximately 3,200 Manufacturers that sell to approximately 128,000
grocery stores, including chain and independent supermarkets, convenience
stores, wholesale clubs and other stores ("Grocery Stores") and more than 700
wholesalers nationwide. The industry includes three types of food brokers, as
follows:

Retail Food Brokers. Manufacturers of branded food and non-food products use
retail food brokers as a cost effective alternative to a direct sales force and
rely on retail food brokers to provide local market penetration, integrated
brand and category-management and access to local merchandising data. When a
broker provides full services to a Manufacturer in connection with the sale of
its products to Retailers, the commission earned is generally 3% of the
Manufacturer's net sales to such Retailers. Retail food brokers typically
perform two types of services on behalf of Manufacturers: headquarters
functions and retail store functions.

Headquarters functions include services provided to both Manufacturers and
Retailers at the headquarters level. Retail food brokers conduct business
development activities, including sales calls and new product introductions to
Retailers, on behalf of Manufacturers. Retail food brokers also assist
Manufacturers in developing, reviewing and executing annual marketing plans.
Other headquarters services include order management, supervision of shelf
space management, coordination of Manufacturers' promotional spending, and
facilitating the resolution of billing issues between Manufacturers and
Retailers. In connection with the implementation of category management at the
Retailers' headquarters level, retail food brokers assist Retailers by
gathering and analyzing demographic, consumer, and store sales information
utilized in the management of product categories as strategic business units.

Retail store functions generally include execution of sales plans for
Manufacturers' products at the store level by assisting in merchandising, shelf
and display management, new store set-ups, implementation of promotional plans,
and placement of point-of-sale coupons, signs and other information. Retail
food brokers also assist Retailers with coupon and advertising programs,
quality assurance and technical training (primarily in relation to prepared
foods). In addition, retail food brokers assist Retailers and Manufacturers in
the collection, analysis and application of retail sales data.

The retail food brokerage industry has been growing as food brokers represent
an increasing percentage of the volume of all commodities (the "ACV") sold
through Grocery Stores. In 1997, the percentage of ACV sold through Grocery
Stores was approximately 55% compared to 45% in 1985. According to Progressive
Grocer, Grocery Store revenues, of which an increasing portion is represented
by food brokers, are generally not materially adversely affected by economic
downturns and have grown from approximately $292 billion in 1985 to $436
billion in 1997.

The Company believes that the retail food brokerage industry is highly
fragmented and is experiencing significant consolidation. In the past 10 years,
the number of food brokerage firms has decreased from 2,500 to 1,000, while the
number of sales representatives employed by such firms increased from 35,000 to
42,000. There are five multi-regional food brokerage firms, including the
Company, each with an approximately 3% market share. In total, there are
approximately 12 large regional food brokerage firms in the United States. A
number of the companies in the food brokerage industry, including Merkert and
Rogers, have participated in the trend towards consolidation by acquiring other
food brokerage businesses, generally financing these transactions with debt
and/or by deferring the payment of a portion of the purchase price.

4
<PAGE>

The Company believes that the consolidation of food brokers is primarily the
result of a desire by Manufacturers and Retailers to manage their businesses
more efficiently and effectively by reducing the number of brokers they
interact with in a given region. Additionally, management believes that
consolidation within the food brokerage industry is being driven, in part, by
the consolidation of Retailers and Manufacturers and the increasing demand for
the application of more sophisticated information technology on the part of
food brokers.

Private Label Food Brokers. Private label food brokers work with
Manufacturers to develop and manage private label programs on behalf of
Retailers. A food broker's responsibilities in connection with a private label
program may include procurement and inventory management and in-store delivery
of private label products. The private label segment has been a substantial
growth segment for Retailers in recent years.

Food Service Brokers. Food service providers include operators of
restaurants, school and hospital cafeterias and other similar establishments.
The food service business also includes prepared meals sold at convenience
stores. Food brokers sell Manufacturers' products to food service providers
through a number of means, including headquarters sales calls and the
representation of Manufacturers' products at trade shows. The food service
segment of the industry has experienced significant growth in recent years as
an increasing percentage of consumer spending for food in the United States has
shifted to meals away from home.

BUSINESS STRATEGY

The Company's objective is to become one of the leading national providers of
outsourced sales, merchandising and marketing services to Manufacturers,
Retailers and food service providers throughout the United States. The
Company's business strategy comprises the following key elements:

Expand Current and Develop New Manufacturer Relationships. The Company seeks
to increase its representation of existing Manufacturers' product lines by
representing Manufacturers' products in new geographic markets and non-
supermarket trade channels, including mass merchandisers, food service
providers, membership warehouses, drug stores and convenience stores. The
Company also seeks to increase the range of products it represents on behalf of
the Manufacturers it currently serves and enter into new relationships with
Manufacturers.

Provide Effective Marketing Support and Valuable Category Management
Technology. The Company's marketing expertise and information technology system
allow it to utilize local demographic information and information about retail
store level conditions to understand consumer purchasing preferences in local
markets. As a result, the Company is able to develop and implement targeted
consumer sales promotions for its Manufacturers' products. The Company also
deploys category analysts who use local sales data to assist Retailers with
shelf schematics, category layouts and total store space management.

Growth Through Strategic Acquisitions. The Company intends to pursue
strategic acquisitions in the food brokerage industry. Since 1994, Merkert and
Rogers have acquired and integrated 21 companies, successfully adding coverage
of new geographic markets and expanding representation of Manufacturers'
product offerings in existing markets. The Company's plans include the
selection, acquisition and management of businesses in the retail, food service
and private label segments of the brokerage market. The Company believes that
its acquisition strategy will enable it to strengthen its market presence,
increase economies of scale and improve operating efficiencies.

Increase Private Label Brokerage. The Company has a division that specializes
in the development, procurement and inventory management of private label
frozen products, including fruits, vegetables and other products on behalf of
certain Retailers. The Company's private label division currently works in
conjunction with Retailers such as A&P, Price Chopper, Publix and Royal Ahold
(including Stop & Shop, Bi-Lo and Giant Food). The increasing geographic
coverage of the Company will provide it with the opportunity to offer private
label services to more Retailers and retail locations.

5
<PAGE>

COMPANY HISTORY

Merkert Enterprises, Inc., one of the entities to be acquired in the
Combination, has operated as a food broker in the northeastern and mid-Atlantic
regions of the United States since 1950. In 1997, Merkert Enterprises, Inc. had
total revenues of approximately $147.4 million and net losses of $3.4 million.
For the first nine months of 1998, Merkert Enterprises, Inc. had total revenues
of $100.5 million and net losses of $6.3 million. The principal source (71%) of
the 1997 total revenues at Merkert Enterprises, Inc. was commissions it
received from Manufacturers. Merkert Enterprises, Inc. also manages private
label programs on behalf of selected Retailers. Merkert Enterprises, Inc. has
grown its revenues both through internally generated growth and through
acquisitions, having acquired and integrated six smaller food brokers since
1994. Merkert Enterprises, Inc. financed such acquisitions, in part, with debt
and/or by deferring the payment of a portion of the purchase price. A portion
of the $72 million net available borrowings under the Company's Credit Facility
(as defined herein) will be used to repay certain of such acquisition-related
obligations of Merkert Enterprises, Inc. Primarily as a result of such
obligations, as well as a substantial tax liability, Merkert Enterprises, Inc.
has experienced losses and a working capital deficit in recent years. The
stockholders of Merkert Enterprises, Inc. have agreed to pay such tax liability
from cash otherwise payable to them in connection with the Combination. After
giving effect to the Offering and the expected application of the net proceeds
therefrom and the use of the proceeds of the $50 million Term Loan (as defined
herein) and a portion of the $25 million Revolving Credit (as defined herein)
under the Credit Facility, the Company will have a working capital deficit of
approximately $(3.7) million. See "Risk Factors--Merkert Enterprises, Inc.-
History of Losses," "Use of Proceeds" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Results of Operations--
Merkert," "--Liquidity and Capital Resources--Merkert" and "--Combined
Liquidity and Capital Resources Following the Combination."

Rogers has operated as a food broker in the southeastern region of the United
States since 1934. In 1997, Rogers had total revenues of approximately $83.0
million and net income of $1.5 million. For the first nine months of 1998,
Rogers had total revenues of $62.6 million and net income of $412,000. All of
Rogers' 1997 revenues were derived from commissions it received from
Manufacturers. Rogers has grown its revenues both through internally generated
growth and through acquisitions, having acquired and integrated 15 smaller food
brokers since 1994. Rogers financed such acquisitions, in part, with debt
and/or by deferring the payment of a portion of the purchase price. A portion
of the net available borrowings under the Credit Facility will be used to repay
certain of such acquisition-related obligations of Rogers. See "Use of
Proceeds" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Combined Liquidity and Capital Resources Following the
Combination."

The Company is a Delaware corporation with its executive offices located at
490 Turnpike Street, Canton, Massachusetts 02021. The Company's telephone
number is (781) 828-4800.

6
<PAGE>

THE OFFERING

<TABLE>
<C> <S>
Common Stock offered by the Company..... 4,400,000 shares.
Common Stock to be outstanding after the
Offering(1)(2)......................... 7,218,000 shares.
Use of proceeds......................... The net proceeds to be received by
the Company in the Offering together
with amounts available under the
Company's $75 million Credit Facility
(which is comprised of a $50 million
Term Loan and a $25 million Revolving
Credit)(as defined herein) will be
used to finance the cash portion of
the consideration to be paid in the
Combination, to repay certain
indebtedness of Merkert and Rogers,
to fund buyouts of certain
obligations of Merkert and Rogers to
make payments to sellers of
previously acquired businesses, to
repay a note payable to Monroe &
Company II, LLC which is attributable
to certain of the Company's expenses,
to fund buyouts of employment
arrangements of departing executives
of Merkert as well as buyouts of
certain consulting arrangements, and
to pay expenses incurred by the
Company and each of Merkert and
Rogers and their respective
stockholders in connection with the
Combination. See "Use of Proceeds."
Nasdaq National Market symbol........... MERK.
</TABLE>
- --------
(1) Includes 1,166,667 shares of Common Stock to be issued to the stockholders
of Merkert in connection with the Combination. Excludes (i) 245,000 shares
of Common Stock issuable upon exercise of outstanding stock options granted
pursuant to the Company's Amended and Restated 1998 Stock Option and
Incentive Plan (the "1998 Stock Plan"), (ii) options to purchase 65,000
shares of Common Stock to be granted to the Company's independent directors
upon consummation of the Offering, (iii) options to purchase 347,000 shares
of Common Stock to be granted to employees of the Company upon consummation
of the Offering and (iv) 281,340 shares of Common Stock available for
future grants under the 1998 Stock Plan. See "Management--1998 Stock Option
and Incentive Plan." At the request of the Company, the Underwriters have
reserved for sale, at the initial public offering price, up to 5% of the
shares offered hereby to be sold to certain directors, officers, and
employees of the Company and certain distributors, dealers, business
associates and related persons. See "Underwriting."

(2) Includes 1,657,319 shares of Common Stock held by Monroe & Company II, LLC,
Gerald R. Leonard and certain trusts for the benefit of members of Mr.
Leonard's family, 335,700 of which are shares of Restricted Common Stock.
Each share of Restricted Common Stock is entitled to 1/10th of one vote on
all matters submitted to the stockholders of the Company. Each share of
Restricted Common Stock is convertible into one share of Common Stock under
certain circumstances. See "Description of Capital Stock--Authorized and
Outstanding Capital Stock."

RISK FACTORS

Purchasers of Common Stock in the Offering should carefully consider the risk
factors set forth under the caption "Risk Factors" and the other information
included in this Prospectus prior to making an investment decision. See "Risk
Factors."

7
<PAGE>

SUMMARY PRO FORMA COMBINED FINANCIAL DATA
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

The Company has conducted operations to date only in connection with the
Combination and the Offering, and will purchase Merkert and Rogers
simultaneously with and as a condition to the consummation of the Offering. For
financial statement presentation purposes, the Company has been designated as
the accounting acquiror. The following table presents summary pro forma
combined financial data of the Company, as adjusted for: (i) the consummation
of the Combination; (ii) certain pro forma adjustments to the historical
financial statements of Merkert and Rogers; and (iii) the consummation of the
Offering and the application of the net proceeds therefrom and the application
of the borrowings available from the Term Loan and a portion of the amounts
available under the Revolving Credit portion of the Company's Credit Facility.
The unaudited pro forma combined financial data set forth below do not purport
to represent the Company's combined results of operations or financial position
for any future period. The summary combined financial data set forth below
should be read in conjunction with, and are qualified by reference to,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," the Company's Unaudited Pro Forma Combined Financial Statements
and the Notes thereto and the Merkert and Rogers financial statements and the
Notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
YEAR ENDED NINE MONTHS
DECEMBER 31, ENDED SEPTEMBER 30,
1997 1998
------------ -------------------
PRO FORMA PRO FORMA
------------ -------------------
<S> <C> <C>
STATEMENT OF OPERATIONS DATA (1)(2)(3)
Sales.................................... $ 43,105 $ 31,511
Commissions.............................. 187,259 131,577
---------- ----------
Revenues................................. 230,364 163,088
Cost of sales............................ 39,027 28,721
Selling, general and administrative
expense................................. 178,133 (2) 126,783 (2)
Restructuring expense.................... -- --
Depreciation and amortization(4)......... 5,390 4,042
---------- ----------
Operating income......................... 7,814 3,542
Interest expense(5)...................... 6,393 4,644
Other (income) expense, net.............. (79) 532
---------- ----------
Income (loss) before income taxes........ 1,500 (1,634)
Net income (loss)........................ $ 91 $ (1,655)
========== ==========
Basic net income (loss) per share........ $ 0.01 $ (0.23)
========== ==========
Shares used in computing net basic income
(loss)
per share(6)............................ 7,218,000 7,218,000
========== ==========
Diluted income (loss) per share.......... 0.01 (0.23)
========== ==========
Shares and potential dilutive securities
used in computing diluted income (loss)
per share............................... 7,230,250 7,218,000
========== ==========
OTHER FINANCIAL DATA:
EBITDA(7)................................ $ 13,204 $ 7,584
========== ==========
<CAPTION>
AS OF SEPTEMBER 30, 1998
-----------------------------------
PRO FORMA
COMBINED(8) AS ADJUSTED(9)
------------ -------------------
<S> <C> <C>
BALANCE SHEET DATA
Working capital (deficit)................ $ (79,511) $ (3,681)
Total assets............................. 170,526 172,571
Total long-term debt, net of current
portion................................. 41,925 61,075
Stockholders' equity..................... 14,875 73,755
</TABLE>

Footnotes on following page

8
<PAGE>

FOOTNOTES FOR SUMMARY PRO FORMA COMBINED FINANCIAL DATA

(1) The Summary Pro Forma Combined Financial Data (other than the Pro Forma
Summary Balance Sheet Data) assume that the Combination and the Offering
took place on January 1, 1997 and are not necessarily indicative of the
results the Company would have obtained had these events actually occurred
on that date or of the Company's future results.
(2) See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Combined Integration Activities" for a discussion of
the effect of the recent integration activities of Merkert and Rogers on
the Company's Pro Forma Statement of Operations Data.
(3) Includes the adjustment to record the income tax provision after
considering the non-deductibility of goodwill.
(4) Includes $3,300 for the year ended December 31, 1997 and $2,475 for the
nine months ended September 30, 1998 of amortization of goodwill and other
intangibles to be recorded as a result of the Combination computed on the
basis described in the Notes to Unaudited Pro Forma Combined Financial
Statements.
(5) Includes pro forma interest expense of $4,500 for the 12 months ended
December 31, 1997 and $3,375 for the nine months ended September 30, 1998
associated with the Term Loan being obtained at the closing of the
Combination and the Offering.
(6) Includes (i) shares to be issued in the Combination to stockholders of
Merkert, (ii) shares issued to the management of and consultants to the
Company, and (iii) the 4,400,000 shares to be sold in this Offering. In
addition, shares and potential dilutive securities used in computing
diluted earnings per share include the dilutive effect of currently
outstanding options to purchase shares of Common Stock.
(7) EBITDA represents earnings before interest, taxes, depreciation and
amortization. The Company believes that EBITDA may be useful to investors
for measuring the Company's ability to service debt, to make new
investments and to meet working capital requirements. EBITDA as calculated
by the Company may not be consistent with calculations of EBITDA by other
companies. EBITDA should not be considered in isolation from or as a
substitute for net income (loss), cash flows from operating activities or
other statements of operations or cash flows prepared in accordance with
generally accepted accounting principles or as a measure of profitability
or liquidity.
(8) The Summary Pro Forma Combined Balance Sheet Data assume that the
Combination was consummated on September 30, 1998.

(9) Adjusted for the sale of 4,400,000 shares of Common Stock offered hereby
and the expected application of the net proceeds therefrom and the expected
application of the Term Loan and a portion of the amounts available under
the Revolving Credit portion of the Company's Credit Facility. See "Use of
Proceeds."

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<PAGE>

SUMMARY INDIVIDUAL FINANCIAL DATA FOR MERKERT AND ROGERS
(DOLLARS IN THOUSANDS)

The following table presents summary financial data for each of Merkert and
Rogers for each of the three years ended December 31, 1995, 1996 and 1997 and
the nine month periods ended September 30, 1997 and 1998 and has not been
adjusted to reflect the Combination or the related changes that are reflected
in the Summary Pro Forma Combined Financial Data. See the Unaudited Pro Forma
Combined Financial Statements and the Notes thereto and the Merkert and Rogers
financial statements and the Notes thereto included elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
-------------------------- ------------------
1995 1996 1997 1997 1998
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
MERKERT
Commissions.................... $ 73,336 $ 80,661 $104,274 $ 78,690 $ 68,993
Sales.......................... 49,233 44,916 43,105 31,495 31,511
-------- -------- -------- -------- --------
Revenues....................... 122,569 125,577 147,379 110,185 100,504
Operating income (loss)(1)..... 2,434 633 1,373 (2,704) (2,126)
OTHER FINANCIAL DATA
EBITDA(1)(2)................... 4,566 3,080 5,857 738 1,289
ROGERS
Commissions.................... $ 47,496 $ 63,311 $ 82,985 $ 62,625 $ 62,584
Operating income............... 3,149 107 4,085 3,092 2,817
OTHER FINANCIAL DATA
EBITDA(2)...................... 4,222 1,753 6,601 4,897 4,704
</TABLE>
- --------
(1) Includes restructuring charges of $2,303 for the first nine months of 1998.
(2) EBITDA represents earnings before interest, taxes, depreciation and
amortization. The Company believes that EBITDA may be useful to investors
for measuring the Company's ability to service debt, to make new
investments and to meet working capital requirements. EBITDA as calculated
by the Company may not be consistent with calculations of EBITDA by other
companies. EBITDA should not be considered in isolation from or as a
substitute for net income (loss), cash flows from operating activities or
other statements of operations or cash flows prepared in accordance with
generally accepted accounting principles or as a measure of profitability
or liquidity.

10
<PAGE>

RISK FACTORS

The following factors should be carefully considered, together with the
other information in this Prospectus, in evaluating an investment in the
Company. This Prospectus contains, in addition to historical information,
forward-looking statements that involve risks and uncertainties. The Company's
actual results could differ significantly from the results discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences include those risk factors set forth below as well as those
factors discussed elsewhere in this Prospectus.

ABSENCE OF COMBINED OPERATING HISTORY; RISKS OF INTEGRATION

To date, Merkert and Rogers have operated independently of one another. The
Company intends to operate Merkert and Rogers and any subsequently acquired
businesses on a cohesive, but locally oriented, basis. If proper overall
business incentives and controls are not implemented, this locally oriented
operating strategy could result in inconsistent operating and financial
practices and the Company's overall profitability could be adversely affected.
The integration of Merkert and Rogers may involve unforeseen difficulties and
costs and may require a disproportionate amount of management's attention and
of the Company's financial and other resources. Of the total estimated
integration costs of $11.1 million, approximately $3.3 million have been or
will be paid by Merkert and Rogers prior to the closing of the Offering,
approximately $4.0 million will be paid with a portion of the proceeds from
the Offering and the remainder will be paid subsequent to the Offering. The
failure of the Company to integrate successfully the operations of Merkert and
Rogers and any subsequently acquired businesses could have a material adverse
effect on the Company's business, financial condition and results of
operations. See "Management" and "Business--Business Strategy." Currently, the
Company has no centralized financial reporting system and initially will rely
on the existing reporting systems of each of Merkert and Rogers. Merkert and
Rogers offer different services, use different capabilities and technologies,
target different clients and have different management styles. Although the
Company believes that there are substantial opportunities to cross-market and
integrate the businesses of Merkert and Rogers, these differences increase the
risk inherent in the integration of the two companies. There can be no
assurance that the Company will be able to integrate successfully the
operations of Merkert and Rogers or that the expense of such integration
program will not exceed management's expectations or that the Company will be
able to institute the necessary Company-wide systems and procedures to manage
successfully the combined enterprise on a profitable basis or to implement the
Company's business and growth strategies.

IMPLEMENTATION OF ACQUISITION STRATEGY; RISKS RELATED TO GROWTH STRATEGY

One of the Company's strategies is to increase its revenues and the markets
it serves through the acquisition of additional food brokerage companies. The
Company expects to spend significant time and effort in expanding its existing
business and identifying, completing and integrating acquisitions. Moreover,
the Company expects to face competition for acquisition candidates which may
limit the number of acquisition opportunities available to the Company and may
result in higher acquisition prices. There can be no assurance that the
Company will be able to identify, acquire or profitably manage additional
companies or successfully integrate such additional companies into the Company
without substantial costs, delays or other problems. In addition, there can be
no assurance that companies acquired in the future will achieve sales and
profitability that justify the investment therein. The Company's inability to
identify appropriate acquisition candidates, to acquire such candidates at
prices acceptable to the Company or to manage such acquired businesses
profitably could have a material adverse effect on the Company's business,
financial condition and results of operations. In addition, acquisitions may
involve a number of special risks, including adverse short-term effects on the
Company's reported operating results, Manufacturer representation conflicts,
diversion of management's attention, dependence on retention, hiring and
training of key personnel, risks associated with unanticipated problems or
legal liabilities and amortization of acquired intangible assets, some or all
of which could have a material adverse effect on the Company's business,
financial condition and results of operations. The Company has identified two
food brokers which operate in areas contiguous to the Company's current
operations (one located in the Midwest and one in the Southeast) and which the
Company believes may satisfy its criteria for strategic acquisitions. The
Company has been engaged in preliminary discussions with each of these
entities regarding such possible acquisitions. In

11
<PAGE>

the event that the Company acquires either or both of such entities, the
transaction or transactions may be financed with amounts made available for
such purpose under the Revolving Credit upon the consent of the Credit
Facility lenders. In addition, the Company has engaged in preliminary
acquisition discussions with certain large regional or multi-regional food
brokers in connection with the implementation of the Company's strategy to
become a national food broker. There can be no assurance that the Company will
enter into an agreement with respect to any of such acquisitions or as to the
terms of any agreement relating thereto. Further, there can be no assurance
that, if any such acquisition is consummated, the Company will be able to
integrate successfully any of such entities into its operations or to operate
any acquired business or businesses profitably.

The Company currently intends to finance future acquisitions by using cash,
Common Stock, borrowings under the Revolving Credit (as defined herein)
portion of the Credit Facility (subject to the approval of its lenders), or
debt or equity financings. There can be no assurance that the Company will be
able to obtain such debt or equity financing if and when it is needed or that,
if available, such financing will be on terms acceptable to the Company. Any
debt financing will result in additional leverage and any further equity
financing may result in dilution to the Company's stockholders. In the event
that the Company does not have sufficient cash resources, or if the Common
Stock does not maintain a sufficient valuation, or if potential acquisition
candidates are unwilling to accept shares of Common Stock as consideration,
the Company may be unable to implement its acquisition strategy. The Company
is obligated to make payments to the sellers of certain businesses acquired by
Merkert and Rogers, some of which are payable only in the event that the
earnings attributable to any of such businesses exceed specific thresholds
determined at the time of acquisition. The Company may incur similar
obligations with respect to acquisitions completed after the Offering. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources" and "Business--Business
Strategy."

The Company's growth strategy includes broadening its service and product
offerings, implementing an aggressive marketing plan, and deploying leading
technologies. There can be no assurance that the Company's systems, procedures
and controls will be adequate to support the Company's operations as they
expand. Any future growth also will impose significant added responsibilities
on members of senior management, including the need to identify, recruit and
integrate new senior level managers and executives. There can be no assurance
that such additional management can be identified and retained by the Company.
The inability of the Company to manage its growth or recruit and retain
additional qualified management could have a material adverse effect on the
Company's business, financial condition and results of operations. See
"Business--Business Strategy" and "Management."

There can be no assurance that the Company's growth strategy will be
successful or that the Company will be able to generate cash flow sufficient
to fund its operations and to support internal growth. The Company's inability
to achieve internal earnings growth or otherwise execute its growth strategy
could have a material adverse effect on the Company's business, financial
condition and results of operations. See "Business--Business Strategy."

MATERIALITY AND ACCOUNTING TREATMENT OF GOODWILL

The Company's balance sheet immediately following the Offering and
consummation of the Combination will include an amount designated as
"goodwill" that represents approximately 69% of assets and approximately 162%
of stockholders' equity.

Goodwill arises when an acquiror pays more for a business than the fair
value of the tangible and separately measurable intangible net assets.
Generally accepted accounting principles require that goodwill and all other
intangible assets be amortized over the period benefited. Management has
determined this amortization period to be 40 years. If management used a 40-
year amortization period for goodwill or any other material intangible asset
having an actual benefit period of less than 40 years, earnings reported in
periods following the acquisition of such goodwill or intangible asset would
be overstated. If the amortization period used by management is longer than
the related benefit period, in later years the Company would be burdened by a
continuing charge against earnings without the associated benefit to income
valued by management in arriving at the consideration paid for the business.
In addition, earnings in later years could also be significantly affected if
management

12
<PAGE>

determined then that the remaining balance of goodwill was impaired.
Management has concluded that the anticipated future cash flows associated
with intangible assets recognized in the Combination will continue for 40
years and that there is no persuasive evidence that any material portion will
dissipate over a period shorter than 40 years. See the Unaudited Pro Forma
Combined Financial Statements of the Company and the Notes thereto included
elsewhere in this Prospectus.

The Financial Accounting Standards Board (the "FASB") has undertaken a
project to comprehensively reconsider the accounting standards for business
combinations. In connection with this project, the FASB may consider such
issues as the accounting for goodwill including its amortization periods. The
Company is presently unable to determine what the results, if any, of this
project may be.

MERKERT ENTERPRISES, INC.-- HISTORY OF LOSSES

One of the companies to be acquired in the Combination, Merkert Enterprises,
Inc., incurred a net loss in each of the three years ended December 31, 1995,
1996 and 1997 and in the nine months ended September 30, 1998. In addition,
Merkert Enterprises, Inc.'s cash flow from operations and available borrowings
has been insufficient to satisfy its capital requirements, which are
principally to fund obligations to sellers in connection with previous
acquisitions, working capital and income taxes payable. As of September 30,
1998, Merkert was not in compliance with certain financial convenants under
its revolving line of credit agreement and was in default under such
agreement. As a result of this historical working capital deficit at Merkert
Enterprises, Inc., Arthur Andersen LLP qualified its report for the period
ended December 31, 1997 relative to the ability of Merkert Enterprises, Inc.
to continue as a going concern. After giving effect to the Offering and the
expected application of the net proceeds therefrom and the application of the
borrowings available from the Term Loan and a portion of the Revolving Credit
of the Company's Credit Facility, the Company will have a working capital
deficit of approximately $(3.7) million. There can be no assurance that the
Company will be able to generate sufficient cash flow to meet its future
capital requirements or that the Company will not have a greater working
capital deficit in the future. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Results of Operations--Merkert"
and "--Liquidity and Capital Resources--Merkert."

SUBSTANTIAL LEVERAGE

Following the consummation of the Combination and related transactions, the
Company will have indebtedness that is substantial in relation to its
stockholders' equity, as well as interest and debt service requirements that
are significant compared to its income and cash flow from operations. At
September 30, 1998, on a pro forma basis, after giving effect to the Offering
and the use of the net proceeds of the Offering and the use of the $50 million
available under the Term Loan and a portion of the Revolving Credit as
described herein, the Company's total indebtedness would have been
approximately $69.9 million.

The degree to which the Company is leveraged could have significant
consequences including the following: (i) the Company's ability to obtain
additional financing in the future for working capital, capital expenditures,
acquisitions or general corporate purposes may be impaired, (ii) a substantial
portion of the Company's cash flow from operations must be dedicated to the
payment of interest and principal on its indebtedness, thereby reducing funds
available to the Company for other purposes, (iii) the agreements governing
the Credit Facility will contain certain restrictive financial and operating
covenants, and (iv) the Company's degree of leverage may limit its flexibility
to adjust to changing market conditions, reduce its ability to withstand
competitive pressures and make it more vulnerable to a downturn in general
economic conditions or its business. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Combined Liquidity and
Capital Resources Following the Combination."

MANUFACTURER REPRESENTATION CONFLICTS

Certain Manufacturers may not allow food brokers they have engaged to
represent any lines or products such Manufacturers believe to be in
competition with their own line of products in a given market territory.

13
<PAGE>

Manufacturers can be subjective in their definition of a conflict. In
addition, a Manufacturer may object to the Company's private label business or
its representation of another Manufacturer which produces a similar product
for sale in other geographic regions or trade channels. The Company is
sensitive to potential conflicts and must exercise care in determining how to
resolve conflicts and potential conflicts as new food broker businesses are
acquired and as Manufacturers continue to grow, merge and expand into new
product categories and geographic areas. The integration of Merkert and Rogers
has resulted, and may continue to result, in certain Manufacturer conflicts,
particularly in the mid-Atlantic region where the operations of Merkert and
Rogers overlap. The Company may be required, in order to resolve a conflict,
to choose to represent particular lines or products in lieu of others, and the
Company may not select the lines of products that are ultimately the most
successful. The inability of the Company to resolve or deal with Manufacturer
representation conflicts or potential conflicts could have a material adverse
effect on the Company's business, financial condition and results of
operations. In addition, industry practice is that food brokers' relationships
with Manufacturers are governed by contracts which are typically terminable by
either party upon 30 days' notice. In the ordinary course of business the
Company experiences turnover in these relationships as a result of
Manufacturer conflicts and strategic decisions by the Company or a
Manufacturer.

POTENTIAL CHANGES IN INDUSTRY; CONSOLIDATION AMONG MANUFACTURERS AND RETAILERS

The food brokerage industry is presently being affected by changes in the
industries of both Manufacturers and Retailers as well as by changes in the
food brokerage industry itself. Consolidation among Manufacturers may result
in, among other things, a greater likelihood of Manufacturer conflicts, which
could result in lost revenues for the Company. See "--Manufacturer
Representation Conflicts." Consolidation among Retailers may result in lost
revenues to the Company in the event that the Company does not cover the
geographic region or regions in which the Retailer's buying or purchasing
office is located. In addition, mass merchandisers such as warehouse clubs and
superstores have experienced significant growth in recent years. Historically,
many mass merchandisers have tended to use fewer brokerage services and,
instead, rely on direct relationships with Manufacturers. These changes in the
food industry marketplace will require the Company to adapt its operations.
There can be no assurance that the Company will be able to adjust to such
industry changes or that the changes the Company undertakes will be effective
and enable the Company to operate its business profitably. The inability of
the Company to make appropriate adjustments in response to these trends could
have a material adverse effect on the Company's business, financial condition
and results of operations.

COMPETITION

The food brokerage industry is highly fragmented and competitive. The
Company's competitors include several large privately held companies and
hundreds of small privately held food brokers. The food brokerage industry is
currently undergoing substantial consolidation. In addition, many
Manufacturers, including some of the Manufacturers served by the Company,
employ sales personnel to sell directly to Retailers and distributors.
Further, food brokers also compete with specialty distributors, wholesalers
and other entities engaged in businesses which provide avenues of distribution
linking Manufacturers, Retailers, food service establishments and/or
consumers. Certain of these competitors may have lower overhead costs than the
Company, have greater financial resources than the Company or have better
knowledge of, or relationships in, local and regional markets which may give
such competitors advantages in offering services and products that are similar
to those of the Company. Consequently, the Company may encounter significant
competition in its efforts to achieve both its acquisition and internal growth
objectives. There can be no assurance that the Company will be successful
against such competition. See "Business--Competition."

DEPENDENCE ON KEY PERSONNEL

The Company will depend on Gerald R. Leonard, Chairman and Chief Executive
Officer, and Douglas H. Holstein, Chief Operating Officer. In addition, the
Company will rely on many of the executives of each of Merkert and Rogers,
whose reputations and relationships with Manufacturers and Retailers have
contributed in large part to the success of Merkert and Rogers, respectively.
Though the Company will be entering into

14
<PAGE>

employment agreements with certain key executives, there can be no assurance
that the Company will be able to retain the services of such executives or any
other management or key sales personnel. A loss of the services of any of
these individuals could have a material adverse effect on the Company's
business, financial condition and results of operations. See "Business--
Business Strategy" and "Management."

SEASONALITY OF OPERATING RESULTS

Each of Merkert and Rogers has experienced and the Company expects to
continue to experience fluctuations in quarterly revenues and operating
results as a result of seasonal patterns. The Company's business is seasonal
in nature, as many Retailers generate relatively lower revenues in January,
February, July and August. As a result, the Company has historically generated
lower revenues in the first and third quarters of the year. Results of
operations for any particular quarter therefore are not necessarily indicative
of the results of operations for any future period. Future seasonal and
quarterly fluctuations could have a material adverse effect on the Company's
business, financial condition and results of operations. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

YEAR 2000 ISSUES

The Company recognizes the importance of ensuring that its business
operations are not disrupted as a result of Year 2000 related computer system
and software issues. The Company is working with Manufacturers, Retailers and
other parties with which it does business to coordinate Year 2000 conversion
efforts. At the present time, the Company believes that its computer systems
and software are substantially Year 2000 compliant, and it is in the process
of upgrading or replacing those systems that are not compliant. Additionally,
the Company has determined that several PBX (telephone) systems and personal
computers must be replaced, but the Company does not expect Year 2000 issues
to materially affect its products, services, competitive position or financial
performance. However, there can be no assurance that this will be the case. In
addition, the ability of third parties with whom the Company transacts
business to adequately address their Year 2000 issues is outside the Company's
control. Although the Company is working with Manufacturers, Retailers and
other parties, there can be no assurance that the failure of such third
parties to adequately address their respective Year 2000 issues will not have
a material adverse effect on the Company's business, financial condition and
results of operations. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Year 2000 Disclosure."

VOTING CONTROL BY DIRECTORS, EXECUTIVE OFFICERS AND PRINCIPAL STOCKHOLDERS

After giving effect to the Offering, the directors and executive officers of
the Company and their affiliates will beneficially own in the aggregate
approximately 29.2% of the outstanding Common Stock (approximately 26.8% if
the Underwriters exercise the over-allotment options in full). This percentage
ownership does not give effect to the exercise of options to purchase 395,000
shares of Common Stock held by or to be granted to certain of these
individuals, which, if exercised in whole or in part, will further concentrate
ownership of the Common Stock. As a result, these stockholders, if they were
to act together, could have the ability, as a practical matter, to
significantly influence the outcome of the election of the Company's directors
and all other matters requiring approval by a majority of the stockholders of
the Company including, in many cases, significant corporate transactions, such
as mergers and sales of all or substantially all of the Company's assets. Such
concentration of ownership, together, in some cases, with certain provisions
of the Company's Amended and Restated Certificate of Incorporation and Amended
and Restated By-laws and certain sections of the Delaware General Corporation
Law, may have the effect of delaying or preventing a "change in control" of
the Company. See "--Anti-takeover Effect of Certificate of Incorporation and
By-law Provisions and Delaware Law," "Management--Directors and Executive
Officers" and "Principal Stockholders."

BENEFITS TO CERTAIN PARTIES

Assuming an initial offering price of $15.00 per share, Monroe & Company II,
LLC, Gerald R. Leonard and certain trusts for the benefit of members of Mr.
Leonard's family will own, upon the consummation of the

15
<PAGE>

Offering, in the aggregate, 1,657,319 shares of Common Stock, which will
represent approximately 23.0% of the outstanding Common Stock following
consummation of the Offering. Of these shares of Common Stock, 335,700 shares
are Restricted Common Stock. Each share of Restricted Common Stock is entitled
to 1/10th of one vote on all matters submitted to the stockholders of the
Company. Holders of Restricted Common Stock will control, in the aggregate,
approximately 19.9% of the votes of all shares of Common Stock outstanding
upon consummation of the Offering. The number of shares of Common Stock held
by Monroe & Company II, LLC, and Gerald R. Leonard will vary if the initial
offering price is greater or less than $15.00 per share. See "Principal
Stockholders" and "Certain Transactions."

ANTI-TAKEOVER EFFECT OF CERTIFICATE OF INCORPORATION AND BY-LAW PROVISIONS AND
DELAWARE LAW

Certain provisions of the Company's Amended and Restated Certificate of
Incorporation and Amended and Restated By-laws, certain sections of the
Delaware General Corporation Law and the ability of the Company's Board of
Directors (the "Board of Directors") to issue shares of preferred stock and to
establish the voting rights, preferences and other terms thereof may be deemed
to have an anti-takeover effect and may discourage takeover attempts not first
approved by the Board of Directors, including takeovers which certain
stockholders may deem to be in their best interests. In addition, these
provisions could delay or frustrate the removal of incumbent directors or the
assumption of control by stockholders, even if such removal or assumption of
control would be beneficial to stockholders. Such provisions include, among
other things, a classified Board of Directors initially serving staggered two-
year terms and eventually three-year terms, the elimination of the power of
the stockholders to act by written consent, the absence of cumulative voting
for directors and certain advance notice requirements for stockholder
proposals and nominations for election to the Board of Directors. See
"Management--Board of Directors," "Description of Capital Stock--Certain
Provisions of Certificate and By-laws" and "--Statutory Business Combination
Provision."

POSSIBLE FUTURE SALES OF SHARES

Sales of substantial amounts of Common Stock in the public market after the
Offering pursuant to Rule 144 under the Securities Act of 1933, as amended
(the "Securities Act"), or otherwise, or the perception that such sales could
occur, may adversely affect prevailing market prices of the Common Stock and
could impair the future ability of the Company to raise capital through an
offering of its equity securities or to effect acquisitions using shares of
its Common Stock. The shares of Common Stock outstanding prior to the Offering
are, and the shares to be issued in the Combination will be, "restricted
securities" within the meaning of Rule 144. Unless the resale of such shares
is registered under the Securities Act (including pursuant to registration
rights granted by the Company (see "Certain Transactions")), these shares may
not be sold in the open market until after the first anniversary of the
transaction in which they were acquired, and then only in compliance with the
applicable requirements of Rule 144. See "Shares Eligible for Future Sale."
The Company, the holders of all shares outstanding prior to the Offering and
all stockholders of Merkert have agreed with the Underwriters (as defined
herein under the caption "Underwriting"), with certain exceptions, not to sell
or otherwise dispose of any shares of Common Stock, or any securities
convertible into or exercisable or exchangeable for shares of Common Stock,
for a period of 180 days after the date of this Prospectus without the written
consent of the Underwriters. The Company also intends to register, soon after
the consummation of the Offering, at least 938,340 shares of Common Stock
issuable pursuant to the 1998 Stock Plan. Shares of Common Stock issued upon
the exercise of options under the 1998 Stock Plan after such registration will
be available for sale in the open market, subject to the Rule 144 and lock-up
limitations described above. See "Management--1998 Stock Option and Incentive
Plan," "Certain Transactions," "Shares Eligible for Future Sale" and
"Underwriting."

POTENTIAL CHANGES TO CREDIT FACILITY TERMS

The Company has obtained a commitment (the "Commitment") for a $75 million
Credit Facility (the "Credit Facility") under which First Union National Bank,
an affiliate of Wheat First Securities, Inc., one of the Underwriters, will
act as the administrative agent (the "Agent") and a lender, and First Union
Capital Markets, a division of Wheat First Securities, Inc., will act as the
arranger. Under certain conditions set forth in the

16
<PAGE>

Commitment, the Agent is entitled to change the pricing (e.g., the interest
rate), structure or other terms of the Credit Facility, but not the total
amount of the Credit Facility. Such changes will only be implemented if the
Agent determines that such changes would be necessary to complete a successful
syndication of the Credit Facility. Although the effect of any change in the
terms of the Credit Facility by the Agent cannot be predicted, such changes,
particularly in the interest rate, could have a material adverse effect on the
Company's financial condition and results of operations. See "Use of Proceeds"
and "Management's Discussion and Analysis of Financial Condition and Results
of Operations--Combined Liquidity and Capital Resources Following the
Combination."

RESTRICTIONS ON PAYMENT OF DIVIDENDS

Following the consummation of the Offering, the Company intends to retain
earnings to finance the growth and development of its business and does not
anticipate paying cash dividends in the foreseeable future. Declaration of any
future dividends will depend upon, among other things, the Company's results
of operations, financial condition, acquisitions, capital requirements, the
terms and provisions of any debt financing agreements, and general business
condition. In addition, the Credit Facility will prohibit the Company from
paying any dividend without the consent of the lenders thereunder. See
"Dividend Policy" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Combined Liquidity and Capital Resources
Following the Combination."

ABSENCE OF PUBLIC MARKET; DETERMINATION OF OFFERING PRICE AND FLUCTUATIONS IN
MARKET PRICE

Prior to the Offering, there has been no public market for the Common Stock.
There can be no assurance that an active trading market will develop after the
Offering or, if developed, that it will be sustained. The initial public
offering price has been determined by negotiation between the Company and the
Representatives and may not be indicative of prices that will prevail in the
trading market after the Offering. Following the Offering, the trading price
of the Common Stock may be subject to significant fluctuations in response to
variations in the annual or quarterly operating results of the Company,
changes in earnings estimates for the Company by investment analysts, the
failure of the Company to meet such estimates or changes in business or
regulatory conditions affecting the Company, its Manufacturers or Retailers or
its competitors. See "Underwriting" for a description of the factors
considered in determining the initial public offering price.

IMMEDIATE AND SUBSTANTIAL DILUTION TO PURCHASERS IN OFFERING

The initial public offering price is substantially higher than the book
value per share of Common Stock. Accordingly, purchasers in the Offering will
suffer immediate and substantial dilution in the net tangible book value per
share of $(21.63). Additional dilution will occur upon the exercise of
outstanding options to purchase shares of Common Stock granted by the Company
to non-employee members of its Board of Directors and certain of the Company's
employees, including certain members of the Company's management, pursuant to
the 1998 Stock Plan. Under the 1998 Stock Plan, the Company is authorized to
issue options for up to thirteen percent of the number of shares of Common
Stock outstanding from time to time. Upon consummation of the Offering,
938,340 shares of Common Stock will be reserved for issuance under the 1998
Stock Plan (1,024,140 shares of Common Stock will be reserved for issuance
under the 1998 Stock Plan if the Underwriters' over-allotment options are
exercised in full). See "Dilution" and "Management--1998 Stock Option and
Incentive Plan."

THE COMBINATION

The Company was organized in March 1998 and, to date, has conducted
operations only in connection with the Combination and the Offering.
Simultaneously with the consummation of the Offering, the Company will
purchase all of the issued and outstanding capital stock of each of Merkert
and Rogers. In connection with the Company's purchase of Merkert and Rogers,
the Company will amend and restate its Certificate of Incorporation to, among
other things, increase the Company's authorized shares of Common Stock and
authorize a class of preferred stock, and will declare a stock dividend. Such
transactions are referred to herein collectively as the

17
<PAGE>

"Combination." For a description of the transactions pursuant to which each of
Merkert and Rogers will be acquired by the Company, see "Certain
Transactions--Organization of the Company."

The aggregate consideration to be paid by the Company at the closing of the
Combination is $74.1 million, consisting of approximately $56.6 million in
cash (representing approximately 96.1% of the estimated net proceeds of the
Offering) and 1,166,667 shares of Common Stock (assuming an initial public
offering price of $15.00 per share). If the initial public offering price is
other than $15.00 per share, the number of shares issued to the former
stockholders of Merkert will be increased or decreased so that such
stockholders receive an aggregate of approximately $17.5 million of Common
Stock valued at the initial public offering price. However, the total number
of shares of Common Stock outstanding following the Combination will not vary
as a result of an initial public offering price of other than $15.00 per share
because the size of the stock dividend that will be declared by the Company
prior to the consummation of the Combination will increase as the initial
offering price increases and decrease as the initial offering price decreases.
As a result, upon the consummation of the Combination (but without giving
effect to the Offering), there will be outstanding a total of 2,818,000 shares
of Common Stock. In connection with the Combination, the Company will repay,
or reserve payment for, in the aggregate, approximately $44.3 million of
indebtedness and certain existing acquisition obligations of Merkert and
Rogers from a portion of the net proceeds of the Offering and from the net
available borrowings under the Credit Facility. The consideration to be paid
by the Company for Merkert and Rogers was determined by arm's length
negotiations between the Company and representatives of each of Merkert and
Rogers, respectively, and was based primarily on a percentage of the
historical revenues and pro forma EBITDA (earnings before interest, taxes,
depreciation and amortization) of each of Merkert and Rogers. For a more
detailed description of these transactions, see "Certain Transactions--
Organization of the Company."

The stockholders of Merkert will hold 1,166,667 (excluding the 275,222
shares currently held by Mr. Leonard) shares of Common Stock immediately
following the Offering and have the right in certain circumstances to include
some or all of their shares of Common Stock in a registration statement filed
by the Company. The Company also intends to register, soon after the
consummation of the Offering, at least 938,340 shares of Common Stock issuable
pursuant to the 1998 Stock Plan. See "Management--1998 Stock Option and
Incentive Plan," "Certain Transactions" and "Shares Eligible for Future Sale."

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 4,400,000 shares of
Common Stock in the Offering (assuming an initial public offering price of
$15.00 per share), after deducting the underwriting discounts and commissions
and estimated offering expenses payable by the Company, will be approximately
$58.9 million ($68.1 million if the Underwriters' over-allotment option is
exercised in full). Of the net proceeds, approximately $56.6 million will be
used to pay the cash portion of the purchase price for Merkert and Rogers. The
remaining net proceeds of the Offering, which are estimated to be
approximately $2.3 million (excluding the net proceeds resulting from any
exercise of the Underwriters' over-allotment option), together with the $72
million net available borrowings under the Company's Credit Facility
(including amounts available under the Term Loan and a portion of the amounts
available under the Credit Facility), will be used as follows; (i)
approximately $17.1 million will be used to repay certain indebtedness of
Merkert and Rogers assumed in connection with the Combination (which
indebtedness bears interest at a weighted average interest rate of
approximately 8.5% and has a weighted average maturity of less than one year),
(ii) approximately $29.6 million will be used to pay, or will be reserved for
the future payment of, certain obligations to certain sellers of previously
acquired businesses (which obligations have a weighted average imputed
interest rate of approximately 9.0% and weighted average maturity of
approximately five years), (iii) approximately $750,000 will be used to repay
a note payable to Monroe & Company II, LLC which is attributable to certain of
the Company's expenses, (iv) approximately $4.0 million will be used to fund,
or will be reserved for the future payment of, buyouts of employment
arrangements of certain departing executives of Merkert and Rogers as well as
buyouts of certain consulting arrangements and (v) approximately $2.9 million
will be used to pay expenses incurred by Merkert American Corporation, and
each of Merkert and Rogers and their respective stockholders in connection
with the Combination. The Company

18
<PAGE>

expects to use the net available borrowings under the Revolving Credit portion
of the Credit Facility for general corporate purposes and working capital
requirements.

The Company has obtained the Commitment for the Credit Facility, under which
First Union National Bank will act as the administrative agent and a lender
and First Union Capital Markets will act as the arranger. First Union National
Bank is an affiliate of Wheat First Securities, Inc., one of the Underwriters
of the Offering. First Union Capital Markets is a division of Wheat First
Securities, Inc. The Credit Facility consists of a $50 million term loan and a
$25 million revolving line of credit, which will be available upon the closing
of this Offering. See "Risk Factors--Potential Changes to Credit Facility
Terms" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Combined Liquidity and Capital Resources Following the
Combination."

DIVIDEND POLICY

The Company intends to retain earnings to finance the growth and development
of its business and for general corporate purposes, including future
acquisitions, and does not anticipate paying cash dividends in the foreseeable
future. Any payment of cash dividends in the future will be at the discretion
of the Board of Directors and will depend upon the financial condition,
capital requirements and earnings of the Company and such other factors as the
Board of Directors may deem relevant. In addition, the Credit Facility will
prohibit the Company from paying any dividend without the consent of the
lenders thereunder. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources."

19
<PAGE>

CAPITALIZATION

The following table sets forth the short-term and long-term obligations and
capitalization at September 30, 1998 of the Company on a pro forma combined
basis to give effect to: (i) the proposed amendment and restatement of the
Company's Certificate of Incorporation; (ii) a stock dividend of 729.9074
shares of Common Stock and 186.50 shares of Restricted Common Stock in respect
of each issued and outstanding share of Common Stock; and (iii) the purchase
of Merkert and Rogers by the Company and the sale or distribution of certain
real estate and non-operating assets and liabilities. This table should be
read in conjunction with the Unaudited Pro Forma Combined Financial Statements
of the Company and the Notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
AS OF SEPTEMBER 30,
1998
---------------------
PRO FORMA AS
COMBINED ADJUSTED(1)
--------- -----------
(DOLLARS IN
THOUSANDS)
<S> <C> <C>
Short-term debt including current portion of long-
term debt (2).................................... $22,299 $ 8,849
======= ========
Long-term debt, less current portion ............. $41,925 $ 61,075
------- --------
Stockholders' equity:
Undesignated preferred stock, 1,000,000 shares
authorized none issued or outstanding.......... -- --
Common stock, $.01 par value per share,
54,000,000 authorized shares, 2,818,000 shares
issued and outstanding pro forma, 7,218,000
shares issued and outstanding pro forma as
adjusted (3)................................... 28 72
Additional paid-in capital...................... 14,847 73,683
Retained earnings............................... -- --
------- --------
Total stockholders' equity.................... 14,875 73,755
------- --------
Total capitalization.............................. $56,800 $134,830
======= ========
</TABLE>
- --------

(1) Reflects the consummation of the Offering and the expected application of
the net proceeds therefrom and the borrowings available under the Term
Loan and a portion of the Revolving Credit.

(2) For a description of the Company's debt, see "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Combined
Liquidity and Capital Resources Following the Combination" and "Notes to
the Merkert and Rogers Financial Statements."

(3) Excludes (i) incentive stock options to purchase up to 347,000 shares to
be granted to members of the Company's management upon consummation of the
Offering at an exercise price per share equal to the price to the public
in the Offering, (ii) non-qualified stock options to purchase up to
245,000 shares granted to certain members of the Company's management at
an exercise price of $11.25 per share, the estimated fair market value at
the date of grant, and (iii) options to purchase up to 65,000 shares to be
granted to the Company's Independent Directors upon consummation of the
Offering at an exercise price per share equal to the price to the public
in the Offering. See "Management--1998 Stock Option and Incentive Plan"
and "--Option Grants."

20
<PAGE>

DILUTION
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

The deficit in pro forma net tangible book value of the Company at September
30, 1998 was approximately $106.8 million, or $37.89 per share of Common
Stock. The deficit in net tangible book value per share represents the amount
of the Company's stockholders' equity, less the intangible assets, divided by
the number of shares of Common Stock issued and outstanding after giving
effect to the purchase of Merkert and Rogers by the Company. Net tangible book
value dilution per share represents the difference between the amount per
share paid by purchasers of shares of Common Stock in the Offering and the pro
forma net tangible book value per share of Common Stock immediately after
completion of the Offering. After giving effect to the sale of 4,400,000
shares of Common Stock by the Company in the Offering and the application of
the estimated net proceeds therefrom, the deficit in pro forma net tangible
book value of the Company as of September 30, 1998 would have been $47.9
million or $6.63 per share. This represents an immediate decrease in the
deficit in pro forma net tangible book value of $31.26 per share to
stockholders as of September 30, 1998, and an immediate dilution in pro forma
net tangible book value of $21.63 per share to purchasers of Common Stock in
the Offering. The following table illustrates the dilution per share:

<TABLE>
<CAPTION>
<S> <C> <C>
Initial public offering price per share................... $ 15.00
Deficit in pro forma net tangible book value per share
before the Offering.................................... (37.89)
Decrease in deficit pro forma net tangible book value
per share attributable to new investors................ 31.26
------
Deficit in pro forma net tangible book value per share
after the Offering....................................... (6.63)
-------
Dilution per share to new investors....................... $(21.63)
=======
</TABLE>

The following table sets forth, on a pro forma basis to give effect to the
Combination as of September 30, 1998 and after giving effect to the sale of
Common Stock in the Offering at a price of $15.00 per share, the number and
percentage of shares of Common Stock purchased from the Company, the aggregate
cash consideration paid and the average price per share paid to the Company:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
----------------- ------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PER SHARE
--------- ------- ------------------- -------------
<S> <C> <C> <C> <C>
Existing Stockholders... 2,818,000 39.0% $ 3,877,150 $ 1.38
New Investors........... 4,400,000 61.0% 66,000,000 15.00
--------- ----- -----------
Total................. 7,218,000 100.0% $69,877,150
========= ===== ===========
</TABLE>

21
<PAGE>

SELECTED FINANCIAL DATA FOR MERKERT AND ROGERS
(DOLLARS IN THOUSANDS)

The following selected consolidated statement of income data for each of the
three years ended December 31, 1997 and consolidated balance sheet data at
December 31, 1996 and 1997 are derived from consolidated financial statements
of each of Merkert and Rogers which have been audited by Arthur Andersen LLP,
independent auditors, and are included elsewhere herein. The selected
financial information at December 31, 1995 and for the years ended December
31, 1993 and 1994 for Merkert and October 31, 1993 and 1994 for Rogers are
derived from unaudited financial statements not included herein. The
consolidated income data for the nine months ended September 30, 1997 and 1998
and the consolidated balance sheet data at September 30, 1998 are derived from
unaudited consolidated financial statements also included elsewhere in the
Prospectus. The unaudited consolidated financial statements have been prepared
by each of Merkert and Rogers on a basis consistent with the audited financial
statements of each of Merkert and Rogers and, in the opinion of management,
include all adjustments, consisting only of normal recurring accruals,
necessary for a fair presentation of the consolidated financial position and
results of operations of each of Merkert and Rogers for these periods. The
consolidated results of operations for the nine months ended September 30,
1998 are not necessarily indicative of results for the year ending December
31, 1998 or any future period. See the Unaudited Pro Forma Combined Financial
Statements and the Notes thereto and the Merkert and Rogers financial
statements and the Notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
----------------------------------------------- ----------------
1993 1994 1995 1996 1997 1997 1998
------- -------- -------- -------- -------- ------- -------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
MERKERT
STATEMENT OF OPERATIONS
DATA
Commissions........... $66,686 $ 68,247 $ 73,336 $ 80,661 $104,274 $78,690 $68,993
Sales................. 28,582 37,395 49,233 44,916 43,105 31,495 31,511
------- -------- -------- -------- -------- ------- -------
Revenues............. 95,268 105,642 122,569 125,577 147,379 110,185 100,504
Operating income
(loss)(1)............ 713 (329) 2,434 633 1,373 (2,704) (2,126)
Net income (loss)..... (192) (750) (461) (2,074) (3,449) (6,119) (6,264)
OTHER FINANCIAL DATA
EBITDA(2)............. 3,747 2,054 4,566 3,080 5,857 738 1,289
</TABLE>

<TABLE>
<CAPTION>
AT
AT DECEMBER 31, SEPTEMBER 30,
--------------------------------------- -------------
1993 1994 1995 1996 1997 1998
------- ------- ------- ------- ------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
MERKERT BALANCE SHEET DATA:
Total Assets........... $28,418 $27,759 $31,425 $47,422 $58,699 $54,870
Long-term debt, less
current maturities.... 3,554 1,508 3,458 15,590 21,278 24,638
Convertible preferred
stock................. 6,360 6,360 6,360 6,360 5,720 5,747
</TABLE>

22
<PAGE>

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED NINE MONTHS ENDED
OCTOBER 31, DECEMBER 31, SEPTEMBER 30,
--------------- ------------------------ ---------------------
1993 1994 1995 1996 1997 1997 1998
------- ------- ------- ------- ------- ------------- -------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
ROGERS
STATEMENT OF OPERATIONS
DATA
Commissions........... $27,365 $30,626 $47,496 $63,311 $82,985 $62,625 $62,584
Operating income
(loss)............... 463 816 3,149 107 4,085 3,092 2,817
Net income (loss)..... 145 13 1,034 (1,089) 745 572 412
OTHER FINANCIAL DATA
EBITDA(2)............. 931 1,245 4,222 1,753 6,601 4,897 4,704
<CAPTION>
AT
AT OCTOBER 31, AT DECEMBER 31, SEPTEMBER 30,
--------------- ------------------------ -------------
1993 1994 1995 1996 1997 1998
------- ------- ------- ------- ------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
ROGERS BALANCE SHEET DA-
TA:
Total Assets.......... $10,948 $13,406 $23,318 $37,761 $38,999 $39,772
Long-term debt, less
current maturities... 5,812 7,093 15,009 24,849 30,830 21,087
</TABLE>

- --------
(1) Includes a restructuring charge of $2,303 for the nine months ended
September 30, 1998.
(2) EBITDA represents earnings before interest, taxes, depreciation and
amortization. The Company believes that EBITDA may be useful to investors
for measuring the Company's ability to service debt, to make new
investments and to meet working capital requirements. EBITDA as calculated
by the Company may not be consistent with calculations of EBITDA by other
companies. EBITDA should not be considered in isolation from or as a
substitute for net income (loss), cash flows from operating activities or
other statements of operations or cash flows prepared in accordance with
generally accepted accounting principles or as a measure of profitability
or liquidity.

23
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Prospectus contains, in addition to historical information, forward-
looking statements that involve risks and uncertainties. The Company's actual
results could differ significantly from the results discussed in the forward-
looking statements. Factors that could cause or contribute to such differences
include those discussed in "Risk Factors" as well as those discussed elsewhere
in this Prospectus. The following discussion and analysis should be read in
conjunction with the Company's unaudited pro forma combined financial
statements and Merkert's and Rogers' respective financial statements and
related notes thereto presented elsewhere in this Prospectus.

INTRODUCTION

The Company was organized in March 1998 to create a leading food brokerage
firm providing outsourced sales, merchandising and marketing services to
Manufacturers. The Company acts as an independent sales and marketing
representative, selling grocery and consumer products on behalf of
Manufacturers and coordinating the execution of Manufacturers' marketing
programs with Retailers. The Company's principal source of revenue is
commissions it receives from Manufacturers. The Company's other activities
include managing private label programs on behalf of selected Retailers.

To date, the Company has conducted operations only in connection with the
Combination and the Offering and will purchase all of the issued and
outstanding capital stock of Merkert and Rogers in the Combination. Prior to
the Combination, Merkert and Rogers have operated throughout the periods
presented as independent, owned entities. For financial reporting purposes,
the Company is presented as the acquiror of Merkert and Rogers.

Merkert, headquartered in Canton, Massachusetts, was founded in 1950 and is
one of the three largest food brokers in the northeastern United States.
Merkert operates 10 offices throughout New England, New York, and the mid-
Atlantic, from Maine west to Ohio and south to Virginia. Rogers, headquartered
in Charlotte, North Carolina, was founded in 1934 and is one of the three
largest food brokers in the southeastern United States. Rogers operates 20
offices throughout the southeastern and mid-Atlantic United States.

The Company has long-standing relationships with many of its Manufacturers
and represents more than 750 Manufacturers. Industry practice is that food
brokers' relationships with Manufacturers are generally governed by contracts
which are typically terminable by either party upon 30 days' notice. In the
ordinary course of business the Company experiences turnover in these
relationships as a result of Manufacturer conflicts or strategic decisions by
the Company or a Manufacturer. Additionally, the Company currently estimates
that a loss in annual revenues of approximately $5.9 million will be incurred
as a result of Manufacturer conflicts associated with the Combination. There
can be no assurance that additional losses in revenue will not be incurred as
a result of potential Manufacturer conflicts associated with the Combination.

ACQUISITION HISTORY

The food brokerage industry has experienced significant consolidation as the
number of food brokerage firms has decreased from 2,500 to 1,000 over the past
10 years. There are approximately 12 large regional firms, which have emerged
as the result of the consolidation of competitors. A number of the companies
in the food brokerage industry, including Merkert and Rogers, have
participated in the trend towards consolidation by acquiring other food
brokerage businesses, generally financing these transactions with debt and/or
by deferring the payment of a portion of the purchase price.

As part of their business development, both Merkert and Rogers have been
active in pursuing acquisition opportunities. Since 1995, each of Merkert and
Rogers has completed several acquisitions, although their respective
acquisition strategies have resulted in different operational outcomes.

24
<PAGE>

Merkert has focused on larger acquisitions within its existing markets which
have given it the opportunity to consolidate operations and achieve greater
efficiencies. Merkert, based on its analysis of the Manufacturer relationships
of acquisition candidates, selected what it viewed as the strongest on-going
relationships between Manufacturers it represented and Manufacturers
represented by the acquired companies.

Since the beginning of 1995, Merkert has completed five asset acquisitions
of food brokerage companies, including the asset purchases of Food Service
Sales in metropolitan New York (January 1995), ABD Sales, Inc. ("ABD") in
metropolitan New York (October 1996), DelGrosso, Richardson, Morrison, Inc.
("DRM") in the mid-Atlantic region (October 1996), JP Luciano, Inc. and
Luciano Food Brokers, Inc. ("Luciano") in upstate New York (January 1997) and
Toomey-DeLong, Inc. ("T-D") in New England (January 1997). DRM was the only
acquisition outside an existing territory of Merkert.

Rogers has focused on the expansion of its geographic coverage. Rogers'
acquisitions have generally represented opportunities for entry into new
territories for it. Rogers' acquisition program has been driven by a strategy
designed to ensure that it is capable of representing its most significant
Retailers in all the territories these Retailers serve as they expand.

Since the beginning of 1995, Rogers has completed 10 significant
acquisitions of food brokerage companies including, among others, Clarke &
Wittekind in Tennessee (March 1995), Dopson-Hicks in Florida (November 1995),
G.B.S. (October 1996) and Fitzwater (November 1996) in the mid-Atlantic
region, Sales Support in South Carolina (November 1996) and Marketing
Performance, Inc. in Alabama (November 1996).

As a result of developing new business from existing Manufacturers in new
territories in which it has made acquisitions, Rogers has been able to achieve
significant growth in revenues. Because many of Rogers' acquisitions have been
in new territories, Rogers has not experienced the same degree of cost saving
opportunities through consolidation as Merkert. See "Results of Operations--
Rogers."

RESULTS OF OPERATIONS

The following defined terms are used in conjunction with both Merkert's and
Rogers' discussion of operating results.

Revenues. Revenues are derived mainly from commissions earned from
Manufacturers based on the Manufacturers' invoices to Retailers for products
sold. Commissions are usually expressed as a percentage of the invoice as
agreed by contract between the Manufacturer and broker. Commission rates
typically range from 3% for full brokerage services to 1% for retail-only
services. Merkert also derives revenues, referred to as "Sales," from the sale
of products including private label packaging materials and frozen products,
such as fruits and vegetables, to certain Retailers, and other products for
certain Manufacturers. See "Business-- Services and Operations."

Cost of sales. Cost of sales are primarily the direct cost of private label
products sold by Merkert, such as the cost of packaging and frozen vegetables
purchased from suppliers.

Selling, general and administrative expenses. Selling expenses are
predominately comprised of salaries, fringe benefits and incentives for
personnel directly involved in providing services to Manufacturers and
Retailers. Other selling expenses include, among other things, automobiles
utilized by the sales personnel, promotional expenses, and travel and
entertainment. General and administrative expenses consist primarily of
salaries and fringe benefits for administrative and corporate personnel,
occupancy and other office expenses, information technology, communications
and insurance.

Depreciation and amortization expenses. Depreciation and amortization
expenses relate to intangible assets, including goodwill incurred and
noncompete agreements entered into in connection with the Company's
acquisition program, and property, plant and equipment.

25
<PAGE>

Following the Combination, the Company expects to achieve certain savings as
a result of its consolidation of operations in geographic areas where Merkert
and Rogers both have operations. Certain of these savings are reflected in the
pro forma combined statement of operations.

RESULTS OF OPERATIONS--MERKERT

The following table sets forth the results of operations of Merkert on a
historical basis. The historical results of Merkert discussed below do not
reflect the operations of Rogers or the effect of any pro forma adjustments
(dollars in thousands).

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, NINE MONTHS ENDED SEPTEMBER 30,
--------------------------------------------------- --------------------------------------
1995 1996 1997 1997 1998
--------------- --------------- --------------- ------------------ ------------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Commissions............. $ 73,336 $ 80,661 $104,274 $ 78,690 $ 68,993
Sales................... 49,233 44,916 43,105 31,495 31,511
-------- ----- -------- ----- -------- ----- --------- ------ --------- ------
Revenues................ $122,569 100.0 % $125,577 100.0 % $147,379 100.0 % $ 110,185 100.0 % $ 100,504 100.0%
Cost of sales........... 45,615 37.2 41,890 33.4 39,027 26.5 28,884 26.2 28,721 28.6
Selling expenses........ 45,717 37.3 52,510 41.8 69,913 47.4 55,022 49.9 45,820 45.5
General and
administrative......... 26,671 21.8 28,097 22.4 32,582 22.1 25,541 23.2 22,371 22.3
Depreciation and
amortization........... 2,132 1.7 2,447 1.9 4,484 3.0 3,442 3.1 3,415 3.4
Restructuring Expense... -- -- -- -- -- -- -- -- 2,303 2.3
-------- ----- -------- ----- -------- ----- --------- ------ --------- ------
Operating income
(loss)................. 2,434 2.0 633 0.5 1,373 0.9 (2,704) (2.5) (2,126) (2.1)
Interest income......... -- -- -- -- -- -- 56 0.1 -- --
Interest expense........ 1,660 1.4 2,283 1.8 5,010 3.4 (3,526) (3.2) (3,506) (3.5)
Other income (expense).. (33) 0.0 (380) (0.3) (79) (0.1) 7 0.0 (532) (0.5)
-------- ----- -------- ----- -------- ----- --------- ------ --------- ------
Income (loss) before
income taxes........... 807 0.7 (1,270) (1.0) (3,558) (2.4) (6,167) (5.6) (6,164) (6.1)
Provision (benefit) for
income taxes........... 1,268 1.0 804 0.6 (109) (0.1) 275 0.2 100 0.1
-------- ----- -------- ----- -------- ----- --------- ------ --------- ------
Net income (loss)....... (461) (0.4) (2,074) (1.7) (3,449) (2.3) (6,442) (5.8) (6,264) (6.2)
Preferred stock
dividend............... 445 0.4 445 0.4 445 0.3 334 0.3 300 0.3
-------- ----- -------- ----- -------- ----- --------- ------ --------- ------
Net income applicable to
common stockholders.... $ (906) (0.7)% $ (2,519) (2.0)% $ (3,894) (2.6)% $ (6,776) (6.1)% $ (6,564) (6.5)%
======== ===== ======== ===== ======== ===== ========= ====== ========= ======
</TABLE>
- --------
Note: Merkert derives its Sales primarily from sales of private label
products, price marking devices and bio-degreasers. Cost of Sales is directly
related to this activity. Selling expenses relate to Merkert's commission
revenues.

Merkert results for the first nine months of 1998 compared to the first nine
months of 1997

Revenues. Revenues decreased by $9.7 million, or 8.8%, from $110.2 million
in the first nine months of 1997 to $100.5 million in the first nine months of
1998. Revenues from commissions decreased by $9.7 million, or 12.3%, from
$78.7 million in the first nine months of 1997 to $69.0 million in the first
nine months of 1998. Approximately 35.0% of such decrease in revenues from
commissions is due to the impact of a discontinued retail merchandising
operation, which had been established in 1995 to serve one specific Retailer.
Approximately 50% of the decrease in revenues from commissions is due to lost
business arising from the resolution of Manufacturer conflicts. The remaining
15% is attributed to other factors arising from prior acquisitions and the
loss of one major Manufacturer that switched to retail-only brokerage service
in 1997, but has since returned to a hybrid brokerage service relationship in
1998. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Combined Integration Activities." Sales were unchanged
in the first nine months of 1998 compared to the first nine months of 1997.

26
<PAGE>

Selling, general and administrative expenses. Selling, general and
administrative expenses decreased by $12.4 million, or 15.4%, from $80.6
million in 1997 to $68.2 million in 1998, primarily due to reductions in
personnel associated with synergies achieved from the acquisitions in
overlapping geographic areas which were made in late 1996 and early 1997.
Expenses also decreased due to the non-recurrence of severance and other costs
incurred in 1997 associated with the integration of prior acquisitions. As a
percentage of revenues, selling, general and administrative expenses decreased
from 73.1% in the first nine months of 1997 to 67.9% in the first nine months
of 1998. Merkert's practice with respect to acquisitions is to achieve
efficiencies through the reduction of costs associated with redundant
administrative and other functions and the leveraging of Merkert's information
technology, purchasing power and other strengths.

Restructuring expense. The results for the first nine months of 1998 reflect
restructuring expenses of $2.3 million, of which $1.8 million is accrued at
September 30, 1998 with no corresponding charge in the first nine months of
1997. These expenses relate to severance costs associated with elimination of
approximately 160 positions primarily as a result of integration activities in
the metropolitan New York and mid-Atlantic regions. The Company anticipates
taking further actions in 1998 which will result in further restructuring
charges.

Depreciation and amortization. Depreciation and amortization expenses were
substantially unchanged from the first nine months of 1997 to the first nine
months of 1998.

Interest expense. Interest expense was substantially unchanged from the
first nine months of 1997 to the first nine months of 1998.

Income (loss) before income taxes. The loss before income taxes was
substantially unchanged from the first nine months of 1997 to the first nine
months of 1998.

Provision (benefit) for income taxes. The provision for income taxes
decreased by $0.2 million in the first nine months of 1997 compared to the
first nine months of 1998.

Net income (loss). The net loss decreased by $0.2 million, or 2.8%, from
($6.4 million) in the first nine months of 1997 to ($6.3 million) in the first
nine months of 1998.

Preferred stock dividends. The amount payable in respect of preferred stock
dividends remained unchanged between the periods.

Net income (loss) applicable to common stockholders. The net loss applicable
to common stockholders decreased by $0.2 million from the first nine months of
1997 to the first nine months of 1998.

Merkert results for 1997 compared to 1996

Revenues. Revenues increased by $21.8 million, or 17.4%, from $125.6 million
in 1996 to $147.4 million in 1997. Revenues from commissions increased by
$23.6 million, or 29.3% from $80.7 million to $104.3 million, substantially
all of which is attributable to acquisitions consummated in late 1996 and
early 1997 net of account losses associated with product conflicts related to
the acquired companies and other factors. Sales of products decreased by $1.8
million, or 4.0%, from $44.9 million in 1996 to $43.1 million in 1997
primarily as a result of a major Retailer choosing to manage its private label
frozen vegetable program internally in the fourth quarter of 1996.

Selling, general and administrative expenses. Selling expenses, principally
related to payroll, auto and related costs, increased by $17.4 million, or
33.1%, from $52.5 million in 1996 to $69.9 million in 1997 due to increased
personnel associated with the acquisitions. General and administrative
expenses increased by $4.5 million, or 16.0%, from $28.1 million in 1996 to
$32.6 million in 1997 also due principally to costs associated with the full
year effect of the acquisitions. Such expenses were offset, in part, by
savings relating to the integration of such acquisitions.

27
<PAGE>

In 1997, Merkert focused on the integration of these acquisitions into
Merkert's operating system. Included in these activities was the reduction of
selling, general and administrative expenses in connection with Merkert's
metropolitan New York operations. The Boerner Division, which operated as one
of three separate Merkert divisions in the metropolitan New York area
following the ABD acquisition, was merged into Merkert's remaining two
metropolitan New York divisions. Additionally, Merkert undertook staff
reductions in the mid-Atlantic region in response to competitive conditions.

Annualized payroll was reduced by $12.0 million, or 18.5%, from $65.0
million in January 1997 to $53.0 million in December 1997 as a result of these
efforts as well as the discontinuation of the merchandising operation. As the
changes were made over the course of the year, the historical periods do not
reflect the full effect of the implementation of these cost-saving
initiatives. Selling, general and administrative expenses in 1997 also reflect
the impact of approximately $1.0 million of restructuring costs associated
with severance of personnel and the elimination of duplicative offices as a
result of these acquisitions.

Depreciation and amortization. Depreciation and amortization increased by
$2.0 million, or 83.2%, from $2.4 million in 1996 to $4.5 million in 1997,
primarily as a result of the amortization of goodwill and other intangible
assets associated with acquisitions.

Interest expense. Interest expense increased by $2.7 million from $2.3
million in 1996 to $5.0 million in 1997, due mainly to interest expense
related to obligations to sellers in connection with acquisitions. Interest
expense associated with the revolving line of credit and Merkert's real estate
mortgage increased by $0.6 million due to increased borrowings to fund working
capital as well as a new corporate headquarters which was completed late in
1997.

Income (loss) before income taxes. The loss before income taxes increased by
$2.3 million from ($1.3) million in 1996 to ($3.6) million in 1997, mainly due
to the effects of the charges for amortization and interest associated with
the acquisitions.

Provision (benefit) for income taxes. Provision for income taxes represented
a benefit of ($0.1) million in 1997 versus a $0.8 million provision in 1996.
The 1996 provision resulted from an increase in the valuation allowance of
$1.6 million for deferred tax assets not likely to be realized, as well as to
permanent non-deductible expenses, principally related to travel and
entertainment expenses.

Net income (loss). The net loss increased by $1.4 million, or 66.3%, from
($2.1) million in 1996 to ($3.4) million in 1997 due to the significant
increase in acquisition-related amortization, interest expense and other
factors as discussed above.

Preferred stock dividends. Preferred stock dividends paid to participants in
the Merkert Enterprises, Inc. Employee Stock Ownership Plan (the "ESOP")
totalled $0.4 million in 1996 and 1997. These dividends are a direct charge to
retained earnings and do not impact the net loss as reported.

Net income (loss) applicable to common stockholders. The net loss applicable
to common stockholders increased by $1.4 million, or 54.6%, from ($2.5)
million in 1996 to ($3.9) million in 1997 as "Net income (loss)" and "Net
income (loss) available to common stockholders" differ only by the direct
retained earnings charge for the preferred stock dividend.

Merkert results for 1996 compared to 1995

Revenues. Revenues increased by $3.0 million, or 2.5%, from $122.6 million
in 1995 to $125.6 million in 1996. Revenues from commissions increased by $7.3
million, or 10.0%, from $73.3 million in 1995 to $80.7 million in 1996
primarily resulting from acquisitions consummated in late 1996, including ABD
in New York and DRM in the mid-Atlantic region. These acquisitions represent
82% of the increase. Internal growth represents the balance of the increase.
Sales of products decreased by $4.3 million, or 8.8%, from $49.2 million

28
<PAGE>

in 1995 to $44.9 million in 1996 primarily as a result of the loss of a
private label frozen vegetable program due to a major Retailer choosing to
manage their program internally.

Selling, general and administrative expenses. Selling expenses principally
related to payroll, auto and related costs, increased by $6.8 million, or
14.9%, from $45.7 million in 1995 to $52.5 million in 1996 due to increased
personnel associated with the acquisitions. General and administrative
expenses increased by $1.4 million, or 5.3%, in 1995 to $28.1 million in 1996
also due principally to costs associated with the acquisitions in the fourth
quarter of 1996. As a percentage of revenue, selling, general and
administrative expenses increased from 59.1% in 1995 to 64.2% of revenue in
1996.

Depreciation and amortization. Depreciation and amortization increased by
$0.3 million, or 14.8%, from $2.1 million in 1995 to $2.4 million in 1996,
largely due to the amortization of goodwill and other intangible assets
associated with the acquisitions.

Interest expense. Interest expense increased by $0.6 million, or 37.5%, from
$1.7 million in 1995 to $2.3 million in 1996, due mainly to interest expense
associated with Merkert's revolving line of credit to fund working capital.

Income (loss) before income taxes. The loss before taxes decreased by $2.1
million from income before taxes of $0.8 million in 1995 to a loss before
income taxes of ($1.3) million in 1996 mainly due to the effects of the
additional operating costs associated with the acquisitions.

Provision (benefit) for income taxes. The provision for income taxes
decreased by $0.5 million from $1.3 million in 1995 to $0.8 million in 1996.
The 1996 provision, despite the loss before income taxes, is due to the $1.1
million increase in the valuation allowance.

Net income (loss). Net loss increased by $1.6 million from ($0.5) million in
1995 to ($2.1) million in 1996.

Preferred stock dividends. The required dividend was $0.4 million in both
periods.

Net income (loss) applicable to common stockholders. The loss applicable to
common stockholders was $0.9 million in 1995 and $2.5 million in 1996.

LIQUIDITY AND CAPITAL RESOURCES -- MERKERT

At September 30, 1998, Merkert's working capital deficit was $(26.6)
million, compared to $(25.0) million and $(17.4) million at December 31, 1997
and 1996, respectively. Merkert's principal capital requirements are to fund
its obligations to sellers in connection with its previous acquisitions, its
working capital and its obligation relating to income taxes payable.
Historically, these requirements were met by cash flows generated from
operations and borrowings under bank credit facilities. As of September 30,
1998, Merkert was not in compliance with certain financial covenants under its
revolving line of credit agreement and was in default under the agreement.
Merkert financed such acquisitions, in part, with debt and/or by deferring the
payment of a portion of the purchase price. The Company will use a portion of
the net available borrowings under the Credit Facility to repay, and to
reserve for the repayment of, certain of Merkert's acquisition-related
obligations. Primarily as a result of such obligations, as well as a
substantial tax liability, Merkert has experienced losses and a working
capital deficit in recent years. The stockholders of Merkert have agreed to
pay such tax liability from cash otherwise payable to them in connection with
the Combination. After giving effect to the Offering and the expected
application of the net proceeds therefrom and the expected application of the
Term Loan and a portion of the amounts available under the Revolving Credit,
the Company will have a working capital deficit of approximately $(3.7)
million. See "Risk Factors--Merkert Enterprises, Inc.--History of Losses."

Net cash provided by (used in) operating activities for the first nine
months of 1998 and the three years ended 1997, 1996 and 1995 were $(2.1)
million, $3.5 million, $4.1 million and $6.2 million, respectively. The 1998
change was principally due to cash outflows from the net loss offset by the
non-cash depreciation and

29
<PAGE>

amortization charges. The changes in cash from operations in 1997, 1996, and
1995 were due to decreases in accounts receivable resulting from improved
collections and increases in accounts payable and accrued expenses associated
with Merkert's higher operating volume.

Net cash provided by (used in) investing activities for the first nine
months of 1998 and the three years ended 1997, 1996 and 1995 were $(1.2)
million, $(7.3) million, $(4.7) million and $(1.3) million, respectively.
Additions to property, plant and equipment, including a new corporate
headquarters completed in late 1997, were $7.3 million, $3.4 million and $1.4
million in 1997, 1996 and 1995, respectively. Initial cash payments for
acquisitions were $0.7 million and $1.4 million in 1997 and 1996,
respectively.

Net cash provided by (used in) financing activities for the first nine
months of 1998 and the three years ended 1997, 1996 and 1995 were $2.7
million, $3.9 million, $(0.5) million and $(2.8) million, respectively. The
1998 cash provided by financing activities relates to the refinancing of the
mortgage debt in February 1998, partially offset by payments on notes payable
associated with prior acquisitions made by Merkert. The 1997 cash provided by
financing activities relates to borrowings under Merkert's credit facility to
fund working capital of $4.5 million and increases in the mortgage of $3.4
million to fund the construction of Merkert's new corporate headquarters,
offset by payments on notes payable of $2.5 million, $0.6 million of
redemptions of preferred stock from the ESOP and stock repurchases from former
officers of Merkert of $1.5 million. Merkert's working capital credit facility
is expected to be paid in full with a portion of the net borrowings available
under the Credit Facility. 1996 and 1995 cash provided by financing activities
relates primarily to the repurchase of stock and repayment of notes payable.

RESULTS OF OPERATIONS--ROGERS

The following table sets forth the results of operations of Rogers on a
historical basis. The historical results of Rogers discussed below do not
reflect the operations of Merkert or the effect of any pro forma adjustments
(dollars in thousands).

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, NINE MONTHS ENDED SEPTEMBER 30,
--------------------------------------------- ------------------------------------
1995 1996 1997 1997 1998
------------- -------------- ------------- ----------------- -----------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Commissions............. $47,496 100.0% $63,311 100.0 % $82,985 100.0% $ 62,625 100.0 % $ 62,584 100.0 %
Selling expenses........ 35,817 75.4 50,614 79.9 63,361 76.3 48,155 76.9 47,792 76.4
General and
administrative......... 7,457 15.7 10,944 17.3 13,023 15.7 9,573 15.3 10,088 16.1
Depreciation and
amortization........... 1,073 2.3 1,646 2.6 2,516 3.0 1,805 2.9 1,887 3.0
------- ----- ------- ----- ------- ----- -------- ------ -------- ------
Operating income
(loss)................. 3,149 6.6 107 0.2 4,085 5.0 3,092 4.9 2,817 4.5
Interest expense........ 1,176 2.4 1,656 2.6 2,536 3.1 (1,979) (3.2) (1,980) (3.2)
------- ----- ------- ----- ------- ----- -------- ------ -------- ------
Income (loss) before
income taxes........... 1,973 4.2 (1,549) (2.4) 1,549 1.9 1,113 1.8 837 1.3
Provision (benefit) for
income taxes........... 939 2.0 (460) (0.7) 804 1.0 541 0.9 425 0.7
------- ----- ------- ----- ------- ----- -------- ------ -------- ------
Net income (loss)....... $ 1,034 2.2% $(1,089) (1.7)% $ 745 0.9% 572 0.9 % $ 412 0.7 %
======= ===== ======= ===== ======= ===== ======== ====== ======== ======
</TABLE>

Rogers results for the first nine months of 1998 compared to the first nine
months of 1997

Revenues. Commission revenues were substantially unchanged in the first nine
months of 1997 compared to the first nine months of 1998. Growth from both
business gained from Manufacturers not previously represented by Rogers and
from the expansion of business with Manufacturers already represented by
Rogers was offset by the loss of certain accounts due to Manufacturer
conflicts resulting from the mid-Atlantic integration.

Selling, general and administrative expenses. Selling, general and
administrative expenses were substantially unchanged from the first nine
months of 1997 compared to the first nine months of 1998.

Depreciation and amortization. Depreciation and amortization expenses were
substantially unchanged from the first nine months of 1997 compared to the
first nine months of 1998.

30
<PAGE>

Interest expense. Interest expense remained substantially unchanged from the
first nine months of 1997 compared to the first nine months of 1998.

Income (loss) before taxes. Income before taxes decreased by $0.3 million,
from $1.1 million in the first nine months of 1997 to $0.8 million in the
first nine months of 1998.

Provision (benefit) for income taxes. The provision for income taxes
decreased by $0.1 million from $0.5 million in 1997 to a provision of $0.4
million in 1998 due to the decrease in income before income taxes discussed
above.

Net income (loss). Net income decreased by $0.2 million, from $0.6 million
in the first nine months of 1997 of $0.4 million in the first nine months of
1998.

Rogers results for 1997 compared to 1996

Revenues. Commission revenues increased by $19.7 million, or 31.1%, from
$63.3 million in 1996 to $83.0 million in 1997. Approximately $13.0 million of
the increase is due to acquisitions made in late 1996, mainly in the mid-
Atlantic region (Fitzwater and G.B.S.). The balance of the increase, $6.7
million, is due to revenue growth from both new Manufacturers and existing
Manufacturers represented. This represents an internal growth rate of 10.6%
and is largely attributable to the development of Manufacturer relationships
in newly acquired regions, including significant growth in Florida.

Selling, general and administrative expenses. Selling expenses, principally
related to payroll, auto and related costs, increased by $12.8 million, or
25.2%, from $50.6 million for 1996 to $63.4 million for 1997, due to temporary
increases in staffing levels associated with acquisitions. General and
administrative expenses increased by $2.1 million or 19.0% from $10.9 million
in 1996 to $13.0 million in 1997 also due principally to increased costs
associated with acquisitions. Salaries and related expenses declined as a
percentage of commission revenues from 66.1% in 1996 to 61.0% in 1997 due to
the continuing integration of acquisitions into Rogers and related synergies
coupled with improved utilization of existing personnel relating to the
internal growth.

Depreciation and amortization. Depreciation and amortization increased by
$0.9 million, or 52.9%, from $1.6 million in 1996 to $2.5 million in 1997 due
to the amortization of goodwill and other intangible assets associated with
the acquisitions.

Interest expense. Interest expense increased by $0.8 million, or 53.1%, from
$1.7 million in 1996 to $2.5 million in 1997, due mainly to continuing
principal payments on obligations to sellers in connection with acquisitions.
Interest expense associated with Rogers' revolving line of credit increased by
$0.4 million due to increased borrowings to fund Rogers' working capital.

Income (loss) before taxes. Income before taxes increased by $3.0 million
from a loss of ($1.5) million in 1996 to income of $1.5 million in 1997.

Provision (benefit) for income taxes. Provision for income taxes increased
by $1.3 million from a benefit of ($0.5) million in 1996 to a provision of
$0.8 million in 1997. This increase results from the corresponding increase in
income before taxes.

Net income (loss). Net income increased by $1.8 million from a loss of
($1.1) million in 1996 to income of $0.7 million in 1997. This increase is a
result of the corresponding increase in income before taxes.

Rogers results for 1996 compared to 1995:

Revenues. Commission revenue increased by $15.8 million, or 33.3%, from
$47.5 million in 1995 to $63.3 million for 1996. Approximately $11.0 million
of the growth was due to acquisitions made in 1995 including

31
<PAGE>

Dopson-Hicks and Clarke & Wittekind. The balance of the increase, $4.8
million, is due to growth from both business gained from Manufacturers not
previously represented by Rogers and from expansion of business with
Manufacturers already represented by Rogers. This represents an internal
growth rate of 10.1%.

Selling, general and administrative expenses. Selling expenses, principally
related to payroll, auto and related costs increased $14.8 million, or 41.3%,
from $35.8 million for 1995 to $50.6 million for 1996 due to increased
personnel associated with the acquisitions. General and administrative
expenses increased by $3.4 million, or 46.8%, from $7.5 million in 1995 to
$10.9 million in 1996 also due principally to increased costs associated with
acquisitions. Salaries and related expenses increased as a percentage of
commission revenues from 63.8% in 1995 to 66.1% in 1996.

Depreciation and amortization. Depreciation and amortization increased by
$0.5 million, or 45.5%, from $1.1 million in 1995 to $1.6 million in 1996
largely due to the amortization of goodwill and other intangible assets
associated with the acquisitions.

Interest expense. Interest expense increased by $0.5 million, or 41.7%, from
$1.2 million in 1995 to $1.7 million in 1996 due mainly to interest expense
incurred on the payment of obligations to sellers in connection with
acquisitions.

Income (loss) before taxes. Income before taxes decreased by $3.5 million
from income of $2.0 million in 1995 to a loss of ($1.5) million in 1996. This
decrease is due to a substantial increase in payroll relating to the
assumption of personnel in acquisitions as well as additions to administrative
and other support personnel to support Rogers' rapid growth.

Provision (benefit) for income taxes. Provision for income taxes decreased
by $1.4 million from a provision of $0.9 million in 1995 to a benefit of
($0.5) million in 1996. This decrease is a result of the corresponding
decrease in income before taxes.

Net income (loss). Net income decreased by $2.1 million from $1.0 million in
1995 to a loss of ($1.1) million in 1996. This decrease is a result of the
corresponding decrease in income before taxes.

LIQUIDITY AND CAPITAL RESOURCES -- ROGERS

At September 30, 1998, Rogers' working capital (deficit) was $(4.6) million,
compared to $3.1 million and $(4.7) million at December 31, 1997 and 1996.
Rogers' principal capital requirements are to fund its obligations with
respect to acquisitions and its working capital requirements. Historically,
these requirements have been met by cash flows generated from operations and
borrowings under bank credit facilities. The September 30, 1998 deficit is due
to the classification of Rogers' borrowings of $9.9 million under its
revolving line of credit as a current liability, because the term expires on
January 31, 1999. From time to time since September 30, 1998, Rogers has not
been in compliance with certain borrowing limitations under its revolving line
of credit. As of November 16, 1998, Wachovia Bank, N.A. waived such non-
compliance as an event of default. Rogers' debt under this revolving line of
credit will be repaid with a portion of the net available borrowings under the
Credit Facility.

Net cash provided (used) by operating activities for the first nine months
of 1998 and the three years ended 1997, 1996 and 1995 were $0.2 million,
$(0.9) million, $0.2 million, and $5.3 million, respectively. The changes were
principally due to increases in working capital associated with the growth in
commission revenues.

Net cash provided (used) in investing activities for the first nine months
of 1998 and the three years ended 1997, 1996 and 1995 were $(0.3) million,
$(1.4) million, $(12.8) million and $(12.5) million, respectively. Payments
for acquisitions were $11.2 million and $11.6 million in 1996 and 1995,
respectively. Additions to property, plant and equipment and increases in the
cash surrender value of life insurance accounted for the balance of the
activity.

32
<PAGE>

Net cash provided by financing activities for the first nine months of 1998
and the three years ended 1997, 1996 and 1995 were $0.1 million, $2.2 million,
$13.1 million and $7.2 million, respectively. The 1998 and 1997 activity
related to net borrowings under Rogers' credit facility to fund working
capital was $4.5 million and $1.2 million, respectively. Rogers' credit
facility is expected to be paid in full with a portion of the net borrowings
available under the Credit Facility. In 1996 and 1995, obligations to sellers
of $10.2 million and $7.9 million, respectively, were incurred in connection
with acquisitions.

COMBINED INTEGRATION ACTIVITIES

Since 1994, Merkert and Rogers have acquired a total of 21 companies,
successfully adding geographic coverage and resulting in increased revenues.
In 1997, Merkert focused its integration activities on the elimination of
duplicative costs and operations resulting from certain of these acquisitions
thereby leveraging its infrastructure. As part of this initiative, Merkert
integrated the T-D acquisition into its New England Division and merged the
ABD acquisition with its Boerner Division, one of two Merkert divisions in the
metropolitan New York area prior to the ABD acquisition.

In connection with the implementation of Merkert's 1997 integration plans
and other factors, Merkert lost Manufacturer accounts in the New England and
New York regions representing approximately $7.0 million of revenues on an
annualized basis. These losses, which were due primarily to Manufacturer
conflicts, were mitigated, in part, by reductions in expenses. These
reductions were primarily the result of reductions in expenses relating to the
servicing of the lost Manufacturer accounts.

Merkert has achieved cost savings in the integration of these acquisitions
by eliminating duplicative offices and combining sales and administrative
organizations and functions. The cost reductions achieved in connection with
these 1997 integration activities have contributed to subsequent increases in
operating income in New England, despite the loss in revenues.

During 1998, Merkert further integrated its two metropolitan New York
business units into one operation. This integration further eliminated
duplicative offices, sales and administrative organizations and functions. In
connection with the implementation of the 1998 integration plans and other
factors, Merkert lost Manufacturer accounts primarily in the metropolitan New
York region representing approximately $3.1 million in revenues on an
annualized basis. These losses were due primarily to Manufacturer conflicts
and other factors.

In addition, during 1998, Merkert and Rogers began the integration of their
combined operations. This process has already resulted in the integration of
the mid-Atlantic region and the closure of a total of five offices in such
region. The Company anticipates that the integration plan will be
substantially completed by the closing of the Combination and the Offering and
that the savings resulting from the integration actions will be substantially
realized in the remainder of 1998 and in 1999. As a result of its ongoing
integration activities, Merkert recorded a $2.3 million restructuring charge
in the nine months ended September 30, 1998. This charge has been eliminated
in the Company's Pro Forma Statement of Operations. The savings primarily
result from the closing of offices due to overlapping geographic coverage and
the elimination of duplicative operations including, among other things, the
elimination of employee payroll and benefits, certain rental and office
expenses relating to the closing of offices, and other direct costs. These
savings will be offset, in part, by an anticipated loss of revenue resulting
from Manufacturer conflicts. The anticipated loss of revenues resulting from
Manufacturer conflicts is net of anticipated revenue gain resulting from,
among other things, new product line representations on behalf of existing
Manufacturers. In addition, the Company expects to incur an increase in lease
expense and a reduction in depreciation expense as a result of the expected
sale of Rogers' headquarters in Charlotte, North Carolina to a third party and
the related leaseback of the facility to the Company. The following table sets
forth the Company's expected Pro Forma Combined EBITDA as if all of the
adjustments described above had occurred at the beginning of the respective
periods. This unaudited pro forma financial data as adjusted does not purport
to represent the Company's combined results of operations or financial
position for any future period. The data set forth below should be read only
in conjunction with, and are qualified by reference to, the

33
<PAGE>

Company's Unaudited Pro Forma Combined Financial Statements and the Notes
thereto and the Merkert and Rogers financial statements and Notes thereto
included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
1997 1998
------------ -------------
(DOLLARS IN
THOUSANDS, EXCEPT PER
SHARE DATA)
<S> <C> <C>
PRO FORMA COMBINED EBITDA(1)(2)..................... $13,204 $ 7,584
Integration Adjustments:
Elimination of salaries, benefits, bonuses and
other direct costs................................ 19,378 11,417
Elimination of rental and other office expenses.... 1,084 813
Loss of revenue resulting from Manufacturer con-
flicts(3)......................................... (12,900) (2,900)
Elimination of non-recurring compensation charge
relating to the Gerald R. Leonard Note............ -- 1,271
------- -------
Adjusted Pro Forma Combined EBITDA (after integra-
tion adjustments).................................. $20,766 $18,185
======= =======
Adjusted Pro Forma Combined Net Income.............. $ 4,637 $ 4,860
======= =======
Adjusted Net Income Per Share....................... $ 0.64 $ 0.67
======= =======
</TABLE>
- --------
(1) EBITDA represents earnings before interest, taxes, depreciation and
amortization. The Company believes that EBITDA may be useful to investors
for measuring the Company's ability to service debt, to make new
investments and to meet working capital requirements. EBITDA as
calculated by the Company may not be consistent with calculations of
EBITDA by other companies. EBITDA should not be considered in isolation
from or as a substitute for net income (loss), cash flows from operating
activities or other statements of operations or cash flows prepared in
accordance with generally accepted accounting principles or as a measure
of profitability or liquidity.

(2) For a further discussion, see the Notes to Unaudited Pro Forma Combined
Statement of Operations Adjustments on pages F-8 and F-10.

(3) The anticipated revenue gain resulting from, among other things, new
product line representations on behalf of existing Manufacturers included
in the pro forma adjustment is based on estimates which management
believes are reasonable, but no assurance can be given that these
estimates are accurate.

COMBINED LIQUIDITY AND CAPITAL RESOURCES FOLLOWING THE COMBINATION

At September 30, 1998, the combined working capital deficit of Merkert and
Rogers was $(31.2) million. Following the completion of the Offering and the
application of the net proceeds therefrom and the borrowings available under
the Term Loan and a portion of the amounts available under the Revolving
Credit, the Company will have a working capital deficit of approximately
$(3.7) million. See the Unaudited Pro Forma Combined Financial Statements and
Notes thereto presented elsewhere in this Prospectus. The Company anticipates
that its cash flow from operations, cash on hand and anticipated borrowings
available under the Revolving Credit (as defined below) will provide cash
sufficient to satisfy the Company's working capital needs, debt service
requirements and planned capital expenditures for at least the next 12 months.

The Company expects to incur up to $11.1 million in integration costs
associated with the Combination of which approximately $3.3 million have been
or will be paid prior to the closing of the Offering by Merkert and Rogers,
approximately $1.5 million of which have been or will be paid with a portion
of the proceeds at the Offering and the remainder will be paid subsequent to
the Offering.

On a combined basis, Merkert and Rogers used $1.8 million of net cash from
operating activities for the first nine months of 1998 due to the effect of
operating losses at Merkert. On a combined basis, cash flows from financing
activities were $2.8 million for the first nine months of 1998 due to
borrowing activity at Merkert.

The Company has obtained the Commitment for the $75 million Credit Facility
from First Union National Bank and First Union Capital Markets. First Union
National Bank is an affiliate of Wheat First Securities, Inc.,

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one of the Underwriters of the Offering. First Union Capital Markets is a
division of Wheat First Securities, Inc. The Credit Facility consists of a
five-year, secured, fully amortizing $50 million term loan (the "Term Loan")
and a three-year, secured $25 million revolving line of credit (the "Revolving
Credit"), which will be available upon the closing of this Offering. The
Company will pay a commitment fee of approximately $2.5 million in connection
with obtaining the Credit Facility. Together with the net proceeds of the
Offering, the Company expects to use amounts available under the Credit
Facility (including amounts available under the Term Loan and a portion of the
amounts available under the Revolving Credit) to (i) repay approximately $17.1
million of indebtedness of Merkert and Rogers assumed in connection with the
Offering, (ii) pay, or reserve for the payment of, approximately $29.6 million
of obligations to certain sellers of previously acquired businesses, (iii)
repay approximately $750,000 outstanding under a promissory note payable to
Monroe & Company II, LLC which is attributable to certain of the Company's
expenses, (iv) fund approximately $4.0 million of buyouts of employment
arrangements of certain departing executives of Merkert as well as buyouts of
certain consulting arrangements and (v) pay approximately $2.9 million of
expenses incurred by Merkert American Corporation, and each of Merkert and
Rogers and their respective stockholders in connection with the Combination.
The Credit Facility will be secured by a lien on substantially all of the
assets of the Company, Merkert, Rogers and their respective subsidiaries and
by a pledge of 100% of the capital stock of Merkert, Rogers and such
subsidiaries. In addition, the Credit Facility will be jointly and severally
guaranteed by Merkert, Rogers and their respective subsidiaries.

Interest shall be payable on the Term Loan and the Revolving Credit at a
rate based on one of three customary interest rates plus an additional
interest margin of 75 to 350 basis points. The applicable margin will be
determined based on certain financial ratios of the Company. The Credit
Facility will require the Company to make certain mandatory prepayments of
amounts outstanding under the Credit Facility with the use of certain excess
cash flow and certain proceeds of debt and equity financings. The Credit
Facility will require the Company to comply with various affirmative and
negative covenants, including, among others: (i) the maintenance of certain
financial ratios, (ii) restrictions on additional indebtedness, (iii)
restrictions on liens, guarantees, dividends and the disposition of assets and
(iv) obtaining the lenders' consent to acquisitions involving cash
consideration in excess of a specified amount. The Credit Facility will be
subject to the completion of customary loan documentation. The pricing,
structure and other terms of the Credit Facility, including the interest rate
but not the amount available under the Credit Facility, are subject to change
by First Union National Bank under certain circumstances set forth in the
Commitment Letter. See "Risk Factors--Potential Changes to Credit Facility
Terms."

The Company intends to pursue acquisition opportunities and expects to fund
future acquisitions through the issuance of additional Common Stock,
borrowings available under the Revolving Credit, debt or equity financings and
cash flow from operations.

The Company is obligated to make payments to the sellers of certain
businesses acquired by Merkert and Rogers. In addition, the Company is
obligated to make payments relative to the mortgage on the Merkert
headquarters. The Company estimates the total principal and interest payments
under these various obligations will be approximately $1.2 million over each
of the next two years, decreasing to approximately $1.1 million over each of
the three succeeding years. A portion of the net available borrowings under
the Credit Facility will be used to repay, prior to their scheduled
maturities, obligations of Merkert and Rogers to certain sellers of previously
acquired businesses. The $9.3 million mortgage, which is a twenty year
obligation at an interest rate of 8.56%, does not contain any financial
covenants, but prohibits prepayment. The mortgage is payable in equal monthly
installments over its life.

Merkert currently has in place an $8.5 million revolving line of credit (the
"Merkert Facility") which is scheduled to expire on February 1, 1999.
Borrowings under the Merkert Facility bear interest at the lender's base
lending rate. The terms of the Merkert Facility include certain negative
covenants which include, without limitation, prohibitions on selling or
otherwise disposing of material assets, incurring additional debt, and other
customary negative covenants. Borrowings under the Merkert Facility are
secured by a continuing security interest in Merkert's accounts receivable and
all other debts, obligations and liabilities owing to Merkert.

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Rogers currently has in place a $10.0 million revolving credit facility (the
"Rogers Facility") which is scheduled to expire on January 31, 1999.
Borrowings under the Rogers Facility bear interest at the lower of: (i) the
lender's one-month LIBOR index plus 2.70% and (ii) the lender's prime lending
rate. The terms of the Rogers Facility include certain negative covenants
which include, without limitation, restrictions on changes in ownership of
Rogers, creation of liens on Rogers' assets, merger and acquisition
transactions, dispositions of assets, and other customary negative covenants.
Borrowings under the Rogers Facility are secured by a lien on Rogers' accounts
receivable and a second mortgage on its corporate headquarters.

Upon the consummation of the Offering, the Company will use a portion of the
net available borrowings under the Credit Facility to repay all of the
outstanding indebtedness of Merkert and Rogers under the Merkert Facility and
the Rogers Facility. See "Use of Proceeds."

The Company estimates that its ongoing requirements for capital
expenditures, based on the requirements of Merkert and Rogers, will be
approximately $2.0 million per year. Capital expenditures will be made to
ensure that the Company maintains its strong position in information
technology and systems and anticipates that significant capital will be
required to upgrade and integrate the systems of companies acquired in the
future. On a combined basis, Merkert and Rogers made capital expenditures of
$2.2 million in 1997, exclusive of $5.5 million for the construction of a new
corporate headquarters for Merkert.

SEASONALITY; FLUCTUATIONS IN QUARTERLY OPERATING RESULTS

Merkert and Rogers have both experienced, and the Company expects to
continue to experience, fluctuations in quarterly revenues and operating
results as a result of seasonal patterns. Rogers' business has been stronger
in the first calendar quarter compared to Merkert's business due to its
presence in Florida; while Merkert's business has been stronger in the fourth
calendar quarter as a result of the historically strong sales in the northeast
associated with the holiday season.

Quarterly results may also be impacted by the timing of any future
acquisitions as well as the timing of any consolidation activities undertaken.
The Company's revenues may also be adversely impacted by disruptions in food
production by Manufacturers it represents, particularly as it relates to
weather dependent production, such as fresh produce.

INFLATION

The Company does not believe that its revenues have been materially affected
by inflation.

YEAR 2000 DISCLOSURE

The statements in the following section include "Year 2000 readiness
disclosure" within the meaning of the Year 2000 Information and Readiness
Disclosure Act of 1998 (the "Year 2000 Disclosure Act"). The protections
available to the Company under the Year 2000 Disclosure Act do not apply to
actions brought under the federal securities laws with respect to statements
made in registration statements filed with the Securities and Exchange
Commission.

The Year 2000 issue exists because many computer systems and applications
currently use two-digit date fields to designate a year. As the century date
change occurs, date sensitive systems recognize the year 2000 as 1900 or not
at all. The inability to recognize or properly respond to the Year 2000 issue
may cause systems to incorrectly process financial and operational
information.

The Company has developed and begun the implementation of a plan to
evaluate, remediate and, where necessary, replace its information technology
infrastructure, software, hardware and communications systems (the "IT
systems") in light of the Year 2000 issue. The Company has substantially
completed the evaluation of its IT systems and non-IT systems (such as climate
control, copying machines, security systems and other comparable systems) for
potential exposure to problems associated with Year 2000 compliance. The
Company's assessment and evaluation efforts have included the testing of
systems, inquiries of third parties and other research.

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<PAGE>

Primarily as a result of the implementation of significant systems upgrades,
the Company believes that it has substantially reduced its potential exposure
to Year 2000 problems. These systems upgrades have included the replacement of
Merkert's order processing system (including the electronic data interchange
("EDI")) with new hardware and software. The Company has tested the
application of this order processing system at Merkert and such tests have
yielded satisfactory results. As a result, the Company believes that this
order processing system is Year 2000 compliant. Additionally, during the
second quarter of 1999, the Company intends to convert Rogers' mid-Atlantic
operations to the order processing system currently in use by Merkert and by
Rogers in regions other than the mid-Atlantic, which the Company believes is
Year 2000 compliant. The estimated cost of this conversion is approximately
$0.1 million.

The Company has determined that Merkert's financial reporting system is not
Year 2000 compliant and intends to replace it with Rogers' existing system,
which has been recently upgraded and which the Company believes is Year 2000
compliant. This replacement is expected to be completed by March 1999 and is
estimated to cost approximately $0.2 million. See "--Combined Integration
Activities."

Substantially all of the costs incurred by the Company relating to the
improvement of its IT systems were incurred in connection with planned
upgrading activities rather than in response to the results of the Company's
Year 2000 compliance evaluation. The Company does not anticipate any
significant additional costs in connection with its Year 2000 compliance
activities. However, if the Company's Year 2000 compliance efforts are not
completed as scheduled, or if the cost of achieving Year 2000 compliance
exceeds the Company's current estimates, the Year 2000 issue could have a
material adverse effect on the Company's business, financial condition or
results of operations.

The Company intends to replace several PBX (telephone) systems at Rogers
because they are not Year 2000 compliant. The estimated cost of the new
telephone systems is $0.1 million. In addition, approximately $0.2 million of
personal computers, which cannot be upgraded, will be replaced in the first
quarter of 1999.

The Company also is vulnerable to the failure by Manufacturers, Retailers or
other third-party vendors or customers to identify and remedy their own Year
2000 issues. Although the Company has initiated efforts to communicate with
such parties regarding their Year 2000 compliance efforts, the Company is
unable to estimate the nature or extent of any potential impact resulting from
the failure of these third parties to achieve Year 2000 compliance. There can
be no assurance that any one or more of such third parties will not experience
Year 2000 problems or that such problems will not have a material adverse
effect on the Company.

The Company has developed a contingency plan to transmit data that is
ordinarily transmitted on the EDI system to third parties that are not Year
2000 compliant. Other than with respect to the transmission of such data, the
Company has not developed a contingency plan in the event that it has not
achieved Year 2000 compliance on or prior to December 31, 1999. The results of
the Company's assessment and evaluation efforts to date have not yet
identified a need for such contingency planning. The Company intends to
continue to assess its Year 2000 compliance, to implement its Year 2000
compliance plans and to communicate with material third parties regarding
their Year 2000 compliance efforts. In the event that the Company develops
information indicating that contingency planning would be prudent, the Company
intends to undertake such planning and to implement appropriate measures
accordingly.

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<PAGE>

BUSINESS

OVERVIEW

The Company was organized in March 1998 to create a leading food brokerage
firm providing outsourced sales, merchandising and marketing services to
Manufacturers. The Company acts as an independent sales and marketing
representative, selling grocery and consumer products on behalf of
Manufacturers and coordinating the execution of Manufacturers' marketing
programs with Retailers. The Company's principal source of revenues is
commissions that it receives from Manufacturers. The Company's other
activities include managing private label programs on behalf of selected
Retailers.

The Company has long-standing relationships with many of its Manufacturers,
including Dean Foods/Birds Eye (41 years), H.J. Heinz (24 years), Minute Maid
(44 years), Ocean Spray (29 years) and Pillsbury (19 years). Key Retailer
relationships include C&S Wholesale Grocers, Inc., Food Lion Supermarkets,
Hannaford Brothers, Kroger, Publix Supermarkets, Royal Ahold (including Stop &
Shop, Bi-Lo and Giant Food), Safeway, Wakefern (Shop Rite), and Winn-Dixie.
The Company represents more than 750 Manufacturers and more than 70,000 food
and non-food stock-keeping units ("SKUs"), and does business with key
Retailers in 22 states.

Since 1994, Merkert and Rogers have acquired and integrated 21 companies,
successfully adding coverage of new geographic markets and expanding
representation of Manufacturers' product offerings within existing markets.
The Company's strategic acquisition plan includes the selection, acquisition
and management of businesses in brokerage market segments, including the
retail food brokerage, food service brokerage and private label brokerage
market segments.

The Company will be the first publicly held food broker in the United
States. The Company is the only food broker with comprehensive geographic
coverage of the eastern United States and the capability to provide service to
that region's largest Retailers. The eastern United States is the most highly
concentrated retail store region in the United States and represents
approximately 43% of national food store sales. The Company has 30 offices
serving Retailers in 22 states. In 1997, the Company had pro forma combined
revenue of approximately $230.4 million and pro forma combined net income of
approximately $0.1 million.

INDUSTRY OVERVIEW

The Company estimates, based on information published by industry sources,
that the food brokerage industry in the United States had annual commission
revenues of approximately $6 billion in 1997. A portion of such revenues were
earned in connection with retail merchandising activities. According to
industry sources, the retail merchandising industry in the United States had
annual revenues of approximately $11.7 billion (exclusive of retail
merchandising revenues in the food brokerage industry) in 1997. Food brokers
serve Manufacturers, Retailers and food service providers. Retail food brokers
represent approximately 3,200 Manufacturers that sell to approximately 128,000
Grocery Stores and more than 700 wholesalers nationwide. The industry includes
three types of food brokers, as follows:

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<PAGE>

introductions to Retailers, on behalf of Manufacturers. Retail food brokers
also assist Manufacturers in developing, reviewing and executing annual
marketing plans. Other headquarters services include order management,
supervision of shelf space management, coordination of Manufacturers'
promotional spending, and facilitating the resolution of billing issues
between Manufacturers and Retailers. In connection with the implementation of
category management at the Retailers' headquarters level, retail food brokers
assist Retailers by gathering and analyzing demographic, consumer, and store
sales information utilized in the management of product categories as
strategic business units.

Retail store functions generally include execution of sales plans for
Manufacturers' products at the store level by assisting in merchandising,
shelf and display management, new store set-ups, implementation of promotional
plans, and placement of point-of-sale coupons, signs and other information.
Retail food brokers also assist Retailers with coupon and advertising
programs, quality assurance and technical training (primarily in relation to
prepared foods). In addition, retail food brokers assist Retailers and
Manufacturers in the collection, analysis and application of retail sales
data.

The retail food brokerage industry has been growing as food brokers
represent an increasing percentage of ACV. In 1997, the percentage of ACV sold
through Grocery Stores was approximately 55% compared to 45% in 1985.
According to Progressive Grocer, Grocery Store revenues, of which an
increasing portion is represented by food brokers, are generally not
materially adversely affected by economic downturns and have grown from
approximately $292 billion in 1985 to $436 billion in 1997.

The Company believes that the retail food brokerage industry is highly
fragmented and is experiencing significant consolidation. In the past 10
years, the number of food brokerage firms has decreased from 2,500 to 1,000,
while the number of sales representatives employed by such firms increased
from 35,000 to 42,000. There are five multi-regional food brokerage firms,
including the Company, each with an approximately 3% market share. In total,
there are approximately 12 large regional food brokerage firms in the United
States. A number of the companies in the food brokerage industry, including
Merkert and Rogers, have participated in the trend towards consolidation by
acquiring other food brokerage businesses, generally financing these
transactions with debt and/or by deferring the payment of a portion of the
purchase price.

BUSINESS STRATEGY

The Company's objective is to become one of the leading national providers
of outsourced sales, merchandising and marketing services to Manufacturers,
Retailers and food service providers throughout the United States. The
Company's business strategy comprises the following key elements:

Expand Current and Develop New Manufacturer Relationships. The Company seeks
to increase its representation of existing Manufacturers' product lines by
representing Manufacturers' products in new

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<PAGE>

geographic markets and non-supermarket trade channels, including mass
merchandisers, food service providers, membership warehouses, drug stores and
convenience stores. The Company also seeks to increase the range of products
it represents on behalf of the Manufacturers it currently serves and enter
into new relationships with Manufacturers.

Provide Effective Marketing Support and Valuable Category Management
Technology. The Company's marketing expertise and information technology
system allow it to utilize local demographic information and information about
retail store level conditions to understand consumer purchasing preferences in
local markets. As a result, the Company is able to develop and implement
targeted consumer sales promotions for its Manufacturers' products. The
Company also deploys category analysts who use local sales data to assist
Retailers with shelf schematics, category layouts and total store space
management.

Growth Through Strategic Acquisitions. The Company intends to pursue
strategic acquisitions in the food brokerage industry. Since 1994, Merkert and
Rogers have acquired and integrated 21 companies, successfully adding coverage
of new geographic markets and expanding representations of Manufacturers'
product offerings in existing markets. The Company's plans include the
selection, acquisition and management of businesses in the following brokerage
market segments:

. Retail: A key element of the Company's acquisition strategy is to expand
its geographic coverage by acquiring existing retail food brokerage
firms in new geographic markets. The Company also seeks acquisition
candidates that conduct business within the Company's existing territory
and offer the Company the opportunity to expand its representation of
Manufacturers and product categories and its coverage of Retailers
within existing markets. The Company has identified two retail food
brokers which operate in areas contiguous to the Company's current
operations (one located in the Midwest and one in the Southeast) and
which the Company believes may satisfy its criteria for strategic
acquisitions. The Company has been engaged in preliminary discussions
with each of these entities regarding such possible acquisitions. In the
event that the Company acquires either or both of such entities, the
transaction or transactions may be financed with amounts made available
for such purpose under the Revolving Credit upon the consent of the
Credit Facility lenders. In addition, the Company has engaged in
preliminary acquisition discussions with certain large regional or
multi-regional food brokers in connection with the implementation of the
Company's strategy to become a national food broker. The Company's
acquisition strategy is also focused on candidates that will enable it
to represent additional product categories and cover additional
distribution channels. In particular, the Company believes that health
and beauty care and general merchandise brokerage and bakery, deli,
meat, seafood, floral and produce brokerage have significant growth
potential. The Company's strategic plans also include the coverage of
convenience stores, as it believes convenience stores will account for
an increasingly larger portion of food sales as sales of meal
replacements and non-traditional grocery items continue to grow. Retail
food brokerage represented approximately 78% of the Company's revenues
for the year ended December 31, 1997 on a pro forma basis.

. Private Label: The Company believes that the private label food
brokerage segment is currently fragmented and that the Company can
further develop its private label operations through targeted
acquisitions of private label food brokers within this growing segment
of the food industry. Private label sales and brokerage represented
approximately 15% of the Company's revenues for the year ended December
31, 1997 on a pro forma basis.

. Food Service: Sales to entities in the food service segment of the food
industry represented approximately 3% of the Company's revenues for the
year ended December 31, 1997 on a pro forma basis. The Company believes
that it will be able to expand its operations within the fragmented food
service segment through the acquisition of existing food service brokers
who sell Manufacturers' products to food service providers.

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<PAGE>

The Company believes that its acquisition strategy will enable it to:

. Strengthen Market Presence: By expanding its geographic coverage, the
Company will be able to offer Manufacturers more extensive and better
coordinated coverage of Retailers who operate across geographic regions.
As the Company expands the portion of a given Manufacturer's sales that
it represents, it will be better positioned to meet Manufacturers' needs
by providing a wide range of services across a broader geographic area.
This will enable Manufacturers to increase the effectiveness of their
marketing programs and reduce the costs associated with managing their
brokerage networks by using fewer food brokerage companies.

. Benefit from Increased Economies of Scale: As the Company expands the
number of Manufacturers and product lines it represents, it expects to
realize certain economies which will result from the low incremental
cost of representing additional Manufacturers and product lines. The
Company also expects to recognize certain economies of scale as the
Company expands its operations to cover a larger geographic region.

. Improve Operating Efficiencies: The Company believes that as it
integrates acquired companies it will be able to eliminate certain
duplicative operations, facilities and personnel. The Company expects to
realize cost savings through the consolidation of certain administrative
functions.

Increase Private Label Brokerage. The Company has a division that
specializes in the development, procurement and inventory management of
private label frozen products, including fruits, vegetables and other products
on behalf of certain Retailers. The Company's private label division currently
works in conjunction with Retailers such as A&P, Price Chopper, Publix and
Royal Ahold (including Stop & Shop, Bi-Lo and Giant Food). In addition, the
increasing geographic coverage of the Company will provide it with the
opportunity to offer private label services to more retailers and more retail
locations.

Expand Food Service Brokerage. Sales to entities in the food service
brokerage segment of the food industry currently represent a small part of the
Company's business. The Company believes that there is a high degree of
fragmentation in this industry segment and that the food service brokerage
segment presents opportunities for profitable growth through strategic
acquisitions, as well as through developing new account relationships through
its existing operations. The Company intends to pursue expansion of its food
service brokerage line within its existing geographic coverage and to develop
food service brokerage in new territories.

Seek International Opportunities. The Company believes that many
opportunities exist outside the United States for sales, marketing and food
brokerage services in connection with retail food stores and in the
development of private label programs for Retailers. Certain Retailers,
including Royal Ahold, J. Sainsbury PLC and Food Lion Supermarkets, among
others, currently operate on an international basis. The Company believes that
international expansion would involve the acquisition of food brokers in
countries where food brokers are used by Manufacturers and Retailers. The
Company has recently entered into an agreement to provide private label
services to a Retailer based in Japan for its peanut butter and red wine
products.

Empower Local Management and Develop Professional Staff. The senior
management of the Company will provide overall strategic direction and
guidance with respect to acquisitions, financing, marketing and operations. In
general, however, it is the intention of the Company to continue to operate
its day-to-day business on a locally oriented basis. The Company intends to
continue the development of proprietary "best practices" by emphasizing an
entrepreneurial culture at the local level. The Company believes that the
flexibility of a locally oriented approach to operational matters enables the
Company to effectively respond to changes in the competitive environment.

The Company believes that a key factor to its continuing success is the
strength of its professionals. The development and training of employees has
contributed to the Company's continued growth and profitability. In keeping
with the Company's philosophy and operating structure, the Company intends to
continue to manage employee relations and human resource development at the
local level. Management at the local level is responsible for developing and
training the professional staff which reports to them and for creating an
environment that promotes employee satisfaction and optimal performance.

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COMPANY HISTORY

The Company was organized in March 1998 and, to date, has conducted
operations only in connection with the Combination and the Offering. See
"Certain Transactions--Organization of the Company" and "The Combination."
Unless the context otherwise requires, references to the "Company" herein mean
Merkert American Corporation together with Merkert and Rogers after
consummation of the Combination.

Merkert Enterprises, Inc., one of the entities to be acquired in the
Combination, has operated as a food broker in the northeastern and mid-
Atlantic regions of the United States since 1950. In 1997, Merkert
Enterprises, Inc. had total revenues of approximately $147.4 million and net
losses of $3.4 million. For the first nine months of 1998, Merkert
Enterprises, Inc. had total revenues of $100.5 million and net losses of $6.3
million. The principal source (71%) of the 1997 total revenues of Merkert
Enterprises, Inc. was from commissions it received from Manufacturers. Merkert
Enterprises, Inc. also manages private label programs on behalf of selected
Retailers. Merkert Enterprises, Inc. has grown its revenues both through
internally generated growth and through acquisitions, having acquired and
integrated six smaller food brokers since 1994. Merkert Enterprises, Inc.
financed such acquisitions, in part, with debt and/or by deferring the payment
of a portion of the purchase price. A portion of the net available borrowings
under the Credit Facility will be used to repay certain of such acquisition-
related obligations of Merkert Enterprises, Inc. Primarily as a result of such
obligations, as well as a substantial tax liability, Merkert Enterprises, Inc.
has experienced losses and a working capital deficit in recent years. The
stockholders of Merkert Enterprises, Inc. have agreed to pay such tax
liability from cash otherwise payable to them in connection with the
Combination. After giving effect to the Offering and the expected application
of the net proceeds therefrom and the application of the Term Loan and a
portion of the amounts available under the Revolving Credit, the Company will
have a working capital deficit of approximately $(3.7) million. See "Risk
Factors--Implementation of Acquisition Strategy; Risks Related to Growth
Strategy," "--Merkert Enterprises, Inc.-- History of Losses," "Use of
Proceeds" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Results of Operations--Merkert," and "--Liquidity and
Capital Resources--Merkert."

Rogers has operated as a food broker in the southeastern region of the
United States since 1934. In 1997, Rogers had total revenues of approximately
$83.0 million and net income of $0.7 million. For the first nine months of
1998, Rogers had total revenues of $62.6 million and net income of $0.4
million. All of Rogers' 1997 revenues were derived from commissions it
received from Manufacturers. Rogers has grown its revenues both through
internally generated growth and through acquisitions, having acquired and
integrated 15 smaller food brokers since 1994. Rogers financed such
acquisitions, in part, with debt and/or by deferring the payment of a portion
of the purchase price. A portion of the net available borrowings under the
Credit Facility will be used to repay certain of such acquisition-related
obligations of Rogers. See "Use of Proceeds" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Combined Liquidity
and Capital Resources Following the Combination."

SERVICES AND OPERATIONS

The Company has traditionally provided Manufacturers with a full array of
sales, marketing and administrative services and has been paid a commission by
Manufacturers. In certain cases, the Company has entered into "hybrid"
arrangements with Manufacturers under which the Company provides less than
full geographic coverage and/or services. Commissions from full and hybrid
services represented approximately 82% of the Company's revenues for the year
ended December 31, 1997 on a pro forma basis. The functions and services
provided by the Company are described below.

Full Services. The Company currently provides full services to approximately
92% of the Manufacturers that it represents. When the Company provides full
services to a Manufacturer in connection with the sale of its products to
Retailers, the commission is generally 3% of the Manufacturer's net sales to
such Retailers. The services that the Company provides to Manufacturers in a
full services arrangement include:

. Account Service and Business Development: In general, the Company's
Manufacturers are serviced by business managers, each of whom is
responsible for identified products of a number of Manufacturers within
one region (such as New England). The Company's business managers,
customer

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service personnel and support staff utilize information developed by the
Company to assist Manufacturers in devising strategic sales plans and
achieving merchandising goals and in utilizing retail information to
develop customized marketing strategies, including determining the
assortment of current and new products to be offered and promotions
designed to increase revenues and profitability. The activities of these
business managers are supervised by general managers who manage
categories of products such as groceries, frozen foods and perishables,
or health, beauty care and confection products.

The Company's Regional Business Managers ("RBMs") are Company executives
who provide the primary link between the Company and certain of the
Company's largest Manufacturers. Each of the Company's RBMs is dedicated
to a single Manufacturer and directs a multi-regional team (a
"Manufacturer Team") comprised of business managers (each of whom
manages the Company's activities on behalf of a Manufacturer in a
specified region), customer service personnel and support staff. These
RBMs provide their Manufacturers with services similar to those provided
by business managers.

. Administrative Management: The Company handles both order management and
certain billing management services for Manufacturers. The Company's
order management system enables it to perform all major order management
functions relating to orders for goods from Retailers to Manufacturers.
The Company has developed a centralized order management system to
generate electronic orders through the EDI system. This system enables
the Company to verify quantities, product codes, pricing, pack sizes and
promotions pertaining to an order. The Company's order management system
also reconciles Manufacturer invoices with Retailer purchase orders and
manages and processes promotional allowances and credits for Retailers.
In addition, the Company facilitates the resolution of billing issues
between Manufacturers and Retailers.

. Category and Shelf Space Management: The Company's category management
analysts and shelf space management analysts serve as liaisons, linking
the Company, RBMs, business managers and Manufacturer Teams with
retailer teams, comprised of headquarters account managers and retail
merchandisers ("Retailer Teams"). These retail analysts develop
information from retail data collected by the Company's Retailer Teams
and by outside sources, including ACNielson Corp. and Information
Resources, Inc. RBMs and business managers use this information in
developing multi-regional, regional and local strategies with
Manufacturers. Retailer Teams also use this information, as well as
store-specific sales and demographic information provided by these
analysts, to implement sales and merchandising strategies at the local
level. These category management activities enable Manufacturers to
prepare fact-based selling strategies used in product and promotional
planning. These activities also enable Retailers to increase sales and
profitability by more effectively utilizing their resources, including
shelf space as well as marketing and promotional expenditures.

. Retail Services: In general, the Company's headquarters account managers
and retail merchandisers represent a wide range of Manufacturers'
products to specified Retailers within a region. The Company's
headquarters account managers call upon Retailers at the headquarters
level and represent numerous products on behalf of the Company's
Manufacturers. The Company's largest Retailers are called upon by
multiple headquarters account managers, each representing specific
product categories such as groceries, frozen food/perishables or health,
beauty care and confectionery products. Smaller Retailers are generally
called upon by headquarters account managers who represent multiple
product categories. Headquarters account managers help execute sales
plans developed by RBMs, business managers and Manufacturers. Through
their frequent service calls, the Company's retail merchandisers develop
relationships with store managers and in-store category managers and
assist headquarters account managers to execute sales plans for
Manufacturers' products. The Company's retail merchandisers execute
sales plans at the store level by providing shelf and display
management, new store set-ups, stocking of new items and placement of
point-of-sale coupons and signs.

The Company's largest Retailers are serviced by dedicated Retailer
Teams. In some cases, these dedicated Retailer Teams include shelf space
management analysts who provide shelf management and display expertise.

43
<PAGE>

The Company also initiates and executes local marketing events on
behalf of Manufacturers in order to build Manufacturer brand
recognition. These efforts include the preparation and display of
special signage, coupon programs and other promotional activities
between Manufacturers and Retailers.

Hybrid Services. In response to increasing demand from certain Manufacturers
who are outsourcing more of their retail services functions, the Company has
recently entered into "hybrid" agreements under which the Company provides
only specified services, geographic coverage and Retailer coverage to a
Manufacturer. The Company has entered into hybrid agreements with
approximately 5% of the Manufacturers the Company represents. The fee for such
services varies based on the particular services provided. By providing a
flexible alternative to commission-based pricing, the Company has increased
the total number of Manufacturers it represents and believes that such hybrid
services may also result in sales of additional services to Manufacturers.
Providing retail-only services is a common hybrid arrangement. Retail-only
services primarily include initial retail shelf set-ups and subsequent store
shelf space management. The Company provides retail-only services to
approximately 3% of the Manufacturers it represents. These retail-only
services generally provide for compensation equivalent to a commission of
approximately 1.0% of the value of product sales to the Retailer.

Private Label. The Company's private label division, which accounted for
approximately 14% of the Company's revenues for the year ended December 31,
1997 on a pro forma basis, develops, procures, and manages inventory of
private label products (including frozen fruits and vegetables and other
products) on behalf of certain Retailers. This division works in conjunction
with major Retailers such as A&P, Price Chopper, Publix and Royal Ahold. The
Company intends to expand its private label programs into all of its regional
markets as part of the integrated package of services the Company offers.

Store Supplies. The Company's store supplies division, which accounted for
approximately 4% of the Company's revenues for the year ended December 31,
1997 on a pro forma basis, operates as a distributor for Monarch Marking
Systems, Inc. and sells price marking equipment, labels and other related
store supplies to Retailers in New England and metropolitan New York City. In
addition, the Company sells a bio-degreaser product to Retailers' supermarket,
meat and bakery departments, restaurants and other food service customers
directly and through local distributors. The Company intends to expand
distribution of this bio-degreaser product into all its markets.

MANUFACTURERS AND RETAILERS

Manufacturers. The Company has had up to 44 years of successful
relationships with companies such as Dean Foods/Birds Eye, H.J. Heinz, Lipton,
Minute Maid, Ocean Spray, Pillsbury, Quaker and hundreds of others. These
companies manufacture grocery-related and food service products covering a
wide spectrum of categories and sub-categories from staples to perishables.
The Company acts as the exclusive broker for certain products of a
Manufacturer only within specific geographic regions. Manufacturers typically
use multiple food brokers, divided by product line or geographic market. No
single Manufacturer represented more than 5% of the Company's revenues for the
year ended December 31, 1997, on a pro forma basis.

44
<PAGE>

Retailers. On the retail side, the Company has a long established history
with many large and mid-sized Retailers in the food industry. Many of these
Retailers are, or are owned by, some of the world's largest food retailers,
while others are leading regional players. No single Retailer represented more
than 6% of the Company's revenues for the year ended December 31, 1997, on a
pro forma basis. The top Retailers serviced by the Company based on 1997
revenues include those listed below:

<TABLE>
<CAPTION>
RETAILER NAME OPERATING REGION
------------- -------------------------------
<S> <C>
C&S Wholesale Grocers, Inc................. Northeast US
Food Lion, Inc./Delhaize................... Southeast US
Hannaford Brothers......................... New England and southeast US
J. Sainsbury PLC (Shaws Supermarkets)...... New England and mid-Atlantic US
Kroger..................................... Southeast US
Publix Supermarkets........................ Southeast US
Royal Ahold (including Stop & Shop, Bi-Lo
and Giant Food)........................... Eastern US
Safeway.................................... Mid-Atlantic US
Supervalu.................................. Northeast and southeast US
White Rose................................. Northeast US
Wakefern (Shop Rite)....................... Mid-Atlantic US
Winn-Dixie................................. Southeast US
</TABLE>

INFORMATION TECHNOLOGY

The application of information technology has become an increasingly
important element in the food brokerage industry. In order to provide
Manufacturers and Retailers with the most efficient and useful information and
services, the Company has invested in current retail information technology.

Electronic Data Interchange. The EDI system, which was first used in the
industry in 1980, streamlines order communications among food brokers,
Retailers and Manufacturers. EDI has played a growing role as an increasing
number of Manufacturers, Retailers and food brokers have integrated their
systems with EDI. Orders sent by EDI are transmitted on-line from the Retailer
to the Company and entered automatically into the Company's order databases.
Orders are reviewed by the Company to verify that quantities, product codes,
pricing, pack sizes and promotions have been correctly submitted. The Company
then places orders with certain Manufacturers via EDI. By reducing manual
order processing, the system significantly curtails order input errors,
expedites order processing and reduces the number of personnel required to
fulfill this function.

Retail Information. The Company utilizes a retail reporting system to update
Manufacturers with store-specific information regarding their products. The
Company's retail representatives record information on in-store merchandise
conditions, including product placement and pricing information. This
information is then entered into the Company's retail reporting system. The
Company's retail reporting system allows both the Company and its
Manufacturers to easily access store-level information. The Company believes
that it is one of only a few food brokers offering comprehensive merchandising
information regarding store-specific retail conditions.

Local Area Network and Web Technology. The Company was among the first food
brokers to install a company-wide local area network and wide area network,
enabling it to provide on-line information to Manufacturers and Retailers. To
disseminate this information, the Company utilizes the internet and dedicated
extranets. The Company's internet site on the worldwide web is being developed
to market the Company's services to potential Manufacturers and Retailers. The
Company's on-line service allows it to communicate with Retailers and
Manufacturers and to provide them with marketing, sales and other information
related to their products and operations.

COMPETITION

The food brokerage market is large and fragmented, with brokers serving
numerous local markets and a few large brokers serving multiple regions in the
United States. The Company acts as the exclusive broker for

45
<PAGE>

certain products of a Manufacturer only within specific geographic markets.
Manufacturers typically use multiple food brokers, divided by product line or
geographic market. The Company competes with other food brokers for the right
to represent Manufacturers' product lines to Retailers. The Company competes
with brokers serving local markets as well as large brokers serving multiple
regions. Competition is based primarily on breadth of geographic coverage, and
the quality and scope of services provided. In addition, many Manufacturers,
including some of the Manufacturers served by the Company, employ sales
personnel to sell directly to Retailers and distributors. See "Risk Factors--
Competition."

The entire food distribution chain, including Manufacturers, Retailers, and
food brokers, has been consolidating over the past 10 years. As the market
becomes more concentrated in terms of the total number of Manufacturer and
Retailer accounts served by food brokers, the Company believes that large
brokers that can provide a full array of services to leading Manufacturers and
Retailers across multiple geographic markets have a competitive advantage. The
Company believes that Manufacturers will favor large regional and national
food brokers with the personnel and technology resources necessary to operate
in an increasingly sophisticated and complex environment, and the capability
to provide the local market focus required by Manufacturers and Retailers.

The Company will, upon completion of the Offering, become the first publicly
held food broker in the United States, with operations spanning most of the
eastern United States. The Company is one of the five largest food brokers in
the United States and competes with the nation's other multi-regional food
brokers--Advantage Sales, Richmont Marketing Specialists, Crossmark and
Acosta-PMI. In total, there are approximately 12 large regional food brokerage
firms in the United States. On a local and regional basis the Company competes
with Pezrow, Eastern States, and MAI. Some of the Company's competitors
include alliances of smaller regional food brokers.

COMBINATION--INTEGRATION OF FUNCTIONS

In connection with the Combination, the Company has developed an integration
program to implement appropriate organizational and operational changes in
connection with the Combination. This program provides a framework by which
the administrative functions of both Merkert and Rogers may be rationalized
and combined into a single unit. Payroll administration and reporting, for
example, will be centralized at the Company's headquarters to eliminate
redundancies. Financial and management reporting systems will also be
integrated, using the systems already in place at Rogers. Moreover, as both
Merkert and Rogers already utilize the same order processing system (with the
exception of Rogers' mid-Atlantic operations), this administrative function
will be integrated and provide the Company with further operating
efficiencies. The Company intends to substantially complete the integration of
Merkert and Rogers prior to the end of 1998. The Company's integration program
includes coordination efforts with Manufacturers to minimize Manufacturer
conflicts and any related losses in connection with the Combination.

EMPLOYEES

The Company has approximately 3,000 full and part-time employees. The
Company believes that its relations with its employees are good. Management
believes that none of the Company's employees is a member of any labor union.

46
<PAGE>

PROPERTIES

The Company's executive offices are located at 490 Turnpike Street, Canton,
Massachusetts 02021. The Company's telephone number at such location is (781)
828-4800. In addition to its executive offices, which are owned, the Company
maintains 30 sales offices in 22 states in the eastern United States, 28 of
which are leased and two of which are owned. The two owned facilities are the
largest and are:

<TABLE>
<CAPTION>
APPROXIMATE
LOCATION PRINCIPAL USAGE AREA IN SQ. FT. LEASED/OWNED
-------- --------------- --------------- ------------
<S> <C> <C> <C>
Charlotte, NC Office 54,000 Owned*
Canton, MA Office 50,000 Owned
</TABLE>
- --------
* This facility is currently owned by Rogers. Following the Combination, the
Company intends to sell this facility to a third party. Such third party
will lease this facility to the Company. The net proceeds of the sale will
be distributed to certain Rogers shareholders. See "Certain Transactions."

The Company believes that its properties are generally well maintained and
in good condition. The Company believes that its properties are adequate for
present needs and that suitable additional or replacement space will be
available as required.

LEGAL PROCEEDINGS

Merkert and Rogers have separately received written notices from the sellers
of two food brokerage businesses acquired by them alleging the breach of
certain covenants contained in agreements with such sellers. In each case,
such sellers are claiming that such breaches have caused the acceleration of
certain payments to such sellers of the deferred purchase price and
employment-related obligations. In the case of Rogers, the obligations to such
sellers are secured by a lien on the assets and a pledge of the capital stock
of Rogers' Florida subsidiary, Rogers-American Company of Florida, Inc. Rogers
has entered into a settlement agreement with such sellers providing for a
buyout of substantially all obligations to such sellers and a release of such
sellers' security for a cash payment of $4.27 million. Such buyout is
contingent on the completion of the Offering and will be funded with a portion
of the net available borrowings under the Credit Facility. In the case of
Merkert, such sellers have filed an arbitration demand claiming breach of
contract and seeking (i) acceleration of the payment of deferred purchase
price in the amount of approximately $7.4 million, together with interest,
costs and attorneys' fees and (ii) termination by such sellers of their
employment with Merkert for cause, which termination would not relieve Merkert
of its liability under such sellers' employment agreements and would render
the non-competition and confidentiality covenants null and void. The
arbitration is currently pending before the American Arbitration Association.
In connection with the acquisition of Merkert, a portion of the cash purchase
price will be held in escrow to cover a portion of the potential liabilities
resulting from an adverse outcome of this arbitration. Taking into account
such escrow and the expected use of the borrowings available under the Term
Loan and a portion of the amounts available under the Revolving Credit (which
expected use includes the funding of obligations relating to such matter), the
Company believes that such matter, if determined adversely to the Company,
would not have a material adverse effect on its financial condition or results
of operations. Merkert is currently the subject of an audit with respect to
its federal income tax returns for its fiscal years 1995, 1996 and 1997. In
connection with the acquisition of Merkert, a portion of the cash purchase
price will be held in escrow to cover potential liabilities resulting from the
audit and the Company does not believe that the ultimate outcome of this audit
will have a material adverse effect on its financial condition or results of
operations. The Company is from time to time a party to litigation arising in
the ordinary course of business. There can be no assurance that the Company's
insurance coverage will be adequate to cover all liabilities occurring out of
such claims. In the opinion of management, any liability that the Company
might incur upon the resolution of any such litigation will not, in the
aggregate, have a material adverse effect on the financial condition or
results of operations of the Company.

47
<PAGE>

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth information concerning the Company's
directors and executive officers and those persons who will become directors
and executive officers upon consummation of the Offering.

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Gerald R. Leonard............... 51 Chairman of the Board, Chief Executive
Officer and President
Douglas H. Holstein............. 55 Chief Operating Officer of the Company,
President of Rogers (a subsidiary of the
Company) and Director
Joseph T. Casey................. 43 Chief Financial Officer and Treasurer
Sidney D. Rogers, Jr............ 46 Chief Administrative Officer and
Secretary
Marty D. Carter................. 39 Vice President of Acquisitions and Chief
Financial Officer of Rogers (a
subsidiary of the Company)
Glenn F. Gillam................. 47 President of Merkert (a subsidiary of
the Company)
Edward P. Grace, III............ 48 Director
James L. Monroe................. 39 Director
James A. Schlindwein............ 70 Director
</TABLE>

Gerald R. Leonard will become Chairman of the Board, Chief Executive Officer
and President of the Company upon consummation of the Offering. Mr. Leonard
has been Chief Executive Officer of Merkert since September 1994. From May
1992 to September 1994, Mr. Leonard served Merkert as President of the Food
Enterprises, New England Division, and has been with Merkert in various
executive capacities since 1983. Mr. Leonard has also held sales and
management positions with Procter & Gamble, William Underwood Company and
Green Giant Company. Mr. Leonard has more than 26 years of experience in food
brokerage, manufacturing and related industries.

Douglas H. Holstein will become Chief Operating Officer, President of
Rogers, and a director of the Company upon consummation of the Offering. Mr.
Holstein has been President of Rogers since January 1993, and has been with
Rogers in various executive capacities since 1981. Prior to joining Rogers,
Mr. Holstein was the Regional Director of the Southeast for the Green Giant
Company.

Joseph T. Casey will become Chief Financial Officer and Treasurer of the
Company upon consummation of the Offering. Mr. Casey has been Chief Financial
Officer of Monroe & Company, LLC since 1997. From 1993 to 1997 Mr. Casey was
the Chief Financial Officer for the Quality Systems Group of Intertek Testing
Services. Prior to Intertek, Mr. Casey held several financial management
positions with EG&G. Mr. Casey began his career at Arthur Andersen & Co.

Sidney D. Rogers, Jr. will become Chief Administrative Officer and Secretary
of the Company upon consummation of the Offering. Mr. Rogers has been Chief
Financial Officer and Vice President of Merkert since 1994 and has been with
Merkert since 1977. Prior to serving as Chief Financial Officer of Merkert,
Mr. Rogers was Vice President of Administration of Merkert since 1986.

Marty D. Carter will become Vice President of Acquisitions of the Company
and Chief Financial Officer of Rogers (a subsidiary of the Company) upon
consummation of the Offering. Mr. Carter has been the Chief Financial Officer
of Rogers since 1987. From 1984 to 1987, Mr. Carter was in the audit practice
group of Touche Ross & Co.

48
<PAGE>

Glenn F. Gillam became President of Merkert (a subsidiary of the Company) on
June 1, 1998. Mr. Gillam has been President of the Food Enterprises, New
England Division, of Merkert since 1994, and has been with Merkert in various
capacities since 1983. Mr. Gillam has held sales and management positions with
companies involved in health and beauty care/general merchandise, frozen food,
confection and grocery since 1973.

Edward P. Grace, III will become a director upon consummation of the
Offering. Mr. Grace is President of Phelps Grace International, Inc., a
restaurant consulting and investment company. From 1989 until September 1996,
Mr. Grace served as Chairman of the Board, President and Chief Executive
Officer of Bugaboo Creek Steak House, Inc., operator of Bugaboo Creek Steak
House and The Capital Grille restaurants. Mr. Grace is Vice Chairman and a
director of RARE Hospitality International, Inc. and a director of
Professional Facilities Management, Inc. He also serves as a Trustee of the
University of Vermont and of Johnson & Wales University.

James L. Monroe has served as President of the Company since March 1998.
Upon consummation of the Offering, Mr. Monroe will become a director of the
Company. In 1997, Mr. Monroe founded Monroe & Company, LLC, a merchant banking
firm that invests in companies in consolidating industries. From January 1994
until December 1996, Mr. Monroe was a Senior Vice President of Oppenheimer &
Co., Inc., an investment banking and brokerage firm, where he managed the
Boston corporate finance department and the national consumer industry banking
practice. From 1992 until 1993, Mr. Monroe was a Managing Director of Advest,
Inc., an investment banking and brokerage firm. Mr. Monroe has 13 years of
investment and merchant banking experience.

James A. Schlindwein will become a director of the Company upon consummation
of the Offering. Mr. Schlindwein has been a director of Merkert since 1995.
Prior to his retirement in September 1994, Mr. Schlindwein served as Executive
Vice President, Merchandising Services, and a director of Sysco Corporation, a
national institutional food service distributor, where he had served since
1980. He is also a director of Tri-Valley Growers, EMMPAK Foods, Inc. Alaska
Seafood International, Chilay Corporation and Thompson's Pet Pasta Products,
Inc.

BOARD OF DIRECTORS

The business of the Company is managed under the direction of the Board of
Directors. After consummation of the Combination and the Offering, the Board
of Directors will consist of five directors. The Company's Amended and
Restated Certificate of Incorporation provides that the Board of Directors
shall be divided into two classes until the day of the first election of Class
II Directors occurring after the consummation of the Offering, and from and
after such date, the Board of Directors shall be divided into three classes
(such event, the "Board Conversion"). On the date of the Board Conversion, the
Class II Directors will be elected for a two-year term, and the initial class
of Class III Directors will be elected for a three-year term. The Amended and
Restated Certificate of Incorporation further provides that following the
Board Conversion, each class of the Board of Directors will be chosen for
staggered three-year terms upon the expiration of their then-current terms.
Holders of shares of Common Stock will have no right to cumulative voting in
the election of directors. Consequently, at each annual meeting of
stockholders, the holders of a majority of the shares of Common Stock will be
able to elect all of the successors of the class of directors whose terms
expire at that meeting.

Following consummation of the Offering, the Board of Directors will
establish an audit committee (the "Audit Committee") and a Compensation
Committee (the "Compensation Committee"). The Audit Committee, a majority of
which will be outside directors, will recommend to the Board of Directors the
firm to be appointed as independent accountants to audit financial statements
and to perform services related to the audit, review the scope and results of
the audit with the independent accountants, review with management and the
independent accountants the Company's year-end operating results, consider the
adequacy of the internal accounting procedures and consider the effect of such
procedures on the accountants' independence. The Compensation Committee, which
will consist solely of outside directors, will review and recommend to the
Board of Directors the compensation arrangements for all directors and
officers, approve such arrangements for other senior level employees and
administer and take such other action as may be required in connection with
certain compensation

49
<PAGE>

and incentive plans of the Company. The Compensation Committee will also
determine the number of options to be granted or shares of Common Stock to be
issued to eligible persons under the Company's 1998 Stock Plan. In addition,
the Compensation Committee will construe and interpret the 1998 Stock Plan and
issuances thereunder, and establish, amend and revoke rules and regulations
for administration of the 1998 Stock Plan.

Members of the Board of Directors who are also employees of the Company do
not receive compensation for their services on the Board of Directors or any
committee thereof. Each director who is not an employee of the Company (an
"Independent Director") receives an annual fee of $25,000. Upon consummation
of the Offering, each Independent Director will be granted an option to
purchase 20,000 shares of Common Stock at an exercise price equal to the
initial public offering price per share of Common Stock. Under the 1998 Stock
Plan, each new Independent Director elected following the Offering is entitled
to receive an initial grant of an option to purchase 20,000 shares of Common
Stock upon his or her election to the Board of Directors, and each Independent
Director who is serving as a director of the Company on the fifth business day
after each annual meeting of stockholders, beginning with the 1999 annual
meeting, will automatically be granted an option to purchase 5,000 shares of
Common Stock. In addition, the Independent Director who serves as chairman of
the Audit Committee of the Board of Directors will receive options to purchase
an additional 5,000 shares of Common Stock upon consummation of the Offering
and an additional 5,000 shares of Common Stock on the fifth business day after
each annual meeting of stockholders beginning with the 1999 annual meeting.
All options granted to Independent Directors under the 1998 Stock Plan shall
vest 50% upon the first anniversary of the grant date, and the remaining 50%
shall vest in equal annual installments over the number of years remaining in
each Director's term as of the first anniversary of the date of grant, shall
terminate upon the tenth anniversary of the date of grant and will have an
exercise price per share equal to the fair market value of the Common Stock on
the date of such grant. See "--1998 Stock Option and Incentive Plan-Stock
Options Granted to Independent Directors."

All members of the Board of Directors are reimbursed for travel expenses
incurred in attending meetings of the Board of Directors and its committees.

EXECUTIVE COMPENSATION; EMPLOYMENT AND NONCOMPETITION AGREEMENTS

The Company was incorporated in March 1998, has conducted no operations
other than those associated with the Offering and the Combination, and will
not pay any of its executive officers any compensation prior to the
consummation of the Offering. The Company will enter into employment and
noncompetition agreements upon consummation of the Offering with certain of
its executive officers. The material terms of these agreements are summarized
below.

Each of Messrs. Leonard, Holstein, Rogers, Carter and Gillam will enter into
employment and noncompetition agreements with the Company providing for base
salaries of $400,000, $300,000, $195,000, $175,000 and $300,000, respectively.
Each employment and noncompetition agreement will be for a term of three
years, and unless terminated or not renewed by the Company or the executive
officer, the term will continue thereafter. In general, these agreements will
provide that the executive officer's employment with the Company may be
terminated for "cause" by the Company for (i) dishonest statements or acts
which constitute material disloyalty or dishonesty toward the Company or cause
significant damage to the Company; (ii) the commission by or indictment of the
executive officer for a felony, or any misdemeanor involving moral turpitude,
deceit, dishonesty or fraud; (iii) an uncured failure by the executive officer
to perform a substantial portion of his duties and responsibilities; (iv)
uncured gross negligence, willful misconduct or insubordination; or (v) an
uncured material breach of any of his material obligations under the
employment and noncompetition agreement. In the event of termination of
employment by the Company without cause, the executive officer will be
entitled to receive from the Company continuation of his then current base
salary until the later of expiration of the initial term or twelve months from
the date of termination of employment, provided that in the case of Messrs.
Holstein and Carter, the executive officer will also be entitled to receive
from the Company continuation of health plan benefits and automobile benefits
until the expiration of the initial term. Each employment and noncompetition

50
<PAGE>

agreement will contain a covenant not to compete with the Company during the
initial term of the agreement and for a period of one year following
termination of employment or, if longer, for the period during which the
executive officer shall be entitled to receive continuation of his base salary
following termination of employment by the Company without cause.

1998 STOCK OPTION AND INCENTIVE PLAN

On May 20, 1998, the Board of Directors of the Company adopted, and the
stockholders approved, the initial 1998 Stock Plan and on July 1, 1998, the
Board of Directors of the Company adopted, and the stockholders approved, the
Amended and Restated 1998 Stock Option and Incentive Plan (the "1998 Stock
Plan"). The 1998 Stock Plan is designed and intended as a performance
incentive for officers, employees, consultants and Independent Directors to
promote the financial success and progress of the Company. The Company
anticipates that providing such persons with a direct stake in the Company's
welfare will assure a closer identification of their interests with those of
the Company, thereby stimulating their efforts on the Company's behalf and
strengthening their desire to remain with the Company. All officers and
Independent Directors are eligible to participate in the 1998 Stock Plan.

The 1998 Stock Plan provides for the issuance of up to thirteen percent of
the number of shares of Common Stock outstanding from time to time. Upon
consummation of the Offering, the Company will have reserved 938,340 shares of
Common Stock for issuance under the 1998 Stock Plan, of which 657,000 shares
will be subject to outstanding options and 281,340 will remain available for
issuance. On and after the date the 1998 Stock Plan becomes subject to Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), options
with respect to no more than the total number of available shares of Common
Stock may be granted to any one individual in any calendar year.

The following summary description does not purport to be complete and is
qualified in its entirety by the 1998 Stock Plan, a copy of which is filed as
an exhibit to the Registration Statement of which this Prospectus is a part.

Plan Administration; Eligibility. The 1998 Stock Plan is administered by the
Board of Directors or the Compensation Committee thereof. All members of the
Committee must be "non-employee directors" as that term is defined under the
rules promulgated by the Securities and Exchange Commission and "outside
directors" as defined in Section 162(m) of the Code and the regulations
promulgated thereunder.

The Compensation Committee has full power to select, from among the
employees and other persons eligible for awards, the individuals to whom
awards will be granted, to make any combination of awards to participants, and
to determine the specific terms and conditions of each award, subject to the
provisions of the 1998 Stock Plan. The Compensation Committee may permit
Common Stock, and other amounts payable pursuant to an award, to be deferred.
In such instances, the Compensation Committee may permit dividends or deemed
dividends, if any, to be credited to the amount of deferrals.

Persons eligible to participate in the 1998 Stock Plan will be those
officers, employees and other key persons, such as consultants, of the Company
and its subsidiaries who are responsible for or contribute to the management,
growth or profitability of the Company and its subsidiaries, as selected from
time to time by the Compensation Committee. Independent Directors will also be
eligible for certain awards under the 1998 Stock Plan.

Stock Options. The 1998 Stock Plan permits the granting of (i) options to
purchase Common Stock intended to qualify as incentive stock options under
Section 422 of the Code ("Incentive Options") and (ii) options that do not so
qualify ("Non-Qualified Options"). Only employees of the Company and its
subsidiaries may be granted Incentive Options. The option exercise price of
each option will be determined by the

51
<PAGE>

Compensation Committee but may not be less than 100% of the fair market value
of the Common Stock on the date of grant in the case of Incentive Options, and
may not be less than 85% of the fair market value of the Common Stock on the
date of grant in the case of Non-Qualified Options.

The term of each option will be fixed by the Compensation Committee and may
not exceed ten years from the date of grant in the case of an Incentive
Option. The Compensation Committee will determine at what time or times each
option may be exercised and, subject to the provisions of the 1998 Stock Plan,
the period of time, if any, after retirement, death, disability or termination
of employment during which options may be exercised. Options may be made
exercisable in installments, and the exercisability of options may be
accelerated by the Compensation Committee.

Upon exercise of options, the option exercise price must be paid in full
either in cash or by certified or bank check or other instrument acceptable to
the Compensation Committee or, if the Compensation Committee so permits, by
delivery of shares of Common Stock already owned by the optionee. The exercise
price may also be delivered to the Company by a broker pursuant to irrevocable
instructions to the broker from the optionee.

At the discretion of the Compensation Committee, stock options granted under
the 1998 Stock Plan may include a "re-load" feature pursuant to which an
optionee exercising an option by the delivery of shares of Common Stock would
automatically be granted an additional stock option (with an exercise price
equal to the fair market value of the Common Stock on the date the additional
stock option is granted) to purchase that number of shares of Common Stock
equal to the number delivered to exercise the original stock option. One of
the purposes of this feature is to enable participants to maintain an equity
interest in the Company without dilution.

To qualify as Incentive Options, options must meet additional U.S. Federal
tax requirements, including limits on the value of shares subject to Incentive
Options which first become exercisable in any one calendar year, and a shorter
term and higher minimum exercise price in the case of certain large
stockholders.

Stock Options Granted to Independent Directors. The 1998 Stock Plan provides
for the automatic grant to each Independent Director of a Non-Qualified Option
to purchase 20,000 shares of Common Stock in connection with the consummation
of the Offering. The 1998 Stock Plan also provides for the automatic grant to
each Independent Director of a Non-Qualified Option to purchase 20,000 shares
of Common Stock upon his or her initial election to the Board of Directors
following the Offering. Each Independent Director who is serving as a director
of the Company on the fifth business day after each annual meeting of
stockholders, beginning with the 1999 annual meeting of stockholders, will
also automatically be granted on such day a Non-Qualified Option to acquire
5,000 shares of Common Stock. In addition, the Independent Director who serves
as chairman of the Audit Committee of the Board of Directors will receive
options to purchase an additional 5,000 shares of Common Stock upon
consummation of the Offering and an additional 5,000 shares of Common Stock on
the fifth business day after each annual meeting of stockholders beginning
with the 1999 annual meeting. The exercise price of each such Non-Qualified
Option will be the fair market value of the Common Stock on the date of grant.
All of such Non-Qualified Options granted to Independent Directors shall vest
50% upon the first anniversary of the grant date, and the remaining 50% shall
vest in equal annual installments over the number of years remaining in each
Director's term as of the first anniversary of the date of grant and shall
terminate on the tenth anniversary of the date of grant.

Stock Appreciation Right. The Compensation Committee may award a stock
appreciation right ("SAR") either as a freestanding award or in tandem with a
stock option. Upon exercise of the SAR, the holder will be entitled to receive
an amount equal to the excess of the fair market value on the date of exercise
of one share of Common Stock over the exercise price per share specified in
the related stock option (or, in the case of freestanding SAR, the price per
share specified in such right, which price may not be less than 85% of the
fair market value of the Common Stock on the date of grant) times the number
of shares of Common Stock with

52
<PAGE>

respect to which the SAR is exercised. This amount may be paid in cash, Common
Stock, or a combination thereof, as determined by the Committee. If the SAR is
granted in tandem with a stock option, exercise of the SAR cancels the related
option to the extent of such exercise.

Restricted Stock. The Compensation Committee may also award shares of Common
Stock to officers, other employees and key persons of the Company subject to
such conditions and restrictions as the Compensation Committee may determine
("Restricted Stock"). These conditions and restrictions may include the
achievement of certain performance goals and/or continued employment with the
Company through a specified restricted period. The purchase price of shares of
Restricted Stock will be determined by the Compensation Committee. If the
performance goals and other restrictions are not attained, the employees will
forfeit their awards of Restricted Stock.

Unrestricted Stock. The Compensation Committee may also grant shares (at no
cost or for a purchase price determined by the Committee) which are free from
any restrictions under the 1998 Stock Plan ("Unrestricted Stock").
Unrestricted Stock may be issued to employees and key persons in recognition
of past services or other valid consideration, and may be issued in lieu of
cash bonuses to be paid to such employees and key persons.

Performance Share Awards. The Compensation Committee may also grant
performance share awards to employees or other key persons of the Company
entitling the recipient to receive shares of Common Stock upon the achievement
of individual or Company performance goals and such other conditions as the
Compensation Committee shall determine ("Performance Share Award").

Dividend Equivalent Rights. The Compensation Committee may grant dividend
equivalent rights, which give the recipient the right to receive credits for
dividends that would be paid if the grantee had held specified shares of
Common Stock. Dividend equivalent rights may be granted as a component of
another award or as a freestanding award. Dividend equivalents credited under
the 1998 Stock Plan may be paid currently or be deemed to be reinvested in
additional shares of Common Stock, which may thereafter accrue additional
dividend equivalents at fair market value at the time of deemed reinvestment
or on the terms then governing the reinvestment of dividends under the
Company's dividend reinvestment plan, if any. Dividend equivalent rights may
be settled in cash, shares, or a combination thereof, in a single installment
or installments, as specified in the award. Awards payable in cash on a
deferred basis may provide for crediting and payment of interest equivalents.

Adjustments for Stock Dividends, Mergers, Etc. The Compensation Committee
will make appropriate adjustments in outstanding awards to reflect stock
dividends, stock splits and similar events. In the event of a merger,
liquidation, sale of the Company or similar event, the Compensation Committee,
in its discretion, may provide for substitution or adjustments of outstanding
options and SARs, or may terminate all unexercised options and SARs with or
without payment of cash consideration.

Amendments and Termination. The Board of Directors may at any time amend or
discontinue the 1998 Stock Plan and the Compensation Committee may at any time
amend or cancel outstanding awards for the purpose of satisfying changes in
the law or for any other lawful purpose. No such action may be taken, however,
which adversely affects any rights under outstanding awards without the
holder's consent. Further, amendments to the 1998 Stock Plan shall be subject
to approval by the Company's stockholders if and to the extent required by the
Securities Exchange Act of 1934, as amended (the "1934 Act"), to ensure that
awards granted under the 1998 Stock Plan are exempt under Rule 16b-3
promulgated under the 1934 Act, or required by the Code to preserve the
qualified status of Incentive Options.

Change in Control Provisions. The 1998 Stock Plan provides that in the event
of a sale of all or substantially all of the assets or Common Stock of the
Company, a merger or consolidation which results in a change in control of the
Company or the liquidation or dissolution of the Company (a "Change in
Control"), all stock options and stock appreciation rights shall automatically
become fully exercisable. In addition, at any time prior to or after a Change
in Control, the Compensation Committee may accelerate awards and waive
conditions and restrictions on any awards to the extent it may determine
appropriate.

U.S. FEDERAL INCOME TAX CONSEQUENCES

Non-Qualified Stock Options. The grant of a Non-Qualified Option will not
result in the recognition of taxable income by the participant or in a
deduction to the Company. Upon exercise, a participant will recognize

53
<PAGE>

ordinary income in an amount equal to the excess of the fair market value of
the Company's Common Stock purchased over the exercise price. The Company is
required to withhold tax on the amount of income so recognized, and a tax
deduction is allowable equal to the amount of such income (subject to the
satisfaction of certain conditions in the case of options exercised by Section
162(m) officers). Gain or loss upon a subsequent sale of any of the Company's
Common Stock received upon the exercise of a Non-Qualified Option generally
would be taxed as capital gain or loss (long-term or short-term, depending
upon the holding period of the Common Stock sold). Certain additional rules
apply if the exercise price for an option is paid in Common Stock previously
owned by the participant.

Incentive Stock Options. Upon the grant or exercise of an Incentive Stock
Option within the meaning of Section 422 of the Code, no income will be
realized by the participant for federal income tax purposes and the Company
will not be entitled to any deduction. However, the excess of the fair market
value of the Company's Common Stock as of the date of exercise over the
exercise price will constitute an adjustment to taxable income for purposes of
the alternative minimum tax. If the shares of the Company's Common Stock are
not disposed of within the one-year period beginning on the date of the
transfer of such Common Stock to the participant, or within the two-year
period beginning on the date of grant of the option, any profit realized by
the participant upon the disposition of such Common Stock will be taxed as
long-term capital gain and no deduction will be allowed to the Company. If the
shares of the Company's Common Stock are disposed of within the one-year
period from the date of transfer of such Common Stock to the participant or
within the two-year period from the date of grant of the option, the excess of
the fair market value of the Common Stock upon the date of exercise or, if
less, the fair market value on the date of disposition, over the exercise
price will be taxable as ordinary income of the participant at the time of
disposition, and a corresponding deduction will be allowable. Certain
additional rules apply if the exercise price for an option is paid in Common
Stock previously owned by the participant. If an option intended to qualify as
an Incentive Option is exercised by a person who was not continually employed
by the Company or certain of its affiliates from the date of grant of such
option to a date not more than three months prior to such exercise (or one
year if such person is disabled), then such option will not qualify as an
Incentive Option and will instead be taxed as a Non-Qualified Option, as
described above.

OPTION GRANTS

In November 1998, the Company granted Non-Qualified Options under the 1998
Stock Plan to the following persons who will become officers of the Company
upon consummation of the Offering: Glenn F. Gillam (75,000 shares), Sidney D.
Rogers, Jr. (50,000 shares), Thomas Studer (40,000 shares) and Douglas H.
Holstein (30,000 shares). In December 1998, the Company granted Non-Qualified
Options under the 1998 Stock Plan to the following persons who will become
officers and/or executives of the Company upon the consummation of the
Offering: Gerald R. Leonard (40,000 shares) and Kenneth D. Chipman (10,000
shares). All of such Non-Qualified Options were issued at an exercise price of
$11.25 per share, the estimated fair market value at the date of grant. One-
fifth of these options become exercisable on each of the first, second, third,
fourth and fifth anniversaries of the date of grant. See "Certain
Transactions." In addition, upon consummation of the Offering, the Company
will grant to certain employees of the Company, including Glenn F. Gillam who
will receive options for an additional 25,000 shares of Common Stock, Doug
Holstein who will receive options for an additional 20,000 shares of Common
Stock, Sidney D. Rogers, Jr. who will receive options for an additional 20,000
shares of Common Stock and Marty D. Carter who will receive options for 20,000
shares of Common Stock, options under the 1998 Stock Plan to purchase an
aggregate of 347,000 shares of Common Stock. Each such option, including those
to be granted to Messrs. Gillam, Holstein, Rogers and Carter, will have a per
share exercise price equal to the Offering price, will expire ten years from
the date of grant and generally will become exercisable as to one-fifth of the
shares covered by such option on each of the first, second, third, fourth and
fifth anniversaries of the date of grant.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

All executive officer compensation decisions will be made by the
Compensation Committee. The Compensation Committee will review and make
recommendations regarding the compensation for management and key employees of
the Company, including salaries and bonuses.

54
<PAGE>

CERTAIN TRANSACTIONS

ORGANIZATION OF THE COMPANY

The Combination will be accomplished through separate purchases by the
Company of all of the issued and outstanding capital stock of each of Merkert
and Rogers. As a result, after the closing of the Combination and the Offering
(the "Closing"), each of Merkert and Rogers will exist as a separate wholly
owned subsidiary of the Company. The stock purchase agreement with Merkert
provides for the Company to pay the stockholders of Merkert (i) a fixed amount
of cash at the Closing (plus an additional cash payment paid and based upon
the receipt by the Company of certain tax refunds) and (ii) shares of Common
Stock at the Closing having a fixed dollar value, with the final number of
shares being determined by the Offering Price. The stock purchase agreement
with Rogers provides for the Company to pay the stockholders of Rogers a fixed
amount of cash at the Closing.

The aggregate consideration to be paid by the Company in the Combination
consists of approximately $74.1 million consisting of approximately $56.6
million in cash (representing approximately 96.1% of the net proceeds of the
Offering) and 1,166,667 shares of Common Stock (assuming an initial public
offering price of $15.00 per share).

The consideration to be paid for each of Merkert and Rogers was determined
through arm's length negotiations between the Company and representatives of
each of Merkert and Rogers. The factors considered by the parties in
determining the consideration to be paid included, among others, the
historical revenues and pro forma EBITDA of each of Merkert and Rogers.

In connection with the Combination, the former stockholders of each of
Merkert and Rogers who will become directors and/or executive officers of the
Company will receive the following consideration pursuant to the Combination:

<TABLE>
<CAPTION>
SHARES OF
CASH COMMON STOCK
---------- ------------
<S> <C> <C>
Gerald R. Leonard...................................... $ 83,786* 5,986*
Douglas H. Holstein.................................... 3,700,000 0
Sidney D. Rogers, Jr................................... 67,876* 4,926*
Marty D. Carter........................................ 1,250,000 0
Glenn F. Gillam........................................ 57,954* 3,864*
</TABLE>
- --------
* Includes cash and shares paid to the Merkert Enterprises, Inc. Employee
Stock Ownership Trust and allocable to such individuals.

In addition, certain expenses incurred by the former stockholders of each of
Merkert and Rogers in connection with the Combination will be paid by the
Company.

As a result of negotiations between the stockholders of Rogers and Merkert
American Corporation regarding the purchase of Rogers, in connection with the
Combination, Messrs. Holstein and Carter, together with certain other former
stockholders of Rogers, will receive (i) the net proceeds, estimated to be
approximately $2,500,000 (of which 10% will be paid to Mr. Holstein and 10%
will be paid to Mr. Carter), resulting from the expected sale by Rogers to a
third party of its Charlotte, North Carolina headquarters, (ii) cash bonuses
in an aggregate amount equal to approximately $950,000 (of which 28% will be
paid to Mr. Holstein and 10% will be paid to Mr. Carter) based upon certain
income tax refunds receivable by the Company and (iii) cash bonuses,
previously accrued by Rogers, in the aggregate amount of approximately
$600,000.

In connection with the Combination, the Company will use a portion of the
net proceeds of the Offering or the net available borrowings under the Credit
Facility to fund the buyouts of Merkert Enterprises, Inc.'s employment
arrangements with Messrs. Merkert and Crane for cash payments of $876,924 and
$583,900,

55
<PAGE>

respectively. In connection with such buyouts, the Company will also provide
family health insurance benefits and disability insurance coverage for three
years to Mr. Merkert and will transfer two automobiles to Messrs. Merkert and
Crane.

The consummation of the Combination is subject to completion of the Offering
and customary conditions including, among others, the continuing accuracy at
the Closing of the representations and warranties made by Merkert or Rogers,
as appropriate, and the Company in the stock purchase agreements, receipt of
all necessary consents and approvals, delivery of opinions of counsel, the
performance of covenants included in the agreements relating to the
Combination, and the nonexistence of a material adverse change in the business
of each of Merkert and Rogers. The stock purchase agreements provide that the
stockholders of Merkert and Rogers, respectively, will indemnify the Company
against certain liabilities, including breaches of Merkert's or Rogers'
representations and warranties thereunder, as appropriate.

In connection with the founding and organization of the Company, on March 4,
1998, Monroe & Company II, LLC purchased 1,376,111 shares of Common Stock for
an aggregate purchase price of $150. On May 11, 1998, Monroe & Company, LLC, a
Delaware limited liability company, entered into a consulting agreement with
the Company pursuant to which Monroe & Company, LLC was engaged to render
certain business consulting, financial advisory and investment banking
services to the Company on an exclusive basis for three years. Pursuant to the
consulting agreement, Monroe & Company, LLC will be paid a financial advisory
fee equal to (i) 5% of any consideration paid by the Company in connection
with any transaction which results in the merger, consolidation or combination
of the Company and a third party, the acquisition by the Company of the
capital stock or assets of a third party or a joint venture with any third
party ("Consideration") up to $1 million, plus (ii) 4% of the Consideration
paid in excess of $1 million and up to $2 million, plus (iii) 3% of the
Consideration paid in excess of $2 million and up to $3 million, plus (iv) 2%
of the Consideration paid in excess of $3 million and up to $4 million, plus
(v) 1% of the Consideration paid in excess of $4 million. Under the consulting
agreement, Monroe & Company, LLC will also be paid a fee equal to 0.75% of any
principal amount committed under a senior credit facility for the Company from
a lending institution. An additional fee shall be payable to Monroe & Company,
LLC upon increases in such amount or upon refinancings with a new lender
during the term of the consulting agreement. Monroe & Company, LLC will also
be entitled to consulting fees based on projects and fee schedules to be
mutually agreed upon by Monroe & Company, LLC and the independent directors of
the Company. The Company has agreed to indemnify Monroe & Company, LLC against
certain liabilities.

During 1997, certain members of the management team and consultants were
assembled, and subsequently Monroe & Company II, LLC was organized to pursue
the consolidation of companies in the food brokerage industry. Mr. Monroe, who
will become a director of the Company upon consummation of the Offering, is a
member and the sole manager of Monroe & Company II, LLC and Monroe & Company,
LLC, and Mr. Grace, who will become a director of the Company upon
consummation of the Offering, is a member of Monroe & Company II, LLC, which
provided the Company with advice and expertise regarding the consolidation
process. Expenses paid by the Company prior to the Closing in connection with
the Combination and the Offering have been financed with funds advanced to the
Company by Monroe & Company II, LLC. Outstanding advanced amounts bear
interest at the applicable federal rate in effect under Section 1274(d) of the
Internal Revenue Code of 1986, as amended, as of the respective dates on which
the advances were made, compounded semi-annually. The Company will repay the
advanced amounts plus interest to Monroe & Company II, LLC at the Closing out
of the Company's net available borrowings under the Credit Facility. See "Use
of Proceeds." Monroe & Company II, LLC has advanced approximately $750,000 to
the Company for such expenses.

In April 1998, Gerald R. Leonard, who will become Chairman of the Board,
Chief Executive Officer and President of the Company upon the consummation of
the Offering, purchased 275,222 shares of Common Stock from the Company for an
aggregate purchase price of $1,500,000. The purchase price for such stock was
paid by a promissory note from Mr. Leonard to the Company in the principal
amount of $1,500,000 (the "Leonard Note"). The Leonard Note provides that
amounts outstanding thereunder will bear interest at a rate per annum of 6%,
compounded semi-annually and that the entire principal amount and accrued
interest will be due and payable on April 8, 2003. Mr. Leonard's obligations
under the Leonard Note are secured by a pledge of the

56
<PAGE>

275,222 shares of Common Stock purchased thereby pursuant to a stock pledge
agreement. The Leonard Note is a recourse obligation of Mr. Leonard with
respect to the sum of (i) the outstanding principal amount from time to time
less $750,000 (but not less than $0) plus (ii) one-half of the accrued and
unpaid interest at such time.

During 1998 and prior to the consummation of the Offering, Joseph T. Casey
will receive from the Company a total of $200,000 in consideration of
acquisition consulting services rendered in connection with the Offering. Upon
consummation of the Offering, Mr. Casey will become the Chief Financial
Officer and Treasurer of the Company.

In November 1998, the Company granted Non-Qualified Options under the 1998
Stock Plan to the following persons who will be officers of the Company
following the consummation of the Offering: Glenn F. Gillam (75,000 shares),
Sidney D. Rogers, Jr. (50,000 shares), Thomas Studer (40,000 shares) and
Douglas H. Holstein (30,000 shares). In December 1998, the Company granted
Non-Qualified Options under the 1998 Stock Plan to the following persons who
will become officers and/or executives of the Company upon consummation of the
Offering: Gerald R. Leonard (40,000 shares) and Kenneth D. Chipman (10,000
shares). All of such Non-Qualified Options were issued at an exercise price of
$11.25, the estimated fair market value at the date of grant. One-fifth of
these options become exercisable on each of the first, second, third, fourth
and fifth anniversaries of the date of grant. In addition, upon consummation
of the Offering, the Company will grant to Glenn F. Gillam, Sidney D. Rogers,
Jr., Doug H. Holstein and Marty D. Carter, Incentive Options to purchase up to
25,000, 20,000, 20,000 and 20,000 shares of Common Stock, respectively. These
options will have a per share exercise price equal to the Offering price, will
expire 10 years from the date of grant, and will become exercisable as to one-
fifth of the shares covered on each of the first, second, third, fourth and
fifth anniversaries of the date of grant.

The Company and Messrs. Monroe and Leonard are parties to a Registration
Rights Agreement dated May 18, 1998, pursuant to which Messrs. Monroe and
Leonard have the right, subject to certain restrictions, beginning on the date
that is 180 days following the completion of the Offering, to cause the
Company to effect a registration of their shares of Common Stock under the
Securities Act, on not more than two occasions. Messrs. Monroe and Leonard
also have certain "piggyback" registration rights in the event the Company
registers any of its securities for either itself or for security holders
exercising their registration rights.

Upon the consummation of the Offering, the Company will also enter into
Registration Rights Agreements with the former stockholders of Merkert,
including Messrs. Leonard, Gillam and Rogers, pursuant to which such former
stockholders will have the right, subject to certain restrictions, to include
their shares of Common Stock received in the Combination in a registration
statement filed by the Company under the Securities Act.

Mr. Monroe represented the Company in connection with each of the
transactions described above.

COMPANY POLICY

The Company's policy is that any future transactions with directors,
officers, employees or affiliates of the Company be approved in advance by a
majority of the Company's Board of Directors, including a majority of the
disinterested members of the Board, and be on terms no less favorable to the
Company than the Company could obtain from non-affiliated parties.

57
<PAGE>

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock after giving effect to the
Combination, and as adjusted to reflect the Offering, by (i) each person known
by the Company to beneficially own five percent or more of the outstanding
shares of the Common Stock, (ii) each director, nominee for director and
certain executive officers of the Company, and (iii) all directors, nominees
for director and executive officers of the Company as a group. Except as
otherwise indicated, the Company believes that the beneficial owners of the
Common Stock listed below, based on information furnished by such owners, have
sole investment and voting power with respect to such shares, subject to
community property laws where applicable.

<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED AFTER
NAME OF BENEFICIAL OWNER(1) OFFERING(2)(3) PERCENTAGE
- --------------------------- -------------- ----------
<S> <C> <C>
Gerald R. Leonard(4)................................. 281,208 3.90%
Sidney D. Rogers, Jr.(5)............................. 4,926 *
Glenn F. Gillam(6)................................... 3,864 *
Edward P. Grace, III(8).............................. -- *
James L. Monroe(7)................................... 1,376,111 19.06
James A. Schlindwein(9).............................. 455,601 6.31
Eugene F. Merkert(10)................................ 613,198 8.50
Robert Q. Crane(11).................................. 684,731 9.49
Tuyet Payne(12)...................................... 591,871 8.20
All directors, director nominees and executive
officers as a group (9 persons)..................... 2,110,418 29.24
</TABLE>
- --------
* less than 1%
(1) Unless otherwise indicated, the mailing address for each stockholder and
director is c/o the Company, 490 Turnpike Street, Canton, Massachusetts
02021.
(2) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares of
Common Stock beneficially owned by a person, shares of Common Stock
subject to options held by that person that are currently exercisable or
exercisable within 60 days of this Prospectus are deemed outstanding, but
are not deemed to be outstanding for the purpose of computing the
percentage ownership of any other person.
(3) Share information assumes an initial public offering price of $15.00 per
share. The acquisition agreements for each of Merkert and Rogers specify
the aggregate dollar values, but not the share amounts, of the Common
Stock to be received by their stockholders in the Combination. As a
result, if the initial public offering price is less or greater than
$15.00, the stockholders of Merkert will receive a larger or smaller
number of shares of Common Stock. In addition, the Company will declare a
stock dividend on all outstanding Common Stock prior to the closing of the
Combination such that, without giving effect to the Offering (but giving
effect to the Combination), there will be outstanding a total of 2,818,000
shares of Common Stock. The size of the stock dividend (and, as a result,
the number of shares of Common Stock held by Monroe & Company II, LLC and
Gerald R. Leonard) will vary if the initial offering price is less or
greater than $15.00, with the size of the dividend increasing if the
initial public offering price increases and decreasing if the initial
public offering price decreases.
(4) Includes 4,244 shares of Common Stock held by the Merkert Enterprises,
Inc. Employee Stock Ownership Trust and allocable to Mr. Leonard. Also
includes an aggregate of 55,044 shares held by The Corrie E. Leonard
Irrevocable Trust and The Kevin M. Leonard Irrevocable Trust, for which
Mr. Leonard serves as a Trustee.
(5) Includes 3,184 shares held by the Merkert Enterprises, Inc. Employee Stock
Ownership Trust and allocable to Mr. Rogers. Excludes 70,000 shares
subject to options not exercisable within 60 days of the Offering.
(6) Includes 3,864 shares held by the Merkert Enterprises, Inc. Employee Stock
Ownership Trust and allocable to Mr. Gillam. Excludes 100,000 shares
subject to options not exercisable within 60 days of the Offering.

58
<PAGE>

(7) Includes 1,376,111 shares of Common Stock held by Monroe & Company II,
LLC, of which Monroe & Company, LLC is the sole manager. Mr. Monroe is the
sole manager of Monroe & Company, LLC. Excludes 20,000 shares which may be
acquired upon the exercise of options not exercisable within 60 days of
the Offering to be granted to Mr. Monroe as a Director of the Company upon
consummation of the Offering.
(8) Excludes 20,000 shares which may be acquired upon the exercise of options
not exercisable within 60 days of the Offering to be granted to Mr. Grace
as a Director of the Company upon consummation of the Offering.
(9) Includes 455,601 shares held by the Merkert Enterprises, Inc. Employee
Stock Ownership Trust, of which Mr. Schlindwein is the trustee. Mr.
Schlindwein disclaims beneficial ownership of the shares held by the
Merkert Enterprises, Inc. Stock Ownership Trust. Excludes 25,000 shares
which may be acquired upon the exercise of options not exercisable within
60 days of the Offering to be granted to Mr. Schlindwein as a Director of
the Company upon consummation of the Offering.
(10) Includes 264 shares held by the Merkert Enterprises, Inc. Employee Stock
Ownership Trust and allocable to Mr. Merkert. Also includes 591,840
shares held by the Eugene F. Merkert 1984 Revocable Trust (the "Revocable
Trust"), of which Mr. Merkert is a trustee, and 21,094 shares held by the
Eugene F. Merkert 1991 Charitable Remainder Unitrust (the "Charitable
Trust"), of which Mr. Merkert is a trustee. Voting of the shares held by
the Revocable Trust requires a vote of a majority of the three trustees.
Mr. Merkert disclaims beneficial ownership of the shares held by the
Revocable Trust and the Charitable Trust.
(11) Includes 2,118 shares held by the Merkert Enterprises, Inc. Employee
Stock Ownership Trust and allocable to Mr. Crane. Also includes 591,840
shares held by the Revocable Trust, of which Mr. Crane is a trustee, and
21,094 shares held by the Charitable Trust, of which Mr. Crane is a
trustee. Voting of the shares held by the Revocable Trust requires a vote
of a majority of the three trustees. Mr. Crane disclaims beneficial
ownership of the shares held by the Revocable Trust and the Charitable
Trust.
(12) Includes 31 shares held by the Merkert Enterprises, Inc., Employee Stock
Ownership Trust and allocable to Ms. Payne. Also includes 591,840 shares
held by the Revocable Trust, of which Ms. Payne is a trustee. Voting of
the shares held by the Revocable Trust requires a vote of a majority of
the three trustees. Ms. Payne disclaims beneficial ownership of the
shares held by the Revocable Trust.

59
<PAGE>

DESCRIPTION OF CAPITAL STOCK

AUTHORIZED AND OUTSTANDING CAPITAL STOCK

The authorized capital stock of the Company consists of 54,000,000 shares of
Common Stock, $0.01 par value per share, of which 4,000,000 are designated as
Restricted Common Stock (the "Restricted Common Stock"), and 1,000,000 shares
of undesignated preferred stock issuable in series by the Board of Directors
("Preferred Stock"). There will be 7,218,000 shares of Common Stock, including
335,700 shares of Restricted Common Stock, outstanding after giving effect to
the Offering (assuming no exercise of the Underwriters' over-allotment option
and no exercise of outstanding options). The following summary description of
the capital stock of the Company does not purport to be complete and is
qualified in its entirety by reference to the Company's Amended and Restated
Certificate of Incorporation (the "Certificate") and Amended and Restated By-
laws (the "By-laws"), copies of which are filed as exhibits to the
Registration Statement of which this Prospectus is a part. The Certificate and
By-laws have been adopted by the stockholders of the Company and the Board of
Directors.

Common Stock and Restricted Common Stock. The holders of Common Stock are
entitled to one vote per share on all matters to be voted on by stockholders.
The holders of Restricted Common Stock are entitled to 1/10th of one vote for
each share held on all matters on which they are entitled to vote. Holders of
Restricted Common Stock are entitled to vote on all matters on which holders
of Common Stock are entitled to vote. Holders of Common Stock and Restricted
Common Stock are entitled to receive such dividends, if any, as may be
declared from time to time by the Board of Directors from funds legally
available therefor. See "Dividend Policy." The possible issuance of Preferred
Stock with a preference over Common Stock and Restricted Common Stock as to
dividends could impact the dividend rights of holders of Common Stock and
Restricted Common Stock. Holders of Common Stock and Restricted Common Stock
are not entitled to cumulative voting rights. Therefore, the holders of a
majority of the votes cast in the election of directors can elect all of the
directors then standing for election, subject to the rights of the holders of
any then outstanding Preferred Stock, if and when issued. The holders of
Common Stock and Restricted Common Stock have no preemptive or other
subscription rights, and there are no conversion rights or redemption or
sinking fund provisions with respect to the Common Stock or the Restricted
Common Stock (except for the automatic conversion, in certain circumstances,
from Restricted Common Stock into Common Stock). Upon the voluntary or
involuntary liquidation, dissolution or winding up of the Company, the net
assets of the Company shall be distributed pro rata to the holders of the
Common Stock and Restricted Common Stock in accordance with their respective
rights and interests, subject to the rights and interests of the holders of
Preferred Stock, if and when issued. All outstanding shares of Common Stock
and Restricted Common Stock, including the shares of Common Stock offered
hereby, are, or will be upon consummation of the Offering, fully paid and non-
assessable.

The Certificate and By-laws provide, subject to the rights of the holders of
any Preferred Stock then outstanding, that the number of directors shall be
fixed by the Board of Directors. The directors, other than those who may be
elected by the holders of any Preferred Stock, are divided into two classes
until the Board Conversion. On the date of the Board Conversion, the Class II
Directors will be elected for a two-year term, and the initial class of Class
III Directors will be elected for a three-year term. The Certificate further
provides that following the Board Conversion, each class of the Board of
Directors will be chosen for staggered three-year terms upon the expiration of
their then-current terms and each year one class of directors will be elected
by the stockholders. Subject to any rights of the holders of Preferred Stock
to elect directors and to remove any director whom the holders of any such
stock had the right to elect, any director of the Company may be removed from
office only with cause and by the affirmative vote of at least two-thirds of
the total votes which would be eligible to be cast by stockholders in the
election of such director. See "Management--Board of Directors."

Each share of Restricted Common Stock will automatically convert into Common
Stock on a share for share basis upon a disposition of such shares of
Restricted Common Stock (i) which occurs after the later to occur of (x) the
first day after the second anniversary of the consummation of the Offering and
the Combination and (y) the first day after the first election of Class II
Directors occurring after the consummation of the Offering and the

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<PAGE>

Combination and (ii) the transferee (whether a natural person or an entity) of
which is not (x) a party (a "Prior Stockholder") which held shares of the
Company's capital stock prior to the Offering or the Combination, (y) a party
related to any Prior Stockholder in any manner described in Section 267(b) or
707(b) of the Internal Revenue Code of 1986, as amended and in effect as of
the date hereof (the "Code"), or (z) a party through which ownership of shares
of the Company's capital stock could be attributed to any Prior Stockholder
under the provisions of Section 318 of the Code.

The Common Stock has been approved for listing on the Nasdaq National Market
under the symbol "MERK."

Undesignated Preferred Stock. The Board of Directors is authorized, without
further action of the stockholders of the Company, to issue up to 1,000,000
shares of Preferred Stock in classes or series and to fix the designations,
powers, preferences and the relative, participating, optional or other special
rights of the shares of each series and any qualifications, limitations and
restrictions thereon as set forth in the Certificate. Any such Preferred Stock
issued by the Company may rank prior to the Common Stock as to dividend
rights, liquidation preference or both, may have full or limited voting rights
and may be convertible into shares of Common Stock.

The purpose of authorizing the Board of Directors to issue Preferred Stock
is, in part, to eliminate delays associated with a stockholder vote on
specific issuances. The issuance of Preferred Stock could have the effect of
making it more difficult for a third party to acquire, or of discouraging a
third party from acquiring or seeking to acquire, a significant portion of the
outstanding Common Stock.

CERTAIN PROVISIONS OF CERTIFICATE AND BY-LAWS

General. A number of provisions of the Company's Certificate and By-laws
concern matters of corporate governance and the rights of stockholders.
Certain of these provisions, as well as the ability of the Board of Directors
to issue shares of Preferred Stock and to set the voting rights, preferences
and other terms thereof, may be deemed to have an anti-takeover effect and may
discourage takeover attempts not first approved by the Board of Directors,
including takeovers which certain stockholders may deem to be in their best
interests. To the extent takeover attempts are discouraged, temporary
fluctuations in the market price of the Company's Common Stock, which may
result from actual or rumored takeover attempts, may be inhibited. These
provisions, together with the classified Board of Directors and the ability of
the Board of Directors to issue Preferred Stock without further stockholder
action, also could delay or frustrate the removal of incumbent directors or
the assumption of control by stockholders, even if such removal or assumption
would be beneficial to stockholders of the Company. These provisions also
could discourage or make more difficult a merger, tender offer or proxy
contest, even if a transaction or contest could be favorable to the interests
of stockholders, and could potentially depress the market price of the Common
Stock. The Board of Directors believes that these provisions are appropriate
to protect the interests of the Company and all of its stockholders. The Board
of Directors has no present plans to adopt any other measures or devices which
may be deemed to have an "anti-takeover effect."

Meetings of Stockholders. The Company's By-laws provide that a special
meeting of stockholders may be called only by the Board of Directors unless
otherwise required by law. The Company's By-laws provide that only those
matters set forth in the notice of the special meeting may be considered or
acted upon at such special meeting, unless otherwise provided by law. In
addition, the Company's By-laws set forth certain other requirements, such as
advance notice and informational requirements and time limitations on any
director nomination or any new business which a stockholder wishes to propose
for consideration at an annual meeting of stockholders.

No Stockholder Action by Written Consent. The Certificate provides that any
action required or permitted to be taken by the stockholders of the Company at
an annual or special meeting of stockholders must be effected at a duly called
meeting and may not be taken or effected by a written consent of stockholders
in lieu thereof.

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<PAGE>

Indemnification and Limitation of Liability. The By-laws provide that
directors and officers of the Company shall be, and in the discretion of the
Board of Directors non-officer employees may be, indemnified by the Company to
the fullest extent authorized by Delaware law, as it now exists or may in the
future be amended, against all expenses and liabilities reasonably incurred in
connection with service for or on behalf of the Company, and further permits
the advancing of expenses incurred in defense of claims. The By-laws also
provide that the right of directors and officers to indemnification shall be a
contractual right and shall not be exclusive of any other right now possessed
or hereafter acquired under any by-law, agreement, vote of stockholders or
otherwise. The Certificate contains a provision permitted by Delaware law that
generally eliminates the personal liability of directors for monetary damages
for breaches of their fiduciary duty, including breaches involving negligence
or gross negligence in business combinations, unless the director has breached
his or her duty of loyalty, failed to act in good faith, engaged in
intentional misconduct or a knowing violation of law, paid a dividend or
approved a stock repurchase in violation of the Delaware General Corporation
Law or obtained an improper personal benefit. This provision does not alter a
director's liability under the federal securities laws. In addition, this
provision does not affect the availability of equitable remedies, such as an
injunction or rescission, for breach of fiduciary duty.

Amendment of the Certificate. The Certificate provides that an amendment
thereof must first be approved by a majority of the Board of Directors and
(with certain exceptions) thereafter approved by the holders of a majority of
the outstanding shares entitled to vote on such amendment, and the affirmative
vote of a majority of the outstanding shares of each class entitled to vote
thereon as a class; provided, however, that the affirmative vote of not less
than two-thirds of the outstanding shares entitled to vote on such amendment,
and the affirmative vote of not less than two-thirds of the outstanding shares
of each class entitled to vote thereon as a class, is required to amend
provisions of the Certificate relating to the establishment, composition and
powers of the Board of Directors and amendments to the Certificate.

Amendment of By-laws. The Certificate provides that the By-laws may be
amended or repealed by the Board of Directors or by the stockholders. Such
action by the Board of Directors requires the affirmative vote of a majority
of the directors then in office. Such action by the stockholders requires the
affirmative vote of the holders of at least two-thirds of the total votes
present and eligible to be cast by holders of voting stock voting as a single
class with respect to such amendment or repeal at an annual meeting of
stockholders or a special meeting called for such purpose, unless the Board of
Directors recommends that the stockholders approve such amendment or repeal at
such meeting, in which case such amendment or repeal shall only require the
affirmative vote of a majority of the total votes present and eligible to be
cast by holders of voting stock voting as a single class with respect to such
amendment or repeal.

Ability to Adopt Stockholder Rights Plan. The Board of Directors may in the
future resolve to issue shares of Preferred Stock or rights to acquire such
shares, to implement a stockholder rights plan which creates voting or other
impediments or under which shares are distributed to a third-party investor, a
group of investors or stockholders or issued to an employee stock ownership
plan to discourage persons seeking to gain control of the Company by means of
a merger, tender offer, proxy contest or otherwise, if such change in control
is not in the best interests of the Company and its stockholders. The Board of
Directors has no present intention of adopting a stockholder rights plan and
is not aware of any attempt to obtain control of the Company.

STATUTORY BUSINESS COMBINATION PROVISION

Upon completion of the Offering, the Company will be subject to the
provisions of Section 203 of the Delaware General Corporation Law ("Section
203"). Section 203 provides, with certain exceptions, that a Delaware
corporation may not engage in any of a broad range of business combinations
with a person, or an affiliate or associate of such person, who is an
"interested stockholder" for a period of three years from the date that such
person became an interested stockholder unless: (i) the transaction resulting
in a person becoming an interested stockholder, or the business combination,
is approved by the board of directors of the corporation before the person
becomes an interested stockholder; (ii) the interested stockholder acquired
85% or more of the outstanding voting stock of the corporation in the same
transaction that makes it an interested stockholder

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<PAGE>

(excluding shares owned by persons who are both officers and directors of the
corporation, and shares held by certain employee stock ownership plans); or
(iii) on or after the date the person becomes an interested stockholder, the
business combination is approved by the corporation's board of directors and
by the holders of at least 66 2/3% of the corporation's outstanding voting
stock at an annual or special meeting, excluding shares owned by the
interested stockholder. Under Section 203, an "interested stockholder" is
defined (with certain limited exceptions) as any person that is (i) the owner
of 15% or more of the outstanding voting stock of the corporation or (ii) an
affiliate or associate of the corporation and was the owner of 15% or more of
the outstanding voting stock of the corporation at any time within the three-
year period immediately prior to the date on which it is sought to be
determined whether such person is an interested stockholder.

A corporation may, at its option, exclude itself from the coverage of
Section 203 by amending its certificate of incorporation or by-laws by action
of its stockholders to exempt itself from coverage; provided, however, that
such by-law or charter amendment shall not become effective until 12 months
after the date the stockholders adopt such exclusion. Neither the Certificate
nor the By-laws contains any such exclusion.

TRANSFER AGENT AND REGISTRAR

BankBoston, N.A. is the transfer agent and registrar for the Company's
Common Stock.

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<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Combination and the Offering, the Company will have
7,218,000 shares of Common Stock outstanding (assuming the Underwriters' over-
allotment option is not exercised), excluding (i) 245,000 shares issuable upon
exercise of options to purchase shares of Common Stock granted in November,
1998 under the 1998 Stock Plan, (ii) 412,000 shares issuable upon exercise of
options to purchase Common Stock to be granted upon consummation of the
Offering and (iii) 281,340 shares of Common Stock reserved for issuance upon
grant or exercise of future awards under the 1998 Stock Plan (1,024,140 shares
of Common Stock will be reserved for issuance under the 1998 Stock Plan if the
Underwriters' over-allotment option is exercised in full). Of the total shares
outstanding, only the 4,400,000 shares sold in the Offering will be freely
tradeable without restriction or further registration under the Securities
Act, except for any shares purchased by affiliates of the Company, which will
be subject to the limitations of Rule 144 under the Securities Act ("Rule
144"). All of the remaining 2,818,000 shares outstanding (the "Restricted
Shares") may be sold only pursuant to an effective registration statement
filed by the Company or an applicable exemption, including, without
limitation, sales meeting the applicable requirements of Rule 144 under the
Securities Act.

None of the 1,651,333 shares of Common Stock owned by current stockholders
of the Company will be eligible for sale in accordance with Rule 144 prior to
March 4, 1999, at which time 1,376,111 shares of Common Stock will be eligible
for sale in the public market subject to the volume limitations under Rule
144.

In general, Rule 144 as currently in effect provides that any person (or
persons whose shares are aggregated), including a person who may be deemed an
"affiliate" of the Company (as defined under the Securities Act), whose
Restricted Shares have been fully paid for and held for at least one year from
the later of the date of issuance by the Company or acquisition from an
affiliate of the Company is entitled to sell, within any three-month period, a
number of shares that does not exceed the greater of (i) the average weekly
trading volume of the Common Stock during the four calendar weeks preceding
the date on which notice of such sale is filed on Form 144 with the Securities
and Exchange Commission (the "Commission") and (ii) 1% of the shares of Common
Stock then outstanding (approximately 72,180 shares upon consummation of the
Offering). In addition, sales under Rule 144 are subject to certain other
restrictions regarding the manner of sale, required notice and availability of
public information concerning the Company. Persons who are not affiliates at
the time of sale and who have not been affiliates of the Company for at least
90 days prior to a sale, and who have beneficially owned the shares proposed
to be sold for at least two years (including the holding period of any prior
owner other than an affiliate), are entitled to sell such shares under Rule
144(k) without the limitations referenced above. Affiliates, including members
of the Board of Directors and senior management, continue to be subject to the
limitations under Rule 144, including volume of sale limitations for all
shares held by them, regardless of the time period held. Shares of Common
Stock sold by the Company to, among others, its employees, officers and
directors upon exercise of options granted pursuant to written compensation
plans or contracts (including certain options granted under the 1998 Stock
Plan), and in reliance on Rule 701 under the Securities Act, may be resold,
beginning 90 days after the effective date of this Prospectus, in reliance on
Rule 144 by such persons who are not affiliates subject only to the provisions
of Rule 144 regarding manner of sale, and by such persons who are affiliates
subject to all provisions of Rule 144 except its one-year minimum holding
period requirement.

Under the 1998 Stock Plan, the Company is authorized to issue options for up
to thirteen percent of the number of shares of Common Stock outstanding from
time to time, of which 245,000 shares are issuable upon the exercise of
outstanding stock options. Upon consummation of the Offering, 938,340 shares
of Common Stock will be reserved for issuance under the 1998 Stock Plan
(1,024,140 shares of Common Stock will be reserved for issuance under the 1998
Stock Plan if the Underwriters' over-allotment options are exercised in full).
See "Management--1998 Stock Option and Incentive Plan" and "Management--Option
Grants." The Company intends to file a Registration Statement under the
Securities Act to register the shares of Common Stock reserved for issuance
under the 1998 Stock Plan. Such Registration Statement is expected to be filed
as soon as practicable after the date of this Prospectus and will become
automatically effective upon filing. Shares of Common Stock issued upon the
exercise of options under the 1998 Stock Plan after the effective date of such
Registration

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<PAGE>

Statement generally will be available for sale in the open market, subject to
Rule 144 limitations with respect to affiliates, and subject to the lock-up
agreements described below.

LOCK-UP AGREEMENTS

The Company and the holders of all shares of Common Stock outstanding prior
to the Offering, including the directors and officers and the holders of
shares issued in connection with the Combination, holding in the aggregate
2,818,000 shares of Common Stock, have agreed that they will not, except under
the limited circumstances described in the respective lock-up agreements,
without the prior written consent of the Representatives, agree to sell,
contract to sell or otherwise dispose of any shares of Common Stock of the
Company for a period of 180 days after the date of this Prospectus.

REGISTRATION RIGHTS

Following the Combination, the holders of 2,818,000 shares of Common Stock
will have the right, in certain circumstances, to require the Company to
include their shares in a registration statement filed by the Company under
the Securities Act. In addition, the holders of 1,651,333 of such shares of
Common Stock will have the right, in certain circumstances, beginning on the
date that is 180 days following the consummation of the Offering, to require
the Company to register their shares of Common Stock under the Securities Act.
See "Certain Transactions."

EFFECT OF FUTURE SALES

Prior to the Offering, there has been no trading market for shares of Common
Stock, and the effect, if any, that future market sales of shares of Common
Stock or the availability of shares of Common Stock for sale will have on the
prevailing market prices for the Common Stock cannot be predicted.
Nevertheless, sales of a substantial number of shares in the public market, or
the perception that such sales could occur, could adversely affect prevailing
market prices for the Common Stock and could impair the Company's future
ability to raise capital through an offering of its equity securities. See
"Risk Factors--Possible Future Sales of Shares."

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UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement among the
Company and Wheat First Union, a division of Wheat First Securities, Inc.,
Cleary Gull Reiland & McDevitt Inc. and Scott & Stringfellow, Inc., as
representatives of the Underwriters (the "Representatives"), the Underwriters
have severally agreed to purchase from the Company, and the Company has agreed
to sell to each of the Underwriters, the respective number of shares of Common
Stock set forth opposite their names below:

<TABLE>
<CAPTION>
UNDERWRITER NUMBER OF SHARES
----------- ----------------
<S> <C>
Wheat First Securities, Inc. ............................
Cleary Gull Reiland & McDevitt Inc. .....................
Scott & Stringfellow, Inc. ..............................
---------
Total.................................................. 4,400,000
=========
</TABLE>

The Underwriting Agreement provides that the obligations of the Underwriters
thereunder are subject to approval of certain legal matters by counsel and to
various other conditions. The nature of the Underwriters' obligations is such
that they are committed to purchase and pay for all the above shares of Common
Stock if any are purchased.

The Underwriters propose to offer the shares of Common Stock directly to the
public at the public offering price set forth on the cover page of this
Prospectus and to selected dealers at such price less a concession not in
excess of $ per share of Common Stock. The Underwriters may allow, and such
selected dealers may reallow, a concession not in excess of $ per share of
Common Stock to certain brokers and dealers. After the initial offering to the
public, the price to public, concessions and reallowances may be changed by
the Representatives.

The Company has granted to the Underwriters an option, exercisable during
the 30-day period after the date of this Prospectus, to purchase up to 660,000
shares of Common Stock to cover over-allotments, if any, at the public
offering price, less the underwriting discount, as set forth on the cover page
of this Prospectus. To the extent that the Underwriters exercise this option,
each of the Underwriters will be committed, subject to certain conditions, to
purchase such additional shares in approximately the same proportion as set
forth in the above table. The Underwriters may purchase such shares only to
cover over-allotments made in connection with this Offering.

Certain executive officers, directors and shareholders of the Company,
including the holders of shares of Common Stock issued in connection with the
Combination, have agreed generally with the Representatives not to offer,
sell, contract to sell or otherwise dispose of, directly or indirectly, or
announce an offering of, any Common Stock, with certain exceptions, for a
period of 180 days after the date hereof without the written consent of Wheat
First Securities, Inc.

The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, or to contribute
to payments that the Underwriters may be required to make in respect thereof.

At the request of the Company, the Underwriters have reserved for sale, at
the initial public offering price, up to 5% of the shares offered hereby to be
sold to certain directors, officers, and employees of the Company and certain
business associates of the Company. The number of shares of Common Stock
available for sale to the general public will be reduced to the extent such
persons purchase such reserved shares. Any reserved shares which are not
orally confirmed for purchase within one day of the pricing of the Offering
will be offered by the Underwriters to the general public on the same terms as
the other shares offered hereby.

The Representatives have informed the Company that the Underwriters do not
intend to confirm sales to any accounts over which they exercise discretionary
authority.

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Prior to this Offering, there has been no public market for the Common
Stock. Consequently, the initial public offering price was determined through
negotiations between the Company and the Representatives. Among the factors
that were considered in making such determination were prevailing market
conditions, the Company's financial and operating history and condition, its
prospects and prospects for the industry in general, the management of the
Company and the market prices of securities for companies in business similar
to that of the Company.

In connection with this Offering, certain Underwriters and selling group
members (if any) and their respective affiliates may engage in transactions
that stabilize, maintain or otherwise affect the market price of the Common
Stock. Such transactions may include stabilization transactions effected in
accordance with Rule 104 of Regulation M of the 1934 Act, pursuant to which
such persons may bid for or purchase Common Stock for the purpose of
stabilizing its market price. The Underwriters also may create a short
position for the account of the Underwriters by selling more Common Stock in
connection with this Offering than they are committed to purchase from the
Company and in such case may purchase Common Stock in the open market
following completion of this Offering to cover all or a portion of such short
position. The Underwriters may also cover all or a portion of such short
position, up to 660,000 shares of Common Stock, by exercising the Underwriters
over-allotment option. In addition, Wheat First Securities, Inc., on behalf of
the Underwriters, may impose penalty bids under contractual arrangements with
the Underwriters whereby it may reclaim from an Underwriter (or dealer
participating in this Offering), for the account of the other Underwriters,
the selling concession with respect to the Common Stock that is distributed in
this Offering but subsequently purchased for the account of the Underwriters
in the open market. Any of the transactions described in this paragraph may
result in the maintenance of the price of the Common Stock at a level above
that which might otherwise prevail in the open market. None of the
transactions described in this paragraph is required, and if any is
undertaken, it may be discontinued at any time.

The Common Stock has been approved for listing on the Nasdaq National
Market, subject to notice of issuance, under the symbol "MERK."

In the ordinary course of their respective businesses, the Underwriters and
certain of their respective affiliates may in the future engage in certain
investment and commercial banking or other transactions of a financial nature
with the Company, or its subsidiaries, including the provision of certain
advisory services and the making of loans to the Company and its affiliates.
In particular, First Union National Bank is an affiliate of Wheat First
Securities, Inc., one of the Underwriters, and is the administration agent and
a lender under the Credit Facility. First Union Capital Markets is a division
of Wheat First Securities, Inc. and is the arranger under the Credit Facility.
First Union National Bank and First Union Capital Markets have received, or
will receive, as applicable, fees in connection with the Credit Facility. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operation--Combined Liquidity and Capital Resources Following the
Combination."

LEGAL MATTERS

Certain legal matters with respect to the validity of the Common Stock
offered hereby will be passed upon for the Company by Goodwin, Procter & Hoar
LLP, Boston, Massachusetts. Certain legal matters relating to the Offering
will be passed upon for the Underwriters by Shearman & Sterling, New York, New
York.

EXPERTS

The financial statements included in this Prospectus and elsewhere in the
Registration Statement, to the extent of and for the periods indicated in the
reports, have been audited by Arthur Andersen LLP, independent public
accountants, or Hege Kramer Connell Murphy & Goldkamp, P.C. as indicated in
their respective reports with respect thereto, and are included herein in
reliance upon the authority of said firms as experts in giving said

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reports. Arthur Andersen LLP's report on the financial statements of Merkert
Enterprises, Inc. and subsidiary as of and for the three years ended December
31, 1997, dated May 22, 1998 and included herein, includes a qualification
stating that there exists a substantial doubt about the ability of Merkert
Enterprises, Inc. to continue as a going concern.

AVAILABLE INFORMATION

The Company has filed with the Commission a Registration Statement on Form
S-1 under the Securities Act with respect to the Common Stock offered hereby.
This Prospectus does not contain all of the information set forth in the
Registration Statement, certain portions of which are omitted as permitted by
the rules and regulations of the Commission. For further information
pertaining to the Company and the Common Stock offered hereby, reference is
made to the Registration Statement, including the exhibits thereto and the
financial statements, notes and schedules filed as a part thereof. Statements
contained in this Prospectus regarding the contents of any contract or other
document referred to herein or therein are not necessarily complete, and in
each instance reference is made to the copy of such contract or other document
filed as an exhibit to the Registration Statement or such other documents,
each such statement being qualified in all respects by such reference.

Upon completion of the Offering, the Company will be subject to the
informational requirements of the Exchange Act and in accordance therewith,
will file reports, proxy statements and other information with the Commission.
Such reports, proxy statements and other information, as well as the
Registration Statement and the exhibits and schedules thereto, may be
inspected, without charge, at the public reference facility maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's regional offices located at Seven World
Trade Center, New York, New York 10048 and Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such
material may also be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. Such materials can also be inspected at a world wide web site
maintained by the Commission at http://www.sec.gov that contains reports,
proxy and information statements and other information regarding registrants
(which, after the Offering, will include the Company) that file electronically
with the Commission. The Company intends to furnish holders of the Common
Stock with annual reports containing financial statements audited by an
independent certified public accounting firm.

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<PAGE>

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
Basis of Presentation................................................... F-2
Notes to Unaudited Pro Forma Combined Financial Statements.............. F-3
Pro Forma Combined Balance Sheet as of September 30, 1998 and notes
thereto (unaudited).................................................... F-4
Pro Forma Combined Statement of Operations for the Year Ended December
31, 1997 and notes thereto (unaudited)................................. F-7
Pro Forma Combined Statement of Operations for the Nine Months Ended
September 30, 1998 and notes thereto (unaudited)....................... F-9
HISTORICAL FINANCIAL STATEMENTS
MERKERT AMERICAN CORPORATION
Report of Independent Public Accountants................................ F-11
Balance Sheet........................................................... F-12
Statement of Operations................................................. F-12
Notes to Financial Statements........................................... F-13
MERKERT ENTERPRISES, INC. AND SUBSIDIARY
Report of Independent Public Accountants................................ F-17
Consolidated Balance Sheets............................................. F-18
Consolidated Statements of Operations................................... F-19
Consolidated Statements of Stockholders' Deficit........................ F-20
Consolidated Statements of Cash Flows................................... F-21
Notes to Consolidated Financial Statements.............................. F-22
ROGERS-AMERICAN COMPANY, INC. AND SUBSIDIARY
Report of Independent Public Accountants................................ F-32
Consolidated Balance Sheets............................................. F-33
Consolidated Statements of Operations................................... F-34
Consolidated Statements of Stockholders' Equity......................... F-35
Consolidated Statements of Cash Flows................................... F-36
Notes to Consolidated Financial Statements.............................. F-37
FITZWATER INC.
Independent Auditors' Report............................................ F-46
Balance Sheet........................................................... F-47
Statements of Income.................................................... F-48
Statement of Stockholders' Equity....................................... F-49
Statements of Cash Flows................................................ F-50
Notes to Financial Statements........................................... F-51
</TABLE>

F-1
<PAGE>

MERKERT AMERICAN CORPORATION, MERKERT AND ROGERS

UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

BASIS OF PRESENTATION

The following unaudited pro forma combined financial statements give effect
to the purchases by Merkert American Corporation (the "Company") of the
outstanding capital stock of Merkert Enterprises, Inc. ("Merkert") and Rogers
American Company, Inc. ("Rogers"). These purchases will occur simultaneously
with the closing of the Company's initial public offering (the "Offering") and
will be accounted for using the purchase method of accounting. Merkert
American Corporation has been designated as the accounting acquiror pursuant
to SAB 97, because the current stockholders of the Company will own the
largest portion of Common Stock after the consummation of the Offering and the
Combination.

The unaudited pro forma combined balance sheet gives effect to the
Combination and the Offering as if they had occurred on September 30, 1998.
The unaudited pro forma combined statement of operations for the year ended
December 31, 1997 and the nine months ended September 30, 1998 give effect to
these transactions as if they had occurred on January 1, 1997.

The pro forma adjustments discussed herein are based on estimates, and
certain assumptions. It is management's opinion that the final allocation of
the purchase price will not differ materially from the preliminary estimated
amounts. Management anticipates that the final price allocation will be
completed soon after the consummation of the Combination. The pro forma
financial data do not purport to represent what the Company's financial
position or results of operations would actually have been if such
transactions had in fact occurred on those dates and are not necessarily
representative of the Company's financial position or results of operations of
the Company for any future period. The unaudited pro forma combined financial
statements should be read in conjunction with the other financial statements
and notes thereto included elsewhere in this Prospectus. See "Risk Factors"
included elsewhere herein.

F-2
<PAGE>

MERKERT AMERICAN CORPORATION, MERKERT AND ROGERS

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

1. GENERAL

Merkert American Corporation was founded to become a leading national food
broker. The Company has conducted no operations to date and will acquire
Merkert and Rogers concurrently with and as a condition of this Offering.

The historical financial statements reflect the financial position and
results of operations of Merkert and Rogers and were derived from the Merkert
and Rogers financial statements where indicated. The periods included in these
financial statements are as of September 30, 1998 and for the twelve months
ended December 31, 1997 and for the nine months ended September 30, 1998. The
audited historical financial statements are included elsewhere herein.

2. PURCHASE OF MERKERT AND ROGERS

Concurrently with and as a condition to the consummation of this Offering,
the Company will purchase all of the outstanding capital stock of Merkert and
Rogers. The Combination will be accounted for using the purchase method of
accounting.

Upon the consummation of the Combination, the Company plans to complete the
integration of the two companies. As part of this integration, the Company has
consolidated several offices in geographic locations in which both Merkert and
Rogers currently operate. The Company has begun achieving significant savings
associated with these consolidations including payroll and other operating
costs associated with reduced headcount and office expenses. In addition, the
Company expects to eliminate several executive, selling and general
administrative personnel that the management of the Company believe will no
longer be required upon the integration.

The estimated results of the Company's plans of integration are not
reflected in the accompanying Pro forma Combined Financial Statements but are
discussed in the footnotes thereto. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations."

Following the Combination, Rogers intends to sell its corporate headquarters
to a third party, Rogers will then distribute the net cash proceeds from the
sale, after paying the related mortgage note payable, to certain stockholders.
In addition Rogers will assign the life insurance policies on key executives
to certain stockholders. Also, the principal stockholders of Rogers have
agreed to transfer a portion of their shares to certain minority stockholders
prior to the Offering. Rogers will record a compensation charge for each of
these events in their financial statements at the date of these events.

Upon the Combination, Merkert intends to settle the employment contracts of
two executives which requires a cash payment of approximately $1,500. Merkert
will record a compensation charge for this amount in its financial statements
at that date.

The consideration to be paid in cash and in shares of Common Stock to the
common stockholders of Merkert and Rogers is as follows: Merkert: cash of
$31,000 and Common Stock of $17,500; Rogers, cash of $25,635. For purposes of
computing the estimated purchase price for accounting purposes, the fair value
of the shares is determined by applying a 15% discount to the expected market
value of the shares issued in connection with the Offering due to restrictions
on the sale and transferability of the shares issued. The shares issued in the
Combination will be unregistered shares. Accordingly, unless registered, these
shares cannot be sold except under Rule 144 or another applicable exemption
from registration under the Securities Act of 1933, as amended (the
"Securities Act"). Additionally, the shares are subject to a six-month
contractual lock-up in favor of the Underwriters. Allocations of the purchase
prices are preliminary and subject to change. The excess of the purchase price
over the fair value of the net liabilities assumed has been assigned to
goodwill, subject to an appraisal of the assets.

F-3
<PAGE>

MERKERT AMERICAN

PRO FORMA BALANCE SHEET
(UNAUDITED)

AS OF SEPTEMBER 30, 1998

(IN THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
ROGERS ADJUSTMENTS FOR PRO FORMA ADJUSTMENTS FOR AS
MERKERT AMERICAN COMPANY THE COMBINATION COMBINED THE BORROWING ADJUSTED
-------- -------- ------- --------------- --------- --------------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and cash
equivalents............ $ -- $ 667 $ 149 $ 816 $ (155) (d) $ 661
Restricted cash......... 619 430 1,049 1,049
Accounts Receivable,
net.................... 15,177 11,127 26,304 26,304
Inventories............. 1,193 1,193 1,193
Deferred income taxes... 639 639 639
Prepaid expenses and
other.................. 2,531 511 2,193 $(1,500) (a) 3,735 3,735
-------- ------- ------ ------- -------- -------- --------
Total current as-
sets................ 19,520 13,374 2,342 (1,500) 33,736 (155) 33,581
Plant and equipment,
net.................... 11,669 5,545 (3,800) (a) 13,414 13,414
Noncompetes, net ....... 4,632 4,000 (6,632) (h)(b) 2,000 2,000
Goodwill................ 17,612 13,175 88,852 (b) 119,639 119,639
Deferred income taxes... -- 150 150 150
Other assets............ 1,437 3,528 (3,378) (a) 1,587 2,200 (d) 3,787
-------- ------- ------ ------- -------- -------- --------
Total assets......... $ 54,870 $39,772 $2,342 $73,542 $170,526 $ 2,045 $172,571
======== ======= ====== ======= ======== ======== ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Accounts payable and
accrued liabilities.... $ 36,173 $ 6,130 1,842 $(9,832) (f) $ 34,313 $ (5,900) (d) $ 28,413
6,250 (d)
Current maturities of
long term debt......... 9,962 11,837 500 22,299 (19,700) (d) 8,849
Payable to
stockholders........... 56,635 (b) 56,635 (56,635) (d) --
-------- ------- ------ ------- -------- -------- --------
Total current liabil-
ities............... 46,135 17,967 2,342 46,803 113,247 (75,985) 37,262
(6,250) (d)
Long term debt, net of
current portion........ 24,638 21,087 (3,800) (a) 41,925 50,000 (d) 61,075
(24,600) (d)
Other................... -- 479 479 479
-------- ------- ------ ------- -------- -------- --------
Total liabilities.... 70,773 39,533 2,342 43,003 155,651 (56,835) 98,816
Redeemable Preferred
Stock.................. 5,747 (5,747) (e) -- --
Redeemable Common ...... 1,619 (1,619) (f)(c) -- --
Stockholders' equity
Common Stock........... 14 1 13 (c) 28 44 (e) 72
Additional paid in
capital............... 3,126 37 11,684 (g) 14,847 58,836 (e) 73,683
Retained earnings
(Accumulated
deficit).............. (22,506) 201 22,305 (c) -- --
Treasury stock......... (3,903) 3,903 (c) -- --
-------- ------- ------ ------- -------- -------- --------
Total stockholders'
equity (deficit).... (23,269) 239 -- 37,905 14,875 58,880 73,755
-------- ------- ------ ------- -------- -------- --------
Total liabilities and
stockholders' equity... $ 54,870 $39,772 $2,342 $73,542 $170,526 $ 2,045 $172,571
======== ======= ====== ======= ======== ======== ========
</TABLE>

F-4
<PAGE>

NOTES TO UNAUDITED PRO FORMA COMBINED
BALANCE SHEET ADJUSTMENTS

AS OF SEPTEMBER 30, 1998

(a) Records the distribution, to certain selling shareholders of Rogers, the
net cash proceeds from the sale of real estate subject to a mortgage of
approximately $3,800 and life insurance policies with a net book value of
$3,378 and the distribution of certain other assets to the selling
shareholders of Merkert with a net book value of $1,500.

(b) Records the goodwill resulting from the Combination of Merkert and Rogers
by the Company. The goodwill is calculated as follows:

<TABLE>
<S> <C>
Cash paid...................................................... $ 56,635
Fair value of shares of common stock issued.................... 14,875
Transaction costs.............................................. 1,900
--------
73,410
Plus: fair value of net tangible liabilities assumed........... 48,229
--------
121,639
Less: intangible assets allocated to noncompete agreements..... 2,000
--------
Goodwill....................................................... $119,639
========
</TABLE>

The pro forma combined balance sheet does not reflect the income tax
liability assumed by certain selling stockholders which is to be paid in
full to the applicable tax authorities at the closing date.

(c) Records the increase in par value for the shares issued to the selling
stockholders of Merkert. Also records the elimination of the historical
equity accounts of Merkert and Rogers.

(d) Records the net proceeds from the Offering, net of Underwriters' discount,
of $61,380. Also records the proceeds from the borrowing of $50,000, of
which $6,250 will be due within 12 months. Also allocates to paid-in
capital $2,500 of deferred Offering costs, including $1,950 of costs
deferred as of September 30, 1998 and records the anticipated use of
proceeds from the Offering as follows:

<TABLE>
<S> <C>
Net Proceeds and borrowing................................... $111,380
Offering costs............................................... (2,500)
Cash paid to selling shareholders............................ (56,635)
Repayment of bank debt and other notes payable............... (14,700)
Fees associated with borrowing............................... (2,200)
Repayment of acquisition obligations......................... (29,600)
Severance and other amounts, including acquisition costs..... (5,900)
--------
$ (155)

As of November 18, 1998 the Company has obtained options to prepay at its
discretion approximately $18 million of the acquisition obligations. The
Company anticipates obtaining options to prepay the remaining obligations.
To the extent the Company is unable to obtain such options they will draw
down less proceeds from the term note.

(e) Records the retirement of redeemable preferred and common stock associated
with the Merkert ESOP.

(f) Records the adjustment to accrued liabilities as follows:

Income tax and other liabilities assumed by certain selling
shareholders................................................ $(19,945)
Severance and other costs associated with the closure of
certain offices and operations.............................. 8,213
Transaction costs............................................ 1,900
--------
Net reduction to accrued liabilities......................... $ (9,832)
========
</TABLE>

F-5
<PAGE>

(g) Records the paid-in capital resulting from the Combination of Merkert and
Rogers by the Company.

<TABLE>
<S> <C>
Fair value of shares issued.................................. $ 14,875
Less: allocated to common stock.............................. (28)
--------
14,847
Less: Paid in capital recorded on the books of Merkert and
Rogers...................................................... (3,163)
--------
Net increase to paid in capital.............................. $ 11,684
========
</TABLE>

(h) Records the elimination of non-compete agreements associated with the
prepayment of certain acquisition obligations.

F-6
<PAGE>

PRO FORMA COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 1997

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
(F)
PRO FORMA PRO FORMA
MERKERT ROGERS COMPANY ADJUSTMENTS COMBINED
-------- ------- ------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Sales................... $ 43,105 $ -- $ -- $ -- $ 43,105
Commission income....... 104,274 82,985 -- -- 187,259
-------- ------- ----- ------- -----------
Revenues................ 147,379 82,985 -- -- 230,364
Cost of sales........... 39,027 -- -- -- 39,027
Selling, general and
administrative
expense................ 102,495 76,384 -- (746)(a),(b)(h) 178,133
Depreciation and
Amortization........... 4,484 2,516 -- (1,610)(c) 5,390
-------- ------- ----- ------- -----------
Operating income
(loss)................. 1,373 4,085 -- 2,356 7,814
Interest expense........ 5,010 2,536 -- (1,153)(d) 6,393
Other (income) expense,
net.................... (79) -- -- -- (79)
-------- ------- ----- ------- -----------
Income (loss) before
income taxes........... (3,558) 1,549 -- 3,509 1,500
Provision (benefit) for
income taxes........... (109) 804 -- 714 (e) 1,409
-------- ------- ----- ------- -----------
Net income (loss)....... $ (3,449) $ 745 $ -- $ 2,795 $ 91
======== ======= ===== ======= ===========
Basic net income per
share.................. $ 0.01
===========
Shares used in computing
basic net income per
share(g)............... 7,218,000
===========
Diluted net income per
share.................. $ 0.01
===========
Shares and potential
dilutive shares used in
computing diluted
earnings per share(g).. 7,230,250
===========
</TABLE>

F-7
<PAGE>

NOTES TO UNAUDITED PRO FORMA COMBINED
STATEMENT OF OPERATIONS ADJUSTMENTS

FOR THE YEAR ENDED DECEMBER 31, 1997

(a) Represents the salaries, fringe benefits and other directly attributable
expenses of certain stockholders of Merkert and Rogers who will no longer
be employed per written agreement; $1,580 in aggregate. Also includes the
add back of $650 of rental expense resulting from the expected sale of
Rogers' headquarters and associated leaseback.

(b) In connection with the Combination and the Offering, the Company has begun
to achieve significant cost savings through the integration of the
operations of Merkert and Rogers. This process has already begun and has
resulted in the integration of the mid-Atlantic region and the closure of
a total of five offices in such region. These anticipated cost savings are
not reflected in the pro forma results of operations. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Combined Integration Activities" for a discussion of the recent
integration activities of Merkert and Rogers.

(c) Represents the net decrease of amortization of goodwill and other
intangibles as a result of the purchase of Merkert and Rogers. The Company
is in the process of allocating the excess purchase price to certain
intangibles and goodwill and has assigned a 40-year life for goodwill and
lives ranging from 5 to 7 years for other intangibles.

(d) Represents the net reduction of interest expense as a result of the
Company's intention to pay down the following obligations with a portion
of the proceeds from the Offering and the Term Loan:

<TABLE>
<CAPTION>
AVERAGE APPROXIMATE 1997 INTEREST
DESCRIPTION BALANCE RATE EXPENSE
----------- -------- ----------- -------------
<S> <C> <C> <C>
Term loan.............................. $ 50,000 9.00% $ 4,500
Revolving line of credit............... (6,000) 8.50% (553)
Revolving line of credit............... (8,700) 8.70% (583)
Mortgage note.......................... (3,800) 8.56% (326)
IRS.................................... 10.00% (1,527)
Acquisition obligations of Merkert and
Rogers................................ (29,600) 9.00% (2,664)
-------
$(1,153)
=======
</TABLE>

The interest rate on the Term Loan is variable, a change of 1/8% in the
rate would increase or decrease net income by approximately $38 on an
annual basis.

(e) Represents the adjustment to record the income tax provision after
considering non-deductible goodwill amortization.

(f) The pro forma combined statement of operations excludes approximately $15
million of aggregate non-recurring compensation charges to be recorded in
the fourth quarter of 1998 by Merkert American, Merkert and Rogers prior
to the purchase. These compensation charges relate to: (1) employment
contract settlements of $1,500 paid to certain executives of Merkert who
are departing the Company; (2) the cash and life insurance policies to be
distributed to certain stockholders of Rogers; and (3) the transfer of
shares of common stock of Rogers by the principal stockholders to certain
minority stockholders and (4) a non-cash stock compensation charge related
to the purchase of Common Stock by Gerald R. Leonard recorded in the
second quarter of 1998.

(g) Includes (1) shares to be issued to the stockholders of Merkert, (2)
shares issued to the management of and consultants to the Company, and (3)
the 4,400,000 shares to be sold in this Offering. In addition, shares and
potential dilutive shares used in computing diluted earnings per share
include the dilutive effect of currently outstanding options to purchase
shares of Common Stock.

(h) Includes $184 of compensation expense related to stock options granted to
certain employees. The Company granted 245,000 options to purchase shares
of Common Stock in October 1998 for $11.25 per share. The Company will
recognize compensation expense for the difference between the exercise
price and the estimated IPO price of $15.00 per share over the five-year
vesting period.

F-8
<PAGE>

PRO FORMA COMBINED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
(F)
PRO FORMA PRO FORMA
MERKERT ROGERS COMPANY ADJUSTMENTS COMBINED
-------- ------- ------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Sales................... $ 31,511 $ -- $ -- $ -- $ 31,511
Commissions............. 68,993 62,584 -- -- 131,577
-------- ------- ------- ------ -----------
Total revenue........... 100,504 62,584 -- -- 163,088
Cost of sales........... 28,721 -- -- -- 28,721
Selling, general and
administrative
expense................ 68,191 57,880 1,271 (559)(a)(b)(h) 126,783
Restructuring expense... 2,303 -- -- (2,303)(b) --
Depreciation and
amortization........... 3,415 1,887 -- (1,260)(c) 4,042
-------- ------- ------- ------ -----------
Operating income........ (2,126) 2,817 (1,271) 4,122 3,542
Interest expense........ 3,506 1,980 -- (842)(d) 4,644
Other (income) expense,
net.................... 532 -- -- -- 532
-------- ------- ------- ------ -----------
Income (loss) before
income taxes........... (6,164) 837 (1,271) 4,964 (1,634)
Provision (benefit) for
income taxes........... 100 425 -- (504)(e) 21
-------- ------- ------- ------ -----------
Net income (loss)....... $ (6,264) $ 412 $(1,271) $5,468 $ (1,655)
======== ======= ======= ====== ===========
Basic net income per
share ................. $ (0.23)
Shares used in computing
basic net income per
share(g)............... 7,218,000
===========
Diluted net income per
share ................. $ (0.23)
===========
Shares and potential
dilutive shares used in
computing diluted
earnings per share(g).. 7,218,000
===========
</TABLE>

F-9
<PAGE>

NOTES TO UNAUDITED PRO FORMA COMBINED
STATEMENT OF OPERATIONS ADJUSTMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998

(a) Represents the salaries, fringe benefits and other directly attributable
expenses of certain stockholders of Merkert and Rogers who will no longer
be employed per written agreement; $1,185 in aggregate. Also includes the
add back of $488 of rental expense resulting from the expected sale of
Rogers' headquarters and associated leaseback.

(b) In connection with the Combination and the Offering, the Company intends
to achieve significant cost savings through the integration of the
operations of Merkert and Rogers. As of September 30, 1998 this process
has already begun and has resulted in the integration of the mid-Atlantic
region and the closure of a total of five offices in such region. Merkert
has recorded a charge of $2,303 for severance for employees who have been
terminated as of September 30, 1998 pursuant to the integration plan. The
Company anticipates the integration actions will be substantially
completed by the closing of the Combination and the Offering and that the
savings from the integration actions will be substantially realized in the
remainder of 1998 and in 1999. The $2,303 restructuring charge recorded by
Merkert in the period has been eliminated on the Pro Forma Statement of
Operations. These anticipated cost savings are not reflected in the pro
forma results of operations. See Management's Discussion and Analysis of
Financial Condition and Results of Operations--Combined Integration
Activities" for a discussion of the recent integration activities of
Merkert and Rogers.

(d) Represents the reduction of interest expense as a result of the Company's
intention to pay down the following obligations with a portion of the
proceeds from the Offering.

<TABLE>
<CAPTION>
APPROXIMATE NINE MONTHS
DESCRIPTION AMOUNT RATE INTEREST EXPENSE
----------- ------- ----------- ----------------
<S> <C> <C> <C>
Term loan............................ $50,000 9.00% $ 3,375
Revolving line of credit............. (6,000) 8.50% (423)
Revolving line of credit............. (8,600) 8.70% (654)
Mortgage note........................ (3,800) 8.56% (242)
IRS.................................. 10.00% (900)
Acquisition obligations of Merkert
and Rogers.......................... (29,600) 9.00% (1,998)
-------
$ (842)
=======
</TABLE>

The interest rate on the Term Loan is variable, a change of 1/8% in the
rate would increase or decrease net income by approximately $38 on an
annual basis.

(e) Represents the adjustment to record the income tax provision after
considering non-deductible goodwill amortization.

(f) The pro forma combined statement of operations excludes in the aggregate
approximately $15 million of aggregate, non-recurring compensation charges
to be recorded in the fourth quarter of 1998 by Merkert American, Merkert
and Rogers prior to the purchase. These compensation charges relate to:
(1) employment contract settlements of $1,500 paid to certain executives
of Merkert who are departing the Company; (2) cash and life insurance
policies to be distributed to certain stockholders of Rogers; and (3) the
transfer of shares of common stock of Rogers by the principal stockholders
to certain minority stockholders.

(g) Includes (1) shares to be issued to stockholders of Merkert and Rogers,
(2) shares issued to the management of and consultants to the Company, and
(3) the 4,400,000 shares to be sold in this Offering. In addition, shares
and potential dilutive shares used in computing diluted earnings per share
include the dilutive effect of currently outstanding options to purchase
shares of Common Stock.

(h) Includes $138 of compensation expense related to stock options granted to
certain employees. The Company granted 245,000 options to purchase shares
of Common Stock in October 1998 for $11.25 per share. The Company will
recognize compensation expense for the difference between the exercise
price and the estimated IPO price of $15.00 per share over the five-year
vesting period.

F-10
<PAGE>

After the stock dividend discussed in Note 6 to Merkert American
Corporation's financial statements is effected, we expect to be in a position
to render the following report.

Arthur Andersen LLP
May 22, 1998

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders of Merkert American Corporation:

We have audited the accompanying balance sheet of Merkert American
Corporation (the "Company") as of March 31, 1998. This balance sheet is the
responsibility of the Company's management. Our responsibility is to express
an opinion on the balance sheet based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the balance sheet is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of Merkert American Corporation as
of March 31, 1998, in conformity with generally accepted accounting
principles.

F-11
<PAGE>

MERKERT AMERICAN CORPORATION

BALANCE SHEET

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31,
1998 1998
ASSETS ------------- ---------
(UNAUDITED)
<S> <C> <C>
Cash.................................................. $ 149 $500
Deferred Offering and Combination Costs............... 2,193 289
------ ----
Total Assets........................................ $2,342 $789
====== ====
LIABILITIES AND STOCKHOLDER'S EQUITY
Accrued Expenses...................................... $1,842 289
Notes Payable......................................... 500 500
Preferred Stock, 1,000,000 authorized, 0 shares issued
and outstanding...................................... -- --
Common Stock, $.01 par value--54,000,000 shares
authorized, 1,651,333 shares issued and outstanding.. 16 --
Additional paid-in capital............................ 2,755 --
Note for sale of common stock......................... (1,500) --
Accumulated deficit................................... (1,271) --
------ ----
0 0
------ ----
Total Liabilities and Stockholder's Equity.......... $2,342 $789
====== ====
</TABLE>

STATEMENT OF OPERATIONS

(IN THOUSANDS)

<TABLE>
<CAPTION>
FROM INCEPTION
MARCH 4, 1998 TO
SEPTEMBER 30, 1998
------------------
(UNAUDITED)
<S> <C>
Compensation Expense......................................... $ 1,271
-------
Net Loss................................................... $(1,271)
=======
</TABLE>

The accompanying notes are an integral part of this balance sheet.

F-12
<PAGE>

MERKERT AMERICAN CORPORATION

NOTES TO FINANCIAL STATEMENTS
(INCLUDES CERTAIN DATA APPLICABLE TO UNAUDITED PERIODS)

1. BUSINESS AND ORGANIZATION

Merkert American Corporation (the "Company") was incorporated on March 4,
1998 in order to create a leading national food broker through the acquisition
of Merkert Enterprises, Inc. and Subsidiary ("Merkert") and Rogers-American
Company, Inc. and Subsidiary ("Rogers"). These acquisitions (hereinafter
referred to as the "Combination") will occur concurrently with and as a
condition of an initial public offering (the "Offering"). The Company intends
to complete the Offering of its common stock and subsequent to the Offering
continue to acquire, through merger or purchase, similar companies in order to
expand its regional and national operations.

The Company's primary assets at September 30, 1998 are cash and deferred
Offering and Combination costs. The Company's only operations to date have
related to the Offering and the Combination. The Company received $500,000 in
cash in exchange for a note payable. As of September 30, 1998, the Company has
used $351,000 of cash to fund certain offering costs, the remaining offering
costs incurred of $1,842,000 are included as accrued expenses on the September
30, 1998 Balance Sheet. Funding for the deferred Offering and Combination
costs has been provided by Monroe & Company II, LLC (See Note 3).

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies followed in
the preparation of these financial statements.

Unaudited Interim Financial Information

The financial statements as of September 30, 1998 and for the period from
inception, March 4, 1998 to September 30, 1998 are unaudited. The Company
believes these financial statements include all adjustments, consisting of
normal recurring adjustments, that the Company considers necessary for a fair
presentation of the financial position and of the results of operations for
the respective periods. It should also be noted that the results for the
interim periods are not necessarily indicative of the results expected for any
other interim period or the full year.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements. Actual results could differ from those estimates.

Stock Based Compensation Plans

The Company intends to account for its stock-based compensation plans under
Accounting Principles Board Opinion No. 25. It will adopt the disclosure only
provisions of Statement of Financial Accounting Standards ("SFAS") No. 123
Accounting for Stock-Based Compensation that requires stock-based compensation
to be disclosed at its fair value.

Earnings Per Share

In February, 1997 the Financial Accounting Standard Board issued SFAS No.
128 Earnings per Share. SFAS No. 128 requires the presentation of basic
earnings per share ("EPS") and diluted earnings per share. Basic EPS excludes
dilution and is calculated using the weighted average number of common shares
outstanding for the period. Diluted EPS is calculated using the weighted
average number of common shares and dilutive potential common shares
outstanding for the period. Dilutive potential shares consist of stock options
and are calculated using the treasury stock method.

F-13
<PAGE>

MERKERT AMERICAN CORPORATION

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(INCLUDES CERTAIN DATA APPLICABLE TO UNAUDITED PERIODS)

Deferred Offering and Combination costs

Deferred Offering and Combination costs consist primarily of legal,
accounting and other professional fees incurred in connection with the
Offering and the Combination. All costs associated with the Combination will
be included as a component of purchase price pursuant to the purchase method
of accounting. All costs associated with the Offering will be charged to
Stockholder's Equity as a reduction to the proceeds when the Offering closes.

3. RELATED PARTY TRANSACTIONS

In connection with the founding and organization of the Company, Monroe &
Company II, LLC purchased 1,376,111 shares of Common Stock for an aggregate
purchase price of $150. On May 11, 1998, Monroe & Company, LLC entered into a
consulting agreement with the Company pursuant to which Monroe & Company, LLC
was engaged to render certain business consulting, financial advisory and
investment banking services to the Company on an exclusive basis for three
years. Pursuant to the consulting agreement, Monroe & Company, LLC will be
paid a financial advisory fee equal to (i) 5% of any consideration paid by the
Company in connection with any transaction which results in the merger,
consolidation or combination of the Company and a third party, the acquisition
by the Company of the capital stock or assets of a third party or a joint
venture with any third party ("Consideration") up to $1 million, plus (ii) 4%
of the Consideration paid in excess of $1 million and up to $2 million, plus
(iii) 3% of the Consideration paid in excess of $2 million and up to $3
million, plus (iv) 2% of the Consideration paid in excess of $3 million and up
to $4 million, plus (v) 1% of the Consideration paid in excess of $4 million.
Under the consulting agreement, Monroe & Company, LLC will also be paid a fee
equal to 0.75% of any principal amount committed under a senior credit
facility for the Company from a lending institution. An additional fee shall
be payable to Monroe & Company, LLC upon increases in such amount or upon
refinancings with a new lender during the term of the consulting agreement.
Monroe & Company, LLC will also be entitled to consulting fees based on
projects and fee schedules to be mutually agreed upon by Monroe & Company, LLC
and the independent directors of the Company (the "Board"). All fees related
to financial advisory services and private placement will be paid to Monroe &
Company, LLC in cash at the closing of the respective transaction. Consulting
fees are paid on a monthly basis as services are rendered.

In April 1998, Gerald R. Leonard, who will become Chairman of the Board,
Chief Executive Officer and President of the Company upon consummation of the
Offering, purchased 275,222 shares of Common Stock from the Company for an
aggregate purchase price of $1,500,000. As a result, the Company recorded a
non-recurring compensation charge of $1,271,000 in the second quarter of 1998.
The purchase price for such stock was paid by a promissory note from Mr.
Leonard to the Company in the principal amount of $1,500,000 (the "Leonard
Note"). The Leonard Note provides that amounts outstanding thereunder will
bear interest at a rate of 6% per annum, and that the entire principal amount
and accrued interest will be due and payable on April 8, 2003. Mr. Leonard's
obligations under the Leonard Note are secured by a pledge of the 275,222
shares of Common Stock purchased thereby pursuant to a stock pledge agreement.
The Leonard Note is a recourse obligation of Mr. Leonard with respect to the
sum of (i) the outstanding principal amount from time to time less $750,000
(but not less than zero dollars) and (ii) one-half of the accrued and unpaid
interest at such time.

4. CAPITAL STOCK

Upon amendment and restatement of the Company's Certificate of
Incorporation, the Company's authorized capital stock will consist of
54,000,000 shares of Common Stock, $.01 par value per share, of which
4,000,000 are designated as Restricted Common Stock and 1,000,000 shares of
undesignated preferred stock.

F-14
<PAGE>

MERKERT AMERICAN CORPORATION

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(INCLUDES CERTAIN DATA APPLICABLE TO UNAUDITED PERIODS)

Common Stock

At September 30, 1998, there were 1,651,333 shares of Common Stock
outstanding. Holders of Common Stock are entitled to one vote for each share
held of record on all matters to be submitted to a vote of the stockholders.

In the event of any liquidation, dissolution or winding-up of the affairs of
the Company, holders of Common Stock will be entitled to share ratably in the
assets of the Company remaining after payment or provision for payment of all
of the Company's debts and obligations and after liquidation payments to
holders of the outstanding shares of undesignated preferred stock, if any.

Undesignated Preferred Stock

At September 30, 1998, there were no shares of undesignated preferred stock
outstanding. Holders of undesignated preferred stock would have priority over
the holders of Common Stock with respect to dividends, and to other
distributions, including the distribution of assets upon liquidation. The
Board of Directors has the authority, without stockholder authorization, to
issue shares of undesignated preferred stock in one or more series and to fix
the terms, limitations, relative rights and preferences and variations.

5. STOCK OPTION PLAN

The Company has adopted the Merkert American Corporation 1998 Stock Option
and Incentive Plan (the "1998 Stock Plan"), which provides for the award of
incentive stock options ("ISOs"), non-qualified stock options ("NQSOs"), stock
appreciation rights, deferred stock awards, restricted and unrestricted stock
awards, performance share awards and dividend equivalent rights to all
directors and employees of and consultants to the Company. The number of
shares authorized for issuance under the 1998 Stock Plan is 938,340. In
general, the terms of the awards granted will be established by either the
Board of Directors or a committee established by the Board of Directors, which
will consist of no less than two non-employee directors.

In November and December 1998, the Company granted Non-Qualified Stock
Options to purchase up to 245,000 shares of Common Stock under the 1998 Stock
Plan to persons who will be officers of the Company following the consummation
of the Offering. These options were issued at an exercise price of $11.25 per
share. These options become exercisable in five annual installments beginning
on the first anniversary of the date of grant. The difference between the
exercise price, $11.25, and the offering price will be recognized as
compensation expenses over the vesting period. See "Certain Transactions." In
addition, in connection with the Offering, the Company will grant to employees
of the Company options under the 1998 Stock Plan to purchase an aggregate of
347,000 shares of Common Stock. Each such option will have a per share
exercise price equal to the Offering price, will expire ten years from the
date of grant and generally will become exercisable in five annual
installments beginning on the first anniversary of the date of grant. The
Company will also grant to directors options under the 1998 Stock Plan to
purchase an aggregate of 65,000 shares of Common Stock. Each such option will
have a per share exercise price equal to the offering price, will expire 10
years from the date of grant and generally will become exercisable in annual
installments vesting 50% upon the first anniversary of the grant date and the
remaining 50% shall vest in equal installments over the number of years
remaining in each director's term as of the first anniversary of the date of
the grant.

6. SUBSEQUENT EVENTS

On May 22, 1998 and as amended on November 16, 1998, Rogers entered into a
stock purchase agreement with Merkert American Corporation and the
stockholders of Rogers. Pursuant to this stock purchase agreement, the Company
will purchase all of the outstanding shares of common stock of Rogers for
approximately $25.6

F-15
<PAGE>

MERKERT AMERICAN CORPORATION

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(INCLUDES CERTAIN DATA APPLICABLE TO UNAUDITED PERIODS)
million. The consummation of the purchase is subject to a number of
conditions, including the successful completion of an initial public offering
of the Common Stock of the Company. There can be no assurances that this stock
purchase agreement will be consummated.

On May 20, 1998 and as amended from time to time, Merkert entered into a
stock purchase agreement with Merkert American Corporation and the
stockholders of Merkert. Pursuant to this stock purchase agreement, the
Company will purchase all of the outstanding shares of common and convertible
redeemable preferred stock of Merkert for approximately $48.5 million in cash
and stock of the Company. The consideration shall be reduced by the amount
payable by Merkert as a result of the current examination of Merkert's federal
and state tax filings for 1992, 1993 and 1994. In addition, Merkert is
currently the subject of an audit with respect to its federal income tax
returns for its fiscal years 1995, 1996 and 1997. Also, Merkert has received
written notice from the seller of a food brokerage business acquired by
Merkert alleging that Merkert has breached certain covenants contained in an
agreement with such seller, claiming that such breaches have caused the
acceleration of certain obligations of Merkert to the seller and have filed an
arbitration demand which is currently pending before the American Arbitration
Association. In connection with the acquisition of Merkert, a portion of the
cash purchase price will be held in escrow to cover potential liabilities
resulting from the IRS audit and the arbitration with the seller of the food
brokerage business and the Company does not believe that the ultimate outcome
of these matters will have a material adverse effect on the Company. The
consummation of the purchase is subject to a number of conditions, including
the successful completion of an initial public offering of the Common Stock of
the Company. In addition, Merkert has agreed to settle the employment
contracts of two executives upon the consummation of this stock purchase
agreement and will record a compensation charge of $1,500,000 at that time.
There can be no assurances that the stock purchase agreement will be
consummated.

The Company and Messrs. Monroe and Leonard are parties to a Registration
Rights Agreement, dated May 18, 1998, pursuant to which Messrs. Monroe and
Leonard have the right, subject to certain restrictions, beginning on the date
that is 180 days following the completion of the Offering, to cause the
Company to effect a registration of their shares of Common Stock under the
Securities Act of 1933, as amended (the "Securities Act"), on not more than
two occasions. Messrs. Monroe and Leonard also have certain "piggy-back"
registration rights in the event the Company registers any of its securities
for either itself or for security holders exercising their registration
rights.

In connection with the Combination, the Company will enter into Registration
Rights Agreements with the former stockholders of Merkert and Rogers,
respectively, pursuant to which such former stockholders will have the right,
subject to certain restrictions, to include their shares of Common Stock
received in the Combination in a registration statement filed by the Company
under the Securities Act.

Upon the effective date of the Company's initial public offering as
described elsewhere in this prospectus, the Company expects to declare a stock
dividend of 729.9074 shares of Common Stock and 186.50 shares of Restricted
Common Stock in respect of each issued and outstanding shares of Common Stock.
All share and per share amounts give effect to such stock dividend.

F-16
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Merkert Enterprises, Inc. and Subsidiary:

We have audited the accompanying consolidated balance sheets of Merkert
Enterprises, Inc. and Subsidiary ("Merkert") as of December 31, 1996 and 1997,
and the related consolidated statements of operations, stockholders' deficit
and cash flows for each of the three years in the period ended December 31,
1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Merkert
Enterprises, Inc. and Subsidiary as of December 31, 1996 and 1997, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1997, in conformity with
generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that
Merkert will continue as a going concern. As discussed in Note 2 to the
financial statements, Merkert has suffered net losses in 1996 and 1997 and has
a net working capital deficiency at December 31, 1997 that raises substantial
doubt about its ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 2. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

Arthur Andersen LLP

Boston, Massachusetts
May 22, 1998

F-17
<PAGE>

MERKERT ENTERPRISES, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
SEPTEMBER 30,
1996 1997 1998
------- -------- -------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash........................................ $ 730 $ 566 $ --
Restricted cash............................. 368 595 619
Accounts receivable, less allowance for
doubtful accounts of $225, $575 and $575,
respectively............................... 16,708 18,437 15,177
Inventories................................. 1,834 1,911 1,193
Prepaid expenses and advances............... 240 318 2,531
------- -------- --------
Total current assets...................... 19,880 21,827 19,520
------- -------- --------
Property, plant and equipment, net............ 8,155 12,628 11,669
------- -------- --------
Intangibles, net of amortization.............. 18,027 23,613 22,244
------- -------- --------
Other assets.................................. 1,360 631 1,437
------- -------- --------
Total assets.............................. $47,422 $ 58,699 $ 54,870
======= ======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current maturities of long-term debt........ $ 651 $ 693 $ 700
Revolving line of credit.................... 1,430 5,883 6,486
Current maturities of notes payable and
lease...................................... 2,746 4,085 2,776
Accounts payable............................ 8,611 8,184 4,318
Accrued expenses............................ 23,844 27,942 31,855
------- -------- --------
Total current liabilities................. 37,282 46,787 46,135
------- -------- --------
Long-term debt and notes payable, less current
maturities................................... 15,590 21,278 24,638
------- -------- --------
Commitments and contingencies
Convertible redeemable preferred stock:
$.01 par value, at redemption value--
Authorized--500,000 shares
Issued and outstanding--237,446, 213,566
and 214,544 shares respectively........... 6,360 5,720 5,747
Common Stock, subject to redemption $.01 par
value
Issued and outstanding--370,753 and 411,853
shares, respectively......................... 805 1,619 1,619
Stockholders' deficit:
Common stock, $.01 par value--
Authorized--3,500,000 shares
Issued and outstanding--1,232,582 and
1,224,582 shares, respectively............ 14 14 14
Additional paid-in capital.................. 3,126 3,126 3,126
Accumulated deficit......................... (12,048) (15,942) (22,506)
Treasury stock--at cost..................... (3,707) (3,903) (3,903)
------- -------- --------
(12,615) (16,705) (23,269)
------- -------- --------
Total liabilities and stockholders'
deficit.................................. $47,422 $ 58,699 $ 54,870
======= ======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-18
<PAGE>

MERKERT ENTERPRISES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS)

<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER
YEAR ENDED DECEMBER 31, 30,
--------------------------- ----------------
1995 1996 1997 1997 1998
------- -------- -------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues:
Commissions.................. $73,336 $ 80,661 $104,274 $78,690 $68,993
Sales........................ 49,233 44,916 43,105 31,495 31,511
------- -------- -------- ------- -------
122,569 125,577 147,379 110,185 100,504
Operating expenses:
Selling expenses............. 45,717 52,510 69,913 55,022 45,820
Cost of sales................ 45,615 41,890 39,027 28,884 28,721
General and administrative... 26,671 28,097 32,582 25,541 22,371
Depreciation and
amortization................ 2,132 2,447 4,484 3,442 3,415
Restructuring Expense........ -- -- -- -- 2,303
------- -------- -------- ------- -------
Operating income (loss).... 2,434 633 1,373 (2,704) (2,126)
------- -------- -------- ------- -------
Other income (expense):
Interest income.............. 155 133 56 56 --
Interest expense............. (1,660) (2,283) (5,010) (3,526) (3,506)
Other income (expense)....... (122) 247 23 7 (532)
------- -------- -------- ------- -------
Total other income
(expense)................. (1,627) (1,903) (4,931) (3,463) (4,038)
------- -------- -------- ------- -------
Income (loss) before provision
for income taxes.............. 807 (1,270) (3,558) (6,167) (6,164)
Provision (benefit) for income
taxes......................... 1,268 804 (109) 275 100
------- -------- -------- ------- -------
Net loss................... (461) (2,074) (3,449) (6,442) (6,264)
Preferred stock dividends...... 445 445 445 334 300
------- -------- -------- ------- -------
Net loss applicable to common
stockholders.................. $ (906) $ (2,519) $ (3,894) $(6,776) $(6,564)
======= ======== ======== ======= =======
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-19
<PAGE>

MERKERT ENTERPRISES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
COMMON STOCK,
$.01 PAR VALUE TREASURY STOCK ADDITIONAL
---------------- ---------------- PAID-IN ACCUMULATED
SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT TOTAL
--------- ------ ------- ------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31,
1994................... 1,447,582 $ 14 -- $ -- $3,126 $ (8,623) $ (5,483)
Net income............ -- -- -- -- -- (461) (461)
Preferred dividend
declared............. -- -- -- -- -- (445) (445)
Purchase of treasury
stock................ -- -- 123,000 2,042 -- -- (2,042)
--------- ---- ------- ------- ------ -------- ---------
Balance, December 31,
1995................... 1,447,582 14 123,000 2,042 3,126 (9,529) (8,431)
Net loss.............. -- -- -- -- -- (2,074) (2,074)
Preferred dividend
declared............. -- -- -- -- -- (445) (445)
Purchase of treasury
stock................ -- -- 92,000 1,665 -- -- (1,665)
--------- ---- ------- ------- ------ -------- ---------
Balance, December 31,
1996................... 1,447,582 14 215,000 3,707 3,126 (12,048) (12,615)
Net loss.............. -- -- -- -- -- (3,449) (3,449)
Preferred dividend
declared............. -- -- -- -- -- (445) (445)
Issuance of stock--
401(k)............... -- -- (10,500) (174) -- -- 174
Purchase of treasury
stock................ -- -- 18,500 370 -- -- (370)
--------- ---- ------- ------- ------ -------- ---------
Balance, December 31,
1997................... 1,447,582 14 223,000 3,903 3,126 (15,942) (16,705)
Net loss (unaudited).. (6,264) (6,264)
Preferred dividend
declared
(unaudited).......... -- -- -- -- -- (300) (300)
--------- ---- ------- ------- ------ -------- ---------
Balance, September 30,
1998 (unaudited)....... 1,447,582 $ 14 223,000 $ 3,903 $3,126 $(22,506) $ (23,269)
========= ==== ======= ======= ====== ======== =========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-20
<PAGE>

MERKERT ENTERPRISES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------- ----------------
1995 1996 1997 1997 1998
------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating
activities:
Net loss.......................... $ (461) $(2,074) $(3,449) $(6,442) $(6,264)
Adjustments to reconcile net
loss to net cash provided by
(used in) operating
activities--
Depreciation and amortization... 2,132 2,447 4,484 3,442 3,415
Loss (gain) on disposal of fixed
assets......................... (31) 45 115 14 (224)
Changes in assets and
liabilities, exclusive of
acquisitions--
(Increase) decrease in--
Accounts receivable, net...... (1,269) (1,565) (1,729) (986) 3,260
Inventories, prepaid expenses
and advances................. 189 718 (155) 596 (1,495)
Other assets.................. 86 (348) 527 204 (797)
Accounts payable.............. 2,868 2,266 (427) (2,690) (3,866)
Accrued expenses.............. 2,664 2,584 4,098 8,473 3,910
------- ------- ------- ------- -------
Net cash provided by (used in)
operating activities......... 6,178 4,073 3,464 2,611 (2,061)
------- ------- ------- ------- -------
Cash flows from investing
activities:
Additions to property, plant and
equipment...................... (1,435) (3,356) (7,273) (8,242) (1,671)
Net proceeds from sale of
property, plant and equipment.. 149 117 530 507 512
Acquisitions, net of cash
acquired....................... -- (1,421) (748) (748)
(Increase) decrease in cash
surrender value, net of
increase in policy loans....... (19) (26) 202 215 (10)
------- ------- ------- ------- -------
Net cash (used in) provided by
investing activities......... (1,305) (4,686) (7,289) (8,268) (1,169)
------- ------- ------- ------- -------
Cash flows from financing
activities:
Dividends paid.................. (445) (445) (445) -- --
Borrowings under revolving line
of credit...................... -- 1,430 4,453 4,857 603
Issuance (repayment) of long-
term debt...................... -- 1,473 3,419 2,351 3,367
Net (repayment) issuance of
notes payable.................. (275) (1,292) (2,529) (1,429) (1,309)
Issuance of convertible
preferred stock................ -- -- -- -- 27
Redemption of convertible
preferred stock................ -- -- (640) -- --
Repurchase of treasury stock.... (2,042) (1,665) (370) (370) --
------- ------- ------- ------- -------
Net cash (used in) provided by
financing activities......... (2,762) (499) 3,888 5,409 2,688
------- ------- ------- ------- -------
Net increase (decrease) in
cash......................... 2,111 (1,112) 63 (248) (542)
Cash:
Beginning of year............... 99 2,210 1,098 1,098 1,161
------- ------- ------- ------- -------
End of period................... $ 2,210 $ 1,098 $ 1,161 $ 850 $ 619
======= ======= ======= ======= =======
Supplemental disclosures of:
Cash flow information--
Cash payments for--
Interest...................... $ 563 $ 934 $ 3,501 $ 1,894 $ 2,422
======= ======= ======= ======= =======
Income taxes.................. $ 822 $ 1,825 $ 21 $ 6 $ 1,756
======= ======= ======= ======= =======
Non-cash flow information--
Purchase price financed by
seller....................... $ 1,158 $13,947 $ 6,292 $ 6,292 $ --
======= ======= ======= ======= =======
Liabilities assumed........... $ -- $ 724 $ 560 $ 560 $ --
======= ======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.

F-21
<PAGE>

MERKERT ENTERPRISES, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(INCLUDING CERTAIN DATA APPLICABLE TO UNAUDITED PERIODS)

1. NATURE OF BUSINESS

Merkert Enterprises, Inc. ("Merkert") is a broker of food and various food-
related products. Merkert provides sales, marketing and merchandising services
to manufacturers ("Manufacturers") of consumer goods and serves as an
intermediary between the Manufacturers and retailers and wholesalers of the
consumer goods. Merkert also provides development, inventory management and
procurement and packaging services of private label frozen fruit and vegetable
products for several retailers. Merkert primarily operates throughout the
northeast and mid-Atlantic regions of the United States.

2. LIQUIDITY

Merkert incurred net losses in 1996 and 1997 and has a net working capital
deficiency of $24,960 as of December 31, 1997, which results in a substantial
doubt about Merkert's ability to continue as a going concern. Management's
plans to alleviate the net working capital deficiency include the sale of all
of the outstanding shares of Merkert's common and convertible redeemable
preferred stock to another entity (see Note 12). This new entity intends to
finance the acquisition through an initial public offering of equity (the
"Offering"). The proceeds from a successful offering will also be used to
repay certain indebtedness of Merkert. Also, Merkert plans to seek to obtain a
new revolving credit facility sufficient to meet Merkert's working capital
requirements. The accompanying consolidated financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of Merkert and
its wholly owned subsidiary Merkert Laboratories, Inc. ("Merkert Labs"). All
intercompany accounts and transactions have been eliminated in consolidation.

Unaudited Interim Financial Information

The financial statements as of September 30, 1998 and for the nine months
ended September 30, 1997 and 1998 are unaudited. Merkert believes these
financial statements include all adjustments, consisting of normal recurring
adjustments, that Merkert considers necessary for a fair presentation of the
financial position and of the results of operations for the respective
periods.

It should also be noted that the results for the interim periods are not
necessarily indicative of the results expected for any other interim period or
full year.

Use of Estimates

The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

F-22
<PAGE>

MERKERT ENTERPRISES, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(INCLUDING CERTAIN DATA APPLICABLE TO UNAUDITED PERIODS)

Revenue Recognition

Commissions are earned and recognized upon shipment by the Manufacturer to
the retailer or wholesaler; product sales revenue is recognized upon shipment
by Merkert.

Marketable Securities

Merkert accounts for its marketable securities in accordance with Statement
of Financial Accounting Standards (SFAS) No. 115, Accounting for Certain
Investments in Debt and Equity Securities. Merkert's investments were
classified as available-for-sale and are recorded at market value. During
1995, all investments were sold and the resulting gain of $567 was included in
other income in the consolidated statement of operations.

Inventories

Inventories are primarily finished goods and consist of price marking guns
and labels as well as other supplies purchased by retailers. Inventories are
stated at the lower of cost or market and are valued on a first-in, first-out
(FIFO) basis.

Fair Value

Effective December 31, 1995, Merkert adopted SFAS No. 107, Disclosures About
Fair Value of Financial Instruments. SFAS No. 107 requires that Merkert
disclose estimated fair values for certain of its financial instruments.
Merkert's financial instruments consist of cash, accounts receivable, notes
payable, accounts payable and long-term debt. The carrying value of Merkert's
financial instruments approximates fair value at December 31, 1995, 1996 and
1997.

Concentration of Credit Risk

Financial instruments that potentially subject Merkert to concentrations of
credit risk principally consist of trade receivables. Merkert's trade
receivables result primarily from commission sales. Merkert maintains reserves
for potential credit losses and such losses have been immaterial.

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed
principally by accelerated methods over the estimated useful lives of the
assets.

Intangibles

Intangibles consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1996 1997
------- -------
<S> <C> <C>
Goodwill................................................... $17,160 $20,595
Noncompete agreements...................................... 1,857 5,883
------- -------
19,017 26,478
Accumulated amortization................................... (990) (2,865)
------- -------
$18,027 $23,613
======= =======
</TABLE>

F-23
<PAGE>

MERKERT ENTERPRISES, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(INCLUDING CERTAIN DATA APPLICABLE TO UNAUDITED PERIODS)

Goodwill, the excess of the acquired business purchase price over the fair
value of the acquired assets, is amortized on a straight-line basis over
estimated useful lives which range from 10 to 20 years. Noncompete agreements
are amortized on a straight-line basis over the life of the respective
agreement. Amortization expense was $467, $861 and $2,615 for the years ended
December 31, 1995, 1996 and 1997, respectively.

Income Taxes

Merkert provides for income taxes in accordance with SFAS No. 109,
Accounting for Income Taxes. SFAS No. 109 recognizes tax assets and
liabilities for the cumulative effect of all temporary differences between the
financial statement carrying amounts and the tax basis of assets and
liabilities and are measured using the enacted tax rates which will be in
effect when these differences are expected to reverse.

Impairment of Long-Lived Assets

Merkert evaluates the carrying value of its long-lived assets in accordance
with SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and
Long-Lived Assets to Be Disposed Of. Accordingly, Merkert evaluates the
carrying value of its long-lived assets including equipment and goodwill
whenever events or changes in circumstances indicate that the carrying value
may not be recoverable. Under SFAS No. 121, an assessment is made to determine
whether the sum of the expected future undiscounted cash flows from the use of
the assets and eventual disposition is less than the carrying value. If the
sum of the expected undiscounted cash flows is less than the carrying value,
an impairment loss is recognized by measuring the excess of carrying value
over fair value (generally estimated by projected future discounted cash flows
for the applicable operation or independent appraisal). At December 31, 1996
and 1997, management believes no such impairment of assets was indicated.

Accrued Expenses

Accrued expenses consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------
1996 1997
------- -------
<S> <C> <C>
Accrued compensation......................................... $ 3,125 $ 3,589
Taxes........................................................ 14,353 16,972
Other........................................................ 6,366 7,381
------- -------
$23,844 $27,942
======= =======
</TABLE>

4. ACQUISITIONS

Merkert completed acquisitions of several food brokerage businesses during
1995, 1996 and 1997.

The acquisitions are accounted for using the purchase method of accounting;
accordingly, the results of operations are included in the accompanying
consolidated financial statements from their respective dates of acquisition.
The purchase price has been allocated to assets acquired and liabilities
assumed based upon their estimated fair values at the date of acquisition. A
portion of the purchase price in certain acquisitions is payable contingent
upon achieving defined performance criteria. Merkert's policy is to estimate
the net present value of the expected payments and record that amount as part
of the purchase price. Merkert records any ultimate changes to the estimate as
an adjustment to the goodwill. Purchase price in excess of net identified

F-24
<PAGE>

MERKERT ENTERPRISES, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(INCLUDING CERTAIN DATA APPLICABLE TO UNAUDITED PERIODS)

tangible and intangible assets is recorded as goodwill and amortized on a
straight-line basis over periods ranging from 10 to 20 years. The following is
a summary of the acquisitions which were consummated in 1995, 1996 and 1997:

<TABLE>
<CAPTION>
PURCHASE PRICE NET
----------------- TANGIBLE
CASH FINANCED ASSETS OTHER
ACQUISITION DATE PAID BY SELLER ACQUIRED GOODWILL INTANGIBLES
----------- ------------ ------ --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Food Service Sales...... January 1995 $ -- $(1,158) $ -- $ 1,158 $ --
ABD Sales, Inc.......... October 1996 (1,121) (9,275) (63) 10,147 312
DelGrosso-Richardson-
Morrison, Inc.......... October 1996 (300) (4,672) 88 3,554 1,330
Toomey-DeLong, Inc. .... January 1997 (635) (5,144) 593 1,160 4,026
Luciano................. January 1997 (113) (1,148) (405) 1,666 --
</TABLE>

Had each of these acquisitions been consummated on January 1, 1996, the
unaudited pro forma revenues and net loss for Merkert for the year ended
December 31, 1996 would have been $164,877 and $(1,787), respectively.

5. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are comprised of the following at December 31,
1996 and 1997:

<TABLE>
<CAPTION>
DEPRECIABLE
1996 1997 LIFE IN YEARS
------- ------- -------------
<S> <C> <C> <C>
Land........................................... $ 693 $ 693 --
Buildings...................................... 5,780 10,113 25-39
Furniture and equipment........................ 4,744 5,590 5
Data processing................................ 4,010 5,497 3
Motor vehicles................................. 1,061 354 5
Leasehold improvements......................... 1,036 217 5
------- -------
17,324 22,464
Less--Accumulated depreciation................. 9,169 9,836
------- -------
$ 8,155 $12,628
======= =======
</TABLE>

Depreciation expense for the years ended December 31, 1995, 1996 and 1997
was $1,665, $1,586 and $1,869, respectively.

6. EMPLOYEE BENEFIT PLANS

Merkert sponsors the Merkert Enterprises, Inc. Employee Stock Ownership Plan
and Trust ("ESOP"). On January 1, 1997, Merkert amended its ESOP to provide
for a contributory plan under the provisions of Section 401(k) (the"401(k)
Plan") of the Internal Revenue Code. As of January 1, 1997, eligible employees
can make voluntary contributions to the 401(k) Plan.

Under the provisions of the 401(k) Plan, Merkert currently matches 100% of
an eligible employee's contribution up to certain limits determined by Merkert
(currently 4%) of the employee's salary. Prior to the adoption of the 401(k)
Plan, Merkert's contributions were made at the discretion of the Board of
Directors.

F-25
<PAGE>

MERKERT ENTERPRISES, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(INCLUDING CERTAIN DATA APPLICABLE TO UNAUDITED PERIODS)

For the years ended December 31, 1995, 1996 and 1997, Merkert expensed
approximately $2,275, $1,249 and $988, respectively, under the terms of the
ESOP and 401(k) Plans. On December 23, 1997, the Board of Directors authorized
the issuance to the ESOP of 51,600 shares, held as treasury stock to satisfy
the fiscal 1997 obligation. The value of the common stock issued to the 401(k)
was at fair value based on an independent appraisal.

At December 31, 1997, the ESOP owned 25% of the common stock and 100% of the
redeemable convertible preferred stock outstanding. Furthermore, under the
terms of the ESOP, Merkert may be required to repurchase both common and
preferred stock issued to either the ESOP or an employee upon the occurrence
of certain events.

7. CONVERTIBLE REDEEMABLE PREFERRED STOCK

The convertible redeemable preferred stock was issued in September 1991.
Each share is convertible into one share of common stock under certain
circumstances. The convertible redeemable preferred stock is subject to a
cumulative annual dividend of $1.875 per share and has pro rata participation
rights in any common stock dividends. The convertible redeemable preferred
stock is redeemable by the holder at any time; only to the extent necessary
for such holder to provide for distributions to participants in the ESOP. The
preferred stock is redeemable at a price equal to the greater of the appraised
value per share or $26.785 per share plus any unpaid dividends. All shares of
common and convertible redeemable preferred stock have equal voting rights.

8. CONTINGENCIES

Merkert is involved in various legal proceedings which have arisen in the
ordinary course of business. Management believes the outcome of such legal
proceedings will not have a material adverse impact on Merkert's consolidated
financial position or results of operations.

9. COMMITMENTS

Promotional Funds

Certain Manufacturers provide Merkert with funds to be used solely for
advertising and other promotional activities. At December 31, 1996 and 1997,
Merkert had cash of $368 and $595, respectively, use of which was restricted
to payment for promotional activities on behalf of its Manufacturers. The
offsetting liability is included in accrued liabilities in the balance sheet
at December 31, 1996 and 1997.

Legal Proceedings

Merkert has received written notice from the seller of a food brokerage
business acquired by Merkert alleging that Merkert has breached certain
covenants contained in an agreement with such seller, claiming that such
breaches have caused the acceleration of certain obligations of Merkert to
such seller and have filed an arbitration demand which is currently pending
before the American Arbitration Association. Merkert believes that this
matter, if determined adversely to Merkert, would not have a material adverse
effect on Merkert. Merkert is from time to time a party to litigation arising
in the ordinary course of business. There can be no assurance that Merkert's
insurance coverage will be adequate to cover all liabilities occurring out of
such claims. In the opinion of management, any liability that Merkert might
incur upon the resolution of this litigation will not, in the aggregate, have
a material adverse effect on the financial condition or results of operations
of Merkert.

F-26
<PAGE>

MERKERT ENTERPRISES, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(INCLUDING CERTAIN DATA APPLICABLE TO UNAUDITED PERIODS)

Leases

Merkert leases certain office and warehouse facilities under operating
leases expiring on various dates through 2005.

Rental costs, including real estate taxes, amounted to approximately $3,273,
$3,469 and $4,386 in 1995, 1996 and 1997, respectively.

The following is a schedule of future minimum rental payments exclusive of
real estate taxes required under operating leases that have initial or
remaining noncancelable lease terms in excess of one year as of December 31,
1997:

<TABLE>
<CAPTION>
RENT
PAYMENTS
--------
<S> <C>
Year ending December 31,
1998............................................................... $ 2,559
1999............................................................... 2,232
2000............................................................... 1,740
2001............................................................... 1,458
2002............................................................... 1,462
Thereafter......................................................... 3,094
-------
Total............................................................. $12,545
=======
</TABLE>

10. INCOME TAXES

The provision (benefit) for income taxes for the years ended December 31, is
as follows:

<TABLE>
<CAPTION>
1995 1996 1997
------ ---- -----
<S> <C> <C> <C>
Federal--
Current.................................................. $ 632 $603 $ (82)
Deferred................................................. 320 -- --
------ ---- -----
952 603 (82)
------ ---- -----
State--
Current.................................................. 210 201 (27)
Deferred................................................. 106 -- --
------ ---- -----
316 201 (27)
------ ---- -----
$1,268 $804 $(109)
====== ==== =====
</TABLE>

A reconciliation between the provision for income taxes computed at U.S.
federal statutory rates and the effective rates reflected in the accompanying
consolidated statements of income are as follows:

<TABLE>
<CAPTION>
YEAR ENDED
---------------------
1995 1996 1997
------ ----- -------
<S> <C> <C> <C>
U.S. federal statutory provision.................... $ 274 $(432) $(1,210)
State income taxes, net of federal income tax
effect............................................. 48 (76) (213)
Change in valuation allowance....................... 4 1,137 1,613
Permanent items..................................... 282 314 459
Other............................................... 660 (139) (758)
------ ----- -------
Effective tax provision........................... $1,268 $ 804 $ (109)
====== ===== =======
</TABLE>

F-27
<PAGE>

MERKERT ENTERPRISES, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(INCLUDING CERTAIN DATA APPLICABLE TO UNAUDITED PERIODS)

The tax effect of temporary differences which give rise to deferred income
tax assets (liabilities) are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1996 1997
------- -------
<S> <C> <C>
Assets--
Accrued interest......................................... $ 1,900 $ 2,487
Intangibles.............................................. 244 1,737
Receivable reserves...................................... 90 230
Health insurance......................................... 15 240
Net operating loss....................................... -- 164
Alternative minimum tax credit........................... -- 157
Other.................................................... 1,255 1,062
------- -------
Total assets........................................... 3,504 6,077
------- -------
Valuation allowance...................................... (3,390) (5,003)
------- -------
Total assets, net of valuation allowance............... 114 1,074
------- -------
Liabilities--
Property basis differences............................... -- (264)
Prepaid expenses......................................... (114) (164)
Other.................................................... -- (646)
------- -------
Total liabilities...................................... (114) (1,074)
------- -------
Net assets (liabilities)............................... $ -- $ --
======= =======
</TABLE>

Merkert has provided a valuation allowance on the portion of the net
deferred tax assets that are not likely to be realized. The valuation
allowance increased in fiscal 1997 and fiscal 1996 by approximately $1,613 and
$1,137, respectively.

Merkert's federal and state tax filings for 1992, 1993 and 1994 are
currently under examination by tax authorities. The examinations are not
complete and Merkert expects to challenge certain preliminary conclusions of
the examinations. Merkert has established reserves in various years which it
believes will be adequate to cover the range of potential liability; however,
the ultimate outcome of the matter is uncertain (see Note 12).

F-28
<PAGE>

MERKERT ENTERPRISES, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(INCLUDING CERTAIN DATA APPLICABLE TO UNAUDITED PERIODS)

11. LONG-TERM DEBT

As of December 31, debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------
1996 1997
------- -------
<S> <C> <C>
Revolving line of credit....................................... $ 1,430 $ 5,883
Bank--mortgage and term loans.................................. 2,834 6,253
Commercial promissory notes.................................... 1,951 1,242
Leases......................................................... -- 186
Acquisition Agreement--DRM..................................... 4,577 3,532
Acquisition Agreement--ABD..................................... 8,723 8,513
Acquisition Agreement--FSS..................................... 625 327
Acquisition Agreement--Luciano................................. -- 1,345
Acquisition Agreement--Toomey-DeLong........................... -- 4,509
Other.......................................................... 277 149
------- -------
20,417 31,939
Less--Current maturities....................................... 4,827 10,661
------- -------
Net long-term debt........................................... $15,590 $21,278
======= =======
</TABLE>

The amounts due under the acquisition agreements represent the total
estimated payments to be made pursuant to these agreements. The total
estimated payments have been discounted using a rate of approximately 10%. The
amounts due under these notes are unsecured and extend through 2009. They are
payable in either monthly or quarterly payments.

On October 31, 1996, Merkert entered into an $8,500 secured revolving line
of credit agreement with a bank. The revolving line of credit bears interest
at the bank's base rate (8.5% at December 31, 1997). On December 23, 1997, the
revolving line of credit agreement was amended to extend the term of the
agreement through February 1, 1999. Amounts outstanding under the revolving
line of credit are secured by eligible accounts receivables. The agreement
contains restrictive covenants customary in this type of financing
arrangement. As of June 30, 1998, Merkert was not in compliance with certain
of these covenants and is in default under the line of credit agreement.

On September 5, 1996, a bank mortgage secured by a building was refinanced
and Merkert entered into a new loan agreement with a bank. The agreement
provided for a $4,335 mortgage loan and amended the existing term loan to
increase the availability under the loan to $2,765. Proceeds from these
borrowings were used to refinance the old bank mortgage note, existing
commercial promissory note, and to fund construction of Merkert's new office
space. The mortgage loan required monthly interest payments only, beginning
October 5, 1996 through July 5, 1997. Effective July 5, 1997, both principal
and interest are due monthly. The mortgage loan matures September 5, 2006, at
which time a balloon payment of the remaining balance would have been due. The
interest rates will float at the bank's base rate, or may be fixed at rates
tied to the London Interbank Offered Rate or U.S. Treasury Rates, at Merkert's
option. The term loan required monthly principal payments of $50, plus
interest and matures September 2, 2001.

The September 5, 1996 loan agreement and the revolving line of credit
agreement contain restrictive covenants customary in these types of financing
arrangements, including limitations on obtaining additional

F-29
<PAGE>

MERKERT ENTERPRISES, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(INCLUDING CERTAIN DATA APPLICABLE TO UNAUDITED PERIODS)

indebtedness and certain financial covenants including a maximum leverage
ratio and minimum tangible net worth requirements. During 1997, Merkert was in
default with respect to the leverage ratios and the minimum tangible net worth
covenant. On December 23, 1997, Merkert obtained a waiver of these defaults.

On February 13, 1998, Merkert entered into a $9,500 secured mortgage
agreement, effective April 1, 1998, with a real estate lender which replaced
their existing mortgage and term loans. The mortgage note bears interest at
8.56%. The loan requires monthly payments of $82, beginning April 1, 1998 and
matures March 1, 2018.

In September 1995, Merkert repurchased 115,000 shares of common stock for an
aggregate purchase price of $1,909. Merkert paid $581 in cash and delivered an
unsecured promissory note in the amount of $1,328. The note requires three
annual principal payments of $443 and bears interest at 8.75%.

In February 1996, Merkert repurchased 92,000 shares of common stock for an
aggregate purchase price of $1,665. Merkert paid $333 and delivered an
unsecured subordinated promissory note in the amount of $1,332. The note
requires five annual principal payments of $266 and bears interest at 8.25%.

In July 1997, Merkert elected to repurchase 8,000 shares of common stock for
an aggregate purchase price of $160. At December 31, 1997, Merkert had
delivered an unsecured subordinated promissory note in settlement of this
obligation.

In conjunction with the acquisitions discussed in Note 4, elements of the
purchase price were financed by the sellers. These amounts are included in the
following table.

Future principal payments on long-term debt for the years ending December
31, are as follows:

<TABLE>
<S> <C>
1998................................................................. $ 4,778
1999................................................................. 3,049
2000................................................................. 2,726
2001................................................................. 1,899
2002................................................................. 2,084
Thereafter........................................................... 11,520
-------
Total.............................................................. $26,056
=======
</TABLE>

12. SUBSEQUENT EVENTS

F-30
<PAGE>

MERKERT ENTERPRISES, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(INCLUDING CERTAIN DATA APPLICABLE TO UNAUDITED PERIODS)

On May 22, 1998, Merkert entered into agreements with certain former
stockholders of businesses previously acquired by Merkert. These agreements
provide Merkert with an option to settle, for a predetermined cash payment,
the outstanding obligation due from Merkert to the respective former
stockholder. The cash payouts per these options approximate the amounts
recorded as liabilities in the accompanying consolidated financial statements.
These options expire December 31, 1998. If and when the option is exercised,
any differences between the option amount and the carrying amount in the
accompanying financial statements will be recorded as an adjustment to
purchase price.

On May 18, 1998, Merkert entered into a settlement with the Internal Revenue
Service ("IRS") which resolved matters raised by the IRS in connection with
Merkert's tax filings for 1992, 1993 and 1994. In connection with the
settlement, Merkert will pay approximately $17.7 million, in aggregate, to
both the IRS and the applicable state tax authorities. The amount of the
settlement did not differ materially from recorded reserves. Pursuant to the
stock purchase agreement among Monroe, Inc., Merkert and the stockholders of
Merkert, the former stockholders of Merkert will use a portion of the cash
proceeds received to pay the tax settlement.

In May, 1998 Merkert became subject to an audit with respect to its federal
income tax returns for its fiscal years 1995, 1996, and 1997. Merkert has
established reserves in various years which it believes will be adequate to
cover any potential liability, however the ultimate outcome of this matter is
uncertain.

F-31
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Rogers-American Company, Inc. and Subsidiary:

We have audited the accompanying consolidated balance sheets of Rogers-
American Company, Inc. ("Rogers") and Subsidiary as of December 31, 1996 and
1997, and the related consolidated statements of operations, stockholders'
equity and cash flows for each of the three years in the period ended December
31, 1997. These financial statements are the responsibility of Rogers'
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Rogers and
Subsidiary as of December 31, 1996 and 1997, and the consolidated results of
their operations and their cash flows for each of the three years in the
period ended December 31, 1997, in conformity with generally accepted
accounting principles.

Arthur Andersen LLP

Boston, Massachusetts
May 22, 1998

F-32
<PAGE>

ROGERS-AMERICAN COMPANY, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
DECEMBER 31,
---------------- SEPTEMBER 30,
1996 1997 1998
------- ------- -------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash......................................... $ 730 $ 556 $ 667
Restricted cash.............................. 220 505 430
Accounts receivable, less allowance for
doubtful accounts of $484, $799 and $799 in
1996, 1997 and 1998, respectively........... 6,413 9,072 11,127
Prepaid expenses and advances................ 292 218 511
Income taxes receivable...................... 512 -- --
Deferred tax asset........................... 546 639 639
------- ------- -------
Total current assets....................... 8,713 10,990 13,374
------- ------- -------
Property, plant and equipment, net............. 5,953 5,931 5,545
------- ------- -------
Intangibles, net of amortization............... 20,519 18,671 17,175
------- ------- -------
Other assets:
Cash value of life insurance, net............ 2,449 3,239 3,509
Deferred tax asset........................... 117 149 150
Other noncurrent assets...................... 10 19 19
------- ------- -------
Total other assets......................... 2,576 3,407 3,678
------- ------- -------
Total assets............................... $37,761 $38,999 $39,772
======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt......... $ 6,344 $ 1,949 $11,837
Accounts payable............................. 3,087 2,034 2,834
Accrued expenses............................. 3,971 3,880 3,296
------- ------- -------
Total current liabilities.................. 13,402 7,863 17,967
------- ------- -------
Long-term debt, less current maturities........ 24,849 30,830 21,087
------- ------- -------
Other noncurrent liabilities................... 316 479 479
------- ------- -------
Commitments and contingencies
Stockholders' equity:
Common stock, $1.00 par value--
Authorized--100,000 shares
Issued--955 shares.......................... 1 1 1
Additional paid-in capital................... 149 37 37
Retained earnings (accumulated deficit)...... (956) (211) 201
------- ------- -------
Total stockholders' equity (deficit)....... (806) (173) 239
------- ------- -------
Total liabilities and stockholders'
equity.................................... $37,761 $38,999 $39,772
======= ======= =======
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-33
<PAGE>

ROGERS-AMERICAN COMPANY, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------- ------------------
1995 1996 1997 1997 1998
------- ------- ------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues:
Commissions.................. $47,496 $63,311 $82,985 $ 62,625 $ 62,584
------- ------- ------- -------- --------
Operating expenses:
Selling expenses............. 35,817 50,614 63,361 48,155 47,792
General and administrative... 7,457 10,944 13,023 9,573 10,088
Depreciation and
amortization................ 1,073 1,646 2,516 1,805 1,887
------- ------- ------- -------- --------
Operating income........... 3,149 107 4,085 3,092 2,817
Interest expense............... (1,176) (1,656) (2,536) (1,979) (1,980)
------- ------- ------- -------- --------
Income (loss) before provision
for income taxes.............. 1,973 (1,549) 1,549 1,113 837
Income tax provision
(benefit)..................... 939 (460) 804 541 425
------- ------- ------- -------- --------
Net income (loss).......... $ 1,034 $(1,089) $ 745 $ 572 $ 412
======= ======= ======= ======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-34
<PAGE>

ROGERS-AMERICAN COMPANY, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
COMMON STOCK,
$1.00 PAR VALUE ADDITIONAL
------------------ PAID-IN RETAINED
SHARES AMOUNT CAPITAL EARNINGS TOTAL
-------- ------- ---------- -------- -------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1994...... 1,120 $ 1 $ 258 $ (901) $ (642)
Net income.................... -- -- -- 1,034 1,034
Issuance of 40 shares at
$1,151.85 per share.......... 40 -- 46 -- 46
Redemption of 69 shares at
$1,151.85 per share.......... (69) -- (79) -- (79)
-------- ------ ----- ------- -------
Balance, December 31, 1995...... 1,091 1 225 133 359
Net loss...................... -- -- -- (1,089) (1,089)
Redemption of 59 shares at
$1,292.16 per share.......... (59) -- (76) -- (76)
-------- ------ ----- ------- -------
Balance, December 31, 1996...... 1,032 1 149 (956) (806)
Net income.................... -- -- -- 745 745
Redemption of 76.4 shares at
$1,470.80 per share.......... (77) -- (112) -- (112)
-------- ------ ----- ------- -------
Balance, December 31, 1997...... 955 1 37 (211) (173)
Net income (unaudited)........ -- -- -- 412 412
-------- ------ ----- ------- -------
Balance, September 30, 1998 (un-
audited)....................... 955 $ 1 $ 37 $ 201 $ 239
======== ====== ===== ======= =======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-35
<PAGE>

ROGERS-AMERICAN COMPANY, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
--------------------------- ---------------
1995 1996 1997 1997 1998
-------- -------- ------- ------- ------
<S> <C> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income (loss).............. $ 1,034 $ (1,089) $ 745 $ 572 $ 412
Adjustments to reconcile net
income (loss) to net cash
provided by (used in)
operating activities--
Depreciation and
amortization................ 1,073 1,646 2,516 1,555 1,887
Loss on disposal of fixed
assets...................... 85 -- -- -- --
Deferred income taxes........ 72 (500) (126) (19) --
Changes in assets and
liabilities exclusive of
acquisitions (increase)
decrease in--
Restricted cash.............. 218 (20) (285) 0 75
Accounts receivable, net..... (1,106) (1,707) (2,659) (3,489) (2,055)
Income taxes receivable...... -- (512) 512 512 --
Prepaid expenses and
advances.................... 414 (77) 74 (65) (293)
Accounts payable............. 484 1,588 (1,053) (1,040) 800
Accrued expenses............. 2,212 129 (91) (397) (584)
Other liabilities............ 891 711 (572) (842) --
Other assets................. (39) 29 (9) 10 --
-------- -------- ------- ------- ------
Net cash provided by (used
in) operating activities.. 5,338 198 (948) (3,203) 242
-------- -------- ------- ------- ------
Cash flows from investing activi-
ties:
Additions to property, plant
and equipment................. (387) (1,045) (453) (352) (6)
Acquisition of businesses, net
of cash acquired.............. (11,594) (11,231) (192) (103) --
Increase in cash surrender
value, net of increase in
policy loans.................. (478) (487) (789) (473) (270)
-------- -------- ------- ------- ------
Net cash provided by (used
in) investing activities.. (12,459) (12,763) (1,434) (928) (276)
-------- -------- ------- ------- ------
Cash flows from financing activi-
ties:
Borrowings on revolving line of
credit........................ -- 3,024 8,370 7,737 1,518
Principal payments on line of
credit........................ (660) -- (3,824) (2,725) --
Issuance of long-term debt..... 7,916 10,157 -- -- --
Repayment of long-term debt.... -- -- (2,226) (918) (1,373)
Issuance of Common Stock....... 46 -- -- -- --
Redemption of common stock..... (79) (76) (112) (93) --
-------- -------- ------- ------- ------
Net cash provided by
financing activities...... 7,223 13,105 2,208 4,001 145
-------- -------- ------- ------- ------
Net increase (decrease) in
unrestricted cash......... 102 540 (174) (130) 111
-------- -------- ------- ------- ------
Unrestricted cash:
Beginning of year.............. 88 190 730 730 556
-------- -------- ------- ------- ------
End of year.................... $ 190 $ 730 $ 556 $ 600 $ 667
-------- -------- ------- ------- ------
Supplemental disclosures of cash
flow information:
Cash payments for--
Interest..................... $ 1,172 $ 1,635 $ 2,486 $ 385 $ 446
-------- -------- ------- ------- ------
Income taxes................. $ 488 $ 722 $ 180 $ 16 $ 261
-------- -------- ------- ------- ------
Noncash flow information:
Purchase price financed by
seller........................ $ 5,519 $ 10,626 $ 48 $ -- $ --
-------- -------- ------- ------- ------
Liabilities assumed............ $ 682 $ 1,227 $ -- $ -- $ --
-------- -------- ------- ------- ------
</TABLE>

F-36
<PAGE>

ROGERS-AMERICAN COMPANY, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(INCLUDES CERTAIN DATA APPLICABLE TO UNAUDITED PERIODS)

1. NATURE OF BUSINESS

Rogers-American Company, Inc. ("Rogers") is a broker of food and various
food-related products. Rogers provides sales, marketing and merchandising
services to manufacturers ("Manufacturers") of consumer goods and serves as an
intermediary between the Manufacturers and retailers and wholesalers of the
consumer goods. Rogers primarily operates throughout the southeast and mid-
Atlantic regions of the United States.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of Rogers' significant accounting policies follows:

Principles of Consolidation

The consolidated financial statements include the accounts of Rogers and its
wholly owned subsidiary Rogers-American Company of Florida, Inc. All
intercompany accounts and transactions have been eliminated in consolidation.

Unaudited Interim Financial Information

The financial statements as of September 30, 1998 and for the nine months
ended September 30, 1997 and 1998 are unaudited. Rogers believes these
financial statements include all adjustments, consisting of normal recurring
adjustments, that Rogers considers necessary for a fair presentation of the
financial position and of the results of operations for the respective
periods. It should also be noted that the results for the interim periods are
not necessarily indicative of the results expected for any other interim
period or the full year.

Use of Estimates

Revenue Recognition

Commissions are earned and recognized upon shipment by the Manufacturer to
the retailer or wholesaler.

Fair Value of Financial Instruments

Effective December 31, 1995, Rogers adopted Statement of Financial
Accounting Standards (SFAS) No. 107, Disclosures About Fair Value of Financial
Instruments. SFAS No. 107 requires that Rogers disclose estimated fair values
for certain of its financial instruments. Rogers' financial instruments
consist of cash and cash equivalents, accounts and notes receivable, notes
payable, accounts payable and long-term debt. Each of these instruments' fair
value approximates carrying value at December 31, 1995, 1996 and 1997.

Concentration of Credit Risk

Financial instruments that potentially subject Rogers to concentrations of
credit risk consist principally of trade receivables. Rogers' trade
receivables result from commission sales. Rogers maintains reserves for
potential credit losses and such losses have been immaterial.

F-37
<PAGE>

ROGERS-AMERICAN COMPANY, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(INCLUDING CERTAIN DATA APPLICABLE TO UNAUDITED PERIODS)

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed using
the straight-line method based upon the following estimated useful lives of
the assets:

<TABLE>
<CAPTION>
ESTIMATED
ASSET CLASSIFICATION USEFUL LIVES
-------------------- ------------
<S> <C>
Building........................................................ 40 years
Leasehold improvements.......................................... 20 years
Furniture and office equipment.................................. 5-7 years
Motor vehicles.................................................. 3-5 years
</TABLE>

Intangibles

Intangibles for the years ended December 31, 1996 and 1997 consist of the
following:

<TABLE>
<CAPTION>
1996 1997
------- -------
<S> <C> <C>
Goodwill................................................... $17,283 $17,460
Noncompete agreements...................................... 6,589 6,604
------- -------
Accumulated amortization................................... (3,353) (5,393)
------- -------
$20,519 $18,671
======= =======
</TABLE>

Goodwill, the excess of the acquired business purchase price over the fair
value of the acquired assets, is amortized on a straight-line basis over its
estimated useful life which ranges from 5 to 20 years. Noncompete agreements
are amortized on a straight-line basis over the life of the respective
agreement. Amortization expense was $831, $1,285 and $2,040 for the years
ended December 31, 1995, 1996 and 1997, respectively.

Cash Surrender Value of Life Insurance

Included within other noncurrent assets is the cash surrender value of life
insurance, net of policy loans. Rogers maintains these life insurance policies
with a face amount of $32,266 on certain officers and key employees. The cash
surrender value of the policies amounted to $3,727 and $4,305, against which
Rogers has loans of $1,278 and $1,066 on December 31, 1996 and December 31,
1997, respectively.

Income Taxes

Rogers provides for income taxes in accordance with SFAS No. 109, Accounting
for Income Taxes. SFAS No. 109 recognizes tax assets and liabilities for the
cumulative effect of all temporary differences between the financial statement
carrying amounts and the tax basis of assets and liabilities and are measured
using the enacted tax rates expected to be in effect when these differences
are expected to reverse.

Impairment of Long-Lived Assets

Rogers evaluates the carrying value of its long-lived assets in accordance
with SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and
Long-Lived Assets To Be Disposed Of. Accordingly, Rogers evaluates the
carrying value of its long-lived assets, including equipment and goodwill,
whenever events or changes in circumstances indicate that the carrying value
may not be recoverable. Under SFAS No. 121, an assessment is made to determine
whether the sum of the expected future undiscounted cash flows from

F-38
<PAGE>

ROGERS-AMERICAN COMPANY, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(INCLUDING CERTAIN DATA APPLICABLE TO UNAUDITED PERIODS)

the use of the assets and eventual disposition is less than the carrying
value. If the sum of the expected undiscounted cash flows is less than the
carrying value, an impairment loss is recognized by measuring the excess of
carrying value over fair value (generally estimated by projected future
discounted cash flows for the applicable operation or independent appraisal).
At December 31, 1996 and 1997, management believes no such impairment of
assets was indicated.

Accrued Expenses

Accrued expenses for the years ended December 31, 1996 and 1997 consist of
the following:

<TABLE>
<CAPTION>
1996 1997
------ ------
<S> <C> <C>
Payroll and employee benefits................................. $1,361 $ 535
Promotional funds............................................. 220 505
Income taxes.................................................. 996 1,270
Health insurance.............................................. 351 476
Interest...................................................... 49 99
Other......................................................... 994 995
------ ------
$3,971 $3,880
====== ======
</TABLE>

3. ACQUISITIONS

Rogers completed acquisitions of several food brokerage businesses during
1995, 1996 and 1997.

The acquisitions are accounted for using the purchase method of accounting;
accordingly, the results of operations are included in the accompanying
consolidated financial statements from their respective dates of acquisition.
The purchase price has been allocated to assets acquired and liabilities
assumed based upon their estimated fair values at the date of acquisition. A
portion of the purchase price in certain acquisitions is payable contingent
upon achieving defined performance criteria. Rogers' policy is to estimate the
net present value of the expected payments and record that amount as part of
the purchase price. Rogers records any ultimate changes to the estimate as an
adjustment to goodwill. Purchase price in excess of identified tangible and
intangible assets is recorded as goodwill and amortized on a straight-line
basis over periods ranging from 5 to 20 years. The following is a summary of
the acquisitions which were consummated in 1995, 1996 and 1997.

<TABLE>
<CAPTION>
PURCHASE PRICE NET
------------------- TANGIBLE
FINANCED ASSETS
ACQUISITION DATE CASH PAID BY SELLER ACQUIRED GOODWILL OTHER INTANGIBLES
----------- ------------- --------- --------- -------- -------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Clarke & Wittekind March 1995 $ -- $(1,403) $282 $ 897 $ 224
A.A. Green October 1995 -- (1,374) -- 1,099 275
Dopson-Hicks October 1995 (206) (3,142) 606 2,194 548
G.B.S. October 1996 -- (982) 288 555 139
Fitzwater November 1996 (800) (5,924) 800 4,739 1,185
Sales Support Inc. November 1996 -- (997) -- -- 997
Tinney & Associates November 1996 -- (1,377) 218 927 232
Brown & Stagner November 1996 -- (1,905) 97 1,446 362
Others Various -- (1,001) 36 486 479
</TABLE>

F-39
<PAGE>

ROGERS-AMERICAN COMPANY, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(INCLUDING CERTAIN DATA APPLICABLE TO UNAUDITED PERIODS)

Had each of these acquisitions been consummated on January 1, 1996, the
unaudited pro forma revenues and net income (loss) for Rogers would have been
$81,328 and $(1,033), respectively, for the year ended December 31, 1996, and
$83,100 and $(771), respectively, for the year ended December 31, 1997.

4. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are comprised of the following at December 31:

<TABLE>
<CAPTION>
1996 1997
------ ------
<S> <C> <C>
Land.......................................................... $ 500 $ 500
Buildings..................................................... 3,500 3,500
Furniture and equipment....................................... 3,117 3,476
Motor vehicles................................................ 79 79
Leasehold improvements........................................ 694 789
------ ------
7,890 8,344
Less--Accumulated depreciation................................ 1,937 2,413
------ ------
$5,953 $5,931
====== ======
</TABLE>

Depreciation expense for the years ended December 31, 1995, 1996 and 1997
was $242, $361 and $476, respectively.

5. EMPLOYEE BENEFIT PLANS

Rogers sponsors the Rogers-American Company, Inc. 401(k) Profit Sharing Plan
(the "401(k) Plan") under the provisions of Section 401(k) of the Internal
Revenue Code. The 401(k) Plan covers all employees, except flexible part-time
employees, who are at least 21 years of age with at least six months of
employment service. These eligible employees can make voluntary contributions
to the 401(k) Plan.

Under the provisions of the 401(k) Plan, Rogers currently matches 25% of an
eligible employee's contribution up to certain limits determined by Rogers
(currently 6%) of the employee's salary. On an annual basis, Rogers may make a
discretionary contribution into the profit sharing component of the 401(k)
Plan. For the years ended December 31, 1995, 1996 and 1997, Rogers expensed
approximately $738, $615 and $403, respectively, under the terms of the 401(k)
Plan.

6. CONTINGENCIES

Rogers is subject to various legal proceedings that arise in the ordinary
course of business. Based on the opinion of Rogers' external legal counsel,
management believes the outcome of such legal proceedings will not have a
material adverse impact on Rogers' consolidated financial position or results
of operations.

7. COMMITMENTS

Several key employees of Rogers have employment agreements that contain
incentive bonus awards. The awards are discretionary in nature and are in
effect for the period from 1999 to 2007. As of December 31, 1997, Rogers has
not accrued a liability for these awards and no amount is due for the year
ended December 31, 1997. Rogers may terminate any of the employment agreements
for just cause without incurring any liability.

F-40
<PAGE>

ROGERS-AMERICAN COMPANY, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(INCLUDING CERTAIN DATA APPLICABLE TO UNAUDITED PERIODS)

Rogers has various supplemental pension agreements with individual
employees. These agreements provide benefits to those individuals at age 65 or
upon the termination of their employment with Rogers, whichever is later. The
estimated liability under the agreement is being accrued over the expected
remaining years of employment on a present value basis. At December 31, 1996
and 1997, Rogers had accrued approximately $316 and $479, respectively. The
vested benefits are payable in 120 equal monthly installments subsequent to
the employee's separation or retirement from Rogers. There were no required
expenses in 1995 and 1996 and $163 was expensed in 1997 under these
agreements.

Rogers has an agreement with its stockholders whereas in the event of death,
disability or retirement of the stockholder, Rogers shall purchase all of the
stock owned by each respective stockholder or his or her estate, payable over
a 10-year period. This agreement is partially funded by insurance.

Rogers has an agreement with a stockholder for the redemption of 584 shares
of common stock owned by the stockholder evenly over a 10-year period from
January 1, 1993 through January 1, 2002. Rogers shall redeem the shares at the
book value per share on the last day of the preceding fiscal year applicable
to the option exercise date or October 31, 1992, whichever is higher.

Promotional Funds

Certain of Rogers' Manufacturers provide Rogers with funds to be used solely
for marketing, advertising and other promotional activities. At December 31,
1997, Rogers had cash of $505 which use was restricted to payment of
promotional funds on behalf of its Manufacturers. The offsetting liability was
recorded as promotional funds in the balance sheet at December 31, 1997. At
December 31, 1996, Rogers had $220 of restricted cash and promotional funds
liability on the balance sheet.

Legal Proceedings

Rogers has received written notice from the sellers of a food brokerage
business acquired by Rogers alleging breach of certain covenants contained in
an agreement with such seller claiming such breaches have caused the
acceleration of certain obligations of Rogers to the seller. The obligations
to the seller are secured by a lien on the assets acquired by Rogers and a
pledge of the capital stock of Rogers' Florida subsidiary. Rogers has entered
into a settlement agreement with such sellers providing for the buyout of
substantially all obligations to such sellers and a release of such sellers'
security for a cash payment of $4.27 million. Such buyout is contingent on the
completion of the Offering and will be funded with a portion of the Term Loan.

Leases

Rogers leases certain office and warehouse facilities and automobiles under
operating leases expiring on various dates through 2003.

Rental costs, including real estate taxes, amounted to approximately $3,871,
$5,773 and $7,985 in 1995, 1996 and 1997, respectively.

F-41
<PAGE>

ROGERS-AMERICAN COMPANY, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(INCLUDING CERTAIN DATA APPLICABLE TO UNAUDITED PERIODS)

The following is a schedule of future minimum rental payments, exclusive of
real estate taxes, required under operating leases that have initial or
remaining noncancelable lease terms in excess of one year as of December 31,
1997:

<TABLE>
<CAPTION>
RENT
PAYMENTS
--------
<S> <C>
Year ending December 31,
1998............................................................... $3,258
1999............................................................... 2,688
2000............................................................... 1,884
2001............................................................... 1,201
2002............................................................... 91
Thereafter......................................................... 17
------
Total............................................................. $9,139
======
</TABLE>

8. RELATED PARTY TRANSACTIONS

Rogers provides office space to an affiliated merchandising entity which
began operations in 1997. Rogers owns 49% of the outstanding voting common
stock of this entity. In addition, Rogers has guaranteed a $500 line of credit
with a bank to this affiliate. At December 31, 1997, approximately $75 was
outstanding under the line of credit. Sales and net income of the affiliate
for 1997 were $922 and $(1). Total assets at December 31, 1997 were $218.
Rogers had no trade receivables outstanding at December 31, 1997 from this
affiliate. During 1997, Rogers had no sales to this affiliate.

Certain of Rogers' shareholders, as a group, own 49% of the voting common
stock of another affiliated entity. At December 31, 1997, approximately $644
was outstanding under the line of credit. During 1996 and 1997, Rogers
recorded commission revenues of approximately $230 and $183 from this
affiliate. Trade receivables at December 31, 1996 and 1997 were $48 and $56,
respectively.

9. INCOME TAXES

The (benefit) provision for income taxes for the years ended December 31
1995, 1996 and 1997 is as follows:

<TABLE>
<CAPTION>
1995 1996 1997
---- ----- ----
<S> <C> <C> <C>
Federal--
Current................................................. $713 $ 30 $698
Deferred................................................ (8) (375) (95)
---- ----- ----
705 (345) 603
---- ----- ----
State--
Current ................................................ 237 10 232
Deferred ............................................... (3) (125) (31)
---- ----- ----
234 (115) 201
---- ----- ----
$939 $(460) $804
==== ===== ====
</TABLE>

F-42
<PAGE>

ROGERS-AMERICAN COMPANY, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(INCLUDING CERTAIN DATA APPLICABLE TO UNAUDITED PERIODS)

<TABLE>
<CAPTION>
YEAR ENDED
-----------------
1995 1996 1997
---- ----- ----
<S> <C> <C> <C>
Computed expected tax provision (benefit)................. $671 $(527) $527
State income taxes, net of federal benefit................ 115 (74) 87
Permanent items........................................... 178 171 140
Other..................................................... (25) (30) 50
---- ----- ----
$939 $(460) $804
==== ===== ====
</TABLE>

The tax effect of temporary differences which give rise to deferred income
tax assets (liabilities) are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------
1996 1997
------ ------
<S> <C> <C>
Assets--
Net operating loss carryforwards........................... $ 362 $ --
Tax credit carryforwards................................... 24 --
Receivable reserves........................................ 189 312
Other...................................................... 170 585
------ ------
Total assets............................................. 745 897
------ ------
Valuation allowance........................................ -- --
------ ------
Total assets, net of valuation allowance................. 745 897
------ ------
Liabilities--
Property basis differences................................. (35) (53)
Other...................................................... (47) (56)
------ ------
Total liabilities........................................ (82) (109)
------ ------
Net assets............................................... $ 663 $ 788
====== ======
</TABLE>

10. LONG-TERM DEBT

As of December 31, long-term debt consists of:

<TABLE>
<CAPTION>
1996 1997
------- -------
<S> <C> <C>
Revolving line of credit................................... $ 3,824 $ 8,370
Mortgage loan.............................................. 3,871 3,794
Acquisition Agreement--Clarke & Wittekind.................. 1,224 1,147
Acquisition Agreement--A.A. Green.......................... 1,050 930
Acquisition Agreement--Dopson-Hicks........................ 2,659 2,396
Acquisition Agreement--G.B.S............................... 972 823
Acquisition Agreement--Fitzwater........................... 6,812 5,193
Acquisition Agreement--Sales Support Inc................... 997 1,002
Acquisition Agreement--Tinney & Associates................. 1,098 990
Acquisition Agreement--Brown & Stagner..................... 1,790 1,806
Other acquisitions......................................... 6,800 6,268
Bank--Notes payable........................................ 96 60
------- -------
31,193 32,779
Less--Current maturities................................... (6,344) (1,949)
------- -------
$24,849 $30,830
======= =======
</TABLE>

F-43
<PAGE>

ROGERS-AMERICAN COMPANY, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(INCLUDING CERTAIN DATA APPLICABLE TO UNAUDITED PERIODS)

On November 8, 1996, Rogers entered into a $10,000 secured revolving credit
facility with a bank. The revolving line of credit bears interest at a
variable rate based on the lesser of the bank's prime rate or LIBOR plus 2.7%,
(8.67% at December 31, 1997). Interest is payable monthly. In April 1998, the
revolving line-of-credit agreement was amended to extend the term of the
agreement through January 31, 1999. Rogers' borrowings under the agreement are
limited to certain percentages of eligible receivables and cash surrender
value of life insurance. The line is collateralized by commission receivables,
cash value of life insurance, intangible assets and proceeds thereof. At
December 31, 1997, Rogers had available to it, unused borrowing capacity of
$1,630 under the line of credit. The agreement contains certain restrictive
covenants. At December 31, 1997, Rogers was in compliance with these
covenants.

From time to time since September 30, 1998, Rogers has not been in
compliance with certain borrowing limitations under its existing financing
agreement. As of November 16, 1998, Wachovia Bank, N.A. waived such non-
compliance as an event of default.

A mortgage note was entered into in February 1991 and refinanced in February
1995. The note is secured by land, building and fixtures. The note bears
interest at 8.5% with monthly payments of $34 including interest through
December 1999 and a balloon payment of $3,646 on January 2000.

The amounts due under the acquisition agreements represent the total
estimated payments to be made pursuant to these agreements. The total
estimated payments have been discounted using a rate of approximately 8%. The
amounts due under these notes payable are unsecured and extend through 2011.
These amounts are payable in either monthly or quarterly installments.

Rogers has the following debt resulting from business acquisitions:

Bay Brokerage--Unsecured notes payables bearing interest at 10% per annum
with monthly payments of $4 through June 2007 and various other assumed
liabilities with various payments through September 2007.

T&M--Unsecured notes payable bearing interest at 8% per annum, with monthly
payments of $2 through September 1999 and $6 through September 2004.

G.B.S.--Unsecured note payable bearing interest at 7% per annum with monthly
payments of $1 starting October 1998 through January 2000. Unsecured note
payable bearing interest at 7% per annum with monthly payments of $8 starting
October 1997 through September 1998, $7 through September 2005, $5 through
August 2006, and one final payment of $7 due on September 2006. Unsecured note
payable bearing interest at 7% per annum with monthly payments of $1 starting
October 1999 through September 2009.

Tinney & Associates--Unsecured note payable with imputed interest at 10% per
annum, with monthly payments of $6 through July 2000.

Brown & Stagner--Unsecured note payable with imputed interest of 8% per
annum and monthly payments of $3 through July 2000.

Clarke & Wittekind--Unsecured note payable with imputed interest of 7.8% per
annum and monthly payments of $1 through March 2005.

Dopson-Hicks--Note payable secured by certain tangible assets and stock of
the subsidiary bearing interest at 8% per annum and monthly payments of $13
through October 2000, $33 through October 2005 and $21 through October 2010.

F-44
<PAGE>

ROGERS-AMERICAN COMPANY, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(INCLUDING CERTAIN DATA APPLICABLE TO UNAUDITED PERIODS)

Rogers has unsecured notes payable to various banks bearing interest at 10%
and 8.5% with monthly payments of $3 and $1 through June 1999 and through
February 2000, respectively.

Notes Payable

Future principal payments on long-term debt for the years ending December
31, are as follows:

<TABLE>
<S> <C>
1998............................................................. $ 1,949
1999............................................................. 10,593
2000............................................................. 5,688
2001............................................................. 2,207
2002............................................................. 2,144
Thereafter....................................................... 10,198
-------
Total.......................................................... $32,779
=======
</TABLE>

11. SUBSEQUENT EVENTS

On May 22, 1998 and as amended on November 16, 1998, Rogers entered into a
stock purchase agreement with Merkert American Corporation and the
stockholders of Rogers (the "Purchase Agreement"). Pursuant to the Purchase
Agreement, Merkert American Corporation will purchase all of the outstanding
shares of common stock of Rogers for approximately $25.6 million in cash. The
consummation of the purchase is subject to a number of conditions, including
the successful completion of an initial public offering of the common stock of
Merkert American Corporation. There can be no assurance that the Purchase
Agreement will be consummated.

In connection with the consummation of the Purchase Agreement, Rogers
intends to sell its corporate headquarters and distribute the net cash
proceeds to certain stockholders. In addition, Rogers will assign the life
insurance policies on key executives to certain stockholders. Also, the
principal stockholders of Rogers have agreed to transfer a portion of their
shares of common stock to certain minority stockholders to compensate those
employees for valuable prior services. Rogers will record a compensation
charge for each of these events in their financial statements at that date.

On May 22, 1998, Rogers entered into agreements with certain sellers of
businesses acquired by Rogers. These agreements provide Rogers with the option
to settle, for a predetermined cash payment, any outstanding obligation due
from Rogers to the respective seller as a result of the acquisition. The cash
payouts per these options approximate the amounts recorded as liabilities in
the accompanying consolidated financial statements. These options expire on
December 31, 1998. If and when these options are exercised, any differences
between the option amount and the carrying amount in the accompanying
financial statements will be recorded as an adjustment to purchase price.

F-45
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Board of Directors Fitzwater Inc.:

We have audited the accompanying balance sheet of Fitzwater Inc. as of
December 31, 1995, and the related statements of income, stockholders' equity,
and cash flows for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Fitzwater Inc. as of
December 31, 1995, and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting
principles.

Hege Kramer Connell Murphy & Goldkamp,
P.C.

Philadelphia, Pennsylvania
March 14, 1996

F-46
<PAGE>

FITZWATER INC.

BALANCE SHEET
DECEMBER 31, 1995

<TABLE>
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents....................................... $ 817,429
Accounts receivable............................................. 1,851,471
Advances to employees........................................... 25,905
Prepaid expenses................................................ 19,460
-----------
Total current assets.......................................... 2,714,265
-----------
Property and equipment:
Land and land improvements...................................... 176,679
Buildings....................................................... 1,353,540
Furniture and office equipment.................................. 1,789,564
Equipment under lease........................................... 89,331
-----------
3,409,114
Less accumulated depreciation................................... 1,536,228
-----------
1,872,886
-----------
Deposits.......................................................... 69,148
Note receivable................................................... 50,000
Goodwill, less accumulated amortization of $420,636............... 46,737
Cash surrender value of officers' life insurance.................. 893,001
-----------
$ 5,646,037
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt............................ $ 314,181
Promotional advances............................................ 693,024
Accounts payable................................................ 115,702
Due to affiliate................................................ 23,239
Accrued liabilities:
ESOP contribution............................................. 700,000
Payroll and payroll taxes, withheld and accrued............... 181,179
Cash and deferred plan contribution........................... 80,065
Health insurance.............................................. 86,083
Other......................................................... 113,857
-----------
Total current liabilities................................... 2,307,330
-----------
Deferred taxes.................................................... 66,562
Long-term debt, less current maturities........................... 2,030,186
Stockholders' equity:
Common stock--par value $.01 per share; authorized 200,000
shares, issued 189,800......................................... 1,898
Additional paid-in capital...................................... 984,652
Unearned ESOP compensation...................................... (3,292,800)
Retained earnings............................................... 3,548,209
-----------
Total stockholders' equity.................................. 1,241,959
-----------
$ 5,646,037
===========
</TABLE>

See accompanying notes to financial statements.

F-47
<PAGE>

FITZWATER INC.

STATEMENTS OF INCOME

<TABLE>
<CAPTION>
TEN MONTHS ENDED
YEAR ENDED OCTOBER 31, 1996
DECEMBER 31, 1995 (UNAUDITED)
----------------- ----------------
<S> <C> <C>
Commissions and operating revenues......... $14,690,831 $11,646,636
Operating expenses (including interest of
$27,818 in 1995).......................... 12,809,863 10,952,583
----------- -----------
Operating profit....................... 1,880,968 694,053
----------- -----------
Other income (expense):
Excise tax............................... -- (329,820)
ESOP contribution........................ (700,000) --
Special commissions...................... (62,214) (65,800)
Amortization expense..................... (46,737) (46,737)
Interest income.......................... 87,087 66,739
----------- -----------
(721,864) (375,618)
----------- -----------
Income before income taxes............. 1,159,104 318,435
Income taxes............................... 516,805 296,315
----------- -----------
Net income............................. $ 642,299 $ 22,120
=========== ===========
</TABLE>

See accompanying notes to financial statements.

F-48
<PAGE>

FITZWATER INC.

STATEMENT OF STOCKHOLDERS' EQUITY

YEAR ENDED DECEMBER 31, 1995 AND TEN MONTHS ENDED OCTOBER 31, 1996 (UNAUDITED)

<TABLE>
<CAPTION>
ADDITIONAL UNEARNED
COMMON PAID-IN ESOP RETAINED
STOCK CAPITAL COMPENSATION EARNINGS TOTAL
------ ---------- ------------ ---------- -----------
<S> <C> <C> <C> <C> <C>
Balance at December 31,
1994................... $1,898 $984,652 $ -- $2,905,910 $ 3,892,460
Net income............ -- -- -- 642,299 642,299
Loan to ESOP for
purchase of common
stock................ -- -- (3,292,800) -- (3,292,800)
------ -------- ----------- ---------- -----------
Balance at December 31,
1995................... $1,898 $984,652 $(3,292,800) $3,548,209 $ 1,241,959
Net income
(unaudited).......... -- -- -- 22,120 22,120
------ -------- ----------- ---------- -----------
Balance at October 31,
1996 (unaudited)....... $1,898 $984,652 $(3,292,800) $3,570,329 $ 1,264,079
====== ======== =========== ========== ===========
</TABLE>

See accompanying notes to financial statements.

F-49
<PAGE>

FITZWATER INC.

STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
TEN MONTHS
YEAR ENDED ENDED
DECEMBER 31, 1995 OCTOBER 31, 1996
----------------- ----------------
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net income................................. $ 642,299 $ 22,120
----------- -----------
Adjustments to reconcile net income to net
cash provided by operating activities:
Loss on sale of assets.................... 849 7,880
Depreciation and amortization............. 436,198 341,870
(Increase) decrease in assets:
Accounts receivable...................... (219,888) 1,338,336
Advances to employees.................... 16,690 25,905
Prepaid expenses......................... 14,347 (924,511)
Deposits................................. (38,858) 62,270
Cash surrender value of officer's life
insurance............................... (180,816) (158,792)
Increase (decrease) in liabilities:
Promotional advances..................... 345,933 (640,573)
Accounts payable......................... (2,983) (115,702)
Accrued liabilities...................... (131,950) (701,597)
Deferred taxes........................... (3,063) 8,785
----------- -----------
Total adjustments....................... 236,459 (756,129)
----------- -----------
Net cash provided by operating
activities.............................. 878,758 (734,009)
----------- -----------
Cash flows from investing activities:
Purchases of property and equipment........ (284,215) (125,863)
Proceeds from the sale of property and
equipment................................. 2,665 895,610
Proceeds on disposal of life insurance
policies, net of policy loans............. -- 1,051,793
----------- -----------
Net cash used in investing activities.... (281,550) 1,821,540
----------- -----------
Cash flows from financing activities:
Increase in amount due to affiliate........ 24,240 (23,239)
Repayment of debt.......................... (115,260) (1,518,220)
Bank borrowings............................ 2,200,000
Payment on notes receivable................ -- 50,000
Loan to ESOP for purchase of common stock.. (3,292,800) --
----------- -----------
Net cash provided by (used in) financing
activities.............................. (1,183,820) (1,491,459)
----------- -----------
Increase (decrease) in cash and cash
equivalents............................. (586,612) (403,928)
Cash and cash equivalents:
Beginning of year.......................... 1,404,041 817,429
----------- -----------
End of year................................ $ 817,429 $ 413,501
=========== ===========
Supplemental cash flow information:
Cash paid during the year for:
Interest.................................. $ 27,818 $ 137,094
Income taxes.............................. 428,217 1,344,282
</TABLE>

See accompanying notes to financial statements.

F-50
<PAGE>

FITZWATER INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1995

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Fitzwater Inc. (the "Company") is a food brokerage firm which represents
national food product producers in the states of Delaware, Maryland, New
Jersey, and Pennsylvania. Accounts receivable are comprised primarily of
commissions from the various principals represented by the Company.

Property and Equipment

Property and equipment are carried at cost. Depreciation is computed using
both the straight-line and accelerated methods for accounting and tax purposes
over the following estimated and useful lives: buildings--27 to 39 years,
furniture and office equipment--5 to 10 years. When assets are retired or
otherwise disposed of, the cost and related accumulated depreciation are
removed from the accounts, and any resulting gain or loss is reflected in
income for the period. The cost of maintenance and repairs is charged to
income as incurred, whereas significant renewals and betterments are
capitalized.

Goodwill

Goodwill is being amortized over a ten-year period using the straight-line
method. The amortization expense is $46,737 for 1995 and 1996.

Cash Equivalents

For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments with maturities of three months or less at the
date of purchase to be cash equivalents.

Concentration of Credit Risk

The Company maintains cash deposits at certain financial institutions in
amounts that exceed federal insured limits of $100,000.

Income Taxes

Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for
Income Taxes was issued by the Financial Accounting Standards Board (FASB) in
February 1992. Under SFAS 109, deferred tax assets and liabilities are based
on provisions of the enacted tax law; the effect of future changes in tax laws
or rates are not anticipated. The item creating the deferred tax liability is
depreciation.

(2) LONG-TERM DEBT

Long-term debt at December 31, 1995 was comprised of the following:

<TABLE>
<S> <C>
Subordinated note payable to former stockholder, payable in
monthly installments of $12,033 including 14% interest.......... $ 144,367
Notes payable to bank, payable in quarterly installments of
$104,200 including 7.65% interest............................... 2,200,000
----------
2,344,367
Less current portion............................................. 314,181
----------
$2,030,186
==========
</TABLE>

F-51
<PAGE>

FITZWATER INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

The proceeds of the notes payable to bank were used to finance the loan to
the ESOP (note 6). The notes payable are secured by property and equipment and
other various assets.

Maturities of long-term debt will be as follows:

<TABLE>
<S> <C>
1996.............................................................. $ 314,181
1997.............................................................. 281,919
1998.............................................................. 291,282
1999.............................................................. 314,212
2000.............................................................. 338,948
Thereafter........................................................ 803,825
----------
$2,344,367
==========
</TABLE>

(3) LINE OF CREDIT

The Company has a line of credit with a bank which provides for borrowings
of up to $600,000, and bears interest at the lender's prime rate. The line of
credit is secured by the Company's assets. There are no outstanding borrowings
at December 31, 1995.

(4) LEASES

Leases of branch sales offices, office space, computer software and
automobiles are accounted for as operating leases. Total rental expense
amounted to $923,285 for 1995.

The following is a schedule of future minimum lease commitments for the
operating leases (with initial terms in excess of one year) as of December 31,
1995:

(5) PROFIT-SHARING PLAN

The Company has a profit sharing/401(k) plan which is the result of the
Company merging its cash and deferred plan into its profit sharing plan to
create one plan effective January 1, 1994. All employees are eligible, and
contributions are voluntary. The Company makes an annual matching contribution
equal to 25% of the amount contributed by the particpant, limited to the first
6% of the amount contributed by the participant. The annual addition to a
participant's account cannot exceed the lesser of $30,000 or 25% of the
employee's total compensation from the employer during the plan year. The
Company's matching contributions were $80,065 for 1995.

(6) EMPLOYEE STOCK OWNERSHIP PLAN

The Company has an Employee Stock Ownership Plan (ESOP) effective as of
January 1, 1995. All of the Company's full-time employees are eligible to
participate in the ESOP. The ESOP borrowed $3,292,800 from Fitzwater, Inc. and
used the proceeds to purchase 58,500 shares of the Company's common stock from
two shareholders who are officers of the Company. Unearned ESOP compensation
(equal to the outstanding balance of the ESOP loan) of $3,292,800 is reflected
as a reduction of stockholder's equity at December 31, 1995. The loan is
secured by the shares of the Company's common stock held by the ESOP. The loan
will be reduced by the Company's future contributions to the ESOP. The Company
accrued a contribution to the ESOP of $700,000 for 1995.

F-52
<PAGE>

FITZWATER INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(7) INCOME TAXES

The provision for income taxes is comprised as follows:

<TABLE>
<CAPTION>
TEN MONTHS ENDED
OCTOBER 31, 1996 1995
---------------- --------
<S> <C> <C>
Currently payable:
Federal......................................... $215,838 $396,202
State........................................... 71,692 123,666
-------- --------
287,530 519,868
Deferred tax (benefit)............................ 8,785 (3,063)
-------- --------
$296,315 $516,805
======== ========
</TABLE>

The change in the deferred tax liability is summarized as follows:

<TABLE>
<S> <C>
Balance, December 31, 1994.......................................... $69,625
Change for the year............................................... (3,063)
-------
Balance, December 31, 1995.......................................... $66,562
=======
</TABLE>

(8) RELATED PARTY TRANSACTIONS

The Company allocated certain operating and administrative expenses to an
affiliate of $74,400 during 1995. These expenses represent expenses actually
incurred by the Company on behalf of the affiliate.

The Company leases an office building for its Western Division in Harrisburg
from a related party. The current lease period began in 1993 and expires
November 14, 1997. Annual lease payments were $160,328 for 1995. Lease
commitments subsequent to 1995 are included in note 4.

(9) COMMITMENTS

In connection with the change in the Company's ownership in 1986, the
Company agreed to compensate the former owner under a noncompete and
consulting agreement at $3,125 per month until December 1996.

(10) STOCKHOLDERS' EQUITY

In 1995, the Company had a 100-for-1 stock split and changed the par value
of the common stock from $1 per share to $.01 per share. This resulted in an
increase in authorized and outstanding shares to 189,800 shares at December
31, 1995.

All shares owned by the stockholders are subject to the terms of a
Stockholder Agreement, dated December 1, 1995, which imposes certain
preconditions and restrictions on any attempted sale, assignment, transfer, or
other disposition of the shares by a stockholder.

(11) DEPRECIATION

Depreciation expense was $389,461 for the year ended December 31, 1995 and
$295,133 for the period ended October 31, 1996.

F-53
<PAGE>

NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHO-
RIZED BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY, THE COMMON STOCK IN ANY
JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF.

---------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary....................................................... 3
Risk Factors............................................................. 11
The Combination.......................................................... 17
Use of Proceeds.......................................................... 18
Dividend Policy.......................................................... 19
Capitalization........................................................... 20
Dilution................................................................. 21
Selected Financial Data for Merkert and Rogers........................... 22
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 24
Business................................................................. 38
Management............................................................... 48
Certain Transactions..................................................... 55
Principal Stockholders................................................... 58
Description of Capital Stock............................................. 60
Shares Eligible for Future Sale.......................................... 64
Underwriting............................................................. 66
Legal Matters............................................................ 67
Experts.................................................................. 67
Available Information.................................................... 68
Index to Financial Statements............................................ F-1
</TABLE>

UNTIL , 1998 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS EF-
FECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING IN THIS
DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS DELIVERY
REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS
WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

4,400,000 SHARES

[MERKERT AMERICAN LOGO APPEARS HERE]

COMMON STOCK

-----------

PROSPECTUS

-----------

Wheat First Union

Cleary Gull Reiland & McDevitt Inc.

Scott & Stringfellow, Inc.

, 1998

<PAGE>

PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the various expenses in connection with the
sale and distribution of the securities being registered, other than the
underwriting discounts and commissions. All amounts shown are estimates except
for the Securities and Exchange Commission registration fee, the NASD filing
fee and the Nasdaq National Market listing fee:

<TABLE>
<CAPTION>
NATURE OF EXPENSE AMOUNT
----------------- ----------
<S> <C>
SEC registration fee............................................. $ 42,916
NASD filing fee.................................................. 15,015
Nasdaq National Market listing fee............................... 78,875
Legal fees and expenses.......................................... 1,400,000
Accounting fees and expenses..................................... 400,000
Blue Sky fees.................................................... 15,000
Printing expenses................................................ 250,000
Transfer agent fee............................................... 2,500
Premium for directors' and officers' insurance................... 130,000
Miscellaneous.................................................... 165,694
----------
Total.......................................................... $2,500,000
==========
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

In accordance with Section 145 of the Delaware General Corporation Law,
Article VII of the Registrant's Amended and Restated Certificate of
Incorporation (the "Certificate") provides that no director of the Registrant
shall be personally liable to the Registrant or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability (i)
for any breach of the director's duty of loyalty to the Registrant or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) in respect of
certain unlawful dividend payments or stock redemptions or repurchases, or
(iv) for any transaction from which the director derived an improper personal
benefit. In addition, the Certificate provides that if the Delaware General
Corporation Law is amended to authorize the further elimination or limitation
of the liability of directors, then the liability of a director of the
Registrant shall be eliminated or limited to the fullest extent permitted by
the Delaware General Corporation Law, as so amended.

Article V of the Registrant's By-laws provides for indemnification by the
Registrant of its directors and officers and certain non-officer employees
under certain circumstances against expenses (including attorneys' fees,
judgments, penalties, fines and amounts paid in settlement) reasonably
incurred in connection with the defense or settlement of any threatened,
pending or completed legal proceeding in which any such person is involved by
reason of the fact that such person is or was an officer or employee of the
Registrant unless it is determined that such person did not act in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the Registrant, and, with respect to criminal actions or
proceedings, such person had no reasonable cause to believe his or her conduct
was unlawful.

The Registrant intends to enter into indemnification agreements with each of
its directors reflecting the foregoing provisions of the By-laws and requiring
the advancement of expenses in proceedings involving directors in most
circumstances and also intends to purchase directors' and officers' insurance
to provide additional protections to the directors and officers of the
Registrant in certain circumstances.

Under the Underwriting Agreement filed as Exhibit 1.1 hereto, the
Underwriters will agree to indemnify, under certain conditions, the
Registrant, its directors and certain officers and persons who control the
Registrant within the meaning of the Securities Act of 1933, as amended (the
"Act"), against certain liabilities.

II-1
<PAGE>

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

In March 1998, the Registrant issued and sold 1,500 shares of Common Stock
to Monroe & Company II, LLC at a purchase price of $.10 per share. No
underwriters or underwriting discounts or commissions were involved.

In April 1998, the Company issued and sold 300 shares of Common Stock to
Gerald R. Leonard for an aggregate purchase price of $1,500,000. No
underwriters or underwriting discounts or commissions were involved. See
"Certain Transactions."

The Company entered into a stock purchase agreement with the stockholders of
Merkert pursuant to which the Company agreed to issue to such stockholders
shares of Common Stock in the Combination, as described under "The
Combination."

There was no public offering in such transactions, and the Registrant
believes that such transactions were exempt from registration requirements of
the Act, by reason of Section 4(2) thereof.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits. The following is a complete list of exhibits filed or
incorporated by reference as part of this Registration Statement.

<TABLE>
<C> <S>
1.1+ Form of Underwriting Agreement.
3.1 Form of Second Amended and Restated Certificate of Incorporation.
3.2+ Form of Amended and Restated By-laws.
4.1+ Specimen certificate for shares of Common Stock, $.01 par value, of the
Registrant.
5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of the
securities being offered.
10.1+ Stock Purchase Agreement, dated May 20, 1998, among the Registrant,
Merkert Enterprises, Inc. and the stockholders of Merkert Enterprises,
Inc.
10.2+ Stock Purchase Agreement, dated May 22, 1998, among the Registrant,
Rogers-American Company, Inc. and the stockholders of Rogers-American
Company, Inc.
10.3+ Form of Employment and Non-Competition Agreement to be entered into by
the Registrant and Gerald R. Leonard, Sidney D. Rogers, Jr. and Glenn
F. Gillam.
10.4+ Form of Employment and Non-Competition Agreement to be entered into by
the Registrant and Douglas H. Holstein and Marty D. Carter.
10.5+ Form of Tax Escrow Agreement to be entered into by the Registrant,
Robert Q. Crane, as Stockholders' Representative and an escrow agent.
10.6+ Form of Indemnification Escrow Agreement to be entered into by the
Registrant, Robert Q. Crane, as Stockholders' Representative, the
stockholders of Merkert Enterprises, Inc. and an escrow agent.
10.7+ Form of General Release to be executed by the stockholders of Merkert
Enterprises, Inc.
10.8+ Agreement, dated May 11, 1998, between the Registrant and Monroe &
Company, LLC.
10.9+ Agreement for the purchase of Common Stock between the Registrant and
Gerald R. Leonard, dated April 8, 1998.
10.10+ Promissory Note of Gerald R. Leonard dated April 8, 1998.
10.11+ Stock Pledge Agreement between the Registrant and Gerald R. Leonard,
dated April 8, 1998.
10.12+ Distributor's Agreement, dated January 1, 1982, between Merkert
Enterprises, Inc. and Monarch Marking Systems, Inc.
10.13+ Agreement, dated October 30, 1997, between Merkert Laboratories, Inc.
and Misco Products Corporation.
10.14+ Registration Rights Agreement, dated May 18, 1998, among the
Registrant, Monroe & Company II, LLC and Gerald R. Leonard.
10.15+ Form of Registration Rights Agreement to be entered into by the
Registrant and the stockholders of Merkert Enterprises, Inc.
10.16 Not Applicable.
</TABLE>

II-2
<PAGE>

<TABLE>
<C> <S>
10.17+ Amended and Restated Merkert American Corporation 1998 Stock Option and Incentive
Plan.
10.18+ Form of Non-Qualified Stock Option Agreement under the Merkert American Corporation
1998 Stock Option and Incentive Plan.
10.19+ Form of General Release to be executed by the Stockholders, Directors and Officers
of Rogers-American Company, Inc.
10.20+ Form of Indemnification Escrow Agreement to be entered into by the Registrant,
Curtis L. Rogers, Jr., as Stockholders' Representative, the stockholders of Rogers-
American Company, Inc. and an escrow agent.
10.21+ Security Agreement by and between Rogers-American Company of Florida, Inc. and
Rogers-American Company, Inc.
10.22+ Stock Pledge Agreement by and between Rogers-American Company, Inc. and Dopson-Hicks
of Tampa, Inc., Dopson-Hicks of Jacksonville, Inc., Dopson-Hicks of Miami, Inc. and
L.C. Hicks, Jr.
10.23+ Indenture of Mortgage, Deed of Trust, Security Agreement, Fixture Filing, Financing
Statement and Assignment of Rents and Leases, dated as of February 13, 1998, between
Merkert Enterprises, Inc. and Corporate Real Estate Capital, LLC.
10.24+ Loan Agreement by and between Corporate Real Estate Capital, LLC and Merkert
Enterprises, Inc.
10.25+ Promissory Note of Merkert Enterprises, Inc. issued to Corporate Real Estate
Capital, LLC.
10.26+ Form of Incentive Stock Option Agreement under the Merkert American Corporation 1998
Stock Option and Incentive Plan.
10.27+ Amendment No. 1, dated November 16, 1998, to Stock Purchase Agreement among the
Registrant, Rogers-American Company, Inc. and the stockholders of Rogers-American
Company, Inc.
10.28+ Amendment No. 1, dated November 18, 1998 to Stock Purchase Agreement among the
Registrant, Merkert Enterprises, Inc. and the stockholders of Merkert Enterprises,
Inc.
10.29 Form of Credit Agreement among the Registrant, as borrower, First Union National
Bank and other financial institutions, as lenders and First Union National Bank, as
agent for the lenders.
10.30 Form of Security Agreement among the Registrant, Merkert Enterprises, Inc., Rogers-
American Company, Inc. and one or more other parties.
10.31 Form of Pledge Agreement among the Registrant, Merkert Enterprises, Inc. and Rogers-
American Company Inc.
10.32 Form of Guaranty Agreement between Merkert Enterprises, Inc. and Rogers-American
Company, Inc.
10.33 Balance Purchase Money Promissory Note of Rogers-American Company, Inc. issued to
Rexham Industries Corp.
10.34 Amendment to Balance Purchase Money Promissory Note of Rogers-American Company, Inc.
issued to Rexham Industries Corp.
10.35 Deed of Trust and Security Agreement, dated November 2, 1992, by and among Rogers-
American Company, Inc., as mortgagor, B.D. Farmer, III and J. Christopher Oates, as
trustees and Rexham Industries Corp., as beneficiary.
21.1+ Subsidiaries of the Registrant.
23.1 Consent of Counsel (included in Exhibit 5.1 hereto).
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of Hege Kramer Connell Murphy & Goldkamp, P.C.
27.1+ Financial Data Schedule.
99.1+ Consent of Edward P. Grace, III to be named as a person to be appointed a Director
of the Registrant in this Registration Statement.
99.2+ Consent of James A. Schlindwein to be named as a person to be appointed a Director
of the Registrant in this Registration Statement.
99.3+ Consent of Gerald R. Leonard to be named as a person to be appointed a Director of
the Registrant in this Registration Statement.
99.4+ Consent of Douglas H. Holstein to be named as a person to be appointed a Director of
the Registrant in this Registration Statement.
</TABLE>
- --------
+ Previously filed

II-3
<PAGE>

(b) The Financial Statement Schedule filed as part of this Registration
Statement is as follows:

Information required by the requested schedules is not applicable or the
required information is included in the financial statements or notes thereto.

ITEM 17. UNDERTAKINGS

The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act, and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.

II-4
<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS AMENDMENT TO REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF CANTON,
COMMONWEALTH OF MASSACHUSETTS, ON DECEMBER 10, 1998.

Merkert American Corporation

/s/ James L. Monroe
By: _________________________________
JAMES L. MONROE, PRESIDENT

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.

<TABLE>
<S> <C>
SIGNATURE TITLE DATE

/s/ James L. Monroe President and December 10,
- ------------------------------------- Director (principal 1998
JAMES L. MONROE executive,
accounting and
financial officer,
sole director)
</TABLE>

II-5
<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
1.1+ Form of Underwriting Agreement.
3.1 Form of Second Amended and Restated Certificate of Incorporation.
3.2+ Form of Amended and Restated By-laws.
4.1+ Specimen certificate for shares of Common Stock, $.01 par value, of
the Registrant.
5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of the
securities being offered.
10.1+ Stock Purchase Agreement, dated May 20, 1998, among the Registrant,
Merkert Enterprises, Inc. and the stockholders of Merkert Enterprises,
Inc.
10.2+ Stock Purchase Agreement, dated May 22, 1998, among the Registrant,
Rogers-American Company, Inc. and the stockholders of Rogers-American
Company, Inc.
10.3+ Form of Employment and Non-Competition Agreement to be entered into by
the Registrant and Gerald R. Leonard, Sidney D. Rogers, Jr. and Glenn
F. Gillam.
10.4+ Form of Employment and Non-Competition Agreement to be entered into by
the Registrant and Douglas H. Holstein and Marty D. Carter.
10.5+ Form of Tax Escrow Agreement to be entered into by the Registrant,
Robert Q. Crane, as Stockholders' Representative and an escrow agent.
10.6+ Form of Indemnification Escrow Agreement to be entered into by the
Registrant, Robert Q. Crane, as Stockholders' Representative, the
stockholders of Merkert Enterprises, Inc. and an escrow agent.
10.7+ Form of General Release to be executed by the stockholders of Merkert
Enterprises, Inc.
10.8+ Agreement, dated May 11, 1998, between the Registrant and Monroe &
Company, LLC.
10.9+ Agreement for the purchase of Common Stock between the Registrant and
Gerald R. Leonard, dated April 8, 1998.
10.10+ Promissory Note of Gerald R. Leonard dated April 8, 1998.
10.11+ Stock Pledge Agreement between the Registrant and Gerald R. Leonard,
dated April 8, 1998.
10.12+ Distributor's Agreement, dated January 1, 1982, between Merkert
Enterprises, Inc. and Monarch Marking Systems, Inc.
10.13+ Agreement, dated October 30, 1997, between Merkert Laboratories, Inc.
and Misco Products Corporation.
10.14+ Registration Rights Agreement, dated May 18, 1998, among the
Registrant, Monroe & Company II, LLC and Gerald R. Leonard.
10.15+ Form of Registration Rights Agreement to be entered into by the
Registrant and the stockholders of Merkert Enterprises, Inc.
10.16 Not Applicable.
10.17+ Amended and Restated Merkert American Corporation 1998 Stock Option
and Incentive Plan.
10.18+ Form of Non-Qualified Stock Option Agreement under the Merkert
American Corporation 1998 Stock Option and Incentive Plan.
10.19+ Form of General Release to be executed by the Stockholders, Directors
and Officers of Rogers-American Company, Inc.
10.20+ Form of Indemnification Escrow Agreement to be entered into by the
Registrant, Curtis L. Rogers, Jr., as Stockholders' Representative,
the stockholders of Rogers-American Company, Inc. and an escrow agent.
10.21+ Security Agreement by and between Rogers-American Company of Florida,
Inc. and Rogers-American Company, Inc.
10.22+ Stock Pledge Agreement by and between Rogers-American Company, Inc.
and Dopson-Hicks of Tampa, Inc., Dopson-Hicks of Jacksonville, Inc.,
Dopson-Hicks of Miami, Inc. and L.C. Hicks, Jr.
10.23+ Indenture of Mortgage, Deed of Trust, Security Agreement, Fixture
Filing, Financing Statement and Assignment of Rents and Leases, dated
as of February 13, 1998, between Merkert Enterprises, Inc. and
Corporate Real Estate Capital, LLC.
10.24+ Loan Agreement by and between Corporate Real Estate Capital, LLC and
Merkert Enterprises, Inc.
10.25+ Promissory Note of Merkert Enterprises, Inc. issued to Corporate Real
Estate Capital, LLC.
10.26+ Form of Incentive Stock Option Agreement under the Merkert American
Corporation 1998 Stock Option and Incentive Plan.
</TABLE>
<PAGE>

<TABLE>
<C> <S>
10.27+ Amendment No. 1, dated November 16, 1998, to Stock Purchase Agreement among the
Registrant, Rogers-American Company, Inc. and the stockholders of Rogers-American
Company, Inc.
10.28+ Amendment No. 1, dated November 18, 1998 to Stock Purchase Agreement among the
Registrant, Merkert Enterprises, Inc. and the stockholders of Merkert Enterprises,
Inc.
10.29 Form of Credit Agreement among the Registrant, as borrower, First Union National
Bank and other financial institutions, as lenders and First Union National Bank, as
agent for the lenders.
10.30 Form of Security Agreement among the Registrant, Merkert Enterprises, Inc., Rogers-
American Company, Inc. and one or more other parties.
10.31 Form of Pledge Agreement among the Registrant, Merkert Enterprises, Inc. and Rogers-
American Company Inc.
10.32 Form of Guaranty Agreement between Merkert Enterprises, Inc. and Rogers-American
Company, Inc.
10.33 Balance Purchase Money Promissory Note of Rogers-American Company, Inc. issued to
Rexham Industries Corp.
10.34 Amendment to Balance Purchase Money Promissory Note of Rogers-American Company, Inc.
issued to Rexham Industries Corp.
10.35 Deed of Trust and Security Agreement, dated November 2, 1992, by and among Rogers-
American Company, Inc., as mortgagor, B.D. Farmer, III and J. Christopher Oates, as
trustees and Rexham Industries Corp., as beneficiary.
21.1+ Subsidiaries of the Registrant.
23.1 Consent of Counsel (included in Exhibit 5.1 hereto).
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of Hege Kramer Connell Murphy & Goldkamp, P.C.
27.1+ Financial Data Schedule.
99.1+ Consent of Edward P. Grace, III to be named as a person to be appointed a Director
of the Registrant in this Registration Statement.
99.2+ Consent of James A. Schlindwein to be named as a person to be appointed a Director
of the Registrant in this Registration Statement.
99.3+ Consent of Gerald R. Leonard to be named as a person to be appointed a Director of
the Registrant in this Registration Statement.
99.4+ Consent of Douglas H. Holstein to be named as a person to be appointed a Director of
the Registrant in this Registration Statement.
</TABLE>
- --------
+ Previously filed

<PAGE>

Exhibit 3.1

FORM OF SECOND
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION

MERKERT AMERICAN CORPORATION

Merkert American Corporation, a corporation organized and existing under
the laws of the State of Delaware (the "Corporation"), hereby certifies as
follows:

1. The Certificate of Incorporation of Merkert American Corporation was
originally filed in the Office of the Secretary of State of the State of
Delaware on March 4, 1998 under the name of Monroe, Inc. and subsequently
amended.

2. This Second Amended and Restated Certificate of Incorporation amends,
restates and integrates the provisions of the Certificate of Incorporation of
the Corporation filed with the Secretary of State of the State of Delaware on
March 4, 1998, as heretofore amended (the "Amended Certificate of
Incorporation"), and (i) was duly adopted by the Board of Directors in
accordance with the provisions of Sections 141(f), 242 and 245 of the General
Corporation Law of the State of Delaware (the "DGCL"), (ii) was declared by the
Board of Directors to be advisable and in the best interests of the Corporation
and was directed by the Board of Directors to be submitted to and be considered
by the stockholders of the Corporation entitled to vote thereon for approval by
the affirmative vote of such stockholders in accordance with Section 242 of the
DGCL and (iii) was duly adopted by a stockholder consent in lieu of a meeting of
the stockholders, executed by the holders of all of the outstanding shares of
the Corporation's Common Stock entitled to vote thereon in accordance with the
provisions of Sections 228, 242 and 245 of the DGCL.

3. The text of the Amended Certificate of Incorporation is hereby amended
and restated in its entirety to provide as herein set forth in full.

ARTICLE I

NAME
----

The name of the Corporation is Merkert American Corporation.

<PAGE>

ARTICLE II

REGISTERED OFFICE
-----------------

The address of the registered office of the Corporation in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of its registered agent at such
address is The Corporation Trust Company.

ARTICLE III

PURPOSES
--------

The nature of the business or purposes to be conducted or promoted by the
Corporation is to engage in any lawful act or activity for which corporations
may be organized under the DGCL.

ARTICLE IV

CAPITAL STOCK
-------------

Section 1. Number of Shares.
----------------------------

The total number of shares of capital stock which the Corporation shall
have the authority to issue is Fifty-Five Million (55,000,000) shares, of which
(i) Fifty-Four Million (54,000,000) shares shall be common stock, par value
$0.01 per share (the "Common Stock"), of which Fifty Million (50,000,000) shares
shall be Common Stock and Four Million (4,000,000) shares shall be Restricted
Common Stock, par value $0.01 per share (the "Restricted Common Stock"), and
(ii) One Million (1,000,000) shares shall be Undesignated Preferred Stock, par
value $0.01 per share (the "Undesignated Preferred Stock"). As set forth in this
Article IV, the Board of Directors or any authorized committee thereof is
authorized from time to time to establish and designate one or more series of
Undesignated Preferred Stock, to fix and determine the variations in the
relative rights and preferences as between the different series of Undesignated
Preferred Stock in the manner hereinafter set forth in this Article IV, and to
fix or alter the number of shares comprising any such series and the designation
thereof to the extent permitted by law.

The number of authorized shares of the class of Undesignated Preferred
Stock may be increased or decreased (but not below the number of shares
outstanding) by the affirmative vote of the holders shares of Common Stock and
Restricted Common Stock representing a majority of the votes entitled to be cast
by such shares, voting together as a single class, subject to such voting rights
as may be provided in the resolution or resolutions establishing any series of
Undesignated Preferred Stock.

2
<PAGE>

Section 2. General.
-------------------

The designations, powers, preferences and rights of, and the
qualifications, limitations and restrictions upon, each class or series of stock
shall be determined in accordance with, or as set forth below in, Sections 3, 4
and 5 of this Article IV.

Section 3. Common Stock.
------------------------

Subject to all of the rights, powers and preferences of any series of the
Undesignated Preferred Stock, if any, and except as provided by law or in this
Article IV:

(a) the holders of the Common Stock shall be entitled to one vote for
each share of Common Stock standing in such holder's name on the books of the
Corporation and, except as may be otherwise required by applicable law, shall
vote together with the holders of shares of Restricted Common Stock as if the
Common Stock and the Restricted Common Stock constituted a single class of
stock.

(b) apart from voting power, the shares of Common Stock and Restricted
Common Stock shall be deemed to be shares of stock of the same class and shall
have equal rights and privileges (including, without limitation, in liquidation
and as to dividends, whether paid in cash, capital stock or other property).
Dividends may be declared and paid or set apart for payment upon the Common
Stock out of any assets or funds of the Corporation legally available for the
payment of dividends, but only when and as declared by the Board of Directors or
any authorized committee thereof. All dividends on shares of Common Stock shall
be paid at the same time and in the same amount per share as dividends on shares
of Restricted Common Stock as if the Common Stock and the Restricted Common
Stock constituted a single class of stock, and no dividend shall be declared or
paid on the shares of Common Stock unless an equal dividend is declared and paid
on the shares of Restricted Common Stock in accordance with the foregoing.

(c) upon the voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, after the distribution or payment to the holders
of shares of any class or series of Undesignated Preferred Stock, if any, as
provided by the Board of Directors with respect to any such class or series of
Undesignated Preferred Stock, the remaining assets of the Corporation available
for distribution to stockholders shall be distributed among and paid to the
holders of Common Stock and Restricted Common Stock ratably in proportion to the
number of shares of Common Stock and Restricted Common Stock held by them,
respectively, as if the Common Stock and the Restricted Common Stock constituted
a single class of stock.

Section 4. Restricted Common Stock
-----------------------------------

Subject to all of the rights, powers and preferences of any series of the
Undesignated Preferred Stock, if any, and except as provided by law or in this
Article IV:

3
<PAGE>

(a) the holders of Restricted Common Stock shall be entitled to vote
with holders of Common Stock on any matter as to which holders of Common Stock
are entitled to vote and, except as may be otherwise required by applicable law,
shall vote together with the holders of shares of Common Stock on such matters
as if the Common Stock and the Restricted Common Stock constituted a single
class of stock. The holders of Restricted Common Stock shall be entitled to one-
tenth (0.1) of one vote for each share of Restricted Common Stock standing in
such holder's name on the books of the Corporation.

(b) apart from voting power, the shares of Restricted Common Stock and
Common Stock shall be deemed to be shares of stock of the same class and shall
have equal rights and privileges (including, without limitation, in liquidation
and as to dividends, whether paid in cash, capital stock or other property).
Dividends may be declared and paid or set apart for payment upon the Restricted
Common Stock out of any assets or funds of the Corporation legally available for
the payment of dividends, but only when and as declared by the Board of
Directors or any authorized committee thereof. All dividends on shares of
Restricted Common Stock shall be paid at the same time and in the same amount
per share as dividends on shares of Common Stock as if the Common Stock and the
Restricted Common Stock constituted a single class of stock, and no dividend
shall be declared or paid on the shares of Restricted Common Stock unless an
equal dividend is declared and paid on the shares of Common Stock in accordance
with the foregoing.

(c) upon the voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, after the distribution or payment to the holders
of shares of any class or series of Undesignated Preferred Stock as provided by
the Board of Directors with respect to any such class or series of Undesignated
Preferred Stock, the remaining assets of the Corporation available for
distribution to stockholders shall be distributed among and paid to the holders
of Restricted Common Stock and Common Stock ratably in proportion to the number
of shares of Restricted Common Stock and Common Stock held by them,
respectively, as if the Restricted Common Stock and the Common Stock constituted
a single class of stock.

(d) each share of Restricted Common Stock shall automatically convert
into Common Stock on a share for share basis (subject to adjustment in the event
of any reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other similar transaction) upon a disposition of
such share of Restricted Common Stock which (i) occurs after the later to occur
of (x) the first day after the second anniversary of the date (the "IPO Date")
of the consummation of the Corporation's initial public offering of Common Stock
(the "Initial Public Offering") and (y) the first day after the annual meeting
of stockholders to be held in 2000 and (ii) is made to a party (whether a
natural person or an entity) which is not (x) a party (a "Prior Stockholder")
which held shares of the Corporation's capital stock prior to the Initial Public
Offering, (y) a party related to any Prior Stockholder in any manner described
in Section 267(b) or 707(b) of the Internal Revenue Code of 1986, as amended and
in effect as of the date hereof (the "Internal Revenue Code"), or (z) a party
through which ownership of shares of the Corporation's capital stock could be
attributed to any Prior Stockholder under the provisions of Section 318 of the
Internal Revenue Code. Except as provided in the preceding

4
<PAGE>

sentence, shares of Restricted Common Stock shall not be converted into shares
of Common Stock.

Section 5. Undesignated Preferred Stock.
----------------------------------------

Subject to any limitations prescribed by law, the Board of Directors or any
authorized committee thereof is expressly authorized to provide for the issuance
of the shares of Undesignated Preferred Stock in one or more series of such
stock, and by filing a certificate pursuant to applicable law of the State of
Delaware, to establish or change from time to time the number of shares to be
included in each such series, and to fix the designations, powers, preferences
and the relative, participating, optional or other special rights of the shares
of each series and any qualifications, limitations and restrictions thereof.
Any action by the Board of Directors or any authorized committee thereof under
this Article IV.5 shall require the affirmative vote of a majority of the
Directors then in office or a majority of the members of such committee. The
Board of Directors or any authorized committee thereof shall have the right to
determine or fix one or more of the following with respect to each series of
Undesignated Preferred Stock to the extent permitted by law:

(a) The distinctive serial designation and the number of shares
constituting such series;

(b) The dividend rates or the amount of dividends to be paid on the
shares of such series, whether dividends shall be cumulative and, if so, from
which date or dates, the payment date or dates for dividends, and the
participating and other rights, if any, with respect to dividends;

(d) Whether the shares of such series shall be redeemable and, if so,
the price or prices at which, and the terms and conditions on which, such shares
may be redeemed;

(e) The amount or amounts payable upon the shares of such series and
any preferences applicable thereto in the event of voluntary or involuntary
liquidation, dissolution or winding up of the Corporation;

(f) Whether the shares of such series shall be entitled to the benefit
of a sinking or retirement fund to be applied to the purchase or redemption of
such shares, and if so entitled, the amount of such fund and the manner of its
application, including the price or prices at which such shares may be redeemed
or purchased through the application of such fund;

(g) Whether the shares of such series shall be convertible into, or
exchangeable for, shares of any other class or classes or of any other series of
the same or any other class or classes of stock of the Corporation and, if so
convertible or exchangeable, the

5
<PAGE>

conversion price or prices, or the rate or rates of exchange, and the
adjustments thereof, if any, at which such conversion or exchange may be made,
and any other terms and conditions of such conversion or exchange;

(h) The price or other consideration for which the shares of such
series shall be issued;

(i) Whether the shares of such series which are redeemed or converted
shall have the status of authorized but unissued shares of Undesignated
Preferred Stock (or series thereof) and whether such shares may be reissued as
shares of the same or any other class or series of stock; and

(j) Such other powers, preferences, rights, qualifications,
limitations and restrictions thereof as the Board of Directors or any authorized
committee thereof may deem advisable.

ARTICLE V

STOCKHOLDER ACTION
------------------

Any action required or permitted to be taken by the stockholders of the
Corporation at any annual or special meeting of stockholders of the Corporation
must be effected at a duly called annual or special meeting of stockholders and
may not be taken or effected by a written consent of stockholders in lieu
thereof.

ARTICLE VI

DIRECTORS
---------

Section 1. General.
-------------------

The business and affairs of the Corporation shall be managed by or under
the direction of the Board of Directors except as otherwise provided herein or
required by law.

Section 2. Election of Directors.
---------------------------------

Election of Directors need not be by written ballot unless the By-laws of
the Corporation shall so provide.

6
<PAGE>

Section 3. Terms of Directors.
------------------------------

The number of Directors of the Corporation shall be fixed by resolution
duly adopted from time to time by the Board of Directors. The Directors, other
than those who may be elected by the holders of any series of Undesignated
Preferred Stock of the Corporation, shall be classified, with respect to the
term for which they severally hold office, as provided in this Article VI.3. At
each annual meeting of stockholders, the successor or successors of the class of
Directors whose term expires at that meeting shall be elected by a plurality of
the votes cast at such meeting. The Directors elected to each class of Directors
shall hold office until their successors are duly elected and qualified or until
their earlier death, disqualification, resignation or removal.

Until the earlier to occur of (i) annual meeting of stockholders to be held
in 2000 and (ii) the first annual meeting (or special meeting in lieu thereof)
occurring after the IPO Date at which Class II Directors are elected, the Board
of Directors shall be divided into two classes, as nearly equal in number as
possible. The initial Class I Directors shall hold office for a term expiring at
the annual meeting of stockholders to be held in 1999. The successor Class I
Directors who are elected at the annual meeting of stockholders to be held in
1999 shall hold office for a term expiring at the annual meeting of stockholders
to be held in 2001.

The initial Class II Directors shall hold office for a term expiring at the
annual meeting of stockholders to be held in 2000. The successor Class II
Directors who are elected at the annual meeting of stockholders to be held in
2000 shall hold office for a term expiring at the annual meeting of stockholders
to be held in 2002.

The initial Class III directors shall be elected at the annual meeting of
stockholders to be held in 2000. From and after the election of the initial
Class III Directors, the Board of Directors shall be divided into three classes,
as nearly equal in number as possible. The initial Class III Directors shall
hold office for a term expiring at the annual meeting of stockholders to be held
in 2003.

At the annual meeting of stockholders to be held in 2001, and at each
annual meeting of stockholders held thereafter, the Directors elected to succeed
the class of Directors whose term expires at that meeting shall hold office for
a term expiring at the annual meeting of stockholders to be held in the third
year following the year of their election.

Notwithstanding the foregoing, whenever, pursuant to the provisions of
Article IV of this Second Amended and Restated Certificate of Incorporation the
holders of any one or more series of Undesignated Preferred Stock shall have the
right, voting separately as a series or together with holders of other such
series, to elect Directors at an annual or special meeting of stockholders, the
election, term of office, removal, filling of vacancies and other terms of such
directorships shall be governed by the terms of this Second Amended and Restated
Certificate of Incorporation and any certificate of designations applicable
thereto, and such Directors so elected shall not be divided into classes
pursuant to this Article VI.3.

7
<PAGE>

During any period when the holders of any series of Undesignated Preferred
Stock have the right to elect additional Directors as provided for or fixed
pursuant to the provisions of Article IV hereof, then upon the commencement and
for the duration of the period during which such right continues: (i) the then
otherwise total authorized number of Directors of the Corporation shall
automatically be increased by such specified number of Directors, and the
holders of such Undesignated Preferred Stock shall be entitled to elect the
additional Directors so provided for or fixed pursuant to said provisions, and
(ii) each such additional Director shall serve until such Director's successor
shall have been duly elected and qualified, or until such Director's right to
hold such office terminates pursuant to said provisions, whichever occurs
earlier, subject to such Director's earlier death, disqualification, resignation
or removal. Except as otherwise provided by the Board of Directors in the
resolution or resolutions establishing such series, whenever the holders of any
series of Undesignated Preferred Stock having such right to elect additional
Directors are divested of such right pursuant to the provisions of such stock,
the terms of office of all such additional Directors elected by the holders of
such stock, or elected to fill any vacancies resulting from the death,
disqualification, resignation or removal of such additional Directors, shall
forthwith terminate and the total and authorized number of Directors of the
Corporation shall be reduced accordingly.

Section 4. Vacancies.
---------------------

Subject to the rights, if any, of the holders of any series of Undesignated
Preferred Stock to elect Directors and to fill vacancies in the Board of
Directors relating thereto, any and all vacancies in the Board of Directors,
however occurring, including, without limitation, by reason of an increase in
size of the Board of Directors, or the death, resignation, disqualification or
removal of a Director, shall be filled solely by the affirmative vote of a
majority of the remaining Directors then in office, even if less than a quorum
of the Board of Directors. Any Director appointed in accordance with the
preceding sentence shall hold office for the remainder of the full term of the
class of Directors in which the new directorship was created or the vacancy
occurred and until such Director's successor shall have been duly elected and
qualified or until his or her earlier resignation or removal. Subject to the
rights, if any, of the holders of any series of Undesignated Preferred Stock to
elect Directors, when the number of Directors is increased or decreased, the
Board of Directors shall determine the class or classes to which the increased
or decreased number of Directors shall be apportioned; provided, however, that
no decrease in the number of Directors shall shorten the term of any incumbent
Director. In the event of a vacancy in the Board of Directors, the remaining
Directors, except as otherwise provided by law, may exercise the powers of the
full Board of Directors until the vacancy is filled.

Section 5. Removal.
-------------------

Subject to the rights, if any, of any series of Undesignated Preferred
Stock to elect Directors and to remove any Director whom the holders of any such
stock have the right to elect, any Director (including persons elected by
Directors to fill vacancies in the Board of Directors) may be removed from
office (i) only for cause and (ii) only by the affirmative vote of at least two-
thirds of the total votes which would be eligible to be cast by stockholders in
the election of

9
<PAGE>

such Director. At least 30 days prior to any meeting of stockholders at which it
is proposed that any Director be removed from office, written notice of such
proposed removal shall be sent to the Director whose removal will be considered
at the meeting. For purposes of this Second Amended and Restated Certificate of
Incorporation, "cause," with respect to the removal of any Director shall mean
only (i) conviction of a felony, (ii) declaration of unsound mind by order of
court, (iii) gross dereliction of duty, (iv) commission of any action involving
moral turpitude, or (v) commission of an action which constitutes intentional
misconduct or a knowing violation of law if such action in either event results
both in an improper substantial personal benefit to the Director and a material
injury to the Corporation.

ARTICLE VII

LIMITATION OF LIABILITY
-----------------------

A Director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a Director, except for liability (i) for any breach of the Director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the DGCL or (iv) for any
transaction from which the Director derived an improper personal benefit. If the
DGCL is amended after the effective date of this Second Amended and Restated
Certificate of Incorporation to authorize corporate action further eliminating
or limiting the personal liability of Directors, then the liability of a
Director of the Corporation shall be eliminated or limited to the fullest extent
permitted by the DGCL, as so amended.

Any repeal or modification of this Article VII by either of (i) the
stockholders of the Corporation or (ii) an amendment to the DGCL, shall not
adversely affect any right or protection existing at the time of such repeal or
modification with respect to any acts or omissions occurring before such repeal
or modification of a person serving as a Director at the time of such repeal or
modification.

ARTICLE VIII

AMENDMENT OF BY-LAWS
--------------------

Section 1. Amendment by Directors
----------------------------------

Except as otherwise provided by law, the By-laws of the Corporation may be
amended or repealed by the affirmative vote of a majority of the Directors then
in office.

Section 2. Amendment by Stockholders
-------------------------------------

9
<PAGE>

The By-laws of the Corporation may be amended or repealed at any annual
meeting of stockholders, or special meeting of stockholders called for such
purpose, by the affirmative vote of at least two-thirds of the total votes
eligible to be cast on such amendment or repeal by holders of voting stock,
voting together as a single class; provided, however, that if the Board of
Directors recommends that stockholders approve such amendment or repeal at such
meeting of stockholders, such amendment or repeal shall only require the
affirmative vote of a majority of the total votes eligible to be cast on such
amendment or repeal by holders of voting stock, voting together as a single
class.

ARTICLE IX

AMENDMENT OF CERTIFICATE OF INCORPORATION
-----------------------------------------

The Corporation reserves the right to amend or repeal this Second Amended
and Restated Certificate of Incorporation in the manner now or hereafter
prescribed by statute and this Second Amended and Restated Certificate of
Incorporation, and all rights conferred upon stockholders herein are granted
subject to this reservation. No amendment or repeal of this Second Amended and
Restated Certificate of Incorporation shall be made unless the same is first
approved by the Board of Directors pursuant to a resolution adopted by the Board
of Directors in accordance with Section 242 of the DGCL, and, except as
otherwise provided by law, thereafter approved by the stockholders. Whenever any
vote of the holders of voting stock is required, and in addition to any other
vote of holders of voting stock that is required by this Second Amended and
Restated Certificate of Incorporation or by law, the affirmative vote of a
majority of the total votes eligible to be cast by holders of voting stock with
respect to such amendment or repeal, voting together as a single class, at a
duly constituted meeting of stockholders called expressly for such purpose shall
be required to amend or repeal any provisions of this Second Amended and
Restated Certificate of Incorporation; provided, however, that the affirmative
vote of not less than two-thirds of the total votes eligible to be cast by
holders of voting stock, voting together as a single class, shall be required to
amend or repeal any of the provisions of Article V, Article VI, Article VII or
Article IX of this Second Amended and Restated Certificate of Incorporation.

10
<PAGE>

I, James L. Monroe, President of the Corporation, for the purpose of
amending and restating the Corporation's Certificate of Incorporation pursuant
to the General Corporation Law of the State of Delaware, do make this
certificate, hereby declaring and certifying that this is my act and deed on
behalf of the Corporation this ___ day of December, 1998.

-----------------------------------
James L. Monroe, President

<PAGE>

EXHIBIT 5.1

[LETTERHEAD OF GOODWIN, PROCTER & HOAR LLP]

December 10, 1998

Merkert American Corporation
490 Turnpike Street
Canton, Massachusetts 02021

Ladies and Gentlemen:

This opinion is furnished in connection with the filing by Merkert American
Corporation, a Delaware corporation (the "Company"), with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended, of a
Registration Statement on Form S-1 (the "Registration Statement") relating to
5,060,000 shares of common stock, par value $.01 per share, of the Company
(the "Registered Shares"), including 660,000 shares which the Underwriters (as
defined below) have an option to purchase solely for the purpose of covering
over-allotments. Pursuant to that certain Underwriting Agreement by and among
the Company and the underwriters named below (the "Underwriting Agreement"),
the Registered Shares will be offered by the several underwriters (the
"Underwriters") represented by Wheat First Securities, Inc., Cleary Gull
Reiland & McDevitt Inc., and Scott & Stringfellow, Inc.

In connection with rendering this opinion, we have examined the form of the
proposed Underwriting Agreement; the Amended and Restated Certificate of
Incorporation and By-laws of the Company, each as amended to date; such
records of the corporate proceedings of the Company as we deemed material; and
such other certificates, receipts, records and documents as we considered
necessary for the purposes of this opinion. In our examination, we have
assumed the genuineness of all signatures, the legal capacity of natural
persons, the authenticity of all documents submitted to us as certified,
photostatic or facsimile copies, the authenticity of the originals of such
copies and the authenticity of telephonic confirmations of public officials
and others. As to facts material to our opinion, we have relied upon
certificates or telephonic confirmations of public officials and certificates,
documents, statements and other information of the Company or representatives
or officers thereof.

We are attorneys admitted to practice in The Commonwealth of Massachusetts.
We express no opinion concerning the laws of any jurisdiction other than the
laws of the United States of America, The Commonwealth of Massachusetts and
the Delaware General Corporation Law.

Based upon the foregoing, we are of the opinion that when the Underwriting
Agreement is completed (including the insertion therein of pricing terms) and
executed by the Company and the Underwriters, and the Registered Shares are
sold to the Underwriters and paid for pursuant to the terms of the
Underwriting Agreement, the Registered Shares will be duly authorized, validly
issued, fully paid and nonassessable by the Company under Delaware General
Corporation Law.

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption
"Legal Matters" in the Prospectus which is a part of the Registration
Statement.

Very truly yours,
/s/ Goodwin, Procter & Hoar LLP

GOODWIN, PROCTER & HOAR LLP

<PAGE>

Exhibit 10.29

FORM OF CREDIT AGREEMENT

AMONG

MERKERT AMERICAN CORPORATION
("Borrower")

THE LENDERS SET FORTH ON SCHEDULE 1 HERETO
("Lenders")

FIRST UNION NATIONAL BANK,
AS AGENT FOR THE LENDERS
("Agent")

December __, 1998

<PAGE>

TABLE OF CONTENTS

Page

SECTION 1 - DEFINITIONS........................................ 1
1.1. Definitions.............................................. 1
1.2. Rules of Construction.................................... 13
1.3. Proforma Calculations.................................... 13

SECTION 2 - CREDIT FACILITY.................................... 13
2.1. The Facilities........................................... 13
2.2. Promissory Notes......................................... 14
2.3. Lenders' Participation................................... 14
2.4. Use of Proceeds.......................................... 14
2.5. Repayment................................................ 14
2.6. Interest................................................. 15
2.7. Advances................................................. 18
2.8. Reduction and Termination of Commitment.................. 20
2.9. Prepayment............................................... 20
2.10. Funding Costs and Loss of Earnings....................... 22
2.11. Payments................................................. 22
2.12. Commitment Fee........................................... 22
2.13. Agent's Fees............................................. 23
2.14. Regulatory Changes in Capital Requirements............... 23

SECTION 2A - LETTERS OF CREDIT................................. 24
2A.1. Availability of Credits................................. 24
2A.2. Commitment Availability................................. 24
2A.3. Approval and Issuance................................... 24
2A.4. Obligations of the Borrower............................. 25
2A.5. Payment by Lenders on Letters of Credit................. 26
2A.6. Collateral Security..................................... 26
2A.7. General Terms of Credits................................ 27

SECTION 3 - REPRESENTATIONS AND WARRANTIES..................... 28
3.1. Organization and Good Standing........................... 28
3.2. Power and Authority; Validity of Agreement............... 28
3.3. No Violation of Laws or Agreements....................... 28
3.4. Material Contracts....................................... 28
3.5. Compliance............................................... 28
3.6. Litigation............................................... 29
3.7. Title to Assets.......................................... 29

ii
<PAGE>

TABLE OF CONTENTS
-----------------

3.8. Accuracy of Information; Full Disclosure................ 29
3.9. Taxes and Assessments................................... 30
3.10. Indebtedness............................................ 30
3.11. Management Agreements................................... 30
3.12. Investments............................................. 30
3.13. ERISA................................................... 30
3.14. Fees and Commissions.................................... 31
3.15. No Extension of Credit for Securities................... 31
3.16. Perfection of Security Interest......................... 31
3.17. Hazardous Wastes, Substances and Petroleum Products..... 31
3.18. Solvency................................................ 32
3.19. Employee Controversies.................................. 32

SECTION 4 - CONDITIONS......................................... 33
4.1. Effectiveness............................................ 33
4.2. Advances................................................. 35

SECTION 5 - AFFIRMATIVE COVENANTS.............................. 35
5.1. Existence and Good Standing.............................. 35
5.2. Interim Financial Statements............................. 36
5.3. Annual Financial Statements.............................. 36
5.4. Compliance Certificate................................... 36
5.5. Additional Reports....................................... 36
5.6. Public Information....................................... 36
5.7. Books and Records........................................ 36
5.8. Insurance................................................ 37
5.9. Litigation; Event of Default............................. 37
5.10. Taxes.................................................... 37
5.11. Costs and Expenses....................................... 37
5.12. Compliance; Notification................................. 37
5.13. ERISA.................................................... 38
5.14. Total Debt to EBITDA Ratio............................... 38
5.15. Senior Debt to EBITDA.................................... 38
5.16. Minimum EBITDA........................................... 39
5.17. Minimum Debt Service Coverage Ratio...................... 39
5.18. Minimum Fixed Charge Coverage Ratio...................... 39
5.19. Borrowing Base........................................... 39
5.20. Management Changes....................................... 39
5.21. Transactions Among Affiliates............................ 39
5.22. Joinders, etc............................................ 39

iii
<PAGE>

TABLE OF CONTENTS
-----------------

Page
----

5.23. Additional Collateral Security Documents................. 40
5.24. Other Information........................................ 40

SECTION 6 - NEGATIVE COVENANTS................................. 40
6.1. Indebtedness............................................. 40
6.2. Guaranties............................................... 40
6.3. Loans.................................................... 40
6.4. Liens and Encumbrances................................... 40
6.5. Additional Negative Pledge............................... 41
6.6. Restricted Payments...................................... 41
6.7. Transfer of Assets; Liquidation.......................... 41
6.8. Acquisitions and Investments............................. 41
6.9. Payments to Affiliates................................... 42
6.10. Certain Changes.......................................... 42
6.11. Restrictive Agreements................................... 43
6.12. Use of Proceeds.......................................... 43

SECTION 7 - DEFAULT............................................ 43
7.1. Events of Default........................................ 43
7.2. Remedies................................................. 45
7.3. Right of Set-off......................................... 45
7.4. Turnover of Property Held by Lender's Affiliates......... 46
7.5. Remedies Cumulative; No Waiver........................... 46

SECTION 8 - AGENCY PROVISIONS.................................. 46
8.1. Application of Payments.................................. 46
8.2. Set-Off.................................................. 46
8.3. Modifications and Waivers................................ 46
8.4. Obligations Several...................................... 47
8.5. Lenders' Representations................................. 47
8.6. Investigation............................................ 47
8.7. Powers of Agent.......................................... 47
8.8. General Duties of Agent, Immunity and Indemnity.......... 47
8.9. No Responsibility for Representations or Validity, etc... 48
8.10. Action on Instruction of Lenders; Right to Indemnity..... 48
8.11. Employment of Agents..................................... 48
8.12. Reliance on Documents.................................... 48
8.13. Agent's Rights as a Lender............................... 48
8.14. Expenses................................................. 48

iv
<PAGE>

TABLE OF CONTENTS
-----------------

Page
----

8.15. Resignation of Agent..................................... 48
8.16. Successor Agent.......................................... 49
8.17. Collateral Security...................................... 49
8.18. Enforcement by Agent..................................... 49

SECTION 9 - MISCELLANEOUS...................................... 49
9.1. Indemnification and Release Provisions................... 49
9.2. Participations and Assignments........................... 50
9.3. Binding and Governing Law................................ 50
9.4. Survival................................................. 50
9.5. No Waiver; Delay......................................... 50
9.6. Modification............................................. 51
9.7. Headings................................................. 51
9.8. Notices.................................................. 51
9.9. Payment on Non-Business Days............................. 51
9.10. Time of Day.............................................. 51
9.11. Severability............................................. 51
9.12. Counterparts............................................. 52
9.13. Consent to Jurisdiction and Service of Process........... 52
9.14. WAIVER OF JURY TRIAL..................................... 52
9.15. ACKNOWLEDGMENTS.......................................... 52

v
<PAGE>

LIST OF EXHIBITS

Exhibit A-1: Advance Request Form

Exhibit A-2: Letter of Credit Request Form

Exhibit B-1: Form of Revolving Credit Note

Exhibit B-2: Form of Term Note

Exhibit C: Disclosure Pursuant to Representations and Warranties

Exhibit D: Funding Costs and Loss of Earnings Calculation

Exhibit E: Form of Compliance Certificate

Exhibit F: Form of Borrowing Base Certificate

Exhibit G: Notice of Acquisition

Exhibit H: Form of Assignment

vi
<PAGE>

CREDIT AGREEMENT

THIS CREDIT AGREEMENT (this "Agreement") is made this day of
December, 1998, by and among MERKERT AMERICAN CORPORATION, a Delaware
corporation ("Borrower"); FIRST UNION NATIONAL BANK, a national banking
association ("First Union") and the other financial institutions identified on
Schedule 1 attached hereto (each individually a "Lender" and individually and
collectively, "Lenders"); and FIRST UNION as agent for the Lenders ("Agent").

In consideration of the agreements hereinafter set forth, and
intending to be legally bound, the parties hereto hereby agree as follows:

SECTION 1

DEFINITIONS

1.1. Definitions. When used in this Agreement, the following
terms shall have the respective meanings set forth below.

"Acquisition Price" shall mean, with respect to any
acquisition, the total consideration to be paid, incurred or assumed by the
Company or its Subsidiaries in connection with such acquisition, including,
without limitation, the principal amount of any Indebtedness assumed or
acquired, and the full amount of any deferred purchase price or contingent
obligations.

"Adjusted EBITDAR" means, for any period, EBITDAR for such
period less capital expenditures made during such period as determined in
accordance with GAAP.

"Adjusted Libor Rate" means, for any Interest Period, as
applied to a Libor Portion, the rate per annum (rounded upwards, if necessary to
the next 1/16 of 1%) determined pursuant to the following formula:

Adjusted Libor Rate = Libor Rate
[1 - Reserve Percentage]

For purposes hereof, "Libor Rate" shall mean, as applied to a Libor Portion, the
rate which appears on the Telerate Page 3750 at approximately 9:00 a.m.
Philadelphia time two London Business Days prior to the commencement of such
Interest Period for the offering to leading banks in the London Interbank Market
of deposits in United States dollars ("Eurodollars") or, if such rate does not
appear on the Telerate page 3750, the rate which appears (or, if two or more
such rates appear, the average rounded up to the nearest 1/16 of 1% of the rates
which appear) on the Reuters Screen LIBO Page as of 9:00 a.m. Philadelphia time
two London Business Days prior to the commencement of the Interest Period, in
either case for an amount substantially equal to such Portion as to which
Borrower may elect the Adjusted Libor Rate to be applicable with a maturity of
comparable duration to the Interest Period selected by Borrower for such Libor
Portion, as may be adjusted from time to time in accordance with
<PAGE>

Paragraph 2.6(e) hereof.

"Advance" means a borrowing under the Revolving Credit
Commitment pursuant to Paragraph 2.7 hereof.

"Advance Request Form" means the certificate in the form
attached hereto as Exhibit A-1 to be delivered by Borrower to Agent as a
condition of each Advance.

"Affiliate" means as to any party: (i) any person who or
entity which directly or indirectly owns, controls or holds five percent (5%) or
more of the outstanding beneficial interests in such party; (ii) any entity of
which five percent (5%) or more of the outstanding beneficial interest is
directly or indirectly owned, controlled, or held by such party; (iii) any
entity which directly or indirectly is under common control with such party;
(iv) any director or general partner of such party or any Affiliate; or (v) any
immediate family member of any person who is an Affiliate. For purposes of this
definition, "control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of an entity,
whether through the ownership of voting securities, by contract, or otherwise.

"Agent" means First Union National Bank, in its capacity as
agent for the Lenders hereunder and any successor in such capacity appointed
pursuant to Paragraphs 8.15 and 8.16 hereof.

"Agreement" means this Credit Agreement and all exhibits
hereto, as each may be amended, modified, extended, consolidated or restated
from time to time.

"Applicable Margin" means the percentage per annum set forth
in the appropriate column below that corresponds to the ratio of Funded Debt to
EBITDA for Borrower and its consolidated Subsidiaries (the Applicable Margin
being the lowest applicable percentage per annum as to which the ratio
requirement has been attained):

Revolving Credit Loan
Applicable Margin Term Loan

Ratio of Total Base Rate Libor Base Rate Libor
Level Debt to EBITDA Portions Portions Portions Portions

I Less than 1.50 to 1 0.75% 2.25% 1.00% 2.50%

II Less than 2.50 to 1 but
greater than or equal to
1.50 to 1 1.25% 2.75% 1.50% 3.00%

III Less than 3.00 to 1 but
greater than or equal to

2
<PAGE>

2.50 to 1 1.50% 3.00% 1.75% 3.25%

IV Greater than or equal to
3.00 to 1 1.75% 3.25% 2.00% 3.50%

Notwithstanding the foregoing, the Applicable Margin from the date hereof
through June 30, 1999 shall be based on Level IV. Thereafter, commencing with
the delivery of a Compliance Certificate for the period ended June 30, 1999, the
Applicable Margin shall adjust automatically, as appropriate, on the day
following delivery of a quarterly Compliance Certificate in accordance with
Paragraph 5.4 hereof, provided, that in the event that a quarterly compliance
certificate has not been delivered on the date required by Paragraph 5.4 then
the Applicable Margin shall adjust to the highest margin provided above as of
the date of required delivery; provided further, however, that the Applicable
Margin shall readjust on the day after delivery of such delinquent Compliance
Certificate based on the ratio set forth in such Compliance Certificate. At any
time that a default rate of interest applies pursuant to Paragraph 2.6(a)(ii),
then the Applicable Margin shall be based on Level IV.

"Base Rate" means the higher of (a) the Federal Funds Rate
plus one half of one percent (1/2%) per annum or (b) the Prime Rate.

"Base Rate Portion" means a Portion as to which the applicable
rate of interest is based on the Base Rate.

"Borrower" means Merkert American Corporation, a Delaware corporation.

"Borrowing Base" means eighty percent (80%) of Eligible Accounts.

"Borrowing Base Certificate" means a certificate in the form
of ExhibitF attached hereto delivered by Borrower to Lenders pursuant to
Paragraph 5.4 or Paragraph 4.1 hereof.

"Business Day" means any day not a Saturday, Sunday or a day
on which Lenders are required or permitted to be closed under the laws of the
Commonwealth of Pennsylvania.

"Capital Leases" means capital leases and subleases, as
defined in Statement 13 of the Financial Accounting Standards Board dated
November 1976, as amended and updated from time to time.

"CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986, as amended from time to time, and all rules and
regulations promulgated in connection therewith.

3
<PAGE>

"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and regulations with respect thereto in effect from time to
time.

"Collateral" means the collateral security for the Loan,
including under the Collateral Security Documents, this Agreement or any other
Loan Document.

"Collateral Security Documents" means the Security Agreement,
the Guaranty, the Pledge Agreements, and any other document or instrument
executed and/or delivered from time to time hereunder or in connection herewith
granting or evidencing Collateral for the Senior Obligations.

"Combination" shall mean the transactions pursuant to which,
on the Effective Date of this Agreement, Merkert Enterprises and Rogers-American
shall become wholly-owned subsidiaries of the Borrower, as described in the
Registration Statement.

"Company" means individually, and "Companies" means
individually and collectively, Borrower and each Guarantor.

"Compliance Certificate" means a certificate in the form of
Exhibit E attached hereto delivered by Borrower to Lenders pursuant to Paragraph
5.4 hereof.

"Debt Service" means, for any period, the sum of interest
expense and scheduled debt payments for such period.

"Default" means an event, condition or circumstance the
occurrence of which would, with the giving of notice or the passage of time or
both, constitute an Event of Default.

"EBITDA" means, for any period, net income for such period as
defined in accordance with GAAP, excluding any extraordinary gains, plus
interest expense, taxes, depreciation and amortization, and all other non-cash
charges to income for such period, in each case as defined in accordance with
GAAP and to the extent each has been deducted in determining net income.

"Eligible Accounts" means, as of any date of determination
thereof, the aggregate of all trade account receivables of Borrower and its
consolidated Subsidiaries, at book value net of reserves and contractual
allowances determined in accordance with GAAP, excluding, without duplication:

(a) any receivable not payable in United States Dollars;

(b) any receivable as to which the account debtor is not
located within the United States;

4
<PAGE>

(d) any receivable due from any Company or any Subsidiary
or Affiliate of any Company;

(e) any receivable with respect to all or part of which a
check, promissory note, draft, trade acceptance or other instrument for the
payment of money has been presented for payment and returned uncollected for any
reason;

(f) any receivable as to which Borrower or the applicable
owner knows that any one or more of the following events has occurred with
respect to the account debtor: death or judicial declaration of incompetency;
the filing by or against such account debtor of a request or petition for
liquidation, reorganization, arrangement, adjustment of debts, adjudication as a
bankrupt, or other relief under the bankruptcy, insolvency, or similar laws of
the United States, any state or territory thereof, or any foreign jurisdiction,
now or hereafter in effect; the making of any general assignment by such account
debtor for the benefit of creditors; the appointment of a receiver or trustee
for such account debtor or for any of the assets of such account debtor,
including, without limitation, the appointment of or taking possession by a
"custodian," as defined in the Bankruptcy Code; the institution by or against
such account debtor of any other type of insolvency proceeding (under the
bankruptcy laws of the United States or elsewhere) or of any formal or informal
proceeding for the dissolution or liquidation of, settlement of claims against,
or winding up of affairs of, such account debtor; the sale, assignment, or
transfer of all or substantially all of the assets of such account debtor; the
inability to pay or the nonpayment by such account debtor of its debts generally
as they become due; the cessation of the business of such account debtor as a
going concern; or, in Agent's sole reasonable judgment, unsatisfactory general
financial performance or credit standing or likelihood of unsatisfactory general
financial performance or credit standing in the near future;

(g) any receivable which is more than ninety (90) days
past the date of the invoice;

(h) any receivable from an account debtor as to which
more than fifty percent (50%) of the amount of all outstanding receivables from
such account debtor are more than ninety (90) days past the date of invoice;

(i) any receivable as to which there is any dispute,
defense, offset or counterclaim with or by the account debtor;

(j) any receivable that has not been created in the
ordinary course of business; and

(k) any receivable representing an obligation for goods
placed on consignment and not yet sold by the consignee, or for goods on
approval;

(l) any receivable payable to a Subsidiary that is not a
Guarantor;

5
<PAGE>

"Environmental Control Statutes" means any federal, state,
county, regional or local laws governing the control, storage, removal, spill,
release or discharge of Hazardous Substances, including without limitation
CERCLA, the Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976 and the Hazardous and Solid Waste Amendments of 1984,
the Federal Water Pollution Control Act, as amended by the Clean Water Act of
1976, the Hazardous Materials Transportation Act, the Emergency Planning and
Community Right to Know Act of 1986, the National Environmental Policy Act of
1975, the Oil Pollution Act of 1990, any similar or implementing state law, and
in each case including all amendments thereto and all rules and regulations
promulgated thereunder and permits issued in connection therewith.

"EPA" means the United States Environmental Protection Agency,
or any successor thereto.

"ERISA" means the Employee Retirement Income Security Act of
1974, all amendments thereto and all rules and regulations in effect at any time
thereunder.

"ERISA Affiliate" means, when used with respect to any Plan,
ERISA, the PBGC or a provision of the Code pertaining to employee benefit plans,
any person or entity that is a member of any group or organization within the
meaning of Code Sections 414(b), (c), (m) or (o) of which Borrower or any
Guarantor is a member.

"Event of Default" means an event described in Paragraph 7.1
hereof.
"Excess Cash Flow" means, for any fiscal year, EBITDA for such
fiscal year, less (i) all payments of principal, interest, fees and expenses
with respect to Total Debt made during such year, (ii) income taxes paid in cash
for such fiscal year, (iii) capital expenditures made during such fiscal year,
and (iv) the change in Working Capital since the end of the prior fiscal year
(such change in Working Capital to constitute a reduction in Excess Cash Flow to
the extent that it is negative, and an increase to Excess Cash Flow to the
extent that it is positive).

"Federal Funds Rate" means, for any day, the effective rate of
interest for such day, as announced from time to time by the Board of Governors
of the Federal Reserve System as shown in publication H.15 as the "Federal Funds
Rate."

"Fixed Charges" means, for any period, the sum of Debt Service
for such period plus Capital Lease payments and rent for such period and cash
income taxes paid during such period.

"GAAP" means generally accepted accounting principles set
forth in the Opinions of the Accounting Principles Board of the American
Institute of Certified Public Accountants and in statements of the Financial
Accounting Standards Board and in such other statements by such other entity as
Agent may reasonably approve, which are applicable in the circumstances as of
the date in question, subject to Paragraph 1.2(a) hereof; and such

6
<PAGE>

principles observed in a current period shall be comparable in all material
respects to those applied in a preceding period.

"Guarantor" means individually, and "Guarantors" means
individually and collectively, Merkert Enterprises, Rogers-American and their
respective Subsidiaries on the date hereof, and any Material Subsidiaries of
Borrower which may join in the Guaranty pursuant to Paragraph 5.22 hereof.

"Guaranty" means the Guaranty Agreement executed by Guarantors
in favor of Lenders as required to be delivered pursuant to Paragraph 4.1 hereof
and including any joinders thereto pursuant to Paragraph 5.22 hereof, as may be
amended, modified or restated from time to time.

"Hazardous Substance" means petroleum products and items
defined in the Environmental Control Statutes as "hazardous substances",
"hazardous wastes", "pollutants" or "contaminants" and any other toxic,
reactive, corrosive, carcinogenic, flammable or hazardous substance or other
pollutant.

"Indebtedness" of any person as of any date of determination
means and includes all obligations of such person which, in accordance with
GAAP, shall be classified on a balance sheet of such person as liabilities of
such person and in any event shall include, without duplication, all (i)
obligations of such person for borrowed money or which have been incurred in
connection with acquisition of property or assets, (ii) obligations secured by
any lien upon property or assets owned by such person, notwithstanding that such
person has not assumed or become liable for the payment of such obligations,
(iii) obligations created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such person,
notwithstanding the fact that the rights and remedies of the seller, lender or
lessor under such agreement in the event of default are limited to repossession
or sale of property, (iv) Capital Leases, (v) guarantees and (vi) letters of
credit and letter of credit reimbursement obligations.

"Initial Offering" means the initial public offering of shares
of common stock of Borrower pursuant to the Registration Statement.

"Interest Period" means, with respect to a Libor Portion, a
period of one (1), two (2), three (3) or six (6) months' duration, as Borrower
may elect, during which the Adjusted Libor Rate is applicable; provided,
however, that (a) if any Interest Period would otherwise end on a day which
shall not be a London Business Day, such Interest Period shall be extended to
the next succeeding London Business Day, unless such London Business Day falls
in another calendar month, in which case such Interest Period shall end on the
next preceding London Business Day, subject to clause (c) below; (b) interest
shall accrue from and including the first day of each Interest Period to, but
excluding, the day on which any Interest Period expires; (c)with respect to an
Interest Period which begins on the last London Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period), the Interest Period shall end on the
last

7
<PAGE>

London Business Day of a calendar month; and (d) Borrower may not elect an
Interest Period that would extend past the Termination Date.

"Lender" means individually, and "Lenders" means individually
and collectively, the institutions identified on Schedule 1 attached hereto and
their respective successors and assigns so long as any such institution retains
any portion of the Revolving Credit Commitment or Loans hereunder.

"Letter of Credit" means individually, and "Letters of Credit"
shall mean individually and collectively, the letter(s) of credit issued for the
account of Borrower, in the form agreed upon at the time of issuance thereof by
Agent, participated in by all the Lenders pursuant to the terms and conditions
of Section 2A hereof.

"Letter of Credit Request Form" means the certificate in the
form attached as Exhibit A-2 hereto, to be delivered to Agent as a condition of
each issuance of a Letter of Credit pursuant to Paragraph 2A.3 hereof.

"Letter of Credit Sublimit" means the portion of the Revolving
Credit Commitment up to which Lenders have agreed to participate in the issuance
by Agent of Letters of Credit pursuant to Section 2A hereof, being Five Million
Dollars ($5,000,000).

"Libor Portion" means a Portion as to which the applicable
rate of interest is based on the Adjusted Libor Rate.

"Loan" means individually, and "Loans" means individually and
collectively, the Revolving Credit Loan and the Term Loan.

"Loan Documents" means the Agreement, the Notes, Collateral
Security Documents, and the other documents and agreements executed and
delivered in connection with this Agreement.

"Local Authorities" means individually and collectively the
state and local governmental authorities and administrative agencies which
govern the business, commercial activities or facilities owned or operated by
any Company.

"London Business Day" means any Business Day on which banks in
London, England are open for business.

"Material Adverse Effect" means a material adverse effect on
the business, financial condition or prospects of the Borrower and its
consolidated Subsidiaries taken as a whole.

"Material Subsidiary" means any direct or indirect Subsidiary
of Borrower which either: (i) comprises 5% or more of the assets of Borrower and
its consolidated

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Subsidiaries as of the last day of the most recently ended fiscal quarter, or
(ii) is responsible for 5% or more of the EBITDA of the Borrower and its
consolidated Subsidiaries for the most recent Rolling Period.

"Maximum Principal Amount" means the maximum principal amount
of the Revolving Credit Commitment, up to which the applicable Lender has agreed
to lend funds and/or participate in the issuance of Letters of Credit as set
forth in Schedule 1 attached hereto, as such amounts may be reduced or
terminated from time to time pursuant to Paragraph 2.8 hereof.

"Merkert Enterprises" means Merkert Enterprises, Inc., a
Massachusetts corporation.

"Net Cash Proceeds" means, with respect to any Sale of
Material Assets, the cash proceeds (including insurance proceeds) received by
the Borrower or its Subsidiaries in such a transaction less (i) the reasonable
costs of the transaction, and (ii) applicable taxes arising out of the
transaction.

"Note" means individually and "Notes" means individually and
collectively the Revolving Credit Notes and the Term Notes.

"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.

"Permitted Investments" means (i) investments in commercial
paper maturing in 180 days or less from the date of issuance which is rated A1
or better by Standard & Poor's Corporation or P1 or better by Moody's Investors
Services, Inc.; (ii) investments in direct obligations of the United States of
America or obligations of any agency thereof which are guaranteed by the United
States of America, provided that such obligations mature within twelve (12)
months of the date of acquisition thereof; and (iii) investments in certificates
of deposit maturing within one (1) year from the date of acquisition thereof
issued by a bank or trust company organized under the laws of the United States
or any state thereof, having capital, surplus and undivided profits aggregating
at least $500,000,000 and the long-term deposits of which are rated A1 or better
by Moody's Investors Services, Inc. or equivalent by Standard & Poor's
Corporation.

"Person" shall mean any individual, corporation, partnership,
company, association, limited liability corporation or other legal entity.

"Plan" means any employee pension benefit or employee welfare
benefit plan as defined in Sections 3(1) or (2) of ERISA maintained or sponsored
by, contributed to, or covering employees of, either Borrower or any ERISA
Affiliate.

"Pledge Agreements" shall mean the Pledge Agreement executed
by Borrower in favor of Agent pursuant to Paragraph 4.1 hereof and any
additional Pledge Agreement

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<PAGE>

executed and delivered from time to time pursuant to Paragraph 5.22 hereof, as
may be amended, modified or restated from time to time.

"Portion" means a portion of the Loan as to which a specific
interest rate and, in the case of a Libor Portion, an Interest Period, has been
elected by Borrower.

"Prime Rate" means the rate of interest announced by Agent
from time to time as its prime rate. Such rate is an index or base rate and is
not necessarily the lowest or best rate charged by Agent to its customers or
other banks.

"Pro Rata Share" means, as to a Lender, the ratio which the
outstanding principal balance of its portion of the Loans hereunder bears to the
aggregate outstanding principal balance of the Loans at any time; or if no
indebtedness is outstanding hereunder or the context otherwise requires, its
percentage share of the Revolving Credit Commitment as set forth in Schedule 1
attached hereto.

"Registration Statement" means the registration statement
filed by the Borrower on Form S-1, No. 333-53419, as amended by Amendment No. 5
to Registration Statement on Form S-1 dated November 19, 1998.

"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System, comprising Part 204 of Title 12 Code of Federal
Regulations, as amended, and any successor thereto.

"Release" means any spill, leak, emission, discharge or the
pumping, pouring, emptying, disposing, injecting, escaping, leaching or dumping
of a Hazardous Substance.

"Required Lenders" means those Lenders (which may include
Agent in its capacity as a Lender) holding Pro Rata Shares aggregating sixty-six
and two-thirds percent (66-2/3%) or more.

"Reserve" means, for any day, that reserve (expressed as a
decimal) which is in effect (whether or not actually incurred) with respect to a
Lender (or any Lender Affiliate of such Lender) on such day, as prescribed by
the Board of Governors of the Federal Reserve System (or any successor or any
other banking authority to which a Lender (or any bank Affiliate of such Lender)
is subject including any board or governmental or administrative agency of the
United States or any other jurisdiction to which a Lender (or any bank Affiliate
of such Lender) is subject for determining the maximum reserve requirement
(including without limitation any basic, supplemental, marginal or emergency
reserves) for Eurocurrency liabilities as defined in Regulation D.

"Reserve Percentage" means, for a Lender (or any bank
Affiliate of such Lender) on any day, that percentage (expressed as a decimal)
prescribed by the Board of Governors of the Federal Reserve System (or any
successor or any other banking authority to which a Lender (or any bank
Affiliate of such Lender) is subject, including any board or

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<PAGE>

governmental or administrative agency of the United States or any other
jurisdiction to which a Lender is subject), for determining the reserve
requirement (including without limitation any basic, supplemental, marginal or
emergency reserves) for (i) deposits of United States Dollars or (ii)
Eurocurrency liabilities as defined in Regulation D, in each case used to fund a
Portion subject to an Adjusted Libor Rate or any Loan made with the proceeds of
such deposit. The Adjusted Libor Rate shall be adjusted on and as of the
effective day of any change in the Reserve Percentage.

"Restricted Payments" means redemptions, repurchases, and
distributions of any kind (including redemptions in exchange for real or
tangible personal property) in respect of the capital stock of Borrower (other
than dividends or distributions consisting solely of shares of capital stock of
Borrower), and payments of principal and interest or other amounts on
Subordinated Debt.

"Revolving Credit Commitment" means at any time the maximum
aggregate principal amount which Lenders have agreed to make available at such
time under Paragraph 2.1 hereof, being Twenty-Five Million Dollars ($25,000,000)
in the aggregate on the date hereof.

"Revolving Credit Loan" means the aggregate outstanding
principal balance of Indebtedness advanced under the Revolving Credit
Commitment, together with interest accrued thereon and fees and expenses
incurred in connection with any of the foregoing.

"Revolving Credit Note" means individually, and "Revolving
Credit Notes" means individually and collectively, the promissory notes in the
form of Exhibit B-1 attached hereto delivered by Borrower to each Lender, as may
be amended, modified, extended, consolidated or restated from time to time.

"Rogers-American" means Rogers-American Company, Inc., a North
Carolina corporation.

"Rolling Period" means a period of four consecutive fiscal
quarters.

"Sale of Material Assets" means the sale or other disposition
(including damage, destruction or condemnation of assets) by Borrower or any of
its Subsidiaries, in a single transaction or in the aggregate as to all
transactions within any twelve (12) consecutive months, of assets (including
stock or other investments or interests in a Person) which, valued at the
greater of book value or fair market value, have a value of One Hundred Thousand
Dollars ($100,000) or more; excluding the sale of Permitted Investments for cash
or the conversion into cash of Permitted Investments.

"Security Agreement" means the Security Agreement executed by
Borrower and Guarantors delivered pursuant to Paragraph 4.1 hereof (including as
joined in by any additional Guarantors pursuant to Paragraph 5.22 hereof from
time to time), as may be amended, modified, or restated from time to time.

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<PAGE>

"Senior Debt" means Total Debt less Subordinated Debt.

"Senior Obligations" means the obligations of the Borrower and
its Subsidiaries to Lenders or Agent with respect to (i) the Loans, (ii) any
currency or interest rate swap or similar obligation, and (iii) any other
obligation under any Loan Document.

"Subordinated Debt" means indebtedness of Borrower or a
Subsidiary subordinated to the Senior Obligations pursuant to a subordination
agreement in form and substance satisfactory to Required Lenders.

"Subsidiary" means, with respect to any Person, any other
Person of which such Person, directly or indirectly, owns or controls more than
fifty percent (50%) of any class or classes of securities, membership interests,
partnership interests or other equity interests, and any partnership in which
such Person is a general partner. Unless otherwise specified, references to
"Subsidiaries" herein shall mean direct and indirect Subsidiaries of Borrower.

"Term Loan" means the outstanding principal balance of
indebtedness advanced pursuant to Paragraph 2.1(b) hereof, together with
interest accrued thereon and fees and expenses payable hereunder in connection
therewith.

"Term Note" means individually, and "Term Notes" means
individually and collectively, the Term Notes in the form of Exhibit C-2
attached hereto to be delivered by Borrower to Lenders pursuant to Paragraph 4.1
hereof, as may be amended, modified or restated from time to time.

"Termination Date" means the earlier of (i) December 31, 2001,
or (ii) the date on which the Revolving Credit Commitment is terminated pursuant
to Paragraph 2.8 hereof.

"Total Debt" means, as of the date of determination, the
aggregate outstanding principal amount of all Indebtedness for: (A) borrowed
money, including without limitation the Loans hereunder and any outstanding
Subordinated Debt; (B) the purchase price for installment purchases of real or
personal property; (C) the principal portion of Capital Leases; (D) guaranties
of Indebtedness of others; and (E) reimbursement obligations under letters of
credit; in each case without duplication.

"Working Capital" means current assets (net of cash) less
current liabilities (net of short term debt and current maturities of long term
debt).

"Year 2000 Compliant" and "Year 200 Compliance"means, as to
any computer system or application or micro-processor dependent good or
equipment, that it will operate as designed and intended prior to, during and
after the calendar year 2000 without error relating to date data or date
information, specifically including any error relating to, or the product of,
date data or date information that represents or references different centuries
or more than one century.

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<PAGE>

1.2. Rules of Construction.

(a) GAAP. Except as otherwise provided herein, financial and
accounting terms used in the foregoing definitions or elsewhere in this
Agreement, shall be defined in accordance with GAAP. If Borrower or Required
Lenders determine that a change in GAAP from that in effect on the date hereof
has altered the treatment of certain financial data to its detriment under this
Agreement, such party may, by written notice to the other within ten (10) days
after the effective date of such change in GAAP, request renegotiation of the
financial covenants affected by such change. If Borrower and Required Lenders
have not agreed on revised covenants within thirty (30) days after the delivery
of such notice, then, for purposes of this Agreement, GAAP will mean generally
accepted accounting principles on the date just prior to the date on which the
change occurred that gave rise to the notice.

(b) Use of term "consolidated". Any term defined in Paragraph
1.1 hereof, when modified by the word "consolidated," shall have the meaning
given to such term herein as to Borrower and all entities whose accounts,
financial results or position, for financial accounting purposes, are
consolidated with those of Borrower in accordance with GAAP.

1.3. Proforma Calculations. In calculating EBITDA, Adjusted EBITDAR,
Debt Service, Fixed Charges, or Interest Expense, or in making any similar
calculation hereunder, for any Rolling Period, in the event that the Combination
or any acquisition or Sale of Substantial Assets has been consummated during
such Rolling Period, then such calculations shall be made based on proforma
financial statements setting forth the results of operations of Borrower and its
consolidated Subsidiaries as though such Combination, acquisition or Sale of
Substantial Assets had been consummated as of the first day of such Rolling
Period.

SECTION 2

CREDIT FACILITY

2.1. The Facilities.

(a) Revolving Credit Commitment. From time to time prior to
the Termination Date, subject to the provisions below, each Lender severally
agrees to make Advances to Borrower up to its respective Maximum Principal
Amount, which Borrower may repay and reborrow prior to the Termination Date, for
purposes specified in Paragraph 2.4 hereof; provided, however, that the
aggregate outstanding principal amount of such Advances, together with the
undrawn amount of all outstanding Letters of Credit and all unreimbursed draws
on Letters of Credit, shall not exceed at any time the lesser of the Revolving
Credit Commitment or the Borrowing Base.

(b) Term Loan. On the Effective Date, each Lender severally
agrees to advance to Borrower its Maximum Principal Amount with respect to the
Term Loan, in the aggregate amount of Fifty Million Dollars ($50,000,000).

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<PAGE>

2.2. Promissory Notes. The Indebtedness of the Borrower to each
Lender under the Revolving Credit Loan will be evidenced by a Revolving Credit
Note executed by Borrower in favor of such Lender, and the Indebtedness of the
Borrower to each Lender under the Term Loan will be evidenced by a Term Note
executed by Borrower in favor of such Lender. The original principal amount of
each Lender's Revolving Credit Note and Term Note will be in the amount
identified in Schedule 1 attached hereto as its Maximum Principal Amount with
respect to the Revolving Credit Loan and the Term Loan, respectively; provided,
however, that notwithstanding the face amount of each such Note, Borrower's
liability thereunder shall be limited at all times to the actual indebtedness,
principal, interest, fees and expenses then outstanding to such Lender under the
Revolving Credit Loan and the Term Loan, respectively.

2.3. Lenders' Participation. Lenders shall be lenders in the Loans in
the Maximum Principal Amounts and Pro Rata Shares set forth in Schedule 1
attached hereto.

2.4. Use of Proceeds. Funds advanced under the Loans shall be used
solely to finance a portion of the purchase price, transaction expenses and fees
with respect to the Combination, to refinance certain existing indebtedness, and
for the working capital needs and general corporate purposes of the Companies.

2.5. Repayment.

(a) Revolving Credit Loan. Subject to certain mandatory
prepayments as set forth in Paragraph 2.9 hereof, the aggregate outstanding
principal balance under the Revolving Credit Loan on the Termination Date,
together with all interest, fees and costs due hereunder, shall be due and
payable in full on such Termination Date. Notwithstanding the immediately
preceding sentence, the aggregate outstanding balance of the Revolving Credit
Loan shall be due and payable immediately upon acceleration of the Revolving
Credit Loan in accordance with Paragraph 7.2 hereof.

(b) Term Loan. Subject to certain mandatory prepayments as set
forth in Paragraph 2.9 hereof, the Term Loan shall be payable in quarterly
installments as follows:

Scheduled Payment Date Amount of Payment

March 31, 1999 $1,562,500
June 30, 1999 $1,562,500
September 30, 1999 $1,562,500
December 31, 1999 $1,562,500

March 31, 2000 $2,187,500
June 30, 2000 $2,187,500
September 30, 2000 $2,187,500
December 31, 2000 $2,187,500

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<PAGE>

March 31, 2001 $2,500,000
June 30, 2001 $2,500,000
September 30, 2001 $2,500,000
December 31, 2001 $2,500,000

March 31, 2002 $3,125,000
June 30, 2002 $3,125,000
September 30, 2002 $3,125,000
December 31, 2002 $3,125,000

March 31, 2003 $3,125,000
June 30, 2003 $3,125,000
September 30, 2003 $3,125,000
December 31, 2003 $3,125,000

Notwithstanding the foregoing, the entire outstanding balance of the Term Loan
shall be due and payable immediately upon the acceleration of the Term Loan in
accordance with Paragraph 7.2 hereof.

2.6. Interest. Portions of the Loans shall bear interest on
the outstanding principal amount thereof in accordance with the following
provisions:

(a) Interest on Loan.

(i) At the Borrower's election in accordance with the
provisions of Paragraph 2.6(b) below, in the absence of an Event of Default
hereunder and prior to maturity or judgment, and subject to clause (ii) below,
any Portion of the Loans shall bear interest at either of the following rates:

(A) Base Rate. The Base Rate plus the Applicable
Margin.

(B) Adjusted Libor Rate. The Adjusted Libor Rate plus
the Applicable Margin.

(ii) Notwithstanding the foregoing, upon the
occurrence and during the continuance of an Event of Default hereunder,
including after maturity and upon judgment, Borrower hereby agrees to pay to
Lenders interest (A) on any outstanding Libor Portion, at the rate which is two
percent (2%) per annum in excess of the Adjusted Libor Rate plus the Applicable
Margin for each such Libor Portion through the end of the applicable Interest
Period, and thereafter, at the rate of two percent (2%) per annum in excess of
the Base Rate plus the Applicable Margin, and (B) on any Base Rate Portion, at
the rate of two percent (2%) per annum in excess of the Base Rate plus the
Applicable Margin.

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<PAGE>

(b) Procedure for Determining Interest Periods and Rates of
Interest.

(i) If Borrower elects the rate based on the Base Rate to
be applicable to a Portion, Borrower must notify Agent of such election in
writing prior to eleven o'clock (11:00) a.m. Philadelphia time one (1) Business
Day prior to the proposed application of such rate. If Borrower elects the rate
based on the Adjusted Libor Rate to be applicable to a Portion, Borrower must
notify Agent of such election and the Interest Period selected prior to eleven
o'clock (11:00) a.m. Philadelphia time at least three (3) London Business Days
prior to the commencement of the proposed Interest Period. If Borrower does not
provide notice for the rate based on the Adjusted Libor Rate, then Borrower
shall be deemed to have requested that the rate based on the Base Rate shall
apply to any Portion as to which the Interest Period is expiring and to any new
Advance of the Revolving Credit Loan until Borrower shall have given proper
notice of a change in or determination of the rate of interest in accordance
with this Paragraph 2.6(b).

(ii) Borrower shall not elect more than six (6) different
Libor Portions to be applicable to the Loans at one time. Any Base Rate Portion
shall be in an amount equal to Five Hundred Thousand Dollars ($500,000) or an
even multiple of One Hundred Thousand Dollars ($100,000) in excess thereof, and
any Libor Portion shall be in an amount equal to Two Million Five Hundred
Thousand Dollars ($2,500,000) or an even multiple of One Hundred Thousand
Dollars ($100,000) in excess thereof.

(c) Payment and Calculation of Interest. With respect to
Portions which bear interest at the rate based on the Adjusted Libor Rate,
interest shall be due and payable on the last day of each Interest Period for
each such Portion, and, in the case of a Portion with an Interest Period of six
(6) months, on the ninetieth (90) day after the commencement of such Interest
Period and on the last day of the Interest Period. With respect to Portions
which bear interest at the rate based on the Base Rate, interest shall be due
and payable on the last Business Day of each March, June, September and
December. Interest shall be calculated in accordance with the provisions of
Paragraph 2.6(b) hereof; all interest shall be calculated on the basis of the
actual number of days elapsed over a year of 360 days in the case of interest
based on the Adjusted Libor Rate, or over a year of 365 or 366 days, as
applicable, in the case of interest based on the Base Rate.

(d) Reserves. If at any time when a Portion is subject to the
rate based on the Adjusted Libor Rate, a Lender (or a bank Affiliate of such
Lender) is subject to and incurs a Reserve, other than a Reserve Percentage
included in the calculation of the applicable Adjusted Libor Rate, Borrower
hereby agrees to pay within five (5) Business Days of demand thereof from time
to time, as billed by Agent on behalf of itself or any other Lender, such amount
as is necessary to reimburse such Lender (or such Lender's bank Affiliate) for
its costs in maintaining such Reserve. Such amount shall be computed by taking
into account the cost incurred by such Lender (or such Lender's bank Affiliate)
in maintaining such Reserve in an amount equal to such Lender's ratable share of
the Portion on which such Reserve is incurred, which computation shall be set
forth in any such demand by Agent on behalf of itself or any other Lender. The
determination by Agent or any Lender of such costs

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<PAGE>

incurred and the allocation of such costs among Borrower and other customers
which have similar arrangements with such Lender (or such Lender's bank
Affiliate) shall be prima facie evidence of the correctness of the fact and the
amount of such additional costs. Upon notification to Borrower of any payment
required pursuant to this Paragraph 2.6(d), Borrower (A) shall make such payment
in accordance with the provisions hereof, and (B) may repay the Portion of the
Loans with respect to which such payment is required, subject to the
requirements of Paragraph 2.9 and 2.10 hereof.

(e) Special Provisions Applicable to Adjusted Libor Rate. The
following special provisions shall apply to the Adjusted Libor Rate:

(i) Change of Adjusted Libor Rate. The Adjusted Libor Rate
may be automatically adjusted by Agent on a prospective basis to take into
account the additional or increased cost of maintaining any necessary reserves
for Eurodollar deposits or increased costs due to changes in applicable law or
regulation or the interpretation thereof occurring subsequent to the
commencement of the then applicable Interest Period, including but not limited
to changes in tax laws (except changes of general applicability in corporate
income tax laws) and changes in the reserve requirements imposed by the Board of
Governors of the Federal Reserve System (or any successor), excluding the
Reserve Percentage and any Reserve which has resulted in a payment pursuant to
subparagraph (d) above, that increase the cost to Lenders of funding the Loans
or a portion thereof bearing interest based on the Adjusted Libor Rate. Agent
shall give Borrower notice of such a determination and adjustment, which
determination shall be prima facie evidence of the correctness of the fact and
the amount of such adjustment. Borrower may, by notice to Agent, (A) request
Agent to furnish to Borrower a statement setting forth the basis for adjusting
such Adjusted Libor Rate and the method for determining the amount of such
adjustment; and/or (B) repay the Portion of the Loans with respect to which such
adjustment is made, subject to the requirements of Paragraph 2.9 and 2.10
hereof.

(ii) Unavailability of Eurodollar Funds. In the event that
Borrower shall have requested the rate based on the Adjusted Libor Rate in
accordance with Paragraph 2.6(b) and any Lender (or such Lender's bank
Affiliate) shall have reasonably determined that Eurodollar deposits equal to
the amount of the principal of the Portion and for the Interest Period specified
are unavailable, or that the rate based on the Adjusted Libor Rate will not
adequately and fairly reflect the cost of making or maintaining the principal
amount of the Portion specified by Borrower during the Interest Period
specified, or that by reason of circumstances affecting Eurodollar markets,
adequate and reasonable means do not exist for ascertaining the rate based on
the Adjusted Libor Rate applicable to the specified Interest Period, such Lender
shall give notice to Agent and Agent shall promptly give notice of such
determination to Borrower that the rate based on the Adjusted Libor Rate is not
available. A determination by such Lender (or such Lender's bank Affiliate)
hereunder shall be prima facie evidence of the correctness of the fact and
amount of such additional costs or unavailability. Upon such a determination,
(i) the obligation to advance or maintain Portions at the rate based on the
Adjusted Libor Rate shall be suspended until Agent shall have notified Borrower
and Lenders that such conditions shall have ceased to exist, and (ii) the rate
based on the Base Rate

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<PAGE>

shall be applicable to all such Portions.

(iii) Illegality. In the event that it becomes unlawful for a
Lender (or such Lender's bank Affiliate) to maintain Eurodollar liabilities
sufficient to fund any Portion of the Loans subject to the rate based on the
Adjusted Libor Rate, then such Lender shall immediately notify Borrower thereof
(with a copy to Agent) and such Lender's obligations hereunder to advance or
maintain advances at the rate based on the Adjusted Libor Rate shall be
suspended until such time as such Lender (or such Lender's bank Affiliate) may
again cause the rate based on the Adjusted Libor Rate to be applicable to any
Portion of the outstanding principal balance of the Loans and any such Lender's
share of any Portion shall then be subject to the rate based on the Base Rate.

2.7. Advances.

(a) Advance Request. Borrower shall give Agent written
notice, not later than eleven o'clock (11:00) a.m. Philadelphia time one (1)
Business Day prior to the proposed Advance in the case of an advance to bear
interest based on the Base Rate, and three (3) Business Days prior to an advance
to bear interest based on the Adjusted Libor Rate, of each requested Advance
under the Revolving Credit Commitment specifying the date, amount and purpose
thereof. Such notice shall be in the form of the Advance Request Form attached
hereto as Exhibit A-1, shall be certified by the chief financial officer of
Borrower, and shall contain the following information and representations, which
shall be deemed affirmed and true and correct as of and upon receipt of the date
of and upon receipt of the requested Advance:

(i) the aggregate amount of the requested Advance, which
shall be no less than $2,500,000 in the case of an Advance to bear interest
based on the Adjusted Libor Rate and no less than $500,000 in the case of an
Advance to bear interest based on the Base Rate, and in either case shall be in
an even multiple of $100,000;

(ii) confirmation of the interest rate(s) elected by the
Borrower to apply to each Advance, and, if applicable, the Interest Period
elected by the Borrower to apply to each Libor Portion to be advanced;

(iii) confirmation of Borrower's compliance with Paragraphs
5.14 through 5.19 as of the most recently ended fiscal quarter for which a
Compliance Certificate has been (or is required to have been) delivered, and
taking into account any Advances, including the requested Advance, and payments
since such date;

(iv) confirmation of Borrower's compliance with the Borrowing
Base, as of the end of the most recent month for which a Borrowing Base
Certificate has been (or is required to have been) delivered, and taking into
account any Advances, including the requested Advance, and payments since such
date;

(v) statements that the representations and warranties set
forth

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<PAGE>

herein and in the other Loan Documents are true and correct as of the date
thereof; no Event of Default or Default hereunder has occurred and is then
continuing or will be caused by the requested Advance; and there has been no
Material Adverse Effect since the date of this Agreement and no event or
circumstance (or combination of events or circumstances) has occurred which is
reasonably likely to have a Material Adverse Effect.

(b) Procedures.

(i) Upon receiving a request for an Advance in accordance
with subparagraph (a) above, Agent shall request by prompt notice to Lenders
that each Lender advance funds to Agent so that each Lender participates in the
requested Advance in the same percentage as it participates in the Revolving
Credit Commitment. Each Lender shall advance its applicable percentage of the
requested Advance to Agent by delivering federal funds immediately available at
Agent's offices prior to twelve o'clock (12:00) noon Philadelphia time on the
date of the Advance. Subject to the satisfaction of the terms and conditions
hereof, Agent shall make the requested Advance available to Borrower by
crediting such amount to Borrower's deposit account with Agent not later than
two o'clock (2:00) p.m. on the day of the requested Advance; provided, however,
that in the event Agent does not receive a Lender's share of the requested
Advance by such time as provided above, Agent shall not be obligated to advance
such Lender's share.

(ii) Unless Agent shall have been notified by a Lender prior
to the date such Lender's share of any such Advance is to be made by such Lender
that such Lender does not intend to make its share of such requested Advance
available to Agent, Agent may assume that such Lender has made such proceeds
available to Agent on such date, and Agent may, in reliance upon such assumption
(but shall not be obligated to), make available to Borrower a corresponding
amount. If such corresponding amount is not in fact made available to Agent by
such Lender on the date the Advance is made, Agent shall be entitled to recover
such amount on demand from such Lender (or, if such Lender fails to pay such
amount forthwith upon such demand, from Borrower) together with interest thereon
in respect of each day during the period commencing on the date such amount was
made available to Borrower and ending on (but excluding) the date Agent recovers
such amount, from such Lender, at a rate per annum equal to the effective rate
for overnight federal funds in New York as reported by the Federal Reserve
Lender of New York for such day (or, if such day is not a Business Day, for the
next preceding Business Day) and from Borrower, at a rate per annum based on the
Base Rate as provided in Paragraph 2.6(a) hereof.

(c) Requests Irrevocable. Each request for an Advance pursuant
to this Paragraph 2.7 shall be irrevocable and binding on Borrower. In the case
of any Advance bearing interest at the rate based upon the Adjusted Libor Rate,
Borrower shall indemnify Lenders against any loss, cost or expense incurred by
Lender as a result of not borrowing such funds on the requested Advance date,
including as a result of any failure to fulfill on or before the date specified
in such request for an Advance the applicable conditions set forth in Section
Four hereof, including, without limitation, any loss, cost or expense incurred
by reason of the liquidation or redeployment of deposits or other funds acquired
by Lenders to fund the

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Advance to be made by Lenders when such Advance, as a result of such failure, is
not made on such date, as calculated by Agent in accordance with Exhibit D
attached hereto.

2.8. Reduction and Termination of Commitment.

(a) Borrower. Borrower shall have the right at any time and
from time to time, upon three (3) Business Days' prior written notice to Agent,
to reduce the Revolving Credit Commitment in increments of Five Million Dollars
($5,000,000) or multiples thereof without penalty or premium, provided that on
the effective date of such reduction Borrower shall make a prepayment of the
Revolving Credit Loan in an amount, if any, by which the aggregate outstanding
principal balance of the Revolving Credit Loan exceeds the amount of the
Revolving Credit Commitment as then so reduced, together with accrued interest
on the amount so prepaid and any amounts due pursuant to Paragraph 2.10 hereof.

(b) Lenders. Required Lenders shall have the right to
terminate the Revolving Credit Commitment at any time, in their discretion and
upon notice to Borrower, upon the occurrence of any Event of Default hereunder
(except if an Event of Default described in Paragraph 7.1(i) shall occur, in
which case termination of the Revolving Credit Commitment shall occur
automatically without notice).

(c) Restoration Only With Consent. Any termination or
reduction of the Revolving Credit Commitment pursuant to subparagraphs 2.8(a)
and (b) shall result in a pro rata reduction in each Lender's Maximum Principal
Amount with respect thereto. Any termination or reduction of the Revolving
Credit Commitment shall be permanent, and the Revolving Credit Commitment and
respective Maximum Principal Amounts cannot thereafter be restored or increased
without the written consent of all affected Lenders.

2.9. Prepayment.

(a) Voluntary Prepayments. Upon one (1) Business Day's prior
written notice by Borrower to Agent, Borrower may repay all or any portion of
the outstanding principal balance under the Revolving Credit Loan or the Term
Loan without premium or penalty, provided that any such payment shall include
all accrued interest on the amount prepaid plus any amounts which may be due
pursuant to Paragraph 2.10 hereof. Any such payments made with respect to the
Revolving Credit Loan prior to the Termination Date shall not reduce the
Revolving Credit Commitment and may be reborrowed in accordance with this
Agreement. Any such payment with respect to the Term Loan shall be applied to
the scheduled installments thereof in the inverse order of maturity.

(b) Mandatory Payments.

(i) In addition to any other required payments hereunder,
Borrowers shall make principal payments on the Loans in the circumstances and in
the amounts set forth below:

(A) Asset Dispositions. In connection with each Sale

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<PAGE>

of Material Assets (it being understood and agreed that any such Sale of
Material Assets shall require the approval of Required Lenders, except to the
extent expressly authorized pursuant to Paragraph 6.7 hereof), the Net Cash
Proceeds to the seller of such transaction shall be paid directly to Agent for
the account of Lenders and applied to the Loans as set forth in subparagraph (D)
below; provided, however, (i) that insurance proceeds with respect to damage or
destruction of property shall not be required to be applied to the Loans
pursuant hereto if such proceeds are used to repair or replace such property
within sixty (60) days after receipt by Borrower or its Subsidiaries and (ii)
that the proceeds of the sale of the Rogers Building in Charlotte, North
Carolina pursuant to Paragraph 6.7 hereof shall be applied first to payment of
the mortgage thereon, and then to distribution to certain shareholders of
Rogers-American.

(B) New Debt. In the event a Borrower incurs Indebtedness
consented to by Required Lenders which is not otherwise permitted pursuant to
Paragraph 6.1 hereof, the net cash proceeds of such Indebtedness shall be paid
directly to Agent for the account of the Lenders and applied to the Loan as set
forth in subparagraph (D) below.

(C) Equity Issuance. In connection with any issuance of
equity by the Borrower after the date of this Agreement, other than pursuant to
the exercise of the underwriter's overallotment with respect to the Initial
Offering, the net cash proceeds to the Borrower of such issuance shall be paid
directly to Agent for the account of the Lenders and applied to the Loan as set
forth in subparagraph (D) below.

(D) Application of Payments.
Payments made pursuant to subparagraph 2.9(b)(i)(A) through (C) above shall be
applied first to the outstanding principal balance of the Term Loan in the
inverse order of maturity of the installments thereof, and then to the
outstanding principal balance of the Revolving Credit Loan

(ii) Underwriter's Overallotment. If the actual price per share in
the Initial Offering is less than the anticipated price range as indicated in
the Registration Statement for the Initial Offering, then the net cash proceeds
to the Borrower from exercise of the underwriter's overallotment with respect to
the Initial Offering shall be applied to repayment of the Term Loan in the
inverse order of maturity of the installments thereof. If the actual price per
share in the Initial Offering is within or above the anticipated price range as
indicated in the Registration Statement for the Initial Offering, then Required
Lenders may require the net cash proceeds to the Borrower from exercise of the
underwriter's overallotment to be applied to repayment of the Revolving Credit
Loan.

(iii) Excess Cash Flow. Until the Term Loan has been repaid in full,
at the time of delivery of a Compliance Certificate with respect to each fiscal
year, commencing with the fiscal year ending December 31, 1999, Borrower shall
make a prepayment in an amount equal to seventy-five percent (75%) of Excess
Cash Flow for such fiscal year, such payment to be applied to the Term Loan in
the inverse order of maturity of

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<PAGE>

the installments thereof.

(iv) Additional Requirements. Any payments pursuant to this
Paragraph 2.9(b) shall be accompanied by all accrued and unpaid interest and
fees in connection with the amount prepaid (including any amount payable under
Paragraph 2.10 hereof); provided, however, that in the absence of an Event of
Default or Default hereunder the Borrower shall be entitled to determine the
order in which Portions of the applicable Loan shall be repaid pursuant to such
payments. Any payments with respect to the Revolving Credit Loan prior to the
Termination Date shall not reduce the Revolving Credit Commitment and may be
reborrowed in accordance with this Agreement.

(c) Borrowing Base. If at any time the aggregate outstanding
principal balance of the Revolving Credit Loan, together with the undrawn amount
of outstanding Letters of Credit and any unreimbursed draws under Letters of
Credit, is in excess of the Borrowing Base, Borrower shall immediately make a
prepayment of the Revolving Credit Loan in accordance with subparagraph (a)
above in an amount sufficient to reduce the balance of the Revolving Credit
Loan, together with the undrawn amount of outstanding Letters of Credit and any
unreimbursed draws under Letters of Credit, to an amount less than or equal to
the Borrowing Base, together with interest on the amount prepaid through the
date or prepayment and any amounts owed pursuant to Paragraph 2.10 hereof.

2.10. Funding Costs and Loss of Earnings. In the event that
Borrower shall have requested the Adjusted Libor Rate to be applicable to a
Portion to be Advanced and Borrower shall revoke the request for such Advance or
shall fail to meet the conditions to such Advance as set forth in Section Four
hereof, and in connection with any prepayment or repayment of a Portion bearing
interest at the rate based on the Adjusted Libor Rate made on other than the
last day of the applicable Interest Period, whether such prepayment or repayment
is voluntary, mandatory, by demand, acceleration or otherwise, Borrower shall
pay to Lenders all reasonable funding costs and loss of earnings which may arise
in connection with such revocation of request for or failure to meet the
conditions to such Advance or such prepayment or repayment, as calculated by
Agent in accordance with Exhibit D hereto.

2.11. Payments. All payments of principal, interest, fees and
other amounts due hereunder, including any prepayments thereof, shall be made by
Borrower to Agent for the account of Lenders in immediately available funds
before two o'clock (2:00) p.m., Philadelphia time, on any Business Day at the
office of Agent set forth on Schedule 1 hereto. Borrower hereby authorizes Agent
to charge Borrower's account with Agent for all payments of principal, interest
and fees when due hereunder.

2.12. Commitment Fee. Borrower shall pay to Agent, for the
benefit of Lenders in accordance with their Pro Rata Shares, a non-refundable
commitment fee at the rate of half of one percent (1/2%) per annum on the
unborrowed portion of the Revolving Credit Commitment from the date hereof
through the Termination Date (as calculated by Agent), which fees shall be
payable at the offices of Agent quarterly in arrears on the last day of each
March, June, September, and December and on the Termination Date. The commitment
fee

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<PAGE>

shall be calculated on the basis of the actual number of days elapsed over a
year of three hundred sixty (360) days.

2.13. Agent's Fees. Borrower shall pay to Agent fees as agreed
between Borrower and Agent.

2.14. Regulatory Changes in Capital Requirements. If any
Lender shall have determined that the adoption or the effectiveness after the
date hereof of any law, rule, regulation or guideline regarding capital
adequacy, or any change in any of the foregoing or in the interpretation or
administration of any of the foregoing by any governmental authority, central
Lender or comparable agency charged with the interpretation or administration
thereof, or compliance by such Lender (or any lending office of such Lender) or
such Lender's holding company with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Lender's capital or on the capital of such Lender's holding
company, as a consequence of this Agreement, the Revolving Credit Commitment,
Advances or the Loans to a level below that which such Lender or its holding
company could have achieved but for such adoption, change or compliance (taking
into consideration such Lender's policies and the policies of such Lender's
holding company with respect to capital adequacy) by an amount deemed by such
Lender to be material, then from time to time Borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender or its holding
company for any such reduction suffered together with interest on each such
amount from the date demanded until payment in full thereof at the rate provided
in Paragraph 2.6(a)(ii) hereof with respect to amounts not paid when due. Such
Lender will notify Borrower of any event occurring after the date of this
Agreement that will entitle such Lender to compensation pursuant to this
Paragraph 2.14 as promptly as practicable after it obtains knowledge thereof and
determines to request such compensation, and such compensation shall not be
charged for any period more than three (3) months prior to the date of such
notice.

A certificate of such Lender setting forth such amount or
amounts as shall be necessary to compensate such Lender or its holding company
as specified above shall be delivered to Borrower and shall be conclusive absent
manifest error, if calculated and charged in a manner consistent with similar
charges made by such Lender to its other customers having similar arrangements
with such Lender. Borrower shall pay such Lender the amount shown as due on any
such certificate delivered by such Lender within ten (10) days after its receipt
of the same.

Failure on the part of any Lender to demand compensation for
increased costs or reduction in amounts received or receivable or reductions in
return on capital with respect to any period shall not constitute a waiver of
such Lender's right to demand compensation with respect to any other period
except as otherwise limited by the terms of this Paragraph 2.14.

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<PAGE>

SECTION 2A

LETTERS OF CREDIT

2A.1. Availability of Credits. Subject to the terms and conditions
set forth herein, Lenders shall from time to time prior to the Termination Date
participate in the issuance by Agent of Letters of Credit for the account of
Borrower on the following terms and conditions:

(a) at the time of issuance of the Letter of Credit, the
lesser of (x) the unborrowed portion of the Revolving Credit Commitment or (y)
the available Borrowing Base, shall equal or exceed the sum of the amount
available to be drawn under such Letter of Credit and the amount available to be
drawn under and any unreimbursed draws under all other Letters of Credit;

(b) at the time of issuance of the Letter of Credit, the
amount available
to be drawn under such Letter of Credit and all other Letters of Credit then
outstanding hereunder plus any unreimbursed draws under all other Letters of
Credit shall not exceed, in the aggregate, the Letter of Credit Sublimit;

(c) except as provided in clause (d) below, the final
expiration date of each Letter of Credit shall be on or before the earlier of
(i) one year from the date of issuance thereof or (ii) the Termination Date;

(d) "evergreen" letters of credit with automatic renewal
provisions may be issued on terms and conditions reasonably satisfactory to
Agent;

(e) there shall not exist at the time of issuance of the
Letter of Credit, or as a result thereof, any Default or Event of Default; and

(f) each Letter of Credit issued under this Section 2A shall
be for the legitimate business purposes of a Borrower or a Guarantor.

Upon issuance of each Letter of Credit by Agent, each Lender shall
have a participating interest therein based on its percentage share of the
Revolving Credit Commitment as set forth in Paragraph 2.3 hereof.

2A.2. Commitment Availability. The amount available under the
Revolving Credit Commitment as from time to time in effect shall be reduced by
the amount available to be drawn under all outstanding Letters of Credit and
unreimbursed amounts of any draws under Letters of Credit. The amount by which
the Revolving Credit Commitment is so reduced shall not be available for
advances under Paragraph 2.7 hereof, except advances thereunder which are made
to reimburse Agent for draws under the Letters of Credit as permitted pursuant
to Paragraph 2A.4(b) hereof.

2A.3. Approval and Issuance.

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<PAGE>

(a) Borrower shall provide Agent not less than three (3) Business
Days' prior written notice of each request for the issuance of a Letter of
Credit by delivery of a Letter of Credit Request Form, which shall be certified
by the chief financial officer of Borrower, and shall, in addition to the
matters described in Paragraph 2.7(a) hereof, list all Letters of Credit
outstanding for the account of Borrower at that time and, for each Letter of
Credit so listed, its face amount, outstanding undrawn balance and expiration
date. It shall be a condition to the issuance of any Letter of Credit that Agent
shall have received a Letter of Credit Request Form as described above and such
letter of credit application and agreement as Agent shall reasonably require in
connection therewith, and that the conditions set forth in Paragraph 4.2 shall
be satisfied.

(b) Agent will promptly provide to Lenders written (including fax)
or telephonic notification of Agent's receipt of the Letter of Credit Request
Form which shall state (i) the amount of the Letter of Credit requested and (ii)
the expiration date of the requested Letter of Credit.

2A.4. Obligations of the Borrower.

(a) Borrower agrees to pay to Agent in connection with each Letter
of Credit issued hereunder: (i) immediately upon the demand of Agent on behalf
of all Lenders, the amount paid by each Lender with respect to such Letter of
Credit; (ii) immediately upon demand of Agent, the amount of any draft presented
purporting to be drawn under such Letter of Credit provided that the draft and
accompanying documents conform to the terms of the Letter of Credit but subject
to the terms of Paragraph 2A.7 (whether or not Agent has at such time honored
such draft) and any other amounts paid thereunder (it being understood that
Agent is not required to make demand upon or proceed against any Lender or other
party or to resort to any Collateral before obtaining payment from Borrower);
(iii) on the date of issuance of each Letter of Credit and on the effective date
of any renewal or extension of any Letter of Credit a fee of one-eighth of one
percent (y%) of the outstanding face amount of such Letter of Credit, payable to
Agent for its own account; (iv) quarterly in arrears a non-refundable fee for
the benefit of Lenders in accordance with each Lender's percentage share of the
Revolving Credit Commitment as set forth on Schedule 1 attached hereto at a rate
per annum equal to the Applicable Margin with respect to Libor Portions under
the Revolving Credit Loan on the outstanding face amount of such Letter of
Credit; and (v) interest on any indebtedness outstanding with respect to such
Letter of Credit, whether for funds paid on drafts on such Letter of Credit, or
otherwise (but such indebtedness shall not include undrawn balances of such
Letter of Credit issued hereunder) at the rate applicable to Base Rate Portions
under the Revolving Credit Loan under Paragraph 2.6(a)(i)(A) hereof from the
date of payment by Agent or Lenders (if not reimbursed by Borrower on the same
day) to the date one (1) Business Day after notice to Borrower of such payment,
and thereafter at the rate applicable to such Base Rate Portions under Paragraph
2.6(a)(ii) hereof. Interest under the preceding clause (v) shall be paid at the
times and in the manner set forth in Paragraph 2.6 hereof, and shall accrue on
amounts paid on a Letter of Credit (if not reimbursed by Borrower on the same
day) from the date of payment by Agent or Lenders, whether or not demand is
made, until such amounts are reimbursed by Borrower whether before, at or after
demand.

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<PAGE>

(b) On or before the Termination Date, in the absence of a Default
or Event of Default, and subject to the provisions of Paragraph 2.7 hereof,
Lenders hereby agree to advance funds to Borrower under the Revolving Credit
Loan to make the payments required under Paragraphs 2A.4(a)(i) and (ii) hereof.
If any payment by the Agent of a draft drawn under a Letter of Credit is for any
reason (including without limitation the occurrence or continuation of a Default
or Event of Default hereunder) not reimbursed prior to or on the date of such
payment, the amount of such payment shall thereupon be deemed for purposes
hereof an advance under Paragraph 2.7 hereof. Such reimbursement obligation
shall be repayable, prepayable, and otherwise subject to all the terms and
conditions thereof as if advanced by Lenders pursuant to Paragraph 2.7 hereof
(but without duplication).

2A.5. Payment by Lenders on Letters of Credit.

(a) With respect to each Letter of Credit issued hereunder,
each Lender agrees that it is irrevocably obligated to pay to Agent, for each
such Letter of Credit, such Lender's Pro Rata Share of each and every payment
made or to be made by Agent under such Letter of Credit (each such payment to be
made, a "LOC Contribution"). Each Lender's LOC Contribution shall be due from
such Lender immediately upon, and in any event no later than the same day as,
receipt of written notice (which may be sent by telex or telecopier) from Agent
(except that if such notice is received after 3:00 p.m. on any Business Day,
payment may be made on the following Business Day, together with interest equal
to the effective rate for overnight funds in New York as reported by the Federal
Reserve Bank of New York for such day (or, if such day is not a Business Day,
for the next preceding Business Day)) that (i) it has made a payment or (ii) a
draft has been presented purporting to be drawn on a Letter of Credit issued
hereunder. Such payment shall be made at Agent's offices in immediately
available federal funds.

(b) The obligation of each Lender to make its LOC Contribution
hereunder is absolute, continuing and unconditional, and Agent shall not be
required first to make demand upon or proceed against Borrower or any guarantor
or surety, or any others liable with respect to the applicable Letter of Credit
and shall not be required first to resort to any Collateral. LOC Contributions
shall be made without regard to termination of this Agreement or the Revolving
Credit Commitment, the existence of an Event of Default or Default hereunder,
the acceleration of indebtedness hereunder or any other event or circumstance.

2A.6. Collateral Security.

(a) The indebtedness, liabilities and obligations of Borrower
under this Section 2A, however created or incurred, whether now existing or
hereafter arising, due or to become due, absolute or contingent, direct or
indirect, secured or unsecured, are among the obligations secured by the
security interests, liens and encumbrances created by the Collateral Security
Documents delivered to Agent by Borrower, and Agent and the Lenders are entitled
to the benefit of the collateral security granted thereunder with respect to
such indebtedness.

(b) Notwithstanding the payment in full of the Loans, the
termination of the Revolving Credit Commitment or the occurrence of the
Termination Date, unless and until

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<PAGE>

Borrower shall have provided the collateral in the form of cash or U.S. Treasury
bills as required by subparagraph (c) below, the Collateral shall continue to
secure the indebtedness, liabilities and obligations of Borrower under this
Section 2A until all Letters of Credit shall have expired and all indebtedness,
liabilities and obligations under this Section 2A shall have been paid in full.

(c) On the termination of the Revolving Credit Commitment or the
occurrence of an Event of Default, Required Lenders may require (and in the case
of an Event of Default occurring under Paragraph 7.1(i) it shall be required
automatically) that Borrower deliver to Agent, cash or U.S. Treasury Bills with
maturities of not more than 90 days from the date of delivery (discounted in
accordance with customary banking practice to present value to determine amount)
in an amount equal at all times to one hundred ten percent (110%) of the
outstanding undrawn amount of all Letters of Credit, such cash or U.S. Treasury
Bills and all interest earned thereon to constitute cash collateral for all such
Letters of Credit. At such time as such collateral is required to be and has not
been deposited, Agent on behalf of Lenders shall be entitled to liquidate such
of the other collateral for the Loans (if any) as is necessary or appropriate in
its sole judgment so as to create such cash collateral.

(d) Any cash collateral deposited under subparagraph (c) above,
and all interest earned thereon, shall be held by Agent and invested and
reinvested at the expense and the written direction of Borrower, in U.S.
Treasury Bills with maturities of no more than ninety (90) days from the date of
investment.

2A.7. General Terms of Credits. In addition to the terms of
the applicable letter of credit application and agreement, the following terms
and conditions apply with respect to each Letter of Credit (a "Credit")
notwith-stand-notwithstanding anything to the contrary contained herein:

(a) Borrower assumes all risks of the acts or omissions of the
beneficiary of each Credit with respect to the use of the Credit or with respect
to the beneficiary's obligations to Borrower. None of the Lenders (other than
First Union in its capacity as Agent) nor any of their officers or directors
shall be liable or responsible for, and the Lenders hereby agree to indemnify
and hold Agent harmless (except for Agent's gross negligence or willful
misconduct) with respect to: (i) the use which may be made of the Credit or for
any acts or omissions of the beneficiary in connection therewith; (ii) the
accuracy, truth, validity, sufficiency or genuineness of documents, or of any
endorsement thereon, even if such documents should in fact prove to be in any or
all respects false, misleading, inaccurate, invalid, insufficient, fraudulent,
or forged; (iii) the payment by Agent against presentation of documents which do
not comply with the terms of the Credit, including failure of any documents to
bear any reference or adequate reference to a Credit; (iv) any other
circumstances whatsoever in making or failing to make payment under a Credit; or
(v) any inaccuracy, interruption, error or delay in transmission or delivery of
correspondence or documents by post, telegraph or otherwise. In furtherance and
not in limitation of the foregoing, Agent may after good faith inspection accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary.

(b) Notwithstanding the foregoing, with respect to any Credit,
Borrower shall

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<PAGE>

have a claim against Agent, and Agent shall be liable to Borrower, to the
extent, but only to the extent, of any direct, as opposed to indirect or
consequential, damages suffered by Borrower caused by the Agent's willful
misconduct or gross negligence.

(c) To the extent not inconsistent with this Agreement, the
Uniform Customs and Practices for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500, are hereby made a part of
this Agreement with respect to obligations in connection with each Credit.

SECTION 3

REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants to Lenders as follows:

3.1. Organization and Good Standing. Each Company is a corporation duly
formed and validly existing under the laws of its jurisdiction of formation as
set forth on Exhibit C, and each has the power and authority to carry on its
business as now conducted and is qualified to do business in the states
indicated on Exhibit C which constitute, except as to failures to qualify which
do not, either singly or in the aggregate, have a Material Adverse Effect, all
states in which the nature of its business or the ownership of its properties
requires such qualification.

3.2. Power and Authority; Validity of Agreement. Each Company has the
power and authority under applicable law and under its organizational documents
to enter into and perform the Loan Documents to the extent that it is a party
thereto; and all actions necessary or appropriate for the execution and
performance by the Companies of the Loan Documents have been taken, and, upon
their execution, the same will constitute the valid and binding obligations of
the Companies to the extent it is a party thereto, enforceable in accordance
with their terms, except as such enforceability may be limited by bankruptcy or
equitable principles applicable to the enforcement of creditors' rights
generally.

3.3. No Violation of Laws or Agreements. The making and performance of
the Loan Documents by the Companies will not violate any provisions of any law
or regulation, federal, state or local, or its partnership agreement, or result
in any breach or violation of, or constitute a default under, any material
agreement or instruments by which any Company or its property may be bound.

3.4. Material Contracts. Except as set forth on Exhibit C attached
hereto, there exists no material default under any contracts material to the
businesses of the Companies or their Subsidiaries.

3.5. Compliance.

(a) Each of the Companies and their Subsidiaries is in compliance
with all applicable laws and regulations, federal, state and local (including
without limitation those

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<PAGE>

administered by the Local Authorities), except for such failure to comply as
could not, either singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect;

(b) The Companies and their Subsidiaries possess all the franchises,
permits, licenses, certificates of compliance and approval and grants of
authority, necessary or required in the conduct of their respective businesses
as of the date hereof; and except as identified on Exhibit C attached hereto, as
of the date hereof all such franchises, permits, licenses, certificates and
grants are valid, binding, enforceable and subsisting without any defaults
thereunder or enforceable adverse limitations thereon and are not subject to any
proceedings or claims opposing the issuance, development or use thereof or
contesting the validity thereof, except to the extent that the failure to obtain
or maintain any of the foregoing could not, either singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect; and

(c) No authorization, consent, approval, waiver, license or formal
exemptions from, nor any filing, declaration or registration with, any court,
governmental agency or regulatory authority (federal, state or local) or non-
governmental entity, under the terms of contracts or otherwise, is required by
the Companies by reason of or in connection with the Companies' execution and
performance of the Loan Documents, except those which have been obtained.

3.6. Litigation. There are no actions, suits, proceedings or claims
which are pending or, to the best of the Companies' knowledge or information,
threatened against any Company or any Subsidiary which, if adversely resolved,
would have a Material Adverse Effect.

3.7. Each of the Companies and their Subsidiaries has good and
marketable title to all of its properties and assets material to the conduct of
its business, free and clear of any liens and encumbrances except the security
interests granted under the Collateral Security Documents, liens and
encumbrances permitted pursuant to Paragraph 6.4 hereof and the liens and
security interests identified on Exhibit C attached hereto. All such assets are
fully covered by the insurance required under Paragraph 5.8 hereof.

3.8. Accuracy of Information; Full Disclosure.

(a) All information furnished to Lenders concerning the financial
condition of the Companies has been prepared in accordance with GAAP and fairly
present in all material respects the financial condition of the Companies as of
the dates and for the periods covered and discloses all liabilities of the
Companies required to be disclosed in accordance with GAAP, except that interim
statements do not have footnotes and are subject to year-end adjustments, and
there has been no material adverse change in the financial condition or business
of the Companies from the date of such statements to the date hereof; and

(b) All financial statements and other documents furnished by the
Companies to Lenders pursuant to this Agreement and the other Loan Documents do
not and will not contain any untrue statement of material fact or omit to state
a material fact necessary in order to make the statements contained herein and
therein not misleading. The Companies have disclosed to the

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<PAGE>

Lenders in writing any and all facts which materially and adversely affect the
business, properties, operations or condition, financial or otherwise, of the
Companies considered as a whole, or the Companies' ability to perform their
obligations under this Agreement and the other Loan Documents.

3.9. Taxes and Assessments.

(a) Each Company and each Subsidiary has filed all required tax
returns or has filed for extensions of time for the filing thereof, and has paid
all applicable federal, state and local taxes, other than taxes not yet due or
which may be paid hereafter without penalty; provided that no such taxes shall
be required to be paid if they are being contested in good faith by appropriate
proceedings and are covered by appropriate reserves maintained in accordance
with GAAP; and there is no material tax deficiency or additional assessment in
connection therewith not provided for in the financial statements required
hereunder.

(b) Each Company and each Subsidiary has properly withheld all
amounts required by law to be withheld for income taxes and unemployment taxes
including without limitation, all amounts required with respect to social
security and unemployment compensation, relating to its employees, and has
remitted such withheld amounts in a timely manner to the appropriate taxing
authority, agency or body.

3.10. Indebtedness. The Companies and their Subsidiaries have no
presently outstanding Indebtedness or obligations, including contingent
obligations and obligations under leases of property from others, except the
Indebtedness and obligations described in Exhibit C hereto, and indebtedness
permitted pursuant to Paragraph 6.1 hereof.

3.11. Management Agreements. No Company is a party to any management
or consulting agreements for the provision of senior executive services to such
Company except as described on Exhibit C hereto.

3.12. Investments. Each direct and indirect Subsidiary of Borrower is
identified on Exhibit C attached hereto, which indicates the number of shares
and classes of the capital stock, membership interests, partnership interests or
other equity interests, as applicable, of each such Subsidiary, and the
ownership thereof. No Company has any other Subsidiaries or any investments in
or loans to any other individuals or business entities except for loans and
investments permitted pursuant to Paragraphs 6.3 or 6.8 hereof.

3.13. ERISA. Each of the Companies, their Subsidiaries and
each ERISA Affiliate is in compliance in all material respects with all
applicable provisions of ERISA and the regulations promulgated thereunder; and,

(a) No Company nor any Subsidiary or ERISA Affiliate maintains or
contributes to or has maintained or contributed to any multiemployer plan (as
defined in section 4001 of ERISA) under which any Company, any Subsidiary or any
ERISA affiliate could have any withdrawal liability which could reasonably be
expected to have a Material Adverse Effect;

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<PAGE>

(b) No Company nor any Subsidiary or ERISA Affiliate, sponsors or
maintains any Plan under which there is an accumulated funding deficiency within
the meaning of (s)412 of the Code, whether or not waived which could reasonably
be expected to have a Material Adverse Effect;

(c) The aggregate liability for accrued benefits and other
ancillary benefits under each defined benefit pension Plan that is sponsored or
maintained by any Company, any Subsidiary or any ERISA Affiliate (determined on
the basis of the actuarial assumptions prescribed for valuing benefits under
terminating single-employer defined benefit plans under Title IV of ERISA) does
not exceed the aggregate fair market value of the assets under each such defined
benefit pension Plan by an amount which could reasonably be expected to have a
Material Adverse Effect;

(d) The aggregate liability of each Company, and each Subsidiary
or ERISA Affiliate arising out of or relating to a failure of any Plan to comply
with the provisions of ERISA or the Code, is not an amount which could
reasonably be expected to have a Material Adverse Effect; and

(e) There does not exist any unfunded liability (determined on the
basis of actuarial assumptions utilized by the actuary for the Plan in preparing
the most recent Annual Report) of any Company or any Subsidiary or ERISA
Affiliate under any Plan providing post-retirement life or health benefits which
could reasonably be expected to have a Material Adverse Effect.

3.14. Fees and Commissions. The Companies owe no brokers' or
finders' fees or commissions of any kind, and know of no claim for any brokers'
or finders' fees or commissions, in connection with the Companies' obtaining the
Revolving Credit Commitment or the Loans from Lenders, except those provided
herein.

3.15. No Extensions of Credit for Securities. The Companies are
not now, nor at any time have they been engaged principally, or as one of their
respective important activities, in the business of extending or arranging for
the extension of credit, for the purpose of purchasing or carrying any margin
stock or margin securities; nor will the proceeds of the Loans be used by any
Company directly or indirectly, for such purposes.

3.16. Perfection of Security Interest. Upon the filing of UCC
financing statements with respect to the collateral covered by the Security
Agreement in the jurisdictions identified on Exhibit C attached hereto, and
taking of possession by the Agent of the certificates evidencing the shares
pledged pursuant to the Pledge Agreement, Agent, for the benefit of Lenders, has
a perfected, first-priority security interest and lien on the Collateral covered
by the Security Agreement and the Pledge Agreement.

3.17. Hazardous Wastes, Substances and Petroleum Products.
Except as otherwise set forth on Exhibit C attached hereto:

(a) Each Company and each Subsidiary (i) has received all
permits and filed all notifications required by the Environmental Control
Statutes to carry on its respective business(es);

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<PAGE>

and (ii) is in compliance with all Environmental Control Statutes.

(b) No Company or Subsidiary has given any written or oral
notice, or failed to give any required notice, to the EPA or any state or local
agency with regard to any actual or imminently threatened Release of Hazardous
Substances on properties owned, leased or operated by such Company or used in
connection with the conduct of its business and operations which could
reasonably be expected to have a Material Adverse Effect.

(c) No Company or Subsidiary has received notice that it is
potentially responsible for clean-up, remediation, costs of clean-up or
remediation, fines or penalties with respect to any actual or imminently
threatened Release of Hazardous Substances pursuant to any Environmental Control
Statute which could reasonably be expected to have a Material Adverse Effect.

3.18. Solvency. To the best of each Company's knowledge, each
Company is, and after receipt and application of the first Advance under this
Agreement will be, solvent such that (i) the fair value of its assets (including
without limitation the fair salable value of the goodwill and other intangible
property of such Company) is greater than the total amount of its liabilities,
including without limitation, contingent liabilities, (ii) the present fair
salable value of its assets (including without limitation the fair salable value
of the goodwill and other intangible property of such Company) is not less than
the amount that will be required to pay the probable liability on their debts as
they become absolute and matured, and (iii) it is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business. No Company intends
to, nor believes that it will, incur debts or liabilities beyond its ability to
pay as such debts and liabilities mature, and no Company is engaged in a
business or transaction, or about to engage in a business or transaction, for
which its property would constitute unreasonably small capital after giving due
consideration to the prevailing practice and industry in which it is engaged.
For purposes of this Paragraph 3.18, in computing the amount of contingent
liabilities at any time, it is intended that such liabilities will be computed
at the amount which, in light of all the facts and circumstances existing at
such time, represents the amount that reasonably can be expected to become an
actual matured liability of the applicable Company.

Each Company hereby agrees that to the extent a Company shall have paid
more than its proportionate share of any payment made hereunder or under the
Guaranty, such Company shall be entitled to seek and receive contribution from
and against any other Company who has not paid its proportionate share of such
payment; provided however such Company shall not seek any such contribution from
any other Company until the Loans have been paid in full and all commitments of
the Lenders hereunder have been terminated. The provisions of this paragraph
shall in no respect limit the obligations and liabilities of any Company to the
Agent and the Lenders and each Company shall remain liable to the Agent and the
Lenders for the full amount of its obligations hereunder and under the Guaranty.

3.19. Employee Controversies. There are no material controversies
pending or, to the knowledge of the Companies, threatened or anticipated between
any Company and any of its respective employees, and there are no labor
disputes, grievances, arbitration proceedings or any

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<PAGE>

strikes, work stoppages or slowdowns pending, or to the Companies' knowledge,
threatened between any Company and its respective employees and representatives,
which in either event could impair the ability of the Company to perform their
obligations under the Loan Documents, or which might reasonably be expected to
have a Material Adverse Effect.

SECTION 4

CONDITIONS

4.1. Effectiveness. The effectiveness of this Agreement shall be subject to
Agent's receipt of the following documents and satisfaction of the following
conditions, each in form and substance satisfactory to Agent:

(a) Promissory Notes. The Notes duly executed by Borrower.

(b) Guaranty. A Guaranty Agreement executed by Merkert
Enterprises and Rogers-American, and their respective Material Subsidiaries,
jointly and severally, in favor of Lenders.

(c) Authorization Documents. A certificate of the secretary of
each Company attaching and certifying as to (i) the certificate or articles of
incorporation and bylaws of such Company; (ii) resolutions or other evidence of
authorization by the board of directors of such Company, authorizing its
execution and full performance of Loan Documents and all other documents and
actions required hereunder; and (iii) incumbency certificates setting forth the
name, title and specimen signature of each officer of such Company who is
authorized to execute the Loan Documents on behalf of such entity.

(d) Good Standing. Certificates of good standing or the
equivalent for each Company in its state of formation and each of the states in
which it is qualified to do business.

(e) Opinions of Counsel. Opinion letters from counsel for the
Companies as may be reasonably satisfactory to Agent.

(f) Borrowing Base Certificates. A Borrowing Base certificate in
the form of Exhibit F attached hereto calculated as of November 30, 1998, for
the Borrower and its consolidated Subsidiaries on a pro forma basis based on
consummation of the Combination.

(g) Financial Statements. Audited combined and combining
financial statements for the past three years and for the nine month period
ended September 30, 1998, preferred on a proforma basis for the Borrower and its
consolidated Subsidiaries after giving effect to the Combination; and
calculation of the ratio of Senior Debt to Proforma EBITDA for the most recent
Rolling Period [as of September 30, 1998, adjusted to give effect to the first
Advance hereunder, consummation of the Initial Offering, and all repayments of
outstanding Indebtedness being made with the proceeds of the Initial Offering
and the first Advance hereunder,] which ratio shall be not in excess of 3.0
to 1.

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<PAGE>

(h) Fees and Expenses. Payment of all fees required by
Paragraphs 2.12 and 2.13 hereof.

(i) Searches. Uniform Commercial Code, tax and judgment searches
against the Companies, with results satisfactory to Agent, in those offices and
jurisdictions as Agent shall reasonably request.

(j) Security Agreement. A Security Agreement executed by each of
the Companies in favor of Agent, for the benefit of Lenders, granting Agent, for
the benefit of Lenders, a lien on all assets of the Companies as Collateral for
the Senior Obligations, together with UCC financing statements in such
jurisdictions and landlord waivers and such other documents and instruments as
Agent shall reasonably require, all in form and substance satisfactory to
Lenders.

(k) Pledge Agreement. Duly executed and delivered Pledge
Agreements pledging all of the issued and outstanding shares of capital stock of
each direct and indirect Subsidiary of Borrower, together with the stock
certificates evidencing the pledged shares and stock powers duly endorsed in
blank.

(l) Blocked Account Agreements. Blocked account agreements in
favor of Agent with each institution with which any Company maintains a deposit
account.

(m) Interest Rate Protection. Interest rate protection
agreements entered into by Borrower in a form acceptable to Agent and from one
or more of the Lenders or an institution acceptable to Agent, with respect to at
least fifty percent (50%) of the Term Loan and for a period of at least three
years; provided, however, that (a) the protected rate shall be no greater than
1.50% above the all-in rate on the date hereof; (b) Borrower hereby grants a
security interest in the Collateral to the Agent for the benefit of such Lenders
as security for Borrower's obligations with respect to any such interest rate
protection agreements, which security interest shall be pari passu with the
security interests of Agent for the benefit of such Lenders for Borrower's
obligations under the Loan Documents; and (c) all documentation for such
interest rate protection shall conform to ISDA standards and must be acceptable
to Agent with respect to intercreditor issues.

(n) Financial Projections. Projections for Borrower and its
consolidated Subsidiary for the period through December 31, 2005, certified by
the chief financial officer of Borrower as constituting a good faith projection
based upon assumptions believed to be reasonable.

(o) Initial Offering; Combination. The Initial Offering shall
have been completed and Borrower shall have received not less than Fifty-Five
Million Dollars ($55,000,000) in gross proceeds therefrom (excluding the
underwriter's overallotment); and the Combination shall be consummated
simultaneously with the first Advance, which first Advance shall not exceed (in
addition to the amount of the Term Loan) Twelve Million Dollars ($12,000,000).

(p) Repayment of Existing Debt. All outstanding bank debt, all
existing seller notes, and all tax liabilities, shall have been paid in full or
be repaid out of the first Advance,

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<PAGE>

except for (i) up to $5,900,000 principal amount of seller note which may remain
outstanding provided that such seller notes shall be unsecured and shall be on
terms satisfactory to Agent; (ii) pending tax liability for fiscal years 1995
through 1997, providing that such liability has been reserved for and Three
Million Dollars ($3,000,000) shall have been placed in an escrow fund held by
Agent, to provide for payment of such tax liabilities; and (iii) mortgage debt
approved by Agent.

(q) Subordination Agreements. Subordination Agreements executed
by any creditor with respect to seller notes which are to remain outstanding
hereunder.

(r) Litigation and Arbitration. All litigation and/or
arbitration with sellers to Merkert Enterprises and Rogers-American described in
the Registration Statement shall have been settled on terms satisfactory to
Agent or funds necessary for the settlement of such matters in an amount
satisfactory to Agent shall have been placed in an escrow fund held by Agent.

(s) Consents. Receipt of all required consents and approvals
under applicable law or contract.

(t) Other Documents. Such additional documents as Agent
reasonably may request.

4.2. Advances. The obligation of Lenders to make Advances under the
Revolving Credit Commitment shall be subject to Borrower's compliance with
Paragraph 2.7 hereof and it shall be a condition to Lenders' obligation
hereunder to make any such Advance that (a) the representations and warranties
set forth herein and in the other Loan Documents shall be true and correct as if
made on the date of such Advance, (b) no Event of Default or Default shall have
occurred and not have been waived on the date of such Advance or be caused by
such Advance, (c) all fees required pursuant to Paragraphs 2.11, 2.12 and 2.13
hereof have been paid as and when due, and (d) there shall have been no Material
Adverse Effect since the date of this Agreement, and no event or circumstance
(or combination of events or circumstances) shall have occurred which is
reasonably likely to have a Material Adverse Effect.

SECTION 5

AFFIRMATIVE COVENANTS

Borrower covenants and agrees that so long as the Revolving Credit
Commitment of Lenders to Borrower or any Indebtedness of Borrower to Lenders is
outstanding, each of the Companies will and will cause each of its Subsidiaries
(and with respect to Paragraph 5.13, will cause each ERISA Affiliate) to:

5.1. Existence and Good Standing. Preserve and maintain (a) its
existence as a corporation and its good standing in all states in which it
conducts business and (b) the effectiveness and validity of all its franchises,
licenses, permits, certificates of compliance or grants of authority required in
the conduct of its business, except for such instances of ineffectiveness or
invalidity as would not, either singly or in the aggregate, have a Material

35
<PAGE>

Adverse Effect.

5.2. Interim Financial Statements. Furnish to each Lender within
thirty (30) days after the end of each of the first three quarterly periods in
each fiscal year of Borrower, unaudited quarterly consolidated and consolidating
financial statements, in form and substance as reasonably required by Agent,
including (i) a consolidated balance sheet, (ii) a consolidated statement of
income, and (iii) a statement of cash flows, prepared in accordance with GAAP
consistently applied (except that such interim statements need not contain
footnotes and may be subject to year-end adjustments).

5.3. Annual Financial Statements. Furnish to each Lender within
one hundred twenty (120) days after the close of each fiscal year audited
consolidated and consolidating annual financial statements, including the
information required under Paragraph 5.2 hereof, which financial statements
shall be prepared in accordance with GAAP and shall be certified without
qualification (except with respect to changes in GAAP as to which Borrower's
independent certified public accountants have concurred) by an independent
certified public accounting firm reasonably satisfactory to Agent; and cause
Agent to be furnished, at the time of the completion of the annual audit, with
copies of any management letters prepared by such accountants and with a
certificate signed by such accountants to the effect that to the best of their
knowledge there exists no Event of Default or Default hereunder.

5.4. Compliance Certificate. At the time of delivery of financial
statements pursuant to Paragraph 5.2 and 5.3 hereof, deliver to Lenders a
certificate in the form of Exhibit E attached hereto executed by the chief
financial officer of Borrower, showing the calculation of the covenants set
forth in Paragraph 5.14 through 5.19 hereof.

5.5. Additional Reports.

(a) Within fifteen (15) days after the end of each month,
furnish to Lenders (i) a Borrowing Base Certificate in the form of Exhibit F
attached hereto, and (ii) a schedule and aging report with respect to accounts
receivable and payable of Borrower and its consolidated Subsidiaries, in form
and substance satisfactory to Agent.

(b) On or before November 1 of each year, deliver to Lenders,
in form satisfactory to Agent, a business plan for the following year approved
by the Board of Directors of Borrower.

5.6. Public Information. Deliver to Lenders promptly upon
transmission thereof, copies of all financial statements, proxy statements,
notices and reports, and copies of any registration statement or annual or
quarterly reports, if any, filed with the Securities and Exchange Commission (or
successor entity) or sent to shareholders of Borrower.

5.7. Books and Records. Keep and maintain satisfactory and
adequate books and records of account in accordance with GAAP and make or cause
the same to be made available to Agent or its agents or nominees at any
reasonable time upon reasonable notice for inspection and to make extracts
thereof and permit Agent or its agents or nominees to discuss contents of

36
<PAGE>

same with senior officers of Borrower and also with outside auditors and
accountants of Borrower.

5.8. Insurance. Keep and maintain all of its property and assets
in good order and repair and covered by insurance with reputable and financially
sound insurance companies against such hazards and in such amounts as is
customary in the industry, under policies requiring the insurer to furnish
reasonable notice to Agent and opportunity to cure any non-payment of premiums
prior to termination of coverage and naming Agent, for the benefit of Lenders,
as loss payee and additional insured.

5.9. Litigation; Event of Default. Notify Lenders in writing
immediately of the institution of any litigation, the commencement of any
administrative proceedings, the happening of any event or the assertion or
threat of any claim, to the extent that any of the foregoing, could reasonably
be expected to have a Material Adverse Effect, or the occurrence of any Event of
Default or Default hereunder.

5.10. Taxes. Pay and discharge all taxes, assessments or other
governmental charges or levies imposed on it or any of its property or assets
prior to the date on which any penalty for non-payment or late payment is
incurred, unless the same are currently being contested in good faith by
appropriate proceedings, diligently prosecuted and covered by appropriate
reserves maintained in accordance with GAAP.

5.11. Costs and Expenses. Pay or reimburse Agent for all
reasonable out-of-pocket costs and reasonable expenses (including but not
limited to reasonable attorneys' fees and disbursements) Agent may reasonably
pay or incur in connection with the preparation and review of this Agreement and
all waivers, consents and amendments in connection therewith and all other
documentation related thereto, and the making of the Loan hereunder, and pay or
reimburse Lenders for all costs, liabilities and expenses (including but not
limited to reasonable attorneys' fees and disbursements) associated with the
collection or enforcement of the same, including without limitation any fees and
disbursements incurred in defense of or to retain amounts of principal, interest
or fees paid or in connection with any audit or examination of the Companies.
All obligations provided for in this Paragraph 5.11 shall survive any
termination of this Agreement or the Revolving Credit Commitment and the
repayment of the Loan.

5.12. Compliance; Notification.

(a) Comply in all material respects with all local, state and
federal laws and regulations applicable to its business (and in all respects
with the Environmental Control Statutes), including without limitation all laws
and regulations of the Local Authorities, and with the provisions and
requirements of all franchises, permits, certificates of compliance, approval
and need issued by regulatory authorities and with other like grants of
authority held by any Company; and notify Lenders immediately in detail of any
actual or alleged failure to comply with or perform, breach, violation or
default under any such laws or regulations or under the terms of any of such
franchises, licenses or grants of authority, or of the occurrence or existence
of any facts or circumstances which with the passage of time, the giving of
notice or otherwise could create such a breach, violation or default or could
occasion the termination of any of such franchises,

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<PAGE>

licenses or grants of authority, to the extent that any of the foregoing could
have a Material Adverse Effect.

(b) With respect to the Environmental Control Statutes,
immediately notify Agent when, in connection with the conduct of the Companies'
business(es) or operations, any person (including, without limitation, EPA or
any state or local agency) provides oral or written notification to any Company,
or any Company otherwise becomes aware, of a condition with regard to an actual
or imminently threatened Release of Hazardous Substances which could reasonably
be expected to have a Material Adverse Effect; and notify Agent in detail
immediately upon the receipt by a Company of an assertion of liability under the
Environmental Control Statutes, of any actual or alleged failure to comply with,
failure to perform, breach, violation or default under any such statutes or
regulations which could reasonably be expected to have a Material Adverse Effect
or of the occurrence or existence of any facts, events or circumstances which
with the passage of time, the giving of notice, or both, could create such a
failure to breach, violation or default.

5.13. ERISA. (a) Comply in all material respects with the
provisions of ERISA to the extent applicable to any Plan maintained for the
employees of any Company or any ERISA Affiliate; (b) do or cause to be done all
such acts and things that are required to maintain the qualified status of each
Plan and tax exempt status of each trust forming part of such Plan; (c) not
incur any material accumulated funding deficiency (within the meaning of ERISA
and the regulations promulgated thereunder), or any material liability to the
PBGC (as established by ERISA); (d) not permit any event to occur with respect
to any Plan sponsored by any Company or any ERISA Affiliate (i) as described in
Section 4042 of ERISA or (ii) which may result in the imposition of a lien on
its properties or assets; and (e) notify Agent in writing promptly after it has
come to the attention of senior management of any Company of the written
assertion or threat of any event described in Section 4042 of ERISA (relating to
the soundness of a Plan) (including any "reportable event" described in Section
4042(a)(3) of ERISA) or the PBGC's ability to assert a material liability
against it or impose a lien on any Company's, or any ERISA Affiliate's
properties or assets; and (f)refrain from engaging in any prohibited
transactions or actions causing possible liability under Section502 of ERISA.

5.14 Total Debt to EBITDA Ratio. Maintain at all times during the
periods set forth in the left-hand column below, a ratio of (a) Total Debt of
Borrower and its consolidated Subsidiaries to (b) EBITDA of Borrower and its
Consolidated Subsidiaries for the most recent Rolling Period, of not greater
than the ratio set forth in the right-hand column below:

Period Ratio
------ -----

Date hereof through 12/31/99 4.00 to 1

[insert step downs]

5.15. Senior Debt to EBITDA. Maintain at all times during the
periods set forth in

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<PAGE>

the left-hand column below a ratio of Senior Debt of Borrower and its
consolidated Subsidiaries to EBITDA of Borrower and its consolidated
Subsidiaries for the most recent Rolling Period, of not greater than the ratio
set forth in the right-hand column below:

Period Ratio
------ -----
Date hereof through 12/31/98 3.25 to 1

[insert step downs]

5.16. Minimum EBITDA. Maintain at all times during the periods set
forth in the left-hand column below EBITDA of Borrower and its consolidated
Subsidiaries for the most recent Rolling Period, of not less than the amount set
forth in the right-hand column below:

Period Ratio

[insert required amounts]

5.17. Minimum Debt Service Coverage Ratio. Maintain at all times a
ratio of EBITDA to Debt Service for Borrower and its consolidated Subsidiaries
for the most recent Rolling Period of not less than ________ to 1.

5.18. Minimum Fixed Charge Coverage Ratio. Maintain at all times a
ratio of Adjusted EBITDAR to Fixed Charges for Borrower and its consolidated
Subsidiaries for the most recent Rolling Period of not less than ________ to 1.

5.19. Borrowing Base. Maintain at all times the outstanding
principal balance of the Loan in an amount less than or equal to the Borrowing
Base.

5.20. Management Changes. Notify Agent in writing within ten
(10) Business Days after any change of its senior executive management.

5.21. Transactions Among Affiliates. Cause all transactions
between and among it and its Affiliates, other than transactions among the
Companies, to be on an arms-length basis and on such terms and conditions as are
customary in the applicable industry between and among unrelated entities.

5.22. Joinders, etc. If any Subsidiary becomes a Material
Subsidiary or if a new Material Subsidiary is formed or acquired, execute or
cause such Material Subsidiary to execute, as applicable, a joinder to the
Guaranty and the Security Agreement by such Material Subsidiary, a supplement to
the Pledge agreements or an additional Pledge Agreement pledging all of the
shares of stock of such Material Subsidiary, and such other documents as Agent
may reasonably require in connection therewith, including without limitation
UCC-1 financing statements,

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<PAGE>

secretary's certificates and opinions of counsel.

5.23. Additional Collateral Security Documents. Execute, deliver,
file and record such additional documents, instruments or agreements as Agent
shall reasonably require from time to time in order to perfect, maintain,
protect or realize upon the Collateral, including without limitation additional
UCC financing statements, landlord waivers and consents and other documentation
as may be required in connection with the establishment by a Company of
additional inventory locations.

5.24. Other Information. Provide any Lender with any other
documents and information, financial or otherwise, reasonably requested by such
Lender from time to time.

SECTION 6

NEGATIVE COVENANTS

So long as any Revolving Credit Commitment or any Indebtedness of
Borrower to Lenders remains outstanding hereunder, Borrower covenants and agrees
that without Required Lenders' prior written consent, each Company and its
Subsidiaries will not:

6.1. Indebtedness. Borrow any monies or create or permit to exist
any Indebtedness except: (i) the Senior Obligations; (ii) trade Indebtedness in
the normal and ordinary course of business for value received; (iii)
Indebtedness and obligations incurred to purchase or lease fixed or capital
assets, provided, that the aggregate outstanding principal amount of such
indebtedness and obligations shall not exceed in the aggregate One Million Five
Hundred Thousand Dollars ($1,500,000) outstanding at any time; (iv) Subordinated
Debt on terms satisfactory to Required Lenders; (v) existing seller obligations
as described on Exhibit C not to exceed Five Million Nine Hundred Thousand
Dollars ($5,900,000), as reduced from time to time by payments thereon; and (vi)
the existing mortgage indebtedness on the buildings in Canton, Massachusetts,
Charlotte, North Carolina described on Exhibit C in the outstanding principal
amount of $______________ and $__________ respectively, as reduced from time to
time by payments thereon, provided that the mortgage indebtedness on the Rogers
Building in Charlotte, North Carolina, so described, shall be paid off in full
upon sale of such building before _______________.

6.2. Guaranties. Guarantee or assume or be or agree to become
liable in any way, either directly or indirectly, for any Indebtedness or
liability of others except: (i) to endorse checks or drafts in the ordinary
course of business and (ii) pursuant to the Guaranty.

6.3. Loans. Make or permit to exist any loans or advances to
others, other than loans or advance by any Company to any other Company.

6.4. Liens and Encumbrances. Create, permit or suffer the
creation or existence of any liens, security interests, or any other
encumbrances on (including any conditional sales arrangement with respect to)
any of its property, real or personal, except the security interests in favor of
the Agent on behalf of Lenders as security for the Loans, and except (i) liens
arising in

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<PAGE>

favor of sellers or lessors for indebtedness and obligations incurred to
purchase or lease fixed or capital assets permitted under Paragraph 6.1(iii)
hereof, provided, however, that such liens secure only the indebtedness and
obligations created thereunder and are limited to the assets purchased or leased
pursuant thereto and the proceeds thereof; (ii) mechanic's and workman's liens,
liens for taxes, assessments or other governmental charges, federal, state or
local, which are then being currently contested in good faith by appropriate
proceedings and are covered by appropriate reserves maintained in accordance
with GAAP; (iii) pledges or deposits to secure obligations under workmen's
compensation, unemployment insurance or social security laws or similar
legislation; (iv) deposits to secure surety, appeal or custom bonds required in
the ordinary course of business, and (v) the existing mortgage liens pursuant to
the mortgage indebtedness permitted pursuant to Paragraph 6.1(vi) hereof.

6.5. Additional Negative Pledge. Agree or covenant with or promise
any person or entity other than the Lenders that it will not pledge its assets
or properties or otherwise grant any liens, security interests or encumbrances
on its property.

6.6. Restricted Payments.

(a) Make any Restricted Payments[, provided that: (i) so
long as there is no Default or Event of Default hereunder at such time, and such
payment will not create a Default or Event of Default, the Companies may make
regularly scheduled payments of principal and interest on Subordinated Debt, and
(ii) Borrower may make a distribution to certain shareholders of Rogers-American
from the proceeds of the sale of the Rogers Building in Charlotte, North
Carolina, provided that the proceeds of such sale are applied first to the
payoff of the mortgage on such building].

(b) Make any voluntary payment or prepayment of any
Indebtedness other than the Senior Obligations.

6.7. Transfer of Assets; Liquidation.

(a) Sell, lease, transfer or otherwise dispose of all or any
portion of its assets, real or personal, including any sale/leaseback or similar
transaction, other than such transactions in the normal and ordinary course of
business for value received provided, however, that in the absence of an Event
of Default or Default hereunder, Borrower and its Subsidiaries may consummate
the sale of the Rogers Building, in Charlotte, North Carolina, and the
subsequent lease thereof by the Companies as described in the Registration
Statement provided that such sale and leaseback is consummated on or before
__________________; or

(b) discontinue, liquidate, or change in any material
respect any substantial part of its operations or business(es).

6.8. Acquisitions and Investments. Purchase or otherwise acquire
(including without limitation by way of share exchange) any part or amount of
the capital stock, partnership interests, or assets of, or make any investments
in, any other Person; or enter into any new business

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activities or ventures not directly related to its present business; or merge or
consolidate with or into any other Person; or create any Subsidiary; provided,
however that, (i) the Companies may own the Subsidiaries owned by them on the
date hereof as set forth on Exhibit C attached hereto, and may create or form
additional wholly-owned Subsidiaries, subject to compliance with Paragraph 5.22
hereof, if applicable; (ii) Borrowers may make Permitted Investments, subject to
the conditions and limitations set forth in the definition thereof; and (iii)
the Companies (or a newly-formed Subsidiary which shall become a Company
pursuant to Paragraph 5.22 hereof) may make acquisitions if: (A) excluding the
acquisition of Smith Webber and Boos, in the case of any acquisition with
respect to which the aggregate Acquisition Price is in excess of Three Million
Dollars ($3,000,000), or together with the aggregate Acquisition Price of all
other acquisitions consummated after the date of this Agreement and within
twelve months prior to such acquisition is in excess of Twenty Million Dollars
($20,000,000), Required Lenders shall have consented thereto, (B) at least ten
(10) Business Days prior to the consummation of such acquisition, the Company
delivers to Agent a notice of acquisition in the form of Exhibit G setting forth
a description of the material terms of the transaction, together with three (3)
years of historical financial information for the entity to be acquired and pro
forma financial statements for the preceding year and the current year, and a
certificate of the chief financial officer of the Company setting forth the
calculation of the covenants set forth in Paragraphs 5.14 through 5.19 and the
following clause (C) on a pro forma basis for the combined group as of the
consummation of the acquisition and as of the fiscal year end following the
acquisition and certifying as to the matters in clauses (D) and (E) following,
(C) the ratio of Senior Debt to EBITDA, calculated on a pro forma basis to give
effect to the acquisition, will be at the level required pursuant to Paragraph
5.15 hereof, less .25, (D) there is no Event of Default or Default hereunder in
existence at the time of such acquisition or investment or which would be caused
by such acquisition or investment, (E) giving effect to such acquisition, the
representations and warranties set forth in Section 3 hereof will be true and
correct in all material respects as applied to Borrowers and their Subsidiaries
including the acquired company or business (including without limitation the
absence or indebtedness or liens except as permitted pursuant to Paragraphs 6.1
and 6.4 hereof), (E) in the case of the acquisition of stock, the Companies (or
newly-formed Subsidiary which shall become a Company pursuant to Paragraph 5.22
hereof) obtains ownership of not less than one hundred percent (100%) of all
classes of voting securities; and (F) such acquisition or investment has been
approved by the board of directors (or equivalent governing authority) of the
entity to be acquired in office immediately prior to the proposed acquisition.

6.9. Payments to Affiliates. Pay any salaries, compensation,
management fees, consulting fees, service fees, licensing fees, or other similar
payments to Affiliates of any Company other than on an arms-length basis for
value, and on terms and conditions as are customary in the industry between and
among unrelated entities.

6.10. Certain Changes.

(a) Make any change in the fiscal year end
of Borrower; or

(b) enter into any amendments to the financial
covenants, rate or interest, amount or time of payments with respect to other
outstanding Indebtedness.

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6.11. Restrictive Agreements. The Companies will not, and will not
permit any of their Subsidiaries to, directly or indirectly, enter into, incur
or permit to exist any agreement or other arrangement that prohibits, restricts
or imposes any condition upon (a) the ability of any Company or any Subsidiary
to create, incur or permit to exist any lien upon any of its material property
or assets, or (b) the ability of any Subsidiary to pay dividends or other
distributions with respect to any shares of its capital stock or to make or
repay loans or advances to any Company or any other Subsidiary or to guarantee
indebtedness of any Company or any other Subsidiary; provided that the foregoing
shall not apply to restrictions and conditions imposed by law or by this
Agreement.

6.12. Use of Proceeds. Use any of the proceeds of the Loan,
directly or indirectly, to purchase or carry margin securities within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System;
or engage as its principal business in the extension of credit for purchasing or
carrying such securities.

SECTION 7

DEFAULT

7.1. Events of Default. Each of the following events shall be an
Event of Default hereunder:

(a) If Borrower shall fail to pay when due any installment
of principal or any interest, fees, costs, expenses or any other sum payable to
Lenders or Agent under the Senior Obligations; or

(b) If any representation or warranty made herein or in
connection herewith or in any statement, certificate or other document furnished
hereunder is false or misleading in any material respect when made; or

(c) If any Company shall default (after expiration of any
applicable cure or grace periods) in the payment or performance of any
obligation or Indebtedness to another either singly or in the aggregate in
excess of One Hundred Thousand Dollars ($100,000), whether now or hereafter
incurred; or

(d) If there shall be a default in or failure to observe at
any test date the covenants set forth in Paragraphs 5.14 through 5.19 hereof or
in Section 6 hereof; or

(e) If any Company shall default in the performance of any
other agreement or covenant contained herein (other than as provided in
subparagraphs (a), (b) or (d) above) or in any document executed or delivered in
connection herewith, including without limitation with respect to any
Collateral, and such default shall continue uncured for twenty (20) days after
notice thereof to Borrower given by Agent; or

(f) If Borrower shall cease to own, directly or indirectly,
one hundred

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percent (100%) of the outstanding capital stock of each Guarantor; or

(g) If (i) any person or group within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "1934 Act") and
the rules and regulations promulgated thereunder (other than _______________)
shall have beneficial ownership (within the meaning of Rule 13d-3 of the 1934
Act), directly or indirectly, of securities of the Company (or other securities
convertible into such securities within the time specified in Rule 13d-3 of the
1934 Act) representing ten percent (10%) or more of the combined voting power of
all securities of the Borrower entitled to vote in the election of directors
(hereinafter called a "Controlling Person"); or (ii) a majority of the board of
directors of the Borrower shall cease for any reason to consist of (A)
individuals who on the date hereof were serving as directors of Borrower and
(B)individuals who subsequently become members of the Board if such individuals'
nominations for election or elections to the Board are recommended or approved
by a majority of the Board of Directors of the Borrower. For purposes of clause
(i) above, a person or group shall not be a Controlling Person if such person or
group holds voting power in good faith, and not for the purpose of circumventing
this Paragraph 7.1(g) as an agent, bank, broker, nominee, trustee, or holder of
revocable proxies given in response to a solicitation pursuant to the 1934 Act,
for one or more beneficial owners who do not individually, or, if they are a
group acting in concert, as a group, have the voting power specified in clause
(i) above;

(h) If custody or control of any substantial part of the
property of any Company shall be assumed by any governmental agency or any court
of competent jurisdiction at the instance of any governmental agency; if any
license or franchise of a Company shall be suspended, revoked, not renewed or
otherwise terminated the loss of which would reasonably be expected to have a
Material Adverse Effect; or if any material contract (as determined in
accordance with Regulation S-K under the Securities Act of 1933, as amended) is
terminated; or if any governmental regulatory authority or judicial body shall
make any other final non-appealable determination the effect of which would have
Material Adverse Effect; or

(i) If any Company or any Subsidiary becomes insolvent,
bankrupt or generally fails to pay its debts as such debts become due; is
adjudicated insolvent or bankrupt; admits in writing its inability to pay its
debts; or shall suffer a custodian, receiver or trustee for it or substantially
all of its property to be appointed and if appointed without its consent, not be
discharged within thirty (30) days; makes a general assignment for the benefit
of creditors; or suffers proceedings under any law related to bankruptcy,
insolvency, liquidation or the reorganization, readjustment or the release of
debtors to be instituted against it and if contested by it not dismissed or
stayed within thirty (30) days; if proceedings under any law related to
bankruptcy, insolvency, liquidation, or the reorganization, readjustment or the
release of debtors is instituted or commenced by any Company or any Subsidiary;
if any order for relief is entered relating to any of the foregoing proceedings;
if any Company or any Subsidiary shall call a meeting of its creditors with a
view to arranging a composition or adjustment of its debts; or if any Company or
any Subsidiary shall by any act or failure to act indicate its consent to,
approval of or acquiescence in any of the foregoing; or

(j) any event or condition shall occur or exist with respect
to any activity

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<PAGE>

or substance regulated under the Environmental Control Statutes and as a result
of such event or condition, the Companies have incurred or in the opinion of
Borrower are reasonably likely to incur liabilities in the aggregate in excess
of One Hundred Thousand Dollars ($100,000); or

(k) if any judgment, writ, warrant or attachment or execution
or similar process which calls for payment or presents liability in excess of
One Hundred Thousand Dollars ($100,000) shall be rendered, issued or levied
against any Company or its respective property and such process shall not be
paid, waived, stayed, vacated, discharged, settled, satisfied or fully bonded
within sixty (60) days after its issuance or levy unless such judgment is
covered by insurance and the insurer has acknowledged coverage in writing with
respect thereto; or

7.2. Remedies. Upon the happening of any Event of Default and at
any time during the continuance thereof, at the election of Required Lenders,
and by notice by Agent to Borrower (except if an Event of Default described in
Paragraph 7.1(i) shall occur in which case acceleration shall occur
automatically without notice), Required Lenders may declare the entire unpaid
balance, principal, interest and fees, of all Indebtedness of Borrower to
Lenders, hereunder or otherwise, to be immediately due and payable. Upon such
declaration, the Revolving Credit Commitment shall immediately and automatically
terminate and Lenders shall have no further obligation to make any advances and
they shall have the immediate right to enforce or realize on any collateral in a
commercially reasonable manner in any manner or order they deem expedient
without regard to any equitable principles of marshaling or otherwise. Whether
such a declaration has been made by Required Lenders that the Indebtedness is
due and payable following an Event of Default, Required Lenders may terminate
the Revolving Credit Commitments at any time during the continuance of an Event
of Default by notice thereof by Agent to Borrower. In addition to any rights
granted hereunder or in any documents delivered in connection herewith, Lenders
shall have all the rights and remedies granted by any applicable law, all of
which shall be cumulative in nature.

7.3. Right of Set-off. If any obligations hereunder or under any
other Loan Document, including under any interest rate swap or rate protection
agreement with a Lender (collectively, the "Liabilities") shall be due and
payable or any one or more Events of Default shall have occurred and be
continuing, whether or not the Agent shall have made demand under any Loan
Document and regardless of the adequacy of any collateral for the Liabilities or
other means of obtaining repayment of the Liabilities, each Lender shall have
the right, without notice to the Borrower and is specifically authorized hereby
to set-off against and apply to the then unpaid balance of the Liabilities any
items or funds of the Borrower held by each Lender or any affiliate of such
Lender, any and all deposits (whether general or special, time or demand,
matured or unmatured) or any other property of the Borrower including, without
limitation, securities and/or certificates of deposit, now or hereafter
maintained by any Borrower for its or their own account with any Lender or any
affiliate of such Lender, and any other indebtedness at any time held or owing
by any Lender or any affiliate of such Lender, to or for the credit or the
account of Borrower, even if effecting such set-off results in a loss or
reduction of interest or the imposition of a penalty applicable to the early
withdrawal of time deposits. For such purpose, the Lenders shall have, and
Borrower hereby grant to each Lender, a first lien on and security interest in
such deposits, property, funds and accounts and the proceeds thereof.

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<PAGE>

7.4. Turnover of Property Held by Lender's Affiliates. Borrower
further authorizes any affiliate of each Lender, upon the occurrence and during
the continuance of an Event of Default, at the request of any such Lender, and
without notice to Borrower, to turn over to the Agent any property of Borrower,
including, without limitation, funds and securities, held by any Lender's
affiliate for any such Borrower's account and to debit any deposit account
maintained by Borrower with such Lender's affiliate (even if such deposit
account is not then due or there results a loss or reduction of interest or the
imposition of a penalty in accordance with law applicable to the early
withdrawal of time deposits), in the amount requested by the Lenders up to the
amount of the Liabilities, and to pay or transfer such amount or property to the
Agent for application to the Liabilities.

7.5. Remedies Cumulative; No Waiver. The rights, powers and
remedies of the Lenders provided in this Agreement and any in the other Loan
Documents are cumulative and not exclusive of any right, power or remedy
provided by law or equity. No failure or delay on the part of the Agent or any
Lender in the exercise of any right, power or remedy shall operate as a waiver
thereof, nor shall any single or partial exercise preclude any other or further
exercise thereof, or the exercise of any other right, power or remedy.

SECTION 8

AGENCY PROVISIONS

This Section sets forth the relative rights and duties of Agent and Lenders
respecting the Loan and, with the exception of Paragraphs 8.3 and 8.15 hereof,
does not confer any enforceable rights on Borrower against Lenders or create on
the part of Lenders any duties or obligations to Borrower.

8.1. Application of Payments. Agent shall apply all payments of
principal, interest, commitment fee or other amounts hereunder made to Agent by
or on behalf of Borrower with respect to the Loan to Lenders on the basis of
their Pro Rata Shares of the outstanding principal balance of the Loans, except
the fees payable under Paragraph 2.13 hereof, which shall be paid solely to
Agent. Such distribution of payments shall be made promptly in federal funds
immediately available at the office of each Lender set forth above.

8.2. Set-Off. In the event a Lender, by exercise of its right of
set-off, or otherwise, receives any payment of principal or interest, in an
amount greater than its Pro Rata Share of such payment based upon the Lenders'
respective shares of principal Indebtedness outstanding hereunder immediately
before such payment, such Lender shall purchase a portion of the Indebtedness
hereunder owing to each other Lender so that after such purchase each Lender
shall hold its Pro Rata Share of all the Indebtedness then outstanding
hereunder, provided that if all or any portion of such excess payment is
thereafter recovered from such Lender, such purchase shall be rescinded and the
purchase price restored to the extent of any such recovery, but without
interest.

8.3. Modifications and Waivers. No modification or amendment
hereof, consent

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<PAGE>

hereunder or waiver of any Event of Default shall be effective except by written
consent of the Required Lenders; provided, however, that the written consent of
all Lenders shall be required to (i) modify, amend, waive, discharge, terminate
or suspend compliance with (A) any rate of interest applicable to the Loans to
the extent it is proposed to be decreased, (B)the amount of the Revolving Credit
Commitment to the extent it is proposed to be increased, or the Lenders'
respective shares thereof; (C) the date or amounts of payment of the Loans or
interest thereon, to postpone payment thereof, (D)the commitment fee set forth
in Paragraph2.12 hereof or other amounts payable by Borrower hereunder except if
payable solely to the Agent, to the extent any such amount is proposed to be
decreased, (E)the definition of Required Lenders, (F)this Paragraph 8.3, or (G)
the definition of Pro Rata Share; (ii) release all or substantially all of the
Collateral; or (iii)release any Guarantor that is a Material Subsidiary.

8.4. Obligations Several. The obligations of the Lenders hereunder
are several, and each Lender hereunder shall not be responsible for the
obligations of the other Lenders hereunder, nor will the failure of one Lender
to perform any of its obligations hereunder relieve the other Lenders from the
performance of their respective obligations hereunder.

8.5. Lenders' Representations. Each Lender represents and warrants
to the other Lenders that (i) it has been furnished all information it has
requested for the purpose of evaluating its proposed participation under this
Agreement; and (ii) it has decided to enter into this Agreement on the basis of
its independent review and credit analysis of Borrower, this Agreement and the
documentation in connection therewith and has not relied for such analysis on
any information or analysis provided by any other Lender.

8.6. Investigation. No Lender shall have any obligation to the
others to investigate the condition of Borrower or any of the Collateral or any
other matter concerning the Loan.

8.7. Powers of Agent. Agent shall have and may exercise those
powers specifically delegated to Agent herein, together with such powers as are
reasonably incidental thereto.

8.8. General Duties of Agent, Immunity and Indemnity. Upon receipt
of notices and reports delivered by Borrower to the Agent under this Agreement,
the Agent shall promptly deliver the same in the form received to the Lenders.
Required Lenders shall also have the right to request Agent to inspect
Borrower's books and records and take the other steps provided in Paragraph 5.7
hereof. In performing its duties as Agent hereunder, Agent will take the same
care as it takes in connection with loans in which it alone is interested,
subject to the limitations on liabilities contained herein; provided that Agent
shall not be obligated to ascertain or inquire as to the performance of any of
the terms, covenants or conditions hereof by Borrower. Neither Agent nor any of
its directors, officers, agents or employees, shall be liable for any action or
omission by any of them hereunder or in connection herewith except for gross
negligence or willful misconduct. Subject to such exception, each of the Lenders
hereby indemnifies Agent (in its capacity as Agent) on the basis of such
Lender's Pro Rata Share, against any liability, claim, loss or expense arising
from or relating to any action taken or omitted to be taken with respect to this
Agreement, any other Loan Document or the transactions contemplated thereby or
Borrower, to the extent that the Agent has not been reimbursed therefor by
Borrower, without affecting any

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obligation of Borrower to reimburse.

8.9. No Responsibility for Representations or Validity, etc. Each
Lender agrees that Agent shall not be responsible to any Lender for any
representations, statements, or warranties of Borrower herein or in the other
Loan Documents. Neither Agent nor any of its directors, officers, employees or
agents, shall be responsible for the validity, effectiveness, sufficiency,
perfection or enforceability of this Agreement or the other Loan Documents, or
any Collateral, or any documents relating thereto or for the priority of any of
Lenders' security interests in any such Collateral.

8.10. Action on Instruction of Lenders; Right to Indemnity. Agent
shall act upon written instruction of Lenders or Required Lenders, as
appropriate, and in all cases Agent shall be fully protected in acting or
refraining from acting hereunder in accordance with such written instructions to
it signed by Required Lenders unless the consent of all the Lenders is expressly
required hereunder in which case Agent shall be so protected when acting in
accordance with such instructions from all the Lenders. Such instructions and
any action taken or failure to act pursuant thereto shall be binding on all the
Lenders, provided that except as otherwise provided herein, Agent may act
hereunder in its own discretion without requesting such instructions.

8.11. Employment of Agents. In connection with its activities
hereunder, Agent may employ agents and attorneys-in-fact and shall not be
answerable, except as to money or securities received by it or its authorized
agents, for the default or misconduct of agents or attorneys-in-fact selected
with reasonable care.

8.12. Reliance on Documents. Agent shall be entitled to rely upon
(a) any paper or document believed by it to be genuine and correct and to have
been signed or sent by the proper person or persons and (b) upon the opinion of
its counsel with respect to legal matters.

8.13. Agent's Rights as a Lender. With respect to their share of
the indebtedness hereunder, Agent shall have the same rights and powers
hereunder as any other Lender and may exercise the same as though it were not
Agent. Each of the Lenders may accept deposits from and generally engage in
other banking or trust business with Borrower as if it were not Agent or a
Lender hereunder.

8.14. Expenses. Each of the Lenders shall reimburse Agent from
time to time at the request of Agent for its Pro Rata Share of any expenses
incurred by Agent in connection with the performance of its functions hereunder
without affecting any obligation of Borrower to reimburse, provided however that
in the event Lenders shall reimburse Agent for expenses for which Borrower
subsequently reimburses Agent, then Agent shall remit to each Lender the
respective amount received from such Lender against such expenses.

8.15. Resignation of Agent. Agent may at any time resign its
position as Agent, without affecting its position as a Lender, by giving written
notice to Lenders and Borrower. Such resignation shall take effect upon the
appointment of a successor agent in accordance with this Paragraph 8.15. In the
event Agent shall resign, Required Lenders with the consent of Borrower,

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which consent will not be unreasonably withheld, shall appoint a Lender as
successor Agent. If within thirty (30) days of the Agent's notice of resignation
no successor agent shall have been appointed by Lenders and accepted such
appointment, then Agent, in its discretion may appoint any other Lender with
banking powers as a successor agent.

8.16. Successor Agent. The successor Agent appointed pursuant to
Paragraph 8.15 shall execute and deliver to its predecessor and Lenders an
instrument in writing accepting such appointment, and thereupon such successor,
without any further act, deed or conveyance, shall become fully vested with all
the properties, rights, duties and obligations of its predecessor Agent. The
predecessor Agent shall deliver to its successor Agent forthwith all Collateral,
documents and moneys held by it as Agent, if any, whereupon such predecessor
Agent shall be discharged from its duties and obligations as Agent under this
Agreement.

8.17. Collateral Security. Agent will hold, administer and manage
any Collateral pledged from time to time hereunder either in its own name or as
Agent on behalf of the Lenders, but each Lender shall hold a direct, undivided
pro-rata beneficial interest therein, on the basis of its Pro Rata Share, by
reason of and as evidenced by this Agreement.

8.18. Enforcement by Agent. All rights of action under this
Agreement and under the Notes and all rights to the Collateral hereunder may be
enforced by Agent and any suit or proceeding instituted by Agent in furtherance
of such enforcement shall be brought in its name as Agent, without the necessity
of joining as plaintiffs or defendants any other Lenders, and the recovery of
any judgment shall be for the benefit of Lenders subject to the expenses of
Agent.

SECTION 9

MISCELLANEOUS

9.1. Indemnification and Release Provisions. Borrower hereby
agrees to defend Agent and each Lender and their directors, officers, agents,
employees and counsel from, and hold each of them harmless against, any and all
losses, liabilities (including without limitation settlement costs and amounts,
transfer taxes, documentary taxes, or assessments or charges made by any
governmental authority), claims, damages, interest judgments, costs, or
expenses, including without limitation reasonable fees and disbursements of
counsel, incurred by any of them arising out of or in connection with or by
reason of this Agreement, the Revolving Credit Commitment, the making of the
Loans or any Collateral therefor, other than those resulting primarily from any
such party's own wilful misconduct or gross negligence, including without
limitation, any and all losses, liabilities, claims, damages, interests,
judgments, costs or expenses relating to or arising under any Environmental
Control Statute or the application of any such Statute to any of the Companies'
properties or assets. Borrower hereby releases Agent and each Lender and their
directors, officers, agents, employees and counsel from any and all claims for
loss, damages, costs or expenses caused or alleged to be caused by any act or
omission on the part of any of them other than those resulting primarily from
any such party's own wilful misconduct or gross negligence. All obligations
provided for in this Paragraph 9.1 shall survive any termination of this
Agreement or the Revolving Credit Commitment and the repayment of the Loans.

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9.2. Participations and Assignments. Borrower hereby acknowledges
and agrees that a Lender may at any time: (a)grant participations in its share
of the Loans or any Note or of its right, title and interest therein or in or to
this Agreement (collectively, "Participations") to any other lending office or
to any other bank, lending institution or other Person which has the requisite
sophistication to evaluate the merits and risks of investments in Participations
("Participants"); provided, however, that: (i)all amounts payable by Borrower
hereunder shall be determined as if such Lender had not granted such
Participation; and (ii) any agreement pursuant to which any Lender may grant a
Participation: (A) shall provide that such Lender shall retain the sole right
and responsibility to enforce the obligations of Borrower hereunder including,
without limitation, the right to approve any amendment, modification or waiver
of any provisions of this Agreement; (B) may provide that such Lender will not
agree to any modification, amendment or waiver of this Agreement requiring
approval of all Lenders pursuant to Paragraph 8.3 hereof without the consent of
the Participant and (C) shall not relieve such Lender from its obligations,
which shall remain absolute, to make Advances as provided hereunder; and
(b)assign (i) all or any percent of its share of the Loans or any Note or right,
title and interest therein or in and to this Agreement, to (x)a Lender; (y)any
Affiliate of a Lender; or (z)any Federal Reserve Bank; or (ii)all or any part of
its share of the Loans or any Note or right, title and interest therein or in
and to this Agreement to a third party; provided, however, that in the absence
of an Event of Default or Default hereunder no assignment pursuant to (b)(ii)
above shall be made without the prior written consent of the Agent and
Borrowers, which consent shall not be unreasonably withheld. Any participations
and any assignments pursuant to subparagraph (b) shall be in an amount not less
than Five Million dollars ($5,000,000) and, shall not result in the aggregate
Maximum Principal Amount of the assigning Lender being less than Five Million
Dollars ($5,000,000) unless it is reduced to zero (0). Any assignment pursuant
to subparagraph (b) shall require payment by the applicable Lender to Agent of a
$3,500 transfer fee. Any assignment pursuant to subparagraph (b) shall be in the
form attached hereto as Exhibit H.

9.3. Binding and Governing Law. This Agreement and all documents
executed hereunder shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns and, except as may be
required by mandatory provisions of applicable law, shall be governed as to
their validity, interpretation and effect by the laws of the Commonwealth of
Pennsylvania.

9.4. Survival. All agreements, representations, warranties and
covenants of Borrower contained herein or in any documentation required
hereunder shall survive the execution of this Agreement and the making of the
Loan hereunder, and except for Paragraphs 5.11 and 9.1 which provide otherwise
will continue in full force and effect as long as any indebtedness or other
obligation of Borrower to Lenders remains outstanding.

9.5. No Waiver; Delay. If Lenders shall waive any power, right or
remedy arising hereunder or under any applicable law, such waiver shall not be
deemed to be a waiver upon the later occurrence or recurrence of any of said
events with respect to Lenders. No delay by Lenders in the exercise of any
power, right or remedy shall, under any circumstances, constitute or be deemed
to be a waiver, express or implied, of the same and no course of dealing between
the parties hereto shall constitute a waiver of Lenders' powers, rights or
remedies. The remedies

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herein provided are cumulative and not exclusive of any remedies provided by
law.

9.6. Modification; Waiver. Except as otherwise provided in this
Agreement, no modification or amendment hereof, or waiver or consent hereunder,
shall be effective unless made in a writing signed by appropriate officers of
the parties hereto.

9.7. Headings. The various headings in this Agreement are
inserted for convenience only and shall not affect the meaning or interpretation
of this Agreement or any provision hereof.

9.8. Notices. Any notice, request or consent required hereunder
or in connection herewith shall be deemed satisfactorily given if in writing and
delivered by hand, mailed (registered or certified mail) or sent by facsimile
transmission to Agent or Borrower at their respective addresses or telecopier
number set forth below, or to Lenders at their respective addresses or
telecopier numbers set forth on Schedule 1 attached hereto, or to any party at
such other addresses or telecopier numbers as may be given by any party to the
others in writing:

if to Borrower:

Merkert American Corporation
490 Turnpike Street
Canton, MA 02021
Attention:
Telecopier:

if to Agent:

First Union National Bank
1345 Chestnut Street
PA 4843
Philadelphia, PA 19107
Attention: Robert A. Brown
Telephone: (215) 973-1259
Telecopier: (215) 786-2877

9.9. Payment on Non-Business Days. Whenever any payment to be
made hereunder shall be stated to be due on a day other than a Business Day,
such payment may be made on the next succeeding Business Day, provided however
that such extension of time shall be included in the computation of interest due
in conjunction with such payment or other fees due hereunder, as the case may
be.

9.10. Time of Day. All time of day restrictions imposed herein
shall be calculated using Agent's local time.

9.11. Severability. If any provision of this Agreement or the
application thereof to

51
<PAGE>

any person or circumstance shall be invalid or unenforceable to any extent, the
remainder of this Agreement and the application of such provisions to other
persons or circumstances shall not be affected thereby and shall be enforced to
the greatest extent permitted by law.

9.12. Counterparts. This Agreement may be executed in any number
of counterparts with the same effect as if all the signatures on such
counterparts appeared on one document, and each such counterpart shall be deemed
to be an original.

9.13. Consent to Jurisdiction and Service of Process. Each Company
irrevocably appoints each officer of Borrower as its attorney upon whom may be
served any notice, process or pleading in any action or proceeding against it
arising out of or in connection with this Agreement, the Notes, the Loan
Documents or any of the Collateral; each Company hereby consents that any action
or proceeding against it be commenced and maintained in any court within the
Commonwealth of Pennsylvania or in the United States District Court for the
Eastern District of Pennsylvania by service of process on any officer of
Borrower; and each Company agrees that the courts of the Commonwealth of
Pennsylvania and the United States District Court for the Eastern District of
Pennsylvania shall have jurisdiction with respect to the subject matter hereof
and the person of each Company and the Collateral. Notwithstanding the
foregoing, Agent, in its absolute discretion may also initiate proceedings in
the courts of any other jurisdiction in which any Company may be found or in
which any of its properties or Collateral may be located.

9.14. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR THE NOTES OR OTHER LOAN DOCUMENTS OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR
ACTIONS OF AGENT OR LENDERS. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
LENDERS' ENTERING INTO THIS AGREEMENT.

9.15. ACKNOWLEDGMENTS. BORROWER ACKNOWLEDGES THAT IT HAS HAD THE
ASSISTANCE OF COUNSEL IN THE REVIEW AND EXECUTION OF THIS AGREEMENT AND,
SPECIFICALLY, PARAGRAPH 9.14 HEREOF, AND FURTHER ACKNOWLEDGES THAT THE MEANING
AND EFFECT OF THE FOREGOING WAIVER OF JURY TRIAL HAVE BEEN FULLY EXPLAINED TO
BORROWER BY SUCH COUNSEL.

52
<PAGE>

IN WITNESS WHEREOF, the undersigned, by their duly authorized
officers, as applicable, have executed this Agreement the day and year first
above written.

Attest: MERKERT AMERICAN CORPORATION

By: By:
------------------------- ---------------------------
Name: Name:
Title: Title:

FIRST UNION NATIONAL BANK, for itself and
as Agent

By:
---------------------------
Name:
Title:

53
<PAGE>

Schedule 1
----------
<TABLE>
<CAPTION>
Lenders, Pro Rata Shares and
Maximum Principal Amounts

Maximum Principal Amount Pro Rata
Lender Revolving Credit Loan Term Loan Share
------ --------------------- --------- --------
<S> <C> <C> <C>
First Union National Bank $ $ %
1345 Chestnut Street
PA 4830
Philadelphia, PA 19107
Attn: Agency Services
Tel: (215) 973-6621 or 5733
Fax: (215) 973-1887

------------ ----------- --------
TOTAL: $25,000,000 $50,000,000 100.000%
</TABLE>

<PAGE>

Exhibit 10.30

FORM OF SECURITY AGREEMENT

THIS SECURITY AGREEMENT (this "Security Agreement") is made as
of the ___ day of December, 1998 by MERKERT AMERICAN CORPORATION (the
"Borrower"), MERKERT ENTERPRISES, INC. ("Merkert Enterprises"), ROGERS-AMERICAN
Companies, INC. ("Rogers-American"), and _____________ ("_________", and
together with Merkert Enterprises and Rogers-American, the "Guarantors", and
together with the Borrower and the other Guarantors, individually and
collectively, the "Companies") in favor of FIRST UNION NATIONAL BANK, a national
banking association, as agent for the Lenders pursuant to the Credit Agreement
described below ("Agent").

BACKGROUND
----------

A. Borrower has entered into that certain Credit Agreement dated
of even date herewith (as amended, restated or otherwise modified from time to
time, the "Credit Agreement") with for the lenders identified therein (together
with such additional financial institutions as may become Lenders from time to
time as therein provided, "Lenders").

B. Guarantors have executed a Guaranty in favor of the Lenders
dated of even date herewith (as amended, restated or otherwise modified from
time to time, the "Guaranty").

C. As a condition to Lenders' willingness to enter into the
Credit Agreement, the Companies are willing to execute and deliver to Agent this
Security Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the Companies and Agent hereby agree as follows:

A. Definitions. All capitalized terms used and not defined herein shall
-----------
have the respective meaning ascribed thereto in the Credit Agreement. In
addition, as used herein, the following terms shall have the following meanings:

1. Books and Records. The term "Books and Records" means all of
the Companies' books and records, including without
limitation, all books and records indicating, summarizing, or
evidencing the Collateral, including without limitation,
computer runs, invoices, tapes, processing software,
processing contracts (such as contracts for computer time and
services) and any computer prepared information, tapes, or
data of every kind and description relating to the Collateral,
whether in the possession of any Companies or in the
possession of third parties.

2. Collateral. The term "Collateral" means the all present and
future assets of the Companies, whether now owned or hereafter
acquired, and any proceeds
<PAGE>

thereof, including without limitation all accounts, contract
rights, leases, and any other rights of the Companies to
payment for goods sold or leased or for services rendered;
furniture; furnishings; fixtures; equipment; machinery;
accessories; moveable trade fixtures; goods; inventory;
building improvement and construction materials, supplies and
equipment; chattel paper; instruments; documents; funds on
deposit with Lenders and their affiliates; Books and Records,
investment property, securities entitlements, financial assets
and general intangibles; as well as all parts, replacements,
substitutions, profits, products and cash and non-cash
proceeds of the foregoing (including insurance and
condemnation proceeds payable by reason of condemnation of or
loss or damage thereto) in any form and wherever located.

3. Liabilities. The term "Liabilities" means any and all
obligations and indebtedness of every kind and description of
the Companies to the Lenders pursuant to, under, or in
connection with the Loan Documents, whether such debts or
obligations are primary or secondary, direct or indirect,
absolute or contingent, sole, joint or several, secured or
unsecured, due or to become due, contractual or tortious,
arising by operation of law or otherwise, or now or hereafter
existing, whether incurred by any Companies as principal,
surety, endorser, guarantor, accommodation party or otherwise,
including, without limitation, principal, interest and fees,
late fees and expenses (including, attorneys' fees and costs
and/or the allocated fees and costs of Agent's in-house legal
counsel), or that have been or may hereafter be contracted or
incurred, and any obligations of the Companies or any of them
under interest rate protection agreements, swaps, hedging
contracts or similar arrangements with any Lender.

4. Loan Documents. The term "Loan Documents" means this Security
Agreement, the Credit Agreement, the Note, the Guaranty, and
any other documents and agreements executed and delivered in
connection with the Credit Agreement.

5. Security Agreement. The term "Security Agreement" means this
Security Agreement, together with all Schedules and Exhibits
hereto as may be amended, restated or otherwise modified from
time to time.

6. Uniform Commercial Code. The term "Uniform Commercial Code"
means the Uniform Commercial Code, in effect from time to time
in the Commonwealth of Pennsylvania.

Unless the context otherwise requires, all capitalized terms not
specifically defined herein which are defined in the Uniform Commercial
Code shall have the meanings stated therein.

B. Security Interest. In order to secure the due and punctual payment
-----------------
and performance of the Liabilities, the Companies hereby grant to
Agent, for the benefit of the Lenders, a
<PAGE>

continuing security interest in and general lien upon their right,
title and interest in the Collateral. The security interests granted
herein are granted as security only and shall not subject Agent to, or
in any way affect or modify, any obligation or liability of the
Companies with respect to any of the Collateral or any transaction
which gave rise thereto.

C. Further Assurances; Filing.
--------------------------

1. Delivery of Documents; Inspection of Collateral. At any time
and from time to time, upon the demand of Agent, the Companies
will, at the Companies' expense: (i) give, execute, deliver,
file, and/or record any notice, statement, instrument,
document, agreement, or other papers that may be necessary or
desirable, or that Agent may request, in order to create,
preserve, perfect, or validate any security interest granted
pursuant hereto or intended to be granted hereunder or to
enable Agent to exercise or enforce its rights hereunder or
with respect to such security interest; (ii) keep, stamp, or
otherwise mark any and all documents, instruments, chattel
paper, and their respective Books and Records in such manner
as Agent may require; and/or (iii) permit representatives and
agents of Agent access to their respective premises at any
time requested by Agent to inspect the Collateral and the
Books and Records and to audit and make copies of or abstracts
from the Books and Records.

2. Filing of Financing Statement. At Agent's sole option, and
without the consent of the Companies, Agent may file a carbon,
photographic, or other reproduction of this Security Agreement
or any financing statement executed pursuant hereto as a
financing statement in any jurisdiction so permitting. Without
the prior written consent of Agent, no Companies shall file or
authorize or permit to be filed in any jurisdiction any such
financing or like statement in which First Union National Bank
or its successor as Agent is not named as the sole secured
party as Agent for the Lender.

D. Representations and Warranties. Each Company represents and warrants to
------------------------------
Agent, which representations and warranties shall be continuing
representations and warranties until all of the Liabilities are
satisfied in full, as follows:

1. Security Agreement Questionnaire. All information provided by
such Companies to Agent and set forth on the Security
Agreement Questionnaire attached hereto as Schedule "A" and
made a part hereof, is complete, true and correct (subject to
subsequent disclosure pursuant to Paragraph E.2. hereof). If,
for any reason, the Security Agreement Questionnaire is not
attached to this Security Agreement at the time of execution,
such failure shall in no way alter Agent's right to rely upon
the representations and warranties contained in the Security
Agreement Questionnaire and the other representations and
warranties contained in this Section D. The Companies agrees
that Agent may attach the Security Agreement Questionnaire to
this Security Agreement at any time
<PAGE>

subsequent to the execution of this Security Agreement.

2. Deposit Accounts. Set forth on Schedule B is a complete, true
and correct listing of all deposit accounts maintained by any
of the Companies including the name of the depository
institution, how the account is titled, and the account number
(subject to subsequent disclosure pursuant to Paragraph E.2.
hereof), and a description of any agreements relating to the
deposit of funds or withdrawal of funds from such deposit
accounts.

3. Authority. If a corporation or a partnership, each Company is
duly organized and validly existing and in good standing under
the laws of the jurisdiction of its organization and is
qualified and licensed to do business in those jurisdictions
where the conduct of its business or ownership of its
properties requires such qualification; and each Company has
the power and authority to own the Collateral held by such
Companies, to enter into and perform this Security Agreement
and any other documents or instruments executed in connection
herewith, and to incur the Liabilities.

4. Duly Authorized; Not in Violation of Law. This Security
Agreement and any other documents or instruments executed in
connection herewith have been duly authorized, and/or
executed, and delivered, and constitute the legal, valid, and
binding obligations of each Company, enforceable against such
Companies in accordance with their terms. This Security
Agreement and any other documents and instruments executed in
connection herewith do not and will not violate any law, the
charter, organizational documents, or by-laws of any
Companies, or any other agreement or instrument to which any
Companies or any of its property may be bound or subject.

5. No Consents Necessary. No consent or approval of any person or
entity, including, without limitation, any debt or equity
holder of any Companies, or of any public authority, is
necessary for the valid execution, delivery and performance of
this Security Agreement, or any document or instrument
executed in connection herewith, or the exercise by Agent or
Lenders of their rights and remedies hereunder.

6. Title. The Companies are, or to the extent that any Collateral
will be acquired after the date hereof, will be, the owners of
the Collateral, holding good and marketable title thereto,
free from any lien, security interest, encumbrance, or claim
other than the liens and encumbrances of Agent and have the
right to grant the security interests created by this Security
Agreement.

7. Materially Misleading Statements. No representation, warranty,
or statement made herein, on any Schedule or Exhibit hereto or
in any certificate or document furnished or to be furnished
pursuant hereto contains or will contain any untrue statement
of fact or omits or will omit any fact necessary to make it
<PAGE>

not misleading.

8. No Fictitious Names. The Companies do not operate or issue
invoices under any name other than the name(s) set forth on the
signature page hereof and as otherwise disclosed on Schedule A.

9. Collateral Not Subject to Agreements or Licenses. The
Collateral is not subject to or restricted by any agreement or
license relating to patents, trademarks, trade secrets, or
copyrights, except that the Companies' computer and word
processing equipment is subject to various software licenses.

E. Covenants. Each Company hereby covenants and agrees that for as long as
---------
any Liabilities are outstanding:

1. Defense of Collateral. The Companies shall defend the
Collateral against all claims and demands of all persons or
entities at any time claiming any interest therein other than
Agent.

2. Notice of Changes in Location of Chief Executive Office,
Residence, Books and Records, Collateral. The Companies shall
provide Agent with prompt written notice of: (i) any intended
change in the chief executive office or residence of the
Companies, and/or any office where the Companies maintain their
Books and Records; (ii) the location or movement of any
Collateral to or at an address other than the addresses set
forth on Schedule A hereto; and (iii) the establishment of any
new deposit account, all such notices to be received by Agent
at least 30 days prior to the effective date of any such
change. If any such new location as set forth in subparagraphs
(i) and (ii) hereof is on leased or mortgaged premises, the
Companies, upon request of Agent, will furnish Agent, prior to
the effective date of any such change, with landlord's or
mortgagee's waivers pertaining to such premises in form and
substance satisfactory to Agent in its sole discretion. With
respect to any new deposit account, the Companies shall, prior
to the first use of such deposit account, furnish to Agent with
blocked account letters or such other agreements with the
applicable depository institution as Agent shall reasonably
require, in each case in form and substance satisfactory to
Agent.

3. Prompt Payment of Taxes; Delivery to Bank of Proof of Payment.
The Companies shall promptly pay any and all taxes,
assessments, and/or governmental charges upon the Collateral
held by the Companies on the dates such taxes, assessments,
and/or governmental charges are due and payable, except to the
extent that such taxes, assessments, and/or charges are
contested in good faith by the Companies by appropriate
proceedings and for which the Companies are maintaining
adequate reserves. Upon request of Agent, the Companies shall
deliver to Agent such receipts and other proofs of payment as
Agent may request.
<PAGE>

4. Notice of Adverse Changes, Events of Default, Seizures and
Institution of Litigation. The Companies shall immediately notify
Agent of: (i) any material adverse changes in its business,
property, or financial condition, including, without limitation,
any loss of or damage to any material portion of Collateral; (ii)
the occurrence of an Event of Default under this Security
Agreement; (iii) any seizure of any material amount of Collateral
or any claims or alleged claims of third parties to any material
amount of the Collateral, and (iv) the institution of any
litigation, arbitration, governmental investigation or
administrative proceedings against or affecting the Companies or
the Collateral which is reasonably likely to have a material
adverse effect on the Companies, its ability to perform its
obligations hereunder, or the ability of Agent to realize on the
Collateral.

5. Insurance. The Companies shall keep and maintain all of its
property and assets in good order and repair and covered by
insurance with reputable and financially sound insurance
companies against such hazards and in such amounts as is
customary in the industry, under policies requiring the insurer
to furnish reasonable notice to Agent and opportunity to cure any
non-payment of premiums prior to termination of coverage and
having Agent, for the benefit of Lenders, as loss payee and
additional insured. The Companies shall furnish Agent with
certificates or other evidence satisfactory to Agent of
compliance with the foregoing insurance provisions.

6. Disposition of Collateral. The Companies shall not sell, offer to
sell, otherwise assign, or permit the involuntary transfer of, or
disposition of the Collateral or any interest therein, except as
permitted pursuant to the Credit Agreement.

7. Security Interests in Collateral. The Companies shall keep the
Collateral free from any lien, security interest, or encumbrance
except those in favor of Agent and except as permitted pursuant
to the Credit Agreement, in good order and repair, reasonable
wear and tear excepted, and will not waste or destroy the
Collateral or any part thereof. If reasonably requested by Agent,
the Companies shall give notice of Agent's security interests in
the Collateral to any third person with whom the Companies has
any actual or prospective contractual relationship or other
business dealings.

8. Compliance with Laws. The Companies shall continue to be in
compliance with all applicable laws, statutes, rules, and
regulations with respect to the Collateral.

9. Maintenance, Inspection of Books and Records. The Companies shall
maintain complete and accurate Books and Records and shall make
all necessary entries therein to reflect the costs, values and
locations of the Collateral and all payments, credits and
adjustments thereto. The Companies shall keep Agent
<PAGE>

fully informed as to the location of all such Books and Records
and shall permit Agent and its authorized agents to have full,
complete and unrestricted access thereto at all reasonable times
to inspect, audit and make copies of any and all such Books and
Records. Upon submission to the Companies of an invoice therefor,
the Companies will reimburse Agent for any and all fees and costs
related to any inspection and/or audit by Agent and its
authorized agents of the Books and Records. Agent's rights
hereunder shall be enforceable at law or in equity, and the
Companies consents to the entry of judicial orders or injunctions
enforcing specific performance of such obligations hereunder.

10. Maintenance and Inspection of Equipment. With respect to
equipment constituting Collateral, the Companies shall: (i) keep
accurate books and records with respect thereto, including,
without limitation, maintenance records; (ii) upon request,
deliver to Agent all evidence of ownership in such Collateral,
including certificates of title with Agent's interest
appropriately noted on the certificate; (iii) permit Agent and
its authorized agents to inspect any or all such equipment at all
reasonable times; (iv) preserve such equipment in good condition
and repair, and pay the cost of all replacement parts, repairs to
and maintenance of such equipment, and (v) if after the date
hereof, any of the Collateral is moved to or located upon land
(other than at locations identified on the Security Agreement
Questionnaire) which land is the subject of a lease or mortgage,
at the request of Agent, deliver an agreement of subordination
from the lessor or mortgagee providing that any lien of such
party shall be subordinate to the security interest of Agent
granted herein.

11. Continuing of Perfected Status of Collateral. The Companies
agrees to cooperate and join, at its expense, with Agent in
taking such steps as are necessary, in Agent's judgment, to
perfect or continue the perfected status of the security
interests granted herein, including, without limitation, the
execution and delivery of any financing statements, amendments
thereto and continuation statements, the notation of encumbrances
in favor of Agent on certificates of title, and the execution and
filing of any collateral assignments and any other instruments
requested by Agent to perfect its security interest in the
Collateral and any and all general intangibles relating to the
Collateral. Agent is expressly authorized to file financing
statements without the Companies' signature.

F. General Authority.
-----------------

1. Bank as Attorney-in-Fact. Each Company hereby irrevocably
appoints Agent (and any of its attorneys, officers, employees, or
agents), upon the occurrence and during the continuation of an
Event of Default, as its true and lawful attorney-in-fact, said
appointment being coupled with an interest, with full power of
substitution, in the name of the Companies, Agent, or otherwise,
for the sole use and benefit of Agent in its sole discretion, but
at the Companies' by law, in its name or in the name
<PAGE>

of the Companies or otherwise, the powers set forth herein,
whether or not any of the Liabilities are due, such powers,
including, but not limited to, the power at any time: (i) to
endorse the name of the Companies upon any instruments of
payment, invoice, freight, or express bill, bill of lading,
storage, or warehouse receipt relating to the Collateral; (ii) to
demand, collect, receive payment of, settle, compromise, or
adjust all or any of the Collateral; (iii) to sign and file one
or more financing statements naming the Companies as debtor and
Agent as secured party and indicating therein the types or
describing the items of Collateral herein specified; (iv) to
correspond and negotiate directly with insurance carriers; and
(v) to execute any notice, statement, instrument, agreement, or
other paper that Agent may require to create, preserve, perfect,
or validate any security interest granted pursuant hereto or to
enable Agent to exercise or enforce its rights hereunder or with
respect to such security interest.

2. Liability of Bank as Attorney-in-Fact. Neither Agent nor its
attorneys, officers, employees, or agents shall be liable for
acts, omissions, any error in judgment, or mistake in fact in
its/their capacity as attorney-in-fact. Each Company hereby
ratifies all acts of Agent as its attorney-in-fact. This power,
being coupled with an interest, is irrevocable until the
Liabilities have been fully satisfied. Agent shall not be
required to take any steps necessary to preserve any rights
against prior parties with respect to any of the Collateral.

3. Effect of Extensions and Modifications. Agent may extend the time
of payment, arrange for payment in installments, or otherwise
modify the terms of, or release, any of the Collateral, without
thereby incurring responsibility to, or discharging or otherwise
affecting any liability of, any Companies or any other obligor.

G. Events of Default. The occurrence of an Event of Default under the
-----------------
Credit Agreement shall constitute an Event of Default and under this
Security Agreement.

H. Remedies.
--------

1. Acceleration of Liabilities; General Rights of Bank. Upon the
occurrence and during the continuance of an Event of Default,
Agent may, at its option, exercise any and all rights and
remedies it has under this Security Agreement, any other Loan
Document and/or applicable law.

2. Right of Setoff. If any Liabilities shall be due and payable or
any one or more Events of Default shall have occurred and be
continuing, whether or not the Agent shall have made demand under
any Loan Document and regardless of the adequacy of any
collateral for the Liabilities or other means of obtaining
repayment of the Liabilities, each Lender shall have the right,
without notice to the Borrower and is specifically authorized
hereby to set-off against and apply to the then unpaid balance of
the Liabilities any items or funds of the Borrower
<PAGE>

held by each Lender or any affiliate of such Lender, any and all
deposits (whether general or special, time or demand, matured or
unmatured) or any other property of the Borrower including,
without limitation, securities and/or certificates of deposit,
now or hereafter maintained by any Borrower for its or their own
account with any Lender or any affiliate of such Lender, and any
other indebtedness at any time held or owing by any Lender or any
affiliate of such Lender, to or for the credit or the account of
Borrower, even if effecting such set-off results in a loss or
reduction of interest or the imposition of a penalty applicable
to the early withdrawal of time deposits. For such purpose, the
Lenders shall have, and Borrower hereby grant to each Lender, a
first lien on and security interest in such deposits, property,
funds and accounts and the proceeds thereof.

3. Turnover of Property Held by Affiliates. Each Company authorizes
any affiliate of each Lender, upon the occurrence and during the
continuance of an Event of Default, at the request of any such
Lender, and without notice to Borrower, to turn over to the Agent
any property of such Companies, including, without limitation,
funds and securities, held by any Lender's affiliate for any such
Companies's account and to debit any deposit account maintained
by such Companies with such Lender's affiliate (even if such
deposit account is not then due or there results a loss or
reduction of interest or the imposition of a penalty in
accordance with law applicable to the early withdrawal of time
deposits), in the amount requested by the Lenders up to the
amount of the Liabilities, and to pay or transfer such amount or
property to the Agent for application to the Liabilities.

4. Additional Rights and Remedies. In addition to the rights and
remedies available to Agent as set forth above, upon the
occurrence of an Event of Default hereunder, or at any time
thereafter, Agent may at its option, immediately and without
notice, do any or all of the following, which rights and remedies
are cumulative, may be exercised from time to time, and are in
addition to any rights and remedies available to Agent under any
other agreement or instrument by and between any Companies and
Agent:

a. Exercise any and all of the rights and remedies of a secured
party under the Uniform Commercial Code, including, without
limitation, the right to require the Companies to assemble
the Collateral and make it available to Agent at a place
reasonably convenient to the parties;

b. Notify account debtors of any Companies that their
obligations to such Companies are payable directly to Agent,
for benefit of the Lenders, and collect such sums.

c. Operate, utilize, recondition and/or refurbish any of the
Collateral for the purpose of enhancing or preserving the
value thereof by any means
<PAGE>

deemed appropriate by Agent, in its sole discretion,
including, without limitation, converting raw materials
and/or work-in-process into finished goods;

d. Demand, sue for, collect, or retrieve any money or
property at any time payable, receivable on account
of, or in exchange for, or make any compromise, or
settlement deemed desirable with respect to any of
the Collateral;

e. Upon five (5) calendar days' prior written notice to the
Borrower (or one (1) day notice by telephone with respect to
Collateral that is perishable or threatens to decline rapidly
in value), which each Company hereby acknowledges to be
sufficient, commercially reasonable and proper, Agent may
sell, lease or otherwise dispose of any or all of the
Collateral at any time and from time to time at public or
private sale, with or without advertisement thereof. Upon a
sale of the Collateral by Agent, Agent shall apply the sale
proceeds: first, to the amount of any reasonable expenses,
including counsel fees and expenses, incurred by Agent in
connection with (i) the administration of this Security
Agreement, (ii) the custody, preservation, sale or collection
or realization of the Collateral, (iii) the exercise or
enforcement of Agent's rights hereunder, or (iv) the failure
of Companies to perform hereunder; second, to accrued and
unpaid interest and fees; and third, to the principal balance
of indebtedness under the Credit Agreement to Lenders on the
basis of their pro rata shares of the outstanding principal
balance of the Loans (as defined therein), except the fees
payable under Paragraph 2.13 thereof, which shall be paid
solely to Agent. Such distribution of payments shall be made
promptly in federal funds immediately available at the office
of each Lender set forth in the Credit Agreement. Each Company
waives the benefit of any marshaling doctrine with respect to
Agent's exercise of its rights hereunder. Each Company grants
a royalty - free license to Agent for all patents, service
marks, trademarks, tradenames, copyrights, computer programs
and other intellectual property and proprietary rights
sufficient to permit Agent to exercise all rights granted to
Agent under this Section. Agent or anyone else may be the
purchaser of any or all of the Collateral so sold and
thereafter hold such Collateral absolutely, free from any
claim or right of whatsoever kind, including any equity of
redemption of any Companies or any other obligor, any such
notice, right and/or equity of redemption being hereby
expressly waived and released.

5. Sale of Collateral by Agent.

I. Miscellaneous.
-------------
<PAGE>

1. Remedies Cumulative; No Waiver. The rights, powers and remedies of
Agent provided in this Security Agreement and any of the other
Loan Documents are cumulative and not exclusive of any right,
power or remedy provided by law or equity. No failure or delay on
the part of Agent in the exercise of any right, power or remedy
shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or remedy preclude any other or
further exercise thereof, or the exercise of any other right,
power or remedy.

2. Notices. Each Company agrees that any notice, request or consent
required to be given to such Companies hereunder or in connection
herewith may be given to Borrower on behalf of such Companies. Any
notice, request or consent required hereunder or in connection
herewith shall be deemed satisfactorily given if in writing and
delivered by hand, mailed (registered or certified mail) or sent
by facsimile transmission to Agent or Borrower at their respective
addresses or telecopier number set forth below, or to any party at
such other addresses or telecopier numbers as may be given by any
party to the others in writing:

if to Borrower:

Merkert American Corporation
490 Turnpike Street
Canton, MA 02021
Attention:
Telecopier:

if to Agent:

First Union National Bank
1345 Chestnut Street
PA 4843
Philadelphia, PA 19107
Attention: Robert A. Brown
Telephone: (215) 973-1259
Telecopier: (215) 786-2877

3. Costs and Expenses; Indemnification. Whether or not the
transactions contemplated by this Security Agreement and the other
Loan Documents are fully consummated, the Borrower shall promptly
pay (or reimburse, as Agent may elect) all costs and expenses
which Agent has incurred or may hereafter incur in connection with
the negotiation, preparation, reproduction, interpretation,
perfection, monitoring, administration and enforcement of the Loan
Documents, the collection of all amounts due under the Loan
Documents, and all amendments, modifications, consents or waivers,
if any, to the Loan Documents. Such costs and expenses shall
include, without limitation, the fees
<PAGE>

and disbursements of counsel to Agent (including Agent's in-house
counsel), the costs of appraisals, searches of public records,
costs of filing and recording documents with public offices,
internal and/or external audit and/or examination fees and costs,
stamp, excise and other taxes, the fees of Agent's accountants,
consultants or other professionals, costs and expenses from any
actual or attempted sale of all or any part of the Collateral, or
any exchange, enforcement, collection, compromise, or settlement of
any of the Collateral or receipt of the proceeds thereof, and for
the care and preparation for sale of the Collateral (including
insurance costs) and defending and asserting the rights and claims
of Agent in respect thereof, by litigation or otherwise. Each
Company shall indemnify, defend and hold harmless Agent with
respect to any and all claims, expenses, demands, losses, costs,
fines or liabilities of any kind (including, without limitation,
those involving death, personal injury or property damage and
including reasonable attorneys fees and costs) arising from the use
or ownership of the Collateral. The reimbursement and
indemnification obligations of the Companies under this Section
shall constitute Liabilities secured by the Collateral and shall
survive any termination of the Loan Documents.

4. Governing Law. This Security Agreement shall be construed in
accordance with and governed by the substantive laws of the
Commonwealth of Pennsylvania without reference to conflict of laws
principles.

5. Integration. This Security Agreement and the other Loan Documents
constitute the sole agreement of the parties with respect to the
subject matter hereof and thereof and supersede all oral
negotiations and prior writings with respect to the subject matter
hereof and thereof.

6. Amendment; Waiver. No amendment of this Security Agreement, and no
waiver of any one or more of the provisions hereof shall be
effective unless set forth in writing and signed by the parties
hereto.

7. Successors and Assigns. This Security Agreement (i) shall be
binding upon the Companies and the Agent and, where applicable,
their respective heirs, executors, administrators, successors and
permitted assigns, and (ii) shall inure to the benefit of the
Companies and the Agent and, where applicable, their respective
heirs, executors, administrators, successors and permitted assigns;
provided, however, that no Companies may assign its rights
hereunder or any interest herein without the prior written consent
of Agent, and any such assignment or attempted assignment by such
Companies shall be void and of no effect with respect to Agent.

8. Severability. The illegality or unenforceability of any provision
of this Security Agreement or any instrument or agreement required
hereunder shall not in any way affect or impair the legality or
enforceability of the remaining provisions of
<PAGE>

this Security Agreement or any instrument or agreement required
hereunder. In lieu of any illegal or unenforceable provision in
this Security Agreement, there shall be added automatically as a
part of this Security Agreement a legal and enforceable provision
as similar in terms to such illegal or unenforceable provision as
may be possible.

9. Consent to Jurisdiction and Service of Process. Each Company
irrevocably appoints each officer of Borrower as its attorney upon
whom may be served any notice, process or pleading in any action or
proceeding against it arising out of or in connection with this
Security Agreement, the Credit Agreement, the Notes, the Loan
Documents or any of the Collateral; each Company hereby consents
that any action or proceeding against it be commenced and
maintained in any court within the Commonwealth of Pennsylvania or
in the United States District Court for the Eastern District of
Pennsylvania by service of process on any officer of Borrower; and
each Company agrees that the courts of the Commonwealth of
Pennsylvania and the United States District Court for the Eastern
District of Pennsylvania shall have jurisdiction with respect to
the subject matter hereof and the person of each Company and the
Collateral. Notwithstanding the foregoing, Agent, in its absolute
discretion may also initiate proceedings in the courts of any other
jurisdiction in which any Companies may be found or in which any of
its properties or Collateral may be located.

10. Inconsistencies. The Loan Documents are intended to be consistent.
However, in the event of any inconsistencies among any of the Loan
Documents, such inconsistency shall not affect the validity or
enforceability of any Loan Document. In the event of any
inconsistency or ambiguity in any of the Loan Documents, the Loan
Documents shall not be construed against any one party but shall be
interpreted consistent with Agent's policies and procedures.

11. Headings. The headings of sections and paragraphs have been
included herein for convenience only and shall not be considered in
interpreting this Security Agreement.

12. Schedules. If a Schedule and/or an Exhibit is attached hereto, the
provisions thereof are incorporated herein.

13. Waiver of Jury Trial; Acknowledgments.

a. EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE NOTES OR
OTHER LOAN DOCUMENTS OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER
<PAGE>

ORAL OR WRITTEN) OR ACTIONS OF AGENT OR LENDERS. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR AGENT'S ENTERING INTO
THIS AGREEMENT ON BEHALF OF THE LENDERS.

b. BORROWER ACKNOWLEDGES THAT IT HAS HAD THE ASSISTANCE OF
COUNSEL IN THE REVIEW AND EXECUTION OF THIS AGREEMENT AND,
SPECIFICALLY, PARAGRAPH 10.14 HEREOF, AND FURTHER ACKNOWLEDGES
THAT THE MEANING AND EFFECT OF THE FOREGOING WAIVER OF JURY
TRIAL HAVE BEEN FULLY EXPLAINED TO BORROWER BY SUCH COUNSEL.
<PAGE>

IN WITNESS WHEREOF the parties hereto have executed this Security Agreement as
of the date above first written.

Attest: MERKERT AMERICAN CORPORATION

By:________________________ By:______________________________
Name: Name:
Title: Title:

Attest: MERKERT ENTERPRISES, INC.

By:__________________________ By:______________________________
Name: Name:
Title: Title:

Attest: ROGERS-AMERICAN COMPANY, INC.

By:__________________________ By:______________________________
Name: Name:
Title: Title:

Attest: [_______________________________]

By:__________________________ By:______________________________
Name: Name:
Title: Title:
<PAGE>

SCHEDULE A
----------

Security Agreement Questionnaire Attached
<PAGE>

SCHEDULE B
----------

Deposit Accounts

<PAGE>

Exhibit 10.31

FORM OF PLEDGE AGREEMENT

THIS PLEDGE AGREEMENT (this "Pledge Agreement") is made this
____ day of December, 1998, by and among MERKERT AMERICAN CORPORATION (the
"Borrower") and the subsidiaries of the Company signatory hereto (each
individually a "Pledgor" and individually and collectively, "Pledgors") in favor
of FIRST UNION NATIONAL BANK, a national banking association ("Agent"), as agent
for the Lenders under the Credit Agreement described below (herein "Pledgee").

W I T N E S S E T H:
-------------------

WHEREAS, Borrower has entered into that certain Credit
Agreement dated of even date herewith (as amended from time to time, the "Credit
Agreement") with the lenders identified therein (together with such additional
financial institutions as may become lenders from time to time as therein
provided, "Lenders") and First Union as Agent for the Lenders ("Agent"); and

WHEREAS, it is a condition to the Credit Agreement that
Pledgors have executed this Pledge Agreement in favor of Pledgee for the benefit
of the Lenders.

NOW THEREFORE, in consideration of the foregoing premises and
other good and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, and intending to be legally bound hereby, Pledgors hereby
agrees with Pledgee as follows:

1. For the purposes of this Pledge Agreement:

(a) Capitalized terms used and not otherwise defined
herein shall have the meanings ascribed to such terms in the Credit Agreement.

(b) The term "Collateral" shall mean all shares of
stock, partnership interests, LLC interests, or other equity interests in any
direct or indirect Subsidiary of Borrower (as defined in the Credit Agreement)
(the "Securities") now or hereafter owned by any Pledgor, together with (i) all
rights to distributions and other rights under organizational documents, or
under any other agreements, with respect thereto, and all contract rights,
general intangibles and investment property associated with or representing such
Pledgor's rights and interests with respect thereto, and (ii) all additions to,
substitutions or exchanges for, proceeds of and distributions on, any of the
foregoing, and all associated secondary rights and secondary considerations of
any kind (subscription rights, bonus shares, etc.). A list of the Securities as
of the date hereof is set forth on Schedule A attached hereto.

(c) The term "Obligations" shall mean any and all
obligations and indebtedness of every kind and description of the Pledgors to
the Lenders pursuant to, under, or in connection with the Loan Documents,
whether such debts or obligations are primary or
<PAGE>

secondary, direct or indirect, absolute or contingent, sole, joint or several,
secured or unsecured, due or to become due, contractual or tortious, arising by
operation of law or otherwise, or now or hereafter existing, whether incurred by
any Pledgor as principal, surety, endorser, guarantor, accommodation party or
otherwise, including, without limitation, principal, interest and fees, late
fees and expenses (including, attorneys' fees and costs and/or the allocated
fees and costs of Agent's in-house legal counsel), or that have been or may
hereafter be contracted or incurred, and any obligations of the Pledgors or any
of them under interest rate protection agreements, swaps, hedging contracts or
similar arrangements with any Lender.

2. Pledgors hereby pledge, and grant a lien as security with
respect to, the Collateral, to Pledgee as agent for the Lenders, as collateral
security for all of the Obligations.

3. Pledgors represent and warrant that:

(a) The chief place of business, chief executive
offices and the office(s) where their records are kept concerning accounts,
contract rights and other similar Collateral, are as set forth on Schedule B
attached hereto, and as set forth on Schedule B, each Pledgor either owns such
premises free and clear of any mortgage or other liens and encumbrances except
as set forth on Schedule B or it leases such premises from the record owner
identified on Schedule B.

(b) Each Pledgor conducts business under and through
its legal name as set forth on the signature page hereto, and no other names
except as set forth on Schedule B attached hereto.

(c) Pledgors have good title to the Securities free and
clear of all liens and encumbrances except the security interest created hereby;
and such Securities constitute the percentage of the issued and outstanding
shares of each class of the capital stock or other equity interests of the
subsidiaries of Pledgors identified in Schedule A.

(d) The Securities are validly issued, fully paid and
nonassessable and are not subject to any charter, bylaw, statutory, contractual
or other restrictions governing their issuance, transfer, ownership or control
except as indicated on the stock certificates for the Securities.

(e) Pledgors have delivered to Pledgee all certificates
or other instruments or documents representing or evidencing the Securities,
together with corresponding assignment or transfer powers duly executed in blank
by Pledgors, and this Pledge Agreement and such powers have been duly and
validly executed and are binding and enforceable against Pledgor in accordance
with their terms except as such enforceability may be affected by bankruptcy
laws and other laws of general application relating to creditors' rights; and
the pledge of the Securities in accordance with the terms hereof creates a valid
and perfected first priority security interest in the Securities securing
payment of the Obligations.

(f) No authorization, approval, or other action by, and
no notice to or filing with, any governmental authority or regulatory body is
required either (i) for the pledge by
<PAGE>

Pledgors of the Securities pursuant to this Pledge Agreement or for the
execution, delivery or performance of this Pledge Agreement by Pledgor or (ii)
for the exercise by Pledgee of the voting or other rights provided for in this
Pledge Agreement or the remedies in respect of the Collateral pursuant to this
Pledge Agreement (except as may be required in connection with such disposition
by laws affecting the offering and sale of securities generally).

4. Anything herein to the contrary notwithstanding, (a)
Pledgors shall remain liable under any contracts and agreements included in the
Collateral to perform all of their respective duties and obligations thereunder
to the same extent as if this Agreement had not been executed, (b) the exercise
by Pledgee of any of its rights hereunder shall not release Pledgees from any of
their duties or obligations under any contracts and agreements included in the
Collateral, and (c) Pledgee shall not have any obligation or liability under any
contracts and agreements included in the Collateral by reason of this Agreement,
nor shall Pledgee be obligated to perform any of the obligations or duties of
Pledgors thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.

5. Pledgors will promptly notify and provide Pledgee with a
complete description of the opening of any new places of business which would be
required to be disclosed pursuant to Paragraph 3(a) above, the conduct of
business under any names or through any entities other than those set forth
above, the relocation of any of the Collateral, and the acquisition of any new
Collateral. Pledgors will furnish to Pledgee from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as Pledgee may reasonably request, all
in reasonable detail.

6. At any time and from time to time, upon the request of
Pledgee, Pledgors will, at their own expense:

(a) defend the Collateral against the claims and
demands of all persons.

(b) deliver and pledge to Pledgee, endorsed or
accompanied by instruments of assignment or transfer satisfactory to Pledgee,
any instruments and documents covered hereby which Pledgee may specify.

(c) give, execute, deliver and file or record in the
proper governmental offices, any instrument, paper or document, including but
not limited to one or more financing statements under the Uniform Commercial
Code, satisfactory to Pledgee, or take any action, which Pledgee reasonably may
deem necessary or desirable in order to create, preserve, perfect, continue,
modify, terminate or otherwise affect any security interest granted pursuant
hereto, or to enable Pledgee to exercise or enforce any of its rights hereunder.

(d) keep, and stamp or otherwise mark, any of its
documents and instruments and its individual books and records relating to any
of the Collateral in such manner as Pledgee reasonably may require.

(e) pay, or reimburse Pledgee in the amount of, all
reasonable expenses
<PAGE>

(including reasonable fees and expenses of attorneys, experts and Pledgees)
incurred in any way in connection with the exercise, defense or assertion of any
rights or interests of Pledgee hereunder, the enforcement of any provisions
hereof, or the management, preservation, use, operation, maintenance,
collection, possession, disposition or enforcement of any of the Collateral (all
such expenses to be Obligations hereunder).

7. Pledgors agree not to (i) sell or otherwise dispose of, or
grant any option with respect to, any of the Collateral, or (ii) create or
permit to exist any lien, security interest, or other charge or encumbrance upon
or with respect to any of the Collateral, except the security interest under
this Pledge Agreement. Pledgors agree that all additional shares of stock or
other equity interests of any direct or indirect Subsidiary of Borrower (as
defined in the Credit Agreement) acquired by any Pledgor after the date hereof
shall automatically and without any further action of Pledgors be pledged
hereunder and constitute a part of the Collateral hereunder, and in connection
therewith, Pledgors agree to immediately deliver to Pledgee any certificates or
other instruments or documents representing or evidencing the Securities and a
supplement to Schedule A attached hereto describing such additional Collateral.

8. Prior to the full payment and performance of the
Obligations, Pledgee shall be entitled to receive, as additional Collateral, any
and all additional shares of stock or any other property of any kind
distributable on or by reason of the Securities pledged hereunder, whether in
the form of or by way of stock dividends, warrants, partial liquidation,
conversion, prepayments or redemptions (in whole or in part), liquidation, or
otherwise. If any of such property, other than such cash dividends shall come
into the possession or control of Pledgors, Pledgors shall hold or control and
forthwith transfer and deliver the same to Pledgee subject to the provisions
hereof.

9. So long as no default has occurred under any of the
Obligations or Loan Documents and Pledgors are in full compliance with the terms
hereof:

(a) Pledgors shall be entitled to receive and retain
any normal, regularly declared cash dividends paid on the Securities pledged
hereunder.

(b) Pledgors may exercise all voting rights, if any,
pertaining to the Securities for any purpose not inconsistent with the terms
hereof or of the Obligations or Loan Documents. In the event the Securities have
been transferred into the name of Pledgee or a nominee or nominees of Pledgee
prior to default, Pledgee or its nominee will execute and deliver upon request
of Pledgors an appropriate proxy in order to permit Pledgors to vote, if
applicable, the same.

10. Pledgors shall take all actions (and execute and deliver
from time to time all instruments and documents) necessary or appropriate or
reasonably requested by Pledgee, to continue the validity, enforceability and
perfected status of the pledge of Securities hereunder.

11. Pledgee shall be under no obligation to take any actions
and shall have no liability (except for gross negligence or willful misconduct)
with respect to the preservation or
<PAGE>

protection of the pledged Securities or any underlying interests represented
thereby as against any prior or other parties. In the event Pledgors request
that Pledgee take or omit to take action(s) with respect to the Collateral,
Pledgee may refuse so to do with impunity if Pledgors do not, upon request of
Pledgee, post sufficient, creditworthy indemnities with Pledgee which, in
Pledgee's sole discretion, are sufficient to hold it harmless from any possible
liability of any kind in connection therewith.

12. Pledgors agree that Pledgee, at any time and without
affecting its rights in the pledged Securities and without notice to Pledgors,
may grant any extensions, releases or other modifications of any kind respecting
the Loan Documents, Obligations and any collateral security therefor and
Pledgors, except as otherwise provided herein or in the Loan Documents, waive
all notices of any kind in connection with the Obligations, the Loan Documents
and any changes therein or defaults or enforcement proceedings thereunder,
whether against Pledgors or any other party. Pledgors hereby waive any rights it
has at equity or in law to require Pledgee to apply any rights of marshaling or
other equitable doctrines in the circumstances.

13. After the occurrence of an Event of Default under the
Credit Agreement:

(a) Pledgee may transfer or cause to be transferred any
of the pledged Securities into its own or a nominee's or nominees' name or
name(s).

(b) Pledgee shall be entitled to receive and apply in
payment of the Obligations any cash dividends, interest or other payment on the
pledged Securities.

(c) Pledgee shall be entitled to exercise in Pledgee's
discretion all voting rights, if any, pertaining thereto and in connection
therewith and at the written request of Pledgee, Pledgors shall execute any
appropriate dividend, payment or brokerage orders or proxies.

(d) Pledgors shall take any action necessary or
required or reasonably requested by Pledgee, in order to allow Pledgee fully to
enforce the pledge of the Securities hereunder and realize thereon to the
fullest possible extent, including but not limited to the filing of any claims
with any court, liquidator or trustee, custodian, receiver or other like person
or party.

(e) Pledgee shall have all the rights and remedies
granted or available to it hereunder, under any statute or the common law, or
under any of the Loan Documents, including the right to sell the pledged
Securities or any portion thereof at one or more public or private sales upon
ten (10) days' written notice and to bid thereat or purchase any part or all
thereof in its own or a nominee's or nominees' names, free and clear of any
equity of redemption; and to apply the net proceeds of the sale, after deduction
for any expenses of sale, including the payment of all Pledgee's reasonable
attorneys' fees in connection with the Obligations and the sale, to the payment
of the Obligations in any manner or order which Pledgee in its sole discretion
may elect, without further notice to or consent of Pledgors and without regard
to any equitable principles of marshaling or other like equitable doctrines.
<PAGE>

(f) Pledgee may increase, in its sole discretion, but shall
not be required to do so, the Obligations by making reasonable additional
advances or incurring reasonable expenses for the account of Pledgors deemed
appropriate or desirable by Pledgee in order to protect, enhance, preserve or
otherwise further the sale or disposition of the Collateral or any other
property it holds as security for the Obligations.

14. Pledgors recognize that Pledgee may be unable to effect a sale
to the public of all or part of the Securities by reason of certain prohibitions
or restrictions in applicable securities laws and regulations (herein
collectively called the "Securities Laws"), or the provisions of other laws,
regulations or rulings, but may be compelled to resort to one or more sales to a
restricted group of purchasers who will be required to agree to acquire the
Securities for their own account, for investment and not with a view to the
further distribution or resale thereof without restriction. Pledgors agree that
any sale(s) so made may be at prices and on other terms less favorable to
Pledgors than if the Securities were sold to the public, and that Pledgee has no
obligation to delay sale of the Securities for period(s) of time necessary to
permit the issuer thereof to register the Securities for sale to the public
under any of the Securities Laws. Pledgors agree that negotiated sales whether
for cash or credit made under the foregoing circumstances shall not be deemed
for that reason not to have been made in a commercially reasonable manner.
Pledgors shall cooperate with Pledgee to satisfy any requirements under the
Securities Laws applicable to the sale or transfer of the Securities by Pledgee.

In connection with any sale or disposition of the Collateral,
Pledgee is authorized to comply with any limitation or restriction as it may be
advised by its counsel is necessary or desirable in order to avoid any violation
of applicable law or to obtain any required approval of the purchasers) by any
governmental regulatory body or officer and it is agreed that such compliance
shall not result in such sale being considered not to have been made in a
commercially reasonable manner nor shall Pledgee be liable or accountable by
reason of the fact that the proceeds obtained at such sale(s) are less than
might otherwise have been obtained at public sale.

Pledgee may elect to obtain the advice of any independent
nationally-known investment banking firm, which is a member firm of the New York
Stock Exchange, with respect to the method and manner of sale or other
disposition of any of the Collateral, the best price reasonably obtainable
therefor, the consideration of cash and/or credit terms, or any other details
concerning such sale or disposition. Pledgee, in its sole discretion, may elect
to sell on such credit terms which it deems reasonable.

15. Upon a sale of the Collateral by Pledgee, Pledgee shall apply
the sale proceeds: first, to the amount of any reasonable expenses, including
-----
counsel fees and expenses, incurred by Pledgee in connection with (i) the
administration of this Pledge Agreement, (ii) the custody, preservation, sale or
collection or realization of the Collateral, (iii) the exercise or enforcement
of Pledgee's rights hereunder, or (iv) the failure of Pledgors to perform
hereunder; second, to accrued and unpaid interest and fees; and third, to the
------ -----
principal balance of indebtedness under the Credit Agreement to Lenders on the
basis of their pro rata shares of the outstanding principal balance of the Loans
(as defined therein), except the fees payable under Paragraph 2.13 thereof,
which shall be paid solely to Agent. Such distribution of payments shall be made
<PAGE>

promptly in federal funds immediately available at the office of each Lender set
forth in the Credit Agreement.

16. The powers conferred on Pledgee hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the safe custody of any Collateral in its
possession and the accounting for monies actually received by it hereunder,
Pledgee shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve any right of or against other parties pertaining to
any Collateral. Pledgors agree jointly and severally to indemnify Pledgee and
each Secured Party from and against any and all claims, losses and liabilities
growing out of or resulting from this Agreement (including, without limitation,
enforcement of this Agreement) or Pledgee's or any Lender's interest in the
Collateral, except claims, losses or liabilities resulting from such party's
gross negligence or wilful misconduct.

17. The parties agree that this Pledge Agreement shall be governed
as to its validity, interpretation and effect by the internal laws of the
Commonwealth of Pennsylvania without regard to the conflict of laws rules
thereof; and any terms used herein which are defined in the Uniform Commercial
Code as enacted in Pennsylvania shall have the meanings therein set forth.

18. This Pledge Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns.

19. If Pledgee shall waive any rights or remedies arising
hereunder or under any applicable law, such waiver shall not be deemed to be a
waiver upon the later occurrence or recurrence of any of said events. No delay
by Pledgee in the exercise of any right or remedy shall under any circumstances
constitute or be deemed to be a waiver, express or implied, of the same and no
course of dealing between the parties hereto shall constitute a waiver of
Pledgee's rights or remedies.

20. Pledgor hereby irrevocably appoints Pledgee, effective upon
the occurrence and during the continuation of an Event of Default under the
Credit Agreement, as its attorney-in--fact to execute, deliver and record, if
appropriate, from time to time any instruments or documents in connection with
the Collateral, in Pledgors or Pledgee's names.

21. EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
PLEDGE AGREEMENT OR THE CREDIT AGREEMENT OR OTHER LOAN DOCUMENTS OR ANY COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS
OF AGENT OR LENDERS. THIS PROVISION IS A MATERIAL INDUCEMENT FOR AGENT'S
ENTERING INTO THIS PLEDGE AGREEMENT ON BEHALF OF THE LENDERS.
<PAGE>

22. EACH PLEDGOR ACKNOWLEDGES THAT IT HAS HAD THE ASSISTANCE OF
COUNSEL IN THE REVIEW AND EXECUTION OF THIS PLEDGE AGREEMENT AND, SPECIFICALLY,
PARAGRAPH 22 HEREOF, AND FURTHER ACKNOWLEDGES THAT THE MEANING AND EFFECT OF THE
FOREGOING WAIVER OF JURY TRIAL HAVE BEEN FULLY EXPLAINED TO SUCH PLEDGOR BY SUCH
COUNSEL.

23. This Pledge Agreement represents the entire understanding of
the parties with respect to the subject matter and no modification or change
herein shall be effective unless contained in a writing signed by the parties
hereto.

IN WITNESS WHEREOF, the undersigned have executed this Pledge
Agreement as of the day and year first above written.

Attest: MERKERT AMERICAN CORPORATION

By: By:
----------------------- --------------------------
Name: Name:
Title: Title:

[Corporate Seal]

Attest: MERKERT ENTERPRISES, INC.

By: By:
----------------------- --------------------------
Name Name:
Title Title:

[Corporate Seal]

Attest: ROGERS-AMERICAN COMPANY, INC.

By: By:
----------------------- --------------------------
Name: Name:
Title: Title:

[Corporate Seal]
<PAGE>

Schedule A

Pledged Securities
------------------

Description Percent of
Company of Securities Certificate No. No. of Shares Outstanding Equity
- ------- ------------- -------------- ------------- ------------------
<PAGE>

Schedule B

Disclosure
----------

<PAGE>

Exhibit 10.32

FORM OF GUARANTY AGREEMENT
--------------------------

THIS GUARANTY AGREEMENT (this "Guaranty"), dated as of
December __, 1998, is made by MERKERT ENTERPRISES, INC., a __________
corporation and ROGERS-AMERICAN COMPANY, a ____________ corporation (each
individually a "Guarantor" and individually and collectively, "Guarantors"), in
favor of FIRST UNION NATIONAL BANK, a national banking association, for itself
and as agent ("Agent") and the Lenders under the Credit Agreement described
below (the "Lenders").

BACKGROUND

1. Agent and the Lenders have entered into a Credit
Agreement dated of even date herewith (as may be amended from time to time, the
"Credit Agreement") with Merkert American Corporation ("Borrower"), under which
the Lenders have agreed to extend certain credit facilities to the Borrower in
consideration of, inter alia, the covenants and obligations made and assumed by
----- ----
the Guarantors as herein set forth.

2. It is a condition precedent to the extension or continued
extension of certain credit facilities by the Lenders under the Credit Agreement
that each Guarantor shall have executed and delivered to the Lenders this
Guaranty.

3. Each Guarantor is a subsidiary of the Borrower, and each
Guarantor's directors have determined that it is in the best interest of such
Guarantor to execute this Guaranty and that such Guarantor will benefit directly
and indirectly from the execution of this Guaranty.

NOW, THEREFORE, in order to induce the Lenders to extend
certain credit facilities under the Credit Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, each Guarantor does hereby
covenant and agree with the Lenders as follows:

1. Definitions and Construction. Reference is made to the
----------------------------
Credit Agreement for a statement of the terms thereof. All terms used in this
Guaranty which are defined in the Credit Agreement and not defined herein shall
have the respective meanings ascribed to such terms in the Credit Agreement.

2. Guaranty. Each Guarantor, jointly and severally,
--------
absolutely and unconditionally, guarantees and becomes surety for the full,
prompt and punctual payment to Lenders, as and when due, whether at maturity, by
acceleration or otherwise, of any and all indebtedness, and performance of any
and all liabilities and obligations of Borrower to Lenders or any of them,
including, without limitation, reimbursement obligations under Letters of
Credit, created at any time under, or pursuant to, the terms of the Credit
Agreement and the other Loan
<PAGE>

Documents whether for principal, interest, premiums, fees, expenses or
otherwise, any obligations under interest rate protection agreements, swaps,
hedging contracts or similar arrangements with any Lender, and any obligations
under or pursuant to any other documents and agreements executed in connection
therewith, including any future advances, whether obligatory or voluntary, or
refinancings, renewals or extensions of or substitutions for, any existing or
future debt (all such indebtedness, liabilities and obligations collectively,
the "Obligations"), together with any and all reasonable expenses, including
without limitation attorneys' fees, disbursements and the costs and expenses of
in-house counsel and legal support staff, which may be incurred by the Lenders
in collecting any or all of the Obligations or enforcing any and all rights
against either Guarantor under this Guaranty (the "Expenses"). Without limiting
either Guarantor's obligations hereunder and notwithstanding any purported
termination of this Guaranty, if any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation, dissolution, assignment for
the benefit of creditors, or similar event with respect to the Borrower or any
endorser of all or any of the Obligations shall occur, and such occurrence shall
result in the return of (or in such event any Lender shall be requested to
return) any payment or performance of any of the Obligations or Expenses, then
(a) without further notice, demand or other action, the obligations of each
Guarantor hereunder shall be reinstated with respect to (i) such payment or
performance returned (or requested to be returned) and (ii) with respect to all
further obligations arising as a result of such return or request, and (b) each
Guarantor shall thereupon be liable therefor, without any obligation on the part
of the Lenders to contest or resist any such return.

3. Nature and Term of Guaranty.
---------------------------

(a) The obligations and liability of each Guarantor
under this Guaranty shall be joint and several, absolute, primary and direct,
irrevocable and unconditional, regardless of any non-perfection of any
collateral security for the Obligations; any lack of validity or enforceability
of the Credit Agreement, any other Loan Document or any of the Obligations or
Expenses; the voluntary or involuntary liquidation, dissolution, sale or other
disposition of all, or substantially all of the assets, marshalling of assets
and liabilities, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition with creditors or
readjustment of, or other similar proceedings affecting Borrower, any Guarantor
or any other guarantor or endorser of, any or all of the Obligations and
Expenses or any of the assets of any of them, or any contest of the validity of
this Guaranty in any such proceeding; or any law, regulation or decree now or
hereafter in effect in any jurisdiction which might in any manner affect any of
such terms or provisions or any of the rights of the Lenders with respect
thereto or which might cause or permit the Borrower or any guarantor or endorser
of the Obligations and Expenses to invoke any defense to, or any alteration in
the time, amount or manner of payment of any or all of the Obligations and
Expenses or performance of this Guaranty.
(b) This Guaranty is a continuing guaranty and
shall remain in full force and effect until the Obligations, the Expenses and
any and all other amounts payable hereunder shall have been paid in full in cash
and no further loans or advances are available and no Letters of Credit are
outstanding under the Credit Agreement and the period during which any payment
by the Borrower or either Guarantor is or may be subject to rescission,
avoidance or refund under the United States Bankruptcy Code (or any similar
state or federal statute) shall have expired.
<PAGE>

4. Limitation on Amount Guarantied. Anything contained in
-------------------------------
this Guaranty to the contrary notwithstanding, the obligations of each Guarantor
hereunder shall be limited to the lesser of (i) the Obligations and Expenses, or
(ii) a maximum aggregate amount equal to the largest amount that would not
render its obligations hereunder subject to avoidance as a fraudulent transfer
or conveyance under Section 548 of Title 11 of the United States Code or any
applicable provisions of comparable state law (collectively, the "Fraudulent
Transfer Laws"), if and to the extent each Guarantor (or a trustee on its
behalf) has properly invoked the protections of the Fraudulent Transfer Laws, in
each case after giving effect to all other liabilities of such Guarantor,
contingent or otherwise, that are relevant under the Fraudulent Transfer Laws.

5. Payment in Accordance with Notes and Credit Agreement.
-----------------------------------------------------

(a) Each Guarantor hereby guaranties that the
Obligations and Expenses shall be paid and performed strictly in accordance with
the terms of the Loan Documents.

(b) If any Obligation or Expense is not paid or
performed by the Borrower punctually, subject to any applicable grace period,
including without limitation any Obligation due by acceleration of the maturity
thereof, the Guarantors will, upon Agent's demand, immediately pay or perform
such Obligation or Expense or cause the same to be paid or performed. Guarantors
will pay to Lenders, upon demand, all costs and expenses, including the
Expenses, which may be incurred by the Lenders in the collection or enforcement
of either Guarantor's obligations under this Guaranty.

6. Defaults; Rights and Remedies of Banks.
--------------------------------------

(a) An event of default hereunder shall include each of
the following:

(i) an Event of Default as defined under any of
the Loan Documents;

(ii) either Guarantor's failure to perform any of
its obligations or duties under this Guaranty; and

(iii) either Guarantor's notice to any Lender that
such Guarantor does not intend to be liable for any future Obligations or
Expenses or contests the validity or enforceability of this Guaranty.

(b) Lenders, or Agent on behalf of Lenders, in their
sole discretion, may proceed to exercise any right or remedy which it may have
under this Guaranty against any Guarantor without first pursuing or exhausting
any rights or remedies which it may have against the Borrower or against any
other person or entity or any collateral security, and may proceed to exercise
any right or remedy which it may have under this Guaranty without regard to any
actions or omissions of any other person or entity, in any manner or order,
without any obligation to marshal in favor of any Guarantor or other persons or
entities and without releasing any of Guarantors' obligations hereunder with
respect to any unpaid Obligations and Expenses. Upon the occurrence
<PAGE>

of an Event of Default, each Guarantor shall immediately pay, comply with and
perform such of the Obligations and Expenses as Lenders, or Agent on behalf of
Lenders, shall direct, irrespective of whether the Obligations and Expenses to
be paid, complied with and performed by such Guarantor are those which gave rise
to the Event of Default. No remedy herein conferred upon or reserved to the
Lenders or Agent is intended to be exclusive of any other available remedy or
remedies, but each and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Guaranty or now or hereafter
existing at law or in equity.

(c) If Borrower or any other person or entity defaults
under the Loan Documents and any Lender is prevented from accelerating payment
thereunder, either by operation of any bankruptcy laws, similar laws or any
court order, such Lender shall be entitled to receive from the Guarantors, upon
demand by such Lender, the sums which would have otherwise been due and payable
had such acceleration occurred.

7. Actions by Lenders Not Affecting Guaranty. Lenders may, at
-----------------------------------------
any time or from time to time, in such manner and upon such terms as they may
deem proper, extend or change the time of payment or the manner or place of
payment of, or otherwise modify or waive any of the terms of, or release,
exchange, settle or compromise any or all of the Obligations and Expenses or any
collateral security therefor, or subordinate payment of the same, or any part
thereof, to the payment of any other indebtedness, liabilities or obligations of
the Borrower which may at any time be due or owing to the Lenders or anyone, or
elect not to enforce any of the Lenders' rights with respect to any or all of
the Obligations and Expenses or any collateral security therefor, all without
notice to, or further assent of any Guarantor and without releasing or affecting
any Guarantor's obligations hereunder.

8. Payments Under Guaranty. All payments by Guarantors
-----------------------
hereunder shall be made in immediately available funds and in lawful money of
the United States of America to the Agent at the office of the Agent referred to
in Section 9.9 of the Credit Agreement or at such other location as the Agent
shall specify by notice to the Guarantors. All payments by any Guarantor under
this Guaranty shall be made by such Guarantor solely from such Guarantor's own
funds and not from any funds of the Borrower.

9. Modifications and Waivers. No failure or delay on the part
-------------------------
of any Lender or Agent in exercising any power or right under this Guaranty
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power preclude any other or further exercise thereof or the
exercise of any other right or power under this Guaranty. No modification or
waiver of any provision of this Guaranty nor consent to any departure therefrom
shall, in any event, be effective unless the same is in writing signed by the
Lenders and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to, or demand on either
Guarantor, in any case, shall entitle such Guarantor to any other or further
notice or demand in similar or other circumstances.

10. Guarantors' Waiver. Each Guarantor hereby waives the
------------------
following:

(a) promptness, diligence, presentment, demand, notice of
acceptance and
<PAGE>

any other notice with respect to any of the Obligations, the Expenses and this
Guaranty;

(b) any defense or circumstance which might otherwise
constitute a legal or equitable discharge of a Guarantor, including, without
limitation, any obligation of any Lender to proceed against Borrower prior to
exercising any rights hereunder;

(c) any and all right to terminate such Guarantor's
obligations and duties hereunder by delivery or written notice to any Lender or
otherwise;

(d) all benefits under any present or future laws exempting
any property, real or personal, or any part of any proceeds thereof, from
attachment, levy or sale under execution, or providing for any stay of execution
to be issued on any judgment recovered under any of the Loan Documents or in any
replevin or foreclosure proceedings, or otherwise providing for any valuation,
appraisal or exemption;

(e) all rights to inquisition on any real estate, which real
estate may be levied upon pursuant to a judgment obtained under any of the Loan
Documents and sold upon any writ of execution issued thereon in whole or in
part, in any order desired by any Lender;

(f) any requirement for bonds, security or sureties required
by any statute, court rule or otherwise; and

(g) any and all procedural errors, defects and imperfections
in any action by Agent or Lenders in replevin, foreclosure or other court
process or in connection with any other action related to any of the Loan
Documents or the transactions contemplated therein.

11. Subordination; Subrogation. Each Guarantor hereby
--------------------------
expressly agrees that it shall not exercise, against any Borrower, other
guarantor, maker, endorser or person (a) any right which such Guarantor may now
have or hereafter acquire by way of subrogation under this Guaranty, by law or
otherwise or by way of reimbursement, indemnity, exoneration, or contribution;
(b) any right to assert defenses as the primary obligor of the Obligations; (c)
any other claim which it now has or may hereafter acquire against any Borrower
or any other person or against or with respect to Borrower's property
(including, without limitation, any property which has been pledged to secure
the Obligations); or (d) any right to enforce any remedy which any Lender may
now have or hereafter acquire against Borrower or any other guarantor, maker or
endorser; in any case, whether any of the foregoing claims, remedies and rights
may arise in equity, under contract, by payment, statute, common law or
otherwise until all Obligations and Expenses have been indefeasibly paid in full
in cash. If in violation of the foregoing any amount shall be paid to any
Guarantor on account of any such rights at any time, such amount shall be held
in trust for the benefit of the Lenders and shall forthwith be paid to the
Lenders to be credited and applied against the Obligations and Expenses, whether
matured or unmatured, in accordance with the terms of the Notes and the Credit
Agreement.

12. No Setoff by Guarantors. No setoff, counterclaim,
-----------------------
deduction, reduction, or diminution of any obligation, or any defense of any
kind or nature which either Guarantor has or
<PAGE>

may have against Borrower or any Lender shall be available hereunder to either
Guarantor.

13. Representations and Warranties. Guarantors hereby
------------------------------
represent and warrant that the representations and warranties set forth in
Article 3 of the Credit Agreement are true and correct in all respects.

14. Covenants. Guarantors covenant and agree that, so long as
---------
the Guaranty shall remain in effect, they shall comply in all respects with the
covenants and agreements set forth in the Credit Agreement, including without
limitation, the covenants and agreements set forth in Articles 5 and 6 thereof.

15. Addresses for Notices. All requests, consents, notices and
---------------------
other communications required or permitted hereunder or in connection herewith
shall be deemed satisfactorily given if in writing and delivered personally or
by registered or certified mail, postage pre-paid, by reliable overnight
courier, or by telecopier to the parties at their respective addresses set forth
below or at such other address as may be given by any party to the other in
writing in accordance with this Section 16:

If to Guarantors:

c/o Merkert American Corporation
490 Turnpike Street
Canton, MA 02021
Attention:
Telecopier:

If to Borrower:

Merkert American Corporation
490 Turnpike Street
Canton, MA 02021
Attention:
Telecopier:

If to Agent:

First Union National Bank
1345 Chestnut Street
PA 4843
Philadelphia, PA 19107
Attention: Robert A. Brown
Telecopier: (215) 786-2877

16. Continuing Guaranty; Transfer of Notes. This Guaranty is a
--------------------------------------
continuing
<PAGE>

guaranty and shall (i) remain in full force and effect until the Obligations,
the Expenses and all other amounts payable under this Guaranty shall have been
paid in full and the period during which any payment Borrower or Guarantors is
or may be subject to avoidance or refund under the United States Bankruptcy Code
(or any similar statute) shall have expired, (ii) be binding upon each Guarantor
and the personal representatives, heirs, successors and assigns of each
Guarantor, and (iii) inure to the benefit of, and be enforceable by the Lenders
and Agent and their respective successors, transferees and assigns. Without
limiting the generality of the foregoing clause (iii), the Lenders may endorse,
assign or otherwise transfer the Obligations to any other person or entity in
accordance with the provisions of the Credit Agreement, and such other person or
entity shall thereupon become vested with all the rights in respect thereof
granted to the Lenders herein or otherwise.

17. Entire Agreement. This Guaranty constitutes the entire
----------------
agreement, and supersedes all prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter hereof.

18. Severability.
------------

(a) The invalidity or unenforceability of any one or more
portions of this Guaranty shall not affect the validity or enforceability of the
remaining portions of this Guaranty.

(b) The Guarantors and the Lenders agree that in an action
or proceeding involving any state or federal bankruptcy, insolvency or other law
affecting the rights of creditors generally:

(1) If any clause or provision shall be held invalid
or unenforceable in whole or in part in any jurisdiction, then such invalidity
or unenforceability shall affect only such clause or provision, or part thereof,
in such jurisdiction and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision in this Guaranty in
any jurisdiction, or any other clause or provision in this Guaranty in any
jurisdiction.

(2) If the guaranty hereunder by either Guarantor
would be held or determined to be void, invalid or unenforceable on account of
the amount of its aggregate liability under this Guaranty, then, notwithstanding
any other provision of this Guaranty to the contrary, the aggregate amount of
such liability shall, without any further action by any of the Guarantors, the
Lenders or any other person, be automatically limited and reduced to the highest
amount which is valid and enforceable as determined in action or proceeding.

(3) If any other guaranty by any one or more other
Guarantor is held or determined to be void, invalid or unenforceable, in whole
or in part, such holding or determination shall not impair or affect:

(A) the validity and enforceability of the
guaranty hereunder by either Guarantor, which shall continue in full force and
effect in accordance with its terms; or
<PAGE>

(B) the validity and enforceability of any clause
or provision not so held to be void, invalid or unenforceable.

19. Counterparts. This Guaranty may be executed by Guarantors
------------
in several separate counterparts, each of which shall be an original and all of
which taken together shall constitute one and the same instrument.

20. Governing Law. This Guaranty shall be deemed to be a
-------------
contract under the laws of the Commonwealth of Pennsylvania and for all purposes
shall be governed by and construed in accordance with such laws.

21. Each Guarantor irrevocably appoints each officer of
Borrower and Guarantors as its attorney upon whom may be served any notice,
process or pleading in any action or proceeding against it arising out of or in
connection with this Guaranty, the Loan Documents or any of the Collateral; each
Guarantor hereby consents that any action or proceeding against it be commenced
and maintained in any court within the Commonwealth of Pennsylvania or in the
United States District Court for the Eastern District of Pennsylvania by service
of process on any officer of Borrower or Guarantors; and each Guarantor agrees
that the courts of the Commonwealth of Pennsylvania and the United States
District Court for the Eastern District of Pennsylvania shall have jurisdiction
with respect to the subject matter hereof and the person of each Guarantor and
the Collateral. Notwithstanding the foregoing, Agent, in its absolute
discretion, may also initiate proceedings in the courts of any other
jurisdiction in which either Guarantor may be found or in which any of its
properties or Collateral may be located.

22. EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY,
AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
GUARANTY OR OTHER LOAN DOCUMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF AGENT OR LENDERS. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR LENDERS' ENTERING INTO THIS AGREEMENT.

23. GUARANTORS ACKNOWLEDGE THAT THEY HAVE HAD THE ASSISTANCE
OF COUNSEL IN THE REVIEW AND EXECUTION OF THIS GUARANTY AND, SPECIFICALLY,
PARAGRAPH 22 HEREOF, AND FURTHER ACKNOWLEDGES THAT THE MEANING AND EFFECT OF THE
FOREGOING WAIVER OF JURY TRIAL HAVE BEEN FULLY EXPLAINED TO GUARANTORS BY SUCH
COUNSEL.
<PAGE>

IN WITNESS WHEREOF, the undersigned, by their duly authorized
officers, as applicable, have executed this Guaranty the day and year first
above written.

Attest: MERKERT ENTERPRISES, INC.

By: By:
------------------------- --------------------------
Name: Name:
Title: Title:

Attest: ROGERS-AMERICAN CORPORATION

By: By:
------------------------- --------------------------
Name: Name:
Title: Title:

Attest: [ ]
------------------------------

By: By:
------------------------- --------------------------
Name: Name:
Title: Title:

<PAGE>

Exhibit 10.33

BALANCE PURCHASE MONEY
PROMISSORY NOTE

$4,000,000.00 Charlotte, North Carolina
November 2, 1992

FOR VALUE RECEIVED, balance purchase money for real estate, the undersigned
maker, ROGERS-AMERICAN COMPANY, INC., a corporation organized and existing under
the laws of the State of North Carolina (the "Maker"), promises to pay to the
order of REXHAM INDUSTRIES CORP., its successors and assigns (the "Holder") the
principal sum of Four Million and 00/100 ($4,000,000.00) Dollars, with interest
at a rate of zero percent (0%) per annum through December 31, 1992; at five
percent (5%) per annum from January 1, 1993 through December 31, 1994; and at
eleven and one-fourth percent (11.25%) per annum during the remaining term of
the loan (the "Contract Rate").

Interest only at the above set forth rates shall be payable monthly in
arrears commencing on the first day of February, 1993 and continuing thereafter
on the first day of each and every month until December 31, 1997, on which date,
if not sooner paid, the entire unpaid indebtedness, both principal and interest,
shall be due and payable.

All payments received hereunder, or under the terms of any instrument now
or hereafter evidencing or securing the within indebtedness, shall be applied
first in payment of accrued and unpaid interest, second in reimbursement to
Holder of any sum or sums paid by Holder in protection of its security
interests, as herein and in the Deed of Trust (as hereinafter defined) and in
the other loan documents or by law provided, and third, to the principal
indebtedness evidenced hereby. All such payments of principal and interest shall
be payable at the office of the Holder in Charlotte, North Carolina, or at such
other place as the Holder may designate in writing.

If any of the aforesaid installments of interest or of principal payable
hereunder is not paid in full as and when the same shall be due, or if Maker
shall default in the performance of any other of its obligations to Holder which
involve the payment of an agreed sum of money only (a "monetary default") and
said monetary default is not cured within three (3) days after the Holder shall
have given written notice thereof to Maker, or if there be any default in the
performance or

<PAGE>

observance of any covenant, agreement or condition of the Deed of Trust, or
other instrument securing the within indebtedness, which covenant, agreement or
condition is not restricted in subject matter to the payment by Maker of a sum
certain (a "non-monetary default"), and if such non-monetary default shall not
be cured within thirty (30) days after the Holder shall have given Maker written
notice thereof (or if the nature of the non-monetary default is such that it
cannot be cured within the first thirty (30) days after notice is received, then
if Maker shall not immediately commence curative action, diligently continue
such action and cure the default within a reasonable time thereafter not to
exceed ninety (90) days from the date of Holder's written notice), then in any
of such events the unpaid balance of the aforesaid principal sum, together with
all accrued and unpaid interest thereon and any other sums advanced hereunder or
thereunder by the Holder, shall, at the option of the Holder, notice of exercise
of said option being hereby waived, forthwith become due and payable, anything
hereinabove contained to the contrary notwithstanding, without any notice or
demand whatsoever, TIME BEING OF THE ESSENCE. Moreover, in the event of a
default, the entire unpaid principal indebtedness shall accrue interest after
the default at a default rate of interest equal to the Contract Rate plus three
percent (3%) in addition to said Contract Rate, and if this Note is placed in
the hands of an attorney for collection, Holder shall be entitled to collect all
reasonable costs and expenses of collection, including, but not limited to,
reasonable attorney's fees, including the cost of representation in insolvency
or bankruptcy proceedings.

Maker shall pay to Holder a late charge of four (4%) percent of any monthly
installment of principal and interest not received by Holder within fifteen (15)
days after the installment is due, but no late charge shall be due with respect
to any delinquency if Holder shall charge default interest on the loan because
of that delinquency.

Maker reserves the privilege, without payment of any fee or charge, of
prepaying the within indebtedness in full at any time.

Presentment, notice of dishonor and protest are hereby waived by all
makers, sureties, guarantors and endorsers hereof. This Note shall be the joint
and several obligation of Maker and of all sureties, guarantors and endorsers,
and shall be binding upon all of them and upon their successors and assigns
notwithstanding any forbearance, release of security or other defense, all of
which are expressly waived.

All notice written or otherwise to Maker may be given by mailing such
notice by certified mail addressed to Maker at

-2-
<PAGE>

7315 Pineville-Matthews Road, Charlotte, North Carolina 28226, or by telecopier
to 1-704-527-9620, or to such other address or telecopier number as Maker may
hereafter designate by written notice to holder. Any notice to Holder shall be
given by mailing such notice by certified mail, return receipt requested, to
Holder at 201 Congress Street, Charlotte, North Carolina, 28211, or to such
other address as may have been designated by Holder by written notice to Maker.

The indebtedness evidenced by this Note is secured by a Deed of Trust and
Security Agreement (the "Deed of Trust") of even date herewith conveying
property (the "Property") in Charlotte, Mecklenburg County, North Carolina, to
B.D. Farmer, III and J. Christopher Oates, Trustees, and by an Assignment of
Leases, Rents and Profits, which Deed of Trust is or will be recorded in the
Mecklenburg County Public Registry. This Note shall be construed under and
subject to the laws of the State of North Carolina.

IN WITNESS WHEREOF, the undersigned Maker has caused this instrument to
be duly executed and delivered in its partnership name by its authority duly
given, as of the day and year first above written.

ROGERS-AMERICAN COMPANY, INC.

ATTEST:

/s/ Robert Maccubin Jr. By: /s/ Curtis L. Roger
- ------------------------- --------------------------
Secretary President

(CORPORATE SEAL)

-3-

<PAGE>

Exhibit 10.34

Charlotte, North Carolina

January 1, 1995 AMENDMENT TO BALANCE PURCHASE
MONEY PROMISSORY NOTE

THIS AMENDMENT TO NOTE, dated as of January 1, 1995, is agreed to by
ROGERS-AMERICAN COMPANY, INC., Maker of BALANCE PURCHASE MONEY PROMISSORY NOTE
(the "Note") in the principal amount of $4,000,000.00, dated November 2, 1992,
and by REXHAM INDUSTRIES, CORP., Holder of said Note;

W I T N E S S E T H:
-------------------

That Maker has requested Holder to amend the Note, and Holder, in
consideration of the agreements of Maker herein contained, has agreed to amend
same, such that the parties agree with respect thereto that the Note is hereby,
and as of the date hereof, amended as follows:

1. Interest shall be payable in arrears on the unpaid principal balance
of the indebtedness (currently $4,000,000.00) at a rate per annum determined as
follows:

a. Throughout the term of the loan the prime rate of interest
charged by NationsBank, N.A. (Carolinas) as of each January 1 and July 1 (the
"Change Dates") shall be determined and

(i) if on the Change Date said prime rate is not less than seven
percent (7%) per annum nor more than ten percent (10%) per
annum, the annual rate of interest payable on the within
indebtedness as of and after that Change Date, to and
through the day immediately preceding the next Change Date,
shall be eight and one-half (8 1/2%) percent per annum, or

(ii) if on the Change Date said prime rate is less than seven
percent (7%) per annum or more than ten percent per
annum, the annual rate of interest payable on the within
indebtedness as of and after the Change Date, to and
through the day immediately preceding the next Change Date,
shall be equal to the sum of (a) the rate of interest
reported by the Wall Street Journal to be payable on the
---- ------ -------
five-year Treasury note having a maturity date nearest the
fifth anniversary of the Change Date and (b) three-fourths
of one percent.
<PAGE>

2. The principal indebtedness and the interest thereon shall be paid in
successive and uninterrupted monthly installments to be applied first to
interest and then to principal, the amount of which installments shall be the
sum which if paid on the first day of the month following the Change Date and
thereafter paid on the first day of each succeeding month, to and including
January 1, 2017, would satisfy in full the principal indebtedness and pay the
interest thereon at the rate per annum established on the immediately preceding
Change Date.

3. The first monthly principal and interest installment shall be due on
February 1, 1995, shall be in the amount of $33,563.25 and shall continue in
that amount until the rate of interest is changed and the monthly installments
adjusted, as provided in Paragraphs 1. and 2., above.

4. The entire unpaid balance of the principal indebtedness, all accrued
interest thereon and any other sums due by Maker to Holder under the provisions
of the Deed of Trust and Security Agreement shall be due and payable on December
31, 1999.

Except as herein specifically amended, the Note remains unamended and is in
full force and effect as a valid and binding obligation of Maker.

IN WITNESS WHEREOF, Maker and Holder have caused these presents to be
executed as of the day and year first above written.

ROGERS-AMERICAN COMPANY, INC.
ATTEST:
By: /s/ Doug Holstein
/s/ ------------------------
- ------------------------- President
Secretary

REXHAM INDUSTRIES CORP.

ATTEST: By: /s/ Frank Brown
-------------------------
/s/ Vice President
- -------------------------
Asst Secretary

-2-

<PAGE>

ROGERS-AMERICAN MORTGAGE TABLE

LOAN AMOUNT 4,000,000
INTEREST RATE 8.50%
LOAN TERM (22 YEAR AMORTIZATION) 264
WITH 5 YEAR BALLOON PAYMENT OF 3,646,218.73
MONTHLY PAYMENT 33,536.25

FIRST PAYMENT DUE FEBRUARY 1, 1995

MORTGAGE
DATE BALANCE INTEREST PRINCIPAL PAYMENT
---- ------- -------- --------- -------

1 Feb-95 $4,000,000.00 $28,333.33 $5,202.91 $33,536.25
2 Mar-95 3,994,797.09 28,296.48 5,239.77 33,536.25
3 Apr-95 3,989,557.32 28,259.36 5,276.88 33,536.25
4 May-95 3,984,280.44 28,221.99 5,314.26 33,536.25
5 Jun-95 3,978,966.18 28,184.34 5,351.90 33,536.25
6 Jul-95 3,973,614.28 28,146.43 5,389.81 33,536.25
7 Aug-95 3,968,224.46 28,108.26 5,427.99 33,536.25
8 Sep-95 3,962,796.47 28,069.81 5,466.44 33,536.25
9 Oct-95 3,957,330.04 28,031.09 5,505.16 33,536.25
10 Nov-95 3,951,824.88 27,992.09 5,544.15 33,536.25
11 Dec-95 3,946,280.73 27,952.82 5,583.42 33,536.25
12 Jan-96 3,940,697.30 27,913.27 5,622.97 33,536.25
13 Feb-96 3,935,074.33 27,873.44 5,662.80 33,536.25
14 Mar-96 3,929,411.52 27,833.33 5,702.91 33,536.25
15 Apr-96 3,923,708.61 27,792.94 5,743.31 33,536.25
16 May-96 3,917,965.30 27,752.25 5,783.99 33,536.25
17 Jun-96 3,912,181.31 27,711.28 5,824.96 33,536.25
18 Jul-96 3,906,356.35 27,670.02 5,866.22 33,536.25
19 Aug-96 3,900,490.12 27,628.47 5,907.77 33,536.25
20 Sep-96 3,894,582.35 27,586.62 5,949.62 33,536.25
21 Oct-96 3,888,632.73 27,544.48 5,991.76 33,536.25
22 Nov-96 3,882,640.96 27,502.04 6,034.21 33,536.25
23 Dec-96 3,876,606.76 27,459.30 6,076.95 33,536.25
24 Jan-97 3,870,529.81 27,416.25 6,119.99 33,536.25
25 Feb-97 3,864,409.82 27,372.90 6,163.34 33,536.25
26 Mar-97 3,858,246.47 27,329.25 6,207.00 33,536.25
27 Apr-97 3,852,039.47 27,285.28 6,250.97 33,536.25
28 May-97 3,845,788.50 27,241.00 6,295.24 33,536.25
29 Jun-97 3,839,493.26 27,196.41 6,339.84 33,536.25
30 Jul-97 3,833,153.43 27,151.50 6,384.74 33,536.25
31 Aug-97 3,826,768.68 27,106.28 6,429.97 33,536.25
32 Sep-97 3,820,338.71 27,060.73 6,475.51 33,536.25
33 Oct-97 3,813,863.20 27,014.86 6,521.38 33,536.25
34 Nov-97 3,807,341.82 26,968.67 6,567.57 33,536.25
35 Dec-97 3,800,774.24 26,922.15 6,614.10 33,536.25
36 Jan-98 3,794,160.15 26,875.30 6,660.95 33,536.25
37 Feb-98 3,787,499.20 26,828.12 6,708.13 33,536.25
38 Mar-98 3,780,791.08 26,780.60 6,755.64 33,536.25
39 Apr-98 3,774,035.43 26,732.75 6,803.50 33,536.25
40 May-98 3,767,231.94 26,684.56 6,851.69 33,536.25
41 Jun-98 3,760,380.25 26,636.03 6,900.22 33,536.25
42 Jul-98 3,753,480.03 26,587.15 6,949.10 33,536.25
43 Aug-98 3,746,530.94 26,537.93 6,998.32 33,536.25
44 Sep-98 3,739,532.62 26,488.36 7,047.89 33,536.25
45 Oct-98 3,732,484.73 26,438.43 7,097.81 33,536.25
46 Nov-98 3,725,386.91 26,388.16 7,148.08 33,536.25
47 Dec-98 3,718,238.83 26,337.53 7,198.72 33,536.25
48 Jan-99 3,711,040.10 26,286.53 7,249.71 33,536.25
49 Feb-99 3,703,790.39 26,235.18 7,301.06 33,536.25
50 Mar-99 3,696,489.33 26,183.47 7,352.78 33,536.25
51 Apr-99 3,689,136.55 26,131.38 7,404.86 33,536.25
52 May-99 3,681,731.69 26,078.93 7,457.31 33,536.25
53 Jun-99 3,674,274.37 26,026.11 7,510.14 33,536.25
54 Jul-99 3,666,764.24 25,972.91 7,563.33 33,536.25
55 Aug-99 3,659,200.90 25,919.34 7,616.91 33,536.25
56 Sep-99 3,651,584.00 25,865.39 7,670.86 33,536.25
57 Oct-99 3,643,913.14 25,811.05 7,725.19 33,536.25
58 Nov-99 3,636,187.94 25,756.33 7,779.91 33,536.25
59 Dec-99 3,628,408.03 25,701.22 7,835.02 33,536.25
60 Jan-2000 3,620,573.00 25,645.73 3,620,573.00 3,646,218.73 BALLOON

<PAGE>

Exhibit 10.35

DRAWN BY AND MAIL TO:
Perry, Patrick, Farmer & Michaux, P.A.
P.O. Box 345566
Charlotte, NC 28235 (BDF)

STATE OF NORTH CAROLINA
DEED OF TRUST
AND SECURITY AGREEMENT
COUNTY OF MECKLENBURG

COLLATERAL IS OR INCLUDES FIXTURES

THIS DEED OF TRUST AND SECURITY AGREEMENT, made and entered into as of the
2nd day of November, 1992, by and among ROGERS-AMERICAN COMPANY, INC., a
corporation organized and existing under the laws of the State of North
Carolina, hereinafter referred to as "Mortgagor"; B.D. FARMER, III and J.
CHRISTOPHER OATES, of Mecklenburg County, North Carolina, Trustees, hereinafter
together referred to as "Trustee"; and REXHAM INDUSTRIES CORP., a corporation
organized under the laws of the State of Delaware, hereinafter referred to as
"Beneficiary";

WITNESSETH:
----------

THAT WHEREAS, Mortgagor is justly indebted to Beneficiary for balance
purchase money for real estate in the principal sum of FOUR MILLION AND 00/100
DOLLARS ($4,000,000.00) lawful money of the United States of America, as
evidenced by a certain Balance Purchase Money Promissory Note of even date
herewith in the sum of Four Million and 00/100 Dollars ($4,000,000.00) payable
to the order of Rexham Corporation (hereinafter referred to as the "Note"),
which Note requires payment of monthly interest installments, with the entire
indebtedness, if not sooner paid, being due and payable on December 31, 1997;
and

WHEREAS, Beneficiary, as a condition to making the loan evidenced by said
Note, has required Mortgagor to secure the payment thereof by this conveyance;

NOW, THEREFORE, in consideration of, and as security for, the aforesaid
indebtedness owed by Mortgagor to Beneficiary, and in further consideration of
the sum of One ($1.00) Dollar to Mortgagor paid by Trustee, the receipt of which
is acknowledged, Mortgagor does hereby grant, bargain, sell, convey and confirm
unto said Trustee, and unto their heirs, successors and assigns, the following
described property, situated in Mecklenburg County, State of North Carolina, and
more particularly described on Exhibit A attached hereto and by this reference
---------
made a part hereof.

<PAGE>

TOGETHER with all buildings and improvements now or hereafter located on
the aforesaid parcel of land (which buildings and improvements, together with
the above described property, are together sometimes herein referred to as the
"premises"); and

TOGETHER with all and singular the tenements, hereditaments, easements and
appurtenances thereunto belonging or in any wise appertaining, and the reversion
or reversions, remainders, rents, issues and profits thereof; and also all the
estate, right, title, interest, claim and demand whatsoever of Mortgagor, in and
to the same and of, in and to every part and parcel thereof; and

TOGETHER with a security interest in the following personal property and
fixtures (sometimes herein referred to as the "personalty") owned by Mortgagor,
to wit:

1. all machinery, apparatus, equipment, fittings and fixtures attached or
to be attached to the premises (said premises and personalty being hereinafter
together referred to as the "property" or the "properties"), and all similar
articles of personal property of every kind and nature whatsoever actually owned
by Mortgagor and now or hereafter incorporated in or otherwise attached to said
property or any part thereof and used or usable in connection with any present
or future operation of said property as an office building and related
improvements, including, but without limiting the generality of the foregoing,
all: furniture and furnishings; heating, air-conditioning and lighting equipment
and installations; pipes; pumps; motors; conduits; plumbing, fire prevention,
fire extinguishing, refrigerating, ventilating and communications apparatus;
boilers, furnaces, oil burners or units thereof; air-cooling apparatus; vacuum
cleaning systems; shades; awnings; screens; storm doors and windows; attached
cabinets; partitions; ducts and compressors; lawn mowers, spreaders, shovels,
hoes and other gardening and landscaping maintenance equipment; vending and
other coin-operated machines; custodial supplies and equipment; automotive
equipment; office supplies; furnishings and furniture; and building materials
and equipment now or hereafter delivered to the above described property and
intended to be installed therein or thereon; and together with all additions
thereto and replacements of all of the above, all of which shall be deemed to be
fixtures and accessions to the properties (Mortgagor hereby agreeing with
respect to such personalty and all additions thereto and replacements thereof to
execute and deliver from time to time, and to pay the cost of preparation and
recording such further instruments (including continuations of Financing
Statements) as may be requested by Trustee or Beneficiary to confirm the
conveyance, transfer and assignment of any of the foregoing;

-2-

<PAGE>

2. all leases, tenant contracts and rental agreements and other contracts,
licenses and permits now or hereafter affecting or in any manner relating to the
properties, or any part thereof, and all of Mortgagor's right and power to
cancel, accept the surrender of or modify any of the terms of any lease demising
space therein without Mortgagee's prior written consent;

3. all rents, issues, and profits which shall hereafter become due or be
paid for the use of the properties or any part thereof, including, without
limitation, all rents, issues, and profits which shall hereinafter become due or
be paid under the aforesaid leases, tenant contracts, rental agreements,
licenses and permits (herein sometimes referred to as the "rents") or any
thereof, reserving to Mortgagor a revocable license to collect the rents only so
long as there is no Event of Default, as hereinafter defined, which shall have
occurred and be continuing; and

4. all monies and proceeds (herein sometimes referred to as the
"proceeds") paid or payable to Mortgagor in connection with the disposition of
the properties, or of any portion thereof, or paid or payable to Mortgagor as a
result of, or in connection with, any written or oral agreement between
Mortgagor and others or any agreement or arrangement made or entered into for
the benefit of Mortgagor, reserving to Mortgagor a revocable license to collect
the proceeds (other than the proceeds from the disposition of a portion of the
properties) so long as there is no Event of Default, as hereinafter defined,
which shall have occurred and be continuing.

This deed of trust constitutes a security agreement under the Uniform
Commerical Code and creates a security interest in the personalty, rents and
proceeds in favor of Beneficiary, which security interest has been or will be
perfected by the filing of required Financing Statements.

TOGETHER with any and all awards or payments to which Mortgagor is or may
be entitled, including interest thereon, and the right to receive the same, as a
result of (1) any exercise of the right of eminent domain, (2) the alteration of
the grade of any street, or (3) any other injury to, taking of, or decrease in
the value of the properties to the extent of all amounts which may be secured by
this Deed of Trust at the date of receipt of any such award or payment by
Trustee or Mortgagor, and of the reasonable attorney's fees, costs and
disbursements incurred by Trustee in connection with the collection of any such
award or payment. Said awards or payments shall be first applied by Beneficiary
to the payment or reimbursement of the aforesaid attorney's fees, costs and

-3-
<PAGE>

disbursements, then to the payment of accrued and unpaid interest and to the
reduction of the principal indebtedness or to the cost of repair or
reconstruction of the damage for which the award or payment is made, or to
either or both of such items in such proportions and in such order as
Beneficiary, in the exercise of its sole discretion, shall determine; provided,
that Beneficiary, by acceptance of this Deed of Trust, agrees that if at the
time of Beneficiary's receipt of any such award or payment (a) Mortgagor is
current in the performance of all of its obligations under the Note, this Deed
of Trust and the other documents evidencing and securing the loan secured hereby
and (b) Mortgagor is able to establish to the reasonable satisfaction of
Beneficiary that the award of payment received and to be received by Beneficiary
(supplemented, if necessary by other funds deposited by Mortgagor with
Beneficiary) are sufficient to pay in full the cost of restoration of the
improvements to a serviceable condition, said Beneficiary will make available
the award or payment paid and received as a result of the exercise of eminent
domain for the purpose of paying the cost of restoration of the improvements,
but the award or payment will be paid to Beneficiary (without interest accruing
thereon while held by Beneficiary) and shall be disbursed by Beneficiary as work
satisfactorily progresses and in accordance with Beneficiary's construction loan
disbursement practices and procedures. Any funds in excess of the cost of
restoration of the improvements may be applied by Beneficiary, at its election,
to the unpaid principal balance of the Note. Notwithstanding these provisions to
the contrary, if at the time of any exercise of eminent domain the cost of
restoration of the improvements is less than $50,000.00, Beneficiary agrees to
disburse the award of payment directly to Mortgagor provided that Mortgagor is
current in the performance of all of its obligations under the Note, this Deed
of Trust and the other loan documents evidencing or securing the loan secured
hereby and Mortgagor agrees with Beneficiary in writing that all of said award
or payment shall be utilized in the restoration of the improvements.

TO HAVE AND TO HOLD said property unto Trustee, and unto their heirs,
successors and assigns, with all rights, privileges and appurtenances thereunto
belonging, forever, but upon the trust and for the uses and purposes
hereinafter set out.

And Mortgagor covenants to and with the said Trustee and with Beneficiary,
its and their successors and assigns, that Mortgagor is seized of said property
in fee; that Mortgagor has the right to convey the property in fee simple; that
the property is free and clear of all liens and encumbrances; that it will
warrant and defend the title to all said property from the claims of all persons
whomsoever; and that it will execute

-4-

<PAGE>

such further assurances of title as may be reasonably required by Beneficiary.

And Mortgagor covenants, warrants and agrees to and with the said Trustee
and Beneficiary:

WITH RESPECT TO TAXES AND OTHER LIENS:

(1) That not less than fifteen (15) days prior to any delinquency,
Mortgagor will pay all taxes, charges and assessments of every kind and nature
that may be levied or charged against the hereinabove described property,
furnishing to Beneficiary proof of payment not more than fifteen (15) days after
each such payment.

(2) That in the event of the failure of Mortgagor to pay all taxes,
charges and assessments as herein provided, Beneficicary shall have the right
(but not the obligation) to pay said taxes, charges and assessments and all
amounts so expended by Beneficiary shall be charged hereunder as principal money
bearing interest at a rate of interest (hereinafter called the "default rate")
equal to the Contract Rate as such term is defined in the Note plus three (3%)
percent in addition to said Contract Rate. The sums advanced, if any, by
Beneficiary, and interest thereon at the default rate, shall be due and payable
immediately after payment thereof by Beneficiary, and all such advances, with
the interest thereon, shall be deemed a portion of the principal indebtedness
and shall be secured by this Deed of Trust; provided, always, that no
advancements by Beneficiary of such taxes, charges or assessments shall be
deemed a waiver by Beneficiary of any rights accruing to it because of
non-payment thereof by Mortgagor or a waiver of Beneficiary's right to require
all future payments thereon to be made by Mortgagor as herein provided.

WITH RESPECT TO FEES, LICENSES AND OTHER CHARGES:

That Mortgagor will pay all license and franchise fees, sewer and water
rates and charges, and all other private and governmental assessments, levies
and charges of any kind and nature whatsoever which are assessed, levied,
confirmed or imposed or which become a lien upon the premises within fifteen
(15) days after receipt of notice of such levies or charges; provided, however,
that in the event Mortgagor elects to contest any such assessments, levies or
charges, including assessment of ad valorem taxes, Mortgagor may do so on the
----------
condition that it shall deposit with Beneficiary such funds, if any, as
Beneficiary may reasonably require to insure the ultimate payment of such levies
and charges, including costs, interest and penalties.

-5-
<PAGE>

WITH RESPECT TO A CONVEYANCE OR OTHER TRANSFER OF THE
PREMISES OR OF AN INTEREST IN MORTGAGOR:

That if, without Beneficiary's prior written approval (which approval may
be withheld for any reason satisfactory to Beneficiary), all or any portion of
the premises, or any interest therein, shall be sold, transferred or conveyed by
Mortgagor, such sale, transfer of conveyance shall constitute a default by
Mortgagor in the performance of its obligations hereunder and under the other
loan documents and upon the occurrence of any one or more of such events,
Beneficiary may thereupon, or at any time thereafter, declare the entire
principal and interest indebtedness hereby secured immediately due and payable.
This privilege to accelerate the due date of the secured indebtedness upon the
happening of such an event may be exercised by Beneficiary irrespective of (1)
whether Beneficiary has accepted payment of one or more principal or interest
payments subsequent to the sale, transfer or conveyance (2) whether the
conveyance or transfer is accomplished with or without consideration, (3) the
relationship of the parties to the conveyance or transfer or (4) whether on
prior occasions Beneficiary has consented to a sale, transfer or conveyance of
all of, or an interest in, said property or in Mortgagor, and the terms "sold",
"transferred" and "conveyed" shall include the transfer of any interest in
Mortgagor.

WITH RESPECT TO SECONDARY FINANCING:

That if, without the prior written consent of Beneficiary, all or any
portion of the premises, or any interest therein, shall be further encumbered by
a deed of trust, mortgage or other conveyance in the nature of security for an
indebtedness, such encumbrance shall constitute a default by Mortgagor in the
performance of its obligations hereunder and under the other loan documents, and
upon the occurrence of any one or more of such events, Beneficiary may
thereupon, or at any time thereafter, declare the entire principal and interest
indebtedness hereby secured immediately due and payable. This privilege to
accelerate the due date of the secured indebtedness upon the happening of such
an event may be exercised by Beneficiary irrespective of (1) whether Beneficiary
has accepted payment of one or more principal or interest payments subsequent to
the encumbrancing or (2) whether on prior occasions Beneficiary has consented to
an encumbrancing of all of, or an interest in, said premises.

WITH RESPECT TO LIENS AGAINST THE PREMISES:

That Mortgagor will insure that no liens (either superior or inferior to
the lien of this Deed of Trust) are filed

-6-
<PAGE>

against the premises by reason of failure to pay timely for any services or
materials supplied thereto, whether such services or materials are supplied to
Mortgagor or to some person, firm or corporation in possession of all or a part
of the demised premises through or under Mortgagor, and, within fifteen (15)
days after the filing of any lien, or claim thereof, Mortgagor will cause the
same to be discharged by deposit, bond, order of court or otherwise.

WITH RESPECT TO WASTE, PROPERTY MAINTENANCE AND
HAZARDOUS MATERIALS LOCATED ON THE PREMISES:

That Mortgagor will maintain the property in good condition and will not
commit or permit any waste on the premises; and that said Mortgagor will obey
and carry out all Federal, State, County, and municipal laws, regulations, rules
and ordinances affecting the premises and will not use or permit the use of the
premises in contravention of same.

That Mortgagor hereby covenants, agrees, warrants and represents (which
covenants, agreements, warranties and representations shall survive any
foreclosure or deed in lieu of foreclosure of the premises and any satisfaction
of the indebtedness secured hereby) that:

(1) neither Mortgagor nor, to the best of Mortgagor's knowledge, any
previous owner of the premises used, generated, stored or disposed of, on, under
or about the premises in violation of any of the laws, ordinances, rules and
regulations hereinafter set forth, and hazardous waste, toxic substances or
related materials defined as "hazardous substances," "hazardous materials," or
"toxic substances," or defined by similar name, in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Sec. 9601, et seq., the Hazardous Materials Transportation Act, 49 U.S.C.
------
Sec. 1801, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. Sec.
------
6901, et seq.; the Toxic Substances Control Act, 15 U.S.C. Sec. 2601 et seq.;
------ ------
the Clean Air Act, 42 U.S.C. Sec. 7401 et seq.; the Clean Water Act, 33 U.S.C.
------
Sec. 1251 et seq.; or North Carolina provisions set forth in NCGS (S)(S)
------
130A-290 through 339 or Articles 21, 21A or 21B of Chapter 143 of the North
Carolina General Statutes, all as amended from time to time, as well as any
"PCBs" or "PCB items" (as defined in 40 C.F.R. (S) 761.3) and any "asbestos"
(as defined in 40 C.F.T. (S) 763.63) (such substances, materials, PCBs, PCB
items and asbestos are hereinafter collectively referred to as "Hazardous
Materials").

(2) Mortgagor will not permit the storage of any Hazardous Materials in
violation of any of the above set forth laws, ordinances, rules and regulations
in, on and/or around the

-7-

<PAGE>

premises now or at any future time and will indemnify, Beneficiary and hold
Beneficiary harmless from and against any and all losses, liabilities, damages,
injuries, penalties, fines, costs, expenses and claims of any and every kind
whatsoever (including attorney's fees and costs) paid, incurred or suffered by,
or asserted against, Beneficiary, as a result of any claim, demand or judicial
or administrative action by any person or entity (including governmental or
private entities) for, with respect to, or as a direct or indirect result of,
the presence on or under or the escape, seepage, leakage, spillage, discharge,
emission, or release from the premises of any Hazardous Materials (including
costs, expenses or claims asserted or arising under the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, any
so-called state or local "Superfund" or "Superlien" law, or any other federal,
state or local statute, law, ordinance, code, rule, regulation order or decree
regulating, relating to or imposing liability or standards on conduct
concerning, any Hazardous Materials) in violation of any of the above set forth
laws, ordinances, rules and regulations. Mortgagor agrees to immediately notify
Beneficiary if Mortgagor becomes aware of any Hazardous Materials or other
environmental problem or liability with respect to the premises or any lien,
action or notice pertaining to the premises resulting from or received in
connection with any violation of any federal, state or local law, statute,
ordinance or regulation, rule, court or administrative order or decree, or
private agreement.

That Beneficiary, its employees and agents shall be permitted to visit the
premises at any time and from time to time for the purpose of inspecting the
premises and monitoring Mortgagor's compliance herewith (the cost of such
inspection and monitoring to be borne by Mortgagor in the event such inspection
and monitoring shall reveal that Mortgagor is in breach of its covenants, duties
or obligations with respect to Hazardous Materials as set forth herein) and if
at any time it is determined that there are any Hazardous Materials located on
the premises, Mortgagor shall diligently commence to take such action, at its
sole expense, to comply with all environmental requirements pertaining to such
Hazardous Materials. The inaccuracy of any of Mortgagor's certifications
contained herein or the failure of Mortgagor to comply with all environmental
requirements of federal, state or local law, statute, ordinance or regulation,
rule, court or adminitrative order or decree, or private agreement, shall
constitute and be a default under this deed of trust and Beneficiary, in lieu of
foreclosure, shall have the option to require specific performance of
Mortgagor's obligations hereunder.

-8-

<PAGE>

That in the event of the failure of Mortgagor to comply with its
obligations hereunder, Beneficiary shall have the further right (but not the
obligation) to pursue any and all remedial action it deems necessary to comply
with environmental requirements of federal, state or local law, statute,
ordinance or regulation, rule, court or administrative order or decree, or
private agreement. Advances, if any, by Beneficiary to cover the expense of
such compliance, which shall include the costs of all inspections, tests and
corrective action, shall be due and payable immediately after payment thereof by
Beneficiary, and all such advances, with interest thereon, shall be deemed a
portion of the principal indebtedness and shall be secured by this Deed of
Trust; provided, always, that no advancements by Beneficiary of such expenses
shall be deemed a waiver by Beneficiary of any rights accruing to it because of
non-compliance of or non-payment thereof by Mortgagor or a waiver of
Beneficiary's right to require all future compliance and payment with respect
thereto to be made by Mortgagor as herein provided.

WITH RESPECT TO THE BANKRUPTCY OR
OTHER INSOLVENCY OF MORTGAGOR:

That if any proceeding shall be instituted by or against Mortgagor, or
against its general partner(s), the purpose or intent of which is to cause
Mortgagor or any of its general partners to be declared a bankrupt, or other
insolvent, and if such proceeding is not dismissed within ninety (90) days after
the petition therefor is filed, or if Mortgagor or any of its general partners
shall make an assignment for the benefit of its or their creditors or otherwise
take or submit to any action indicating an inability on the part of any of them
to meet its or their financial obligations as they accrue, then in any such
event, Mortgagor shall be deemed to be in default in the performance of
Mortgagor's obligations to Beneficiary hereunder and Beneficiary may thereupon
immediately, and without the notice required in the event of other non-monetary
defaults or any other notice whatsoever, declare the unpaid balance of the
indebtedness hereby secured immediately due and payable.

WITH RESPECT TO MORTGAGOR'S FINANCIAL STATEMENTS:

That Mortgagor shall furnish Beneficiary annually, and not later than April
1 of each year with respect to the prior calender year a statement of
Mortgagor's financial condition, including a balance sheet and income statement
prepared in accordance with generally accepted accounting principles, certified
by the principal financial officer of Mortgagor as true and correct.

-9-

<PAGE>

WITH RESPECT TO BENEFICIARY'S APPOINTMENT
OF A RECEIVER:

That upon default by Mortgagor, Beneficiary shall be entitled to the
immediate appointment of a Receiver for the property, without notice to
Mortgagor and regardless of whether the property is adequate security for the
debt. Beneficiary or the Receiver appointed pursuant to the provisions of this
paragraph shall enjoy all of the rights of Mortgagor with regard to any and all
contracts between Mortgagor and others and shall have the right from time to
time in its discretion to vary the terms of any such contracts, or to sue for
the recovery of any sum or sums due, past due or to become due thereunder and
any and all acts so done are hereby authorized, ratified and approved by
Mortgagor.

WITH RESPECT TO THE FUTURE ENACTMENT
OR ADOPTION OF UNFAVORABLE LAWS OR REGULATIONS:

That in the event of the enactment of any law changing the laws now in
force and providing for the taxation of deeds of trust, or of debts secured
thereby, or the manner of collection of such taxes, or in the event of the
enactment of any law or ordinance, the promulgation of any zoning or other
governmental regulation, or the rendition of any judicial decree restricting or
affecting the use of the property or rezoning the district wherein the same
shall be situate, and if any of such events in Beneficiary's reasonable
judgment shall materially and adversely affect the rights and security of
Beneficiary, said Beneficiary may, upon not less than six months written notice
to Mortgagor, require payment of the indebtedness secured hereby at such time as
may be stipulated in such notice, and the whole of the indebtedness hereby
secured, together with accrued interest, shall thereupon become due and payable
at par.

WITH RESPECT TO THE USE AND OPERATION OF THE
PREMISES AND PRESERVING BENEFICIARY'S SECURITY
INTEREST THEREIN:

(1) That Mortgagor will comply with all laws, ordinances, orders, rules,
regulations and requirements of all governmental authorities.

(2) That Mortgagor will at all times keep in full force and effect such
Federal, State, municipal and other governmental approvals as may be necessary
from time to time to comply with all governmental requirements relating to the
premises or to Mortgagor's development, use and occupancy thereof, delivering to
Beneficiary, within ten (10) days after its request therefor, all additional
permits issued by a

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governmental authority with respect to the premises, and all communications in
which Mortgagor is notified that additional permits or approvals will be
required, and, upon Beneficiary's written request therefor, Mortgagor will
furnish Beneficiary with sufficient proof of compliance with all requirements;
provided, that Mortgagor shall be privileged to contest in good faith any and
all such requirements and shall not be in default hereunder so long as
Mortgagor's rights to develop, use and occupy the premises is not interrupted,
the contest has not been abandoned by Mortgagor and neither the value of the
property nor the quality of Beneficiary's lien thereon is or will be adversely
affected, in Beneficiary's reasonable opinion.

(3) That Mortgagor will pay promptly all costs, commissions and expenses,
including reasonable attorney's fees, incurred in enforcing and carrying out the
provisions of this Deed of Trust, or of the Note secured hereby, and will pay
promptly any and all sums required to preserve the priority of the lien of this
Deed of Trust.

(4) That Mortgagor will pay all such costs and reasonable attorney's fees,
immediately upon demand therefor, as may be incurred by Beneficiary or Trustee
herein in the event it or they are named as parties defendant in any judicial
proceedings by reason of said parties having an interest in the real estate
described herein.

WITH RESPECT TO ACCEPTANCE BY
BENEFICIARY OF PARTIAL PERFORMANCE:

That no acceptance or approval by Beneficiary of any payment or payments by
Mortgagor, or by any third party for the account of Mortgagor, in amounts less
than sufficient to satisfy in full all monetary obligations due by Mortgagor to
Beneficiary (or to any third party for preservation of the security or of the
lien hereof) as of the date of payment thereof shall be deemed to constitute
satisfaction of such obligations, or any of them, or to cure any default
occasioned by Mortgagor's failure to fully satisfy Mortgagor's said obligations
or to constitute a waiver by Beneficiary of the default or of its right to
accelerate the maturity date of the secured indebtedness and to avail itself of
all remedies granted or reserved to Beneficiary in the event of such default;
nor shall Beneficiary's failure to discover Mortgagor's non-performance or
partial performance of non-monetary obligations, or to require performance or
curative action in the event of such non-performance or partial performance, be
deemed or construed to be an acceptance by Beneficiary of said non-performance
or partial performance or be deemed to cure the default occasioned thereby or be
held to

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<PAGE>

constitute a waiver by Beneficiary of its right to accelerate the maturity date
of the secured indebtedness on account of said non-performance or partial
performance or on account of a subsequent default of the same or similar nature
or to deprive Beneficiary of any remedy granted or reserved.

WITH RESPECT TO MAINTAINING
PROPER INSURANCE:

Mortgagor will effect and keep in effect:

(1) Fire and extended coverage insurance policies in a company or
companies approved by Beneficiary in an amount not less than the greater of the
unpaid principal balance of the Note or the full replacement value of the
property, excluding foundation and excavation costs, and, in any event, in an
amount sufficient to prevent the application of any coinsurance contributions
for any loss. Such policies shall insure the property and tangible personalty
against loss by fire, lighting, windstorm, hail, explosion, vandalism, theft,
malicious mischief and such other casualties and hazards as are customarily
covered by such policies.

(2) Comprehensive public liability insurance naming Mortgagor and
Beneficiary as insureds and insuring against any and all claims arising out of
Mortgagor's ownership or use of the properties, which insurance shall be in
amounts reasonably satisfactory to Beneficiary and in any event not less than
$1,000,000.00 with respect to any single loss or damage.

(3) Flood hazard insurance in an amount acceptable to Beneficiary in the
event the properties are at any time deemed by proper authorities to be within a
flood hazard district.

All policies shall contain mortgagee clauses naming Beneficiary as first
and primary payee in the event of loss or damage and shall provide that there
may be no cancellation of any such policy by the insured or the insurer except
after Beneficiary has been given ten (10) days written notice of a proposed
cancellation. Mortgagor will deposit all policies with Beneficiary and promptly
pay all premiums to become payable with respect thereto, in default of which
Beneficiary may pay such premiums, with Beneficiary's advances, if any, to
become a part of the principal indebtedness and to bear interest at the default
rate of interest from the date of the advance to the date of repayment by
Mortgagor. Upon each request of Beneficiary, Mortgagor will provide to said
Beneficiary acceptable evidence that all premiums payable on any of the policies
as of the date of the request have been fully paid.

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<PAGE>

Any insurance funds received by Beneficiary in the event of loss or damage
may be applied by Beneficiary, at its election, to the unpaid principal balance
of the Note; provided, however, that Beneficiary, by acceptance of this Deed of
Trust, agrees that if at the time of any loss or damage (a) Mortgagor is current
in the performance of all of its obligations under the Note, this Deed of Trust
and the other documents evidencing and securing the loan secured hereby and (b)
Mortgagor is able to establish to the reasonable satisfaction of Beneficiary
that the insurance proceeds received and to be received by Beneficiary
(supplemented, if necessary by other funds deposited by Mortgagor with
Beneficiary) are sufficient to pay in full the cost of repair and
reconstruction, said Beneficiary will make available the insurance proceeds paid
and received as a result of loss or damage for the purpose of paying the cost of
repair or reconstruction of the damaged or destroyed improvements, but the
insurance funds will be paid to Beneficiary (without interest accruing thereon
while held by Beneficiary) and shall be disbursed by Beneficiary as work
satisfactorily progresses and in accordance with Beneficiary's construction loan
disbursement practices and procedures. Any insurance funds in excess of the cost
of repair or reconstruction of the damaged or destroyed improvements may be
applied by Beneficiary, at its election, to the unpaid principal balance of the
Note. Notwithstanding these provisions to the contrary, if at the time of any
loss or damage the cost of repairs or reconstruction to restore the improvements
is less than $50,000.00, Beneficiary agrees to disburse insurance funds
recovered for such loss or damage directly to Mortgagor provided that Mortgagor
is current in the performance of all of its obligations under the Note, this
Deed of Trust and the other loan documents evidencing or securing the loan
secured hereby and Mortgagor agrees with Beneficiary in writing that all of said
insurance funds shall be utilized in the repair of the improvements.

WITH RESPECT TO INVALIDITY OF CERTAIN
MORTGAGE PROVISIONS:

That if any term, restriction or covenant of this Deed of Trust is deemed
or held to be invalid or unenforceable, all other terms, restrictions and
covenants and the application thereof to all persons and circumstances subject
hereto shall remain unaffected to the extent permitted by law; and if any
application of any term, restriction or covenant to any person or circumstance
is deemed invalid or unenforceable, the application of such term, restriction or
covenant to other persons and circumstances shall remain unaffected to the
extent permitted by law.

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<PAGE>

WITH RESPECT TO REPAYMENT OF THE INDEBTEDNESS HEREBY
SECURED AND PERFORMANCE OF MORTGAGOR'S OTHER AGREE-
MENTS; WITH RESPECT TO FORECLOSURE:

That Mortgagor shall promptly (and in any event within the times
stipulated) perform and comply with each and every of Mortgagor's agreements and
obligations as herein, in the Note and as in its other agreements with
Beneficiary provided, and as imposed upon Mortgagor by law, and if default shall
be made in the payment of the indebtedness evidenced by said Note, or of the
interest on same, or of any of either, or in payment of any taxes, charges or
assessments as hereinabove provided, or with reference to the keeping of said
premises insured, with premiums paid, and in good order and condition, as herein
provided, or if Mortgagor shall fail to perform any other term, condition or
obligation of this Deed of Trust, of the Note hereby secured, or of any other
agreement between Mortgagor and Beneficiary relating to the secured loan, or if
Mortgagor, without the prior written approval of Beneficiary, shall sell,
transfer or convey the security property or any part thereof or any interest
therein (as such sale, transfer and conveyance are defined in this Deed of
Trust), then in all or any of said events (each of which shall be deemed an
Event of Default hereunder), the full principal sum, with all unpaid interest
thereon, shall at the option of Beneficiary, its successors or assigns, become
at once due and payable without further notice and irrespective of the date of
maturity expressed herein or in the Note; and it shall then become lawful for
Trustee and upon request of Beneficiary, its successors and assigns, it shall
become their duty, and they are hereby authorized, empowered and directed to
give such notice and to conduct such hearing as may be required by applicable
law and thereafter to advertise for sale under this Deed of Trust the premises
and personalty above described, by notice of such sale published at least once a
week for two (2) consecutive weeks immediately preceding such sale in some
newspaper published in Mecklenburg County and by like notice published at the
courthouse door of Mecklenburg County for at least twenty (20) days immediately
preceding such sale, and at the time and place in said County named, to sell the
premises and personalty at public auction for cash to the highest bidder and on
completion of such sale to make and deliver to the purchaser or purchasers a
proper deed and bill of sale therefor in fee, and out of the proceeds of said
sale to pay first, all costs and expenses incident to said sale, including two
(2%) percent of the bid price in fees and commission to Trustee as compensation
for making said sale; second, the unpaid principal and interest of the debt
hereby secured and all amounts due Beneficiary because of taxes, charges and
assessments paid; and third; the residue, if any, to those lawfully entitled
thereto.

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<PAGE>

WITH RESPECT TO THE UNIFORM COMMERCIAL CODE

That this deed of trust is a security agreement under the Uniform
Commercial Code and Mortgagor hereby (1) grants to Beneficiary, its successors
and assigns, a security interest in all collateral, (2) agrees that upon all
requests therefor by Beneficiary Mortgagor will promptly furnish to Beneficiary
itemized descriptions of personal property hereafter acquired by Mortgagor, will
execute all supplementary security agreements and Financing Statements deemed
necessary or desirable by Beneficiary to perfect its security interest in the
collateral and will pay the cost of preparing and filing the supplementary
documents and (3) agrees that the above-established method of realizing upon the
collateral security through foreclosure, as outlined in the immediately
preceding paragraph of this Deed of Trust, is commercially reasonable.

WITH RESPECT TO FEES AND EXPENSES OF COLLECTION:

That if the Note and this Deed of Trust are placed in the hands of Trustee
for foreclosure, and if Mortgagor elects to satisfy the secured obligation in
full prior to completion of the foreclosure proceeding, Trustee shall be
entitled to reimbursement of all expenses incurred by them prior to receipt by
Beneficiary of funds sufficient to satisfy the debt, and Mortgagor shall also
pay at the time and as a condition of such satisfaction a Trustee's fee of one
percent (1%) of the principal sum to be prepaid (but not less than One Thousand
Five Hundred Dollars [$1,500.00]) if the foreclosure proceeding has not been
commenced and two percent (2%) of said principal sum (but not less than Two
Thousand Five Hundred Dollars [$2,500.00]) if the foreclosure proceeding has
been commenced as of the date of satisfaction of the debt.

WITH RESPECT TO CANCELLATION OF THE LIEN
OF THIS DEED OF TRUST:

That if Mortgagor, its successors or assigns, shall pay or cause to be paid
to Beneficiary, its successors or assigns, the indebtedness evidenced by the
aforesaid Note in accordance with the terms and conditions of same, and at the
times and places therein mentioned for payment thereof, together with all
interest thereon, and all taxes, charges and assessments and all other sums or
advances hereby secured, as hereinbefore expressed and agreed to be done, then
in that event, this Deed of Trust and the estates and liens hereby created and,
conveyed and the Note hereby secured shall cease, determine and become void, the
Financing Statements shall be terminated and this Deed of Trust shall be
cancelled in the records of the Register of Deeds for Mecklenburg County, North
Carolina, in either of

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<PAGE>

the following ways, and none other: (1) by the Register of Deeds, his or her
assistant or deputy, upon exhibition to him or her of this Deed of Trust and the
Note hereby secured with endorsement of payment and satisfaction thereon by the
owner and holder thereof, or (2) by joint entry of satisfaction upon the margin
of the page whereon this Deed of Trust is recorded in the said Register of Deeds
office by either Trustee herein (or by any one successor Trustee) and by
Beneficiary, acting by and through one of Beneficiary's executive officers or a
duly appointed attorney-in-fact. The mode of cancellation (2), above, shall not
require exhibition of the Note secured hereby or of this Deed of Trust and may
be accomplished before or after maturity of the debt hereby secured, but the
signatures shall be witnessed by the Register of Deeds, or by his or her
assistant or deputy, and thereafter the Trustee signing such marginal entry of
satisfaction shall be absolved from any liabilities or obligations to any
person, firm or corporation later producing the promissory note, irrespective of
whether the same have been negotiated or otherwise transferred by Beneficiary
and irrespective of whether same has, in fact, been satisfied.

WITH RESPECT TO COMMUNICATIONS BETWEEN THE PARTIES:

That when either Mortgagor or Beneficiary desires or is required to give a
notice to the other, it shall be sufficient for all purposes if such notice is
personally delivered or sent by registered or certified United States mail,
postage prepaid, addressed to the intended recipient at the following addresses:

Mortgagor: Rogers-American Company, Inc.
7315 Pineville-Matthews Road
Charlotte, North Carolina 28226
Attn: _____________________

Beneficiary: Rexham Industries Corp.
201 Congress Street
Charlotte, North Carolina 28211
Attn: General Counsel

The above addresses may be changed from time to time by written notice
given in each instance by the party whose address is to be changed, but the
foregoing address and any such change thereof shall be the address of said party
for all purposes hereunder until a written notice of change is actually received
by the other party.

Any notice given in the manner specified herein shall be deemed to have
been given on the day it is personally delivered or three business days after it
is deposited in the United States mail, postage prepaid, whichever is earlier
(except

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<PAGE>

that, as aforesaid, notices of address change shall be effective only after
actual receipt thereof by the other party).

WITH RESPECT TO SUBSTITUTION OF TRUSTEE:

That should Beneficiary, or the successors or assigns of Beneficiary, for
any reason desire to substitute the Trustee herein named, or either of them, (or
substitute for any of their successors), then said Beneficiary, or the
successors or assigns of Beneficiary, shall have the right to appoint successor
Trustee(s) by instrument in writing, duly acknowledged so as to entitle the same
to record in this State, and the individual or individuals or corporation(s)
named as new Trustee, immediately upon recordation of the written substitution
of trustee instrument in the Mecklenburg County Public Registry, shall become
successor to the title to the said property, and said successor(s) shall become
vested with the title in trust for the uses and purposes herein conferred on
Trustee in the same manner and with the same effect as though said individual(s)
or corporation(s) were named herein as Trustee.

The terms "Beneficiary", "Trustee", and "Mortgagor" shall be construed to
identify and include the herein named parties, their heirs, successors in
interest and assigns, and where the foregoing text refers to "Beneficiary" or
"Mortgagor" in the singular, imposing obligations or conferring rights or
benefits, such obligations, rights, and benefits shall be deemed to be imposed
or conferred upon all persons, firms, or corporations then included within said
term of "Beneficiary" or "Mortgagor".

IN WITNESS WHEREOF, the undersigned Rogers-American Company, Inc. has
caused these presents to be duly executed under seal in its corporate name by
its authority duly given, as of the day and year first above written.

ROGERS-AMERICAN COMPANY, INC.

ATTEST:

___________________ By:_________________________________

________Secretary ___________ President

[CORPORATE SEAL]

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<PAGE>

STATE OF NORTH CAROLINA

COUNTY OF MECKLENBURG

This ____________ day of ________________, 1992, personally came before me,
__________________________, who being by me duly sworn, says that he is ________
President of ROGERS-AMERICAN COMPANY, INC., and that the seal affixed to the
foregoing instrument in writing is the corporate seal of said corporation; that
said writing was signed and sealed by him on behalf of said corporation by its
authority duly given. And the said _____________ President acknowledged the said
writing to be the act and deed of said corporation.

WITNESS my hand and notarial seal, this the ____________ day of __________,
1992.

______________________________
Notary Public

My commission expires:

_____________________
(NOTARIAL SEAL)

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<PAGE>

EXHIBIT "A"

The real property being conveyed herein is more particularly described as lying
and being situated in Pineville Township, Mecklenburg County, North Carolina.

BEGINNING at a point in the southern margin of the right-of-way of Matthews-
Pineville Road, also known as N.C. Highway 51; which point is located N. 78-55-
22 W. 400.00 feet from the intersection of the said southerly margin of
Matthews-Pineville Road and the southwesterly line of the property of Ray E.
Hollowell, Jr., being the common line of Ray E. Hollowell, Jr. and T. M. Shelton
(now or formerly) which line is described in the deed to Ray E. Hollowell, Jr.
from Albemarle Plaza Associates recorded in Book 4397, at Page 359 of the
Mecklenburg County Public Registry; thence from said point or place of Beginning
in a new line S. 24-00-00 W. 505.00 feet to a point, thence along an arc of a
circular curve to the left having a radius of 65.00 feet, an arc distance of
110.00 feet to a point, which arc is subtended by a chord having a bearing of N.
88-59-04 W. a distance of 97.34 feet; thence along a new line N. 80-44-08 W.
459.80 feet to a point in the westerly margin of the right-of-way of Carmel
Commons Boulevard; thence with the westerly margin of Carmel Commons Boulevard
in a northerly direction in a circular curve to the right having a radius of
793.31 feet, a distance of 80 feet to a point, thence continuing with the margin
of said right-of-way N. 12-15-00 E. 310.00 feet; thence continuing with said
right-of-way N. 19-13-36 E. 80.71 feet to a point; thence with the arc of a
circular curve to the right having a radius of 60 feet, a distance of 83.31 feet
to a point in the southerly margin of the right-of-way of Matthews-Pineville
Road; thence with the margin of said right-of-way in a westerly direction along
a circular curve to the right having a radius of 3,176.51 feet a distance of
127.24 feet to a point; thence continuing with said right-of-way S. 78-55-22 E.
468.76 feet to the point or place of Beginning, which parcel contains 7.09 acres
more or less as shown on a survey of R. B. Pharr dated June 2, 1981.

Together with a non-exclusive right-of-way and easement for the purpose of
ingress, egress and regress by pedestrian and vehicular traffic to and from
Carmel Commons Boulevard, as it now exits, from the southernmost point of such
roadway as depicted in Map Book 19, Page 488 of the Mecklenburg County Register
of Deeds, through and including the intersection of Carmel Commons Boulevard and
Carmel Road (Extension). Construction of Carmel Commons Boulevard has been
completed from Matthews-Pineville Road-N.C. #51 to Carmel Road (Extension),
however, Grantor herein has not offered the portion of roadway covered by this
Easement for dedication. Upon the filing of a recorded plat offering the balance
of such roadway for dedication, and the acceptance of the full length of such
roadway by the City of Charlotte for public maintenance, this Easement shall
merge therein and terminate. Until such acceptance by the City of Charlotte,
Grantor agrees to maintain said roadway in good condition. Grantor further
agrees that said roadway will be dedicated to public use. The provisions of this
paragraph shall run with the land.

Grantor reserves unto himself, his heirs and assigns an easement for the purpose
of placing, maintaining, repairing and replacing a sign or other identifying
device of size and design acceptable to Grantee, its successors and assigns, to
identify the office park of which the above described property is a part,
located within the above tract approximately at the point of intersection of
forty feet from N.C. Highway 51 and twenty feet from Carmel Commons Boulevard,
together with reasonable access thereto, provided that any sign placed thereon
shall not violate any law, ordinance or regulation pertaining thereto, or any
restrictive covenants affecting the property, and further provided Grantor shall
repair and restore any damage to the above described property resulting from
placing or maintaining a sign thereon or any other exercise of the rights under
this easement. Grantor shall provide reasonable maintenance of the sign at his
own expense. Such easement shall be for a period of twenty years, or until such
lesser time as such location shall not be used for the stated purpose for the
period of one year.

<PAGE>

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our
reports (and to all references to our Firm) included or made a part of this
registration statement.

-------------------------------
Arthur Andersen LLP

Boston, Massachusetts

December 10, 1998

<PAGE>

EXHIBIT 23.3

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our
reports (and to all references to our Firm) included or made a part of this
registration statement.

/s/ Hege Kramer Connell Murphy &
Goldkamp, P.C.
Hege Kramer Connell Murphy & Goldkamp,
P.C.

Philadelphia, Pennsylvania

December 9, 1998