AMENDMENT NUMBER THREE
TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
This AMENDMENT NUMBER THREE TO AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT (this "Amendment"), dated as of May 28, 1996, is entered into by and
among (1) CERTIFIED GROCERS OF CALIFORNIA, LTD., a California corporation
("Certified"), GROCERS GENERAL MERCHANDISE COMPANY, a California corporation
("GGMC"), and GROCERS SPECIALTY COMPANY, a California corporation ("GSC")
(Certified, GGMC, and GSC are jointly and severally referred to herein as
"Borrower"), (2) Hawaiian Grocery Stores, Limited, a Hawaii corporation ("HGS"),
and (3) the financial institutions which are signatories hereto (hereinafter
collectively referred to as the "Lenders" and individually as a "Lender"), BT
COMMERCIAL CORPORATION, a Delaware corporation, as agent (the "Agent"), UNION
BANK OF CALIFORNIA, a California banking corporation ("Union"), as co-agent, and
FIRST NATIONAL BANK OF BOSTON, National Association ("First National"), as co-
agent, in light of the following facts:
RECITALS
A. Borrower, Agent, and Lenders have previously entered into that
certain Amended and Restated Loan and Security Agreement, dated as of March 17,
1994, as amended by that certain Amendment Number One to Amended and Restated
Loan and Security Agreement, dated as of November 1, 1994, and as further
amended by that certain Amendment Number Two to Amended and Restated Loan and
Security Agreement, dated as of December 3, 1994 (collectively, the
"Agreement").
B. Borrower has requested that Lenders consent to the sale by GSC of
all of the common stock of HGS to RHL Management Group, Inc., a Delaware
corporation ("RHL"), and to modify certain obligations of HGS owed to Lenders.
Lenders have consented thereto, pursuant to the terms and conditions set forth
herein, and have agreed to otherwise amend the Agreement in accordance with the
terms of this Amendment.
AGREEMENT
NOW, THEREFORE, the parties hereto agree as follows:
1. DEFINED TERMS. All capitalized terms used but not defined herein
shall have the meanings assigned to such terms in the Agreement. The Agreement
is hereby amended to include the following additional terms:
"New HGS Note" means that certain Subordinated Secured Promissory Note
dated as of May 28, 1996, which refinances the outstanding principal
balance of the HGS Note, in the original principal amount of Five
Million Three Hundred Thousand Dollars ($5,300,000) issued by HGS in
favor of GSC.
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"HGS Security Agreement" means that certain Security Agreement dated
as of May 28, 1996, pursuant to which HGS grants a security interest
in substantially all of its personal property to secure its
obligations to GSC under the New HGS Note.
2. AMENDMENTS. Subject to the full and satisfactory performance of
the conditions precedent set forth in Section 3 below, the parties hereto agree
as follows:
a. NEW HGS NOTE. HGS shall execute the New HGS Note and HGS
Security Agreement in favor of GSC, together with a UCC-1 Financing
Statement to secure HGS' obligations thereunder, which UCC-1 shall show
Agent, as assignee. The New HGS Note, together with all security therefor,
is hereby pledged to Lenders as Collateral pursuant to the terms of the
Agreement, and the original New HGS Note shall be delivered to Agent.
Lenders acknowledge that the obligations of HGS under the New HGS Note are
subordinate to the obligations of HGS to its primary lender, Congress
Financial Corporation (Western) ("Congress"), and that the security
interests granted pursuant to the HGS Security Agreement shall be junior to
the security interests of Congress. Lenders hereby consent to the
refinancing of the HGS Note and the subordination of all security therefor.
b. SALE OF HGS/SUBORDINATION OF GUARANTY. Lenders hereby consent to
(i) the sale of the common stock of HGS to RHL at anytime prior to July 31,
1996, for a price of $2,425,387 cash less closing adjustments, if any,
provided that the net price shall not be less than $2,000,000, and (ii)
effective concurrently with the consummation of such sale, the
subordination of the obligations of HGS pursuant to that certain Continuing
Guaranty dated as of January 30, 1992 and reaffirmed on March 17, 1994,
made by HGS in favor of Lenders to the obligations of HGS to Congress
Financial Corporation (Western).
c. WARRANT AND PREFERRED STOCK. In connection with the sale of HGS
to RHL, GSC will retain a warrant to purchase 20% of the common stock of
HGS and 1,000 shares of preferred stock of HGS. Lenders hereby consent to
the retention of these interests.
3. CONDITIONS PRECEDENT. The obligations of Agent and Lenders under
this Amendment are subject to and conditioned upon the fulfillment of each and
all of the following conditions precedent, which shall be deemed to have
occurred substantially concurrently with the sale by GSC to RHL of the common
stock of HGS:
(a) Agent shall have received this Amendment duly executed by
Borrower, HGS and Lenders;
(b) Agent shall have received a consent and reaffirmation duly
executed by each of Certified, GGMC and GSC under their respective Guaranties,
including the consent by each such guarantor to the execution and delivery by
Borrower of this Amendment;
(c) Agent shall have received the original of the New HGS Note;
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(d) UCC-1 Financing Statements showing HGS as Debtor, GSC as
Secured Party, and Agent as assignee, shall have been executed and filed as
deemed necessary by Agent to perfect the security interests granted pursuant to
the HGS Security Agreement and the assignment of such security interests to
Lenders; and
(e) Arrangements acceptable to Agent shall have been made with
respect to payment of all of Agent's Expenses incurred in connection with the
negotiation, preparation and execution of this Amendment.
4. DELIVERY BY AGENT. Agent agrees to deliver, prior to the closing
of the sale-of-stock transaction, (a) the original HGS Note to the law firm of
Sheppard, Mullin, Xxxxxxx & Xxxxxxx LLP to be cancelled at such closing, and (b)
to such law firm an executed UCC Termination Statement with respect to Document
No. 92-016081 filed on February 3, 1992, at the Office of the Bureau of
Conveyances in Honolulu, Hawaii, in each case for delivery only following
consummation of the sale of HGS.
5. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in
any number of counterparts and by different parties on separate counterparts,
each of which when so executed and delivered shall be deemed to be an original.
All such counterparts, taken together, shall constitute but one and the same
Amendment. This Amendment shall become effective upon
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the fulfillment of all of the conditions set forth in Section 3 hereof.
6. REAFFIRMATION OF THE AGREEMENT. Except as specifically amended
by this Amendment, the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed at Los Angeles, California, as of the date first hereinabove
written.
CERTIFIED GROCERS OF CALIFORNIA, LTD.,
a California corporation
By
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Title:
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GROCERS GENERAL MERCHANDISE COMPANY, a California
corporation
By
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Title:
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GROCERS SPECIALTY COMPANY,
a California corporation
By
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Title:
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HAWAIIAN GROCERY STORES, LIMITED, a Hawaii
corporation
By
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Title:
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BT COMMERCIAL CORPORATION, a Delaware
corporation, individually and as Agent
By
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Title:
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FIRST NATIONAL BANK OF BOSTON, a National
Association, individually and as Co-Agent
By
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Title:
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UNION BANK OF CALIFORNIA, N.A., individually
and as Co-Agent
By
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Title:
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THE BANK OF CALIFORNIA, N.A.
By
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Title:
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DG BANK DEUTSCHE GENOSSENSCHAFTSBANK,
a German bank acting through its New York
branch
By
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Title:
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By
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Title:
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DRESDNER BANK, AG, Los Angeles agency and
Grand Cayman Branch, as a bank
By
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Title:
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By
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Title:
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NATIONAL CANADA CORPORATION, a Delaware
corporation
By
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Title:
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By
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Title:
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SANWA BANK CALIFORNIA, a California banking
corporation
By
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Title:
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SANWA BUSINESS CREDIT CORPORATION, a Delaware
corporation
By
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Title:
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THE DAI-ICHI KANGYO BANK, LIMITED, a Japanese
bank acting through its Los Angeles agency
By
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Title:
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By
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Title:
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THE SAKURA BANK, LIMITED, a Japanese bank
acting through its Los Angeles agency
By
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Title:
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By
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Title:
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MANUFACTURERS BANK
By
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Title:
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CITY NATIONAL BANK, a national banking
association
By
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Title:
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CONSENT OF GUARANTORS
Each of the undersigned, as a guarantor of the obligations of
CERTIFIED GROCERS OF CALIFORNIA, LTD., a California corporation ("Certified"),
GROCERS GENERAL MERCHANDISE COMPANY, a California corporation ("GGMC"), and
GROCERS SPECIALTY COMPANY, a California corporation ("GSC") (Certified, GGMC,
and GSC are collectively referred to herein as "Borrower"), arising out of that
certain Amended and Restated Loan and Security Agreement, dated as of March 17,
1994, as amended by that certain Amendment Number One to Amended and Restated
Loan and Security Agreement, dated as of November 1, 1994, and as further
amended by that certain Amendment Number Two to Amended and Restated Loan and
Security Agreement, dated as of December 3, 1994 (collectively, the
"Agreement"), among BT Commercial Corporation, a Delaware corporation, Union
Bank of California, a California banking corporation, First National Bank of
Boston, National Association (collectively, "Agents"), and the other lenders
party thereto (collectively, "Lenders"), on the one hand, and Borrower, on the
other hand, hereby (a) acknowledges receipt of a copy of that certain Amendment
Number Three to Amended and Restated Loan and Security Agreement ("Amendment"),
dated as of May 28, 1996, among Agents, Lenders and Borrower, and Hawaii Grocery
Stores, Limited, a Hawaii corporation ("HGS"), (b) consents to the release of
the Continuing Guaranty dated March 17, 1994, given by HGS in favor of Lenders,
(c) consents to the other terms contained in the Amendment, and (d) agrees that
the Continuing Guaranty executed by each of the undersigned, dated as of
March 17, 1994 (collectively, the "Guaranties"), in connection with the
Agreement shall remain in full force and effect as a continuing guaranty of the
obligations of Borrower owing to Agents and Lenders under the Agreement as
amended by the Amendment.
Although Agents have informed us of the matters set forth above, and
we have acknowledged same, we understand and agree that Agents have no duty
under the Agreement, the Guaranties or any other agreement between us to so
notify us or to seek an acknowledgment, and nothing contained herein is intended
to or shall create such a duty as to any advances or transactions hereafter.
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IN WITNESS WHEREOF, each of the undersigned has caused this Consent of
Guarantors to be duly executed by their respective authorized officers as of
May 28, 1996.
CERTIFIED GROCERS OF CALIFORNIA, LTD., a
California corporation
By
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Title:
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GROCERS GENERAL MERCHANDISE COMPANY,
a California corporation
By
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Title:
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GROCERS SPECIALTY COMPANY, a California
corporation
By
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Title:
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