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Exhibit 10.1
SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
This Sixth Amendment to Loan and Security Agreement (the
"Sixth Amendment") is made as of this __ day of August, 2000 by and
between
Fleet Retail Finance Inc., formerly known as BankBoston Retail
Finance Inc. (in such capacity, herein the "Agent"), a Delaware
corporation with offices at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000, as agent for the ratable benefit of the "Lenders", who are party
to the Agreement (defined below)
and
Back Bay Capital Funding LLC, a Delaware Limited Liability
Company with offices at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000
(the "Term Lender")
and
Drug Emporium, Inc. (hereinafter, the "Borrower"), a Delaware
corporation with its principal executive offices at 000 Xxxxxx Xxxxxxx
Xxxxx, Xxxxxx, Xxxx 00000
in consideration of the mutual covenants herein contained and benefits to be
derived herefrom.
W I T N E S S E T H:
WHEREAS, on October 28, 1998 the Agent, the Lenders and the Borrower
entered in a certain Loan and Security Agreement, as amended by a First
Amendment to Loan and Security Agreement dated May 11, 1999, a Second Amendment
to Loan and Security Agreement dated September 15, 1999, a Third Amendment to
Loan and Security Agreement dated December 10, 1999, a Fourth Amendment to Loan
and Security Agreement dated March 8, 2000, and a Fifth Amendment to Loan and
Security Agreement dated May 10, 2000 (the "Agreement"); and
WHEREAS, the Borrower, the Agent, the Lenders, and the Term Lender
desire to amend certain of the provisions of the Agreement;
NOW, THEREFORE, it is hereby agreed among the Agent, the Lenders, the
Term Lender, and the Borrower as follows:
1. CAPITALIZED TERMS. All capitalized terms used herein and not otherwise
defined
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shall have the same meaning herein as in the Agreement.
2.
3. AMENDMENT TO ARTICLE 1. Article 1 of the Agreement is hereby amended by
deleting the definition of "Libor Margin" and replacing it with the following:
4.
5.
"LIBOR MARGIN": (a) Until Section (b) of this Definition is in
effect: 250 basis points.
(b) Commencing February, 2001, the Libor Margin shall
be reset monthly (commencing with the Business Day after the
Agent's receipt of the Pricing Certificate (Section ) for
loans initiated on or after the date when so set, that is to
say Libor contracts in effect at the time of
increases/decreases in margin will remain at the margin
originally utilized when the contract was opened. The margin
in effect at a given time will apply to contracts opened at
that time, and shall be based upon the following pricing grid:
LIBOR MARGIN PRICING GRID
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TIER FIXED CHARGE RATIO TRAILING/ROLLING 12 MONTH MARGIN (BASIS
AVERAGE EXCESS AVAILABILITY POINTS)
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I Equal or Greater than 1.7 Equal or Greater than 125
$20,000,000.00
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II Equal or Greater than 1.7 Less than $20,000,000.00 150
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III less than 1.7 and greater than N/A 150
1.25
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IV less than 1.25 and greater N/A 200
than 1.0
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V less than or equal to 1.0 N/A 250
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1. AMENDMENT TO ARTICLE 2A. Section 2A-4(a) of the Agreement is hereby amended
to read as follows:
2.
2A-4. INTEREST ON THE TERM LOAN.
(a) The unpaid principal balance of the Term Loan shall bear interest,
until repaid, fixed at 15.25% per annum, payable as follows:
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(i) Interest on the unpaid principal balance of the Term Loan,
equal to 12.75% per annum ("CURRENT PAY INTEREST") shall be
payable monthly in arrears, on the first day of each month,
and on the Term Loan Maturity Date.
(i) Accrued Interest on the unpaid principal balance of the
Term Loan, equal to 2.5% per annum ("PIK INTEREST") , shall be
added to the then unpaid principal balance of the Term Note
quarterly, on the first day of each April, July, October, and
January hereafter.
(a) Following the occurrence of any Event of Default (and whether or
not Acceleration has taken place), at the direction of the Term Lender,
Current Pay Interest shall be 14.75% per annum and PIK Interest shall
remain at 2.5% per annum.
1. WAIVER OF COMPLIANCE WITH SECTIONS 4-18, 4-19, 4-20 AND 4-23. The Lenders
waive compliance by the Borrower with the terms of Sections 4-18, 4-19, 4-20 and
4-23 of the Agreement in connection with the investments in and/or loans to be
made in connection with the continued operation of Borrower's commerce business
("E-Commerce", which term includes XxxxXxxxxxxx.xxx Inc. and the business to be
carried on by it), including without limitation, any amount invested in,
advanced to or paid or incurred by or on behalf of E-Commerce up to a maximum
aggregate amount of $30,500,00.00. An additional amount not to exceed
$1,500,000.00 may be invested in, advanced to or paid or incurred by or on
behalf of E-Commerce for a period ending 60 days from the date of this
Amendment. Thereafter, no further amounts shall be advanced to E-COMMERCE
directly or indirectly, including by way of any additional trade support.
2.
3. REVOLVING CREDIT AMENDMENT FEE. As compensation for the Revolving Credit
Lenders' having committed to enter into this Sixth Amendment the Borrower shall
pay to the Agent for the benefit of the Revolving Credit Lenders, at closing, an
amendment fee in the amount of $110,000.00.
4.
5. TERM LOAN AMENDMENT FEE. As compensation for the Term Lender's having
committed to enter into this Sixth Amendment the Borrower shall pay to the Agent
for the benefit of the Term Lender, at closing, an amendment fee in the amount
of $12,500.00.
6.
7. RATIFICATION OF LOAN DOCUMENTS. Except as provided herein, all terms and
conditions of the Agreement and of the other Loan Documents remain in full force
and effect. Furthermore, except as provided herein, all warranties and
representations made in the Agreement and in the other Loan Documents remain in
full force and
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effect.
8.
9. CONDITIONS TO EFFECTIVENESS. This Sixth Amendment shall not be effective
until each of the following conditions precedent have been fulfilled to the
satisfaction of the Agent and the Lenders:
10.
(a) This Sixth Amendment shall have been duly executed and delivered by
the all necessary parties hereto.
(a) No Suspension Event shall have occurred and be continuing.
(a) The Borrower shall have provided such additional instruments and
documents to the Agent as the Agent and the Agent's counsel may have
reasonably requested.
(a) The Agent shall promptly notify the Borrower when such conditions
are satisfied.
(a) The Borrower shall have paid to the Agent for the account of the
Revolving Credit Lenders and the Term Lender, the respective Amendment
Fees.
(a) The Borrower shall have furnished the Agent with corporate
resolutions authorizing the execution of this Amendment and the
documents contemplated herein.
1. MISCELLANEOUS.
2.
(a) This Sixth Amendment may be executed in several counterparts and by
each party on a separate counterpart, each of which when so executed
and delivered shall be an original, and all of which together shall
constitute one instrument.
(a) This Sixth Amendment expresses the entire understanding of the
parties with respect to the transactions contemplated hereby. No prior
negotiations or discussions shall limit, modify, or otherwise affect
the provisions hereof.
(a) Any determination that any provision of this Sixth Amendment or any
application hereof is invalid, illegal or unenforceable in any respect
and in any instance shall not effect the validity, legality, or
enforceability of such provision in any other instance, or the
validity, legality or enforceability of any other provisions of this
Sixth Amendment.
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(a) The Borrower shall pay on demand all costs and expenses of the Agent,
including, without limitation, reasonable attorneys' fees, in
connection with the preparation, negotiation, execution and delivery of
this Sixth Amendment.
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(a) The Borrower warrants and represents that the Borrower has
consulted with independent legal counsel of the Borrower's selection in
connection with this Sixth Amendment and is not relying on any
representations or warranties of any Lender or the Agent or their
respective counsel in entering into this Sixth Amendment.
IN WITNESS WHEREOF, the parties have caused this Sixth Amendment to
Loan and Security Agreement to be executed by their duly authorized officers as
a sealed instrument as of the date first above written.
DRUG EMPORIUM, INC.
("Borrower")
By:
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Name:
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Title:
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FLEET RETAIL FINANCE INC.
("Agent")
By:
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Name:
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Title:
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The "LENDERS"
FLEET RETAIL FINANCE INC.
By
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Print Name:
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Title:
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NATIONAL CITY COMMERCIAL FINANCE, INC.
By
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Print Name:
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Title:
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AMERICAN NATIONAL BANK AND
TRUST COMPANY OF CHICAGO
By
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Print Name:
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Title:
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LASALLE BUSINESS CREDIT, INC.
By
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Print Name:
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Title:
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BACK BAY CAPITAL FUNDING LLC
By
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Print Name:
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Title:
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