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Exhibit 10.2
SEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
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This Seventh Amendment to Loan and Security Agreement (the
"Seventh Amendment") is made as of this __ day of September, 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, a Fifth Amendment to Loan and
Security Agreement dated May 10, 2000, and a Sixth Amendment to Loan and
Security Agreement dated August 18, 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:
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1. CAPITALIZED TERMS. All capitalized terms used herein and not otherwise
defined shall have the same meaning herein as in the Agreement.
2.
3. 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 $38,500,00.00.
4.
5. AMENDMENT TO ARTICLE 5. Section 5-12 of the Agreement is hereby amended to
read as follows:
6.
(a) EBITDA: The Borrower shall not permit or suffer
its EBITDA, tested as of the last day of each fiscal quarter
on the basis set forth below, to be less than the following:
MINIMUM CONSOLIDATED EBITDA:
"()" Denotes Negative
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BASIS TESTED MINIMUM EBITDA
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Three Quarters Ending August, 2000 ($21,200,000)
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Four Quarters Ending November, 2000 ($19,500,000)
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Four Quarters Ending February, 2001 ($2,000,000)
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For fiscal quarters thereafter, minimum EBITDA shall be established based upon
reasonable projections prepared by the Borrower and agreed upon by the Agent.
1. AMENDMENT TO ARTICLE 5. Section 5-14 of the Agreement is hereby amended to
read as follows:
2.
5-14. MINIMUM EXCESS AVAILABILITY. Availability after
giving effect to all then held checks (if any); accounts
payable which are beyond credit terms then accorded the
Borrower and overdrafts shall not be less than $10,000,000.00,
measured on a rolling thirty (30) day average basis, provided,
however, for the month of November, 2000, only, Availability
shall not be less than $7,500,000.00.
1. 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 effect.
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2.
3. CONDITIONS TO EFFECTIVENESS. This Seventh Amendment shall not be effective
until each of the following conditions precedent have been fulfilled to the
satisfaction of the Agent and the Lenders:
4.
(a) This Seventh 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) XxxxXxxxxxxx.xxx Inc. shall have executed and delivered to the
Borrower, a promissory note in the principal amount of $38,500,000.00
and a Pledge Agreement, each in form and substance satisfactory to the
Agent, pursuant to which XxxxXxxxxxxx.xxx Inc. shall have pledged to
the Borrower 480,000 shares of preferred stock of Xxxxxxxxxxxxx.xxx,
Inc., such promissory note and Pledge Agreement to be assigned to the
Agent, for the benefit of the Lenders.
(a) The Agent, the Lenders, and the Borrower shall execute a Consent
Agreement in the form annexed hereto.
(a) The Agent shall promptly notify the Borrower when such conditions
are satisfied.
(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 Seventh 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 Seventh 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
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hereof.
(a) Any determination that any provision of this Seventh 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
Seventh Amendment.
(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 Seventh Amendment.
(a) The Borrower warrants and represents that the Borrower has
consulted with independent legal counsel of the Borrower's selection in
connection with this Seventh Amendment and is not relying on any
representations or warranties of any Lender or the Agent or their
respective counsel in entering into this Seventh Amendment.
IN WITNESS WHEREOF, the parties have caused this Seventh 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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