EXHIBIT 10.108
SECOND WAIVER
(1997 PARTICIPATION AGREEMENT)
This SECOND WAIVER (1997 PARTICIPATION AGREEMENT) (the "Waiver"),
dated as of October 1, 1998, is among SMART & FINAL INC., a Delaware corporation
(the "Lessee"), SMART & FINAL STORES CORPORATION, a California corporation, and
AMERICAN FOODSERVICE DISTRIBUTORS, a California corporation (each a "Significant
Sublessee" and together, the "Significant Sublessees"), STATE STREET BANK AND
TRUST COMPANY OF CALIFORNIA N.A., not in its individual capacity (except as
expressly stated herein), but solely as the successor Owner Trustee under the
Trust Agreement (the "Lessor"), the banks named on Schedule I to the
Participation Agreement as holders of the Notes (the "Lenders"), CREDIT LYONNAIS
LEASING CORP., a Delaware corporation, as the Equity Participant under the Trust
Agreement (the "Equity Participant"), and CREDIT LYONNAIS NEW YORK BRANCH, a
branch duly licensed under the laws of New York of a banking corporation
organized and existing under the laws of the Republic of France, as agent for
the Lenders (the "Agent").
PRELIMINARY STATEMENTS
WHEREAS, the parties hereto have entered into a Participation
Agreement dated as of April 16, 1997 (as amended by that certain First Amendment
to Participation Agreement dated as of April 16, 1997, and by that Second
Amendment to Participation Agreement dated as of March 2, 1998, collectively the
"Participation Agreement"; the terms defined therein being used herein as
therein defined unless otherwise defined herein);
WHEREAS, the Lessee had previously requested, and the Lenders, the
Equity Participant, the Agent and the Lessor previously agreed, that any Default
or Event of Default be waived, through September 30, 1998, that may have
occurred by reason of the Lessee's failure to comply with certain covenants of
the Participant Agreement expressly identified in that certain Waiver among the
parties hereto, dated as of July 22, 1998; and
WHEREAS, the Lessee has further requested that any Default or Event of
Default be waived through November 15, 1998, that may have occurred by reason of
the Lessee's failure to comply with certain covenants of the Participant
Agreement expressly identified below;
NOW, THEREFORE, in consideration of the premises, the parties hereto
hereby agree as follows:
SECTION 1. Waiver under Participant Agreement. Effective as of
----------------------------------
October 1, 1998 (the "Effective Date") and subject to the satisfaction of the
conditions precedent set forth in Section 3 hereof, the Lenders, the Equity
---------
Participant, the Agent and the Lessor hereby waive, during the period beginning
on the Effective Date and ending on and including November 15, 1998 (the "Waiver
Period"), any Default or Event of Default which would arise under any of the
Transaction Documents by reason of the Lessee's failure to comply with Sections
4.03(c) and (d)
of the Participation Agreement. At the end of the Waiver Period, if the Lessee
is not in compliance with any of such Sections pursuant to the terms thereof, a
Default or Event or Default shall be deemed to exist unless, and except to the
extent that, such Default or Event of Default is further waived or the same
shall cease to exist by reason of an amendment to the applicable provisions of
the Participation Agreement.
SECTION 2. Rates.
-----
(a) As of June 20, 1998 and until the end of the Waiver Period, the
definition of "Finance Rate" in the Participation Agreement is amended by (x)
deleting the reference to "0.50%" and replacing it with "(a) prior to June 20,
1998, 0.50%, and (b) from June 20, 1998 and until the end of the Waiver Period,
1.25%", and (y) adding to the end of clause (ii) "plus, from June 20, 1998 and
until the end of the Waiver Period, 0.50%".
(b) As of June 20, 1998 and until the end of the Waiver Period, the
definition of "Certificate Rate" in the Participation Agreement is amended by
adding to the end of the definition "plus, from June 20, 1998 and until the end
of the Waiver Period, 0.75%".
(c) As of June 20, 1998 and until the end of the Waiver Period,
Section 1.06 (Fees Payable by Lessee) of the Participation Agreement is hereby
amended by deleting the reference to "0.175%" and replacing it with "(a) prior
to June 20, 1998, 0.175%, and (b) from June 20, 1998 and until the end of the
Waiver Period, 0.35%, in each case,".
(d) As of June 20, 1998 and until the end of the Waiver Period,
clauses (i), (ii) and (iii) of Section 2.02(b) of Loan Agreement are hereby
deleted and replaced in their entirety with the following:
"(i) For each LIBOR Note at a rate equal to the LIBOR Rate
plus (a) prior to June 20, 1998, 0.50%, and (b) from June 20, 1998 and
until the end of the Waiver Period, 1.25%;
(ii) For each Eurodollar Note at a rate equal to the
Eurodollar Rate plus (a) prior to June 20, 1998, 0.50%, and (b) from
June 20, 1998 and until the end of the Waiver Period, 1.25%; and
(iii) For a Base Rate Note, at a rate equal to the Base
Rate, plus, from June 20, 1998 and until the end of the Waiver Period,
0.50%."
SECTION 3. Conditions of Effectiveness. This Waiver shall become
---------------------------
effective when the Agent shall have received counterparts of this Waiver
executed by the Lessee, the Significant Sublessees and the other parties to the
Participation Agreement as required thereby.
SECTION 4. Reference to and Effect on the Transaction Documents. (a)
----------------------------------------------------
Upon the effectiveness of this Waiver, on and after the date hereof, (i) each
reference in the Participation Agreement to "this Agreement," "hereunder,"
"hereof" or words of like import referring to the Participation Agreement, and
each reference in the other Transaction Documents
2
to "the Participation Agreement," "thereunder," "thereof" or words of like
import referring to the Participation Agreement, shall mean and be a reference
to the Participation Agreement as modified hereby, and (ii) each reference in
the Loan Agreement to "this Agreement," "hereunder," "hereof" or words of like
import referring to the Loan Agreement, and each reference in the other
Transaction Documents to "the Loan Agreement," "thereunder," "thereof" or words
of like import referring to the Loan Agreement, shall mean and be a reference to
the Loan Agreement as modified hereby
(b) Except as specifically provided above, the Participation
Agreement, the Loan Agreement and all other Transaction Documents are and shall
continue to be in full force and effect and are hereby in all respects ratified
and confirmed. Without limiting the generality of the foregoing, any collateral
described therein does and shall continue to secure the payment of all secured
obligations under and as defined therein.
(c) The execution, delivery and effectiveness of this Waiver shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of the Agent, the Lenders, the Equity Participant, or the Lessor
under any of the Transaction Documents, nor constitute a waiver of any provision
of any of the Transaction Documents.
(d) Each of the parties hereto specifically acknowledges and agrees
that (i) none of the parties to the Participation Agreement or the Loan
Agreement have agreed to any other or future waiver of or amendment to the
Transaction Documents, (ii) neither the granting of the waiver described herein
nor the granting of any prior waivers and amendments under the Transaction
Documents creates any obligation whatsoever on the part of any of the parties to
the Participation Agreement or the Loan Agreement to grant any other or future
waiver or amendment under the Transaction Documents, and (iii) except as
specifically set forth herein, each of the parties to the Participation
Agreement and the Loan Agreement have reserved all rights and remedies under the
Transaction Documents.
SECTION 5. General Release of Claims. (a) The Lessee and Sublessee
-------------------------
each represent and agree that they have both diligently and thoroughly
investigated the existence of any Claim (as defined below), and to their
knowledge and belief, no Claim exists and no facts exist that could give rise to
or support a Claim.
(b) As additional consideration for the waivers as set forth herein,
the Lessee and Significant Sublessees and each of their respective agents,
employees, directors, officers, attorneys, affiliates, subsidiaries, successors
and assigns (individually a "Releasing Party," and collectively the "Releasing
Parties") each hereby releases and forever discharges each of the Lessor, the
Equity Participant, the Agent and each Lender and all of their respective
agents, direct and indirect shareholders, employees, directors, officers,
attorneys, branches, affiliates, subsidiaries, successors and assigns
(individually, a "Released Party," and collectively, the "Released Parties") of
and from all damage, loss, claims, demands, liabilities, obligations (except for
any such obligations hereafter arising pursuant to the terms of the Transaction
Documents, as amended to date), actions and causes of action whatsoever
(collectively "Claims") that the Releasing Parties and each of them may, as of
the date hereof, have or claim to have against each
3
of the Released Parties, in each case whether presently known or with respect to
which the facts are known (or should have been known) that could give rise to or
support a Claim and of every nature and extent whatsoever on account of or in
any way relating to, arising out of or based upon the Transaction Documents or
this Waiver (including clause (a) above) or the negotiation or documentation
hereof or the waivers under the Transaction Documents effected by this Waiver or
the transactions contemplated hereby, or any action or omission in connection
with any of the foregoing, including, without limitation, all such loss or
damage of any kind heretofore sustained, or that may arise as a consequence of
the dealings between the parties up to the date hereof in connection with or in
any way related to the Transaction Documents or this Waiver. Each Releasing
Party further covenants and agrees that it has not assigned heretofore, and will
not hereafter xxx any Released Party upon, any Claim released or purported to be
released under this Section, and the Lessee and Significant Sublessees each will
indemnify and hold harmless said Released Parties against any loss or liability
on account of any actions brought by any Releasing Party or its assigns or
prosecuted on behalf of any Releasing Party and relating to any Claim released
or purported to be released under this Section. It is further understood and
agreed that any and all rights under the provisions of Section 1542 of the
California Civil Code are expressly waived by each of the Releasing Parties.
Section 1542 provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
SECTION 6. Representations and Warranties. Each of the Lessee and
------------------------------
the Significant Sublessees represents and warrants to the other parties to the
Participation Agreement that:
(a) The representations and warranties in the Participation Agreement
and each of the other Transaction Documents to which it is a party remain true
and correct in all material respects immediately prior to and upon giving effect
to this Waiver, as if the same were made on the date of the effectiveness of the
amendments set forth herein (except for those relating to an earlier date which
were true and correct in all material respects as of such date).
(b) The execution, delivery and performance of this Waiver by the
Lessee and the Significant Sublessees has been duly authorized by all necessary
organizational action.
(c) All conditions set forth in Section 3 of this Waiver have been
---------
satisfied.
(d) Upon giving effect to this Waiver, there is no and will not be
any, Default or Event of Default.
SECTION 7. Costs, Expenses and Taxes. The Lessee agrees to pay on
-------------------------
demand all costs and expenses of the Agent, the Lenders, the Equity Participant
and the Lessor in connection with the preparation, execution, delivery and
administration of this Waiver and the other instruments and documents, if any,
to be delivered hereunder, including, without limitation,
4
the reasonable fees and out of pocket expenses of counsel for the Agent, the
Lenders, the Equity Participant and the Lessor with respect thereto and with
respect to advising each of such parties as to its rights and responsibilities
hereunder and thereunder. The Lessee further agrees to pay on demand all costs
and expenses, if any (including, without limitation, reasonable counsel fees and
expenses), in connection with the enforcement (whether though negotiations,
legal proceedings or otherwise) of this Waiver, and the other instruments and
documents to be delivered hereunder, including, without limitation, reasonable
counsel fees and expenses in connection with the enforcement of rights under
this Section.
SECTION 8. Execution in Counterparts. This Waiver hereto may be
-------------------------
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which taken together shall constitute but one and
the same agreement. Delivery of an executed counterpart of a signature page to
this Waiver hereto by telefacsimile shall be effective as delivery of a manually
executed counterpart of this Waiver.
SECTION 9. Governing Law. This Waiver hereto shall be governed by,
-------------
and construed in accordance with, the laws of the State of California.
5
IN WITNESS WHEREOF, the parties hereto have caused this Second Waiver
(1997 Participation Agreement) to be executed by their respective officers
thereunto duly authorized, as the date first above written.
CREDIT LYONNAIS NEW YORK BRANCH,
as Agent
By: /s/ Pascal Poupelle
--------------------------------------
Name: Pascal Poupelle
Title: Executive President
CREDIT LYONNAIS LOS ANGELES BRANCH,
as Lender
By: /s/ Pascal Poupelle
--------------------------------------
Name: Pascal Poupelle
Title: Executive President
BANQUE NATIONALE DE PARIS,
as Lender
By: /s/ Xxxxx Xxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxx
Title: Senior Vice President & Manager
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.,
as Lender
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
Title: Vice President
CREDIT LYONNAIS LEASING CORP.,
as Equity Participant
By: /s/ X.X. Xxxxxxxx
----------------------------------
Name: X.X. Xxxxxxxx
Title: Vice President/Secretary
CIBC INC.,
as Lender
By: /s/ Xxxxxx Xxxxxxx
----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Executive Director
CIBC Xxxxxxxxxxx Corp. as Agent
STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA N.A., not in its individual
capacity (except as expressly stated
herein), but solely as successor Owner
Trustee under the Trust Agreement, as the
Lessor
By: /s/ Xxxx Xxxxxx
----------------------------------
Name: Xxxx Xxxxxx
Title: Assistant Vice President
SMART & FINAL INC.,
as Lessee
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Secretary
SMART & FINAL STORES CORPORATION,
as Significant Sublessee
By: /s/ Xxxxxxx Xxxxxxx
--------------------
Name: Xxxxxxx Xxxxxxx
Title: VP & Treasurer
AMERICAN FOODSERVICE DISTRIBUTORS,
as Significant Sublessee
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Secretary
