Exh 10.39
EXECUTION VERSION
SIXTH AMENDMENT AND WAIVER TO LEASE AGREEMENT
This Sixth Amendment and Waiver to Lease Agreement, dated as of September
, 2003 (this "Agreement"), is among the Persons that have executed this
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Agreement (the "Parties"). Capitalized terms used, but not defined, in this
Agreement are used as defined in the Lease Agreement, dated as of November 30,
2001, between Xxxxx Fargo Bank Northwest, National Association, as Owner Trustee
under S&F Trust 1998-1, as lessor, and Smart & Final Inc., as lessee, as amended
by Waiver and Amendment Agreement No. 1, dated as of June 4, 2002, by Waiver and
Amendment Agreement No. 2, dated as of February 14, 2003, by Amendment Agreement
No. 3, dated as of June 1, 2003, by Waiver and Amendment Agreement No. 4, dated
as of July 11, 2003 and by Consent, Waiver, Collateral Release and Amendment
Agreement No. 5A, dated as of September 3, 2003 (the "Lease"). Capitalized terms
used herein without definition have the meanings ascribed to such terms in the
Lease.
RECITALS
A. The Lessee has informed the Agent that it intends to sell (i) its
northern California broadline foodservice operations (other than the Xxxxx &
Xxxxxxxx meat processing business) to Sysco Corp., a Delaware corporation, and
(ii) its Xxxxx & Xxxxxxxx meat processing business to Pacific Fresh, Inc., a
California corporation, for a total purchase price for both transactions of
approximately $27.5 million in cash. The transactions will be structured as a
sale of most of the accounts receivable and inventories of Port Stockton Food
Distributors, Inc. (including its meat processing business under the tradename
Xxxxx & Xxxxxxxx) and the assumption of a lease in connection with the meat
processing business (the "Sale Transactions"). The assets to be sold in the Sale
Transactions are set forth on Annex A hereto (such assets, the "Sale Assets").
B. The Lessee has also informed the Agent that it intends to cease
operations at, and eventually cause to be sold, the Port Stockton dry grocery
warehouse (the "Dry Grocery Warehouse") and eventually sell certain other assets
with respect to the northern California broadline foodservice operations, all of
which are more particularly described on Annex B hereto (such assets and the Dry
Grocery Warehouse, collectively, the "Retained Assets").
C. The Lessee has informed the Agent that it intends to replace the Dry
Grocery Warehouse with one or more unidentified Replacement Properties on a
later date in accordance with Section 11.2 of the Lease.
D. Section 28.3(d) of the Lease prohibits sales of assets by the Credit
Parties except under certain circumstances. The Sale Transactions would violate
Section 28.3(d) and the planned disposition of that portion of the Retained
Assets exclusive of the Dry Grocery Warehouse may violate Section 28.3(d). The
Lessee's ceasing of operations at the Dry Grocery Warehouse would violate
Section 8.2 of the Lease.
E. The Lessee has requested that the applicable Financing Parties, and,
subject to the terms and conditions of this Agreement, the applicable Financing
Parties desire to, (i) consent to the Sale Transactions, (ii) consent to the
planned disposition of that portion of the Retained Assets exclusive of the Dry
Grocery Warehouse and the ceasing of operations at the Dry Grocery
Warehouse, (iii) waive the limitations of Section 28.3(d) of the Lease in
connection with the Sale Transactions and the planned disposition of that
portion of the Retained Assets exclusive of the Dry Grocery Warehouse, and (iv)
release the Liens granted to the Agent under the Security Documents with respect
to the Sale Assets and, when sold, that portion of the Retained Assets exclusive
of the Dry Grocery Warehouse.
NOW, THEREFORE, for good and valuable consideration received, the Parties
agree as follows.
1. Section References. Unless otherwise expressly stated, all section
references in this Agreement refer to sections of the Lease.
2. Consents. The Lenders and the Holder consent to:
(a) the Sale Transactions;
(b) the planned disposition of that portion of the Retained Assets
exclusive of the Dry Grocery Warehouse; and
(c) the release of all Liens on the Sale Assets and, when sold, that
portion of the Retained Assets exclusive of the Dry Grocery Warehouse, in
accordance with Section 5 of this Agreement.
3. Waivers. The A-2 Lenders, the B Lenders and the Holder waive:
(a) the requirements of Section 28.3(d) of the Lease in connection
with the Sale Transactions and the planned disposition of the Retained Assets
exclusive of the Dry Grocery Warehouse; and
(b) the requirements of Section 8.2 of the Lease in connection with
the ceasing of operations at the Dry Grocery Warehouse.
4. Lessee's Agreements and Acknowledgments. Lessee acknowledges and agrees
to all matters approved or waived by the Lenders and the Holder, as applicable,
in Sections 2 and 3 of this Agreement.
5. Release of Collateral.
(a) On the date that the later of the following two events occurs: (i)
consummation of the Sale Transactions and (ii) satisfaction of the conditions
precedent set forth in Section 6 of this Agreement (the "Release Date"), the
Agent shall release its Liens on the Sale Assets. On the Release Date, the Agent
shall, at the expense of the Lessee, promptly return to the Lessee any
instruments, certificates and other documents evidencing solely any Lien on the
Sale Assets. In addition, effective on the Release Date, the Agent authorizes
the Lessee and its agents or representatives to file such documents or
instruments, including terminations of the UCC Financing Statements filed as the
Lessee considers necessary to evidence, effect or confirm the release and
termination of all Liens created under the Security Documents only with respect
to the Sale Assets.
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(b) Upon the later to occur of (i) consummation of the disposition of
any of the Retained Assets and (ii) satisfaction of the conditions precedent set
forth in Section 6 hereof (any such date, a "Retained Asset Release Date"), the
Agent shall release its Lien on the Retained Assets being disposed of. On any
Retained Asset Release Date, the Agent shall, at the expense of the Lessee,
promptly return to the Lessee any and all instruments, certificates and other
documents evidencing solely any lien, charge or encumbrance on the Retained
Assets being disposed of. Effective on any Retained Asset Release Date, the
Agent authorizes the Lessee and its agents or representatives to file such
documents or instruments as the Lessee may deem necessary, in form and substance
satisfactory to the Agent, to evidence, effect or confirm the release and
termination of any and all Liens created under the Security Documents with
respect to the Retained Assets being disposed of.
6. Conditions Precedent. The effectiveness of this Agreement is subject to
the satisfaction of each of the following conditions precedent.
(a) Certain Documents. The Agent shall have received all of the
following, in form and substance satisfactory to the Agent:
(i) Amendment Documents. This Agreement, duly executed by Lessee
and each Guarantor and any other instrument, document or certificate required by
the Agent to be executed or delivered by Lessee or any other Person in
connection with this Agreement, duly executed by them (collectively, the
"Amendment Documents");
(ii) Copies of Sale Documents. Upon request by the Agent, true
and correct copies of the stock and asset purchase agreements and any other
agreements, documents or instruments executed in connection with the (A) Sale
Transactions or (B) sale of the Retained Assets;
(iii) Consent of Required Secured Parties. The Majority Secured
Parties shall have executed and delivered this Agreement;
(iv) Amendment to Lessee Credit Agreement. Evidence to the
Agent's satisfaction that the Sale Transactions have been approved by, and that
appropriate waivers and releases have been obtained from, the lenders and the
administrative agent under the Lessee Credit Agreement; and
(v) Additional Information. Such additional documents,
instruments and information as the Agent may reasonably request to effect the
transactions contemplated hereby.
(b) [not used]
(c) [not used]
(d) Representations and Warranties. The representations and warranties
contained in this Agreement and in the Lease shall be true and correct as of,
and as if made on, the date hereof (except for those that by their terms
specifically refer to an earlier date, in which case such representations and
warranties shall be true and correct as of the earlier date).
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(e) Corporate Proceedings Satisfactory. All corporate proceedings
taken in connection with the transactions contemplated by this Agreement and all
other agreements, documents and instruments executed or delivered pursuant to
it, and all legal matters incident thereto, shall be satisfactory to the Agent.
(f) No Lease Default or Lease Event of Default. No Lease Default or
Lease Event of Default shall have occurred and be continuing after giving effect
to this Agreement.
7. Representations and Warranties. Each Credit Party represents and
warrants to the Agent and the Secured Parties that, as of the date of and after
giving effect to this Agreement, (a) the execution, delivery and performance of
this Agreement and all other Amendment Documents executed or delivered in
connection herewith have been authorized by all requisite corporate action on
the part of each Credit Party and will not violate any Credit Party's
certificate of incorporation or bylaws, (b) all representations and warranties
set forth in the Lease and in any other Operative Agreement are true and correct
as if made again on and as of such date (except those, if any, that by their
terms specifically relate only to an earlier date, in which case such
representations and warranties are true and correct as of the earlier date), (c)
no Lease Default or Lease Event of Default has occurred and is continuing, and
(d) the Lease (as amended by this Agreement) and all other Operative Agreements
are and remain legal, valid, binding and enforceable obligations in accordance
with their terms.
8. Survival of Representations and Warranties. All representations and
warranties made by any Credit Party in this Agreement or any other Operative
Agreement shall survive the execution and delivery of this Agreement and the
other Operative Agreements, and no investigation by the Agent or the Secured
Parties, or any closing, shall affect the representations and warranties or the
right of the Agent and the Secured Parties to rely upon them.
9. Costs and Expenses. The Lessee shall pay on demand all reasonable costs
and expenses of the Agent (including the reasonable fees, costs and expenses of
counsel to the Agent) incurred in connection with the preparation, execution and
delivery of this Agreement.
10. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO
CONFLICT-OF-LAWS PRINCIPLES.
11. Execution. This Agreement may be executed in any number of counterparts
and by different Parties on separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same instrument. A Party's delivery of an executed
counterpart of this Agreement by telecopier shall be effective as delivery of a
manually executed counterpart of this Agreement.
12. Limited Effect. This Agreement relates only to the specific matters it
covers, shall not be considered to be a waiver of any other rights any Secured
Party may have under the Operative Agreements, and shall not be considered to
create a course of dealing or to otherwise obligate any Secured Party to grant
similar waivers or execute any amendments under the same or similar
circumstances in the future.
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13. Ratification By Guarantors. Each Guarantor consents to this Agreement,
and each Guarantor acknowledges that its guaranty remains in full force and
effect without any modification.
14. Certain Waivers. Each Credit Party agrees that none of the Financing
Parties shall be liable under a claim of, and waives any claim against any
Financing Party based upon, lender liability (including, but not limited to,
liability for breach of the implied covenant of good faith and fair dealing,
fraud, negligence, conversion, misrepresentation, duress, control and
interference, infliction of emotional distress, defamation and breach of
fiduciary duty) as a result of any discussions or actions taken or not taken by
any Financing Party on or before the date hereof, the discussions conducted
pursuant hereto, or any course of action taken by any Financing Party in
response thereto or arising therefrom. This Section 14 shall survive the
execution and delivery of this Agreement and the expiration or termination of
the Lease.
[Signature Pages Follow]
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EXECUTION VERSION
LESSOR:
Xxxxx Fargo Bank Northwest, National Association,
as Owner Trustee under S&F Trust 1998-1
By: /s/ Xxx X. Xxxxx
-------------------------------
Name: Xxx X. Xxxxx
Title: Vice President
LESSEE:
Smart & Final Inc.
By: /s/ Xxxxxxx X. Xxxxxxx By:
------------------------------- -------------------------------
Name: Xxxxxxx X. Xxxxxxx Name:
Title: Senior Vice President & -----------------------------
Chief Financial Officer Title:
----------------------------
A-2 LENDER, B LENDER AND AGENT:
Fleet Capital Corporation
By: /s/ Xxxxx XxXxxxx
-------------------------------
Name: Xxxxx XxXxxxx
Title: Vice President
A-2 LENDER:
GMAC Commercial Finance, LLC,
successor by merger to GMAC Business Credit, LLC
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
A-2 LENDER:
Cooperative Centrale Raiffeisen-Boerenleenbank B.A.
"Rabobank Nederland," New York Branch
By: /s/ Xxxxxxxx X. Xxxxx By: /s/ Xxx Xxxxx
------------------------------- -------------------------------
Name: Xxxxxxxx X. Xxxxx Name: Xxx Xxxxx
Title: Executive Director Title: Managing Director
A-2 LENDER:
Natexis Banques Populaires
By: /s/ Nicolas Regent By: /s/ Xxxxxx X. van Tulder
------------------------------- -------------------------------
Name: Nicolas Regent Name: Xxxxxx X. van Tulder
Title: Vice President Multinational Title: Vice President And Manager
Multinational Group
A-2 LENDER:
BNP Paribas
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxxxxxx Xxxxxxxx
------------------------------- -------------------------------
Name: Xxxx X. Xxxxxx Name: Xxxxxxxx Xxxxxxxx
Title: Managing Director Title: Director
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B LENDER:
Transamerica Equipment Financial Services Corporation
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
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HOLDER:
Casino USA, Inc.
By: /s/ Etienne Snollaerts
-------------------------------
Name: Etienne Snollaerts
Title: Director
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GUARANTOR:
American Foodservice Distributors
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President &
Chief Financial Officer
GUARANTOR:
Smart & Final Stores Corporation
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President &
Chief Financial Officer
GUARANTOR:
Smart & Final Oregon, Inc.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President &
Chief Financial Officer
GUARANTOR:
Port Stockton Food Distributors, Inc.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President - Finance
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GUARANTOR:
Amerifoods Trading Company
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President &
Chief Financial Officer
GUARANTOR:
Casino Frozen Foods, Inc.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President &
Chief Financial Officer
GUARANTOR:
XxxxXxxxxxxXxxxxxxxxxx.Xxx, Inc.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President &
Chief Financial Officer
GUARANTOR:
Xxxx Produce International, Inc.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President &
Chief Financial Officer
GUARANTOR:
HL Holding Corporation
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President &
Chief Financial Officer
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ANNEX A
SALE ASSETS
1. Certain assets of Port Stockton Food Distributors, Inc. including trade
accounts receivable and inventory, as proposed to be sold in bulk transfers
to third parties, leased facilities located at: (i) 000 Xxxxx Xxxxxx,
Xxxxxxxx, XX; (ii) 000 Xxxxx Xxxxxx, Xxxxxxxx, XX; and (iii) 000 Xxxxx
Xxxxxx, Xxxxxxxx, XX (Xxxxx & Xxxxxxxx facilities), and certain tradenames,
all together comprising the Sysco Corporation transaction for the principal
Port Stockton business and the Pacific Seafood transaction for the Xxxxx &
Xxxxxxxx meat processing unit.
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EXECUTION VERSION
ANNEX B
RETAINED ASSETS
1. Residual collateral interest in one synthetic lease property located at
0000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxx, XX.
2. Residual assets and liabilities of Port Stockton Food Distributors, Inc.,
including but not limited to vendor accounts receivable, inventory not
transferred in the bulk sales, fixtures and equipment, other fixed assets,
residual tradenames, and operating leases (including vehicle fleet leases
and freezer facility usage agreements). One real property is owned and will
be held for sale: 0000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxx, XX (freezer facility
currently sub-leased to third party). The residual principal leased real
estate is located at: (i) 0000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxx, XX; (ii) 0000
Xxxx Xxxxx Xxxxxx, Xxxxxxxx, XX; and (iii) 0000 Xxxx Xxxxx Xxxxxx,
Xxxxxxxx, XX.
