SECOND AMENDMENT TO NOTE AGREEMENT
THIS SECOND AMENDMENT dated as of May 9, 1997 (the or this "Amendment")
to the Note Agreement dated as of September 20, 1991 is between UNITED GROCERS,
INC., an Oregon corporation (the "Company"), and each of the institutions which
is a signatory to this Amendment (collectively, the "Noteholders").
RECITALS:
A. The Company and each of the Noteholders have heretofore entered into
a Note Agreement dated as of September 20, 1991, as amended (the "Note
Agreement"). The Company has heretofore issued the $30,000,000 9.15% Senior
Notes Due October 1, 2000 (the "Notes") dated September 24, 1991 pursuant to the
Note Agreement.
B. The Company and the Noteholders now desire to amend the Note
Agreement in the respects, but only in the respects, hereinafter set forth.
C. Capitalized terms used herein shall have the respective meanings
ascribed thereto in the Note Agreement unless herein defined or the context
shall otherwise require.
D. All requirements of law have been fully complied with and all other
acts and things necessary to make this Amendment a valid, legal and binding
instrument according to its terms for the purposes herein expressed have been
done or performed.
NOW, THEREFORE, the Company and the Noteholders, in consideration of
good and valuable consideration the receipt and sufficiency of which is hereby
acknowledged, do hereby agree as follows:
Section 1. AMENDMENT.
1.1 Section 5.7 of the Note Agreement shall be and is hereby amended in
its entirety to read as follows:
"5.7. Fixed Charge Coverage. The Company will, as of the end
of each Fiscal Quarter specified below, maintain the ratio of
Consolidated Net Income Available for Fixed Charges for the immediately
preceding 12-month period to Fixed Charges for such 12-month period at
not less than the ratio set forth opposite such period:
Fiscal Quarters Ending Ratio
---------------------- -----
From the Closing Date through
June 28, 1996 1.4 to 1
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September 27, 1996 through
June 28, 1997 1 to 1
October 3, 1997 1.15 to 1
January 2, 1998 and thereafter 1.4 to 1"
Section 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
2.1 To induce the Noteholders to execute and deliver this Amendment
(which representations shall survive the execution and delivery of this
Amendment), the Company represents and warrants to the Noteholders that:
(a) this Amendment has been duly authorized, executed and
delivered by it and this Amendment constitutes the legal, valid and
binding obligation, contract and agreement of the Company enforceable
against it in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws or equitable principles relating to or limiting creditors'
rights generally;
(b) the Note Agreement, as amended by this Amendment,
constitutes the legal, valid and binding obligation, contract and
agreement of the Company enforceable against it in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles
relating to or limiting creditors' rights generally;
(c) the execution, delivery and performance by the Company of
this Amendment (i) has been duly authorized by all requisite corporate
action and, if required, shareholder action, (ii) does not require the
consent or approval of any governmental or regulatory body or agency,
and (iii) will not (A) violate (1) any provision of law, statute, rule
or regulation or its certificate of incorporation or bylaws, (2) any
order of any court or any rule, regulation or order of any other agency
or government binding upon it, or (3) any provision of any material
indenture, agreement or other instrument to which it is a party or by
which its properties or assets are or may be bound, or (B) result in a
breach or constitute (alone or with due notice or lapse of time or
both) a default under any indenture, agreement or other instrument
referred to in clause (iii)(A)(3) of this Section 2.1(c);
(d) as of the date hereof and after giving effect to this
Amendment, no Default or Event of Default has occurred which is
continuing; and
(e) all the representations and warranties contained in
Section 3.1 of the Note Agreement are true and correct in all material
respects with the same force and effect as if made by the Company on
and as of the date hereof.
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Section 3. CONDITIONS TO EFFECTIVENESS OF THIS AMENDMENT.
3.1 This Amendment shall not become effective until, and shall become
effective when, each and every one of the following conditions shall have been
satisfied:
(a) executed counterparts of this Amendment, duly executed by
the Company and the holders of at least 100% of the outstanding
principal of the Notes, shall have been delivered to the Noteholders;
(b) each of the Noteholders shall have been paid a fee equal
to two-tenths of one percent (0.002%) of the outstanding principal
amount of the Note held by such Noteholder; and
(c) the representations and warranties of the Company set
forth in Section 2 hereof are true and correct on and with respect to
the date hereof.
Section 4. WAIVER.
4.1 Upon and by virtue of this Amendment, the failure of the Company to
comply with the provisions of Section 5.7 of the Note Agreement on or prior to
the date hereof which constitutes an Event of Default under the Note Agreement
shall be deemed to have been waived by the Noteholders which Event of Default
has occurred solely as a result of the Company's failure to maintain the ratio
of Net Income Available for Fixed Charges to Fixed Charges for the 12-month
period ending on September 27, 1996, December 28, 1996 and March 28, 1997. The
Company understands and agrees that the waiver contained in this Section 3.1
pertains only to the Default and Event of Default herein described and to the
extent so described and not to any other Default or Event of Default which may
exist under, or any other matters arising in connection with, the Note Agreement
or to any rights which the Noteholders have by virtue of any such other actions
or matters.
Section 5. MISCELLANEOUS.
5.1 This Amendment shall be construed in connection with and as part of
the Note Agreement, and except as modified and expressly amended by this
Amendment, all terms, conditions and covenants contained in the Note Agreement
and the Note are hereby ratified and shall be and remain in full force and
effect.
5.2 Any and all notices, requests, certificates and other instruments
executed and delivered after the execution and delivery of this Amendment may
refer to the Note Agreement without making specific reference to this Amendment
but nevertheless all such references shall include this Amendment unless the
context otherwise requires.
5.3 The descriptive headings of the various Sections or parts of this
Amendment are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
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5.4 This Amendment shall be governed by and construed in accordance
with Colorado law.
5.5 The execution hereof by you shall constitute a contract between us
for the uses and purposes hereinabove set forth, and this Amendment may be
executed in any number of counterparts, each executed counterpart constituting
an original, but all together only one agreement.
UNITED GROCERS, INC.
By
Its
Accepted and Agreed to:
GREAT-WEST LIFE & ANNUITY
INSURANCE COMPANY
By
Its
By
Its
UNITED OF OMAHA LIFE INSURANCE
COMPANY
By
Its
MUTUAL OF OMAHA INSURANCE
COMPANY
By
Its
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COMPANION LIFE INSURANCE COMPANY
By
Its
By
Its
AMERICAN REPUBLIC INSURANCE
COMPANY
By
Its
By
Its
UNITED WORLD LIFE INSURANCE
COMPANY
By
Its
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