AMENDMENT NUMBER FOUR
TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
This AMENDMENT NUMBER FOUR TO AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT (this "Amendment"), dated as of June 27, 1996, is entered into by and
among CERTIFIED GROCERS OF CALIFORNIA, LTD., a California corporation
("Certified"), GROCERS GENERAL MERCHANDISE COMPANY, a California corporation
("GGMC"), and GROCERS SPECIALTY COMPANY, a California corporation ("GSC")
(Certified, GGMC, and GSC are jointly and severally referred to herein as
"Borrower"), on the one hand, and the financial institutions which are
signatories hereto (hereinafter collectively referred to as the "Lenders" and
individually as a "Lender"), BT COMMERCIAL CORPORATION, a Delaware corporation ,
as agent ("Agent"), UNION BANK OF CALIFORNIA, N.A., a national banking
association, as co-agent, and FIRST NATIONAL BANK OF BOSTON, National
Association, as co-agent, on the other hand, in light of the following facts:
R E C I T A L S
A. The parties hereto have previously entered into that certain Amended and
Restated Loan and Security Agreement, dated as of March 17, 1994, as amended by
that certain Amendment Number One to Amended and Restated Loan and Security
Agreement, dated as of November 1, 1994, as further amended by that certain
Amendment Number Two to Amended and Restated Loan and Security Agreement, dated
as of December 3, 1994, and as further amended by that certain Amendment Number
Three to Amended and Restated Loan and Security Agreement, dated as of May __,
1996 (collectively, the "Agreement").
B. Borrower has requested that Lenders consent to the acquisition
(the "Xxxxxxx'x Acquisition"), for a cash purchase price (the "Xxxxxxx'x
Purchase Price") of up to $31,000,000 (of which not more than $7,000,000 may be
for inventory) from Bay Area Foods, Inc. ("BAF"), of certain assets (the
"Xxxxxxx'x Assets") consisting of inventory, fixtures, machinery, equipment, and
leasehold improvements, and the assumption of certain liabilities respecting
store real property leases (the "Xxxxxxx'x Liabilities"), all associated with
twelve (12) Xxxxxxx'x grocery stores.
C. Lenders are consenting hereby to the Xxxxxxx'x Acquisition,
subject and pursuant to the terms of this Amendment.
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A G R E E M E N T
NOW THEREFORE, the parties hereto agree as follows:
1. DEFINED TERMS. All initially capitalized terms used but not
defined herein shall have the meanings assigned to such terms in the Agreement.
2. CONSENT TO XXXXXXX'X ACQUISITION. Subject to the terms of this
Amendment and notwithstanding any of the terms of the Agreement to the contrary,
Lenders hereby consent to the acquisition of the Xxxxxxx'x Assets by Certified,
the payment of the Xxxxxxx'x Purchase Price to BAF by Certified, and the
borrowing by Certified of Loans ("Xxxxxxx'x Acquisition Loans") to fund payment
of some or all of the Xxxxxxx'x Purchase Price.
3. CONSENT TO STRUCTURE OF XXXXXXX'X ACQUISITION. Upon the election
of Certified, the Xxxxxxx'x Assets may be acquired by Certified's wholly-owned
subsidiary, Crown Grocers, Inc., a California corporation ("Crown") and
Certified may loan the proceeds of the Xxxxxxx'x Acquisition Loans to Crown to
fund the payment by Crown to BAF of the Xxxxxxx'x Purchase Price; PROVIDED, that
in such event: (a) the loan by Certified to Crown shall be evidenced by a
secured promissory note (the "Crown Note"); (b) the Crown Note shall be secured
pursuant to a security agreement and associated documents and instruments
(collectively, the "Crown Security Documents") granting a first priority lien
upon and security interest in all of the Xxxxxxx'x Assets; (c) the Crown Note
and the Crown Security Documents shall be pledged to Lenders to secure the
Obligations pursuant to a pledge agreement (the "Crown Note Pledge Agreement");
(d) Crown shall execute and deliver a continuing guaranty (the "Crown Guaranty")
of the Obligations, secured by a second priority lien upon and security interest
in the Xxxxxxx'x Assets; (e) counsel to Certified and Crown shall issue a legal
opinion in favor of Lenders (the "Crown Legal Opinion") confirming the valid,
binding and enforceable obligations arising under the Crown Note, the Crown
Security Documents, the Crown Note Pledge Agreement and the Crown Guaranty.
4. COVENANTS REGARDING DISPOSITION OF XXXXXXX'X ASSETS. Borrower
hereby covenants and agrees as follows:
(a)that on or before the date which is 45 days after the date of
the funding of the Xxxxxxx'x Acquisition Loans, Borrower shall cause such of the
Xxxxxxx'x Assets to have been sold by Certified or Crown, as applicable, to
third party owner-operators such that the proceeds arising from such
disposition(s) shall have been paid over to Agent for application against the
Obligations in an amount greater than or equal to $15,000,000; PROVIDED that any
failure to effect such disposition shall not constitute an Event of Default and
shall result solely in Borrower's obligation to make payment of the Disposition
Fee as hereinafter provided.
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(b) on or before the date which is the three-month anniversary
date of the funding of the Xxxxxxx'x Acquisition Loans, Borrower shall have (X):
(i) caused such of the Xxxxxxx'x Assets to have been sold by Certified or Crown,
as applicable, to third party owner-operators such that the proceeds arising
from such disposition(s) shall have been paid over to Agent for application
against the Obligations in an amount greater than or equal to $25,000,000
inclusive of the amounts paid over in compliance with subsection (a) above; or
(ii) Loan Availability net of all reserves for Letters of Credit and other items
of at least $35,000,000; and (Y) provided to Agent a written certification as to
the status of the disposition of the Xxxxxxx'x Assets as of such date, including
a statement as to such of the Xxxxxxx'x Assets as are then owned by Borrower or
any of its Subsidiaries.
5. AMENDMENT TO SECTION 6.26. Section 6.26 of the Agreement is
amended to add a new subsection (m) thereto as follows:
"(m) Borrower and its Subsidiaries may make and own an
Investment in a Subsidiary, consisting of a corporation the majority
of the voting stock of which shall be owned by Certified, which
Investment may consist of the Xxxxxxx'x Assets (as defined in
Amendment Number Four to this Agreement) having a book value not to
exceed $5,000,000 which are owned by Borrower or any of its
Subsidiaries on the three-month anniversary date of the date of
funding of the Xxxxxxx'x Acquisition Loans (as defined in Amendment
Number Four to this Agreement)."
6. AMENDMENT FEE. Concurrently with the funding of the Xxxxxxx'x
Acquisition Loans, Borrower shall pay to Agent a fee (the "Amendment Fee") in an
amount equal to one-fourth of one percent (0.25%) of the aggregate amount of the
Xxxxxxx'x Acquisition Loans (to the extent actually borrowed), for the account
of Lenders, pro-rata in accordance with each Lender's share of the Commitment;
PROVIDED, HOWEVER, that if any Lender fails to execute this Amendment on or
before June 27, 1996, such Lender shall forfeit its pro-rata share of the
Amendment Fee which would have been for the account of such Lender and Borrower
shall have no obligation to pay such pro-rata share of the Amendment Fee.
7. DISPOSITION FEE. In the event that Agent shall not have received
proceeds arising from the disposition of Xxxxxxx'x Assets in compliance with
Section 4(a) of this Amendment, Borrower shall pay to Agent a fee (the
"Disposition Fee") in an amount equal to one-fourth of one percent (0.25%) of
the aggregate amount of the Xxxxxxx'x Acquisition Loans (to the extent actually
borrowed), for the account of Lenders; PROVIDED, HOWEVER, that if any Lender
fails to execute this Amendment on or before June 27, 1996, such Lender shall
forfeit its pro-rata share of the Disposition Fee which would have been for the
account of such Lender and Borrower shall have no obligation to pay such pro-
rata share of the Disposition Fee.
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8. CONDITIONS PRECEDENT. The effectiveness of this Amendment is
subject to and conditioned upon the fulfillment of each and all of the following
conditions precedent:
(a) Agent shall have received this Amendment duly executed by
Borrower and Required Lenders.
(b) Agent shall have received a consent and affirmation duly
executed by each of Certified, GGMC, and GSC indicating the consent by each such
guarantor to the execution and delivery by Borrower of this Amendment and the
affirmation of the continued effectiveness of each such guarantor's guaranty of
the Obligations.
(c) In the event Certified elects to effect the acquisition
through Crown, Agent shall have received the duly executed and issued Crown
Note, the Crown Security Documents, the Crown Note Pledge Agreement, the Crown
Guaranty and the Crown Legal Opinion, all in form and substance satisfactory to
Agent, in its sole discretion.
(d) Agent shall have received payment of the Amendment Fee.
(e) Agent shall have received payment of all Agents Expenses
incurred by Agent in connection with the negotiation, preparation and execution
of this Amendment.
(f) Agent shall have received certified copies or originals of
the executed purchase and sale documents between BAF and Certified respecting
the Xxxxxxx'x Acquisition, which purchase and sale documents shall substantially
conform to the terms of the Xxxxxxx'x Acquisition as represented by Certified to
Agent.
9. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in
any number of counterparts and by different parties on separate counterparts,
each of which when so executed and delivered shall be deemed to be an original.
All such counterparts, taken together, shall constitute but one and the same
Amendment. This Amendment shall become effective upon the fulfillment of all of
the conditions set forth in Section 8 hereof.
10. REAFFIRMATION OF THE AGREEMENT. Except as specifically amended
by this Amendment, the Agreement shall remain in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed at Los Angeles, California as of the date first hereinabove written.
CERTIFIED GROCERS OF CALIFORNIA, LTD., a
California corporation
By
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Title:
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GROCERS GENERAL MERCHANDISE COMPANY, a
California corporation
By
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Title:
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GROCERS SPECIALTY COMPANY,
a California corporation
By
------------------------------
Title:
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BT COMMERCIAL CORPORATION, a Delaware
corporation, individually and as Agent
By
------------------------------
Title:
-------------------------
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THE FIRST NATIONAL BANK OF BOSTON, a
National Association, individually and
as Co-Agent
By
------------------------------
Title:
-------------------------
UNION BANK OF CALIFORNIA, N.A.,
individually and as Co-Agent
By
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Title:
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DG BANK DEUTSCHE GENOSSENSCHATFTSBANK, a
German bank acting through its New York
branch
By
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Title:
-------------------------
By------------------------------
Title:
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6
DRESDNER BANK, AG, Los Angeles agency
and Grand Cayman Branch, as a bank
By
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Title:
-------------------------
By
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Title:
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NATIONAL CANADA CORPORATION, a Delaware
corporation
By
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Title:
-------------------------
By
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Title:
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SANWA BANK CALIFORNIA, a California
banking corporation
By
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Title:
-------------------------
7
SANWA BUSINESS CREDIT CORPORATION,
a Delaware corporation
By
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Title:
-------------------------
THE DAI-ICHI KANGYO BANK, LIMITED, a
Japanese bank acting through its
Los Angeles agency
By
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Title:
-------------------------
By
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Title:
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THE SAKURA BANK, LIMITED, a Japanese
bank acting through its Los Angeles
agency
By
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Title:
-------------------------
By
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Title:
-------------------------
8
MANUFACTURERS BANK
By
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Title:
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CITY NATIONAL BANK, a national banking
association
By
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Title:
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CONSENT OF GUARANTORS
Each of the undersigned, as a guarantor of the obligations of
CERTIFIED GROCERS OF CALIFORNIA, LTD., a California corporation ("Certified"),
GROCERS GENERAL MERCHANDISE COMPANY, a California corporation ("GGMC"), and
GROCERS SPECIALTY COMPANY, a California corporation ("GSC") (Certified, GGMC and
GSC are collectively referred to herein as "Borrower"), arising out of that
certain Amended and Restated Loan and Security Agreement, dated as of March 17,
1994, as amended by that certain Amendment Number One to Amended and Restated
Loan and Security Agreement, dated as of November 1, 1994, as further amended by
that certain Amendment Number Two to Amended and Restated Loan and Security
Agreement, dated as of December 3, 1994, and as further amended by that certain
Amendment Number Three to Amended and Restated Loan and Security Agreement,
dated as of May __, 1996 (collectively, the "Agreement"), among BT Commercial
Corporation, a Delaware corporation, Union Bank of California, N.A., a national
banking association, First National Bank of Boston, National Association
(collectively, "Agents"), and the other lenders party thereto (collectively,
"Lenders"), on the one hand, and Borrower, on the other hand, hereby
acknowledges receipt of a copy of that certain Amendment Number Four to Amended
and Restated Loan and Security Agreement, dated as of June 27, 1996, among
Agents, Lenders and Borrower, consents to the terms contained therein, and
agrees that the Continuing Guaranty executed by each of the undersigned shall
remain in full force and effect as a continuing guaranty of the obligations of
Borrower owing to Agents and Lenders under the Agreement.
Although Agents have informed us of the matters set forth above, and
we have acknowledged same, we understand and agree that Agents have no duty
under the Agreement, the Guaranties or any other agreement between us to so
notify us or to seek an acknowledgment, and nothing contained herein is intended
to or shall create such a duty as to any advances or transactions hereafter.
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IN WITNESS WHEREOF, each of the undersigned has caused this Consent of
Guarantors to be duly executed by their respective authorized officers as of
June 27, 1996.
CERTIFIED GROCERS OF CALIFORNIA, LTD., a
California corporation
By
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Title:
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GROCERS GENERAL MERCHANDISE COMPANY, a
California corporation
By
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Title:
-------------------------
GROCERS SPECIALTY COMPANY, a California
corporation
By
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Title:
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