FOURTH AMENDMENT TO LOAN AGREEMENT
This FOURTH AMENDMENT TO LOAN AGREEMENT (this "Amendment") is made and
entered into effective as of November 19, 1999 by and among the following
parties:
(a) HOMELAND STORES, INC. ("Borrower"), a Delaware corporation,
(b) HOMELAND HOLDING CORPORATION ("Parent"), a Delaware corporation,
(Borrower and Parent are sometimes hereinafter referred to as
the "Companies" and individually as a "Company"),
(c) JCH BEVERAGE, INC. ("JCH"), a Texas corporation, as a Credit
Party under the Loan Agreement,
(d) SLB MARKETING, INC. ("SLB"), a Texas corporation, as a Credit
Party under the Loan Agreement,
(e) IBJ WHITEHALL BUSINESS CREDIT CORPORATION ("IBJ"), formerly IBJ
Schroder Business Credit Corporation, the assignee of IBJ
Schroder Bank & Trust Company,
(f) HELLER FINANCIAL, INC. ("Heller"),
(g) NATIONAL BANK OF CANADA ("NBC"),
(such lenders and other financial institutions and their
respective successors and assigns, individually, a "Lender" and
together, the "Lenders"), and
(h) NBC, as agent for the Lenders (in such capacity, the "Agent").
RECITALS:
A. Pursuant to that certain Loan Agreement, dated as of December 17,
1998, by and among Borrower, Parent, Lenders and Agent, as amended by that
certain First Amendment to Loan Agreement, dated as of April 23, 1999, by and
among Borrower, Parent, Lenders and Agent, that certain Second Amendment to Loan
Agreement (the "Second Amendment"), dated as of October 22, 1999, by and among
Borrower, Parent, Lenders, Agent and SLB, and that certain Third Amendment to
Loan Agreement, dated as of November 2, 1999, by and among Borrower, Parent,
Lenders and Agent (as the same may be amended, renewed, extended, restated or
otherwise modified from time to time, the "Loan Agreement"), Lenders agreed
to provide to Borrower a senior secured revolving credit and letter of credit
facility, a senior secured term loan facility, and two secured acquisition term
loan facilities.
B. Pursuant to the Second Amendment, the Agent and the Required Lenders
consented to the formation by SLB, a wholly-owned Subsidiary of Borrower, of
JCH as a wholly-owned Subsidiary of SLB, for the purpose of owning and holding
certain liquor and alcoholic beverage licenses in the State of Texas.
C. Borrower and Parent wish to restructure the ownership interests in
SLB and JCH, with such restructuring being effective as of October 14, 1999,
thereby making JCH a wholly-owned Subsidiary of Borrower and SLB a wholly-owned
Subsidiary of JCH.
D. Section 13.4 of the Loan Agreement requires that Borrower and Parent
obtain the written consent of Agent and Required Lenders prior to the
acquisition by Borrower or any of Borrower's Subsidiaries of a Subsidiary.
E. Section 13.5 of the Loan Agreement requires that Borrower and Parent
obtain the written consent of Agent and Required Lenders prior to the sale or
transfer by Borrower or any of Borrower's Subsidiaries of any stock of any of
Borrower's Subsidiaries.
F. Section 13.7 of the Loan Agreement requires that Borrower and Parent
obtain the written consent of Agent and Required Lenders prior to any
transaction between Borrower, Parent or any of Borrower's Subsidiaries, and
any Affiliate of Borrower, Parent or any Subsidiary thereof, involving the sale
of exchange of property or assets that is not specifically required or permitted
by the terms of the Loan Agreement.
G. Borrower and Parent have requested that Agent and Required Lenders
consent to the restructure of the ownership interests in SLB and JCH.
AGREEMENTS:
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:
1. Terms Defined. Unless otherwise defined in this Amendment, each
capitalized term used in this Amendment has the meaning given to such term in
the Loan Agreement (as amended by this Amendment).
2. Covenants Regarding Subsidiaries. Section 12.27 of the Loan Agreement
is amended and restated to read in its entirety as follows:
SEC. 12.27 SUBSIDIARIES' OPERATIONS. Borrower covenants (a) that
the business and operations of JCH Beverage, Inc., a Texas corporation
and a wholly-owned Subsidiary of Borrower ("JCH"), will be limited to the
ownership of the stock of SLB Marketing, Inc., a Texas corporation and
wholly-owned Subsidiary of JCH ("SLB"), and (b) that the business and
operations of SLB will be limited to the purchase and sale of alcoholic
beverages conducted in and from stores operated by Borrower.
3. Consent to Restructure of Ownership Interests in SLB and JCH.
Subject to the satisfaction of and compliance with all other terms and
conditions set forth in this Amendment, Agent and Required Lenders consent to:
(a) the acquisition by Borrower from SLB of all of the issued and outstanding
shares of common stock of JCH; and (b) the acquisition by JCH from Borrower of
all of the issued and outstanding shares of common stock of SLB.
4. Termination of Stock Pledge Agreements. Subject to the satisfaction
of and compliance with all other terms and conditions set forth in this
Amendment, the following stock pledge agreements shall be terminated and
void: (a) that certain Stock Pledge Agreement, dated December 17, 1998, made
by Borrower in favor of Agent for the ratable benefit of Lenders; and (b) that
certain Stock Pledge Agreement, dated October 22, 1999, made by SLB in favor of
Agent for the ratable benefit of Lenders.
5. Conditions Precedent. The effectiveness of this Amendment is
expressly conditioned upon the satisfaction of the following conditions
precedent:
(a) Agent shall have received all of the following, each dated
(unless otherwise indicated) the date of this Consent, in form and
substance satisfactory to Agent:
(i) Amendment Documents. This Amendment and any other
instrument, document or certificate required by Agent to be executed
or delivered by Borrower, Parent or any other party in connection
with this Amendment, duly executed by the parties thereto (the
"Amendment Documents").
(ii) Security Documents and Instruments. All the instruments
and documents then required to be delivered pursuant to Section 8 of
the Loan Agreement or any other provision of the Loan Agreement or
pursuant to the instruments and documents referred to in Section 8 of
the Loan Agreement with regard to the restructure of the ownership
interests in SLB and JCH; and the same shall be in full force and
effect and shall grant, create or perfect the Liens, rights, powers,
priorities, remedies and benefits contemplated herein or therein,
as the case may be.
(iii) Legal Opinion. A legal opinion from Companies' counsel,
Crowe & Dunlevy, a Professional Corporation, in form and substance
satisfactory to Agent and dated as of the date of this Amendment.
(iv) Additional Information. Such additional documents,
instruments and information as Agent may reasonably request to effect
the transactions contemplated hereby.
(b) Litigation. There shall be no pending or, to the knowledge of
any Company, threatened litigation with respect to any Company or any of
its Subsidiaries or (relating to the transactions contemplated herein)
with respect to Agent or any of the Lenders, which relates to the business,
operations, liabilities, assets, properties, prospects or condition
(financial or otherwise) of any Company or its Subsidiaries, which
pending or threatened litigation could, in Agent's reasonable judgment,
be expected to have a Material Adverse Effect. There shall exist no
judgment, order, injunction or other similar restraint prohibiting any
transaction contemplated hereby.
(c) Compliance with Law. The Agent shall be satisfied that
each Company, SLB and JCH (i) has obtained all authorizations and
approvals of any governmental authority or regulatory body required for
the due execution, delivery and performance by such company, of this
Amendment and any document related to each of the Amendment Documents and
the restructuring of the ownership interests in SLB and JCH, to which it
is or will be a party and for the perfection of or the exercise by Agent
and each Lender of their respective rights and remedies under the Loan
Documents, and (ii) shall be in compliance with, and shall have obtained
appropriate approvals pertaining to, all applicable laws, rules,
regulations and orders, including, without limitation, all governmental,
environmental, ERISA and other requirements, regulations and laws, the
violation or failure to obtain approvals for which could reasonably be
expected to have a Material Adverse Effect.
(d) Delivery of Documents. All corporate proceedings taken in
connection with the transactions contemplated by this Amendment and all
other agreements, documents and instruments executed and/or delivered
pursuant hereto, and all legal matters incident thereto, shall be
satisfactory to Agent and its legal counsel.
(e) No Default. No Default or Event of Default shall have occurred
and be continuing after giving effect to the restructuring of the ownership
interests in JCH and SLB contemplated hereby.
(f) Expiration of Consent. All of the conditions precedent to the
effectiveness of this Amendment must have been satisfied on or prior to
5 p.m., Dallas, Texas time, on November 30, 1999.
6. Representations and Warranties. Each Company, SLB and JCH hereby
represents and warrants to Agent and Lenders that, as of the date of and after
giving effect to this Amendment, (a) the execution, delivery and performance of
this Amendment has been authorized by all requisite corporate action on the
part of such company, and will not violate the corporate charter or bylaws of
such company, (b) all representations and warranties set forth in the Loan
Agreement and in any other Loan Documents are true and correct, in all material
respects, as if made again on and as of such date (including, without
limitation, the representations and warranties previously made as of the Closing
Date in the Loan Agreement). (c) no Default or Event of Default has occurred
and is continuing, and (d) the Loan Agreement (as amended by this Amendment),
the Notes and the other Loan Documents are and remain legal, valid, binding and
enforceable obligations of each Company, SLB and JCH, as applicable.
7. Amendment Documents as Loan Documents. The term Loan Documents,
as defined in the Loan Agreement and as used in any of the Loan Documents,
includes, without limitation, this Amendment and each of the other Amendment
Documents.
8. Governing Law. THIS AMENDMENT AND THE OTHER AMENDMENT DOCUMENTS
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
9. Counterparts. This Amendment may be executed in any number of
counterparts, all of which when taken together shall constitute one agreement,
and any of the parties hereto may execute this Amendment by signing any such
counterpart.
10. No Oral Agreements. THIS AMENDMENT, TOGETHER WITH THE LOAN AGREEMENT
AND THE OTHER LOAN DOCUMENTS AS WRITTEN, REPRESENT THE FINAL AGREEMENTS BY AND
AMONG THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN (A) BORROWER, PARENT, SLB OR JCH, AND (B)
AGENT OR ANY LENDER.
11. Loan Agreement Remains in Effect; No Waiver. Except as expressly
provided herein, all terms and provisions of the Loan Agreement and the other
Loan Documents shall remain unchanged and in full force and effect and are
hereby ratified and confirmed. No waiver by Agent or any Lender of any Default
or Event of Default shall be deemed to be a waiver of any other Default or Event
of Default. No delay or omission by Agent or any Lender in exercising any
power, right or remedy shall impair such power, right or remedy or be construed
as a waiver thereof or an acquiescence therein, and no single or partial
exercise of any power, right or remedy shall preclude other or further exercise
thereof or the exercise of any other power, right or remedy under the Loan
Agreement, the Loan Documents or otherwise.
12. Ratification of Guaranties. Each of Parent, SLB and JCH reaffirms
their respective obligations under their respective Guaranty, agrees that their
respective Guaranty shall remain in full force and effect notwithstanding
execution of this Amendment and the Amendment Documents, and agrees that their
respective Guaranty and the Loan Agreement shall continue to be legal, valid and
binding obligations of such Guarantor, enforceable in accordance with the terms
therein with regard to the Obligations (as defined in such Guaranty).
13. Survival of Representations and Warranties. All representations
and warranties made in this Amendment or any other Amendment Document shall
survive the execution and delivery of this Amendment and the other Amendment
Documents, and no investigation by Agent or any Lender or any closing shall
affect the representations and warranties or the right of Agent or any Lender
to rely upon them.
14. Reference to Loan Agreement. Each of the Loan Documents, including
the Loan Agreement, the Amendment Documents and any and all other agreements,
documents or instruments now or hereafter executed and/or delivered pursuant
to the terms hereof or pursuant to the terms of the Loan Agreement, as amended
hereby, are hereby amended so that any reference in such Loan Documents to the
Loan Agreement shall mean a reference to the Loan Agreement as amended hereby.
15. Severability. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
16. Successors and Assigns. This Amendment is binding upon and shall
inure to the benefit of Agent, Lenders, Borrower, Parent, SLB and JCH and their
respective successors and assigns, except that neither Borrower, Parent, SLB nor
JCH may assign or transfer any of their rights or obligations hereunder without
the prior written consent of Agent and Lenders.
17. Headings. The headings, captions and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
[This space intentionally left blank].
IN WITNESS WHEREOF, Borrower, Parent, SLB, JCH, Agent and Lenders have
caused this Amendment to be executed and delivered by their duly authorized
officers effective as of the date first above written.
BORROWER:
HOMELAND STORES, INC.
By:
Wayne S. Peterson,
Senior Vice President - Finance,
Chief Financial Officer and Secretary
PARENT:
HOMELAND HOLDING CORPORATION
By:
Wayne S. Peterson,
Senior Vice President - Finance,
Chief Financial Officer and Secretary
CREDIT PARTIES:
SLB MARKETING, INC.
By:
Jack C. Hensley,
President and Secretary
JCH BEVERAGE, INC.
By:
Jack C. Hensley,
President and Secretary
AGENT AND A LENDER:
NATIONAL BANK OF CANADA
By:
Larry L. Sears,
Vice President and Manager
By:
Randall K. Wilhoit,
Vice President
ADDITIONAL LENDERS:
IBJ WHITEHALL BUSINESS CREDIT CORPORATION
By:
John C. Williams,
Vice President
HELLER FINANCIAL, INC.
By:
Thomas W. Bukowski,
Senior Vice President