NINTH AMENDMENT TO LOAN AGREEMENT
This NINTH AMENDMENT TO LOAN AGREEMENT (this "Amendment") is
made and entered into effective as of April 24, 2001 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) SLB MARKETING, INC. ("SLB"), a Texas corporation, as a Credit
Party under the Loan Agreement,
(d) JCH BEVERAGE, INC. ("JCH"), 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"), a Canadian chartered bank,
(such lenders and other financial institutions and their
respective successors and assigns, individually, a "Lender" and
collectively, the "Lenders"), and
(h) NBC, as agent for 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 the
following:
(1) First Amendment to Loan Agreement, dated as of April 23, 1999,
by and among Borrower, Parent, Lenders and Agent;
(2) Second Amendment to Loan Agreement, dated as of October 22,
1999, by and among Borrower, Parent, Lenders, Agent and SLB;
NINTH AMENDMENT TO LOAN AGREEMENT - Page 1
(3) Third Amendment to Loan Agreement, dated as of November 2,
1999, by and among Borrower, Parent, Lenders, and Agent;
(4) Fourth Amendment to Loan Agreement, dated as of November 19,
1999, by and among Borrower, Parent, Lenders, Agent, SLB, and JCH;
(5) Fifth Amendment to Loan Agreement, dated as of February 29,
2000, by and among Borrower, Parent, Lenders, Agent, SLB, and JCH;
(6) Sixth Amendment to Loan Agreement, dated as of April 25,
2000, by and among Borrower, Parent, Lenders, Agent, SLB, and JCH;
(7) Seventh Amendment to Loan Agreement, dated as of December 22,
2000, by and among Borrower, Parent, Lenders, Agent, SLB, and JCH; and
(8) Eighth Amendment to Loan Agreement, dated as of March 23,
2001, by and among Borrower, Parent, Lenders, Agent, SLB, and JCH
(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. Borrower and Parent have requested that Agent and Lenders amend the
Loan Agreement to provide for the following:
(a) amend the applicable interest rate margins for the Loans;
(b) amend financial covenants in the Loan Agreement pertaining to
EBITDA, the Funded Debt-to EBITDA Ratio, and capital expenditures.
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. Borrowing Base. The definition of Borrowing Base, as set forth in
Section 1.1 of the Loan Agreement, is hereby amended to read in full as follows:
NINTH AMENDMENT TO LOAN AGREEMENT - Page 2
"Borrowing Base" shall mean, as of any time, an amount equal to the
sum of the following:
(a) up to fifty-six percent (56%) of the Net Amount of Eligible
Inventory,
(b) up to fifty-six percent (56%) of the Net Amount of Eligible
Pharmaceutical Inventory,
(c) up to eighty-five percent (85%) of the Net Amount of
Eligible Coupons,
(d) up to fifty percent (50%) of the Net Amount of Eligible
Pharmaceutical Receivables, and
(e) up to sixty-five percent (65%) of the Net Amount of
Eligible Vendor Receivables,
as determined by reference to and as set forth in the last Borrowing Base
Certificate required to be delivered to the Agent and each Lender prior
to such time pursuant to Section 12.1(j) hereof. Without in any way
waiving or modifying Agent's right to establish reserves as provided
otherwise in this Agreement, the Agent and the Lenders intend to, and
shall have the right to, adjust the percentages set forth above in the
event that either the appraisal prepared by Great American Appraisal &
Valuations Services, LLC and presented to the Agent on April 18, 2001,
any of the appraisals required by Section 12.14(c) hereof, or any further
information received by Agent from appraisers indicate appraised values
of the Inventory, which, in the Agent's discretion, make a reduction in
such percentages appropriate, with conforming adjustments to be made to
the Borrowing Base Certificate.
The Credit Parties, Agent, and Lenders acknowledge that the Lenders
intend to, and shall have the right to, adjust the percentages set forth above
subsequent to the execution and delivery of this Amendment, in the event that
the appraisal prepared by Great American Appraisal & Valuations Services, LLC
and presented to the Agent on April 18, 2001 indicates appraised values of the
Inventory, which, inthe Agent's discretion, make a reduction in such
percentages appropriate.
3. Interest Rate Increase. The definitions of Revolving Credit Base
Rate Margin, Revolving Credit Eurodollar Margin, Term Loan Base Rate Margin,
and Term Loan Eurodollar Margin, as set forth in Section 1.1 of the Loan
Agreement, are hereby amended to read in full as follows:
"Revolving Credit Base Rate Margin" shall mean three-quarters
percent (0.75%).
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"Revolving Credit Eurodollar Margin" shall mean two and three-
quarters percent (2.75%).
"Term Loan Base Rate Margin" shall mean one percent (1.00%).
"Term Loan Eurodollar Margin" shall mean three and one-quarter
percent (3.25%).
4. Suspension of Eurodollar Advances. Notwithstanding anything to the
contrary contained in the Loan Agreement in general, and in Sections 2.4 and 5.2
of the Loan Agreement in particular, from and after the date hereof, and until
otherwise agreed in writing by Agent, Borrower shall not be entitled or
permitted to select a borrowing of a Eurodollar Advance or to convert any Base
Rate Advance, or portion thereof, to a Eurodollar Advance.
5. Establishment of Additional Reserves. Section 2.4 of the Loan
Agreement is hereby amended by adding the following sentence, to read as
follows:
Further, and without limiting any of the foregoing, the Credit Parties
specifically agree that the Agent may establish reserves against the
Borrowing Base of Borrower in an amount equal to the amount of the Net
Proceeds of any sale or disposition of an Excluded Property or any Real
Property that is leased by any Credit Party, which reserves shall be in
addition to any other reserves established by Agent.
6. Proceeds of Sales of Excluded Properties. Subsection 6.1(c) of the
Loan Agreement is hereby amended to read as follows:
(c) Borrower shall, on each date that any Credit Party receives
Gross Proceeds of any sale or disposition of an Excluded Property or any
Real Property that is leased by any Credit Party, prepay, as determined
by Agent at the option of Agent, either
(i) the outstanding principal of the Advances and unreimbursed
Letters of Credit, or
(ii) the outstanding principal of the Term Loan Advances, in
inverse order of maturity,
in each case, as applicable, in an amount equal to 100% of the Net
Proceeds of such sale or disposition; and then if no Revolving Credit
Advance, unreimbursed Letter of Credit or Term Loan Advance is then
outstanding, provide Letter of Credit Cash Collateral until an amount
NINTH AMENDMENT TO LOAN AGREEMENT - Page 4
equal to the undrawn amount of all outstanding Letters of Credit has
been secured by Letter of Credit Cash Collateral; and thereafter
Borrower may retain the remaining Net Proceeds, if any.
Further, and consistent with the above, clause (viii) of the definition
of Collateral in Section 1.1 of the Loan Agreement is hereby amended to read as
follows:
(viii) Real Property. All real properties owned or leased
by either of the Companies, other than those real properties described on
Schedule 1.1(C) attached to this Agreement (the "Excluded Properties"),
but only so long as the Company that owns or leases an Excluded Property
grants the Agent and the Lenders a negative pledge on the Excluded
Properties and agrees that the net proceeds from any disposition of the
Excluded Properties will be applied to the in accordance with Section
6.1(c) of this Agreement upon receipt thereof by the Companies; and
7. Shared National Credit Program. Article 6 of the Loan Agreement is
hereby amended by adding Section 6.9, to read in its entirety as follows:
Sec. 6.9. CONTINGENT FEE Borrower shall pay to the Agent for
the account of the Lenders an annual contingent fee in the amount of
$100,000 in the event that, at any time during the twelve months
preceding any anniversary of the Closing Date, the annual risk rating of
the Revolving Loan, the Term Loan, or any other loan hereunder, as
assigned by the Federal banking examiners under the Shared National
Credit Review Program, results in the Revolving Loan, the Term Loan or
any other loan hereunder being classified or criticized on the basis of
its evaluated ability to be repaid. The annual contingent fee will be
payable at the earliest of the Maturity Date, termination of this
Agreement or re-financing of this Agreement. To the extent that
applicable Federal law requires the confidentiality of the results of
such examinations or otherwise prohibits or restricts disclosures of
such examinations, neither the Agent nor the Lenders shall be required to
disclose to the Companies the results of any such examinations or risk
ratings.
8. Quarterly Reports. The introductory phrase to Subsection 12.1(a)
of the Loan Agreement is hereby amended require the Borrower's quarterly
reports to be furnished to the Agent and each Lender thirty (30), instead of
45, days after the close or each Fiscal Quarter of Borrower, and to read as
follows:
(a) as soon as practicable and in any event within thirty (30) days
after the close of each Fiscal Quarter of each Fiscal Year of Borrower:
9. Report on Minimum Availability. Section 12.1 of the Loan Agreement
is hereby amended by adding the following clause (t), to read as follows:
(t) not later than the next Business Day after the first (1st) and
the fifteenth (15th) days of each fiscal month, a certificate dated as
NINTH AMENDMENT TO LOAN AGREEMENT - Page 5
of the first (1st) and the fifteenth (15th) day of such month, as
applicable, or, if such day is not a Business Day, then on the next
following Business Day, from Borrower and signed by the chief executive
officer, chief financial officer or chief accounting officer of Parent
setting forth the average availability under the Revolving Credit
Facility Commitment for a period of ten (10) Business Days prior to the
first (1st) and the fifteenth (15th) day of each month, as applicable,
or, if such day is not a Business Day, then on the next following
Business Day.
10. Borrowing Base Certificate. The form of the Borrowing Base
Certificate attached to the Loan Agreement as Exhibit 12.1(j) is hereby
amended and replaced by the form of the Borrowing Base Certificate attached as
Exhibit 12.1(j) to this Amendment.
11. Inventory Audits. Subsection 12.14(c) of the Loan Agreement is
hereby amended to read as follows:
(c) At Agent's request at any time and from time to time, allow
a third-party appraiser acceptable to Agent to perform an appraisal of
the Inventory, copies of which shall be made available to Agent and
Lenders.
12. Real Estate Appraisals. Subsection 12.14 of the Loan Agreement is
hereby amended by adding the following clause (e), to read as follows:
(e) At Agent's request at any time, allow a third party
appraiser, acceptable to the Agent in its sole discretion, and at
Borrower's expense, to provide directly to the Agent and the Lenders
appraisals of the Borrower's real property owned and Equipment located
on such owned real estate, in form and detail acceptable to the Agent
and the Lenders.
13. Minimum EBITDA. The first sentence of Subsection 12.16(a) of the
Loan Agreement is hereby amended to read as follows:
The Companies shall not permit their EBITDA, for the four (4)-
Fiscal Quarter period ending at the end of each Fiscal Quarter
specified below or, if a Fiscal Year is specified below, then ending
at the end of each Fiscal Quarter occurring during or at the end of
the Fiscal Year indicated below, to be less than the amount indicated
below for such Fiscal Year or Fiscal Quarter, as applicable:
NINTH AMENDMENT TO LOAN AGREEMENT - Page 6
Fiscal Quarter/Fiscal Year Minimum EBITDA
The fourth Fiscal Quarter of Fiscal Year 2000: $19,000,000
The first, second, third and fourth Fiscal Quarters
of Fiscal Year 2001: $17,000,000
Fiscal Quarter Year 2002 and thereafter: $19,000,000
14. Funded Debt-to-EBITDA Ratio: The first sentence of Subsection
12.16(c) of the Loan Agreement is hereby amended to read as follows:
The Companies shall not permit their Funded Debt-to-EBITDA Ratio
ending at the end of each Fiscal Quarter to be greater than the ratio
indicated below for such Fiscal Quarter:
Funded
Fiscal Quarter Debt-to-EBITDA Ratio
The fourth Fiscal Quarter of Fiscal Year 2000: 5.75 to 1.0
The first Fiscal Quarter of Fiscal Year 2001: 6.00 to 1.0
The second Fiscal Quarter of Fiscal Year 2001 6.00 to 1.0
The third Fiscal Quarter of Fiscal Year 2001: 6.50 to 1.0
The fourth Fiscal Quarter of Fiscal Year 2001 6.50 to 1.0
The first Fiscal Quarter of Fiscal Year 2002
and each Fiscal Quarter thereafter: 6.50 to 1.0
15. Minimum Availability. Section 12.16 of the Loan Agreement is
hereby amended by adding the following clause (d), to read as follows:
(d) Minimum Availability. The average availability under the
Revolving Credit Facility Commitment for a period of ten (10) Business
Days prior to the first (1st) and the fifteenth (15th) day of each month,
or, if such day is not a Business Day, then on the next following
Business Day, shall be at least One Million Dollars ($1,000,000).
16. Capital Expenditures: Subsection 13.1(a) of the Loan Agreement is
hereby amended to read as follows:
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The Companies shall not suffer or permit Net Capital Expenditures of the
Parent and its Subsidiaries during Fiscal Year 2001 to exceed $5,000,000.
Thereafter, the Companies shall not suffer or permit Net Capital
Expenditures of the Parent and its Subsidiaries during any Fiscal Year to
exceed the sum of (a) $13,000,000, plus (b) the Carryover Capital
Expenditures Amount, if any.
17. Amendment to Events of Default: Section 14.1(c) of the Loan
Agreement is hereby amended to include Subsection 12.1(t), which is added by
this Amendment, among the series of Sections listed in Section 14.1(c) as being
excepted from the applicability of provisions for notice and cure, as set forth
in Section 14.1(c).
18. Amendments, Modification and Waiver.
(a) Amendment to Increase the Interest Rate: Clause (i) of Section
16.2(c) of the Loan Agreement is hereby amended to provide that consent of all
of the Lenders to a change in the rate of interest is required only if the
change is a decrease, as opposed to an increase, and to read as follows:
(i) extend the due date of the principal of or interest on the
Revolving Loan, the Term Loan, the Acquisition Term Loan, or any other
amount payable hereunder, or portion thereof, decrease the rate of
interest on the Revolving Loan, the Term Loan, or portion thereof, or
reduce the amount of any principal payable on the Revolving Loan, the
Term Loan, or portion thereof, or reduce the fees payable to the Lenders
hereunder or extend the time of payment thereof;
(b) Amendment to Financial Covenants: Section 16.2(c) of the Loan
Agreement is hereby amended to provide that consent of all of the Lenders to an
amendment to the financial covenants is required, by adding the following clause
(ix) to read as follows:
(ix) amend Section 12.16 hereof, titled "Financial Covenants."
19. 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 Amendment, in form and
substance satisfactory to Agent:
(i) Amendment Documents. This Amendment and any
other instrument, including, document or certificate required by
Agent to be executed or delivered by Borrower, Parent or any other
party in connection with this Amendment or any consent granted
herein, duly executed by the parties thereto (collectively, the
"Amendment Documents"); and
NINTH AMENDMENT TO LOAN AGREEMENT - Page 8
(ii) Additional Information. Such additional documents,
instruments and information as Agent or its legal counsel, Hughes
& Luce, L.L.P., special counsel to Agent, and all local counsel to
Agent, may reasonably request to effect the transactions
contemplated hereby.
(b) 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, Hughes & Luce, L.L.P.
(c) Amendment Fee. In consideration of the Lenders' entry into
the agreements set forth in this Amendment, Borrower shall pay, and
Lenders shall have received, an amendment fee in the amount of $50,000.
20. Conditions Subsequent. The effectiveness of this Amendment is
expressly conditioned upon the satisfaction of the conditions subsequent that
Agent shall have received all of the following, in form and substance
satisfactory to Agent:
(a) Availability Forecasts. Not later than not later than the
next Business Day after the first (1st) and the fifteenth (15th) days
of each fiscal month, a forecast of availability under the Revolving
Credit Facility Commitment for the immediately following four (4) week
period, in form, scope and substance reasonably satisfactory to the
Agent;
(b) Monthly Budgets. Not later than April 30, 2001, a month-by-
month budget of the financial condition and results of operations of
Parent and its Subsidiaries for the Fiscal Year ending December 29, 2001
(covering in any event balance sheets, statements of cash flow and of
income for each quarter and calendar month); in all instances in form,
scope and substance reasonably satisfactory to the Agent; and Borrower
shall cause such budget to be updated from time to time as material
changes in the financial condition and results of operations of Parent
and its Subsidiaries necessitate and shall promptly furnish or cause to
be furnished to the Agent and each Lender a copy of any such updated
budget; and
(c) Fiscal Year 2002 Budget. Not later than November 30, 2001, a
preliminary Fiscal-Year budget of the financial condition and results of
operations of Parent and its Subsidiaries for Fiscal Year 2002 (covering
in any event balance sheets, statements of cash flow and of income for
each quarter and calendar month, together with financial covenant
calculations); in all instances in form, scope and substance reasonably
satisfactory to the Agent.
NINTH AMENDMENT TO LOAN AGREEMENT - Page 9
21. Real Estate and Equipment Appraisals; Legal Review; and Consultant.
(a) Real Estate and Equipment Appraisals. Borrower agrees that
the Agent may engage a third party, acceptable to the Agent in its sole
discretion, and at Borrower's expense, to provide directly to the Agent
and the Lenders appraisals of the Borrower's real property owned and
Equipment located on such owned real estate, in form and detail
acceptable to the Agent and the Lenders.
(b) Legal Review. Borrower agrees that the Agent may conduct a
legal review at Borrower's expense.
(c) Consultant. Borrower agrees that the Agent and the Lenders
will have the right to retain a consultant to review any and all aspects
of the Borrower's operations, including coordinating with and reviewing
the McDonald & Co. engagement. The Borrower will agree to retain such
Consultant, who shall be acceptable to the Bank Group, within 30 days of
this Amendment.
22. Default Fee. Borrower agrees to pay a "Default Fee" to Agent and
the Lenders upon the occurrence of any Event of Default from and after the date
of this Amendment, other than an Event of Default resulting from a failure to
comply with the financial covenant in Section 12.16(d), styled "Minimum
Availability". The Default Fee will be in the amount of Two Hundred Thousand
Dollars ($200,000) and will be in addition to any waiver or other amendment fees
that may be required.
23. Representations and Warranties. Each Company 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 each
Company and will not violate the corporate charter or bylaws of any 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 (as the same may be
amended and restated from time to time) and the other Loan Documents are and
remain legal, valid, binding and enforceable obligations of each Company, as
applicable.
24. 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 executed in connection herewith.
25. Governing Law. THIS AMENDMENT AND THE OTHER LOAN 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.
NINTH AMENDMENT TO LOAN AGREEMENT - Page 10
26. 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.
27. No Oral Agreements. THIS AMENDMENT, TOGETHER WITH THE LOAN
AGREEMENT AND THE OTHER LOAN DOCUMENTS AS WRITTEN, REPRESENT THE FINAL
AGREEMENTS BETWEEN 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, OR PARENT, AND (B)
AGENT OR ANY LENDER.
28. 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 such 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.
29. Ratification of Guaranties. Each of Parent and by their signature
below SLB and JCH, reaffirms its respective obligations under its respective
Guaranty, agrees that its respective Guaranty shall remain in full force and
effect not withstanding execution of this Amendment and the Amendment Documents,
and agrees that its 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 Indebtedness.
30. Counterclaims. EACH CREDIT PARTY DECLARES THAT SUCH CREDIT PARTY
HAS NO SET-OFF, COUNTERCLAIM, DEFENSE OR OTHER CAUSES OF ACTION (TOGETHER, THE
"COUNTERCLAIMS") AGAINST AGENT OR ANY LENDER ARISING OUT OF THE TRANSACTIONS
EVIDENCED BY THE LOAN AGREEMENT AND THE LOAN DOCUMENTS (INCLUDING ALL AMENDMENTS
THERETO) OR ANY TRANSACTIONS THAT WERE RENEWED OR EXTENDED BY THE LOAN
DOCUMENTS. TO THE EXTENT ANY COUNTERCLAIMS MAY EXIST, WHETHER KNOWN OR UNKNOWN,
SUCH ARE WAIVED AND RELEASED HEREBY BY EACH CREDIT PARTY. EACH CREDIT PARTY
AGREES TO INDEMNIFY AND HOLD AGENT AND LENDERS HARMLESS FROM ANY AND ALL
COUNTERCLAIMS THAT SUCH CREDIT PARTY OR ANY OTHER PERSON OR ENTITY CLAIMING BY,
THROUGH, OR UNDER SUCH CREDIT PARTY MAY AT ANY TIME ASSERT AGAINST AGENT OR ANY
LENDER.
NINTH AMENDMENT TO LOAN AGREEMENT - Page 11
31. Fees and Expenses. Borrower agrees to pay all expenses paid or
incurred by Agent in connection with this Amendment and any related documents,
including but not limited to recording fees, computer fees, duplication fees,
telephone and telecopier fees, travel and transportation fees, search and filing
fees, and the reasonable fees and expenses of Hughes & Luce, L.L.P., counsel to
Agent.
32. 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 Lender or any closing shall affect the
representations and warranties or the right of Lender to rely upon them.
33. 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.
34. 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.
35. 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 Borrower, Parent, SLB and JCH may not
assign or transfer any of their rights or obligations hereunder without the
prior written consent of Lenders.
36. Headings. The headings, captions and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
[Signature Pages Follow]
NINTH AMENDMENT TO LOAN AGREEMENT - Page 12
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 and
Chief Financial Officer and Secretary
PARENT:
HOMELAND HOLDING
CORPORATION
By:________________________________
Wayne S. Peterson,
Senior Vice President - Finance and
Chief Financial Officer and Secretary
CREDIT PARTIES:
SLB MARKETING, INC.
By:________________________________
Wayne S. Peterson,
Attorney-in-Fact
JCH BEVERAGE, INC.
By:________________________________
Wayne S. Peterson,
Attorney-in-Fact
NINTH AMENDMENT TO LOAN AGREEMENT - Page 13
AGENT AND A LENDER:
NATIONAL BANK OF CANADA,
a Canadian chartered bank
By:_______________________________
Name:_____________________________
Title:____________________________
By:_______________________________
Name:_____________________________
Title:____________________________
ADDITIONAL LENDERS:
IBJ WHITEHALL BUSINESS CREDIT
CORPORATION
By: _____________________________
Name:____________________________
Title:___________________________
HELLER FINANCIAL, INC.
By:______________________________
Name:____________________________
Title:___________________________
NINTH AMENDMENT TO LOAN AGREEMENT - Page 14
EXHIBIT 12.1(j)
FORM OF BORROWING BASE CERTIFICATE
as of ______, 200_
(Capitalized terms used herein have the meanings given them in the Loan
Agreement.)
A. Determination of Borrowing Availability.
Inventory (excluding Pharmaceutical Inventory)
1. (a) Grocery
(b) Variety
(c) Meat
(d) S & F Beverage
(e) Delicatessen
(f) Bakery
(g) Produce
2. Total Inventory: $___________
3. Net Amount of Eligible Inventory: $___________
4. Advance Rate x 56% = $___________
Pharmaceutical Inventory:
5. Total Pharmaceutical Inventory: $___________
6. Less: Ineligible Pharmaceutical Inventory: $___________
7. Net Amount of Eligible Pharmaceutical Inventory: $___________
8. Advance Rate x 56% = $___________
Coupons
9. Total Coupons: $___________
10. Less: Ineligible Coupons: $___________
11. Net Amount of Eligible Coupons: $___________
Exhibit 12.1(j)
Form of Borrowing Base Certificate - Page 1
12. Advance Rate x 85% = $___________
Pharmaceutical Receivables
13. Total Pharmaceutical Receivables: $___________
14. Less: Ineligible Pharmaceutical Receivables: $___________
15. Net Amount of Eligible Pharmaceutical Receivables: $___________
16. Advance Rate x 50% = $___________
Vendor Receivables
17. Total Vendor Receivables: $___________
18. Less: Ineligible Vendor Receivables: $___________
19. Net Amount of Eligible Vendor Receivables: $___________
20. Advance Rate x 65% = $___________
21. Borrowing Base (Sum of Items 4, 8, 12, 16 and 20): $___________
22. Less: Letter of Credit Usage: $___________
23. Less: Reserves against Receivables
(if any): $___________
24. Less: Reserves against Inventory
(if any): $___________
25. Less: Outstanding balance of Revolving
Credit Advances: $___________
26. Availability under Borrowing
Base: $___________
B. Determination of Revolving Loan Borrowing Limit.
1. Revolving Credit Facility Commitment: $37,000,000.00
2. Less: Letter of Credit Usage: $_____________
3. Availability under Revolving Loan Borrowing Limit: $_____________
Compare A.26 to B.3 - The Advance requested
may not exceed the lesser of A-26 and B.3.
Exhibit 12.1(j)
Form of Borrowing Base Certificate - Page 2
CERTIFICATION
There are no other stores leased by Homeland on which the rental payments
are more than thirty (30) days past due, other than those listed on the attached
Schedule "A".
Homeland hereby reaffirms the grant of a security interest in the
Collateral, securing the payment, performance and observance of the Obligations
to the Agent for the ratable benefit of the Lenders. All representations and
warranties made by Homeland Stores, Inc. in the Mortgages, the Coupon
Certificate dated as of _________, and the Pharmaceutical Receivables
Certificate dated as of __________, are true and correct in all material
respects with the same effect as though such representations and warranties
had been made on the date hereof (unless any such representation or warranty
speaks as of a particular date, in which case it shall be deemed repeated as of
such date).
The undersigned hereby certifies on this date as to the accuracy of the
information set forth in this certificate on and as of the ____ day of
__________________, 200_.
Dated:_____________, 200_ HOMELAND STORES, INC.
By: _________________________
Name:________________________
Title:_______________________
Certification
Exhibit A
Monthly Amount of
Name of Lessor Store No. Store Location Lease Payment Past Due Payment