EXHIBIT 10.107
SECOND WAIVER
(1994 PARTICIPATION AGREEMENT)
This SECOND WAIVER (1994 PARTICIPATION AGREEMENT) (the "Waiver"),
dated as of October 1, 1998, is among SMART & FINAL INC., a Delaware corporation
(the "Lessee"), SMART & FINAL STORES CORPORATION, a California corporation, and
PORT STOCKTON FOOD DISTRIBUTORS, INC., a California corporation (each a
"Permitted Sublessee" and together, the "Permitted Sublessees"), STATE STREET
BANK AND TRUST COMPANY OF CALIFORNIA N.A., a national banking association, not
in its individual capacity, but solely as the successor Owner Trustee, CREDIT
LYONNAIS LOS ANGELES BRANCH, a branch duly licensed under the laws of California
of a banking corporation organized and existing under the laws of the Republic
of France, BANK LEUMI USA, a New York State chartered bank, THE INDUSTRIAL BANK
OF JAPAN, LIMITED, LOS ANGELES AGENCY, an agency duly licensed under the laws of
California of a banking corporation organized and existing under the laws of
Japan, and VIA BANQUE, S.A., a banking corporation organized and existing under
the laws of the Republic of France (each of the foregoing holding Series A
Notes, being in such capacity a "Series A Lender"; and each of the foregoing
holding Series B Notes, being in such capacity a "Series B Lender"), CREDIT
LYONNAIS LEASING CORP., as the Equity Participant under the Trust Agreement (the
"Equity Participant"), and CREDIT LYONNAIS NEW YORK BRANCH, a branch duly
licensed under the laws of New York of a banking corporation organized and
existing under the laws of the Republic of France, as agent for the Lenders (the
"Agent").
PRELIMINARY STATEMENTS
WHEREAS, the parties hereto have entered into a Participation
Agreement dated as of December 15, 1994 (as amended and restated by that certain
First Amendment and Restatement, dated as of June 20, 1997, and amended by that
certain Second Amendment to Participation Agreement dated as of August 15, 1997,
and by that Third Amendment to Participation Agreement dated as of March 2,
1998, collectively the "Participation Agreement"; the terms defined therein
being used herein as therein defined unless otherwise defined herein);
WHEREAS, the Lessee had previously requested, and the Lenders, the
Equity Participant, the Agent and the Lessor previously agreed, that any Default
or Event of Default be waived, through September 30, 1998, that may have
occurred by reason of the Lessee's failure to comply with certain covenants of
the Participant Agreement expressly identified in that certain Waiver among the
parties hereto, dated as of July 22, 1998; and
WHEREAS, the Lessee has further requested that any Default or Event of
Default be waived, through November 15, 1998, that may have occurred by reason
of the Lessee's failure to comply with certain covenants of the Participant
Agreement expressly identified below;
NOW, THEREFORE, in consideration of the premises, the parties hereto
hereby agree as follows:
SECTION 1. Waiver under Participant Agreement. Effective as of
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October 1, 1998 (the "Effective Date") and subject to the satisfaction of the
conditions precedent set forth in Section 3 hereof, the Lenders, the Equity
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Participant, the Agent and the Lessor hereby waive, during the period beginning
on the Effective Date and ending on and including November 15, 1998 (the "Waiver
Period"), any Default or Event of Default which would arise under any of the
Transaction Documents by reason of the Lessee's failure to comply with Sections
4.03(c) and (d) of the Participation Agreement. At the end of the Waiver
Period, if the Lessee is not in compliance with any of such Sections pursuant to
the terms thereof, a Default or Event or Default shall be deemed to exist
unless, and except to the extent that, such Default or Event of Default is
further waived or the same shall cease to exist by reason of an amendment to the
applicable provisions of the Participation Agreement.
SECTION 2. Rates.
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(a) As of June 20, 1998 and until the end of the Waiver Period, the
definition of "Finance Rate" in the Participation Agreement is amended by (X) in
clause (i) deleting the reference to "0.56930%", as well as the balance of
clause (i) after such reference, and replacing it with "(a) prior to June 20,
1998, 0.56930%, and (b) from June 20, 1998 and until the end of the Waiver
Period, 1.31930%," and (Y) adding to the end of clause (ii) "plus, from June 20,
1998 and until the end of the Waiver Period, 0.50%".
(b) As of June 20, 1998 and until the end of the Waiver Period, the
definition of "Certificate Rate" in the Participation Agreement is amended by
adding to the end of the definition "plus, in any case, from June 20, 1998 and
until the end of the Waiver Period, 0.75%".
(c) As of June 20, 1998 and until the end of the Waiver Period,
clauses (i), (ii) and (iii) of Section 2.02(b) of Loan Agreement are hereby
deleted and replaced in their entirety with the following:
"(i) For each LIBOR Series A Note, at a rate equal to the LIBOR
Rate plus (a) prior to June 20, 1998, 0.50% per annum, and (b) from
June 20, 1998 and until the end of the Waiver Period, 1.25% per annum;
and for each LIBOR Series B Note, at a rate equal to the LIBOR Rate
plus (x) prior to June 20, 1998, 0.75% per annum; and (y) from June
20, 1998 and until the end of the Waiver Period, 1.50%;
(ii) For each Eurodollar Series A Note, at a rate equal to the
Eurodollar Rate plus (a) prior to June 20, 1998, 0.50% per annum, and
(b) from June 20, 1998 and until the end of the Waiver Period, 1.25%
per annum; and for each Eurodollar Series B Note, at a rate equal to
the Eurodollar Rate plus (x) prior to June 20, 1998, 0.75% per annum;
and (y) from June 20, 1998 and until the end of the Waiver Period
1.50%; and
(iii) For a Base Rate Note, whether a Series A Note or a Series
B Note, at a rate equal to the Base Rate, plus, from June 20, 1998 and
until the end of the Waiver Period, 0.50%."
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SECTION 3. Conditions of Effectiveness. This Waiver shall become
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effective when the Agent shall have received counterparts of this Waiver
executed by the Lessee, the Significant Sublessees and the other parties to the
Participation Agreement as required thereby.
SECTION 4. Reference to and Effect on the Transaction Documents. (a)
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Upon the effectiveness of this Waiver, on and after the date hereof, (i) each
reference in the Participation Agreement to "this Agreement," "hereunder,"
"hereof" or words of like import referring to the Participation Agreement, and
each reference in the other Transaction Documents to "the Participation
Agreement," "thereunder," "thereof" or words of like import referring to the
Participation Agreement, shall mean and be a reference to the Participation
Agreement as modified hereby, and (ii) each reference in the Loan Agreement to
"this Agreement," "hereunder," "hereof" or words of like import referring to the
Loan Agreement, and each reference in the other Transaction Documents to "the
Loan Agreement," "thereunder," "thereof" or words of like import referring to
the Loan Agreement, shall mean and be a reference to the Loan Agreement as
modified hereby.
(b) Except as specifically provided above, the Participation
Agreement, the Loan Agreement and all other Transaction Documents are and shall
continue to be in full force and effect and are hereby in all respects ratified
and confirmed. Without limiting the generality of the foregoing, any collateral
described therein does and shall continue to secure the payment of all secured
obligations under and as defined therein.
(c) The execution, delivery and effectiveness of this Waiver shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of the Agent, the Lenders, the Equity Participant, or the Lessor
under any of the Transaction Documents, nor constitute a waiver of any provision
of any of the Transaction Documents.
(d) Each of the parties hereto specifically acknowledges and agrees
that (i) none of the parties to the Participation Agreement or the Loan
Agreement have agreed to any other or future waiver of or amendment to the
Transaction Documents, (ii) neither the granting of the waiver described herein
nor the granting of any prior waivers and amendments under the Transaction
Documents creates any obligation whatsoever on the part of any of the parties to
the Participation Agreement or the Loan Agreement to grant any other or future
waiver or amendment under the Transaction Documents, and (iii) except as
specifically set forth herein, each of the parties to the Participation
Agreement and the Loan Agreement have reserved all rights and remedies under the
Transaction Documents.
SECTION 5. General Release of Claims. (a) The Lessee and Sublessee
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each represent and agree that they have both diligently and thoroughly
investigated the existence of any Claim (as defined below), and to their
knowledge and belief, no Claim exists and no facts exist that could give rise to
or support a Claim.
(b) As additional consideration for the waivers as set forth herein,
the Lessee and Significant Sublessees and each of their respective agents,
employees, directors, officers, attorneys, affiliates, subsidiaries, successors
and assigns (individually a "Releasing Party," and collectively the "Releasing
Parties") each hereby releases and forever discharges each of the
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Lessor, the Equity Participant, the Agent and each Lender and all of their
respective agents, direct and indirect shareholders, employees, directors,
officers, attorneys, branches, affiliates, subsidiaries, successors and assigns
(individually, a "Released Party," and collectively, the "Released Parties") of
and from all damage, loss, claims, demands, liabilities, obligations (except for
any such obligations hereafter arising pursuant to the terms of the Transaction
Documents, as amended to date), actions and causes of action whatsoever
(collectively "Claims") that the Releasing Parties and each of them may, as of
the date hereof, have or claim to have against each of the Released Parties, in
each case whether presently known or with respect to which the facts are known
(or should have been known) that could give rise to or support a Claim and of
every nature and extent whatsoever on account of or in any way relating to,
arising out of or based upon the Transaction Documents or this Waiver or the
negotiation or documentation hereof or the waivers under the Transaction
Documents effected by this Waiver (including clause (a) above) or the
transactions contemplated hereby, or any action or omission in connection with
any of the foregoing, including, without limitation, all such loss or damage of
any kind heretofore sustained, or that may arise as a consequence of the
dealings between the parties up to the date hereof in connection with or in any
way related to the Transaction Documents or this Waiver. Each Releasing Party
further covenants and agrees that it has not assigned heretofore, and will not
hereafter sue any Released Party upon, any Claim released or purported to be
released under this Section, and the Lessee and Significant Sublessees each will
indemnify and hold harmless said Released Parties against any loss or liability
on account of any actions brought by any Releasing Party or its assigns or
prosecuted on behalf of any Releasing Party and relating to any Claim released
or purported to be released under this Section. It is further understood and
agreed that any and all rights under the provisions of Section 1542 of the
California Civil Code are expressly waived by each of the Releasing Parties.
Section 1542 provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
SECTION 6. Representations and Warranties. Each of the Lessee and
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the Significant Sublessees represents and warrants to the other parties to the
Participation Agreement that:
(a) The representations and warranties in the Participation Agreement
and each of the other Transaction Documents to which it is a party remain true
and correct in all material respects immediately prior to and upon giving effect
to this Waiver, as if the same were made on the date of the effectiveness of the
amendments set forth herein (except for those relating to an earlier date which
were true and correct in all material respects as of such date).
(b) The execution, delivery and performance of this Waiver by the
Lessee and the Significant Sublessees has been duly authorized by all necessary
organizational action.
(c) All conditions set forth in Section 3 of this Waiver have been
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satisfied.
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(d) Upon giving effect to this Waiver, there is no and will not be
any, Default or Event of Default.
SECTION 7. Costs, Expenses and Taxes. The Lessee agrees to pay on
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demand all costs and expenses of the Agent, the Lenders, the Equity Participant
and the Lessor in connection with the preparation, execution, delivery and
administration of this Waiver and the other instruments and documents, if any,
to be delivered hereunder, including, without limitation, the reasonable fees
and out of pocket expenses of counsel for the Agent, the Lenders, the Equity
Participant and the Lessor with respect thereto and with respect to advising
each of such parties as to its rights and responsibilities hereunder and
thereunder. The Lessee further agrees to pay on demand all costs and expenses,
if any (including, without limitation, reasonable counsel fees and expenses), in
connection with the enforcement (whether though negotiations, legal proceedings
or otherwise) of this Waiver, and the other instruments and documents to be
delivered hereunder, including, without limitation, reasonable counsel fees and
expenses in connection with the enforcement of rights under this Section.
SECTION 8. Execution in Counterparts. This Waiver hereto may be
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executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which taken together shall constitute but one and
the same agreement. Delivery of an executed counterpart of a signature page to
this Waiver hereto by telefacsimile shall be effective as delivery of a manually
executed counterpart of this Waiver.
SECTION 9. Governing Law. This Waiver hereto shall be governed by,
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and construed in accordance with, the laws of the State of California.
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IN WITNESS WHEREOF, the parties hereto have caused this Second Waiver
(1994 Participation Agreement) to be executed by their respective officers
thereunto duly authorized, as the date first above written.
SMART & FINAL INC.
By: /s/ Donald G. Alvarado
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Name: Donald G. Alvarado
Title: Secretary
SMART & FINAL STORES CORPORATION
By: /s/ Richard Phegley
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Name: Richard Phegley
Title: VP & Treasurer
PORT STOCKTON FOOD DISTRIBUTORS, INC.
By: /s/ Donald G. Alvarado
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Name: Donald G. Alvarado
Title: Secretary
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Pascal Poupelle
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Name: Pascal Poupelle
Title: Executive President
CREDIT LYONNAIS LEASING CORP.
By: /s/ L. M. Wertheim
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Name: L. M. Wertheim
Title: Vice President/Secretary
CREDIT LYONNAIS LOS ANGELES BRANCH
By: /s/ Pascal Poupelle
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Name: Pascal Poupelle
Title: Executive President
BANK LEUMI USA
By: /s/ Jacques Delvoye
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Name: Jacques Delvoye
Title: V.P.
THE INDUSTRIAL BANK OF JAPAN, LIMITED, LOS ANGELES
AGENCY
By: /s/ Vicente L. Timiraos
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Name: Vicente L. Timiraos
Title: SVP & SDGM
VIA BANQUE, S.A.
By: /s/ Christel Prot
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Name: Christel Prot
Title: Sous Directeur
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA
N.A., not in its individual capacity, but solely
as successor to Fleet National Bank as Owner
Trustee under the Trust Agreement, as the Lessor
By: /s/ Mark Henson
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Name: Mark Henson
Title: Assistant Vice President