Exhibit 10.12
SECOND AMENDMENT TO LOAN AGREEMENT
THIS SECOND AMENDMENT ("Amendment") made as of this 29th day of August,
1998 among GRISTEDE'S SLOAN'S, INC., a Delaware corporation having its principal
place of business at 823 Eleventh Avenue, New York, New York 10019 (the
"Borrower"), each of the Subsidiaries of the Borrower listed on Schedule I
annexed to the Agreement (as hereinafter defined) (individually, a "Guarantor"
and collectively, the "Guarantors") (the Borrower and the Guarantors,
collectively, the "Credit Parties"), EUROPEAN AMERICAN BANK, a New York banking
organization, having an office at 335 Madison Avenue, New York, New York 10017
("EAB" or a "Bank") ISRAEL DISCOUNT BANK OF NEW YORK, a New York banking
organization, having an office at 511 Fifth Avenue, New York, New York 10017
("Israel Discount" or a "Bank"), KEYBANK NATIONAL ASSOCIATION, a national
banking association, having an office at 1377 Motor Parkway, Islandia, New York
11768 ("Key" or a "Bank") and BANK LEUMI USA (formerly known as Bank Leumi Trust
Company of New York), a New York trust company, having an office at 562 Fifth
Avenue, New York, New York 10036 ("Leumi" or a "Bank") and EUROPEAN AMERICAN
BANK, as agent for the Banks (the "Agent").
W I T N E S S E T H :
WHEREAS, the Credit Parties, the Banks and the Agent have entered into
a Loan Agreement dated as of the 7th day of November, 1997, which Loan Agreement
has heretofore been amended pursuant to that certain First Amendment dated April
30, 1998 (as so amended, the "Agreement"); and
WHEREAS, the Banks have made loans to the Borrower as evidenced by
certain notes of the Borrower and specifying interest to be paid thereon; and
WHEREAS, the Credit Parties have requested that the Agent and the Banks
amend certain of the financial covenants contained in Section 5.03 of the
Agreement; and
WHEREAS, the Agent and the Banks have agreed to amend certain of the
financial covenants contained in Section 5.03 of the Agreement on the terms and
conditions contained herein.
NOW, THEREFORE, in consideration of Ten ($10.00) Dollars and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Credit Parties, the Banks and the Agent do hereby agree as
follows:
1. DEFINED TERMS. As used in this Amendment, capitalized terms,
unless otherwise defined, shall have the meanings set forth in the Agreement.
2. REPRESENTATIONS AND WARRANTIES. As an inducement for the Bank
to enter into this Amendment, the Credit Parties each represent and warrant
as follows:
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A. That with respect to the Agreement and the Loan Documents
executed in connection therewith and herewith:
(i) There are no defenses or offsets to the
Borrower's or any Guarantor's obligations under the Agreement
as amended hereby, the Notes or any of the Loan Documents or
any other agreements in favor of the Bank referred to in the
Agreement, and if any such defenses or offsets exist without
the knowledge of the Borrower or any Guarantor, the same are
hereby waived.
(ii) All of the representations and warranties made
by the Borrower and any Guarantor in the Agreement as amended
hereby are true and correct in all material respects as if
made on the date hereof, except for those made with respect to
a particular date, which such representations and warranties
are restated as of the date of this Amendment to be true and
correct in all material respects as of such date; and provided
further that the representations and warranties set forth in
Section 4.01(f) of the Agreement shall relate to the audited
consolidated financial statements of the Borrower and its
Consolidated Subsidiaries for the fiscal year ended November
30, 1997 and the internally prepared consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries for
the fiscal quarter ended August 30, 1998.
(iii) The outstanding aggregate principal balance of
the Loans as evidenced by the Notes is $21,836,074.67 as of
October 1, 1998 and interest has been paid through October 1,
1998.
3. AMENDMENTS. The following amendments are hereby made to the
Agreement:
(a) The definition of Consolidated Tangible Net Worth
contained in the Agreement is hereby deleted in its entirety and replaced as
follows:
"Consolidated Tangible Net Worth" means, as to any Person, the
excess of (i) (a) such Person's Consolidated Total Assets,
less all intangible assets properly classified as such in
accordance with GAAP, including, but without limitation,
patents, patent rights, trademarks, trade names, franchises,
copyrights, licenses, permits and goodwill, plus (b) such
Person's Consolidated Subordinated Debt, over (ii) such
Person's Consolidated Total Liabilities."
(b) Section 5.03(c) of the Agreement is hereby deleted in its
entirety and replaced as follows:
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"(c) Leverage Ratio. The Borrower and the Guarantors will
at all times maintain a Leverage Ratio, to be tested
quarterly, of not greater than the following:
Period Leverage Ratio
------------------------------ --------------
From the date of the Agreement 3.00 to 1.00
until August 30, 1998
From August 31, 1998 until 2.50 to 1.00
May 29, 1999
From May 30, 1999 until 2.25 to 1.00
May 27, 2000
From May 28, 2000 and 2.00 to 1.00
thereafter."
(c) Section 5.03(d) of the Agreement is hereby deleted in
its entirety and replaced as follows:
"(d) FUNDED DEBT-TO-EBITDA-RATIO. The Borrower and Guarantors
will maintain at all times on a consolidated basis, a Funded
Debt to EBITDA Ratio, to be tested quarterly, of not greater
than the following:
Period Funded Debt to BBITDA Ratio
------------------------ ---------------------------
From November 29, 1998 2.50 to 1.00
until August 28, 1999
From August 29, 1999 2.25 to 1.00
until August 26, 2000
From August 27, 2000 2.00 to 1.00
and thereafter."
(d) Section 5.03(e) of the Agreement is hereby deleted in
its entirety and replaced as follows:
"(e) FIXED CHANGE COVERAGE RATIO. The Borrower and Guarantors
will maintain at all times (other than for the fiscal quarter
ending August 30, 1998), beginning with the fiscal quarter
ending May 31, 1998, on a consolidated basis, a minimum Fixed
Charge Coverage Ratio of not less than 1.25 to 1.0, such ratio
to be tested quarterly. The Borrower and Guarantors will
maintain at all times on a consolidated basis during the
fiscal quarter ending August 30, 1998, a minimum Fixed Charge
Coverage Ratio of not less than 1.10 to 1.0."
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4. EFFECTIVNESS. This Amendment shall become effective upon the
occurrence of the following events and the receipt and satisfactory review by
the Agent and its counsel of the following documents:
(a) The Agent and each Bank shall have received this Amendment,
duly executed by the Borrower and each Guarantor.
(b) The Agent shall have received copies of any and all
modifications of the documentation referred to in Section 3.01 of the Agreement
which could result in a Material Adverse Change.
(c) The Agent shall have been paid, on behalf of the Banks, an
amendment fee in the amount of $10,000.00.
5. GOVERNING LAW. This Amendment shall be governed by, and construed
in accordance with, the laws of the State of New York.
6. COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
7. RATIFICATION. Except as hereby amended, the Agreement and all
other Loan Documents executed in connection therewith shall remain in full force
and effect in accordance with their originally stated terms and conditions. The
Agreement and all other Loan Documents executed in connection therewith, as
amended hereby, are in all respects ratified and confirmed.
8. WAIVER OF JURY TRIAL. The Borrower, each Guarantor, the Agent and
the Banks waive all rights to trial by jury on any cause of action directly or
indirectly involving the terms, covenants or conditions of this Amendment or any
Loan Document.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the year and date first above written.
EUROPEAN AMERICAN BANK, as Agent
By: /s/ George L. Stirling
-----------------------------
George L. Stirling
Vice President
EUROPEAN AMERICAN BANK
By: /s/ George L. Stirling
-----------------------------
George L. Stirling
Vice President
ISRAEL DISCOUNT BANK OF NEW YORK
By: /s/ Scott Fishbein
-----------------------------
Name: Scott Fishbein
Title: Vice President
By: /s/ Lisa Baum
-----------------------------
Name: Lisa Baum
Title: Senior Vice President
KEYBANK NATIONAL ASSOCIATION
By: /s/ Joseph Burns
-----------------------------
Name: Joseph Burns
Title: Vice President
BANK LEUMI USA
By: /s/ Richard Silverstein
-----------------------------
Name: Richard Silverstein
Title: First Vice President
By: /s/ Joseph Koenigsberg
-----------------------------
Name: Joseph Koenigsberg
Title: Vice President
GRISTEDE'S SLOAN'S, INC.
By: /s/ John Catsimatidis
-----------------------------
John Catsimatidis
Chief Executive officer
CITY PRODUCE OPERATING CORP.
By: /s/ John Catsimatidis
-----------------------------
John Catsimatidis
President
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GRISTEDE'S OPERATING CORP
By: /s/ John Catsimatidis
-----------------------------
John Catsimatidis
President
NAMDOR INC.
By: /s/ John Catsimatidis
-----------------------------
John Catsimatidis
President
RAS OPERATING CORP.
By: /s/ John Catsimatidis
-----------------------------
John Catsimatidis
President
SAC OPERATING CORP.
By: /s/ John Catsimatidis
-----------------------------
John Catsimatidis
President
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