EXHIBIT 10.13
FIRST AMENDMENT TO LOAN AGREEMENT
THIS FIRST AMENDMENT ("Amendment") made as of this 30th day of November,
2002 among GRISTEDE'S FOODS, 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 1 to
the Agreement, as hereinafter defined (each individually, a "Guarantor" and
collectively, the "Guarantors") (the Borrower and the Guarantors, collectively,
the "Credit Parties"), CITIBANK, N.A., a national banking association, having an
office at 666 Fifth Avenue, New York, New York 10103 ("Citibank" 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"), BANK LEUMI USA, a New York trust company, having an office at 562 Fifth
Avenue, New York, New York 10036 ("Leumi" or a "Bank") ("Leumi" or a "Bank") and
CITIBANK, N.A., as agent for the Banks (the "Agent").
W I T N E S S E T H :
WHEREAS, the Borrower, the Banks and the Agent have entered into a Loan
Agreement dated as of the 31st day of October, 2001 (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
agree to amend certain of the financial requirements contained in the Agreement.
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 Borrower, the Guarantors, the Agent and the Banks do hereby
agree as follows:
1. Defined Terms. As used in this Amendment, capitalized terms, unless
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otherwise defined, shall have the meanings set forth in the Agreement.
2. Amendment to Citibank's Address. The address for Citibank contained
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in the Loan Documents is hereby modified to be 666 Fifth Avenue, New York, New
York 10103.
3. Amendments. (a) The definition of EBITDA set forth in the Agreement is
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hereby deleted in its entirety and replaced as follows:
"'EBITDA' means, as to the Borrower and its Subsidiaries for any
period, the sum of (i) net income (excluding extraordinary gains and
losses), plus (ii) interest expense, plus (iii) depreciation expense,
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plus (iv) amortization of intangible assets, plus (v) federal, state
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and local income taxes deducted in calculating net income, plus (vi)
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non-cash rent leveling expenses, plus (vii) non-cash items
----
permitted by GAAP, plus for the fiscal year ended December 1, 2002 and
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the fiscal quarter ending March 2, 2003, $1,400,000.00 of Subordinated
Debt, in each case measured for the Borrower and its Subsidiaries on a
consolidated basis for such period, computed and consolidated in
accordance with GAAP."
(b) The definition of Funded Debt set forth in the Agreement is
hereby deleted in its entirety and replaced as follows:
"'FUNDED DEBT' means, as to any Person, such Debt of such Person which
is (i) all indebtedness or liability for borrowed money (other than
(x) Subordinated Debt payable to United Acquisition Corp. and/or its
Affiliates in an amount not exceeding $14,200,000.00, as such amount
may be changed from time to time, and (y) other unsecured Debt owing
to either United Acquisition Corp, or any Affiliate of John
Catsimatidis); (ii) all indebtedness or liability for the deferred
purchase price of property (excluding trade obligations); (iii) all
obligations for principal as a lessee under Capital Leases, as
determined in accordance with GAAP; (iv) all obligations to reimburse
an issuing bank for the amount of all undrawn letters of credit,
unmatured drafts accepted or other deferred payment obligations
incurred under letters of credit, and (v) all liabilities of such
Person under any preferred stock which, at the option of the holder or
upon the occurrence of one or more certain events, is redeemable by
such holder, or which, at the option of such holder is convertible
into Debt."
(c) Section 2.17 of the Agreement is hereby deleted in its entirety
and replaced as follows:
"SECTION 2.17. APPLICABLE MARGIN. The Prime Applicable Margin and the
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LIBOR Applicable Margin shall each be determined on the basis of the
Borrower's Funded Debt to EBITDA Ratio, as calculated based on the
Borrower's consolidated financial statements for its most recent
fiscal year or quarter. The Prime Applicable Margin and the LIBOR
Applicable Margin shall be determined as follows:
(i) The initial Prime Applicable Margin shall be 125 basis
points and the initial LIBOR Applicable Margin shall be 300 basis
points, and each shall be applicable until delivery of the Borrower's
consolidated financial statements for its fiscal year ending December
2, 2001 pursuant to Section 5.01(b) hereof.
(ii) Beginning with delivery of the Borrower's financial
statements for the fiscal year ending December 2, 2001, and for each
fiscal quarter thereafter the Applicable Margins shall be as follows:
Funded Debt/EBITDA Prime Margin LIBOR Margin
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> 3.5 times 1.50% 3.25%
< 3.5 times 1.25% 3.00%
< 3.0 times 1.00% 2.75%
< 2.5 times 0.75% 2.50%
< 2.0 times 0.50% 2.25%
< 1.5 times 0.00% 1.75%
The Agent shall determine the Applicable Margins within five (5)
Business Days of its receipt of all required financial statements and
certificates.
Upon the occurrence and during the continuance of a Default or an
Event of Default the Prime Applicable Margin and the LIBOR Applicable
Margin may, as a result of changes in the Borrower's Funded Debt to
EBITDA Ratio, increase but will not decrease."
(d) Section 5.02(a)(ix)(4) of the Agreement is hereby deleted in its
entirety and replaced as follows:
"(4) The Debt secured by all such Liens shall not exceed
$20,000,000.00 at any time outstanding in the aggregate (including
without limitation $5,000,000.00 in Capital Lease obligations to
Commerce Bank); and"
(e) Section 5.02(l) of the Agreement is hereby deleted in its
entirety and replaced as follows:
"Losses. Incur a net loss (i) in excess of $930,000.00 for the fiscal
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year ending December 1, 2002, or (ii) for any fiscal year thereafter."
(f) Section 5.03(b) of the Agreement is hereby deleted in its
entirety and replaced as follows:
"(b) Maximum Consolidated Cash Capital Expenditures. The Borrower, the
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Guarantors and their respective Subsidiaries will not make
Consolidated Cash Capital Expenditures during any fiscal year
commencing with the fiscal year ending December 1, 2002 and each
fiscal year thereafter in excess of twenty five (25%) percent of
EBITDA for such fiscal year plus Subordinated Debt in excess of
$14,200,000.00 (the "Permitted Consolidated Cash Capital
Expenditures"). If Consolidated Cash Capital Expenditures for any such
fiscal year shall exceed Permitted Consolidated Cash Capital
Expenditures for such fiscal year as reported in the Borrower's
audited annual financial statements referred to in Section 5.01(b)(i)
hereof, then the Borrower may obtain additional Subordinated Debt from
its Affiliates within sixty (60) days of the due date for the delivery
of such financial statements to the Agent and the Banks.
Notwithstanding the foregoing, for the fiscal year ending December 1,
2002, Permitted Consolidated Cash Capital Expenditures shall not
exceed $8,550,000.00."
(g) Section 5.03(c) of the Agreement is hereby deleted in its
entirety and replaced as follows:
"(c) Leverage Ratio. The Borrower and the Guarantors will at all times
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maintain a Leverage Ratio of not greater than the following, to be
tested quarterly at the end of each fiscal quarter:
Date/Fiscal Year Ending Maximum Leverage Ratio
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Quarter ended September 2, 2001 4.00 to 1.0
End of FYE 2001 and through the first
three fiscal quarters of FYE 2002 3.75 to 1.0
End of FYE 2002 and through the first
fiscal quarter of FYE 2003 4.50 to 1.0
Second and third fiscal quarters
of FYE 2003 3.50 to 1.0
End of FYE 2003 and thereafter 3.00 to 1.0"
(h) 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
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maintain at all times on a consolidated basis, a Funded Debt to EBITDA
Ratio of not greater than the following, to be measured and tested at
the end of each fiscal quarter, and in the case of EBITDA, for a
period covering the four (4) fiscal quarters then ended:
Date/Fiscal Year Ending Funded Debt/EBITDA
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Quarter ended September 2, 2001 4.00 to 1.0
End of FYE 2001 and through the first
three fiscal quarters of FYE 2002 3.75 to 1.0
End of FYE 2002 and through the first
fiscal quarter of FYE 2003 4.50 to 1.0
Second and third fiscal quarters
of FYE 2003 3.50 to 1.0
End of FYE 2003 and thereafter 3.00 to 1.0"
(i) Section 5.03(e) of the Agreement is hereby deleted in its
entirety and replaced as follows:
"Fixed Charge Coverage Ratio. The Borrower and Guarantors will
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maintain at all times, on a consolidated basis, a minimum Fixed Charge Coverage
Ratio of not less than the following, such ratio to be tested quarterly on a
rolling four quarter basis at the end of each fiscal quarter:
Date/Fiscal Year Ending Fixed Charge Coverage Ratio
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Quarter ended September 2, 2001 1.05 to 1.0
End of FYE 2001 and through the first
three fiscal quarters of FYE 2002 1.10 to 1.0
End of FYE 2002 and through the first
fiscal quarter of FYE 2003 1.10 to 1.0
Second and third fiscal quarters
of FYE 2003 1.15 to 1.0
End of FYE 2003 and thereafter 1.20 to 1.0"
(i) Section 5.03(g) of the Agreement is hereby deleted in its
entirety and replaced as follows:
"(g) Minimum EBITDA. The Borrower and the Guarantors shall have
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minimum EBITDA of not less than the following, to be tested annually
at the end of each fiscal year:
Fiscal Year Ending Minimum EBITDA
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FYE 2001 $12,000,000
FYE 2002 $12,200,000
FYE 2003 and thereafter $14,000,000"
5. Amended and Restated Subordination Agreement. The Borrower shall cause
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United Acquisition Corp. to deliver to the Agent an amended and restated
Subordination Agreement in the amount of $14,200,000.00 by not later than April
30, 2003, which amended and restated Subordination Agreement shall be
satisfactory to the Agent and its counsel in all respects.
6. Effectiveness. This Amendment shall become effective upon the receipt
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and satisfactory review by the Bank and its counsel of:
(a) This Amendment, duly executed by the Borrower and each Guarantor;
and
(b) From the Borrower, an amendment fee of $59,850.00 for the pro
rata distribution to the Banks.
7. Governing Law. This Amendment shall be governed by, and construed in
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accordance with, the laws of the State of New York.
8. Counterparts. This Amendment may be executed in any number of
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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.
9. Ratification. Except as hereby amended, the Agreement and all other
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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.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the year and date first above written.
CITIBANK, N.A., as Agent
By:
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Anthony V. Pantina
Vice President
CITIBANK, N.A.
By:
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Anthony V. Pantina
Vice President
ISRAEL DISCOUNT BANK OF NEW YORK
By:
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Name:
Title:
By:
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Name:
Title:
BANK LEUMI USA
By:
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Name:
Title:
By:
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Name:
Title:
GRISTEDE'S FOODS, INC.
By:
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John Catsimatidis
Chief Executive Officer
CITY PRODUCE OPERATING CORP.
By:
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John Catsimatidis
President
NAMDOR INC.
By:
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John Catsimatidis
President