EXECUTION COPY
AMENDMENT NO. 5
TO
AMENDED AND RESTATED
GUARANTY AGREEMENT
This Amendment No. 5 to Amended and Restated Guaranty
Agreement (this "Amendment"), made as of the 8th day of January,
1997, among RISER FOODS, INC., a Delaware corporation (herein the
"Guarantor"), the Banks (as hereinafter defined), and KEYBANK
NATIONAL ASSOCIATION (as successor by merger to Society National
Bank), as agent for the Banks (herein the "Agent").
WITNESSETH:
WHEREAS, the Guarantor has executed and delivered to the
financial institutions which are a party to the Credit Agreements
(as defined below) (the "Banks"), that certain Amended and Restated
Guaranty Agreement, dated as of May 27, 1993 (as amended pursuant
to Amendment No. 1 to Amended and Restated Guaranty Agreement,
dated as of May 16, 1994, Amendment No. 2 to Amended and Restated
Guaranty Agreement, dated as of October 6, 1994, Amendment No. 3 to
Amended and Restated Guaranty Agreement, dated as of April 28, 1995
and Amendment No. 4 to Amended and Restated Guaranty Agreement,
dated as of August 20, 1996, the "Guaranty Agreement"), pursuant to
which the Guarantor unconditionally guaranteed the payment of all
of the Obligations (as defined in the Guaranty Agreement);
WHEREAS, ▇▇▇▇-▇▇▇▇ Supermarkets, Inc. (formerly known as
▇▇▇▇▇▇ Foods, Inc.) an Ohio corporation ("▇▇▇▇-▇▇▇▇"), the Banks
and the Agent have entered into that certain Amended and Restated
Credit Agreement, dated as of May 27, 1993 (as amended pursuant to
Amendment No. 1 to Amended and Restated Credit Agreement, dated as
of May 16, 1994, Amendment No. 2 to Amended and Restated Credit
Agreement, dated as of October 6, 1994, and Amendment No. 3 to
Amended and Restated Credit Agreement, dated as of April 28, 1995,
the "▇▇▇▇-▇▇▇▇ Agreement"), pursuant to which the Banks have made
certain financial accommodations available to ▇▇▇▇-▇▇▇▇;
WHEREAS, American Seaway Foods, Inc., an Ohio corporation
("American"), the Banks and the Agent have entered into that
certain Amended and Restated Credit Agreement, dated as of May 27,
1993 (as amended pursuant to Amendment No. 1 to Amended and
Restated Credit Agreement, dated as of October 6, 1994 and
Amendment No. 2 to Amended and Restated Credit Agreement, dated as
of April 28, 1995, the "American Agreement" and, together with the
▇▇▇▇-▇▇▇▇ Agreement, the "Credit Agreements");
WHEREAS, the Banks which are signatories hereto
constitute all of the Banks for the purpose of amending the
Guaranty Agreement pursuant to Section 8.22 of the American
Agreement and Section 8.21 of the ▇▇▇▇-▇▇▇▇ Agreement; and
WHEREAS, the Guarantor, the Banks and the Agent desire
further to amend the Guaranty Agreement as set forth herein.
NOW, THEREFORE, in consideration of the mutual promises
and agreements contained herein and other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the Guarantor, the Banks and the Agent do hereby
agree as follows:
SECTION 1. DEFINED TERMS.
Each defined term used herein and not otherwise defined
herein shall have the meaning ascribed to such term in the Guaranty
Agreement.
SECTION 2. AMENDMENTS TO THE GUARANTY AGREEMENT.
The Guarantor, the Banks and the Agent hereby agree that
the following Sections of the Guaranty Agreement shall be amended,
effective as of the date hereof and subject to the terms and
conditions hereof, as follows:
2.1 [Intentionally Omitted]
2.2 Amendment to Section 6(n). Section 6(n) shall be
deleted in its entirety and the following shall be substituted in
lieu thereof:
(n) No Material Adverse Change. No material adverse
change has occurred in the Guarantor's or any of its
Subsidiaries' property, business, operations, or condition,
financial or otherwise, since the date of the financial
statements of the Guarantor and each of its Subsidiaries, each
as dated as of October 19, 1996, and delivered to the Agent.
2.3 Amendment to Section 7(k). Section 7(k) shall be
deleted in its entirety and the following shall be substituted in
lieu thereof:
(k) Consolidated Net Worth. The Guarantor shall not
suffer or permit, as at any date, the Consolidated Net Worth
to be: (i) as of the Effective Date, less than $85,000,000 and
(ii) at all times after the Effective Date, less than the sum
of:
(A) $85,000,000, plus;
(B) an aggregate amount equal to fifty percent
(50%) of Guarantor's Consolidated Net Income (if
any and only to the extent a positive number)
attributable to each Fiscal Year ending after the
Effective Date (which aggregate amount shall not be
reduced by any consolidated net losses reported for
any Fiscal Year ending after the Effective Date),
plus;
(C) if such date is during and not at the end of a
Fiscal Year, an amount equal to fifty percent (50%)
of Guarantor's Consolidated Net Income (if any and
only to the extent a positive number) for the
fiscal period consisting of the Fiscal Quarters of
such Fiscal Year that have ended on or before such
date.
2.4 Amendment to Section 7(l). Section 7(l) shall be
deleted in its entirety and the following shall be substituted in
lieu thereof:
(l) Consolidated Leverage Ratio. The Guarantor shall
not suffer or permit, as at the end of any Fiscal Quarter, the
Consolidated Leverage Ratio to exceed Fifty percent (50%).
2.5 Amendment to Section 7(m). Section 7(m) shall be
deleted in its entirety and the following shall be substituted in
lieu thereof:
(m) Interest Coverage Ratio. The Guarantor shall not
suffer or permit, as at the end of any Fiscal Quarter, the
ratio of (i) Consolidated Pre-Tax Earnings plus Consolidated
Interest Expense to (ii) the Consolidated Interest Expense to
be less than 2.50 to 1.0 for the Four Quarter Period ending as
of such Fiscal Quarter end.
2.6 Amendment to Sections 7(n), (o) and (p). Each of
Sections 7(n), 7(o) and 7(p) shall be deleted in its entirety and
"[Intentionally Omitted]" shall be substituted in lieu thereof.
2.7 Amendment to Section 7(s). Section 7(s) shall be
amended by deleting clause (VII) thereof (and the "and" immediately
preceding such clause), the following new clause (VII) shall be
substituted in lieu thereof and the following shall be added as
clauses (VIII) and (IX) thereto:
(VII) any investment permitted by the Credit Agreements,
(VIII) any nominal investment in other food companies held by the
Guarantor in order to obtain shareholder reports and (IX) any
guarantee by the Guarantor of certain lease obligations of
wholesale customers of American entered into in the ordinary course
of the Guarantor's business consistent with past practice.
2.8 Amendment to Sections 7(t). Section 7(t) shall be
deleted in its entirety and "[Intentionally Omitted]" shall be
substituted in lieu thereof.
2.9 Amendment to Section 7(u)and 7(v). Sections 7(u)
and 7(v) shall be deleted in its entirety and the following shall
be substituted in lieu thereof:
(u) Sales, Etc. of Assets. The Guarantor shall not, and
shall not permit any of its Subsidiaries, to sell, lease,
transfer, convey or otherwise dispose of any of its assets;
except that: (I) ▇▇▇▇-▇▇▇▇ and American may sell assets
subject to the limitations set forth in the Credit Agreements
and (II) the Guarantor may sell tangible assets which have
become obsolete or have been determined to be no longer
useable in its business by reason of normal wear and tear.
(v) Mergers, Etc.. The Guarantor shall not, and shall
not permit any Subsidiary to, merge with or into or
consolidate with, or acquire all or substantially all of the
assets of, any Person except that: (i) Subsidiaries may
acquire all or substantially all or substantially all of the
assets of a Person to the extent permitted by the Agreements
and (ii) the Guarantor may acquire all or substantially all or
substantially all of the assets of a Person so long as (A) no
Default or Event of Default shall exist or shall thereupon
occur and (B) the aggregate purchase price of such assets,
when taken together with (A) the purchase price of all such
purchases (exclusive of capital expenditures not incurred in
connection with acquisitions of all or substantially all
assets of any person) by the Guarantor occurring after the
Effective Date and (B) the purchase price of acquisitions of
all or substantially all assets of a Person by American, ▇▇▇▇-
▇▇▇▇ or any other Subsidiary of the Guarantor occurring after
the Effective Date, shall not exceed Twenty Million Dollars
($20,000,000).
2.10 Amendment to Section 7(y). Section 7(y) shall be
deleted in its entirety and the following substituted in lieu
thereof:
(y) Sale and Leaseback. The Guarantor shall not enter
into, or permit any of its Subsidiaries to enter into, any
transaction in which the Guarantor sells property owned by the
Guarantor and subsequently leases such property from the
purchaser thereof unless, (i) the selling entity has received
consideration in an amount at least equal to the fair market
value of the assets leased, (ii) the aggregate dollar amount
of all assets sold in any Fiscal Year in such transactions by
the Guarantor, American, ▇▇▇▇-▇▇▇▇ and any other Subsidiary of
the Guarantor shall not in the aggregate exceed Ten Million
Dollars ($10,000,000) and (iii) no Default or Event of Default
shall exist before or after giving effect to any such
transaction.
2.11 Amendment to Sections 7(z), (bb) and (cc). Each of
Sections 7(z), 7(bb) and 7(cc) shall be deleted in its entirety and
"[Intentionally Omitted]" shall be substituted in lieu thereof.
2.12 Amendment to Sections 8(i). Section 8(i) shall be
deleted in its entirety and "[Intentionally Omitted]" shall be
substituted in lieu thereof.
2.13 Amendment to Sections 8(ii), (iii) and (v). Each of
Sections 8(ii) and 8(iii) shall be amended by deleting the
references to "(n), (o), (p) and (t)" in the second to the last
line thereof and Section 8(v) shall be amended by deleting the
reference to Section 6(h) and a reference to Section 6(f) shall be
substituted in lieu thereof.
2.14 Amendment to Sections 8(viii). Section 8(viii)
shall be deleted in its entirety and "[Intentionally Omitted]"
shall be substituted in lieu thereof.
2.15 Amendment to Section 14. Section 14 shall be
amended to add the following definitions:
"Consolidated Funded Debt" means, as at any date of
determination, without duplication, the sum of (i) all amounts
owed to the Banks under the Credit Agreements plus (ii) all
obligations of the Guarantor and its Subsidiaries on a
consolidated basis for money borrowed including, without
limitation, Capitalized Leases, all notes payable, and drafts
accepted representing extensions of credit, all obligations
evidenced by bonds, debentures, notes or other similar
instruments, and obligations upon which interest charges are
customarily paid or discounted, and all guaranties of such
obligations.
"Consolidated Interest Expense" means, for any period,
the amount of interest expense of the Guarantor and its
Subsidiaries for such period on the aggregate principal amount
of the indebtedness of the Guarantor and its Subsidiaries plus
any capitalized interest of the Guarantor or its Subsidiaries
which accrued during such period, each as determined on a
consolidated basis in accordance with generally accepted
accounting principles.
"Consolidated Leverage Ratio" means, as at any date of
determination, the ratio (expressed as a percentage) of: (x)
the Consolidated Funded Debt of the Guarantor and its
Subsidiaries to (y) the sum of the Consolidated Fund Debt of
the Guarantor and its Subsidiaries plus the Consolidated Net
Worth of the Guarantor and its Subsidiaries, each as
determined on a consolidated basis in accordance with
generally accepted accounting principles.
"Consolidated Net Worth" means, as at any date of
determination, the net book value of all assets of the
Guarantor and its Subsidiaries minus the Consolidated Total
Liabilities, in each case as determined on a consolidated
basis in accordance with generally accepted accounting
principles.
"Consolidated Pre-Tax Earnings" means, for any period,
the net earnings (or losses) before income taxes for such
period (excluding extraordinary gains or losses) of the
Guarantor and its Subsidiaries as determined on a consolidated
basis in accordance with generally accepted accounting
principles.
"Effective Date" means, January 8, 1997.
"Four Quarter Period" means a period consisting of four
consecutive Fiscal Quarters, whether or not in the same Fiscal
Year of the Guarantor.
2.16 Amendment to Section 14. Section 14 shall be
amended to delete the following definitions: "Building No. 5 and
the Cash-n-Carry Building", "Capital Distributions", "Consolidated
Capital Expenditures", "Consolidated Capital Expenditure Excess
Amount", "Consolidated Intangible Assets", "Consolidated Net
Operating Cash Flow", "Consolidated Tangible Net Worth", "MetLife
Agreement" and "Store Construction Agreements".
2.17 Amendment to Guaranty. The Guaranty shall be
amended such that all references to "Society" or "Society National
Bank" shall be references to "KeyBank" or "KeyBank National
Association".
2.18 Deletion of Schedule I. The Guaranty Agreement
shall be amended to delete Schedule I thereto.
SECTION 3. WAIVER OF CERTAIN NON-COMPLIANCE
The Guarantor's non-compliance with Section 7(v) by
reason of the merger of Seaway Food Service, Inc. into American
Seaways Foods, Inc. is hereby waived.
SECTION 4. REPRESENTATIONS AND WARRANTIES
The Guarantor hereby represents and warrants to the Banks
and the Agent as follows:
4.1 The Amendment. This Amendment has been duly and
validly executed by an authorized executive officer of the
Guarantor and constitutes the legal, valid and binding obligation
of the Guarantor enforceable against the Guarantor in accordance
with its terms.
4.2 Guaranty Agreement. The Guaranty Agreement, as
amended by this Amendment, remains in full force and effect and
remains the valid and binding obligation of the Guarantor
enforceable against the Guarantor in accordance with its terms.
The Guarantor hereby ratifies and confirms the Guaranty Agreement
as amended by this Amendment.
4.3 Nonwaiver. The execution, delivery, performance and
effectiveness of this Amendment shall not operate nor be deemed to
be nor construed as a waiver (i) of any right, power or remedy of
the Banks or the Agent under the Guaranty Agreement, nor (ii) of
any term, provision, representation, warranty or covenant contained
in the Guaranty Agreement or any other documentation executed in
connection therewith. Further, except as provided in Section 3 of
this Amendment, none of the provisions of this Amendment shall
constitute, be deemed to be or construed as, a waiver of any
Default of Event of Default under the Guaranty Agreement as amended
by this Agreement.
4.4 Reference to and Effect on the Guaranty Agreement.
Upon the effectiveness of this Amendment, each reference in the
Guaranty Agreement to "this Agreement", "hereunder", "hereof",
"herein", or words of like import shall mean and be a reference to
the Guaranty Agreement, as amended hereby and by each prior
amendment and each reference to the Guaranty Agreement in any other
document, instrument or agreement executed and/or delivered in
connection with the Guaranty Agreement shall mean and be a
reference to the Guaranty Agreement, as amended by this Amendment
and each prior amendment.
SECTION 5. CONDITIONS PRECEDENT TO EFFECTIVENESS
OF THIS AMENDMENT NO. 5.
In addition to all of the other conditions and agreements
set forth herein, the effectiveness of this Amendment is subject to
the following conditions precedent:
5.1 The Amendment. The Banks and the Agent shall have
received this Amendment No. 5 to Amended and Restated Guaranty
Agreement, executed and delivered by a duly authorized officer of
the Guarantor.
5.2 Amendment No. 4 to ▇▇▇▇-▇▇▇▇ Agreement. The Banks
and the Agent shall have received an Amendment No. 4 to Amended and
Restated Credit Agreement from ▇▇▇▇-▇▇▇▇, executed and delivered by
a duly authorized officer of ▇▇▇▇-▇▇▇▇, and all of the respective
conditions precedent to such Amendment shall have been satisfied.
5.3 Amendment No. 3 to American Agreement. The Banks
and the Agent shall have received an Amendment No. 3 to Amended and
Restated Credit Agreement from American, executed and delivered by
a duly authorized officer of American, and all of the respective
conditions precedent to such Amendment shall have been satisfied.
5.4 Acknowledgement of Borrowers. The Banks and the
Agent shall have received the Acknowledgement of Borrowers attached
to this Amendment, executed and delivered by a duly authorized
officer of each of ▇▇▇▇-▇▇▇▇ and American.
5.5 Guarantor's Certificate. The Banks and the Agent
shall have received a certificate, in form and substance
satisfactory to the Agent, executed for and on behalf of the
Guarantor by the Chief Executive Officer or Chief Operating Officer
of the Guarantor and the Secretary or Assistant Secretary of the
Guarantor (one of which certifying officers shall not be a
signatory of this Amendment) and dated as of the date of this
Amendment, certifying (i) the Director's Resolutions of the
Guarantor authorizing this Amendment, and each document or other
instrument executed in connection with the Amendment, (ii) the
names and signatures of the officers signing this Amendment on
behalf of the Guarantor, and (iii) compliance by the Guarantor with
all representations, warranties, covenants and conditions under the
Guaranty as amended by this Amendment.
5.6 Other Documents. The Banks and the Agent shall have
received each additional document, instrument or piece of
information reasonably requested by the Agent, including, without
limitation, any financing statements as may be necessary to
continue the perfection of the security interests created by the
Security Agreements.
SECTION 6. MISCELLANEOUS.
6.1 Governing Law. This Amendment shall be governed by
and construed in accordance with the laws of the State of Ohio.
6.2 Severability. In the event any provision of this
Amendment should be invalid, the validity of the other provisions
hereof and of the Guaranty Agreement shall not be affected thereby.
6.3 Counterparts. This Amendment may be executed in one
or more counterparts, each of which, when taken together, shall
constitute but one and the same agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Guarantor has caused this
Amendment No. 5 to Amended and Restated Guaranty Agreement to be
duly executed and delivered by its duly authorized officer as of
the date first above written.
RISER FOODS, INC.
By:
Title:
ACCEPTED AND AGREED as of
the date and year first above written by:
KEYBANK NATIONAL ASSOCIATION, as a
Bank and as Agent
By:
Title:
NATIONAL CITY BANK,
as a Bank
By:
Title:
NBD BANK, as a Bank
By:
Title:
STAR BANK NATIONAL ASSOCIATION, as a Bank
By:
Title:
ACKNOWLEDGEMENT OF BORROWERS
Each of the undersigned, ▇▇▇▇-▇▇▇▇ SUPERMARKETS, INC.
(formerly known as ▇▇▇▇▇▇ Foods, Inc.) and AMERICAN SEAWAY FOODS,
INC. (formerly known as Heritage Wholesalers, Inc. and successor by
merger to Seaway Food Service, Inc.), each of which being a
borrower of certain sums from the Banks under the Agreements (as
defined in the Guaranty Agreement), hereby acknowledges and agrees
to the terms of the foregoing Amendment No. 5 to Amended and
Restated Guaranty Agreement. Each of the undersigned represents
and warrants to the Banks and the Agent that the respective
Agreements (as amended), executed and delivered by each of the
undersigned, remain the valid and binding obligations of each of
the undersigned, respectively, enforceable against it in accordance
with their terms.
▇▇▇▇-▇▇▇▇ SUPERMARKETS, INC. (formerly
known as ▇▇▇▇▇▇ Foods, Inc.)
By:
Title:
AMERICAN SEAWAY FOODS, INC. (formerly
known as Heritage Wholesalers, Inc. and
successor by merger to Seaway Food
Service, Inc.)
By:
Title:
Executed: January 8, 1997