FIRST AMENDMENT TO LOAN AGREEMENT
This FIRST AMENDMENT TO LOAN AGREEMENT (this "Amendment") is made and
entered into effective as of November 24, 1997 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 collectively
referred to as the "Companies" and individually as a
"Company"),
(c) IBJ ▇▇▇▇▇▇▇▇ BUSINESS CREDIT CORPORATION ("IBJ"), the
assignee of IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company,
(d) ▇▇▇▇▇▇ FINANCIAL, INC. ("▇▇▇▇▇▇"),
(e) NATIONAL BANK OF CANADA ("NBC"),
(such lenders and other financial institutions and their
respective successors and assigns, individually, a "Lender"
and collectively, the "Lenders"), and
(f) NBC, as agent for the Lenders (in such capacity, the "Agent").
RECITALS:
A. Pursuant to that certain Loan Agreement dated as of August 2, 1996,
by and among Borrower, Parent, Lenders and Agent (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 in the maximum aggregate
principal amount of Twenty-Seven Million Five Hundred Thousand Dollars
($27,500,000).
B. Borrower and Parent have requested that Agent and Lenders amend the
Loan Agreement, as follows:
(1) to increase the Revolving Loan Facility Commitment from
Twenty-Seven Million Five Hundred Thousand Dollars ($27,500,000) to
Thirty-Two Million Dollars ($32,000,000);
(2) to include the Eligible Vendor Receivables in the calculation
of the Borrowing Base, with an advance rate of sixty-five percent
(65%); and
(3) to authorize certain Permitted Acquisitions, including,
without limitation, the acquisition of certain assets of Food Lion,
Inc. pursuant to the terms of the Contract of Sale (the "Food Lion
Agreement"), dated October 13, 1997, by and between Food Lion, Inc.
and Borrower.
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. Additional Definitions. Section 1.1 of the Loan Agreement is
hereby amended by adding thereto each of the following definitions in
alphabetical order to read in their entirety as follows:
"Eligible Vendor Receivables" shall mean only such Vendor
Receivables of Borrower as the Agent, in its reasonable discretion,
shall from time to time, (a) determine are free from off-set,
counterclaim and any other method of reduction, and (b) otherwise elect
to consider Eligible Vendor Receivables for purposes of this Agreement.
The value of such Vendor Receivables (the "Net Amount of Eligible Vendor
Receivables") shall be determined at any time by reference to the then
most recent Borrowing Base Certificate delivered under Section 11.1(j)
hereof, which Borrowing Base Certificate shall reflect the value of such
Vendor Receivables at their book value determined in accordance with
GAAP (on a basis consistent with the accounting method used by Borrower
as of the First Amendment Closing Date). Criteria for eligibility may
be fixed and revised from time to time by the Agent in its reasonable
discretion. By way of example only, and without limiting the discretion
of the Agent to consider any Vendor Receivables not to be Eligible Vendor
Receivables, the Agent may consider any of the following classes of
Vendor Receivables not to be Eligible Vendor Receivables:
(i) Vendor Receivables subject to any Lien (whether or not
any such Lien is permitted under this Agreement), other than those
granted in favor of the Agent;
(ii) Vendor Receivables for which there is (A) no executed
Vendor Offset Agreement by the applicable vendor and (B) no waiver
by the Agent of any requirement for a Vendor Offset Agreement with
regard to a particular vendor; and
(iii) Vendor Receivables in respect of which the relevant
Security Agreement, after giving effect to the related filings of
financing statements that have then been made, if any, does not or
has ceased to create a valid and perfected first priority Lien in
favor of the Lenders securing the Lender Debt.
"First Amendment Closing Date" shall mean November 24, 1997.
"Food Lion" shall mean Food Lion, Inc., a North Carolina corporation.
"Net Amount of Eligible Vendor Receivables" shall have the meaning
set forth in the definition of Eligible Vendor Receivables.
"Permitted Acquisition" shall mean any Investment in assets or
properties (exclusive of stock, securities or Indebtedness of a Person,
other than Indebtedness incurred as the result of a Permitted
Acquisition) that:
(a) constitute a food retailing business that carries a mix
of grocery, meat, produce, household goods, and variety products,
and may contain specialty departments, such as a pharmacy;
(b) constitute in purchase price, together with the
aggregate purchase price of other Permitted Acquisitions made
during the then current Fiscal Year, no more than either:
(i) twenty percent (20%) of the indicated amount of
Net Capital Expenditures as permitted under Section 12.1
hereof, without adjustment for Excess Cash Flow, as provided
in Section 12.1; or
(ii) twenty percent (20%) of the actual amount of Net
Capital Expenditures made during the then current Fiscal
Year;
(c) would cause, after giving effect to the proposed terms
hereof, no Default under this Agreement;
(d) have a purchase price which does not exceed six (6)
times the pro forma EBITDA attributable to the Investment under
consideration for qualification as a Permitted Acquisition, as
calculated for the thirteen (13) Calendar Months immediately
following the proposed date of consummation of such Investment;
and
(e) with respect to Permitted Acquisitions involving a
purchase price of $500,000 or more, would not cause the pro forma
Borrowing Base Availability, as calculated on a monthly basis for
the thirteen (13) Calendar Months immediately following the proposed
date of the consummation of such Investment, after giving effect
to such Investment, to be less than Four Million Dollars
($4,000,000).
"Project Oklahoma" shall mean the acquisition by Borrower of certain
assets of Food Lion under that certain Contract of Sale by and between
Food Lion and Borrower, effective as of October 13, 1997, together with
the Capital Expenditures more fully described on Schedule 1.1 (D)
attached hereto.
"Vendor Inventory" of any Person shall mean any and all Inventory
and stock supplied by an independent, third-party vendor to Borrower or
to a supplier (e.g., AWG) of Borrower, intended for sale or lease or to
be furnished under contracts of service in the ordinary course of
business of such Person, of every kind and description.
"Vendor Offset Agreement" shall mean a vendor offset agreement
substantially in the form of Exhibit 1.1 (a) hereto (with such
modifications as are acceptable to the Agent and as amended, modified
or supplemented from time to time).
"Vendor Rebate Agreement" shall mean any written agreement or
written commitment pursuant to which an independent, third-party vendor
to Borrower or to a supplier (e.g., AWG) of Borrower becomes obligated
to pay to Borrower funds in connection with product rebates, promotional
discounts, advertising incentives and other marketing arrangements.
"Vendor Receivables" shall mean and include all accounts, contract
rights (including rebates, promotional discounts and incentives),
instruments, documents, chattel paper and general intangibles, whether
secured or unsecured, now existing and hereafter created, of the Credit
Parties, whether or not specifically sold or assigned to the Agent or
the Lenders, and arising from a sale or other disposition of Vendor
Inventory by Borrower or from cooperative advertising services provided
by the Borrower in the ordinary course of Borrower's business, which is
payable to Borrower by an independent, third-party vendor to Borrower or
to a supplier (e.g., AWG) of Borrower pursuant to the terms of a Vendor
Rebate Agreement.
3. Amendments to Borrowing Base and Revolving Loan Facility Commitment.
Section 1.1 of the Loan Agreement is hereby amended by amending each of the
following definitions contained therein to read in their entirety as follows:
"Borrowing Base" shall mean, as of any time, an amount equal to the
sum of the following:
(a) up to sixty-five percent (65%) of the Net Amount of
Eligible Inventory,
(b) up to sixty-five percent (65%) 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 11.1(j) hereof.
"Revolving Loan Facility Commitment" shall mean Thirty-Two Million
Dollars ($32,000,000).
4. Amendment to Reporting Requirements. Section 11.1 of the Loan
Agreement is hereby amended by adding the following Section 11.1(s):
(s) with reasonable promptness, information regarding Vendor
Receivables as Agent may from time to time reasonably request, including,
without limitation, copies of Vendor Rebate Agreements.
5. Audits in Connection with Permitted Acquisitions. Section 11.14(b)
of the Loan Agreement is hereby amended by adding the following sentence at
the end of the existing Section 11.14(b):
Further, each of Parent and Borrower shall allow, and shall cause each of
Borrower's Subsidiaries to allow, the Agent or Lenders, in conjunction
with the Agent, or their designees to enter any locations at which assets
and properties that either are proposed to be transferred to Borrower or
have been transferred to Borrower, as a result of a Permitted
Acquisition, are located, at any reasonable time or times during regular
business hours, to inspect such assets and properties and to inspect,
audit and to make copies or extractions from the books, records,
journals, orders, receipts, correspondence and other data relating to
such assets and properties for the purpose of determining the
eligibility of such assets and properties for inclusion in the
Borrowing Base.
6. Compliance with Vendor Rebate Agreements. Section 11 of the Loan
Agreement is hereby amended by adding the following Section 11.23:
Sec. 11.23. COMPLIANCE WITH VENDOR REBATE AGREEMENTS. Each of Parent
and Borrower shall comply, and shall cause each of Borrower's Subsidiaries
to comply, in all material respects, with all Vendor Rebate Agreements;
and each of Parent and Borrower shall duly observe, and cause each of
Borrower's Subsidiaries to duly observe, in all material respects, all
valid requirements of applicable Vendor Rebate Agreements, the
non-observance of which could reasonably be expected to have a Material
Adverse Effect.
7. Agreements Regarding Permitted Acquisitions. Section 11 of the Loan
Agreement is hereby amended by adding the following Section 11.24:
Sec. 11.24. AGREEMENTS REGARDING PERMITTED ACQUISITIONS. Borrower
covenants as follows in connection with each Permitted Acquisition:
(a) Prior to or simultaneously with consummation of any
Permitted Acquisition, Borrower shall deliver to Agent all of the
following, in form and substance satisfactory to Agent:
(i) Security Documents And Instruments. All of the
instruments and documents then required to be delivered
pursuant to Section 7 of this Agreement or any other provision
of this Agreement or pursuant to the instruments and documents
referred to in Section 7 of this Loan Agreement with regard to
the assets and properties being acquired by Borrower pursuant
to the Permitted Acquisition; and the same shall be in full
force and effect and shall grant, create or perfect the Liens,
rights, powers, priorities, remedies and benefits contemplated
herein or therein, as the case may be.
(ii) Evidence Of Insurance. Evidence, in form, scope and
substance and with such insurance carriers reasonably
satisfactory to the Agent, of all insurance policies required
pursuant to Section 11.3(a) of this Agreement with regard to
the assets and properties being acquired by Borrower pursuant
to the Permitted Acquisition.
(iii) Additional Information. Such additional documents,
instruments and information as Agent or its legal counsel,
special counsel to the Agent, and all local counsel to the
Agent, may reasonably request.
(b) Litigation. As of the consummation of the Permitted
Acquisition, there shall be no pending or, to the knowledge of any
Company, threatened litigation with respect to the Permitted
Acquisition, which challenges or relates to the Permitted Acquisition,
which pending or threatened litigation could be expected to have a
Material Adverse Effect. There shall exist no judgment, order,
injunction or other similar restraint prohibiting any transaction
contemplated by the Permitted Acquisition.
(c) Landlord's Liens. None of the assets or properties to
be acquired pursuant to the Permitted Acquisition shall be subject
to any contractual or statutory Lien or Liens in favor of any lessor
under any Lease, except such Liens as the Agent, in its sole
discretion, shall deem not material, and except such Liens that have
been waived or subordinated to the Liens in favor of Agent and the
Lenders in a manner satisfactory to the Agent, in its sole
discretion.
(d) Collection Account. If applicable, Borrower shall have
established one or more Collection Accounts into which the cash
receipts for each store, if any, to be acquired pursuant to the
Permitted Acquisition (to the extent such cash receipts constitute
proceeds of any Collateral) shall be deposited.
(e) No Default. No Default or Event of Default shall have
occurred and be continuing.
(f) Representations and Warranties. The representations and
warranties contained herein and in all other Loan Documents shall be
true and correct as of the date hereof as if made on the date of the
Permitted Acquisition.
(g) Delivery of Documents. All 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.
(h) Permitted Acquisition Certificate. Borrower shall have
delivered to Agent a certificate pertaining to the Permitted
Acquisition, in the form as set forth in Exhibit 11.24 attached
hereto.
8. Amendment to Permitted Investments. Section 12.4 (p) of the Loan
Agreement is hereby amended and restated to read in its entirety as follows:
(p) Investments that are Permitted Acquisitions.
9. Validity of Vendor Receivables. Section 14 of the Loan Agreement is
hereby amended by adding the following Section 14.21:
Sec. 14.21. VALIDITY OF VENDOR RECEIVABLES. (a) Except with respect
to Vendor Receivables, the aggregate amount of which would not constitute
a material percentage of all Vendor Receivables at any given time and
Vendor Receivables the failure of which to satisfy the following
requirements, would not have a material adverse effect on the value of
the Collateral, each Vendor Receivable existing on the First Amendment
Closing Date is, and each future Vendor Receivable will be, at the time
of its creation, a genuine obligation enforceable against the Vendor who
is the account debtor thereof in accordance with the terms of the Vendor
Rebate Agreement applicable to such Vendor Receivable, and represents
an undisputed and bona fide indebtedness owing to Borrower by the Vendor
identified as being so indebted to Borrower in the applicable Vendor
Rebate Agreement, without defense, setoff or counterclaim, free and clear
of all Liens other than the security interest in favor of the Agent under
the Security Documents; and no payment has been received with respect to
any Vendor Receivable and no Vendor Receivable is subject to any credit
or extension or agreement therefor.
(b) No Vendor Receivable is evidenced by any note, draft, trade
acceptance or other instrument for the payment of money.
10. Amendments to Exhibits. The Loan Agreement is hereby amended as
follows:
(a) Form of Vendor Offset Agreement. Exhibit 1.1(a) is added in
its entirety as set forth on Exhibit 1.1(a) attached hereto;
(b) Form of Borrowing Base Certificate. Exhibit 11.1(j) is
amended and restated to read in its entirety as set forth on Exhibit
11.1(j) attached hereto; and
(c) Form of Permitted Acquisition Certificate. Exhibit 11.23 is
added in its entirety as set forth on Exhibit 11.23 attached hereto.
11. Amendments to Schedules. The Loan Agreement is hereby amended as
follows:
(a) Lenders and Commitments. Schedule 1.1(A) is amended and
restated to read in its entirety as set forth on Schedule 1.1(A) attached
hereto;
(b) Special Account Stores. Schedule 11.17(c) is amended by
supplementing the existing Schedule 11.17(c) with Schedule 11.17(c)
attached hereto;
(c) Environmental Report Stores. Schedule 11.18 is amended by
supplementing the existing Schedule 11.18 with Schedule 11.18 attached
hereto;
(d) Existing Indebtedness for Borrowed Money and Contingent
Obligations. Schedule 12.3(c) is amended by supplementing the existing
Schedule 12.3(c) with Schedule 12.3(c) attached hereto;
(e) Real Property. Schedule 14.5(a) is amended by supplementing
the existing Schedule 14.5(a) with Schedule 14.5(a) attached hereto; and
(f) Environmental Information. Schedule 14.15 is amended by
supplementing the existing Schedule 14.15 with Schedule 14.15 attached
hereto.
12. Waivers Regarding Project Oklahoma. Lenders hereby waive the
following in regards to Project Oklahoma:
(a) Section (b) of the definition of Permitted Acquisition as
defined in Section 1.1 of the Loan Agreement:
(b) Section 10(a) of the Loan Agreement;
(c) the inclusion of the Capital Expenditures incurred by
Borrower as a result of Project Oklahoma in the calculation of the
Maximum Net Capital Expenditures for Fiscal Years 1997 and 1998 in
Section 12.1(a) of the Loan Agreement; and
(d) in regards to that leasehold estate to be evidenced by that
certain Lease Agreement by and between Food Lion and Borrower, whereby
Food Lion will lease to Borrower and Borrower will rent from Food Lion,
certain premises located at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, Section
7.2(a) of the Loan Agreement.
Lenders' waivers in this Section 12 are limited to Project Oklahoma, and do
not constitute a waiver of either any other section of the Loan Agreement,
or any other section of this Amendment.
13. Conditions Precedent. The effectiveness of this Amendment is
subject to the satisfaction of each 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, document or certificate required by Agent or Lenders
to be executed or delivered by Borrower, Parent or any other party
in connection with this Amendment, duly executed by the parties
thereto (the "Amendment Documents").
(ii) Security Documents And Instruments. All the instruments
and documents then required to be delivered pursuant to Section 7
of the Loan Agreement or any other provision of the Loan Agreement
or pursuant to the instruments and documents referred to in Section
7 of the Loan Agreement with regard to the assets of Food Lion
being acquired by Borrower pursuant to the Food Lion Agreement;
and the same shall be in full force and effect and shall grant,
create or perfect the Liens, rights, powers, priorities, remedies
and benefits contemplated herein or therein, as the case may be.
(iii) Notes. A Note for each Lender, each duly completed,
executed and delivered in accordance with Section 2.3 of the Loan
Agreement.
(iv) Evidence Of Insurance. Evidence, in form, scope and
substance and with such insurance carriers reasonably satisfactory
to the Agent, of all insurance policies required pursuant to
Section 11.3(a) of the Loan Agreement with regard to the assets of
Food Lion being acquired by Borrower pursuant to the Food Lion
Agreement.
(v) Disbursement Authorization. A disbursement
authorization letter, substantially in the form of Exhibit 8.12 of
the Loan Agreement, duly executed and delivered by Borrower as to
the disbursement on the First Amendment Closing Date of the
proceeds of the Advance on such date.
(vi) Other Fees And Expenses. Evidence that the costs and
expenses (including, without limitation, reasonable attorneys'
fees and expenses) incurred by Agent incident to this Amendment or
required to be paid in accordance with Section 15.5 of the Loan
Agreement, to the extent incurred and submitted to Borrower, shall
have been paid in full by Borrower.
(vii) Additional Information. Such additional documents,
instruments and information as Agent or its legal counsel, ▇▇▇▇▇▇
& ▇▇▇▇, L.L.P., special counsel to the Agent, and all local counsel
to the Agent, may reasonably request to effect the transactions
contemplated hereby.
(b) Closing Fee. Borrower shall pay to the Agent for the account
of Lenders a closing fee in the amount of Twenty-Two Thousand Five
Hundred Dollars ($22,500), which shall be distributed by Agent to Lenders
on a pro rata basis of their Commitments.
(c) Qualification. Each Company shall be duly qualified and in
good standing in each jurisdiction in which it owns or leases property
or in which the conduct of its business requires it to so qualify, except
where the failure to so qualify could not reasonably be expected to have
a Material Adverse Effect.
(d) Food Lion Agreement. The Agent and all Lenders shall have
had the opportunity to examine the Food Lion Agreement and the related
material contracts, properties, books of account, records, leases,
contracts, insurance coverage and properties of each Company, and to
perform such other due diligence regarding each Company as the Agent or
any Lender shall have requested, the results of all of which shall have
been satisfactory to the Agent and all Lenders in all material respects.
(e) Litigation. There shall be no pending or, to the knowledge of
any Company, threatened litigation with respect to any Company or any of
its Subsidiaries or (relating to the transactions contemplated herein)
with respect to the Agent or any of the Lenders, which challenges or
relates to the financing arrangements to be provided hereunder, or to
the business, operations, liabilities, assets, properties, prospects or
condition (financial or otherwise) of any Company or its Subsidiaries,
which pending or threatened litigation could, in the Agent's reasonable
judgment, be expected to have a Material Adverse Effect. There shall
exist no judgment, order, injunction or other similar restraint
prohibiting any transaction contemplated hereby.
(f) Compliance with Law. The Agent shall be satisfied that each
Company (a) has obtained all authorizations and approvals of any
governmental authority or regulatory body required for the due execution,
delivery and performance by such Company of each Amendment Document to
which it is or will be a party and for the perfection of or the exercise
by the Agent and each Lender of their respective rights and remedies
under the both the Amendment Documents and the Loan Documents, and (b)
shall be in compliance with, and shall have obtained appropriate
approvals pertaining to, all applicable laws, rules, regulations and
orders, including, without limitation, all governmental, environmental,
ERISA and other requirements, regulations and laws, the violation or
failure to obtain approvals for which could reasonably be expected to
have a Material Adverse Effect.
(g) Proceedings; Receipt of Documents. All requisite corporate
action and proceedings in connection with the borrowings and the
execution and delivery of the Amendment Documents shall be satisfactory
in form and substance to the Agent and the Agent shall have received, on
or before the First Amendment Closing Date, all information and copies
of all documents, including, without limitation, records of requisite
corporate action and proceedings, which the Agent may have requested in
connection therewith, such documents where requested by the Agent to be
certified by appropriate corporate Persons or governmental authorities.
Without limiting the generality of the foregoing, the Agent shall have
received on or before the First Amendment Closing Date the following,
each dated such day (unless otherwise specified), in form and substance
satisfactory to the Agent (unless otherwise specified) and, except for
the Notes, in sufficient copies for each Lender:
(i) a copy of any amendments to the articles or
certificate of incorporation, as the case may be, of each
Company, to the extent such amendments have been effected
subsequent to the Closing Date, in each case certified (as of
a date reasonably near the First Amendment Closing Date), by
the Secretary of State of Delaware as being a true and correct
copy thereof;
(ii) a copy of any amendments to the bylaws of each
Company, to the extent such amendments have been effected
subsequent to the Closing Date;
(iii) certified copies of the resolutions of the Board
of Directors of each Company approving this Amendment, the Notes,
and each other Amendment Document to which it is a party or by
which it is bound, and of all documents evidencing other
necessary corporate action and governmental approvals, if any,
with respect to this Agreement, the Notes, and each other
Amendment Document;
(iv) a copy of a certificate of the Secretary of State of
each State listed on Schedule 8.15 of the Loan Agreement, dated
a date reasonably near the date of the First Amendment Closing
Date, stating that Borrower and each Company, as the case may be,
is duly qualified and in good standing as a foreign entity in
such State;
(v) a certificate of each Company signed on behalf of
such Person by an appropriate officer of such Person, certifying
as to the absence of any amendments to the charter and the bylaws
of such Person since the Closing Date; and
(vi) a certificate of the Secretary or an Assistant
Secretary of each Company certifying the names and true
signatures of the officers of such Person authorized to sign,
on behalf of such Person, this Amendment, the Notes and each
other Loan Document, to which such Person is a party or by which
it is bound.
(h) No Market Disruption. There shall have occurred no
disruption or adverse change in the financial or capital markets
generally which the Agent, in its reasonable discretion, deems material.
(i) Landlord's Liens. None of the Collateral shall be subject
to any contractual or statutory Lien or Liens in favor of any lessor
under any Lease, except such Liens as the Agent, in its sole discretion,
shall deem not material, and except such Liens that have been waived or
subordinated to the Liens in favor of Agent and the Lenders in a manner
satisfactory to the Agent, in its sole discretion.
(j) Collection Account. Prior to the First Amendment Closing
Date, except as otherwise permitted by the Loan Agreement, Borrower
shall have established one or more Collection Accounts into which the
cash receipts for each store operated by Borrower or a Subsidiary of
Borrower (to the extent such cash receipts constitute proceeds of any
Collateral) shall be deposited.
(k) No Default. No Default or Event of Default shall have
occurred and be continuing (after giving effect to Paragraphs 2 through
11 of this Amendment).
(l) Representations and Warranties. The representations and
warranties contained herein and in all other Loan Documents, as amended
hereby, shall be true and correct as of the date hereof as if made on
the date hereof.
(m) 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, ▇▇▇▇▇▇ & ▇▇▇▇, L.L.P.
14. Conditions Subsequent to Amendment. Notwithstanding anything to
the contrary contained in paragraph 12(a)(i), Borrower, and Parent agree to
execute and deliver (as applicable) any other agreements, documents or
instruments related to the attachment, creation or perfection of Lender's
Liens on any of the Collateral, including, without limitation, UCC-3
amendments to financing statements previously filed in favor of Agent, in
form and substance reasonably satisfactory to Agent, within 30 days of the
date of this Amendment. Borrower, and Parent further agree that failure to
execute and deliver the Amendment Documents referred to in this paragraph 13
shall constitute an Event of Default under the Loan Agreement and that such
Loan Documents shall be included within the definition of Amendment Documents
contained herein.
15. 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 and any and all other Amendment Documents executed and/or delivered
in connection herewith have been authorized by all requisite corporate action
on the part of each Company and will not violate the corporate charter or
bylaws 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 (after giving effect to Paragraphs 2 through
11 of this Amendment), and (d) the Loan Agreement (as amended by this
Amendment), the Notes and the other Loan Documents are and remain legal,
valid, binding and enforceable obligations of each Company, as applicable.
16. 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.
17. 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.
18. 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.
19. 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.
20. Loan Agreement Remains in Effect: No Waiver. Except as expressly
provided herein, all terms and provisions of the Loan Agreement and the other
the 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.
21. Ratification of Guaranty. Parent reaffirms Parent's obligations
under the Guaranty, agrees that the Guaranty shall remain in full force and
effect not withstanding execution of this Amendment and the Amendment
Documents, and agrees that the Guaranty and the Loan Agreement shall continue
to be legal, valid and binding obligations of the Guarantor, enforceable in
accordance with the terms therein with regard to the Indebtedness, as
increased pursuant to this Amendment.
22. 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.
23. 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.
24. 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.
25. Successors and Assigns. This Amendment is binding upon and shall
inure to the benefit of Agent, Lenders, Borrower, and Parent and their
respective successors and assigns, except Borrower, and Parent may not assign
or transfer any of their rights or obligations hereunder without the prior
written consent of Lenders.
26. Headings. The headings, captions and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
[This space intentionally left blank].
IN WITNESS WHEREOF, Borrower, Parent, 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: ___________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Acting Chief Executive Officer
PARENT:
HOMELAND HOLDING CORPORATION
By: ___________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Acting Chief Executive Officer
AGENT AND A LENDER:
NATIONAL BANK OF CANADA
By: ___________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇,
Group Vice President
By: ___________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Vice President
ADDITIONAL LENDERS:
IBJ ▇▇▇▇▇▇▇▇ BUSINESS CREDIT
CORPORATION
By:
Name:
Title:
▇▇▇▇▇▇ FINANCIAL, INC.
By:
Name:
Title: