EXHIBIT 10.109
SECOND WAIVER
(1998 PARTICIPATION AGREEMENT)
This SECOND WAIVER (1998 PARTICIPATION AGREEMENT) (the "Waiver"),
dated as of October 1, 1998, is among SMART & FINAL INC., as Lessee, SMART &
FINAL STORES CORPORATION, as Sublessee and Construction Agent, SMART & FINAL
REALTY TRUST 1998, as Lessor, WILMINGTON TRUST COMPANY, as Trustee, CREDIT
LYONNAIS LEASING CORP., as Investor, financial institutions party hereto from
time to time, as Lenders, and CREDIT LYONNAIS LOS ANGELES BRANCH, a branch duly
licensed under the laws of the State of California as a banking corporation
organized and existing under the laws of the Republic of France, as Agent for
the benefit of itself and Lenders.
PRELIMINARY STATEMENTS
WHEREAS, the parties hereto have entered into a Participation
Agreement dated as of May 20, 1998 (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
Investor, 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;
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 Investor,
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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
Operative Documents by reason of the Lessee's failure to comply with Section 5.6
(Consolidated Cash Flow Ratio) of the Participation Agreement. At the end of
the Waiver Period, if the Lessee is not in compliance with such Section 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. Applicable Margin.
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(a) As of June 20, 1998 and until the end of the Waiver Period, the
definition of "Applicable Margin" in the Participation Agreement is amended by
deleting clause (a) thereof and replacing it with the following:
"Applicable Margin" means:
(a) for any Interest Period occurring in whole or in part one
hundred eighty (180) days after the Document Closing Date, (i) with respect
to interest determined by reference to the Base Rate, prior to June 20,
1998, zero (0) basis points, and from June 20, 1998 and until the end of
the Waiver Period, fifty (50) basis points; and (ii) with respect to
interest determined by reference to LIBO Rate, prior to June 20, 1998,
sixty (60) basis points, and from June 20, 1998 and until the end of the
Waiver Period, one hundred and twenty-five (125) basis points. In
addition, notwithstanding clause (b) below, the Commitment Fee Applicable
Margin from June 20, 1998 and until the end of the Waiver Period shall be
equal to thirty-five (35) basis points."
(b) As of June 20, 1998 and until the end of the Waiver Period, the
definition of "Yield" 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%."
SECTION 3. Conditions of Effectiveness. This Waiver shall become
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effective when the Agent shall have received counterparts of (a) this Waiver
executed by the Lessee, the Sublessee and the other parties to the Participation
Agreement as required thereby, and (b) the Consent appended hereto executed by
each of Smart & Final Inc. and Smart & Final Stores Corporation.
SECTION 4. Reference to and Effect on the Operative Documents.
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(a) Upon the effectiveness of this Waiver, on and after the date
hereof, 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 Operative 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.
(b) Except as specifically provided above, the Participation
Agreement, and all other Operative 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 Investor, or the Lessor under any
of the Operative Documents, nor constitute a waiver of any provision of any of
the Operative Documents.
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(d) Each of the parties hereto, and by execution of the Consent
appended hereto, each Guarantor, specifically acknowledges and agrees that (i)
none of the parties to the Participation Agreement or any other Operative
Document have agreed to any other or future waiver of or amendment to the
Operative Documents, (ii) neither the granting of the waiver described herein
nor the granting of any prior waivers and amendments under the Operative
Documents creates any obligation whatsoever on the part of any of the parties to
any of the Operative Documents to grant any other or future waiver or amendment
under the Operative Documents, and (iii) except as specifically set forth
herein, each of the parties to any of the Operative Documents have reserved all
rights and remedies under the Operative Documents.
SECTION 5. General Release of Claims.
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(a) The Lessee and Sublessee 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 Sublessee 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 Lessor, the Investor,
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 Operative 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 Operative Documents or this Waiver (including clause (a) above and the
Consent attached hereto) or the negotiation or documentation hereof or the
waivers under the Operative Documents effected by this Waiver 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 Operative Documents or this Waiver. Each Releasing Party
further covenants and agrees that it has not assigned heretofore, and will not
hereafter xxx any Released Party upon, any Claim released or purported to be
released under this Section, and the Lessee and Sublessee 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:
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"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 Sublessee 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 Operative 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 and the Consent, 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 and the
Consent by the Lessee and the Sublessee have 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.
(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 Investor and the
Lessor in connection with the preparation, execution, delivery and
administration of this Waiver, the Consent 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, the Consent 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 and the Consent
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hereto may be 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 or the Consent hereto by telefacsimile shall be
effective as delivery of a manually executed counterpart of this Waiver or such
Consent.
SECTION 9. Governing Law. This Waiver and the Consent hereto shall
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be governed by, 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
(1998 Participation Agreement) to be executed by their respective officers
thereunto duly authorized, as the date first above written.
SMART & FINAL INC.
as Lessee
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: Secretary
SMART & FINAL STORES CORPORATION,
as Sublessee
By: /s/ Xxxxxxx Xxxxxxx
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Name: Xxxxxxx Xxxxxxx
Title: VP & Treasurer
SMART & FINAL REALTY TRUST 1998,
as Lessor
By: Wilmington Trust Company, not in its
individual capacity but solely as Trustee
By: /s/ Xxxxxx X. Xxxx
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Name: Xxxxxx X. Xxxx
Title: Financial Services Officer
CREDIT LYONNAIS LEASING CORP.,
as Investor
By: /s/ X.X. Xxxxxxxx
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X.X. Xxxxxxxx
Vice President and Secretary
CREDIT LYONNAIS LOS ANGELES BRANCH
as Agent and Lender
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: First Vice President and Manager
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK
B.A., "RABOBANK NEDERLAND," NEW YORK BRANCH,
as Lender
By: /s/ Xxxxxxxx X. Xxxxx
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Name: Xxxxxxxx X. Xxxxx
Title: Vice President
By: /s/ Xxx Xxxxx
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Name: Xxx Xxxxx
Title: Senior Credit Officer
WILMINGTON TRUST COMPANY,
as Trustee
By: /s/ Xxxxxx X. Xxxx
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Name: Xxxxxx X. Xxxx
Title: Financial Services Officer
CONSENT
Dated as of October 1, 1998
The undersigned, SMART & FINAL INC., a Delaware corporation, and SMART
& FINAL STORES CORPORATION, a California corporation, are each a party to the
Guaranty (as defined in the Participation Agreement referred to in the foregoing
Waiver) and each (i) hereby consents to the foregoing Waiver, and (ii) hereby
confirms and agrees that the Guaranty is, and shall continue to be, in full
force and effect and is hereby ratified and confirmed in all respects, except
that, upon the effectiveness of, and on and after the date of, the said Waiver,
each reference in the Guaranty to the Participation Agreement, "thereunder,"
"thereof" or words of like import shall mean and be a reference to the
Participation Agreement as modified by the said Waiver.
SMART & FINAL
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: Secretary
SMART & FINAL STORES CORPORATION
By: /s/ Xxxxxxx Xxxxxxx
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Name: Xxxxxxx Xxxxxxx
Title: VP & Treasurer
