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Exhibit 10.127
THIRD AMENDMENT
TO
PARTICIPATION AGREEMENT
Dated as of August 25, 2000
This THIRD AMENDMENT TO PARTICIPATION AGREEMENT (this "Amendment") is among
SMART & FINAL INC., a Delaware corporation (the "Borrower"), the holders under
the Trust Agreement referred to below (the "Holders"), the financial
institutions and other entities party to the Synthetic Lease Credit Agreement
referred to below (the "Lenders"), and CREDIT LYONNAIS LOS ANGELES BRANCH, as
administrative agent (the "Administrative Agent") for the Lenders and the
Holders.
PRELIMINARY STATEMENTS:
1. Reference is made to (i) the Participation Agreement (as amended,
supplemented or otherwise modified from time to time, the "Participation
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Agreement") dated as of November 13, 1998 among the Borrower, the Guarantors
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party thereto, First Security Bank, National Association, as owner trustee under
the S&F Trust 1998-1, the various banks and other institutions party thereto as
Holders and as Lenders, and Credit Lyonnais Los Angeles Branch, as
Administrative Agent for the Lenders and the Holders, (ii) the Credit Agreement
(as defined in the Participation Agreement) (as amended, supplemented or
otherwise modified from time to time, the "Synthetic Lease Credit Agreement"),
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and (iii) the Trust Agreement (as defined in the Participation Agreement) (as
amended, supplemented or otherwise modified from time to time, the "Trust
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Agreement").
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2. The parties have agreed to amend certain provisions of the
Participation Agreement, in each case as set forth herein.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Amendments.
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(a) Section 3.4 of the Participation Agreement is amended and restated
hereby to read as follows:
"Each Holder and Lender agrees at all times (a) to maintain the same
ratable interest in (i) the aggregate "Commitments" under (and as defined
in) the Lessee Credit Agreement and (ii) the sum of the Lender Commitments
and Holder Commitments (with respect to the aggregate of its Lender
Commitment for Tranche A Loans, its Lender Commitment for Tranche B Loans
and its Holder Commitment, if any); (b) to maintain an 8.6:1.4 ratio
between (i) the dollar amount of its Lender Commitment for Tranche A Loans
and (ii) the sum of the dollar
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amounts of its Lender Commitment for Tranche B Loans and its Holder
Commitment, if any, provided that, solely with respect to any Lender or
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Holder that shall, as of the Initial Closing Date, hold its lender
Commitment for Tranche A Loans Tranche B Loans and its Holder Commitment
(if any) other than in the ratio described above, such lender or Holder
shall not be required to maintain the 8.6:1.4 ratio described in this
clause (b); and (c) to make advances consistent with such committed amounts
referenced in Section 3.4(b) in accordance with the requirements of the
Operative Agreements and the Lessee Credit Agreement, respectively. It is
expressly understood that no Lender shall be required to be Holder
hereunder so long as each Lender complies with the requirements of this
Section 3.4."
(b) Section 5.10 of the Participation Agreement is amended and
restated hereby to read as follows:
"Each Holder and Lender agrees at all times (a) to maintain the
same ratable interest in (i) the aggregate "Commitments" under (and as
defined in) the Lessee Credit Agreement and (ii) the sum of the Lender
Commitments and Holder Commitments (with respect to the aggregate of its
Lender Commitment for Tranche A Loans, its Lender Commitment for Tranche B
Loans and its Holder Commitment, if any); and (b) to maintain an 8.6:1.4
ratio between (i) the dollar amount of its Lender Commitment for Tranche A
Loans and the sum of the dollar amounts of its Lender Commitment for
Tranche B Loans and its Holder Commitment, if any, and (ii) the dollar
amount of its outstanding Tranche A Loans and the sum of the dollar amounts
of its outstanding Tranche B Loans and Holder Advances, if any, provided
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that, solely with respect to any Lender or Holder that shall, as of the
Initial Closing Date, hold its Lender Commitment for Tranche A Loans and
Tranche B Loans and its Holder Commitment (if any) other than in the ratio
described above, such Lender or Holder shall not be required to maintain
the 8.6:1.4 ratio described in this clause (b)."
(c) Section 10.1(a)(ii) of the Participation Agreement is amended and
restated hereby to read as follows:
"(A) the same ratable interest in (i) the aggregate "Commitments"
under (and as defined in) the Lessee Credit Agreement and (ii) the sum of
the Lender Commitments and Holder Commitments (with respect to the
aggregate of its Lender Commitment for Tranche A Loans, its Lender
Commitment for Tranche B Loans and its Holder Commitment, if any), (B)
Tranche A Commitments and Tranche B Commitments and/or Holder Commitments,
the sum of the dollar amounts of which commitments shall be held in a ratio
of 8.6 (with respect to Tranche A Commitments) to 1.4 (with respect to the
sum of Tranche B Commitments and Holder Commitments), and (C) outstanding
Tranche A Loans (if any) and outstanding Tranche B Loans (if any) and/or
outstanding Holder
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Advances (if any), the sum of the dollar amounts of which outstanding
amounts (if any) shall be held in a ratio of 8.6 (with respect to the
outstanding Tranche A Loans) to 1.4 (with respect to the sum of outstanding
Tranche B Loans and outstanding Holder Advances)."
(d) Section 10.1(b)(ii) of the Participation Agreement is amended and
restated hereby to read as follows:
"(A) the same ratable interest in (i) the aggregate "Commitments"
under (and as defined in) the Lessee Credit Agreement and (ii) the sum of
the Lender Commitments and Holder Commitments (with for Tranche A Loans,
its Lender Commitment for Tranche B Loans and its Holder Commitment, if
any), (B) Tranche A Commitments and Tranche B Commitments and/or Holder
Commitments, the sum of the dollar amounts of which commitments shall be
held in a ratio of 8.6 (with respect to Tranche A Commitments) to 1.4 (with
respect to the sum of Tranche B Commitments and Holder Commitments), and
(C) outstanding Tranche A Loans (if any) and outstanding Tranche B Loans
(if any) and/or outstanding Holder Advances (if any), the sum of the dollar
amounts of which outstanding amounts (if any) shall be held in a ratio of
8.6 (with respect to the outstanding Tranche A Loans) to 1.4 (with respect
to the sum of outstanding Tranche B Loans and outstanding Holder
Advances)."
SECTION 2. Conditions to Effectiveness. The amendments set forth
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herein shall become effective on the date (the "Amendment Effective Date") on
which the Administrative Agent shall have executed this Amendment and shall have
received counterparts of this Amendment executed by the Borrower and the
Majority Secured Parties (as defined in the Participation Agreement).
SECTION 3. Representations and Warranties. The Borrower represents and
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warrants as follows:
(a) Authority. The Borrower and each other Loan Party has the
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requisite corporate power and authority to execute and deliver this Amendment
and Consent, as applicable, and to perform its obligations hereunder and under
the Operative Agreements (in each case as modified hereby) to which it is a
party. The execution, delivery and performance by the Borrower of this Amendment
and by each other Loan Party of the Consent, and the performance by each Loan
Party of each Operative Agreement (in each case as modified hereby) to which it
is a party have been duly approved by all necessary corporate action of such
Loan Party and no other corporate proceedings on the part of such Loan Party are
necessary to consummate such transactions.
(b) Enforceability. This Amendment has been duly executed and
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delivered by the Borrower. The Consent has been duly executed and delivered by
each Guarantor and each
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Grantor. This Amendment and each Operative Agreement (in each case as modified
hereby) is the legal, valid and binding obligation of each Loan Party party
hereto and thereto, enforceable against such Loan Party in accordance with its
terms, and is in full force and effect.
(c) Representations and Warranties. The representations and
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warranties contained in each Operative Agreement (other than any such
representations and warranties that, by their terms, are specifically made as of
a date other than the date hereof) are true and correct on and as of the date
hereof as though made on and as of the date hereof and will be true and correct
on and as of the Amendment Effective Date as though made on and as of such date.
(d) No Default. After giving effect to this Amendment, no event has
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occurred and is continuing that constitutes a Default or Event of Default under
any Operative Agreement.
SECTION 4. General Release of Claims.
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(a) The Borrower represents and agrees that it has diligently and
thoroughly investigated the existence of any Claim (as defined below), and to
its knowledge and belief, no Claim exists and no facts exist that could give
rise to or support a Claim
(b) As additional consideration for entering into this Amendment and
for the amendments set forth herein, the Borrower and each Guarantor and each of
their respective agents, employees, directors, officers, attorneys, affiliates,
subsidiaries, successors and assigns (individually a "Releasing Party," and
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collectively the "Releasing Parties") hereby releases and forever discharges
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each of the Lessor, the Administrative Agent, the Syndication Agent, the Agent
and each Lender and each Holder under the Trust Agreement 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
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and from all damage, loss, claims, demands, liabilities, obligations (except for
any such obligations hereafter arising pursuant to the terms of the Operative
Agreements, as amended to date), actions and causes of action whatsoever
(collectively "Claims") that the Releasing Parties or any of them may, as of the
date hereof, have or claim to have against each or any of the Released Parties,
in each case whether presently known or unknown 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 Agreements or this
Amendment (including clause (a)) or the negotiation or documentation hereof or
the amendments under the Operative Agreements effected by this Amendment 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 Agreements or this Amendment. Each Releasing Party
further covenants and agrees that it has not assigned heretofore, and will not
hereafter sue any Released Party upon, any Claim released or purported to be
released under this Section, and the Borrower 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
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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:
"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 5. Reference to and Effect on the Credit Documents.
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(a) Upon and after the effectiveness of this Amendment, each
reference in the Participation Agreement or the Synthetic Lease Credit Agreement
to "this Agreement", "hereunder", "hereof" or words of like import referring to
the Participation Agreement, and each reference in the other Operative
Agreements or in the Loan 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 modified above, the Participation
Agreement, the Synthetic Lease Credit Agreement and the other Operative
Agreements 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, the Security Documents (as defined in the Participation Agreement)
and all of the Collateral described therein do and shall, to the extent set
forth therein, continue to secure the payment of all obligations and liabilities
of the Borrower and/or the Lessor (as defined in the Participation Agreement),
as applicable, under the Participation Agreement and/or any of the other
Operative Agreements, in each case as amended hereby.
(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of the Administrative Agent, the Lenders, the Holders, or the
Lessor under any of the Operative Agreements, nor constitute a waiver of any
provision of any of the Operative Agreements.
(d) Each of the parties hereto specifically acknowledges and agrees
that (i) none of the parties to the Participation Agreement or any other
Operative Agreement have agreed to any other or future waiver or amendment of
any of the Operative Agreements, (ii) neither the granting of the amendments
described herein nor the granting of any prior waivers or amendments under the
Operative Agreements creates any obligation whatsoever on the part of any of the
parties to any of the Operative Agreements to grant any other or future waiver
or amendment under any of the Operative Agreements, and (iii) except as
specifically set forth herein, each of the parties to any of the Operative
Agreements have reserved all rights and remedies under the Operative Agreements.
SECTION 6. Costs, Expenses and Taxes. The Borrower agrees to pay on
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demand all reasonable costs and expenses of the Administrative Agent and the
Lenders in
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connection with the preparation, execution, delivery and administration of this
Amendment 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 Administrative Agent and the Lenders with respect
thereto and with respect to advising each of such parties as to its rights and
responsibilities hereunder and thereunder. The Borrower 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 Amendment 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 7. Consent of Lenders and Holders Under Operative Agreements.
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By their execution hereof, the Lenders and Holders under the Operative
Agreements, hereby consent and agree to the terms of this Amendment and to the
amendments and modifications set forth herein for purposes of Section 28.1 of
the Lease (as defined in the Participation Agreement).
SECTION 8. Counterparts. This Amendment may be executed in any number
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of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed to be an original and
all of which taken together shall constitute but one and the same agreement.
Delivery of an executed counterpart of a signature page to this Amendment by
telefacsimile shall be effective as delivery of a manually executed counterpart
of this Amendment.
SECTION 9. Governing Law. This Amendment shall be governed by, and
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construed in accordance with, the laws of the State of California.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first written above.
SMART & FINAL INC.,
as Borrower
By: /s/ RICHARD N. PHEGLEY
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Title: Vice President & Treasurer
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CREDIT LYONNAIS LOS ANGELES BRANCH,
as Administrative Agent
By: /s/DIANNE SCOTT
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Title: First Vice President & Manager
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Holders and Lenders:
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CREDIT LYONNAIS LOS ANGELES BRANCH, as a Lender
By: /s/DIANNE SCOTT
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Title: First Vice President & Manager
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CREDIT LYONNAIS LEASING CORP., as a Holder
By: /s/
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Title:
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BANK OF AMERICA, N.A., as a Lender and a Holder
By: /s/ KIMBERLY WHITNEY
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Title: Managing Director
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UNION BANK OF CALIFORNIA, N.A., as a Lender and a Holder
By: /s/ TERRY ROCHA
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Title: Vice President
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WELLS FARGO BANK, N.A., as a Lender
By:
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Title:
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COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK N.A.
"RABOBANK NEDERLAND", NEW YORK BRANCH, as a Lender and a
Holder
By: /s/ IAN REECE
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Title:
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NATEXIS BANQUE - BFCE, as a Lender and a Holder
By: /s/ CHRISTINE DIRRINGER
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Title: Assistant Vice President
By: /s/ FRANK MADDEN
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Title:
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HARRIS TRUST AND SAVINGS BANK, as a Lender and a Holder
By: /s/
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Title:
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CONSENT
Dated as of August 25, 2000
The undersigned, as Guarantors under the "Guaranty Agreement" (as defined in the
Participation Agreement referred to in the foregoing Amendment), each hereby
consents and agrees to the foregoing Amendment and hereby confirms and agrees
that (i) the Guaranty Agreement and the Security Agreement and all other
Operative Agreements are, and shall continue to be, in full force and effect and
are hereby ratified and confirmed in all respects except that, upon Amendment
Effective Date (as defined in the foregoing Amendment), each reference in the
Guaranty Agreement, the Security Agreement and the other Operative Agreements to
the "the Participation Agreement", "thereunder", "thereof" and words of like
import referring to the Participation Agreement shall mean and be a reference to
the Participation Agreement as amended and modified by said Amendment, and (ii)
the Security Agreement and all of the Collateral described therein do, and shall
continue to, secure the payment of all of the Secured Obligations as defined in
the Security Agreement.
AMERICAN FOODSERVICE DISTRIBUTORS
By: /s/ RICHARD N. PHEGLEY
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Richard N. Phegley
Title: Vice President & Treasurer
SMART & FINAL STORES CORPORATION
By: /s/ RICHARD N. PHEGLEY
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Richard N. Phegley
Title: Vice President & Treasurer
SMART & FINAL OREGON, INC.
By: /s/ RICHARD N. PHEGLEY
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Richard N. Phegley
Title: Vice President & Treasurer
PORT STOCKTON FOOD DISTRIBUTORS, INC.
By: /s/ RICHARD N. PHEGLEY
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Richard N. Phegley
Title: Vice President & Treasurer
HENRY LEE COMPANY
By: /s/ RICHARD N. PHEGLEY
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Richard N. Phegley
Title: Vice President & Treasurer
AMERIFOODS TRADING COMPANY
By: /s/ RICHARD N. PHEGLEY
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Richard N. Phegley
Title: Vice President & Treasurer
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HL HOLDING CORPORATION
By: /s/ RICHARD N. PHEGLEY
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Richard N. Phegley
Title: Vice President & Treasurer
