Eighth Amendment to Loan and Security Agreement among Drug Emporium, Inc., Fleet Retail Finance Inc., and Lenders

Summary

This amendment updates the existing Loan and Security Agreement between Drug Emporium, Inc., Fleet Retail Finance Inc. (as Agent), Back Bay Capital Funding LLC (as Term Lender), and other lenders. It changes the minimum cash availability requirements and adds a daily reserve until certain financial conditions are met. The amendment also confirms that all other terms of the original agreement remain in effect. It becomes effective once all parties sign and certain conditions are satisfied, including the absence of any suspension events and delivery of required documents.

EX-10.1 2 l85851aex10-1.txt EXHIBIT 10.1 1 Exhibit 10.1 EIGHTH AMENDMENT TO LOAN AND SECURITY AGREEMENT ----------------------------------------------- This Eighth Amendment to Loan and Security Agreement (the "Eighth Amendment") is made as of this __ day of December, 2000 by and between Fleet Retail Finance Inc., formerly known as BankBoston Retail Finance Inc. (in such capacity, herein the "Agent"), a Delaware corporation with offices at 40 Broad Street, Boston, Massachusetts 02109, as agent for the ratable benefit of the "Lenders", who are party to the Agreement (defined below) and Back Bay Capital Funding LLC, a Delaware Limited Liability Company with offices at 40 Broad Street, Boston, Massachusetts 02109 (the "Term Lender") and Drug Emporium, Inc. (hereinafter, the "Borrower"), a Delaware corporation with its principal executive offices at 155 Hidden Ravines Drive, Powell, Ohio 43065 in consideration of the mutual covenants herein contained and benefits to be derived herefrom. W I T N E S S E T H: WHEREAS, on October 28, 1998 the Agent, the Lenders and the Borrower entered in a certain Loan and Security Agreement, as amended by a First Amendment to Loan and Security Agreement dated May 11, 1999, a Second Amendment to Loan and Security Agreement dated September 15, 1999, a Third Amendment to Loan and Security Agreement dated December 10, 1999, a Fourth Amendment to Loan and Security Agreement dated March 8, 2000, a Fifth Amendment to Loan and Security Agreement dated May 10, 2000, a Sixth Amendment to Loan and Security Agreement dated August 18, 2000, and a Seventh Amendment to Loan and Security Agreement dated September __, 2000 (the "Agreement"); and WHEREAS, the Borrower, the Agent, the Lenders, and the Term Lender desire to amend certain of the provisions of the Agreement; NOW, THEREFORE, it is hereby agreed among the Agent, the Lenders, the Term Lender, and the Borrower as follows: 1. Capitalized Terms. All capitalized terms used herein and not otherwise defined shall have the same meaning herein as in the Agreement. -1- 2 2. Amendment to Article 5. Section 5-14 of the Agreement is hereby amended to read as follows: 5-14. Minimum Excess Availability. Availability shall not be less than $1,500,000.00, at all times through January 12, 2001, and $10,000,000.00, at all times, thereafter, in each case measured without regard to the additional Availability Reserve set forth in Paragraph 3 of the Eighth Amendment. For the purposes of the calculation of Availability under this Section 5-14 cash deposited in the Concentration Account no later than noon on the date of calculation shall be added to the amount of Availability. 3. Additional Availability Reserves. The Agent and the Borrower hereby agree that commencing December 19, 2000 an additional Availability Reserve in the amount of $300,000.00 per Business Day, measured on a cumulative basis, shall be established, until the Borrower satisfies the minimum Availability covenant of $10,000,000.00 set forth in Section 5-14. 4. Ratification of Loan Documents. Except as provided herein, all terms and conditions of the Agreement and of the other Loan Documents remain in full force and effect. Furthermore, except as provided herein, all warranties and representations made in the Agreement and in the other Loan Documents remain in full force and effect. 5. Conditions to Effectiveness. This Eighth Amendment shall not be effective until each of the following conditions precedent have been fulfilled to the satisfaction of the Agent and the Lenders: (a) This Eighth Amendment shall have been duly executed and delivered by the all necessary parties hereto. (b) No Suspension Event shall have occurred and be continuing. (c) The Borrower shall have provided such additional instruments and documents to the Agent as the Agent and the Agent's counsel may have reasonably requested. (d) The Agent shall promptly notify the Borrower when such conditions are satisfied. (e) The Borrower shall have furnished the Agent with corporate resolutions authorizing the execution of this Amendment and the documents contemplated herein. -2- 3 6. Miscellaneous. (a) This Eighth Amendment may be executed in several counterparts and by each party on a separate counterpart, each of which when so executed and delivered shall be an original, and all of which together shall constitute one instrument. (b) This Eighth Amendment expresses the entire understanding of the parties with respect to the transactions contemplated hereby. No prior negotiations or discussions shall limit, modify, or otherwise affect the provisions hereof. (c) Any determination that any provision of this Eighth Amendment or any application hereof is invalid, illegal or unenforceable in any respect and in any instance shall not effect the validity, legality, or enforceability of such provision in any other instance, or the validity, legality or enforceability of any other provisions of this Eighth Amendment. (d) The Borrower shall pay on demand all costs and expenses of the Agent, including, without limitation, reasonable attorneys' fees, in connection with the preparation, negotiation, execution and delivery of this Eighth Amendment. (e) The Borrower warrants and represents that the Borrower has consulted with independent legal counsel of the Borrower's selection in connection with this Eighth Amendment and is not relying on any representations or warranties of any Lender or the Agent or their respective counsel in entering into this Eighth Amendment. -3- 4 IN WITNESS WHEREOF, the parties have caused this Eighth Amendment to Loan and Security Agreement to be executed by their duly authorized officers as a sealed instrument as of the date first above written. DRUG EMPORIUM, INC. ("Borrower") By: ------------------------------- Name: ----------------------------- Title: ---------------------------- FLEET RETAIL FINANCE INC. ("Agent") By: ------------------------------- Name: ----------------------------- Title: ---------------------------- The "LENDERS" FLEET RETAIL FINANCE INC. By -------------------------------- Print Name: ------------------------------- Title: ------------------------------- -4- 5 NATIONAL CITY COMMERCIAL FINANCE, INC. By -------------------------------- Print Name: ------------------------------- Title: ------------------------------- AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO By -------------------------------- Print Name: ------------------------------- Title: ------------------------------- LASALLE BUSINESS CREDIT, INC. By -------------------------------- Print Name: ------------------------------- Title: ------------------------------- BACK BAY CAPITAL FUNDING LLC By -------------------------------- Print Name: ------------------------------- Title: ------------------------------- -5-