Exhibit 10.23
SEVENTH AMENDMENT
TO THE
AMENDED AND RESTATED CREDIT AGREEMENT
SEVENTH AMENDMENT dated as of May 6, 1997 (this "Amendment") to the
AMENDED AND RESTATED CREDIT AGREEMENT dated as of June 15, 1995 (as modified
by the Waiver and First Amendment thereto dated as of February 16, 1996, the
Second Amendment thereto dated as of May 10, 1996, the Third Amendment
thereto dated as of September 11, 1996, the Fourth Amendment thereto dated as
of January 13, 1997, the Fifth Amendment thereto dated as of March 7, 1997,
and the Waiver and Sixth Amendment thereto dated as of April 4, 1997, the
"Credit Agreement"), each among THE GRAND UNION COMPANY, a Delaware
corporation (the "Borrower"), the institutions from time to time party
thereto as lenders (the "Banks") and BANKERS TRUST COMPANY, as agent (the
"Agent"). Capitalized terms used herein and not defined herein shall have
the respective meanings set forth for such terms in the Credit Agreement.
W I T N E S S E T H :
WHEREAS, the Borrower has requested that the Credit Agreement be
amended to, among other things, (a) make the clean-down requirements of the
Credit Agreement inapplicable during the 1997 calendar year, (b) lower the
minimum amount of capital expenditures the Borrower is required by the Credit
Agreement to make during the Borrower's fiscal year ending in March 1998 (the
"1998 Fiscal Year"), and (c) change the EBITDA and interest coverage
requirements of the Credit Agreement that are applicable during the 1998
Fiscal Year; and
WHEREAS, subject to and upon the terms and conditions hereinafter
set forth and in the Credit Agreement as amended hereby, the Banks party
hereto are agreeable to the foregoing;
NOW, THEREFORE, the parties hereto hereby agree as follows:
Section 1. Amendments. The Credit Agreement is hereby amended
effective as of the date hereof as follows:
(a) Section 4.2(A)(i) of the Credit Agreement
is amended by inserting "(other than August 31, 1997 unless a Default or an
Event of Default has occurred and is then continuing)" at such time after the
word "year" in the first line thereof.
(b) Section 7.14 of the Credit Agreement is amended by
replacing the amount "$87,100,000" appearing in the second line of the table
contained therein with the amount "$30,000,000".
(c) Section 8.3 of the Credit Agreement is amended by
inserting the following as a new last paragraph of such Section:
"In respect of any Capitalized Lease Obligations
(Equipment) incurred by the Borrower or any of its
Subsidiaries pursuant to clause (b) of this Section
8.3, the Agent, at the request of the Borrower, may
pursuant to documentation satisfactory to the Agent in
its sole discretion either, at the Agent's option,
release or subordinate the Liens under the Security
Documents on the equipment to which such obligations
relate."
(d) Section 8.9 of the Credit Agreement is amended by deleting
such section in its entirety and replacing it with the following:
"8.9 EBITDA. The Borrower will not permit EBITDA (i) for the
fiscal quarter ending in July 1997 (taken as one accounting period) to be
less than $23,000,000, (ii) for the period of two consecutive fiscal quarters
ending in October 1997 (taken as one accounting period) to be less than
$54,000,000, (iii) for the period of three consecutive fiscal quarters ending
in January 1998 (taken as one accounting period) to be less than $87,000,000
and (iv) for any period of four consecutive fiscal quarters (taken as one
accounting period) ending on the last day of any fiscal quarter set forth
below to be less than the amount set forth opposite such fiscal quarter below:
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Fiscal Quarter
Ending in Amount
-------------- ------
March 1998 120,000,000
July 1998 150,000,000
October 1998 150,000,000
January 1999 150,000,000
April 1999 165,000,000
July 1999 165,000,000
October 1999 165,000,000
January 2000 165,000,000
April 2000 165,000,000
July 2000 165,000,000
October 2000 165,000,000
January 2001 165,000,000
March 2001 165,000,000
July 2001 165,000,000
October 2001 165,000,000
January 2002 165,000,000
March 2002 165,000,000"
(e) Section 8.11 of the Credit Agreement is amended by
deleting such section in its entirety and replacing it with the following:
"8.11 EBITDA to Total Cash Interest Expense. The Borrower will not
permit the ratio of (i) EBITDA to (ii) Total Cash Interest Expense (x) for
the period of three consecutive fiscal quarters (taken as one accounting
period) ending in January 1998 to be less than 1.0:1, (y) for the period of
four consecutive fiscal quarters (taken as one accounting period) ending in
March 1998 to be less than 1.0:1, and (z) for any period of four consecutive
fiscal quarters (taken as one accounting period) ending during any period set
forth below to be less than the amount set forth opposite such period below:
Period Ratio
------ -----
Fiscal Quarter ending in July 1.4:1
1998 to and including
Fiscal Quarter ending
in January 1999
Fiscal Quarter ending in April 1.5:1
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1999 to and including
Fiscal Quarter ending
in January 2000
Fiscal Quarter ending in April 1.7:1
2000 to and including
Fiscal Quarter ending
in January 2001
Fiscal Quarter ending in March 1.7:1
2001 to and including
Fiscal Quarter ending
in January 2002
Thereafter 1.7:1"
(f) Section 8.17 ("Additional Financial Covenants") of the
Credit Agreement is deleted in its entirety.
(g) The definition of the term "EBITDA" contained in
Section 10 of the Credit Agreement is amended by inserting the following at
the end of such definition:
"; and provided further that, for purposes of
calculating EBITDA for any period, the following
shall be added back to EBIT for such period to the
extent deducted from Consolidated Net Income for
such period: one-time restructuring charges
arising from employee terminations and
administrative cost reductions and one or a series
of related charges arising from inventory
valuation adjustments, in each case that are taken
by the Borrower during its fiscal year ending in
March 1998, but only to the extent (y) such
charges were decided to be taken by the Borrower
prior to the finalization of the Borrower's
financial statements for its fiscal year ending in
March 1997, and (z) the aggregate amount of such
charges, when taken together with any similar or
other restructuring charges taken by the Borrower
and its Subsidiaries in the last quarter of its
fiscal year ending in March 1997, do not exceed
$10,000,000."
(h) The definition of the term "Section 7.14 Credit
Amount" is amended by replacing the reference to the year "1998" with the
following:
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"or prior to 1999, zero, and for any fiscal year of the
Borrower ending in 2000".
Section 2. Representations and Warranties. The Borrower hereby represents
and warrants to the Agent and each Bank that:
(a) after giving effect to this Amendment, no Default or
Event of Default has occurred and is continuing on and as of the date hereof;
and
(b) the representations and warranties of the Borrower
and the other Credit Parties contained in the Credit Agreement and the other
Credit Documents are true and correct on and as of the date hereof as if made
on and as of the date hereof after giving effect to the amendments
contemplated hereby, except to the extent such representations and warranties
expressly relate to a different specific date.
Section 3. Effectiveness. This Amendment shall become effective as of the
date specified in Section 1 hereof when the Agent shall have executed and
delivered a counterpart of this Amendment and received duly executed
counterparts of this Amendment from the Borrower, each Subsidiary of the
Borrower that is a party to any Credit Document and as many of the Banks as
shall be necessary to comprise the "Required Banks" or the "Required Class
Creditors", as the case may be; provided that this Amendment shall cease
immediately to be of any further force and effect if (i) the Borrower fails
to comply with Section 4 hereof, or (ii) the aggregate amount of charges
relating to employee terminations, administrative cost reductions and
inventory valuation adjustments and other restructuring charges taken by the
Borrower and its Subsidiaries during the Borrower's fiscal quarter ending in
March 1997 exceeds $10,000,000.
Section 4. Amendment Fee. In the event this Amendment is executed and
delivered by the Agent and the Required Banks, the Borrower shall pay to the
Agent on or prior to May 13, 1997, in immediately available funds, for the
account of each Bank that executes and delivers a signature page to this
Amendment on or prior to May 6, 1997, an amendment fee equal to 12.5 basis
points on the sum of (a) such Bank's Revolving Loan Commitment, and (b)
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the aggregate outstanding principal amount of Term Loans held by such Bank.
Section 5. Status of Credit Documents. (a) This Amendment is limited
solely for the purposes and to the extent expressly set forth herein, and,
except as expressly modified hereby, (i) the terms, provisions and conditions
of the Credit Documents, (ii) the terms and provisions of the Further
Assurances Agreement dated as of June 15, 1995, as modified in writing prior
to the date hereof, between the Borrower and the Agent, and (iii) the Liens
granted under the Credit Documents shall continue in full force and effect
and are hereby ratified and confirmed in all respects.
(b) No amendment made to the Credit
Agreement pursuant to this Amendment shall relieve the
Borrower from complying with any other term or provision of
the Credit Agreement as amended hereby.
Section 6. Counterparts. This Amendment may be executed and delivered in
any number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A complete set of counterparts shall be lodged with the Borrower
and the Agent.
Section 7. Governing Law. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH, AND SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the parties hereto have caused their respective
duly authorized officers to execute and deliver this Seventh Amendment to the
Amended and Restated Credit Agreement as of the date first above written.
THE GRAND UNION COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President and
Treasurer
BANKERS TRUST COMPANY,
Individually and as Agent
By: /s/ Xxxx Xxx Xxxxx
------------------------
Name: Xxxx Xxx Xxxxx
Title: Managing Director
BANKAMERICA BUSINESS CREDIT, INC.
By: /s/ Xxxxxxx Xxxxxxxx
------------------------
Name: Xxxxxxx Xxxxxxxx
Title: VP
BANK POLSKA KASA OPIEKI, SA
By: /s/ Xxxxxxx X. Xxxx
------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
Senior Lending Officer
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COMPAGNIE FINANCIERE DE CIC ET
DE L'UNION EUROPEENNE
By: /s/ Xxxx Xxxxxxx
------------------------
Name: Xxxx Xxxxxxx
Title: First Vice President
By: /s/ Xxxxx X'Xxxxx
------------------------
Name: Xxxxx X'Xxxxx
Title: Vice President
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Xxxxxxx X. Xxxxx
------------------------
Name: Xxxxxxx X. Xxxxx
Title: Division Executive
FLEET CAPITAL CORPORATION
By: /s/ Xxxx Xxxxx
------------------------
Name: Xxxx Xxxxx
Title: Vice President
XXXXXX FINANCIAL, INC.
By: /s/ Xxxxxxxxx Xxxxxxxx
------------------------
Name: Xxxxxxxxx Xxxxxxxx
Title: AVP
XXXXXX COMMERCIAL PAPER INC.
By: /s/ Xxxxxxx Xxxxxxx
------------------------
Name: Xxxxxxx Xxxxxxx
Title: Authorized Signatory
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ML CBO IV (CAYMAN) LTD, LLC
By: Protective Asset Management,
as Collateral Manager
By: /s/ Xxxxx Xxxxxxx CPA, CFA
----------------------------
Name: Xxxxx Xxxxxxx CPA, CFA
Title: President
Protective Asset Management, L.L.C.
SENIOR DEBT PORTFOLIO
By: Boston Management and Research,
as Investment Advisor
By: /s/ Payson X. Xxxxxxxxx
------------------------
Name: Payson X. Xxxxxxxxx
Title: Vice President
TRANSAMERICA BUSINESS CREDIT
CORPORATION
By: /s/ Xxxxxx Xxxxxxx
------------------------
Name: Xxxxxx Xxxxxxx
Title: Sr. Vice Pres
XXX XXXXXX AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President & Director
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The foregoing Seventh Amendment is hereby consented and agreed to,
and the Liens and guaranties under the Credit Documents are hereby confirmed,
by:
MERCHANDISING SERVICES, INC.
GRAND UNION STORES, INC. OF VERMONT
GRAND UNION STORES OF NEW HAMPSHIRE, INC.
SPECIALTY MERCHANDISING SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President and Treasurer
of each of the above listed
entities
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