1
Exhibit 10.12(b)
NINTH AMENDMENT TO CREDIT AGREEMENT
THIS NINTH AMENDMENT TO CREDIT AGREEMENT (the "Amendment") is
made as of July 22, 1996, between STATER BROS. MARKETS, a California corporation
("Borrower"), and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a
national banking association ("Bank").
WHEREAS, Borrower and Bank entered into that certain Credit
Agreement dated as of March 8, 1994, as amended by the First Amendment dated as
of September 23, 1994, the Second Amendment dated as of February 6, 1995, the
Third Amendment dated as of March 31, 1995, the Fourth Amendment dated as of May
31, 1995, the Fifth Amendment dated as of June 20, 1995, the Sixth Amendment and
Waiver dated as of June 23, 1995, the Seventh Amendment dated as of June 1, 1996
and the Eighth Amendment dated as of June 15, 1996 (as so amended, the
"Agreement").
WHEREAS, Borrower and Bank desire to further modify and amend
certain of the terms and provisions of the Agreement.
NOW, THEREFORE, in consideration of the premises herein
contained and for other good and valuable consideration, Borrower and Bank do
hereby mutually agree as follows:
AGREEMENT
1. Definitions. Capitalized terms used but not defined
in this Amendment shall have the meaning given to them in the Agreement.
2. Amendments. The Agreement is hereby amended as
follows:
2.1 In Paragraph 1.1 of the Agreement, the
definition of "Availability Period" is amended by substituting the
date "June 1, 1998" for the date "August 1, 1996" appearing therein.
2.2 In Paragraph 1.1 of the Agreement, the
definition of "Dividend Fixed Charge Coverage Ratio" is amended and
restated in its entirety as follows:
" 'Dividend Fixed Charge Coverage Ratio'
means the ratio of: (i) the sum of, without duplication, net
profit before taxes, without giving effect to extraordinary
gains or to Noncash Extraordinary Losses, plus interest
expense, plus depletion, depreciation and amortization
expense, less the difference between Net Capital Expenditures
and Borrower's Excess Cash Flow for the immediately preceding
fiscal year, and less the lesser of (y) Borrower's actual tax
liability or (z) the actual amount of taxes paid in cash
(without giving effect to any refunds
2
received) by Holdings; to (ii) the sum of interest expense
payable in cash, plus scheduled payments on long term
indebtedness and capitalized leases, plus dividends paid to
Holdings other than for the payment of taxes by Holdings,
plus quarterly increases and less quarterly decreases by
Borrower in all intercompany loans to Holdings, including
payments in lieu of dividends to Holdings for the purposes of
paying Holdings senior note interest expense, consulting fees
to Xxxxx and preferred dividends to Xxxxx. For purposes of
calculating this ratio, the difference between Net Capital
Expenditures and Borrower's Excess Cash Flow for the
immediately preceding fiscal year may not be less than Three
Million Dollars ($3,000,000) in the aggregate in any four (4)
consecutive fiscal quarter period on a rolling four (4) quarter
basis beginning with the fiscal quarter ending December 31,
1994, and, beginning with the fiscal quarter ending
December 31, 1995, to less than Eight Million Dollars
($8,000,000) in the aggregate for any two (2) consecutive
twelve month periods; provided, however, that for the purpose
of this definition, dividends payable to Holdings for the
payment of interest on the Senior Notes shall be accrued on a
monthly basis and intercompany loans to Holdings for such
purposes shall be recognized on a monthly basis."
2.3 In Paragraph 1.1 of the Agreement, the following
definition is added:
" 'Letter of Credit Commitment' means (i) on
any date during the month of August of each calendar year
during the Availability Period, Twenty-Five Million Dollars
($25,000,000), and (ii) at all other times an amount equal to
the lesser of (A) Twenty-Five Million Dollars ($25,000,000)
and (B) the Construction Letter of Credit Sublimit plus an
amount (not less than Nineteen Million Dollars ($19,000,000))
equal to the amount of the letter of credit required at such
time under Borrower's worker's compensation insurance policy."
2.4 Subparagraph 2.1(a) of the Agreement is amended
and restated in full as follows:
"(a) The total of all advances outstanding
at any one time under the Revolving Facility, including those
advances under the Inventory Sublimit, may not exceed Fifteen
Million Dollars ($15,000,000)."
2.5 In Section 2.1(d) of the Agreement, the
phrase "Reference Rate plus three-quarters (0.75) of one percentage
point" is deleted and the phrase "Reference Rate plus one-half (0.5)
of one percentage point" is substituted in its stead.
2.6 Paragraph 2.2 of the Agreement is amended and
restated in full as follows:
3
"2.2 The Letter of Credit Facility. From
time to time during the Availability Period, Bank will create
and issue commercial and standby letters of credit for
Borrower's account. The total of the undrawn and the drawn
and unreimbursed amount of all commercial and standby letters
of credit outstanding at any time under the Letter of Credit
Facility, including the Construction Letter of Credit
Sublimit, may not exceed the Letter of Credit Commitment at
such time.
2.7 Subparagraph 2.4(a) of the Agreement is amended
and restated in full as follows:
"(a) The total of all advances
outstanding at any one time under the Inventory Sublimit may
not exceed Five Million Dollars ($5,000,000)."
2.8 In Section 2.4(d) of the Agreement, the
phrase "Reference Rate plus three quarters of one (.75) percentage
point" is deleted and the phrase "Reference Rate plus one-half (0.5)
of one percentage point" is substituted in its stead.
2.9 Reference is made to the Sixth Amendment and
Waiver to the Agreement (the "Sixth Amendment") referred to in the
first WHEREAS clause of this Amendment. Paragraph 2.17 of the Sixth
Amendment added a new provision to Paragraph 7.2 of the Agreement, and
designated this provision as "Subparagraph (f)." This provision is
hereby redesignated as Subparagraph (g) to Paragraph 7.2 of the
Agreement.
2.10 Subparagraph 7.2(a) of the Agreement is amended
and restated in full as follows:
"(a) Within ninety (90) days after the
end of each fiscal year, each of Holdings' and Borrower's
consolidated financial statements, consolidated profit and
loss statement, consolidated statements of cash flows and
reconciliation of capital accounts of Holdings and Borrower
for such fiscal year, all in reasonable detail and stating in
comparative form the figures as at the close and for the
previous fiscal year, audited by and with the unqualified
opinion of Ernst & Young or another certified public
accountant selected by Holdings and acceptable to Bank,
together with a Compliance Certificate."
2.11 Paragraph 7.5 of the Agreement is amended and
restated in full as follows:
"7.5 Tangible Net Worth. Maintain as of the
end of each fiscal quarter Tangible Net Worth of at least One
Hundred Forty-Five Million Dollars ($145,000,000) minus an
amount (not in excess of Twenty-Five Million Dollars
($25,000,000)) equal to the amount of any dividend paid by
Borrower as permitted under Subparagraph 7.12(e) of this
Agreement.
4
2.12 Subparagraph 7.8(a) of the Agreement is
amended and restated in full as follows:
"(a) Repay all advances outstanding under
the Revolving Facility (other than advances under the
Inventory Sublimit) and not draw any new advances (other than
under the Inventory Sublimit in accordance with Subparagraph
(b) below) for a period of at least five (5) calendar days,
which days do not need to be consecutive, in each calendar
month other than March and September during the Availability
Period."
2.13 Subparagraph 7.9(f) of the Agreement is
amended by deleting the phrase "the real property constructed,
acquired or refinanced during such period" where it appears at the end
of such Subparagraph, and by substituting in its place the phrase
"real property of Borrower."
2.14 Paragraph 7.12 of the Agreement is amended
by (i) deleting the word "or" at the end of Subparagraph 7.12(c), (ii)
adding the word "or" to the end of Subparagraph 7.12(d), (iii)
deleting the phrase "(a), (b), (c) and (d)" where it appears in the
last paragraph of Paragraph 7.12 and substituting in its stead the
phrase "(a), (b), (c), (d) and (e)", and (iv) adding the following as
Subparagraph 7.12(e):
"(e) a single dividend to Holdings of up
to Twenty-Five Million Dollars ($25,000,000) for the purchase
by Holdings of a portion of its preferred stock held by Xxxxx
Corporation if, and only if, (i) no Default or Event of
Default has occurred and is continuing, (ii) the holders of
the Notes have approved the payment of such dividend and have
waived the violation of any affected terms and conditions of
the Indenture as provided in Section 9.02 of the Indenture,
and (iii) Bank in its sole discretion has approved a plan by
Holdings for the purchase and redemption by Holdings of all of
the remaining stock of Holdings held by Xxxxx Corporation."
2.15 Paragraph 6 of Exhibit A to the Agreement is
amended by adding the following to the end of such Paragraph:
"The calculations set forth in Exhibit "B" to
this Certificate shall include, without limitation, the
calculation of Fixed Charge Coverage Ratio for the four fiscal
quarters of Borrower immediately prior to the current fiscal
quarter of Borrower."
5
3. Effect of Amendment. Except as specifically amended
above, the Agreement shall remain in full force and effect and is hereby
ratified and confirmed.
IN WITNESS WHEREOF, this Amendment has been executed by the
parties hereto as of the date first above written.
STATER BROS. MARKET BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:__________________________ By:
-----------------------------------------
Xxxx X. Xxxxx, Chairman, X. X. Xxxxxxxxxxx, Vice President and
President & CEO Commercial Banking Manager
By: -------------------------- By: _________________________________________
Xxxxx X. Xxxxxx, Secretary Xxxx X. XxXxxxx, Vice President
