Village Super Market, Inc.
$30,000,000
8.12% Senior Notes due September 16, 2009
Note Purchase Agreement
DATED AS OF SEPTEMBER 1, 1999
Village Super Market, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxx Xxxxxx 00000
8.12% Senior Notes due September 16, 2009
Dated as of September 1, 1999
TO THE PURCHASER LISTED IN THE ATTACHED
SCHEDULE A WHO IS A SIGNATORY HERETO:
Ladies and Gentlemen:
VILLAGE SUPER MARKET, INC., a New Jersey corporation
(the "Company"), agrees with you as follows:
Section 1. Authorization of Notes
The Company will authorize the issue and sale of $30,000,000
aggregate principal amount of its 8.12% Senior Notes due
September 16, 2009 (the "Notes", such term to include any
such notes issued in substitution therefor pursuant to
Section 13 of this Agreement or the Other Agreements (as
hereinafter defined). The Notes shall be substantially in
the form set out in Exhibit 1, with such changes therefrom,
if any, as may be approved by you and the Company.
Certain capitalized terms used in this Agreement are
defined in Schedule B; references to a "Schedule" or an
"Exhibit" are, unless otherwise specified, to a Schedule
or an Exhibit attached to this Agreement.
Section 2. Sale and Purchase of Notes.
Subject to the terms and conditions of this Agreement, the
Company will issue and sell to you and you will purchase from
the Company, at the Closing provided for in Section 3, Notes
in the principal amount specified opposite your name in
Schedule A at the purchase price of 100% of the principal amount
thereof. Contemporaneously with entering into this Agreement,
the Company is entering into separate Note Purchase Agreements
(the "Other Agreements") identical with this Agreement with each
of the other purchasers named in Schedule A (the "Other
Purchasers"), providing for the sale at such Closing to each of
the Other Purchasers of Notes in the principal amount specified
opposite its name in Schedule A. Your obligation hereunder, and
the obligations of the Other Purchasers under the Other Agreements,
are several and not joint obligations, and you shall have no
obligation under any Other Agreement and no liability to any
Person for the performance or nonperformance by any Other
Purchaser thereunder.
Section 3. Closing.
The sale and purchase of the Notes to be purchased by you and the
Other Purchasers shall occur at the offices of Xxxxxxx and Xxxxxx,
000 X. Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, at 10:00 A.M. Chicago
time, at a closing (the "Closing") on September 16, 1999. At the
Closing the Company will deliver to you the Notes to be purchased
by you in the form of a single Note (or such greater number of Notes
in denominations of at least $100,000 as you may request) dated the
date of the Closing and registered in your name (or in the name of
your nominee), against delivery by you to the Company or its order
of immediately available funds in the amount of the purchase price therefor by
wire transfer of immediately available funds for the account of the Company to
account number 2100015573297 at First
Union National Bank, Summit, NJ 07091, ABA No. 000000000. If at
the Closing the Company shall fail to tender such Notes to you as
provided above in this Section 3, or any of the conditions specified
in Section 4 shall not have been fulfilled to your satisfaction, you shall, at
your election, be relieved of all further obligations under this Agreement,
without thereby waiving any rights you may have by reason of such failure or
such nonfulfillment.
Section 4. Conditions to Closing.
Your obligation to purchase and pay for the Notes to be sold to you at the
Closing is subject to the fulfillment to your satisfaction, prior to or at the
Closing, of the following conditions:
Section 4.1. Representations and Warranties. The representations and
warranties of the Company in this Agreement shall be correct when made and at
the time of the Closing.
Section 4.2. Performance; No Default.; The Company shall have performed and
complied with all agreements and conditions contained in this Agreement required
to be performed or complied with by it prior to or at the Closing, and after
giving effect to the
issue and sale of the Notes (and the application of the proceeds thereof as
contemplated by Schedule 5.14), no Default or Event of Default shall have
occurred and be continuing. Neither the Company
nor any Subsidiary shall have entered into any transaction since the date of the
Memorandum that would have been prohibited by Sections
10.1 through 10.5 hereof had such Sections applied since such date.
Section 4.3. Compliance Certificates.
(a) Officer's Certificate. The Company shall have delivered to you
an Officer's Certificate, dated the date of the Closing, certifying that the
conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.
(b) Secretary's Certificate. The Company shall have delivered to you a
certificate certifying as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery of
the Notes and the Agreements.
Section 4.4. Opinions of Counsel. You shall have received opinions
in form and substance satisfactory to you, dated the date of the Closing (a)
from Xxxxx Xxxxx, Esq., General Counsel of the Company, covering the matters set
forth in Exhibit 4.4(a) and covering such other matters incident to the
transactions contemplated hereby as you or your counsel may reasonably request
(and the Company hereby instructs its counsel to deliver such opinion to you)
and (b) from Xxxxxxx and Xxxxxx, your special counsel in connection with such
transactions, substantially in the form set forth in Exhibit 4.4(b)
and covering such other matters incident to such transactions as you may
reasonably request.
Section 4.5. Purchase Permitted By Applicable Law, Etc. On the date of the
Closing your purchase of Notes shall (a) be permitted by the laws and
regulations of each jurisdiction to which you are subject, without recourse to
provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting
limited investments by insurance companies without restriction as to the
character of the particular investment, (b) not violate any applicable law or
regulation (including, without limitation, Regulation T, U or X of the Board of
Governors of the Federal Reserve System) and (c) not subject you to
any tax, penalty or liability under or pursuant to any applicable law or
regulation, which law or regulation was not in effect on the date hereof. If
requested by you, you shall have received an Officer's Certificate certifying as
to such matters of fact as you may
reasonably specify to enable you to determine whether such purchase
is so permitted.
Section 4.6. Sale of Other Notes. Contemporaneously with the Closing, the
Company shall sell to the Other Purchasers, and the Other Purchasers shall
purchase, the Notes to be purchased by them at the Closing as specified in
Schedule A.
Section 4.7. Payment of Special Counsel Fees. Without limiting the provisions
of Section 15.1, the Company shall have paid on or before the Closing the fees,
charges and disbursements of your special counsel referred to in Section 4.4 to
the extent reflected in a statement of such counsel rendered to the Company at
least one Business Day prior to the Closing.
Section 4.8. Private Placement Number. A Private Placement Number issued by
Standard & Poor's CUSIP Service Bureau (in cooperation with the Securities
Valuation Office of the National Association of Insurance Commissioners) shall
have been obtained for the Notes.
Section 4.9. Changes in Corporate Structure. Except as specified in Schedule
4.9, the Company shall not have changed its jurisdiction of incorporation or
been a party to any merger or consolidation and shall not have succeeded to all
or any substantial part of the liabilities of any other entity, at any time
following the date of the most recent financial statements referred to in
Schedule 5.5.
Section 4.10. Funding Instructions. At least three Business Days prior to the
date of the Closing, you shall have received written instructions executed by a
Responsible Officer of the Company directing the manner of the payment of funds
and setting forth (i) the name and address of the transferee bank, (ii) such
transferee bank's ABA number, (iii) the account name and number into which the
purchase price for the Notes is to be deposited, and (iv) the name and telephone
number of the account representative responsible for verifying receipt of
such funds.
Section 4.11. Year 2000 Compliance Certificate. The Company shall have
delivered to you a certificate in the form required by the Securities Valuation
Office of the National Association of Insurance Commissions addressing in
reasonable detail the extent to which the computer applications used by the
Company or any of its Subsidiaries are able to recognize and perform properly
date-sensitive functions involving dates prior to and after December 31, 1999.
Section 4.12. Related Transactions. (a) Concurrently with delivery
of the Notes to you on the date of the Closing, the Company shall
apply the requisite portion of the proceeds from the sale of the
Notes to the repayment in full of the Company's obligations under the Existing
Loan Agreement and you shall receive from the Company documentation evidencing
such payment and release of all Liens
securing such obligations in form and substance satisfactory to you
and your special counsel.
(b) Prior to the Closing, you shall have received a true, correct
and complete copy of the Loan Agreement which is to be entered into
by the Company on the date of the Closing and such Loan Agreement
shall be satisfactory in form and substance to you and your special counsel.
(c) Concurrently with the delivery of the Notes to you on the date
of the Closing, the Company shall enter into the Loan Agreement in the form
provided to the you and your special counsel.
Section 4.13. Proceedings and Documents. All corporate and other proceedings
in connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be satisfactory to
you and your special counsel,
and you and your special counsel shall have received all such counterpart
originals or certified or other copies of such documents
as you or they may reasonably request.
Section 5. Representations and Warranties of the Company.
The Company represents and warrants to you that:
Section 5.1. Organization; Power and Authority. The Company is a corporation
duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation, and is duly qualified as a
foreign corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other
than those jurisdictions as to which the failure to be so qualified or in good
standing could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. The Company has the corporate power and
authority to own or hold under lease the properties it purports to own or hold
under lease, to transact the business it transacts and proposes to transact, to
execute and deliver this Agreement and the Other Agreements and the Notes and to
perform the provisions hereof and thereof.
Section 5.2. Authorization, Etc. This Agreement, the Other Agreements and the
Notes have been duly authorized by all necessary corporate action on the part of
the Company, and this Agreement constitutes, and upon execution and delivery
thereof each Note will constitute, a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except as
such enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (b) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
Section 5.3. Disclosure. The Company, through its agent, First Union Capital
Markets Corp., has delivered to you and each Other Purchaser a copy of a Private
Placement Memorandum, dated July 1999 (the "Memorandum"), relating to the
transactions contemplated hereby. The Memorandum fairly describes, in all
material respects, the general nature of the business and principal properties
of the Company and its Subsidiaries. Except as disclosed in Schedule 5.3, and
except with respect to financial projections and forecasts, this Agreement, the
Memorandum, the documents, certificates or other writings delivered to you by or
on behalf of the Company in connection with the transactions contemplated hereby
and the financial statements listed in Schedule 5.5, taken as a whole, do not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading in light of the
circumstances under which they were made. No representation is made as to the
projections provided with the disclosure material other than that the
projections are based on information that the Company believes to be accurate
and were calculated in a manner the Company believes to be reasonable. Except
as disclosed in the Memorandum or as expressly described in Schedule 5.3, or in
one of the documents, certificates or other writings identified therein, or in
the financial statements listed in Schedule 5.5, since July 31, 1998, there has
been no change in the financial condition, operations, business, properties or
prospects of the Company or any Subsidiary except changes that individually or
in the aggregate could not reasonably be expected to have a Material Adverse
Effect. There is no fact known to the Company that could reasonably be expected
to have a Material Adverse Effect that has not been set forth herein or in the
Memorandum or in the other documents, certificates and other writings delivered
to you by or on behalf of the Company specifically for use in connection with
the transactions contemplated hereby.
Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates;.
(a) Schedule 5.4 contains (except as noted therein) complete and correct lists
(i) of the Company's Subsidiaries, showing, as to each Subsidiary, the correct
name thereof, the jurisdiction of its organization, and the percentage of shares
of each class of its capital stock or similar equity interests outstanding owned
by the Company and each other Subsidiary, (ii) of the Company's Affiliates,
other than Subsidiaries, and (iii) of the Company's directors and senior
officers.
(b) All of the outstanding shares of capital stock or similar equity interests
of each Subsidiary shown in Schedule 5.4 as being owned by the Company and its
Subsidiaries have been validly issued, are fully paid and nonassessable and are
owned by the Company or another Subsidiary free and clear of any Lien (except as
otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation or other legal
entity duly organized, validly existing and in good standing under the laws of
its jurisdiction of organization, and is duly qualified as a foreign corporation
or other legal entity and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Each such
Subsidiary has the corporate or other power and authority to own or hold under
lease the properties it purports to own or hold under lease and to transact the
business it transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to, any legal
restriction or any agreement (other than this Agreement, the agreements listed
on Schedule 5.4 and customary limitations imposed by corporate law statutes)
restricting the ability of such Subsidiary to pay dividends out of profits or
make any other similar distributions of profits to the Company or any of its
Subsidiaries that owns outstanding shares of capital stock or similar equity
interests of such Subsidiary.
Section 5.5. Financial Statements. The Company has delivered to each Purchaser
copies of the financial statements of the Company and its Subsidiaries listed on
Schedule 5.5. All of said financial statements (including in each case the
related schedules and notes) fairly present in all material respects the
consolidated financial position of the Company and its Subsidiaries as of the
respective dates specified in such financial statements and the consolidated
results of their operations and cash flows for the respective periods so
specified and have been prepared in accordance with GAAP consistently applied
throughout the periods involved except as set forth in the notes thereto
(subject, in the case of any interim financial statements, to normal year-end
adjustments).
Section 5.6. Compliance with Laws, Other Instruments, Etc. The execution,
delivery and performance by the Company of this Agreement and the Notes will not
(a) contravene, result in any breach of, or constitute a default under, or
result in the creation of any Lien in respect of any property of the Company or
any Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or
credit agreement, lease, corporate charter or by-laws, or any other agreement or
instrument to which the Company or any Subsidiary is bound or by which the
Company or any Subsidiary or any of their respective properties may be bound or
affected, (b) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Company or any Subsidiary
or (c) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Subsidiary.
Section 5.7. Governmental Authorizations, Etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company of this Agreement or the Notes.
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders. (a)
Except as disclosed on Schedule 5.8, there are no actions, suits or proceedings
pending or, to the knowledge of the Company, threatened against or affecting the
Company or any Subsidiary or any property of the Company or any Subsidiary in
any court or before any arbitrator of any kind or before or by any Governmental
Authority that, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any term of any
agreement or instrument to which it is a party or by which it is bound, or any
order, judgment, decree or ruling of any court, arbitrator or Governmental
Authority or is in violation of any applicable law, ordinance, rule or
regulation (including without limitation Environmental Laws) of any Governmental
Authority, which default or violation, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
Section 5.9. Taxes. The Company and its Subsidiaries have filed all tax
returns that are required to have been filed in any jurisdiction, and have paid
all taxes shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent, except for any taxes and assessments (a) the amount
of which is not individually or in the aggregate Material or (b) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company or a Subsidiary,
as the case may be, has established adequate reserves in accordance with GAAP.
The Company knows of no basis for any other tax or assessment that could
reasonably be expected to have a Material Adverse Effect. The charges, accruals
and reserves on the books of the Company and its Subsidiaries in respect of
Federal, state or other taxes for all fiscal periods are adequate. The Federal
income tax liabilities of the Company and its Subsidiaries have been determined
by the Internal Revenue Service and paid for all fiscal years up to and
including the fiscal year ended July 31, 1995.
Section 5.10. Title to Property; Leases. The Company and its Subsidiaries have
good and sufficient title to their respective properties that individually or in
the aggregate are Material, including all such properties reflected in the most
recent audited balance sheet referred to in Section 5.5 or purported to have
been acquired by the Company or any Subsidiary after said date (except as sold
or otherwise disposed of in the ordinary course of business), in each case free
and clear of Liens prohibited by this Agreement. All leases that individually
or in the aggregate are Material are valid and subsisting and are in full force
and effect in all material respects.
Section 5.11. Licenses, Permits, Etc. Except as disclosed in Schedule 5.11,
(a) the Company and its Subsidiaries own or possess all licenses, permits,
franchises, authorizations, patents, copyrights, service marks, trademarks and
trade names, or rights thereto, that individually or in the aggregate are
Material, without known conflict with the rights of others;
(b) to the best knowledge of the Company, no product of the Company infringes
in any Material respect any license, permit, franchise, authorization, patent,
copyright, service xxxx, trademark, trade name or other right owned by any other
Person; and
(c) to the best knowledge of the Company, there is no Material violation by
any Person of any right of the Company or any of its Subsidiaries with respect
to any patent, copyright, service xxxx, trademark, trade name or other right
owned or used by the Company or any of its Subsidiaries.
Section 5.12. Compliance with ERISA. (a) The Company and each ERISA Affiliate
have operated and administered each Plan in compliance with all applicable laws
except for such instances of noncompliance as have not resulted in and could not
reasonably be expected to result in a Material Adverse Effect. Neither the
Company nor any ERISA Affiliate has incurred any liability pursuant to Title I
or IV of ERISA or the penalty or excise tax provisions of the Code relating to
employee benefit plans (as defined in Section 3 of ERISA), and no event,
transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the Company or any
ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to Section 401(a)(29) or 412 of the Code, other than such liabilities or
Liens as would not be individually or in the aggregate Material.
The present value of the aggregate benefit liabilities under each of the
Plans (other than Multiemployer Plans), determined as of the end of such Plan's
most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities by more than $669,000 in the case of any
single Plan and by more than $1,417,000 in the aggregate for all Plans. The
term "benefit liabilities" has the meaning specified in Section 4001 of ERISA
and the terms "current value" and "present value" have the meaning specified in
Section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
Section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
(d) The expected post-retirement benefit obligation (determined as of the
last day of the Company's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by Section 4980B of
the Code) of the Company and its Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the issuance and sale of
the Notes hereunder will not involve any transaction that is subject to the
prohibitions of Section 406 of ERISA or in connection with which a tax could be
imposed pursuant to Section 4975(c)(1)(A)-(D) of the Code. The representation
by the Company in the first sentence of this Section 5.12(e) is made in reliance
upon and subject to the accuracy of your representation in Section 6.2 as to the
sources of the funds used to pay the purchase price of the Notes to be purchased
by you.
Section 5.13. Private Offering by the Company. Neither the Company nor anyone
acting on its behalf has offered the Notes or any similar securities for sale
to, or solicited any offer to buy any of the same from, or otherwise approached
or negotiated in respect thereof with, any Person other than you, the Other
Purchasers and not more than 35 other Institutional Investors, each of which has
been offered the Notes at a private sale for investment. Neither the Company
nor anyone acting on its behalf has taken, or will take, any action that would
subject the issuance or sale of the Notes to the registration requirements of
Section 5 of the Securities Act.
Section 5.14. Use of Proceeds; Margin Regulations. The Company will apply the
proceeds of the sale of the Notes as set forth in Schedule 5.14. No part of the
proceeds from the sale of the Notes hereunder will be used, directly or
indirectly, for the purpose of buying or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
(12 CFR 221), or for the purpose of buying or carrying or trading in any
securities under such circumstances as to involve the Company in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation of Regulation T of said Board (12 CFR 220). Margin stock does not
constitute more than 2% of the value of the consolidated assets of the Company
and its Subsidiaries and the Company does not have any present intention that
margin stock will constitute more than 2% of the value of such assets. As used
in this Section, the terms "margin stock" and "purpose of buying or carrying"
shall have the meanings assigned to them in said Regulation U.
Section 5.15. Existing Indebtedness; Future Liens;. (a) Schedule 5.15 sets
forth a complete and correct list of all outstanding Indebtedness of the Company
and its Subsidiaries as of the date of the Closing. Neither the Company nor any
Subsidiary is in default and no waiver of default is currently in effect, in the
payment of any principal or interest on any Indebtedness of the Company or such
Subsidiary and no event or condition exists with respect to any Indebtedness of
the Company or any Subsidiary that would permit (or that with notice or the
lapse of time, or both, would permit) one or more Persons to cause such
Indebtedness to become due and payable before its stated maturity or before its
regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Company nor any
Subsidiary has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its property, whether now owned
or hereafter acquired, to be subject to a Lien not permitted by Section 10.4.
Section 5.16. Foreign Assets Control Regulations, Etc. Neither the sale of the
Notes by the Company hereunder nor its use of the proceeds thereof will violate
the Trading with the Enemy Act, as amended, or any of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) or any enabling legislation or executive order relating
thereto.
Section 5.17. Status under Certain Statutes. Neither the Company nor any
Subsidiary is an "investment company" registered or required to be registered
subject to regulation under the Investment Company Act of 1940, as amended, or
is subject to regulation under the Public Utility Holding Company Act of 1935,
as amended, the ICC Termination Act of 1995, as amended, or the Federal Power
Act, as amended.
Section 5.18. Notes Rank Pari Passu. The obligations of the Company under this
Agreement and the Notes rank at least pari passu in right of payment with all
other senior unsecured Indebtedness (actual or contingent) of the Company,
including, without limitation, all senior unsecured Indebtedness of the Company
described in Schedule 5.15 hereto.
Section 5.19. Environmental Matters. Neither the Company nor any Subsidiary
has knowledge of any claim or has received any notice of any claim, and no
proceeding has been instituted raising any claim against the Company or any of
its Subsidiaries or any of their respective real properties now or formerly
owned, leased or operated by any of them or other assets, alleging any damage to
the environment or violation of any Environmental Laws, except, in each case,
such as could not reasonably be expected to result in a Material Adverse Effect.
Except as otherwise disclosed to you in writing:
(a) neither the Company nor any Subsidiary has knowledge of any facts which
would give rise to any claim, public or private, of violation of Environmental
Laws or damage to the environment emanating from, occurring on or in any way
related to real properties now or formerly owned, leased or operated by any of
them or to other assets or their use, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has stored any Hazardous
Materials on real properties now or formerly owned, leased or operated by any of
them or has disposed of any Hazardous Materials in a manner contrary to any
Environmental Laws in each case in any manner that could reasonably be expected
to result in a Material Adverse Effect; and
(c) all buildings on all real properties now owned, leased or operated by the
Company or any of its Subsidiaries are in compliance with applicable
Environmental Laws, except where failure to comply could not reasonably be
expected to result in a Material Adverse Effect.
Section 5.20. Wakefern Cooperative. The Company is a member in good standing
of the Wakefern cooperative, has duly performed all of its duties and
obligations as a member of the Wakefern cooperative and has the right to use the
"Shop-Rite" name and trademark. No claim is pending or, to the best knowledge
of the Company, threatened asserting any breach of any such duties or
obligations or seeking to limit or curtail the Company's right to use such name
or trademark.
Section 6. Representations of the Purchaser.
Section 6.1. Purchase for Investment. You represent that you are purchasing
the Notes for your own account or for one or more separate accounts maintained
by you or for the account of one or more pension or trust funds and not with a
view to the distribution thereof; provided that the disposition of your or their
property shall at all times be within your or their control. You understand
that the Notes have not been registered under the Securities Act and may be
resold only if registered pursuant to the provisions of the Securities Act or if
an exemption from registration is available, except under circumstances where
neither such registration nor such an exemption is required by law, and that the
Company is not required to register the Notes.
Section 6.2. Source of Funds. You represent that at least one of the following
statements is an accurate representation as to each source of funds (a "Source")
to be used by you to pay the purchase price of the Notes to be purchased by you
hereunder:
(a) the Source is an "insurance company general account" within the meaning of
Department of Labor Prohibited Transaction Exemption ("PTE") 95-60 (issued July
12, 1995) and there is no employee benefit plan, treating as a single plan, all
plans maintained by the same employer or employee organization, with respect to
which the amount of the general account reserves and liabilities for all
contracts held by or on behalf of such plan, exceed ten percent (10%) of the
total reserves and liabilities of such general account (exclusive of separate
account liabilities) plus surplus, as set forth in the NAIC Annual Statement
filed with your state of domicile; or
(b) the Source is either (i) an insurance company pooled separate account,
within the meaning of PTE 90-1 (issued January 29, 1990), or (ii) a bank
collective investment fund, within the meaning of the PTE 91-38 (issued July 12,
1991) and, except as you have disclosed to the Company in writing pursuant to
this paragraph (b), no employee benefit plan or group of plans maintained by the
same employer or employee organization beneficially owns more than 10% of all
assets allocated to such pooled separate account or collective investment
fund; or
(c) the Source constitutes assets of an "investment fund" (within the meaning
of Part V of the QPAM Exemption) managed by a "qualified professional asset
manager" or "QPAM" (within the meaning of Part V of the QPAM Exemption), no
employee benefit plan's assets that are included in such investment fund, when
combined with the assets of all other employee benefit plans established or
maintained by the same employer or by an affiliate (within the meaning of
Section V(c)(1) of the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client assets
managed by such QPAM, the conditions of Part l(c) and (g) of the QPAM Exemption
are satisfied, neither the QPAM nor a Person controlling or controlled by the
QPAM (applying the definition of "control" in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Company and (i) the identity of
such QPAM and (ii) the names of all employee benefit plans whose assets are
included in such investment fund have been disclosed to the Company in writing
pursuant to this paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a separate account or
trust fund comprised of one or more employee benefit plans, each of which has
been identified to the Company in writing pursuant to this paragraph (e); or
(f) the Source does not include assets of any employee benefit plan, other
than a plan exempt from the coverage of ERISA.
As used in this Section 6.2, the terms "employee benefit plan", "governmental
plan", "party in interest" and "separate account" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.
Section 7. Information as to the Company.
Section 7.1. Financial and Business Information. The Company shall deliver to
each holder of Notes that is an Institutional Investor:
(a) Quarterly Statements - within 60 days after the end of each quarterly
fiscal period in each fiscal year of the Company (other than the last quarterly
fiscal period of each such fiscal year), duplicate copies of:
(i) a consolidated balance sheet of the Company and its Subsidiaries as at
the end of such quarter, and
(ii) consolidated statements of income, changes in shareholders' equity and
cash flows of the Company and its Subsidiaries for such quarter and (in the case
of the second and third quarters) for the portion of the fiscal year ending with
such quarter,
setting forth in each case in comparative form the figures for the corresponding
periods in the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to quarterly financial statements generally, and
certified by a Senior Financial Officer as fairly presenting, in all material
respects, the financial position of the companies being reported on and their
results of operations and cash flows, subject to changes resulting from year-end
adjustments; provided that delivery within the time period specified above of
copies of the Company's Quarterly Report on Form 10-Q prepared in compliance
with the requirements therefor and filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of this Section 7.1(a),
so long as such quarterly financial statements reflect the financial information
described in the foregoing clauses (a)(i) and (ii) for the fiscal quarter to
which any such filing relates;
(b) Annual Statements - within 105 days after the end of each fiscal year of
the Company, duplicate copies of,
(i) a consolidated balance sheet of the Company and its Subsidiaries, as at
as the end of such year, and
(ii) consolidated statements of income, changes in shareholders' equity and
cash flows of the Company and its Subsidiaries, for such year, setting forth in
each case in comparative form the figures for the previous fiscal year, all in
reasonable detail, prepared in accordance with GAAP, and accompanied by:
(1) an opinion thereon of independent certified public accountants of
recognized national standing, which opinion shall state that such financial
statements present fairly, in all material respects, the financial position of
the companies being reported upon and their results of operations and cash flows
and have been prepared in conformity with GAAP, and that the examination of such
accountants in connection with such financial statements has been made in
accordance with generally accepted auditing standards, and that such audit
provides a reasonable basis for such opinion in the circumstances, and
(2) a certificate of such accountants stating that they have reviewed this
Agreement and stating further whether, in making their audit, they have become
aware of any condition or event that then constitutes a Default or an Event of
Default, and, if they are aware that any such condition or event then exists,
specifying the nature and period of the existence thereof (it being understood
that such accountants shall not be liable, directly or indirectly, for any
failure to obtain knowledge of any Default or Event of Default unless such
accountants should have obtained knowledge thereof in making an audit in
accordance with generally accepted auditing standards or did not make such an
audit),
provided that the delivery within the time period specified above of the
Company's Annual Report on Form 10-K for such fiscal year (together with the
Company's annual report to shareholders, if any, prepared pursuant to Rule 14a-3
under the Exchange Act) prepared in accordance with the requirements therefor
and filed with the Securities and Exchange Commission, together with the
accountant's certificate described in clause (2) above, shall be deemed to
satisfy the requirements of this Section 7.1(b), so long as such annual reports
contain the financial information described in the foregoing clauses (b)(i) and
(ii) for the fiscal year to which they relate and are accompanied by the reports
of the Company's independent public accountants referred to in this Section
7.1(b);
(c) SEC and Other Reports - promptly upon their becoming available, one copy
of (i) each financial statement, report, notice or proxy statement sent by the
Company or any Subsidiary to public securities holders generally, and (ii) each
regular or periodic report, each registration statement (without exhibits except
as expressly requested by such holder), and each prospectus and all amendments
thereto filed by the Company or any Subsidiary with the Securities and Exchange
Commission and of all press releases and other statements made available
generally by the Company or any Subsidiary to the public concerning developments
that are Material;
(d) Notice of Default or Event of Default - promptly, and in any event within
five days after a Responsible Officer becoming aware of the existence of any
Default or Event of Default or that any Person has given any notice or taken any
action with respect to a claimed default hereunder or that any Person has given
any notice or taken any action with respect to a claimed default of the type
referred to in Section 11(f), a written notice specifying the nature and period
of existence thereof and what action the Company is taking or proposes to take
with respect thereto;
(e) ERISA Matters - promptly, and in any event within five days after a
Responsible Officer becoming aware of any of the following, a written notice
setting forth the nature thereof and the action, if any, that the Company or an
ERISA Affiliate proposes to take with respect thereto:
(i) with respect to any Plan, any reportable event, as defined in Section
4043(b) of ERISA and the regulations thereunder, for which notice thereof has
not been waived pursuant to such regulations as in effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or the threatening by the
PBGC of the institution of, proceedings under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by the PBGC with respect to such
Multiemployer Plan; or
(iii) any event, transaction or condition that could result in the incurrence
of any liability by the Company or any ERISA Affiliate pursuant to Title I or IV
of ERISA or the penalty or excise tax provisions of the Code relating to
employee benefit plans, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate pursuant to Title I
or IV of ERISA or such penalty or excise tax provisions, if such liability or
Lien, taken together with any other such liabilities or Liens then existing,
could reasonably be expected to have a Material Adverse Effect;
(f) Notices from Governmental Authority - promptly, and in any event within 30
days of receipt thereof, copies of any notice to the Company or any Subsidiary
from any Federal or state Governmental Authority relating to any order, ruling,
statute or other law or regulation that could reasonably be expected to have a
Material Adverse Effect; and
(g) Requested Information - with reasonable promptness, such other data and
information relating to the business, operations, affairs, financial condition,
assets or properties of the Company or any of its Subsidiaries or relating to
the ability of the Company to perform its obligations hereunder and under the
Notes as from time to time may be reasonably requested by any such holder of
Notes, including without limitation, such information as is required by SEC Rule
144A under the Securities Act to be delivered to the prospective transferee of
the Notes.
Section 7.2. Officer's Certificate. Each set of financial statements delivered
to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b) hereof shall
be accompanied by a certificate of a Senior Financial Officer setting forth:
(a) Covenant Compliance - the information (including detailed calculations)
required in order to establish whether the Company was in compliance with the
requirements of Section 10.1 through Section 10.5 hereof, inclusive, during the
quarterly or annual period covered by the statements then being furnished
(including with respect to each such Section, where applicable, the calculations
of the maximum or minimum amount, ratio or percentage, as the case may be,
permissible under the terms of such Sections, and the calculation of the amount,
ratio or percentage then in existence); and
(b) Event of Default - a statement that such officer has reviewed the relevant
terms hereof and has made, or caused to be made, under his or her supervision, a
review of the transactions and conditions of the Company and its Subsidiaries
from the beginning of the quarterly or annual period covered by the statements
then being furnished to the date of the certificate and that such review shall
not have disclosed the existence during such period of any condition or event
that constitutes a Default or an Event of Default or, if any such condition or
event existed or exists (including, without limitation, any such event or
condition resulting from the failure of the Company or any Subsidiary to comply
with any Environmental Law), specifying the nature and period of existence
thereof and what action the Company shall have taken or proposes to take with
respect thereto.
Section 7.3. Inspection. The Company shall permit the representatives of each
holder of Notes that is an Institutional Investor:
(a) No Default - if no Default or Event of Default then exists, at the expense
of such holder and upon reasonable prior notice to the Company, to visit the
principal executive office of the Company, to discuss the affairs, finances and
accounts of the Company and its Subsidiaries with the Company's officers, and
(with the consent of the Company, which consent will not be unreasonably
withheld) its independent public accountants, and (with the consent of the
Company, which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each Subsidiary, all at such
reasonable times and as often as may be reasonably requested in writing; and
(b) Default - if a Default or Event of Default then exists, at the expense of
the Company, to visit and inspect any of the offices or properties of the
Company or any Subsidiary, to examine all their respective books of account,
records, reports and other papers, to make copies and extracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
officers and independent public accountants (and by this provision the Company
authorizes said accountants to discuss the affairs, finances and accounts of the
Company and its Subsidiaries), all at such times and as often as may be
requested.
Section 8. Prepayment of the Notes.
Section 8.1. Required Prepayments. On September 16, 2003 and on each September
16 thereafter to and including September 16, 2009 the Company will prepay
$4,285,714.29 principal amount (or such lesser principal amount as shall then be
outstanding) of the Notes at par and without payment of the Make-Whole Amount or
any premium; provided that upon any partial prepayment of the Notes pursuant to
Section 8.2 or purchase of the Notes permitted by Section 8.6 the principal
amount of each required prepayment of the Notes becoming due under this Section
8.1 on and after the date of such prepayment or purchase shall be reduced in the
same proportion as the aggregate unpaid principal amount of the Notes is reduced
as a result of such prepayment or purchase.
Section 8.2. Optional Prepayments with Make-Whole Amount. The Company may, at
its option, upon notice as provided below, prepay at any time (but only on a
Business Day) all, or from time to time any part of, the Notes, in an amount not
less than 10% of the aggregate principal amount of the Notes then outstanding in
the case of a partial prepayment, at 100% of the principal amount so prepaid,
together with interest accrued thereon to the date of such prepayment, plus the
Make-Whole Amount determined for the prepayment date with respect to such
principal amount. The Company will give each holder of Notes written notice of
each optional prepayment under this Section 8.2 not less than 30 days and not
more than 60 days prior to the date fixed for such prepayment. Each such notice
shall specify such date (which must be a Business Day), the aggregate principal
amount of the Notes to be prepaid on such date, the principal amount of each
Note held by such holder to be prepaid (determined in accordance with Section
8.4), and the interest to be paid on the prepayment date with respect to such
principal amount being prepaid, and shall be accompanied by a certificate of a
Senior Financial Officer as to the estimated Make-Whole Amount due in connection
with such prepayment (calculated as if the date of such notice were the date of
the prepayment), setting forth the details of such computation. Two Business
Days prior to such prepayment, the Company shall deliver to each holder of Notes
a certificate of a Senior Financial Officer specifying the calculation of such
Make-Whole Amount as of the specified prepayment date.
Section 8.3. Change in Control. (a) Notice of Change in Control or Control
Event. The Company will, within five Business Days after any Responsible
Officer has knowledge of the occurrence of any Change in Control or Control
Event, give written notice of such Change in Control or Control Event to each
holder of Notes unless notice in respect of such Change in Control (or the
Change in Control contemplated by such Control Event) shall have been given
pursuant to subparagraph (b) of this Section 8.3. If a Change in Control has
occurred, such notice shall contain and constitute an offer to prepay Notes as
described in subparagraph (c) of this Section 8.3 and shall be accompanied by
the certificate described in subparagraph (g) of this Section 8.3.
(b) Condition to Company Action. The Company will not take any action that
consummates or finalizes a Change in Control unless (i) at least 30 days prior
to such action it shall have given to each holder of Notes written notice
containing and constituting an offer to prepay Notes as described in
subparagraph (c) of this Section 8.3, accompanied by the certificate described
in subparagraph (g) of this Section 8.3, and (ii) contemporaneously with such
action, it prepays all Notes required to be prepaid in accordance with this
Section 8.3.
(c) Offer to Prepay Notes. The offer to prepay Notes contemplated by
subparagraphs (a) and (b) of this Section 8.3 shall be an offer to prepay, in
accordance with and subject to this Section 8.3, all, but not less than all, the
Notes held by each holder (in this case only, "holder" in respect of any Note
registered in the name of a nominee for a disclosed beneficial owner shall mean
such beneficial owner) on a date specified in such offer (the "Proposed
Prepayment Date"). If such Proposed Prepayment Date is in connection with an
offer contemplated by subparagraph (a) of this Section 8.3, such date shall be
not less than 30 days and not more than 120 days after the date of such offer
(if the Proposed Prepayment Date shall not be specified in such offer, the
Proposed Prepayment Date shall be the first Business Day after the 45th day
after the date of such offer).
(d) Acceptance. A holder of Notes may accept the offer to prepay made
pursuant to this Section 8.3 by causing a notice of such acceptance to be
delivered to the Company not later than 15 days after receipt by such holder of
the most recent offer of prepayment. A failure by a holder of Notes to respond
to an offer to prepay made pursuant to this Section 8.3 shall be deemed to
constitute an acceptance of such offer by such holder.
(e) Prepayment. Prepayment of the Notes to be prepaid pursuant to this
Section 8.3 shall be at 100% of the principal amount of such Notes, together
with interest on such Notes accrued to the date of prepayment, plus the Make-
Whole Amount determined for the prepayment date with respect to such principal
amount. The prepayment shall be made on the Proposed Prepayment Date except as
provided in subparagraph (f) of this Section 8.3.
(f) Deferral Pending Change in Control. The obligation of the Company to
prepay Notes pursuant to the offers required by subparagraph (c) and accepted in
accordance with subparagraph (d) of this Section 8.3 is subject to the
occurrence of the Change in Control in respect of which such offers and
acceptances shall have been made. In the event that such Change in Control has
not occurred on the Proposed Prepayment Date in respect thereof, the prepayment
shall be deferred until, and shall be made on, the date on which such Change in
Control occurs. The Company shall keep each holder of Notes reasonably and
timely informed of (i) any such deferral of the date of prepayment, (ii) the
date on which such Change in Control and the prepayment are expected to occur,
and (iii) any determination by the Company that efforts to effect such Change in
Control have ceased or been abandoned (in which case the offers and acceptances
made pursuant to this Section 8.3 in respect of such Change in Control shall be
deemed rescinded).
(g) Officer's Certificate. Each offer to prepay the Notes pursuant to this
Section 8.3 shall be accompanied by a certificate, executed by a Senior
Financial Officer of the Company and dated the date of such offer, specifying:
(i) the Proposed Prepayment Date; (ii) that such offer is made pursuant to this
Section 8.3; (iii) the principal amount of each Note offered to be prepaid; (iv)
the interest that would be due on each Note offered to be prepaid, accrued to
the Proposed Prepayment Date; (v) that the conditions of this Section 8.3 have
been fulfilled; and (vi) in reasonable detail, the nature and date or proposed
date of the Change in Control.
(h) Certain Definitions. "Change in Control" shall be deemed to have occurred
if:
(i) any person (as such term is used in Section 13(d) and Section 14(d)(2) of
the Exchange Act as in effect on the date of the Closing) or related persons
constituting a group (as such term is used in Rule 13d-5 under the Exchange Act)
(collectively, "Exchange Act Persons"), other than the Company Management Group,
become the "beneficial owners" (as such term is used in Rule 13d-3 under the
Exchange Act as in effect on the date of the Closing), directly or indirectly,
of more than 50% of the total voting power of all classes then outstanding of
the Company's Voting Stock, or
(2) acquire after the date of the Closing the power to elect, appoint or cause
the election or appointment of at least a majority of the members of the board
of directors of the Company, through beneficial ownership of the capital stock
of the Company or otherwise;
(ii) a consolidation, merger or other like transaction between and among the
Company and any Exchange Act Persons acting in concert or a sale or acquisition
of all or substantially all of the assets of the Company and its Subsidiaries
with or involving any such Exchange Act Persons and immediately after giving
effect thereto to the Company Management Group would in the aggregate own and
control (beneficially or otherwise) 50% or less (by number of shares) of the
issued and outstanding Voting Stock of the successor or acquiring entity, as the
case may be. "Company Management Group" means: Xxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxx
Xxxxx, Xxxxxxx Xxxxx, Xxxx Xxxxx and the spouses, heirs and beneficial trusts
related to such Persons.
"Control Event" means:
(i) the execution by the Company or any of its Subsidiaries or Affiliates of
any agreement or letter of intent with respect to any proposed transaction or
event or series of transactions or events which, individually or in the
aggregate, may reasonably be expected to result in a Change in Control,
(ii) the execution of any written agreement which, when fully performed by the
parties thereto, would result in a Change in Control, or
(iii) the making of any written offer by any person (as such term is used in
Section 13(d) and Section 14(d)(2) of the Exchange Act as in effect on the date
of the Closing) or related persons constituting a group (as such term is used in
Rule 13d-5 under the Exchange Act as in effect on the date of the Closing) to
the holders of the common stock of the Company, which offer, if accepted by the
requisite number of holders, would result in a Change in Control.
(i) All calculations contemplated in this Section 8.3 involving the capital
stock of any Person shall be made with the assumption that all convertible
Securities of such Person then outstanding and all convertible Securities
issuable upon the exercise of any warrants, options and other rights outstanding
at such time were converted at such time and that all options, warrants and
similar rights to acquire shares of capital stock of such Person were exercised
at such time.
Section 8.4. Allocation of Partial Prepayments. In the case of each partial
prepayment of the Notes pursuant to Section 8.2, the principal amount of the
Notes to be prepaid shall be allocated among all of the Notes at the time
outstanding in proportion, as nearly as practicable, to the respective unpaid
principal amounts thereof not theretofore called for prepayment. All partial
prepayments made pursuant to Section 8.3 shall be applied only to the Notes of
the holders who have elected to participate in such prepayment.
Section 8.5. Maturity; Surrender, Etc;. In the case of each prepayment of
Notes pursuant to this Section 8, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such date
and the applicable Make-Whole Amount, if any. From and after such date, unless
the Company shall fail to pay such principal amount when so due and payable,
together with the interest and Make-Whole Amount, if any, as aforesaid, interest
on such principal amount shall cease to accrue. Any Note paid or prepaid in
full shall be surrendered to the Company and cancelled and shall not be
reissued, and no Note shall be issued in lieu of any prepaid principal amount of
any Note.
Section 8.6. Purchase of Notes. The Company will not and will not permit any
Affiliate to purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except upon the payment or prepayment
of the Notes in accordance with the terms of this Agreement and the Notes. The
Company will promptly cancel all Notes acquired by it or any Affiliate pursuant
to any payment, prepayment or purchase of Notes pursuant to any provision of
this Agreement and no Notes may be issued in substitution or exchange for any
such Notes.
Section 8.7. Make-Whole Amount. The term "Make-Whole Amount" means, with
respect to any Note, an amount equal to the excess, if any, of the Discounted
Value of the Remaining Scheduled Payments with respect to the Called Principal
of such Note over the amount of such Called Principal; provided that the Make-
Whole Amount may in no event be less than zero. For the purposes of determining
the Make-Whole Amount, the following terms have the following meanings:
"Called Principal" means, with respect to any Note, the principal of such Note
that is to be prepaid pursuant to Section 8.2 or Section 8.3 or has become or is
declared to be immediately due and payable pursuant to Section 12.1, as the
context requires.
"Discounted Value" means, with respect to the Called Principal of any Note, the
amount obtained by discounting all Remaining Scheduled Payments with respect to
such Called Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Notes is payable) equal to the
Reinvestment Yield with respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called Principal of any Note,
1.00% over the yield to maturity in the case of any prepayment of the Notes
pursuant to Section 8.3 and 0.50% over the yield to maturity in any other case,
in any such case, implied by (a) the yields reported, as of 10:00 A.M. (New York
City time) on the second Business Day preceding the Settlement Date with respect
to such Called Principal, on the display designated as "Page USD" of the
Bloomberg Financial Markets Services Screen (or, if not available, any other
national recognized trading screen reporting on-line intraday trading in the
U.S. Treasury securities) for actively traded on-the-run U.S. Treasury
securities having a maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date, or (b) if such yields are not reported as
of such time or the yields reported as of such time are not ascertainable
(including by way of interpolation), the Treasury Constant Maturity Series
Yields reported, for the latest day for which such yields have been so reported
as of the second Business Day preceding the Settlement Date with respect to such
Called Principal, in Federal Reserve Statistical Release H.15 (519) (or any
comparable successor publication) for actively traded U.S. Treasury securities
having a constant maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date. Such implied yield will be determined, if
necessary, by (i) converting U.S. Treasury xxxx quotations to bond-equivalent
yields in accordance with accepted financial practice and (ii) interpolating
linearly between (1) the actively traded on-the-run U.S. Treasury security with
the maturity closest to and greater than the Remaining Average Life and (2) the
actively traded on-the-run U.S. Treasury security with the maturity closest to
and less than the Remaining Average Life.
"Remaining Average Life" means, with respect to any Called Principal, the number
of years (calculated to the nearest one-twelfth year) obtained by dividing (a)
such Called Principal into (b) the sum of the products obtained by multiplying
(i) the principal component of each Remaining Scheduled Payment with respect to
such Called Principal by (ii) the number of years (calculated to the nearest
one-twelfth year) that will elapse between the Settlement Date with respect to
such Called Principal and the scheduled due date of such Remaining Scheduled
Payment.
"Remaining Scheduled Payments" means, with respect to the Called Principal of
any Note, all payments of such Called Principal and interest thereon that would
be due after the Settlement Date with respect to such Called Principal if no
payment of such Called Principal were made prior to its scheduled due date;
provided that if such Settlement Date is not a date on which interest payments
are due to be made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of interest
accrued to such Settlement Date and required to be paid on such Settlement Date
pursuant to Section 8.2, 8.3 or 12.1.
"Settlement Date" means, with respect to the Called Principal of any Note, the
date on which such Called Principal is to be prepaid pursuant to Section 8.2 or
Section 8.3 or has become or is declared to be immediately due and payable
pursuant to Section 12.1, as the context requires.
Section 9. Affirmative Covenants.
The Company covenants that so long as any of the Notes are outstanding:
Section 9.1. Compliance with Law. The Company will, and will cause each of its
Subsidiaries to, comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including, without limitation,
ERISA and applicable laws in respect of Non-U.S. Pension Plans and all
Environmental Laws, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective properties or to the conduct of
their respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or regulations
or failures to obtain or maintain in effect such licenses, certificates,
permits, franchises and other governmental authorizations could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
Section 9.2. Insurance. The Company will, and will cause each of its
Subsidiaries to, maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and businesses against
such casualties and contingencies, of such types, on such terms and in such
amounts (including deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a similar business
and similarly situated.
Section 9.3. Maintenance of Properties. The Company will, and will cause each
of its Subsidiaries to, maintain and keep, or cause to be maintained and kept,
their respective properties in good repair, working order and condition (other
than ordinary wear and tear), so that the business carried on in connection
therewith may be properly conducted at all times; provided that this Section
shall not prevent the Company or any Subsidiary from discontinuing the operation
and the maintenance of any of its properties if such discontinuance is desirable
in the conduct of its business and the Company has concluded that such
discontinuance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
Section 9.4. Payment of Taxes and Claims. The Company will, and will cause
each of its Subsidiaries to, file all tax returns required to be filed in any
jurisdiction and to pay and discharge all taxes shown to be due and payable on
such returns and all other taxes, assessments, governmental charges, or levies
imposed on them or any of their properties, assets, income or franchises, to the
extent such taxes and assessments have become due and payable and before they
have become delinquent and all claim for which sums have become due and payable
that have or might become a Lien on properties or assets of the Company or any
Subsidiary; provided that neither the Company nor any Subsidiary need pay any
such tax or assessment or claims if (a) the amount, applicability or validity
thereof is contested by the Company or such Subsidiary on a timely basis in good
faith and in appropriate proceedings, and the Company or a Subsidiary has
established adequate reserves therefor in accordance with GAAP on the books of
the Company or such Subsidiary or (b) the nonpayment of all such taxes and
assessments in the aggregate could not reasonably be expected to have a Material
Adverse Effect.
Section 9.5. Corporate Existence, Etc. The Company will at all times preserve
and keep in full force and effect its corporate existence. Subject to Sections
10.5, the Company will at all times preserve and keep in full force and effect
the corporate existence of each of its Subsidiaries (unless merged into the
Company or a Wholly-owned Subsidiary) and all rights and franchises of the
Company and its Subsidiaries unless, in the good faith judgment of the Company,
the termination of or failure to preserve and keep in full force and effect such
corporate existence, right or franchise could not, individually or in the
aggregate, have a Material Adverse Effect.
Section 9.6. Nature of Business. Neither the Company nor any Subsidiary will
engage in any business if, as a result, the general nature of the business,
taken on a consolidated basis, which would then be engaged in by the Company and
its Subsidiaries would be substantially changed from the general nature of the
business engaged in by the Company and its Subsidiaries on the date of this
Agreement.
Section 9.7. Notes to Rank Pari Passu. The Notes and all other obligations
under this Agreement of the Company are and at all times shall remain direct and
unsecured obligations of the Company ranking pari passu as against the assets of
the Company with all other Notes from time to time issued and outstanding
hereunder without any preference among themselves and pari passu with all other
present and future unsecured Indebtedness (actual or contingent) of the Company
which is not expressed to be subordinate or junior in rank to any other
unsecured Indebtedness of the Company.
Section 10. Negative Covenants.
The Company covenants that so long as any of the Notes are outstanding:
Section 10.1. Consolidated Net Worth. The Company will not, at any time,
permit Consolidated Net Worth to be less than the sum of (a) $50,000,000, plus
(b) an aggregate amount equal to 50% of its Consolidated Net Earnings (but, in
each case, only if a positive number) for each completed fiscal quarter
beginning with the fiscal quarter ending October 30, 1999.
Section 10.2. Fixed Charges Coverage Ratio. The Company will keep and maintain
the ratio of Consolidated Net Earnings Available for Fixed Charges to
Consolidated Fixed Charges for each period of four consecutive fiscal quarters
at not less than 2.25 to 1.00.
Section 10.3. Limitations on Indebtedness. (a) The Company will not, and will
not permit any Subsidiary to, create, issue, assume, guarantee or otherwise
incur or in any manner become liable in respect of any Indebtedness except:
(i) Indebtedness evidenced by the Notes;
(ii) Indebtedness of the Company and its Subsidiaries outstanding as of the
date of this Agreement and described on Schedule 5.15 hereto;
(iii) additional Indebtedness of the Company and its Subsidiaries; provided
that at the time of creation, issuance, assumption, guarantee or incurrence
thereof and after giving effect thereto and to the application of the proceeds
thereof:
(1) Consolidated Indebtedness shall not exceed 55% of Consolidated Total
Capitalization, and
(2) in the case of the issuance of any Priority Indebtedness, the aggregate
amount of Consolidated Priority Indebtedness (including the Priority
Indebtedness then to be created or incurred) shall not exceed 15% of
Consolidated Net Worth;
(iv) Indebtedness of a Subsidiary owing to the Company or to a Wholly-owned
Subsidiary; and
Indebtedness of a Subsidiary at the time such Subsidiary becomes a Subsidiary;
provided that (a) such Indebtedness shall not have been incurred in
contemplation of such Subsidiary becoming a Subsidiary and (b) immediately after
such Subsidiary becomes a Subsidiary, no Default of Event of Default would
exist;
(b) Indebtedness described on Schedule 5.15 may be renewed, extended, refunded
or replaced (without increase in the principal amount remaining unpaid at the
time of such renewal, extension, refunding or replacement); provided that at the
time of such renewal, extension, refunding or replacement, and after giving
effect thereto, no Default or Event of Default would exist.
(c) Any Person which becomes a Subsidiary after the date hereof shall for all
purposes of this Section 10.3 be deemed to have created, assumed or incurred at
the time it becomes a Subsidiary all Indebtedness of such Person existing
immediately after it becomes a Subsidiary.
Section 10.4. Limitation on Liens. The Company will not, and will not permit
any Subsidiary to, create or incur, or suffer to be incurred or to exist, any
Lien on its or their property or assets, whether now owned or hereafter
acquired, or upon any income or profits therefrom, or transfer any property for
the purpose of subjecting the same to the payment of obligations in priority to
the payment of its or their general creditors, or acquire or agree to acquire,
or permit any Subsidiary to acquire, any property or assets upon conditional
sales agreements or other title retention devices, except:
(a) Liens for property taxes and assessments or governmental charges or levies
and Liens securing claims or demands of mechanics and materialmen; provided that
payment thereof is not at the time required by Section 9.4;
(b) Liens of or resulting from any judgment or award, the time for the appeal
or petition for rehearing of which shall not have expired, or in respect of
which the Company or a Subsidiary shall at any time in good faith be prosecuting
an appeal or proceeding for a review and in respect of which a stay of execution
pending such appeal or proceeding for review shall have been secured;
(c) Liens incidental to the conduct of business or the ownership of properties
and assets (including Liens in connection with worker's compensation,
unemployment insurance and other like laws, warehousemen's and attorneys' liens
and statutory landlords' liens) and Liens to secure the performance of bids,
tenders or trade contracts, or to secure statutory obligations, surety or appeal
bonds or other Liens of like general nature, in any such case incurred in the
ordinary course of business and not in connection with the borrowing of money;
provided in each case, (i) the obligation secured is not overdue or, if overdue,
is being contested in good faith by appropriate actions or proceedings, and (ii)
the Company or a Subsidiary has established adequate reserves therefor in
accordance with GAAP on the books of the Company or such Subsidiary;
(d) leases or subleases granted by the Company or its Subsidiaries to other
Persons, survey exceptions or minor encumbrances, easements or reservations, or
rights of others for rights-of-way, utilities and other similar purposes, or
zoning or other restrictions as to the use of real properties, which are
necessary for the conduct of the activities of the Company and its Subsidiaries
or which customarily exist on properties of corporations engaged in similar
activities and similarly situated and which do not in any event materially
impair their use in the operation of the business of the Company and its
Subsidiaries;
(e) Liens securing Indebtedness of a Subsidiary to the Company or to another
Wholly-owned Subsidiary;
(f) Liens existing as of the date of the Closing and described on Schedule
5.15 hereto;
(g) Liens created or incurred after the date of the Closing given to secure
the payment of the purchase price incurred in connection with the acquisition or
purchase or the cost of construction of property or of assets useful and
intended to be used in carrying on the business of the Company or a Subsidiary,
including Liens existing on such property or assets at the time of acquisition
thereof or at the time of completion of construction, as the case may be,
whether or not such existing Liens were given to secure the payment of the
acquisition or purchase price or cost of construction, as the case may be, of
the property or assets to which they attach; provided that (i) the Lien shall
attach solely to the property or assets acquired, purchased or constructed, (ii)
such Lien shall have been created or incurred within 120 days of the date of
acquisition or purchase or completion of construction, as the case may be, (iii)
at the time of acquisition or purchase or of completion of construction of such
property or assets, the aggregate amount remaining unpaid on all Indebtedness
secured by Liens on such property or assets, whether or not assumed by the
Company or a Subsidiary, shall not exceed an amount equal to 100% of the lesser
of the total purchase price or fair market value at the time of acquisition or
purchase (as determined in good faith by the Board of Directors of the Company)
or the cost of construction on the date of completion thereof, (iv) Indebtedness
secured by any such Lien shall have been created or incurred within the
limitations provided in Section 10.3(a)(iii)(1), and (v) at the time of
creation, issuance, assumption, guarantee or incurrence of the Indebtedness
secured by such Lien and after giving effect thereto and to the application of
the proceeds thereof, no Default or Event of Default would exist;
(h) any such Lien existing on property or assets of a corporation at the time
such corporation is consolidated with or merged into the Company or a Subsidiary
or its becoming a Subsidiary, or any Lien existing on any property or assets
acquired by the Company or any Subsidiary at the time such property or assets
are so acquired (whether or not the Indebtedness secured thereby shall have been
assumed), provided that (i) each such Lien shall extend solely to the property
or assets so acquired, (ii) any Indebtedness secured by any such Lien shall have
been created or incurred within the limitations provided in Section
10.3(a)(iii)(1), and (iii) at the time of creation, issuance, assumption,
guarantee or incurrence of the Indebtedness secured by such Lien and after
giving effect thereto and to the application of the proceeds thereof, no Default
or Event of Default would exist;
Liens created or incurred after the date of the Closing given to secure
Indebtedness of the Company or any Subsidiary in addition to the Liens permitted
by the preceding clauses (a) through (h) hereof; provided that (i) all
Indebtedness secured by such Liens shall have been incurred within the
applicable limitations provided in Sections 10.3(a)(iii)(1) and (2) and (ii) at
the time of creation, issuance, assumption, guarantee or incurrence of the
Indebtedness secured by such Lien and after giving effect thereto and to the
application of the proceeds thereof, no Default or Event of Default would
exist; and
(j) any extension, renewal or refunding of any Lien permitted by the preceding
clause (f) of this Section 10.4 in respect of the same property theretofore
subject to such Lien in connection with the extension, renewal or refunding of
the Indebtedness secured thereby; provided that (i) such extension, renewal or
refunding of Indebtedness shall be without increase in the principal amount
remaining unpaid as of the date of such extension, renewal or refunding, (ii)
such Lien shall attach solely to the same such property, and (iii) at the time
of such extension, renewal or refunding and after giving effect thereto, no
Default or Event of Default would exist.
Section 10.5. Mergers, Consolidations and Sales of Assets. (a) The Company
will not, and will not permit any Subsidiary to, consolidate with or be a party
to a merger with any other Person, or sell, lease or otherwise dispose of all or
substantially all of its assets (except as expressly permitted by Section
10.5(b)); provided that:
(i)any Subsidiary may merge or consolidate with or into the Company or any
Wholly-owned Subsidiary so long as in (1) any merger or consolidation involving
the Company, the Company shall be the surviving or continuing corporation and
(2) in any merger or consolidation involving a Wholly-owned Subsidiary (and not
the Company), the Wholly-owned Subsidiary shall be the surviving or continuing
corporation;
(ii) the Company may consolidate or merge with or into any other corporation
if (1) the corporation which results from such consolidation or merger (the
"surviving corporation") is a solvent corporation organized under the laws of
any state of the United States or the District of Columbia, (2) the due and
punctual payment of the principal of and premium, if any, and interest on all of
the Notes, according to their tenor, and the due and punctual performance and
observation of all of the covenants in the Notes and this Agreement to be
performed or observed by the Company are expressly assumed in writing by the
surviving corporation and the surviving corporation shall furnish to the holders
of the Notes an opinion of counsel satisfactory to such holders to the effect
that the instrument of assumption has been duly authorized, executed and
delivered and constitutes the legal, valid and binding contract and agreement of
the surviving corporation enforceable in accordance with its terms, except as
enforcement of such terms may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles, and (3) at the
time of such consolidation or merger and immediately after giving effect
thereto, (A) no Default or Event of Default would exist and (B) the surviving
corporation would be permitted by the provisions of Section 10.3(a)(iii)(1) to
incur at least $1.00 of additional Indebtedness;
the Company may sell or otherwise dispose of all or substantially all of its
assets to any Person for consideration which represents the fair market value of
such assets (as determined in good faith by the Board of Directors of the
Company) at the time of such sale or other disposition if (1) the acquiring
Person is a solvent corporation organized under the laws of any state of the
United States or the District of Columbia, (2) the due and punctual payment of
the principal of and premium, if any, and interest on all the Notes, according
to their tenor, and the due and punctual performance and observance of all of
the covenants in the Notes and in this Agreement to be performed or observed by
the Company are expressly assumed in writing by the acquiring corporation and
the acquiring corporation shall furnish to the holders of the Notes an opinion
of counsel satisfactory to such holders to the effect that the instrument of
assumption has been duly authorized, executed and delivered and constitutes the
legal, valid and binding contract and agreement of such acquiring corporation
enforceable in accordance with its terms, except as enforcement of such terms
may be limited by bankruptcy, insolvency, reorganization, moratorium and similar
laws affecting the enforcement of creditors' rights generally and by general
equitable principles, and (3) at the time of such sale or disposition and
immediately after giving effect thereto, (A) no Default or Event of Default
would exist and (B) the acquiring corporation would be permitted by the
provisions of Section 10.3(a)(iii)(1) to incur at least $1.00 of additional
Indebtedness.
(b) The Company will not, and will not permit any Subsidiary to, sell, lease,
transfer, abandon or otherwise dispose of assets (except assets sold in the
ordinary course of business for fair market value and except as provided in
Section 10.5(a)(iii)); provided that the foregoing restrictions do not apply to:
(i) the sale, lease, transfer or other disposition of assets of a Subsidiary
to the Company or a Wholly-owned Subsidiary; or
(ii) the sale of assets for cash or other property to a Person or Persons
other than an Affiliate if all of the following conditions are met:
(1) such assets (valued at net book value) do not, together with all other
assets of the Company and its Subsidiaries previously disposed of during the
immediately preceding 12 calendar months (other than in the ordinary course of
business), exceed 15% of Consolidated Total Assets, determined as of the end of
the immediately preceding fiscal quarter;
(2) in the opinion of the Company's Board of Directors, the sale is for fair
value and is in the best interests of the Company; and
(3) immediately after the consummation of the transaction and after giving
effect thereto, (A) no Default or Event of Default would exist, and (B) the
Company would be permitted by the provisions of Section 10.3(a)(iii)(1) to incur
at least $1.00 of additional Indebtedness;
provided, however, that for purposes of the foregoing calculation, there shall
not be included any assets the proceeds of which were or are applied within 180
days of the date of sale of such assets to either (A) the acquisition of assets
useful and intended to be used in the operation of the business of the Company
and its Subsidiaries as described in Section 9.6 and having a fair market value
(as determined in good faith by the Board of Directors of the Company) at least
equal to that of the assets so disposed of or (B) the prepayment at any
applicable prepayment premium, on a pro rata basis, of Senior Indebtedness of
the Company. It is understood and agreed by the Company that any such proceeds
paid and applied to the prepayment of the Notes as hereinabove provided shall be
prepaid as and to the extent provided in Section 8.2.
Section 10.6. Transactions with Affiliates. The Company will not, and will not
permit any Subsidiary to, enter into or be a party to any transaction or
arrangement with any Affiliate (including, without limitation, the purchase
from, sale to or exchange of property with, or the rendering of any service by
or for, any Affiliate), except in the ordinary course of and pursuant to the
reasonable requirements of the Company's or such Subsidiary's business and upon
fair and reasonable terms no less favorable to the Company or such Subsidiary
than would obtain in a comparable arm's-length transaction with a Person other
than an Affiliate.
Section 11. Events of Default.
An "Event of Default" shall exist if any of the following conditions or events
shall occur and be continuing:
(a) the Company defaults in the payment of any principal or Make-Whole Amount,
if any, on any Note when the same becomes due and payable, whether at maturity
or at a date fixed for prepayment or by declaration or otherwise; or
(b) the Company defaults in the payment of any interest on any Note for more
than five Business Days after the same becomes due and payable; or
(c) the Company defaults in the performance of or compliance with any term
contained in Sections 10.1 through 10.5; or
(d) the Company defaults in the performance of or compliance with any term
contained herein (other than those referred to in paragraphs (a), (b) and (c) of
this Section 11) and such default is not remedied within 30 days after the
earlier of (i) a Responsible Officer obtaining actual knowledge of such default
and (ii) the Company receiving written notice of such default from any holder of
a Note (any such written notice to be identified as a "notice of default" and to
refer specifically to this paragraph (d) of Section 11); or
(e) any representation or warranty made in writing by or on behalf of the
Company or by any officer of the Company in this Agreement or in any writing
furnished in connection with the transactions contemplated hereby proves to have
been false or incorrect in any material respect on the date as of which made; or
(f) (i) the Company or any Subsidiary is in default (as principal or as
guarantor or other surety) in the payment of any principal of or premium or
make-whole amount or interest on any Indebtedness that is outstanding in an
aggregate principal amount of at least $5,000,000 beyond any period of grace
provided with respect thereto, or (ii) the Company or any Subsidiary is in
default in the performance of or compliance with any term of any evidence of any
Indebtedness in an aggregate outstanding principal amount of at least $5,000,000
or of any mortgage, indenture or other agreement relating thereto or any other
condition exists, and as a consequence of such default or condition such
Indebtedness has become, or has been declared, due and payable before its stated
maturity or before its regularly scheduled dates of payment, or (iii) as a
consequence of the occurrence or continuation of any event or condition (other
than the passage of time or the right of the holder of Indebtedness to convert
such Indebtedness into equity interests), (1) the Company or any Subsidiary has
become obligated to purchase or repay Indebtedness before its regular maturity
or before its regularly scheduled dates of payment in an aggregate outstanding
principal amount of at least $5,000,000, or (2) one or more Persons have
required the Company or any Subsidiary so to purchase or repay such
Indebtedness; or
(g) the Company or any Subsidiary (i) is generally not paying, or admits in
writing its inability to pay, its debts as they become due, (ii) files, or
consents by answer or otherwise to the filing against it of, a petition for
relief or reorganization or arrangement or any other petition in bankruptcy, for
liquidation or to take advantage of any bankruptcy, insolvency, reorganization,
moratorium or other similar law of any jurisdiction, (iii) makes an assignment
for the benefit of its creditors, (iv) consents to the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its property, (v) is
adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for
the purpose of any of the foregoing; or
(h) a court or Governmental Authority of competent jurisdiction enters an order
appointing, without consent by the Company or any of its Subsidiaries, a
custodian, receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its property, or constituting
an order for relief or approving a petition for relief or reorganization or any
other petition in bankruptcy or for liquidation or to take advantage of any
bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution,
winding-up or liquidation of the Company or any of its Subsidiaries, or any such
petition shall be filed against the Company or any of its Subsidiaries and such
petition shall not be dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money aggregating in
excess of $5,000,000 (excluding for purposes of such determination such amount
of any insurance proceeds paid by or on behalf of the Company or any of its
Subsidiaries in respect of such judgment or judgments unconditionally
acknowledged in writing to be payable by the insurance carrier that issued the
related insurance policy) are rendered against one or more of the Company and
its Subsidiaries and which judgments are not, within 45 days after entry
thereof, bonded, discharged or stayed pending appeal, or are not discharged
within 45 days after the expiration of such stay; or
(j) if (i) any Plan shall fail to satisfy the minimum funding standards of
ERISA or the Code for any plan year or part thereof or a waiver of such
standards or extension of any amortization period is sought or granted under
Section 412 of the Code, (ii) a notice of intent to terminate any Plan shall
have been or is reasonably expected to be filed with the PBGC or the PBGC shall
have instituted proceedings under ERISA Section 4042 to terminate or appoint a
trustee to administer any Plan or the PBGC shall have notified the Company or
any ERISA Affiliate that a Plan may become a subject of any such proceedings,
(iii) the aggregate "amount of unfunded benefit liabilities" (within the meaning
of Section 4001(a)(18) of ERISA) under all Plans, determined in accordance with
Title IV of ERISA, shall exceed $5,000,000, (iv) the Company or any ERISA
Affiliate shall have incurred or is reasonably expected to incur any liability
pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of
the Code relating to employee benefit plans, (v) the Company or any ERISA
Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or any
Subsidiary establishes or amends any employee welfare benefit plan that provides
post-employment welfare benefits in a manner that would increase the liability
of the Company or any Subsidiary thereunder; and any such event or events
described in clauses (i) through (vi) above, either individually or together
with any other such event or events, could reasonably be expected to have a
Material Adverse Effect; or
(k) the Company is no longer a member of the Wakefern Food Corporation
cooperative.
As used in Section 11(j), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
Section 12. Remedies on Default, Etc.
Section 12.1. Acceleration. (a) If an Event of Default with respect to the
Company described in paragraph (g) or (h) of Section 11 (other than an Event of
Default described in clause (i) of paragraph (g) or described in clause (vi) of
paragraph (g) by virtue of the fact that such clause encompasses clause (i) of
paragraph (g)) has occurred, all the Notes then outstanding shall automatically
become immediately due and payable.
(c) If any other Event of Default has occurred and is continuing, any holder or
holders of more than 51% in principal amount of the Notes at the time
outstanding may at any time at its or their option, by notice or notices to the
Company, declare all the Notes then outstanding to be immediately due and
payable.
(d) If any Event of Default described in paragraph (a) or (b) of Section 11 has
occurred and is continuing, any holder or holders of Notes at the time
outstanding affected by such Event of Default may at any time, at its or their
option, by notice or notices to the Company, declare all the Notes held by it or
them to be immediately due and payable.
Upon any Note's becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Note will forthwith mature and the entire
unpaid principal amount of such Note, plus (i) all accrued and unpaid interest
thereon and (ii) the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for), and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
Section 12.2. Other Remedies. If any Default or Event of Default has occurred
and is continuing, and irrespective of whether any Notes have become or have
been declared immediately due and payable under Section 12.1, the holder of any
Note at the time outstanding may proceed to protect and enforce the rights of
such holder by an action at law, suit in equity or other appropriate proceeding,
whether for the specific performance of any agreement contained herein or in any
Note, or for an injunction against a violation of any of the terms hereof or
thereof, or in aid of the exercise of any power granted hereby or thereby or by
law or otherwise.
Section 12.3. Rescission. At any time after any Notes have been declared due
and payable pursuant to clause (b) or (c) of Section 12.1, the holders of not
less than 67% in principal amount of the Notes then outstanding, by written
notice to the Company, may rescind and annul any such declaration and its
consequences if (a) the Company has paid all overdue interest on the Notes, all
principal of and Make-Whole Amount, if any, on any Notes that are due and
payable and are unpaid other than by reason of such declaration, and all
interest on such overdue principal and Make-Whole Amount, if any, and (to the
extent permitted by applicable law) any overdue interest in respect of the
Notes, at the Default Rate, (b) all Events of Default and Defaults, other than
non-payment of amounts that have become due solely by reason of such
declaration, have been cured or have been waived pursuant to Section 17, and (c)
no judgment or decree has been entered for the payment of any monies due
pursuant hereto or to the Notes. No rescission and annulment under this Section
12.3 will extend to or affect any subsequent Event of Default or Default or
impair any right consequent thereon.
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. No course of
dealing and no delay on the part of any holder of any Note in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice
such holder's rights, powers or remedies. No right, power or remedy conferred
by this Agreement or by any Note upon any holder thereof shall be exclusive of
any other right, power or remedy referred to herein or therein or now or
hereafter available at law, in equity, by statute or otherwise. Without
limiting the obligations of the Company under Section 15, the Company will pay
to the holder of each Note on demand such further amount as shall be sufficient
to cover all costs and expenses of such holder incurred in any enforcement or
collection under this Section 12, including, without limitation, reasonable
attorneys' fees, expenses and disbursements.
Section 13. Registration; Exchange; Substitution of Notes.
Section 13.1. Registration of Notes. The Company shall keep at its principal
executive office a register for the registration and registration of transfers
of Notes. The name and address of each holder of one or more Notes, each
transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note that is an
Institutional Investor promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered holders of Notes.
Section 13.2. Transfer and Exchange of Notes. Upon surrender of any Note at
the principal executive office of the Company for registration of transfer or
exchange (and in the case of a surrender for registration of transfer, duly
endorsed or accompanied by a written instrument of transfer duly executed by the
registered holder of such Note or its attorney duly authorized in writing and
accompanied by the address for notices of each transferee of such Note or part
thereof), the Company shall execute and deliver, at the Company's expense
(except as provided below), one or more new Notes (as requested by the holder
thereof) in exchange therefor, in an aggregate principal amount equal to the
unpaid principal amount of the surrendered Note. Each such new Note shall be
payable to such Person as such holder may request and shall be substantially in
the form of Exhibit 1. Each such new Note shall be dated and bear interest from
the date to which interest shall have been paid on the surrendered Note or dated
the date of the surrendered Note if no interest shall have been paid thereon.
The Company may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of Notes. Notes
shall not be transferred in denominations of less than $100,000; provided that
if necessary to enable the registration of transfer by a holder of its entire
holding of Notes, one Note may be in a denomination of less than $100,000. Any
transferee, by its acceptance of a Note registered in its name (or the name of
its nominee), shall be deemed to have made the representation set forth in
Section 6.2.
Section 13.3. Replacement of Notes. Upon receipt by the Company of evidence
reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in the case of
an Institutional Investor, notice from such Institutional Investor of such
ownership and such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the holder of such Note is, or is a nominee
for, an original Purchaser or another holder of a Note with a minimum net worth
of at least $50,000,000, such Person's own unsecured agreement of indemnity
shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation thereof, the
Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.
Section 14. Payments on Notes.
Section 14.1. Place of Payment. Subject to Section 14.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made in New York, New York at the principal office of The
Bank of New York in such jurisdiction. The Company may at any time, by notice
to each holder of a Note, change the place of payment of the Notes so long as
such place of payment shall be either the principal office of the Company in
such jurisdiction or the principal office of a bank or trust company in such
jurisdiction.
Section 14.2. Home Office Payment. So long as you or your nominee shall be the
holder of any Note, and notwithstanding anything contained in Section 14.1 or in
such Note to the contrary, the Company will pay all sums becoming due on such
Note for principal, Make-Whole Amount, if any, and interest by the method and at
the address specified for such purpose below your name in Schedule A, or by such
other method or at such other address as you shall have from time to time
specified to the Company in writing for such purpose, without the presentation
or surrender of such Note or the making of any notation thereon, except that
upon written request of the Company made concurrently with or reasonably
promptly after payment or prepayment in full of any Note, you shall surrender
such Note for cancellation, reasonably promptly after any such request, to the
Company at its principal executive office or at the place of payment most
recently designated by the Company pursuant to Section 14.1. Prior to any sale
or other disposition of any Note held by you or your nominee you will, at your
election, either endorse thereon the amount of principal paid thereon and the
last date to which interest has been paid thereon or surrender such Note to the
Company in exchange for a new Note or Notes pursuant to Section 13.2. The
Company will afford the benefits of this Section 14.2 to any Institutional
Investor that is the direct or indirect transferee of any Note purchased by you
under this Agreement and that has made the same agreement relating to such Note
as you have made in this Section 14.2.
Section 15. Expenses, Etc.
Section 15.1. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all costs and expenses
(including reasonable attorneys' fees of a special counsel and, if reasonably
required, local or other counsel) incurred by you and each Other Purchaser or
holder of a Note in connection with such transactions and in connection with any
amendments, waivers or consents under or in respect of this Agreement or the
Notes (whether or not such amendment, waiver or consent becomes effective),
including, without limitation: (a) the costs and expenses incurred in enforcing
or defending (or determining whether or how to enforce or defend) any rights
under this Agreement or the Notes or in responding to any subpoena or other
legal process or informal investigative demand issued in connection with this
Agreement or the Notes, or by reason of being a holder of any Note, and (b) the
costs and expenses, including financial advisors' fees, incurred in connection
with the insolvency or bankruptcy of the Company or any Subsidiary or in
connection with any work-out or restructuring of the transactions contemplated
hereby and by the Notes. The Company will pay, and will save you and each other
holder of a Note harmless from, all claims in respect of any fees, costs or
expenses, if any, of brokers and finders (other than those retained by you).
Section 15.2. Survival. The obligations of the Company under this
Section 15 will survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement or the Notes, and the
termination of this Agreement.
Section 16. Survival of Representations and Warranties; Entire Agreement.
All representations and warranties contained herein shall survive the execution
and delivery of this Agreement and the Notes, the purchase or transfer by you of
any Note or portion thereof or interest therein and the payment of any Note, and
may be relied upon by any subsequent holder of a Note, regardless of any
investigation made at any time by or on behalf of you or any other holder of a
Note. All statements contained in any certificate or other instrument delivered
by or on behalf of the Company pursuant to this Agreement shall be deemed
representations and warranties of the Company under this Agreement. Subject to
the preceding sentence, this Agreement and the Notes embody the entire agreement
and understanding between you and the Company and supersede all prior agreements
and understandings relating to the subject matter hereof.
Section 17. Amendment and Waiver.
Section 17.1. Requirements. This Agreement and the Notes may be amended, and
the observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), with (and only with) the written consent of the
Company and the Required Holders, except that (a) no amendment or waiver of any
of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term
(as it is used therein), will be effective as to you unless consented to by you
in writing, and (b) no such amendment or waiver may, without the written consent
of the holder of each Note at the time outstanding affected thereby, (i) subject
to the provisions of Section 12 relating to acceleration or rescission, change
the amount or time of any prepayment or payment of principal of, or change the
rate or change the time of payment or method of computation of interest or of
the Make-Whole Amount on, the Notes, (ii) change the percentage of the principal
amount of the Notes the holders of which are required to consent to any such
amendment or waiver, or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or
20.
Section 17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 17 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly pay or cause to be
paid any remuneration, whether by way of supplemental or additional interest,
fee or otherwise, or grant any security, to any holder of Notes as consideration
or as an inducement to the entering into by any holder of Notes of any waiver or
amendment of any of the terms and provisions hereof unless such remuneration is
concurrently paid, or security is concurrently granted, on the same terms,
ratably to each holder of Notes then outstanding even if such holder did not
consent to such waiver or amendment.
Section 17.3. Binding Effect, Etc. Any amendment or waiver consented to as
provided in this Section 17 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the
Company and the holder of any Note nor any delay in exercising any rights
hereunder or under any Note shall operate as a waiver of any rights of any
holder of such Note. As used herein, the term "this Agreement" and references
thereto shall mean this Agreement as it may from time to time be amended or
supplemented.
Section 17.4. Notes Held by Company, Etc. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company or any of its Affiliates shall be deemed not to
be outstanding.
Section 18. Notices.
All notices and communications provided for hereunder shall be in writing and
sent (a) by telefacsimile if the sender on the same day sends a confirming copy
of such notice by a recognized overnight delivery service (charges prepaid), or
(b) by registered or certified mail with return receipt requested (postage
prepaid), or (c) by a recognized overnight delivery service (with charges
prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address specified for such
communications in Schedule A, or at such other address as you or it shall have
specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at such address as
such other holder shall have specified to the Company in writing, or
(iii) if to the Company, to the Company at its address set forth at the
beginning hereof to the attention of Xxxxx Xxxxxx and Xxxxx Xxxxx, or at such
other address as the Company shall have specified to the holder of each Note in
writing.
Notices under this Section 18 will be deemed given only when actually received.
Section 19. Reproduction of Documents.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in the regular
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This Section 19
shall not prohibit the Company or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.
Section 20. Confidential Information.
For the purposes of this Section 20, "Confidential Information" means
information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly marked or labeled
or otherwise adequately identified [in writing] when received by you as being
confidential information of the Company or such Subsidiary; provided that such
term does not include information that (a) was publicly known or otherwise known
to you prior to the time of such disclosure, (b) subsequently becomes publicly
known through no act or omission by you or any Person acting on your behalf, (c)
otherwise becomes known to you other than through disclosure by the Company or
any Subsidiary or (d) constitutes financial statements delivered to you under
Section 7.1 that are otherwise publicly available. You will maintain the
confidentiality of such Confidential Information in accordance with procedures
adopted by you in good faith to protect confidential information of third
parties delivered to you; provided that you may deliver or disclose Confidential
Information to (i) your directors, trustees, officers, employees, agents,
attorneys and affiliates (to the extent such disclosure reasonably relates to
the administration of the investment represented by your Notes), (ii) your
financial advisors and other professional advisors who agree to hold
confidential the Confidential Information substantially in accordance with the
terms of this Section 20, (iii) any other holder of any Note, (iv) any
Institutional Investor to which you sell or offer to sell such Note or any part
thereof or any participation therein (if such Person has agreed in writing prior
to its receipt of such Confidential Information to be bound by the provisions of
this Section 20), (v) any Person from which you offer to purchase any security
of the Company (if such Person has agreed in writing prior to its receipt of
such Confidential Information to be bound by the provisions of this Section 20),
any federal or state regulatory authority having jurisdiction over you, (vii)
the National Association of Insurance Commissioners or any similar organization,
or any nationally recognized rating agency that requires access to information
about your investment portfolio or (viii) any other Person to which such
delivery or disclosure may be necessary or appropriate (w) to effect compliance
with any law, rule, regulation or order applicable to you, (x) in response to
any subpoena or other legal process, (y) in connection with any litigation to
which you are a party or (z) if an Event of Default has occurred and is
continuing, to the extent you may reasonably determine such delivery and
disclosure to be necessary or appropriate in the enforcement or for the
protection of the rights and remedies under your Notes and this Agreement. Each
holder of a Note, by its acceptance of a Note, will be deemed to have agreed to
be bound by and to be entitled to the benefits of this Section 20 as though it
were a party to this Agreement. On reasonable request by the Company in
connection with the delivery to any holder of a Note of information required to
be delivered to such holder under this Agreement or requested by such holder
(other than a holder that is a party to this Agreement or its nominee), such
holder will enter into an agreement with the Company embodying the provisions of
this Section 20.
Section 21. Substitution of Purchaser.
You shall have the right to substitute any one of your Affiliates as the
purchaser of the Notes that you have agreed to purchase hereunder, by written
notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this Section 21), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (other than in this Section
21), such word shall no longer be deemed to refer to such Affiliate, but shall
refer to you, and you shall have all the rights of an original holder of the
Notes under this Agreement.
Section 22. Miscellaneous.
Section 22.1. Successors and Assigns. All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Note) whether so expressed or
not.
Section 22.2. Payments Due on Non-Business Days. Anything in this Agreement or
the Notes to the contrary notwithstanding, any payment of principal of or Make-
Whole Amount or interest on any Note that is due on a date other than a Business
Day shall be made on the next succeeding Business Day without including the
additional days elapsed in the computation of the interest payable on such next
succeeding Business Day.
Section 22.3. Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
Section 22.4. Construction. Each covenant contained herein shall be construed
(absent express provision to the contrary) as being independent of each other
covenant contained herein, so that compliance with any one covenant shall not
(absent such an express contrary provision) be deemed to excuse compliance with
any other covenant. Where any provision herein refers to action to be taken by
any Person, or which such Person is prohibited from taking, such provision shall
be applicable whether such action is taken directly or indirectly by such
Person. Where the character or amount of any asset or liability or item of
income or expense is required to be determined or any consolidation or other
accounting computation is required to be made by the Company for the purposes of
this Agreement, the same shall be done by the Company in accordance with GAAP,
to the extent applicable, except where such principles are inconsistent with the
requirements of this Agreement.
Section 22.5. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto.
Section 22.6. Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the law of
the State of New York, excluding choice-of-law principles of the law of such
State that would require the application of the laws of a jurisdiction other
than such State.
If you are in agreement with the foregoing, please sign the form of agreement on
the accompanying counterpart of this Agreement and return it to the Company,
whereupon the foregoing shall become a binding agreement between you and the
Company.
Very truly yours,
VILLAGE SUPER MARKET, INC.
By
[Title]
Accepted as of
[VARIATION]
By
Its
Information Relating to Purchasers
NAME AND ADDRESS OF PURCHASER
PRINCIPAL AMOUNT OF
NOTES TO BE PURCHASED
$
Defined Terms
As used herein, the following terms have the respective meanings set forth below
or set forth in the Section hereof following such term:
"Agreement" means this Agreement and "Agreements" means, collectively, this
Agreement and the Other Agreements.
"Affiliate" means, at any time, and with respect to any Person, (a) any other
Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, 10% or more of any class of voting or equity interests of the
Company or any Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or more of any class of voting or equity interests. As used in this
definition, "Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
Unless the context otherwise clearly requires, any reference to an "Affiliate"
is a reference to an Affiliate of the Company.
"Business Day" means (a) for the purposes of Section 8.7 only, any day other
than a Saturday, a Sunday or a day on which commercial banks in New York City
are required or authorized to be closed, and (b) for the purposes of any other
provision of this Agreement, any day other than a Saturday, a Sunday or a day on
which commercial banks in Newark, New Jersey or New York, New York are required
or authorized to be closed.
"Capital Lease" means, at any time, a lease with respect to which the lessee is
required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"Closing" is defined in Section 3.
"Code" means the Internal Revenue Code of 1986, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time.
"Company" means Village Super Market, Inc., a New Jersey corporation.
"Confidential Information" is defined in Section 20.
"Company Management Group" is defined in Section 8.3(h).
"Consolidated Fixed Charges" for any period means on a consolidated basis the
sum of (a) all Rentals (other than Rentals on Capital Leases) payable during
such period by the Company and its Subsidiaries, and (b) all Interest Expense on
all Indebtedness of the Company and its Subsidiaries payable during such period.
"Consolidated Indebtedness" means all Indebtedness of the Company and its
Subsidiaries determined on a consolidated basis eliminating inter-company items.
"Consolidated Net Earnings" shall mean the net earnings of the Company and its
Subsidiaries determined on a consolidated basis in accordance with GAAP,
excluding: (a) extraordinary gains and losses; (b) any equity interest of the
Company on the unremitted earnings of any corporation not a Subsidiary; and (c)
any amounts not to exceed $2,000,000 relating to a one-time charge associated
with the settlement of litigation involving the Company's Garwood, New Jersey
Litigation.
"Consolidated Net Earnings Available for Fixed Charges" for any period means
the sum of (a) Consolidated Net Earnings during such period plus (to the extent
deducted in determining Consolidated Net Earnings), (b) all provisions for any
Federal, state or other income taxes made by the Company and its Subsidiaries
during such period, (c) all provisions for depreciation and amortization (other
than amortization of debt discount) made by the Company and its Subsidiaries
during such period, and (d) Consolidated Fixed Charges during such period.
"Consolidated Net Worth" means, as of the date of any determination thereof the
amount of the capital stock accounts (net of treasury stock, at cost) plus (or
minus in the case of a deficit) the surplus in retained earnings of the Company
and its Subsidiaries as determined in accordance with GAAP.
"Consolidated Priority Indebtedness" means all Priority Indebtedness of the
Company and its Subsidiaries determined on a consolidated basis eliminating
inter-company items.
"Consolidated Total Assets" means as of the date of any determination thereof,
total assets of the Company and its Subsidiaries determined on a consolidated
basis in accordance with GAAP.
"Consolidated Total Capitalization" means as of the date of any determination
thereof, the sum of (a) Consolidated Indebtedness plus (b) Consolidated Net
Worth.
"Control Event" is defined in Section 8.3(h).
"Default" means an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.
"Default Rate" means that rate of interest that is the greater of (i) 2% per
annum above the rate of interest stated in clause (a) of the first paragraph of
the Notes or (ii) 2% over the rate of interest publicly announced by The Bank of
New York in New York as its "base" or "prime" rate.
"Environmental Laws" means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including but not limited to
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the rules and regulations promulgated thereunder from
time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not incorporated) that
is treated as a single employer together with the Company under Section 414 of
the Code.
"Event of Default" is defined in Section 11.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Act Persons" is defined in Section 8.3(h).
"Existing Loan Agreement" means that certain Loan Agreement, dated as of May 30,
1997 among First Union National Bank (f/k/a CoreStates Bank, N.A.) and Summit
Bank, as lenders and First Union National Bank, as agent.
"GAAP" means generally accepted accounting principles as in effect from time to
time in the United States of America.
"Garwood, New Jersey Litigation" means the litigation described on Schedule 5.8.
"Governmental Authority" means
(a) the government of
(h) the United States of America or any State or other political subdivision
thereof, or
(ii)any jurisdiction in which the Company or any Subsidiary conducts all or
any part of its business, or which asserts jurisdiction over any properties of
the Company or any Subsidiary, or
(b) any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government.
"Guaranty" means, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such Indebtedness or obligation or any property constituting
security therefor;
(b) to advance or supply funds (i) for the purchase or payment of such
Indebtedness or obligation, or (ii) to maintain any working capital or other
balance sheet condition or any income statement condition of any other Person or
otherwise to advance or make available funds for the purchase or payment of
such Indebtedness or obligation;
(c) to lease properties or to purchase properties or services primarily for
the purpose of assuring the owner of such Indebtedness or obligation of the
ability of any other Person to make payment of the Indebtedness or
obligation; or
(d) otherwise to assure the owner of such Indebtedness or obligation against
loss in respect thereof.
In any computation of the Indebtedness or other liabilities of the obligor under
any Guaranty, the Indebtedness or other obligations that are the subject of
such Guaranty shall be assumed to be direct obligations of such obligor.
"Hazardous Material" means any and all pollutants, toxic or hazardous wastes or
any other substances, including all substances listed in or regulated in any
Environmental law that might pose a hazard to health or safety, the removal of
which may be required or the generation, manufacture, refining, production,
processing, treatment, storage, handling, transportation, transfer, use,
disposal, release, discharge, spillage, seepage, or filtration of which is or
shall be restricted, regulated, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"holder" means, with respect to any Note, the Person in whose name such Note is
registered in the register maintained by the Company pursuant to Section 13.1.
"Indebtedness" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money and its redemption obligations in
respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of property acquired by
such Person (excluding accounts payable arising in the ordinary course of
business but including all liabilities created or arising under any conditional
sale or other title retention agreement with respect to any such property);
(c) all liabilities appearing on its balance sheet in accordance with GAAP in
respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien with respect to any
property owned by such Person (whether or not it has assumed or otherwise become
liable for such liabilities);
(e) all its liabilities in respect of letters of credit or instruments serving
a similar function issued or accepted for its account by banks and other
financial institutions (whether or not representing obligations for borrowed
money), except letters of credit representing obligations for performance
guarantees;
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities of a type described
in any of clauses (a) through (f) hereof.
Indebtedness of any Person shall include all obligations of such Person of the
character described in clauses (a) through (g) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.
"Institutional Investor" means (a) any original purchaser of a Note, (b) any
holder of a Note holding more than 5% of the aggregate principal amount of the
Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"Interest Expense" of the Company and its Subsidiaries for any period means all
interest (including the interest component on Rentals on Capital Leases) and all
amortization of debt discount and expense on any particular Indebtedness
(including, without limitation, payment-in-kind, zero coupon and other like
Securities, fees and commissions for letters of credit and bankers' acceptance
financing and the net interest costs of interest rate swaps and xxxxxx) for
which such calculations are being made. Computations of Interest Expense on a
pro forma basis for Indebtedness having a variable interest rate shall be
calculated at the rate in effect on the date of any determination.
"Investments" means all investments, in cash or by delivery of property, made
directly or indirectly in any property or assets or in any Person, whether by
acquisition of shares of capital stock, Indebtedness or other obligations or
Securities or by loan, advance, capital contribution or otherwise; provided that
"Investments" shall not mean or include routine investments in property to be
used or consumed in the ordinary course of business.
"Lien" means, with respect to any Person, any mortgage, lien, pledge, charge,
security interest or other encumbrance, or any interest or title of any vendor,
lessor, lender or other secured party to or of such Person under any conditional
sale or other title retention agreement or Capital Lease, upon or with respect
to any property or asset of such Person (including in the case of stock,
stockholder agreements, voting trust agreements and all similar arrangements).
"Loan Agreement" means that certain Loan Agreement, dated as of September 16,
1999 between First Union National Bank and the Company.
"Make-Whole Amount" is defined in Section 8.7.
"Material" means material in relation to the business, operations, affairs,
financial condition, assets, properties, or prospects of the Company and its
Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the business,
operations, affairs, financial condition, assets, properties or prospects of the
Company and its Subsidiaries taken as a whole, or (b) the ability of the Company
to perform its obligations under this Agreement and the Notes, or (c) the
validity or enforceability of this Agreement or the Notes.
"Memorandum" is defined in Section 5.3.
"Minority Interests" means any shares of stock of any class of a Subsidiary
(other than directors' qualifying shares as required by law) that are not owned
by the Company and/or one or more of its Subsidiaries. Minority Interests shall
be valued by valuing Minority Interests constituting preferred stock at the
voluntary or involuntary liquidating value of such preferred stock, whichever is
greater, and by valuing Minority Interests constituting common stock at the book
value of capital and surplus applicable thereto adjusted, if necessary, to
reflect any changes from the book value of such common stock required by the
foregoing method of valuing Minority Interests in preferred stock.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" (as such
term is defined in Section 4001(a)(3) of ERISA).
"Non-U.S. Pension Plan" means any plan, fund, or other similar program
established or maintained outside the United States of America by the Company or
any one or more of the Subsidiaries primarily for the benefit of employees of
the Company or such Subsidiaries residing outside the United States of America,
which plan, fund or other similar program provides for retirement income for
such employees or a deferral of income for such employees in contemplation of
retirement and is not subject to ERISA or the Code.
"Noteholder Notice" is defined in Section 8.3(a).
"Notes" is defined in Section 1.
"Officer's Certificate" means a certificate of a Senior Financial Officer or of
any other officer of the Company whose responsibilities extend to the subject
matter of such certificate.
"Other Agreements" is defined in Section 2.
Other Purchasers" is defined in Section 2.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA or any successor thereto.
"Person" means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, or a government or
agency or political subdivision thereof.
"Plan" means an "employee benefit plan" (as defined in Section 3(3) of ERISA)
that is or, within the preceding five years, has been established or maintained,
or to which contributions are or, within the preceding five years, have been
made or required to be made, by the Company or any ERISA Affiliate or with
respect to which the Company or any ERISA Affiliate may have any liability.
"Preferred Stock" means any class of capital stock of a corporation that is
preferred over any other class of capital stock of such corporation as to the
payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.
"Priority Indebtedness" means (a) any Indebtedness of the Company secured by a
Lien created or incurred within the limitations of Section 10.4(i), and (b) any
Indebtedness of the Company's Subsidiaries.
"property" or "properties" means, unless otherwise specifically limited, real or
personal property of any kind, tangible or intangible, xxxxxx or inchoate.
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-14 issued by
the United States Department of Labor.
"Required Holders" means, at any time, the holders of at least 51% in principal
amount of the Notes at the time outstanding (exclusive of Notes then owned by
the Company or any of its Affiliates).
"Responsible Officer" means any Senior Financial Officer and any other officer
of the Company with responsibility for the administration of the relevant
portion of this Agreement.
"Rentals" means and include as of the date of any determination thereof all
fixed payments (including as such all payments which the lessee is obligated to
make to the lessor on termination of the lease or surrender of the property)
payable by the Company or a Subsidiary, as lessee or sublessee under a lease of
real or personal property, but shall be exclusive of any amounts required to be
paid by the Company or a Subsidiary (whether or not designated as rents or
additional rents) on account of maintenance, repairs, insurance, taxes and
similar charges. Fixed rents under any so-called "percentage leases" shall be
computed solely on the basis of the minimum rents, if any, required to be paid
by the lessee regardless of sales volume or gross revenues.
"SEC Rule 144A" means Rule 144A under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended from time to time.
"Security" shall have the same meaning as in Section 2(1) of the Securities Act.
"Senior Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.
"Senior Indebtedness" means all Indebtedness of the Company or of any Subsidiary
which is not expressed to be subordinate or junior in right of payment to any
other Indebtedness of the Company.
"Subsidiary" means, as to any Person, any corporation, association or other
business entity in which such Person or one or more of its Subsidiaries or such
Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to
a "Subsidiary" is a reference to a Subsidiary of the Company.
"Swaps" means, with respect to any Person, payment obligations with respect to
interest rate swaps, currency swaps and similar obligations obligating such
Person to make payments, whether periodically or upon the happening of a
contingency. For the purposes of this Agreement, the amount of the obligation
under any Swap shall be the amount determined in respect thereof as of the end
of the then most recently ended fiscal quarter of such Person, based on the
assumption that such Swap had terminated at the end of such fiscal quarter, and
in making such determination, if any agreement relating to such Swap provides
for the netting of amounts payable by and to such Person thereunder or if any
such agreement provides for the simultaneous payment of amounts by and to such
Person, then in each such case, the amount of such obligation shall be the net
amount so determined.
"Voting Stock" means Securities of any class or classes, the holders of which
are ordinarily, in the absence of contingencies, entitled to elect a majority of
the corporate directors (or Persons performing similar functions).
"Wakefern" means Wakefern Food Corp., a New Jersey corporation.
"Wholly-owned Subsidiary" means, at any time, any Subsidiary one hundred percent
(100%) of all of the equity interests (except directors' qualifying shares) and
voting interests of which are owned by any one or more of the Company and the
Company's other Wholly-owned Subsidiaries at such time.
[Form of Note]
Village Super Market, Inc.
8.12% Senior Note due September 16, 2009
No. [ ] September 16, 1999
$[ ] PPN 927107 A@ 1
FOR VALUE RECEIVED, the undersigned, VILLAGE SUPER MARKET, INC.(herein called
the "Company"), a corporation organized and existing under the laws of the State
of State of , hereby promises to pay to , or registered assigns, the
principal sum of DOLLARS on September 16, 2009, with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
unpaid balance thereof at the rate of 8.12% per annum from the date hereof,
payable semiannually, on the sixteenth day of March and September in each year,
commencing with the March 16th or September 16th next succeeding the date
hereof, until the principal hereof shall have become due and payable, and (b) to
the extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreements
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 10.12% or (ii) 2% over the rate of interest publicly
announced by The Bank of New York from time to time in New York as its "base" or
"prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with respect to
this Note are to be made in lawful money of the United States of America at New
York, New York or at such other place as the Company shall have designated by
written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the "Notes") issued
pursuant to separate Note Purchase Agreements, dated as of September 1, 1999 (as
from time to time amended, the "Note Purchase Agreements"), between the Company
and the respective Purchasers named therein and is entitled to the benefits
thereof. Each holder of this Note will be deemed, by its acceptance hereof, (i)
to have agreed to the confidentiality provisions set forth in Section 20 of the
Note Purchase Agreements and (ii) to have made the representation set forth in
Section 6.2 of the Note Purchase Agreements.
This Note is a registered Note and, as provided in the Note Purchase Agreements,
upon surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
for a like principal amount will be issued to, and registered in the name of,
the transferee. Prior to due presentment for registration of transfer, the
Company may treat the person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other purposes, and the
Company will not be affected by any notice to the contrary.
The Company will make required prepayments of principal on the dates and in the
amounts specified in the Note Purchase Agreements. This Note is also subject to
optional prepayment, in whole or from time to time in part, at the times and on
the terms specified in the Note Purchase Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements, occurs and
is continuing, the principal of this Note may be declared or otherwise become
due and payable in the manner, at the price (including any applicable Make-Whole
Amount) and with the effect provided in the Note Purchase Agreements.
This Note shall be construed and enforced in accordance with, and the rights and
parties shall be governed by, the law of the State of New York, excluding
choice-of-law principles of the law of such State which would require
application of the laws of the jurisdiction other than such State.
VILLAGE SUPER MARKET, INC.
LOAN AGREEMENT
BETWEEN
FIRST UNION NATIONAL BANK,
a National Banking Association,
As "Lender"
AND
VILLAGE SUPER MARKET, INC.,
a New Jersey Corporation,
as "Borrower"
DATED: September 16, 1999
Prepared By:Xxxxxxx X. Xxxxx, Esq.
Windels, Marx, Davies & Ives
000 Xxxxxx Xxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxx Xxxxxx 00000
Telephone No. (000) 000-0000
Telecopier No. (000) 000-0000
LOAN AGREEMENT
This Loan Agreement is made as of this 16th day of September, 1999,
BETWEEN: FIRST UNION NATIONAL BANK, a National Banking Association having an
office at 000 Xxxxx Xxxx, Mail Code NJ 3161, Summit, New Jersey 07901 (the
"Lender");
AND: VILLAGE SUPER MARKET, INC. (the "Borrower"), a New Jersey corporation
having its principal place of business at 000 Xxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx
Xxxxxx 00000.
PURPOSE: This Loan Agreement is intended to set the terms of certain revolving
credit loans involving the Lender and the Borrower.
In exchange of the mutual covenants in the Loan Documents and other good and
valuable consideration, receipt and sufficiency of which is hereby acknowledged,
the parties to this Loan Agreement hereby agree to the flowing terms, conditions
and provisions:
SECTION I - DEFINITIONS
Capitalized Terms. The capitalized terms in this Loan Agreement shall be
defined as follows:
"Affiliate" of a Person means another Person who directly or indirectly
controls, is controlled by, or is under common control with such Person.
"Applicable Margin" means, with respect to any LIBOR Loan, the number of Basis
Points set forth below in the first column upon the Borrower obtaining and
maintaining the Ratio of EBITDAR to Interest Plus Rent set forth below in the
second column:
Applicable Margin Ratio of EBITDAR to Interest Plus Rent
125 basis points Equal to or greater than 2.75 to 1.00
150 basis points Equal to or greater than 2.40 to 1.00,
but less than 2.75 to 1.00
175 basis points Equal to or greater than 2.30 to 1.00,
but less than 2.40 to 1.00
Any increase or decrease in the Applicable Margin hereunder shall be effective
two (2) Banking Days after the Borrower has delivered to the Lender all of the
financial information for the prior Fiscal Quarter required hereunder.
Notwithstanding the foregoing, it is hereby acknowledged that the initial
Applicable Margin shall be 125 basis points and at all times during which there
exists a Default or Event of Default hereunder, the Applicable Margin shall be
175 basis points for LIBOR Loans.
"Banking Day" means any day excluding Saturday, Sunday and any day that in the
State of New Jersey is a legal holiday or a day on which banking institutions
are authorized by law to close.
"Basis Point" means one one-hundredth (.01) of a percentage point.
"Borrower" means the "Borrower" named in the caption of this Loan Agreement and
its successors and assigns.
"Capital Expenditure" shall have the meaning attributable to such term under
GAAP.
"Capital Lease" means any lease with respect to which the obligation to pay rent
or other amounts constitutes Capitalized Lease Obligations.
"Capitalized Lease Obligations" means obligation to pay rent or other amounts
under a lease of (or other agreement conveying the right to use) real and/or
personal property which obligations are required to be classified and accounted
for as capital leases on a balance sheet in accordance with GAAP.
"Commitment" means, from and including the Date of Closing to but excluding the
Maturity Date, the $15,000,000.00 as such amount may be adjusted pursuant to
Section 2.3 or otherwise hereunder.
"Company" means any of Borrower and the Subsidiaries. "Companies" means Borrower
and all of the Subsidiaries.
"Date of Closing" means the date on which the conditions precedent set forth in
Section 4.1 have been fulfilled to the satisfaction of the Lender.
"Default" means any condition or event that, with notice or lapse of time, would
give rise to an Event of Default.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated thereunder.
"Event of Default" means any event of default listed in Section VIII.
"Existing Credit Facility" means the credit facility made available to the
Borrower pursuant to that certain Revolving Credit and Term Loan Agreement dated
as of May 30, 1997 by and between the Borrower, the Lender (then known as
CoreStates Bank, N.A.), as a lender and the agent thereunder, and Summit Bank,
as a lender thereunder.
"Fiscal Year" means the fiscal year for each Company which is the 52 or 53 week
period ending on the last Saturday of the month of July of each calendar year.
"Fiscal Quarter" means the four fiscal quarters in each Fiscal Year of the
Borrower as adopted by the Borrower for reporting purposes with the Securities
and Exchange Commission ("SEC") or (if the Borrower is no longer a reporting
company with the SEC) as otherwise reasonably adopted by the Borrower in good
faith.
"GAAP" means generally accepted accounting principles, consistently applied.
"Garwood Facility" means the proposed supermarket to be constructed in Garwood,
New Jersey (bordering Westfield, New Jersey).
"Hazardous Substance(s)" means any pollutants and dangerous substances including
radon, and any "hazardous wastes" or "hazardous substances" as defined in the
Industrial Site Recovery Act (N.J.S.A. 13: 1 K-6 et seq.), the Spill
Compensation and Control Act (N.J.S.A. 58:10-23.11 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. 6901 et seq.), the Comprehensive
Environmental Responsibility Compensation and Liability Act (42 U.S.C. 9601 et
seq.) or any other state or federal environmental law or regulation.
"Interest Payment Date" means:
(a) as to any Prime Rate Loan, the first day of each month and
the applicable Maturity Date; or
(b) as to any LIBOR Loan, the last day of each Interest Period; provided
however, that when the applicable Interest Period is more than one month
interest shall also be payable on the same day in each calendar month that the
Interest Period commenced (or the last day of the month if there is no
corresponding date in such month).
"Interest Period" means with respect to any LIBOR Loan:
(a) initially, the period commencing on the borrowing or conversion date, as
the case may be, with respect to such LIBOR Loan and ending one (1), two (2) or
three (3) months thereafter, as selected by the Borrower in its Notice of
Borrowing delivered pursuant to Section 2.7 hereof, or in its notice of
conversion delivered pursuant to Section 2.8 hereof, as the case may be, given
with respect thereto; and
(b) thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to such LIBOR Loan and ending one (1), two (2) or
three (3) months thereafter, as selected by the Borrower in its notice of
continuance delivered pursuant to Section 2.8 hereof, with respect thereto;
provided that, all of the foregoing provisions relating to Interest Period shall
be subject to the following:
(a) if any Interest Period pertaining to a LIBOR Loan would otherwise end on a
day that is not a LIBOR Banking Day, such Interest Period shall be extended to
the next succeeding LIBOR Banking Day unless the result of such extension would
be to carry such Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding LIBOR Banking Day; and
(b) any Interest Period pertaining to a LIBOR Loan that begins on the last LIBOR
Banking Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last LIBOR Banking Day of a calendar month.
"InsuRite" means Insure-Rite Ltd., a captive insurance company owned by
Wakefern, the Borrower and various other entities.
"Lending Office" means the lending office of the Lender designated in the
caption of this Loan Agreement or such other office of the Lender as the
Lender may from time to time specify to the Borrower as the office at which its
Loan is to be maintained.
"Letter of Credit" is defined in Section 2.11(A).
"Liabilities" means, at any date, (i) the amount of all liabilities
and obligations that, in accordance with GAAP, should be classified as
liabilities as shown on the liability side of a consolidated balance sheet of
the Borrower at such date inclusive of all amounts for deferred taxes and (ii)
all guarantees and endorsements (including all indebtedness and liabilities
guaranteed, directly or indirectly in any manner by Borrower, including letters
of credit and standby letters of credit (except for the xxxxxxx'x compensation
letter of credit to the extent accrued as a liability on the Borrower's balance
sheet)).
"LIBOR Banking Day" means any Banking Day on which dealing in the London
interbank market may be carried on by commercial banks in London, England.
"LIBOR Loan" means any Loan that bears interest at a rate of interest based upon
the LIBOR Rate.
"LIBOR Rate" means, with respect to each day during each Interest Period
pertaining to a LIBOR Loan, the per annum rate (rounded to the next higher 1/100
of 1%) for deposits in United States dollars for a period equal to the relevant
Interest Period as reported on the Telerate Page 3750 as of 11:00 a.m. (London
time), on the day that is two (2) LIBOR Banking Days prior to the commencement
of such Interest Period (or if not so reported, then as determined by the Lender
from another recognized source for London interbank market quotations), adjusted
for reserves by dividing that rate by 1.00 minus the LIBOR Reserve.
"LIBOR Reserve" means the maximum percentage reserve requirements (rounded to
the next higher 1/100 of 1% and expressed as a decimal)
of the Lender (including, without limitation, basic, supplemental, marginal and
emergency reserves), in effect on any day during the relevant Interest Period
under Regulation D with respect to eurocurrency funding currently referred to as
"Eurocurrency liabilities" in Regulation D.
"Lien" means any mortgage, pledge, security interest, encumbrance, collateral
assignment, lien or charge of any kind (including any agreement to give any of
the foregoing), any conditional sale or other title retention agreement or any
lease in the nature thereof
"LIFO" means the LIFO provision for any period, computed in
accordance with GAAP.
"Loan" means each and every Revolving Credit Loan made by the Lender hereunder.
For purposes of this Loan Agreement, the continuation or conversion of a LIBOR
Loan or Prime Rate Loan shall not constitute the making of a new Loan.
"Loan Agreement" means this Loan Agreement.
"Loan Document(s)" means this Loan Agreement and all documents, notes,
assignments, certificates and agreements of any kind listed, described or
referenced on the Closing Memorandum annexed to this Loan Agreement as "Exhibit
A" or otherwise executed in connection with this Loan Agreement.
"Maturity Date" means September 16, 2002; subject, however, to extension as
provided in Section 3.6 hereof.
"Net Income" means net income (excluding (i) any extraordinary items, (ii) an
amount not to exceed $2,000,000 related to a one-time charge associated with the
settlement of certain currently pending litigation involving the Garwood
Facility, (iii) other non-cash gains, and (iv) other non-cash losses) for the
Companies calculated on a consolidated basis in accordance with GAAP.
"Note" means the Revolving Loan Note.
"Note Private Placement" means the private placement of the Borrower's notes as
contemplated in Section 4.1(C) hereof.
"Notice of Borrowing" means the notice of borrowing as described in Section
2.7.
"Obligation(s)" means all debts, liabilities, duties and obligations owing by
any Company to the Lender, whether direct or indirect, now existing or in the
future created or acquired, contingent or non-contingent, due or to become due,
liquidated or unliquidated, including those arising under the Revolving Loan,
commitments of any kind by the Lender, or on behalf of any Company, all expenses
of the Lender to protect its interests under any Loan Documents, and all other
debts and obligations relating to, or arising under, this Loan Agreement or any
other Loan Document.
"Opinion Letter" means the opinion letter from the Borrower's counsel to the
Lender and its counsel in the form annexed as "Exhibit C" to this Loan
Agreement.
"Permitted Dispositions" means (a) sales or other forms of dispositions of
Properties of any of the Companies so long as the aggregate book value of such
Properties sold or disposed in any Fiscal Year does not exceed five percent (5%)
of the total assets of the Companies determined on a consolidated basis in
accordance with the definition of Tangible Net Worth for the Fiscal Year then
most recently ended and (b) any sale-leaseback transaction involving any of the
Companies' store facilities which are acquired subsequent to the Date of
Closing, in which such Company sells or transfers said facility to a Person
(other than a Company) and, as part of the same transaction, a Company rents or
leases, or similarly acquires the right to possession or use of, such facility
for essentially the same purpose.
"Permitted Encumbrance(s)" means any of the following: (a) taxes, assessments
and other governmental charges not yet due and payable or that can be paid
without penalty, or that are currently being contested in good faith by
appropriate proceedings; provided, the Companies shall have set aside on their
books adequate reserves for any tax, assessment or other governmental charge so
being contested; (b) workmen's, repairmen's, warehousemen's and carriers' liens
and other similar Liens arising in the ordinary course of business for charges
not delinquent or that are currently being contested in good faith by
appropriate proceedings, provided, the Borrower shall have set aside on its
books adequate reserves for such Liens being contested; (c) easements, rights of
way, exceptions, encroachments, reservations, restrictions, conditions or
limitations that do not in the aggregate materially interfere with or impair the
intended use of any property or render title to any property unmarketable; (d)
rights reserved to, or vested in, any municipality or governmental or other
public authority that do not in the aggregate materially interfere with or
impair the intended operation or use of any property or render title to any
property unmarketable; (e) a purchase money mortgage in favor of Xxxxxx Xxxxxx
on certain land in Westfield, New Jersey, in the outstanding principal amount of
$4,150,000; (f) Liens on or in shares of capital stock of Wakefern owned by
Borrower to secure Borrower's obligations to Wakefern to make capital
contributions to Wakefern and indebtedness owing to Wakefern with respect to the
purchase of inventory; (g) Liens listed on Exhibit 6 to the Principal's
Certificate and consented to by the Lender; (h) purchase money Liens (other than
Liens listed or described above) on Property directly acquired with the proceeds
of the Liabilities secured by said Lien so long as (x) the amount of any such
Liabilities does not exceed 100% of the fair market value of the Property so
encumbered and (y) the aggregate amount of all such Liabilities does not
exceed $2,000,000 at any time outstanding (exclusive of the Liabilities secured
by Liens permitted pursuant to clause (i) below; (i) purchase money Liens for
equipment purchased under any Wakefern sponsored financing program so long as
the Lien only affects and attaches to the equipment so purchased; (j) Liens in
favor of Wakefern on deposits made with Wakefern; (k) Liens in favor of the
Lender; and (l) leases listed on Exhibit 7 to the Principal's Certificate and
consented to by the Lender.
"Person(s)" means an individual, corporation, partnership, limited partnership,
limited liability company, joint venture, trust, joint stock company,
unincorporated organization, association, governmental agency or political
subdivision.
"Plan(s)" means each employee benefit plan maintained for employees of any
Company, as defined in Section 3(2) of the Employee Retirement Income Act of
1974, as amended.
"Prime Rate" means the per annum rate of interest established by Lender as its
reference rate in making loans, and does not reflect the rate of interest
charged to any particular borrower or class of borrowers. The Borrower
acknowledges that the Prime Rate is not tied to any external index or rate of
interest and that the rate of interest charged hereunder shall change
automatically and immediately as of the date of any change in the Prime Rate
without notice to Borrower.
"Prime Rate Loan" means any Loan that bears interest at a rate of interest based
upon the Prime Rate.
"Principal's Certificate" means the principal's certificate of this date given
to the Lender by the president of Borrower.
"Privately Placed Notes" means the $30,000,000 Senior Unsecured Notes of the
Borrower issued in connection with the Note Private Placement.
"Property" means all property, rights and interests presently owned or in the
future created or acquired by any Company, whether tangible or intangible,
including realty, fixtures, goods, inventory, equipment, real property leases,
stock, instruments, chattel paper, bank accounts and equipment leases including
the stock of the Subsidiaries, and the proceeds and products of the foregoing.
"Ratio of EBITDAR to Interest Plus Rent" means, for the four (4) most recently
completed Fiscal Quarters preceding the date of determination, the sum of
earnings before interest, taxes, depreciation, amortization and Rent, excluding
(i) any extraordinary items, (ii) an amount not to exceed $2,000,000 related
a one-time charge associated with the settlement of certain currently pending
litigation involving the Xxxxxxx Facility, (iii) other non-cash gains, and (iv)
other non-cash losses, divided by the sum of the aggregate amount of its
interest expense accruing with respect to any and all of its indebtedness plus
the aggregate amount of its Rent.
"Ratio of Funded Debt Plus 8* Rent to EBITDAR" means, as applied to any person
or entity, the sum of all indebtedness for borrowed money, including, without
limitation, Capitalized Lease Obligations, subordinated debt (including debt
subordinated to the Lender), and unreimbursed drawings under letters of credit,
or any other monetary obligation evidenced by a note, bond, debenture or other
agreement of that person or entity and excluding any obligations of the Borrower
to purchase stock of Wakefern, plus the product of eight (8) times the aggregate
amount of its Rent divided by the sum of earnings before interest, taxes,
depreciation, amortization and Rent, excluding (i) any extraordinary items,
(ii) an amount not to exceed $2,000,000 related to a one-time charge associated
with the settlement of certain currently pending litigation involving the
Xxxxxxx Facility, (iii) other non-cash gains, and (iv) other non-cash losses.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor to all or a
portion thereof establishing reserve requirements.
"Rent" means the minimum amount of rental and other obligations, determined on a
consolidated basis in accordance with GAAP, required to be paid during such
period by any of the Companies as lessee under all leases of real or personal
property (other than Capital Leases), excluding any amounts required to be paid
by the lessee (whether or not therein designated as rent or additional rent) (a)
which are on account of maintenance and repairs, insurance, taxes, assessments
and similar charges or (b) which are based on profits, revenues or sales
realized by the lessee from the leased property or otherwise based on the
performance of the lessee.
"Revolving Loan" means the loans described in Section II.
"Revolving Note" means the Revolving Note of this date from Borrower to the
order of the Lender, and any amendments or modifications thereof. A copy of the
Revolving Note is annexed to this Loan Agreement as "Exhibit B."
"Section" means a section of this Loan Agreement.
"Subsidiaries" means any other corporation or similar entity, a majority of the
stock or dispositive voting power of which is owned or possessed directly or
indirectly by the Borrower.
"Sumas Family" means (i) Xxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxx Xxxxx,
and Xxxx Xxxxx, (ii) any spouse, heirs, legatees, or lineal descendants (to the
third degree of consanguinity) of the individuals listed in clause (i) above, or
(ii) trusts established primarily for the benefit of the individuals listed in
clauses (i) and (ii) above, so long as such any such trust has been established
in good-faith for legitimate estate planning purposes.
"Tangible Net Worth" means (x) total "assets" less (y) total "liabilities," in
each case as would be shown on a consolidated balance sheet of the Companies
prepared in accordance with GAAP. For purposes of this definition, there shall
be (a) excluded from the definition of "assets" all assets classified as
intangible in accordance with GAAP, including organizational expenses, patents,
trademarks, service marks, copyrights, goodwill, franchises, brand names,
covenants not to compete, research and development costs, treasury stock, and
monies due from principals and Affiliates and all unamortized debt discounts and
deferred charges, (b) deducted from "assets" reserves for LIFO, depreciation,
depletion, obsolescence and amortization and all other proper reserves that are
required to be maintained pursuant to the Loan Agreement or that, in accordance
with GAAP, should be established in connection with the business conducted by
the Companies and (c) "liabilities" shall include any debt subordinated in
writing to the Obligations on terms and conditions acceptable to the Lender.
"Telerate Page 3750" means the display designated as "Page 3750" on the Dow
Xxxxx Telerate Service (or such other page as may replace that page on that
service for the purpose of displaying London interbank offered rates of major
banks.
"Term" means the duration of this Loan Agreement as set forth in Section 3.6.
"Termination Event" means a "reportable event" as defined in section 4043(b) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), the
filing of a notice to terminate under section 4041 of ERISA or any other event
or condition that might constitute grounds under section 4042 of ERISA for the
termination of, or for the appointment of a trustee to administer, any Plan.
"Traveler's Mortgage Debt" means that certain mortgage indebtedness owing to
Travelers Insurance Company and the Travelers Indemnity Company in an original
principal amount of $4,000,000 secured by a mortgage upon certain of the
Borrower's real property located in Egg Harbor, New Jersey
"Wakefern" means Wakefern Food Corp., a New Jersey corporation.
1.2 Interpretation. Unless otherwise specified, the following rules of
construction shall apply to this Loan Agreement:
(A) The term "any" shall be construed as if followed by the phrase "one or
more"; the term "including" shall be construed as if followed by the phrase
"without limitation"; and the term "days" shall be construed as if preceded by
the word "calendar," unless it is capitalized and is preceded by the word
"Banking".
(B) Singular words include the plural and plural words include the singular.
(C) Title headings and subheadings are for organizational purposes only and
neither add to, nor limit, the meaning of any provision.
(D) All accounting terms not specifically defined herein shall be construed
in accordance with GAAP and all financial data required to be delivered
hereunder shall be prepared in accordance with GAAP.
SECTION II - REVOLVING LOAN
Subject to the terms and conditions set forth in this Loan Agreement and the
full satisfaction of all requirements of the Lender and its counsel, including
delivery of all documents listed on Exhibit A, and the absence of any Default or
Event of Default, the Lender will, from time to time, make loans to the Borrower
in such amounts and under such terms as set forth below:
2.1 Amount of Loans. The aggregate amount of all loans and extensions of
credit at any time outstanding under the Revolving Loan shall not exceed FIFTEEN
MILLION AND 00/100 ($15,000,000) DOLLARS. The Borrower may request that
Revolving Loans be made in the form of a Prime Rate Loan or LIBOR Loan in
accordance with the procedures, and subject to the limitations, set forth in
this Loan Agreement. Until the Maturity Date, in the absence of any Default or
Event of Default, the Borrower may borrow, reborrow and repay the Revolving Loan
so long as the aggregate outstanding balance is never in excess of $15,000,000.
2.2 Loans In Excess of Maximum. If, for any reason, the aggregate outstanding
balance of the Revolving Loan should at any time exceed FIFTEEN MILLION AND
00/100 ($15,000,000) DOLLARS, all sums advanced shall nonetheless constitute
indebtedness under this Loan Agreement and shall be due and payable upon demand.
2.3 Reduction in Commitment. At any time, the Borrower, on ten (10) days'
advance written notice to the Lender, may reduce the Commitment under the
Revolving Loan set forth in Section 2.1 provided that (a) the reduction is in
increments of One Million and 00/100 ($1,000,000) Dollars, and (b) the reduction
does not reduce the Commitment to an amount less than the current principal
balance then outstanding hereunder. Any such notice of reduction shall be
irrevocable and permanent, and the Borrower shall have no right to increase the
Commitment under the Revolving Loan once reduced by the Borrower hereunder.
2.3 Principal Payment. The Borrower shall not be required to make principal
payments prior to the Maturity Date except as required under Section 2.2 or if
there shall be an Event of Default. On the Maturity Date, the Borrower shall
repay the entire principal balance of the Revolving Loan outstanding as of the
Maturity Date together with all accrued interest and other sums then outstanding
under the Revolving Loan, which shall all then be due and payable in full.
2.4 Interest Payment. Accrued interest on the daily principal balance is due
and payable on each Interest Payment Date. Any interest not paid when due, in
the Lender's discretion, and without limitation of any other right or remedy in
any Loan Document (including the right to charge a late fee or to raise the
interest rate after an Event of Default) may be added to the principal amount
outstanding under the Revolving Loan and accrue interest at the Prime Rate and
be payable upon demand.
2.5 Clean-up of Principal Balance. The Borrower shall be required to repay
the aggregate principal balance of the Revolving Loan to a maximum of One
Hundred and 00/100 ($100.00) Dollars for thirty (30) consecutive days during
each period of twelve (12) months in which the Revolving Loan is available
hereunder.
2.7 Method of Borrowing.
(A) Notice of Borrowing. To borrow or to select a type of loan under the
Revolving Loan, the Borrower shall deliver to the Lender (or transmit by
telecopier with the original to be mailed or delivered to the Lender on the same
day) by 11:00 a.m. of any Banking Day an irrevocable Notice of Borrowing signed
by an authorized signer of the Borrower as designated in the borrowing
resolutions substantially in the form of the annexed Exhibit D specifying each
of the following:
(i) the proposed borrowing date for a Revolving Loan which, (a) in the case
of a Prime Rate Loan may be the same Banking Day or, (b) in the case of
a LIBOR Loan shall be a LIBOR Banking Day at least two (2) Banking Days
thereafter;
(ii) the type of loan requested;
(iii) the amount of the proposed borrowing which, in the case of a Prime Rate
Loan shall be at least $500,000 and in multiples of $50,000 and in the case of
a LIBOR Loan shall be in multiples of $1,000,000;
(iv) in the case of a LIBOR Loan, the duration of the Interest Period for each
borrowing (which Interest Period: (a) shall be either one (1) month, two (2)
months, or (3) three months; and (b) shall not extend beyond the Maturity Date)
and;
(v) instructions to the Lender as to the deposit or transmittal of the borrowed
funds.
Amounts drawn on the Revolving Loan on the effective date of the Loan Agreement
shall be deemed to be LIBOR Loans.
(B) Determination of Rate. For any LIBOR Loan, two (2) LIBOR Banking Days
before the first day of the applicable Interest Period, the Lender shall
determine the applicable LIBOR Rate and advise Borrower of that rate by
telephone or telecopier. If by 11:30 a.m. of the day in which the Lender quotes
any rate the Borrower shall not have advised the Lender (by telephone with
immediate telecopier confirmation) whether Borrower wishes to receive the quoted
rate, then the Lender may, in its discretion, conclude that the Borrower has
rejected the quoted rate and chosen instead to receive a Prime Rate Loan in an
amount equal to the Loan requested in the applicable Notice of Borrowing. The
Lender's determination of any rate shall be conclusive, absent manifest error.
(C) Deduction for Amounts Due. If any Revolving Loan is to be made on a day on
which Borrower is to repay any outstanding Loan, the Lender is authorized to
apply proceeds from the new Loan to make that payment and advance to Borrower
only the net amount of the new Loan after deducting the amount of the existing
Loan payment including principal and accrued interest that had been due.
2.8 Loan Selection.
(A) Revolving Loan. During the term of the Revolving Loan prior to 12:00 noon of
the Banking Day prior to the Maturity Date, by delivering a Notice of Borrowing
pursuant to Section 2.7, the Borrower may: (1) convert any Prime Rate Loan to a
LIBOR Loan by giving the Lender the Notice of Borrowing two (2) LIBOR Banking
Days before the first day of the applicable Interest Period; (2) at the end of
any Interest Period, convert any LIBOR Loan to a Prime Rate Loan; and (3) at the
end of any Interest Period, convert any LIBOR Loan to a LIBOR Loan with a
different Interest Period. The Borrower must select either a LIBOR Rate or the
Prime Rate for the entire amount of any advance, but may simultaneously have
outstanding various types of Revolving Loans. The Borrower shall have no right
to select an Interest Period for a LIBOR Loan that would go beyond the Maturity
Date.
(B) Lender's Election of Rate. If the Lender does not receive a timely Notice
of Borrowing prior to the expiration of any Interest Period for a LIBOR Loan,
the Borrower shall be deemed to have elected to pay in full that LIBOR Loan at
the end of the Interest Period out of the proceeds of a new Prime Rate Loan.
That new Prime Rate Loan will be in a principal amount equal to the principal
amount and, if the Lender determines in its absolute discretion, accrued
interest of the LIBOR Loan that is being repaid and shall be deemed made
automatically and contemporaneously with the payment of that LIBOR Loan.
2.9 Use of Proceeds. The proceeds of any advances under the Revolving Loan
will be used by the Borrower to fund general working capital and corporate
purposes of the Companies or for any other purpose (but not new store
construction).
2.10 Notes. The Revolving Loan shall be evidenced by the Revolving Note, a
copy of which is annexed as Exhibit B.
2.11 Standby Letters of Credit. The Lender, in its discretion, may issue or
process an application for a letter of credit or any other credit accommodation
on behalf of the Borrower. The letters of credit issued hereunder may be used to
secure obligations to the Borrower's insurers under the Borrower's worker's
compensation program or any other lawful purpose. While there is no commitment
to issue any letters of credit hereunder, the aggregate principal amount of
letters of credit which may be issued by the Lender and outstanding hereunder
shall not exceed Three Million and 00/100 ($3,000,000) Dollars. If any letters
of credit are issued, the following terms shall also apply:
(A) Any letters of credit issued by the Lender will be in the Lender's customary
form (individually a "Letter of Credit" and, collectively, the "Letters of
Credit") for the account of the Borrower. Letters of Credit may be issued at any
time and from time to time on or after the date hereof through the date which is
sixty (60) days before the Maturity Date, provided that the existing letter of
credit no. 516165 issued by New Jersey National Bank (predecessor to CoreStates,
in turn, the predecessor to the Lender) on the account of Borrower an original
face amount of $1,705,000 (with $1,000,000 currently available to be drawn)
shall be deemed to be a Letter of Credit under this Loan Agreement. The
aggregate amount outstanding at any time of all Letters of Credit shall not
exceed $3,000,000. The term of any Letter of Credit shall not exceed one year,
and each such Letter of Credit shall have an expiry which is not later than the
Maturity Date; provided, however, that any outstanding Letter of Credit with
provision for automatic renewal will continue to be renewed up to the Banking
Day prior to the Maturity Date as set forth under the terms of such Letter of
Credit and payment of fees, repayment terms and other provisions of such Letter
of Credit will continue to be governed by this Section 2.12 except the last
sentence of clause (G) below. No outstanding Letter of Credit, and no Letter of
Credit issued hereunder, shall be automatically renewed for any period beyond
five (5) years from the date of initial issuance.
(B) The Borrower shall notify the Lender at least ten (10) Banking Days in
advance by written notice of its request that the Lender issue a Letter of
Credit. Each such notice shall be irrevocable and confirmed immediately by
delivery to the Lender of a Request for Letter of Credit in the Lender's
customary form, but without any accompanying terms and conditions which are
inconsistent with this Loan Agreement or the other Loan Documents.
(C) Each request for a Letter of Credit shall constitute a representation and
warranty by the Borrower that, except as contemplated by the Loan Documents: (i)
the representations and warranties set forth in Section V hereof remain accurate
as of the date of such request, and (ii) no Default or Event of Default exists
under this Loan Agreement or any other Loan Document.
(D) Each Letter of Credit outstanding shall reduce the amount available under
the Lender's Commitment in an amount equal to such Letter of Credit, and for the
purposes of Section 2.1 each such Letter of Credit shall be deemed to be a use
of the Lender's Commitment.
(E) Each payment by the Lender under a Letter of Credit shall be treated as a
loan (a "Letter of Credit Loan") and shall be payable one (1) Banking Day after
notice of such payment is given to Borrower, or, if earlier, on the Maturity
Date. Each Letter of Credit Loan outstanding shall reduce the amount available
under the Lender's Commitment as under paragraph (D) above.
(F) Each Letter of Credit Loan shall bear interest on the outstanding principal
amount thereof, for each day from the date such Letter of Credit Loan is made
until the date payment is made in full, at a rate per annum equal to the Prime
Rate in effect from time to time.
(G) The obligation to repay each Letter of Credit Loan in full, together with
accrued interest thereon in accordance with this Loan Agreement, shall be
absolute, unconditional and irrevocable, under all circumstances whatsoever, and
(without limiting the generality of the foregoing) shall not be affected by:
(i) the use which may be made of the Letter of Credit Loan or any acts or
omissions of the drawer in connection therewith;
(ii) the validity or genuineness of documents presented in connection with a
drawing, or of any endorsement thereon, even if such documents should in fact
prove to be in any or all respects invalid, fraudulent or forged, provided that
such documents appear on their face to comply with the terms of the Letter of
Credit;
(iii) any irregularity in the transaction with respect to which the Letter of
Credit is issued; or
(iv) the existence of any claim, set-off, defense or other right which the
Borrower might have against the Lender, or any other Person, whether in
connection with the Letter of Credit, the transaction contemplated by the Letter
of Credit, or any unrelated transaction.
If all conditions to borrowing Revolving Loans are satisfied, the Borrower shall
have the right to repay any Letter of Credit Loan with the proceeds of Revolving
Loans made on or prior to the maturity of the Letter of Credit Loan.
(H) The Borrower shall pay to the Lender a fee (the "Letter of Credit Fee") on
the undrawn portion of all Letters of Credit at a rate per annum equal to one
and one-quarter percent (1-1/4%) which shall be payable quarterly in advance on
the first Banking Day of each January, April, July and October to occur after
the date hereof. The foregoing shall modify the fees payable in connection with
all outstanding Letters of Credit.
(I) The Borrower shall pay to the Lender with respect to each Letter of Credit
issued, the usual and customary administrative fees and other charges of the
Lender in connection with any Letter of Credit, including without limitation,
all charges for the issuance of Letters of Credit, the negotiation of any draft
paid pursuant to any Letter of Credit and any amendments or supplements thereto.
(J) At Closing, the Borrower shall supply to the Lender a list of all
outstanding Letters of Credit issued by any financial institution.
2.12 Termination. The provisions of this Loan Agreement that provide for the
making of advances under the Revolving Loan shall expire automatically on 12:00
noon on the Banking Day before the Maturity Date and may be terminated by the
Lender at any time after the occurrence of any Default or Event of Default
(unless subsequently cured to the satisfaction of the Lender prior to
termination) and shall be terminated automatically upon the occurrence of any
Event of Default described in Section 8.12.
2.13 Interest Rates For Revolving Loan. The Borrower agrees to pay interest on
the unpaid portion of Revolving Loans as follows:
(A) for Prime Rate Loans at a fluctuating rate equal to the Prime Rate in effect
from time to time; and
(B) for each LIBOR Loan at a fixed rate equal to the sum of the LIBOR Rate for
that Loan plus the Applicable Margin.
2.14 Calculation of Interest. Interest shall be calculated on a 360-day year
based on the number of days elapsed. After the last day of each Interest Period
for any Loan the Lender shall endeavor to mail to the Borrower a statement of
that Loan as of the last day of the Interest Period. That statement will be
deemed to be correct unless the Borrower has delivered to the Lender specific
written objections within thirty (30) days of the Borrower's receipt.
2.15 Increased Cost. If at any time or from time to time any change occurring
after the date hereof in any requirement of law, regulation, order, decree,
treaty or directive or the interpretation or application thereof by governmental
authority or compliance by the Lender with any request or directive (whether or
not having the force of law) occurring after the date hereof from any central
bank or monetary authority or other Governmental authority:
(A) does or shall subject the Lender to any tax of any kind whatsoever with
respect to this Loan Agreement or any LIBOR Loan, or change the basis of
taxation of payments to the Lender of principal, interest or others amount
payable hereunder (except for changes in the rate or method of tax on the
overall net income of the Lender in any jurisdiction); or
(B) does or shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by, or
deposits or other liabilities in or for the account of, advances or loans by, or
other credit extended by, or any other acquisition of funds by, any office of
the Lender which are not otherwise included in the determination of the LIBOR
Rate hereunder; or
(C) does or shall impose on the Lender any other condition regarding this Loan
Agreement or the Loans; and the result of any of the foregoing is to increase
the cost to the Lender of making, renewing, converting or maintaining advances
or extensions of credit as LIBOR Loans, or to reduce any amount receivable in
respect of such LIBOR Loans, then, in any such case, the Lender will promptly
notify the Borrower of the change and of the estimated amount of such cost
increase or reduction in amount and Borrower shall promptly pay to the Lender
upon their demand, such additional amount which will compensate the Lender for
such additional cost or reduced amount receivable as the Lender deems to be
material as determined by the Lender. If the Borrower becomes so obligated, at
Borrower's option and upon two (2) LIBOR Banking Days, prior notice by telephone
or telegraph (to be confirmed promptly in writing) given by the Borrower to the
Lender, the Borrower may (in lieu of paying such additional amounts as
aforesaid): (i) terminate the obligation of the Lender to make or maintain LIBOR
Loans and/or (ii) convert all LIBOR Loans then outstanding to any other type of
Revolving Loan, as the case may be, by prepayment and reborrowing in the manner
specified in this Loan Agreement. If any such conversion of a LIBOR Loan is made
on a day which is not the last day of an applicable Interest Period, the
Borrower shall pay to the Lender upon request such amount or amounts as may be
necessary to compensate the Lender for any loss or expense sustained or incurred
by the Lender in respect of the prepayment of such LIBOR Loan as a result of
such conversion. If the Lender becomes entitled to claim any additional amounts
pursuant to this Section, it shall promptly notify Borrower thereof. A
certificate as to any additional amounts payable pursuant to the foregoing
submitted by an officer of the Lender to the Borrower shall be conclusive in the
absence of manifest error.
2.16 [INTENTIONALLY DELETED].
2.16 Basis for Determining InterBank Rate Inadequate or Unfair. If with respect
to any Interest Period:
(A) the Lender determines that deposits in dollars in the applicable amounts are
not being offered to the Lender in the London market for such Interest Period,
or
(B) the Lender determines that the applicable LIBOR Rate will not adequately and
fairly reflect the cost to the Lender of maintaining or funding a LIBOR Loan for
such Interest Period, then, the Lender shall promptly notify Borrower and, until
the Lender determines that the circumstances giving rise to such suspension no
longer exist, the Lender's obligation to make future LIBOR Loans shall be
suspended.
Funding Assumptions. The amounts payable pursuant to Sections 2.15, 2.17 and
3.5 hereof shall be determined based on the assumption that the Lender
funded the entire amount of the relevant LIBOR Loan through matching funding
obtained in the London interbank market; provided, however, that the Lender may
fund each LIBOR Loan in any manner it sees fit, and the foregoing assumption
shall be utilized only for the calculation of amounts payable under the Sections
identified above.
SECTION III - PAYMENTS, PROCEEDS AND TERM
3.1 Manner of Payment. All payments shall be delivered to the Lender in
immediately available funds when due.
3.2 Payment on Non-Banking Days. Any payment that is due on a day other than a
Banking Day may be made on the next succeeding Banking Day together with
interest for each such additional day after the original due date.
3.3 Late Payments. If any payment of principal, interest or fees payable
hereunder or under the Note is not received within fifteen (15) days from the
date that payment is due, the Lender may charge a "late charge" equal to five
cents ($.05) of each dollar of such delinquent payment for the purpose of
defraying the expense incident to handling that delinquent payment. This late
charge can be imposed on each late payment. This late charge shall be in
addition to, and not in lieu of, any other right or remedy the Lender may have
as a result of a late payment.
3.4 Prepayments. At any time after receipt of the prior written notice to the
Lender specified below, any Loan being made pursuant to this Loan Agreement may
be prepaid, in whole, or in part without penalty in multiples of ONE HUNDRED
THOUSAND and 00/100 DOLLARS ($100,000), provided, however, that no LIBOR Loan
may be prepaid except at the end of the applicable Interest Period and accrued
interest on the amount being prepaid plus any applicable fees as set forth in
Section 3.5 below shall simultaneously be paid. The notice required pursuant to
the immediately preceding sentence must be received by the Lender no later than
(i) 11:30 a.m. on the proposed prepayment date in that case of a prepayment of
the Prime Rate Loan and (ii) 11:30 a.m. on the LIBOR Banking Day that is at
least two (2) LIBOR Banking Days prior to the proposed prepayment date.
Prepayments shall be applied first to any expenses outstanding under any Loan
Document, then to any fees due hereunder, then to interest and then to
principal.
3.5 Funding Losses. The Borrower shall compensate the Lender, upon its written
request (which request shall set forth the basis for requesting such
compensation), for all reasonable losses, expenses and liabilities, including,
without limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required to fund any
LIBOR Loan (all such losses "Funding Losses") which the Lender may sustain: (i)
if for any reason an advance of, or conversion from or into, a LIBOR Loan does
not occur on a date specified therefor in a Notice of Borrowing or notice of
conversion given pursuant to Sections 2.7 or 2.8; (ii) if any repayment
(including any prepayment made pursuant to Section 3.4) or conversion of any of
its LIBOR Loans occurs on a date which is not the last day of an Interest Period
with respect thereto; or (iii) as a consequence of any other default by the
Borrower to repay its Loans when required by the terms of this Loan Agreement or
any Note held by the Lender.
3.6 Term. The Term of this Loan Agreement shall commence as of the Date of
Closing and, subject to the provisions hereof, shall expire at midnight on the
Maturity Date. The Maturity Date, and therefore the Term of this Agreement, may
be extended for additional one (1) year periods as of the first and second
anniversaries of the Date of Closing upon the written request of the Borrower to
the Lender made at least two (2) months prior (but not more than three (3)
months prior to said anniversary date). Such notice shall be accompanied (i) by
a certificate from the Chief Financial Officer of the Borrower stating that no
Default or Event of Default has occurred and is then continuing and the
representations and warranties contained herein and in the other Loan Documents
are true and correct in all material respects on such date and (ii) three year
financial projections in GAAP format. The Lender shall not be obligated to
grant any such extension, it being acknowledged that the Lender may or may not
grant any such extension in its sole and absolute discretion, however, the
Lender agrees to reply to any such request within thirty days after receipt of
a request therefor in accordance with this Section 3.6.
3.7 Interest Limits. If the fulfillment of any provision in any Loan Document
relating to the rate of interest is prohibited by, or in violation of, any
applicable law in effect at the time payment is due, the interest rate shall be
automatically reduced to the maximum rate then permitted by law. If for any
reason the Lender should receive as interest an amount that would exceed the
highest applicable lawful rate of interest, that amount in excess of the lawful
rate will be deemed to have been credited against principal and not against
interest. This provision shall control every other provision in any Loan
Document that is applicable to the calculation of interest.
3.8 Borrowings. The Borrower shall give the Lender notice of each borrowing to
be made hereunder after the Date of Closing by (i) 11:00 am. of the date of such
borrowing, if a Prime Rate Loan, or (ii) by 11:00 am. two (2) LIBOR Banking Days
before the date of such borrowing, if a LIBOR Loan, all as further provided in
Section 2.7.
3.9 Certain Notices. Notices by the Borrower to the Lender of each borrowing
and each prepayment shall be irrevocable and shall be effective only if received
by the Lender not later than 11:00 a.m. New York City time.
3.10 Facility Fees. A commitment fee shall accrue on the daily average amount
of the Commitment for the period from and including the Date of Closing to the
earliest of the date the Commitment is terminated by the Borrower or the Lender,
as the case may be, in accordance with the terms hereof or the Maturity Date at
a rate per annum equal to twenty-five (25) Basis Points calculated on the basis
of a 360 day year for the actual number of days elapsed. The accrued commitment
fee shall be due and payable in arrears on the first day of each calendar
quarter, commencing on the first day of the first calendar quarter after the
Date of Closing and on the Maturity Date.
3.11 Fees. In consideration of credit underwriting services rendered by the
Lender and the negotiation and preparation of the Commitment and the Loan
Documents evidencing said Commitment, on or before the Date of Closing, the
Borrower shall pay to the Lender, a credit underwriting fee in the amount of
$25,000. On or before the Date of Closing and from time to time thereafter, the
Borrower shall also pay or reimburse the Lender for all of its counsel fees and
other reasonable out-of-pocket expenses related to this transaction and any
subsequent waivers, modifications or amendments.
3.12 Payment Generally. All payments under this Loan Agreement or the Note or
fees shall be made by the Borrower in United States Dollars in immediately
available funds not later than 2:00 p.m. New York City time on the date on which
such payment shall become due (each such payment made after such time on such
due date to be deemed to have been made on the next succeeding Banking Day) at
the Lending Office provided, that, when a new Loan is to be made by the Lender
on a date the Borrower is to repay any principal of an outstanding Loan, the
Lender shall apply the proceeds thereof to the payment of the principal to be
repaid and only an amount equal to the difference between the principal to be
borrowed and the principal to be repaid shall be made available by the Lender to
the Borrower as provided in Section 2.7. The Borrower shall, at the time of
making each payment under this Loan Agreement or any Note, specify to the Lender
the principal or other amount payable by the Borrower under this Loan Agreement
or the Note to which such payment is to be applied, and in the event that it
fails to so specify, or if a Default or Event of Default has occurred and is
continuing, the Lender may apply such payment as it may elect in its sole
discretion. If the due date of any payment under this Loan Agreement or the Note
would otherwise fall on a day which is not a Banking Day, such date shall be
extended to the next succeeding Banking Day and interest shall by payable for
any principal so extended for the period of such extension.
3.13 Debiting of Account. If so requested by the Lender, the Borrower shall
maintain a demand deposit account (a DDA Account) with the Lender, and the
Lender may, and the Borrower hereby authorizes the Lender to, debit any such DDA
Account or such other account maintained by the Borrower with the Lender for the
amount of any payment, as and when such payment becomes due hereunder, whether
such payment is for accrued interest, principal or expense, even if debiting any
such account results in a loss or reduction of interest to the Borrower or the
imposition of a penalty applicable to the early withdrawal of time deposits.
Such authorization shall not affect the Borrower's obligation to pay when due
all amounts payable hereunder, whether or not there are sufficient funds in any
accounts of the Borrower. The foregoing rights of the Lender to debit the
Borrower's accounts shall be in addition to, and not in limitation of, any
rights of set-off which the Lender may have hereunder or under any other Loan
Document.
SECTION IV - CONDITIONS PRECEDENT
4.1 Requirements for Initial Advance. The obligation of the Lender to make the
initial advances under this Loan Agreement requested on the Date of Closing is
subject to the satisfaction of all of the following conditions precedent:
(A) Loan Documents. The following Loan Documents, each duly executed and
delivered by the parties thereto:
(i) this Loan Agreement;
(ii) the Note;
(iii) an incumbency certificate executed by an appropriate officer of the
Borrower certifying, as of the Date of Closing, the names, titles and true
signatures of the officers certified to execute the Loan Documents, and the
names, titles and true signatures of such officers of the Borrower authorized to
deliver Notices of Borrowing and letter of credit requests on behalf of the
Borrower;
(iv) a favorable New Jersey law opinion of counsel to the Borrower (which may
be rendered by Xxxxx Xxxxx, Esq. Borrower's in-house general counsel) ,
addressed to the Lender, to the effect that the Loan Documents have been duly
authorized and executed and are enforceable against the Borrower in accordance
with their respective terms, and as to such other matters reasonably requested
by the Lender;
(v) a secretary's certificate for the Borrower, to which are attached certified
copies of: (a) the articles of incorporation of the Borrower and all amendments
thereto, certified by an appropriate corporate officer, (b) the By-Laws of the
Borrower and all amendments thereto, and (c) appropriate resolutions and
shareholder consents authorizing the transactions herein contemplated;
(v) a certificate from the chief financial officer of the Borrower dated the
Date of Closing to the effect that as of such date: (a) no Default or Event of
Default has occurred or is continuing, (b) since April 29, 1999, there has been
no material adverse change in the business, financial condition or operations of
the Borrower, and (c) each of the representations and warranties of the Borrower
contained in this Loan Agreement are true in all material respects;
(vi) good standing certificate issued by the appropriate official of the state
in which the Borrower is incorporated; and such good standing certificates
issued by the appropriate official of each of the states in which the Borrower
is qualified as a foreign corporation as the Lender shall require;
(vii) certificates of insurance evidencing the existence and full force and
effect of the insurance described in Section 6.2 hereof;
(viii) the certificate of merger, agreement of merger, and such other
documentation as the Lender may reasonably request pertaining to the merger of
Village Liquor Shop with and into the Borrower, with the Borrower as the
surviving entity; and
(ix) such other documents as the Lender may reasonably require, including
without limitation, other agreements, instruments, or indentures to which any
obligor is a party, including, without limitation, financing statements, proofs,
opinions, guaranties and other written assurances.
(B) Fees and Expenses. The Borrower shall have paid (or otherwise satisfied to
the satisfaction of the Lender) all fees hereunder that are expenses due and
payable on or prior to the Date of Closing, including, without limitation, the
fees specified in Section 3.11 and fees and expenses incurred by the Lender's
counsel related to the preparation, negotiation, and closing of the transaction
contemplated herein that have been requested pursuant to invoices submitted to
the Borrower on or prior to the Date of Closing.
(C) Private Placement Transaction. On or before the Date of Closing, the
Borrower shall have consummated the private placement transaction described in a
Confidential Private Offering Memorandum dated July, 1999 (the "Note Private
Placement") and, in connection therewith, the Borrower shall have furnished to
the Lender evidence of the application of the proceeds of the sale of the
Privately Placed Notes so issued to the satisfaction of the following
Liabilities and the release of any Liens securing the same: (i) all of
Borrower's indebtedness and liabilities arising under the Existing Credit
Facility pursuant to a certain pay-off letter issued by the Lender in its
capacity as agent thereunder and acknowledged by the Borrower and Summit Bank;
and (ii) all of Borrower indebtedness and liabilities arising under or in
connection with the Traveler's Mortgage Debt in accordance with a certain pay-
off letter obtained by the Borrower on or prior to the Date of Closing.
4.2 Requirements for Any Advance and Issuance of Letter of Credit. The
obligation of the Lender to make any Revolving Credit Loan and the obligation of
the Lender to issue any Letter of Credit, in each case subsequent to the Date of
Closing, is subject to satisfaction of the following conditions:
(A) the representations and warranties contained in Section V hereof are true
and correct on and as of the date of funding of each such Loan or date of
issuance of such Letter of Credit, as the case may be;
(B) no Default or Event of Default has occurred and is continuing;
(C) there has been no material adverse change in the Borrower's condition,
financial or otherwise, since the date of this Loan Agreement; and
(D) all of the Loan Documents remain in full force and effect.
SECTION V - REPRESENTATIONS AND WARRANTIES
As of the Date of Closing, as of the time of each advance under the Revolving
Loan, and as of the date of issuance of any Letter of Credit hereunder, the
Borrower represents, and warrants to the Lender and agrees as follows:
5.1 Organization and Authority. Each Company is a duly organized and validly
existing corporation that is in good standing under the laws of the State of New
Jersey and is duly qualified and in good standing in each state in which its
property or business subjects it to qualification requirements as a foreign
corporation. Each Company (A) is duly qualified and registered to transact
business in each jurisdiction in which its properties or business make
qualification or registration necessary, and (B) has full power, authority,
franchises, licenses and right to enter into and perform each of the Loan
Documents to which it is a party and to carry on its business as now being
conducted.
5.2 Binding Effect. Each Loan Document constitutes a legal, valid and binding
obligation of the Companies which are parties thereto, enforceable in accordance
with their terms.
5.3 No Conflicting Agreements or Laws. Neither the execution nor the delivery
of any Loan Document, nor the consummation of the transactions contemplated
thereby, nor the fulfillment of, compliance with or performance of the terms and
conditions therein, is prevented or limited by, conflicts with or will result in
the breach or violation of, or a default under the terms or conditions of (A)
any certificate of incorporation, charter or other agreement to which the
Borrower is bound, or (B) any law, order of any court or administrative agency
or any rule or regulation applicable to the Borrower. The Borrower is not, or by
Borrower's execution, delivery or performance of any Loan Document will not be,
in default under, or in violation of, any of its obligations under any agreement
or undertaking to which the Borrower is a party or by which the Borrower is
bound.
5.4 No Conflicting Litigation. There is no action or proceeding pending or
threatened against the Borrower or involving any assets of, or ownership in, the
Borrower before any court, administrative agency or governmental authority that
might (A) adversely affect the Borrower's ability to authorize or perform any
Obligations, (B) involve the possibility of any judgment or liability that would
result in any material adverse change in the Borrower's business, properties or
assets, (C) adversely affect the enforceability of any Loan Document, or (D)
involve possible or threatened claims totaling in excess of $500,000, except for
any litigation that has been accurately and completely described on Exhibit 2
annexed to the Principal's Certificate.
5.5 Ownership of Subsidiaries. Village Liquor Shop has been merged into the
Borrower, with the Borrower as the surviving entity, therefore, the Borrower
does not directly or indirectly own or control any Subsidiaries, other than such
subsidiaries which may be created or acquired subsequent to the Date of Closing
in accordance with Section 7.4(f) hereof.
5.6 Liens Against Property. The Borrower has good and marketable title to all
of the Property. All Property is now free and clear of Liens, except for any
Permitted Encumbrances, and there are no judgments of record in any other state
where any Property may be located against any name used within the past twenty
(20) years by any Company or by any Company's predecessor in interest.
5.7 Location of Property and Offices. The chief executive offices and primary
business records of the Borrower are at all times maintained, and for the past
four (4) months have at all times been maintained, at the principal place of
business of the Borrower set forth in the caption of this Loan Agreement. All
Property and other business records of the Companies are, and will be, at the
locations set forth on Exhibit 1 annexed to the Principal's Certificate, except
for new stores and offices that may be opened only after notice to the Lender of
each such location.
5.8 Financial Information and Condition. The consolidated audited financial
statement of the Borrower dated July 25, 1998 and delivered to the Lender truly
sets forth its financial condition and the results of operations as of that date
and there has been no material adverse change since then. All other statements,
representations and warranties made by the Borrower to the Lender have been, and
as of the Date of Closing are, accurate and complete and no information has been
omitted that would make any of them misleading or incomplete. Immediately prior
to, and after the making of each loan described in this Loan Agreement, the
Lender was not and will not be, (A) "insolvent" as that term is defined in
N.J.S.A. 25:2-23 (or any successor statute governing fraudulent transfers) or in
11 U.S.C.A. 101(3 1) or (B) left with "unreasonably small capital" or "debts
beyond the debtor's ability to pay as such debts become due", as those phrases
are construed under 11 U.S.C.A. 548 (a)(2)(B) or any other applicable statute
governing "fraudulent transfers".
5.9 Environmental Matters. Except as set forth in Exhibit 3 to the
Principal's Certificate, no Company has generated, stored, treated, discharged,
handled, refined, spilled, released or disposed of any Hazardous Substances in
violation of any applicable law or regulation. No Company has received any
notice, or is on notice of, any claim, investigation, litigation or
administrative proceeding, actual or threatened, or any order, writ or judgment
that relates to any discharge, spill, handling, refining, release, emission,
leaching or disposal of pollutants of any kind including any Hazardous
Substances by, or on property owned or leased by, any Company. The Standard
Industrial Classification code numbers relating to any activities any Company,
are also set forth on that Exhibit 3. In connection with any acquisition, sale,
closing, transfer, change in control or merger of Borrower or any Company since
December 31, 1983 or any Property now or previously owned or leased by them that
was subject to New Jersey law, the New Jersey Industrial Site Recovery Act
(N.J.S.A. 13: 1 K-6 et seq.) ("ISRA"), including any predecessor statute (such
as the Environmental Clean-Up Responsibility Act) was complied with by
submitting a "Negative Declaration" as that term is defined in N.J.A.C. 7:1-3.3
or by completing a "Clean-up Plan" as that term is defined in N.J.A.C. 7:1-3.3,
which Negative Declaration or Clean-up Plan has been approved, without condition
or reservation, by the New Jersey Department of Environmental Protection and
Energy.
5.10 Taxes. Each Company has filed all tax returns and reports required to be
filed and has paid all taxes that are due and owing (including penalties,
deficiency assessments and interest) other than those that are being diligently
and in good faith disputed and the asserted liability for which is shown as a
reserve on the financial statements delivered to the Lender in accordance with
GAAP. All such returns and reports are accurate and complete in all respects.
5.11 Name and History. During the past twenty (20) years, no Company has (A)
had, used or operated under any other name or trade name, (B) acquired any other
organization or entity or a substantial portion of the assets of any other
organization or entity, (C) merged, or been merged into, any other organization
or entity or (D) controlled, directly or indirectly, any non-individual Person,
except as set forth on Exhibit 4 annexed to the Principal's Certificate.
5.12 Controlling Interests. The names and respective interests and offices of
all Persons who directly or indirectly own or control Ten Percent (10%) or more
of any class of stock of the Borrower are set forth on Exhibit 5 annexed to the
Principal's Certificate. The Sumas Family holds a sufficient number of shares of
all classes of stock of Borrower to cast at least 51% of the votes that may be
cast in any election.
5.13 ERISA. There has not occurred, and there are no circumstances that, with
the lapse of time or giving of notice, may lead to the occurrence of, a
Termination Event under any Plan. No Company, nor any Plan maintained by any
Company (nor any related trust) has incurred any accumulated funding deficiency.
Except as disclosed on Exhibit 2 to the Principal's Certificate, no event or set
of circumstances has occurred under which any Company could be subject to any
liability (including but not limited to liability under Sections 4201 and 4242
of ERISA) with respect to a "multi-employer plan" (as defined in Section 3(37)
of ERISA) to which it contributes other than for contributions made in the
ordinary course of business, none of which are overdue. No representation or
warranty is made by Borrower with respect to payments or contributions due after
the date hereof by participants in any "Multi-employer plan" other than Borrower
and its affiliates.
5.14 Margin Stock. No Company is involved, as one of its important
activities, in the business of extending credit for the acquisition of any
"margin stock" (within the meaning of Regulation U issued by the Board of
Governors of the Federal Reserve System of the United States) and no proceeds of
any Loans under this Loan Agreement will be used to purchase, or to extend
credit to others so that they may purchase, any such margin stock.
5.15 Compliance with Loan Documents. Each Company is in full compliance with
all terms and conditions of all Loan Documents.
5.16 No Claims or Offsets. The aggregate principal amount of indebtedness due
to the Lender as of the date hereof is as stated in the Note. The Borrower
acknowledges and agrees that such indebtedness is unconditionally due to the
Lender, and that as of the date hereof has no claims against the Lender nor any
counterclaims, defenses or offsets to the Borrower's obligations under the Note
or the other Loan Documents of any nature whatsoever.
5.17 Compliance with Laws. To the best of its knowledge, each Company, in the
conduct of its business, is in compliance with all laws, regulations and orders,
the failure to comply with which would have a material adverse effect on the
business of such Company.
5.18 Wakefern. The Borrower is a member in good standing of the Wakefern
cooperative. The Borrower has duly performed all of its duties and obligations
as a member of the Wakefem cooperative and has the right to use the "Shop-Rite"
name and trademark. No claim is pending or, to the best of the Borrower's
knowledge, threatened asserting any breach of any such duties or obligations or
seeking to limit or curtail the Borrower's right to use such name or trademark.
5.19 Accuracy of Statements. All statements, representations and warranties
made by the Borrower in this Loan Agreement and in the Loan Documents are
correct and complete and no information has been omitted therefrom which would
make any of them misleading or incomplete.
5.20 Survival. All representations and warranties in any Loan Document shall
survive both the closing of any Loans and any independent investigation by the
Lender.
SECTION VI - AFFIRMATIVE COVENANTS
The Borrower agrees to observe and perform its duties and covenants under each
Loan Document and Obligation and, in addition, to do all of the following, and
to cause the Subsidiaries to remain in compliance with the following:
6.1 Protection of Property. Protect the value of, and any Company's interest
in, the Property including (A) maintaining the Property in good condition and
repair and preserving it against loss, damage, contamination, pollution and
depreciation in value, other than by normal wear and tear; and (B) defending
against all claims and demands of any Person claiming title to or a Lien against
or security interest or any interest adverse to the Lender in, any Property,
except for Liens that are Permitted Encumbrances.
6.2 Insurance. Maintain insurance as follows:
(A) property insurance written in the broadest "all risk" form
available on a replacement cost basis and covering all tangible Property. That
insurance shall be in amounts at all times at least equal to the full insurable
value of such Property, but in no event shall the insurance be less than the sum
of the Obligations nor shall it be less than $15,000,000 per location and
$75,000,000 in the aggregate; and
(B) public liability insurance in the name of Borrower, with comprehensive
general liability coverage of not less than $175,000,000, and including a
contractual liability endorsement, in the amounts of $2,000,000 for the death or
bodily injury to one person, $5,000,000 for the death or bodily injury in any
one accident or occurrence and $500,000 for loss or damage to the property of
any person or persons; and
(C) if the Borrower shall be operating or using a boiler, boiler explosion and
casualty insurance reasonably satisfactory to the Lender; and
(D) business interruption insurance in amounts no less than the amounts
maintained as of the Date of Closing; and
(E) worker's compensation insurance, as may be required by law; and
(F) all such insurance coverage may be effected under overall blanket or excess
(G) coverage policies provided, however, that all insurance shall be in amounts
sufficient to prevent the insured from being a co-insurer within the terms of
any insurance policy; and
(H) all policies of insurance shall be in a form reasonably acceptable to the
Lender and shall be issued by insurers duly licensed and authorized to conduct
that type of insurance business in New Jersey or Pennsylvania as the case may
be. The Lender shall have the right, at any time, to reject insurance provided
by an insurance company other than InsuRite that does not at all times have a
policy-holders rating of "A", or better, and financial rating of "V", or better,
in the then current edition of Best's Insurance Guide; and
(I) all policies of insurance or satisfactory endorsements thereof, together
with a paid receipt, shall be deposited with the Lender prior to the Date of
Closing and, at least thirty (30) days prior to the expiration of any such
policies, the Borrower shall furnish paid receipts and other evidence,
satisfactory to the Lender, that all such policies have been renewed or
replaced; and
(J) comply with all provisions of any other Loan Document relating to insurance.
6.3 Financial Information. Deliver financial information and documents directly
to the Lender as follows:
(A) within forty-five (45) days after the end of each of the first three (3)
Fiscal Quarters of each Fiscal Year, the 10-Q reports for such Fiscal Quarter
submitted to the Securities and Exchange Commission by any Company (or
equivalent financial statements if the Company is no longer a reporting Company
with the SEC); and
(B) within ninety (90) days after the close of each Fiscal Year, (i) the 10-K
report most recently submitted to the Securities and Exchange Commission by any
Company and (ii) to the extent not included in the 10-K, an audited consolidated
balance sheet of the Companies as of the close of each such Fiscal Year together
with the related consolidated statements of operations, retained earnings and
statements of cash flows for such Fiscal Year, certified without qualification
by independent certified public accountants that are reasonably satisfactory to
the Lender including their certificate and accompanying comment and a
certificate stating that they have no knowledge of the existence of any
condition or event that constitutes a Default or Event of Default under any Loan
Document or any other Obligation; and
(C) simultaneously with the submission of each financial report as stated above,
a certificate of the president or chief financial officer of each Company that
the signers (i) believe that the financial report is true and complete, (ii)
have no knowledge of the existence of any condition or event that constitutes a
Default or Event of Default under any Loan Document or other Obligation, (iii)
if any Default or Event of Default existed or exists, specifying the nature and
period of existence and what, if any, remedial action is being taken, and (iv)
calculating and demonstrating compliance with all financial covenants herein;
and
(D) within five (5) days of filing or public release, true copies of all (i)
filings that are made with the Securities and Exchange Commission or other
regulatory authorities, and (ii) reports, statements, communications and
announcements that are sent by the Borrower to its shareholders;
(E) within forty-five (45) days after the end of each six-month semi-annual
fiscal period, a profit and loss report for such fiscal period prepared on a
store by store basis; and
(F) simultaneously with delivery of the same to the holders of the Privately
Placed Notes, the Borrower shall furnish to the Lender any notice, report,
financial statement, certificates, projections or other forms of information
(financial or otherwise) required to be delivered by or on behalf of the
Borrower to such holders pursuant to the documents evidencing or governing such
notes; provided, however, that the Borrower shall have no such obligation to
furnish information pursuant to this clause (F) to the extent that such
information (or substantially the same information) has been furnished to the
Lender pursuant to any other clause of this Section 6.3; and
(G) such other information including tax filings and reports respecting the
business and properties or the condition or operations, financial or otherwise,
of any Company as the Lender may, from time to time, reasonably request.
6.4 Notices to Lender. Notify the Lender immediately in writing (A) of any
default, or asserted default by any Company, under any real property lease, or
under any agreement involving actual or threatened claims or liability in excess
of Five Hundred Thousand Dollars ($500,000); (B) if any Company becomes involved
in any litigation involving actual or threatened claims or liability in excess
of Five Hundred Thousand Dollars ($500,000) that is not fully covered by
insurance; (C) the occurrence of any theft, fire or other casualty, or any
governmental taking, involving any Property having a value in excess of Five
Hundred Thousand Dollars ($500,000); and (D) on receipt of any information,
notice, claim or investigation as to any alleged use, storage, treatment or
handling, except as expressly permitted in this Loan Agreement or any discharge,
spill, emission or disposal, of any Hazardous Substance by, or on any property
owned or leased by, any Company that may involve more than Five Hundred Thousand
Dollars ($500,000) in testing and cleanup costs.
6.5 Further Assurances. Furnish further assurances that the Lender in its
discretion determines to be reasonably necessary or desirable to confirm and
assure that all Property remains free of Liens other than Permitted
Encumbrances, the reasonable cost of so doing to be paid by the Borrower. The
Borrower shall also, within five (5) days of request, deliver to the Lender a
notarized statement of the indebtedness owing under each Obligation.
6.6 Complete Records. Maintain accurate, current and complete records of each
Company's financial affairs and transactions and of all Property reasonably
satisfactory to the Lender.
6.7 Location of Offices. Maintain the chief executive offices and company-wide
business records of the Companies at the address for the Borrower set forth in
the caption of this Loan Agreement and maintain the other records and Property
at the locations set forth on Exhibit 1 annexed to the Principal's Certificate
provided, however, that any such address may be changed after prior written
notice to the Lender.
6.8 Inspection of Property and Records. Arrange, within one (1) Banking Day of
request, for the Lender's agents, employees or representatives to inspect any
Property and any books and records and commercial premises of any Company.
6.9 Bank Accounts. Except for local short-term cash deposit and payroll
accounts for any stores of any Company, all Companies shall keep and maintain
all existing and future demand deposit, operating, tax reserve and other deposit
accounts in Borrower's name with the Lender and its Affiliates, except as
expressly permitted in advance, in writing, by the Lender, in its discretion.
Permission to open any such accounts with any other bank or financial
institution shall be requested of the Lender, in writing, at least fifteen (15)
days in advance of the date when any such proposed account is to be opened. All
funds deposited in any accounts of institutions other than the Lender as
permitted above shall be regularly transferred into, and maintained at all times
in, the Borrower's operating accounts at the Lender.
6.10 Minimum Tangible Net Worth. For each Fiscal Quarter occurring after the
close of the Fiscal Year ended July 31, 1999, not cause or permit Tangible Net
Worth of the Companies, on a consolidated basis, to be less than the sum of (x)
$50,000,000 and (y) fifty percent (50%) of accumulated quarterly positive Net
Income for each such Fiscal Quarter then ending. Notwithstanding the foregoing,
if there are any charges with respect to the Xxxxxxx Facility in Fiscal Year
ended July 31, 1999, such charges (net of any tax benefit inuring to the
Borrower as a result thereof) shall be excluded for purposes of the base
calculation of Minimum Tangible Net Worth in clause (x) above.
6.11 Ratio of Funded Debt Plus 8* Rent to EBITDAR. As to the Companies, on a
consolidated basis, maintain a Ratio of Funded Debt Plus 8* Rent to EBITDAR of
not more than 4.00 to 1.00 measured as of the end of each Fiscal Year and Fiscal
Quarter on a rolling four quarters basis.
6.12 Ratio of EBITDAR to Interest Plus Rent. As to the Companies, on a
consolidated basis, maintain a Ratio of EBITDAR to Interest Plus Rent of not
less than 2.30 to 1.00 measured as of the end of each Fiscal Year and Fiscal
Quarter on a rolling four quarters basis.
6.13 Capital Expenditures. Not cause or permit the aggregate sum of all of the
consolidated Capital Expenditures of the Companies (excluding the Xxxxxxx
Facility) made at any time during the period commencing at the beginning Fiscal
Year 2000 through and including the end of Fiscal Year 2002 to exceed
$38,000,000.
In addition to the Capital Expenditures permitted above in this Section 6.13,
Borrower may expend additional amounts in the form of Capital Expenditures in an
aggregate amount not to exceed $12,000,000 in connection with the construction
and fit-up of the Xxxxxxx Facility; provided, that prior to any such expenditure
the Lender shall have received and approved (i) a final budget itemizing such
expenditures, (ii) documentary evidence that the litigation regarding the
Xxxxxxx Facility has been settled, and (iii) documentary evidence that all
zoning, land use and construction permits, approvals, authorizations and
certificates necessary to commence and proceed with the development and
construction of the Xxxxxxx Facility have been obtained.
6.14 Taxes and Laws. Pay all taxes, assessments, government charges and levies
when due and comply with all federal, state and local laws and regulations that
are applicable to any Company or the business of any Company and provide proof
of such payment and compliance as Lender may request, provided however that any
Company may diligently and in good faith dispute an asserted tax liability by an
appeal in a forum of appropriate jurisdiction so long as the asserted liability
is shown as a reserve on all financial statements and reports delivered to the
Lender in accordance with GAAP.
6.15 Lender's Expenses. Pay all reasonable fees, costs and expenses incurred by
the Lender and its counsel in connection with the preparation or later
modification of any Loan Document (whether or not any loan is actually
consummated or modification is made) and the making, closing and administering
of the loans contemplated thereby, including lien and title searches, copying
costs, delivery and postage charges and all filing and recording costs.
6.16 Indemnification. Assume all liability for, and agree to indemnify, protect
and save harmless the Lender, its agents and employees from and against all
liability (including liability in tort, whether absolute or otherwise),
obligations, losses, penalties, claims, suits, costs and disbursements,
including reasonable legal fees and disbursements, in any way relating to, or
arising out of, any relationship with any Company or any Obligation except
liabilities arising from the willful misconduct of the Lender. This provision
shall survive the termination or expiration of this Loan Agreement
6.17 Cooperative Obligations. Perform all its duties and obligations, and
maintain its existence, as a member of the Wakefern cooperative and maintain its
right to use the "Shop-Rite" name and trademark.
6.18 Simultaneous Liens. If any Lien arises in violation of Section 7.1,
Borrower shall immediately cause all Obligations to be secured equally and
ratably with the indebtedness secured by any such Lien, and, in any case, the
Obligations shall have the benefit of an equitable Lien equally and ratably
securing the Obligations, provided, however, that this provision shall not in
any way limit Borrower's duty to remain in compliance with all other provisions
of this Loan Agreement and the Lender's acceptance of any Lien in its favor
shall not constitute a waiver of any Default including any violation of Section
7.1.
6.19 Corporate Existence. Maintain each Company as a corporation in good
standing in its state of incorporation.
6.20 Payment of Obligations. Pay all of its obligations and liabilities as
they become due.
6.21 Year 2000 Compatibility. Take all actions necessary to assure the
Borrower's computer based systems are able to operate and effectively process
data on and after January 1, 2000. At the request of the Lender, the Borrower
shall provide the Lender with assurance acceptable to the Lender that Borrower's
computer systems have Year 2000 compatibility.
SECTION VII - NEGATIVE COVENANTS
The Borrower agrees not to do, or permit any other Company to do, any of the
following without the express prior written consent of the Lender, which consent
may be granted or withheld by the Lender in its reasonable discretion:
7.1 No Liens. Suffer any Lien against any Property (including any real property
leases and subleases), except for any Permitted Encumbrances.
7.2 Hazardous Substances. Generate, store, treat, discharge, refine, handle,
release or dispose of any Hazardous Substances except (A) for consumer products
sold in the ordinary course of business in accordance with all applicable laws
and regulations and (B) standard maintenance uses of common cleaning and
maintenance products.
7.3 Other Liabilities. Incur, or permit any Subsidiary to incur, Liabilities
or contingent obligations, except (A) indebtedness to the Lender; (B) trade
payables in the ordinary course of business; (C) pursuant to real property
leases and equipment leases; (D) the indebtedness contemplated in the definition
of Permitted Encumbrances; (E) the unsecured indebtedness evidenced by the
Privately Placed Notes; and (F) unsecured indebtedness (in addition to the
unsecured indebtedness permitted pursuant to clauses (A), (B) and (E) above) in
an aggregate outstanding principal amount not to exceed at any time $2,000,000.
7.4 Ownership And Organizational Changes. Permit or effect any of the
following:
(A) Any shares of stock of any Subsidiaries to be sold, transferred, conveyed,
assigned, pledged, hypothecated, or otherwise encumbered, except for transfers
to another Subsidiary;
(B) Any change in the ownership of any stock of Borrower that is owned by any
member of the Sumas Family if, as a result of that transfer, the Sumas Family
will no longer hold a sufficient number of shares of all classes of stock of
Borrower to cast at least 51% of the votes that may be cast in any election;
(C) Any change in the capitalization or capital structure of any Company
(including the issuance of any new, additional or different type or class of
stock, the modification, reduction or retirement of any existing class or type
of stock or the changing or modifying of the voting power of any stock) if, as a
result of that change, there would be a violation of any provision of this Loan
Agreement, including subsections (A) or (B) of this Section 7.4;
(D) The Borrower or any Company to enter into any merger or consolidation or
participate in a joint venture with any other company, except that any such
transaction may take place between Subsidiaries or as permitted pursuant to
Section 7.8(G);
(E) Any Company to acquire all, or a substantial portion of, the assets of any
commercial Person, or acquire any assets or interest therein of any firm for an
aggregate purchase price of $500,000 or more except (i) those acquisitions made
by the Borrower in the ordinary course of business (such as acquisitions of
inventory; acquisitions of stores or selling space are not acquisitions in the
ordinary course) or as permitted pursuant to Section 7.8(G) or (ii) until such
time as the Revolving Loan is repaid in full, acquisitions of up to an
additional 100,000 square feet of selling space; or
(F) Any subsidiary to be created or acquired, except that a new Subsidiary may
be formed if it is wholly-owned by the Borrower and guarantees payment of the
Obligations in form acceptable to the Lender.
7.5 Dividend Limitations and Stock Repurchases. As to the Borrower, pay or incur
any liability to pay any cash dividends or distribution of any kind to any of
Borrower's shareholders or repurchase any of the outstanding shares of the
capital stock of the Borrower if the aggregate amount of any such dividends,
distributions, or repurchases would (A) in any Fiscal Year exceed, in the
aggregate, twenty percent (20%) of the excess of Borrower's Net Income for the
prior Fiscal Year in excess of One Million and 00/100 ($1,000,000) Dollars, or
(C) would result in a violation of any provision of this Loan Agreement,
including, but not limited to, Sections 6.10, 6.11, 6.12 and 6.13. Prior to
payment of any dividend or any intended stock repurchase the Borrower shall
provide the Lender with proof satisfactory to the Lender that, on a pro forma
basis, the Borrower will be in full compliance with all covenants set forth in
the Loan Agreement, including, but not limited to, the financial covenants set
forth in Sections 6.10, 6.11, 6.12, and 6.13, after such dividend or stock
repurchase is completed. Notwithstanding the foregoing, if the Borrower is
entitled to pay dividends or repurchase stock in a given year or years but does
not pay such dividends or repurchase such stock, these unpaid dividends or
stock repurchases shall accumulate and may be paid in the future provided that
after giving effect to such payment, no Default or Event of Default would then
exist. Prior to payment of any accumulated dividend or any intended stock
repurchase the Borrower shall provide the Lender with written evidence
satisfactory to the Lender (in its sole judgment) of the amount of accumulated
unpaid dividends or stock repurchases eligible for payment and that, on a pro
forma basis, the Borrower will be in full compliance with all covenants set
forth in this Loan Agreement, including, but not limited to, Sections 6.10,
6.11, 6.12 and 6.13, after giving effect to any such dividend or stock
repurchase.
7.6 Other Names. Use or adopt any name other than (i) its formal corporate name
set forth in this Loan Agreement, (ii) "The Shop-Rite Annex" (for the Borrower's
Bernardsville facility only), (iii) the name "Shop-Rite" or (iv) "Village
Market" (for the Borrower's South Orange facility only) unless, at least fifteen
(15) days in advance of using any other name, the Lender has been provided with
appropriate trade name certificates and current judgment, tax, UCC- 11 and other
search reports for that new name, to the reasonable satisfaction of the Lender.
7.7 Change in Fiscal Year. Change the Fiscal Year of any Company without the
consent of the Lender.
7.8 Restricted Investments. Directly or indirectly purchase or acquire any
obligations, securities, stock or other assets to be held for investment (as
distinguished from assets held for direct and immediate use or consumption by
any Company), or to make any loans, advances or extensions of credit, except for
any of the following:
(A) readily marketable direct obligations of the United States of America;
(B) commercial paper maturing within 180 days from the date of issuance that has
been issued by a corporation conducting the majority of its business in the
United States and has a rating of "A-1" or better from Xxxxx'x Investor Services
or "P-1" or better from Standard & Poors;
(C) readily marketable direct obligations of any state, county or municipality
in the United States that has a rating of at least "A-l" from Xxxxx'x Investor
Service or "P-1" from Standard & Poors;
(D) notes, checks and chattel paper from customers that are accepted by any
Company as payment for the sale of inventory in the ordinary course of business;
(E) certificates of deposit and "repo" obligations of (i) the Lender and its
Affiliates or (ii) any other United States domiciled bank or trust company that
has unrestricted capital funds of at least $500,000,000 and whose long term
certificates of deposit have a rating of at least "A- I" from Xxxxx'x Investor
Service or "P- I " from Standard & Poors;
(F) investments in Wakefern stock and/or InsuRite stock in aggregate amounts of
not more than One Million Five Hundred Thousand and 00/100 ($1,500,000) Dollars
in any Fiscal Year;
(G) equity contributions or investments of less than Seven Hundred Fifty
Thousand and 00/100 ($750,000) Dollars in the aggregate during the Term hereof;
(H) repurchases of common stock of the Borrower to the extent permitted by
Section 7.5 above; or
(I) investments in Wakefern in an aggregate amount not to exceed the lesser of
(i) Fifteen Million Dollars ($15,000,000.00) or (ii) the amount of the maximum
accounts payable owing to Wakefern by the Borrower for inventory purchases. Of
the maximum permitted amount, the Borrower shall be permitted to invest a
maximum of Five Million Dollars ($5,000,000.00) in obligations of Wakefern
having a maturity of greater than 30 days but not more than one year. All other
investments of Wakefern shall have a maturity of 30 days or less;
provided, however, that no more than Fifty (50%) Percent of the aggregate
principal amount of the above-mentioned debt instruments (including bonds,
obligations, commercial paper, bills or notes) shall have maturity dates in
excess of one year from the date of original issuance.
7.9 Different Business. Engage in any business other than the operation of
supermarkets and related retail activities as conducted in the normal course of
business.
7.10 Prohibited Dispositions. Sell or otherwise dispose of (A) all, or a
substantial portion of the Property of any Company, or (B) any Property, other
than in arm's length transactions that are made in the ordinary course of
business, provided, however, that the Companies may engage in any Permitted
Dispositions so long as no Default has occurred and is continuing.
Notwithstanding the prior sentence, this provision shall not be deemed to have
authorized any sale or disposition that will result in a violation of any other
provision of this Loan Agreement or any other Loan Document.
7.11 Management Changes. Permit or suffer a change in management that would
result in less than three of the following individuals being in active, full
time and direct control of the business of each of the Companies: Xxxxx Xxxxx,
Xxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxx Xxxxx and Xxxxx Xxxxxx.
7.12 Assignment of Leases. Sell, assign, convey any interest in, or permit any
Lien against, any leases, subleases, licenses or rights of use or occupancy of
any kind with respect to any real property whatsoever, except for (a) the
assignment of any lease for an existing store where a new store in the same
locality is being opened and (b) assignments of leases for the existing South
Orange, Bernardsville Annex and Watchung locations, and certain property leased
by the Borrower located in Kingston, Pennsylvania (which has been assigned to a
non-ShopRite supermarket operator).
7.13 Repayments. Prepay any indebtedness for borrowed money or Capitalized
Lease Obligations; provided, however that the foregoing shall not restrict the
ability of the Borrower to cause the mandatory prepayment of the Privately
Placed Notes to the extent that such prepayment is pursuant to the express terms
of Sections 8.1 and 8.3 of that certain Note Purchase Agreement dated as of
September 1, 1999 among the Borrower and the note purchasers listed therein as
is effect as of the date hereof; provided, further that the foregoing proviso
shall not in any event be construed by the Borrower or any other Person as a
consent, waiver or other form of forbearance of any right or remedy that the
Lender may have hereunder, by law or otherwise arising out of the facts or
circumstances related to the prepayment of the Privately Placed Notes described
above.
SECTION VIII - EVENTS OF DEFAULT
Any of the following events or conditions shall, at the option of the Lender,
constitute an "Event of Default" under this Loan Agreement and any other Loan
Documents or obligations (except that the event or conditions described in
Section 8.12 automatically shall be an Event of Default, shall terminate the
Commitment hereunder and shall cause all amounts hereunder to be immediately due
and payable, without any action by the Lender):
8.1 Payments. Any failure to pay any principal or interest under the Revolving
Loan when due, or any failure to pay all other monies within five (5) days after
each due date under the Revolving Loan or any other Obligation; or
8.2 Other Obligations. Any failure to perform or observe any term or condition
under this Loan Agreement, any other Loan Document or any Obligation in a timely
fashion, other than any payments referred to in Section 8.1; provided, however,
that the Borrower may effect a complete cure of any Default of any non-monetary
covenant in this Loan Agreement, except for any Event of Default under any other
subsection of this Section VIII, within fifteen (15) days of the occurrence of
the Event of Default so long as (A) in the reasonable judgment of the Lender the
Default is curable in its entirety during that fifteen (15) day cure period and
(C) this right to cure is not exercised more than one (1) time in any
consecutive six (6) month period; or
8.3 Representations. Any representation, statement, information or warranty
that is at any time made or delivered to the Lender by or on behalf of any
Company shall be materially incorrect, incomplete or misleading when made; or
8.4 Consents. Any Company shall do, or permit to be done, any act for which the
Lender's written consent is required under any Loan Document, without first
obtaining such written consent; or
8.5 Financial Information and Inspections. Any Company shall fail, promptly
after demand, to furnish financial information or to permit inspection of any
books, records or Property as required under any Loan Document; or
8.6 Insurance. Any failure to maintain, or provide evidence to any insurance
coverage required under any Loan Document; or
8.7 Organizational Status. Any Company shall dissolve or fail to remain in good
standing in its state of incorporation or duly qualified in each state where its
properties or business make qualification necessary (except with respect to any
Subsidiary that is merged into another Company); or
8.8 Warrants and Tax Liens. Any warrant of attachment or for distraint, or
notice of tax lien with respect to an amount of Five Hundred Thousand and 00/100
Dollars ($500,000) or more shall be issued relating to, or encumbering, any
Property, or any that is not, within thirty (30) days of entry, discharged, or
stayed and bonded, to the satisfaction of the Lender; or
8.9 Judgments. Any judgment shall be entered against any Company in excess of
Five Hundred Thousand Dollars ($500,000), that is not, within thirty (30) days
of entry, discharged, or stayed and bonded, to the satisfaction of the Lender or
fully covered by insurance and the insurance company has, in writing,
unconditionally accepted liability for that judgment; or
8.10 Lien on Property. Any Lien shall encumber any Property other than (i) a
Permitted Encumbrance or (ii) an involuntary Lien that is specially covered
under Sections 8.8 or 8.9.
8.11 Loss or Destruction. Any loss or destruction of any Property that, in the
Lender's reasonable judgment, has a market value of Five Hundred Thousand and
00/100 ($500,000) Dollars, or more, unless, that loss or destruction is
adequately covered by insurance and, within ninety (90) days of that loss or
destruction, either an insurance company has admitted its liability for such
loss or destruction, or such loss or destruction is fully compensated by
insurance to the satisfaction of the Lender; or
8.12 Insolvency. Any filing of a petition by or against any Company under any
bankruptcy or insolvency law or an assignment by any Company of any property or
assets for the benefit of creditors, or the failure of any Company to pay its
debts in the ordinary course as those debts become due, or the calling of a
meeting of creditors of any Company to obtain any general financial
accommodation; provided, however, that as to any such action that is
involuntarily commenced against and is being contested by the subject Company,
that Company shall have until the earlier of thirty (30) days or an adjudication
of insolvency to contest and obtain a dismissal of that action; or
8.13 Seizure of Property. Any seizure by governmental authorities of, or the
imposition of legal restraints against, any property of any Company that has an
aggregate value in excess of Five Hundred Thousand Dollars and 00/100
($500,000), which is not, within fifteen (15) days of that seizure or
imposition, fully bonded to the reasonable satisfaction of the Lender; or
8.14 Leases. Any Company shall be in default under any term or condition under
any Capital Lease Obligation or under any material operating leases (other than
those which are being contested in good faith and have not resulted in the loss
of any Property by any Company); or
8.15 Enforceability. Any action or proceeding is instituted to obtain a ruling
or judgment that any term or condition of any Loan Document, or any restriction
against, or interest in, any Property that any Loan Document purports to give to
the Lender, is unenforceable in any respect; or
8.16 Termination of Plan. Any Termination Event occurs under any Plan, a
trustee shall be appointed by a court of appropriate authority to administer any
Plan, the Pension Benefit Guaranty Corporation shall institute proceedings to
terminate any Plan or to appoint a trustee or administer any Plan or any Plan
shall be formally terminated; or
8.17 Other Liabilities. Any Company shall fail to make any payment when due or
fail to perform any obligation under its Liabilities in excess of Five Hundred
Thousand and 00/100 ($500,000) Dollars (including, without limitation,
Liabilities evidenced by the Privately Placed Notes)(other than as referred to
in any other subsection of this Section VIII) when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) and such
failure shall continue after the applicable grace period, if any, specified in
the agreement relating to any such Liabilities; or
8.18 Other Loan Documents. An Event of Default shall occur under any of the
Loan Documents.
SECTION IX - REMEDIES
Whenever an Event of Default occurs (and any applicable cure period has
expired), the Lender may, in addition to any right or remedy the Lender may have
at law or in equity, at its option, do any one or more of the following in any
order, in any combination and at any time:
9.1 Acceleration. Declare any Obligations, including the Revolving Loan to be
immediately due and payable; or
9.2 Other Remedies. Exercise any other rights or remedies it may have under any
Loan Document or Obligation; or
9.3 Terminate Financing. Immediately terminate or reduce the lending Commitment
under the Revolving Loan; or
9.4 Direct Recourse. Institute suit directly against the Borrower; or
9.5 Other Creditor Remedies. Exercise any right or remedy available to the
Lender under any applicable law of any jurisdiction; or
9.6 Collection Expenses. Collect from the Borrower: (A) all reasonable fees
and disbursements of the Lender's attorneys incurred in obtaining advice or
representation relating to the collection or enforcement of any Obligation; and
(B) all expenses of, or in anticipation of, litigation including fees and
(C) expenses of witnesses, experts and stenographers and the cost to obtain or
produce appraisals. All such collection fees and expenses shall be due and
payable upon demand, and shall accrue interest at the highest rate in effect
from time to time under any Obligation; or
9.7 Other Expenses. At any time and from time to time, perform any duty or
obligation of any Company under any Loan Document or Obligation and to take any
other actions deemed by the Lender to be reasonably necessary to protect the
Lender's interest in any Property or to avoid any risk of damage or loss to the
Lender including steps to comply with applicable environmental laws. All
expenses of any nature incurred by the Lender under this Section shall be due
and payable upon demand, and shall accrue interest at the highest rate in effect
from time to time under any Obligation. The exercise by the Lender of its rights
under this Section shall not constitute a waiver of any Event of Default or of
any right or remedy under this any Loan Document; or
9.8 Increase in Interest. Increase the rate of interest under any Obligations
to a floating interest rate determined by the Lender equal to three hundred
(300) basis points (3.00%) above the rate of interest otherwise applicable of
the Loans. This increase in interest rate shall be computed on the basis of a
360-day year and shall survive the entry of any judgment relating to any
Obligation.
9.9 Cessation of LIBOR Borrowing Rights. Prohibit any further borrowing at the
LIBOR Rate. If a Default occurs and is waived by the Lender, the Borrower will
have no further right to borrow at the LIBOR Rate notwithstanding any waiver or
forbearance by the Lender with respect to such Default, and all borrowings and
loans thereafter shall be Prime Rate Loans. No obligation to waive or forbear
from exercising any remedies upon a Default shall be inferred from this Section
9.9.
9.10 Right of Set-off. Without limiting any general right of set-off the Lender
may possess by operation of law and regardless of the adequacy of any collateral
for the Obligations or other means of obtaining repayment of the Obligations,
set-off against and apply to the then unpaid balance of the Obligations any
items or funds of the Borrower held by the Lender, any and all deposits (whether
general or special, time or demand, matured or unmatured) or any other property
of the Borrower, including, without limitation, securities and/or certificates
of deposit, now or hereafter maintained by the Borrower for its or their own
account with the Lender, and any other indebtedness at any time held or owing by
the Lender to or for the credit or the account of the Borrower, even if
effecting such set-off results in a loss or reduction of interest or the
imposition of a penalty applicable to the early withdrawal of time deposits.
For such purpose, the Lender shall have, and the Borrower hereby grants to the
Lender, a lien on and security interest in such deposits, property, funds and
accounts and the proceeds thereof.
9.11 Additional Rights of Lender. The Lender may exercise any of the rights and
remedies in Sections 9.6 or 9.7 upon the occurrence of any Default whether or
not the Lender has formally declared an Event of Default or accelerated any
Obligations, provided, however, that the Lender shall not exercise any rights or
remedies pursuant to this Section 9.11 until after the Borrower is on notice of
the circumstance or condition that would give rise to the Default.
SECTION X - MISCELLANEOUS PROVISIONS
10.1 Waiver. The Lender shall not be deemed to have waived any rights or
remedies under any Loan Document or Obligation by:
(A) forbearing or failing to exercise, or delaying in exercising, any rights and
remedies; or
(B) forbearing or failing to insist upon, or any delay in insisting upon, the
strict performance of any term or condition of any Loan Document or other
Obligation; or
(C) granting any extension, modification or waiver of any term or condition of
any Loan Document or other Obligation, except, and only to the extent, that the
extension, modification, or waiver shall expressly provide; or
(D) any other act, omission, forbearance or delay by the Lender, its officers,
agents, servants or employees; or
(E) any waiver of any rights or remedies on any one occasion.
10.2 Written Modifications. No extension, modification, amendment or waiver of
any term or condition of any Loan Document shall be valid or binding upon the
Lender, unless it is in writing and signed by a duly authorized officer of the
Lender.
10.3 Demands and Notices. All demands and notices under any Loan Document shall
be in writing and shall be served either personally or by certified mail, return
receipt requested, on the party to whom that notice or demand is to be given or
made at the address first set forth in the caption to this Loan Agreement. All
notices and demands directed to Lender shall be sent to Portfolio Management
(Mail Code NJ 3161), with a copy of any such notice or demand to be sent to
Lender's counsel, Windels, Marx, Davies & Ives, 000 Xxxxxx Xxxxxx, Xxx
Xxxxxxxxx, Xxx Xxxxxx 00000 (Attn: Xxxxxxx X. Xxxxx). All notices to the
Borrower shall be sent to the Borrower (Attn: Xxxxxx Xxxxx and Xxxxx Xxxxxx).
(The Lender shall endeavor, but shall have no obligation whatsoever and no
responsibility whatsoever for any failure, to send copies of notices of
conditions of default to the attention of the in-house counsel). Any party
desiring to change the address to which notices or demands shall be sent shall
notify the other parties of the new address by certified mail, return receipt
requested. Any notice or demand properly sent by Lender via certified mail,
return receipt requested, shall be deemed to have been served on the third
business day after mailing, regardless of when it is actually received.
10.4 Governing Law. All terms of each Loan Document and the duties, rights and
remedies of the parties thereunder shall be governed by,
and construed according to, the laws of the State of New Jersey.
10.5 Jurisdiction. In any litigation relating to any Loan Document, Borrower
hereby consents to the exclusive personal jurisdiction of the state and federal
courts of the State of New Jersey.
10.6 Partial Invalidity. If any term or provision of any Loan Document is held
to be invalid by any court of competent jurisdiction, such invalidity shall not
affect the remaining terms and provisions, which shall continue in full force
and effect
10.7 Successors and Assigns. Each Loan Document shall be binding upon, and
inure to the benefit of, the parties thereto and their respective successors or
heirs, and assigns, provided, however, that the Borrower shall not be permitted
to assign or transfer any rights or duties under any Loan Document without the
express prior consent of the Lender, which consent the Lender may grant or
withhold in its sole discretion. The Lender shall have the absolute right to
assign, or sell a participation interest in any or all of Lender's interest in,
any Loan Document or any Loans made pursuant to any Loan Document.
10.8 Additional Rights and Remedies. All rights and remedies given to the
Lender under any Loan Document shall be in addition to, and not in limitation
of, any right or remedy that the Lender may have, whether under any other
provisions of any Loan Document or other agreement, or at law or in equity.
10.9 Further Assurances. The Borrower agrees to execute and deliver all
documents and instruments reasonably requested by the Lender to further the
purposes of this Loan Agreement or any other Loan Document.
10.10 Indemnification. The Borrower shall indemnify, defend and hold harmless
the Lender against any and all losses, liabilities, claims or causes of action
(including but not limited to reasonable attorneys' fees and settlement costs)
arising from or related to (or alleged to arise from or be related to)
Borrower's use of the proceeds of the Loan or the Commitment.
10.11 No Jury Trial. The Borrower and the Lender hereby irrevocably and
unconditionally waive trial by jury in any legal action or proceeding relating
to this Loan Agreement or the Note or any other Loan Document and for any
counterclaim therein.
10.12 Arbitration.
(A) Arbitration Generally. Upon demand of any party hereto, whether made before
or after institution of any judicial proceeding, any claim or controversy
arising out of, or relating to the Loan Documents between the parties hereto (a
"Dispute") shall be resolved by binding arbitration conducted under and governed
by the Commercial Financial Disputes Arbitration Rules (the "Arbitration Rules")
of the American Arbitration Association (the "AAA") and the Federal Arbitration
Act. Disputes may include, without limitation, tort claims, counterclaims,
disputes as to whether a matter is subject to arbitration, claims brought as
class actions, or claims arising from documents executed in the future. A
judgment upon the award may be entered in any court having jurisdiction.
Notwithstanding the foregoing, this arbitration provision does not apply to
disputes under or related to swap agreements.
(B) Special Rules. all arbitration hearings shall be conducted in the city in
which the office of the Lender first stated herein is located. A hearing shall
begin within ninety (90) days of demand for arbitration and all hearings shall
be concluded within one hundred twenty (120) days of demand for arbitration.
These time limitations may not be extended unless a party shows cause for
extension and then for no more than a total of sixty (60) days. The expedited
procedures set forth in rule 51, et seq., of the Arbitration Rules shall be
applicable to claims of less than One Million and 00/100 ($1,000,000) Dollars.
Arbitrators shall be licensed attorneys selected from the commercial financial
Dispute Arbitration Panel of the AAA. The parties do not waive applicable
federal or state substantive law except as provided herein.
(C) Preservation and Limitation of Remedies. Notwithstanding the preceding
binding arbitration provisions, the parties agree to preserve, without
diminution, certain remedies that any party may exercise before or after an
arbitration proceeding is brought. The parties shall have the right to proceed
in any court of proper jurisdiction or by self-help to exercise or prosecute the
following remedies, as applicable: (i) all rights to foreclose against any real
or personal property or other security by exercising a power of sale or under
applicable law by judicial foreclosure including a proceeding to confirm the
sale; (ii) all rights to self-help including peaceful occupation of real
property and collection of rents, set-off, and peaceful possession of personal
property; (iii) obtaining provisional or ancillary remedies including injunctive
relief, sequestration, garnishment, attachment, appointment of receiver and
filing an involuntary bankruptcy proceeding; and (iv) when applicable, a
judgment by confession of judgment. Any claim or controversy with regard to any
party's entitlement to such remedies is a Dispute.
(D) Special Damages. Each party agrees that it shall not have a remedy of
punitive or exemplary damages against the other in any Dispute and hereby waives
any right or claim to punitive or exemplary each now has or which may arise in
the future in connection with any Dispute, whether the Dispute is resolved by
arbitration or judicially.
10.13 Most-Favored Status. In the event that the definitive
documentation executed and delivered in connection with the issuance and sale of
the Privately Placed Notes or the incurrence of any other Liabilities in the
form of funded indebtedness for borrowed money permitted to be incurred pursuant
to Section 7.3 (such indebtedness, the "Specified Indebtedness") (i) contain
covenants or events of default that are more restrictive or onerous on the
Borrower than those covenants or events of default contained in this Agreement;
(ii) provide for, or permits the exercise of, remedies upon the occurrence of an
event of default thereunder (including, without limitation, any direct or
indirect acceleration of the obligations of the Borrower thereunder) which are
not provided for in, or permitted to be exercised under of in respect of, this
Agreement; or (iii) provide guarantees or other sources of payment for
obligations of the Borrower under the Specified Indebtedness which have not been
provided hereunder or in connection herewith (each such covenant, event of
default and provision described in the preceding clauses (i) through (iii) being
herein called a "More Favorable Provision"), then prior to or simultaneously
with the Borrower entering into or becoming bound by any of the documentation
pertaining to the Specified Indebtedness or any amendment, modification or
supplement thereto containing a More Favorable Provision, the Borrower shall
executed and deliver to the Lender an amendment to this Agreement and such other
documents and instruments as the Lender shall reasonably request, in each case
satisfactory in form and substance to the Lender, which modify the provisions of
this Agreement so as to give the Lender the benefit of each More Favorable
Provision.
The Lender and the Borrower have caused this Loan Agreement to be executed as of
the day and year first above written.
"Lender"
FIRST UNION NATIONAL BANK,
a National Banking Association
By:
Name:
Title:
"Borrower"
VILLAGE SUPER MARKET, INC.,
ATTEST: a New Jersey Corporation
By: By:
Name: Name:
Title: Title:
