EXHIBIT 10.28
STATER BROS. MARKETS
STATER BROS. HOLDINGS INC.
THIRD AMENDMENT
TO CREDIT AGREEMENT
This THIRD AMENDMENT TO CREDIT AGREEMENT (this "THIRD AMENDMENT") is
dated as of January 18, 2002 entered into by and among STATER BROS. MARKETS, a
California corporation ("BORROWER"), STATER BROS. HOLDINGS, INC., a Delaware
corporation ("HOLDINGS"), the financial institutions listed on the signature
pages hereof ("LENDERS") and BANK OF AMERICA, N.A., as administrative agent for
Lenders ("ADMINISTRATIVE AGENT"), and Issuing Lender, and, for purposes of
Section 4 hereof, the Credit Support Party (as defined in Section 4 hereof)
listed on the signature pages hereof, and is made with reference to that certain
Credit Agreement dated as of August 6, 1999, as amended by the First Amendment
dated as of September 15, 2000 and the Second Amendment dated as of December 13,
2001 (as amended, modified or supplemented from time to time, the "CREDIT
AGREEMENT"), by and among Borrower, Holdings, Lenders, Administrative Agent, and
Issuing Lender. Capitalized terms used herein without definition shall have the
same meanings herein as set forth in the Credit Agreement.
RECITALS
WHEREAS, Borrower, Holdings, Lenders and Issuing Lender desire to
amend the Credit Agreement as set forth below;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1 AMENDMENTS TO SECTION 1: DEFINITIONS AND ACCOUNTING TERMS.
A. Subsection 1.01 of the Credit Agreement is hereby amended by
amending and restating clause (d) of the definition of " Applicable Amount" in
the following manner:
"(d) with respect to standby Letters of Credit, 1.50 percent."
B. Subsection 1.01 of the Credit Agreement is hereby amended by
amending and restating the definition of "Maturity Date" in the following
manner:
""Maturity Date" means March 31, 2003, as it may be earlier
terminated in accordance with the terms hereof."
C. Subsection 1.01 of the Credit Agreement is hereby amended by
amending and restating clause (e) of the definition of "Restricted Payment" in
the following manner:
"(e) the prepayment, repayment, redemption, defeasance or other
acquisition or retirement for value prior to any scheduled maturity,
scheduled repayment or scheduled sinking fund payment of any
Holdings Senior Notes, any Existing Holdings Notes or the
Subordinated Note."
D. Subsection 1.01 of the Credit Agreement is hereby amended by
adding thereto the following definition in proper alphabetical order:
""Subordinated Note" means the $20,000,000 subordinated note due
March 31, 2007 issued by Holdings in the form of Exhibit G."
1.2 AMENDMENTS TO SECTION 2: THE COMMITMENTS AND EXTENSIONS OF
CREDIT.
A. Subsection 2.04(a)(iv) of the Credit Agreement is hereby amended
by deleting such subsection in its entirety and substituting the following
therefore:
"(iv) No standby Letter of Credit shall expire more than 12 months
after the issuance thereof. No commercial Letter of Credit shall
expire more than 180 days after the issuance thereof. No Letter of
Credit shall expire after the Letter of Credit Expiration Date;
provided, however, that no Letter of Credit issued under the
Revolving Loan Commitment L/C Sublimit shall expire after the
Maturity Date. If any Letter of Credit Usage remains outstanding
after the Letter of Credit Expiration Date, Borrower shall, not
later than the Letter of Credit Expiration Date, deposit cash in an
amount equal to such Letter of Credit Usage in a Letter of Credit
Cash Collateral Account."
B. Section 8.01 of the Credit Agreement is hereby amended by (i)
deleting "and" at then of clause (b), (ii) deleting "." at the end of clause (c)
and inserting "; and" in its place, and (iii) adding the following clause (d):
"(d) Indebtedness in an aggregate principal amount not to exceed
$20,000,000 evidenced by the Subordinated Note."
C. Section 8.02 of the Credit Agreement is hereby amended by (i)
deleting "." at the end of clause (e) and inserting "; and" in its place, and
(ii) adding the following clause (f):
"(f) Holdings may redeem or repurchase its outstanding capital stock
on or prior to March 31, 2002 for an aggregate purchase price not to
exceed $40,000,000, of which up to $20,000,000 may be paid in cash
and $20,000,000 by the issuance of the Subordinated Note."
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1.3 AMENDMENTS TO SECTION 7: NEGATIVE COVENANTS.
Subsection 7.14(b) of the Credit Agreement is hereby amended by
deleting such subsection in its entirety and substituting the following
therefor:
"(b) CONSOLIDATED EBITDA.
Permit Consolidated EBITDA for any period set forth
below to be less than the correlative amount indicated; provided
that Consolidated EBITDA for the fiscal quarters ending on or before
December 24, 2000 shall be measured on an Annualized basis:
MINIMUM CONSOLIDATED
PERIOD ENDING EBITDA
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Fiscal Quarter Ending June 25, 2000 $75,000,000
Two Fiscal Quarters Ending September 24, 2000 $75,000,000
Three Fiscal Quarters Ending on or about December 24, 2000 $75,000,000
Each Four Fiscal Quarter Period Ending after December 24, 2000 and on or $75,000,000
before September 30, 2001
Each Four Fiscal Quarter Period Ending on or after December 31, 2001 $85,000,000"
1.4 OTHER AMENDMENTS TO THE CREDIT AGREEMENT.
The Credit Agreement is hereby amended by (i) adding the new Exhibit
G attached hereto as Exhibit 1 and (ii) adding a corresponding reference to such
Exhibit G to the Exhibits listed on the Table of Contents of the Credit
Agreement.
SECTION 2. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders and Issuing Lender to enter into this
Third Amendment and to amend the Credit Agreement in the manner provided herein,
each of Borrower and Holdings represents and warrants to each Lender and Issuing
Lender that the following statements are true, correct and complete:
A. EXISTENCE AND QUALIFICATION; POWER; COMPLIANCE WITH LAWS. Each
Borrower Party is a corporation duly organized or formed, validly existing and
in good standing under the Laws of the state of its incorporation or
organization, has the power and authority and the legal right to own and operate
its properties, to lease the properties it operates and to conduct its business,
is duly qualified and in good standing under the Laws of each jurisdiction where
its
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ownership, lease or operation of properties or the conduct of its business
requires such qualification, and is in compliance with all Laws except to the
extent that noncompliance does not have a Material Adverse Effect.
B. POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each Borrower
Party has the power and authority and the legal right to make, deliver and
perform this Third Amendment and, in the case of Holdings and Borrower, to
perform its obligations under the Credit Agreement as amended by this Third
Amendment (the "AMENDED AGREEMENT"), and has taken all necessary action to
authorize the execution, delivery and performance of this Third Amendment and to
authorize the performance under the Amended Agreement. No consent or
authorization of, filing with, or other act by or in respect of any Governmental
Authority, is required in connection with the execution, delivery, performance,
validity or enforceability of this Third Amendment or the Amended Agreement.
This Third Amendment has been duly executed and delivered by each Borrower
Party, and this Third Amendment and the Amended Agreement constitute a legal,
valid and binding obligation of each Borrower Party party thereto, enforceable
against each Borrower Party party thereto in accordance with their respective
terms.
C. NO LEGAL BAR. The execution, delivery, and performance by each
Borrower Party of this Third Amendment and the performance by each Borrower
Party party thereto of the Amended Agreement and compliance with the provisions
hereof and thereof have been duly authorized by all requisite action on the part
of such Borrower Party and do not and will not (a) violate or conflict with, or
result in a breach of, or require any consent under (i) any Organization
Documents of such Borrower Party or any of its Subsidiaries, (ii) any applicable
Laws, rules, or regulations or any order, writ, injunction, or decree of any
Governmental Authority or arbitrator, or (iii) any Contractual Obligation of
such Borrower Party or any of its Subsidiaries or by which any of them or any of
their property is bound or subject, (b) constitute a default under any such
agreement or instrument, (c) result in, or require, the creation or imposition
of any Lien on any of the properties of such Borrower Party or any of its
Subsidiaries, or (d) require any approval of stockholders or any approval or
consent of any Person of any Contractual Obligation of any Borrower Party.
D. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 5 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the date of this Third Amendment to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.
E. ABSENCE OF DEFAULT. No event has occurred and is continuing or
will result from the consummation of the transactions contemplated by this Third
Amendment that would constitute an Event of Default or a Default.
SECTION 3. ACKNOWLEDGEMENT AND CONSENT
Development is a party to the Development Guaranty, as amended,
pursuant to which Development has guaranteed the Obligations. Development is
referred to herein as the
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"CREDIT SUPPORT PARTY," and the Development Guaranty is referred to herein as
the "CREDIT SUPPORT DOCUMENT".
The Credit Support Party hereby acknowledges that it has reviewed
the terms and provisions of the Credit Agreement and this Third Amendment and
consents to the amendment of the Credit Agreement effected pursuant to this
Third Amendment. The Credit Support Party hereby confirms that the Credit
Support Document to which it is a party or otherwise bound will continue to
guaranty, to the fullest extent possible the payment and performance of all
Guarantied Obligations (as such term is defined in the Credit Support Document),
including without limitation the payment and performance of all such Guarantied
Obligations in respect of the Obligations of Borrower and Holdings now or
hereafter existing under or in respect of the Amended Agreement and the Notes
defined therein.
The Credit Support Party acknowledges and agrees that the Credit
Support Document to which it is a party or otherwise bound shall continue in
full force and effect and that all of its obligations thereunder shall be valid
and enforceable and shall not be impaired or limited by the execution or
effectiveness of this Third Amendment. The Credit Support Party represents and
warrants that all representations and warranties contained in the Amended
Agreement and the Credit Support Document to which it is a party or otherwise
bound are true, correct and complete in all material respects on and as of the
date of this Third Amendment to the same extent as though made on and as of that
date, except to the extent such representations and warranties specifically
relate to an earlier date, in which case they were true, correct and complete in
all material respects on and as of such earlier date.
The Credit Support Party acknowledges and agrees that the Credit
Support Party is not required by the terms of the Credit Agreement or any other
Loan Document to consent to the amendments to the Credit Agreement effected
pursuant to this Third Amendment and nothing in the Credit Agreement, this Third
Amendment or any other Loan Document shall be deemed to require the consent of
the Credit Support Party to any future amendments to the Credit Agreement.
SECTION 4. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER
LOAN DOCUMENTS.
(i) On and after the date of this Third Amendment, each reference in
the Credit Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import referring to the Credit Agreement,
and each reference in the other Loan Documents to the "Credit
Agreement", "thereunder", "thereof" or words of like import
referring to the Credit Agreement shall mean and be a reference to
the Amended Agreement.
(ii) Except as specifically amended by this Third Amendment, the
Credit Agreement and the other Loan Documents shall remain in full
force and effect and are hereby ratified and confirmed.
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(iii) The execution, delivery and performance of this Third
Amendment shall not, except as expressly provided herein, constitute
a waiver of any provision of, or operate as a waiver of any right,
power or remedy of Administrative Agent, any Lender or the Issuing
Lender under, the Credit Agreement or any of the other Loan
Documents.
B. FEES AND EXPENSES. Borrower acknowledges that all costs, fees and
expenses as described in subsection 11.03 of the Credit Agreement incurred by
Administrative Agent and its counsel with respect to this Third Amendment and
the documents and transactions contemplated hereby shall be for the account of
Borrower.
C. HEADINGS. Section and subsection headings in this Third Amendment
are included herein for convenience of reference only and shall not constitute a
part of this Third Amendment for any other purpose or be given any substantive
effect.
D. APPLICABLE LAW. THIS THIRD AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA (INCLUDING WITHOUT LIMITATION SECTION 1646.5 OF THE CIVIL CODE OF THE
STATE OF CALIFORNIA), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS; EFFECTIVENESS. This Third Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Third Amendment shall become
effective upon the execution of a counterpart hereof by Borrower, Holdings,
Requisite Lenders and the Credit Support Party and receipt by Borrower and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Third
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
STATER BROS. MARKETS
By:__________________________________
Title:_______________________________
STATER BROS. HOLDINGS, INC.
By:__________________________________
Title:_______________________________
STATER BROS. DEVELOPMENT, INC. (for
purposes of Section 4), as a Credit
Support Party
By:__________________________________
Title:_______________________________
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BANK OF AMERICA, N.A., as Administrative
Agent
By:__________________________________
Title:_______________________________
BANK OF AMERICA, N.A., as Issuing Lender
and a Lender
By:__________________________________
Title:_______________________________
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EXHIBIT 1
EXHIBIT G
FORM OF SUBORDINATED NOTE
