FIRST AMENDMENT TO LOAN AGREEMENT
THIS FIRST AMENDMENT (this "Amendment"), dated as of July 15, 2004, is
made between VILLAGE SUPER MARKET, INC., a New Jersey corporation, as borrower
(the "Borrower"), and WACHOVIA BANK, NATIONAL ASSOCIATION, a National Banking
Association, as lender (formerly known as First Union National Bank, the
"Lender").
RECITALS
A. Reference is made to the Loan Agreement, dated as of September 16, 1999
(the "Loan Agreement"), between the Borrower and the Lender, pursuant to which
Lender made available to Borrower the Revolving Loan (as defined in the Loan
Agreement).
B. The Borrower has requested (i) an increase of the maximum amount
available under the Revolving Loan from $15,000,000 to $20,000,000, (ii) an
extension of the Maturity Date of the Revolving Loan to September 16, 2007,
(iii) modifications of certain financial covenants set forth in the Loan
Agreement and (iv) certain other modifications to the terms and conditions of
the Loan Agreement, as specified herein.
C. The Lender is amenable to said modifications in accordance with, and
subject to, the terms and conditions of this Amendment.
NOW, THEREFORE, for good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged), the parties hereto agree as
follows:
Section 1. Definitions
All capitalized terms used but not otherwise defined in this Amendment
shall have the meanings given to such terms in the Loan Agreement.
Section 2. Acknowledgment of Revolving Loan and Waiver.
The Borrower acknowledges and agrees that the Revolving Loan is a valid
and binding obligation of the Borrower enforceable against the Borrower in
accordance with the terms of the Loan Documents, and that there are no claims,
set-offs or defenses to the payment thereof.
Section 3. Amendment to the Loan Agreement.
(a) References in the following Sections of the Loan Agreement to
"$15,000,000" shall be deleted and replaced by references to "$20,000,000":
the defined term "Commitment" in Section 1.1 of the Loan Agreement;
Section 2.1 of the Loan Agreement; and Section 2.2 of the Loan Agreement.
(b) The defined term "Maturity Date" set forth in Section 1.1 of
the Loan Agreement shall be amended and restated to read as follows:
""Maturity Date" means September 16, 2007; subject, however to
extension as provided in Section 3.6 hereof."
(c) The defined term "Net Income" set forth in Section 1.1 of the
Loan Agreement shall be amended and restated to read as follows:
""Net Income" means net income (excluding (i) any extraordinary
items, (ii) non-cash gains, and (iii) non-cash losses, including
impairment charges) for the Companies calculated on a consolidated
basis in accordance with GAAP."
(d) Clause (e) of the defined term "Permitted Encumbrance(s)" set
forth in Section 1.1 of the Loan Agreement shall be amended and restated to
read as follows:
"(e) [INTENTIONALLY OMITTED];"
(e) The defined term "Ratio of EBITDAR to Interest Plus Rent" set
forth in Section 1.1 of the Loan Agreement shall be amended and restated to
read as follows:
"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) non-cash gains, (iii) non-cash losses,
including impairment charges, (iv) LIFO provisions and (v) non-
cash compensation in the form of stock or stock options, 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.
(f) The defined term "Ratio of Funded Debt Plus 8* Rent to EBITDAR"
set forth in Section 1.1 of the Loan Agreement shall be deleted in its entirety
and replaced by the following language:
""Ratio of EBITDAR to Interest Plus Rent/CPLTD/CPCL" 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) non-cash gains, (iii) non-cash losses,
including impairment charges, (iv) LIFO provisions and (v) non-
cash compensation in the form of stock or stock options, 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 plus the current portion of its
long-term debt plus the current portion of its Capital Leases."
(g) The defined term "Rent" set forth in Section 1.1 of the Loan
Agreement shall be amended and restated to read as follows:
""Rent" means the minimum amount of rental and other
obligations actually due and payable during the relevant period by
any of the Companies as lessee under all leases of real property,
excluding any amounts required to be paid by the lessee (whether
or not therein designated as rent or additional rent) (a) that are
on account of maintenance and repairs, insurance, taxes,
assessments and similar charges or (b) that are based on profits,
revenues or sales realized by the lessee from the leased property
or otherwise based on the performance of the lessee."
(h) There shall be added to Section 1.1 of the Loan Agreement the
following new defined term in its appropriate alphabetical location:
"Total Liabilities" means all liabilities of Borrower, determined
in accordance with GAAP.
(i) Section 2.6 of the Loan Agreement shall be amended and restated
to read as follows:
"2.6 [INTENTIONALLY OMITTED]."
(j) Section 2.9 of the Loan Agreement shall be amended and restated
to read as follows:
"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."
(k) Section 6.10 of the Loan Agreement shall be amended and restated
to read as follows:
"6.10 [INTENTIONALLY OMITTED]."
(l) Section 6.11 of the Loan Agreement shall amended and restated to
read as follows:
"6.11 [INTENTIONALLY OMITTED]."
(m) Section 6.12 of the Loan Agreement shall be amended and restated
to read as follows:
"6.12 Ratio of EBITDAR to Interest Plus Rent/CPLTD/CPCL.
As to the Companies, on a consolidated basis, maintain a Ratio of
EBITDAR to Interest Plus Rent/CPLTD/CPCL of not less than
1.20 to 1.00, measured as of the end of each Fiscal Year and
Fiscal Quarter on a rolling four quarters basis."
(n) Section 6.13 of the Loan Agreement shall be amended and restated
to read as follows:
"6.13 [INTENTIONALLY OMITTED]."
(o) A new Section 6.22 shall be added to the Loan Agreement to read
as follows:
"6.22 Ratio of Total Liabilities to Tangible Net Worth. Borrower
shall at all times maintain a ratio of Total Liabilities to
Tangible Net Worth of not more than 2.00 to 1.00, which shall be
calculated at the end of each Fiscal Year and on the last day of
each Fiscal Quarter."
(p) A new Section 6.23 shall be added to the Loan Agreement to read
as follows:
"6.23 Prohibition Against Losses. Borrower shall at all times
maintain a positive Net Income, which shall be calculated at the
end of each Fiscal Year.
(q) Section 7.5 of the Loan Agreement shall be amended and restated
to read as follows:
"7.5 [INTENTIONALLY OMITTED]."
(r) Section 7.8(F) of the Loan Agreement shall be amended and
restated to read as follows:
"(F) investments in Wakefern stock and/or InsuRite stock;"
(s) Section 7.8(H) of the Loan Agreement shall be amended and
restated to read as follows:
"(H) repurchases of common stock of the Borrower;"
(t) Section 7.8(I) of the Loan Agreement shall be amended and
restated to read as follows:
"(I) deposits of cash with or acceptance of notes due from
Wakefern made or done pursuant to the terms and provisions of
any co-operative agreement between Borrower and Wakefern; or"
(u) A new Section 7.8(J) shall be added to the Loan Agreement to
read as follows:
"(J) investments maintained with and arranged by Lender in
connection with cash management services provided to Borrower
by Lender."
Section 4. Conditions Precedent. The agreement of the Lender to amend the
Loan Agreement as set forth herein is subject to the conditions precedent that,
on or before the date hereof, the Lender shall have received the following,
each in form and substance satisfactory to the Lender:
(a) this Amendment, duly executed and delivered by the Borrower;
(b) an Amended and Restated Revolving Note made by Borrower in favor
of Lender in the aggregate principal amount of $20,000,000, substantially in
the form attached hereto as EXHIBIT "A", duly executed and delivered by the
Borrower;
(c) payment in full to Lender of a loan processing fee in connection
with this Amendment in the amount of $25,000;
(d) payment in full of all fees and expenses incurred by the Lender's
outside counsel for legal services rendered in connection with this Amendment;
and
(e) such other documents and information as the Lender may reasonably
request.
Section 5. Representations and Warranties. To induce the Lender to enter
into this Amendment, the Borrower makes the following representations and
warranties to the Lender, which shall survive the execution and delivery
hereof:
(a) The execution and delivery of this Amendment has been authorized
by all necessary corporate action on its part, this Amendment has been duly
executed and delivered by it, and this Amendment and the Loan Agreement, as
amended hereby, constitutes the legal, valid and binding obligations of it
enforceable against it in accordance with its terms subject to applicable
bankruptcy, insolvency, reorganization and other laws affecting creditors'
rights generally, moratorium laws from time to time in effect and general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law);
(b) No Event of Default has occurred and is continuing under the Loan
Agreement, and no event has occurred that, with notice, lapse of time or both,
would constitute such an Event of Default; and
(c) The representations and warranties set forth in the Loan
Agreement and the other Loan Documents are true and correct as of the date
hereof in all material respects.
Section 6. Effect of Amendment; No Novation. Except as expressly set
forth herein, this Amendment shall not, by implication or otherwise,
limit, impair, constitute a waiver of, or otherwise affect the rights and
remedies of the Lender under the Loan Agreement, nor alter, modify,
amend or in any way affect any of the terms, conditions, obligations, covenants
or agreements contained in the Loan Agreement, all of which are ratified and
affirmed in all respects and shall continue in full force and effect. All
references to the Loan Agreement in any Loan Document or other instrument,
agreement or document shall hereafter be deemed to refer to the Loan Agreement
as amended by this Amendment. This Amendment is given as a modification of the
Borrower's obligations under the Loan Agreement and is not given in
substitution therefor or extinguishment thereof and is not intended to be a
novation.
Section 7. Waiver of Claims and Defenses; Release. The Borrower agrees
that, as of the date hereof, it has no claim, counterclaim, cause of action or
defense of any kind by way of setoff or otherwise (i) to the payment and
satisfaction in full of the Revolving Loan, (ii) in connection with any
provisions of the Loan Agreement and the other Loan Documents and (iii) in
connection with any and all acts or omissions of the Bank in administering the
amounts outstanding under the Loan Documents or otherwise. The foregoing
notwithstanding, to the extent that any such claim or defense may or does
exist as of the date hereof, the Borrower waives and releases any and all
such claims, counterclaims, causes of action and defenses.
Section 8. Entire Agreement. This Amendment constitutes the entire
agreement of the parties hereto with respect to an amendment of the Loan
Agreement pertaining to the subject matter hereof, and it supersedes and
replaces all prior and contemporaneous agreements, discussions and
understandings (whether written or oral) with respect to such amendment.
Section 9. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement.
Section 10. Governing Law. This Amendment, including the validity thereof
and the rights and obligations of the parties hereunder, shall be construed in
accordance with and governed by the laws of the State of New Jersey.
Section 11. Execution Certification. This Amendment has been executed by
the Borrower and delivered to the Lender in the State of New Jersey.
Section 12. Patriot Act Notice. To help the funding of terrorism and money
laundering activities, Federal law requires all financial institutions to
obtain, verify, and record information that identifies each person who opens
an account. For purposes of this Section, account shall be understood to
include loan accounts.
[SIGNATURE PAGE TO FOLLOW]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the day and year first above written.
BORROWER
VILLAGE SUPER MARKET, INC.,
ATTEST: a New Jersey Corporation
By:__________________ By: ____________________
Name: _______________ Name: __________________
Title: _____________ Title: _________________
LENDER
WACHOVIA BANK, NATIONAL
ASSOCIATION, f/k/a as First Union
National Bank
By: ____________________
Name: __________________
Title: _________________
EXHIBIT A
