Exhibit 10.24
EXECUTED COPY
AMENDMENT No. 2 dated as of March 21, 2002, to the Credit Agreement
dated as of February 23, 2001, as amended (the "Credit Agreement"), among THE
GREAT ATLANTIC & PACIFIC TEA COMPANY, INC., a Maryland corporation (the
"Company"), THE GREAT ATLANTIC & PACIFIC COMPANY OF CANADA, LIMITED, a
Canadian corporation (the "Canadian Borrower"), Compass Foods, Inc.,
Xxxxxx'x, Inc., Xxxx'x Food Stores, Inc., Shopwell, Inc., Xxxxxxxx, Inc.,
Super Fresh Food Markets, Inc. and Super Market Service Corp.(together with
the Company, the "U.S. Borrowers" and the U.S. Borrowers together with the
Canadian Borrower, the "Borrowers"), the banks party thereto (the "Lenders"),
JPMORGAN CHASE BANK (successor to The Chase Manhattan Bank), a New York
banking corporation, as agent for the U.S. Lenders (in such capacity, the
"U.S. Administrative Agent"), and X.X. XXXXXX BANK CANADA formerly known as
The Chase Manhattan Bank of Canada, a Canadian chartered bank, as agent for
the Canadian Lenders (in such capacity, the "Canadian Administrative Agent").
A. Pursuant to the Credit Agreement, the Lenders have extended
credit to the Borrowers, and have agreed to extend credit to the Borrowers, in
each case pursuant to the terms and subject to the conditions set forth therein.
B. The Borrowers have requested that the Lenders agree to amend
certain provisions of the Credit Agreement as set forth herein.
C. The undersigned Lenders are willing to so amend the Credit
Agreement, in each case pursuant to the terms and subject to the conditions
set forth herein.
D. Capitalized terms used and not otherwise defined herein shall
have the meanings assigned thereto in the Credit Agreement.
In consideration of the premises and the agreements, provisions and
covenants herein contained, the parties hereto hereby agree, on the terms and
subject to the conditions set forth herein, as follows:
SECTION 1. Amendments. (a) Section 1.01 of the Credit
Agreement is hereby amended by deleting the definition of the term "Canadian
Borrowing Base" and substituting in lieu thereof the following:
"Canadian Borrowing Base" means, on any date (subject to
adjustment as provided in Section 1.06), an amount (calculated based on
the most recent Borrowing Base Certificate delivered to the Canadian
Administrative Agent in accordance with Section 5.01(f), absent any error
in such Borrowing Base Certificate) that is equal to, less the Canadian
Vendor Reserve, (a) the sum of (i) 65% of (A) the amount of the Adjusted
Eligible Inventory located at the Canadian Distribution Centers minus (B)
the Over 13 Weeks Old Reserves allocable to the Canadian Distribution
Centers at such date and (ii) 60% of the amount of the Adjusted Eligible
Inventory located at the Canadian Stores (or in transit from any
Distribution Center to the Canadian Stores) at such date, minus (b) the
sum of (i) the aggregate dollar amount (expressed in U.S. Dollars)
represented by gift certificates then outstanding and entitling the holder
thereof to use all or a portion thereof to pay all or a portion of the
purchase price for any Inventory as of such day, (ii) the Canadian Reserve
for Leasehold Obligation and (iii) the maximum aggregate amount (giving
effect to any netting agreements) that the Canadian Borrower and the
Canadian Loan Parties would be required to pay under any Hedging
Agreements the obligations under which constitute Canadian Obligations if
such Hedging Agreements were terminated, determined as of the most recent
date for which financial statements have been delivered pursuant to
Section 5.01(a), (b) or (c), as applicable. The Canadian Borrowing Base
shall be computed weekly, as required by Section 5.01(f), and established
based upon the most recent Borrowing Base Certificate delivered to the
Canadian Administrative Agent and shall remain in effect until the
delivery to the Canadian Administrative Agent of a subsequent Borrowing
Base Certificate.
(b) Section 1.01 of the Credit Agreement is hereby amended by
deleting the date "December 31, 2003" appearing in the definition of the term
"Maturity Date" and substituting in lieu thereof the date "June 30, 2005".
(c) Section 1.01 of the Credit Agreement is hereby amended by
deleting the definition of the term "U.S. Borrowing Base" and substituting in
lieu thereof the following:
"U.S. Borrowing Base" means, on any date (subject to
adjustment as provided in Section 1.06), an amount (calculated based on
the most recent Borrowing Base Certificate delivered to the U.S.
Administrative Agent in accordance with Section 5.01(f), absent any error
in such Borrowing Base Certificate) that is equal to (a) the sum of (i)
65% of (A) the amount of the Adjusted Eligible Inventory located at the
U.S. Distribution Centers minus (B) the Over 13 Weeks Old Reserves
allocable to the U.S. Distribution Centers at such date, (ii) 60% of the
amount of the Adjusted Eligible Inventory located at the U.S. Stores (or
in transit from any Distribution Center to the U.S. Stores) at such date
and (iii) 50% of Eligible Real Estate at such date; provided that the
amount resultant from such percentage of real estate shall not exceed 15%
of the aggregate amount of the total Commitments minus (b) the sum of (i)
the aggregate dollar amount (expressed in U.S. Dollars) represented by
gift certificates then outstanding and entitling the holder thereof to use
all or a portion thereof to pay all or a portion of the purchase price for
any Inventory as of such day, (ii) the U.S. Reserve for Leasehold
Obligation, (iii) the PACA Liability Reserve and (iv) the maximum
aggregate amount (giving effect to any netting agreements) that the
Company and its Subsidiaries would be required to pay under any Hedging
Agreements the obligations under which constitute U.S. Obligations if such
Hedging Agreements were terminated, determined as of the most recent date
for which financial statements have been delivered pursuant to Section
5.01(a), (b) or (c), as applicable. The U.S. Borrowing Base shall be
computed weekly, as required by Section 5.01(f), and established based
upon the most recent Borrowing Base Certificate delivered to the U.S.
Administrative Agent and shall remain in effect until the delivery to the
Administrative Agent of a subsequent Borrowing Base Certificate.
(d) Section 1.01 of the Credit Agreement is hereby amended by adding
the following defined terms in proper alphabetical order:
"Amendment No. 2 Effective Date" means the date Amendment No. 2
dated as of March 21, 2002, to the Credit Agreement becomes effective
in accordance with its terms.
"Demutualization Proceeds" means the Net Proceeds received by the
Company pursuant to the demutualization of The Prudential Insurance
Company of America, including Net Proceeds received by the Company from
the sale of shares of capital stock in Prudential Financial, Inc. issued
to the Company in connection with such demutualization.
"Make-Whole Premium" means, with respect to any debt security at any
repurchase date, the excess, if any, of (a) the present value of the sum
of the principal amount and premium, if any, that would be payable on such
debt security on its maturity date and all remaining interest payments
(not including any portion of such payments of interest accrued as of the
repurchase date) to and including such maturity date, discounted on a
semi-annual bond equivalent basis from such maturity date to the
repurchase date at a per annum interest rate equal to the sum of the
Treasury Yield (determined on the Business Day immediately preceding the
date of such repurchase), plus 50 basis points over (b) the aggregate
principal amount of the debt securities being redeemed.
"Treasury Securities" means any investment in obligations issued or
guaranteed by the United States government or any agency thereof.
"Treasury Yield" means the yield to maturity at the time of
computation of Treasury Securities with a constant maturity (as compiled
by and published in the most recent Federal Reserve Statistical Release
H.15(519) which has become publicly available at least two Business Days
prior to the date fixed for repurchase (or, if such Statistical Release is
no longer published, any publicly available source of similar data)) most
nearly equal to the then remaining average life of the debt securities
being repurchased, provided that if the average life of such debt
securities is not equal to the constant maturity of a Treasury Security
for which a weekly average yield is given, the Treasury Yield shall be
obtained by linear interpolation (calculated to the nearest one-twelfth of
a year) from the weekly average yields of Treasury Securities for which
such yields are given, except that if the average life of the notes is
less than one year, the weekly average yield on actually traded Treasury
Securities adjusted to a constant maturity of one year shall be used.
(e) Section 2.05 of the Credit Agreement is hereby amended by
deleting the amount "U.S.$75,000,000" appearing in clause (ii)(1) of the fourth
sentence of paragraph (b) thereof and substituting in lieu thereof the amount
"U.S.$150,000,000".
(f) Section 2.10 of the Credit Agreement is hereby amended by
deleting the world "In" appearing at the beginning of paragraph (c) thereof and
substituting in lieu thereof the following:
At any time that any Loans are outstanding, in
(g) Section 6.01 of the Credit Agreement is hereby amended by (i)
deleting the word "and" appearing at the end of clause (vii) of paragraph (a)
thereof, (ii) adding following clause (vii) of paragraph (a) thereof the
following:
(viii) Guarantees by the Company or any of its Subsidiaries of
Indebtedness of third parties given in connection with the acquisition or
improvement of real property for use in the business of the Company and
its Subsidiaries not exceeding $10,000,000 at any one time outstanding;
and
and (iii) by renumbering clause "(viii)" of paragraph (a) thereof as clause
"(ix)" of such paragraph (a).
(h) Section 6.07 of the Credit Agreement is hereby amended by
deleting the amount "$50,000,000" appearing in clause (b) of such Section and
substituting in lieu thereof the amount "$150,000,000".
(i) Section 6.08 of the Credit Agreement is hereby amended by (i)
deleting the word "and" appearing at the end of clause (a)(ii) thereof and
substituting in lieu thereof a comma, (ii) adding before the period at the end
of clause (a)(iii) thereof the following:
and (iv) the Company may purchase shares of its capital stock for an
aggregate purchase price not exceeding $30,000,000, provided that, after
giving effect to any proposed purchase, (A) no Default shall have occurred
and be continuing, (B) the total U.S. Exposure does not exceed 50% of the
lesser of the total U.S. Commitments and the U.S. Borrowing Base, and (C)
the total Canadian Exposure does not exceed 50% of the lesser of the total
Canadian Commitments and the Canadian Borrowing Base
and (iii) deleting the provisos contained in paragraph (b) thereof in their
entirety and substituting in lieu thereof the following:
provided that the Company may repurchase from time to time, prior to their
maturity, the debt securities referred to in the preceding clause (i) for
a purchase price less than or equal to par plus a Make-Whole Premium, so
long as the aggregate cost of all such repurchased debt securities from
the Amendment No. 2 Effective Date through the term of the Availability
Period does not exceed the sum of (w) the Demutualization Proceeds, (x)
U.S.$50,000,000, provided that no Loans are outstanding on the date of
repurchase or, if applicable, the date of the commencement of any tender
offer with respect to such repurchase pursuant to this clause (x), and (y)
the Net Proceeds received by the Company without violation of Section 6.05
and that are not required to be used to prepay the Loans pursuant to
Section 2.10(c); provided that only Net Proceeds received within the 360
days prior to repurchase shall be available for such repurchase pursuant
to this clause (y); provided, further, that, after giving effect to any
proposed repurchase, (A) no Default shall have occurred and be continuing,
(B) the total U.S. Exposure does not exceed 50% of the lesser of the total
U.S. Commitments and the U.S. Borrowing Base, and (C) the total Canadian
Exposure does not exceed 50% of the lesser of the total Canadian
Commitments and the Canadian Borrowing Base; provided, finally, that the
Company may also repurchase the 2004 Notes with the proceeds of
Indebtedness permitted pursuant to Section 6.01(a)(ii)(B).
(j) Section 6.10 of the Credit Agreement is hereby amended by
inserting the words "securing Obligations or any refinancing thereof" after the
word "Lien" appearing in clause (a) thereof and by inserting the word "actually"
before the word "owned" in clause (a) thereof.
(k) Section 6.14 of the Credit Agreement is hereby amended by
deleting the table set forth therein and substituting in lieu thereof the
following:
Year Amount
---- ------
Fiscal year ending on or $300,000,000
about February 23, 2002
Fiscal year ending on or $325,000,000
about February 22, 2003
Fiscal year ending on or $375,000,000
about February 22, 2004
Each fiscal year thereafter $400,000,000
(l) Schedule 3.12 of the Credit Agreement is hereby amended by
adding at the end thereof the following:
Food Basics, Inc. 100%
SECTION 2. Representations and Warranties. Each of the
Borrowers represents and warrants to the Agents and the Lenders that:
(a) This Amendment has been duly executed and delivered by it and
constitutes its legal, valid and binding obligation enforceable against it
in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization or other similar laws
affecting creditors' rights generally and except as enforceability may be
limited by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(b) After giving effect to this Amendment, the representations and
warranties set forth in Article III of the Credit Agreement are true and
correct in all material respects with the same effect as if made on the
date hereof, except to the extent such representations and warranties
expressly relate to an earlier date.
(c) After giving effect to this Amendment, no Event of Default, or
event that with notice or lapse of time or both would constitute an Event
of Default, has occurred and is continuing.
SECTION 3. Conditions to Effectiveness. (a) This Amendment (other
than the amendment to the definition of the term "Maturity Date" set forth in
Section 1(b)) shall become effective (as of the date first written above) on the
date (the "Amendment Effective Date") when (i) the Agents (or their counsel)
shall have received counterparts of this Amendment that, when taken together,
bear the signatures of the Borrowers and the Required Lenders and (ii) the
Agents shall have received payment of the amendment fees payable under Section
4(a) below (to the extent due on the Amendment Effective Date) and any
out-of-pocket expenses of the Agents payable by the Borrowers that have been
invoiced before the Amendment Effective Date.
(b) The amendment to the definition of the term "Maturity Date" set forth
in Section 1(b) shall become effective (as of the date first written above) on
the date when (i) the Agents (or their counsel) shall have received counterparts
of this Amendment that, when taken together, bear the signatures of the
Borrowers and the Lenders and (ii) the Agents shall have received payment of the
extension fees payable under Section 4(b) below (to the extent due on the
Amendment Effective Date) and any out-of-pocket expenses of the Agents payable
by the Borrowers that have been invoiced before the Amendment Effective Date.
SECTION 4. Fees. The Borrowers agree to pay to each Lender that
executes and delivers a copy of this Amendment to the Agents (or their counsel)
on or prior to 5:00 p.m. on April 3, 2002, (a) an amendment fee in an amount
equal to 0.10% of such Lender's Commitment (whether used or unused) and (b) an
extension fee in an amount equal to 0.25% of such Lender's Commitment (whether
used or unused), in each case as of the Amendment Effective Date; provided that
the Borrowers shall have no liability for (i) any such amendment fee if this
Amendment does not become effective pursuant to Section 3(a) or (ii) any such
extension fee if the amendment to the definition of the term "Maturity Date" set
forth in Section 1(b) does not become effective pursuant to Section 3(b). Such
amendment fee and extension fee shall be payable (i) on the Amendment Effective
Date, to each Lender entitled to receive such fee as of the Amendment Effective
Date and (ii) in the case of any Lender that becomes entitled to such fee after
the Amendment Effective Date, within two Business Days after such Lender becomes
entitled to such fee.
SECTION 5. Expenses. The Borrowers shall reimburse the Agents for
their reasonable out-of-pocket expenses incurred in connection with this
Amendment, including the reasonable fees and expenses of Cravath, Swaine &
Xxxxx, counsel for the Agents, and XxXxxxxx Binch, Canadian counsel for the
Agents.
SECTION 6. Effect of Amendment. 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
Agents or the Lenders under the Credit Agreement, and shall not alter, modify,
amend or in any way affect the terms, conditions, obligations, covenants or
agreements contained in the Credit Agreement, all of which are ratified and
affirmed in all respects and shall continue in full force and effect. Nothing
herein shall be deemed to entitle the Borrowers to a consent to, or a waiver,
amendment, modification or other change of, any terms, conditions, obligations,
covenants or agreements contained in the Credit Agreement in similar or
different circumstances. This Amendment shall apply and be effective only with
respect to the provisions of the Credit Agreement specifically referred to
herein.
SECTION 7. Credit Agreement. Except as specifically amended hereby,
the Credit Agreement shall continue in full force and effect in accordance with
the provisions thereof as in existence on the date hereof. After the date
hereof, any reference to the Credit Agreement shall mean the Credit Agreement as
amended hereby. This Amendment shall constitute a Loan Document for all purposes
under the Credit Agreement.
SECTION 8. Applicable Law. THIS AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 9. Counterparts. This Amendment may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract. Delivery of an executed
signature page of this Amendment by facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof.
SECTION 10. Headings. The Section headings used herein are for
convenience of reference only, are not part of this Amendment and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective authorized officers as of the day and year
first written above.
THE GREAT ATLANTIC & PACIFIC
TEA COMPANY, INC.,
by
Name:
Title:
THE GREAT ATLANTIC & PACIFIC
COMPANY OF CANADA, LIMITED,
by
Name:
Title:
JPMORGAN CHASE BANK,
individually and as U.S. Administrative Agent,
by
Name:
Title:
X.X. XXXXXX BANK CANADA,
as Canadian Administrative Agent,
by
Name:
Title:
JPMORGAN CHASE BANK, TORONTO BRANCH, as a Lender,
by
Name:
Title:
COMPASS FOODS, INC.,
by
Name:
Title:
XXXXXX'X, INC.,
by
Name:
Title:
XXXX'X FOOD STORES, INC.,
by
Name:
Title:
SHOPWELL, INC.,
by
Name:
Title:
XXXXXXXX, INC.,
by
Name:
Title:
SUPER FRESH FOOD MARKETS, INC.,
by
Name:
Title:
SUPER MARKET SERVICE CORP.,
by
Name:
Title:
SIGNATURE PAGE TO AMENDMENT NO. 2 DATED AS OF MARCH 21, 2002, TO THE CREDIT
AGREEMENT DATED AS OF FEBRUARY 23, 2001, as amended, among THE GREAT ATLANTIC
& PACIFIC TEA COMPANY, INC., THE GREAT ATLANTIC & PACIFIC COMPANY OF CANADA,
LIMITED, THE OTHER BORROWERS PARTY THERETO, THE LENDERS, JPMORGAN CHASE BANK,
as U.S. Administrative Agent, and X.X. XXXXXX BANK CANADA, as Canadian
Administrative Agent,
Name of Institution: ___________________
by:
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Name:
Title:
