FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Pursuant To Section 13 or 15 (d) of
The Securities and Exchange Act of 1934
QUARTER ENDED September 12, 1998 COMMISSION FILE NO. 33-80833
JITNEY-JUNGLE STORES OF AMERICA, INC.
(Exact name of registrant as specified in its charter)
STATE OF INCORPORATION I.R.S. EMPLOYER I.D. NO.
Mississippi 64-0280539
ADDRESS OF PRINCIPAL EXECUTIVE OFFICE
1770 Ellis Avenue, Suite 200, Jackson, MS 39204
REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE
601-965-8600
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months, and (2) has been subject to
such filing requirements for the past 90 days. YES (X) NO
The number of shares of Registrant's Common Stock, par value one cent
($.01) per share, outstanding at October 15, 1998, was 425,000 shares.
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JITNEY-JUNGLE STORES OF AMERICA, INC.
TABLE OF CONTENTS
<S> <C>
PART I. FINANCIAL INFORMATION Page
Item 1.Financial Statements:
Condensed Consolidated Balance Sheets
September 12, 1998 (Unaudited) and January 3,1998 2
Condensed Consolidated Statements of Operations
Thirty-six (36) and Twelve (12) Week Periods Ended
September 12, 1998 (Unaudited) and
Thirty-seven (37) and Twelve (12) Week Periods Ended
September 20, 1997 (Unaudited) 3
Condensed Consolidated Statements of Changes in
Stockholders' Deficit for the Thirty-six (36) Week Period
Ended September 12, 1998 (Unaudited) and
Thirty-seven (37) Week Period Ended
September 20, 1997 (Unaudited) 4
Condensed Consolidated Statements of Cash Flows
Thirty-six (36) Week Period Ended
September 12, 1998 (Unaudited) and
Thirty-seven (37) Week Period Ended
September 20, 1997 (Unaudited) 5
Notes to Condensed Consolidated Financial Statements
September 12, 1998 (Unaudited) and
September 20, 1997 (Unaudited) 6-8
Item 2.Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-16
PART II.OTHER INFORMATION
Item 1.Legal Proceedings 17
Item 2.Change in Securities 17
Item 3.Defaults Upon Senior Securities 17
Item 4.Submission of Matters to a Vote of Security Holders 17
Item 5.Other Information 17-18
Item 6.Exhibits and Reports on Form 8-K 18
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PART I. ITEM 1. FINANCIAL STATEMENTS
JITNEY-JUNGLE STORES OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
September 12, January 3,
1998 1998
(Unaudited)
ASSETS ----------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 8,494 $ 11,984
Receivables 19,652 13,833
Merchandise inventories 159,849 162,786
Prepaid expenses and other 24,688 11,570
Deferred income taxes 13,701 15,681
---------- ----------
Total current assets 226,384 215,854
---------- ----------
PROPERTY AND EQUIPMENT - net 286,578 303,774
---------- ----------
Other assets
Goodwill, net of amortization of
$3,895 at September 12, 1998
and $1,105 at January 3, 1998 152,077 142,415
Other assets - net 27,209 32,237
Deferred income taxes 6,279
---------- ----------
Total other assets 185,565 174,652
---------- ----------
TOTAL ASSETS $ 698,527 $ 694,280
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 112,273 $ 112,641
Accrued expenses 70,010 75,558
Current portion of capitalized leases 6,772 6,760
Payable to former shareholders of Delchamps, Inc 7,702 26,637
Restructuring obligations 9,238 14,927
---------- ----------
Total current liabilities 205,995 236,523
Noncurrent liabilities:
Long-term debt 503,317 449,831
Obligations under capitalized leases,
excluding current installments 64,717 68,321
Restructuring obligations, excluding
current installments 37,240 40,588
Deferred income taxes 3,875
---------- ----------
Total liabilities 811,269 799,138
Commitments and contingencies
Redeemable Preferred stock (aggregate liquidation
preference value of $70,756 at
September 12, 1998 and $65,077 at
January 3, 1998) 68,865 63,042
Stockholders' deficit:
Class C Preferred stock - Series 1
(at liquidation value) 9,695 9,071
Common stock ($.01 par value, authorized
5,000,000 shares, issued 425,000 shares 4 4
Additional paid-in capital (302,326) (302,326)
Retained earnings 111,020 125,351
---------- ----------
Total stockholders' deficit (181,607) (167,900)
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 698,527 $ 694,280
========= =========
See notes to condensed consolidated financial statements.
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JITNEY-JUNGLE STORES OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands Except Per Share Amounts)
36 Weeks 37 Weeks 12 Weeks 12 Weeks
Ended Ended Ended Ended
Sept 12, Sept 20, Sept 12, Sept 20,
1998 1997 1998 1997
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
---------------- ---------------- ------------- ---------------
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NET SALES $ 1,432,963 $ 873,590 $ 474,371 $ 286,651
---------------- ---------------- ------------- ---------------
COSTS AND EXPENSES:
Cost of goods sold 1,058,083 652,927 343,789 214,343
Direct store expenses 284,952 147,766 94,920 50,358
Warehouse, administrative
and general expenses 52,87 39,597 17,967 10,926
Nonrecurring charges 5,479 2,742
Interest expense - net 48,27 26,066 16,625 9,414
---------------- ---------------- ------------- ---------------
Total costs and
expenses 1,444,727 871,835 473,301 287,783
---------------- ---------------- ------------- ---------------
Earnings (loss) before taxes
on income (11,764) 1,755 1,070 (1,132)
Income tax expense (benefit) (3,880) 589 403 (460)
---------------- ---------------- ------------- ---------------
Earnings (loss) before
extraordinary item (7,884) 1,166 667 (672)
EXTRAORDINARY ITEM, net of
income tax benefit
of $518 (870) (870)
---------------- ---------------- ------------- ---------------
NET EARNINGS (LOSS) $ (7,884) $ 296 $ 667 $ (1,542)
================ ================ ============= ===============
EARNINGS (LOSS) PER COMMON AND
COMMON EQUIVALENT SHARE $ (33.43) $ (12.63) $ (3.37) $ (8.34)
================ ================ ============= ===============
EARNINGS (LOSS) PER COMMON AND
COMMON EQUIVALENT SHARE
ASSUMING DILUTION $ (33.43) $ (12.63) $ (3.37) $ (8.34)
================ ================ ============= ===============
See notes to condensed consolidated financial statements.
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JITNEY-JUNGLE STORES OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR THE THIRTY-SIX (36) WEEK PERIOD ENDED SEPTEMBER 12, 1998 (Unaudited)
AND THE THIRTY-SEVEN (37) WEEK PERIOD ENDED SEPTEMBER 20, 1997 (Unaudited)
(Dollars in thousands)
Class C
Preferred Stock,
Series 1 Common Stock Additional Treasury
No. of No. of Paid-In Retained Stock at
Shares Amount Shares Amount Capital Earnings Cost
------ ------ ------ ------ ---------- --------- --------
Balance
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January 4, 1997 76,042 $ 8,240 425,000 $ 4 $ (302,326) $ 144,027
Net earnings 296
Accretion of discount on Class A
Preferred stock (144)
Cumulation of dividends on
Preferred stock 583 (5,662)
Balance ------- ------- ------- ------ ---------- ------- --------
September 20, 1997 76,042 $ 8,823 425,000 $ 4 $ (302,326) $ 138,517 $
======= ======= ======= ====== ========= ======= ========
Balance
January 3, 1998 76,042 $ 9,071 425,000 $ 4 $ (302,326) $ 125,351
Net loss (7,884)
Purchase of 1700 shares of
treasury stock $ (20)
Sale of 1700 shares of
treasury stock $ 20
Accretion of discount on Class A
Preferred stock (144)
Cumulation of dividends on
Preferred stock 624 (6,303)
Balance ------ ------ ------- ------ ---------- -------- --------
September 12, 1998 76,042 $ 9,695 425,000 $ 4 $ (302,326) $ 111,020 $
====== ====== ======= ====== ========= ======== ========
See notes to condensed consolidated financial statements.
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JITNEY-JUNGLE STORES OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands) 36 Weeks 37 Weeks
(Unaudited) Ended Ended
September 12, September 20,
1998 1997
OPERATING ACTIVITIES: ----------- -----------
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Net earnings (loss) $ (7,884) $ 296
Adjustment to reconcile net earnings (loss) to net
cash provided by (used in) operating activities:
Depreciation 40,046 20,575
Amortization of deferred loan costs 2,358 838
Loss (gain) on disposition of property and
other assets (39) 1,918
Deferred income tax benefit (8,174) (17,707)
Increase (decrease) in restructuring obligation (15,768) 50,748
Changes in assets and liabilities:
Notes and accounts receivable (5,481) (8,718)
Store and warehouse inventories 427 6,633
Prepaid expenses (13,118) (5,879)
Accounts payable (368) 12,277
Accrued expenses (4,561) 13,585
---------- ----------
Net cash provided by (used in)
operating activities (12,562) 74,566
---------- ----------
INVESTING ACTIVITIES:
Capital expenditures (30,012) (17,881)
Proceeds from sale of property and other assets 11,054 7,186
Direct acquistion costs (4,465)
Payment to former shareholders of Delchamps, Inc. (18,935)
Decrease (increase) in other assets 2,523 (250,576)
---------- ----------
Net cash used in investing
activities (39,835) (261,271)
---------- ----------
FINANCING ACTIVITIES:
Proceeds (payments) on long-term debt - net 53,498 192,314
Payments on capitalized lease obligations (3,604) (3,356)
Other liabilities (987)
Merger cost (14)
Purchase of treasury stock (20)
Sale of treasury stock 20
---------- ----------
Net cash provided by
financing activities 48,907 188,944
---------- ----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (3,490) 2,239
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 11,984 7,642
---------- ----------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 8,494 $ 9,881
========== ==========
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest $47,735 $ 25,306
========== ==========
Cash paid for income taxes, net of refunds $ 38 $ 5,750
========== ==========
See notes to condensed consolidated financial statements.
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JITNEY-JUNGLE STORES OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 12, 1998 (Unaudited) AND SEPTEMBER 20, 1997 (Unaudited)
(Dollars in thousands)
1. BASIS OF PRESENTATION
The unaudited condensed consolidated financial statements include those of
Jitney-Jungle Stores of America, Inc. and its wholly-owned subsidiaries,
Southern Jitney Jungle Company, Interstate Jitney-Jungle Stores, Inc.,
McCarty-Holman Co., Inc. and subsidiary, Jitney-Jungle Bakery, Inc.,
Delchamps Inc. and subsidiary and JJ Construction Corp. All material
intercompany profits, transactions and balances have been eliminated.
These interim financial statements have been prepared on the basis of
accounting principles used in the annual financial statements for the
35 weeks ended January 3, 1998. In the opinion of management, the
accompanying unaudited condensed consolidated financial statements
contain all adjustments (all of which were of a normal recurring nature)
necessary for a fair statement of consolidated financial position and
results of operations of the Company for the interim periods. The
results of operations of the Company for the thirty-six weeks ended
September 12, 1998, are not necessarily indicative of the results which
may be expected for the entire year.
The Company changed its fiscal year end on January 3, 1998 to the closest
Saturday to December 31. Previously, the Company reported its fiscal year
end results as of the Saturday nearest to April 30. Data included herein
for the third quarter of fiscal 1997 reflect the unaudited results of
operations for the thirty-seven weeks ended September 20, 1997.
2. ACQUISITION
In September 1997, the Company acquired the majority of the common stock
of Delchamps, Inc. Certain shareholders dissented from the merger and
are pursuing their appraisal remedy under Alabama law. Management does
not expect this matter to have a material affect on operations or the
price of the acquisition. The acquisition was accounted for as a
purchase and, accordingly, Delchamps' results of operations were
included in the Company's consolidated financial statements subsequent
to the acquisition date.
The purchase price, net of cash acquired of $84, has been allocated to
the assets acquired and liabilities assumed based upon the estimated
fair values at the date of acquisition, as set forth below. The only
variation between such amounts and the final allocation will be
a final determination of amounts to be paid to former
shareholders of Delchamps who dissented from the merger (and related
professional fees). Management believes, however that when the final
valuation of the net assets acquired is complete, the allocation of the
purchase price will not differ materially from the amounts shown herein.
<PAGE> 7
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<S> <C>
Receivables and other current assets $ 12,569
Inventory 94,347
Property, equipment and leasehold improvements 121,822
Deferred income tax asset 22,739
Other assets 2,106
Goodwill 155,972
Accounts payable and accrued expenses (80,764)
Notes payable and long-term debt , immediately (14,463)
Capital lease obligations (15,760)
Restructuring obligations (62,426)
_____________
Net purchase price $ 236,142
=============
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3. RESTRUCTURING OBLIGATIONS
In connection with the Delchamps acquisition, the Company
recorded a restructuring obligation of $63,319 relating to (i) stores
closed by Delchamps prior to the acquisition; (ii) Delchamps stores to
be closed after the acquisition because of unprofitability; (iii) Company
and Delchamps stores required to be divested under a consent decree with
the Federal Trade Commission; (iv) closure of the Delchamps headquarters
in Mobile, Alabama; and (v) closure of the Delchamps warehouse facility
in Hammond, Louisiana. The $63,319 consists of $45,292 of future rental
payments, $2,007 of severance costs, $362 of loss on divestiture of fixed
assets, $1,432 for locations previously closed by Delchamps
and $14,226 of miscellaneous expenses related mainly to the shutdown of
the Mobile and Hammond facilities.
Of the total restructuring costs, $62,426 was recorded as goodwill as
part of the purchase price allocation in the Delchamps acquisition and
$893 was included as a nonrecurring charge in the statement of operations
($599 in the 35 weeks ended January 3, 1998 and $294 in the first quarter
of fiscal 1998).
4. NONRECURRING CHARGES
Nonrecurring charges recorded during the thirty-six week period ended
September 12, 1998 consisted of severance benefits of $250 and loss on
stores sold under the consent decree with the Federal Trade Commission
in the Delchamps acquisition of $294. No nonrecurring charges were
recorded during the third quarter of fiscal 1998. Nonrecurring charges
recorded during the thirty-seven week period ended September 20, 1997
were $5,479 including $958 of severance benefits, $1,779 due to an
employment agreement relating to the Company's former chief executive
officer, $2,008 for bridge loan fees and $734 for stores that have been
or will be closed or sold.
5. EXTRAORDINARY ITEM
In connection with the Delchamps acquisition and the recapitalization
in March 1996 ("Recapitalization"), the Company retired certain long-term
debt prior to its scheduled maturity. Early retirement of such debt
resulted in extraordinary losses of $870 (net of income tax benefit of
$518) during the twelve week and thirty-seven week periods ended
September 20, 1997.
<PAGE> 8
6. LONG-TERM DEBT
Long-term debt consisted of the following:
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September 12, January 3,
1998 1998
------------ -----------
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Senior notes at 12%,
maturing in 2006 $ 200,000 $ 200,000
Senior subordinated notes
at 10.375% 200,000 200,000
maturing in 2007
Senior Credit Facility 103,317 49,831
------------ -----------
Long-term debt $ 503,317 $ 449,831
============ ===========
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The Company has available a Senior Credit Facility of $150 million
under which letters of credit aggregating $11,661 were outstanding
at September 12, 1998. In addition, due to the interruption of business
and the recent damage caused to the assets of the Company related to
Hurricane Georges, the availability under the Senior Credit Facility
has been increased by $25 million until January 15, 1999.
7. EARNINGS (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE
Earnings (loss) per common and common equivalent share is based on net
income (loss) after preferred stock dividend requirements and the
weighted average number of shares outstanding during each interim
period. Cumulative dividends not declared or paid on preferred shares
amounted to $2,101 and $6,303 for the twelve weeks and thirty-six weeks
ended September 12, 1998, respectively. Cumulative dividends not
declared or paid on preferred shares amounted to $2,001 and $5,662 for
the twelve weeks and thirty-seven weeks ended September 20, 1997. The
number of shares used in computing the earnings (loss) per share was
425,000 for the twelve weeks and 424,400 for the thirty-six weeks ended
September 12, 1998 and 425,000 for the twelve weeks and thirty-
seven weeks ended September 20, 1997. Incremental shares attributed to
outstanding warrants were not included in the computation as their
effect on earnings (loss) per share would be antidilutive.
8. COMMITMENTS AND CONTINGENCIES
The Company is a party to certain litigation incurred in the normal
course of business. In the opinion of management, the ultimate
liability, if any, which may result from this litigation will not
have a material adverse effect on the Company's financial position
or results of operations.
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Dollars in thousands)
The following is management's discussion and analysis of significant
factors affecting the Company's financial condition and results of
operations during the periods included in the accompanying condensed
consolidated statements of operations.
A table showing the percentage of net sales represented by certain
items in the Company's condensed consolidated statements of operations
is as follows:
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36 Weeks 37 Weeks 12 Weeks 12 Weeks
Ended Ended Ended Ended
Sept 12, Sept 20, Sept 12, Sept 20,
1998 1997 1998 1997
-------- -------- --------- ---------
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Gross profit 26.2 25.3 27.5 25.2
Direct store expenses 19.9 16.9 20.0 17.6
Warehouse, administrative
and general expenses 3.7 4.6 3.8 3.8
Nonrecurring charges 0.0 0.6 0.0 1.0
Operating income 2.6 3.2 3.7 2.9
Interest expense, net 3.4 3.0 3.5 3.4
Earnings (loss) before
income taxes (0.8) 0.2 0.2 (0.5)
Provision for income taxes (0.3) 0.1 0.1 (0.2)
Extraordinary item 0.0 0.1 0.0 0.1
Net earnings (loss) (0.5) 0.0 0.1 (0.6)
EBITDA 5.3 5.1 6.5 6.0
</TABLE>
A summary of the period to period changes in certain items included
in the condensed consolidated statements of operations for the
thirty-six and thirty-seven week periods and twelve week periods ended
September 12, 1998 and September 20, 1997, respectively is as follows:
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Thirty-six Weeks Ended Twelve Weeks Ended
September 12,1998 September 12,1998
$ % $ %
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $ 559,373 64.0 % $187,720 65.5 %
Gross profit 154,217 n/m 58,274 n/m
Direct store expenses 137,186 n/m 44,562 n/m
Warehouse,
administrative
and general expenses 13,278 n/m 7,041 n/m
Nonrecurring charges (4,935) n/m (2,742) n/m
Operating income 8,688 31.2 9,413 n/m
Interest expense, net 22,207 85.2 7,211 76.6
Earnings (loss) before
income taxes (13,519) n/m 2,202 n/m
Provision for income
taxes (4,469) n/m 863 n/m
Extraordinary item 870 n/m 870 n/m
Net earnings (loss) (8,180) n/m 2,209 n/m
EBITDA 23,304 44.0 13,689 79.3
(n/m - not meaningful
comparison)
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RESULTS OF OPERATIONS
GENERAL
The results of operations of Delchamps have been included in the
Company's consolidated financial statements since September 12, 1997.
Accordingly, the thirty-seven weeks ended September 20, 1997 only
includes the effects of the Delchamps acquisition from September 12,
1997 through September 20, 1997 whereas the thirty-six weeks ended
September 12, 1998 reflects the acquisition for the entire period. The
percentage change in same store sales has been calculated by comparing
supermarkets open throughout both periods, including, for the thirty-seven
weeks ended September 20, 1997, supermarkets acquired in the Delchamps
acquisition.
During the thirty-six weeks ended September 12, 1998, the Company focused,
among other things, on integrating the operations of Delchamps.
Specifically, the Company replaced Delchamps' shelf tags with the Company's
shelf tags and changed the mix of products offered at Delchamps' stores to
conform to the Company's mix and, in certain cases, local preferences. The
integration of Delchamps into the Company's information systems and
retraining of Delchamps' store employees was also completed. In addition,
the Company closed Delchamps' Hammond warehouse in February 1998, closed
Delchamps' Mobile headquarters in April 1998, and began to use the Company's
in-house printing facilities to print a majority of the print advertising
for Delchamps' stores, which was previously outsourced by Delchamps.
<PAGE> 11
PROPERTIES
The following table recaps store data for fiscal year 1998:
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Q1 FY98 Q2 FY98 Q3 FY98
Ended Ended Ended
Mar 28, 98 Jun 20, 98 Sep 12, 98
__________ __________ __________
<S> <C> <C> <C>
Stores Beginning 217 200 198
Acquired
Opened 2
Closed/sold (17) (2) (1)
________________________________
Ending 200 198 199
================================
Format Conventiona 172 168 167
Combination 11 14 16
Discount 17 16 16
________________________________
Total 200 198 199
================================
Locations Mississippi 81 81 82
Alabama 49 48 49
Arkansas 5 5 5
Florida 15 15 15
Tennessee 7 6 6
Lousiana 43 43 42
________________________________
Total 200 198 199
================================
Gasoline Beginning 54 53 53
Acquired
Opened 1 1
Closed/sold (1) (1)
________________________________
Ending 53 53 54
================================
Locations Mississippi 45 44 45
Alabama 2 2 2
Arkansas 2 2 2
Florida
Tennessee 4 5 5
Lousiana
________________________________
Total 53 53 54
================================
</TABLE>
NET SALES
Net sales increased $187,720 or 65.5% in the twelve week period and
$559,373 or 64.0% in the thirty-six week period ended September 12, 1998
as compared to the twelve and thirty-seven week periods ended
September 20, 1997. The net sales increase was primarily attributable
to the Delchamps acquisition. Same store sales decreased approximately
6.2% for the twelve week period and 4.4% for the thirty-six week period
ended September 12, 1998. Sales throughout the thirty-seven weeks
ended September 20, 1997 were positively impacted by the introduction
of the Company's Gold Card, its customer loyalty program, in approximately
79 Jitney-Jungle and Jitney Premier supermarkets in January 1997. Sales
for the thirty-six weeks ended September 12, 1998 were positively impacted
by the introduction of the Gold Card in 52 Delchamps supermarkets in March
1998 and in the remaining Delchamps supermarkets during the second quarter
ended June 20, 1998. The decline in same store sales is attributable
primarily to competion presures [23 competitive openings (of which 6 were
replacement stores) during the thirty-six week period ended September 12,
1998], distribution problems which are being corrected,
a decline in sales at Delchamps supermarkets due to disruptions
caused by the transition process which has been completed, and the fact that
the Gold Card introduction positively impacted sales for most of the
thirty-seven weeks ended September 20, 1997 but only the latter part of
the thirty-six weeks ended September 12, 1998. During the third quarter ended
<PAGE> 12
September 12, 1998, the Company opened 2 new stores (in Hattiesburg, MS and
in Jackson, AL) in its newest prototype combination store format and
opened 1 gasoline station. In addition, 1 store was closed. During the
thirty-six weeks ended September 12, 1998 the Company opened 2 new stores
in its combination store format and opened 2 gasoline stations. In addition,
2 gasoline stations and 20 stores were sold or closed including 10 stores that
were required to be sold by the Federal Trade Commission in connection with
the Delchamps acquisition. The Company's store count at the
end of the quarter was 199 supermarkets (16 discount stores, 167 conventional
stores and 16 combination stores) and 54 gasoline stations as compared to 221
supermarkets (18 discount stores, 192 conventional stores and 11 combination
stores) and 53 gasoline stations at September 20, 1997.
GROSS PROFIT
Gross profit for the third quarter of fiscal 1998 increased $58,274 to
$130,582 or 27.5% of net sales, compared to $72,308, or 25.2% of net sales,
for the third quarter of fiscal 1997. Gross profit as a percentage of sales
was 26.2% for the thirty-six week period ended September 12, 1998 as compared
to 25.3% for the thirty-seven week period ended September 20, 1997. Gross
profit increased primarily due to the increase in net sales due to the
Delchamps acquisition. During the second quarter of fiscal 1998 the Company
began to benefit from increased purchasing leverage resulting from the
Delchamps acquisition and this trend continued during the third
quarter ended September 12, 1998. The realized and expected benefits of such
increased purchasing leverage are difficult to quantify precisely. Other
benefits of increased purchasing leverage include reduced costs from volume
incentives. The Company expects to continue to benefit from such purchasing
leverage. The increase in gross profit as a percentage of net sales is
principally due to such increased purchasing leverage and the improvement in
product mix in the combination stores. In addition during the second and
third quarters of fiscal 1998 the Company made significant progress to reduce
store shrink.
DIRECT STORE EXPENSES
Direct store expenses were $94,920 or 20.0% of net sales and $50,358 or 17.6%
of net sales for the twelve week periods and $284,952 or 19.9% of net sales
and $147,766 or 16.9% of net sales for the thirty-six week and thirty-seven
week periods ended September 12, 1998 and September 20, 1997, respectively.
Direct store expenses increased primarily due to an increase in net sales
(due to the Delchamps acquisition). The increase in direct store expenses
as a percentage of net sales was primarily in the areas of rent, labor and
utilities. Rent expense as a percentage of net sales in the Delchamps stores
is more than twice that of the other Company stores. The increase in store
labor as a percentage of net sales was principally due to a temporary
increase in the number of employees, which was necessary in order to
complete retraining required at the Delchamps supermarkets. The increase
in utility costs was principally due to the heat wave across the Southeast.
WAREHOUSE, ADMINISTRATIVE AND GENERAL EXPENSES
Warehouse, administrative and general expenses were $17,967 or 3.8% of net
sales and $10,926 or 3.8% of net sales for the twelve week periods and
$52,875 or 3.7% of net sales and $39,597 or 4.6% of net sales for the
thirty-six week and thirty-seven week periods ended September 12, 1998
and September 20, 1997 respectively. Warehouse, administrative and
general expenses increased primarily due to an increase in net sales
and increased warehousing expenses resulting from the Delchamps
transaction. The decrease in warehouse, administrative and general
expenses as a percent of sales for the thirty-six weeks ended
September 12, 1998 was primarily due to additional sales and a decrease
in administrative expenses as a result of the closing of the Delchamps'
Mobile headquarters in April 1998. The Company has closed Delchamps'
Hammond warehouse, which the Company expects will lead to substantial
cost savings. The resulting increase in volume at the Company's Jackson
warehouse facilities has created operating inefficiencies that are
currently being addressed by the Company's management and are expected to
be resolved by the end of fiscal 1998. As a result of these inefficiencies,
the Company experienced higher warehouse expenses during the thirty-six
weeks ended September 12, 1998 than it expects to experience in the
remainder of fiscal 1998.
NONRECURRING CHARGES
Nonrecurring charges were $544 for the thirty-six week period ended
September 12, 1998 consisting of severance benefits of $250 and loss
on stores sold under the consent decree with the Federal Trade Commission
in the Delchamps acquisition of $294. No nonrecurring charges were recorded
<PAGE> 13
during the twelve week period ended September 12, 1998. Nonrecurring
charges consisting of $958 of severance benefits, $1,779 relating to future
payments to be made under an agreement with the Company's former chief
executive officer, $2,008 for bridge loan fees and $734 for stores that
have been or will be closed or sold were recorded during the thirty-seven
week period ended September 20, 1997.
EXTRAORDINARY ITEM
In connection with the Delchamps acquisition and the Recapitalization, the
Company retired certain long-term debt prior to its scheduled maturity.
Early retirement of such debt resulted in extraordinary losses of $870
(net of income tax benefit of $518) during the twelve week and thirty-seven
week periods ended September 20, 1997. There were no extraordinary items
during the thirty-six week period ended September 12, 1998.
OPERATING INCOME
Operating income was $17,695 or 3.7% of net sales and $8,282 or 2.9% of
net sales for the twelve week periods and was $36,509 or 2.6% of net
sales and $27,821 or 3.2% of net sales for the thirty-six week and
thirty-seven week periods ended September 12, 1998 and September 20,
1997, respectively. The increase in operating income was due to the
factors discussed above.
EBITDA
EBITDA represents net income before interest income, interest expense,
income taxes, depreciation and amortization and LIFO charges/credits
and is calculated before any deduction for nonrecurring charges.
EBITDA increased $13,689 or 79.3% to $30,960 or 6.5% of net sales in
the third quarter of fiscal 1998 as compared to $17,271 or 6.0% of net
sales in the third quarter of fiscal 1997. EBITDA increased $23,304 or
44.0% to $76,316 or 5.3% of net sales for the thirty-six week
period ended September 12, 1998 as compared to $53,012 or 6.1% of net
sales for the thirty-seven week period ended September 20, 1997. EBITDA
increased primarily due to an increase in sales due to the Delchamps
acquisition. The decrease in EBITDA as a percentage of net sales for
the thrity-six week period ended September 12, 1998 was
due primarily to the increase in direct store expenses and warehouse
expenses discussed above. EBITDA as presented is consistent with the
definition used for covenant purposes contained in the Indenture
governing the Company's Senior Notes and Senior Subordinated Notes.
EBITDA is a widely accepted financial indicator of a company's ability
to service debt. However, EBITDA should not be construed as an
alternative to operating income, net income or cash flows from operating
activities (as determined in accordance with generally accepted accounting
principles) and should not be construed as an indication of the Company's
operating performance or as a measure of liquidity. EBITDA as defined
by the Company may not be comparable to similarly titled measures
reported by other companies.
NET INTEREST EXPENSE
Net interest expense was $16,625 in the third quarter of fiscal 1998
as compared to $9,414 in the third quarter of fiscal 1997 and was $48,273
and $26,066 for the thirty-six week and thirty-seven week periods ended
September 12, 1998 and September 20, 1997, respectively. The increase
in interest expense was primarily due to interest expense on the $200
million Senior subordinated notes issued in September 1997 in connection
with the Delchamps acquisition.
INCOME TAX EXPENSE (BENEFIT)
Income tax expense for the twelve weeks and thirty-seven weeks ended
September 20, 1997 was 40.6% and 33.6%, respectively, of pre-tax income
compared to the federal and state statutory rate of 37.3%. The income
tax benefit for the twelve weeks and thirty-six weeks ended September
12, 1998 was 37.7% and 33.0%, respectively, of pre-tax loss compared
to the federal and state statutory rate of 37.3%; the difference in
rates for the twelve weeks and thirty-six weeks ended September 12, 1998
occurred primarily because goodwill relating to the Delchamps
acquisition is deductible for financial reporting purposes but not
for income tax purposes.
<PAGE> 14
NET INCOME (LOSS)
Net income (loss) for the twelve weeks ended September 12, 1998 was
$667 compared to ($1,542) for the twelve weeks ended September 20, 1997.
Net income (loss) for the thirty-six weeks ended September 12, 1998 was
($7,884) compared to $296 for the thirty-seven weeks ended September 20,
1997. The decrease in net income resulted primarily from the increase in
interest expense discussed above. Net income (loss) attributable to common
shareholders decreased to ($14,187) for the thirty-six weeks ended
September 12, 1998 compared to ($5,366) for the thirty-seven weeks ended
September 20, 1997 and reflects the cumulation of dividends on preferred
stock issued in the Recapitalization.
LIQUIDITY AND CAPITAL RESOURCES
Due to the Recapitalization and acquisition of Delchamps in September
1997 the Company has become highly leveraged and has certain restrictions
on its operations. At September 12, 1998, Jitney-Jungle had $574,806 of
total long-term debt (including capitalized leases and current installments)
and a shareholders deficit of $181,607.
The Company's principal uses of liquidity have been to fund working capital,
meet debt service requirements and finance Jitney-Jungle's strategic plans.
The Company's principal sources of liquidity have been cash flow from
operations and borrowings under the Senior Credit Facility. Outstanding
borrowings at September 12, 1998 were $103,317 under the Senior Credit
Facility.
Cash used in operating activities during the thirty-six week period ended
September 12, 1998 was $12,562. Cash provided by operating activities
during the thirty-seven week period ended September 20, 1997 was $74,566.
Restructuring obligations decreased due to the payment of restructuring
obligations. Notes and accounts receivable increased primarily due to an
increase in receivables from vendors. Accrued expenses decreased
primarily due to the payment of interest on Senior Notes, Senior
Subordinated Notes and the Senior Credit Facility.
Net cash used in investing activities was $39,835 and $261,271 for the
thirty-six week and thirty-seven week periods ended September 12, 1998
and September 20, 1997, respectively. The Company paid approximately
$5,137 in cash to former Delchamps shareholders and deposited $13,798
in cash with the clerk of court of Mobile County Alabama as required by
law in connection with the appraisal proceeding described below. The
Company realized proceeds from the sale of 10 stores which were required
to be sold by the Federal Trade Commission due to the Delchamps
acquisition and also sold land for $4,483.
Net cash provided by financing activities was $48,907 and $188,944 for
the thirty-six week and thirty-seven week periods ended September 12,
1998 and September 20, 1997, respectively. The principal sources of
funds in financing activities for the thirty-six week period ended
September 12, 1998 were the borrowings under the Senior Credit Facility.
The principal uses of funds in financing activities for the
thirty-six week period ended September 12, 1998 were the payment of
capital lease obligations.
Management believes that the Company will be able to finance capital
expenditures and other cash requirements for the remainder of fiscal
1998 through cash flows from operations and borrowings under its
Senior Credit Facility. Capital expenditure plans are continuously
evaluated and modified from time to time depending on cash availability
and other economic factors. The Company considers acquisition
opportunities from time to time. Any such future acquisitions may
require the Company to seek additional debt or equity financing.
ENVIRONMENTAL MATTERS
The Company's expenditures to comply with environmental laws and
regulations at its gas stations and supermarkets primarily consist
of those related to closing or upgrading underground storage tanks
and retrofitting chloroflurocarbon ("CFC") chiller units. The Company's
unreimbursed costs for remediation at the 16 locations which have
had leaks or spills have not been material. The Company is in the
process of complying with the requirements of the Resource
Conservation and Recovery Act of 1980, as amended (the "RCRA")
regarding underground storage tanks which must be met by the end
of calendar 1998. In order to comply with the RCRA, the Company
spent $30,000 to close non-compliant tanks during the thirty-six
weeks ended September 12, 1998 and $500,000 to upgrade non-compliant
tanks during fiscal 1997 and the 35 weeks ended January 3, 1998. The
Company estimates that it will cost between $120,000 to $210,000 to
upgrade the remaining non-compliant tanks during the remainder of
fiscal 1998. The Company is in the process of retrofitting all of
its chillers to use non-chloroflurocarbon based refrigerants in
anticipation of the phase out of the manufacture of chloroflurocarbon
<PAGE> 15
pursuant to the Clean Air Act. The Company has budgeted $145,000 for
the fourth quarter of fiscal 1998 and $183,000 for fiscal 1999 to
retrofit all of its remaining CFC chiller units.
YEAR 2000
During calendar years 1996 and 1997, the Company's Information Systems
Department conducted an extensive information systems review of all
primary systems, such as financial, payroll, human resources, employee
benefits, purchasing, merchandising, retail/pricing, warehousing and
store management as well as secondary systems such as catering, damage
reclamation and loss prevention. This review evaluated these systems
in terms of their Year 2000 compliance, flexibility to absorb Delchamps'
operations, capacity, general efficiency, compatibility and
competitive advantage. The department recommended, and the Company is
implementing, the replacement or upgrading all of the Company's primary
and secondary systems, most of which were 10 to 15 years old. From
March 1997 to September 12, 1998, the Company spent approximately
$3.3 million to replace its financial, payroll, human resources and
employee benefits systems. The Company's other primary systems
(purchasing, merchandising, retail/pricing, warehousing and
store management, and various operating systems) are either
being upgraded for Year 2000 compliance through regular maintenance
updates or are scheduled to be replaced by May 31, 1999, at an
estimated cost of $3.0 million, at which time all potential Year
2000 problems in the Company's primary systems should be resolved.
Although the Company's operations are not dependent on its secondary
systems, the Company has spent $250,000 as of September 12, 1998
upgrading these systems and anticipates spending approximately an
additional $1 million in order to complete that project by the end
of June 1999, at which time all potential Year 2000 problems
in the Company's secondary systems should be resolved. All of the
funds reported or estimated in this report have been or will be
reported as capital expenditures. The normal annual software support
which includes Year 2000 upgrades are included in the normal
Information Systems Department operating expense budget. All funds
for Year 2000 projects are derived from operating proceeds. No primary
information systems projects have been deferred as a result of the Year
2000 efforts. The Company has engaged an independent contractor to
verify compliance on the primary systems modules. No assurances can
be given, however, that all Year 2000 problems will be effectively
resolved on schedule or before the Year 2000. Any such problems, if
not resolved, could have a material adverse effect on the Company's
business, financial condition and results of operations.
The Company has sent a survey to its significant third party suppliers,
financial institutions and insurance companies (i) inquiring into their
Year 2000 compliance status, (ii) seeking commitments of their intention
to become Year 2000 compliant and (iii) gathering information to assess
the effect of any non-compliance on the Company's operations. No
assurances can be given that these third parties will become Year 2000
compliant. Any such non-compliance could have a material adverse effect
on the Company's business, financial condition and results of
operations.
The most reasonably likely worst case Year 2000 scenario would result
in the failure to order or acquire new products for warehouse or store
replenishment. The Company has established a disaster recovery plan that
is available as a reasonable contingency plan. Through this disaster
recovery plan, manual processes are outlined that will enable the Company
to order and obtain available products for delivery to the stores without
reliance on existing primary technology normally used by the Company.
SEASONALITY
No material portion of the Company's business is affected by seasonal
fluctuations, except that sales are generally stronger in the fourth
quarter as a result of Thanksgiving, Christmas and New Year's Day.
CAUTIONARY STATEMENTS
This quarterly report on Form 10-Q may contain forward-looking statements
regarding future expectations about the Company's business, management's
plans for future operations or similar matters. The Company's actual
results could differ materially from those anticipated in such forward-
looking statements due to several important factors including the following:
<PAGE> 16
deterioration in economic conditions generally or in the Company's markets,
unusual or unanticipated costs or consequences relating to, or changes in,
the Company's acquisition plans, demands placed on management by the
substantial increase in the Company's size due to the acquisition of
Delchamps, unanticipated or unusual distribution problems, breakdown
of quality control, competitive pressures, labor disturbances and
customer dissatisfaction. Forward-looking statements speak only as of
the date made, and the Company undertakes no obligation to update or
revise such statements to reflect new circumstances or unanticipated
events as they may occur.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In May 1998, the Company's wholly-owned subsidiary Delchamps, Inc.
instituted a proceeding in the Circuit Court of Mobile County, Alabama
petitioning the court to determine the fair value (as defined in the
Alabama Business Corporation Act) of 689,884 shares of former
Delchamps, Inc. common stock held by persons purporting to exercise
dissenters' rights in connection with the Delchamps acquisition.
Delchamps, Inc. estimates such fair value to be $20 per share; the
dissenting shareholders have demanded payment of $68 per share. The
Company has deposited $20 per share in cash with the clerk of the court,
as required by law. In its financial statements, the Company has
accounted for the acquisition of these shares at a price of $30 per
share, which was the price paid by the Company to other former
Delchamps, Inc. shareholders. Any final determination that the
shares formerly held by dissenting shareholders have a fair value
of less or more than $30 per share would be reflected as a decrease
or increase in the Company's goodwill, which is being amortized over
a 40 year period. The Company does not expect the outcome of this
matter to have a material effect on the Company's results of operations
or the price of the acquisition, although no assurances can be given.
The Company is a party to certain litigation incurred in the normal
course of business. In the opinion of management, the ultimate liability,
if any, which may result from this litigation will not have a material
adverse effect on the Company's financial position or results of
operations.
ITEM 2. CHANGE IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
In late September of 1998, the Company's operations were temporarily
affected by Hurricane Georges. As a result of the storm approximately
85 stores were temporarily closed primarily along the Gulf Coast in
the states of Florida, Alabama, Mississippi and Louisiana. Most
stores were closed for only a few hours with the worst affected store
being closed for less than five days. The Company experienced
lost product, limited physical damage to certain of its stores and
equipment, interruptions to its normal business operations and extra
expenses incurred as a result of the storm. The Company is fully
insured for all of the aforementioned adverse consequences resulting
from the storm and is working with its insurance carrier's
<PAGE> 17
representatives to document its losses and recover the insurance
proceeds. The amount of such loss is still being assessed by
the Company. On October 5, 1998, the Company secured an amendment
to its Revolving Credit Agreement to add an additional $25 million
of supplemental availability to its existing line of credit to
provide for additional cash flow needs, if necessary, as a result
of the interruption of business caused by the storm. The additional
$25 million of supplemental availability to the Revolving Credit
Agreement expires on January 15, 1999. No funds under the
additional $25 million of supplemental availability have been drawn
to date.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit No.
--------------
* 4.1 Amendment and Waiver Agreement No.1 dated April 10,
1998 to Amended and Restated Revolving Credit Agreement
dated September 15, 1997 by and among Fleet Capital
Corporation and the Company.
* 4.2 Amendment and Waiver Agreement No.2 dated June 19, 1998
to Amended and Restated Revolving Credit Agreement dated
September 15, 1997 by and among Fleet Capital Corporation
and the Company.
* 4.3 Amendment and Waiver Agreement No.3 dated October 5, 1998
to the Amended and Restated Revolving Credit Agreement
dated September 15, 1997 by and among Fleet Capital
Corporation and the Company.
* 27.1 Financial Data Schedule
* Filed herewith.
(b) Reports on Form 8-K
None
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
JITNEY-JUNGLE STORES OF AMERICA, INC.
(Registrant)
/s/ David R. Black
-----------------------
David R. Black
Senior Vice President - Finance
Chief Financial Officer
Dated: October 27, 1998
AMENDMENT AND WAIVER AGREEMENT No.1
TO
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
AMENDMENT AGREEMENT NO. I dated
April 10, 1998, to the Amended and Restated Revolving
Credit Agreement dated as of September 15, 1997 (as
heretofore amended, and as may be further amended,
restated, modified or supplemented from time to time,
the "Credit Agreement") among Jitney-Jungle Stores of
America, Inc. ("Jitney Jungle"), Southern Jitney Jungle
Company, McCarty-Holman Co., Inc., Jitney-Jungle
Bakery, Inc., Pump and Save, Inc., Interstate Jitney
Jungle Stores, Inc., Delta Acquisition Corporation and
Delchamps, Inc. ("Delchamps") (each a "Borrowers"),
the Guarantors named therein, the Lenders named
therein and Fleet Capital Corporation, as Agent.
WHEREAS the Borrowers requested that the
Agent and the Lenders agree to amend certain
provisions contained in the Credit Agreement;
WHEREAS the Lenders are willing to amend
such provisions on the terms and conditions hereof;
WHEREAS Delchamps and Jitney Jungle have
entered into an Agreement for
Purchase and Sale of Retail Grocery Stores dated as of
January 26, 1998 attached hereto as Exhibit A (as
amended from time to time, the "Bruno's Sale
Agreement"), with Bruno's, Inc., an Alabama
corporation ("Bruno's"), whereby Jitney Jungle and
Delchamps have agreed to sell four Delchamps stores
(Delchamps store numbers 10, 11, 18 and 35) to
Bruno's (the "Bruno's Sale") for the purchase price
described in the Bruno's Sale Agreement (the "Bruno's
Purchase Price");
WHEREAS Delchamps desires to sell a certain
parcel of land located in Gulfport, Mississippi (the
"Gulfport Sale") as more fully described in the Contract
of Purchase and Sale dated March 27, 1997, attached
hereto as Exhibit B, among Delchamps, and John M.
Mladinich.
WHEREAS Jitney Jungle intends to form a
wholly-owned subsidiary named JJ Construction Corp.,
a Mississippi corporation ("JJ Construction") and
requests that the Agent and the Lenders consent to the
formation of JJ Construction;
WHEREAS the Borrowers have requested that
the Lenders waive certain provisions of the Credit
Agreement as to the Bruno's Sale, the Gulfport Sale
and the formation of JJ Construction;
WHEREAS the Lenders are willing to waive
certain provisions of the Credit Agreement on the terms
and conditions hereof;
NOW, THEREFORE, the Borrowers, the
Guarantors, the Lenders and the Agent hereby agree as
follows:
SECTION 1 CAPITALIZED TERMS.
Capitalized terms used herein and not defined shall have
the respective meanings assigned to such terms in the
Credit Agreement.
SECTION 2 AMENDMENTS TO THE
CREDIT AGREEMENT. The Credit Agreement shall
be, and upon the fulfillment of the conditions set forth
in Section 6 hereof is, amended as follows:
SECTION 2.1 SCHEDULE II is deleted in its
entirety and SCHEDULE II attached hereto shall be
substituted therefor.
SECTION 2.2 The phrase "fiscal quarter ending
January 10,1998" contained in the definition of Initial
Adjustment Date is deleted and the phrase "fiscal
quarter ending March 28, 1998" shall be substituted
therefor.
SECTION 2.3 The phrase "Fiscal Year ending
on or about May 2, 1998" contained in Section 2.07
(b)(ii)(B) is deleted and the phrase "Fiscal Year ending
on or about January 3, 1998" shall be substituted
therefor.
SECTION 2.4 The phrase "Saturday nearest to
April 30 of each year" in Section 6.09 is deleted and the
phrase "Saturday nearest to December 31 of each year"
shall be substituted therefor.
SECTION 2.5 The phrase "Indebtedness to A.I.
Credit Corp. incurred in connection with a Premium
Finance Agreement, Disclosure Statement and Security
Agreement dated as of May 29, 1997 in a maximum
amount of $16,000,000" in Section 7.03 (xii) is deleted
and the phrase 'Indebtedness to A.I. Credit Corp.
incurred in connection with a Premium Finance
Agreement, Disclosure Statement and Security
Agreement dated as of May 29, 1997, as amended, in a
maximum amount of $28,000,000" shall be substituted
therefor.
SECTION 2.6 Section 7.09 is hereby amended
in its entirety to read as follows:
Leverage Ratio Permit the Leverage Ratio at the end of
each fiscal quarter set forth below to be greater than:
Date of Determination Ratio
The Fiscal Quarters ending 5.50:1.00
January 3, 1998, March 28, 1998,
June 20, 1998 and September 12, 1998
The Fiscal Quarter ending 5.00:1.00
January 2, 1999
Each Fiscal Quarter ending 4.40:1.00
in Fiscal Year 1999
Each Fiscal Quarter ending 4.30:1.00
in Fiscal Year 2000
Each Fiscal Quarter ending 3.90:1.00
in Fiscal Year 2001
Each Fiscal Quarter ending 3.60:1.00
in Fiscal Year 2002
Each Fiscal Quarter ending 3.40:1.00
in Fiscal Year 2003
SECTION 2.7 Section 7.10 shall be amended by
adding the phrases "The Fiscal Quarter ending January
3, 1998" and "1.65:1.00" immediately below the Date of
Determination and the Ratio column headings,
respectively.
SECTION 2.8 Section 7.11 hereby amended in
its entirety to read as follows:
EBITDA Permit EBITDA at the end of each fiscal
quarter for the four most recent consecutive fiscal
quarters ending on or prior to the date of determination
to be less than the following amounts; provided, that for
the fiscal quarters ending January 3, 1998, March 28,
1998 and June 20, 1998, EBITDA shall be calculated,
with respect to Jitney Jungle and its subsidiaries (other
than Delchamps and its subsidiaries), for the number of
fiscal quarters that shall have elapsed since May 3,1997
and with respect to Delchamps and its subsidiaries, for
the period commencing June 29, 1997 though the date
of determination:
Date of Determination Amount
Fiscal Quarter ending $54,000,000
January 3, 1998
Fiscal Quarter ending $70,000,000
March 28, 1998
Fiscal Quarter ending $76,800,000
June 20, 1998
Fiscal Quarter ending $77,600,000
September 12, 1998
Fiscal Quarter ending $96,800,000
January 2, 1999
Each Fiscal Quarter ending $112,000,000
in Fiscal Year 1999
Each Fiscal Quarter ending $114,000,000
in Fiscal Year 2000
Each Fiscal Quarter ending $124,000,000
in Fiscal Year 2001
Each Fiscal Quarter ending $135,000,000
in Fiscal Year 2002
Each Fiscal Quarter ending $148,000,000
in Fiscal Year 2003
SECTION 3. WAIVER AND CONSENT (BRUNO'S SALE)
SECTION 3.1. The Agent and the Lenders
hereby consent to the Bruno's Sale as described above
and pursuant to the Bruno's Sale Agreement; provided,
however, that all Net Cash Proceeds from the Bruno's
Sale shall be applied to the prepayment of the Loans
pursuant to Section 2.09(d)(i) of the Credit Agreement.
SECTION 3.2. The Agent and the Lenders
hereby agree that the provision of Section 2.07(b)(ii) of
the Credit Agreement with respect to the mandatory
permanent reduction of the Total Commitment and
Supplemental Availability shall not be applicable to the
Net Cash Proceeds of the Bruno's Purchase Price used
for the prepayment of the Loans pursuant to Section 3.1
above.
SECTION 3.3. The Agent and the Lenders
acknowledge that Delchamps and Jitney Jungle have
made a Reinvestment Election pursuant to Section
2.o9(d)(i) of the Credit Agreement with regard to the
Net Cash Proceeds from the Bruno's Sale.
SECTION 3.4. The Agent and the Lenders
agree that any Net Cash Proceeds
from the Bruno's Sale reinvested in Reinvestment
Assets shall not be applied toward (x) the $1,000,000
per fiscal year limit or (y) the $5,000,000 limit from the
Initial Closing Date until the Final Maturity Date on
such reinvestment as provided in Section 2.09(d)(i) of
the Credit Agreement.
SECTION 4. WAIVER AND CONSENT (GULFPORT SALE)
SECTION 4.1. The Agent and the Lenders
hereby consent to the Gulfport Sale as described above
and pursuant to the Gulfport Sale Agreement; provided,
however, that all Net Cash Proceeds from the Gulfport
Sale shall be applied to the prepayment of the Loans
pursuant to Section 2.09(d}(i) of the Credit Agreement.
SECTION 4.2. The Agent and the Lenders
hereby agree that the provision of Section 2.07(b)(ii) of
the Credit Agreement with respect to the mandatory
permanent reduction of the Total Commitment and
Supplemental Availability shall not be applicable to the
Net Cash Proceeds of the Gulfport Sale used for the
prepayment of the Loans pursuant to Section 4.1 above.
SECTION 4.3. The Agent and the Lenders
acknowledge that Delchamps and Jitney Jungle have
made a Reinvestment Election pursuant to Section
2.09(d)(i) of the Credit Agreement with regard to the
Net Cash Proceeds from the Gulfport Sale.
SECTION 4.4. The Agent and the Lenders
agree that any Net Cash Proceeds
from the Gulfport Sale reinvested in Reinvestment
Assets shall not be applied toward (x) the $1,000,000
per fiscal year limit or (y) the $5,000,000 limit from the
Initial Closing Date until the Final Maturity Date on
such reinvestment as provided in Section 2.09(d)(i) of
the Credit Agreement.
SECTION 5. FORMATION OF JJ CONSTRUCTION.
SECTION 5.1. The Agent and the Lenders
hereby consent to the formation of JJ Construction in
accordance with Section 7.22 of the Credit Agreement
JJ Construction shall exist solely for the purpose of
constructing new supermarkets and related facilities to
be owned and operated by the Borrowers. JJ
Construction shall engage in no other activity including,
but not limited to, the operation of any supermarket or
the acquisition of any inventory.
SECTION 5.2. By executing and delivering this
Amendment Agreement No.1, JJ Construction hereby
becomes a Guarantor under the Credit Agreement and a
Grantor under the Security Agreement and agrees to be
bound by, and to comply with the provisions of each of
the Credit Agreement and the Security Agreement in the
same manner as if JJ Construction were an original
signatory thereto as a Guarantor and a Grantor,
respectively.
SECTION 5.3. Jitney Jungle hereby agrees to
pledge its stock in JJ Construction to the Agent
pursuant to the terms and conditions of the Pledge
Agreement and promptly to deliver or cause to be
delivered to the Agent the stock certificates evidencing
its ownership of JJ Construction, together with stock
powers, undated and executed in blank, in form and
substance satisfactory to the Agent The parties hereto
hereby further agree to amend Schedule I to the Pledge
Agreement by deleting it in its entirety and substituting
Schedule I attached hereto therefor.
SECTION 6. CONDITIONS PRECEDENT
This Amendment Agreement shall become
effective on such date as the following conditions have
been satisfied in full or waived by the Agent in writing:
SECTION 6.1 The Agent shall have received in
form and substance satisfactory to the Agent and its
counsel Agreement.
6.1.1 Copies of the Bruno's Sale Agreement
and the Gulfport Sale Agreement.
6.1.2 A certificate signed by the Secretary of
each Borrower, Grantor and Guarantor, dated the date
hereof, Certifying that attached thereto is a true and
complete copy of resolutions adopted by such person's
Board of Directors authorizing the execution, delivery
and performance of this Amendment Agreement, and
that such resolutions have not been modified, rescinded
or amended and are in full force and effect.
6.1.3 Each of (a) a copy of the certificate or
articles of incorporation, as amended to date, of JJ
Construction, certified as of a recent date by the
Secretary of State of the State of Mississippi, and a
certificate as to the good standing of JJ Construction
from such Secretary of the State, dated as of a recent date;
(b) a certificate of the Secretary of JJ Construction,
dated the date hereof and certifying (I) that attached
thereto is a true and complete copy of the By-laws of JJ
Construction as in effect on the date of such certificate
and at all times since a date prior to the date of the
resolution described in item (ii) below, (ii) that attached
thereto is a true and complete copy of a resolution
adopted by the Board of Directors of JJ Construction
authorizing the execution, delivery and performance of
this Amendment Agreement, the Credit Agreement, the
Security Documents the Notes, the other Loan
Documents and the Credit Events thereunder, as
applicable, and that such resolution has not been
modified rescinded or amended and is in full force and
effect, (iii) that JJ Construction's certificate or articles of
incorporation has not been amended since the date of
the last amendment thereto shown on the certificate of
good standing furnished pursuant to (a) above, and (iv)
as to the incumbency and specimen signature of each of
JJ Construction's officers executing this Amendment
Agreement or any other Loan Documents delivered in
connection herewith or therewith, as applicable and (c) a
certificate of another of JJ Construction's officers as to
incumbency and signature of its Secretary.
6.1.4 Each document (including, without
limitation, each Uniform Commercial Code financing
statement) required by law or required by the Agent to
be filed, registered or recorded in order to create in
favor of the Agent for the benefit of the Secured Parties
a first priority perfected security interest in the
Collateral shall have been properly filed, registered or
recorded in each jurisdiction in which the filing,
registration or recordation thereof is so required or
requested. The Agent shall have received evidence
satisfactory to it, of each such filing, registration or
recordation.
6.1.5 A certificate signed by a Financial Officer
of each Borrower and Guarantor, that (i) the representations
and warranties made in this Amendment
Agreement are true and correct, both immediately prior
to and after giving effect to the transactions
contemplated herein, and (ii) there exists no unwaived
Default or Event of Default.
6.1.6 Counterparts of this Amendment executed
by each Borrower, each Guarantor, each Grantor and
the Required Lenders shall have been delivered to the
Agent.
6.1.7 Such other approvals, opinions or
documents as the Agent may reasonably request.
SECTION 6.2 All representations and
warranties contained in this Amendment Agreement or
otherwise made in writing to the Agent in connection
herewith shall be true and correct in all mated respects.
SECTION 6.3 No unwaived Default or Event of
Default has occurred and is continuing.
SECTION 6.4 Messrs. Kaye, Scholer, Fierman,
Hays & Handler, LLP, counsel to the Agent, shall have
received payment in full for all legal fees charged, and
all costs and expenses incurred, by such counsel in
connection with the transactions contemplated under
this Amendment Agreement and the other Loan
Documents and instruments in connection herewith and
therewith.
SECTION 7. MISCELLANEOUS
SECTION 7.1 Each of the Borrowers and each
Guarantor reaffirms and restates the representations and
warranties set forth in Article IV of the Credit
Agreement, as amended by this Amendment Agreement
and all such representations and warranties shall be true
and correct on the date hereof with the same force and
effect as it made on such date (except insofar as such
representation and warranties relate to expressly to an
earlier date). Each of the Borrowers and each Guarantor
represents and warrants (which representations and
warranties shall survive the execution and delivery
hereof) to the Agent that:
(a) It has the corporate power and authority
to execute, deliver and carry out the terms and
provisions of this Amendment Agreement and has taken
or caused to be taken all necessary corporate action to
authorize the execution, delivery and performance of
this Amendment Agreement;
(b) No consent of any other person
(including, without limitation, shareholders or creditors
of any Borrower or a Guarantor), and no action of, or
filing with any governmental or public body or authority
is required to authorize, or is otherwise required in
connection with the execution, delivery and performance
of this Amendment Agreement;
(c) This Amendment Agreement and the
other instruments and documents contemplated hereby
have been duly executed and delivered by a duly
authorized officer on behalf of such party, and
constitutes a legal, valid and binding obligation of such
party enforceable against such party in accordance with its
terms, subject to bankruptcy, reorganization, insolvency,
moratorium and other similar laws affecting the
enforcement of creditors' rights generally and the
exercise of judicial discretion in accordance with general
principles of equity; and
(d) The execution, delivery and performance
of this Amendment Agreement and the other
instruments and documents contemplated hereby will
not violate any law, statute or regulation, or any order
or decree of any court or governmental instrumentality,
or conflict with, or result in the breach of, or constitute
a default under any contractual obligation of such party.
SECTION 7.2 Except as herein expressly
amended nothing herein shall be deemed to be a waiver
of any covenant or agreement contained in the Credit
Agreement, and each Borrower and each Guarantor
hereby agrees that air of the covenants and agreements
contained in the Credit Agreement and the other Loan
Documents are hereby ratified and confirmed in all
respects and shall remain in full force and effect in
accordance with their respective terms.
SECTION 7.3 All references to the Credit
Agreement in the Credit Agreement or any other Loan
Document and the other documents and instruments
delivered pursuant to or in connection therewith shall
mean such Agreement as amended hereby and as each
may in the future be amended, restated, supplemented or
modified from time to time.
SECTION 7.4 This Amendment Agreement may
be executed by the parties hereto individually or in
combination, in one or more counterparts, each of which
shall be an original and all of which shall constitute one
and the same agreement.
SECTION 7.5 De1ivery of an executed
counterpart of a signature page by telecopier shall be
effective as delivery of a manually executed counterpart.
SECTION 7.6 This Amendment Agreement shall
be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.
SECTION 7.7 The parties hereto shall, at any
time and from time to time following the execution of
this Amendment Agreement, execute and deliver all
such further instruments and take all such further action
as may be reasonably necessary or appropriate in order
to carry out the provisions of this Amendment
Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties
have caused this Amendment Agreement to be
executed by their respective officers thereunto duly
authorized, as to the dare first above written.
JITNEY-JUNGLE STORES OF AMERICA, INC.,
as Borrower and as Guarantor
By: /s/ R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
General Counsel
SOUTHERN JITNEY JUNGLE COMPANY,
as Borrower and Guarantor
By: /s/ R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
General Counsel
McCARTY-HOLMAN CO., INC.,
as Borrower and Guarantor
By: /s/ R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
General Counsel
JITNEY-JUNGLE BAKERY, INC.,
as Borrower and Guarantor
By: /s/ R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
General Counsel
<PAGE>
PUMP AND SAVE, INC.,
as Borrower and as Guarantor
By: /s/ R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
General Counsel
INTERSTATE JITNEY JUNGLE STORES, INC.,
as Borrower and Guarantor
By: /s/ R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
General Counsel
DELCHAMPS, INC.,
as Borrower and Guarantor
By: /s/ R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
General Counsel
JJ CONSTRUCTION CORP.
By: /s/ R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
General Counsel
SUPERMARKET CIGARETTE SALES, INC.,
as Guarantor
By: /s/ R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
General Counsel
<PAGE>
FLEET CAPITAL CORPORATION, as Agent
By: /s/ Thomas Maiale
Name: Thomas Maiale
Title: Vice President
FLEET CAPITAL CORPORATION, as Lender
By: /s/ Thomas Maiale
Name: Thomas Maiale
Title: Vice President
BTM CAPITAL CORPORATION, as Lender
By: /s/ William R. Zork, Jr.
Name: William R. Zork, Jr.
Title: Executive Vice President
HELLER FINANCIAL INC., as Lender
By: /s/ Stephen M. Metivier
Name: Stephen M. Metivier
Title: Assistant Vice President
IBJ SCHRODER BUSINESS CREDIT CORP.,
as Lender
By: /s/ James M. Steffy
Name: James M. Steffy
Title: Vice President
<PAGE>
NATIONAL BANK OF CANADA, a Canadian
Chartered Bank, as Lender
By: /s/ J. Michael Smith
Name: J. Michael Smith
Title: Vice President
By: /s/ Grothan R. Frosh
Name: Grothan R. Frosh
Title: Vice President
NATIONAL CITYBANK, as Lender
By: /s/ Joseph D. Robinson
Name: Joseph D. Robinson
Title: Vice President
DEUTSCHE FINANCIAL SERVICES HOLDING
CORPORATION, as Lender
By: /s/ Mark Tauber
Name: Mark Tauber
Title: Executive Vice President
FLEET BANK, N.A., as a Letter of
Credit Issuer
By: /s/ Thomas Maiale
Name: Thomas Maiale
Title: Vice President
EXECUTION COPY
AMENDMENT AND WAIVER AGREEMENT NO.2
TO
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
Amendment and Waiver Agreement No.2,
(this "Agreement") dated as of June 19, 1998 to the
Amended and Restated Revolving Credit Agreement
dated as of September 15, 1997 (as heretofore amended,
and as may be further amended, restated, modified or
supplemented from time to time, the "Credit
Agreement") among Jitney-Jungle Stores of America,
Inc. ("Jitney Jungle"), Southern Jitney Jungle Company,
McCarty.Holman Co., Inc., Jitney-Jungle Bakery, Inc.,
Pump and Save, Inc., Interstate Jitney Jungle Stores,
Inc., Delchamps, Inc. ("Delchamps") (each a
"Borrower" and collectively, the "Borrower"), the
Guarantors named therein, the Lenders named therein
and Fleet Capital Corporation, as Agent.
WHEREAS Delchamps desires to sell (the
"Mandeville_Sale") a certain parcel of land located in
Mandeville, Louisiana (the "Mandeville Parcel") as
more fully described in the Purchase Agreement dated
January 29, 1998, attached hereto as Exhibit A (the
"Mandeville Sale Agreement"), among Delchamps, and
Premier Centre, L.L C
WHEREAS Delchamps has entered into a site-
development agreement dated April 24, 1998, attached
hereto as Exhibit B (the "Mandeville Site Development
Agreement"), between Delchamps and Premier Centre,
L.L.C., pursuant to which Delchamps will construct a
supermarket (the "Mandeville Supermarket") on the
Mandeville Parcel.
WHEREAS the Borrowers have requested that
the Agent and the Lenders agree to waive certain
provisions in the Credit Agreement and to consent to
the Borrowers entering into site development
arrangements for the construction of new supermarkets;
WHEREAS the Borrowers have requested that
the Agent and the Lenders agree to amend certain
provisions contained in the Credit Agreement;
WHEREAS the Agent and the Lenders are
willing to consent to the Mandeville Sale, the site
development arrangements and to amend and waive
such provisions of the Credit Agreement on the terms
and conditions contained herein;
Now, THEREFORE, the Borrowers, the
Guarantors, the Lenders and the Agent hereby agree as
follows:
SECTION 1. CAPTTALIZED TERMS.
Capitalized terms used herein and not defined shall have
the respective meanings assigned to such terms in the
Credit Agreement.
SECTION 2. AMENDMENTS TO THE CREDIT AGREEMENT.
The Credit Agreement shall be, and upon the fulfillment
of the conditions set forth in Section 6 hereof is,
amended as follows:
SECTION 2.1 Section 7.09 of the Credit
Agreement is hereby amended in its entirety to read as
follows:
Leverage Ratio. Permit the Leverage Ratio at the end
of each fiscal quarter set forth below to be greater than:
Date of Determination Ratio
The Fiscal Quarters ending
January 3, 1998 and March 28, 1998 5.50:1.00
The Fiscal Quarter ending
June 20, 1998 6.00:1.00
The Fiscal Quarter ending
September 12, 1998 6.00:1.00
The Fiscal Quarter ending
January 2,1999 5.25:1.00
Each Fiscal Quarter ending
in Fiscal Year 1999 4.40:1.00
Each Fiscal Quarter ending
in Fiscal Year 2000 4.30:1.00
Each Fiscal Quarter ending
in Fiscal Year 2001 3.90:1.00
Each Fiscal Quarter ending
in Fiscal Year 2002 3.60:1.00
Each Fiscal Quarter ending
in Fiscal Year 2003 3.40:1.00
SECTION 2.2 Section 7-10 of the Credit
Agreement is hereby amended in its entirety to read as
follows:
Interest Coverage Ratio. Permit the Interest Coverage
Ratio at the end of each fiscal quarter set forth below to
be less than:
Date of Determination Ratio
The Fiscal Quarters ending
June 2O, 1998 and
September 12, 1998 1.50:1.00
The Fiscal Quarter ending
January 2, 1999 1.65:1.00
Each Fiscal Quarter ending
in Fiscal Year 1999 1.80:1.00
Each Fiscal Quarter ending
in Fiscal Year 2000 1.85:1.00
Each Fiscal Quarter ending
in Fiscal Year 2001 and
thereafter 2.00:1.00
SECTION 3. WAIVER AND CONSENT (MANDEVILLE SALE)
SECTION 3.1. The Agent and the Lenders
hereby consent to the Mandeville Sale as described
above and pursuant to the Mandeville Sale Agreement.
SECTION 3.2. The Agent and the Lenders
hereby waive the requirement of Section 2.09(d}(i) that
the Borrowers make a mandatory prepayment of the
Loans in an amount equal to 100% of the Net Cash
Proceeds from the Mandeville Sale.
SECTION 3.3. The Agent and the Lenders
hereby agree That the provision of Section 2.O7(b)(ii)
of the Credit Agreement with respect to the mandatory
permanent reduction of the Total Commitment and
Supplemental Availability shall not be applicable to the
Net Cash Proceeds of the Mandeville Sale.
SECTION 3.4. The Agent and the Lenders
waive Section 7.01 of the Credit
Agreement to permit the Borrowers to grant Premier
Centre, L.L.C. a security interest in
Delchamp's benefits to the Mandeville Site-Development
Agreement, any plans and/or specifications required for
the construction of the Mandeville Supermarket, and all
permits and approvals with regard to the construction of
the Mandeville Supermarket.
SECTION 3.5. The Agent and the Lenders
hereby waive Section 7.02 to the
Credit Agreement as it applies to the Mandeville Site-
Development Agreement.
SECTION 3.6. The Agent and the Lenders
hereby waive Section 7.05 to the Credit Agreement as it
applies to the Mandeville Site-Development Agreement
SECTION 4. CONSENT TO SITE-DEVELOPMENT AGREEMENTS.
The Agent and the Lenders hereby consent to
the execution by the Borrowers of site-development
agreements for the construction of supermarkets (in
each case a "Store"), in each case substantially in the
form of either Exhibit C or Exhibit D attached hereto
(each a "Site-Development Agreement") with one or
more developers (each such developer with respect to a
Store is is herein called a "Developer"); provided,
however that the aggregate construction costs
(including, but not limited to, supplies, labor, change
orders, administrative costs, architectural costs,
financing costs. Insurance costs and any other direct or
indirect costs) incurred in the construction of a Store
pursuant to a Site-Development Agreement shall not
exceed $3,500,000. Upon the execution of a Site-
Development Agreement the Borrowers shall promptly
deliver, or cause to be promptly delivered to the Agent a
copy of such Site-Development Agreement and any
other agreement executed in connection therewith.
SECTION 5. WAIVERS REGARDING SITE DEVELOPMENT AGREEMENT
SECTION 5.1. The Agent and the Lenders
hereby waive Section 7.01 of the
Credit Agreement to permit the Borrowers to grant a
Developer, pursuant to a Site-Development Agreement,
a security interest in the Borrower's benefits to such
Site-Development Agreement, any plans and/or
specifications required for the construction of the Store
covered by the Site Development Agreement, and all
permits and approvals with regard to the construction of
such Store.
SECTION 5.2. The Agent and the Lenders
hereby waive Section 7.02 to the Credit Agreement as it
applies to any Site-Development Agreement.
SECTION 5.3. The Agent and the Lenders
hereby waive Section 7.05 to the Credit Agreement as it
applies to any Site-Development Agreement.
SECTION 5.4. The Agent and the Lenders
hereby agree that any proceeds received from the sale of
either real Property or a Store to a Developer pursuant
to a Site-Development Agreement shall not be subject to
the provisions of Section 2.09(d)(i) of the Credit
Agreement with respect to the application of proceeds
of an Asset Sale.
SECTION 5.3. The Agent and the Lenders
hereby agree that the provision of Section 2.O7(b)('ii) of
the Credit Agreement with respect to the mandatory
permanent reduction of the Total Commitment and
Supplemental Availability shall not be applicable to the
Net Cash Proceeds received by the Borrowers from the
sale of real property or a Store pursuant to a Site-
Development Agreement.
SECTION 6. CONDITIONS PRECEDENT
This Agreement shall become effective on such date as
the following conditions have been satisfied in full or
waived by the Agent in writing:
SECTION 6.1 The Agent shall have received in
form and substance satisfactory to the Agent and its
counsel;
SECTION 6.1.1 Copies of the Mandeville Sale
Agreement and the form of Site-Development
Agreements.
SECTION 6.1.2 A certificate signed by the
Secretary of each Borrower, Grantor and Guarantor,
dated the date hereof, certifying that attached thereto is
a true and complete copy of resolutions adopted by such
person's Board of Directors authorizing the execution,
delivery and performance of this Agreement, and that
such resolutions have not been modified, rescinded or
amended and are in full force and effect.
SECTION 6.1.3 A certificate signed by a
Financial Officer of each
Borrower and Guarantor, that (i) the representations
and warranties made in this
Agreement are true and correct, both immediately prior
to and after giving effect to the
transactions contemplated herein, and (ii) there exists no
unwaived Default or Event of
Default.
SECTION 6.1.4 Counterparts of this
Amendment executed by each Borrower, each
Guarantor and the Required Lenders shall have been
delivered to the Agent.
SECTION 6.1.5 Such other approvals, opinions
or documents as the Agent may reasonably request.
SECTION 6.2 All representations and
warranties contained in this Agreement or otherwise
made in writing to the Agent in connection herewith
shall be true and correct in all material respects.
SECTION 6.3 No unwaived Default or Event of
Default has occurred and is continuing.
SECTION 6.4 Messrs. Kaye, Scholer, Fiermnan,
Hays & Handler, LLP, counsel to the Agent, shall have
received payment in full for all legal fees charged, and
all costs and
expenses incurred, by such counsel in connection with
the transactions contemplated under this Agreement and
the other Loan Documents and instruments in
connection herewith and therewith..
SECTION 7. TERMINATION. The waiver and
consent contained herein as it relates to the Site-
Development Agreements shall be Immediately
revocable by the Agent upon notice to the Borrowers;
provided, however any such termination shall not apply
to any Site-Development Agreement that has been
previously executed and delivered to the Agent.
SECTION 3. MISCELLANEOUS
SECTION 8.1 Each of the Borrowers and each
Guarantor reaffirms and restates the representations and
warranties set forth in Article IV of the Credit
Agreement, as amended by this Agreement, and all such
representations and warranties shall be true and correct
on the date hereof with the same force and effect as if
made on such date (except insofar as such
representation and warranties relate expressly to an
earlier date). Each of the Borrowers and each Guarantor
represents and warrants (which representations and
warranties shall survive the execution and delivery
hereof) to the Agent that:
(a) It has the corporate power and authority
to execute, deliver and carry out the terms and
provisions of this Agreement and has taken or caused to
be taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement;
(b) No consent of any other person
(including, without limitation, shareholders or creditors
of any Borrower or a Guarantor), and no action of, or
filing with any governmental or public body or authority
is required to authorize, or is otherwise required in
connection with the execution, delivery and performance
of this Agreement;
(c) This Agreement and the other
instruments and documents contemplated hereby have
been duly executed and delivered by a duly authorized
officer on behalf of such party, and constitutes a legal,
valid and binding obligation of such party enforceable
against such party in accordance with its terms, subject
to bankruptcy, reorganization, insolvency. moratorium
and other similar laws affecting the enforcement of
creditors' rights generally and the exercise of judicial
discretion in accordance with general principles of
equity; and
(d) The execution or, delivery and
performance of this Agreement and the other
instruments and documents contemplated hereby will
not violate any law, statute or regulation, or any order
or decree of any court or governmental instrumentality,
or conflict with, or result in the breach of, or constitute
a default under any contractual obligation of such party.
SECTION 8.2 Except as herein expressly
amended nothing herein shall be deemed to be a waiver
of any covenant or agreement contained in the Credit
Agreement, and each Borrower and each Guarantor
hereby agrees that all of the covenants and agreements
contained in the Credit Agreement and the other Loan
Documents are hereby ratified and
confirmed in all respects and shall remain in full force
and effect in accordance with their
respective terms.
SECTION 8.3 All references to the Credit
Agreement in the Credit Agreement or any other Loan
Document and the other documents and instruments
delivered pursuant to or in connection therewith shall
mean such Agreement as amended hereby and as each
may in the future be amended, restated, supplemented or
modified from time to time.
SECTION 8.4 This Agreement may be executed
by the parties hereto individually or in combination, in
one or more counterparts, each of which shall be an
original and all of which shall constitute one and the
same agreement.
SECTION 8.5 Delivery of an executed
counterpart of a signature page by telecopier shall be
effective as delivery of a manually executed counterpart.
SECTION 8.6 This Agreement shall be
governed by, and construed and interpreted in
accordance with, the laws of the State of New York.
SECTION 8.7 The parties hereto shall, at any
time and from time to time following the execution of
this Agreement, execute and deliver all such further
instruments and take all such further action as may be
reasonably necessary or appropriate in order to carry
out the provisions of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
<PAGE>
IN WITNESS WHEREOF, the parties
have caused this Amendment Agreement to be
executed by their respective officers thereunto duly
authorized, as to the date first above written.
JITNEY-JUNGLE STORES OF AMERICA, INC.,
as Borrower and as Guarantor
By: /s/ R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
General Counsel
SOUTHERN JITNEY JUNGLE COMPANY,
as Borrower and Guarantor
By: /s/ R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
General Counsel
McCARTY-HOLMAN CO., INC.,
as Borrower and Guarantor
By: /s/ R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
General Counsel
JITNEY-JUNGLE BAKERY, INC.,
as Borrower and Guarantor
By: /s/ R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
General Counsel
<PAGE>
PUMP AND SAVE, INC.,
as Borrower and as Guarantor
By: /s/ R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
General Counsel
INTERSTATE JITNEY JUNGLE STORES, INC.,
as Borrower and Guarantor
By: /s/ R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
General Counsel
DELCHAMPS, INC.,
as Borrower and Guarantor
By: /s/ R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
General Counsel
JJ CONSTRUCTION CORP.
By: /s/ R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
General Counsel
SUPERMARKET CIGARETTE SALES, INC.,
as Guarantor
By: /s/ R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
General Counsel
<PAGE>
FLEET CAPITAL CORPORATION, as Agent
By: /s/ Thomas Maiale
Name: Thomas Maiale
Title: Vice President
FLEET CAPITAL CORPORATION, as Lender
By: /s/ Thomas Maiale
Name: Thomas Maiale
Title: Vice President
PNC BANK, NATIONAL ASSOCIATES, as Lender
By: /s/ Richard F. Muse, Jr.
Name: Richard F. Muse, Jr.
Title: Vice President
HELLER FINANCIAL INC., as Lender
By: /s/ Stephen M. Metivier
Name: Stephen M. Metivier
Title: Assistant Vice President
IBJ SCHRODER BUSINESS CREDIT CORP.,
as Lender
By: /s/ James M. Steffy
Name: James M. Steffy
Title: Vice President
<PAGE>
NATIONAL BANK OF CANADA, a Canadian
Chartered Bank, as Lender
By: /s/ J. Michael Smith
Name: J. Michael Smith
Title: Vice President
NATIONAL CITYBANK, as Lender
By: /s/ Joseph D. Robinson
Name: Joseph D. Robinson
Title: Vice President
DEUTSCHE FINANCIAL SERVICES HOLDING
CORPORATION, as Lender
By: /s/ Pamela D. Petrick
Name: Pamela D. Petrick
Title: Vice President
FLEET BANK, N.A., as a Letter of
Credit Issuer
By: /s/ Thomas Maiale
Name: Thomas Maiale
Title: Vice President
AMENDMENT NO.3
TO
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
AMENDMENT NO.3 dated October 5,1998 to
the Amended and Restated Revolving Credit Agreement
dated as of September 15,1997 (as heretofore amended,
and as may be further amended. restated, modified or
supplemented from time to time, the "Credit
Agreement") among Jitney-Jungle Stores of America,
Inc., Southern Jitney Jungle Company, MaCarty-
Holman Co., Inc., Jitney-Jungle Bakery, Inc., Pump and
Save, Inc., Interstate Jitney Jungle Stores Inc., and
Delchamps. Inc. (each a "Borrower" and collectively,
the "Borrowers"), the Guarantors named therein, the
Lenders named therein and Fleet Capital Corporation, as
Agent.
WHEREAS, as a result of the interruption of
business and the recent damage caused to the assets of
certain Borrowers and Guarantors related to Hurricane
Georges, the Borrowers have requested that the Agent
and the Lenders agree to increase the Total
Commitment and the Supplemental Availability under
the Credit Agreement and amend certain other
provisions contained in the Credit Agreement;
WHEREAS the Lenders are willing to amend
such provisions on the terms and conditions hereof;
NOW, THEREFORE, the Borrowers, the
Guarantors, the Lenders and the Agent hereby agree as
follows:
SECTION 1 CAPITALIZED TERMS.
Capitalized terms used herein and not defined shall have
the respective meanings assigned to such terms in the
Credit Agreement.
SECTION 2 AMENDMENTS TO THE CREDIT AGREEMENT.
The Credit Agreement shall be, and upon the fulfillment
of the conditions set forth in
Section 5 hereof is, amended as follows:
SECTION 2.1 Schedule 2.01(a) attached hereto
is hereby made a part of the Credit Agreement.
SECTION 2.2 The definition of Commitment is
hereby deleted in its entirely and the following is hereby
substituted therefore:
"Commitment" shall mean, with respect to each
Lender, the sum of the
Commitment of such Lender as set forth on Schedules
2.01 and 2.01(a), annexed hereto,
as it maybe adjusted from time to time pursuant to
Section 2.07.
SECTION 2.3 The Percentage of Commitment
column on Schedule 2.01 is hereby deleted in its
entirety.
SECTION 2.4 The definition of Supplemental
Availability is hereby amended by adding the phrase
"plus the aggregate amount of the Commitments set
forth on Schedule 2.01(a), if any" at the end of the
definition.
SECTION 2.5 Section 2.l7(b) is hereby
amended by deleting the parenthetical phrase "(as
determined in accordance with the percentage amounts
set forth in Schedule 2.01 hereto)" and substituting
therefore the phrase "(as determined by dividing the sum
of such Lender's Commitment by the Total
Commitment)".
SECTION 2.6 Section 2.17(c)(i) is hereby
amended by deleting the phrase "as determined in
accordance with the percentage amounts set forth in
Schedule 2.01 hereto" and substituting therefore the
phrase "as determined by dividing the sum of such
Lender's Commitment by the Total Commitment".
SECTION 3 ADDITIONAL COMMITMENTS: REDUCTION OF
COMMITMENTS
SECTION 3.1 The parties hereto agree that any
Lender may, upon written notice to the Agent
substantially in the form of Exhibit A hereto, increase
the portion of its Commitment set forth on Schedule
2.01(a); provided, however, that in no event shall the
aggregate of the Commitments set forth on Schedule
2.01(a) exceed US $25,000,000. Upon receipt of such
notice, the Agent shall notify the Borrowers and the
Lenders of such increase.
SECTION 3.2 The parties hereto agree that the
Commitment of each Lender set forth on Schedule
2.01(a) shall be reduced to US$0 on January 15,1999.
SECTION 3.3 The parties hereto agree that all
Loans, whether made under the Commitments set forth
on Schedule 2.01 or 2.01(a), shall be treated pari passu
and shall be secured by the Collateral pro rata taking all
Loans into account.
SECTION 3.4 Upon the request of any Lender,
the Borrowers hereby agree to execute and deliver a
Note, substantially in the form of Exhibit A to the Credit
Agreement, payable to such Lender in the principal
amount of the Commitment of such Lender set forth on
Schedule 2.01(a) and with a maturity date of January
15, 1999.
SECTION 4 ADDITIONAL AGREEMENTS
SECTION 4.1 Notwithstanding any provision of
Section 2.09(e)(ii) of the Credit Agreement, upon the
receipt by the Agent or any Borrower, any Guarantor or
any of their respective subsidiaries (x) of any net
proceeds of any insurance required to be maintained
pursuant to Section 6.03 of the Credit Agreement (or
otherwise maintained by such Borrower, Guarantor or
subsidiary) on account of any loss, damage or injury to
any asset of any such Borrower, Guarantor or subsidiary
(including, without limitation, any Collateral) caused
directly or indirectly by Hurricane Georges, or (y) or
any net proceeds of any business interruption insurance
required to be maintained pursuant to Section 6.03 of
the Credit Agreement (or otherwise maintained by such
Borrower, Guarantor or subsidiary) related directly or
indirectly to Hurricane Georges. such Borrower, such
Guarantor or such subsidiary shall promptly notify the
Agent of such receipt in writing (or by telephone
promptly confirmed in writing), and not later than the
fifth Business Day following receipt by the Agent or
such Borrower, such Guarantor or such subsidiary of
any such proceeds, there shall become due and payable a
prepayment of the Loans in an amount equal to 100% of
such proceeds. The proceeds of any prepayment made
pursuant to this Section 4.1 shall be applied to the
outstanding Loans in accordance with Section 2.09(f) of
the Credit Agreement: provided, however, if at the time
of such prepayment the outstanding Loans exceed the
aggregate of the Lenders' Commitments on Schedule
2.01, the proceeds of such prepayment shall first be
applied to Loans made under the Lenders'
Commitments on Schedule 2.0l(a), pro rata in
accordance with each Lenders Commitment on
Schedule 2,01(a) until all such Loans have been repaid
in full and any remaining proceeds shall be applied to the
outstanding Loans in accordance with Section 2.09(f) of
the Credit Agreement.
SECTION 4.2 On each date that a prepayment
of principal of the Loans is required pursuant to Section
4.1 hereof, the Commitment of the Lenders set forth on
Schedule 2.01(a) shall be reduced in an amount equal to
such prepayment and each Lender's Commitment on
Schedule 2.0l(a) shall be reduced pro rata based on each
Lenders share of the aggregate of the Commitments set
forth on such schedule.
SECTION 5 CONDITIONS PRECEDENT
This Amendment shall become effective on such date as
the following conditions have been satisfied in full or
waived by the Agent in writing:
SECTION 5.1 The Agent shall have received in
form and substance satisfactory to the Agent and its
counsel:
(a) A certificate signed by the Secretary of
each Borrower, Grantor and Guarantor, dated the date
hereof, certifying that attached thereto is a true and
complete copy of resolutions adopted by such person's
Board of Directors authorizing the execution, delivery
and performance of this Amendment, and that such
resolutions have not been modified, rescinded or
amended and are in full force and effect.
(b) A certificate signed by a Financial Officer
of each Borrower and Guarantor, that (i) the
representations and warranties made in this Amendment
are true and correct, both immediately prior to and after
giving effect to the transactions contemplated herein,
and (ii) there exists no unwaived Default or Event of
Default both immediately prior to and after giving effect
to the transaction contemplated herein.
(c) Counterparts of this Amendment
executed by each Borrower, each Guarantor, each
Grantor and each Lender shall have been delivered to
the Agent.
(d) Evidence that this Amendment and the
transactions contemplated herein shall not violate or
contravene any credit agreement, indenture or other
agreement to which any Borrower, Guarantor or
Grantor is a party.
(e) An Opinion of Butler, Snow, O'Mara.
Stevens & Cannada, PLLC, addressed to the Agent and
the Lender, as to the authorization, execution and
delivery of this Amendment and the Notes delivered
herewith and the non-contravention of this Amendment
with credit agreement, indenture or other agreement to
which any Borrower, Guarantor or Grantor is a party.
(f) If so requested, each Lender that has
increased its Commitment shall have received Notes
reflecting such increase in Commitment duly executed
by the Borrowers.
(g) Such other approvals, opinions or
documents as the Agent may reasonably request.
SECTION 5.2 All representations and
warranties contained in this Amendment or otherwise
made in writing to the Agent in connection herewith
shall be true and correct in all material respects.
SECTION 5.3 No unwaived Default or Event of
Default has occurred and is continuing.
SECTION 5.4 Kaye, Scholer, Fierrnan, Hays &
Handler, LLP, counsel to the Agent, shall have received
payment in full for all legal fees charged, and all costs
and expenses incurred, by such counsel in connection
with the transactions contemplated under this
Amendment and the other Loan Documents and
instruments in connection herewith and therewith.
SECTION 6 MISCELLANEOUS
SECTION 6.1 Each of the Borrowers and each
Guarantor reaffirms and restates the representations and
warranties set forth in Article IV of the Credit
Agreement, as amended by this Amendment, and all
such representations and warranties shall be true and
correct on the date hereof with the same force and effect
as if made on such date (except insofar such
representation and warranties relate expressly to an
earlier date). Each of the Borrowers and each Guarantor
represents and warrants (which representations and
warranties shall survive the execution and delivery
hereof) to the Agent that:
(a) It has caused the corporate power and
authority to execute, deliver and carry out the terms and
provisions of this Amendment and the Notes and has
taken or caused to take all necessary corporate action
to authorize the execution, delivery and
performance of this Amendment;
(b) No consent of any other person
(including, without limitation, shareholders or creditors
of any Borrower or a Guarantor), and no action of, or
filing with any governmental or public body or authority
is required to authorize, or is otherwise required in
connection with the execution, delivery and performance
of this Amendment;
(c) This Amendment, the Notes and the
other instruments and documents contemplated hereby
have been duly executed and delivered by a duly
authorized officer on behalf of such party, and
constitutes a legal, valid and binding obligation of such
party enforceable against such party in accordance with
its terms, subject to bankruptcy, reorganization,
insolvency, moratorium and other similar laws affecting
the enforcement of creditors' rights generally and the
exercise of judicial discretion in accordance with general
principles of equity; and
(d) The execution, delivery and performance
of this Amendment, the Notes and the other instruments
and documents contemplated hereby will not violate any
law, statute or regulation, or any order or decree of any
court or governmental instrumentality, or conflict with,
or result in the breach of, or constitute a default under
any contractual obligation of such party.
SECTION 6.2 Nothing herein shall be deemed
to be a waiver of any covenant or agreement contained
in the Credit Agreement, and each Borrower and each
Guarantor hereby agrees that all of the covenants and
agreements contained in the Credit Agreement and the
other Loan Documents are hereby ratified and
confirmed in all respects and shall remain in full force
and effect in accordance with their respective terms,
SECTION 6.3 All references to the Credit
Agreement in the Credit Agreement or any other Loan
Document and the other documents and instruments
delivered pursuant to or in connection therewith shall
mean such Agreement as amended hereby and as each
may in the future be amended, restated, supplemented or
modified from time to time.
SECTION 6.4 This Amendment may be
executed by the parties hereto individually or in
combination, in one or more counterparts, each of which
shall be an original and all of which shall constitute one
and the same agreement.
SECTION 6.5 Delivery of an executed
counterpart of a signature page by telecopier shall be
effective as delivery of a manually executed counterpart.
SECTION 6.6 This Amendment shall be
governed by, and construed and interpreted in
accordance with, the laws of the State of New York.
SECTION 6.7 The parties hereto shall, at any
time and from time to time following the execution of
this Amendment, execute and deliver all such further
instruments and take all such further action as may be
reasonably necessary or appropriate in order to carry
out the provisions of this Amendment.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
SCHEDULE 2.01(a)
Commitments
Lender Commitment
Fleet Capital Corporation $8,333,333
60 East 42nd Street
New York, New York 10017
Attention. Mr. Thomas Maiale
Tel #: (212) 885-8826
Fax #: (212) 885-8829
Heller Financial, Inc. $5,833,333
101 Park Avenue
New York, New York 10178
Attention: Mr. Tom Bukowski
Tel #: (212) 880-7169
Fax #: (212) 880-7002
PNC Bank, National Association $2,666,667
2 PNC Plaza 18th Floor
620 Liberty Avenue
Pittsburgh, PA 15222
Attention: Mr. Richard Muse
Tel #: (412) 762-4471
Fax #: (412)762-4069
IBJ Schroder Business Credit Corp. $2,333,333
One State Street
New York, New York 10004
Attention: Mr. Jim Steffy
Tel #: (212) 858-2094
Fax#: (212)858-2151
National Bank of Canada, $2,166,667
a Canadian Chartered Bank
125 West 55th Street
New York, New York 10019
Attention: Mr. Torn Doss
Senior Vice President
Tel #: (212) 632-8560
Fax#: (212) 632-8564
Lender Commitment
Deutsche Financial Services $2,000,000
Corporation
2331 Waukegan Road
Bannuck Bunn. Illinois 60016
Attention: Mr. Charles Arkin
Fax #: (847) 948-1872
National City Dank $1,666,667
1900 East Ninth Street
Cleveland, Ohio 44114
Attention: Mr. Joseph D. Robison
Tel #: (216) 575-9254
Fax #: (216) 575-9396
Total Commitment $25,000,000
<PAGE>
EXHIBIT A
[DATE]
Fleet Capital Corporation
60 East 42nd Street
New York, NY 10017
Attn: Thomas Maiale
Gentlemen:
Reference is made to that certain Amendment
No.3 dated October ____, 1998 to the Amended and
Restated Revolving Credit Agreement dated as of
September 15, 1997 (as heretofore amended, and as
may be further amended, restated, modified or
supplemented from time to time, the "Credit
Agreement") among Jitney-Jungle Stores of America,
Inc., Southern Jitney Jungle Company, McCarty-
Holman Co., Inc., Jitney-Jungle Bakery. Inc., Pump and
Save, Inc.. Interstate Jitney Jungle Stores, Inc., and
Delchamps, Inc. (each a "Borrower" and collectively,
the "Borrowers"), the Guarantors named therein, the
Lenders named therein and Fleet Capital Corporation, as
Agent.
Capitalized terms used herein and not defined
shall have the respective meanings assigned to such
terms in the Credit Agreement.
[BANK] hereby agrees to increase its
Commitment as set forth on Schedule 2.01(a) to the
Credit Agreement by [___________________] making
its Commitment [________________].
[BANK]
By ____________________
Name:
Title:
Accepted and agreed this day of
FLEET CAPITAL CORPORATION, as Agent
By _________________________
Name:
Title:
<PAGE>
WAIVER AND CONSENT AGREEMENT
WAIVER AND CONSENT AGREEMENT
dated May 8, 1998 to the Amended and Restated
Revolving Credit Agreement dated as of September
15,1997 (as heretofore amended, and as may be further
amended, restated, modified or supplemented from time
to time, the "Credit Agreement") among Jitney-Jungle
Stores of America, Inc, ("Jutney Jungle"), Southern
Jitney Jungle Company, McCarty-Holman Co., Inc.,
Jitney-Jungle Bakery, Inc., Pump and Save, Inc.,
Interstate Jitney Jungle Stores. Inc., and Delchamps,
Inc., ("Delchamps") (each a "Borrower" and
collectively, the "Borrowers"), the guarantors named
therein, the lenders named therein (the "Lenders") and
Fleet Capital Corporation, as agent for the Lenders (the
"Agent"). Capitalized terms used herein and not defined
shall have the respective meanings assigned to such
terms in the Credit Agreement.
WHEREAS the Jitney-Jungle desires to execute
and deliver to A.I. Credit Corp.
("Credit Corp.") a Premium Finance Agreement and a
Disclosure Statement and Security Agreement, each
dated April 30,1998 (together, the "Agreements");
WHEREAS the Agent and the Lenders are
willing to consent to the execution and delivery of the
Agreements and to waive such provisions of the Credit
Agreement on the terms and conditions contained
herein;
NOW, THEREFORE, the Borrowers, the
Guarantors, the Lenders and the Agent hereby agree as
follows:
1. Consent. The Agent and the Lenders
hereby consent to the execution by Jitney-Jungle of the
Agreements.
2. Waiver. Pursuant to the terms, and
conditions contained herein, the Agent and the Lenders
hereby agree to the following:
2.1 to waive Section 7.01 of the Credit
Agreement only to the extent necessary to permit Jitney-
Jungle to grant liens in favor or Credit Corp. to secure
payment of amounts due under the Agreements;
2.2 to waive Section 7.03 to the Credit
Agreement only to the extent necessary to permit Jitney-
Jungle to incur, create, assume and permit to exist
Indebtedness to Credit Corp. incurred in connection
with the Agreements up to a maximum amount of
$16,500,000;
2.3 to waive Section 7.18(a) to the Credit
Agreement only to the extent necessary to allow Jitney-
Jungle, directly or indirectly, to prepay, redeem,
purchase, defease or retire in advance of its scheduled
maturity any Indebtedness under certain insurance
policies maintained with Aon Risk Services with respect
to the premiums payable under such policies, as
contemplated by the financing arrangements with Credit
Corp. pursuant to the Agreements.
3. Effective Date. This Agreement shall
become effective upon compliance with the conditions
set fort immediately below:
(a) The Agent shall have received an original
counterpart of this Waiver and Consent, duly executed
and delivered by the Borrowers, the Guarantors and the
Lenders.
(b) No Event or Event of Default shall have
occurred and there shall have been no material adverse
change in the business or financial condition of any of
the Borrowers.
5. Ratification. Except as expressly waived
herein, all terms and conditions of the Loan Agreement
and all other Loan Documents remain in full force and
effect. All collateral security and guarantees in
connection with the Loan Agreement and/or the Loan
Documents are hereby confirmed and ratified in all
respects.
6. Counterparts. This Waiver and Consent
may be executed in counterparts, each of which shall
constitute an original but all of which when taken
together shall constitute one contract, and shall become
effective when copies hereof which, when taken
together, bear the signatures of each of the parties
hereto shall be delivered to the Agent, Delivery of an
executed counterpart of a signature page to this Waiver
and Consent by telecopier shall be effective as delivery
of a manually executed signature page hereto.
7. Governing Law. THIS WAIVER AND CONSENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(OTHER THAN THE CONFLICTS OF LAWS PRINCIPLES THEREOF).
<PAGE>
IN WITNESS WHEREOF, the parties
have caused this Amendment Agreement to be
executed by their respective officers thereunto duly
authorized, as to the date first above written.
FLEET CAPITAL CORPORATION, as Agent
By: /s/ Thomas Maiale
Name: Thomas Maiale
Title: Vice President
FLEET CAPITAL CORPORATION, as Lender
By: /s/ Thomas Maiale
Name: Thomas Maiale
Title: Vice President
PNC BANK, NATIONAL ASSOCIATES, as Lender
By: /s/ Richard F. Muse, Jr.
Name: Richard F. Muse, Jr.
Title: Vice President
HELLER FINANCIAL INC., as Lender
By: /s/ Stephen M. Metivier
Name: Stephen M. Metivier
Title: Assistant Vice President
IBJ SCHRODER BUSINESS CREDIT CORP.,
as Lender
By: /s/ James M. Steffy
Name: James M. Steffy
Title: Vice President
<PAGE>
NATIONAL BANK OF CANADA, a Canadian
Chartered Bank, as Lender
By: /s/ J. Michael Smith
Name: J. Michael Smith
Title: Vice President
NATIONAL CITYBANK, as Lender
By: /s/ Joseph D. Robinson
Name: Joseph D. Robinson
Title: Vice President
DEUTSCHE FINANCIAL SERVICES HOLDING
CORPORATION, as Lender
By: /s/ Pamela D. Petrick
Name: Pamela D. Petrick
Title: Vice President
FLEET BANK, N.A., as a Letter of
Credit Issuer
By: /s/ Thomas Maiale
Name: Thomas Maiale
Title: Vice President
ACCEPTED AND AGREED
JITNEY-JUNGLE STORES OF AMERICA, INC.
SOUTHERN JITNEY JUNGLE COMPANY
McCARTY-HOLMAN CO., INC.
JITNEY-JUNGLE BAKERY, INC.,
PUMP AND SAVE, INC.,
INTERSTATE JITNEY JUNGLE STORES, INC.,
DELCHAMPS, INC.,
SUPERMARKET CIGARETTE SALES, INC.,
By: /s/R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
and General Counsel
<PAGE>
WAIVER AND CONSENT AGREEMENT
To
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
WAIVER AND CONSENT AGREEMENT,
dated September 2,1998, to the Amended and Restated
Revolving Credit Agreement dated as of September
15,1997 (as heretofore amended, and as may be further
amended, restated, modified or supplemented from time
to time, the "Credit Agreement") among Jitney-Jungle
Stores of Americia, Inc. ("Jitney Jungle"). Southern
Jitney Jungle Company, McCarty -Holman Co., Inc.,
Jitney-Jungle Bakery, Inc., Pump and Save. Inc.,
Interstate Jitney Jungle Stores. Inc., Delta Acquisition
Corporation and Delchamps, Inc. ("Delchamps") (each a
"Borrower" and collectively, the "Borrowers"), the
guarantors named therein, the lenders named therein
(the "Lenders") and Fleet Capital Corporation, as agent
for the Lenders (the "Agent"). Capitalized terms used
herein and not defined shall have the respective
meanings assigned to such terms in the Credit
Agreement.
WHEREAS, Jitney Jungle intends to trade in its
Cessna model 550 aircraft with manufacturer's serial
number 550-0567 and United States nationality and
registration marks N4IBH (the "Airframe") and the
Pratt & Whitney aircraft engines with manufacturer's
serial numbers PCE 711463 and PCE 71462 (together
with the Airframe, the "Existing Plane") and to apply
the proceeds received from such trade-in to the cost of
its acquisition of the Cessna Citation Ultra model 560
aircraft with manufacturer's serial number 560-0430
specified by United States nationality and registration
Number N71JJ (the "New Airframe") and Pratt &
Whitney aircraft engines with manufacturer's serial
numbers PCE -JC0450 (together with the New
Airframe, the ("New Plane");
WHEREAS, Jitney Jungle desires to sell (the
"East Fortification Street Sale") certain subdivision lots
located in Jackson, Mississippi (the "Parcel") as more
fully described in the Agreement of Sale and Purchase,
dated on or about August 31, 1998, attached hereto as
Exhibit A (the "East Fortification Street Agreement"),
among Jitney Jungle and McCarty Holman Company, a
Mississippi limited partnership.
WHEREAS, the Borrowers have requested that
the Agent and the Lenders agree to waive certain
provisions in the Credit Agreement arising from the
trade-in of the Existing Plane, the purchase of the New
Plane and the East Fortification Street Sale;
WHEREAS, the Agent and the Lenders are
willing to consent to such waivers on the terms and
conditions contained herein;
NOW, THEREFORE, the Borrowers, the
Guarantors, the Lenders and the Agent hereby agree as
follows:
SECTION 1. WAIVER AND CONSENT
(AIRCRAFT), Pursuant to the terms and conditions
contained herein, the Agent and the Lenders hereby
agree to the following:
SECTION 1.1. The Agent and the Lenders
agree to release their lien on the Existing Plane and that
the US$2,400,000 credit to be received by Jitney Jungle
for the trade-in of the Exiting Plane (the "Trade-In
Proceeds") to be applied towards the purchase of the
New Plane pursuant to the Trade-In Quotation
Agreement, dated October 22, 1997 between Citation
Marketing and Jitney Jungle, shall not be subject to the
provisions of Section 2.09(d)(i) of the Credit Agreement
with respect to the application of proceeds of an Asset
Sale,
SECTION 1.2. The Agent and the Lenders
agree that the provision of Section
2.07(b)(ii) of the Credit Agreement with respect to the
mandatory permanent reduction of
the Total Commitment and Supplemental Availability
shall not be applicable to the Trade-In Proceeds.
SECTION 1.3. The Agent and the Lenders
agree to waive Section 7.01 of the Credit Agreement as
it applies to the lien on the New Plane created under
each of the Loan and Aircraft Security Agreement
between Jitney Jungle and Fleet Capital Corporation
(the "Aircraft Loan Agreement") and the promissory
note, executed by Jitney Jungle and payable to Fleet
Capital Corporation (in such capacity, the "Aircraft
Lender"), in connection therewith (the "Aircraft Note");
provided, however that if the Agent has not received the
proceeds from the Aircraft Loan by September 30,
1998, the waiver contained in this Section 1,3 shall,
cease to be effective until such time that the Agent has
received such proceeds.
SECTION 1.4. The Agent and the Lenders
agree to waive Section 7.03 of the
Credit Agreement as it applies to each of the Aircraft
Loan Agreement and the Aircraft
Note; provided, however, that Jitney Jungle hereby
agrees to deliver all proceeds from
the Aircraft Loan to the Agent.
SECTION 2. WAIVER AND CONSENT
(EAST FORTIFICATION STREET SALE)
SECTION 2.1. The Agent and the Lenders
hereby agree to release their lien on the Parcel and
consent to the East Fortification Street Sales described
above and pursuant to the East Fortification Street Sale
Agreement; provided, however, that the Net Cash
Proceeds received by Jitney Jungle in connection with
the East Fortification Street Sale shall be used to prepay
the Loans pursuant to Section 2.09(d)(i) of the Credit
Agreement.
SECTION 2.2. The Agent and the Lenders
hereby agree that the provision of
Section 2.07(b)(ii) of the Credit Agreement with respect
to the mandatory permanent
reduction of the Total Commitment and Supplemental
Availability shall not be applicable
to the Net Cash Proceeds received by Jitney Jungle in
connection with the East
Fortification Street Sale.
SECTION 3 EFFECTIVE DATE. This
Agreement shall become effective upon compliance with
the conditions set forth immediately below:
SECTION 3.1. The Agent shall have received
an original counterpart of this Waiver and Consent, duly
executed and delivered by the Borrowers, the
Guarantors and the Lenders.
SECTION 3.2. The Agent shall have received
a copy of the executed East Fortification Street Sale
Agreement.
SECTION 3.3. No Default or Event of Default
shall have occurred and be continuing and there shall
have been no material adverse change in the business or
financial condition of any of the Borrowers.
SECTION 3.4. All representations and
warranties contained in this Waiver and Consent or
otherwise made in writing to the Agent in connection
herewith shall be true and correct in all material
respects.
SECTION 3.5. Messrs. Kaye, Scholer,
Fierman, Hays & Handler, LLP, counsel to the Agent,
shall have received payment in full for all legal fees
charged, and all costs and expenses incurred, by such
counsel in connection with the transaction contemplated
under this Waiver and Consent and the other Loan
Documents and instruments in connection herewith and
therewith.
SECTION 4. MISCELLANEOUS
SECTION 4.1. Each of the Borrowers and
each Guarantor reaffirms and restates the
representations and warranties set forth in Article IV of
the Credit Agreement, and all such representations and
warranties shall be true and correct on the date hereof
with the same force and effect as if made on such date
(except insofar as such representation and warranties
relate expressly to an earlier date). Each of the
Borrowers and each Guarantor represents and warrants
(which representations and warranties shall survive the
execution and delivery hereof) to the Agent that:
SECTION 4.2. No consent of any other person
(including, without limitation, shareholders or creditors
of any Borrower or a Guarantor), and no action of, or
filing with any governmental or public body or authority
is required to authorize, or is otherwise required in
connection with the execution, delivery and performance
of this Waiver and Consent;
SECTION 4.3. This Waiver and Consent and
the other instruments and documents contemplated
hereby have been duly executed and delivered by a duly
authorized officer on behalf of such party, and
constitutes a legal, valid and binding obligation of such
party Enforceable against such party in accordance with its
terms, subject to bankruptcy, reorganization, insolvency,
moratorium and other similar laws affecting the
enforcement of creditors' rights generally and the
exercise of judicial discretion in accordance with general
principles of equity; and
SECTION 4.4. The execution, delivery and
performance of this Waiver and Consent and the other
instruments and documents contemplated hereby will
not violate any law, statute or regulation, or any order
or decree of any court or governmental instrumentality,
or conflict with, or result in the breach of; or constitute
the default under any contractual obligation of such party.
SECTION 5. RATIFICATION. Except as
expressly waived herein, all terms and conditions of the
Credit Agreement and all other Loan Documents remain
in full force and effect. All collateral security and
guarantees in connection with the Credit Agreement
and/or the Loan Documents are hereby confirmed and
ratified in all respects.
SECTION 6. COUNTERPARTS. This Waiver
and Consent may be executed in counterparts, each of
which shall constitute an original but all of which when
taken together shall constitute one contract, and shall
become effective when copies hereof which, when taken
together, bear the signatures of each of the parties
hereto shall be delivered to the Agent. Delivery of an
executed counterpart of a signature page to this Waiver
and Consent by telecopier shall be effective as delivery
of a manually executed signature page hereto.
SECTION 7. GOVERNING LAW. THIS WAIVER AND CONSENT
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERRPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (OTHER
THAN THE CONFLICTS OF LAWS PRINCIPLES THEREOF).
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the parties
have caused this Amendment Agreement to be
executed by their respective officers thereunto duly
authorized, as to the date first above written.
JITNEY-JUNGLE STORES OF AMERICA, INC.,
as Borrower and as Guarantor
By: /s/ R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
General Counsel
SOUTHERN JITNEY JUNGLE COMPANY,
as Borrower and Guarantor
By: /s/ R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
General Counsel
McCARTY-HOLMAN CO., INC.,
as Borrower and Guarantor
By: /s/ R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
General Counsel
JITNEY-JUNGLE BAKERY, INC.,
as Borrower and Guarantor
By: /s/ R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
General Counsel
<PAGE>
PUMP AND SAVE, INC.,
as Borrower and as Guarantor
By: /s/ R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
General Counsel
INTERSTATE JITNEY JUNGLE STORES, INC.,
as Borrower and Guarantor
By: /s/ R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
General Counsel
DELCHAMPS, INC.,
as Borrower and Guarantor
By: /s/ R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
General Counsel
JJ CONSTRUCTION CORP.
By: /s/ R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
General Counsel
SUPERMARKET CIGARETTE SALES, INC.,
as Guarantor
By: /s/ R. Barry Cannada
Name: R. Barry Cannada
Title: Executive Vice President
General Counsel
<PAGE>
FLEET CAPITAL CORPORATION, as Agent
By: /s/ Thomas E. Joyce
Name: Thomas E. Joyce
Title: Vice President
FLEET CAPITAL CORPORATION, as Lender
By: /s/ Thomas E. Joyce
Name: Thomas E. Joyce
Title: Vice President
PNC BANK, NATIONAL ASSOCIATES, as Lender
By: /s/ Richard F. Muse, Jr.
Name: Richard F. Muse, Jr.
Title: Vice President
HELLER FINANCIAL INC., as Lender
By: /s/ Thomas W. Bukowski
Name: Thomas W. Bukowski
Title: Senior Vice President
IBJ SCHRODER BUSINESS CREDIT CORP.,
as Lender
By: /s/ James M. Steffy
Name: James M. Steffy
Title: Vice President
<PAGE>
NATIONAL BANK OF CANADA, a Canadian
Chartered Bank, as Lender
By: /s/ Ed Simpson
Name: Ed Simpson
Title: Vice President
By: /s/ Bill Fay
Name: Bill Fay
Title: Vice President
NATIONAL CITYBANK, as Lender
By: /s/ Joseph D. Robinson
Name: Joseph D. Robinson
Title: Vice President
DEUTSCHE FINANCIAL SERVICES HOLDING
CORPORATION, as Lender
By: /s/ Pamela D. Petrick
Name: Pamela D. Petrick
Title: Vice President
FLEET BANK, N.A., as a Letter of
Credit Issuer
By: /s/ Thomas E. Joyce
Name: Thomas E. Joyce
Title: Senior Vice President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JAN-02-1999
<PERIOD-END> JAN-04-1998
<CASH> 8,494
<SECURITIES> 0
<RECEIVABLES> 19,652
<ALLOWANCES> 0
<INVENTORY> 159,849
<CURRENT-ASSETS> 226,384
<PP&E> 647,558
<DEPRECIATION> 360,980
<TOTAL-ASSETS> 698,707
<CURRENT-LIABILITIES> 205,995
<BONDS> 0
68,865
9,695
<COMMON> 4
<OTHER-SE> (191,306)
<TOTAL-LIABILITY-AND-EQUITY> 698,527
<SALES> 1,432,963
<TOTAL-REVENUES> 1,432,963
<CGS> 1,058,083
<TOTAL-COSTS> 1,395,910
<OTHER-EXPENSES> 544
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 48,273
<INCOME-PRETAX> (11,764)
<INCOME-TAX> (3,880)
<INCOME-CONTINUING> (7,884)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,884)
<EPS-PRIMARY> (33.43)
<EPS-DILUTED> (33.43)
</TABLE>
