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 June 19, 1999 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 August 3, 1999, was 425,080
shares.
CAUTIONARY NOTICE
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: deterioration in economic conditions
generally or in the Company's markets, unusual or unanticipated costs
or consequences relating to, or changes in any acquisition and/or
divestiture 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, relationships with its major suppliers,
restrictions and costs associated with the Company's leveraged capital
structure and limitations imposed by its debt agreements, 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.
<PAGE>
JITNEY-JUNGLE STORES OF AMERICA, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page
<S> <C>
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets
June 19, 1999 (Unaudited) and January 2, 1999 2
Condensed Consolidated Statements of Operations
Twenty-four (24) and Twelve (12) Week Periods Ended
June 19, 1999 (Unaudited) and
June 20, 1998 (Unaudited) 3
Condensed Consolidated Statements of Changes in
Stockholders' Deficit for the Twenty-four (24)
Week Periods Ended June 19, 1999 (Unaudited) and
June 20, 1998 (Unaudited) 4
Condensed Consolidated Statements of Cash Flows
Twenty-four (24) Week Period Ended
June 19, 1999 (Unaudited) and
June 20, 1998 (Unaudited) 5
Notes to Condensed Consolidated Financial Statements
June 19, 1999 (Unaudited) and
June 20, 1998 (Unaudited) 6-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-13
PART II.OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 2. Change in Securities 14
Item 3. Defaults Upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
</TABLE>
<PAGE>
PART I. ITEM 1. FINANCIAL STATEMENTS
JITNEY-JUNGLE STORES OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
June 19, January 2,
1999 1999
(Unaudited)
ASSETS ----------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 9,971 $ 18,041
Receivables 17,140 28,197
Refundable income taxes 1,785 16,862
Merchandise inventories 170,227 166,774
Prepaid expenses and other 4,410 5,655
---------- ----------
Total current assets 203,533 235,529
---------- ----------
PROPERTY AND EQUIPMENT - net 302,355 297,454
---------- ----------
Other assets:
Goodwill, net of amortization of $5,755
at June 19, 1999 and $4,250 at
January 2, 1999 129,699 131,206
Other assets - net 25,081 26,957
---------- ----------
Total other assets 154,780 158,163
---------- ----------
TOTAL ASSETS $ 660,668 $ 691,146
========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 101,213 $ 138,087
Accrued expenses 63,970 69,995
Current portion of capitalized leases 7,393 5,789
Restructuring obligations 5,850 10,880
---------- ----------
Total current liabilities 178,426 224,751
Noncurrent liabilities:
Long-term debt 545,740 517,071
Obligations under capitalized leases,
excluding 70,298 62,935
Restructuring obligations, excluding
current installments 24,962 21,407
---------- ----------
Total liabilities 819,426 826,164
Commitments and contingencies
Redeemable Preferred stock (aggregate liquidation
preference value of $77,439 at June 19, 1999
and $73,279 at January 2, 1999) 75,708 71,452
Stockholders' deficit:
Class C Preferred stock - Series 1(at
liquidation value) 10,433 9,973
Common stock ($.01 par value, authorized
5,000,000 shares, issued and outstanding
425,080 and 425,280 shares, respectively) 4 4
Additional paid-in capital (302,305) (302,305)
Retained earnings 57,402 85,858
---------- ----------
(234,466) (206,470)
---------- ----------
Total stockholders' deficit (234,466) (206,470)
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 660,668 $ 691,146
========= =========
See notes to condensed consolidated financial statements.
</TABLE>
2
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JITNEY-JUNGLE STORES OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Twenty-four Weeks Ended Twelve Weeks Ended
June 19, June 20, June 19, June 20,
1999 1998 1999 1998
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------ ------------ ------------ ------------
NET SALES $ 920,838 $ 958,592 $ 460,847 $ 484,383
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
COSTS AND EXPENSES:
Cost of goods sold 679,011 716,364 340,984 358,242
Direct store expenses 186,420 190,032 92,925 95,809
Warehouse, administrative
and general expenses 42,407 36,468 21,140 18,347
Interest expense - net 34,313 32,769 17,213 17,546
Acquisition integration
costs and other
special charges 2,413 16,838 2,413 2,842
------------ ------------ ------------ ------------
Total costs and
expenses 944,564 992,471 474,675 492,786
------------ ------------ ------------ ------------
Loss before taxes on income (23,726) (33,879) (13,828) (8,403)
Income tax benefit (11,639) (2,488)
------------ ------------ ------------ ------------
NET LOSS $ (23,726) $ (22,240) $ (13,828) $ (5,915)
============ ============ ============ ============
LOSS PER COMMON SHARE
$ (66.93) $ (62.72) $ (38.16) $ (19.06)
============ ============ ============ ============
LOSS PER COMMON
SHARE-DILUTED $ (66.93) $ (62.72) $ (38.16) $ (19.06)
============ ============ ============ ============
See notes to condensed consolidated financial statements.
</TABLE>
3
<PAGE>
JITNEY-JUNGLE STORES OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR THE TWENTY-FOUR (24) WEEK PERIODS ENDED JUNE 19, 1999 (Unaudited)
AND JUNE 20, 1998 (Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Class C
Preferred Stock,
Series 1 Common Stock Additional
No. of No. of Paid-In Retained
Shares Amount Shares Amount Capital Earnings
------ ------ ------ ------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balance January 3, 1998 76,042 $ 9,071 425,000 $ 4 $ (302,326) $ 125,351
Net loss (22,240)
Accretion of discount on Class A
Preferred stock (96)
Cumulation of dividends on
Preferred stock 416 (4,202)
------ ------ ------- ------ -------- --------
Balance June 20, 1998 76,042 $ 9,487 425,000 $ 4 $ (302,326) $ 98,813
====== ====== ======= ====== ======== ========
Balance, January 2, 1999 76,042 $ 9,973 425,280 $ 4 $ (302,305) $ 85,858
Net loss (23,726)
Retirement of 200 shares of
common stock (200)
Accretion of discount on Class A
Preferred stock (96)
Cumulation of dividends on
Preferred stock 460 (4,634)
------ ------ ------- ------ -------- --------
Balance, June 19, 1999 76,042 $10,433 425,080 $ 4 $ (302,305) $ 57,402
====== ====== ======= ====== ======== ========
See notes to condensed consolidated financial statements.
</TABLE>
4
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JITNEY-JUNGLE STORES OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Twenty-four Weeks Ended
June 19, June 20,
1999 1998
OPERATING ACTIVITIES: ------- -------
<S> <C> <C>
Net loss $(23,726) $(22,240)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 28,461 26,196
Amortization of deferred loan costs 1,580 1,292
Loss (gain) on disposition and write-down
of property and other assets 2,063 (39)
Deferred income tax benefit (8,188)
Decrease in restructuring obligation (2,299) (3,811)
Changes in current assets and liabilities:
Notes and accounts receivables 11,057 3,258
Refundable income taxes 15,077
Store and warehouse inventories (3,453) 11,856
Prepaid expenses 1,245 (8,356)
Accounts payable (36,875) (9,757)
Accrued expenses and other (5,753) 2,355
------- -------
Net cash used in operating
activities (12,623) (7,434)
------- -------
INVESTING ACTIVITIES:
Capital expenditures (19,916) (16,453)
Proceeds from sale of property and other assets 7,573
Direct acquisition costs (4,487)
Payment to former shareholders of Delchamps, Inc. (18,805)
Change in other assets (1,274) 2,391
------- -------
Net cash used in investing
activities (21,190) (29,781)
------- --------
FINANCING ACTIVITIES:
Proceeds on long-term debt - net 28,669 38,686
Payments on capitalized lease obligations (2,912) (2,449)
Other (14) (1,007)
------- -------
Net cash provided by
financing activities 25,743 35,230
------- -------
DECREASE IN CASH AND CASH EQUIVALENTS (8,070) (1,985)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 18,041 11,984
------- -------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 9,971 $ 9,999
======= =======
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest $ 35,786 $ 30,886
======= =======
Cash paid for income taxes, net of refunds $(15,077) $ 38
======= =======
Noncash investing and financing activities:
Capital lease obligations incurred $ 11,879 $ 0
======= =======
See notes to condensed consolidated financial statements.
</TABLE>
5
<PAGE>
JITNEY-JUNGLE STORES OF AMERICA, INC. AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 19, 1999 (Unaudited) AND JUNE 20, 1998 (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.
The condensed consolidated financial statements presented herein
have been prepared in accordance with the instructions to Form 10-Q
and do not include all of the information and note disclosures
required by generally accepted accounting principles. These
statements should be read in conjunction with the Form 10-K filed
by the Company for fiscal year ended January 2, 1999. The
accompanying condensed financial statements have not been audited
by independent accountants in accordance with generally accepted
auditing standards, but in the opinion of management such
condensed financial statements include all adjustments, consisting
only of normal recurring adjustments, necessary to summarize fairly
the Company's financial position and results of operations. The
results of operations of the Company for the twenty-four weeks
ended June 19, 1999, are not necessarily indicative of the results
which may be expected for the entire year.
2. ACQUISITION INTEGRATION COSTS AND OTHER SPECIAL CHARGES
The Company incurred significant costs during the year ended
January 2, 1999 as a result of integrating the Delchamps and
Jitney-Jungle operations. Certain of these costs (principally
related to store closures) were allocated to goodwill. However,
other costs attributable to the Delchamps acquisition, including
costs incurred in consolidating warehouse operations,
remerchandising of Delchamps stores, and training of
Delchamps employees have been expensed as acquisition
integration costs in accordance with the guidelines set forth in
EITF 95-3 ("Recognition of Liabilities in Connection with a
Purchase Business Combination").
Acquisition integration costs and other special charges recorded
during the twelve weeks and twenty-four weeks ended June 19,
1999 consisted of $2,063 related to the write-down of assets
associated with three stores closed during the second quarter and
$350 related to legal costs incurred on an expired financing
agreement. Acquisition integration costs and other special
charges consisting of $250 of severance benefits, $294 of loss
on stores sold under the consent decree with the Federal Trade
Commission in the Delchamps acquisition and $16,294 of
business integration costs related to Delchamps were recorded
during the twenty-four week period ended June 20, 1998.
During the twelve week period ended June 20, 1998, $2,842 of
business integration costs related to Delchamps were recorded.
3. LONG-TERM DEBT
Long-term debt consisted of the following:
6
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<TABLE>
<CAPTION>
June 19, January 2,
1999 1999
--------- ---------
<S> <C> <C>
Senior notes at 12%, maturing in 2006 $ 200,000 $ 200,000
Senior subordinated notes at 10.38%, 200,000 200,000
maturing in 2007
Senior Credit Facility 141,618 112,950
Other long- term debt 4,122 4,121
--------- ---------
Long-term debt $ 545,740 $ 517,071
========= =========
</TABLE>
The Company had available a Senior Credit Facility of $162.3
million under which letters of credit aggregating $5.8 million were
outstanding at June 19, 1999.
On July 26, 1999, the Company entered into a supplemental $50
million credit facility (the "New Facility") with a new lender and
reduced the Senior Credit Facility to $150.0 million. The New
Facility, which will be used to finance the acquisition of tangible
assets including inventory, is secured by a second lien on
substantially all of the Company's assets.
4. LOSS PER COMMON AND COMMON EQUIVALENT SHARE
Loss per common and common equivalent share is based on the 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 $2,349 and $4,635 for the twelve weeks and
twenty-four weeks ended June 19, 1999. Cumulative dividends not
declared or paid on preferred shares amounted to $2,101 and $4,202
for the twelve weeks and twenty-four weeks ended June 20, 1998.
The number of shares used in computing the loss per share was
425,129 and 425,182 for the twelve weeks and twenty- four weeks
ended June 19, 1999, respectively, and 423,300 for the twelve
weeks and twenty-four weeks ended June 20, 1998. Potential
common shares attributed to outstanding warrants were not included
in the computation as their effect on the loss per share would be
antidilutive.
5. COMMITMENTS AND CONTINGENCIES
The Company is a party to certain litigation incurred in the 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. A discussion of certain litigation which remains
outstanding may be found in Item 3. Legal Proceedings and Legal
Matters in the January 2, 1999 Form 10-K.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands)
7
<PAGE>
The following is management's discussion and analysis of significant
factors affecting the Company's earnings and liquidity during the
periods included in the accompanying condensed consolidated
statements of operations. This discussion and analysis should be read in
conjunction with the condensed consolidated financial statements
included in Item 1.
A table showing the percentage of net sales represented by certain items
in the Company's condensed consolidated statements of operations is as
follows:
<TABLE>
<CAPTION>
Twenty-four Weeks Ended Twelve Weeks Ended
June 19, June 20, June 19, June 20,
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales 100.0 % 100.0 % 100.0 % 100.0 %
Gross profit 26.3 25.3 26.0 26.0
Direct store expenses 20.2 19.8 20.2 19.8
Warehouse, administrative
and general expenses 4.6 3.8 4.6 3.7
Operating income 1.5 1.7 1.2 2.5
Interest expense, net 3.7 3.4 3.7 3.6
Acquisition integration costs
and other special charges 0.3 1.8 0.5 0.6
Loss before income taxes (2.5) (3.5) (3.0) (1.7)
Income tax benefit 0.0 (1.2) 0.0 0.5
Net loss (2.5) (2.3) (3.0) (1.2)
EBITDA 4.5 4.4 4.3 5.1
</TABLE>
A summary of the period to period changes in certain items included in
the condensed consolidated statements of operations for the twenty-four
week and twelve week periods ended June 19, 1999 and June 20, 1998
is as follows:
8
<PAGE>
<TABLE>
<CAPTION>
Period-to-Period Changes Period-to-Period Changes
Twenty-four Weeks Ended Twelve Weeks Ended
June 19, 1999 June 19, 1999
$ % $ %
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $(37,754) (3.9)% $(23,536) (4.9)%
Gross profit (401) (0.2) (6,278) (5.0)
Direct store expenses (3,612) (3.3) (2,884) (5.7)
Warehouse, administrative
and general expenses 5,939 23.4 2,793 29.4
Operating income (2,728) n/m (6,187) n/m
Interest expense, net 1,544 4.7 (333) (1.9)
Acquisition integration and other
special charges (14,425) n/m (429) n/m
Loss before income taxes 10,153 n/m (5,425) n/m
Income tax benefit 11,639 n/m 2,488 n/m
Net loss (1,486) n/m (7,913) n/m
EBITDA (464) (1.1) (4,692) (19.0)
(n/m - not meaningful comparison)
</TABLE>
RESULTS OF OPERATIONS
NET SALES
Net sales decreased $23,536 or 4.9% in the twelve week period and
$37,754 or 3.9% in the twenty-four week period ended June 19, 1999
compared to the corresponding period ended June 20, 1998. The net
sales decrease was primarily attributable to closing 23 stores (17 of
which were closed during the first quarter of the prior year in connection
with the Delchamps acquisition including 10 stores which were required
to be sold by the Federal Trade Commission); 33 new competitive
openings over the past four quarters, 9 and 16 of which occurred during
the twelve and twenty-four weeks ended June 19, 1999, respectively;
low overall price inflation; and pricing and promotional changes
by certain competitors over the last year. Partially offsetting
these factors were the impact of opening 2 new "Premier" stores,
remodeling 6 stores during the current fiscal year, and
additional promotional activities during the twenty-four weeks ended
June 19,1999. Same store sales decreased approximately 5.0% and
2.7% for the twelve week and twenty-four week period ended June 19,
1999, respectively. The second quarter marked the anniversary of the
Delchamps Gold Card marketing launch which generated significant sales
gains for the Delchamps stores in fiscal year 1998. The Company's store
count at the end of the quarter was 196 supermarkets (75 combination
stores, including 23 Premiers, 106 conventional stores and 15 discount
stores) and 55 gasoline stations compared to 198 supermarkets and 53
gasoline stations at June 20, 1998.
GROSS PROFIT
Gross profit for the second quarter of fiscal 1999 decreased $6,278 to
$119,863, or 26.0% of net sales, compared to $126,141, or 26.0% of net
sales, for the second quarter of fiscal 1998. Gross profit as a percentage
of sales was 26.3% for the twenty-four week period ended June 19,
1999 as compared to 25.3% for the twenty four week period ended June
20, 1998. Gross margin for the second quarter of 1999 remained
consistent with gross margins achieved during the second quarter of
1998. Gross margin improvements achieved during the twenty-four
weeks ended June 19, 1999 were attributable to improved procurement
costs as a result of the Delchamps acquisition, partially offset by the
increased promotional activities, competitive influences and low
inflation discussed above.
9
<PAGE>
DIRECT STORE EXPENSES
Direct store expenses were $92,925, or 20.2%, and $95,809, or 19.8%
of net sales, and $186,420, or 20.2% and $190,032, or 19.8% of net
sales, for the twelve week period and twenty-four week period ended
June 19, 1999 and June 20, 1998, respectively. Direct store expenses
decreased primarily as a result of lower payroll and fringe benefit costs
associated with a decline in sales. Additionally, the Company
experienced an improvement in store utilities due a milder summer than
the prior year and an improvement in insurance costs. These
improvements were offset by an increase in store advertising costs. This
increase in advertising primarily caused the increase in direct store
expenses as a percentage of net sales.
WAREHOUSE, ADMINISTRATIVE AND GENERAL EXPENSES
Warehouse, administrative and general expenses were $21,140, or 4.6%
and $18,347, or 3.7% of net sales, and $42,407, or 4.6% and $36,468,
or 3.8% of net sales, for the twelve week period and twenty-four week
period ended June 19, 1999 and June 20, 1998, respectively.
Warehouse, administrative and general expenses increased primarily
due to increased costs associated with warehouse labor expense, the
employer portion of group medical expense, relocation expense,
litigation settlements and increased depreciation due to additional
capital expenditures placed in service during fiscal year 1998 and the
beginning of 1999.
ACQUISITION INTEGRATION CHARGES AND OTHER SPECIAL CHARGES
The Company incurred significant costs during the year ended
January 2, 1999 as a result of integrating the Delchamps and Jitney-
Jungle operations. Certain of these costs (principally related to store
closures) were allocated to goodwill. However, other costs
attributable to the Delchamps acquisition, including costs incurred in
consolidating warehouse operations, remerchandising of Delchamps
stores, and training of Delchamps employees have been expensed as
acquisition integration costs in accordance with the guidelines set
forth in EITF 95-3 ("Recognition of Liabilities in Connection with a
Purchase Business Combination").
Acquisition integration costs and other special charges recorded
during the twelve weeks ended June 19, 1999 consisted of $2,063
related to the write-down of assets associated with three stores closed
during the second quarter and of $350 related to legal costs incurred
on an expired financing agreement. Acquisition integration costs and
other special charges consisting of $250 of severance benefits, $294
of loss on stores sold under the consent decree with the Federal Trade
Commission in the Delchamps acquisition and $16,294 of business
integration costs related to Delchamps were recorded during the
twenty-four week period ended June 20,1998. During the twelve
week period ended June 20, 1998, $2,842 of business integration
costs related to Delchamps were recorded.
OPERATING INCOME
Operating income was $5,798, or 1.2% and $11,985, or 2.5% of net
sales, and $12,999, or 1.5% and $15,728 or 1.7% of net sales, for the
twelve week and twenty-four week period ended June 19, 1999
compared to the twelve week and twenty-four week period ended June
20, 1998. The decrease in operating income was due to the factors
discussed above.
EBITDA
EBITDA (net income before interest income, special charges, interest
expense, income taxes, depreciation and amortization and LIFO
charges/credits) decreased $4,692 or 19.0% to $20,016 or 4.3% of net
sales in the second quarter of fiscal 1999 as compared to $24,708 or
5.1% of net sales in the second quarter of fiscal 1998. EBITDA
10
<PAGE>
decreased $464 or 1.1% to $41,460 or 4.5% of net sales for the twenty-
four week period ended June 19, 1999 as compared to $41,924 or 4.4%
of net sales for the twenty-four week period ended June 20, 1998.
EBITDA decreased primarily due to a reduction in sales coupled with
an increase in warehouse, general and administrative expenses.
EBITDA as presented is consistent with the definition used for covenant
purposes contained in the Indenture. 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.
NET INTEREST EXPENSE
Interest expense was $17,213 in the second quarter of fiscal 1999
compared to $17,546 in the second quarter of fiscal 1998 and was
$34,313 and $32,769 for the twenty-four week periods ended June 19,
1999 and June 20, 1998, respectively. The increase in interest expense
for the twenty-four week period ended June 19, 1999 was primarily due
to interest expense on the credit facility and capital leases.
INCOME TAX BENEFIT
The Company has not recorded an income tax benefit relating to
operating losses in 1999 since the Company's operating losses can no
longer be carried back and offset against earnings in earlier periods.
The Company has a net operating loss carryforward of approximately
$54,611 at June 19, 1999. Income taxes were ($2,488) and ($11,639)
with an effective tax rate of 29.6% and 34.4% for the twelve week and
twenty-four week periods ended June 20, 1998. The difference in rates
compared to the federal and statutory rate of 37.3% for the twelve and
twenty-four weeks ended June 20, 1998 occurred primarily because
goodwill related to the Delchamps acquisition is deductible for financial
reporting purposes but not for income tax purposes.
LIQUIDITY AND CAPITAL RESOURCES
Historically, the Company has funded its working capital requirements,
capital expenditures and other needs principally from operating cash
flows. Due to the merger and acquisition of Delchamps, however, the
Company has become highly leveraged and has certain restrictions on
its operations. At June 19, 1999, Jitney-Jungle had $654,243
of total long-term commitments (including long-term debt, capitalized
leases and restructuring obligations) and a shareholders deficit of
$234,466.
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 June 19, 1999 were $141,618 under
the Senior Credit Facility.
Cash used in operating activities was $12,623 and $7,434 during the
twenty-four week period ended June 19, 1999 and June 20, 1998,
respectively. The increase in the cash used in operating activities was
primarily attributable to reduced accounts payable and increased
inventory levels (new and remodeled stores), partially offset by the
collection of income tax refunds, notes and accounts receivable.
Net cash used in investing activities was $21,190 and $29,781 for the
twenty-four week period ended June 19, 1999 and June 20, 1998,
respectively. Two new stores and six remodels were completed during
the twenty-four week period ended June 19,1999. Cash used in
investing activities included amounts associated with the purchase of
Delchamps, Inc. in the prior year.
11
<PAGE>
Net cash provided by financing activities was $25,743 and $35,230 for
the twenty-four week period ended June 19, 1999 and June 20, 1998,
respectively. The principal sources of funds in financing activities for
both periods were borrowings under the Senior Credit Facility.
In order for the Company to grow and achieve its long-term operating
objectives, it requires sufficient capital resources to build new stores and
remodel existing stores in its highly competitive markets. In addition,
the Company must maintain its existing facilities, and requires the
financial flexibility both to take advantage of inventory acquisition
opportunities and to withstand short-term economic and competitive
pressures. The Company's capital expenditure program for the
remainder of 1999 is subject to various factors including, but not limited
to, availability of capital, restrictions under various of the Company's
debt instruments, and working capital requirements. In the near term, if
the Company were to significantly reduce or postpone its new store and
remodel program, there would be no substantial impact on current
operations and it is likely that more cash would be available for debt
servicing. In the long term, if these programs were substantially
reduced, in the Company's opinion, its operating business and
ultimately its cash flow would be adversely impacted.
To enable the Company to acquire tangible assets including inventory,
on July 26, 1999, the Company entered into a new $50 million credit
facility which is secured by a second lien on substantially all of the
Company's assets. The company believes that the New Facility will
enable the Company to meet all of its tangible asset needs and provide
additional liquidity.
An important factor in the Company's liquidity is its relationship with
its trade suppliers. Although the Company recently experienced some
decline in its trade terms, management believes that the Company's
credit terms with its major suppliers are consistent in the aggregate with
those terms offered throughout the industry. Management anticipates
that it will recover some of the more favorable trade terms it recently
lost and thereafter management does not expect that there will be any
significant change in the aggregate in credit terms with its major
suppliers in the future. However, if credit is curtailed, the Company's
liquidity would decrease.
The Company's expenditures to comply with environmental laws and
regulations at its grocery stores primarily consist of those related to
remediation of underground storage tank leaks and spills and retrofitting
chlorofluorocarbon ("CFC") chiller units. The Company's unreimbursed
cost for remediation at the 16 facilities which have had leaks or spills
has not been material. All significant required expenditures in
connection with the cleanup of such leaks and spills have been made at
such locations except at one location which is undergoing remediation
and four locations which are being monitored only. In addition, the
Company has obtained insurance coverage for bodily injury, property
damage and corrective action expenses resulting from releases of
petroleum products from underground storage tanks during the covered
period at all 58 locations. The Company spent $5,000, $5,000,
$170,000, $130,000, $914,000 and $468,000 for retrofitting CFC-
containing chiller units during the second quarter of 1999, first quarter
of 1999, fiscal 1998, 1997 stub, fiscal 1997 and fiscal 1996,
respectively. Between approximately $175,000 and $200,000 in total
expenditures are contemplated for retrofitting the CFC units in fiscal
1999. All expenditures necessary to upgrade all Pump and Save tanks
to comply with 1998 tank standards were completed in fiscal 1998.
These regulatory compliance costs are not covered by insurance.
INFLATION
The Company's primary costs, inventory and labor, are affected by
a number of factors that are beyond its control, including
availability and price of merchandise, the competitive climate and
general and regional economic conditions. As is typical of the
supermarket industry, the Company has generally been able to
maintain margins by adjusting its retail prices, but competitive
conditions may from time to time render it unable to do so while
maintaining its market share.
12
<PAGE>
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 the Thanksgiving, Christmas and New
Year's Day holidays.
YEAR 2000
During calendar years 1996, 1997 and 1998, the
Company's Information Services Department conducted an
extensive information services system 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
Information Services Department recommended, and the Company
is implementing, the replacement or upgrading of all the
Company's primary and secondary systems, most of which were 10
to 15 years old. From March 1997 to June 19, 1999, the Company
spent, excluding license fees, approximately $3,200,000 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)
are scheduled to be replaced and/or remediated by the end of October, 1999,
at an estimated cost of $3,900,000, 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 been upgrading these
systems and anticipates completing that project by the end of
October 1999, at which time all potential Year 2000 problems in the
Company's secondary systems should be resolved. 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 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.
13
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is a party to certain litigation incurred in the 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
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit No.
--------------
*4.15 Term Loan Agreement dated July 26, 1999 by and
among A.G. Capital Funding Partners, L.P., Company,
Silver Oak Capital, L.L.C., and Northwoods Capital,
Limited and the Company
*4.16 Amendment and Waiver Agreement No. 7 to the
Amended and Restated Revolving Credit Agreement
dated September 15, 1997 by and among Fleet Capital
Corporation and the Company
*4.17 Intercreditor Agreement dated July 26, 1999 between
Fleet Capital Corporation and Silver Oak Capital,
L.L.C., as acknowledged by the Company
*27.1 Financial Data Schedule
* Filed herewith.
(b) Reports on Form 8-K
14
<PAGE>
On June 11, 1999, the Company filed a Current Report on Form
8-K announcing the resignation of Michael E. Julian, Chairman of the
Board and Chief Executive Officer, and Richard D. Coleman, Chief
Financial Officer. The Company named Ronald E. Johnson as Chief
Executive Officer and reappointed David R. Black as Chief Financial
Officer.
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,
Chief Financial Officer
Dated: August 3, 1999
TERM LOAN AGREEMENT
PREAMBLE
This TERM LOAN AGREEMENT, dated as of
July 26, 1999, among JITNEY-JUNGLE STORES OF
AMERICA, INC., a Mississippi corporation ("Jitney Jungle"),
SOUTHERN JITNEY JUNGLE COMPANY, a Mississippi
corporation and a wholly-owned subsidiary of Jitney Jungle
("Southern Jitney"), McCARTY-HOLMAN CO., INC., a
Mississippi corporation and a wholly-owned subsidiary of
Jitney Jungle ("McCarty-Holman"), JITNEY- JUNGLE
BAKERY, INC., a Mississippi corporation and a wholly-owned
subsidiary of Jitney Jungle ("Bakery"), PUMP AND SAVE,
INC., a Mississippi corporation and a wholly-owned subsidiary
of McCarty-Holman ("Pump And Save"), INTERSTATE
JITNEY JUNGLE STORES, INC., an Alabama corporation
and a wholly-owned subsidiary of Jitney Jungle ("Interstate"),
DELCHAMPS, INC., an Alabama corporation and a
wholly-owned subsidiary of Jitney Jungle ("Delchamps" and
together with Jitney Jungle, Southern Jitney, McCarty-Holman,
Bakery, Pump And Save and Interstate, each a "Borrower" and
collectively, and jointly and severally, the "Borrowers"), the
Guarantors signatory hereto, the lenders named in Schedule
2.01 annexed hereto (collectively with their respective
permitted successors and assigns, the "Lenders"), and SILVER
OAK CAPITAL, L.L.C. ("Silver Oak"), as agent for the
Lenders (in such capacity together with any successor thereto in
such capacity, the "Agent"). Capitalized terms used in this
paragraph shall have the respective meanings ascribed to such
terms above or hereinafter.
RECITALS
A. The Borrowers, the Guarantors, certain
lenders (such lenders, together with any successors and assigns,
the "Existing Lenders") and Fleet Capital Corporation
("Fleet"), as agent (in such capacity, together with any
successor in such capacity, the "Existing Agent") are parties to
the Amended and Restated Revolving Credit Agreement, dated
as of September 15, 1997 (as heretofore amended and as
further amended, modified, extended, renewed, replaced,
refunded or refinanced (by one or more of the same or different
lenders) from time to time, together with the Exhibits and
Schedules thereto, the "Existing Credit Agreement"), which
amended and restated that Revolving Credit Agreement, dated
as of March 5, 1996, among certain of the Borrowers and the
Guarantors, the lenders named therein and Fleet Bank, N.A.
(formerly known as NatWest Bank N.A.) as agent, providing
for loans to be made to, and letters of credit to be issued for the
account of, the Borrowers in the aggregate principal and/or
face amount not exceeding $162,300,000 at any one time
outstanding.
B. The Borrowers have jointly and
severally applied to the Lenders for term loans in an aggregate
principal amount of $50,000,000 to be made on the Closing
Date. The proceeds of the term loans shall be used by the
Borrowers in accordance with Section 4.10 of each of the
Senior Indenture and the Senior Subordinated Indenture (as
defined below). The Lenders are severally, and not jointly,
willing to extend such loans to the Borrowers subject to the
terms and conditions hereinafter set forth.
C. The Existing Agent and the Agent are
parties to the Intercreditor Agreement, dated as of the date
hereof (as heretofore amended and as further amended,
modified, supplemented or replaced, the "Intercreditor
Agreement"). Accordingly, the Borrowers, the Guarantors, the
(PAGE)
Lenders and the Agent, each intending to be legally bound, do
hereby agree as follows:
I. DEFINITIONS & RULES OF CONSTRUCTION
Section 1.01 Defined Terms. For purposes hereof,
the following terms shall have the meanings specified below:
"A.I. Credit Corp. Indebtedness":
Indebtedness to A.I. Credit Corp. incurred in connection with
(a) a Premium Finance Agreement, Disclosure Statement and
Security Agreement dated June 3, 1997, as amended, in a
maximum principal amount of $12,996,000, (b) a Premium
Finance Agreement, Disclosure Statement and Security
Agreement dated December 12, 1997, as amended, in a
maximum principal amount of $11,226,268, (c) a Premium
Finance Agreement, Disclosure Statement and Security
Agreement dated April 30, 1998, as amended, in a maximum
principal amount of $16,500,000, and (d) a Premium Finance
Agreement, Disclosure Statement and Security Agreement
dated October 9, 1998, as amended, in a maximum principal
amount of $9,752,521.
"Acquisition Integration Costs": an amount
equal to $23,758,000, as identified as "Acquisition integration
costs and other special charges" in the Borrowers' audited
financial statements for the Fiscal Year ended January 2, 1999.
"Additional Interest": defined in Section
2.03(a).
"Adjusted LIBO Rate": with respect to any
Term Loan for any Interest Period, an interest rate per annum
(rounded to the nearest 1/16 of 1%) equal to the product of (i)
the LIBO Rate in effect for such Interest Period and (ii)
Statutory Reserves. For purposes hereof, "Statutory Reserves"
shall mean a fraction (expressed as a decimal), the numerator
of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve
percentages (including, without limitation, any marginal,
special, emergency, or supplemental reserves) expressed as a
decimal established by the Board and any other banking
authority to which any Lender is subject with respect to the
Adjusted LIBO Rate for Eurocurrency Liabilities (as defined in
Regulation D). Such reserve percentages shall include, without
limitation, those imposed under Regulation D. Term Loans
shall be deemed to constitute Eurocurrency Liabilities and as
such shall be deemed to be subject to such reserve requirements
without benefit of or credit for proration, exceptions or offsets
which may be available from time to time to any Lender under
Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in
any reserve percentage.
"Affiliate": with respect to any person, any
other person which, directly or indirectly, controls or is
controlled by or is under common control with such person
and, without limiting the generality of the foregoing, includes
(i) any other person which beneficially owns or holds 5% or
more of any class of voting securities of such person or 5% or
more of the equity interest in such person, (ii) any person of
which such person beneficially owns or holds 5% or more of
any class of voting securities or in which such person
beneficially owns or holds 5% or more of the equity interest in
such person and (iii) any director, officer or partner of such
person. For the purposes of this definition, the term "control"
(including, with correlative meanings, the terms "controlled
by" and "under common control with"), as used with respect to
any person, means the possession, directly or indirectly, of the
(PAGE)
power to direct or cause the direction of the management and
policies of such person, whether through the ownership of
voting securities or by contract or otherwise.
"Agent": defined in the Preamble.
"Anticipated Reinvestment Amount": with
respect to any Reinvestment Election, the amount specified in
the Reinvestment Notice delivered by the relevant Borrower in
connection therewith as the amount of the Net Cash Proceeds
from the related Asset Sale that such Borrower intends to use to
purchase, construct or otherwise acquire Reinvestment Assets.
"Applicable Margin": the percentage rate per
annum, fixed on the Closing Date, equal to the excess of (x)
14% per annum over (y) the Adjusted LIBO Rate, expressed as
a percentage rate per annum, on the Closing Date.
"Asset Sale": the sale, transfer or other
disposition (including without limitation a sale-leaseback) by
any Borrower, any Guarantor or any subsidiary of any of them
to any person other than a Borrower or a Guarantor of any
asset of such Borrower, such Guarantor or such subsidiary
(other than sales in the ordinary course of business of
inventory).
"Assignment and Acceptance": an assignment
and acceptance entered into by a Lender and an assignee and
accepted by the Agent, in substantially the form of Exhibit E
annexed hereto.
"Bakery": defined in the preamble to this
Agreement.
"Basic Interest": defined in Section 2.03(a).
"Board": defined in Section 4.08.
"Borrower": defined in the Preamble.
"Borrowers" all of the Borrowers on a
collective, and joint and several, basis.
"BRS": Bruckmann, Rosser, Sherrill & Co.,
L.P., together with its successors and assigns.
"Business Day": any day, other than a
Saturday, Sunday or legal holiday in the State of New York, on
which banks are open for substantially all their banking
business in New York City.
"Capital Expenditures": the amount of all
purchases made by the Borrowers or any of their respective
subsidiaries directly or indirectly for the purpose of acquiring,
constructing or maintaining fixed assets, real property or
equipment which, in accordance with generally accepted
accounting principles, would be added as a debit to the fixed
asset account of any such Borrower or any such subsidiary
(excluding fixed assets acquired relating to Capitalized Lease
Obligations and fixed assets acquired pursuant to a financing
permitted under Section 7.01(e) of this Agreement (other than
with respect to the down payment for such fixed assets))
including the acquisition cost of assets of any kind (but not the
acquisition cost paid for inventory) which are acquired in
connection with an acquisition or purchase permitted by this
Agreement. For purposes of this definition, the purchase price
<PAGE>
paid with respect to equipment, fixed assets or real property
which is purchased simultaneously with the trade-in or sale of
existing equipment, fixed assets, or real property owned by any
Borrower or any of its subsidiaries or with insurance proceeds
(regardless of whether such proceeds are first applied to prepay
the Term Loans) or cash landlord/vendor allowances shall be
included in Capital Expenditures only to the extent of the gross
amount of such purchase price paid less the credit granted by
the seller of such equipment for the equipment being traded in
at such time, the purchase price of such existing equipment or
the amount of such proceeds or allowances, as the case may be.
"Capitalized Lease Obligation": an obligation
to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) Property which
obligation is required to be classified and accounted for as a
capital lease on a balance sheet prepared in accordance with
generally accepted accounting principles, consistently applied,
and for purposes hereof the amount of such obligation shall be
the capitalized amount thereof determined in accordance with
such principles.
"Cash Proceeds": with respect to any Asset
Sale, the aggregate cash payments (including any cash received
by way of deferred payment pursuant to a note receivable
issued in connection with such Asset Sale, other than the
portion of such deferred payment constituting interest, but only
as and when so received) received by a Borrower, a Guarantor
or any subsidiary of any of them from such Asset Sale.
"Change of Control": any of the following: (i)
BRS shall fail to own, beneficially and of record all voting
rights with respect to, at least 35% of all of the issued and
outstanding shares of each class of voting stock of Jitney
Jungle, or (ii) BRS shall cease to own capital stock of Jitney
Jungle entitling it, at the time a determination is made
hereunder, to cast the votes required to elect a majority of
members of the Board of Directors of Jitney Jungle or (iii)
Jitney Jungle shall fail to own, beneficially and all voting rights
with respect to, 100% of all of the issued and outstanding
shares of each class of capital stock of each of its subsidiaries,
(iv) the occurrence of a "Change of Control" (as such term is
defined in the Senior Indenture) under the Senior Indenture or
(v) the occurrence of a "Change of Control" (as such term is
defined in the Senior Subordinated Indenture) under the Senior
Subordinated Indenture.
"Closing Date": July __, 1999.
"Code": the Internal Revenue Code of 1986,
as amended from time to time.
"Collateral": all Property subject to any Lien
in favor of the Agent or securing Obligations, including without
limitation under the Security Documents.
"Commitment": with respect to each Lender,
the Commitment of such Lender as set forth in Schedule 2.01
annexed hereto, as it may be adjusted from time to time
pursuant to Section 10.03.
"Commitment Letter": the letter agreement,
dated June 28, 1999, as amended, by Angelo, Gordon & Co.,
L.P., for itself and on behalf of certain affiliated funds and
managed accounts, to Jitney Jungle, as in effect on the Closing
Date and as amended, supplemented or modified from time to
time in writing by Angelo, Gordon & Co., L.P. and Jitney
Jungle.
<PAGE>
"Company": Jitney Jungle, on behalf of itself
and as agent for each of the Borrowers, the Guarantors and
each subsidiary of any of them.
"Consolidated": in respect of any person, as
applied to any financial or accounting term, such term
determined on a consolidated basis in accordance with
generally accepted accounting principles (except as otherwise
required herein) for the person and all consolidated subsidiaries
thereof.
"Default": any condition, act or event which,
with notice or lapse of time or both, would constitute an Event
of Default.
"Delchamps": defined in the Preamble.
"dollars" or the symbol "$": dollars in lawful
currency of the United States of America.
"EBITDA": for any period, the sum of (i) Net
Income (before any (A) extraordinary and non-recurring non-
cash gains, (B) extraordinary and non-recurring non-cash losses
and (C) non-cash gains or losses from assets held for sale), (ii)
Interest Expense to the extent deducted in determining Net
Income for such period, (iii) depreciation and amortization
expense to the extent deducted in determining Net Income for
such period, (iv) cash federal, state and local income taxes to
the extent deducted in determining Net Income for such period
and (v) increases in LIFO reserves to the extent deducted in
determining Net Income for such period, in each case of the
Borrowers and their respective subsidiaries for such period
determined on a Consolidated basis, computed and calculated in
accordance with generally accepted accounting principles. For
purposes of calculating EBITDA solely for the Fiscal Year
ending January 2, 1999 and the fiscal quarters ending March
27, 1999, June 19, 1999 and September 11, 1999, Acquisition
Integration Costs shall not be deducted in computing Net
Income as otherwise required by generally accepted accounting
principles.
"Eligible Assignee": a commercial bank,
finance company, insurance company, fund or other financial
institution acceptable to the Agent in its sole and absolute
discretion.
"Environmental Claim": any written notice of
violation, claim, demand, abatement or other order by any
governmental authority or any person for personal injury
(including sickness, disease or death), tangible or intangible
property damage, damage to the environment, nuisance,
pollution, contamination or other adverse effects on the
environment, or for fines, penalties or deed or use restrictions,
resulting from or based upon (i) the existence, or the
continuation of the existence, of a Release (including, without
limitation, sudden or non-sudden, accidental or non-accidental
Releases), of, or exposure to, any Hazardous Material in, into
or onto the environment (including, without limitation, the air,
ground, water or any surface) at, in, by or from any of the
properties of a Borrower or its subsidiaries, (ii) the
environmental aspects of the transportation, storage, treatment
or disposal of Hazardous Materials in connection with the
operation of any of the properties of a Borrower or its
subsidiaries or (iii) the violation, or alleged violation by a
Borrower or any of its subsidiaries, of any Environmental Laws
relating to any of the properties of a Borrower or its
subsidiaries.
"Environmental Laws": the Comprehensive
Environmental Response, Compensation, and Liability Act (42
U.S.C. ' 9601 et seq.), the Hazardous Material Transportation
Act (49 U.S.C. ' 1801 et seq.), the Resource Conservation and
Recovery Act (42 U.S.C. ' 6901 et seq.), the Federal Water
<PAGE>
Pollution Control Act (33 U.S.C. ' 1251 et seq.), the Oil
Pollution Act of 1990 (P.L. 101-380), the Safe Drinking Water
Act (42 U.S.C. ' 300(f), et seq.), the Clear Air Act (42 U.S.C.
' 7401 et seq.), the Toxic Substances Control Act, as amended
(15 U.S.C. ' 2601 et seq.), the Federal Insecticide, Fungicide,
and Rodenticide Act (7 U.S.C. ' 136 et seq.), and the
Occupational Safety and Health Act (29 U.S.C. ' 651 et seq.),
as such laws have been and hereafter may be amended or
supplemented, and any related or analogous present or future
Federal, state or local, statutes, rules, regulations, ordinances,
licenses, permits and interpretations and orders of regulatory
and administrative bodies.
"ERISA": the Employee Retirement Income
Security Act of 1974, as amended, and the rules and
regulations promulgated thereunder, as in effect from time to
time.
"ERISA Affiliate": any trade or business
(whether or not incorporated) which together with any person
or a subsidiary of such person would be treated as a single
employer under the provisions of Title I or Title IV of ERISA.
"Event of Default": defined in Section 8.01.
"Excess Cash Flow": for any period, without
duplication, (i) the sum for such period of (A) Net Income, (B)
depreciation and amortization expenses of the Borrowers and
their respective subsidiaries for such period, to the extent the
same are deducted from net revenues in determining Net
Income for such period, (C) the change (with such change
being deemed to be a positive number in the event of an
increase and such change being deemed to be a negative
number in the event of a decrease) in deferred tax liabilities of
the Borrowers and their respective subsidiaries during such
period, (D) other non-cash items of the Borrowers and their
respective subsidiaries properly deducted in arriving at Net
Income for such period, and (E) the change (with such change
being deemed to be a negative number to the extent that it shall
have resulted in an increase in Net Income for such period and
such change being deemed to be a positive number to the extent
that it shall have resulted in a decrease in Net Income for such
period) in deferred tax assets of the Borrowers and their
respective subsidiaries during such period, minus (ii) the sum
for such period of (A) the aggregate amount actually paid by
the Borrowers and their respective subsidiaries in cash during
such period on account of Capital Expenditures (including
payments in respect of Capitalized Lease Obligations), (B) the
aggregate amount actually distributed by the Borrowers and
their respective subsidiaries in cash during such period in
respect of dividends on or other distributions, redemptions or
other retirements of capital stock of any Borrower or subsidiary
thereof, in accordance with the provisions of this Agreement,
(C) reserves taken and occasioned by the closing of store
locations, and (D) the aggregate of principal payments (whether
regularly scheduled payments, voluntary or mandatory
prepayments or occurring by reason of acceleration or
otherwise) of all Indebtedness (including, without limitation,
Capitalized Lease Obligations, Indebtedness issued under the
Senior Indenture and Indebtedness issued under the Senior
Subordinated Indenture and Indebtedness issued under the
Existing Credit Agreement, including all payments or principal
under the Existing Credit Agreement whether in permanent
reduction of "Commitments" thereunder or the temporary
repayment of "Loans" that may be reborrowed thereunder)
made or scheduled to have been made by the Borrowers and
their respective subsidiaries during such period, determined on
a Consolidated basis in accordance with generally accepted
accounting principles.
"Existing Agent": defined in Recital A.
<PAGE>
"Existing Credit Agreement": defined in
Recital A.
"Existing Credit Satisfaction Date": the date
on which all "Obligations" (as defined in the Existing Credit
Agreement), other than those which survive the termination of
"Commitments" (as defined in the Existing Credit Agreement),
have been paid in full after the earlier of an acceleration thereof
which has not been revoked or termination of the
"Commitments" (as defined in the Existing Credit Agreement).
"Existing Credit Termination Date": the date
on which all "Obligations" (as defined in the Existing Credit
Agreement) have been paid in full, other than those which
survive the termination of "Commitments" (as defined in the
Existing Credit Agreement), and all "Commitments" (as
defined in the Existing Credit Agreement) have been
terminated.
"Existing Lenders": defined in Recital A.
"Existing Security Documents": the "Security
Documents" as defined in the Existing Credit Agreement.
"Final Maturity Date": July __, 2004.
"Financial Officer": with respect to any
person, the chief financial officer, chief accounting officer or
treasurer of such person.
"fiscal month": each of the thirteen
consecutive four-week periods of the Borrowers used for
accounting purposes and ending on the dates designated as
fiscal month-ends in Schedule I annexed hereto.
"fiscal quarter": each of the four fiscal
quarters of each fiscal year of the Borrowers used for
accounting purposes and ending on the dates designated as
fiscal quarter-ends in Schedule I annexed hereto.
"Fiscal Year": the fiscal year of the Borrowers
for accounting purposes which ends on the dates designated as
fiscal year-ends in Schedule I annexed hereto.
"Fleet": defined in Recital A.
"Grantor": any Assignor, Grantor, Pledgor,
Mortgagor or Debtor, as such terms are defined in any of the
Security Documents.
"Guarantee": any obligation, contingent or
otherwise, of any person guaranteeing or having the economic
effect of guaranteeing any Indebtedness or obligation of any
other person in any manner, whether directly or indirectly, and
shall in any event include any guarantee under Article XI
hereof, and shall include, without limitation, any obligation of
such person, direct or indirect, to (i) purchase or pay (or
advance or supply funds for the purchase or payment of) such
Indebtedness or obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment
of such Indebtedness or obligation, (ii) purchase Property or
<PAGE>
services for the purpose of assuring the owner of such
Indebtedness or obligation of the payment of such Indebtedness
or obligation, or (iii) maintain working capital, equity capital,
available cash or other financial condition of the primary
obligor so as to enable the primary obligor to pay such
Indebtedness or obligation; provided, however, that the term
Guarantee shall not include endorsements for collection or
collections for deposit, in either case in the ordinary course of
business.
"Guarantor": collectively, each Borrower and
each subsidiary thereof or any subsidiary of any Borrower
which becomes a guarantor of the Obligations after the date
hereof.
"Hazardous Material": any pollutant,
contaminant, chemical, or industrial or hazardous, toxic or
dangerous waste, substance or material, defined or regulated as
such in (or for purposes of) any Environmental Law and any
other toxic, reactive, or flammable chemicals, including
(without limitation) any asbestos, any petroleum (including
crude oil or any fraction), any radioactive substance and any
polychlorinated biphenyls; provided, in the event that any
Environmental Law is amended so as to broaden the meaning
of any term defined thereby, such broader meaning shall apply
subsequent to the effective date of such amendment; provided,
further, to the extent that the applicable laws of any state
establish a meaning for "hazardous material," "hazardous
substance," "hazardous waste," "solid waste" or "toxic
substance" which is broader than that specified in any federal
Environmental Law, such broader meaning shall apply.
"Indebtedness": with respect to any person,
without duplication, (i) all obligations of such person for
borrowed money or with respect to deposits or advances of any
kind, (ii) all obligations of such person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all
obligations of such person for the deferred purchase price of
Property or services, except current accounts payable arising in
the ordinary course of business and not overdue or being
contested in good faith, (iv) all obligations of such person
under conditional sale or other title retention agreements
relating to Property purchased by such person, (v) all payment
obligations of such person with respect to interest rate or
currency protection agreements, (vi) all obligations of such
person as an account party under any letter of credit or in
respect of bankers' acceptances, (vii) all obligations of any
third party secured by Property owned by such person
(regardless of whether or not such person is liable for
repayment of such obligations), (viii) all Guarantees of such
person and (ix) all obligations of such person as lessee under
leases the expenditures under which are Capitalized Lease
Obligations.
"Indemnitees": defined in Section 10.04(c).
"Information": defined in Section 10.11.
"Intercompany Indebtedness": with respect to
any Borrower, Indebtedness of such person to any subsidiary
thereof or any other Borrower or any subsidiary thereof,
incurred in the ordinary course of business and evidenced
solely as an amount payable on the books of such Borrower.
"Intercompany Loans": with respect to any
Borrower, loans made by such person to any subsidiary thereof
or any other Borrower or any subsidiary thereof, in the
ordinary course of such Borrower's business.
"Intercreditor Agreement": defined in Recital
C.
<PAGE>
"Interest Expense": for any fiscal period, the
interest expense paid or payable in cash of the Borrowers and
their respective subsidiaries during such fiscal period
determined on a Consolidated basis in accordance with
generally accepted accounting principles, and shall in any event
include, without limitation, interest on Capitalized Lease
Obligations for such fiscal period.
"Interest Payment Date": the last Business
Day of each Interest Period, commencing July 30, 1999.
"Interest Period" shall mean as to any Term
Loan (i) initially, the period commencing on and excluding the
Closing Date and ending on the numerically corresponding day
in August, 1999, and (ii) thereafter, the period commencing on
and including the first calendar day after the preceding Interest
Period and ending on and including the numerically
corresponding day (or, if there is no numerically corresponding
day, on and including the last day) in the calendar month that is
one (1) month thereafter in accordance with the terms hereof;
provided, however, that (x) if an Interest Period would end on
a day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next
preceding Business Day, and (y) no Interest Period shall end
later than the Final Maturity Date.
"Interstate": defined in the Preamble.
"IRB Indebtedness": the Indebtedness with
respect to the City of Jackson, Mississippi Industrial Revenue
Bonds (McCarty-Holman Co., Inc. Project), Series 1985, in the
aggregate outstanding amount of $3,650,000.
"IRB Trustee": SunTrust Bank, Atlanta, as
trustee under the trust indenture relating to the IRB
Indebtedness.
"Landlord Waiver": a landlord's or bailee's
agreement with respect to each property of a Borrower subject
to a lease substantially in the form of Exhibit H hereto or as
agreed to by the Agent.
"Lender": defined in the Preamble.
"Leverage Ratio": at the end of any fiscal
quarter, the ratio of (i) the sum of (x) all Indebtedness of the
Borrowers and their respective subsidiaries (including, without
limitation, the amount of Obligations outstanding under this
Agreement (whether for principal, interest or premium), the
Indebtedness under the Senior Notes and Indebtedness under
the Senior Subordinated Notes and Indebtedness under the
Existing Credit Agreement, but excluding Intercompany
Indebtedness, Indebtedness to trade creditors incurred in the
ordinary course of business and A.I. Credit Corp.
Indebtedness) and (y) $0 from the Initial Closing Date (as
defined in the Existing Credit Agreement) through 1/2/1999,
thereafter, Restructuring Obligations, as at the date of
determination to (ii) EBITDA of the Borrowers and their
respective subsidiaries for the four-quarter period ending at the
date of determination, in each case determined on a
Consolidated basis in accordance with generally accepted
accounting principles.
"LIBO Rate": with respect to any Interest
Period, an interest rate per annum (rounded to the nearest 1/16
<PAGE>
of 1%) equal to the rate at which dollar deposits of $5,000,000
in principal amount with a maturity equal to the applicable
Interest Period are offered in immediately available funds on
the London inter-bank market, as certified by the Company to
each Lender in a written notice including a print-out of the
Telerate Access Service page indicating such rate on or before
12 noon of the second Business Day prior to the first day of
such Interest Period.
"Lien": with respect to any Property, (i) any
mortgage, lien, pledge, hypothecation, encumbrance, charge or
security interest in or on such asset, (ii) the interest of a vendor
or a lessor under any conditional sale agreement, capital lease
or other title retention agreement relating to such asset, (iii) in
the case of securities, any purchase option, call or similar right
of a third party with respect to such securities, or (iv) any other
right of or arrangement with any creditor to be entitled to
receive any such mortgage, lien, pledge, encumbrance, charge
or security interest on or to have such creditor's claim satisfied
out of such assets, or the proceeds therefrom, prior to the
general creditors of the owner thereof.
"Make-Whole Premium": defined in Section
2.04(b).
"Margin Stock": defined in Regulation U.
"Material Adverse Effect": a material adverse
effect on (i) the business, assets, liabilities, properties,
prospects, operations or financial condition of the Borrowers
and their respective subsidiaries taken as a whole, (ii) the
ability of any Borrower or any Guarantor to perform or pay the
Obligations in accordance with the terms hereof or of any other
Term Loan Document or to perform its other material
obligations thereunder or (iii) the Agent's Lien on any
Collateral (other than a de minimis portion of the Collateral) or
the priority of such Lien.
"McCarty-Holman": defined in the Preamble.
"Moody's": defined in Section 7.06.
"Mortgage": defined in Section 3.03.
"Multiemployer Plan": a "multiemployer plan"
as defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": with respect to any
Asset Sale, the Cash Proceeds resulting therefrom net of
expenses of sale (including reasonable brokers and attorneys
fees and payment of principal, premium and interest of
Indebtedness secured by the assets the subject of the Asset Sale
and required to be, and which is, repaid under the terms
thereof as a result of such Asset Sale), and incremental taxes
paid or payable as a result thereof.
"Net Income": for any period, the aggregate
income (or loss) of the Borrowers and their respective
subsidiaries determined on a Consolidated basis for such
period, all computed and calculated in accordance with
generally accepted accounting principles consistently applied.
"Notes": the notes of the Borrowers, executed
and delivered as provided in Section 2.02, in substantially the
form of Exhibit A annexed hereto, as amended, modified or
supplemented from time to time.
<PAGE>
"Obligations": all obligations, liabilities and
Indebtedness of any Borrower and/or any Guarantor to the
Lenders and the Agent, whether now existing or hereafter
created, direct or indirect, matured or unmatured, contingent or
uncontingent, liquidated or unliquidated, whether created
directly or acquired by assignment, participation or otherwise,
arising under, in connection with or with respect to this
Agreement, the Notes, the Security Documents and the other
Term Loan Documents, including, without limitation, the
principal of and interest on the Term Loans and the payment or
performance of all other obligations, liabilities, and
Indebtedness of any Borrower and/or any Guarantor to the
Lenders and/or the Agent hereunder or under any one or more
of the other Term Loan Documents, including but not limited
to all fees, costs, expenses and indemnity obligations hereunder
and thereunder.
"Other Taxes": defined in Section 2.09(b).
"PBGC": the Pension Benefit Guaranty
Corporation.
"Pension Plan": any Plan which is subject to
the provisions of Title IV of ERISA.
"Permits": defined in Section 4.18.
"Permitted Liens": Liens permitted under
Section 7.01.
"person": any natural person, corporation,
business trust, association, company, limited liability company,
joint venture, partnership, limited partnership, limited liability
partnership, trust, estate or government or any agency or
political subdivision thereof.
"Plan": any employee benefit plan within the
meaning of Section 3(3) of ERISA and which is maintained (in
whole or in part) for employees of any Borrower or any
subsidiary thereof or any ERISA Affiliate thereof.
"Pledge Agreement": the Pledge Agreement
by and among Jitney Jungle and each of its Subsidiaries and
each Guarantor for the benefit of the Secured Parties,
substantially in the form of Exhibit C hereto, as the same may
be amended, modified or supplemented from time to time.
"Property": cash, securities, personal
property, real property, intellectual property or other property
or assets of any kind.
"Register": defined in Section 10.03(e).
"Regulation": regulation adopted by a
governmental authority, including without limitation the Board
or the United States Treasury, as the same is from time to time
in effect, all official rulings and interpretations thereunder or
thereof and all releases implementing the same.
"Reinvestment Assets": with respect to any
Asset Sale, any properties or assets that replace the properties
or assets that were the subject of such Asset Sale that will be
employed in the business of the Borrowers and their respective
subsidiaries as operated on the Closing Date, except that (i)
such properties or assets shall not be employed in any business
unrelated to that of the Borrowers and their respective
<PAGE>
subsidiaries as operated on the Closing Date and (ii) such
properties or assets may not, without the prior written consent
of the Required Lenders, include multiple stores or distribution
centers of a related business, or stock of such business,
acquired in one or more transactions from the owner or owners
of such business.
"Reinvestment Election": defined in Section
2.05(d).
"Reinvestment Notice": a written notice signed
by a Responsible Officer of the relevant Borrower stating that
such Borrower, in good faith, intends and expects to use all or
a specified portion of the Net Cash Proceeds of an Asset Sale to
purchase, construct or otherwise acquire Reinvestment Assets.
"Reinvestment Prepayment Amount": with
respect to any Reinvestment Election, the amount, if any, on
the Reinvestment Prepayment Date relating thereto by which (i)
the Anticipated Reinvestment Amount in respect of such
Reinvestment Election exceeds (ii) the aggregate amount
thereof expended by the relevant Borrower to acquire
Reinvestment Assets.
"Reinvestment Prepayment Date": with respect
to any Reinvestment Election, the earlier of (i) the date
occurring one year after such Reinvestment Election and (ii) the
date on which the Borrowers shall have determined not to, or
shall have otherwise ceased to, proceed with the purchase,
construction or other acquisition of Reinvestment Assets with
the related Anticipated Reinvestment Amount.
"Release": any releasing, spilling, leaking,
seeping, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, disposing or dumping, in each
case as defined in Environmental Law, and shall include any
"Threatened Release," as defined in Environmental Law.
"Remedial Work": any investigation, site
monitoring, containment, cleanup, removal, restoration or
other remedial work of any kind or nature with respect to any
Property of any Borrower or any of its subsidiaries (whether
such Property is owned, leased, subleased or used), including,
without limitation, with respect to Hazardous Materials and the
Release thereof.
"Reportable Event": a Reportable Event as
defined in Section 4043(b) of ERISA, but not including any
such event as to which the PBGC, by applicable regulation, has
waived the requirement of notice under Section 4043(a).
"Replacement Property": defined in Section
2.05(g)(ii).
"Required Lenders": Lenders having 51% of
the outstanding principal amount of the Term Loans.
"Responsible Officer": with respect to any
person, the chief executive officer, chief financial officer,
president, vice president, or treasurer, of such person.
"Restructuring Obligations": the aggregate
rental and other monetary obligations of the Borrowers and
their respective subsidiaries for closed stores and for certain
other obligations assumed by the Borrowers in connection with
the Acquisition (as defined in the Existing Credit Agreement).
<PAGE>
"S&P": defined in Section 7.06.
"SEC": the Securities and Exchange
Commission.
"Secured Parties": the Agent and the Lenders.
"Securities Purchase and Holders Agreement":
the Securities Purchase and Holders Agreement, dated as of
March 5, 1996, among Jitney Jungle, BRS, the individuals
listed on Schedule I thereto and the Trust established under a
Trust Agreement dated as of March 1, 1996 between Jitney
Jungle as grantor and Trustmark National Bank, as trustee, as
from time to time amended, supplemented or modified.
"Security Agreement": the Security
Agreement among the Grantors and the Agent, for the benefit
of the Secured Parties, substantially in the form of Exhibit D
annexed hereto, as amended, modified or supplemented from
time to time.
"Security Agreement - Patents and
Trademarks": the Security Agreement - Patents and
Trademarks among the Grantors and the Agent, for the benefit
of the Secured Parties, substantially in the form of Exhibit F
annexed hereto, as amended, modified or supplemented from
time to time.
"Security Documents": the Security
Agreement, the Pledge Agreement, the Security Agreement -
Patents and Trademarks, the Mortgages, the Intercreditor
Agreement (with respect only to the Existing Agent's holding
certain Collateral as bailee for the Agent pursuant to Section
5(b) thereof) and each other agreement now existing or
hereafter created providing collateral security for the payment
or performance of any Obligations.
"Senior Indenture": the Indenture relating to
the Senior Notes dated as of March 5, 1996, as amended and in
effect on the Closing Date, among the Borrowers and Marine
Midland Bank, as trustee, as from time to time amended,
supplemented or modified, subject to the terms of Section 7.18.
"Senior Notes": the $200,000,000 minimum
aggregate original principal amount of the Borrowers' senior
unsecured promissory notes issued and delivered pursuant to
the Senior Indenture.
"Senior Subordinated Indenture": the
Indenture relating to the Senior Subordinated Notes, dated as of
September 15, 1997, by and among the Borrowers party
thereto, the Subsidiary Guarantors (as defined therein) party
thereto and Marine Midland Bank, as trustee, as from time to
time as amended, modified or supplemented, subject to the
terms of Section 7.18.
"Senior Subordinated Notes": the
$200,000,000 minimum aggregate original principal amount of
the Borrowers' senior subordinated unsecured promissory notes
issued and delivered pursuant to the Senior Subordinated
Indenture.
"Silver Oak": defined in the Preamble.
<PAGE>
"Southern Jitney Jungle": defined in the
Preamble.
"Special Deposit": defined in Section
2.05(g)(iii).
"Subordinated Indebtedness": with respect to
any Borrower or any subsidiary thereof, Indebtedness
subordinated in right of payment to such person's monetary
obligations under this Agreement and the other Term Loan
Documents upon terms satisfactory to and approved in writing
by the Agent, to the extent it does not by its terms (except as
otherwise approved in writing by the Agent) mature or become
subject to any mandatory prepayment or amortization of
principal prior to the Termination Date, and shall in any event
include the Indebtedness of Jitney Jungle pursuant to the Senior
Subordinated Indenture.
"subsidiary": with respect to any person, the
parent of such person, any corporation, association or other
business entity of which securities or other ownership interests
representing more than 50% of the ordinary voting power are,
at the time as of which any determination is being made, owned
or controlled, directly or indirectly, by the parent or one or
more subsidiaries of the parent.
"SunTrust LC": the irrevocable letter of credit
number F501212 issued by SunTrust Bank, Atlanta, in favor of
the IRB Trustee.
"Taxes": defined in Section 2.09(a).
"Termination Date": the earlier to occur of (i)
the Final Maturity Date and (ii) the date on which the
Commitments shall terminate, expire or be cancelled in
accordance with the terms of this Agreement.
"Term Loan": defined in Section 2.01.
"Term Loan Documents": this Agreement,
each Security Document, the Notes, and each other document,
instrument, or agreement now or hereafter delivered to the
Agent or any Lender in connection herewith or therewith.
"Total Commitment": $50,000,000.
"Transactions": defined in Section 4.02.
"Treasury Yield": defined in Section 2.04(b).
SECTION 1.02. Rules of Construction.
(a) Company May Act on Behalf of the
Borrowers. Whenever the Borrowers are required under this
Agreement to perform any act or task, including (by way of
example and not as an exclusive list) the receipt of the proceeds
of loans, the payment of money, the rendering of reports or the
maintenance of Property, such act may be performed by the
Company.
(b) Gender, Number and References. Unless
the context otherwise requires, all references to Sections are to
<PAGE>
Sections of this agreement. References to any one gender
shall include the other two genders, and references to the plural
shall include the singular and vice versa.
(c) GAAP Terms. Unless otherwise expressly
provided herein, each accounting term used herein shall have
the meaning given it under generally accepted accounting
principles in effect from time to time in the United States
applied on a basis consistent with those used in preparing the
financial statements referred to in Section 6.05.
II. THE TERM LOANS
SECTION 2.01. Term Loans. Subject to the terms and
conditions and relying upon the representations and warranties
herein set forth, each Lender, severally and not jointly, agrees
to make a term loan to the Borrowers on the Closing Date in
the aggregate principal amount equal to the amount of such
Lender's Commitment as set forth opposite its name on
Schedule 2.01 (a "Term Loan"). The failure of any Lender to
make a Term Loan shall not in itself relieve any other Lender
of its obligation to lend hereunder, but no Lender shall be
responsible for the failure of any other Lender to make its
ratable portion of the Term Loans available on the Closing
Date. Each Lender shall make its Term Loan on the Closing
Date by wire transfer of cash in immediately available funds to
the Company at the address for wire transfers set forth in
Schedule 2.01(b) contemporaneously with, and against delivery
of, a Note executed by each Borrower and payable to the order
of the Lender, as referred to in Section 2.02. In the event that
the Term Loans shall not be made on or prior to the Closing
Date, the Commitment of each Lender shall automatically and
permanently terminate.
SECTION 2.02. Notes. The Term Loan made by
each Lender to the Borrowers shall be evidenced by a Note,
duly executed on behalf of the Borrowers, dated the Closing
Date, in substantially the form of Exhibit A annexed hereto,
delivered and payable to such Lender in a principal amount
equal to its Commitment. The outstanding balance of each
Term Loan, as evidenced by any such Note, shall mature and
be due and payable on the Final Maturity Date. Each Note
shall bear interest from its date on the outstanding principal
balance thereof, as provided in Section 2.03.
SECTION 2.03 Interest.
(a) Rate. Each Term Loan shall bear and
accrue interest at a rate per annum equal to the sum of (i) the
Adjusted LIBO Rate plus the Applicable Margin ("Basic
Interest") plus (ii) subject to Section 2.05(b), additional interest
accruing (but not compounding) at a rate of 7.381616% per
annum ("Additional Interest").
(b) Payment. Subject to Section 2.05(b), (i)
Basic Interest accrued on any Term Loan shall be paid each
month in arrears, based on the number of calendar days elapsed
since the preceding payment of Basic Interest on such Term
Loan, on (x) the Interest Payment Date or (y) on the Final
Maturity Date if such day occurs before the Interest Payment
Date, and (ii) Additional Interest shall be paid in arrears on the
Final Maturity Date.
(c) Computation. All computations of interest
shall be made on the basis of a year of 360 days.
<PAGE>
SECTION 2.04. Additional Payments.
(a) Closing Point. The Borrowers shall pay to
each Lender on the Closing Date a point in an amount equal to
such Lender's ratable share of the excess of (i) 1.0% of the
Total Commitment over (ii) the total amount of all amounts
paid to Angelo, Gordon & Co., L.P. under the Commitment
prior to the Closing Date other than those amounts paid on
account of the fees and disbursements of counsel, accountants
or other agents or advisors retained by Angelo, Gordon & Co.,
L.P.
(b) Yield Maintenance Premium. If the
Borrowers prepay the Term Loans or any portion thereof on or
before the nine-month anniversary of the Closing Date, or if
the Term Loans become due and payable by acceleration after
an Event of Default, by operation of law or otherwise on or
before the nine-month anniversary of the Closing Date, then
each Lender shall be entitled to receive, and the Borrowers
shall pay, a make-whole premium (the "Make-Whole
Premium") in an amount equal to (x) the sum of Basic Interest
and Additional Interest that would have been paid to the
Lenders if the Term Loans had been paid in full on the nine-
month anniversary of the Closing Date, divided by (y) the sum
of 1 plus the Treasury Yield plus 50 basis points. The
"Treasury Yield" shall be a decimal equal to:
(i) the yield per annum for actively traded U.S.
Treasury securities maturing on such nine-
month anniversary or as soon after as
practicable, as indicated by Telerate Access
Service (page 8003 or the relevant page at the
date of determination indicating such yields)
(or, if such data ceases to be available, any
publicly available source of similar market
data) at approximately 11:00 a.m., New York
City time, on (x) the third Business Day prior
to the date of such prepayment or (y) the date
immediately following such acceleration,
multiplied by
(ii) the number days remaining after and excluding
the date of the prepayment or the date of
acceleration, as the case may be, and such
nine-month anniversary,
and divided by
(iii) 360.
(c) Prepayment Points. If the Borrowers
prepay the Term Loans or any portion thereof prior to (and
excluding) the Final Maturity Date during any period set forth
below, each Lender shall be entitled to receive, and the
Borrowers shall pay together with such prepayment, such
Lender's ratable share of the amount set forth below for such
period:
<TABLE>
<CAPTION>
Period Fee
<S> <C>
271st calendar day after and excluding 1% of the principal amount repaid
Closing Date to and including 1st
anniversary of Closing Date
2nd calendar year after and excluding 2% of the principal amount repaid
Closing Date
3rd calendar year after and excluding 3% of the principal amount repaid
Closing Date
4th calendar year after and excluding 2% of the principal amount repaid
Closing Date
5th calendar year after and excluding 1% of the principal amount repaid
Closing Date
</TABLE>
<PAGE>
(d) Nonrefundable. All points payable under
or in connection with this Agreement shall be nonrefundable in
all circumstances.
SECTION 2.05. Prepayment of Term Loans.
(a) Subject to Payment of Existing Obligations.
Notwithstanding the following provisions of this Section 2.05,
until the Existing Credit Satisfaction Date shall have occurred
(i) the Borrowers shall not have any right or obligation to
prepay the Term Loans under this Section 2.05 or any
obligation to make any Special Deposit pursuant to Section
2.05(g)(iii), (ii) the Borrowers' failure to comply with this
Section 2.05 shall not constitute an Event of Default hereunder
so long as such failure is caused by the Borrowers' compliance
with the terms of the Existing Credit Agreement and (iii) in the
event the Borrowers make a prepayment of any Term Loan to
the Agent or to any Lender, or the Agent or any Lender
otherwise receives a payment of principal on a Term Loan, the
recipient thereof shall transmit such prepayment to the Existing
Agent pursuant to the Intercreditor Agreement and such
payment shall not reduce or be deemed a payment of any
Obligations.
(b) Interest. Each payment of the outstanding
principal of the Term Loans prior to (and excluding) the Final
Maturity Date, including an optional or mandatory prepayment
under this Section 2.05 or upon acceleration after an Event of
Default or by operation of law or otherwise, must be
accompanied by, and the Borrowers shall pay, all interest and
points accrued or payable with respect to the principal amount
prepaid as provided in Sections 2.03 and 2.04; provided,
however, that the amount of Additional Interest accrued on the
principal amount prepaid shall be calculated for purposes of
any such prepayment at the rate of 2.081616% per annum,
without compounding, from and excluding the Closing Date to
and including the date of such prepayment, and all Additional
Interest accrued on such principal amount in excess of the
amount so calculated shall be forgiven and deemed satisfied and
paid without any additional consideration, if, and only if, at the
time of such prepayment, each and every one of the following
conditions shall be satisfied on the date of such prepayment:
(i) all principal payments required to be paid
hereunder, without acceleration, have been
paid on the dates when due; and
(ii) all interest payments (X) shall have been paid
when due, after giving effect to any applicable
grace periods, in the full amount thereof or (Y)
shall have been paid not later than 4 p.m. on
the first Business Day after and excluding the
day on which the Agent gives notice that such
interest has not been paid, in the full amount
thereof together with a late charge of 3% per
annum on the outstanding principal amount at
the time such interest is scheduled to be paid
from and including the date when scheduled to
be paid (without giving effect to any applicable
grace periods) to and including the third
Business Day after such date, and, if not paid
on or before such third Business Day, at the
rate of 0.1% per day on such principal amount
for each calendar day thereafter until such
interest has been paid; provided, however, that
failure to give such notice shall not limit the
<PAGE>
right of the Agent to collect such interest or to
otherwise exercise its rights or remedies under
this Agreement; and
(iii) no Default or Event of Default has at any time
occurred under Sections 8.01(e) and (f); and
(iv) no monetary event of default (and the
expiration of any cure periods with respect
thereto) has occurred with respect to any
Indebtedness in a principal amount exceeding
$20,000,000 (other than the Indebtedness under
the Existing Credit Agreement), and no
acceleration of any Indebtedness in a principal
amount exceeding $20,000,000 (other than the
Indebtedness hereunder) has at any time
occurred; and
(v) no Borrower, nor any Guarantor nor any
Grantor has at any time prior to the date of
such prepayment (X) asserted in writing or
agreed or consented to in writing that this
Agreement, any Note, any of the Security
Documents or any of the other Term Loan
Documents is not enforceable in accordance
with its terms or (Y) asserted in writing or
agreed or consented in writing that any Lien
purported to be created by any of the Security
Documents is not a valid Lien on any Collateral
or (Z) or asserted in writing or agreed or
consented in writing that any Lien is subject to
any Lien securing Indebtedness in an amount
exceeding $7,500,000 or agreed to grant a Lien
on any Collateral to secure Indebtedness in an
amount exceeding $7,500,000 other than those
permitted under this Agreement.
(c) Optional Prepayments. The Borrowers
shall have the right to prepay the Term Loans at any time in
whole or from time to time subject to Sections 2.05(a) and (b).
(d) Mandatory Prepayments upon Asset Sales.
Within five Business Days of the receipt thereof by any
Borrower, any Grantor, any Guarantor or any subsidiary of any
of them of Cash Proceeds from any Asset Sale, the Borrowers
shall make a mandatory prepayment of the Term Loans in an
amount equal to 100% of the Net Cash Proceeds thereof, which
proceeds shall be applied as set forth in paragraph (i) below;
provided, that up to an aggregate of $1,000,000 per fiscal year
but not to exceed $5,000,000 of Net Cash Proceeds from Asset
Sales from the Closing Date through the Final Maturity Date
shall not be required to be used to so repay Term Loans to the
extent the Borrowers elect, as hereinafter provided, to cause
such Net Cash Proceeds to be reinvested in Reinvestment
Assets (a "Reinvestment Election"). The Borrowers may
exercise their Reinvestment Election (within the parameters
specified in the preceding sentence) with respect to an Asset
Sale if (x) at the time of such election there is continuing no
Default or Event of Default and (y) the Borrowers deliver a
Reinvestment Notice to the Agent no later than the fifteenth
Business Day following the date of the consummation of the
respective Asset Sale, with such Reimbursement Election being
effective with respect to the Net Cash Proceeds of such Asset
Sale equal to the Anticipated Reinvestment Amount specified in
such Reinvestment Notice. The Borrowers agree to grant a
Lien (subject only to Liens permitted by clause (a), (b), (c),
(d), (f), (i) and (j) of Section 7.01) in such Reinvestment Assets
in favor of the Agent, such security interest to be granted on
the date of acquisition of such Reinvestment Assets by any
Borrower. On the Reinvestment Prepayment Date with respect
to a Reinvestment Election, the Borrowers shall make a
mandatory prepayment of the Term Loans in an amount equal
to the Reinvestment Prepayment Amount, if any, for such
Reinvestment Election.
<PAGE>
(e) Mandatory Prepayments upon Sale of
Equity. Within five Business Days of:
(i) the sale, issuance or other disposition by any
Borrower, any Guarantor or any subsidiary of
either thereof of any of its capital stock or other
equity interests in such person or any option,
warrant or similar right to acquire any of same
(except sales by Jitney Jungle of its capital
stock to employees of the Borrowers following
purchases thereof in an aggregate amount not in
excess of $1,000,000 during the term of this
Agreement as permitted by Section 7.04(ii)),
(ii) the consummation of the issuance of any debt
securities of any Borrower, any Guarantor or
any of their respective subsidiaries, or
(iii) the incurrence by any Borrower of any
Subordinated Indebtedness,
the Borrowers shall make a mandatory prepayment of the Term
Loans in an amount equal to 100% of the proceeds received
(net of taxes due and any reasonable expenses of sale).
Nothing contained in this paragraph shall constitute, or be
deemed to constitute, a consent to any sale of assets or stock or
other equity interests or the issuance or incurrence of any
Indebtedness.
(f) Intentionally Omitted.
(g) Mandatory Prepayments from Insurance
Proceeds. (i) If any Borrower, any Guarantor, any of their
respective subsidiaries or the Agent receives (x) any net
proceeds of any insurance required to be maintained pursuant
to Section 6.03 hereof on account of any loss, damage or injury
to any asset of any Borrower, any Guarantor or such subsidiary
(including, without limitation, any Collateral) or any
condemnation or eminent domain awards with respect to any
real property or improvements thereon owned by any
Borrower, any Guarantor or any of their respective
subsidiaries, or (y) any net proceeds of any business
interruption insurance required to be maintained pursuant to
Section 6.03 hereof, then, subject to Section 2.05(g)(ii):
(A) not less than five Business Days prior to and
excluding such receipt the Company shall give
the Agent notice thereof in writing (or by
telephone promptly confirmed in writing), and
(B) not later than the fifth Business Day following
such receipt, the Borrowers shall prepay the
Term Loans in an amount equal to 100% the
proceeds or award received.
(ii) In the case of the receipt of net
proceeds or awards described in Section 2.05(g)(i)(x), the
Borrowers may elect, by written notice delivered to the Agent
not later than the day on which a prepayment would otherwise
be required under clause (i), to apply all or a portion of such
net proceeds or award for the purpose of replacing, repairing,
restoring or rebuilding the relevant tangible property, and, in
such event, any required prepayment under clause (i) above
shall be reduced dollar for dollar by the amount of such
election. An election under this clause (ii) shall not be effective
unless: (x) at the time of such election there is continuing no
Default or Event of Default; (y) the Borrowers shall have
certified to the Agent that: (1) the net proceeds of the
insurance adjustment for such loss, damage or injury or the
amount of such award, together with other funds available to
the Borrowers, shall be substantially sufficient to complete such
replacement, repair, restoration or rebuilding in accordance
<PAGE>
with all applicable laws, regulations and ordinances; and (2) to
the best knowledge of the Borrowers, no Default or Event of
Default has arisen or will arise as a result of such loss, damage,
injury, condemnation, taking, replacement, repair or
rebuilding; and (z) if the amount of net proceeds or awards in
all such cases is equal to or greater than $1,500,000 in the
aggregate in any calendar year (including the proceeds received
on the date of determination), the Borrowers shall have
obtained the written consent of the Agent to such election. In
the event that any net proceeds or awards described in clause
(i) above are received with respect to any equipment or other
personal property and are not applied within 90 days of receipt
thereof as provided in this clause (ii), then the full amount of
such proceeds and awards shall be applied as a prepayment of
the Term Loans. In the event that any net proceeds or awards
described in clause (i) above are received with respect to any
real property or improvements thereon, (x) within 90 days of
such loss, damage or injury thereto or the condemnation or
taking thereof, the Borrowers shall deliver plans, specifications
and other relevant particulars to the Agent with respect to the
replacement, repair, restoration or rebuilding thereof, in form
and substance reasonably satisfactory to the Agent, and (y) if
such proceeds or awards are not applied within one year of
receipt thereof as provided in this clause (ii) and in accordance
with the foregoing plans, specifications and other relevant
particulars, then the full amount of such proceeds and awards
shall be applied as a prepayment of the Term Loans. Any
Property acquired with such proceeds and awards pursuant to
an election under this Section 2.05(g)(ii) shall be referred to as
"Replacement Property". The Borrowers agree to grant a Lien
(subject only to Liens permitted by clause (a), (b), (c), (d), (f),
(i) and (j) of Section 7.01) in such Replacement Property in
favor of the Agent, such security interest to be granted on the
date of acquisition of such Replacement Property by any
Borrower.
(iii) In the event of an election under clause (ii)
above, pending application of the net proceeds or award to the
required replacement, repairs, restoration or rebuilding, such
Borrower, such Guarantor or such subsidiary shall not later
than the time at which prepayment would have been, in the
absence of such election, required under clause (i) above,
deposit the amount that would have been prepaid (the "Special
Deposit") with the Agent, pursuant to agreements in form,
scope and substance reasonably satisfactory to the Agent. The
Special Deposit, together with all earnings on such Special
Deposit, shall be available to the Borrowers solely for the
replacement, repair, rebuilding or restoration of the tangible
property suffering the injury, loss, damage, condemnation or
taking by eminent domain in respect of which such prepayment
and Special Deposit were made or to such other purpose as to
which the Agent may consent in writing; provided, however,
that at such time as a Default or Event of Default shall occur,
the balance of the Special Deposit and earnings thereon may be
applied by the Agent to repay the Obligations in such order as
the Agent shall elect. The Agent shall be entitled to require
proof, as a condition to the making of any withdrawal from the
Special Deposit, that the proceeds of such withdrawal are being
applied for the purposes permitted hereunder.
(h) Mandatory Repayment in the Event Debt
Exceeds Limits. In the event that the outstanding principal
amount under the Term Loans at any time, when added to the
then outstanding principal amount of indebtedness or other
obligations, violates the terms and provisions of any
outstanding Indebtedness of the Borrower (including, without
limitation, under the Senior Indenture, the Senior Subordinated
Indenture or the Existing Credit Agreement), the Borrowers
shall repay that amount of the Term Loans necessary to cure
such violation.
(i) Procedures for Prepayments. When
making a prepayment, whether mandatory or otherwise,
pursuant to this Section 2.05, the Company shall furnish to the
Agent, not later than 12:00 noon (New York City time) three
(3) Business Days prior to the date of such prepayment,
written, telex or facsimile notice (promptly confirmed in
<PAGE>
writing) of prepayment which shall specify the prepayment date
and the principal amount of the Term Loans (or portion
thereof) to be prepaid, which notice shall be irrevocable and
shall commit the Borrowers to prepay such Term Loans by the
amount stated therein on the date stated therein.
(j) No Reborrowing. Subject to paragraph (a)
above, any payments made pursuant to this Section 2.05,
whether optional or mandatory, may not be reborrowed.
SECTION 2.06. Reserve Requirements; Change in
Circumstances.
(a) Change in Law. If at any time and from
time to time after the date of this Agreement, any Lender shall
determine that the adoption of any applicable law, rule,
regulation or guideline regarding capital adequacy, or any
change in any applicable law, rule, regulation or guideline
regarding capital adequacy, or any change in the interpretation
or administration of any thereof by any governmental authority,
central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such
Lender (or its lending office or an affiliate) with any request or
directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable
agency, has or will have the effect of (i) reducing the amount
of any payment (whether of principal, interest or otherwise)
receivable by such Lender or otherwise reducing the rate of
return on such Lender's or its affiliate's capital as a
consequence of such Lender's obligations hereunder to a level
below that which such Lender or affiliate could have achieved
but for such adoption, change or compliance (taking into
consideration such Lender's or its affiliate's policies with
respect to capital adequacy), (ii) increasing the cost to such
Lender of making or maintaining a Term Loan, or (iii)
requiring a payment in respect of a Term Loan, then from time
to time the Borrowers shall pay to such Lender such additional
amount or amounts as will compensate such Lender or its
affiliate for such reduction, additional cost or payment.
Notwithstanding any other provision of this Section 2.06, no
Lender shall demand any payment referred to above if it shall
not at the time be the general policy or practice of such Lender
to demand such compensation in substantially similar
circumstances under substantially comparable provisions of
other credit agreements.
(b) Procedures. A statement of any Lender or
the Agent setting forth such amount or amounts, supported by
calculations in reasonable detail, as shall be necessary to
compensate such Lender or its affiliate as specified in
paragraph (a) above shall be delivered to the Borrowers and
shall be conclusive absent manifest error. The Borrowers shall
pay each Lender or the Agent the amount shown as due on any
such statement within ten (10) days after its receipt of the same.
(c) No Waiver. Failure on the part of any
Lender or the Agent to demand compensation for any increased
costs, reduction in amounts received or receivable or reduction
in the rate of return earned on such Lender's or its affiliate's
capital, shall not constitute a waiver of such Lender's or the
Agent's rights to demand compensation for any increased costs
or reduction in amounts received or receivable or reduction in
rate of return. The protection under this Section 2.06 shall be
available to each Lender and the Agent regardless of any
possible contention of the invalidity or inapplicability of any
law, regulation or other condition which shall give rise to any
demand by such Lender or the Agent for compensation.
(d) Change in Lending Offices. Any Lender
claiming any additional amounts payable pursuant to this
Section 2.06 agrees to use reasonable efforts (consistent with
<PAGE>
legal and regulatory restrictions) to hold its Term Loan in a
different lending office if doing so would avoid the need for, or
reduce the amount of, any such additional amounts and would
not, in the sole judgment of such Lender, be otherwise
disadvantageous to such Lender.
SECTION 2.07. Pro Rata Treatment. Except
as otherwise provided hereunder, the Term Loans, each
payment or prepayment of principal of the Notes, each payment
of interest on the Notes and each payment of any fee or other
amount payable hereunder shall be made pro rata among the
Lenders in the proportions that the outstanding principal
amount of their respective Term Loans bear to the total
outstanding principal amount of all Term Loans.
SECTION 2.08. Sharing of Setoffs. Subject to
the Intercreditor Agreement, each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or
counterclaim against any Borrower, any Guarantor or any of
their respective subsidiaries, obtain payment (voluntary or
involuntary) in respect of a Note held by it as a result of which
the unpaid principal portion of the Note held by it shall be
proportionately less than the unpaid principal portion of the
Note held by any other Lender, it shall be deemed to have
simultaneously purchased from such other Lender a
participation in the Note held by such other Lender, so that the
aggregate unpaid principal amount of the Note and
participations in Notes held by it shall be in the same
proportion to the aggregate unpaid principal amount of all
Notes then outstanding as the principal amount of the Note held
by it prior to such exercise of banker's lien, setoff or
counterclaim was to the principal amount of all Notes
outstanding prior to such exercise of banker's lien, setoff or
counterclaim, provided, however, that if any such purchase or
purchases or adjustments shall be made pursuant to this Section
2.08 and the payment giving rise thereto shall thereafter be
recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price
or prices or adjustments restored without interest. Each
Borrower and each Guarantor expressly consents to the
foregoing arrangements and agrees that any Lender holding a
participation in a Note deemed to have been so purchased may
exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing to such
Lender as fully as if such Lender held a Note in the amount of
such participation.
SECTION 2.09. Taxes. (a) Any and all
payments by the Borrowers and/or Guarantors hereunder shall
be made free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or
withholdings in any such case imposed by the United States or
any political subdivision thereof, excluding:
(i) in the case of the Agent and
each Lender, taxes imposed or based on its net
income, and franchise or capital taxes imposed
on it, (A) if the Agent or such Lender is
organized under the laws of the United States
or any political subdivision thereof and (B) if
the Agent or such Lender is not organized
under the laws of the United States or any
political subdivision thereof, and its principal
office or Domestic Lending Office is located in
the United States, and in the case of both (A)
and (B), withholding taxes payable with respect
to payments to the Agent or such Lender at its
principal office or Domestic Lending Office
under laws (including, without limitation, any
treaty, ruling, determination or regulation) in
effect on the date hereof, but not any increase
in withholding tax resulting from any
subsequent change in such laws (other than
withholding with respect to taxes imposed or
based on its net income or with respect to
franchise or capital taxes), and
<PAGE>
(ii) taxes (including withholding
taxes) imposed by reason of the failure of the
Agent or any Lender, in either case that is
organized outside the United States, to comply
with Section 2.09(f) (or the inaccuracy at any
time of the certificates, documents and other
evidence delivered thereunder)
(all such nonexcluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred
to as "Taxes"). If any Borrower or any Guarantor shall be
required by law to deduct any Taxes from or in respect of any
sum payable hereunder to the Lenders or the Agent, (x) the
sum payable shall be increased by the amount necessary so that
after making all required deductions (including without
limitation deductions applicable to additional sums payable
under this Section 2.09) such Lender or the Agent (as the case
may be) receives an amount equal to the sum it would have
received had no such deductions been made, (y) such Borrower
and/or such Guarantor shall make such deductions and (z) such
Borrower and/or such Guarantor shall pay the full amount
deducted to the relevant tax authority or other authority in
accordance with applicable law.
(b) Stamp Taxes. In addition, each Borrower
and each Guarantor agrees to pay any present or future stamp
or documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made
hereunder or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement (hereinafter referred
to as "Other Taxes").
(c) Tax Indemnity. The Borrowers will
indemnify each Lender and the Agent for the full amount of
Taxes or Other Taxes (including, without limitation, any Taxes
or Other Taxes imposed by any jurisdiction (except as specified
in clauses (a)(i) and (ii)) on amounts payable under this Section
2.09) paid by such Lender or the Agent (as the case may be)
and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto. This indemnification
shall be made within 30 days from the date such Lender or the
Agent (as the case may be) makes written demand therefor. If
any Lender receives a refund in respect of any Taxes or Other
Taxes for which such Lender has received payment from the
Borrowers hereunder, such Lender shall promptly notify the
Borrowers of such refund and such Lender shall, within 30
days of receipt of a request by the Borrowers, repay such
refund to the Borrowers (or if there shall at such time be
continuing a Default or Event of Default, pay the same to the
Agent to be applied to the Obligations in such order and
manner as the Agent shall choose in its discretion); provided,
that the Borrowers, upon the request of such Lender, agree to
return such refund (whether returned to the Borrowers or
applied to the Obligations) (plus any penalties, interest or other
charges) to such Lender in the event such Lender is required to
repay such refund.
(d) Certificates. Within 30 days after the date
of any payment of Taxes or Other Taxes withheld by any
Borrower or any Guarantor in respect of any payment to any
Lender, the Borrowers will furnish to the Agent, at its address
referred to in Section 10.01 hereof, such certificates, receipts
and other documents as may be reasonably required to evidence
payment thereof.
(e) Tax Obligations Survive. Without
prejudice to the survival of any other agreement hereunder, the
agreements and obligations contained in this Section 2.09 shall
survive the payment in full of principal and interest hereunder.
(f) Tax Reports. Each Lender that is organized
outside of the United States shall deliver to the Borrowers on
<PAGE>
the date hereof (or, in the case of an assignee, on the date of
the assignment) and from time to time as required for renewal
under applicable law duly completed copies of United States
Internal Revenue Service Form 1001, Form 4224 or Form W-8
(or any successor or additional forms), as appropriate,
indicating in each case that such Lender is entitled to receive
payments under this Agreement without any deduction or
withholding of any United States federal income taxes. The
Agent (if the Agent is an entity organized outside the United
States) and each Lender that is organized outside the United
States shall promptly notify the Borrowers and the Agent of any
change in its Domestic Lending Office and such Lender shall,
prior to the immediately following due date of any payment by
the Borrowers hereunder, deliver to the Borrowers (with copies
to the Agent), such certificates, documents or other evidence,
as required by the Code or Treasury Regulations issued
pursuant thereto, including without limitation Internal Revenue
Service Form 4224, Form 1001, Form W-8 and any other
certificate or statement of exemption required by Treasury
Regulation Section 1.1441-4(a), Section 1.1441-6(c) or Code
Section 881(c)(2)(B)(ii) or any subsequent version thereof,
properly completed and duly executed by such Lender
establishing that such payment is (i) not subject to withholding
under the Code because such payment is effectively connected
with the conduct by such Lender of a trade or business in the
United States or constitutes portfolio interest for purposes of
Code Section 881(c) or (ii) totally exempt from United States
tax under a provision of an applicable tax treaty. The
Borrowers shall be entitled to rely on such forms in their
possession until receipt of any revised or successor form
pursuant to this Section 2.09(f). If the Agent or a Lender fails
to provide a certificate, document or other evidence required
pursuant to this Section 2.09(f), then (i) the Borrowers shall be
entitled to deduct or withhold on payments to the Agent or such
Lender as a result of such failure, as required by law, and (ii)
the Borrowers shall not be required to make payments of
additional amounts with respect to such withheld Taxes
pursuant to clause (x) of Section 2.09(a) to the extent such
withholding is required by reason of the failure of the Agent or
such Lender to provide the necessary certificate, document or
other evidence.
SECTION 2.10. Payments and Computations. The
Borrowers shall make each payment hereunder and under any
instrument delivered hereunder not later than 12:00 noon (New
York City time) on the day when due in lawful money of the
United States (in freely transferable dollars) (a) directly to the
two Term Lenders identified on Schedule 2.10 at their
respective addresses for payment set forth therein, to the extent
of their respective pro rata shares of any such payment, and (b)
to the Agent, at the address for payment set forth in such
Schedule, for all other Term Lenders.
SECTION 2.11. Payments to Lenders. The Agent
shall pay to each Lender not later than one (1) Business Day
after receipt thereof, its ratable portion, based on the principal
amount of the Term Loan owing to such Lender, of all interest
payments and any other points received by the Agent hereunder
in respect of the Term Loans, net of any amounts payable by
such Lender to the Agent, by wire transfer. It is agreed that
each Lender's Term Loan is intended by the Lenders to be
equal at all times to such Lender's ratable portion (as
determined in accordance with the percentage amounts set forth
in Schedule 2.01 hereto) of the aggregate principal amount of
all Term Loans outstanding.
SECTION 2.12. Indemnity. Each Borrower shall
indemnify each Lender against any loss (including, without
limitation, loss of anticipated profits) or expense (including, but
not limited to, any loss or expense sustained or incurred or to
be sustained or incurred in liquidating or employing deposits
from third parties acquired to affect or maintain any Term Loan
or part thereof as a Eurocurrency Obligation) which such
Lender may sustain or incur as a consequence of the following
events (regardless of whether such events occur as a result of
the occurrence of an Event of Default or the exercise of any
<PAGE>
right or remedy of the Agent or the Lenders under this
Agreement or any other agreement, or at law): any failure of
any Borrower to fulfill on the date of any borrowing of a Term
Loan hereunder (including, without limitation, any conversion
to or continuation of a Term Loan or portion thereof) the
applicable conditions set forth in Article V hereof applicable to
it; any failure of any Borrower to borrow a Term Loan here-
under (including, without limitation, to convert to or continue a
Term Loan) after irrevocable notice of borrowing pursuant to
Section 2.03 hereof has been given; any payment, prepayment
or conversion of a Term Loan on a date other than the last day
of the relevant Interest Period; any default in payment or
prepayment of the principal amount of any Term Loan or any
part thereof or interest accrued thereon, as and when due and
payable (at the due date thereof, by irrevocable notice of
prepayment or otherwise); or the occurrence of an Event of
Default. Such loss or expense shall include, without limitation,
an amount equal to the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount so
paid or prepaid for the period from the date of such payment,
prepayment or conversion or failure to borrow to the last day
of the Interest Period for such Term Loan (or, in the case of a
failure to borrow, the Interest Period for such Term Loan
which would have commenced on the date of such failure to
borrow), at the applicable rate of interest for such Term Loan
provided for herein over (ii) the amount of interest (as
reasonably determined by such Lender) that would be realized
by such Lender in reemploying the funds so paid, prepaid or
converted or not borrowed in United States Treasury
obligations with comparable maturities for comparable periods.
Any such Lender shall provide to the Borrowers a statement,
signed by an officer of such Lender, explaining any loss or
expense and setting forth, if applicable, the computation
pursuant to the preceding sentence, and such statement shall be
conclusive absent manifest error. The Borrowers shall pay
such Lender the amount shown as due on any such statement
within three (3) Business Days after the receipt of the same.
SECTION 2.13. Joint and Several Borrowers. The
parties hereto agree and confirm that the obligations of the
Borrowers under and/or in connection with this Agreement and
the other Term Loan Documents (including, without limitation,
with respect to payments of principal, interest, points and all
other amounts with respect to the Term Loans) are the joint and
several undertaking of each Borrower.
III. COLLATERAL SECURITY.
SECTION 3.01. Security Documents. The Obligations
shall be secured by the Collateral described in the Security
Documents and are entitled to the benefits thereof. The
Borrowers shall, and shall cause the other Grantors to, duly
execute and deliver the Security Documents, all consents of
third parties necessary to permit the effective granting of the
Liens created in such agreements, financing statements
pursuant to the Uniform Commercial Code and other
documents, all in form and substance satisfactory to the Agent,
as may be reasonably required by the Agent to grant to the
Agent for the benefit of the Secured Parties a valid, perfected
and enforceable Lien on and security interest in (subject only to
Permitted Liens) the Collateral.
SECTION 3.02. Filing and Recording. The Borrowers
shall, at their sole cost and expense, cause all instruments and
documents given as evidence of security pursuant to this
Agreement to be duly recorded and/or filed or otherwise
perfected in all places necessary, in the opinion of the Agent,
and take such other actions as the Agent may reasonably
request, in order to perfect and protect the Liens of the Agent
and the Secured Parties in the Collateral. Each Borrower and
each Guarantor, to the extent permitted by law, hereby
authorizes the Agent to file any financing statement in respect
<PAGE>
of any Lien created pursuant to the Security Documents which
may at any time be required or which, in the opinion of the
Agent, may at any time be desirable although the same may
have been executed only by the Agent or, at the option of the
Agent, to sign such financing statement on behalf of such
Borrower or such Guarantor, as the case may be, and file the
same, and each Borrower and each Guarantor hereby
irrevocably designates the Agent, its agents, representatives and
designees as its agent and attorney-in-fact for this purpose. In
the event that any re-recording or refiling thereof (or the filing
of any statements of continuation or assignment of any
financing statement) is required to protect and preserve such
Lien, each Borrower shall, at the Borrowers' cost and expense,
cause the same to be recorded and/or refiled at the time and in
the manner requested by the Agent.
SECTION 3.03. Real Property; Mortgages.
(a) Prior to Closing. To the extent requested
prior to the Closing Date by the Agent:
(i) each Borrower and each
Guarantor shall duly execute and deliver to the
Agent mortgages or deeds of trust (each such
mortgage or deed of trust, as it may be
amended, modified or supplemented from time
to time in accordance with its terms, a
"Mortgage") in respect of real property owned
or leased by such Borrower or such Guarantor,
together with consents of third parties to the
Mortgages executed and delivered by it, as the
Agent shall request (in each case in form and
substance satisfactory to the Agent) so as to
create in the Agent's favor, for the benefit of
the Secured Parties, upon recordation thereof, a
valid, perfected and enforceable Lien (subject
to Liens permitted under Section 7.01 hereof)
on the real property and improvements
described therein, such Mortgages to be in
form and substance satisfactory to the Agent;
and
(ii) each Borrower and each
Guarantor shall cause the Mortgages executed
and delivered to be duly recorded in the
appropriate recording office or offices and shall
pay all fees and taxes payable in connection
therewith.
(b) Post Closing. Upon any Borrower or
any Guarantor acquiring any real property (whether owned or
leased) after the Closing Date in accordance with the provisions
of this Agreement, such Borrower or such Guarantor shall, to
the extent requested by the Agent, execute and deliver a
Mortgage with respect to such real property and such other
documents as may be reasonably requested by the Lenders with
respect thereto. In the event a leasehold cannot be subject to a
Mortgage but can be transferred to an affiliate of the
mortgagee, the mortgagee shall transfer its interest in the
leasehold to Subsidiary with no Indebtedness (other than
Indebtedness owed hereunder or under the Existing Credit
Agreement), shall grant Liens on the stock of such Subsidiary
to the Agent and the Existing Agent in accordance with the
Intercreditor Agreement, and, notwithstanding any other
provision of this Indebtedness, shall cause such Subsidiary (X)
to become a Borrower and Guarantor hereunder (Y) not to
incur any Indebtedness (other than Indebtedness owed
hereunder or under the Existing Credit Agreement) and (Z) not
to grant any Lien on any of its Property other than Liens to
secure both Indebtedness owed hereunder and under the
Existing Credit Agreement in the relative priorities set forth in
the Intercreditor Agreement. This Section 3.03 shall not be
deemed to allow any Borrower or any Guarantor to acquire any
Property if otherwise prohibited by this Agreement.
Notwithstanding the foregoing, the Borrowers and Guarantors
shall only be obligated to exercise reasonable efforts to comply
with the requirements of this Section 3.03 with respect to the
<PAGE>
granting of mortgages on leaseholds.
SECTION 3.04. Additional Collateral. Each Borrower
and each Guarantor acknowledges that it is its intention to
provide the Agent with a Lien on all the Property (excluding
automobiles) of the Borrowers, the Guarantors and their
respective subsidiaries, whether now owned or hereafter
acquired (other than as agreed to in writing by the Agent),
subject only to Liens permitted hereunder. Without limitation
of Section 3.03(b) hereof, each Borrower and each Guarantor
shall from time to time promptly notify the Agent of the
acquisition by any of them or any of their respective
subsidiaries of any material Property in which the Agent does
not then hold a perfected Lien (other than as agreed to in
writing by the Agent), or the creation or existence of any such
Property, and such person shall, upon request by the Agent,
promptly execute and deliver to the Agent or cause to be
executed and delivered to the Agent pledge agreements,
security agreements, mortgages or other like agreements with
respect to such Property, together with such other documents,
certificates, opinions of counsel and the like as the Agent shall
reasonably request in connection therewith, in form and
substance satisfactory to the Agent, such that the Agent shall
receive valid and perfected Liens (subject to Liens permitted
hereby) on all such Property (including Property which, on the
Closing Date, is not subject to a Lien in favor of the Agent). In
addition, in the event that any Borrower, any Guarantor or any
of their respective subsidiaries acquires or owns any material
trademarks, copyrights, patents or other intellectual property,
the Borrowers shall notify the Agent promptly in writing and
shall execute, or cause the execution of a security agreement
and other documents with respect thereto in form and substance
reasonably satisfactory to the Agent. Notwithstanding the
foregoing, the Borrowers and Guarantors shall only be
obligated to exercise reasonable efforts to comply with the
requirements of this Section with respect to the granting of
mortgages on leaseholds.
SECTION 3.05. Pledge of Reinvestment Assets or
Replacement Property.
(a) Notice of Acquisition. If any Borrower
acquires Reinvestment Assets or Replacement Property, the
Company shall give the Agent written notice, signed by a
Responsible Officer, not less than 20 calendar days before the
acquisition thereof:
(i) describing the Reinvestment Assets or
Replacement Property to be acquired and the
location where such Reinvestment Assets or
Replacement Property shall be held, such
descriptions to be in detail sufficient to allow
the Agent to obtain a perfected and enforceable
Lien thereon; and
(ii) certifying as to the documents which are
required to be signed, delivered and/or filed,
and any other actions that need to be taken, to
grant the Agent a perfected and enforceable
Lien on the Reinvestment Assets or
Replacement Property for the benefit of the
Lenders (subject only to Permitted Liens), or
that no such action is necessary for the Agent
to hold a perfected and enforceable Lien
thereon.
(b) Grant of Lien. Unless no action need
be taken to grant the Agent a perfected and enforceable Lien on
Reinvestment Assets or Replacement Property, the Borrower
acquiring the Reinvestment Assets or Replacement Property
shall on or before the date of such acquisition execute, deliver
and file such documents, and take such other actions, as may
be necessary to grant the Agent such a Lien, and the Company
shall deliver to the Agent on or before the date of such
acquisition a certificate signed by a Responsible Officer to the
effect that such actions have been taken.
<PAGE>
IV. REPRESENTATIONS AND WARRANTIES
Each of the Borrowers and each of the
Guarantors jointly and severally represents and warrants to
each of the Lenders that:
SECTION 4.01. Organization, Legal Existence. Each
Borrower, each Guarantor and each of their respective
subsidiaries is a legal entity duly organized, validly existing and
in good standing under the laws of the jurisdiction of their
respective organization, has the requisite power and authority
to own their Property and to carry on their business as now
conducted and as currently proposed to be conducted and is
qualified to do business in each jurisdiction where the failure to
so qualify would not have a Material Adverse Effect (all such
jurisdictions being listed in Schedule 4.01 annexed hereto).
Each Borrower and each Guarantor has the corporate power to
execute, deliver and perform its obligations under this
Agreement and the other Term Loan Documents to which it is
a party, and, with respect to each Borrower, to borrow
hereunder and to execute and deliver the Notes.
SECTION 4.02. Authorization. The execution, delivery
and performance by each Borrower and each Guarantor of this
Agreement and each of the other Term Loan Documents to
which it is a party, the borrowings hereunder by each
Borrower, the execution and delivery by each Borrower of the
Notes and the grant of Liens in, to or on the Collateral by the
Security Documents (collectively, the "Transactions") (a) have
been duly authorized by all requisite corporate and, if required,
stockholder action and (b) will not (i) violate (A) any provision
of law, statute, rule or regulation applicable to any Borrower,
any Guarantor or any of their respective subsidiaries or the
certificate or articles of incorporation or other applicable
constitutive documents or the by-laws of any Borrower, any
Guarantor or any of their respective subsidiaries, as the case
may be, (B) any order of any court, or any rule, regulation or
order of any other agency of government binding upon any
Borrower, any Guarantor or any of their respective
subsidiaries, or (C) any provisions of any indenture, agreement
or other instrument to which any Borrower, any Guarantor or
any of their respective subsidiaries, or any of their respective
properties or assets are or may be bound (which violation
would reasonably be expected to have a Material Adverse
Effect), (ii) be in conflict with, result in a breach of or
constitute (alone or with notice or lapse of time or both) a
default under any indenture, agreement or other instrument
referred to in (b)(i)(C) above which will remain in effect
following the Closing Date or (iii) result in the creation or
imposition of any Lien of any nature whatsoever (other than in
favor of the Agent, for the benefit of the Secured Parties, as
contemplated by this Agreement and the Security Documents)
upon any Property of any Borrower, any Guarantor or any of
their respective subsidiaries.
SECTION 4.03. Governmental Approvals. No
registration or filing (other than the filings necessary to perfect
the Liens created by the Security Documents) with, consent or
approval of, or other action by, any Federal, state or other
governmental agency, authority or regulatory body is or will be
required on behalf of any Borrower or any Guarantor or any
subsidiary of any of them in connection with the Transactions,
other than any which have been made or obtained on the
Closing Date, in each case as set forth on Schedule 4.03.
SECTION 4.04. Binding Effect. This Agreement and
each of the other Term Loan Documents to which it is a party
constitutes, and each of the Notes when duly executed and
delivered will constitute, a legal, valid and binding obligation
of each Borrower and each Guarantor, as appropriate,
<PAGE>
enforceable in accordance with its terms, subject to the effect of
any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally
and to general principles of equity (regardless of whether
considered in a proceeding in equity or at law).
SECTION 4.05. Material Adverse Change. Since
March 27, 1999, there has been no change, event or facts with
respect to the Borrowers or their respective subsidiaries that
would reasonably be expected to have a Material Adverse
Effect, other than those that have been disclosed to the Agent
prior to the Closing Date.
SECTION 4.06. Litigation; Compliance with Laws;
etc.
(a) No Suits. There are not any actions, suits
or proceedings at law or in equity or by or before any
governmental instrumentality or other agency or regulatory
authority now pending or, to the knowledge of any Responsible
Officer of any Borrower, any Guarantor or any of their
respective subsidiaries, threatened, against or affecting any
Borrower, any Guarantor or any of their respective subsidiaries
or the businesses, assets or rights of any Borrower, any
Guarantor or any of their respective subsidiaries (i) which
involve any of the Transactions or (ii) as to which it is probable
(within the meaning of Statement of Financial Accounting
Standards No. 5) that there will be an adverse determination
and which, if adversely determined, would, individually or in
the aggregate, reasonably be expected to have a Material
Adverse Effect.
(b) No Violations. None of the Borrowers,
any Guarantor or any of their respective subsidiaries is in
violation of any law in any material respect, or in default with
respect to any judgment, writ, injunction, decree, rule or
regulation of any court or governmental agency or instrumen-
tality which would reasonably be expected to have a Material
Adverse Effect.
SECTION 4.07. Financial Statements.
(a) Year-end and Quarterly Statements. The
Borrowers have heretofore furnished to the Lenders
Consolidated balance sheets and statements of income and cash
flows of Jitney Jungle and its Consolidated subsidiaries dated as
of January 2, 1999 audited by and accompanied by the opinion
of Deloitte & Touche, its independent public accountants.
Such balance sheets and statements of income and cash flows
present fairly the Consolidated financial condition and results of
operations of Jitney Jungle and its subsidiaries as of the dates
and for the periods indicated, and such balance sheets and the
notes thereto disclose all material liabilities, direct or
contingent, of Jitney Jungle and its subsidiaries, as of the dates
thereof to the extent such material liabilities are required to be
disclosed under generally accepted accounting principles. The
Borrowers have heretofore furnished to the Lenders unaudited
Consolidated balance sheets and statements of income and cash
flows of Jitney Jungle and its Consolidated subsidiaries dated as
of March 27, 1999, for the twelve-week fiscal period of Jitney
Jungle ending on such date. Such unaudited balance sheets and
statements of income and cash flows present fairly the
Consolidated financial condition and results of operations of
Jitney Jungle and it subsidiaries as of the dates and for the
periods indicated, and such balance sheets and the notes thereto
disclose all material liabilities, direct or contingent, of Jitney
Jungle and its subsidiaries as of the dates thereof. The financial
statements referred to in this Section 4.07(a) have been
prepared in accordance with generally accepted accounting
principles consistently applied (with respect to the twelve-week
financial statements only, subject to year-end adjustments).
<PAGE>
(b) Projections. The Borrowers have, on or
about June 27, 1999, furnished to the Lenders projected income
statements, balance sheets, cash flows, forecasts as to Excess
Cash Flow and as to compliance with the covenants contained
in Sections 7.07, 7.08, 7.09, 7.10 and 7.11 hereof, in each
case of the Borrowers on a Consolidated basis for the period
initially ending January 2, 2000 and for two fiscal years ending
thereafter (which projections shall be on a fiscal month by
fiscal month basis for the fiscal period ending January 2, 2000
and on a yearly basis thereafter), together with a schedule
demonstrating prospective compliance with all financial
covenants contained in this Agreement, such projections
disclosing all material assumptions made by Jitney Jungle and
its subsidiaries in formulating such projections and both before
and after giving effect to the Transactions. The projections are
based upon reasonable estimates and assumptions, all of which
are reasonable in light of the conditions which existed at the
time the projections were made, have been prepared on the
basis of the assumptions stated therein, and reflect as of the
Closing Date the reasonable estimate of Jitney Jungle and its
subsidiaries of the results of operations and other information
projected therein.
SECTION 4.08. Federal Reserve Regulations. None
of any Borrower, any Guarantor or any of their respective
subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock. No part of the proceeds
of the Term Loans will be used, whether directly or indirectly,
and whether immediately, incidentally or ultimately, (i) to
purchase or carry Margin Stock in violation of any of
Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System of the United States (the "Board") as
in effect on the date hereof, or to extend credit to others for the
purpose of purchasing or carrying Margin Stock or to refund
indebtedness originally incurred for such purpose, or (ii) for
any purpose which entails a violation of, or which is
inconsistent with, the provisions of any regulation of the Board.
If requested by any Lender, the Borrowers or any of their
respective subsidiaries shall furnish to such Lender a statement
on Federal Reserve Form U-1 referred to in said Regulation U.
SECTION 4.09. Taxes. The Borrowers, the Guarantors
and each of their respective subsidiaries have each filed or
caused to be filed all Federal, state, local and foreign tax
returns which are required to be filed by them, other than tax
returns in respect of taxes that (x) are not franchise, capital or
income taxes, (y) in the aggregate are not material and (z)
would not, if unpaid, result in the imposition of any material
Lien on any Property of any Borrower, any Guarantor or any
of their respective subsidiaries. The Borrowers, the Guarantors
and their respective subsidiaries have paid or caused to be paid
all taxes shown to be due and payable on such filed returns or
on any assessments received by them, other than any taxes or
assessments the validity of which the Borrowers, the
Guarantors or any of their respective subsidiaries is contesting
in good faith by appropriate proceedings, and with respect to
which the Borrowers, the Guarantors or any of their respective
subsidiaries shall, to the extent required by generally accepted
accounting principles consistently applied, have set aside on its
books adequate reserves. As of the Closing Date, no Federal
income tax returns of the Borrowers, the Guarantors or any of
their respective subsidiaries are currently being audited by the
United States Internal Revenue Service. All deficiencies which
have been asserted against the Borrowers, the Guarantors or
any of their respective subsidiaries as a result of such
completed examinations have been fully paid or finally settled
and no issue has been raised in any such examination which, by
application of similar principles, reasonably can be expected to
result in assertion of a material deficiency for any other year
not so examined which has not been reserved for in any
financial statement of the Borrowers, the Guarantors or any of
their respective subsidiaries delivered to the Lenders. None of
the Borrowers, the Guarantors or any of their respective
subsidiaries has taken any reporting positions for which they do
not have a reasonable basis and none of the Borrowers, the
Guarantors or any of their respective subsidiaries anticipates
any further material tax liability with respect to the years which
<PAGE>
have not been closed. None of the Borrowers, the Guarantors
or any of their respective subsidiaries has as of the date hereof
requested or been granted any extension of time to file any
Federal, state, local or foreign tax return. None of the
Borrowers, the Guarantors or any of their respective
subsidiaries is party to or has any obligation under any tax
sharing agreement.
SECTION 4.10. Employee Benefit Plans. With respect
to the provisions of ERISA:
(i) No Reportable Event has
occurred or is continuing with respect to any
Pension Plan.
(ii) No prohibited transaction
(within the meaning of Section 406 of ERISA
or Section 4975 of the Code) has occurred with
respect to any Plan subject to Part 4 of Subtitle
B of Title I of ERISA that could subject any
Borrower or any ERISA Affiliate thereof to a
material civil penalty assessed pursuant to the
provisions of Section 502 of ERISA or a
material tax imposed under the provisions of
Section 4975 of the Code.
(iii) None of any Borrower or any
ERISA Affiliate thereof is now, or has been
during the preceding five years, obligated to
contribute to a Pension Plan or a
Multiemployer Plan. None of any Borrower or
any ERISA Affiliate thereof has (A) ceased
operations at a facility so as to become subject
to the provisions of Section 4062(e) of ERISA,
(B) withdrawn as a substantial employer so as
to become subject to the provisions of Section
4063 of ERISA, (C) ceased making
contributions to any Pension Plan subject to the
provisions of Section 4064(a) of ERISA to
which any Borrower, any subsidiary thereof or
any ERISA Affiliate thereof made
contributions, (D) incurred or caused to occur a
"complete withdrawal" (within the meaning of
Section 4203 of ERISA) or a "partial
withdrawal" (within the meaning of Section
4205 of ERISA) from a Multiemployer Plan
that is a Pension Plan so as to incur withdrawal
liability under Section 4201 of ERISA (without
regard to subsequent reduction or waiver of
such liability under Section 4207 or 4208 of
ERISA), or (E) been a party to any transaction
or agreement under which the provisions of
Section 4204 of ERISA were applicable, in
each case, which would result in a Material
Adverse Effect.
(iv) No notice of intent to terminate
a Pension Plan (other than a Multiemployer
Plan) has been filed, nor has any Plan been
terminated pursuant to the provisions of Section
4041(e) of ERISA which would result in a
Material Adverse Effect.
(v) The PBGC has not instituted
proceedings to terminate (or appoint a trustee to
administer) a Pension Plan and no event has
occurred or condition exists which might
constitute grounds under the provisions of
Section 4042 of ERISA for the termination of
(or the appointment of a trustee to administer)
any such Plan.
(vi) With respect to each Pension
Plan (other than a Multiemployer Plan) that is
subject to the provisions of Title I, Subtitle B,
Part 3 of ERISA, the funding method used in
connection with such Plan is acceptable under
ERISA, and the actuarial assumptions and
methods used in connection with funding such
<PAGE>
Pension Plan satisfy the requirements of Section
302 of ERISA. The assets of each such Pension
Plan (other than the Multiemployer Plans) are
at least equal to the present value of the greater
of (i) accrued benefits (both vested and non--
vested) under such Plan, or (ii) "benefit
liabilities" (within the meaning of Section
4001(a)(16) of ERISA) under such Plan, in
each case as of the latest actuarial valuation
date for such Plan (determined in accordance
with the same actuarial assumptions and
methods as those used by the Plan's actuary in
its valuation of such Plan as of such valuation
date). No such Pension Plan has incurred any
"accumulated funding deficiency" (as defined
in Section 412 of the Code), whether or not
waived, which would result in a Material
Adverse Effect.
(vii) There are no actions, suits or
claims pending (other than routine claims for
benefits) or, to the knowledge of any Borrower
or any ERISA Affiliate thereof, which could
reasonably be expected to be asserted, against
any Plan (other than a Multiemployer Plan) or
the assets of any such Plan which would cause
a Material Adverse Effect. No civil or criminal
action brought pursuant to the provisions of
Title I, Subtitle B, Part 5 of ERISA is pending
or threatened against any fiduciary or any Plan
(other than a Multiemployer Plan) which would
have a Material Adverse Effect. None of the
Plans or any fiduciary thereof (in its capacity as
such) has been the direct or indirect subject of
any audit, investigation or examination by any
governmental or quasi-governmental agency
which would have a Material Adverse Effect.
(viii) All of the Plans substantially
comply currently, and have substantially
complied in the past, both as to form and
operation, with their terms and with the
provisions of ERISA and the Code, and all
other applicable laws, rules and regulations; all
necessary governmental approvals for the Plans
have been obtained and a favorable
determination as to the qualification under Sec-
tion 401(a) of the Code of each of the Plans
which is an employee pension benefit plan
(within the meaning of Section 3(2) of ERISA)
has been made by the Internal Revenue Service
and a recognition of exemption from federal
income taxation under Section 501(a) of the
Code of each of the funded employee welfare
benefit plans (within the meaning of Section
3(l) of ERISA) has been made by the Internal
Revenue Service, and nothing has occurred
since the date of each such determination or
recognition letter that would adversely affect
such qualification.
SECTION 4.11. No Material Misstatements. No
information, report, financial statement, exhibit or schedule
prepared or furnished by or on behalf of any Borrower or any
Guarantor or any subsidiary of any of them to the Agent or any
Lender in connection with any of the Transactions or this
Agreement, the Security Documents, the Notes or any other
Term Loan Documents or included therein at the time it was
prepared contained any material misstatement of fact or omitted
to state any material fact necessary to make the statements
therein, taken together with all other such statements made to
the Agent or any Lender, in the light of the circumstances
under which they were made, not misleading. The Borrowers
provided certain internal work papers and forecasts to the
Lenders in connection with this agreement, and the Borrowers
represent and warrant that such work papers and forecasts were
prepared in good faith and believed to be accurate and not
deceptive or materially incomplete or misleading.
SECTION 4.12. Investment Company Act; Public
Utility Holding Company Act. None of the Borrowers, the
Guarantors or any of their respective subsidiaries is an
<PAGE>
"investment company" as defined in, or is otherwise subject to
regulation under, the Investment Company Act of 1940. None
of the Borrowers, the Guarantors or any of their respective
subsidiaries is a "holding company" as that term is defined in
or is otherwise subject to regulation under, the Public Utility
Holding Company Act of 1935.
SECTION 4.13. Valid Lien. The Agent has a legal,
valid and perfected Lien for the ratable benefit of the Lenders
on all of the Collateral, including without limitation all cash,
securities or "investment property" as such term is defined in
the Uniform Commercial Code. Without limiting the
foregoing, each of the Security Documents creates and grants
to the Agent, for the benefit of the Lenders, a valid and
perfected Lien on the Collateral identified therein, including
without limitation any leasehold interest subject to a leasehold
mortgage or deed of trust and all cash, securities or
"investment property" as such term is defined in the Uniform
Commercial Code, subject only to Permitted Liens. Schedule
4.13 annexed hereto lists each financing statement or mortgage
which has been filed against any of the Borrowers or
Guarantors as of the Closing Date and each other Lien securing
Indebtedness in excess of $1,000,000 of which the Company
has actual knowledge.
SECTION 4.14. Bank Accounts. Schedule 4.14 hereto
sets forth as of the Closing Date a list of all bank accounts of
the Borrowers.
SECTION 4.15. Capitalization. (a) As of the Closing
Date, the authorized capital stock of Jitney Jungle consists of (i)
5,000,000 shares of common stock, $0.01 par value per share,
of which 425,080 shares shall be issued and outstanding and (ii)
600,000 shares of preferred stock, par value $0.01 per share,
consisting of (A) 225,000 shares of the Series A Preferred
Stock of which 225,000 shall be issued and outstanding, (B)
275,000 shares of the Series B Preferred Stock of which
274,460.24 shall be issued and outstanding and (C) 100,000
shares of the Series C Preferred Stock of which 98,879.80 shall
be issued and outstanding. The owners of the capital stock of
Jitney Jungle and the number of shares of capital stock owned
by each such owner on the Closing Date and after
consummation of the Transactions is set forth on Schedule
4.15(a) annexed hereto. On the Closing Date and after
consummation of the Transactions, except as set forth in
Schedule 4.15(b), Jitney Jungle will have no subsidiaries.
(b) As of the Closing Date and after
consummation of the Transactions, Schedule 4.15(b) annexed
hereto sets forth, with respect to each Borrower and each
Guarantor (other than Jitney Jungle), its jurisdiction of
incorporation, its capitalization and the ownership of capital
stock of each such Borrower or Guarantor. None of such
Borrowers or Guarantors has any subsidiaries, except as set
forth on Schedule 4.15(b) annexed hereto.
SECTION 4.16. Title to Properties; Possession Under
Leases; Trademarks.
(a) Real Property. Each Borrower, each
Guarantor and each of their respective subsidiaries owns good
and marketable, indefeasible fee simple title to all of the real
estate described on Schedule 4.16(a-1) annexed hereto as
owned by it and has a valid leasehold interest in all of the real
estate described on Schedule 4.16(a-2) annexed hereto as leased
by it, in each case (to the best of Borrowers' knowledge with
respect to leases) free and clear of all Liens or other
encumbrances of any kind, except as described in Schedule
4.16(a-2) annexed hereto and except Liens permitted under
Section 7.01 hereof. Schedules 4.16(a-1) and 4.16(a-2)
annexed hereto correctly identify as of the Closing Date, (x)
each parcel of real property owned by such Borrower, such
<PAGE>
Guarantor or such subsidiary, together in each case with an
accurate street address and description of the use of such
parcel, (y) each parcel of real property leased by or to such
Borrower, such Guarantor or such subsidiary, together in each
case with an accurate street address and description of the use
of such parcel, and (z) each other interest in real property
owned, leased or granted to or held by such Borrower, such
Guarantor or such subsidiary. Except as set forth on Schedules
4.16(a-1) and 4.16(a-2):
(i) no structure owned or leased by
any Borrower, any Guarantor or any of their respective
subsidiaries fails to conform in any material respect
with applicable ordinances, regulations, zoning laws
and restrictive covenants (including in any such case
and without limitation those relating to environmental
protection) nor encroaches upon real property of
others, nor is any such real property encroached upon
by structures of others in any case in any manner that
would have or would be reasonably likely to have a
Material Adverse Effect on the Agent's or Lenders'
interest in any Collateral located on the premises or
otherwise would have or would be reasonably likely to
have a Material Adverse Effect;
(ii) no charges or violations have
been filed, served, made or threatened, to the
knowledge of such Borrower or Guarantor, against or
relating to any such property or structure or any of the
operations conducted at any such property or structure,
as a result of any violation or alleged violation of any
applicable ordinances, requirements, regulations,
zoning laws or restrictive covenants (including in any
such case and without limitation those relating to
environmental protection) or as a result of any
encroachment on the property of others where the
effect of same would have or would be reasonably
likely to have a Material Adverse Effect on the Agent's
or Lenders' interest in any Collateral located on the
premises or otherwise would have or would be
reasonably likely to have a Material Adverse Effect;
(iii) other than pursuant to
applicable laws, rules, regulations or ordinances,
covenants that run with the land or provisions in the
applicable leases, there exists no restriction on the use,
transfer or mortgaging of any such property;
(iv) such Borrower, such Guarantor
and/or such subsidiary each have adequate permanent
rights of ingress to and egress from any such property
used by it for the operations conducted thereon;
(v) there are no developments
affecting any of the real property or interests therein
pending or (to the best of Borrowers' knowledge)
threatened which might reasonably be expected to
curtail or interfere in any material respect with the use
of such property for the purposes for which it is now
used; and
(vi) as of the Closing Date, none of
the Borrowers, the Guarantors or any of their
respective subsidiaries has any obligation to acquire
any interest in, any real property.
(b) Liens. Except as set forth in Schedule
4.16(a-2), each Borrower, each Guarantor and each of their
respective subsidiaries owns and has good and marketable title
to all the owned properties and assets reflected on its most
recent balance sheet (other than assets permitted to be sold
under this Agreement) subject to no Liens except Liens
permitted under Section 7.01.
<PAGE>
(c) Leases. Except as set forth in Schedule
4.16(a-2), each Borrower, each Guarantor and each of their
respective subsidiaries holds valid leasehold interests in the
Property reflected on its most recent balance sheet as leased by
it, and each such lease is in full force and effect and each
Borrower, each Guarantor and each of their respective
subsidiaries enjoys peaceful and undisturbed possession under
all such leases, other than leases terminated in the ordinary
course of business and disputes with lessors being pursued in
good faith; provided, however, that each lease of real property
which, after giving effect to the transactions contemplated
hereby, will be subject to a leasehold mortgage or deed of trust
in favor of the Agent for the ratable benefit of the Lenders and
thus included in the Collateral, is in full force and effect and no
breach, default, event of default, violation or other event
entitling the landlord to terminate such lease has occurred or
will occur by virtue of the transactions contemplated hereby,
including without limitation the granting of Liens on such
leaseholds to the Agent for the ratable benefit of the Lenders.
Schedule 4.16(a-3) contains a complete list of leaseholds that
are subject to the Liens held by the Agent and the Existing
Agent, Schedule 4.16(a-4) contains a complete list of leaseholds
that are not subject to the Liens held by the Agent or the
Existing Agent but which, by their terms, can either be subject
to such Liens or transferred to a newly-formed subsidiary
whose stock has been pledged to the Agent and the Existing
Agent, and Schedule 4.16(a-5) contains a complete list of
leaseholds that are subject to Liens held by the Existing Agent
pursuant to consents given by landlords that cannot be subject
to a Lien in favor of the Agent.
(d) Intellectual Property. Each Borrower,
each Guarantor and each of their respective subsidiaries own or
control or have the right to use all trademarks, trademark
rights, trade names, trade name rights, copyrights, patents,
patent rights and licenses which are material to the conduct of
the business of such Borrower, such Guarantor or such
subsidiary. To the best of such Borrower's or such Guarantor's
knowledge, as applicable, none of such Borrower, such
Guarantor or any of their respective subsidiaries is infringing
upon or otherwise acting adversely to any of such trademarks,
trademark rights, trade names, trade name rights, copyrights,
patent rights or licenses owned by any other person or persons.
There is no claim or action by any such other person pending,
or to the knowledge of any Responsible Officer of such
Borrower or such Guarantor, as applicable, threatened against
such Borrower or such Guarantor, or any of their respective
subsidiaries with respect to any of the rights or Property
referred to in this Section 4.16(d), except as would not
reasonably be expected to have a Material Adverse Effect.
SECTION 4.17. Solvency. After giving effect to the
Transactions,
(a) Balance Sheet Solvency. The fair salable
value of the assets of each of Jitney Jungle and each of its
Consolidated subsidiaries is not less than the amount that will
be required to be paid on or in respect of the probable liability
on the existing debts and other liabilities (including contingent
liabilities) of Jitney Jungle and each such Consolidated
subsidiary, as they become absolute and mature.
(b) Adequate Capital. The assets of each of
Jitney Jungle and each of its Consolidated subsidiaries do not
constitute unreasonably small capital for Jitney Jungle and such
Consolidated subsidiaries to carry out their respective
businesses as now conducted and as proposed to be conducted
including the capital needs of Jitney Jungle and such
Consolidated subsidiaries, taking into account the particular
capital requirements of the business conducted by Jitney Jungle
and each such Consolidated subsidiary and projected capital
requirements and capital availability thereof.
<PAGE>
(c) Incurring Debts. None of the Borrowers or
any of their respective subsidiaries intends to incur debts
beyond its ability to pay such debts as they mature. The cash
flow of each of Jitney Jungle and its Consolidated subsidiaries,
after taking into account all anticipated uses of the cash of
Jitney Jungle and its Consolidated subsidiaries, will at all times
be sufficient to pay all such amounts on or in respect of debt of
Jitney Jungle and its Consolidated subsidiaries when such
amounts are required to be paid.
(d) Judgments. None of the Borrowers nor
any of their respective subsidiaries believes that final judgments
against them in actions for money damages presently pending
will be rendered at a time when, or in an amount such that,
they will be unable to satisfy any such judgments promptly in
accordance with their terms (taking into account the maximum
reasonable amount of such judgments in any such actions and
the earliest reasonable time at which such judgments might be
rendered). The cash flow of each of Jitney Jungle and each of
its Consolidated subsidiaries, after taking into account all other
anticipated uses of the cash of Jitney Jungle and its
Consolidated subsidiaries (including the payments on or in
respect of debt referred to in paragraph (c) of this Section), will
at all times be sufficient to pay all such judgments promptly in
accordance with their terms.
SECTION 4.18. Permits, etc. Each Borrower, each
Guarantor and each of their respective subsidiaries possesses all
licenses, permits, approvals and consents, including, without
limitation, all environmental, health and safety licenses,
permits, approvals and consents of all Federal, state and local
governmental authorities which are required under
Environmental Law and are material to the conduct of its
business (collectively, "Permits"), other than as set forth on
Schedule 4.18; each such Permit is and will be in full force and
effect; each Borrower, each Guarantor and each of their
respective subsidiaries is in compliance in all material respects
with all such Permits, and, to its knowledge, no event
(including, without limitation, any material violation of any
law, rule or, regulation) has occurred which would be likely to
lead to the revocation or termination of any such Permit or any
additional restriction thereon, except as such Permits expire
and must be reissued due to the passage of time.
SECTION 4.19. Compliance with Environmental
Laws. (i) The operations of each Borrower, each Guarantor and
their respective subsidiaries comply in all material respects with
all applicable Environmental Laws; (ii) none of any Borrower,
any Guarantor or any of their respective subsidiaries and all of
their present facilities or operations, as well as to their knowl-
edge, their past facilities or operations, are subject to any
judicial proceeding, administrative proceeding or written order
or agreement with any governmental authority or private party
respecting (a) any Environmental Law, (b) any Remedial
Work, or (c) any Environmental Claims arising from the
Release of a Hazardous Material into the environment, except
as would not reasonably be expected to have a Material
Adverse Effect; (iii) none of the operations of any Borrower,
any Guarantor or any of their respective subsidiaries are the
subject of any Federal or state investigation evaluating whether
any Remedial Work is needed to respond to a Release of any
Hazardous Material into the environment in violation of any
Environmental Law, except as would not reasonably be
expected to have a Material Adverse Effect; (iv) none of any
Borrower, any Guarantor or any of their respective subsidiaries
or any predecessor of any Borrower, any Guarantor or any of
their respective subsidiaries have filed any notice under any
Environmental Law indicating past or present treatment,
storage, or disposal of a Hazardous Material in material
violation of any Environmental Law or reporting a material
spill or Release of a Hazardous Material into the environment
in violation of any Environmental Law, except for spills the
responses to which would not collectively reasonably be
expected to have a Material Adverse Effect; (v) to the best of
<PAGE>
Borrowers' knowledge, none of any Borrower, any Guarantor
or any of their respective subsidiaries have any contingent
liability in connection with any Release of any Hazardous
Material into the environment, except as would not reasonably
be expected to have a Material Adverse Effect; (vi) none of the
operations of any Borrower, any Guarantor or any of their
respective subsidiaries involve the generation, transportation,
treatment or disposal of Hazardous Materials except in
compliance with all Environmental Laws, except as would not
reasonably be expected to have a Material Adverse Effect; (vii)
none of any Borrower, any Guarantor or any of their respective
subsidiaries has disposed of any Hazardous Material by placing
it in or on the ground or waters of any premises owned, leased
or used by any of them and to the knowledge of such
Borrower, such Guarantor and such subsidiaries, neither has
any lessee, prior owner or other person, except as would not
reasonably be expected to have a Material Adverse Effect;
(viii) no underground storage tanks or surface impoundments
are on any Property of any Borrower, any Guarantor or any of
their respective subsidiaries, except as would not reasonably be
expected to have a Material Adverse Effect; and (ix) no Lien in
favor of any governmental authority for (A) any liability under
any Environmental Law or regulation, or (B) damages arising
from or costs incurred by such governmental authority in
response to a Release of a Hazardous Material into the
environment, has been filed or attached to the Property of any
Borrower, any Guarantor or any of their respective
subsidiaries.
SECTION 4.20. Material Agreements. Schedule 4.20
hereto sets forth as of the Closing Date a list of all material
agreements, contracts and instruments to which each Borrower,
each Guarantor and each of their respective subsidiaries is a
party or by which any of such persons is bound and all
amendments, modifications and supplements to each of the
foregoing. No Borrower, no Guarantor and no subsidiary of
either of them is in default or breach, or will, after giving
effect to the transactions contemplated hereby, be in default or
breach of any of such agreements, contracts and instruments,
including without limitation the Existing Credit Agreement, the
Senior Indenture or the Senior Subordinated Indenture. No
Borrower, no Guarantor and no subsidiary of either of them is
in default or breach, or will, after giving effect to the
transactions contemplated hereby, be in default or breach of
any lease of real property which would entitle the landlord to
terminate such lease.
SECTION 4.21. Broker's Fees. No broker's or
finder's fee, commission or similar compensation has been or
will be payable with respect to any of the Transactions other
than to Donaldson Lufkin & Jenrette Securities Corporation,
which was retained as the Company's financial advisor and
whose fees and disbursements shall be payable solely by the
Company. No other similar fees or commissions will be
payable by any Person for any other services rendered to any
Borrower ancillary to the Transactions.
V. CONDITIONS OF CLOSING
SECTION 5.01. Conditions Precedent. The
effectiveness of this Agreement and the obligation of each
Lender to make the Term Loans hereunder on the Closing Date
shall be subject to the following conditions precedent:
(a) Representations. The representations and
warranties set forth in Article IV hereof and in any
documents delivered herewith, including, without
limitation, the Term Loan Documents, shall be true and
correct in all material respects with the same effect as
though made on and as of such date (except insofar as
<PAGE>
such representations and warranties relate expressly to
an earlier date).
(b) No Default. The Borrowers shall be in
compliance with all the terms and provisions contained
herein on their part to be observed or performed, and
at the time of and immediately after the Closing Date,
no Default or Event of Default shall have occurred and
be continuing.
(c) Legal Opinions. The Agent and the
Lenders shall have received the favorable written
opinion(s) of counsel for each of the Borrowers, the
Guarantors and the Grantors, substantially in the forms
of Exhibit B annexed hereto, dated the Closing Date,
addressing such matters and from such jurisdictions as
shall be requested by the Agent, addressed to the Agent
and the Lenders and satisfactory to the Agent.
(d) Corporate Documents. The Agent and the
Lenders shall have received (i) a copy of the certificate
or articles of incorporation or constitutive documents,
in each case as amended to date, of each of the
Borrowers, the Grantors and the Guarantors, certified
as of a recent date by the Secretary of State or other
appropriate official of the state of its organization, and
a certificate as to the good standing of each from such
Secretary of State or other official, in each case dated
as of a recent date; (ii) a certificate of the Secretary of
each of the Borrowers, Grantors and Guarantors, dated
the Closing Date and certifying (A) that attached
thereto is a true and complete copy of such person's
By-laws 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 (B) below, (B) that
attached thereto is a true and complete copy of a
resolution adopted by such person's Board of Directors
authorizing the execution, delivery and performance of
this Agreement, the Security Documents, the Notes,
and the other Term Loan Documents, as applicable,
and that such resolution has not been modified,
rescinded or amended and is in full force and effect,
(C) that such person's certificate or articles of
incorporation or constitutive documents has not been
amended since the date of the last amendment thereto
shown on the certificate of good standing furnished
pursuant to (i) above, and (D) as to the incumbency and
specimen signature of each of such person's officers
executing this Agreement, the Notes, each Security
Document or any other Term Loan Document delivered
in connection herewith or therewith, as applicable; (iii)
a certificate of another of such person's officers as to
incumbency and signature of its Secretary; and (iv)
such other documents as the Agent or any Lender may
reasonably request.
(e) Compliance Certificate. The Agent shall
have received a certificate, dated the Closing Date and
signed by the Financial Officer of each of the
Borrowers, confirming compliance with the conditions
precedent set forth in this Section 5.01.
(f) Note. Each Lender shall have received its
Note, each duly executed by the Borrowers, payable to
its order and otherwise complying with the provisions
of Section 2.02 hereof.
(g) Security Documents. The Agent shall have
received (i) the Security Documents, each duly
executed by the applicable Grantors, (ii) certificates of
insurance naming the Agent as additional insured or
loss payee (as its interest may appear), as the case may
be, (iii) evidence satisfactory to the Agent that the
certificates of the Pledged Stock (as defined in the
Existing Credit Agreement) and the related undated
stock powers executed in blank are held by the Existing
<PAGE>
Agent as agent for the Existing Lenders and the
Lenders, and (iv) each of the other documents,
instruments, insurance policies and agreements
requested by the Agent.
(h) Lien Searches. The Agent shall have
received certified copies of requests for copies or
information on Form UCC-11 or certificates
satisfactory to the Lenders of a UCC Reporter Service
and the results of a search of the Uniform Commercial
Code filings, listing all effective financing statements
which name as debtor any Borrower, any Guarantor or
any Grantor and which are filed in the appropriate
offices in the States in which are located the chief
executive office and other operating offices of such
person or where Collateral is located, together with
copies of such financing statements, and the results of
such requests and searches shall be satisfactory to the
Agent in its sole and absolute discretion. The Agent
shall have received certified copies of searches of real
property records by First American Title Company and
any other persons with respect to the items of real
property listed on Schedule 5.01(h). With respect to
any Liens not permitted pursuant to Section 7.01
hereof, the Agent shall have received termination
statements, and/or payoff letters which provide further
assurances regarding provision of termination
statements, in form and substance satisfactory to it.
(i) Lien Filings. Each document (including,
without limitation, each Uniform Commercial Code
financing statement, mortgage or deed of trust)
required by law or requested by the Agent to be filed,
registered or recorded in order to create in favor of the
Agent for the benefit of the Lenders a perfected Lien
on the Collateral subject only to the Permitted Liens
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 an acknowledgment copy, or
other evidence satisfactory to it, of each such filing,
registration or recordation.
(j) Fees & Expenses. The Agent shall have
received payment of cash in immediately available
funds of all points and other charges owed by the
Borrowers to the Agent and the Lenders under this
Agreement on the Closing Date, including without
limitation:
(i) the point payable under Section
2.04(a);
(ii) all expenses incurred by each Lender in
connection with due diligence,
negotiating, drafting and closing the
transactions contemplated hereby,
including payment in full of all
reasonable fees and disbursements of
Messrs. Kramer Levin Naftalis &
Frankel LLP, counsel to the Agent and
the Lenders, and Policano & Manzo,
financial advisors to the Agent and the
Lenders.
(k) Existing Lenders. The Agent shall have
received (i) an executed amendment to the Existing
Credit Agreement under which the Existing Lenders
consent to the Borrowers' execution, delivery and
performance of this Agreement and which is otherwise
satisfactory to the Agent in its sole and absolute
discretion, and (ii) an executed Intercreditor Agreement
in the form of Exhibit G.
(l) Third Party Consents. The Agent shall
have received either (i) copies of executed consents to
the Transactions required of third parties other than the
Existing Lenders, or (ii) a certificate to the effect that
no such consents are required.
<PAGE>
(m) No Litigations. No actions, suits or
proceedings at law or in equity or by or before any
governmental instrumentality or other agency or
regulatory authority shall be pending or threatened
against or affecting any Borrower, any Guarantor, any
grantor, any of their respective subsidiaries,
businesses, assets or rights, any of the Collateral, the
Agent or any Lender (A) which could reasonably be
expected to have a Material Adverse Effect or a
material adverse effect on the business, assets,
liabilities, properties, prospects, operations or financial
condition which may materially impair the ability of
any Borrower, any Grantor or any Guarantor to
perform its obligations under any Term Loan
Document to which it is a party or the rights and
remedies of the Agent and the Lenders under this
Agreement and the Security Documents or (B) which
purport to adversely affect any of the Transactions;
(n) Borrowing Base Certificate. The Agent
shall have received the most recent borrowing base
certificate of the Borrowers;
(o) Financial Statements & Certificate. The
Agent shall have received the financial statements
described in Section 4.07 hereof, and with respect to
the financial statements delivered pursuant to Section
4.07(c), a certificate dated the Closing Date signed by
the Financial Officer of Jitney Jungle, to the effect that
such financial statements have been prepared by such
Financial Officer in accordance with generally accepted
accounting principles consistently applied, and
satisfactory in all respects to the Agent, and confirming
that such statements are consistent with drafts thereof
previously delivered to the Agent.
(p) Diligence. The Agent and the Lenders
shall have had the opportunity, if they so choose, to
examine the books of account and other records and
files of the Borrowers, the Grantors and Guarantors
and their respective subsidiaries, to make copies
thereof, and to conduct a pre-closing audit or perform
other due diligence which shall include, without
limitation, verification of payment of payroll taxes and
accounts payable and review of tax, environmental,
employee benefit and labor issues, and the results of
such examination, audit and due diligence shall have
been reasonably satisfactory to the Agent and Lenders
in all respects.
(q) Information. None of the information
submitted prior to the Closing Date shall have been or
become, taken together with all other such information
submitted prior to the Closing Date, false, incomplete
or inaccurate in any material and adverse respect, and
none of the conditions represented or indicated by any
Borrower or any of their respective subsidiaries to exist
shall change in any material and adverse respect.
(r) Agreements. The Agent shall have
received and had the opportunity to review and
determine to be in form and substance satisfactory to it:
(i) copies of all lease agreements
entered into by any Borrower, any Guarantor,
any Grantor and/or any of their respective
subsidiaries;
(ii) copies of all loan agreements,
notes and other documentation evidencing
Indebtedness for borrowed money of any
Borrower, any Guarantor, any Grantor and/or
any of their respective subsidiaries (including,
without limitation, certified copies of any
<PAGE>
amendments to or consents under the Senior
Indenture, together with all exhibits and
schedules thereto, and all certificates,
documents and opinions delivered in connection
therewith) and of all other material agreements
of any of them listed on Schedule 4.20 hereto.
(s) Certificates. The Agent and the Lenders
shall have received certificates from the chief financial
officer of each Borrower and each Guarantor, in form
and substance satisfactory to the Agent and the
Lenders, attesting to the "solvency" of such Borrower
and such Guarantors, as the case may be, in each case
individually and together with its subsidiaries, taken as
a whole, immediately after giving effect to the
Transactions, determined in accordance with generally
accepted accounting principles, consistently applied.
As used herein, the term "solvency" of any person
means (i) the fair value of the Property of such person
exceeds its total liabilities (including, without
limitation, contingent liabilities), (ii) the present fair
saleable value of the assets of such person is not less
than the amount that will be required to pay its
probable liability on its debts as they become absolute
and matured, (iii) such person does not intend to, and
does not believe that it will, incur debts or liabilities
beyond its ability to pay as such debts and liabilities
mature and (iv) such person is not engaged, and is not
about to engage, in business or a transaction for which
its Property would constitute an unreasonably small
capital.
(t) Legal Matters. All legal matters in
connection with the Transactions shall be reasonably
satisfactory to the Agent, the Lenders and their
respective counsel in their sole discretion.
(u) Trade Support. The Company shall have
furnished a certificate to the Agent, signed by the
Company's Financial Officer, setting forth as of June
17, 1999 and as of the Closing Date the average terms
provided to the Borrowers by their vendors in general,
including without limitation the average maturity of
outstanding payables and the amount of allowances,
rebates and credits and related terms, and such average
terms shall be no less favorable to the Borrower on the
Closing Date in any material respect than those
provided to the Company on June 17, 1999.
(w) Other Documents. The Agent shall have
received such other documents as the Lenders or the
Agent or Agent's counsel shall reasonably deem
necessary.
(x) Leaseholds. Each leasehold listed on
Schedule 4.16(a-3) is subject to the Liens of the Agent
and each Lender has determined that the value of the
leaseholds that are subject to the Agent's lien or held in
a subsidiary whose stock is pledged to the Agent on the
Closing Date and/or expected to be subject to the
Agent's lien or transferred to a subsidiary whose stock
is pledged to the Agent on the Closing Date is
acceptable to such Lender in its sole and absolute
discretion.
VI. AFFIRMATIVE COVENANTS
Each Borrower covenants and agrees with the
Agent and each Lender that, so long as this Agreement shall
remain in effect or the principal of or interest on any Note or
<PAGE>
any fee, expense or amount payable hereunder or in connection
with any of the Transactions shall be unpaid, it will, and will
cause each Guarantor and each of their respective subsidiaries
and, with respect to Section 6.07 hereof, each ERISA Affiliate,
to:
SECTION 6.01. Legal Existence. Do or cause to be
done all things necessary to preserve, renew and keep in full
force and effect its legal existence, except for the mergers and
Asset Sales permitted under Section 7.05.
SECTION 6.02. Businesses and Properties. (a) At all
times do or cause to be done all things necessary to preserve,
renew and keep in full force and effect the rights, licenses,
Permits, franchises, patents, copyrights, trademarks and trade
names material to the conduct of its businesses; (b) comply with
all laws, rules, regulations and governmental orders (whether
Federal, state or local) applicable to the operation of such
businesses whether now in effect or hereafter enacted
(including, without limitation, all applicable laws, rules,
regulations and governmental orders relating to public and
employee health and safety and all Environmental Laws) and
with any and all other applicable laws, rules, regulations and
governmental orders the lack of compliance with which would
have a Material Adverse Effect; (c) take all actions which may
be required to obtain, preserve, renew and extend all Permits
and other authorizations which are material to the operation of
such businesses; and (d) at all times maintain, preserve and
protect all Property material to the conduct of such businesses
and keep such Property in good repair, working order and
condition, ordinary wear and tear excepted, and from time to
time make, or cause to be made, all needful and proper repairs,
renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection
therewith may be properly conducted at all times.
Notwithstanding the foregoing, non-compliance with clauses (a)
and (c) above shall not constitute an Event of Default unless
such non-compliance is not cured within 15 days after the
occurrence of such non-compliance.
SECTION 6.03. Insurance. (a) Keep its insurable
properties adequately insured at all times by financially sound
and reputable insurers with a rating of "A-" or better, as
established by Best's Rating Guide (or an equivalent rating with
such other publications of a similar nature as shall be in current
use), (b) maintain such other insurance, to such extent and
against all risks, including fire and other risks insured against
by extended coverage; provided, however, that such insurance
shall insure the Property of the Borrowers and their respective
subsidiaries against all risk of physical damage, including,
without limitation, loss by fire, explosion, theft, fraud and such
other casualties as may be reasonably satisfactory to the Agent,
but in no event at any time in an aggregate amount less than the
replacement value of the Collateral, (c) maintain in full force
and effect public liability insurance against claims for personal
injury or death or property damage occurring upon, in, about
or in connection with the use of any properties owned,
occupied or controlled by the Borrowers or any of their
respective subsidiaries, in such amount as the Agent shall
reasonably deem necessary, and (d) maintain such other
insurance as may be required by law and against loss or
damage of the kinds customarily insured against by
corporations of established reputation engaged in the same or
similar businesses and similarly situated, in such type and in
such amounts as is customarily maintained under similar
circumstances by such other corporations; provided, that with
respect to any insurance maintained with respect to Collateral
located at a non-warehouse location owned, occupied or
controlled by any Borrower or any of its subsidiaries, the
Borrowers shall have 15 days to cure any non-compliance with
this Section 6.03. All insurance covering tangible personal
property subject to a Lien in favor of the Agent for the benefit
of the Lenders granted pursuant to the Security Documents
shall provide that, in the case of each separate loss, the full
amount of insurance proceeds shall, subject to the Intercreditor
<PAGE>
Agreement, be payable to the Agent and shall further provide
for at least 30 days' prior written notice to the Agent of the
cancellation or substantial modification thereof. Unless a
Default or an Event of Default has occurred and is continuing,
all claims with respect to the foregoing insurance shall be
settled by the Borrowers in the ordinary course of business.
SECTION 6.04. Taxes. Pay and discharge promptly
when due all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or in
respect of its Property before the same shall become delinquent
or in default, as well as all lawful claims for labor, materials
and supplies or otherwise, which, if unpaid, would give rise to
Liens upon such properties or any part thereof, except such
taxes, assessments and governmental charges and levies which
are diligently contested in good faith by appropriate
proceedings and as to which adequate reserves have been
established in accordance with generally accepted accounting
principles.
SECTION 6.05. Financial Statements, Reports, etc.
Furnish to the Agent, with copies for each of the Lenders:
(a) Year End Statements. Within 90 days after
the end of each Fiscal Year, (i) Consolidated balance
sheets and Consolidated income statements showing the
financial condition of the Borrowers and their
respective subsidiaries as of the close of such Fiscal
Year and the results of their operations during such
year, and (ii) a Consolidated statement of shareholders'
equity and a Consolidated statement of cash flow, as of
the close of such Fiscal Year, all the foregoing
financial statements to be audited by nationally
recognized independent public accountants reasonably
acceptable to the Agent (which report shall not contain
any qualification except with respect to new accounting
principles mandated by the Financial Accounting
Standards Board), and to be in form and substance
reasonably acceptable to the Agent;
(b) Quarter End Statements. Within 45 days
after the end of each fiscal quarter (except the fourth
fiscal quarter), unaudited Consolidated balance sheets
and Consolidated income statements showing the
financial condition and results of operations of the
Borrowers and their respective subsidiaries as of the
end of each such fiscal quarter, a Consolidated
statement of shareholders' equity and a Consolidated
statement of cash flow as of the end of each such fiscal
quarter, together with a statement comparing actual
results for such fiscal quarter with the projections set
forth in paragraph (g) below, certified by the Financial
Officer of the Company as presenting fairly the
financial condition and results of operations of the
Borrowers and their respective subsidiaries and as
having been prepared in accordance with generally
accepted accounting principles consistently applied,
setting forth in each case in comparative form the
corresponding figures for the corresponding fiscal
quarter of the preceding year and corresponding figures
for the period beginning with the first day of the
relevant Fiscal Year and ending on the last day of the
relevant fiscal quarter and the corresponding period for
the previous Fiscal Year, in each case subject to normal
year-end audit adjustments;
(c) Rolling Monthly Statements. Within 30
days after the end of each fiscal month, (i) unaudited
Consolidated balance sheets and Consolidated income
statements showing the financial condition and results
of operations of the Borrowers and their respective
subsidiaries as of the end of such fiscal month, a
Consolidated statement of shareholders= equity and a
<PAGE>
Consolidated statement of cash flow as of the end of
each such fiscal month, together with a statement
comparing actual results for such fiscal month with the
projections set forth in paragraph (g) below, certified
by the Financial Officer of Jitney Jungle as presenting
fairly the financial condition and results of operations
of the Borrowers and their respective subsidiaries and
as having been prepared in accordance with generally
accepted accounting principles consistently applied,
setting forth in each case in comparative form the
corresponding figures for the corresponding fiscal
month of the preceding year and corresponding figures
for the period beginning with the first day of the
current Fiscal Year and ending on the last day of the
relevant fiscal month and the corresponding period for
the previous Fiscal Year, in each case subject to normal
year-end audit adjustments, (ii) a statement of
comparable store sales by division, (iii) a statement of
average customer accounts on a Consolidated basis,
and (iv) a statement of average transaction size on a
Consolidated basis.
(d) Other Reports. Promptly after the same
become publicly available, copies of such registration
statements, annual, periodic and other reports, and such
proxy statements and other information, if any, as shall
be filed by any Borrower or any of their respective
subsidiaries with the SEC or any governmental
authority that may be substituted therefor, or any
national securities exchanges and copies of all proxy
statements submitted to its shareholders;
(e) Certificate as to No Default. Concurrently
with any delivery under (a) or (b) above, a certificate
of the firm or person referred to therein (x) which
certificate shall, in the case of the certificate of the
Financial Officer of the Company, certify that to the
best of his or her knowledge no Default or Event of
Default has occurred and, if such a Default or Event of
Default has occurred, specifying the nature and extent
thereof and any corrective action taken or proposed to
be taken with respect thereto and (y) which certificate,
in the case of the certificate furnished by the
independent public accountants referred in paragraph
(a) above, may be limited to accounting matters and
disclaim responsibility for legal interpretations, but
shall certify that in the course of preparing the audit
and the certificate referred to herein, such accountants
have not become aware of the occurrence of any other
Default or Event of Default and, if such a Default or
Event of Default has occurred, specifying the nature
thereof, provided, however, that any certificate
delivered concurrently with (a) above shall be signed
by the Financial Officer of Jitney Jungle in addition to
the independent public accountants;
(f) Management Letter. Concurrently with
any delivery under (a) above, a management letter, if
any, prepared by the independent public accountants
who reported on the financial statements delivered
under (a) above, with respect to the internal audit and
financial controls of the Borrowers and their respective
subsidiaries;
(g) Projections. Within 30 days after the
beginning of each Fiscal Year, a summary of business
plans and financial operation projections for the
Borrowers and their respective subsidiaries for such
Fiscal Year prepared by management and in form,
substance and detail (including, without limitation,
principal assumptions) reasonably satisfactory to the
Agent;
(h) Notice of Breach of Other Agreements.
Immediately upon becoming aware thereof, notice to
the Agent of the breach beyond any applicable grace
period by any party of any material agreement with any
Borrower, any Guarantor or any of their respective
subsidiaries;
<PAGE>
(i) Fleet Reports. Promptly after the same is
provided to the Existing Agent, copies of any
Borrowing Base Certificate or other written report or
document required to be furnished to the Existing
Agent under the Existing Credit Agreement; and
(j) Other Information. Such other information
as the Agent or any Lender may reasonably request,
including, without limitation, profit and loss
information on a store by store basis, as well as
supplemental expense information. At the reasonable
request of any Lender, the Agent agrees to promptly
forward such request for information to the Borrowers.
SECTION 6.06. Litigation and Other Notices. Give the
Agent prompt written notice of the following:
(a) Orders Invalidating Agreement. The
issuance by any court or governmental agency or
authority of any injunction, order, decision or other
restraint having the effect of invalidating, any provision
of this Agreement, the Notes or the other Term Loan
Documents, or the initiation of any litigation or similar
proceeding seeking any such injunction, order, decision
or other restraint;
(b) Commencement of Litigation. The filing
or commencement of any action, suit or proceeding
against any Borrower, any Guarantor or any of their
respective subsidiaries, whether at law or in equity or
by or before any court or any Federal, state, municipal
or other governmental agency or authority, (i) which is
material and is brought by or on behalf of any
governmental agency or authority, or in which
injunctive or other equitable relief is sought or (ii) as to
which it is probable (within the meaning of Statement
of Financial Accounting Standards No. 5) that there
will be an adverse determination and which, if
adversely determined, would (A) reasonably be
expected to result in liability of any Borrower, any
Guarantor or any of their respective subsidiaries thereof
in an aggregate amount of $500,000 or more, not
reimbursable by insurance, or (B) materially impair the
right of any Borrower, any Guarantor or any of their
respective subsidiaries to perform its obligations under
this Agreement, any Note or any other Term Loan
Document to which it is a party;
(c) Default. Any Default or Event of Default
or any "Default" or "Event of Default" under the
Existing Credit Agreement (as such terms are defined
in the Existing Credit Agreement), Senior Indenture (as
such terms are defined in the Senior Indenture) or the
Senior Subordinated Indenture (as such terms are
defined in the Senior Subordinated Indenture),
specifying the nature and extent thereof and the action
(if any) which is proposed to be taken with respect
thereto;
(d) Redemption of Public Notes. Upon the
issuance, mailing or delivery thereof, (i) copies of
notice of any redemption or other payment of the
Senior Notes under the Senior Indenture or the Senior
Subordinated Notes under the Senior Subordinated
Indenture and copies of any written information,
correspondence or communication under the Senior
Indenture or the Senior Subordinated Indenture or with
respect to the Senior Notes or the Senior Subordinated
Notes not otherwise required to be delivered to the
Agent or the Lenders hereunder; and (ii) copies of
notice of any redemption, exchange or other payment
with respect to any preferred stock of the Borrowers;
provided, that this clause (d) shall not constitute the
<PAGE>
consent of the Agent or any Lender to any such
redemption, exchange or other payment; and
(e) Material Adverse Effect. Any development
in the business or affairs of any Borrower, any
Guarantor or any of their respective subsidiaries which
has had or which is likely, in the reasonable judgment
of any Responsible Officer of any Borrower, to have, a
Material Adverse Effect (including, without limitation,
any actual or threatened strike, work stoppage or other
labor action, whether or not authorized by labor
unions).
SECTION 6.07. ERISA.
(a) Payments. Pay and discharge promptly
any liability imposed upon it pursuant to the provisions of Title
IV of ERISA; provided, however, that neither any Borrower
nor any ERISA Affiliate thereof shall be required to pay any
such liability if (1) the amount, applicability or validity thereof
shall be diligently contested in good faith by appropriate
proceedings, and (2) such person shall have set aside on its
books reserves which are required by generally accepted
accounting principles consistently applied.
(b) Filings. Deliver to the Agent, promptly,
and in any event within 30 days, after (i) the occurrence of any
Reportable Event, a copy of the materials that are filed with the
PBGC, (ii) any Borrower or any ERISA Affiliate thereof or an
administrator of any Pension Plan files with participants,
beneficiaries or the PBGC a notice of intent to terminate any
such Plan, a copy of any such notice, (iii) the receipt of notice
by any Borrower or any ERISA Affiliate thereof or an
administrator of any Pension Plan from the PBGC of the
PBGC's intention to terminate any Pension Plan or to appoint a
trustee to administer any such Plan, a copy of such notice, (iv)
the filing thereof with the Internal Revenue Service, copies of
each annual report that is filed on Treasury Form 5500 with
respect to any Plan, together with certified financial statements
(if any) for the Plan and any actuarial statements on Schedule B
to such Form 5500, (v) any Borrower or any ERISA Affiliate
thereof knows or has reason to know of any event or condition
which might constitute grounds under the provisions of Section
4042 of ERISA for the termination of (or the appointment of a
trustee to administer) any Pension Plan, an explanation of such
event or condition, (vi) the receipt by any Borrower or any
ERISA Affiliate thereof of an assessment of withdrawal liability
under Section 4201 of ERISA from a Multiemployer Plan, or
any other notice from such Multiemployer Plan of any action or
event involving or in connection with insolvency,
reorganization or termination (each as defined in ERISA) a
copy of such assessment, or notice, (vii) any Borrower or any
ERISA Affiliate thereof knows or has reason to know of any
event or condition which might cause any one of them to incur
a liability under Section 4062, 4063, 4064 or 4069 of ERISA
or Section 412(n) or 4971 of the Code, an explanation of such
event or condition, and (viii) any Borrower or any ERISA
Affiliate thereof knows or has reason to know that an
application is to be, or has been, made to the Secretary of the
Treasury for a waiver of the minimum funding standard under
the provisions of Section 412 of the Code, a copy of such
application, and in each case described in clauses (i) through
(iii) and (v) through (vii) together with a statement signed by
the Financial Officer of such Borrower setting forth details as
to such Reportable Event, notice, event or condition and the
action which such Borrower or such ERISA Affiliate thereof
proposes to take with respect thereto which, whether
individually or in the aggregate, would cause a Material
Adverse Effect.
(c) Changes in Status. Within 30 days after
the end of any fiscal quarter in which any Borrower becomes
aware, directly or indirectly, of any fact or information that
<PAGE>
materially changes the status of such Borrower with respect to
the Multiemployer Plans, give notice thereof to the Agent.
SECTION 6.08. Maintaining Records; Access to
Properties and Inspections; Right to Audit. Maintain financial
records in accordance with accepted financial practices and,
upon reasonable notice (which may be telephonic), at all
reasonable times and as often as any Agent may request, permit
any authorized representative designated by such Agent to visit
and inspect the properties and financial records of each of the
Borrowers and their respective subsidiaries and to make
extracts from such financial records, at the Borrowers' cost and
expense, and permit any authorized representative designated
by such Agent to discuss the affairs, finances and condition of
each of the Borrowers and their respective subsidiaries with the
appropriate Financial Officer and such other officers as such
Agent shall deem appropriate and the Borrowers' independent
public accountants, as applicable. An authorized representative
of each of the Lenders may accompany the Agent on such visits
and inspections (and during such visit or inspection, discuss the
affairs, finances and condition of each of the Borrowers and
their respective subsidiaries with the appropriate Financial
Officer, such other officer or the Borrowers' independent
public accountants, as applicable). The Agent shall have the
right to audit, as often as it may request, the existence and
condition of the inventory, books and records of the Borrowers
and their respective subsidiaries and to review their compliance
with the terms and conditions of this Agreement and the other
Term Loan Documents.
SECTION 6.09. Fiscal Year End. Cause its Fiscal
Year to end on the Saturday nearest to December 31 of each
year.
SECTION 6.10. Further Assurances. Promptly execute
any and all further documents and take all further actions which
may be required under applicable law, or which the Agent may
reasonably request, to grant, preserve, protect and perfect the
Lien created by the Security Documents in the Collateral.
SECTION 6.11. Additional Grantors and Guarantors.
Promptly inform the Agent of the creation or acquisition of any
direct or indirect subsidiary (subject to the provisions of
Section 7.05 hereof) and cause each direct or indirect
subsidiary not in existence on the date hereof to become a
Guarantor hereunder pursuant to an agreement in form and
substance reasonably satisfactory to the Agent, and to execute
the Security Documents, as applicable, as a Grantor, and cause
each such subsidiary to pledge its inventory and all other
owned assets pursuant to the Security Agreement.
SECTION 6.12. Environmental Laws.
(a) Compliance. Comply, and cause each of
its subsidiaries to comply, in all material respects with the
provisions of all Environmental Laws, and shall keep the
properties which it and its subsidiaries own free of any Lien
imposed pursuant to any Environmental Law, except where
such Liens are being contested in good faith by appropriate
proceedings in accordance with applicable law, and, with
respect to any properties it or any of its subsidiaries occupies
but does not own, it or its subsidiaries shall not conduct any
activities or allow any condition to remain which would
reasonably be expected to cause the imposition of any Lien
under any Environmental Law. Each Borrower and each
Guarantor shall not cause or suffer or permit, and shall not
suffer or permit any of their respective subsidiaries to cause or
suffer or permit, the Property of such Borrower, such
Guarantor or their respective subsidiaries to be used for the
use, generation, production, processing, handling, storage,
transporting or disposal of any Hazardous Material, except for
the use, generation, handling, storage or transportation of fuel,
<PAGE>
raw materials and inventory held or generated in the ordinary
course of operating its business, refrigerants, wastes and
routine cleaning and maintenance products.
(b) Materials Supplied to Government. Supply
to the Agent copies of all material submissions by each
Borrower, each Guarantor or any of their respective
subsidiaries to any governmental body and of the final reports
of all environmental audits and of all other environmental tests,
studies or assessments (including the data derived from any
sampling or survey of asbestos, soil, or subsurface or other
materials or conditions) that may be conducted or performed
(by or on behalf of such Borrower, such Guarantor or any of
their respective subsidiaries) on or regarding the properties
owned, operated, leased or occupied by such Borrower, such
Guarantor or any of their respective subsidiaries or regarding
any conditions that might have been affected by Hazardous
Materials on or Released or removed from such properties.
Each Borrower and each Guarantor shall also permit and
authorize, and shall cause its subsidiaries to permit and
authorize, the consultants or other persons that prepare such
submissions or reports or perform such audits, tests, studies or
assessments to discuss such submissions, reports or audits with
the Agent and the Lenders; provided, that attorneys for such
Borrower, such Guarantor or such subsidiary or such
consultants or other persons shall be entitled to participate in
such discussions.
(c) Notices of Hazard or Release. Promptly
(and in no event more than ten Business Days after the
applicable Borrower or the applicable Guarantor becomes
aware or is otherwise informed of such event) provide written
notice to the Agent upon the happening of any of the following:
(i) such Borrower, such Guarantor or any
of their respective subsidiaries, or any tenant or other
occupant of any Property of such Borrower, such
Guarantor or any of their respective subsidiaries
receives written notice of any claim, complaint, charge
or notice of a violation or potential violation of any
Environmental Law;
(ii) there has been a Release of Hazardous
Materials upon, under or about or affecting any of the
properties owned, operated, leased or occupied by such
Borrower, such Guarantor or any of their respective
subsidiaries, or Hazardous Materials at levels or in
amounts that may have to be reported, remedied or
responded to under Environmental Law are detected on
or in the soil or groundwater;
(iii) such Borrower, such Guarantor or any
of their respective subsidiaries is or may be liable for
any material costs of cleaning up or otherwise
responding to a Release of Hazardous Materials;
(iv) any part of the properties owned,
operated, leased or occupied by such Borrower, such
Guarantor or any of their respective subsidiaries is or
may be subject to a Lien under any Environmental
Law; or
(v) such Borrower, such Guarantor or any
of their respective subsidiaries undertakes any material
Remedial Work with respect to any Hazardous
Materials.
(d) Remedial Work. Timely undertake and
complete any Remedial Work required to be undertaken by
such Borrower or such Guarantor by any Environmental Law,
<PAGE>
except to the extent that such requirement is being diligently
contested in good faith by appropriate proceedings in
accordance with applicable law.
(e) Indemnity. Without in any way limiting
the scope of Section 10.04(c) and in addition to any obligations
thereunder, each Borrower hereby indemnifies and agrees to
hold the Agent and the Lenders harmless from and against any
liability, loss, damage, suit, action or proceeding arising out of
its business or the business of its subsidiaries pertaining to
Hazardous Materials, including, but not limited to, claims of
any governmental body or any third person arising under any
Environmental Law or under tort, contract or common law,
except for any liability, loss, damage, suit or proceeding to the
extent that it results from the gross negligence, bad faith or
willful misconduct of the Agent or any Lender. To the extent
laws of the United States or any state or local jurisdiction in
which Property owned, operated, leased or occupied by any
Borrower, any Guarantor or any of their respective subsidiaries
is located provide that a Lien upon such Property of such
Borrower, such Guarantor or such subsidiary may be obtained
for the costs of removal by a governmental body of Hazardous
Materials which have been Released and a Release has
occurred with respect to which such Borrower, such Guarantor
or such subsidiary is required to provide notice to the Agent
pursuant to Section 6.12(c), no later than ninety days after
notice is given by the Agent to such Borrower, such Guarantor
or such subsidiary, such Borrower, such Guarantor or such
subsidiary shall deliver to the Agent a report issued by a
qualified third party engineer providing an assessment of such
Hazardous Materials which were Released upon or beneath the
specified property. To the extent any Hazardous Materials
located therein or thereunder either subject the Property to a
Lien or require a response pursuant to any applicable
Environmental Laws, the response specified in Section 6.12(f)
shall be an affirmative covenant of the Borrowers hereunder.
(f) Timely Commencement of Remediation. In
the event that any Remedial Work is required to be performed
by any Borrower, any Guarantor or any of their respective
subsidiaries under any applicable Environmental Law, any
judicial order, or by any governmental entity, such Borrower,
such Guarantor or such subsidiaries shall commence all such
Remedial Work at or prior to the time required therefor under
such Environmental Law or applicable judicial orders and
thereafter diligently prosecute to completion all such Remedial
Work in accordance with and within the time allowed under
such applicable Environmental Laws or judicial orders, except
to the extent that such requirement is being diligently contested
in good faith by appropriate proceedings in accordance with
applicable law.
SECTION 6.13. Pay Obligations to Lenders and
Perform Other Covenants. (a) Make full and timely payment of
the Obligations, whether now existing or hereafter arising, (b)
duly comply with all the terms and covenants contained in this
Agreement (including, without limitation, the mandatory
prepayments in accordance with Article II hereof) in each of
the other Term Loan Documents, all at the times and places
and in the manner,set forth therein, and (c) except for the filing
of continuation statements and the making of other filings by
the Agent as secured party or assignee, at all times take all
actions necessary to maintain the Liens and security interests
provided for under or pursuant to this Agreement and the
Security Documents as valid and perfected Liens on the
Property intended to be covered thereby (subject only to Liens
expressly permitted hereunder) and supply all requested
information to the Agent necessary for such maintenance.
SECTION 6.14. Maintain Operating Accounts.
Maintain its principal disbursement accounts, operating
accounts and other depository accounts as set forth on Schedule
4.14 annexed hereto, and notify the Agent promptly of the
closing of any account specified in Schedule 4.14 annexed
<PAGE>
hereto and the opening up of any new accounts, in detail
satisfactory to the Agent and with respect to any such new
account, provide the Agent with such agreements, in form and
substance satisfactory to the Agent, as the Agent shall request.
SECTION 6.15. Amendments. Promptly supply to the
Agent certified copies of any amendments to the Senior
Indenture, the Senior Notes, the Senior Subordinated
Indenture, the Senior Subordinated Notes or any Subordinated
Indebtedness (subject to Section 7.18 hereof).
SECTION 6.16. Use of Proceeds. Use all proceeds of
the Term Loans for any purpose permitted hereunder and not
violating the terms of the Senior Indenture or the Senior
Subordinated Indenture.
SECTION 6.17. Year 2000. Take all actions necessary
to permit the proper functioning, in and following the year
2000, of (i) the Borrowers computer systems and (ii) equipment
containing embedded microchips (including systems and
equipment supplied by others or with which the Borrowers'
systems and equipment interface and which are within the
control of the Borrowers) and the testing of all such systems
and equipment, as so programmed, unless the failure to take
such actions would not reasonably be likely to have a Material
Adverse Effect.
SECTION 6.18. Obtaining a Rating for Obligations
Hereunder. Immediately after the Closing Date, the Company
shall exercise its best efforts to have the Obligations rated by a
nationally recognized statistical rating organization, which, as
of the Closing Date, would include Standard & Poor=s Rating
Services and Moody=s Investor Services, Inc. The Company
shall exercise its best efforts to maintain such rating in force
once obtained.
SECTION 6.19. Retention of Accounting Specialist.
The Company shall retain Policano & Manzo as an accounting
specialist at the Company's expense pursuant to a retention
agreement mutually acceptable to Policano & Manzo and the
Required Lenders at a cost not exceeding $100,000 per annum;
provided, however, that if Policano & Manzo shall resign,
breach its agreement or cease to exist, the Company shall retain
a comparable specialist that is reasonably acceptable to the
Required Lenders.
SECTION 6.20. Liens on Leaseholds. Subject to the
Intercreditor Agreement, the Company shall within 90 days
after and excluding the Closing Date (a) use commercially
reasonable efforts to obtain such consents as are necessary to
grant the Agent and Existing Agent mortgages or deeds of
trust on leaseholds which are precluded by their terms, as of
the Closing Date, from being subject to the Agent's Liens or
(b) transfer ownership of such leaseholds to a newly formed
subsidiary whose stock is pledged to the Agent and the Existing
Agent or (c) certify in writing to the Agent and each Lender as
to the leaseholds that can neither be encumbered nor
transferred as set forth in the preceding clauses with an
explanation, reasonably satisfactory to the Agent and the
Existing Agent.
VII. NEGATIVE COVENANTS
Each Borrower covenants and agrees with
Agent and each Lender that, so long as this Agreement shall
remain in effect or the principal of or interest on any Note or
any fee, expense or amount payable hereunder or in connection
with any of the Transactions shall be unpaid, it will not and will
<PAGE>
not cause or permit any Guarantor or any of their respective
subsidiaries and, in the case of Section 7.16 hereof, any ERISA
Affiliate thereof to, either directly or indirectly:
SECTION 7.01. Liens. Incur, create, assume or permit
to exist any Lien on any of its Property (including the stock of
any direct or indirect subsidiary), whether owned at the date
hereof or hereafter acquired, or assign or convey any rights to
or security interests in any future revenues, except:
(a) Workers Compensation. Liens incurred
and pledges and deposits made in the ordinary course
of business in connection with workers' compensation,
unemployment insurance, old-age pensions and other
social security benefits (not including any lien
described in Section 412(m) of the Code);
(b) Statutory Liens. Liens imposed by law,
such as landlord, carriers', warehousemen's,
mechanics', materialmen's and vendors' liens and other
similar liens, incurred in good faith in the ordinary
course of business and securing obligations which are
not overdue or which are being contested in good faith
by appropriate proceedings as to which the applicable
Borrower or any of its subsidiaries, as the case may be,
shall, to the extent required by generally accepted
accounting principles consistently applied, have set
aside on its books adequate reserves;
(c) Tax Liens. Liens securing the payment of
taxes, assessments and governmental charges or levies,
that are not delinquent or are being diligently contested
in good faith by appropriate proceedings and as to
which adequate reserves have been established in
accordance with generally accepted accounting
principles; provided, however, that in no event shall
the aggregate amount of such reserves be less than the
aggregate amount secured by such Liens;
(d) Zoning, Easements. Zoning restrictions,
easements, licenses, reservations, provisions,
covenants, conditions, waivers, restrictions on the use
of real property or minor irregularities of title (and with
respect to leasehold interests, mortgages, obligations,
liens and other encumbrances incurred, created,
assumed or permitted to exist and arising by, through
or under a landlord, ground lessor or owner of the
leased property, with or without consent of the lessee)
which do not in the aggregate materially detract from
the value of its Property or materially impair the use
thereof in the operation of its business or with respect
to leasehold interests permitted to exist under any
Mortgage, as permitted by such Mortgage or with
respect to leasehold interests on real property not
subject to any Mortgage, of the types permitted by, and
containing the same general terms and limitations of,
any of the Mortgages delivered on the Closing Date;
(e) Purchase Money/Sale-Leaseback. Liens
upon any equipment acquired through the purchase or
lease by any Borrower or any of its subsidiaries which
are created or incurred by such Borrower as a
condition to the financing of such acquisition to secure
or provide for the payment of any part of the purchase
price of, or lease payments on, such equipment (but no
other amounts and not in excess of the purchase price
or lease payments) to the extent any such transaction
does not violate any other provision of this Agreement;
provided, however, that any such Lien shall not apply
to any other Property of such Borrower or any of its
subsidiaries;
(f) Existing Lenders' Liens. Liens created in
favor of the Existing Agent for the benefit of the
<PAGE>
Secured Parties (as defined in the Intercreditor
Agreement) not exceeding the amount of Indebtedness
under the Existing Credit Agreement which is allowed
to be secured by a first and prior lien under the
Intercreditor Agreement;
(g) Existing Liens. Liens existing on the date
of this Agreement and set forth in Schedule 7.01
annexed hereto or set forth in Schedule B to each of the
title policies delivered pursuant to the Existing Credit
Agreement;
(h) Lenders' Liens. Liens created in favor of
the Agent for the benefit of the Agent and the Lenders;
(i) Performance Bond Liens. Liens securing
the performance of bids, tenders, leases, contracts
(other than for the repayment of borrowed money),
statutory obligations, surety, customs and appeal bonds
and other obligations of like nature, incurred as an
incident to and in the ordinary course of business;
(j) Judgment Liens. Liens for judgments
which would not result in an Event of Default under
Article VIII(l);
(k) Capitalized Leases. Liens in respect of
Capitalized Lease Obligations;
(l) A.I. Credit. Liens in favor of A.I. Credit
Corp. securing payments of A.I. Credit Corp.
Indebtedness; provided, however, that compliance is
maintained with Section 7.03(xii) hereof;
(m) Aircraft Liens. Liens in favor of Fleet
pursuant to the Loan and Aircraft Security Agreement,
dated as of September 28, 1998, between Jitney Jungle
and Fleet; or
(n) Sale-Leaseback Property Liens. Liens on
property in connection with transactions permitted
pursuant to Section 7.02 hereof.
SECTION 7.02. Sale and Lease-Back Transactions.
(a) Except as set forth in Section 7.02(b), enter
into any arrangement, directly or indirectly, with any person
whereby any Borrower, any Guarantor or any of their
respective subsidiaries shall sell or transfer any Property and
used or useful in its business, whether now owned or hereafter
acquired, and thereafter rent or lease such Property which such
Borrower, such Guarantor or such subsidiary intends to use for
substantially the same purpose or purposes as the Property
being sold or transferred, except that so long as no Default or
Event of Default exists at such time or immediately after giving
effect thereto, upon thirty (30) days' prior written notice by the
Borrowers to the Agent, the Borrowers may enter into such
arrangements with respect to real property with the prior
written consent of the Agent and the Required Lenders (such
consent not to be unreasonably withheld).
(b) Notwithstanding Section 7.02(a), the
Borrowers may enter into sale-leaseback transactions in
connection with the construction of new stores as and to the
extent set forth and permitted in the Existing Credit Agreement
as in effect on the Closing Date.
<PAGE>
(c) Notwithstanding any other provisions
hereof, any and all leases in connection with sale-leaseback
transactions permitted pursuant to this Section 7.02 must be
mortgageable to the Existing Agent and the Agent.
SECTION 7.03. Indebtedness. Incur, create, assume or
permit to exist any Indebtedness other than (i) Indebtedness
(including, without limitation, Capitalized Lease Obligations)
secured by Liens permitted under Section 7.01, (ii)
Indebtedness (including, without limitation, Guarantees)
existing on the date hereof and listed in Schedule 7.03 annexed
hereto, but (except for extensions or renewals of the IRB
Indebtedness) not the increase, extension, renewal or refunding
thereof, (iii) Indebtedness incurred hereunder and under the
other Term Loan Documents, (iv) Indebtedness incurred with
respect to interest rate protection agreements and other similar
arrangements entered into with Fleet, (v) Guarantees
constituting the endorsement of negotiable instruments for
deposit or collection in the ordinary course of business, (vi)
Guarantees of the Obligations, (vii) Indebtedness under the
Senior Indenture or the Senior Notes, but not the increase,
extension, renewal or refunding thereof, (viii) Indebtedness
under the Senior Subordinated Indenture, but not the increase,
extension, renewal or refunding thereof, (ix) other
Subordinated Indebtedness, but not the increase, extension,
renewal or refunding thereof, (x) Indebtedness to trade
creditors incurred in the ordinary course of business, (xi)
Intercompany Indebtedness, (xii) A.I. Credit Corp.
Indebtedness, (xiii) Indebtedness with respect to unsecured
letters of credit not issued under the Existing Credit Agreement
in a maximum amount of $5,000,000, plus any amount by
which the maximum amount of Letters of Credit under the
Existing Credit Agreement (presently $30,000,000) is
permanently reduced, and (xiv) Indebtedness under the Existing
Credit Agreement.
SECTION 7.04. Dividends, Distributions and
Payments. Declare or pay, directly and indirectly, any cash
dividends or make any other distribution, whether in cash,
securities or other Property (other than payment-in-kind
payments or non-cash accretions to liquidation preference made
with respect to any preferred stock of Jitney Jungle) or a
combination thereof, with respect to (whether by reduction of
capital or otherwise) any shares of its capital stock or directly
or indirectly redeem, purchase, retire or otherwise acquire for
value (or permit any subsidiary to purchase or acquire) any
shares of any class of its capital stock or set aside any amount
for any such purpose, other than (i) the issuance of warrants to
purchase up to 15%, on a fully diluted basis, of the common
stock of Jitney Jungle and (ii) dividends or other distributions
by any subsidiary of Jitney Jungle to Jitney Jungle or a
subsidiary thereof and purchases by Jitney Jungle of the capital
stock of Jitney Jungle from retiring employees of the Borrowers
pursuant to the Securities Purchase and Holders Agreement in
an aggregate amount for all such employees not in excess of
$1,000,000 during the term of this Agreement (as such amount
may from time to time be reduced by purchases of such capital
stock by Jitney Jungle from such employees and increased by
any sales by Jitney Jungle of such capital stock to other
employees; provided, that such purchased capital stock shall be
sold within 180 days of such purchase to one or more
employees of the Borrowers for a cash consideration equal to
or greater than the consideration paid by Jitney Jungle for such
capital stock).
SECTION 7.05. Consolidations, Merger and Sales of
Assets. Consolidate with or merge into any other person, or
sell, lease, transfer or assign to any persons or otherwise
dispose of (whether in one transaction or a series of
transactions) all or substantially all of its assets (whether now
owned or hereafter acquired), or permit another person to
merge into it, or acquire all or substantially all the capital stock
or assets of any other person, except that (i) the Borrowers and
their respective subsidiaries may sell any of their inventory and
other assets in the ordinary course of their business; (ii) the
<PAGE>
Borrowers may sell automobiles used by employees in a
manner consistent with the Borrowers' past practices; (iii) any
Borrower may sell obsolete equipment in the ordinary course of
business; (iv) any Borrower (other than Jitney Jungle) or
Guarantor (other than Jitney Jungle) may merge into any other
Borrower or Guarantor; (v) the Borrowers and their respective
subsidiaries may sell assets (other than inventory or as
otherwise permitted hereby) that constitute properties of any
Borrower or any subsidiary thereof no longer necessary for the
proper conduct of their respective businesses, for fair
consideration; (vi) the Borrowers and their respective
subsidiaries may lease or sublease real property covered by a
Mortgage in the ordinary course of business; (vii) the
Borrowers and their respective subsidiaries may sell assets as
part of sale-leaseback transactions to the extent permitted by
Section 7.02; (viii) the Borrowers and their respective
subsidiaries may sell assets permitted to be sold under the
Existing Credit Agreement as in effect on the date hereof and
(ix) in addition to those asset sales permitted by other clauses of
this Section 7.05, the Borrowers and their respective
subsidiaries may sell supermarkets owned or leased by any of
such entities (and any inventory related to such supermarkets)
so long as (1) such sales are permitted by the Existing Credit
Agreement, including, without limitation, under any future
amendment, waiver or consent with respect thereto, (2) the
Borrowers and their respective subsidiaries, as appropriate,
shall comply with the prepayment requirements and
commitment and Supplemental Availability (as defined in the
Existing Credit Agreement) reduction requirements set forth in
Section 3 of the Amendment and Waiver Agreement No. 7,
dated the date hereof, to the Existing Credit Agreement, except
that "Total Commitment", as defined in the Existing Credit
Agreement, shall be reduced by 50% of the fair market value
of all proceeds of such Asset Sales (whether or not in cash),
and the "Supplemental Availability" (as defined in the Existing
Credit Agreement) shall be reduced by 12.5% of the fair
market value of all proceeds of such Asset Sales other than
those attributable to inventory (whether or not in cash); the
Company acknowledging for the avoidance of doubt that this
clause may require the Company to apply more than 50% of
the Net Cash Proceeds (as defined in the Existing Credit
Agreement) of such Asset Sales to the prepayment of "Loans"
(as defined in the Existing Credit Agreement)), (3) the
aggregate proceeds from all such sales (whether in cash or
other Property) shall not exceed $75,000,000 and (4) the fair
market value of proceeds under this clause (ix) shall be
determined by a financial advisor of recognized national
standing retained by the Company's board of directors in an
opinion rendered to the board with a copy to the Agent and the
Existing Agent; and (x) in addition to those asset sales
permitted by other clauses of this Section 7.05, the Borrowers
and their respective subsidiaries may sell other assets so long as
(1) such sales are permitted by the Existing Credit Agreement,
including, without limitation, under any future amendment,
waiver or consent with respect thereto, (2) 100% of "Net Cash
Proceeds" (as defined in the Existing Credit Agreement) shall
be applied to the prepayment of the "Loans" (as defined in the
Existing Credit Agreement) and the "Total Commitment" (as
defined in the Existing Credit Agreement) shall be permanently
reduced by the 100% of the fair market value of all proceeds of
such Asset Sales (3) the aggregate fair market value of such
proceeds from all such sales shall not exceed $50,000,000, and
(4) the fair market value of proceeds under this clause (x) shall
be determined by a financial advisor of recognized national
standing retained by the Company's board of directors in an
opinion rendered to the board with a copy to the Agent and the
Existing Agent.
SECTION 7.06. Investments. Own, purchase or
acquire any stock, obligations, assets or securities of, or any
interest in, or make any capital contribution or loan or advance
to, any other person, or make any other investments, except (a)
certificates of deposit in dollars of any commercial banks
registered to do business in any state of the United States (i)
having capital and surplus in excess of $1,000,000,000 and (ii)
whose long-term debt rating is at least investment grade as
determined by either Standard & Poor's Ratings Services, a
division of McGraw Hill, Inc. ("S&P") or Moody's Investors
<PAGE>
Service, Inc. ("Moody's"); (b) readily marketable direct
obligations of the United States government or any agency
thereof which are backed by the full faith and credit of the
United States; (c) commercial paper at the time of acquisition
having the highest rating obtainable from either S&P or
Moody's; (d) federally tax exempt securities rated A or better
by either S&P or Moody's; (e) investments in the stock of any
subsidiary existing on the Closing Date, but not any additional
investments therein; (f) loans to employees in connection with
the purchase of capital stock of the Borrowers and/or for other
purposes not in excess of $750,000 in the aggregate outstanding
at any time for all loans under this clause (f); (g) so long as no
Default or Event of Default shall exist at the time of acquisition
(or after giving effect thereto) and subject to Section 7.13,
acquisitions by any Borrower or any subsidiary thereof of
assets of a business of a non-Affiliated person not to exceed in
purchase price (whether in the form of cash, securities or other
Property, assumption of liabilities or otherwise) $1,000,000
individually or $5,000,000 in the aggregate for all such
acquisitions during the term of this Agreement; (h) acquisitions
of new stores for the conduct of the Borrowers' business to the
extent permitted under this Agreement; and (i) Intercompany
Loans; provided, that, in each case mentioned in (a), (b), (c)
and (d) above, such obligations shall mature not more than one
year from the date of acquisition thereof; provided, further,
that the Term Loans may not be used to purchase or otherwise
fund the investments described in clauses (a) through and
including (d) above.
SECTION 7.07. Intentionally Omitted.
SECTION 7.08. Intentionally Omitted.
SECTION 7.09. Leverage Ratio. Permit the Leverage
Ratio at the end of each fiscal quarter set forth below to be
greater than:
<TABLE>
<CAPTION>
Date of Determination Ratio
<S> <C>
The fiscal quarter ending September 11, 1999 7.90:1.00
The fiscal quarter ending January 1, 2000 8.60:1.00
The fiscal quarter ending March 26, 2000 8.60:1.00
The fiscal quarter ending June 18, 2000 8.00:1.00
The fiscal quarter ending September 10, 2000 8.00:1.00
The fiscal quarter ending December 31, 2000 8.00:1.00
Each fiscal quarter ending in Fiscal Year 2001 8.00:1.00
and thereafter
</TABLE>
SECTION 7.10. Intentionally Omitted.
<PAGE>
SECTION 7.11. 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, however, beginning
with the end of the fiscal quarter starting immediately after the
consummation of the sale of any supermarket owned or leased
by any of the Borrowers or the pending acquisition of any
supermarket by any of the Borrowers, the amount of EBITDA
appearing opposite such fiscal quarter below and for each fiscal
quarter thereafter, shall in the case of a sale of a supermarket
be reduced, or in the case of the opening or acquisition of a
supermarket, increased by an amount equal to the EBITDA for
such supermarket, on a dollar for dollar basis, as set forth in
financial projections (and in the case of a sale of a supermarket,
the historical EBITDA of such supermarket) to be provided by
the Borrowers to the Agent and the Existing Agent, all in a
manner acceptable to the Existing Agent in its sole discretion
(such discretion to be exercised under this covenant consistent
with its exercise under the corresponding covenant in the
Existing Credit Agreement).
<TABLE>
<CAPTION>
Date of Determination Amount
<S> <C>
The fiscal quarter ending September 11, 1999 $85,100,000
The fiscal quarter ending January 1, 2000 $78,500,000
The fiscal quarter ending March 26, 2000 $80,100,000
The fiscal quarter ending June 18, 2000 $85,000,000
The fiscal quarter ending September 10, 2000 $85,700,000
The fiscal quarter ending December 31, 2000 $83,000,000
Each fiscal quarter ending in Fiscal Year 2001 $83,000,000
and thereafter
</TABLE>
SECTION 7.12. Interest Rate Protection
Arrangements. Enter into any interest rate protection
agreement, interest rate swap agreement, hedge contract or any
other agreement, arrangement, device or instrument designed
or intended to protect the applicable Borrower against
fluctuations in the rate of interest on its Indebtedness with any
person other than with respect to the Existing Credit
Agreement.
SECTION 7.13. Business. Alter the nature of its
business as operated on the date of this Agreement in any
material respect.
SECTION 7.14. Sales of Receivables. Sell, assign,
discount, transfer, or otherwise dispose of any accounts
receivable, promissory notes, drafts or trade acceptances or
other rights to receive payment held by it, with or without
recourse, except for the purpose of collection or settlement in
the ordinary course of business.
SECTION 7.15. Use of Proceeds. Permit the proceeds
of the Term Loans to be used for any purpose which entails a
violation of, or is inconsistent with, Regulation G, T, U or X of
the Board, or for any purpose other than those set forth in
Section 6.16 hereof
SECTION 7.16. ERISA.
(a) Civil Penalty. Engage in any transaction in
connection with which any Borrower or any ERISA Affiliate
thereof could be subject to either a material civil penalty
assessed pursuant to the provisions of Section 502 of ERISA or
a material tax imposed under the provisions of Section 4975 of
the Code.
(b) Terminate Plan. Terminate any Pension
Plan in a "distress termination" under Section 4041 of ERISA
which could result in a material liability of any Borrower or
any ERISA Affiliate thereof to the PBGC, or take any other
action which could result in a material liability of any Borrower
or any ERISA Affiliate thereof to the PBGC.
(c) Payment Default. Fail to make payment
when due of all amounts which, under the provisions of any
Plan, any Borrower or any ERISA Affiliate thereof is required
to pay as contributions thereto (other than a failure by reason of
inadvertent error that is corrected as soon as practicable after
discovery of such error if the effect of such failure would
reasonably be expected to result in a Material Adverse Effect),
or, with respect to any Pension Plan, permit to exist any
"accumulated funding deficiency" (within the meaning of
Section 302 of ERISA and Section 412 of the Code), whether
or not waived, with respect thereto.
(d) Amendment Requiring Security. Adopt an
amendment to any Pension Plan requiring the provision of
security under Section 307 of ERISA or Section 401 (a)(29) of
the Code.
SECTION 7.17. Accounting Changes. Make, or permit
any subsidiary to make, any material change in its accounting
treatment or financial reporting practices except as required or
permitted by generally accepted accounting principles in effect
from time to time.
SECTION 7.18. Prepayment or Modification of
Indebtedness; Modification of Charter and Other Documents.
(a) Prepay Debt. Directly or indirectly
prepay, redeem, purchase, defease or retire in advance of its
scheduled maturity any Indebtedness (for borrowed money or
under capital leases), including without limitation Indebtedness
issued under the Senior Indenture, the Senior Subordinated
Indenture or any of the Senior Notes or the Senior
Subordinated Notes or any Subordinated Indebtedness, other
than (i) Indebtedness incurred hereunder, (ii) Indebtedness in
respect of Capitalized Lease Obligations relating to real
property, (iii) Indebtedness in respect of Capitalized Lease
Obligations relating to personal property (such prepayments,
redemptions, purchases or retirements under this clause (iii) not
to exceed $2,500,000 in the aggregate during the term of this
Agreement), or pay any Indebtedness in violation of any
subordination provisions with respect thereto, (iv) A.I. Credit
Corp. Indebtedness, or (v) Indebtedness incurred under the
Existing Credit Agreement.
(b) Modify Debt. Except as will not materially
and adversely affect the rights of the Agent or the Lenders in
the Collateral, directly or indirectly modify, amend or
otherwise alter the terms and provisions of the "Security
Documents" as defined in the Existing Credit Agreement or the
Senior Subordinated Notes or any Subordinated Indebtedness.
<PAGE>
(c) Amend Charter, etc. Directly or indirectly
modify, amend or alter their certificates or articles of
incorporation (except in connection with issuances of capital
stock permitted by Section 7.23(iii)), preferred
stock/certificates of designations or by-laws.
(d) SunTrust LC. Directly or indirectly
modify, amend or otherwise alter the terms and provisions of
the SunTrust LC without the written consent of the Agent.
SECTION 7.19. Transactions with Affiliates. Except as
otherwise specifically permitted in this Agreement, including
fees permitted in Section 7.20, directly or indirectly purchase,
acquire or lease any Property from, or sell, transfer or lease
any Property to, or enter into any other transaction with, any
stockholder, Affiliate or agent of any Borrower, any subsidiary
thereof or any relative thereof, except at prices and on any
terms not less favorable to it than that which would have been
obtained in an arm's-length transaction with a non-affiliated
third party; provided, that no transaction or series of
transactions involving any asset or assets with a cumulative
value of more than $5,000,000 shall be permitted under this
section 7.19 unless the Company shall have obtained a fairness
opinion from an investment bank of recognized standing to the
effect that such transaction is fair.
SECTION 7.20. Consulting Fees. Pay any
management, consulting or other fees of any kind to any
Affiliate of any Borrower or any subsidiary thereof, other than
salaries to employees consistent with industry practice, legal
fees and consulting and investment banking fees, except as
specified in Schedule 7.20 annexed hereto.
SECTION 7.21. Limitations on Dividends and Other
Payments. Create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability
of any subsidiary of any Borrower to (a) pay dividends or make
any other distribution on its capital stock or any other equity
interest or participation in, or measured by, its profits, owned
by any other Borrower or any subsidiary thereof, or pay any
indebtedness owed to, any other Borrower or any subsidiary
thereof, (b) make loans or advances to any other Borrower or
any subsidiary thereof, or (c) transfer any of its properties or
assets to any other Borrower or any subsidiary thereof, except
for such encumbrances or restrictions existing under or by
reason of (i) applicable law, (ii) this Agreement, (iii) the Senior
Indenture as in effect on the Closing Date, (iv) the Senior
Subordinated Indenture as in effect on the Closing Date or (v)
the Existing Credit Agreement as in effect on the Closing Date.
SECTION 7.22. Limitation on Creation of
Subsidiaries. Establish, create or acquire, or permit any
subsidiary of any Borrower to establish, create or acquire, any
new subsidiary, without the prior written consent of the Agent.
SECTION 7.23. Limitation on Issuance of Capital
Stock. Issue, or permit any subsidiary to issue, any capital
stock (including by way of sales of treasury stock) or any
options or warrants to purchase, or securities convertible into,
capital stock, except (i) to qualify directors to the extent
required by applicable law, (ii) upon the formation of any new
subsidiary to the extent permitted by this Agreement, and (iii)
the issuance by Jitney Jungle of capital stock (including by way
of treasury stock) or any options or warrants to purchase, or
securities convertible into, capital stock of Jitney Jungle.
SECTION 7.24. Asset Sales.
(a) Indenture Covenant. The Borrowers
agree with the Agent for the benefit of each Lender that (i) the
<PAGE>
Borrowers shall comply with Section 4.10(a) of the Senior
Indenture as in effect as of the date hereof, and (ii) such
provision is incorporated herein by reference as if fully set
forth herein.
(b) Bank Covenant. The Borrowers shall
apply the proceeds of any Asset Sale as required by the terms
of the Existing Credit Agreement as in effect on the date
hereof, or as the same may be amended from time to time,
provided, however, that with respect to any Asset Sales
described in clauses (ix) or (x) of Section 7.05 hereof,
"Loans", "Total Commitment" and "Supplemental Availability"
(as such terms are defined in the Existing Credit Agreement)
shall be paid and permanently reduced (as applicable) as and to
the extent described in such respective clauses.
VIII. EVENTS OF DEFAULT & REMEDIES
SECTION 8.01. Events of Default. Each of the
following events shall be referred to herein as an"Event of
Default":
(a) Representation False. Any representation
or warranty made or deemed made in or in connection
with this Agreement or any of the Security Documents,
the Notes or other Term Loan Documents, shall prove
to have been incorrect in any material respect when
made or deemed to be made;
(b) Principal Default. The Borrowers shall fail
to make any payment of any principal of any Note
when and as the same shall become due and payable,
whether at the due date thereof or at a date fixed for
prepayment thereof or by acceleration thereof or
otherwise;
(c) Interest Default. The Borrowers shall fail
to make any payment of any interest on any Note, of
any fee or any other amount payable hereunder, or
under or with respect to the Notes or any other Term
Loan Document or in connection with any of the
Transactions before 4 p.m. on the second Business Day
after and excluding the date on which the same shall
have become due and payable;
(d) Covenant Default. Default shall be made
in the due observance or performance of any covenant,
condition or agreement to be observed or performed on
the part of any Borrower, any Guarantor, any Grantor
or any of their respective subsidiaries pursuant to the
terms of this Agreement, any of the Notes or any other
Term Loan Document (and, with respect to defaults
under Sections 6.04, 6.06, 6.07 and 6.12 hereof, such
default shall continue for fifteen (15) days);
(e) Voluntary Bankruptcy. Any Borrower,
any Guarantor, any Grantor or any subsidiary of any
thereof shall (i) voluntarily commence any proceeding
or file any petition seeking relief under Title 11 of the
United States Code or any other Federal, state or
foreign bankruptcy, insolvency, liquidation or similar
law, (ii) consent to the institution of, or fail to contra-
vene in a timely and appropriate manner, any such
proceeding or the filing of any such petition, (iii) apply
for or consent to the appointment of a receiver, trustee,
custodian, sequestrator or similar official for such
Borrower, such Guarantor, such Grantor or such
subsidiary or for a substantial part of its Property, (iv)
file an answer admitting the material allegations of a
<PAGE>
petition filed against it in any such proceeding, (v)
make a general assignment for the benefit of creditors,
(vi) become unable, admit in writing its inability or fail
generally to pay its debts as they become due or (vii)
take corporate action for the purpose of effecting any of
the foregoing;
(f) Involuntary Bankruptcy. An involuntary
proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of any
Borrower, any Guarantor, any Grantor or any
subsidiary of any thereof, or of a substantial part of the
Property of any Borrower, any Guarantor, any Grantor
or any subsidiary of any thereof, under Title 11 of the
United States Code or any other Federal, state or
foreign bankruptcy, insolvency, receivership or similar
law, (ii) the appointment of a receiver, trustee,
custodian, sequestrator or similar official for any
Borrower, any Guarantor, any Grantor or any
subsidiary of any thereof or for a substantial part of the
Property of any Borrower, any Guarantor, any Grantor
or any subsidiary of any thereof or (iii) the winding-up
or liquidation of any Borrower, any Guarantor, any
Grantor or any subsidiary of any thereof; and such
proceeding or petition shall continue undismissed for
30 days or an order or decree approving or ordering
any of the foregoing shall continue unstayed and in
effect for 60 days;
(g) Cross Default. Either the Indebtedness
governed by the Existing Credit Agreement shall have
been accelerated, by operation of law or otherwise, or
default shall be made with respect to any other
Indebtedness (excluding Indebtedness outstanding
hereunder and Indebtedness covered by clause (h) or (i)
of this Article VIII) or any obligations under a
capitalized lease relating to any personal property of
any Borrower, any Guarantor, any Grantor or any
subsidiary of any thereof, and, with respect to such
lease, whose unpaid principal amount exceeds (together
with all other Indebtedness or capitalized leases in
default under this clause (g)) $250,000 in the aggregate
at any time, if the effect of any such default shall be to
accelerate, or to permit the holder or obligee of any
such Indebtedness or obligations under a capitalized
lease (or any trustee on behalf of such holder or
obligee) at its option to accelerate, the maturity of such
Indebtedness or such obligations under a capitalized
lease, or if any such Indebtedness or such obligations
under a capitalized lease shall not be paid when
scheduled to be due and payable (taking into account
any grace periods);
(h) Capitalized Lease Defaults. Default shall
be made with respect to any obligations under a
capitalized lease relating to any real property of any
Borrower, any Guarantor, any Grantor or any
subsidiary of any thereof, whose principal amount
exceeds (together with all other capitalized leases in
default under this clause (h)) $2,250,000 in the
aggregate at any time, if the effect of any such default
shall be to accelerate the maturity of such obligations
under such capitalized lease;
(i) IRB Default. Default shall be made with
respect to any IRB Indebtedness (including, without
limitation, under the Letter of Credit Reimbursement
Agreement, dated as of December 1, 1995, between
McCarty-Holman Co., Inc. and Sun Trust Bank,
Atlanta (or any successor or replacement agreement),
pursuant to which an irrevocable letter of credit in
favor of the IRB Trustee relating to such Indebtedness,
was issued) by the City of Jackson, Mississippi or any
Borrower, and Guarantor, any Grantor or any
subsidiary of any thereof, if the effect of any such
default shall be to accelerate, or to permit the holder or
obligee of any such Indebtedness (or any trustee on
behalf of such holder or obligee) at its option to
<PAGE>
accelerate, the maturity of such Indebtedness or if any
such Indebtedness shall not be paid when scheduled to
be due and payable (taking into account any grace
periods);
(j) ERISA Default. (i) A Reportable Event
shall have occurred with respect to a Pension Plan, (ii)
the filing by any Borrower, any ERISA Affiliate, or an
administrator of any Plan of a notice of intent to
terminate such a Plan in a "distress termination" under
the provisions of Section 4041 of ERISA, (iii) the
receipt of notice by any Borrower, any ERISA
Affiliate, or an administrator of a Plan that the PBGC
has instituted proceedings to terminate (or appoint a
trustee to administer) such a Pension Plan, (iv) any
other event or condition exists which constitutes
grounds under the provisions of Section 4042 of ERISA
for the termination of (or the appointment of a trustee
to administer) any Pension Plan by the PBGC, (v) a
Pension Plan shall fail to maintain the minimum
funding standard required by Section 412 of the Code
for any plan year or a waiver of such standard is sought
or granted under the provisions of Section 412(d) of the
Code, (vi) any Borrower or any ERISA Affiliate
thereof has incurred, or is likely to incur, a liability
under the provisions of Section 4062, 4063, 4064, 4201
or 4203 of ERISA, (vii) any Borrower or any ERISA
Affiliate thereof fails to pay the full amount of an
installment required under Section 412(m) of the Code,
(viii) the occurrence of any other event or condition
with respect to any Plan which would constitute an
event of default under any other agreement entered into
by any Borrower or any ERISA Affiliate, and in each
case in clauses (i) through (viii) of this subsection (j),
such event or condition, together with all other such
events or conditions, if any, could subject any
Borrower or any ERISA Affiliate thereof to any taxes,
penalties or other liabilities which, in the reasonable
opinion of the Agent, would have a Material Adverse
Effect on the financial condition of any Borrower or
any ERISA Affiliate;
(k) Multiemployer Plans. Any Borrower or
any ERISA Affiliate thereof (i) shall have been notified
by the sponsor of a Multiemployer Plan that it has
incurred any material withdrawal liability to such
Multiemployer Plan, and (ii) does not have reasonable
grounds for contesting such withdrawal liability and is
not in fact contesting such withdrawal liability in a
timely and appropriate manner;
(l) Judgment. A judgment (not reimbursed by
insurance policies of any Borrower, any Guarantor, any
Grantor or any subsidiary of any thereof) or decree for
the payment of money, a fine or penalty which when
taken together with all other such judgments, decrees,
fines and penalties shall exceed $500,000 shall be
rendered by a court or other tribunal against any
Borrower, any Guarantor, any Grantor or any
subsidiary of any thereof and (i) shall remain
undischarged or unbonded for a period of 30
consecutive days during which the execution of such
judgment, decree, fine or penalty shall not have been
stayed effectively or (ii) any judgment creditor or other
person shall legally commence actions to collect on or
enforce such judgment, decree, fine or penalty;
(m) Term Loan Document. This Agreement,
any Note, any of the Security Documents or any of the
other Term Loan Documents shall for any reason cease
to be, or shall be asserted by any Borrower, any
Guarantor or any Grantor not to be, a legal, valid and
binding obligation of such Borrower, such Guarantor or
such Grantor, as applicable, enforceable in accordance
with its terms, or the security interest or Lien purported
to be created by any of the Security Documents shall
for any reason cease to be, or be asserted by any
<PAGE>
Borrower, any Guarantor or any Grantor not to be, a
valid Lien on any Collateral subject only to Permitted
Liens; or
(n) Change of Control. A Change of Control
shall occur.
SECTION 8.02. Acceleration. Upon the occurrence
of any Event of Default (other than the voluntary and
involuntary bankruptcy defaults set forth in Section 8.01(e) and
(f)) and at any time thereafter during the continuance of such
event, the Agent may, and upon the written request of the
Required Lenders shall, by written notice (or facsimile notice
promptly confirmed in writing) to the Borrowers, take any or
all of the following actions at the same or different times:
declare the Notes, any amounts then owing to the Lenders and
all other Obligations to be forthwith due and payable,
whereupon the principal of such Notes, together with accrued
interest (except as set forth in Section 2.05(b)) and points
thereon and other liabilities of the Borrowers accrued
hereunder and all other Obligations, shall become forthwith due
and payable, without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly
waived by each Borrower and each Guarantor, anything con-
tained herein or in the Notes to the contrary notwithstanding;
provided, however, that with respect to a default described in
paragraph (e) or (f) above, the principal of the Notes, together
with accrued interest and points thereon and any amounts then
owing to the Lenders and any other liabilities of any Borrower
accrued hereunder and all other Obligations shall automatically
become due and payable, without presentment, demand, protest
or other notice of any kind, all of which are hereby expressly
waived by each Borrower and each Guarantor, anything
contained herein or in the Notes to the contrary
notwithstanding.
SECTION 8.03. Remedies. Subject to Section 8.07,
during the continuance of an Event of Default, the Agent shall
have and may exercise all rights and remedies of a mortgagee
or a secured party under the Uniform Commercial Code in
effect in the State of New York at such time, whether or not
applicable to the affected Collateral, and otherwise, including,
without limitation, the right to foreclose the Liens granted
herein or in any of the Security Documents by any available
judicial procedure and/or to take possession of any or all of the
Collateral, the other security for the Obligations and the books
and records relating thereto, with or without judicial process;
for the purposes of the preceding sentence, the Agent may
enter upon any or all of the premises where any of the
Collateral, such other security or books or records may be
situated and take possession and remove the same therefrom.
Subject to Section 8.07, the Agent shall have the right, in its
sole discretion, to determine which rights, Liens or remedies it
shall at any time pursue, relinquish, subordinate, modify or
take any other action with respect thereto, without in any way
modifying or affecting any of them or any of the Lenders' or
the Agent's rights hereunder or under any other Term Loan
Documents; and any moneys, deposits, accounts, balances or
other Property which may come into any Lender's or the
Agent's hands at any time or in any manner, may be retained
by such Lender or the Agent and applied to any of the
Obligations. In case any one or more Events of Default shall
occur and be continuing, and subject to Section 8.07 the Agent
may proceed to protect and enforce its rights or remedies either
by suit in equity or by action at law, or both, whether for the
specific performance of any covenant, agreement or other
provision contained herein or in any document or instrument
delivered in connection with or pursuant to this Agreement or
any other Term Loan Document, or to enforce the payment of
the Obligations or any other legal or equitable right or remedy.
SECTION 8.04. Rights Cumulative. No right or
remedy herein conferred upon the Lenders or the Agent is
intended to be exclusive of any other right or remedy contained
<PAGE>
herein or in any instrument or document delivered in
connection with or pursuant to this Agreement or any other
Term Loan Document, and every such right or remedy shall be
cumulative and shall be in addition to every other such right or
remedy contained herein and therein or now or hereafter
existing at law or in equity or by statute, or otherwise.
SECTION 8.05 No Waiver. No course of dealing
between any Borrower or any Grantor or Guarantor and any
Lender or the Agent or any failure or delay on the part of any
Lender or the Agent in exercising any rights or remedies
hereunder or under any other Term Loan Document shall
operate as a waiver of any rights or remedies of the Lenders or
the Agent and no single or partial exercise of any rights or
remedies hereunder or under any other Term Loan Document
shall operate as a waiver or preclude the exercise of any other
rights or remedies hereunder or under any other Term Loan
Document or of the same right or remedy on a future occasion.
SECTION 8.06. Application of Proceeds. After the
occurrence of an Event of Default and acceleration of the
Obligations as herein provided, and subject to Section 8.07, the
proceeds of the Collateral and of Property of persons other than
the Borrowers and the Grantors securing the Obligations and
collections from each Guarantee of the Obligations shall be
applied by the Agent to payment of the Obligations in the
following order, unless a court of competent jurisdiction shall
otherwise direct or if otherwise provided in a Security
Document:
(i) FIRST, to payment of all
reasonable costs and expenses of the Agent and
the Lenders incurred in connection with the
preservation, collection and enforcement of the
Obligations or any Guarantee thereof, or of any
of the Liens granted to the Agent pursuant to
the Security Documents or otherwise,
including, without limitation, any amounts
advanced by the Agent or the Lenders to
protect or preserve the Collateral;
(ii) SECOND, to payment of that
portion of the Obligations constituting accrued
and unpaid interest and points and indemnities
due and payable under Article II hereof, ratably
amongst the Agent and the Lenders in
accordance with the proportion which the
accrued interest and points and indemnities due
and payable under Article II hereof constituting
the Obligations owing to the Agent and each
such Lender at such time bears to the aggregate
amount of accrued interest and points and
indemnities payable under Article II hereof
constituting the Obligations owing to the Agent
and all of the Lenders at such time until such
interest, points and indemnities shall be paid in
full;
(iii) THIRD, to payment of the
principal of the Obligations, ratably amongst
the Lenders in accordance with the proportion
which the principal amount of the Obligations
owing to each such Lender bears to the
aggregate principal amount of the Obligations
owing to all of the Lenders until such principal
of the Obligations shall be paid in full;
(iv) FOURTH, to the payment of
all other Obligations, ratably amongst the
Lenders in accordance with the proportion
which the amount of such other Obligations
owing to each such Lender bears to the
aggregate principal amount of such other
Obligations owing to all of the Lenders until
such other Obligations shall be paid in full; and
<PAGE>
(v) FIFTH, the balance, if any,
after all of the Obligations have been satisfied,
shall, except as otherwise provided in the
Security Documents, be deposited by the Agent
in an operating account of the Borrowers with
the Agent designated by the Borrowers, or paid
over to such other person or persons as may be
required by law.
Each of the Borrowers and the Guarantors acknowledges and
agrees that they shall remain jointly and severally liable to the
extent of any deficiency between the amount of the proceeds of
the Collateral and collections under the Guarantees of the
Obligations and the aggregate amount of the sums referred to in
the first through fourth clauses above.
SECTION 8.07. Intercreditor Agreement. Until the
Existing Credit Termination Date has occurred, all rights and
remedies of the Agent or the Lenders with respect to the
Collateral under this Agreement or any other Term Loan
Document shall be subject to the Intercreditor Agreement and
governed thereby.
IX. AGENT
SECTION 9.01. Appointment. In order to expedite
the transactions contemplated by this Agreement, Silver Oak is
hereby appointed to act as Agent on behalf of the Lenders.
Each of the Lenders and each subsequent holder of any Note by
its acceptance thereof, irrevocably authorizes the Agent to take
such action on its behalf and to exercise such powers hereunder
and under the Security Documents and other Term Loan
Documents as are specifically delegated to or required of the
Agent by the terms hereof and the terms thereof together with
such powers as are reasonably incidental thereto. Neither the
Agent nor any of its directors, officers, employees or agents
shall be liable as such for any action taken or omitted to be
taken by it or them hereunder or under any of the Security
Documents and other Term Loan Documents or in connection
herewith or therewith (a) at the request or with the approval of
the Required Lenders (or, if otherwise specifically required
hereunder or thereunder, the consent of all the Lenders) or (b)
in the absence of its or their own gross negligence, bad faith or
willful misconduct.
SECTION 9.02. Authorization. The Agent is hereby
expressly authorized on behalf of the Lenders, without hereby
limiting any implied authority, (a) to receive on behalf of each
of the Lenders any payment of principal of or interest on the
Notes outstanding hereunder and all other amounts accrued
hereunder paid to the Agent, and promptly to distribute to each
Lender its proper share of all payments so received, (b) to
distribute to each Lender copies of all notices, agreements and
other material as provided for in this Agreement or in the
Security Documents and other Term Loan Documents as
received by such Agent and (c) to take all actions with respect
to this Agreement and the Security Documents and other Term
Loan Documents as are specifically delegated to the Agent.
SECTION 9.03. Action by Agent. In the event that
(a) the Borrowers fail to pay when due the principal of or
interest on any Note or any fee payable hereunder or (b) the
Agent receives written notice of or otherwise becomes aware of
the occurrence of a Default or an Event of Default, the Agent
shall promptly give written notice thereof to the Lenders, and
<PAGE>
shall take such action with respect to such Event of Default or
other condition or event as it shall be directed to take by the
Required Lenders (but shall not be required to take any such
actions which violate any law or any term of this Agreement or
any other Term Loan Document); provided, however, that,
unless and until the Agent shall have received such directions,
the Agent may take such action or refrain from taking such
action hereunder or under the Security Documents or other
Term Loan Documents with respect to a Default or Event of
Default as it shall deem advisable in the best interests of the
Lenders.
SECTION 9.04. Agent Not Responsible.
(a) For Term Loan Documents. The Agent
shall not be responsible in any manner to any of the Lenders
for the effectiveness, enforceability, perfection, value,
genuineness, validity or due execution of this Agreement, the
Notes or any of the other Term Loan Documents or Collateral
or any other agreements or certificates, requests, financial
statements, notices or opinions of counsel or for any recitals,
statements, warranties or representations contained herein or in
any such instrument or be under any obligation to ascertain or
inquire as to the performance or observance of any of the
terms, provisions, covenants, conditions, agreements or
obligations of this Agreement or any of the other Term Loan
Documents or any other agreements on the part of any
Borrower or any Guarantor and, without limiting the generality
of the foregoing, the Agent shall, in the absence of knowledge
to the contrary, be entitled to accept any certificate furnished
pursuant to this Agreement or any of the other Term Loan
Documents as conclusive evidence of the facts stated therein
and shall be entitled to rely on any note, notice, consent,
certificate, affidavit, letter, telegram, teletype message,
statement, order or other document which it believes in good
faith to be genuine and correct and to have been signed or sent
by the proper person or persons. Neither the Agent nor any of
its directors, officers, employees or agents shall have any
responsibility to any Borrower or any Guarantor on account of
the failure or delay in performance or breach by any Lender
other than the Agent of any of its obligations hereunder or to
any Lender on account of the failure of or delay in performance
or breach by any other Lender or any Borrower or any
Guarantor of any of their respective obligations hereunder or in
connection herewith. The Agent may consult with legal
counsel selected by it in connection with matters arising under
this Agreement or any of the other Term Loan Documents and
any action taken or suffered in good faith by it in accordance
with the opinion of such counsel shall be full justification and
protection to it. The Agent may exercise any of its powers and
rights and perform any duty under this Agreement or any of the
other Term Loan Documents through agents or attorneys. The
Agent and the Borrowers may deem and treat the payee of any
Note as the holder thereof until written notice of transfer shall
have been delivered as provided herein by such payee to the
Agent and the Borrowers.
(b) No Reliance by Lenders. Each Lender
acknowledges that it has, independently and without reliance
upon the Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement
and any other Term Loan Document to which such Lender is
party. Each Lender also acknowledges that it will,
independently and without reliance upon the Agent or any other
Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own
decisions in taking or not taking action under or based upon
this Agreement, any other Term Loan Document, any related
agreement or any document furnished hereunder.
(c) Agent May Do Other Business. It is
understood and agreed that the Agent may exercise its rights
and powers under other agreements and instruments to which it
is or may be a party, and engage in other transactions with any
Borrower or any Guarantor, as though it were not Agent of the
<PAGE>
Lenders hereunder. With respect to the Term Loans made
hereunder and the Notes issued to it, the Agent in its individual
capacity and not as an Agent shall have the same rights, powers
and duties hereunder and under any other Term Loan
Document executed in connection herewith as any other Lender
and may exercise the same as though it were not the Agent, and
the Agent and its affiliates may accept deposits from, lend
money to and generally engage in any kind of business with
any Borrower, any Guarantor or other affiliate thereof as if it
were not the Agent.
SECTION 9.05. Reimbursement. Each Lender agrees
(i) to reimburse the Agent in the amount of such Lender's pro
rata share (based on its Commitment hereunder) of any
expenses incurred for the benefit of the Secured Parties by the
Agent, including counsel fees and compensation of agents paid
for services rendered on behalf of the Secured Parties, not
reimbursed by the Borrowers and (ii) to indemnify and hold
harmless the Agent and any of its directors, officers, employees
or agents, on demand, in the amount of its pro rata share, from
and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against it or such directors,
officers, employees or agents in its or their capacity as, or
acting on behalf of, the Agent in any way relating to or arising
out of this Agreement or any of the other Term Loan
Documents or any action taken or omitted by it or any of them
under this Agreement or any of the other Term Loan
Documents, to the extent not reimbursed by the Borrowers;
provided, however, that no Secured Party shall be liable to the
Agent for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgment, suits, costs, expenses or
disbursements resulting from the gross negligence or willful
misconduct of the Agent or any of its directors, officers,
employees or agents.
SECTION 9.06. Agent May Resign. Subject to the
appointment and acceptance of a successor Agent as provided
below, the Agent may resign at any time by notifying the
Lenders and the Borrowers. Upon any such resignation, the
Lenders shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by such Lenders
and shall have accepted such appointment within 30 days after
the retiring Agent gives notice of its resignation, then the
retiring Agent may, on behalf of the Lenders, appoint a
successor Agent which shall be a financial institution with an
office (or an affiliate with an office) in New York, New York,
having a combined capital and surplus of at least $50,000,000.
Upon the acceptance of any appointment as Agent hereunder by
a successor financial institution, such successor shall thereupon
succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent and the retiring
Agent shall be discharged from its duties and obligations
hereunder and under each of the other Term Loan Documents.
After any Agent's resignation hereunder, the provisions of this
Article shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as
Agent.
X. MISCELLANEOUS
SECTION 10.01. Notices. Notices, consents and other
communications provided for herein shall be in writing and
shall be delivered or mailed by certified mail return receipt
requested (or in the case of telex or facsimile communication,
delivered by telex, graphic scanning, telecopier or other
telecommunications equipment, with receipt confirmed with a
copy, mailed as aforesaid) addressed,
(a) if to any Borrower, Guarantor or
Grantor, at 1770 Ellis Avenue, Jackson, MS 39204,
Attention: Ronald E. Johnson, President, with a copy
<PAGE>
to Bruckmann, Rosser, Sherrill & Co., Inc., 126 East
56th Street, New York, NY 10022, Attention: Harold
Rosser, Managing Director and with a copy to Dechert,
Price & Rhoads, 4000 Bell Atlantic Tower, 1717 Arch
Street, Philadelphia, PA 19103, Attention: Gary L.
Green, Esq.;
(b) if to the Agent, at Silver Oak Capital,
L.L.C., c/o Angelo, Gordon & Co., 245 Park Avenue,
New York, New York 10167, Attention: Jim Malley,
with a copy to Kramer Levin Naftalis & Frankel LLP,
919 Third Avenue, New York, NY 10022, Attention:
Thomas Moers Mayer, Esq.; and
(c) if to any Lender, at the address set
forth below its name in Schedule 2.01 annexed hereto.
All notices and other communications given to any party hereto
in accordance with the provisions of this Agreement shall be
deemed to have been given on the date of receipt if hand
delivered or three days after being sent by registered or
certified mail, postage prepaid, return receipt requested, if by
mail, or upon receipt if by any telex, facsimile or other
telecommunications equipment, in each case addressed to such
party as provided in this Section 10.01 or in accordance with
the latest unrevoked direction from such party.
SECTION 10.02. Survival of Agreement. All
covenants, agreements, representations and warranties made by
any Borrower, any Guarantor or any of their respective
subsidiaries herein and in the certificates or other instruments
prepared or delivered in connection with this Agreement, any
of the Security Documents or any other Term Loan Document,
shall be considered to have been relied upon by the Lenders
and shall survive the making by the Lenders of the Term Loans
and the execution and delivery to the Lenders of the Notes and
shall continue in full force and effect as long as the principal of
or any accrued interest on the Notes or any other fee or amount
payable under the Notes or this Agreement or any other Term
Loan Document is outstanding and unpaid.
SECTION 10.03. Assignments & Participations.
(a) Successors & Assigns. Whenever in this
Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns
of such party; and all covenants, promises and agreements by
or on behalf of any Borrower, any Guarantor, any Grantor, any
ERISA Affiliate, any subsidiary of any thereof, the Agent or
the Lenders, that are contained in this Agreement shall bind
and inure to the benefit of their respective successors and
assigns. Without limiting the generality of the foregoing, each
Borrower specifically confirms that any Lender may at any
time and from time to time pledge or otherwise grant a security
interest in any Term Loan or any Note (or any part thereof) to
any Federal Reserve Bank. The Borrowers may not assign or
transfer any of their rights or obligations hereunder without the
written consent of all the Lenders.
(b) Participations. Each Lender, without the
consent of the Borrowers but with the prior consent of the
Agent (which consent shall not unreasonably be withheld), may
sell participations to one or more banks or other entities in all
or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its
Commitment and the Term Loan owing to it and the Note held
by it); provided, however, that (i) such Lender's obligations
under this Agreement (including, without limitation, its
Commitment), shall remain unchanged, and (ii) such Lender
shall remain solely responsible to the other parties hereto for
<PAGE>
the performance of such obligations, and (iii) the Borrowers,
the Agent and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement.
(c) Assignments. Each Lender, without the
consent of the Borrowers, may assign and delegate to an
Eligible Assignee with the prior written consent of the Agent
(which consent may be granted or withheld in the Agent's sole
and absolute discretion) all or a portion of its interests, rights
and obligations under this Agreement and the other Term Loan
Documents; provided, however, that (i) each such assignment
shall be of a constant, and not a varying, percentage of all of
the assigning Lender's rights and obligations under this
Agreement, which shall include the same percentage interest in
the Term Loans and Notes, (ii) the amount of the Term Loan
being assigned pursuant to each such assignment (determined as
of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Agent) shall be either (x) 100%
of the Assignor's Term Loan and other rights hereunder or (y)
a minimum principal amount of $5,000,000 or in such lower
amount as the Agent may, in its sole and absolute discretion,
permit, and (iii) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and
recording in the Register (as defined below), an Assignment
and Acceptance, together with any Note subject to such
assignment and a processing and recordation fee of $3,500.
Upon such execution, delivery, acceptance and recording and
after receipt of the written consent of the Agent, from and after
the effective date specified each Assignment and Acceptance,
which effective date shall be at least five (5) Business Days
after the execution thereof, the assignee thereunder shall be a
party hereto and, to the extent provided in such Assignment
and Acceptance, have the rights and obligations of a Lender
hereunder and under the other Term Loan Documents.
(d) Assignment and Acceptance. By executing
and delivering an Assignment and Acceptance, the Lender
which is assignor thereunder and the assignee thereunder
confirm to, and agree with, each other and the other parties
hereto as follows: (i) such assignee confirms that it has received
a copy of this Agreement and of the other Term Loan
Documents, together with copies of financial statements and
such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance; (ii) such assignee
will, independently and without reliance upon the Agent, such
Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action
under this Agreement; (iii) such assignee appoints and
authorizes the Agent to take such action as the Agent on its
behalf and to exercise such powers under this Agreement as are
delegated to the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto; and (iv) such
assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
(e) Register. The Agent shall maintain at its
address referred to in Section 10.01 hereof a copy of each
Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders and
the Commitment of, and principal amount of the Term Loan
owing to, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrowers, the Agent and the Lenders
may treat each person whose name is recorded in the Register
as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrowers or
any Lender at any reasonable time and from time to time upon
reasonable prior notice.
<PAGE>
(f) Assignee's Notes. Upon its receipt of an
Assignment and Acceptance executed by an assigning Lender
and an assignee together with any Note or Notes subject to such
assignment and the written consent to such assignment, the
Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit E annexed
hereto, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register and (iii) give
prompt notice thereof to the Lenders and the Borrowers.
Within five (5) Business Days after receipt of such notice, the
Borrowers, at their own expense, shall execute and deliver to
the Agent in exchange for each surrendered Note or Notes a
new Note or Notes to the order of such assignee in an amount
equal to its portion of the Commitment assumed by it pursuant
to such Assignment and Acceptance and, if the assigning
Lender has retained any Commitment hereunder, a new Note
or Notes to the order of the assigning Lender in an amount
equal to the Commitment retained by it hereunder. Such new
Note or Notes shall be in an aggregate principal amount equal
to the aggregate principal amount of such surrendered Note or
Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of
Exhibit A. Notes surrendered to the Borrowers shall be
canceled by the Borrowers.
(g) Information. Notwithstanding any other
provision herein, any Lender may, in connection with any
assignment or participation or proposed assignment or
participation pursuant to this Section 10.03, disclose to the
assignee or participant or proposed assignee or participant, any
information, including, without limitation, any Information,
relating to any Borrower, any Grantor or any Guarantor
furnished to such Lender by or on behalf of any Borrower in
connection with this Agreement; provided, however, that prior
to any such disclosure, each such assignee or participant or
proposed assignee or participant shall agree to preserve the
confidentiality of any confidential Information relating to the
Borrowers received from such Lender.
SECTION 10.04. Expenses; Indemnity.
(a) Expenses. Each Borrower agrees to pay all
out-of-pocket expenses incurred by the Agent in connection
with the preparation of this Agreement, the Security
Documents, the Notes and the other Term Loan Documents or
with any amendments, modifications, waivers, extensions,
renewals, renegotiations or work-outs of the provisions hereof
or thereof (whether or not the transactions hereby contemplated
shall be consummated) or incurred by the Agent or any of the
Lenders in connection with the enforcement or protection of its
rights in connection with this Agreement or any of the other
Term Loan Documents or with the Term Loans made or the
Notes, or in connection with any pending or threatened action,
proceeding, or investigation relating to the foregoing, including
but not limited to the reasonable fees and disbursements of
counsel for the Agent and each Lender and ongoing field
examination expenses and charges. Without limitation of the
foregoing, each Borrower hereby agrees to reimburse the
Agent for any and all reasonable costs and expenses incurred in
connection with audits and field exams of the Borrowers' and
their subsidiaries' properties, assets, business and operations
performed at the request of the Agent by an independent party
selected by the Agent (provided that as long as no Default or
Event of Default is in existence, the obligations of the
Borrowers under this sentence shall not exceed $50,000 per
calendar year). Each Borrower further indemnifies the Lenders
from and agrees to hold them harmless against any
documentary taxes, assessments or charges made by any
governmental authority by reason of the execution and delivery
of this Agreement or the Notes.
(b) Borrowers' Indemnity. Each Borrower
indemnifies the Agent and each Lender and their respective
<PAGE>
directors, officers, employees and agents against, and agrees to
hold the Agent, each Lender and each such person harmless
from, any and all losses, claims, damages, liabilities and
related expenses, including reasonable counsel fees and
expenses, incurred by or asserted against the Agent, each
Lender or any such person arising out of, in any way connected
with, or as a result of (i) the use of any of the proceeds of the
Term Loans, (ii) this Agreement, any of the Security
Documents, or the other documents contemplated hereby or
thereby, except, as to any Lender, as a result of a breach
thereof by such Lender, (iii) the performance by the parties
hereto and thereto of their respective obligations hereunder and
thereunder and consummation of the transactions contemplated
hereby and thereby, or (iv) breach of any representation or
warranty and/or any of the foregoing, whether or not the
Agent, any Lender or any such person is a party thereto;
provided, however, that such indemnity shall not, as to the
Agent or any Lender, apply to any such losses, claims,
damages, liabilities or related expenses to the extent that they
result from the gross negligence, bad faith or willful
misconduct of the Agent or any Lender.
(c) Environmental Indemnity. Each Borrower
indemnifies, and agrees to defend and hold harmless the Agent
and the Lenders and their respective officers, directors,
shareholders, agents and employees (collectively, the
"Indemnitees") from and against any loss, cost, damage,
liability, lien, deficiency, fine, penalty or expense (including,
without limitation, reasonable attorneys' fees and reasonable
expenses for investigation, removal, cleanup and remedial costs
and modification costs incurred to permit, continue or resume
normal operations of any Property or assets or business of any
Borrower or any subsidiary thereof) arising from a violation of,
or failure to comply with any Environmental Law and to
remove any Lien arising therefrom except to the extent caused
by the gross negligence, bad faith or willful misconduct of any
Indemnitee, which any of the Indemnitees may incur or which
may be claimed or recorded against any of the Indemnitees by
any person.
(d) Indemnities Survive Termination. The
provisions of this Section 10.04 shall remain operative and in
full force and effect regardless of the expiration of the term of
this Agreement, the consummation of the transactions
contemplated hereby, the repayment of any of the Term Loans,
the invalidity or unenforceability of any term or provision of
this Agreement or the Notes, or any investigation made by or
on behalf of the Agent or any Lender. All amounts due under
this Section 10.04 shall be payable on written demand therefor
(which demand shall include a reasonable description of such
amounts).
SECTION 10.05. APPLICABLE LAW. THIS AGREEMENT AND
THE NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.
SECTION 10.06. Right of Setoff. Subject to the
Intercreditor Agreement, if an Event of Default shall have
occurred and be continuing, upon the request of the Required
Lenders, each Lender shall and is hereby authorized at any
time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held
and other indebtedness at any time owing by such Lender to or
for the credit or the account of the Borrowers against any and
all of the Obligations, the Notes held by such Lender or any
other Term Loan Document, irrespective of whether or not
such Lender shall have made any demand under this
Agreement, the Notes or such other Term Loan Document and
although such obligations may be unmatured. Each Lender
agrees to notify promptly the Agent and the Borrowers after
any such setoff and application made by such Lender, but the
failure to give such notice shall not affect the validity of such
<PAGE>
setoff and application. The rights of each Lender under this
Section are in addition to other rights and remedies (including,
without limitation, other rights of setoff) which may be
available to such Lender.
SECTION 10.07. Payments on Business Days. Should
the principal of or interest on the Notes or any fee or other
amount payable hereunder become due and payable on other
than a Business Day, payment in respect thereof may be made
on the next succeeding Business Day, and such extension of
time shall in such case be included in computing interest, if
any, in connection with such payment. All payments by any
Borrower and any Guarantor hereunder and all Term Loans
made by the Lenders hereunder shall be made in lawful money
of the United States of America in immediately available funds
at the office of the Agent set forth in Section 10.01 hereof.
SECTION 10.08. Waivers; Amendments; Final
Maturity Date.
(a) No Waiver by Inaction. No failure or
delay of the Agent or any Lender in exercising any power or
right hereunder or under any other Term Loan Document shall
operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such right or power,
preclude any other or further exercise thereof or the exercise of
any other right or power. The rights and remedies of the Agent
and the Lenders hereunder or under any other Term Loan
Document are cumulative and not exclusive of any rights or
remedies which they may otherwise have. No waiver of any
provision of this Agreement or the Notes nor consent to any
departure by any Borrower or any Guarantor therefrom shall in
any event be effective unless the same shall be authorized as
provided in Section 10.08(b) below, and then such waiver or
consent shall be effective only in the specific instance and for
the purpose for which given. No notice to or demand on any
Borrower or any Guarantor in any case shall entitle it to any
other or further notice or demand in similar or other
circumstances.
(b) Amendment. Each holder of any of the
Notes shall be bound by any amendment, modification, waiver
or consent authorized as provided herein, whether or not such
Note shall have been marked to indicate such amendment,
modification, waiver or consent. Neither this Agreement nor
any provision hereof may be waived, amended or modified
except pursuant to an agreement or agreements in writing
entered into by the Borrowers and the Required Lenders;
provided, however, (i) that no such agreement shall (A) change
the principal amount of, or extend or advance the maturity of
or the dates for the payment of principal of or interest on, any
Note or points payable hereunder or reduce the rate of interest
on any Note or points payable hereunder, without the consent
of each holder affected thereby, (B) change the Commitment of
any Lender or amend or modify the provisions of this Section
10.08, Section 2.01, Section 2.04, Section 2.07 or Section
10.04 hereof or the definition of "Required Lenders," or
(C) release any substantial portion of the Collateral, in each
case without the prior written consent of each Lender affected
thereby except that the Agent may, without the prior written
consent of any Lender, release Collateral permitted to be sold
pursuant to the terms of Section 7.05 hereof and (ii) that no
such agreement shall amend, modify or otherwise affect the
rights or duties of the Agent under this Agreement or the other
Term Loan Documents without the written consent of the
Agent. Each Lender and holder of any Note shall be bound by
any modification or amendment authorized by this Section
regardless of whether its Notes shall be marked to make
reference thereto, and any consent by any Lender or holder of
a Note pursuant to this Section shall bind any person
subsequently acquiring a Note from it, whether or not such
Note shall be so marked.
<PAGE>
SECTION 10.09. Severability. In the event any one or
more of the provisions contained in this Agreement or in the
Notes should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the
remaining provisions contained herein or therein shall not in
any way be affected or impaired thereby. The parties shall
endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.
SECTION 10.10. Entire Agreement; Waiver of Jury
Trial, etc. (a) This Agreement, the Notes, the other Term Loan
Documents and the Intercreditor Agreement constitute the
entire contract between the parties hereto relative to the subject
matter hereof. Any previous agreement among the parties
hereto with respect to the Transactions is superseded by this
Agreement, the Notes, the other Term Loan Documents and
the Intercreditor Agreement. Except as expressly provided
herein or in the Notes, or the Term Loan Documents (other
than this Agreement), nothing in this Agreement, the Notes, the
other Term Loan Documents or the Intercreditor Agreement,
expressed or implied, is intended to confer upon any party,
other than the parties hereto, any rights, remedies, obligations
or liabilities under or by reason of this Agreement, the Notes,
the other Term Loan Documents or the Intercreditor
Agreement.
(b) EXCEPT AS PROHIBITED BY LAW, EACH PARTY
HERETO HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE NOTES, ANY
OF THE OTHER TERM LOAN DOCUMENTS OR THE TRANSACTIONS.
(c) Except as prohibited by law, each party
hereto hereby waives any right it may have to claim or recover
in any litigation referred to in paragraph (b) of this Section
10.10 any special, exemplary, punitive or consequential
damages or any damages other than, or in addition to, actual
damages.
(d) Each party hereto (i) certifies that no
representative, agent or attorney of any Lender has
represented, expressly or otherwise, that such Lender would
not, in the event of litigation, seek to enforce the foregoing
waivers and (ii) acknowledges that it has been induced to enter
into this Agreement, the Notes or the other Term Loan
Documents, as applicable, by, among other things, the mutual
waivers and certifications herein.
SECTION 10.11. Confidentiality. The Agent and the
Lenders agree to keep confidential (and to cause their
respective officers, directors, employees, agents, advisors,
consultants and representatives to keep confidential) all
information, materials and documents furnished by or on behalf
of the Guarantors, the Borrowers, the Grantors or any of their
respective subsidiaries to the Agent or any Lender (the
"Information"). Notwithstanding the foregoing, the Agent and
each Lender shall be permitted to disclose Information (i) to
such of its officers, counsel, directors, employees, agents,
advisors, consultants and representatives as need to know such
Information in connection with its participation in any of the
Transactions or the administration of this Agreement or the
other Term Loan Documents with instructions to maintain the
confidentiality thereof; (ii) to the extent required by applicable
laws and regulations or by any subpoena or similar legal
process, or requested by any governmental agency or authority
(the Agent and each Lender receiving such subpoena or similar
legal process agrees to use reasonable efforts to promptly
furnish the Borrowers with a copy thereof); (iii) to the extent
<PAGE>
such Information (A) becomes publicly available other than as a
result of a breach of this Agreement, (B) becomes available to
the Agent or such Lender on a non-confidential basis from a
source other than any Borrower, any Guarantor, any Grantor
or any of their respective subsidiaries or (C) was available to
the Agent or such Lender on a non-confidential basis prior to
its disclosure to the Agent or such Lender by any Borrower,
any Guarantor, any Grantor or any of their respective
subsidiaries; (iv) to the extent any Borrower, any Guarantor or
any of their respective subsidiaries shall have consented to such
disclosure in writing; (v) in connection with the sale of any
Collateral pursuant to the provisions of any of the other Term
Loan Documents; or (vi) pursuant to Section 10.03(g) hereof.
This Section 10.11 supersedes and replaces all other
agreements among the parties relating to any obligation of any
Lender to hold Information confidential, including without
limitation that Letter between Angelo, Gordon & Co. and
Jitney Jungle dated June 16, 1999.
SECTION 10.12. Submission to Jurisdiction. (a) Any
legal action or proceeding with respect to this Agreement or the
Notes or any other Term Loan Document may be brought in
state courts located in the City of New York or of the United
States of America for the Southern District of New York, and,
by execution and delivery of this Agreement, each of the
Borrowers and each of the Guarantors hereby accept for
themselves and in respect of their Property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each
of the Borrowers and each of the Guarantors hereby
irrevocably waives, in connection with any such action or
proceeding, any objection, including, without limitation, any
objection to the laying of venue or based on the grounds of
forum non convenience, which they may now or hereafter have
to the bringing of any such action or proceeding in such
respective jurisdictions. Each of the Borrowers and each of the
Guarantors hereby irrevocably consents to the service of
process of any of the aforementioned courts in any such action
or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to each such person, as the case
may be, at its address set forth in Section 10.01 hereof.
Nothing herein shall affect the right of the Agent or any Lender
to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against any
Borrower or any Guarantor in any other jurisdiction.
SECTION 10.13. Counterparts; Facsimile Signature.
This Agreement may be executed in counterparts, each of
which shall constitute an original but all of which when taken
together shall constitute but 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 Agreement by telecopier shall be effective as
delivery of a manually executed signatures hereto.
SECTION 10.14. Headings. Article and Section
headings and the Table of Contents used herein are for
convenience of reference only and are not to affect the
construction of, or to be taken into consideration in
interpreting, this Agreement.
SECTION 10.15. LIMITATION OF LIABILITY. NO CLAIM MAY BE
MADE BY ANY BORROWER, ANY GUARANTOR, ANY SPECIFIED PERSON, OR ANY
OTHER PERSON AGAINST THE AGENT, ANY LENDER, SILVER OAK OR THE
AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, PARTNERS, ATTORNEYS OR
AGENTS OF THE AGENT, SUCH LENDER OR SILVER OAK FOR ANY SPECIAL,
INDIRECT OR CONSEQUENTIAL DAMAGES OR, TO THE FULLEST EXTENT
PERMITTED BY LAW, FOR ANY PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM
OR CAUSE OF ACTION (WHETHER BASED ON CONTRACT, TORT, STATUTORY
<PAGE>
LIABILITY, OR ANY OTHER GROUND) BASED ON, ARISING OUT OF OR RELATED
TO ANY TERM LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH,
AND EACH BORROWER (FOR ITSELF AND ON BEHALF OF EACH GUARANTOR AND
EACH SPECIFIED PERSON) HEREBY WAIVES, RELEASES AND AGREES NEVER TO
SUE UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER SUCH CLAIM NOW EXISTS
OR HEREAFTER ARISES AND WHETHER OR NOT IT IS NOW KNOWN OR SUSPECTED
TO EXIST IN ITS FAVOR. ON NO ACCOUNT SHALL ANY LENDER BE LIABLE OR
RESPONSIBLE TO ANY OTHER PARTY OR PERSON FOR ANY BREACH OF THIS
AGREEMENT BY ANOTHER LENDER OR FOR THE OBLIGATIONS OF SUCH OTHER
LENDER. EACH PARTY HERETO ACKNOWLEDGES THAT THE OBLIGATIONS OF
EACH LENDER HEREUNDER IS SEVERAL AND NOT JOINT, AND LIMITED TO
SUCH LENDER'S PRO RATA SHARE OF SUCH OBLIGATIONS, AND THAT NO
MEMBER, PARTNER, SHAREHOLDER, INVESTMENT ADVISOR, OFFICER OR
DIRECTOR OF THE AGENT OR ANY LENDER SHALL BE LIABLE FOR ANY CLAIM
ARISING HEREUNDER OR IN CONNECTION HEREWITH.
SECTION 10.16. Intercreditor Agreement. Each
Lender hereby (i) acknowledges that it has received and
reviewed a copy of the Intercreditor Agreement, (ii) agrees to
be bound by the terms thereof as if it were the "Junior Lien
Holder" thereunder, (iii) consents to the Agent entering into the
Intercreditor Agreement and (iv) agrees not to take any action
which the Agent is not permitted to take under the Intercreditor
Agreement. The Agent hereby agrees to the terms of the
Intercreditor Agreement.
XI. GUARANTEES
Each Guarantor unconditionally guarantees, as
a primary obligor and not merely as a surety, jointly and
severally with each other Guarantor, the due and punctual
payment of the principal of and interest on each of the Notes,
when and as due, whether at maturity, by acceleration, by
notice of prepayment or otherwise, and the due and punctual
performance of all other Obligations. Each Guarantor further
agrees that the Obligations may be extended and renewed, in
whole or in part, without notice to or further assent from it,
and that it will remain bound upon its guarantee
notwithstanding any extension or renewal of any Obligations.
Each Guarantor waives presentment to, demand
of payment from and protest to the Borrowers of any of the
Obligations, and also waives notice of acceptance of its
guarantee and notice of protest for nonpayment. The
obligations of a Guarantor hereunder shall not be affected by
(a) the failure of any Lender or the Agent to assert any claim or
demand or to enforce any right or remedy against the
Borrowers or any other Guarantor under the provisions of this
Agreement, the Notes or any of the other Term Loan
Documents or otherwise; (b) any rescission, waiver,
amendment or modification of any of the terms or provisions of
this Agreement, the Notes, any of the other Term Loan
Documents, any guarantee or any other agreement; (c) the
release of any security held by the Agent for the Obligations or
any of them; or (d) the failure of any Lender or the Agent to
exercise any right or remedy against any other Guarantor of the
Obligations.
Each Guarantor further agrees that its
guarantee constitutes a guarantee of payment when due and not
<PAGE>
of collection, and waives any right to require that any resort be
had by any Lender or the Agent to any security (including,
without limitation, any Collateral) held for payment of the
Obligations or to any balance of any deposit account or credit
on the books of any Lender or the Agent in favor of any
Borrower or any other person.
The obligations of each Guarantor hereunder
shall not be subject to any reduction, limitation, impairment or
termination for any reason, including, without limitation, any
claim of waiver, release, surrender, alteration or compromise,
and shall not be subject to any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the
invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, the
obligations of each Guarantor hereunder shall not be discharged
or impaired or otherwise affected by the failure of the Agent or
any Lender to assert any claim or demand or to enforce any
remedy under this Agreement, the Notes or under any other
Term Loan Document, any guarantee or any other agreement,
by any waiver or modification of any provision thereof, by any
default, failure or delay, willful or otherwise, in the
performance of the Obligations, or by any other act or omission
which may or might in any manner or to any extent vary the
risk of such Guarantor or otherwise operate as a discharge of
such Guarantor as a matter of law or equity.
Each Guarantor further agrees that its
guarantee shall continue to be effective or be reinstated, as the
case may be, if at any time payment, or any part thereof, of
principal of or interest on any Obligation is rescinded or must
otherwise be returned by the Agent or any Lender upon the
bankruptcy or reorganization of any Borrower or otherwise.
Each Guarantor hereby subordinates all rights
of subrogation against any Borrower and its Property and all
rights of indemnification, contribution and reimbursement from
any Borrower and its Property, in each case in connection with
this guarantee and any payments made hereunder, and
regardless of whether such rights arise by operation of law,
pursuant to contract or otherwise, to the prior payment in full
in cash of all Obligations.
<PAGE>
IN WITNESS WHEREOF, the Borrowers, the
Guarantors, the Agent and the Lenders have caused this
Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
JITNEY-JUNGLE STORES OF AMERICA, INC.,
as Borrower and as Guarantor
By:
R. Barry Cannada, Chief Administrative
Officer/Executive Vice President
SOUTHERN JITNEY JUNGLE COMPANY,
as Borrower and as Guarantor
By:
R. Barry Cannada, Chief Administrative
Officer/Executive Vice President
McCARTY-HOLMAN CO., INC.,
as Borrower and as Guarantor
By:
R. Barry Cannada, Chief Administrative
Officer/Executive Vice President
JITNEY-JUNGLE BAKERY, INC.,
as Borrower and as Guarantor
By:
R. Barry Cannada, Chief Administrative
Officer/Executive Vice President
PUMP AND SAVE, INC.,
as Borrower and as Guarantor
By:
R. Barry Cannada, Chief Administrative
Officer/Executive Vice President
INTERSTATE JITNEY JUNGLE STORES, INC.,
as Borrower and as Guarantor
By:
R. Barry Canada, Chief Administrative
Officer/Executive Vice President
DELCHAMPS, INC.,
as Borrower and as Guarantor
By:
R. Barry Cannada, Chief Administrative
Officer/Executive Vice President
SUPERMARKET CIGARETTE SALES, INC.,
as Guarantor
By:
R. Barry Cannada, Chief Administrative
Officer/Executive Vice President
JJ CONSTRUCTION CORP.,
as Guarantor
By:
R. Barry Cannada, Chief Administrative
Officer/Executive Vice President
SILVER OAK CAPITAL, L.L.C.,
as Agent
By:
Jeffrey H. Aronson
Title: Authorized Signatory
AG CAPITAL FUNDING PARTNERS, L.P.
By: Angelo, Gordon & Co., L.P.,
as Investment Adviser
By:
NORTHWOODS CAPITAL, LIMITED
By: Angelo, Gordon & Co., L.P.,
as Collateral Manager
By:
Jeffrey H. Aronson
Title: Authorized Signatory
SILVER OAK CAPITAL, L.L.C.,
as agent for those entities indicated
on Schedule 2.01
By:
Jeffrey H. Aronson
Title: Authorized Signatory
<PAGE>
Schedule 2.01
Commitments
Lender Commitment Percentage of
Commitment
<PAGE>
TERM LOAN AGREEMENT
Dated as of July __, 1999
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.,
DELCHAMPS, INC.,
THE GUARANTORS NAMED HEREIN,
THE LENDERS NAMED HEREIN,
and
SILVER OAK CAPITAL, L.L.C., AS AGENT
<PAGE>
TABLE OF CONTENTS
Page
PREAMBLE 1
RECITALS 1
I. DEFINITIONS 2
SECTION 1.01. Defined Terms 2
SECTION 1.02. Rules of Construction 15
II. THE TERM LOANS 15
SECTION 2.01. Term Loans 15
SECTION 2.02. Notes 15
SECTION 2.03 Interest 16
SECTION 2.04. Additional Payments 16
SECTION 2.05. Prepayment of Term Loans 17
SECTION 2.06. Reserve Requirements; Change in
Circumstances 21
SECTION 2.07. Pro Rata Treatment 22
SECTION 2.08. Sharing of Setoffs 22
SECTION 2.09. Taxes 23
SECTION 2.10. Payments and Computations 25
SECTION 2.11. Payments to Lenders 25
SECTION 2.12. Indemnity 25
SECTION 2.13. Joint and Several Borrowers 26
III. COLLATERAL SECURITY 26
SECTION 3.01. Security Documents. 26
SECTION 3.02. Filing and Recording 26
SECTION 3.03. Real Property; Mortgages 26
SECTION 3.04. Additional Collateral 27
SECTION 3.05. Pledge of Reinvestment Assets or
Replacement Property. 28
IV. REPRESENTATIONS AND WARRANTIES 28
SECTION 4.01. Organization, Legal Existence 28
SECTION 4.02. Authorization 28
SECTION 4.03. Governmental Approvals 29
SECTION 4.04. Binding Effect 29
SECTION 4.05. Material Adverse Change 29
SECTION 4.06. Litigation; Compliance with Laws; etc 29
SECTION 4.07. Financial Statements. 30
SECTION 4.08. Federal Reserve Regulations 30
SECTION 4.09. Taxes 31
SECTION 4.10. Employee Benefit Plans 31
SECTION 4.11. No Material Misstatements 33
SECTION 4.12. Investment Company Act; Public
Utility Holding Company Act 33
SECTION 4.13. Security Interest 33
SECTION 4.14. Bank Accounts 34
SECTION 4.15. Capitalization 34
SECTION 4.16. Title to Properties; Possession Under
Leases; Trademarks 34
SECTION 4.17. Solvency 36
SECTION 4.18. Permits, etc. 37
SECTION 4.19. Compliance with Environmental Laws 37
SECTION 4.20. Material Agreements 38
SECTION 4.21. Broker's Fees 38
V. CONDITIONS OF CLOSING 38
SECTION 5.01. Conditions Precedent. 38
VI. AFFIRMATIVE COVENANTS 42
SECTION 6.01. Legal Existence 42
SECTION 6.02. Businesses and Properties 43
SECTION 6.03. Insurance 43
SECTION 6.04. Taxes 44
SECTION 6.05. Financial Statements, Reports, etc. 44
SECTION 6.06. Litigation and Other Notices 46
SECTION 6.07. ERISA 47
SECTION 6.08. Maintaining Records; Access to
Properties and Inspections; Right to Audit 47
SECTION 6.09. Fiscal Year End 48
SECTION 6.10. Further Assurances 48
SECTION 6.11. Additional Grantors and Guarantors 48
SECTION 6.12. Environmental Laws 48
SECTION 6.13. Pay Obligations to Lenders and
Perform Other Covenants 50
SECTION 6.14. Maintain Operating Accounts 50
SECTION 6.15. Amendments 51
SECTION 6.16. Use of Proceeds 51
SECTION 6.17. Year 2000 51
SECTION 6.18. Obtaining a Rating for Obligations
Hereunder 51
SECTION 6.19. Retention of Accounting Specialist 51
SECTION 6.20. Liens on Leaseholds 51
VII. NEGATIVE COVENANTS 51
SECTION 7.01. Liens 52
SECTION 7.02. Sale and Lease-Back Transactions 53
SECTION 7.03. Indebtedness 54
SECTION 7.04. Dividends, Distributions and
Payments 54
SECTION 7.05. Consolidations, Merger and Sales of
Assets 54
SECTION 7.06. Investments 56
SECTION 7.07. Intentionally Omitted 56
SECTION 7.08. Intentionally Omitted 56
SECTION 7.09. Leverage Ratio 56
SECTION 7.10. Intentionally Omitted 57
SECTION 7.11. EBITDA 57
SECTION 7.12. Interest Rate Protection Arrangements 57
SECTION 7.13. Business 58
SECTION 7.14. Sales of Receivables 58
SECTION 7.15. Use of Proceeds 58
SECTION 7.16. ERISA 58
SECTION 7.17. Accounting Changes 58
SECTION 7.18. Prepayment or Modification of
Indebtedness; Modification of Charter and
Other Documents 58
SECTION 7.19. Transactions with Affiliates 59
SECTION 7.20. Consulting Fees 59
SECTION 7.21. Limitations on Dividends and Other
Payments 59
SECTION 7.22. Limitation on Creation of Subsidiaries 60
SECTION 7.23. Limitation on Issuance of Capital
Stock 60
SECTION 7.24. Asset Sales 60
VIII. EVENTS OF DEFAULT & REMEDIES 60
SECTION 8.01. Events of Default. 60
SECTION 8.02. Acceleration 63
SECTION 8.03. Remedies 63
SECTION 8.04. Rights Cumulative. 64
SECTION 8.05 No Waiver. 64
SECTION 8.06. Application of Proceeds 64
SECTION 8.07. Intercreditor Agreement. 65
IX. AGENT 65
SECTION 9.01. Appointment. 65
SECTION 9.02. Authorization. 66
SECTION 9.03. Action by Agent. 66
SECTION 9.04. Agent Not Responsible. 66
SECTION 9.05. Reimbursement 67
SECTION 9.06. Agent May Resign. 67
X. MISCELLANEOUS 68
SECTION 10.01. Notices 68
SECTION 10.02. Survival of Agreement 68
SECTION 10.03. Assignments & Participations 69
SECTION 10.04. Expenses; Indemnity 71
SECTION 10.05. APPLICABLE LAW 72
SECTION 10.06. Right of Setoff 72
SECTION 10.07. Payments on Business Days 72
SECTION 10.08. Waivers; Amendments; Final
Maturity Date 72
SECTION 10.09. Severability 73
SECTION 10.10. Entire Agreement; Waiver of Jury
Trial, etc. 73
SECTION 10.11. Confidentiality 74
SECTION 10.12. Submission to Jurisdiction 74
SECTION 10.13. Counterparts; Facsimile Signature 75
SECTION 10.14. Headings 75
SECTION 10.15. LIMITATION OF LIABILITY 75
SECTION 10.16. Intercreditor Agreement 75
XI. GUARANTEES 76
EXHIBITS
EXHIBIT A Form of Note
EXHIBIT B Form of Legal Opinion
EXHIBIT C Form of Pledge Agreement
EXHIBIT D Form of Security Agreement
EXHIBIT E Form of Assignment and Acceptance
EXHIBIT F Form of Security Agreement -- Patents and Trademarks
EXHIBIT G Form of Intercreditor Agreement
EXHIBIT H Form of Landlord Waiver
SCHEDULES
SCHEDULE 2.01 Lenders/Commitments
SCHEDULE 2.01(b) Wire Transfer Address (Company)
SCHEDULE 2.10 Wire Transfer Addresses (Term Lenders; Agent)
SCHEDULE 4.01 Jurisdictions
SCHEDULE 4.03 Consents
SCHEDULE 4.14 Bank Accounts
SCHEDULE 4.15(a) Share Ownership
SCHEDULE 4.15(b) Subsidiaries
SCHEDULE 4.16(a-1) Real Estate
SCHEDULE 4.16(a-2) Leaseholds
SCHEDULE 4.16(a-3) Leaseholds Subject to Liens
SCHEDULE 4.16(a-4) Leaseholds Not Subject to Liens
SCHEDULE 4.16(a-5) Leaseholds Not Subject to Liens by Agent
SCHEDULE 4.18 Permits
SCHEDULE 4.20 Material Agreements
SCHEDULE 5.01(h) Real Property Searches
SCHEDULE 7.01 Existing Liens
SCHEDULE 7.03 Existing Indebtedness
SCHEDULE 7.20 Consulting Fees
SCHEDULE I Fiscal Reporting Periods of the Borrowers
Execution Copy
AMENDMENT AND WAIVER AGREEMENT NO. 7
TO
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
AMENDMENT AND WAIVER
AGREEMENT NO. 7 (this "Amendment") dated July 26,
1999 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.("Interstate Jitney-
Jungle"), and Delchamps, Inc. ("Delchamps") (each a
"Borrower" and collectively, the "Borrowers"), the
Guarantors named therein, the Lenders named therein and
Fleet Capital Corporation, as Agent.
WHEREAS, the Borrowers have entered
into a financing arrangement with Angelo, Gordon & Co.,
L.P., for itself and on behalf of certain affiliated funds and
managed accounts (collectively, "AGC") whereby AGC
has agreed to extend to the Borrowers a term loan in the
amount of $50,000,000, secured by a second lien on
certain assets of the Borrowers and the Guarantors (the
"Additional Facility").
WHEREAS, as collateral security for the
Additional Facility the Borrowers and the Guarantors have
granted a second lien (the "Second Lien") on certain of
their property and assets to Silver Oak Capital, L.L.C., as
agent (the "AGC Agent"), for the benefit of AGC, which
lien is junior in all respects to the lien granted to the Agent
for the benefit of the Lenders.
WHEREAS, in connection with the
Additional Facility the Agent, on behalf of the Lenders,
shall execute and deliver that certain Intercreditor
Agreement dated as of July 26, 1999 between the Agent
and the AGC Agent(as amended, modified or supplemented
from time to time, the "Intercreditor Agreement")
substantially in the form of Exhibit A annexed hereto.
WHEREAS, the Borrowers have requested
that the Lenders consent to the Additional Facility and the
Second Lien, and waive certain provisions of the Credit
Agreement relating to the Additional Facility and the
Second Lien as set forth herein.
WHEREAS, the Borrowers have requested
that the Agent and the Lenders amend certain terms and
provisions of the Credit Agreement.
WHEREAS the Lenders are willing to
consent to the Additional Facility and the granting of the
Second Lien and to amend and waive certain provisions of
the Credit Agreement, as more fully described herein, on
the terms and conditions hereof.
NOW, THEREFORE, the Borrowers, the
Guarantors, the Lenders and the Agent hereby agree as
follows:
<PAGE>
1 SECTION CAPITALIZED TERMS
2
Capitalized terms used herein and not
defined shall have the respective meanings assigned to such
terms in the Credit Agreement.
1 SECTION AMENDMENTS TO THE CREDIT AGREEMENT
2
The Credit Agreement shall be, and upon the
fulfillment of all of the conditions set forth in Section 5
hereof is, amended as follows:
1.1 SECTION The preamble of the Credit
Agreement is hereby amended by deleting the amount
"$162,300,000" and substituting the amount
"$150,000,000" therefor.
1.2
1.3 SECTION Schedule 2.01 is hereby
amended in its entirety by substituting Schedule 2.01
attached hereto therefore.
1.4
1.5 SECTION The following definition is
hereby added in its proper alphabetical order to Article I of
the Credit Agreement:
1.6
"Acquisition Integration Costs" shall mean,
an amount equal to $23,758,000, as identified as
"Acquisition integration costs and other special
charges" in the Borrowers' audited financial
statements for the Fiscal Year ended January 2,
1999.
1.1 SECTION The following definition is
hereby added in its proper alphabetical order to Article I of
the Credit Agreement:
1.2
"Alcohol and Gasoline Reserve" shall mean,
at any time, an amount equal to the lesser of (x) the
aggregate value, computed at the lower of cost (on a
FIFO basis) and current market value of the
Borrowers' inventory of gasoline and liquor and
other alcoholic beverages and (y) $2,200,000 (as
such amount may be reduced, by the Agent in its
sole discretion, from time to time as a result of the
sale of either a gas station in connection with the
sale of a supermarket or a liquor store, in each case
owned or leased by the Borrowers).
1.1 SECTION The definition of "Applicable
Margin" as it appears in Article I of the Credit Agreement
is hereby amended in its entirety to read as follows:
1.2
"Applicable Margin" shall mean in the case
of Loans which are Base Rate Loans, one and one-
quarter percent (1.25%), minus the then applicable
Reduction Discount, if any, and (y) in the case of
Loans which are Eurodollar Loans, two and one-
half percent (2.50%), minus the then applicable
Reduction Discount, if any.
1.1 SECTION The definition of "Eligible
Inventory" as it appears in Article I of the Credit
Agreement is hereby amended by deleting the words
"liquor and other alcoholic beverages," and ", gasoline" as
they appear in such definition.
1.2
1.3 SECTION The definition of "Fixed
Charge Coverage Ratio" as it appears in Article I of the
Credit Agreement is hereby amended in its entirety to read
as follows:
<PAGE>
1.4
"Fixed Charge Coverage Ratio" shall mean,
for any fiscal period, the ratio of (i) EBITDA of the
Borrowers and their respective subsidiaries for the
four most recent consecutive fiscal quarters ending
on or prior to the date of determination to (ii) the
sum of, without duplication, (A) Interest Expense,
(B) Capital Expenditures (excluding Capital
Expenditures in respect of Reinvestment Assets to
the extent funded with the Net Cash Proceeds of
Asset Sales), (C) cash dividends paid by, or other
distributions, redemptions, repurchases or
retirements of capital stock of, the Borrowers and
their respective subsidiaries, (D) taxes actually paid
by the Borrowers and their respective subsidiaries
in cash (less any tax refunds actually received by
the Borrowers and their respective subsidiaries in
cash) and (E) the aggregate of principal payments
(whether regularly scheduled payments, voluntary
or mandatory prepayments (excluding mandatory
prepayments made by reason of any reduction of the
Total Commitment and/or the Supplemental
Availability or in connection with the sale of a store
owned or leased by the Borrowers) or occurring by
reason of acceleration or otherwise) of all
Indebtedness (including, without limitation,
Capitalized Lease Obligations, Restructuring
Obligations, Indebtedness issued under the Senior
Indenture and under the Senior Subordinated
Indenture) made or scheduled to have been made by
the Borrowers and their respective subsidiaries
(other than principal payments on Loans), for such
four-quarter period, in each case determined on a
Consolidated basis in accordance with generally
accepted accounting principles. Notwithstanding the
foregoing sentence, for the fiscal quarters ending
1/1/00, 3/25/00, 6/17/00 and 9/9/00 Fixed Charge
Coverage Ratio shall be calculated on a building 1,
2, 3 and 4 fiscal quarter basis, respectively; after
9/9/00 Fixed Charge Coverage Ratio shall be
calculated in accordance with the immediately
preceding sentence.
1.1 SECTION The definition of "Reduction
Discount" as it appears in Article I of the Credit Agreement
is hereby amended in its entirety to read as follows:
1.2
"Reduction Discount" shall mean initially
zero and from and after the first day of each fiscal
quarter, commencing with the fiscal quarter ending
January 1, 2000, immediately following the date of
delivery by the Borrowers to the Agent of the
financial statements with respect to the immediately
preceding fiscal quarter (a "Test Period") of the
Borrowers and their respective subsidiaries (the
"Financials") as required under Section 6.05(b)(i) of
this Agreement, together with calculations in form
and substance reasonably satisfactory to the Agent
supporting the calculation of the Leverage Ratio as
at the end of such fiscal quarter and a written
certification from the Financial Officer of Jitney
Jungle to such effect, the Reduction Discount shall
be as specified in clauses (i) through (vi) below,
when, and for so long as, the Leverage Ratio set
forth in such clause has been satisfied as at the end
of the then Test Period:
(i) for purposes of calculating
the Applicable Margin and the Commitment
Fee, the Reduction Discount shall be zero in
the event that, as of the end of the Test
Period, the Leverage Ratio for the four
consecutive fiscal quarters ending on the last
day of such Test Period is greater than or
equal to 6.00; or
(ii) for purposes of calculating
the Applicable Margin, the Reduction
Discount shall be .25 and for purposes of
calculating the Commitment Fee, the
Reduction Discount shall be zero in the
event that, as of the end of the Test Period,
the Leverage Ratio for the four consecutive
fiscal quarters ending on the last day of such
Test Period is greater than or equal to 5.00
but less than 6.00; or
(iii) for purposes of calculating
the Applicable Margin, the Reduction
Discount shall be .50 and for purposes of
calculating the Commitment Fee, the
Reduction Discount shall be .075 in the
event that, as of the end of the Test Period,
the Leverage Ratio for the four consecutive
fiscal quarters ending on the last day of such
Test Period is greater than or equal to 4.25
but less than 5.00; or
(iv) for purposes of calculating
the Applicable Margin, the Reduction
Discount shall be .75 and for purposes of
calculating the Commitment Fee, the
Reduction Discount shall be .125 in the
event that, as of the end of the Test Period,
the Leverage Ratio for the four consecutive
fiscal quarters ending on the last day of such
Test Period is greater than or equal to 3.75
but less than 4.25; or
(v) for purposes of calculating
the Applicable Margin, the Reduction
Discount shall be 1.00 and for purposes of
calculating the Commitment Fee, the
Reduction Discount shall be .25 in the event
that, as of the end of the Test Period, the
Leverage Ratio for the four consecutive
fiscal quarters ending on the last day of such
Test Period is greater than or equal to 3.25
but less than 3.75; or
(vi) for purposes of calculating
the Applicable Margin, the Reduction
Discount shall be 1.25 and for purposes of
calculating the Commitment Fee, the
Reduction Discount shall be .25 in the event
that, as of the end of the Test Period the
Leverage Ratio for the four consecutive
fiscal quarters ending on the last day of such
Test Period is less than 3.25;
provided, that the entire Reduction Discount, if any,
at any time in effect shall be reduced to zero at all
times on and after the occurrence and during the
continuance of an Event of Default; and provided,
further, that in the event that the Leverage Ratio on
the last day of any Test Period (the "New Test
Period") is less than or greater than the ratio then in
effect for the previous Test Period pursuant to
clause (ii), (iii), (iv), (v) or (vi) above, the
Reduction Discount specified in clause (ii), (iii),
(iv), (v) or (vi) above shall be discontinued and the
Reduction Discount shall be the Reduction Discount
applicable to the Leverage Ratio for such New Test
Period effective as of the first day of the fiscal
quarter immediately following the date of delivery
by the Borrowers to the Agent of such Financials.
1.1 SECTION The following sentence is
hereby added at the end of the definition of "EBITDA" as it
appears in Article I of the Credit Agreement:
1.2
"For purposes of calculating EBITDA solely
for the Fiscal Year ending January 2, 1999 and the
fiscal quarters ending March 27, 1999, June 19,
1999 and September 11, 1999 Acquisition
Integration Costs shall not be deducted in
computing Net Income as otherwise required by
generally accepted accounting principles."
1.1 SECTION Section 2.01(a) of the Credit
Agreement is hereby amended by adding the phrase
"minus, (4) the Alcohol and Gasoline Reserve"
immediately after the phrase "minus (3) reserves
established pursuant to Section 2.01(c) below at such time"
as it appears in such Section.
1.2
1.3 SECTION Section 2.07(b)(i) of the Credit
Agreement is hereby amended in its entirety to read as
follows:
1.4
The Supplemental Availability shall be
permanently reduced on each of the dates set forth
below by the amount set forth below opposite such
date (such reduced amount being the Supplemental
Availability in effect for the next succeeding
calendar quarter):
<TABLE>
<CAPTION>
Supplemental Availability
Reduction Date Amount
<S> <C>
September 30, 1999 $1,750,000
January 2, 2000 $1,750,000
March 26, 2000 $1,750,000
June 18, 2000 $1,750,000
September 10, 2000 $2,000,000
December 31, 2000 $2,000,000
March 25, 2001 $2,000,000
June 17, 2001 $2,000,000
September 9, 2001 $2,250,000
December 30, 2001 $2,250,000
March 24, 2002 $2,250,000
June 16, 2002 $2,250,000
September 8, 2002 $2,750,000
December 29, 2002 $2,750,000
March 23, 2003 $2,750,000
June 15, 2003 $2,750,000
September 7, 2003 $6,500,000
January 4, 2004 $6,500,000
</TABLE>
<PAGE>
1.1 SECTION Clause (ii) of Section 6.05(b)
of the Credit Agreement is hereby amended by deleting the
number "25" and substituting the number "30" therefor.
1.2
1.3 SECTION Section 7.07 of the Credit
Agreement is hereby amended in its entirety to read as
follows:
1.4
SECTION 7.07. Capital
Expenditures and Other Obligations. Permit the
aggregate amount of payments made, without
duplication, for Capital Expenditures, Capitalized
Lease Obligations and Indebtedness secured by
Liens permitted under Section 7.01(e) and/or
Section 7.01(k) hereof (excluding Capital
Expenditures in respect of Reinvestment Assets to
the extent funded with the Net Cash Proceeds of
Asset Sales), at the end of each fiscal period set
forth below to be greater than:
<TABLE>
<CAPTION>
Date of Determination Amount
<S> <C>
The fiscal quarter ending March 27, 1999 $17,000,000
The two fiscal quarter period ending
June 19,1999 $38,000,000
The three fiscal quarter period ending
September 11, 1999 $57,000,000
The Fiscal Year ending January 1, 2000 $75,000,000
The fiscal quarter ending March 25, 2000 $16,500,000
The two fiscal quarter period ending
June 17, 2000 $33,000,000
The three fiscal quarter period ending
September 9, 2000 $47,000,000
The Fiscal Year ending December 30, 2000 $62,000,000
Each fiscal quarter thereafter, for the four
most recent consecutive fiscal quarters of
the Borrowers and their respective
Consolidated subsidiaries 50% of EBITDA for such period
</TABLE>
1.1 SECTION Section 7.09 of the Credit
Agreement is hereby amended in its entirety to read as
follows:
1.2
SECTION 7.09. 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 quarter ending March 27, 1999 5.90:1.00
The fiscal quarter ending June 19, 1999 6.20:1.00
The fiscal quarter ending September 11, 1999 7.20:1.00
The fiscal quarter ending January 1, 2000 7.80:1.00
The fiscal quarter ending March 26, 2000 7.80:1.00
The fiscal quarter ending June 18, 2000 7.30:1.00
The fiscal quarter ending September 10, 2000 7.30:1.00
The fiscal quarter ending December 31, 2000 7.30:1.00
Each fiscal quarter ending
in Fiscal Year 2001 and thereafter 7.30:1.00
1.1 SECTION Section 7.10 of the Credit
Agreement is hereby amended in its entirety to read as
follows:
1.2
SECTION 7.10. 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 quarter ending March 27, 1999 1.70:1:00
The fiscal quarter ending June 19, 1999 1.50:1.00
The fiscal quarter ending September 11, 1999 1.35:1.00
The fiscal quarter ending January 1, 2000 1.20:1.00
Each fiscal quarter ending in Fiscal Year 2000
and thereafter 1.20:1.00
1.1 SECTION Section 7.11 is hereby
amended in its entirety to read as follows:
SECTION 7.11. 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, however, beginning
with the end of the fiscal quarter starting
immediately after the consummation of the sale of
any supermarket owned or leased by any of the
Borrowers or the opening or acquisition of any
supermarket by any of the Borrowers, the amount
of EBITDA appearing opposite such fiscal quarter
below and for each fiscal quarter thereafter, shall in
the case of a sale of a supermarket be reduced, or in
the case of the opening or acquisition of a
supermarket, increased, by an amount equal to the
EBITDA for such supermarket, on a dollar for
dollar basis, as set forth in financial projections (and
in the case of a sale of a supermarket, the historical
EBITDA of such supermarket) to be provided by
the Borrowers to the Agent, all in a manner
acceptable to the Agent in its sole discretion:
Date of Determination Amount
The fiscal quarter ending September 11, 1999 $95,000,000
The fiscal quarter ending January 1, 2000 $88,000,000
The fiscal quarter ending March 26, 2000 $90,000,000
The fiscal quarter ending June 18, 2000 $95,000,000
The fiscal quarter ending September 10, 2000 $96,000,000
The fiscal quarter ending December 31, 2000 $93,000,000
Each fiscal quarter ending in Fiscal Year 2001 and
thereafter $93,000,000
1 SECTION ADDITIONAL AGREEMENTS
2
2.1 SECTION (a) The Borrowers, the
Guarantors and the Lenders hereby agree that
notwithstanding any other provision contained in the Credit
Agreement, immediately upon the receipt by the Borrowers
of Cash Proceeds from the sale of any supermarket owned
or leased by any of the Borrowers (i) 100% of the Net Cash
Proceeds (including Net Cash Proceeds received from the
sale of inventory in connection with the sale of such
supermarket) of any such Asset Sale shall be applied to
repay Loans in accordance with Section 2.09(f) of the
Credit Agreement, (ii) the Total Commitment shall be
permanently reduced by an amount equal to 50% of the
aggregate of the cash proceeds and value of non-cash
proceeds (including proceeds received from the sale of
inventory in connection with the sale of such supermarket)
from any such Asset Sale (with any non-cash proceeds
being valued for purposes of this clause (ii) at the value
therefor set forth in a fairness opinion from an investment
bank acceptable to the Agent, which opinion shall be
delivered to the Agent at the time of such Asset Sale) and
(iii) Supplemental Availability shall immediately be
reduced by an amount equal to 12.5% of the aggregate of
the cash proceeds and value of non-cash proceeds
(excluding any proceeds received from the sale of
inventory in connection with the sale of such supermarket)
from any such Asset Sale (with any non-cash proceeds
being valued for purposes of this clause (iii) at the value
therefor set forth in a fairness opinion from an investment
bank acceptable to the Agent, which opinion shall be
delivered to the Agent at the time of such Asset Sale).
Nothing contained in this paragraph 3.1(a) shall constitute a
consent by any Lender to any sale of a supermarket.
(b) Notwithstanding any other provision
contained in the Credit Agreement, the Lenders hereby
consent to the sale of any supermarket owned or leased by
any of the Borrowers (including any inventory related to
such supermarket) provided that (i) the purchase price and
terms for such sale represents the fair market value of the
supermarket so sold and the Borrowers cause a fairness
opinion (from an investment bank acceptable to the Agent)
to the same effect to be delivered to the Agent prior to such
sale, (ii) the entire purchase price for such sale is payable in
cash upon the consummation of such sale and (iii) both
before and after giving effect to such sale no Default or
Event of Default has occurred and is continuing under the
Credit Agreement.
(c) Paragraphs (a) and (b) of this Section
3.1 shall not apply to the sale of any supermarket owned or
leased by any of the Borrowers if such sale would cause the
aggregate proceeds (whether in cash or in other property)
received by the Borrowers in connection with the sale of
supermarkets owned or leased by any of the Borrowers
from the date hereof through the Facility Termination Date
to exceed $75,000,000. For purposes of this paragraph (c)
the amount of any non-cash proceeds received by the
Borrowers in connection with the sale of any supermarket
owned or leased by any of the Borrowers shall be
determined by a fairness opinion from an investment bank
acceptable to the Agent, which opinion shall be delivered to
the Agent at the time of any such Asset Sale.
1.1 SECTION Without limiting Section 3.03
of the Credit Agreement, the Borrowers and the Guarantors
agree that in the event the AGC Agent shall deliver to the
Agent a notice pursuant to Section 2(e)(iv) of the
Intercreditor Agreement with respect to any real property,
the Borrowers and the Guarantors shall cause to be
executed and delivered to the Agent by the relevant
Borrower or Guarantor and recorded in the appropriate land
records with all relevant recording or similar taxes therefor
paid in full a Mortgage (in form and substance satisfactory
to the Agent) with respect to such real property (such
recordation to be completed no later than 25 days after such
notice is given by the AGC Agent to the Agent, with the
failure to timely comply with this sentence constituting an
Event of Default).
1.2
1.3 SECTION The Borrowers hereby agree to
deliver, or cause to be delivered, to the Agent any report
delivered by Policano & Manzo (or any successor or
replacement thereof), as accounting specialist to the
Borrowers, to the AGC Agent, the Borrowers or any other
Person upon such delivery.
1 SECTION WAIVER
2
Upon the fulfillment of all of the conditions
set forth in Section 5 herein the following waivers shall
become effective:
1.1 SECTION For purposes of Section 7.08
of the Credit Agreement, the Agent and the Lenders hereby
waive the requirement that the average daily Undrawn
Availability for the fiscal months ending June 19, 1999 and
July 17, 1999 remain above $15,000,000.
1.2
1.3 SECTION The Agent and the Lenders
hereby waive compliance with Sections 7.01 and 7.03 of
the Credit Agreement solely as they pertain to the
Additional Facility and the Second Lien.
1 SECTION CONDITIONS PRECEDENT
2
This Amendment and the agreements and
waivers contained in Sections 3 and 4 herein shall become
effective on such date as the following conditions have
been satisfied in full or waived by the Agent in writing:
1.1 SECTION The Agent shall have received
in form and substance satisfactory to the Agent and its
counsel:
1.2
(a) Evidence that the Additional
Facility and all documents in connection therewith
have been executed 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
transactions 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 Lenders, as to the non-
contravention of the Additional Facility and the
Second Lien with the Credit Agreement, any other
credit agreement, indenture or other agreement to
which any Borrower, Guarantor or Grantor is a
party.
(f) A fully executed copy of the
Intercreditor Agreement, dated the date hereof
between the Agent and AGC Agent on terms and
conditions satisfactory to the Agent in its sole
discretion.
(g) The Agent shall have
received, for the benefit of the Lenders, an
amendment fee of $608,625.
(h) Such other approvals,
opinions or documents as the Agent may reasonably
request.
1.1 SECTION 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.
1.2
1.3 SECTION No unwaived Default or Event
of Default has occurred and is continuing.
1.4
1.5 SECTION 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 and the
other Loan Documents and instruments in connection
herewith and therewith.
1 SECTION CONTINUATION OF ADDITIONAL FACILITY
2
2.1 SECTION The Borrowers and the
Guarantors hereby agree that they shall not terminate or
reduce the Additional Facility before the earlier to occur of
(x) the Termination Date and (y) July 26, 2004, and that
failure to comply with this provision shall constitute an
Event of Default.
1 SECTION INTERCREDITOR AGREEMENT
2
2.1 SECTION The Lenders hereby authorize
the Agent to execute and deliver the Intercreditor
Agreement.
1 SECTION MISCELLANEOUS
2
2.1 SECTION 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 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 Amendment and has taken or
caused to be taken all necessary corporate action to
authorize the execution, delivery and performance
of this Amendment;
(a) 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;
(a) This Amendment 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
(a) The execution, delivery and
performance of this Amendment 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.
1.1 SECTION Except as expressly set forth
herein 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.
1.2
1.3 SECTION 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.
1.4
1.5 SECTION 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.
1.6
1.7 SECTION Delivery of an executed
counterpart of a signature page by telecopier shall be
effective as delivery of a manually executed counterpart.
1.1 SECTION This Amendment shall be
governed by, and construed and interpreted in accordance
with, the laws of the State of New York.
1.2
1.3 SECTION 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]
IN WITNESS WHEREOF, the parties have
caused this Amendment 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________________________________
Name:
Title:
SOUTHERN JITNEY JUNGLE COMPANY,
as Borrower and as Guarantor
By________________________________
Name:
Title:
McCARTY- HOLMAN CO., INC.,
as Borrower and as Guarantor
By_________________________________
Name:
Title:
JITNEY-JUNGLE BAKERY, INC.,
as Borrower and as Guarantor
By_________________________________
Name:
Title:
PUMP AND SAVE, INC.,
as Borrower and as Guarantor
By_________________________________
Name:
Title:
INTERSTATE JITNEY JUNGLE STORES, INC.,
as Borrower and as Guarantor
By_________________________________
Name:
Title:
DELCHAMPS, INC.,
as Borrower and as Guarantor
By_________________________________
Name:
Title:
JJ CONSTRUCTION CORP.,
as Guarantor
By_________________________________
Name:
Title:
SUPERMARKET CIGARETTE SALES, INC.,
as Guarantor
By_________________________________
Name:
Title:
FLEET CAPITAL CORPORATION,
as Agent
By_________________________________
Name:
Title:
FLEET CAPITAL CORPORATION,
as Lender
By_________________________________
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION,
as Lender
By_________________________________
Name:
Title:
HELLER FINANCIAL INC.,
as Lender
By_________________________________
Name:
Title:
IBJ WHITEHALL BUSINESS CREDIT CORP.,
as Lender
By_________________________________
Name:
Title:
NATIONAL BANK OF CANADA,
a Canadian Chartered Bank,
as Lender
By_________________________________
Name:
Title:
NATIONAL CITY BANK,
as Lender
By_________________________________
Name:
Title:
DEUTSCHE FINANCIAL SERVICES CORPORATION,
as Lender
By__________________________________
Name:
Title:
FLEET BANK, N.A.,
as a Letter of Credit Issuer
By__________________________________
Name:
Title:
<PAGE>
Exhibit A
<PAGE>
SCHEDULE 2.01
<TABLE>
<CAPTION>
Commitments
Lender Commitment
<S> <C>
Fleet Capital Corporation $46,210,720.90
60 East 42nd Street
New York, New York 10017
Attention: Mr. Thomas Maiale
Tel #: (212) 885-8826
Fax #: (212) 885-8808
Heller Financial, Inc. $32,347,504.62
150 East 42nd Street, 7th Floor
New York, New York 10017
Attention: Mr. Tom Bukowski
Tel #: (212) 880-7169
Fax #: (212) 880-7002
PNC Bank, National Association $16,266,173.75
2 PNC Plaza 18th Floor
620 Liberty Avenue
Pittsburgh, PA 15222
Attention: Mr. Richard Muse
Tel #: (412) 762-4471
Fax #: (412) 768-4369
IBJ Whitehall Business Credit Corp. $14,232,902.03
One State Street
New York, New York 10004
Attention: Mr. Andrew Sepe
Tel #: (212) 858-2497
Fax #: (212) 858-2151
National Bank of Canada, $13,216,266.17
a Canadian Chartered Bank
165 Madison Avenue, Suite 1610
Memphis, Tennessee 38103
Attention: Mr. Jim Norvell
Tel #: (901) 578-3303
Fax #: (901) 525-2914
Deutsche Financial Services $18,484,288.35
Corporation
3225 Cumberland Boulevard Suite 700
Atlanta, GA 30339
Attention: Mr. Stephan Metts
Tel #: (770) 541-5719
Fax #: (770) 933-8571
National City Bank $9,242,144.18
1900 East Ninth Street
Cleveland, Ohio 44114
Attention: Mr. Joseph D. Robison
Tel #: (216) 575-9254
Fax #: (216) 222-0003
Total Commitment $150,000,000
</TABLE>
INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT, dated as
of July 26, 1999, between Fleet Capital
Corporation, in its capacity as "Agent"
under the Senior Loan Documents referred to
below (in such capacity, together with any
successor in such capacity, the "Agent"),
and Silver Oak Capital, L.L.C., in its
capacity as "Agent" under the Junior Term
Loan Documents referred to below (in such
capacity, together with any successor in
such capacity, the "Junior Lien Holder").
WHEREAS, the Agent is the agent
under and is a party to the Amended and
Restated Revolving Credit Agreement, dated
as of September 15, 1997 (as amended,
modified, extended, renewed, replaced,
refunded or refinanced (by one or more of
the same or different lenders and whether
entered into prior to or after the
commencement of any case or proceeding
relating to the bankruptcy or insolvency of
any Jitney Entity (as defined below)) from
time to time, the "Credit Agreement") with
Jitney-Jungle Stores of America, Inc., a
Mississippi corporation (the "Company"), the
subsidiaries of the Company party thereto
from time to time (together with the
Company, the "Jitney Entities") and the
financial institutions party thereto as
lenders;
WHEREAS, the Junior Lien Holder is
the agent under and is a party to the Term
Loan Agreement, dated as of the date hereof
(as amended, modified, extended, renewed,
replaced, refunded or refinanced (by one or
more of the same or different lenders and
whether entered into prior to or after the
commencement of any case or proceeding
relating to the bankruptcy or insolvency of
any Jitney Entity) from time to time, the
"Junior Term Loan Agreement" and together
with the Junior Security Documents referred
to below and the other documents and
instruments now or hereafter executed and/or
delivered in connection with the foregoing,
the "Junior Term Loan Documents"), with the
Jitney Entities and the financial
institutions party thereto as lenders (the
"Junior Lenders"; in the event that any one
or more Junior Lenders are also lenders
under the Credit Agreement, references
herein to Junior Lenders shall not mean any
such persons in their capacities as lenders
under the Credit Agreement);
WHEREAS, the Junior Lenders have
agreed to provide financial accommodations
to one or more of the Jitney Entities;
WHEREAS, as a condition precedent
to the Junior Lenders agreeing to provide
any financial accommodations to any of the
<PAGE>
Jitney Entities under the Junior Term Loan
Agreement (all obligations and liabilities
of the Jitney Entities with respect to any
present or future financial accommodations
by the Junior Lenders to one or more of the
Jitney Entities under the Junior Term Loan
Agreement and all other present and future
obligations of the Jitney Entities under the
Junior Term Loan Documents being
collectively hereinafter referred to as
"Junior Lien Obligations"), the Junior
Lenders have required that the Jitney
Entities execute (and additionally agree to
execute in the future) one or more security
agreements, pledge agreements, assignments,
mortgages, deeds of trust and/or other
agreements providing collateral security for
the payment or performance of any Junior
Lien Obligations (collectively with any
court orders or other documents which grant
a security interest in any assets or
property of any Jitney Entity to secure any
or all of the Junior Lien Obligations, as
amended, modified or supplemented from time
to time in accordance with the terms thereof
and the provisions of the last sentence of
Section 8 hereof, the "Junior Security
Documents");
WHEREAS, pursuant to the Junior
Security Documents, the Junior Lien Holder
is the secured party and beneficial holder
of security interests, mortgages and liens
created under such Junior Security Documents
(all security interests, mortgages and
liens, and all related rights, powers and
remedies, in each case, now or hereafter
granted, created, attaching or perfected
under the Junior Security Documents being
hereinafter referred to as the "Junior
Liens") on assets and property, now or
hereafter owned, of the Jitney Entities
including, without limitation, (i) cash,
securities and other "investment property"
(as defined in the Uniform Commercial Code)
of the Jitney Entities held by the Agent as
bailee for the Junior Lien Holder as
provided in Section 5(b) hereof and (ii) the
Jitney Entities' respective fee or leasehold
interests in the parcels of land described
on Exhibit A attached hereto (collectively,
the "Land")(all such assets and property now
or hereafter subject to a Junior Lien,
including, without limitation, any
replacement collateral of any Jitney Entity
authorized by the Bankruptcy Court in order
to adequately protect the interests of the
Junior Lenders during the pendency of any
case or proceeding relating to the
bankruptcy or insolvency of such Jitney
Entity, being hereinafter referred to as the
"Collateral");
<PAGE>
WHEREAS, pursuant to various
security agreements, pledge agreements,
assignments, mortgages, deeds of trust
and/or other agreements including, without
limitation, the mortgages and deeds of trust
described on Exhibit B attached hereto
encumbering the Land (collectively with any
court orders or other documents which grant
a security interest in any assets or
property of any Jitney Entity to secure any
or all of the Senior Obligations (as
hereinafter defined), as amended, modified,
extended, replaced or supplemented from time
to time, the "Senior Security Documents")
heretofore, now or hereafter entered into
pursuant to the terms of the Credit
Agreement and constituting Loan Documents
(as defined in the Credit Agreement) (the
Senior Security Documents and the other Loan
Documents, as such term is defined in the
Credit Agreement, collectively, the "Senior
Loan Documents"), the Jitney Entities and
various other subsidiaries of the Company
have granted or will in the future grant to
the Agent for the benefit of the Agent and
the other Secured Parties (as such term is
defined in the Credit Agreement and such
Secured Parties, together with any future
lenders or issuers of letters of credit or
interest rate protection under or pursuant
to the Credit Agreement, hereinafter
referred to as the "Secured Parties")
security interests, mortgages and liens
(such security interests, mortgages and
liens, and all related rights, powers and
remedies, whether now existing or hereafter
granted, created, attaching or perfected,
the "Senior Liens") in the Collateral as
collateral security for the payment or
performance of the Senior Obligations; and
WHEREAS, it is a condition
precedent to the consent by the lenders
under the Credit Agreement to the making by
the Junior Lenders to one or more of the
Jitney Entities of any loans or other
extensions of credit under the Junior Term
Loan Agreement and to the grant by any
Jitney Entities to the Junior Lien Holder of
Junior Liens that the Junior Lien Holder
enter into this Agreement and, in the
Agent's sole and absolute discretion, record
or file this Agreement in all locations
where any Senior Loan Documents are recorded
or filed.
<PAGE>
NOW, THEREFORE, it is agreed as
follows:
I. Consent to Junior Liens. The
Agent hereby consents to the grant of the
Junior Liens, subject to the terms and
conditions of this Agreement and to the
extent securing (a) not greater than
$50,000,000 in aggregate principal amount of
Junior Lien Obligations (less any payments
on such principal) at any one time plus
(b) interest (including deferred interest),
fees, expenses, indemnities, prepayment
premiums, makewholes and other amounts
(excluding principal) now or hereafter owing
under the Junior Term Loan Documents.
A. Priority of Senior Liens. The
Junior Lien Holder and the Agent hereby
agree that:
B.
1. the Senior Liens and Senior
Security Documents (whether created or
entered into prior to or after the
commencement of any case or proceeding
relating to the bankruptcy or insolvency of
any Jitney Entity) shall be and hereby are
and shall be deemed to have priority over,
and be senior in all respects to, the Junior
Liens and Junior Security Documents (whether
created or entered into prior to or after
the commencement of any case or proceeding
relating to the bankruptcy or insolvency of
any Jitney Entity); provided that prior to
the commencement of any case or proceeding
relating to the bankruptcy or insolvency of
any Jitney Entity such Senior Liens shall
not, without the prior written consent of
the Junior Lien Holder, secure an amount of
obligations under the Senior Loan Documents
(after taking into account any concurrent
payments) exceeding at any time (a)
$150,000,000 in aggregate principal amount
of Senior Obligations and undrawn amount of
letters of credit at any one time plus
(b) interest, fees, expenses, indemnities
and other amounts (excluding principal) now
or hereafter owing under the Senior Loan
Documents (it being understood and agreed
that the following shall be deemed to be
included under clause (b) above (and in no
event under clause (a) above) and therefore
not violating this proviso: (1) any amounts
described in clause (b) above which are
charged to any loan account of any Jitney
Entity with the Agent or any other Secured
Party (including, without limitation,
amounts expended by the Agent or any other
Secured Party to protect or preserve any
Collateral or the Senior Lien thereon (and
the priority thereof)) and (2) any amounts
owing by any Jitney Entity as a result of
<PAGE>
any reversals in loan balances due to any
checks or other remittances or payments
applied to any Senior Obligations being
returned, uncollected or rescinded for any
reason) (and to the extent the Collateral
secures Senior Obligations in excess of the
amount permitted by this proviso, the Senior
Liens on such Collateral are hereby released
and discharged as to any excess amount),
2.
3. the Junior Liens and Junior
Security Documents (whether created or
entered into prior to or after the
commencement of any case or proceeding
relating to the bankruptcy or insolvency of
any Jitney Entity) shall be and hereby are
and shall be deemed to be junior and subject
and subordinate to the Senior Liens and
Senior Security Documents (whether created
or entered into prior to or after the
commencement of any case or proceeding
relating to the bankruptcy or insolvency of
any Jitney Entity), in each case, as to all
of the Collateral, and
4.
5. the Junior Liens shall secure
(a) not greater than $50,000,000 in
aggregate principal amount of Junior Lien
Obligations (less any payments on such
principal) at any one time plus (b) interest
(including deferred interest), fees,
expenses, indemnities, prepayment premiums,
makewholes and other amounts (excluding
principal) now or hereafter owing under the
Junior Term Loan Documents (and to the
extent the Collateral secures Junior Lien
Obligations in excess of the amount
permitted by this clause (iii), such Junior
Liens are hereby released and discharged as
to any excess amount).
6.
C. The Senior Liens shall be and
hereby are senior and prior to the Junior
Liens irrespective of the time, order or
method of attachment or perfection of the
Senior Liens or Junior Liens, or the time or
order of the filing or non-filing and
recording or non-recording of the Junior
Security Documents or Senior Security
Documents, or related financing statements,
or the giving of or failure to give notice
of purchase money security interests and
irrespective of any other fact,
circumstance, act or occurrence that might
otherwise affect the priorities established
under this Section 2.
D.
E. Nothing contained in this
Agreement shall, or shall be deemed to,
restrict, impair or impose any condition
<PAGE>
with respect to the exercise by the Agent of
any right, remedy, power or privilege under
any Senior Loan Document.
F.
G. Except for the Collateral (which
Collateral shall include any replacement
collateral of any Jitney Entity authorized
by the Bankruptcy Court in order to
adequately protect the interests of the
Junior Lenders during the pendency of any
case or proceeding relating to the
bankruptcy or insolvency of such Jitney
Entity, subject to Section 6 hereof), the
Junior Lien Holder (x) shall not request or
accept from the Company or any of its
subsidiaries any collateral security for
payment or performance of any Junior Lien
Obligations and (y) hereby releases any
security interest, mortgage or lien in any
such collateral security (other than the
Collateral).
H.
I. The Junior Lien Holder shall not
record in any land records any Junior Term
Loan Documents or amendments or supplements
thereof against any of the Collateral
consisting of real estate (including,
without limitation, leasehold interests
therein or fixtures) except:
J.
1. after obtaining the Agent's
prior written consent;
2.
3. during the pendency of any case
or proceeding relating to the bankruptcy or
insolvency of any Jitney Entity in
connection with the exercise of the rights
preserved to the Junior Lien Holder in
Section 6 hereof;
4.
5. in connection with the closing
under the Junior Term Loan Agreement, with
respect to any real estate comprising
Collateral as to which the Agent has already
recorded its Senior Lien in the appropriate
land records; or
6.
7. after giving the Agent not less
than 30 days prior written notice thereof,
with respect to any real estate comprising
Collateral as to which the Agent has not
already recorded its Senior Lien in the
appropriate land records (which notice with
respect to any such real estate shall in no
event be given prior to the date of
acquisition thereof by the relevant Jitney
Entity).
8.
K. By its acceptance of the
benefits of any Collateral, each Junior
Lender agrees that it shall not request or
accept (except through the Junior Lien
Holder) any collateral security for any
Junior Lien Obligations, it being agreed
that any collateral security for any Junior
<PAGE>
Lien Obligations shall be granted in favor
of the Junior Lien Holder (and not directly
to any other person) in compliance with and
subject to the terms of this Agreement.
A. Standstill. All obligations,
indebtedness and liabilities arising under
or owing in connection with the Senior Loan
Documents (including, in any event, the
Obligations (as defined in the Credit
Agreement)and all interest owing by the
Company or any of its subsidiaries under the
Senior Loan Documents which accrues after
the commencement of any case, proceeding or
other action relating to the bankruptcy,
insolvency or reorganization of the Company
or any of its subsidiaries, regardless of
whether any such interest is allowed as a
claim in any such case, proceeding or other
action) are herein referred to collectively
as the "Senior Obligations".
A. Until such time as all Senior
Obligations (other than those
indemnification obligations which expressly
survive the termination of the Senior Loan
Documents as to which no event giving rise
to any liability thereunder shall have
occurred) shall have been paid in full in
cash after the earlier of (x) the
acceleration of the Senior Obligations
(which acceleration has not been revoked by
the requisite Secured Parties) and (y) the
termination of all commitments under the
Credit Agreement to make any loans or issue
any letters of credit to any Jitney Entity
(the "Standstill Termination") and whether
or not there has been commenced or
continuing any bankruptcy, receivership or
similar proceeding with respect to the
Company or any of its subsidiaries, the
Junior Lien Holder shall not:
B.
1. commence or continue any
default, foreclosure or liquidation
proceedings or remedies, whether legal or
equitable, in respect of any Collateral; or
2.
3. take any other action to collect
or receive, or enforce its rights in,
realize upon, seek adequate protection with
regard to (except as set forth in Section 6
hereof to the extent not inconsistent with
the other provisions of this Section 3(b)
(including, without limitation, of this
clause (ii)) and the provisions of
Sections 3(a), 3(d), 3(e), 3(f), 3(i) and
3(j) hereof), take or gain possession of,
<PAGE>
give the Junior Lien Holder preference
against, or priority over, any of the
Collateral; or
4.
5. receive all or any part of the
Collateral (including, without limitation,
proceeds thereof) or collect payment out of
all or any part of the Collateral
(including, without limitation, proceeds
thereof) from any of the Jitney Entities or
any successors or assigns of any of the
Jitney Entities, including, without
limitation, a receiver, trustee or debtor in
possession, whether by setoff or in any
other manner, or enforce any remedies with
respect to the Collateral.
6.
C. Except as otherwise provided in
Section 6 hereof, nothing in this Agreement
shall, or shall be deemed to, restrict,
impair or impose any condition with respect
to the exercise by the Junior Lien Holder or
any holder of Junior Lien Obligations of any
right, remedy or power not related to any
Collateral.
D.
E. The Junior Lien Holder
acknowledges that a Standstill Termination
shall not have occurred if the Senior
Obligations being paid in full in cash are
paid with proceeds of Senior Obligations
provided under a replacement or successor
Credit Agreement (including, without
limitation, any such replacement or
successor Credit Agreement providing debtor-
in-possession financing).
F.
G. The Junior Lien Holder shall not
contest the validity, perfection, priority
or enforceability of the security interests,
mortgages and liens securing or purportedly
securing any of the Senior Obligations and
that as between the Agent and the Junior
Lien Holder, the terms of this Agreement
shall govern even if part or all of the
Senior Obligations or the security
interests, mortgages and liens securing
payment and performance thereof are avoided,
disallowed, set aside or otherwise
invalidated in any judicial proceeding or
otherwise.
H.
I. The Agent shall not contest the
validity, perfection, priority or
enforceability of the security interests,
mortgages and liens in favor of the Junior
Lien Holder securing or purportedly securing
the Junior Lien Obligations (except with
respect to any violation by the Junior Lien
Holder of any of the provisions hereof,
including, without limitation, Section 2
hereof) and that as between the Agent and
<PAGE>
the Junior Lien Holder, the terms of this
Agreement shall govern even if part or all
of the Junior Lien Obligations or the
security interests, mortgages and liens
securing payment and performance thereof are
avoided, disallowed, set aside or otherwise
invalidated in any judicial proceeding or
otherwise.
J.
K. The Agent shall have the
exclusive right to manage, perform, and
enforce the terms of the Senior Security
Documents with respect to the Collateral, to
exercise and enforce all privileges and
rights thereunder according to its
discretion and the exercise of its business
judgment, including, without limitation, the
exclusive right to take or retake control or
possession of any Collateral and to hold,
prepare for sale, process, sell, lease,
dispose of or liquidate any Collateral;
provided, however, that this Section 3(g)
shall not limit any rights preserved to the
Junior Lien Holder under Section 6 hereof
after the commencement of any case or
proceeding relating to the bankruptcy or
insolvency of any Jitney Entity.
L.
M. The Junior Lien Holder hereby
waives, to the fullest extent it may
lawfully do so, any right under applicable
law to object in any fashion to any aspect
of any public or private sale of the
Collateral or any part thereof (except to
the extent that any such sale by the Agent
fails to comply with any applicable
standards of sale required by the Uniform
Commercial Code) or with respect to any
other right exercised by the Agent or any of
the other Secured Parties under the Senior
Loan Documents; provided, however, that this
Section 3(h) shall not limit any rights
preserved to the Junior Lien Holder under
Section 6 hereof after the commencement of
any case or proceeding relating to the
bankruptcy or insolvency of any Jitney
Entity.
N.
O. The Junior Lien Holder hereby
waives any and all rights to have any
Collateral or any other assets or property
securing or purportedly securing any Senior
Obligations granted to the Agent marshalled
upon any foreclosure or other disposition of
any such Collateral or other assets or
property by the Agent or any Jitney Entity
with the consent of the Agent or any other
Secured Parties. It shall not be necessary
for the Agent or any other Secured Party
(and the Junior Lien Holder waives any
rights which it may have to so require the
Agent or any other Secured Party) prior to
exercising its rights with respect to any
Collateral or any other assets or property
<PAGE>
securing or purportedly securing any Senior
Obligations, first to (i) institute suit or
exhaust its rights against any of the Jitney
Entities or others liable under any Senior
Loan Documents or against any other person,
(ii) enforce its respective rights against
any other security which shall ever have
been given to secure any of the Senior
Obligations, (iii) enforce its respective
rights against any guarantors of any of the
Senior Obligations, (iv) join any of the
Jitney Entities or any others liable under
any of the Senior Loan Documents in any
action seeking to foreclose upon any of the
Collateral or any other assets or property
securing any Senior Obligations, or
(v) exhaust any rights available to it
against any other security which shall ever
have been given under the Senior Loan
Documents to secure any of the obligations
of the Jitney Entities to it.
P.
Q. The Junior Lien Holder shall not
be entitled to enforce any rights of
subrogation created or arising as a result
of this Agreement to receive payments or
distributions of assets of any Jitney Entity
on the Senior Obligations until the
Standstill Termination shall have occurred.
R.
S. Dispositions. Notwithstanding
anything to the contrary contained in the
Junior Security Documents or any other
Junior Term Loan Document, the Junior Lien
Holder shall not have (and hereby
irrevocably waives) any right to restrict or
permit, or approve or disapprove, any
Disposition (as hereinafter defined) of all
or any portion or item of the Collateral
except:
T.
1. with respect to any Disposition
of Collateral made by a Jitney Entity prior
to the commencement of a case or proceeding
relating to the bankruptcy or insolvency of
such Jitney Entity, to the extent such
Disposition is prohibited by Section 7.05 or
7.24 of the Junior Term Loan Agreement as in
effect on the date hereof, without giving
effect to any amendments thereto; and
2.
3. with respect to any Disposition
of Collateral made by a Jitney Entity after
the commencement of a case or proceeding
relating to the bankruptcy or insolvency of
such Jitney Entity, the Junior Lien Holder
retains any rights it may have under the
Bankruptcy Code in accordance with
Section 6(b) hereof.
4.
<PAGE>
U. If any Collateral is the subject
of a Disposition, the Junior Lien Holder
hereby agrees that any Junior Lien therein
shall terminate and be released
automatically and without further action
upon the consummation of such Disposition;
provided, however, that this Section 4(b)
shall not limit any rights preserved to the
Junior Lien Holder under Section 6 hereof
after the commencement of any case or
proceeding relating to the bankruptcy or
insolvency of any Jitney Entity.
V.
W. The Junior Lien Holder will,
promptly upon the request of the Agent,
deliver to the Agent all documents and
instruments deemed necessary by the Agent in
connection with any such termination and
release; provided, however, that this
Section 4(c) shall not limit any rights
preserved to the Junior Lien Holder under
Section 6 hereof after the commencement of
any case or proceeding relating to the
bankruptcy or insolvency of any Jitney
Entity.
X.
Y. In the event that the Agent
settles, adjusts or compromises any claim in
respect of all or any portion of the
Collateral, including, without limitation,
any condemnation, confiscation, seizure,
loss or destruction or theft of, or damage
to, all or any portion of the Collateral,
the Junior Lien Holder agrees to be bound by
any such settlement, adjustment or
compromise and shall, promptly upon the
request of the Agent, confirm its consent to
same and release any claim that the Junior
Lien Holder might otherwise have in respect
of such Collateral, claim or proceeds
thereof; provided, however, that this
Section 4(d) shall not limit any rights
preserved to the Junior Lien Holder under
Section 6 hereof after the commencement of
any case or proceeding relating to the
bankruptcy or insolvency of any Jitney
Entity.
Z.
AA. Prior to the occurrence of the
Standstill Termination, in the event of any
sale, transfer, assignment or other
disposition of all or any part of the
Collateral, including, without limitation, a
sale, transfer, assignment or other
disposition of Collateral in any
liquidation, receivership or bankruptcy
proceeding of any Jitney Entity or of any
assets of any Jitney Entity, or the payment
of any insurance, condemnation,
confiscation, seizure or other claim upon
the condemnation, confiscation, seizure,
loss or destruction or theft of, or damage
to, any Collateral (all of the foregoing
<PAGE>
referred to collectively as "Disposition"),
the Agent (for the benefit of the Secured
Parties) shall be entitled, to the exclusion
of the Junior Lien Holder, to receive all of
the proceeds of such Disposition, and the
Agent may, without any further consent or
agreement on the part of the Junior Lien
Holder, apply any or all of such proceeds to
any outstanding Senior Obligations, in such
manner as the Agent may determine, and the
Junior Lien Holder hereby consents to any
such application.
BB.
CC. Prior to the occurrence of the
Standstill Termination, the Agent (for the
benefit of the Secured Parties) shall be
entitled, to the exclusion of the Junior
Lien Holder and without any further consent
or agreement on the part of the Junior Lien
Holder, to release any or all of the
proceeds of any Disposition to the Company
or any other Jitney Entity for use in
repairing or replacing such Collateral or
otherwise, as the Agent may determine in its
sole discretion, and the Junior Lien Holder
hereby consents to any such release, except
that such consent shall not limit any right
preserved to the Junior Lien Holder under
Section 6 hereof after the commencement of
any case or proceeding relating to the
bankruptcy or insolvency of any Jitney
Entity.
DD.
EE. Turnover of Collateral by Junior
Lien Holder; Bailee. The Junior Lien
Holder hereby agrees to immediately deliver
to the Agent all Collateral that is now, or
may hereafter be, in its possession. Until
the Standstill Termination shall have
occurred, the Junior Lien Holder shall turn
over the proceeds of any Collateral received
by it as soon as practicable after the
Junior Lien Holder's receipt thereof (and
until turned over to the Agent, the Junior
Lien Holder shall hold same in trust for the
Agent), regardless of whether the Agent has
a perfected and enforceable lien on the
Collateral or any portion thereof.
FF.
GG. The Agent hereby agrees to act
as bailee for the Junior Lien Holder with
respect to any cash, securities and other
"investment property" (as defined in the
Uniform Commercial Code) of any Jitney
Entity in the possession of the Agent solely
to enable the Junior Lien Holder to perfect
its Junior Lien in such cash, securities and
other investment property; provided that
(1) after the commencement of a case or
other proceeding relating to the bankruptcy
or insolvency of any Jitney Entity, such
agreement by the Agent to act as bailee
<PAGE>
shall automatically terminate upon the
earliest of (i) the date agreed to in
writing by the Agent and the Junior Lien
Holder, (ii) such time as the Bankruptcy
Court finds that the interests of the Junior
Lenders are adequately protected as
contemplated by the applicable sections of
the Bankruptcy Code or that such interests
are not entitled to adequate protection and
(iii) such time as the Bankruptcy Court
orders that such agreement terminate, (2)
such agreement of the Agent shall not create
or impose any obligations on the part of the
Agent, (3) subject to the immediately
succeeding sentence, the Agent may release
any or all of such cash, securities and
other investment property to any Jitney
Entity, apply any such cash to the payment
of any Senior Obligations, transfer any such
cash, securities and other investment
property to any person or otherwise dispose
of any of same, terminate or modify any
lock-box or other cash management
arrangements maintained by the Agent with
any Jitney Entity or otherwise deal with any
such cash, securities and other investment
property, all without notice to or consent
of the Junior Lien Holder or any Junior
Lender and (4) the Agent may at any time
terminate any agreement to act as bailee for
the Junior Lien Holder upon notice to the
Company and the Junior Lien Holder and by
transferring any cash, securities and other
investment property of any Jitney Entity
then in its possession (subject to clause
(3) above) to either (x) the Junior Lien
Holder or (y) any financial institution with
a combined capital and surplus of not less
than $50,000,000 at the time of such
transfer or any other person reasonably
acceptable to the Junior Lien Holder, the
Company and the Agent, in each instance
under this clause (y), which agrees to act
as bailee for the Junior Lien Holder with
respect to such cash, securities and other
investment property to enable the Junior
Lien Holder to perfect its Junior Lien in
such cash, securities and other investment
property, subject to clauses (1)-(4) above.
Notwithstanding clause (3) of the proviso to
the immediately preceding sentence, so long
as the Agent is the bailee for the Junior
Lien Holder as provided in such sentence,
without the prior written consent of the
Junior Lien Holder, the Agent shall take no
action permitted under such clause (3) which
releases the Junior Lien in a material
portion of the property of the Jitney
Entities subject to such bailment
arrangements, except for any one or more of
the following:
HH.
1. the Agent may take any action
described in such clause (3) in the ordinary
course of business of the Agent and/or any
<PAGE>
of the Jitney Entities or which is otherwise
permitted under the terms of the Senior Loan
Documents, as such Senior Loan Documents are
in effect on the date hereof;
2.
3. the Agent may apply any such
property to the payment of the Senior
Obligations and/or remit same to the Junior
Lien Holder; or
4.
5. the Agent may take any action
described in such clause (3) in connection
with the foreclosure, sale or other
realization by the Agent of any property
subject to such bailment arrangements.
6.
II. Certain Bankruptcy and Other
Rights. The Agent and each Secured Party
agrees not to make loans, issue letters of
credit or otherwise extend credit to the
Jitney Entities under the Senior Loan
Documents prior to the commencement of any
case or proceeding relating to the
bankruptcy or insolvency of any Jitney
Entity such that the aggregate amount of
Senior Obligations would violate the proviso
in Section 2(a)(i) above unless the Junior
Lien Holder shall have consented in writing
thereto.
JJ.
KK. Except as set forth in Section
6(c) below, nothing contained in this
Agreement shall restrict, impair or
otherwise affect any rights of the Junior
Lien Holder and/or the Junior Lenders under
the Bankruptcy Code or any comparable or
similar bankruptcy or insolvency statute,
including, without limitation, any right to
(i) file or join in the filing of an
involuntary bankruptcy petition, (ii) move
to appoint a trustee or examiner, or to move
to terminate the period in which any Jitney
Entity has the exclusive right to file a
plan of reorganization, (iii) seek adequate
protection, (iv) object to the use of cash
collateral, (v) object to the incurrence of
any indebtedness or the granting of any lien
or security interest, (vi) file and
prosecute a plan of reorganization or join
with other parties in interest in filing a
plan, or (vii) object to any disclosure
statement or plan of reorganization.
LL.
1. If one or more Jitney Entities
becomes a debtor or debtors in a case or
proceeding under the Bankruptcy Code or any
comparable or similar bankruptcy or
insolvency statute and without limiting
Section 6(e) below, neither the Agent nor
any Secured Party shall be limited in the
amount of credit which may be extended by
<PAGE>
one or more of them to any one or more of
the Jitney Entities secured by "priming
liens" and granted status as super-priority
administrative expense claims under the
applicable provisions of the Bankruptcy Code
or any comparable or similar bankruptcy or
insolvency statute, without the conversion
or payment of any part of the Junior Lien
Obligations; provided, however, that the
Junior Lien Holder and each Junior Lender
shall retain all rights, if any, to seek
adequate protection of their interests under
the applicable provisions of the Bankruptcy
Code or any comparable or similar bankruptcy
or insolvency statute.
2.
3. Notwithstanding Section 6(b)
hereof, neither the Junior Lien Holder nor
any Junior Lender shall exercise any rights
or take any action which is contrary to or
otherwise violates or causes the violation
of any of the agreements of the Junior Lien
Holder or any Junior Lender under any of the
following provisions of this Agreement:
4.
5. Section 2(a)(i)-(iii)
6. Section 2(b)
7. Section 2(c)
8. Section 2(e)(i)
9. Section 2(e)(iii)
10. Section 2(e)(iv)
11. Section 2(f)
12. Section 3(a)
13. Section 3(b)
14. Section 3(d)
15. Section 3(e)
16. Section 3(f)
17. Section 3(i)
18. Section 3(j)
Section 4(a), prior to the
commencement of a case or
proceeding relating to the
bankruptcy or insolvency of any
Jitney Entity;
Section 4(e); and
Section 5.
1. Nothing contained in this
Section 6(c) shall be construed as a
commitment or agreement by any Secured Party
to extend any credit to any Jitney Entity
after one or more of the Jitney Entities
becomes a debtor or debtor under the
<PAGE>
Bankruptcy Code or any comparable or similar
bankruptcy or insolvency statute.
2.
B. Without limiting Section 6(e)
below, nothing contained in this Agreement
shall restrict, impair or otherwise affect
any rights of the Agent or any Secured Party
under the Bankruptcy Code or any comparable
or similar bankruptcy or insolvency statute
to object to or take action in consequence
of the exercise by the Junior Lien Holder or
any Junior Lender of any rights preserved to
the Junior Lien Holder or any Junior Lender
hereunder, including without limitation any
right of the Agent or any Secured Party to
declare an event of default under the Senior
Loan Documents or any other document
providing financing to any Jitney Entity.
C.
D. Nothing contained in this
Agreement shall restrict, impair or
otherwise affect any rights of the Agent
and/or the Secured Parties under the
Bankruptcy Code or any comparable or similar
bankruptcy or insolvency statute, including,
without limitation, any right to (i) file or
join in the filing of an involuntary
bankruptcy petition, (ii) move to appoint a
trustee or examiner, or to move to terminate
the period in which any Jitney Entity has
the exclusive right to file a plan of
reorganization, (iii) seek adequate
protection, (iv) object to the use of cash
collateral,(v) object to the incurrence of
any indebtedness or the granting or priority
of any lien or security interest, (vi) file
and prosecute a plan of reorganization or
join with other parties in interest in
filing a plan, or (vi) object to any
disclosure statement or plan of
reorganization.
E.
F. Further Assurances; General
Authority of the Agent Over the Collateral;
etc. The Junior Lien Holder hereby agrees
to provide in each of the Junior Security
Documents in a manner satisfactory to the
Agent that such Junior Security Documents
are subject to the terms of this Agreement.
G.
H. The Junior Lien Holder hereby
irrevocably constitutes and appoints the
Agent and any officer or agent thereof with
full power and authority in the name of the
Junior Lien Holder or in the Agent's name,
from time to time in the Agent's discretion,
on behalf of the Junior Lien Holder and
without notice to or further assent by the
Junior Lien Holder to do any of the
following:
<PAGE>
I.
1. to ask for, demand, sue for,
collect, receive and give acquittance for
any and all moneys due or to become due
upon, or in connection with, the Collateral;
2.
3. to receive, take, endorse,
assign and deliver any and all checks,
notes, drafts, acceptances, documents and
other negotiable and non-negotiable
instruments taken or received as, or in
connection with, the Collateral;
4.
5. to commence, prosecute, defend,
settle, compromise or adjust any claim,
suit, action or proceeding with respect to,
or in connection with, the Collateral,
including but not limited to foreclosure
upon the Collateral, or any part thereof,
and any action the Agent may deem
appropriate to protect and enforce the
rights vested in it by this Agreement or any
Senior Loan Document;
6.
7. to execute such releases and
consents with respect to any Collateral
subject to any Disposition and to execute
and deliver such other documents, agreements
and instruments and/or take such action on
behalf of the Junior Lien Holder that the
Junior Lien Holder fails to timely do or
take hereunder; and
8.
9. to do, at its option and at the
expense of any or all of the Jitney Entities
at any time or from time to time, all acts
and things which the Agent deems necessary
to protect or preserve the Collateral and to
realize upon the Collateral.
10.
11. All actions taken by the Agent or any
officer or agent thereof under this Section
7(b) are hereby ratified and approved. The
foregoing power of attorney shall not limit
any rights preserved to the Junior Lien
Holder under Section 6(b) above after the
commencement of any case or proceeding
relating to the bankruptcy or insolvency of
any Jitney Entity.
12.
II. Nature of the Senior Obligations
and Modification of Junior Security
Documents. The Junior Lien Holder acknowl-
edges that the Senior Obligations are, in
part, revolving in nature and that the
amount of such revolving indebtedness which
may be outstanding at any time or from time
to time may be increased (subject to the
proviso in Section 2(a)(i) hereof and to
Sections 6(a) and (b) hereof) or reduced and
subsequently reborrowed. The terms of the
Senior Obligations may be modified, extended
<PAGE>
or amended from time to time, and the amount
thereof may be increased (subject to the
proviso in Section 2(a)(i) hereof and to
Sections 6(a) and (b) hereof) or reduced,
all without notice to or consent by the
Junior Lien Holder and without affecting the
provisions of this Agreement. Without in
any way limiting the foregoing (but subject
to the proviso in Section 2(a)(i) hereof and
to Section 6(a) and (b) hereof), the Junior
Lien Holder hereby agrees that the maximum
amount of Senior Obligations may be
increased at any time and from time to time
to any amount. The Junior Lien Holder
consents that, without the necessity of any
reservation of rights against the Junior
Lien Holder, and without notice to or
further assent by the Junior Lien Holder,
(a) any demand for payment of any Senior
Obligations may be rescinded in whole or in
part, and any Senior Obligations may be
continued, and the Senior Obligations, or
the liability of any of the Jitney Entities
or any other party upon or for any part
thereof, or any collateral security or
guaranty therefor, or right of offset with
respect thereto, may, from time to time, in
whole or in part, be renewed, extended,
modified, accelerated, compromised, waived,
surrendered or released and (b) the Senior
Loan Documents and any document or
instrument evidencing or governing the terms
of any other Senior Obligations or any
collateral security documents or guaranties
or documents in connection with the Senior
Loan Documents or the Senior Obligations
may, subject to the proviso in
Section 2(a)(i) hereof and to Sections 6(a)
and (b) hereof, be amended, modified,
supplemented or terminated, in whole or in
part, as the Secured Parties may deem
advisable from time to time, and any
collateral security at any time held by any
of the Secured Parties for the payment of
any of the Senior Obligations may be sold,
exchanged, waived, surrendered or released,
in each case all without notice to or
further assent by the Junior Lien Holder,
which will remain bound under this
Agreement, and all without impairing,
abridging, releasing or affecting the lien
subordination provided for herein,
notwithstanding any such renewal, extension,
modification, acceleration, compromise,
amendment, supplement, termination, sale,
exchange, waiver, surrender or release. The
Junior Lien Holder waives any and all notice
of the creation, modification, renewal,
extension or accrual of any of the Senior
Obligations and notice of or proof of
reliance by any of the Secured Parties upon
this Agreement, and the Senior Obligations,
and any of them, shall conclusively be
deemed to have been created, contracted or
incurred in reliance upon this Agreement,
<PAGE>
and all dealings between any of the Jitney
Entities and one or more of the Secured
Parties shall be deemed to have been
consummated in reliance upon this Agreement.
The Junior Lien Holder acknowledges and
agrees that the Secured Parties have relied
upon the lien subordination provided for
herein in consenting to the grant of the
Junior Liens and the making by the Junior
Lenders of financial accommodations to one
or more of the Jitney Entities under the
Junior Term Loan Agreement, and in
continuing to make funds available to the
Jitney Entities under the Credit Agreement.
The Junior Lien Holder waives notice of or
proof of reliance on this Agreement and
protest, demand for payment and notice of
default. The Junior Lien Holder hereby
agrees that the Junior Lien Holder may not,
directly or indirectly, amend, modify or
supplement any provision of the Junior
Security Documents, or consent to same, in
each instance without the prior written
consent of the Agent, except that the Junior
Lien Holder may amend, modify or supplement
any Junior Security Document (or consent to
same) without the prior written consent of
the Agent solely to add additional
Collateral thereunder and/or perfect the
Junior Lien in any Collateral, in each
instance, so long as the same amendment,
modification or supplement is concurrently
entered into with respect to the
corresponding Senior Security Document.
III.
A. Representations and Warranties.
Each of the Junior Lien Holder and the
Agent hereby represents and warrants to the
other that:
1. it has the power and authority
to execute, deliver and carry out the terms
and provisions of this Agreement and the
transactions contemplated hereby and has
taken or caused to be taken all necessary
actions to authorize the execution, delivery
and performance by it of this Agreement and
the transactions contemplated hereby;
2.
3. except for those which have been
previously obtained and are in full force
and effect, no consent of any other person
and no action of, or filing with, any
governmental or public body or authority are
required to authorize, or are otherwise
required in connection with the execution,
delivery and performance of, this Agreement
by it and consummation of the transactions
contemplated hereby;
4.
<PAGE>
5. this Agreement has been duly
executed and delivered by it and constitutes
its legal, valid and binding obligation
enforceable in accordance with its terms,
subject, as to enforceability, to
bankruptcy, reorganization, insolvency,
moratorium and other similar 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
6.
7. the execution, delivery and
performance of this Agreement by it 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 of its
contractual obligations.
8.
B. The Junior Lien Holder hereby
represents and warrants to the Agent that,
except for the Collateral, there is no
collateral security granted by the Company
or any of its subsidiaries securing any of
the Junior Lien Obligations.
C.
II. Amendment and Waiver. No delay on
the part of the Agent or any other Secured
Party in exercising any right, power,
privilege or remedy hereunder or under any
Senior Loan Documents or in failing to
exercise the same shall operate as a waiver
of such right, power, privilege or remedy
and no delay on the part of the Junior Lien
Holder or any Junior Lender in exercising
any right, power, privilege or remedy
hereunder or under any Junior Term Loan
Document not prohibited hereby or in failing
to exercise the same shall, except as herein
agreed, operate as a waiver of such right,
power, privilege or remedy; nor shall any
single or partial exercise of any right,
power, privilege or remedy under this
Agreement preclude any other or further
exercise thereof or the exercise of any
other right, power, privilege or remedy; and
no notice to or demand on any Jitney Entity
or the Junior Lien Holder shall be deemed a
waiver of any obligation or duty of any
Jitney Entity or the Junior Lien Holder or
of the Agent's right to take further action
without notice or demand; nor in any event
shall any modification, alteration or waiver
of any of the provisions hereof be effective
unless in writing and signed for or on
behalf of the Agent and the Junior Lien
Holder and then only in the specific in-
stance for which given. The rights and
remedies provided in this Agreement and in
any agreement relating to any of the Senior
<PAGE>
Obligations and all other agreement,
instruments and documents referred to in any
of the foregoing are cumulative and shall
not be exclusive of any rights or remedies
provided by law.
III.
IV. Notices. All notices and other
communications to any party hereunder shall
be deemed to have been given or made when in
writing and: (i) sent by telex, telecopy or
telegram; (ii) delivered by nationally
recognized overnight courier service or
otherwise against a receipt therefor; or
(iii) mailed by express, registered or
certified mail, postage prepaid, addressed
as set forth below or to such other address
as hereafter designated in writing by the
Junior Lien Holder or the Agent.
If to the Junior Lien Holder:
Silver Oak Capital, L.L.C.
c/o Angelo, Gordon & Co.
245 Park Avenue
New York, New York 10167
Attention: Jim Malley
If to the Agent:
Fleet Capital Corporation
60 East 42nd Street
New York, New York 10017
Attention: Thomas Maiale
or to such other address as each party may
designate for itself by like notice. Any
such notice, demand, request or other
communication shall be deemed given upon
receipt, refusal of delivery or return for
failure to be called for.
I. GOVERNING LAW. THIS AGREEMENT AND
THE RIGHTS AND OBLIGATIONS OF THE JUNIOR
LIEN HOLDER AND THE AGENT HEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.
II.
A. SUBMISSION TO JURISDICTION. ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT MAY BE BROUGHT IN THE COURTS
OF THE STATE OF NEW YORK OR OF THE UNITED
STATES OF AMERICA LOCATED IN SUCH STATE,
AND, BY EXECUTION AND DELIVERY OF THIS
<PAGE>
AGREEMENT, EACH OF THE JUNIOR LIEN HOLDER
AND THE AGENT HEREBY ACCEPTS FOR ITSELF AND
IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. EACH OF THE JUNIOR LIEN
HOLDER AND THE AGENT HEREBY IRREVOCABLY
WAIVES, IN CONNECTION WITH ANY SUCH ACTION
OR PROCEEDING, (i) TRIAL BY JURY AND (ii)
ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY SUCH ACTION OR
PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
EACH OF THE JUNIOR LIEN HOLDER AND THE AGENT
HEREBY IRREVOCABLY WAIVES IN CONNECTION WITH
ANY SUCH ACTION OR PROCEEDING THE RIGHT TO
INTERPOSE ANY SETOFF, COUNTERCLAIM OR CROSS-
CLAIM.
B.
C. SERVICE OF ANY SUMMONS AND
COMPLAINT AND ANY OTHER PROCESS WHICH MAY BE
SERVED IN ANY SUCH ACTION OR PROCEEDING MAY
BE MADE BY MAILING OR DELIVERING A COPY OF
SUCH PROCESS TO THE JUNIOR LIEN HOLDER OR
THE AGENT, AS THE CASE MAY BE, AT THE JUNIOR
LIEN HOLDER'S OR AGENT'S ABOVE ADDRESS, AS
APPROPRIATE. EACH OF THE JUNIOR LIEN HOLDER
AND THE AGENT AGREES THAT A FINAL JUDGMENT
IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN
ANY OTHER MANNER PROVIDED BY LAW. EACH OF
THE JUNIOR LIEN HOLDER AND THE AGENT
IRREVOCABLY WAIVES ANY SOVEREIGN OR OTHER
IMMUNITY IN RESPECT OF ITSELF OR ITS ASSETS
TO WHICH IT MAY BE OR BECOME ENTITLED IN
RESPECT OF ANY PROCEEDINGS OR THE EXECUTION
THEREOF IN CONNECTION WITH THIS AGREEMENT,
AND EACH OF THE JUNIOR LIEN HOLDER AND THE
AGENT CONSENTS TO SUCH PROCEEDINGS AND
EXECUTION.
D.
E. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE JUNIOR LIEN HOLDER OR THE AGENT
TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE
OTHER IN ANY OTHER JURISDICTION.
F.
G. Benefit of Agreement. This
Agreement shall be binding upon and inure to
the benefit of the Junior Lien Holder and
the Agent and their respective successors
and assigns and all subsequent holders of
the Senior Liens and Senior Obligations.
H.
I. Any person who shall become the
"Agent" under and as defined in the Credit
Agreement shall be deemed to be the Agent
hereunder.
<PAGE>
J.
K. Any person who shall become the
"Agent" under and as defined in the Junior
Term Loan Agreement shall be deemed to be
the Junior Lien Holder hereunder.
L.
M. The provisions of this Agreement
are and are intended solely for the purpose
of defining the relative rights with respect
to the Collateral of the Junior Lien Holder
and any holders from time to time of the
Junior Lien Obligations, on the one hand,
and the Agent, the other Secured Parties and
their successors and assigns, on the other
hand. Nothing contained in this Agreement,
any Junior Security Documents or any
documents evidencing or governing the Junior
Lien Obligations is intended to or shall
impair, as among any of the Jitney Entities
and its creditors (other than the Agent, the
other Secured Parties and their successors
and assigns) and the Junior Lien Holder and
any such holders of the Junior Lien
Obligations, the obligation of the Jitney
Entities, which is absolute and
unconditional, to pay to the Junior Lien
Holder and such holders of Junior Lien
Obligations all amounts payable with respect
to the Junior Lien Obligations as and when
the same shall become due and payable,
subject to the rights under this Agreement
of the Agent, the other Secured Parties and
their successors and assigns.
N.
III. Counterparts. This Agreement may
be executed in any number of counterparts
and by the different parties hereto in
separate counterparts, each of which when so
executed and delivered shall be an original
and all of which shall together constitute
one and the same agreement.
I. Captions. The captions of the
sections of this Agreement have been
inserted for convenience only and shall not
in any way affect the meaning or
construction of any provision of this
Agreement.
II.
FLEET CAPITAL CORPORATION,
as Agent
By:
Name: Thomas Maiale
Title: Vice President
<PAGE>
SILVER OAK CAPITAL, L.L.C.,
as Agent for the Junior Lenders
By:
Name:
Title:
<PAGE>
ACKNOWLEDGMENT
The undersigned, herein referred
to as the "Jitney Entities" in the above
Intercreditor Agreement (herein called the
"Agreement"), hereby accept notice of the
execution and delivery thereof and of the
terms and provisions thereof, and, in
consideration of the extension of credit to
them by the lenders under the Senior Loan
Documents, agree to record this Agreement at
their sole expense in all locations where
any Senior Security Documents are recorded
(if and to the extent the Agent requests any
such recording), to do and perform any and
all acts and things which may be required on
their part to enable the Junior Lien Holder
to perform its obligations thereunder, and
to refrain from doing any act or thing which
would cause or contribute to a violation by
the Junior Lien Holder of the Agreement or
of any of its obligations thereunder; and
the undersigned further agree that, in the
event of the violation by any of the
undersigned of any of the terms and
provisions thereof or hereof, or in the
event of the violation, either by action or
non-action, by the Junior Lien Holder of the
Agreement or any of the obligations of the
Junior Lien Holder thereunder, all of the
Senior Obligations shall thereupon, without
any notice whatsoever to any of the
undersigned, become immediately due and
payable. THE UNDERSIGNED HEREBY AGREE THAT
THE PROVISIONS OF SECTIONS 12 AND 13 OF THE
AGREEMENT SHALL APPLY TO ANY LITIGATION
ARISING OUT OF OR RELATING TO ANY MATTERS
COVERED BY THE AGREEMENT.
Dated: July __, 1999
JITNEY-JUNGLE STORES OF AMERICA, INC.
By
Name: R. Barry Cannada
Title: Chief Administrative
Officer and Executive Vice
President
<PAGE>
SOUTHERN JITNEY JUNGLE COMPANY
By
Name: R. Barry Cannada
Title: Chief Administrative
Officer and Executive Vice
President
McCARTY-HOLMAN CO., INC.
By
Name: R. Barry Cannada
Title: Chief Administrative
Officer and Executive Vice
President
JITNEY-JUNGLE BAKERY, INC.
By
Name: R. Barry Cannada
Title: Chief Administrative
Officer and Executive Vice
President
PUMP AND SAVE, INC.
By
Name: R. Barry Cannada
Title: Chief Administrative
Officer and Executive Vice
President
<PAGE>
INTERSTATE JITNEY JUNGLE STORES, INC.
By
Name: R. Barry Cannada
Title: Chief Administrative
Officer and Executive Vice
President
DELCHAMPS, INC.
By
Name: R. Barry Cannada
Title: Chief Administrative
Officer and Executive Vice
President
JJ CONSTRUCTION CORP.
By
Name: R. Barry Cannada
Title: Chief Administrative
Officer and Executive Vice
President
SUPERMARKET CIGARETTE SALES, INC.
By
Name: R. Barry Cannada
Title: Chief Administrative
Officer and Executive Vice
President
<PAGE>
[NOTARY BLOCKS TO BE ADDED]
<PAGE>
EXHIBIT A
Land
<PAGE>
EXHIBIT B
Senior Mortgages and Deeds of Trust
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JAN-01-2000
<PERIOD-START> MAR-28-1999
<PERIOD-END> JUN-19-1999
<CASH> 9,971
<SECURITIES> 0
<RECEIVABLES> 17,140
<ALLOWANCES> 0
<INVENTORY> 170,227
<CURRENT-ASSETS> 203,533
<PP&E> 500,710
<DEPRECIATION> 198,355
<TOTAL-ASSETS> 660,668
<CURRENT-LIABILITIES> 178,426
<BONDS> 0
75,708
10,433
<COMMON> 4
<OTHER-SE> (244,903)
<TOTAL-LIABILITY-AND-EQUITY> 660,668
<SALES> 460,847
<TOTAL-REVENUES> 460,847
<CGS> 340,984
<TOTAL-COSTS> 474,675
<OTHER-EXPENSES> 2,413
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,213
<INCOME-PRETAX> (13,828)
<INCOME-TAX> 0
<INCOME-CONTINUING> (13,828)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (13,828)
<EPS-BASIC> (38.16)
<EPS-DILUTED> (38.16)
</TABLE>
