<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended October 4, 1997
---------------
or
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period ______________ from ______________
Commission file number 1-681Q4
BIG V SUPERMARKETS, INC.
(Exact name of registrant as specified in its charter)
NEW YORK 14-1459448
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
176 North Main Street, Florida, New York 10921
(Address of principal executive offices) (Zip Code)
(914) 651-4411
(Registrant's telephone number, including area code)
Not applicable.
(Former name, former address and former fiscal year,
if changed since last report)
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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes x No
------- -------
Shares of Common Stock outstanding as of November 17, 1997: 1,000 shares
This quarterly report on Form 10-Q is being filed voluntarily and shall not be
deemed to be subject to Section 18 of the Securities Exchange Act of 1934.
<PAGE>
BIG V SUPERMARKETS, INC.
FORM 10-Q FOR THE 16 WEEKS ENDED OCTOBER 4, 1997
INDEX
PART I
FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
Item 1. Financial Statements
Unaudited Consolidated Statements of Income (Loss) 3
Unaudited Consolidated Balance Sheets 4
Unaudited Consolidated Statements of Cash Flows 5
Notes to Unaudited Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7-11
PART II
OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12 - 13
SIGNATURES 14
</TABLE>
-2-
<PAGE>
BIG V SUPERMARKETS, INC.
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(In Thousands)
<TABLE>
<CAPTION>
UNAUDITED
-------------------------------------------------------------------
For the Sixteen For the Sixteen For the Forty For the Forty
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
October 4, 1997 October 5, 1996 October 4, 1997 October 5, 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
SALES $234,913 $222,713 $579,062 $565,781
-------- -------- -------- --------
COSTS AND EXPENSES:
Cost of Sales (exclusive of depreciation and
amortization shown separately below) 172,347 163,017 429,545 418,871
Selling, general and administrative 49,141 47,930 118,214 118,654
Special charges - 3,004 - 3,004
Depreciation and amortization 4,473 5,711 12,196 14,043
Interest expense, net of interest income of $86 and
$79 for the 16 week periods and $194 and $190
for the 40 week periods ended October 4, 1997
and October 5, 1996, respectively 7,564 7,598 19,196 19,089
----- ----- ------ ------
Total costs and expenses 233,525 227,260 579,151 573,661
------- ------- ------- -------
INCOME (LOSS) BEFORE INCOME TAXES 1,388 (4,547) (89) (7,880)
INCOME TAX BENEFIT 60 1,601 523 2,923
-- ----- --- -----
NET INCOME (LOSS) $ 1,448 $ (2,946) $ 434 $ (4,957)
======== ======== ======== ========
</TABLE>
See notes to unaudited consolidated financial statements.
-3-
<PAGE>
BIG V SUPERMARKETS, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands)
<TABLE>
<CAPTION>
(UNAUDITED)
OCTOBER 4, 1997 DECEMBER 28, 1996/1/
--------------- ----------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 13,144 $ 10,595
Accounts receivable 15,416 13,066
Inventories 31,776 35,437
Refundable income taxes 85 120
Prepaid expenses and other current assets 3,252 3,434
-------- --------
Total current assets 63,673 62,652
PROPERTY AND EQUIPMENT - At cost, less accumulated
depreciation and amortization of $76,207 at October 4, 1997
and $70,005 at December 28, 1996 60,589 72,304
GOODWILL - Less accumulated amortization of $12,462 at
October 4, 1997 and $10,914 at December 28, 1996 66,848 68,396
INVESTMENT IN WAKEFERN FOOD CORPORATION 11,236 11,236
WAKEFERN WAREHOUSE AGREEMENT - Less accumulated
amortization of $7,001 at October 4, 1997 and $6,205
at December 28, 1996 34,367 35,163
OTHER ASSETS 13,581 14,866
------ ------
TOTAL ASSETS $250,294 $264,617
======== ========
LIABILITIES AND STOCKHOLDER'S DEFICIT
CURRENT LIABILITIES:
Accounts payable $ 33,953 $ 39,738
Accrued expenses and taxes other than income taxes 12,356 15,028
Income taxes payable 13 17
Deferred income taxes 6,967 6,314
Current portion of long-term debt 13,892 10,959
Current portion of capitalized lease obligations 444 447
-------- --------
Total current liabilities 67,625 72,503
------ ------
OTHER LONG-TERM LIABILITIES 7,703 6,247
----- -----
LONG-TERM DEBT - Less current portion 167,503 165,590
------- -------
CAPITALIZED LEASE OBLIGATIONS - Less current portion 26,310 36,614
------ ------
DEFERRED INCOME TAXES 5,162 7,973
----- -----
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER'S DEFICIT
Common stock, par value, $1.00 per share; authorized, 1,000
shares; issued, 1,000 shares 1 1
Paid-in capital 8,531 8,665
Accumulated deficit (32,541) (32,976)
------- -------
Total stockholder's deficit (24,009) (24,310)
------- -------
TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIT $250,294 $264,617
======== ========
</TABLE>
/1/ Taken from the audited consolidated financial statements for the year
ended December 28, 1996.
See notes to unaudited consolidated financial statements.
-4-
<PAGE>
BIG V SUPERMARKETS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
<TABLE>
<CAPTION>
UNAUDITED
----------------------------------
For the Forty For the Forty
Weeks Ended Weeks Ended
October 4, 1997 October 5, 1996
--------------- ---------------
<S> <C> <C>
CASH BALANCE, BEGINNING OF PERIOD $10,595 $11,683
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) 434 (4,957)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization 12,100 14,043
Amortization of deferred debt costs 887 897
Amortization of discount on debt 104 53
Noncash gain from lease termination (1,170) -
Noncash rent expense 676 530
Deferred income taxes (2,158) (1,934)
Loss on disposal of equipment 96 -
Loss on sale of equity investment 596 -
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (1,249) 827
Decrease (increase) in inventories 3,661 (353)
Decrease in refundable income taxes 35 145
Increase in prepaid expenses (14) (534)
Increase in other assets (198) (488)
Decrease in accounts payable (5,785) (8,004)
Decrease in accrued expenses (2,672) (328)
(Decrease) increase in income taxes payable (4) 3
Increase (decrease) in other long-term liabilities 780 (23)
------ -----
Net cash provided by (used in) operating activities 6,119 (123)
------ -----
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of property and equipment (6,756) (5,898)
Proceeds from the sale of store equipment 21 -
Note receivable from the sale of equity investment (1,100) -
Increase in investment in Wakefern Food Corp. - (41)
Sale of Connecticut stores - 8,555
------ -----
Net cash (used in) provided by investing activities (7,835) 2,616
------ -----
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term borrowings 5,699 263
Proceeds from revolver borrowings 4,500 5,500
Principal payments on long-term debt (5,457) (7,366)
Principal payments on capital lease obligations (344) (290)
Capital contribution from Holding 16 -
Return of capital to Holding (149) (214)
------ -----
Net cash provided by (used in) financing activities 4,265 (2,107)
------ -----
NET INCREASE IN CASH 2,549 386
------ -----
CASH BALANCE, END OF PERIOD $13,144 $12,069
======= =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $20,387 $20,178
Income taxes $ 1,768 $ 576
</TABLE>
During the period ended October 5, 1996, the Company's investment in Wakefern
and notes payable to Wakefern were reduced by $688 as a result of store
closings.
See notes to unaudited consolidated financial statements.
-5-
<PAGE>
BIG V SUPERMARKETS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
1. Basis of Presentation
The accompanying interim consolidated financial statements as of and for
the period ending October 4, 1997, included herein, have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and rule 10-01 of Regulation
S-X promulgated by the Securities and Exchange Commission. The balance sheet at
December 28, 1996, has been taken from the audited financial statements as of
that date. In the opinion of management, the consolidated financial statements
include all adjustments, which consist only of normal recurring adjustments
necessary for a fair presentation of operating results for the interim periods.
Certain financial information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been omitted. Accordingly, reference is made to the
consolidated financial statements and notes thereto included in the Company's
annual report on Form 10-K for the year ended December 28, 1996. Operating
results for the periods presented are not necessarily indicative of the results
for the entire fiscal year.
2. Income Taxes
Income taxes are based on the estimated effective tax rate expected to be
applicable for the full fiscal year in accordance with Accounting Standards
Board Opinion No. 28, "Interim Financial Reporting". The income tax benefit
recorded in the accompanying financial statements results from the unwinding of
property, plant & equipment deferred tax liabilities partially offset by the
utilization of federal and state loss carryforwards.
3. Sale of Equity Investment
On October 1, 1997 the Company sold its fifty-percent interest in the
Montgomery Towne Square shopping center, located in Montgomery, NY, to the
remaining limited partner, Columbia Hawkins Group ("Columbia"), for $1.1
million. As part of the transaction, the Company terminated the existing
premises and master leases and entered into similar leases with the new owner.
The combined transaction resulted in the removal of a $10.0 million capital
lease obligation and the recording of a $0.6 million net gain.
-6-
<PAGE>
ITEM 2.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Basis of Presentation
The following discussion of the Company's financial condition and results
of operations should be read in conjunction with the unaudited financial
statements and notes thereto included elsewhere in this Form 10-Q.
<TABLE>
<CAPTION>
16 Weeks Ended 16 Weeks Ended 40 Weeks Ended 40 Weeks Ended
October 4, 1997 October 5, 1996 October 4, 1997 October 5, 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Income Statement Data:
Sales................................ 100.0% 100.0% 100.0% 100.0%
Gross margin......................... 26.6 26.8 25.8 26.0
Selling, general and administrative.. 20.9 21.5 20.4 21.0
EBITDA (1)........................... 5.8 3.6 5.5 4.6
Depreciation and amortization........ 1.9 2.6 2.1 2.5
Interest, net........................ 3.2 3.4 3.3 3.4
--- --- --- ---
Income (Loss) before income taxes.... 0.6 (2.0) 0.0 (1.4)
Income tax benefit................... 0.0 0.7 0.1 0.5
--- --- --- ---
Net income (loss).................... 0.6% (1.3)% 0.1% (0.9)%
==== ====== ==== ======
Other Data (in millions):
EBITDA............................... $ 13.7 $ 7.9 $ 31.9 $ 26.0
====== ====== ====== ======
Net cash provided by (used in)
operating activities............ $ 0.3 $ (0.8) $ 6.1 $ (0.1)
====== ====== ====== ======
Net cash (used in) provided by
investing activities............ $ (4.4) $ (1.8) $ (7.8) $ 2.6
====== ====== ====== ======
Net cash used in financing
activities...................... $ 4.2 $ 3.2 $ 4.2 $ (2.1)
====== ====== ====== ======
</TABLE>
- -----------
(1) EBITDA represents net earnings before interest expense, depreciation and
amortization, including noncash losses on the sale of property, plant and
equipment, income taxes and LIFO provision/credit. EBITDA is a widely accepted
financial indicator of a company's ability to service and/or incur debt, and
also represents a primary debt covenant of the Company. Noncompliance with this
covenant would represent a default under the Company's debt agreements which
could subject the Company to debt acceleration if not waived or amended. EBITDA
should not be construed as an alternative to, or a better indicator of,
operating income (as determined in accordance with generally accepted accounting
principles) or to 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.
-7-
<PAGE>
Results of Operations
16 and 40 Weeks Ended October 4, 1997 Compared to 16 and 40 Weeks Ended
October 4, 1996
Sales
For the 16 and 40 week periods ended October 4, 1997, total sales were
$234.9 million and $579.1 million, respectively. For the comparable periods
ended October 5, 1996, total sales were $222.7 million and $565.8 million,
respectively.
Total and same store sales increased 5.5% and 4.7%, respectively, for the
quarter ended October 4, 1997, as compared to the prior year. For the 40 week
period ended October 4, 1997, total and same store sales increased 2.3% and
1.4%, respectively, as compared to the same period of the prior year.
The comparable 16 and 40 week periods increase in total sales was the
product of numerous factors including new and newly renovated stores developing
their customer base, our company-wide program to increase customer satisfaction,
and aggressive marketing and perishable merchandising initiatives designed
specifically to build sales. The increase in year-to-date total sales would
have been 3.1% but for the one month impact of the Company's Connecticut stores
sold in January 1996. Positive same store sales for the second and third
quarters of 1997 have mitigated the effect on sales of the first quarter's mild
1997 winter and sustained competitive pressure.
Gross Margin
Gross margin decreased .2% for the 16 and 40 week periods ended October 4,
1997, from the comparable periods of the prior year.
The 16 week gross margin comparisons were affected by a pretax LIFO charge
of $0.2 million compared to a pretax LIFO credit of $0.9 million for the
comparable prior year period. The 16 week gross margin would have increased
0.3%, net of the LIFO impact on both years. The increase illustrates the
improvement in product mix and stock loss.
The 40 week gross margin comparisons were affected by a pretax LIFO charge
of $0.4 million and $0.6 million for the 40 week periods ended October 4, 1997
and October 5, 1996, respectively. The .2% decrease for the year-to-date period
was the result of scheduled margin reductions on product shipped to stores
partially offset by improvements in product mix and stock loss.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were 20.9% of sales for the 16
week period ended October 4, 1997 and 21.5% for the comparable period ended
October 5, 1996. The decrease in the current quarter compared to the same
quarter of the prior year was attributable to non-recurring prior year expenses
related to a general liability premium call (.2%), sales tax audit expense
(.2%), and advertising (.2%).
-8-
<PAGE>
EBITDA
EBITDA increased 72.2% to $13.7 million for the 16 week period ended
October 4, 1997, compared to $7.9 million for the comparable prior year period.
The prior year EBITDA amount is net of $3.0 million in special charges. For the
40 week period ended October 4, 1997, EBITDA increased 22.8% to $31.9 million
compared to $26.0 million for the comparable prior year period.
The increase in the quarterly EBITDA is primarily related to the
aforementioned special charges and decreases in selling, general and
administrative expenses.
Depreciation and Amortization
Depreciation and amortization, as a percentage of sales, were 1.9% and 2.1%
of sales for the 16 and 40 week periods ended October 4, 1997, respectively.
Prior year amounts were 2.6% and 2.5% of sales for the comparable periods ended
October 5, 1996, respectively. The decreases for the 16 and 40 week periods
compared to comparable prior year periods were due to the full amortization of
several leasehold assets and the termination of a capital leases in 1996 and
1997.
Interest, net
Interest expense, net, changed marginally for the 16 and 40 week periods
ended October 4, 1997 compared to the same periods of the prior year. Increased
variable rates associated with the senior bank term loans and higher average
daily borrowings under the senior bank revolving loans influenced interest
expense during the quarter and year-to-date periods. Scheduled debt reductions
nearly offset the effect of increased rates and higher daily borrowings.
Net Income (Loss)
Net income for the 16 week period ended October 4, 1997 was $1.4 million
compared to the net loss of $2.9 million for the same period of the prior year.
Net losses were $0.4 million and $5.0 million for the 40 week periods ended
October 4, 1997 and October 5, 1996, respectively. Net income and reductions
in net loss in the current quarter and year-to-date periods compared to the same
periods of the prior year were attributable to the higher level of EBITDA and
lower levels of depreciation and amortization.
-9-
<PAGE>
Liquidity and Capital Resources
The Company's long-term debt (including current maturities and capital
leases) at October 4, 1997, was $208.1 million. All mandatory principal
payments required by the various debt agreements were satisfied during the 16
and 40 week periods ended October 4, 1997.
The Company had a working capital ratio of .9:1 at October 4, 1997 and
December 28, 1996. The Company typically requires small amounts of working
capital since inventory is generally sold prior to the time payments to Wakefern
Food Corp. and other suppliers are due. The Company's primary source of
liquidity during the 16 weeks ended October 4, 1997 were cash flows generated
through operations supplemented by increased revolver borrowings and other long-
term debt.
Net cash provided by operating activities was $6.1 million for the 40 week
period ended October 4, 1997. This compares to net cash used of $0.1 million
for the comparable period ended October 5, 1996. The increase in net cash
provided by operating activities during the current 40 week period was primarily
due to the $3.6 million decrease in inventories and prior year net loss
including $3.0 million in special charges.
Net cash used in investing activities was $7.8 million for the 40 week
period ended October 4, 1997. This compares to $2.6 million provided by
investing activities for the comparable period ended October 5, 1996. The
decrease in the current 40 week period was the result of the sale of the two
Connecticut stores on January 28, 1996 and the sale of the Company's interest
in a Montgomery, NY shopping center.
Net cash provided by financing activities was $4.2 million for the 40 week
period ended October 4, 1997. This compares to $2.1 million used by financing
activities for the 40 week period ended October 5, 1996. The increase in net
cash provided by financing activities during the current 40 week period compared
to the same period of the prior year was primarily due to new equipment
financing and increased revolver borrowings.
During the 40 weeks ended October 4, 1997, the aggregate effect of net
cash provided by operating activities of $6.1 million, net cash used in
investing activities of $7.8 million and net cash provided by financing
activities of $4.2 million resulted in a net increase in cash of $2.5 million at
October 4, 1997, as compared to December 28, 1996.
For the 52 weeks ending December 27, 1997, the Company projects that its
major uses of cash will be as follows: (i) cash interest payments (including
capitalized leases) of $25.3 million; (ii) capital expenditures of $11.6
million; and (iii) scheduled debt and capital lease payments of $16.6 million
(including the non-recourse demand note payable solely from the proceeds of the
sale of the Company's Baldwin Place Shopping Center located in Somers, New
York). Management believes operating cash flow, together with borrowings under
the bank revolving credit facility and equipment financing, will be sufficient
to meet the Company's operating needs, scheduled capital expenditures and will
enable the Company to service its debt in accordance with its terms.
The Bank Credit Agreement provides for a $26.0 million revolving credit
facility, under which there was $8.5 million outstanding as of October 4, 1997.
Additionally, $6.4 million was
-10-
<PAGE>
Liquidity and Capital Resources, continued
used from this facility for letters of credit and bonding purposes. The Bank
Credit Agreement requires the Company maintain minimum levels of consolidated
net worth, EBITDA and fixed charge coverages, and maximum levels of capital
expenditures (each as defined in the Bank Credit Agreement). The Company was in
full compliance with all of its financial covenants as of October 4, 1997 and
management believes the Company will remain in compliance for the next 12
months.
-11-
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
4.27 Partnership Interest Sale-Purchase Agreement
between Big V Supermarkets, Inc. and Columbia
Hawkins Group
4.28 Loan & Security Agreement, dated July 3, 1997 by
and between Big V Supermarkets, Inc. and FINOVA
Capital Corporation.
4.29 Fifth Amendment and Consent dated October 1, 1997
to Amended and Restated Bank Credit Agreement
dated December 17, 1993 between Big V Holding
Corp., BV Holdings Corporation, Big V
Supermarkets, Inc., various banks, and Bankers
Trust Company, as agent.
10.25 Management Stock Subscription Agreement between
Big V Holding Corp. and Stephen L. Hittman, dated
April 18, 1997.
10.26 Stock Pledge Agreement between Big V Holding
Corp., and Stephen L. Hittman, dated April 18,
1997.
10.27 Secured Promissory Note between Big V Holding
Corp. and Stephen L. Hittman, dated April 18,
1997.
10.28 Management Stock Subscription Agreement between
Big V Holding Corp. and John Onufer, Jr., dated
April 24, 1997.
10.29 Stock Pledge Agreement between Big V Holding
Corp. and John Onufer, Jr., dated April 24, 1997.
-12-
<PAGE>
Item 6. Exhibits and Reports on Form 8-K, continued
10.30 Secured Promissory Note between Big V Holding
Corp. and John Onufer, Jr., dated April 24, 1997.
10.31 Non-Qualified Time-Accelerated Restricted Stock
Option Agreement with John Onufer, Jr., dated
April 24, 1997.
10.32 Management Stock Subscription Agreement between
Big V Holding Corp. and Donald J. Trella, dated
August 29, 1997.
10.33 Stock Pledge Agreement between Big V Holding
Corp. and Donald J. Trella, dated August 29,
1997.
10.34 Secured Promissory Note between Big V Holding
Corp. and Donald J. Trella, dated August 29,
1997.
10.35 Secured Promissory Note between Big V Holding
Corp. and Donald J. Trella, dated August 29,
1997.
27 Financial Data Schedule.
(b) Reports on Form 8-K
Not applicable.
-13-
<PAGE>
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.
BIG V SUPERMARKETS, INC.
/s/ James A. Toopes, Jr.
Date: November 18, 1997 ----------------------------------
James A. Toopes, Jr., Executive
Vice President-Finance,
Administration and Corporate
Development
/s/ John Onufer, Jr.
Date: November 18, 1997 ----------------------------------
John Onufer, Jr., Vice President-
Controller
-14-
<PAGE>
EXHIBIT 4.27
LOAN AND SECURITY AGREEMENT
Dated July 3, 1997
by and between
BIG V SUPERMARKETS, INC.
as Borrower
14-145-9448
-------------------------------
(Federal Tax ID No. of Borrower)
and
FINOVA CAPITAL CORPORATION
as Lender
$5,000,000
Maximum Loan
-------------------------------------------
COMMERCIAL EQUIPMENT FINANCE
-------------------------------------------
<PAGE>
LOAN AND SECURITY AGREEMENT
---------------------------
AGREEMENT, dated as of July 3, 1997, by and between Big V SUPERMARKETS,
INC., a New York corporation ("Borrower"), having its principal place of
business at 176 North Main Street, Florida, New York 10921; and FINOVA CAPITAL
CORPORATION, a Delaware corporation ("Lender"), having a place of business at 95
North Route 17 South, Paramus, New Jersey 07652.
WITNESSETH:
WHEREAS, Borrower has requested Lender to make a loan to Borrower and
Lender is willing to make such loan to Borrower upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and intending to be legally bound hereby, the parties
hereto covenant and agree as follows:
ARTICLE 1. DEFINITIONS; CONSTRUCTION
1.1 Definitions.
-----------
In addition to other words and terms defined elsewhere in this Agreement,
as used herein the following words and terms have the following meanings,
respectively, unless the context hereof otherwise clearly requires:
"ADVANCE" means any advance made hereunder by Lender to Borrower.
"AGREEMENT" means this Loan and Security Agreement as amended, modified or
supplemented from time to time.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day on
which banking institutions are authorized or obligated to close in New Jersey or
New York.
"CLOSING DATE" means the date on which the parties enter into this
Agreement and all conditions to the making of the initial Advance contained in
this Agreement and the other Loan Documents have been satisfied in Lender's sole
and absolute discretion.
"COLLATERAL" means all assets of Borrower in which Borrower has granted or
will grant a Lien to Lender, pursuant to this Agreement, including those assets
described and defined as Collateral in Section 3.1.
<PAGE>
"CONSTITUENT DOCUMENTS" means the certificate of incorporation, agreement
of partnership or limited partnership, organizational agreement, operating
agreement, by-laws, or such other similar document pursuant to which Borrower
was organized or its affairs are governed.
"CREDIT FACILITY" means the loans made or to be made by the Bank Group (as
hereinafter defined) to Borrower, pursuant to the Bank Group Credit Facility
Loan Documents.
"CREDIT FACILITY LOAN DOCUMENTS" means the Amended and Restated Credit
Agreement dated as of December 28, 1990, amended and restated as of November 1,
1993, and further amended and restated as of December 17, 1993 (as heretofore or
hereafter amended, modified or supplemented from time to time, the "Bank Group
Credit Facility Loan Agreement") by and among Borrower, Big V Holding Corp., a
Delaware corporation, BV Holdings Corporation, a Delaware corporation, the
lenders named therein and signatory thereto, Union Bank of Switzerland, as co-
agent, and Bankers Trust Company, as agent (Bankers Trust Company, Union Bank of
Switzerland and such other lenders are collectively referred to as the "Bank
Group") , and all agreements, instruments and documents executed and/or
delivered or to be executed and/or delivered in connection with the Bank Group
Credit Facility, as the same have been or may from time to time hereafter be
amended, modified or supplemented.
"DEFAULT" means an event which with notice or lapse of time, or both,
would constitute an Event of Default.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EVENT OF DEFAULT" means any of the Events of Default described in Section
7.1 hereof.
"EXECUTIVE OFFICER" means the President, the Chief Executive Officer, or
the Chief Financial Officer of Borrower elected from time to time.
"FF&E" means all furniture, fixtures and equipment listed on Schedule A
annexed hereto and all other furniture, fixtures and equipment, whether now
owned or hereafter acquired by Borrower and described in any Request for Advance
and financed (or refinanced by reimbursement to Borrower) with the proceeds of
the Loan or any Advance, and any and all accessions thereto, substitutions and
replacements of any of the foregoing, wherever located. Each item of FF&E is
hereinafter referred to as an "Item of FF&E".
"GAAP" means generally accepted accounting principles in the United States
of America (as such principles may change from time
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<PAGE>
to time) applied on a consistent basis (except for changes in application in
which Borrower's independent certified public accountants concur), applied both
to classification of items and amounts.
"HOPEWELL STORE" means the Shop Rite Supermarket owned and operated by
Borrower, located at 727 Beekman Road, Hopewell Junction, New York (a/k/a
Beekman, New York) 12533.
"INTERIM INTEREST RATE" means the rate of interest publicly announced by
Citibank, N.A. ("Citibank") in New York, New York, from time to time as its
Prime Rate plus one and one-half percent 1-1/2%) per annum. The Prime Rate is
not intended to be the lowest rate of interest charged by Citibank to its
borrowers.
"LAW" means any law (including common law), constitution, statute, treaty,
regulation, rule, ordinance, order, injunction, writ, decree or award of any
government or governmental agency.
"LEGAL REQUIREMENTS" means any and all present and future judicial, and
administrative rulings or decisions, and any and all present and future federal,
state, and local laws, ordinances, rules, regulations, permits and certificates,
in each case, in any way applicable to Borrower (or the ownership or use of the
Collateral or its other assets), the Collateral and/or this transaction.
"LIEN" means any mortgage, pledge, lien, security interest (including
without limitation any conditional sale or other title retention agreement),
grant of a leasehold, charge or other encumbrance of any nature whatsoever, and
also means the filing of or the agreement to give any financing statement or
analogous document under the UCC or analogous law of any jurisdiction.
"LOAN" means, as of any date of determination, the aggregate amount of all
Advances theretofore made hereunder. Each Store Tranche (as hereinafter defined)
constitutes a portion of the Loan.
"LOAN DOCUMENTS" means this Agreement, the Note, the Subordination
Agreements, the Insurance Letter, the Environmental Certificate with
Representations, Covenants and Warranties, the Requests for Advance and any
other agreements, instruments and documents required to be, or which are,
executed by Borrower in connection with this Agreement or the Loan (as the same
may from time to time be amended, modified or supplemented).
"MATURITY DATE" means, with respect to each such Store Tranche, the date
upon which the sixtieth (60th) consecutive monthly payment of principal and
interest with respect to such Store Tranche is scheduled to be due.
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<PAGE>
"MAXIMUM LOAN" means the maximum aggregate amount to be loaned hereunder,
not to exceed the lesser of (a) $5,000,000 or (b) Borrower's cost to acquire
FF&E for each Store, which amount with respect to each such Store shall not
exceed the Maximum Store Advance applicable to such Store.
"MAXIMUM STORE ADVANCE" means the maximum aggregate amount to be loaned
hereunder to be used with respect to a Store, not to exceed the lesser of (a)
the amount set forth below opposite such Store or (b) Borrower's cost to acquire
FF&E for such Store:
Store Maximum Store Advance
----- ---------------------
Hopewell Store $2,141,787.25
Peekskill Store $2,858,212.75
"NOTE" means the promissory note of Borrower executed and delivered by
Borrower under this Agreement, in substantially the form annexed hereto as
Exhibit A with the blanks appropriately filled in.
"OBLIGATIONS" means all of the indebtedness, liabilities and obligations of
every kind and nature of Borrower to Lender, whether now existing or hereafter
arising, under, in connection with or evidenced by this Agreement, the Note
and/or the other Loan Documents.
"OFFICE", when used in connection with Lender, means its office located at
95 North Route 17 South, Paramus, New Jersey 07652, or such other office of
Lender as may be designated in writing from time to time by Lender to Borrower.
"OUTSIDE DATE" means July 31, 1997.
"PEEKSKILL STORE" means the Shop Rite Supermarket owned and operated by
Borrower, located at Route 6, Peekskill, New York (a/k/a East Main Street,
Cortland, New York) 10566.
"PERMITTED SUBORDINATE LIENS" means Liens covering the Collateral held,
respectively, by the landlords of the Premises and Bankers Trust Company, as
agent for the Bank Group, which Liens are subordinate to the Liens covering the
Collateral held by Lender pursuant to the respective Subordination Agreements.
"PERSON" means an individual, corporation, national banking association,
partnership, trust, unincorporated association, joint venture, joint-stock
company, government (including political subdivisions), governmental authority
or agency, or any other entity.
"PLAN" means any employee benefit plan which is covered by ERISA and which
is maintained by Borrower or, in the case of a
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<PAGE>
plan to which more than one employer contributes, to which Borrower made
contributions at any time within the five plan years preceding the date of
termination.
"PREMISES" means, with respect to the Hopewell Store, 727 Beekman Road,
Hopewell Junction, New York (a/k/a Beekman, New York) 12533, and with respect to
the Peekskill Store, Route 6, Peekskill, New York (a/k/a East Main Street,
Cortland, New York) 10566, each more particularly described on Schedule B
annexed hereto.
"REQUEST FOR ADVANCE" means a Request for Advance in the form of Exhibit B
annexed hereto.
"STORE TRANCHE COMMENCEMENT DATE" means, with respect to the Hopewell
Store, the Closing Date, and with respect to the Peekskill Store, the earliest
of (i) the Outside Date, or (ii) the date all of the FF&E purchased for the
Peekskill Store has been delivered and installed at the Peekskill Store, and
unconditionally accepted in writing by Borrower, and the construction of the
Peekskill Store has been completed and the Peekskill Store is open for business,
or (iii) the date the aggregate Advances made with respect to the Peekskill
Store equals the applicable Maximum Store Advance, or (iv) the date the
aggregate Advances equal to the Maximum Loan have been made, or (v) the date
Lender and Borrower agree is the Peekskill Store's Store Tranche Commencement
Date.
"STORE TRANCHE INTEREST RATE" means ten and ninety-five hundredths percent
(10.95%), provided, however, that if on the first business day preceding each
applicable Store Tranche Commencement Date, the highest yield for Treasury Notes
with a maturity date on or closest to the applicable Maturity Date of such Store
Tranche, as published in The Wall Street Journal (the "Index"), is greater or
-----------------------
less than 6.27% (the "Yield"), the applicable Store Tranche Interest Rate
provided herein shall be increased or decreased to reflect such increase or
decrease in the Yield. Interest shall be calculated on the basis of a year of
360 days and twelve months of thirty (30) days each and charged on a daily
basis.
"STORE(S)" means the Hopewell Store and/or the Peekskill Store.
"SUBORDINATION, AGREEMENT(S)" means (i) the subordination agreement entered
into between Lender and Bankers Trust Company, as agent for the Bank Group, and
(ii) the subordination agreements entered into between Lender and the landlord
of each Premises, pursuant to which, Bankers Trust Company and each such
landlord subordinate their respective interests in the Collateral to the Liens
held by Lender and otherwise in form and substance satisfactory to Lender.
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<PAGE>
"TERM" means, with respect to each such Store Tranche, if the applicable
Store Tranche Commencement Date is not the first day of a month, the period
beginning on the first day of the month immediately succeeding such Store
Tranche Commencement Date and ending on the applicable Maturity Date, and, if
such Store Tranche Commencement Date is the first day of a month, the period
beginning on such Store Tranche Commencement Date and ending on the applicable
Maturity Date.
"UCC" means the Uniform Commercial Code as adopted in the State of New
York.
1.2 General Interpretive Principles.
-------------------------------
For purposes of this Agreement, except as otherwise expressly provided
herein or unless the context otherwise requires:
(i) any pronoun used shall be deemed to cover both gender
forms as well as the neuter form;
(ii) all references to the plural shall include the singular,
the singular the plural and the part the whole;
(iii) the word "or" has the inclusive meaning frequently
identified by the phrase "and/or";
(iv) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(v) the words "herein", "hereunder" and "hereof" and similar
terms in this Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement;
(vi) references herein to "Articles", "Sections",
"Subsections", "Paragraphs", and other subdivisions without reference to a
document are to designated Articles, Sections, Subsections, Paragraphs and other
subdivisions of this Agreement;
(vii) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to Paragraphs and
other subdivisions;
(viii) the term "include" or "including" shall mean, without
limitation, by reason of enumeration; and
(ix) the term "satisfactory to Lender" or "satisfaction of
Lender" or "satisfactory to counsel" or
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<PAGE>
"satisfaction of counsel" or other similar terms means reasonably satisfactory
to Lender or its counsel in its sole and absolute discretion.
ARTICLE 2. THE LOAN
2.1 The Loan.
--------
Subject to the terms and conditions and relying upon the representations
and warranties herein set forth, including, without limitation, the fulfillment
of each and every condition of lending, Lender agrees to make a Loan to Borrower
in the principal amount of up to the Maximum Loan, but not to exceed the Maximum
Store Advance applicable to each such Store.
2.2 Use of Proceeds.
---------------
The proceeds of the Advances shall be used by Borrower solely for the
following purposes: (a) to reimburse Borrower for payments made by Borrower to
suppliers (each, a "Supplier" and collectively, the "Suppliers") for the
property listed on Schedule A annexed hereto, which was previously purchased by
Borrower and which has been delivered to and is located and installed at the
Hopewell Store, and (b) to pay Suppliers for the purchase and installation of
Items of FF&E acceptable to Lender in its reasonable discretion, which are
located and installed at the Peekskill Store (or to reimburse Borrower for the
payments made by Borrower to Suppliers for such Items of FF&E), all pursuant to
and in accordance with the terms of the purchase agreements between Borrower and
the Suppliers, provided that Items of FF&E which are substantially similar in
all respects (including, without limitation, quality and cost) to the property
listed on Schedule A annexed hereto will be acceptable to Lender.
2.3 The Note.
--------
The obligation of Borrower to repay the Loan (including all Tranches, as
hereinafter defined) and to pay interest thereon shall be evidenced by the Note.
The Note shall be dated the Closing Date and shall be executed by Borrower
delivered to Lender on the Closing Date.
2.4 Advances.
--------
Lender agrees, on the terms and subject to the conditions set forth herein,
to make Advances to Borrower from time to time on or prior to the Store Tranche
Commencement Date applicable to a Store, so long as the total Advances do not
exceed the Maximum Loan or the applicable Maximum Store Advance and no Event of
Default has occurred; and Borrower agrees, on the terms and subject to the
conditions set forth herein, to accept such Advances from Lender and apply them
in accordance with the terms
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<PAGE>
of this Agreement; provided, however, that Lender shall not be obligated to make
--------- -------
any Advance hereunder from and after the Outside Date.
2.5 Requests for Advances.
---------------------
Borrower shall, not later than the fifth Business Day next preceding the
date of any requested Advance, submit to Lender a Request for Advance, setting
forth (a) the date requested for such Advance, which date shall be a Business
Day, (b) the amount of the requested Advance, which amount shall not be less
than Two Hundred Thousand Dollars ($200,000.00), (c) the use of proceeds from
the Advance requested, (d) a description of the Items of FF&E and FF&E costs to
be paid with the Advance, (e) the Suppliers requested to be paid with the
proceeds of such Advance and their addresses, and (f) all other information set
forth on the Request for Advance. The submission of each Request for Advance
shall constitute Borrower's irrevocable commitment to borrow such amount. The
date each Advance is made is a "Disbursement Date". In addition, as a
precondition to making any Advance hereunder, Lender may, in its sole and
absolute discretion, require that each Request for Advance indicate the payee(s)
to be paid with the proceeds of such Advance and be accompanied by such
requisitions, certificates, releases and waivers of liens, approvals and
supporting invoices, copies of agreements with the Suppliers to be paid, bills
or other documents, in each case, in form and substance and from such Person or
Persons as are reasonably satisfactory to Lender.
2.6 Disbursement.
------------
Subject to the conditions set forth herein, Lender shall, on each
Disbursement Date, credit, by wire transfer, the amount of the Advance to be
made to the account of Borrower or the Supplier or Suppliers specified in
writing by Borrower pursuant to Section 2.5 hereof.
2.7 Loan Account.
------------
Lender shall maintain a loan account on its books in the name of Borrower
for the Loan in which will be recorded all Advances made by Lender, all payments
of principal thereof and all accruals and payments of interest thereon. The
entries in the loan account (in the absence of manifest error in the making
thereof) shall be conclusive evidence of the outstanding principal thereof and
accrued interest thereon from time to time. Lender shall provide Borrower with
statements of said account from time to time on request.
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<PAGE>
2.8 Interest Rates.
--------------
2.8.1 Interest Prior to Maturity. Prior to maturity (whether by
--------------------------
acceleration or otherwise), during the period between the making of an Advance
and the Store Tranche Commencement Date applicable to a Store, Advances shall
bear interest at the Interim Interest Rate. Thereafter, and prior to maturity
(whether by acceleration or otherwise), the unpaid principal amount of each such
Store Tranche shall bear interest at the applicable Store Tranche Interest Rate.
2.8.2 Interest After Maturity. Commencing with the day after the
-----------------------
entire principal amount of the Loan shall have become due and payable by reason
of acceleration or commencing ten (10) days after any part of the Loan shall
otherwise be due and payable (without giving effect to any grace or cure period
other than as set forth herein), such part of the Loan or the entire Loan (as
the case may be) shall bear interest at the daily rate of two percent (2%) per
annum above the then applicable Interim Interest Rate or Store Tranche Interest
Rate (as the case may be) (the "Default Rate").
2.8.3 Maximum Rate. Lender and Borrower intend the Loan Documents to
------------
comply in all respects with all provisions of Law and not to violate, in any
way, any legal limitations on interest charges. Accordingly, if, for any reason,
Borrower is required to pay, or has paid, interest at a rate in excess of the
highest rate of interest which may be charged by Lender or which Borrower may
legally contract to pay under applicable law (the "Maximum Rate"), then the
Interim Interest Rate or the applicable Store Tranche Interest Rate (as the case
may be) shall be deemed to be reduced, automatically and immediately, to the
Maximum Rate, and interest payable hereunder shall be computed and paid at the
Maximum Rate and the portion of all prior payments of interest in excess of the
Maximum Rate shall be deemed to have been prepayments of the outstanding
principal of the Loan and applied to the installments in the inverse order of
their maturities, without prepayment premium or fee.
2.9 Payments.
--------
2.9.1 Time; Place; Manner. All payments to be made respect of
-------------------
principal, interest, or other amounts due from Borrower hereunder or under the
Note shall become due at 12:00 o'clock noon, New York City time, on the day when
due without presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived. Such payments shall be made to Lender in lawful money
of the United States of America in immediately available funds.
2.9.2 Payments of Principal and Interest. Prior to the respective
-----------------------------------
Store Tranche Commencement Date, Borrower shall
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<PAGE>
pay interest only on the Advances, at the Interim Interest Rate, in arrears, on
the first day of each month. From and after the applicable Store Tranche
Commencement Date, provided there is no Default hereunder or under any of the
other Loan Documents and provided further that there has been no material
adverse change in the business, operations or financial condition of Borrower or
in the Collateral, the aggregate Advances made with respect to such Store
outstanding as of the applicable Store Tranche Commencement Date shall
automatically convert to a fixed term obligation (the fixed term obligations are
hereinafter referred to individually, as a "Store Tranche" and collectively, as
the "Store Tranches"). Each Store Tranche, together with interest thereon at
the applicable Store Tranche Interest Rate, shall be repaid in sixty (60) equal
consecutive monthly payments of principal and interest each in an amount which
will fully amortize such Store Tranche at the applicable Store Tranche Interest
Rate over the Term of such Store Tranche. The first such monthly payment of
principal and interest with respect to a Store Tranche shall be due and payable
on the first day of the second month succeeding the applicable Store Tranche
Commencement Date and the payments shall continue on a like day in each and
every month thereafter through and including the Maturity Date applicable to
such Store Tranche; provided that (i) if the applicable Store Tranche
Commencement Date is the first day of a month, the first such monthly payment of
principal and interest shall be due on the first day of the immediately
succeeding month, and (ii) if the applicable Store Tranche Commencement Date is
not the first day of the month, Borrower shall pay, on the first day of the
month immediately succeeding such Store Tranche Commencement Date, interest
only, at the applicable Store Tranche Interest Rate, from the applicable Store
Tranche Commencement Date to the last day of the month in which such Store
Tranche Commencement Date occurs. Lender shall compute the amount of each
payment and advise Borrower of such amount. The entire unpaid principal balance
of a Store Tranche which was not payable earlier, whether due to regularly
scheduled payments, acceleration or otherwise, together with any unpaid
interest, fees, costs and charges shall be due and payable on the applicable
Maturity Date. After the maturity of all or any part of the Loan (by
acceleration or otherwise), interest on the Loan or such part thereof shall be
due and payable at the Default Rate on demand.
2.9.3 Application of Payments. Each payment under this Agreement and
-----------------------
the other Loan Documents shall be applied, first to fees, costs, expenses and
charges, if any, owing to Lender, then to interest as may be due hereunder, and
the balance of such payment shall be applied to the principal balance of the
Loan.
2.9.4 Net Payments. All payments hereunder and under the Note shall
------------
be made by Borrower to Lender without defense,
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<PAGE>
set-off, claim or counterclaim and without deduction for any present or future
income, stamp or other taxes, levies, imposts, deductions, charges or
withholdings whatsoever imposed, assessed, levied or collected by or for the
benefit of any jurisdiction or taxing authority. In addition, Borrower shall
pay any and all taxes (stamp or otherwise) payable or determined to be payable
in connection with the execution and delivery of this Agreement, the Note and
the other Loan Documents and on all payments to be made by Borrower hereunder
and under the Note and the other Loan Documents (other than Lender's income or
franchise or similar taxes) and all taxes payable in connection with or related
to the Collateral.
2.10 Prepayments.
-----------
Borrower may not prepay any Advances or Store Tranche, in whole or in part,
prior to the first regularly scheduled payment date occurring after the first
anniversary of the Store Tranche Commencement Date of the applicable Store
Tranche to be prepaid. Borrower shall have the right, upon not less than thirty
(30) days prior written notice to Lender, on any regularly scheduled payment
date occurring after the first anniversary of the Store Tranche Commencement
Date of the applicable Store Tranche, to prepay the outstanding principal
balance of such Store Tranche in whole, but not in part, provided that Borrower
shall pay to Lender, together with the principal balance of such Store Tranche,
(i) all accrued and unpaid interest on the amount prepaid through the date of
prepayment, (ii) all outstanding fees, charges and other amounts then due under
the Loan Documents, and (iii) a prepayment fee ("Prepayment Fee") in an amount
equal to the product of (A) the outstanding principal balance of such Store
Tranche at the time of prepayment, times (B) the applicable percentage set forth
opposite the year of the Term of such Store Tranche in which the prepayment is
made, as set forth below:
Year of Term of Store Tranche
Which Prepayment is Made Percentage
----------------------------- ----------
2 2.5%
3 2.0%
4 1.5%
5 1.0%
Once given, the notice of prepayment shall be irrevocable. Any acceleration of
the Loan as a consequence of the occurrence of a willful Default shall be
presumed to be a mechanism to avoid the requirements of this provision and shall
be deemed a prepayment and subject to the appropriate prepayment premium set
forth above, in addition to all other amounts otherwise due under this
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<PAGE>
Agreement and the other Loan Documents. If the Loan is accelerated prior to the
date upon which prepayment is permitted to be made hereunder, the applicable
percentage shall be 3%. Borrower shall not be obligated to pay a Prepayment Fee
if Borrower prepays the entire balance of a Store Tranche at any time during the
last ninety (90) days of its Term.
2.11 Administrative Costs.
--------------------
If Borrower shall fail to make any payment of principal or interest within
ten (10) days after the same is due, Borrower shall pay a late charge of five
percent (5%) of the unpaid amounts, but in no event greater than the maximum
rate permitted by law, and such amount shall be payable upon demand. Such
payment is not interest for the use of money, but is solely to cover Lender's
administrative costs occasioned by such delay.
ARTICLE 3. SECURITY
3.1 Security.
--------
As security for the full and timely payment and performance of all of the
Obligations of Borrower to Lender, Borrower hereby assigns, pledges, transfers
and sets over to Lender, and hereby agrees that Lender shall have, and hereby
grants to and creates in favor of Lender, a first security interest under the
UCC subject to no other Liens (other than Permitted Subordinate Liens), in and
to the following, in each case whether now existing or hereafter arising, now
owned or hereafter acquired, wherever located ("Collateral"):
3.1.1 All property listed on Schedule A annexed hereto and all other
furniture, fixtures and equipment and other FF&E described in every Request for
Advance delivered by Borrower pursuant to Section 2.5 of this Agreement and
financed (or refinanced by reimbursement to Borrower) with the proceeds of any
Advance; and
3.1.2 All accessions thereto, substitutions for, and all replacements
of, any and all of the foregoing, and all proceeds of the foregoing, cash and
non-cash, including insurance proceeds.
3.2 Lender Has Rights and Remedies of a Secured Party.
-------------------------------------------------
In addition to all rights and remedies given to Lender by this Agreement,
Lender shall have all the rights and remedies of a secured party under the UCC.
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3.3 Additional Provisions Applicable to the Collateral.
--------------------------------------------------
The parties agree that, at all times during the term of this Agreement, the
following provisions shall be applicable to the Collateral:
3.3.1 Borrower covenants and agrees that it will keep accurate and
complete books and records concerning the Collateral owned or acquired by it in
accordance with GAAP.
3.3.2 Lender shall have the right to review the books and records of
Borrower pertaining to the Collateral and to copy the same and to make excerpts
therefrom, all at such reasonable times upon reasonable notice and as often as
Lender may reasonably request, and, so long as there is no continuing Default or
Event of Default, the cost of performing the same shall be borne by Lender.
3.3.3 Borrower shall maintain and keep its principal place of
business and its chief executive office at the address set forth at the
beginning of this Agreement, and at no other location without giving Lender at
least thirty (30) days prior written notice of any move. Borrower shall
maintain and keep its records concerning the Collateral at such address and at
no other location without giving Lender at least thirty (30) days prior written
notice of any move. Borrower shall keep all Collateral only at the Premises
with respect to which the Advance was requested. Borrower may not move the
Collateral without the prior written consent of Lender.
3.3.4 Except for Liens granted to Lender and Permitted Subordinate
Liens covered by the Subordination Agreements, Borrower shall not sell, lease,
transfer or otherwise dispose of or encumber any of the Collateral.
3.3.5 Borrower shall cause the Collateral to be maintained and
preserved in the same condition, repair and working order as when new, ordinary
wear and tear excepted, and shall promptly make or cause to be made all repairs,
replacements and other improvements in connection therewith which are necessary
or desirable to that end.
3.4 Certain Covenants.
-----------------
Borrower covenants and agrees with Lender for the benefit of Lender that:
3.4.1 Borrower has and will have good and merchantable title to all
of its assets, including the Collateral, in each case as from time to time owned
or acquired by it, and shall keep the Collateral free and clear of all Liens,
other than Liens granted to Lender hereunder and Permitted Subordinate Liens
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<PAGE>
covered by the Subordination Agreements. Borrower will defend such title against
the claims and demands of all Persons whomsoever.
3.4.2 Borrower will faithfully preserve and protect Lender's Liens in
the Collateral and will, at its own cost and expense, cause said Liens to be
perfected and continued perfected, and for such purpose Borrower will from time
to time at the request of Lender and at the expense of Borrower, make, execute,
acknowledge and deliver, and file or record, or cause to be filed or recorded,
in the proper filing places, all such instruments, documents and notices,
including without limitation financing statements and continuation statements,
as Lender may deem necessary or advisable from time to time in order to perfect
and continue perfected said security interest. Borrower will do all such other
acts and things and make, execute, acknowledge and deliver all such other
instruments and documents, including without limitation further security
agreements, pledges, endorsements, assignments and notices, as Lender may deem
necessary or advisable from time to time in order to perfect and preserve the
priority of said Liens as a first Lien on and security interest in the
Collateral prior to the rights of all other Persons therein or thereto.
3.4.3 Borrower will not, without the prior written consent of Lender,
(i) borrow or permit any Person to borrow against the Collateral other than the
Loan to Borrower from Lender pursuant to this Agreement and the obligations
represented by the Permitted Subordinate Liens; (ii) create, incur, assume or
suffer to exist any Lien with respect to any of the Collateral (other than
Permitted Subordinate Liens covered by the Subordination Agreements); (iii)
permit any levy or attachment to be made against any of the Collateral except
any levy or attachment relating to this Agreement; or (iv) permit any financing
statement to be on file with respect to any of the Collateral, except financing
statements in favor of Lender and those relating to Permitted Subordinate Liens
covered by the Subordination Agreements.
3.4.4 Risk of loss of, damage to or destruction of the Collateral is
and shall remain upon Borrower. Borrower will insure the Collateral as provided
in Section 6.3 of this Agreement. If Borrower fails to effect and keep in full
force and effect such insurance or fails to pay the premiums thereon when due,
Lender may do so for the account of Borrower and add the cost thereof to the
Obligations and the same shall be payable to Lender on demand. Borrower hereby
assigns and sets over unto Lender for the benefit of Lender all moneys which may
become payable on account of such insurance, including without limitation any
return of unearned premiums which may be due upon cancellation of any such
insurance, and directs the insurers to pay Lender any amount so due. Lender,
its officers, employees
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and authorized agents and its successors and assigns, are hereby appointed
attorneys-in-fact of Borrower, for the purpose of endorsing any draft or check
which may be payable to Borrower in order to collect the proceeds of such
insurance or any return of unearned premiums. Such appointment is irrevocable
and coupled with an interest. The proceeds of insurance shall be applied to
reduction of the Obligations in any order Lender may choose or, in Lender's sole
discretion, to the repair or replacement of the Collateral, or any part thereof,
in which case Lender may impose such conditions on the disbursement of the
proceeds as Lender in its sole discretion deems appropriate.
3.4.5 Upon the occurrence and during the continuation or existence of
any Event of Default, Borrower shall promptly upon demand by Lender assemble the
Collateral and make it available to Lender at the place or places to be
designated by Lender. The right of Lender to have the Collateral assembled and
made available to it is of the essence of this Agreement and Lender may, at its
election, enforce such right in equity for specific performance.
3.4.6 Lender shall have no duty as to the collection or protection of
the Collateral or any part thereof or any income thereon, or as to the
preservation of any rights pertaining thereto, beyond exercising reasonable care
in the custody of any Collateral actually in the possession of Lender. Lender
shall be deemed to have exercised reasonable care in the custody and
preservation of such of the Collateral as may be in its possession if it takes
such action for that purpose as Borrower shall request in writing, provided that
such requested action shall not, in the judgment of Lender, impair Lender's
security interest in the Collateral or its rights in, or the value of, the
Collateral, and provided further that such written request is received by Lender
in sufficient time to permit it to take the requested action.
ARTICLE 4. CONDITIONS OF CLOSING
The obligation of Lender to make the Loan and each Advance hereunder is
subject to the accuracy, as of the date hereof and each Disbursement Date, of
the representations and warranties herein contained, to the performance by
Borrower of its obligations to be performed hereunder on or before such
Disbursement Date and to the fulfillment (to the satisfaction of Lender and its
counsel) of the following further conditions. If all conditions contained herein
are not so satisfied by the Outside Date, Lender shall have no obligation
whatsoever to make any Advance and shall have no liability for its refusal to do
so.
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<PAGE>
4.1 Representations and Warranties.
------------------------------
The representations and warranties contained in Article 5 hereof shall be
true on the Closing Date and on and as of each Disbursement Date with the same
effect as if made on and as of such date.
4.2 Corporate Action.
----------------
On the Closing Date, Borrower shall deliver to Lender a certificate in form
and substance satisfactory to Lender, dated the Closing Date, signed by a duly
authorized officer of Borrower, certifying as to (a) true copies of the
Constituent Documents of Borrower, all as in effect on such date, (b) true
copies of all action taken by Borrower relative to this Agreement, the Note and
the other Loan Documents, and (c) the names, true signatures and incumbency of
the officer or officers of Borrower authorized to execute and deliver this
Agreement, the Note and the other Loan Documents on behalf of Borrower (and
Lender may conclusively rely on such certificate unless and until a later
certificate revising the prior certificate has been furnished to Lender).
Borrower shall also deliver to Lender good standing certificates for Borrower
issued by the Secretary of State of its State of incorporation and each state in
which it is required by Law to be qualified.
4.3 Opinion of Counsel.
------------------
On the Closing Date, Lender shall have received a favorable written opinion
of counsel for Borrower, dated the Closing Date and in form and substance
reasonably satisfactory to Lender and its counsel, Winick & Rich, P.C.
4.4 No Change of Law or Facts.
-------------------------
No change shall have occurred after the date of execution and delivery of
this Agreement in applicable Law or regulations thereunder or interpretations
thereof by appropriate regulatory authorities which, in the opinion of Lender or
its counsel, would make it illegal for Lender to acquire the Note, make an
Advance or the Loan, or otherwise to participate in the Loan, nor shall any
facts come to the attention of Lender, concerning Borrower, its business or
financial condition which, in the opinion of Lender would increase the risk to
Lender of repayment of the Loan by Borrower.
4.5 Documents.
---------
The following documents shall have been duly authorized, executed and
delivered by the respective party or parties thereto, shall be in form and
substance satisfactory to Lender and its counsel and shall be in full force and
effect on the
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<PAGE>
Closing Date and on each Disbursement Date, and an executed counterpart of each
thereof shall have been delivered to Lender and its counsel:
4.5.1 this Agreement;
4.5.2 the Note;
4.5.3 a Request for Advance completed in accordance herewith;
4.5.4 insurance certificates or policies of insurance evidencing the
coverages required by Section 6.3 hereof;
4.5.5 an agreement with respect to certain environmental matters (the
"Environmental Certificate with Representations, Covenants and
Warranties"); and
4.5.6 other Loan Documents, if any.
4.6 Collateral.
----------
With each Request for Advance, Borrower shall provide to Lender a complete
description of each item of FF&E the cost of which will be paid with the
proceeds of the Advance (either by paying the Supplier or reimbursing Borrower
therefrom), together with all other agreements, instruments, documents and other
information required to be delivered pursuant to Section 2.5 hereof, including,
without limitation, evidence, in form and substance satisfactory to Lender in
its sole discretion, that Borrower owns legal title to the FF&E, free and clear
of all Liens, except for Permitted Subordinate Liens covered by the
Subordination Agreements. Lender may reject any such item of FF&E (other than
those items listed on Schedule A), in which case, Borrower may substitute other
FF&E acceptable to Lender or reduce the amount of the Advance requested, subject
to Section 2.5(b) hereof. Each Item of FF&E which is substantially similar in
all respects (including, without limitation, quality and cost) to the FF&E
located at the Hopewell Store shall likewise be acceptable to Lender.
4.7 Financing Statements.
--------------------
On the Closing Date and prior to each Advance, UCC financing statements
covering the security interest created by this Agreement in the Collateral and
all FF&E described in each Request for Advance shall have been duly filed in the
office of the Secretary of State of the State where the Collateral is located
(i.e. New York) and in all other places as, in the opinion of Lender, or its
counsel, are necessary or desirable to
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<PAGE>
perfect such Liens, and Lender shall have been granted a perfected first Lien
covering the Collateral.
4.8 Licenses and Permits.
--------------------
All appropriate action shall have been taken prior to the Closing Date in
order to permit consummation of the transactions contemplated herein and hereby
and enforcement of all of the terms hereof and thereof, and all licenses,
permits, waivers, exemptions, authorizations and approvals required (or, in the
opinion of Lender or its counsel, advisable) to be in effect on the Closing Date
shall have been issued and shall be in full force and effect on such date, and
copies thereof shall have been delivered to Lender.
4.9 Credit Facility Loan Documents.
------------------------------
Borrower shall have furnished Lender with a copy of all of the Credit
Facility Loan Documents, which shall be in form and substance satisfactory to
Lender and Borrower and its affiliates shall be in compliance with all of the
terms thereof.
4.10 Additional Conditions for Advance.
---------------------------------
Prior to Lender making any Advance to be used in connection with the
Peekskill Store, Borrower shall have furnished to Lender (i) the comparative
first quarter 1996 and 1997 financial statements for Borrower, and (ii) the
comparative current annual financial statement and interim operating results for
the Peekskill Store, all of which shall be satisfactory to Lender in form and
substance.
4.11 Subordination Agreements. Each of Bankers Trust Company and each
------------------------
landlord of the Premises shall have entered into a Subordination Agreement with
and in form and substance satisfactory to the Lender, which shall be in full
force and effect.
4.12 Additional Conditions.
---------------------
4.12.1 Lender shall have received all other agreements, instruments,
financing statements, certificates, waivers, searches, releases, terminations,
reports, confirmations, agreements with Suppliers and contractors, corporate or
other action, opinion letters, copies of acquisition documents, copies of all
leases, evidence of delivery and acceptance of the Collateral, evidence of
performance of work, evidence of payment of obligations, evidence of ownership
of the Collateral and other documents as Lender or its counsel shall have
reasonably requested (each in form and substance reasonably satisfactory to
Lender and its counsel), including, without limitation, certificates of
incorporation and by-laws, UCC-1
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<PAGE>
financing statements, lien waivers, credit references, consents, approvals,
authorization to date documents, casualty and liability insurance policies and
endorsements related to such insurance, satisfactory environmental audits and
other environmental information and certificates, appraisals, surveys and
financial statements and other financial information.
[4.12.2 Lender shall have completed its environmental due diligence.]
4.12.3 There shall have been no material adverse change in the
business, operations or financial condition of Borrower or in the Collateral.
4.12.4 Prior to and after giving effect to the requested Advance or
the Loan, there shall be no continuing Default or Event of Default hereunder or
under the other Loan Documents.
4.12.5 All legal matters incident to the Loan shall be satisfactory
to Lender and its counsel.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender that:
5.1 Organization and Qualification.
------------------------------
Borrower is duly organized, validly existing and in good standing as a
corporation under the Laws of the State of New York with full power and
authority to own its properties and to transact its business as now transacted
and as contemplated to be transacted. Borrower is qualified and in good
standing to transact business in each State where the ownership of its
properties or the transaction of its business requires such qualification.
5.2 Authority and Authorization.
---------------------------
Borrower has full power and authority to execute, deliver and carry out the
provisions of this Agreement, the Note and the other Loan Documents to which it
is a party, to borrow hereunder and under the other Loan Documents and to create
the Liens provided for herein, and to perform its obligations hereunder and
thereunder, and all such action has been duly and validly authorized by all
necessary proceedings on its part.
5.3 Execution and Binding Effect.
----------------------------
This Agreement, the Note and the other Loan Documents to which
Borrower is a party have been duly and validly executed and
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<PAGE>
delivered by Borrower and constitute the legal, valid and binding obligation of
Borrower enforceable in accordance with their respective terms.
5.4 Authorizations and Filings
--------------------------
Except for the filing of UCC financing statements, no authorization,
consent, approval, license, exemption or other action by, and no registration,
qualification, designation, declaration or filing with, any governmental
authority is or will be necessary or advisable in connection with the execution
and delivery of this Agreement, the Note, the other Loan Documents or the
consummation by Borrower of the transactions herein and therein contemplated, or
performance by Borrower of or compliance by Borrower with, the terms and
conditions hereof or thereof.
5.5 Absence of Conflicts.
--------------------
Neither the execution and delivery of this Agreement, the Note or the other
Loan Documents, nor consummation of the transactions herein or therein
contemplated nor performance of, or compliance with the terms and conditions
hereof or thereof will (a) result in any violation or breach of (i) the
provisions of Borrower's Constituent Documents, or (ii) any Law, or the order,
rule or regulation of any court or governmental agency or body having
jurisdiction over Borrower, or any of its properties, or (iii) any agreement,
bond, note, instrument or indenture to which Borrower is a party or pursuant to
which any of its properties are affected, or (b) result in the creation or
imposition of any Lien upon any property (now owned or hereafter acquired) of
Borrower, except for the Lien created by this Agreement.
5.6 Financial Statements.
--------------------
Borrower has heretofore furnished to Lender certain financial statements
and related financial information ("Financial Statements"). Such Financial
Statements (including the notes thereto) present fairly the financial condition
of Borrower as of the dates of the balance sheets contained therein, and the
results of its operations for the periods then ended, all in conformity with
GAAP on a basis consistent with that of Financial Statements for corresponding
prior periods. Except as disclosed therein, Borrower has no material contingent
liabilities (including liabilities for taxes), unusual forward or long-term
commitments or unrealized or anticipated losses from unfavorable commitments.
5.7 No Defaults.
-----------
There is no Default under the Loan Documents.
-20-
<PAGE>
5.8 Litigation.
----------
There is no pending or threatened claim or proceeding by or before any
court or governmental agency against or affecting Borrower (including, without
limitation, the proceedings listed on Schedule 5.8 annexed hereto) which, if
adversely decided would have a material adverse effect on the business,
operations or financial condition of Borrower or on the ability of Borrower to
perform its obligations under this Agreement, the Note or the other Loan
Documents or on the Collateral.
5.9 Title to FF&E. Borrower has good title to all property listed on
-------------
Schedule A annexed hereto subject to no Lien other than the Liens held by Lender
which will be first perfect Liens covering such property and the Permitted
Subordinate Liens covered by the Subordination Agreements. At the time each
Advance is made, Borrower will have good title to the FF&E described on the
applicable Request for Advance, or will acquire good title thereto upon the
disbursement of the proceeds of the Advance, subject to no Lien covering the
FF&E other than the Liens held by Lender which will be first perfected Liens
covering the FF&E and the Permitted Subordinate Liens covered by the
Subordination Agreements.
5.10 Title to Other Collateral.
-------------------------
Borrower has good title to all of its assets, including, without
limitation, the Collateral and all assets reflected in the most recent balance
sheet referred to in Section 5.6 hereof, free and clear of all Liens covering
the Collateral, other than the Liens granted hereunder to Lender covering the
Collateral, which are and will at all times be perfected first Liens covering
the Collateral and Permitted Subordinate Liens covered by the Subordination
Agreements.
5.11 Taxes.
-----
All tax returns required to be filed by Borrower have been properly
prepared, executed and filed. All taxes, assessments, fees and other
governmental charges upon Borrower or upon any of its properties, incomes, sales
or franchises which are due and payable have been paid.
5.12 Financial Accounting Practices.
------------------------------
Borrower makes and keeps books, records and accounts which, in reasonable
detail, accurately and fairly reflect Borrower's transactions and dispositions
of its assets.
-21-
<PAGE>
5.13 Power To Carry On Business.
--------------------------
Borrower has all requisite power and authority to own and operate its
properties and to carry on its business as now conducted and as presently
planned to be conducted.
5.14 No Material Adverse Change.
--------------------------
Since the date of the Financial Statements referred to in Section 5.6,
there has been no material adverse change in the business, operations or
financial condition of Borrower.
5.15 Compliance with Laws.
--------------------
Borrower is not in violation of any Law, except for violations which in the
aggregate do not have a material adverse effect on the business, operations or
financial condition of Borrower or on the Collateral.
5.16 Compliance with Agreements.
-------------------------
Borrower is not in default under any agreement, bond, note, indenture or
contract (including, without limitation, the Credit Facility Loan Documents),
except for defaults which in the aggregate do not have a material adverse effect
on the business, operation or financial condition of Borrower or on the
Collateral.
5.17 Bankruptcy.
----------
Borrower has not made or contemplated an assignment for the benefit of
creditors. No application or petition has been filed for the appointment of a
custodian, trustee, receiver or agent to take possession of the Collateral, or
to take possession of any of the other properties or assets of Borrower.
Borrower is generally paying its debts as such debts become due. Borrower is
not "insolvent" as that term is defined in Section 101(26) of the "Bankruptcy
Code" (Title 11 of the United States Code, 11 U.S.C. Section 101, et seq.) or
would be insolvent after giving effect to the Loan and the transactions
contemplated by the Loan Documents. Borrower has not filed a petition with the
Bankruptcy Court under the Bankruptcy Code, or commenced any proceeding relating
to Borrower under any bankruptcy or reorganization statute or under any
arrangement, insolvency, readjustment of debt, dissolution or liquidation law of
any jurisdiction. No petition or application of the type described above has
been filed or commenced against Borrower, in which (i) Borrower, by any act, has
indicated or intends to indicate its approval thereof, consent thereto, or
acquiescence therein; (ii) an order has been or is expected to be entered
appointing any such custodian, trustee, receiver or agent, adjudicating Borrower
bankrupt or insolvent, or approving such petition or application
-22-
<PAGE>
in any such proceeding; (iii) the Bankruptcy Court has ordered or is expected to
order relief against Borrower under the Bankruptcy Code; or (iv) such petition
or application was not dismissed within ninety (90) days of such filing or
commencement.
5.18 Accurate and Complete Disclosure.
--------------------------------
No representation or warranty made by Borrower in this Agreement and no
statement made by Borrower in the Financial Statements furnished pursuant to
Section 5.6 hereof or otherwise, or any certificate, report, exhibit or document
furnished by Borrower to Lender pursuant to or in connection with this Agreement
or the Loan is false or misleading in any material respect (including by
omission of material information necessary to make such representation, warranty
or statement not misleading).
5.19 Regulations G and U.
-------------------
Borrower is not engaged in the business of extending credit for the purpose
of purchasing or carrying "margin stock", as such term is used in Regulations G
or U promulgated by the Board of Governors of the Federal Reserve System as
amended from time to time. No part of the proceeds of the Loan will be used to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying any "margin stock". Borrower does not own any "margin
stock".
5.20 Perfection.
----------
Except for the filings under Article 9 of the UCC specified in Sections 4.6
and 4.7 hereof (and continuation statements at periodic intervals), no further
filing or recording is necessary under the UCC or under any other Laws of any
jurisdiction, in order to perfect in all applicable jurisdictions the Liens of
Lender in the Collateral. Upon such filings, Lender will be granted a perfected
first Lien covering the Collateral. There are no other Liens covering the
Collateral, except for Permitted Subordinate Liens covered by the Subordination
Agreements.
5.21 Place of Business
-----------------
Both the place of business (or chief executive office if there is more
than one place of business) of Borrower and the place where it keeps its
corporate records concerning the Collateral and all of its interest in, to and
under this Agreement are located at the address set forth at the beginning of
this Agreement, but can be changed pursuant to Section 6.9 hereof.
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<PAGE>
5.22 Location of Collateral.
----------------------
For all purposes, including, without limitation, perfection of security
interests therein under Article 9 of the UCC, the Collateral is deemed located
and at all times shall be located at the Premises with respect to which the
Advance was requested.
5.23 Name Changes, Mergers, Acquisitions. Borrower has not within the
-----------------------------------
six-year period immediately preceding the Closing Date, changed its name, been
the surviving entity of a merger or consolidation, or acquired all or
substantially all of the assets of any Person.
ARTICLE 6. COVENANTS
Borrower covenants that from and after the date hereof and until payment in
full of the Note and interest thereon and all other amounts due from Borrower
hereunder or under the Note or the other Loan Documents, unless Lender shall
otherwise consent in writing:
6.1 Reporting and Information Requirements.
--------------------------------------
6.1.1 Annual Financial Statements. As soon as practicable, and in
---------------------------
any event within one hundred twenty (120) days after the close of each fiscal
year of Borrower, Borrower shall furnish to Lender its annual audit reports for
such year for Borrower, including audited statements of income, retained
earnings and changes in financial position of Borrower for such fiscal year and
audited balance sheets of Borrower as of the close of such fiscal year, and
notes to each, all in reasonable detail, setting forth in comparative form the
corresponding figures for the preceding fiscal year where such presentation is
appropriate under GAAP, certified without qualification by independent certified
public accountants of recognized standing selected by Borrower and satisfactory
to Lender, together with (or included in such certification) a written statement
of such accountants substantially to the effect that (i) such accountants
examined such financial statements in accordance with generally accepted
auditing standards and accordingly made such tests of accounting records and
such other auditing procedures as they considered necessary in the circumstances
and (ii) in the opinion of such accountants such financial statements present
fairly the financial position of Borrower as of the end of such fiscal year and
the results of its operations and the changes in its financial position for the
fiscal year then ended, in conformity with GAAP applied on a basis consistent
with that of the preceding fiscal year (except for changes in application in
which such accountants concur). Borrower shall also furnish to Lender its
annual 10K within one hundred twenty (120) days after the close of each fiscal
year of Borrower.
-24-
<PAGE>
6.l.2 Quarterly Financial Statements. Within ninety (90) days after
------------------------------
the end of each of the first three fiscal quarters of each fiscal year, Borrower
shall furnish to Lender a copy of its interim financial statements of the type
described in Section 6.l.l above, certified by an Executive Officer of Borrower
or if Borrower chooses, audited, as set forth in Section 6.1.1 above, and
certified by an Executive Officer of Borrower. Borrower shall also furnish to
Lender its quarterly l0Q within ninety (90) days after the close of each of the
first three fiscal quarters of each fiscal year of Borrower.
6.1.3 Further Requests. Borrower will promptly furnish to Lender
----------------
such other information (financial or otherwise) concerning Borrower, its assets
or the Collateral in such form as Lender may reasonably request.
6.1.4 Compliance Certificates. At the same time Borrower delivers
-----------------------
the financial statements required under the provisions of Sections 6.l.l and
6.1.2, Borrower shall furnish to Lender a certificate of an Executive Officer to
the effect that no Default or Event of Default exists, or, if such cannot be so
certified, specifying in reasonable detail the exceptions, if any, to such
statement.
6.1.5 Notice of Event of Default. Promptly upon becoming aware of
--------------------------
any Default or Event of Default, Borrower shall give Lender notice thereof,
together with a written statement of a Chief Executive Officer of Borrower
setting forth the details thereof and any action with respect thereto taken or
contemplated to be taken by Borrower.
6.1.6 Notice of Material Adverse Change. Promptly upon becoming
---------------------------------
aware thereof, Borrower shall give Lender written notice about any material
adverse change in the business, operations or financial condition of Borrower or
on the Collateral or on the ability of Borrower to perform its obligations under
this Agreement, the Note or the other Loan Documents.
6.l.7 Notice of Material Proceedings. Promptly upon becoming aware
------------------------------
thereof Borrower shall give Lender written notice of the commencement, existence
or threat of any proceeding by or before any court or administrative agency
against or affecting Borrower or the Collateral which, if adversely decided,
would have a material adverse effect on the business, operations or financial
condition of Borrower or on the ability of Borrower to perform its obligations
under this Agreement, the Note, the other Loan Documents or on the Collateral.
6.l.8 Visitation. Borrower shall permit such persons as Lender may
----------
designate to visit and inspect the Collateral and to examine the books and
records of Borrower and take copies and extracts therefrom, and to discuss its
affairs with officers of
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<PAGE>
Borrower and its independent accountants, at such reasonable times and as often
as Lender may reasonably request, and, so long as there is no continuing Default
or Event of Default, the cost of performing the above shall be borne by Lender.
6.1.9 Other Deliveries. Promptly upon their becoming available,
----------------
Borrower shall furnish to Lender, copies of all registration statements and any
amendments and supplements thereto and any regular and periodic reports filed by
Borrower (or any affiliate of Borrower) with any securities exchange or with the
Securities and Exchange Commission or any governmental authority succeeding to
any or all of the functions of said commissions and all letters of comment or
correspondence sent to Borrower or any affiliate of Borrower from such exchanges
or to such exchanges from or relating to Borrower.
6.2 Preservation of Existence and Franchises.
----------------------------------------
6.2.1 Borrower shall not enter into any merger, reorganization or
consolidation, or wind up, liquidate or dissolve, nor agree to do any of the
foregoing; provided, however, that Borrower may merge or consolidate with or
into another entity or another entity may merge or consolidate with or into
Borrower, so long as (a) Borrower shall give Lender not less than thirty (30)
days prior written notice of any proposed merger or consolidation, (b) on the
date of receipt of the notice by Lender and on the date of the proposed merger
or consolidation, there is then no Default or Event of Default, (c) after giving
effect to any proposed merger or consolidation, the Tangible Net Worth (as
hereinafter defined) of the merged or consolidated entity is not less than the
Tangible Net Worth of Borrower immediately preceding such merger or
consolidation, and (d) Borrower shall have delivered to Lender such financial
and other information with respect to the merger or consolidation and the
parties thereto as Lender shall have reasonably requested. "Tangible Net Worth"
as at a particular date, means (a) the total assets of such entity, excluding
intangible assets, such as goodwill, patents, copyrights and trademarks, minus
(b) the total liabilities of such entity, all as determined in accordance with
GAAP consistently applied. In the event that Borrower fails to comply with the
provisions of this Section 6.2 or Lender does not consent to any such merger or
consolidation, Borrower may prepay the outstanding principal balance of the Loan
and all other Obligations without any prepayment premium, including the
Prepayment Fee.
6.2.2 Borrower will qualify to do business and will remain in good
standing under the laws of each jurisdiction in which it is required to be
qualified by reason of the location of the Premises owned or leased by it or the
conduct of its business at the Premises.
-26-
<PAGE>
6.2.3 Borrower shall do, or cause to be done, all things reasonably
necessary to preserve and keep in full force and effect its corporate existence
and all material permits, licenses, rights and privileges necessary or
appropriate for the conducting of its business as now and hereafter conducted.
Borrower shall not change its name, except upon fifteen (15) days prior written
notice to Lender.
6.2.4 Borrower shall continue to engage in substantially the same
kind of business and shall not make any material change in its business or in
the nature of its operations or engage in any substantially unrelated line of
business. In the event that Borrower fails to comply with the provisions of
this Section 6.2.4 or Lender does not consent to any such change in Borrower's
business, Borrower may prepay the outstanding principal balance of the Loan and
all other Obligations, without any prepayment premium, including the Prepayment
Fee.
6.2.5 Borrower will comply with all Laws relative to the conduct of
its business or the location of the properties owned or leased by it, the non-
compliance with which could have a material adverse effect on the business,
operations, assets or financial or other condition of Borrower, as contemplated
hereby, or the ability of Borrower to perform its Obligations under this
Agreement, the Note or the other Loan Documents and will obtain or cause to be
obtained as promptly as possible any material permit, license, consent,
privilege or approval of any governmental authority and make any filing or
registration therewith which at the time shall be required with respect to the
performance of its Obligations under this Agreement, the Note or the other Loan
Documents or for the operation of its business as presently conducted or as
contemplated by it.
6.2.6 Borrower shall not (a) convey, assign, sell, mortgage,
encumber, pledge, hypothecate, grant a security interest in, grant options with
respect to, lease or otherwise dispose of all or any part of any legal or
beneficial interest in any part or all of the Collateral or any interest
therein, except as permitted herein and for Permitted Subordinate Liens covered
by the Subordination Agreements; or (b) except as otherwise permitted herein,
convey, assign, transfer or otherwise dispose of all or substantially all of its
assets (other than the Collateral, the prohibition on transfer of which is
governed by subparagraph (a) above). In the event Borrower fails to comply with
the provisions of this Secton 6.2.6(b) or Lender does not consent to any such
disposition, Borrower may prepay the outstanding principal balance of the Loan
and all other Obligations without any prepayment premium, including the
Prepayment Fee.
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<PAGE>
6.3 Insurance.
---------
Borrower shall, at its own expense, maintain and deliver evidence to Lender
of such insurance required by Lender, written by insurers and in amounts
satisfactory to Lender.
6.4 Payment of Taxes and Other Potential Charges.
--------------------------------------------
Borrower shall pay or discharge
6.4.1 all taxes, assessments and other governmental charges or levies
imposed upon it or any of its properties, including the Collateral, or income
(including such as may arise under ERISA or any similar provision of law), on or
prior to the date on which penalties attach thereto; and
6.4.2 all lawful claims of materialmen, mechanics, carriers,
warehousemen, landlords and other like Persons which, if unpaid, might result in
the creation of a Lien upon any such property, on or prior to the date when due;
provided, that unless and until foreclosure, distraint, levy, sale or similar
- --------
proceedings shall have been commenced and judgment against Borrower or its
properties shall have been entered, Borrower need not pay or discharge any such
tax, assessment, charge, levy, claim or current liability so long as (i) the
validity thereof is contested in good faith and by appropriate proceedings
diligently pursued, (ii) in Lender's sole judgment there is no reasonably
foreseeable risk of forfeiture of the Collateral, and (iii) such reserves or
other appropriate provisions as may be required by GAAP shall have been made
therefor, and so long as such failure to pay or discharge does not have a
material adverse effect on the business, operations or financial condition of
Borrower or the Collateral.
6.5 Financial Accounting Practices.
------------------------------
Borrower shall make and keep books, records and accounts which, in
reasonable detail, accurately and fairly reflect its business, including all
transactions and dispositions of its assets, all prepared in accordance with
GAAP. Lender and/or its agents shall have the right to review the books and
records of Borrower and to photocopy the same and to make excerpts therefrom, at
all reasonable times and upon reasonable notice and as often as Lender may
reasonably request, and, so long as there is no continuing Default or Event of
Default, the cost of performing the same shall be borne by Lender.
6.6 Compliance with Laws.
--------------------
Borrower shall comply with all applicable Laws in all respects, provided,
--------
that Borrower shall not be deemed to be in
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violation of this Section 6.6 as a result of any failures to comply which would
not result in fines, penalties, injunctive relief or other civil or criminal
liabilities which, in the aggregate, would not materially affect the business or
operations of Borrower or the ability of Borrower to perform its obligations
under this Agreement, the Note or the other Loan Documents or the Collateral.
6.7 Material Obligations.
--------------------
Borrower shall pay and satisfy, when due, all material liabilities and
obligations with respect to the Premises and the Stores, including, without
limitation, all obligations under all leases for the Premises; provided, that
--------
unless and until proceedings shall have been commenced with respect thereto and
judgment against Borrower or its properties shall have been entered in
connection therewith, Borrower need not pay any such liability or obligation so
long as (i) the validity thereof is contested in good faith and by appropriate
proceedings diligently pursued, (ii) in Lender's sole judgment there is no
reasonably foreseeable risk of forfeiture of the Collateral, and (iii) such
reserves or other appropriate provisions as may be required by GAAP shall have
been made therefor, and so long as such failure to pay does not have a material
adverse effect on the business, operations or financial condition of Borrower or
the Collateral.
6.8 Maintenance of Collateral.
-------------------------
Borrower will maintain and preserve the Collateral in good condition,
repair and working order, promptly repairing, replacing or rebuilding any part
of the Collateral which may be destroyed by any casualty, or become damaged,
worn or dilapidated.
6.9 Maintenance of Principal Place of Business.
------------------------------------------
Borrower shall maintain and keep its principal place of business and chief
executive office at the address set forth at the beginning of this Agreement,
and at no other location without giving Lender at least thirty (30) days prior
written notice of any move. Borrower shall maintain and keep its records at
such address and at no other location without giving Lender at least thirty (30)
days prior written notice of any move.
6.10 Amendment to Constituent Documents.
----------------------------------
Borrower shall not amend or modify any of its Constituent Documents in any
respect which could have a material adverse effect on the Collateral or
Borrower's ability to satisfy the Obligations.
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6.11 Satisfaction of Certain Obligations.
-----------------------------------
In the event Borrower fails to make any payment or do any act as herein
provided (including, but not limited to, maintaining any insurance required to
be maintained under the Loan Documents or paying all taxes in accordance with
the terms hereof) or there shall be a claim or Lien asserted or filed against
the Collateral (other than the Permitted Subordinate Liens), Lender may, but
shall not be obligated to (and without releasing Borrower from any obligation
hereunder), make all such payments and perform all such acts or otherwise
satisfy such obligations. All sums paid by Lender in respect thereof and all
costs, fees and expenses, including reasonable attorneys' fees, court costs,
expenses and other charges relating thereto, which are incurred by Lender on
account thereof, shall bear interest at the Default Rate, shall be payable on
demand by Borrower to Lender, and shall be additional Obligations hereunder
secured by the Collateral.
6.12 Further Assurances
------------------
Borrower shall cause to be done, executed, acknowledged and delivered all
and every such further act, conveyance and assurance as Lender shall reasonably
require for accomplishing the purposes of this Agreement, the Note and the other
Loan Documents. Borrower will defend and protect its title with respect to the
Collateral and will indemnify Lender with respect thereto. Any payment in
respect of such indemnity shall be made directly to Lender on demand in
immediately available funds. Forthwith after notice from Lender, Borrower shall
promptly, without further consideration, execute, acknowledge and deliver such
further instruments and documents and will take such other actions as Lender may
deem necessary or advisable from time to time to ensure the enforceability or
priority of the Liens granted hereby, or otherwise to confirm and carry out the
intent and purpose of this Agreement.
ARTICLE 7. DEFAULTS AND REMEDIES
7.1 Events of Default.
-----------------
The occurrence of one or more of the following described events is an Event
of Default:
7.1.1 Borrower fails to make any payment of principal of or interest
on the Note, within ten (10) days after such payment is or shall become due; or
7.1.2 Borrower fails to perform or observe any of its covenants or
agreements contained herein or in any other Loan Documents which cannot be
cured; or
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<PAGE>
7.1.3 Borrower fails to perform or observe any other covenant or
agreement to be performed or observed by it hereunder or under the other Loan
Documents and such failure continues unremedied for a period of thirty (30) days
after notice thereof shall have been given to Borrower by Lender; or
7.1.4 Borrower voluntarily creates, suffers to exist, incurs or
assumes any Lien, security interest, charge or encumbrance on, or with respect
to, any part of or all the Collateral (other than Liens permitted under this
Agreement), or the Liens held by Lender in and to the Collateral shall cease to
be the first perfected Lien in and to the Collateral; or
7.1.5 Borrower sells, assigns, leases, or otherwise disposes of or
relinquishes possession of, any Collateral, unless replaced in accordance with
Section 6.8 hereof or assigned to a Permitted Assignee pursuant to Section 9.15
hereof or as otherwise permitted in Sections 6.2.1 and 6.2.6 hereof; or
7.1.6 any representation or warranty made by Borrower herein or in
any other Loan Document or in any document or certificate furnished by Borrower
to Lender in connection herewith or therewith at any time proves to have been
incorrect in any material respect when made; or
7.1.7 this Agreement or any Loan Document at any time for any reason
ceases to be in full force and effect or is declared by a court or governmental
agency of competent jurisdiction to be null and void; or
7.1.8 there shall be an event of default which is continuing under
the terms of any agreement, instrument or document with or for the benefit of
Lender which is not a Loan Document or under any other loan, credit facility or
other financial accommodation made by Lender to Borrower, including, without
limitation, all promissory notes, guarantees, equipment leases, security
agreements, mortgages and deeds of trust; or
7.1.9 Borrower is indicted by a governmental authority under any
criminal statute or there is commenced against Borrower a criminal or civil
proceeding pursuant to which the proceedings, penalties or remedies obtained
include forfeiture of any of the Collateral or a material portion of the assets
of Borrower; or
7.1.10 there is a material adverse change in the business, operations
or financial condition of Borrower or in the Collateral; or
7.1.11 a proceeding is instituted seeking a decree or order for
relief in respect of Borrower in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect or for
the appointment of a receiver,
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liquidator, assignee, custodian, trustee, sequestrator (or other similar
official) of Borrower, or for any substantial part of its properties or for the
dissolution, winding-up or liquidation of its affairs or any substantial part of
any of its properties and such proceeding remains undismissed or unstayed for a
period of sixty (60) consecutive days or such court enters a decree or order
granting the relief sought in such proceeding; or
7.1.12 Borrower voluntarily suspends transaction of its business,
commences a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, consents to the entry of an order for
relief in an involuntary case under any such law or consents to the appointment
of or taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of Borrower for any substantial part of
any of its properties, or makes a general assignment for the benefit of
creditors, or takes any action in furtherance of any of the foregoing; or
7.1.13 there shall be a judgment or judgments against Borrower, which
is not covered by insurance, for any amount in excess of $500,000 in the
aggregate, which shall remain unpaid, unstayed on appeal, undischarged, unbonded
or undismissed for a period of thirty (30) days or more; or
7.1.14 Borrower fails, by the Store Tranche Commencement Date, to
execute and deliver to Lender delivery and acceptance receipts in form and
substance reasonably satisfactory to Lender, for all FF&E financed by Lender
with respect thereto; or
7.1.15 Borrower fails to perform or observe any of its covenants or
agreements contained in Section 6.3 hereof or in the letter regarding insurance
requirements delivered by Borrower in connection with the Loan or the Loan
Documents (the "Insurance Letter") or any such insurance shall at any time cease
to be in full force and effect; or
7.1.16 there shall be an "Event of Default" which is continuing under
and as defined in any of the Credit Facility Loan Documents; or
7.1.17 Borrower ceases to operate its business at any of the
Premises.
7.2 Consequences of Event of Default.
--------------------------------
7.2.1 If an Event of Default occurs and is continuing, Lender may, by
notice to Borrower, declare the unpaid principal amount of the Note and interest
accrued thereon and all other Obligations and liabilities of Borrower hereunder
or under the
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Note or the Loan Documents to be immediately due and payable and the same shall
thereupon become and be immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived,
and an action therefor shall immediately accrue. In addition, if an Event of
Default occurs and is continuing prior to a Store Tranche Commencement Date,
Lender may, at its option, terminate and cancel its agreement to make Advances.
7.2.2 In addition, if an Event of Default occurs and is continuing,
Lender shall have all rights and remedies granted herein and in the other Loan
Documents and all rights or remedies available at law (including, without
limitation, the UCC) or equity, whether as a secured party or otherwise
(including specifically those granted by the Uniform Commercial Code as in
effect in the jurisdiction or jurisdictions where the Collateral is located)
and, except as limited by Law, all remedies of Lender (i) shall be cumulative
and concurrent; (ii) may be pursued separately, successively or concurrently
against Borrower or against all or any portion of the Collateral, at the sole
discretion of Lender; (iii) may be exercised as often as occasion therefor shall
arise, it being agreed by Borrower that the exercise or failure to exercise any
rights or remedies shall in no event be construed as a waiver or release thereof
or of any other right, remedy or recourse; and (iv) are intended to be, and
shall be, nonexclusive. To the fullest extent permitted by applicable Law,
Lender may resort to the rights, remedies and recourses set forth herein and any
other security therefor in such order and manner as Lender may elect.
7.2.3 Without limiting any of the foregoing, Borrower agrees that
upon the occurrence and during the continuance of an Event of Default (i) Lender
may, with or without notice and without legal process, enter upon any property
owned, leased or otherwise under the real or apparent control of Borrower or any
agent thereof or any other location where the Collateral may be located and
disassemble, disconnect, render unusable or repossess all or any item of the
Collateral; (ii) written notice mailed to Borrower, as provided in this
Agreement for the giving of notice, shall be reasonable if given ten (10) days
prior to (a) any public sale or (b) the date after which a private sale may be
made; (iii) a sale of the Collateral may be made as a unit or in parcels and for
cash and upon terms; (iv) Lender may buy the Collateral at any public sale and
at any private sale as permitted by the UCC; and (v) such public or private sale
or sales may be held or adjourned from time to time, and Lender shall have the
right to conduct such sale or sales on Borrower's premises (including, without
limitation, the Premises) or elsewhere where the Collateral is located, and
shall have the right to use Borrower's premises without charge for such sale or
sales for such time or times as Lender may determine.
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<PAGE>
ARTICLE 8. EXPENSES AND INDEMNITIES
8.1 Expenses.
--------
Borrower shall promptly reimburse Lender for all reasonable fees, costs
and expenses incurred by Lender in connection with the negotiation, preparation,
execution, delivery, administration, operation and enforcement of each of the
Loan Documents, including, but not limited to, the reasonable attorneys' and
paralegals' fees of in-house and outside counsel, expert witness fees, lien,
title search and insurance fees, appraisal fees, all charges and expenses
incurred in connection with any and all environmental reports and environmental
remediation activities, and all other costs, expenses, taxes and filing or
recording fees payable in connection with the transactions contemplated by this
Agreement, including, without limitation, all such reasonable fees, costs and
expenses as Lender shall incur or for which Lender shall become obligated in
connection with (i) any inspection or verification of the Collateral, (ii) any
proceeding relating to the Loan Documents or the Collateral, (iii) actions taken
with respect to the Collateral and Lender's security interest therein,
including, without limitation, the defense or prosecution of any action
involving Lender and Borrower or any third party, except actions taken by or
against Lender resulting from or arising out of Lender's willful misconduct or
gross negligence, (iv) enforcement of any of Lender's rights and remedies with
respect to the Obligations or Collateral, (v) consultation with Lender's
attorneys and participation in any workout, bankruptcy or other insolvency or
other proceeding involving any Borrower or any affiliate, whether or not suit is
filed, and (vi) any other matters relating to or arising out of the Loan and/or
the Loan Documents.
ARTICLE 9. MISCELLANEOUS
9.1 Further Assurances.
------------------
Borrower shall at any time and from time to time upon the written request
of Lender, execute and deliver such further agreements, instruments and
documents and do such further acts and things as Lender may reasonably request
in order to effect the purposes of this Agreement.
9.2 General Indemnity.
-----------------
Borrower shall indemnify, defend and hold harmless Lender from and
against, and, upon demand, reimburse Lender for, all claims, demands,
liabilities, losses, damages, judgments, penalties, costs and expenses,
including, without limitation, reasonable attorneys' fees and disbursements,
which may be imposed upon, asserted against or incurred or paid by Lender, on
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<PAGE>
account of any act performed or omitted to be performed under this Agreement,
the Note or the other Loan Documents or on account of any transaction arising
out of or in any way connected with the Collateral or this Agreement, the Note
or the other Loan Documents (including, without limitation, any litigation
matter involving claims or alleged claims by or disputes with third parties),
except as a result of the willful misconduct or gross negligence of Lender.
9.3 No Implied Waiver; Cumulative Remedies.
--------------------------------------
No course of dealing and no delay or failure of Lender in exercising any
right, power or privilege under this Agreement, the Note or any of the other
Loan Documents shall affect such right, power or privilege except as and to the
extent that the assertion of any such right, power or privilege shall be barred
by an applicable statute of limitations; nor shall any single or partial
exercise thereof or any abandonment or discontinuance of steps to enforce such a
right, power or privilege preclude any further exercise thereof or of any other
right, power or privilege. The rights and remedies of Lender under this
Agreement, the Note or the other Loan Documents are cumulative and not exclusive
of any rights or remedies which Lender would otherwise have.
9.4 Taxes.
-----
Borrower agrees to pay or reimburse Lender for any and all stamp, document,
transfer, recording or filing taxes or fees and all similar impositions payable
or hereafter determined by Lender to be payable in connection with this
Agreement, the Note or the other Loan Documents (including but not limited to
those necessary or advisable to record or to ensure the enforceability or
priority of this Agreement, the Note or the other Loan Documents), as determined
by Lender in its sole discretion from time to time, and any other documents,
instruments or transactions pursuant to or in connection herewith, and Borrower
agrees to save Lender harmless from and against any and all present or future
claims or liabilities with respect to or resulting from any delay in paying or
omission to pay any such taxes, fees or similar impositions.
9.5 Time of Essence.
---------------
Time is of the essence for the performance by Borrower of the Obligations
set forth in this Agreement and the other Loan Documents.
9.6 Modifications, Amendments or Waivers.
------------------------------------
Lender and Borrower may from time to time enter into written agreements
amending, modifying or supplementing this Agreement,
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<PAGE>
the Note or the other Loan Documents or changing the rights of Lender or
Borrower hereunder or thereunder, and Lender may from time to time grant waivers
or consents to a departure from the due performance of the obligations of
Borrower thereunder. Any such agreement, waiver or consent must be in writing
and shall be effective only to the extent set forth in such writing. In the
case of any such waiver or consent, any Event of Default so waived or consented
to shall be deemed to be cured and not continuing, but no such waiver or consent
shall extend to any subsequent or other Event of Default or impair any right
consequent thereto.
9.7 Holidays.
--------
Except as otherwise provided herein, whenever any payment or action to be
made or taken hereunder or the Note or any other Loan Document shall be stated
to be due on a day which is not a Business Day, such payment or action shall be
made or taken on the next following Business Day (and such day shall be included
in the calculation of interest due), unless such next succeeding Business Day
falls in a different calendar month, in which case payment or action shall be
made or taken on the next preceding Business Day.
9.8 Notices.
-------
9.8.1 Except as otherwise provided herein, all notices and other
communications required under the terms and provisions of this Agreement, the
Note or the other Loan Documents shall be in writing and shall become effective
when delivered by hand or received by overnight courier, telex, facsimile,
telegram or registered first class mail, postage prepaid, addressed as follows:
If to Lender, at:
FINOVA Capital Corporation
95 North Route 17 South
Paramus, New Jersey 07652
Facsimile No. 201-712-3712
Attention: Pamela Marchant
Vice President
with a copy to: Winick & Rich, P.C.
919 Third Avenue
New York, New York 10022
Facsimile No. 212-308-5945
Attention: Michael A. Karpen, Esq.
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<PAGE>
If to Borrower, at:
Big V Supermarkets, Inc.
176 North Main Street
Florida, New York 10921
Facsimile No. 914-651-7048
Attention: Stephen L. Hittman
Vice President - Real Estate
with a copy to: Cole, Schotz, Meisel, Forman & Leonard
Court Plaza North
25 Main Street
Hackensack, New Jersey 07602-0800
Facsimile No. (201) 489-1536
Attention: Harvey A. Miller, Esq.
or at such other address as either party may, from time to time, designate in
writing to the other party hereto.
9.8.2 If any notice is given by telex, facsimile transmission, or
telegram, the party giving such notice shall confirm such notice by a writing
delivered by hand or overnight courier; provided, however, that for all purposes
--------- -------
hereunder, notice shall be deemed effective and received at the time given by
telex, telecopier or telegram or three (3) days after depositing such notice
with the U.S. mail or on the Business Day immediately following delivery of such
notice to an overnight courier.
9.9 Governing Law.
-------------
THIS AGREEMENT, THE NOTE, THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO AND THERETO SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
9.10 Personal Jurisdiction and Service of Process.
--------------------------------------------
BORROWER IRREVOCABLY CONSENTS THAT ANY LEGAL ACTION OR PROCEEDING AGAINST
BORROWER UNDER, ARISING OUT OF, OR IN ANY MANNER RELATING TO THIS AGREEMENT, THE
NOTE OR THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN ANY STATE COURT OF THE STATE
OF NEW YORK LOCATED NEW YORK COUNTY OR IN THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK. BORROWER, BY ITS EXECUTION AND DELIVERY OF
THIS AGREEMENT, EXPRESSLY AND IRREVOCABLY CONSENTS AND SUBMITS TO THE PERSONAL
JURISDICTION OF ANY OF SUCH COURTS IN ANY SUCH ACTION OR PROCEEDING. BORROWER
FURTHER AGREES THAT ANY LEGAL ACTION OR PROCEEDING BORROWER MAY BRING, ARISING
OUT OF OR IN ANY MANNER RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS,
SHALL ONLY BE BROUGHT IN ANY STATE COURT OF THE STATE OF NEW YORK LOCATED IN NEW
YORK COUNTY OR IN
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<PAGE>
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. BORROWER
ALSO IRREVOCABLY CONSENTS TO THE SERVICE OF ANY COMPLAINT, SUMMONS, NOTICE OR
OTHER PROCESS RELATING TO SUCH ACTION OR PROCEEDING BY DELIVERY THEREOF TO
BORROWER IN THE MANNER PROVIDED FOR NOTICES IN THIS AGREEMENT. BORROWER HEREBY
EXPRESSLY AND IRREVOCABLY WAIVES ANY CLAIM OR DEFENSE IN ANY SUCH ACTION OR
PROCEEDING BASED ON ANY ALLEGED LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR
FORUM NON CONVENIENS OR ANY SIMILAR BASIS. BORROWER SHALL NOT BE ENTITLED IN
- ----- --- ----------
ANY SUCH ACTION OR PROCEEDING TO ASSERT ANY DEFENSE GIVEN OR ALLOWED UNDER THE
LAWS OF ANY STATE OTHER THAN THE STATE OF NEW YORK, UNLESS SUCH DEFENSE IS ALSO
GIVEN OR ALLOWED BY THE LAWS OF THE STATE OF NEW YORK. NOTHING HEREIN SHALL
AFFECT OR IMPAIR IN ANY MANNER OR TO ANY EXTENT THE RIGHT OF LENDER TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST BORROWER IN ANY OTHER
JURISDICTION OR TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.
9.11 Waiver of Jury Trial.
--------------------
BORROWER AND LENDER HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO
ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY AGREEMENT, INSTRUMENT
OR DOCUMENT EXECUTED AND DELIVERED IN CONNECTION HEREWITH OR THEREWITH,
INCLUDING THE LOAN DOCUMENTS.
9.12 Severability.
------------
The provisions of this Agreement, the Note and any other Loan Document are
intended to be severable. If any such provision is held invalid or
unenforceable in whole or in part in any jurisdiction, such provision shall, as
to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.
9.13 Prior Understandings.
--------------------
This Agreement and the other Loan Documents supersede all prior
understandings and agreements, whether written or oral, between the parties
hereto relating to the transactions provided for herein or therein.
9.14 Survival.
--------
All representations and warranties of Borrower contained in this Agreement
or any other Loan Document or made in writing in connection herewith or
therewith shall survive the execution and delivery of this Agreement, the Note
and the other Loan Documents, any investigation or inspection by Lender, the
making of the Loan hereunder, the payment of the Note or the expiration of this
Agreement. All covenants and agreements of Borrower
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<PAGE>
contained herein shall continue in full force until payment in full of the
Obligations. Borrower's obligation to pay the principal of and interest on the
Note and all such other Obligations shall be absolute and unconditional under
any and all circumstances.
9.15 Successors and Assigns.
----------------------
This Agreement shall be binding upon and shall inure to the benefit of
Lender and Borrower and their respective successors and permitted assigns,
except that Borrower may not assign, delegate or transfer any of its rights or
obligations hereunder or any interest herein without the written consent of
Lender which Lender may withhold in its absolute discretion. Any actual or
attempted assignment by Borrower without Lender's consent shall be null, void
and of no effect whatsoever. Lender may assign or otherwise transfer any or all
of its rights, title, interests and obligations hereunder and under the Note and
the other Loan Documents in whole or in part. No such assignment shall relieve
Lender of its obligations to make the Loan provided in this Agreement. If Lender
makes such an assignment, the assignee shall have all of the rights of the
Lender and Borrower shall not assert against the assignee any defense,
counterclaims or setoff which Borrower may have against Lender. Except to the
extent otherwise required by its context, the word "Lender" where used in this
Agreement shall mean and include the holder of the Note originally issued to
Lender, and the holder of such Note shall be bound by and have the benefits of
this Agreement to the same extent as if such holder had been a signatory hereto,
except that no assignee shall be deemed to assume any obligation or duty imposed
upon Lender hereunder or the other Loan Documents and Borrower shall look only
to Lender for performance thereof. As used in this Section 9.15, "assign" shall
be deemed to include a pledge, sale of, or grant of a mortgage on, or a security
interest in, any of the Collateral or this Agreement or the other Loan Documents
by Lender and the term "assignee" shall be deemed to refer to the recipient of
such pledge, sale, mortgage or security interest. Notwithstanding anything to
the contrary contained in this Section 9.15, Borrower shall have the right to
assign any Store Tranche to any Permitted Assignee (as hereinafter defined), if
and only if, there is a merger or consolidation which complies with the
provisions of Section 6.2.1 hereof or (a) there is then no Default under the
Loan Documents, (b) Lender has completed its standard due diligence as to the
condition of the Permitted Assignee and its assets and is reasonably satisfied
with such condition, financial, environmental and otherwise, (c) the Permitted
Assignee has agreed to be the "Borrower" under and with respect to the assigned
Store Tranche and to assume Borrower's obligations under the assigned Store
Tranche and the covenants under the Loan Documents and has executed Loan
Documents reasonably satisfactory to Lender, and (d) after giving effect to any
assignment,
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<PAGE>
Borrower's financial condition is not materially adversely changed. "Permitted
Assignee" shall mean any of the following: (i) The Wakefern Food Cooperative;
(ii) any entity arising from Borrower being restructured as a publicly held
company; or (iii) any entity controlling, controlled by or under common control
with Borrower ("control" meaning direct or indirect ownership of at least fifty
percent (50%) of the aggregate issued and outstanding beneficial interest in the
controlled entity).
9.16 Counterparts.
------------
This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts each of which, when so
executed and delivered by the parties, constituting an original but all such
counterparts together constituting but one and the same instrument.
9.17 Publicity.
---------
Lender is hereby authorized to issue appropriate press releases and to
cause a tombstone to be published announcing the consummation of the
transactions contemplated in this Agreement, including the aggregate amount of
the Loan.
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed and delivered this Agreement effective as of the day
and year first above written.
BIG V SUPERMARKETS, INC.
By: /s/ Stephen Hitman
-----------------------------------
Title: /S/ STEPHEN HITMAN
--------------------------------
VICE PRESIDENT - REAL ESTATE
FINOVA CAPITAL CORPORATION
By: /s/ Anthony Holland
-------------------------------------
Title: Director, Contract Administrator
----------------------------------
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<PAGE>
Exhibit 4.28
PARTNERSHIP INTEREST
Sale-Purchase Agreement
-----------------------
between
BIG V SUPERMARKETS, INC.,
Seller
and
COLUMBIA HAWKINS GROUP,
Purchaser
as of October 1, 1997
<PAGE>
PARTNERSHIP INTEREST SALE-PURCHASE AGREEMENT, dated as of October 1, 1997,
between BIG V SUPERMARKETS, INC., a New York corporation, having an office at
176 North Main Street, Florida, New York 10921 (the "Seller"), and COLUMBIA
HAWKINS GROUP, a New York general partnership, having an office at 52 Corporate
Circle, P.O. Box 12753, Albany, New York 12212 (the "Purchaser").
W I T N E S S E T H:
WHEREAS, Columbia Hawkins Group L.P., a New York limited partnership (the
"Partnership") was formed pursuant to an Agreement of Limited Partnership
Agreement dated as of September 2, 1994 between Purchaser, as sole general
partner, and Seller, as sole limited partner (the "Partnership Agreement"); and
WHEREAS, the Partnership owns certain land (the "Land") more particularly
described on Exhibit A hereto, together with the buildings and improvements
(collectively, the "Building") located thereon; and
WHEREAS, the parties hereto wish to enter into an agreement pursuant to
which Seller shall sell and Purchaser shall purchase (a) the entire interest of
Seller as sole limited partner in the Partnership under the Partnership
Agreement, including its rights to all distributions, income, gain, loss,
deduction and credit of the Partnership allocable to the aforesaid limited
partner's interests under the Partnership Agreement, and (b) all other right of
Seller as sole limited partner of the Partnership ((a) and (b) being herein
referred to as, collectively, the "Interest"); and
WHEREAS, Purchaser acknowledges that such sale and purchase shall result in
dissolution of the Partnership by operation of law, and simultaneously therewith
Purchaser shall merge with and into Columbia Hawkins Group, L.L.C., a New York
limited liability company (the "Successor to Purchaser").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein set forth, the Seller and the Purchaser hereby agree as follows:
1. Sale of Partnership Interest.
----------------------------
(a) Sale-Purchase. The Seller hereby agrees to sell and convey to the
-------------
Purchaser, and the Purchaser hereby purchases from the Seller, all of the
Seller's right, title and interest in and to the Interest.
(b) Purchase Price. The purchase price for the Interest (the "Purchase
--------------
Price") is One Million One Hundred Thousand Dollars ($1,100,000.00) payable at
closing hereunder by certified check or bank check payable to Seller in the
amount of the Purchase Price (or, at Seller's option, exercisable on two
1
<PAGE>
(2) business days' notice prior to closing, by wire transfer of immediately
available funds, in accordance with Seller's written wire transfer
instructions). Payment of the Purchase Price shall fully discharge all
obligations of the Partnership to make any payments to Seller pursuant to the
Partnership Agreement.
(c) Substitution as Partner. This Agreement is being entered into
-----------------------
based upon (1) the Purchaser succeeding to all the powers, privileges, rights
and interests of Seller under the Partnership Agreement, including all rights
with respect to Partnership property upon the dissolution of the Partnership and
(2) Successor to Purchaser succeeding by merger to all such powers, privileges,
rights and interests of Purchaser.
(d) Assumption of Obligations, etc. Purchaser hereby accepts the
------------------------------
Interest, agrees to become a limited partner of the Partnership, assumes the
obligations of Seller under the Partnership Agreement hereafter arising and
otherwise agrees to be bound by all the terms and provisions of the Partnership
Agreement. Such acceptance, commencement of such limited partner status and such
assumption automatically shall become effective upon completion of the Closing
(as defined below).
(e) Payment of Counsel Fees and Costs. Each party shall pay its own
---------------------------------
counsel fees and costs.
2. Closing. The payment of the purchase price, and execution and delivery
-------
of the Closing Documents (as that term is hereinafter defined) (the "Closing")
shall take place by an escrow through the mails, pursuant to the form of escrow
agreement attached hereto as Exhibit "F" (the "Escrow Agreement") concurrently
with the execution and delivery hereof (the "Closing Date").
2
<PAGE>
3. Closing Documents. At the Closing:
-----------------
(a) The Purchaser shall deliver to the Seller, and, as applicable,
shall execute: (i) a Premises Lease Termination Agreement, executed by the
Successor to Purchaser, as landlord, and Seller, as tenant, pertaining to a
certain Agreement of Lease dated as of September 1, 1994 between the
Partnership, as landlord, and Seller, as tenant (the "Premises Lease") demising
a certain portion of the shopping center ("Shopping Center") known as Montgomery
Towne Square, located in the Township of Montgomery, Orange County, New York;
(ii) a Master Lease Termination Agreement, executed by the Successor to
Purchaser, as landlord, and Seller, as tenant, pertaining to a certain Agreement
of Lease dated as of September 1, 1994 between the Partnership, as landlord, and
Seller, as tenant (the "Master Lease"), demising all portions of the Shopping
Center other than the common areas and the premises described in the Premises
Lease; (iii) a new lease in the form attached hereto as Exhibit "B" (the "New
Lease") of the Premises described in the Master Lease, executed by the Successor
to Purchaser, as landlord, and Seller, as tenant; (iv) a new lease in the form
attached hereto as Exhibit "E" (the "New Premises Lease") of the Premises
described in the Premises Lease, executed by Successor to Purchaser, as
landlord, and Seller, as tenant; (v) an Assignment and Assumption of Partnership
Interest with respect to the Interest, in the form of Exhibit "C" attached
hereto (the "Assignment and Assumption"); (vi) a mutual release and indemnity
agreement signed by Purchaser in the form of Exhibit "D" attached hereto (the
"Release"); (vii) a certified copy of resolutions duly adopted by the partners
of the Purchaser and by the members of Successor to Purchaser, authorizing the
transactions contemplated by this Agreement and the execution and delivery of
the Note and other closing instruments and documents referenced herein or
contemplated hereby; and (viii) such other documents and agreements as
reasonably may be required to fully effectuate the transactions hereby
contemplated (all of the documents described in clauses (iii) through (viii)
being collectively referred to herein as the "Purchaser's Closing Documents").
(b) The Seller shall deliver to the Purchaser, and, as applicable,
shall execute: (i) the Assignment and Assumption; (ii) the Release; (iii) a
certified copy of the resolutions of the Board of Directors of the Seller,
authorizing the transactions contemplated by this Agreement and the execution
and delivery of this Agreement and the other closing instruments and documents
referenced herein or contemplated hereby; (iv) the Purchaser's Closing Documents
to which Seller is a party; and (v) such other documents and agreements as
reasonably may be required to fully effectuate the transactions hereby
contemplated (all of the documents described in clauses (i) through (v) being
collectively referred to herein as the "Seller's Closing Documents"; together
with the Purchaser's Closing Documents, the "Closing Documents").
3
<PAGE>
4. Representations, Warranties and Agreements.
------------------------------------------
(a) In order to induce the Purchaser to enter into this Agreement and
to purchase the Interest hereunder, the Seller represents and warrants that: (i)
the performance of this Agreement will not result in any breach of, or
constitute any default under, any agreement or other instrument to which Seller
is a party or by which Seller is bound; (ii) Seller has due and proper authority
to consummate the transactions contemplated hereby and to execute and deliver
the documents contemplated hereby; (iii) the Interest is free and clear of all
liens and encumbrances (other than liens or encumbrances arising under the
Partnership Agreement, which shall be released at Closing pursuant to the
Release); and (iv) Seller is the sole owner of the Interest and no person or
entity has any right or interest in and to the Interest and Seller has not
heretofore pledged, assigned, hypothecated or otherwise transferred or conveyed
the Interest or any interest therein.
(b) The execution by the Purchaser of this Agreement shall be deemed
an acknowledgment by the Purchaser that the Seller has fully complied with all
of its obligations hereunder, that the Seller is discharged therefrom and that
the Seller shall have no further liability with respect to any of its
representations, warranties and agreements hereunder.
(c) The Purchaser represents and warrants (i) that (A) neither the
Seller nor any employee, agent, affiliate or attorney representing or purporting
to represent the Seller has made, and (B) the Purchaser has not relied on, any
representation or warranty to the Purchaser, whether express or implied, and, in
particular, that no such representation or warranty has been made with respect
to the Interest, or the revenues and expenses of the Partnership. The Purchaser
agrees that the Seller shall not be bound in any manner by guarantees, promises,
projections, operating statements, set-ups, or other information pertaining to
the Interest made, furnished or claimed to have been made or furnished by the
Seller or any other person or entity, including any employee, agent, affiliate,
attorney or other person representing or purporting to represent the Seller,
whether verbally or in writing, except as expressly set forth in this Agreement.
(d) The matters set forth in the recitals in this Agreement are
incorporated by reference herein. All agreements, representations and warranties
made by the Seller and by the Purchaser in this Agreement shall survive the
execution and delivery of this Agreement and other closing documents.
5. No Broker. Each of the parties to this Agreement represents and
---------
warrants to the other that it has not dealt with any broker in connection with
this transaction. Each party
4
<PAGE>
agrees that it shall indemnify the other against, and hold the other harmless
from, any claims for brokerage, commissions or other compensation made by any
other broker or finder with whom the indemnifying party has dealt in connection
with this transaction. The representations and warranties contained in this
Section 5 shall survive the execution and delivery of this Agreement and other
closing documents.
6. Entire Agreement. This Agreement and the documents referred to herein,
----------------
or executed concurrently herewith, contain all of the terms agreed upon between
the parties with respect to the subject matter hereof, and all understandings
and agreements heretofore had or made between the parties hereto are merged in
this Agreement and such documents, which alone express the agreement of said
parties.
7. Partial Invalidity. If any term or provision of this Agreement or the
------------------
application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Agreement shall be valid and be enforced to the
fullest extent permitted by law.
8. Further Assurances. The parties hereto agree to execute such
------------------
instruments and documents and to take such further actions as may be necessary
or desirable in order to implement the intent and purpose of this Agreement.
9. Successors and Assigns. This Agreement shall be binding upon and shall
----------------------
inure to the benefit of Seller and Purchaser and their respective heirs,
personal representatives, successors and assigns (except as otherwise provided
in this Agreement).
10. Governing Law. This Agreement shall be governed by the laws of the
-------------
State of New York.
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the date first above written.
Seller:
BIG V SUPERMARKETS, INC.,
a New York corporation
By: /S/ Joseph V. Fisher
------------------------
Name: Joseph V. Fisher
Title: President
5
<PAGE>
Purchaser:
COLUMBIA HAWKINS GROUP,
a New York General Partnership
By: /S/ Joseph R. Nicolla
-------------------------
Name: Joseph R. Nicolla
Title: Partner
Successor to Purchaser
COLUMBIA HAWKINS GROUP, L.L.C.,
a New York Limited
Liability Company
By: /S/ Joseph R. Nicolla
-------------------------
Name: Joseph R. Nicolla
Title: Member
6
<PAGE>
FIFTH AMENDMENT AND CONSENT
---------------------------
FIFTH AMENDMENT AND CONSENT (this "Amendment"), dated as of October 7,
1997, among BIG V HOLDING CORP. ("Holdings"), BV HOLDINGS CORPORATION ("BV
Holdings"), BIG V SUPERMARKETS, INC. (the "Borrower"), the financial
institutions party to the Credit Agreement referred to below (the "Banks") and
BANKERS TRUST COMPANY, as Agent (the "Agent"). Unless otherwise defined herein,
all capitalized terms used herein shall have the respective meanings provided
such terms in the Credit Agreement referred to below.
W I T N E S S E T H :
-------------------
WHEREAS, Holdings, BV Holdings, the Borrower, the Banks and the Agent are
parties to an Amended and Restated Credit Agreement, dated as of December 28,
1990, and amended and restated as of November 1, 1993, and further amended and
restated as of December 17, 1993 (as amended, modified or supplemented through
the date hereof, the "Credit Agreement"); and
WHEREAS, subject to the terms and conditions set forth herein, the parties
hereto wish to amend and/or modify the Credit Agreement as provided herein;
NOW, THEREFORE, it is agreed:
1. Section 4.02(d) of the Credit Agreement is hereby amended by deleting
the amount "$1,750,000" appearing therein and inserting the amount "$3,600,000"
in lieu thereof.
2. Notwithstanding anything to the contrary contained in Sections 3.02(d)
or 7.02 of the Credit Agreement, the Banks hereby agree that the Borrower may
sell its entire equity interest as a limited partner in Columbia Hawkins Group
L.P. for an amount no less than $1,100,000 in cash to be received at the time of
the closing of such sale, and that the Net Sale Proceeds from such sale shall
not be required to be applied as provided in such Section 3.02(d).
3. In order to induce the Banks to enter into this Amendment, Holdings, BV
Holdings and the Borrower hereby represent and warrant that (x) no Default or
Event of Default exists on the Fifth Amendment Effective Date (as defined
<PAGE>
below), both before and after giving effect to this Amendment and (y) all of the
representations and warranties contained in the Credit Documents shall be true
and correct in all respects on the Fifth Amendment Effective Date, both before
and after giving effect to this Amendment with the same effect as though such
representations and warranties had been made on and as of the Fifth Amendment
Effective Date (it being understood that any representation or warranty made as
of a specified date shall be true and correct in all material respects as of
such specific date).
4. This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provision of the Credit
Agreement or any other Credit Document.
5. This Amendment may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts shall be lodged with the Borrower and the Agent.
6. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF
NEW YORK.
7. This Amendment shall become effective on the date (the "Fifth
Amendment Effective Date") when Holdings, BV Holdings, the Borrower and the
Required Banks shall have signed a counterpart hereof (whether the same or
different counterparts) and shall have delivered (including by way of
telecopier) the same to the Agent at its Notice Office.
8. From and after the Fifth Amendment Effective Date, all references
in the Credit Agreement and each of the other Credit Documents to the Credit
Agreement shall be deemed to be references to the Credit Agreement after giving
effect to this Amendment.
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Amendment to be duly executed and delivered as of the date first above
written.
BIG V HOLDING CORP.
By /s/ James A. Toopes, Jr.
-------------------------------
Title: Executive V.P.
BV HOLDINGS CORPORATION
By /s/ James A. Toopes, Jr.
-------------------------------
Title: Executive V.P.
BIG V SUPERMARKETS, INC.
By /s/ James A. Toopes, Jr.
-------------------------------
Title: Executive V.P.
BANKERS TRUST COMPANY,
Individually and as Agent
By /s/
-------------------------------
Title: Vice President
BANQUE NATIONALE DE PARIS
By /s/ Serge Desrayaud
------------------------------
Title: Vice President
By /s/ Pamela Lucash
------------------------------
Title: Assistant Treasurer
<PAGE>
BANKERS TRUST (DELAWARE)
By /s/
------------------------------
Title: Vice President
MACKAY SHIELDS
By
------------------------------
Title:
FIRST SOURCE FINANCIAL LLP
By: First Source Financial, Inc.,
its Agent/Manager
By: /s/ J. Walding
-----------------------------
Title: Vice President
BANK POLSKA KASA OPIEKI S.A.
By
-----------------------------
Title:
HELLER FINANCIAL, INC.
By /s/ Julia J. Maslanka
-----------------------------
Title: Vice President
<PAGE>
PAMCO CAYMAN, LTD.
By: Protective Asset Management
Company, as Collateral Manager
By: /s/ Mark K. Okada
-----------------------------
Title: Executive Vice President
<PAGE>
EXHIBIT 10.25
MANAGEMENT STOCK SUBSCRIPTION AGREEMENT
---------------------------------------
This Management Stock Subscription Agreement is entered into as of the 18th
day of April, 1997, by and between Big V Holding Corp., a Delaware corporation
(the "Company"), and the management investor so indicated on the signature page
hereof (the "Management Investor").
WHEREAS, the Company desires to sell to the Management Investor, and the
Management Investor desires to purchase from the Company, shares of common stock
of the Company on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and conditions set forth in this Agreement, the parties to
this Agreement, intending to be legally bound, mutually agree as follows:
ARTICLE I
Purchase and Sale of Shares
---------------------------
1.1 Sale and Issuance of Shares. Subject to the terms and conditions of
---------------------------
this Agreement, the Management Investor does hereby subscribe for and agrees to
acquire at the Closing (as hereinafter defined), and the Company agrees to issue
to the Management Investor at the Closing, the aggregate number of shares of the
Company's common stock set forth under his name on the signature page hereto
(the "Shares") in exchange for the aggregate consideration set forth on the
signature page hereto (the "Purchase Price"). A portion of the Purchase Price
shall be payable in cash in the amount set forth on the signature page hereto
(the "Cash Amount"), and the balance of the Purchase Price shall be paid by the
Management Investor's issuance to the Company of a Secured Promissory Note in
the principal amount set forth on the signature page hereto (the "Note").
1.2 Closing. The closing (the "Closing") of the purchase and sale of the
-------
Shares being purchased by the Management Investor shall occur at the offices of
the Company, on the date hereof (the "Closing Date"). At the Closing, the
Company shall deliver to the Management Investor a certificate or certificates
representing the Shares purchased hereunder and the Management Investor shall
deliver to the Company (i) the Cash Amount, (ii) the Note, (iii) a Stock Pledge
Agreement executed in favor of the Company, and (iv) a counterpart signature
page to the Amended and Restated Shareholders' Agreement dated as of December
17, 1993 (the "Shareholders' Agreement").
<PAGE>
ARTICLE II
Representations and Warranties of the Company
---------------------------------------------
The Company represents and warrants to the Management Investor that:
2.1 Organization and Standing. The Company is a corporation duly
-------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to carry on its
business as now conducted and as proposed to be conducted.
2.2 Authorization. All corporate action on the part of the Company and its
-------------
officers and directors necessary for the authorization, execution and delivery
of this Agreement and the performance of all obligations of the Company under
this Agreement required to be performed at or prior to the Closing and for the
authorization, issuance and delivery of the Shares being sold under this
Agreement has been taken. This Agreement, when executed and delivered by all
parties hereto, shall constitute the valid and legally binding obligations of
the Company, except to the extent the enforceability thereof may be limited by
bankruptcy laws, insolvency laws, reorganization laws, moratorium laws or other
laws affecting creditors' rights generally or by general equitable principles.
2.3 Validity of Shares. The Shares, when issued, sold and delivered in
------------------
accordance with the terms of this Agreement, shall be duly and validly issued,
fully paid and nonassessable.
ARTICLE III
Representations, Warranties and Agreements of
---------------------------------------------
the Management Investor
-----------------------
3.1 Authorization. The Management Investor represents and warrants that
-------------
this Agreement, when executed and delivered by him, will constitute a valid and
legally binding obligation of the Management Investor, except to the extent the
enforceability thereof may be limited by bankruptcy laws, insolvency laws,
reorganization laws, moratorium laws or other laws affecting creditors' rights
generally or by general equitable principles.
3.2 Investment Representations.
--------------------------
(a) This Agreement is made with the Management Investor in reliance
upon the Management Investor's representation to the Company, which by his
acceptance hereof the Management Investor hereby confirms, that (i) the Shares
to be received by him will be acquired by him, or a trust for the benefit of his
spouse, children or parents, for investment for his own account, and not with a
view to the sale or distribution of any
2
<PAGE>
part thereof in violation of applicable Federal and state securities laws, and
(ii) he has no current intention of selling, granting participation in or
otherwise distributing the same in violation of applicable Federal and state
securities laws. By executing this Agreement, the Management Investor further
represents that he does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to such
person, or to any third person, with respect to any of the Shares in violation
of applicable Federal and state securities laws.
(b) The Management Investor understands that the Shares have not been
registered under the 1933 Act on the basis that the sale provided for in this
Agreement and the issuance of securities hereunder is exempt from registration
under the 1933 Act pursuant to Section 4(2) thereof and regulations issued
thereunder, and that the Company's reliance on such exemption is predicated on
representations of the Management Investor set forth herein.
(c) The Management Investor represents that he has, either alone or
together with his "purchaser representative" as that term is defined in
Regulation D promulgated under the 1933 Act, such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of his investment. The Management Investor further represents that he has
had access, during the course of the transaction and prior to his purchase of
Shares, to information concerning the Company and its assets, liabilities and
prospects, and that he has had, during the course of the transaction and prior
to his purchase of the Shares, the opportunity to ask questions of, and receive
answers from, the Company concerning the terms and conditions of the offering
and to obtain additional information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify the accuracy of any information furnished to him or to which
he had access.
(d) The Management Investor understands that the Shares may not be sold,
transferred or otherwise disposed of without registration under the 1933 Act or
an exemption therefrom, and that in the absence of an effective registration
statement covering the Shares or an available exemption from registration under
the 1933 Act, the Shares must be held indefinitely. In particular, the
Management Investor is aware that the Shares may not be sold pursuant to Rule
144 promulgated under the 1933 Act unless all of the conditions of that Rule are
met. Among the current conditions for use of Rule 144 by certain holders is the
availability to the public of current information about the Company. Such
information is not now available, and the Company has no current plans to make
such information available. Such Management Investor represents that, in the
absence of an effective registration statement covering the Shares, he will
sell, transfer or otherwise dispose of the Shares only in a manner consistent
with his representations set forth herein and then only in accordance with the
Shareholders' Agreement.
3
<PAGE>
(e) Each Management Investor agrees, except with respect to transfers
permitted under the Shareholders' Agreement, that he will not make a transfer,
disposition or pledge of any of the Shares other than pursuant to an effective
registration statement under the 1933 Act, unless and until (i) the Management
Investor shall have notified the Company of the proposed disposition and shall
have furnished the Company with a statement of the circumstances surrounding the
disposition, and (ii) if requested by the Company, at the expense of the
Management Investor or transferee, he shall have furnished to the Company an
opinion of counsel, reasonably satisfactory to the Company and its counsel, to
the effect that such transfer may be made without registration of the Shares
under the 1933 Act.
3.3 Legends; Stop Transfer.
----------------------
(a) The Management Investor acknowledges that all certificates evidencing
the Shares shall bear the following legend:
"TRANSFER RESTRICTED
These securities have not been registered under the Securities Act of 1933,
as amended, and may not be sold, offered for sale, pledged or hypothecated
in the absence of an effective registration statement as to the securities
under said Act or an opinion of counsel satisfactory to the Company and its
counsel that such registration is not required.
These securities are subject to the terms and conditions, including
restrictions on transfer, of an Amended and Restated Shareholders'
Agreement dated as of December 17, 1993, as amended from time to time, a
copy of which is on file with the Secretary of the Company."
(b) The certificates evidencing the Shares shall also bear any legend
required by any applicable state securities law.
(c) In addition, the Company shall make a notation regarding the
restrictions on transfer of the Shares in its stock books, and the Shares shall
be transferred on the books of the Company only if transferred or sold pursuant
to an effective registration statement under the 1933 Act covering such Shares
or pursuant to and in compliance with the provisions of Section 3.2(e) hereof.
All Common Stock of the Company hereafter issued to the Management Investor
shall bear the same endorsement, shall be subject to all the terms and
conditions of this Agreement, and for all purposes shall be deemed "Shares"
hereunder. A copy of this Agreement, together with any amendments thereto, shall
remain on file with the Secretary of the Company and shall be available for
inspection to any properly interested person without charge within five (5) days
after the Company's receipt of a written request therefor.
4
<PAGE>
ARTICLE IV
Miscellaneous
-------------
4.1 Notices. All notices and other communications necessary or
-------
contemplated under this Agreement shall be in writing and shall be delivered in
the manner specified herein or, in the absence of such specification, shall be
deemed to have been duly given when delivered by hand or one day after sending
by overnight delivery service, or five days after sending by certified mail,
postage prepaid, return receipt requested: to the Company, at the address of
its principal executive offices, and to the Management Investor, at his address
listed on the signature page hereto.
By notice complying with the foregoing provisions of this Section 4.1, each
party shall have the right to change the mailing address for future notices and
communications to such party.
4.2 Execution of Counterparts. This Agreement may be executed in
-------------------------
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement.
4.3 Binding Effect; Assignment. The rights and obligations of the
--------------------------
Management Investor under this Agreement may not be assigned to any other
person. Except as expressly provided in this Agreement, this Agreement shall
not be construed so as to confer any right or benefit upon any person other than
the parties to this Agreement, and their respective successors and assigns.
This Agreement shall be binding upon the Company and the Management Investor,
and their respective successors and assigns.
4.4 Governing Law. This Agreement shall be deemed to be a contract made
-------------
under the laws of the State of Delaware, and for all purposes shall be construed
in accordance with the laws of said State, without regard to principles of
conflicts of law. Both of the parties hereto agrees to submit to the
jurisdiction of the courts of the State of Delaware in any action or proceeding
arising out of or relating to this Agreement.
4.5 Severability of Provisions. Any provision of this Agreement which is
--------------------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
4.6 Exhibits and Headings. All Exhibits to this Agreement shall be deemed
---------------------
to be a part of this Agreement. The Article and Section headings used or
contained in this Agreement are for convenience of reference only and shall not
affect the construction of this Agreement.
5
<PAGE>
* * *
MANAGEMENT STOCK SUBSCRIPTION AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as an instrument under seal, as of the date first above written.
BIG V HOLDING CORP.
By: /s/ James A. Toopes, Jr.
------------------------
Name: James A. Toopes, Jr.
Title: Executive Vice President
MANAGEMENT INVESTOR
/s/ Stephen Hittman
-------------------
Name: Stephen Hittman
Number of Shares: 2,200
Aggregate Purchase Price: $77,000
Cash Amount: $10,000.00
Note Amount: $67,000.00
6
<PAGE>
COUNTERPART SIGNATURE PAGE
--------------------------
The undersigned, in connection with the purchase of shares of Common Stock,
par value $.01 per share, of Big V Holding Corp., a Delaware corporation (the
"Company"), hereby agrees to be bound by the terms and conditions of the Amended
and Restated Shareholders' Agreement, dated as of December 17, 1993, by and
among the Company and the investors named therein (the "Shareholders'
Agreement"), as a "Management Investor" (as such term is defined in the
Shareholders' Agreement).
IN WITNESS WHEREOF, the undersigned has executed this Counterpart Signature
Page as of April 18, 1997.
/s/ Stephen Hittman
-------------------
Name:
7
<PAGE>
EXHIBIT 10.26
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT dated as of April 18, 1997 is made and entered
into by and between Big V Holding Corp., a Delaware corporation ("Holding") and
Stephen Hittman (the "Pledgor").
RECITALS
--------
A. The Pledgor has entered into a certain Management Stock Subscription
Agreement dated as of April 18, 1997 by and between Holding and the Pledgor (the
"Subscription Agreement") whereby Holding has agreed to issue and sell an
aggregate of 2,200 shares of its common stock, par value $0.01 per share (the
"Common Stock") to the Pledgor. Capitalized terms used herein and not otherwise
defined shall have the same meanings ascribed to them in the Employment
Agreement.
B. On the date hereof the Pledgor is delivering a note or notes of
Pledgor payable to Holding in the principal amount of $67,000.00 as of the date
hereof (the "Indebtedness"), which Indebtedness is being incurred in connection
with the sale of 2,200 shares of Common Stock to the Pledgor.
C. The Pledgor wishes to grant further security and assurance to Holding
in order to secure the payment of the principal and interest on the Indebtedness
and to pledge to Holding all shares of Common Stock to be held by such Pledgor.
AGREEMENT
---------
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
1. Pledge. As collateral security for the full and timely payment of the
------
principal of and interest on the Indebtedness, the Pledgor hereby delivers,
deposits, pledges, transfers and assigns to Holding, in form transferable for
delivery, and creates in Holding a security interest in 2,200 shares of Common
Stock held by the Pledgor and all certificates or other instruments or documents
evidencing the same now or hereafter owned by the Pledgor (together with any
securities or property to be delivered to the Pledgor pursuant to Section 2(c)
hereof, the "Pledged Securities").
The Pledgor hereby delivers to Holding appropriate undated security
transfer powers duly executed in blank for the Pledged Securities set forth
above and will deliver appropriate undated security transfer powers duly
executed in blank for the Pledged Securities to be pledged hereunder from time
to time hereafter.
<PAGE>
2. Administration of Security. The following provisions shall govern the
--------------------------
administration of the Pledged Securities:
(a) So long as an Event of Default has not occurred and is continuing
with respect to any Indebtedness (as used herein, "Event of Default" shall mean
the occurrence of any event of default under any instrument evidencing any
Indebtedness), the Pledgor shall be entitled to act with respect to the Pledged
Securities in any manner not inconsistent with this Stock Pledge Agreement, the
Subscription Agreement, the Amended and Restated Shareholders' Agreement dated
as of December 17, 1993 by and among the Holding and its stockholders (the
"Shareholders' Agreement") or any instrument evidencing any Indebtedness,
including voting the Pledged Securities and receiving all cash distributions
thereon and giving consents, waivers and ratifications in respect thereof;
(b) If at any time, the Pledgor receives any proceeds from the sale by
the Pledgor or any of the Pledgor's Permitted Transferees (as that term is
defined in the Shareholders' Agreement) of any Common Stock to anyone, the Net
Proceeds (as defined below) from such sale of Common Stock shall be applied to
the prepayment first of the accrued and unpaid interest on any Indebtedness and
then to the unpaid principal of any Indebtedness. The term "Net Proceeds" shall
mean the total proceeds received from the sale of Common Stock, minus an amount
-----
equal to the sum of (i) the federal income tax liability that would be payable
in respect of the gain recognized upon such sale, after giving effect to any
state income tax liability described in clause (ii) below, assuming a tax rate
equal to the maximum federal income tax rate on long-term capital gains in
effect at the time of sale, and (ii) any state income tax liability that would
be payable in respect of such gain, assuming the maximum applicable state income
tax rate on sales of such securities.
(c) If, while this Stock Pledge Agreement is in effect, the Pledgor
(or any of the Pledgor's Permitted Transferees) shall become entitled to receive
or shall receive any debt or equity security certificate (including, without
limitation, any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of capital, or
issued in connection with any reorganization), option or right, whether as a
dividend or distribution in respect of, in substitution of, or in exchange for
any Pledged Securities, or otherwise, the Pledgor and each of the Pledgor's
Permitted Transferees agree to accept the same as Holding's agent and to hold
the same in trust on behalf of and for the benefit of Holding and to deliver the
same forthwith to Holding in the exact form received, with the endorsement of
the Pledgor and the Pledgor's Permitted Transferees when necessary and/or
appropriate undated security transfer powers duly executed in blank, to be held
by Holding, subject to the terms of this Stock Pledge Agreement, as additional
collateral security for the Indebtedness. Notwithstanding the foregoing, it is
agreed that the Pledgor or any of the Pledgor's Permitted Transferees may
exercise any option or right received as contemplated in the preceding sentence,
and Holding will exercise any such option or right upon receipt of written
instructions to that effect and any required payments or documents from the
Pledgor or the Pledgor's Permitted Transferees and the securities received upon
such exercise of any such option or right shall thereafter be held by Holding as
contemplated by the preceding sentence.
2
<PAGE>
(d) The Pledgor and each of the Pledgor's Permitted Transferees shall
immediately upon request by Holding and in confirmation of the security
interests hereby created, execute and deliver to Holding such further
instruments, deeds, transfers, assurances and agreements, in form and substance
as Holding shall request, including any financing statements and amendments
thereto, or any other documents, as required under Delaware law and any other
applicable law to protect the security interests created hereunder and to enable
Holding to exercise its rights hereunder.
(e) If at any time, Holding exercises its right as set forth in the
Shareholders' Agreement to purchase the Pledged Securities, or the Pledgor
exercises his right as set forth in the Shareholders' Agreement to require
Holding to purchase the Pledged Securities, then the cash payable for the
Pledged Securities so purchased shall be the difference between the Put Price or
the Call Price, as applicable (as those terms are defined in the Shareholders'
Agreement), and the outstanding principal balance and accrued but unpaid
interest then due in respect of the Indebtedness.
(f) Subject to any sale by Holding or other disposition by Holding of
the Pledged Securities or other property pursuant to this Stock Pledge Agreement
and subject to Section 5 below, the Pledged Securities shall be returned to the
Pledgor or such Pledgor's Permitted Transferees upon payment in full of the
unpaid principal of, accrued interest on and any other amounts due in respect of
the Indebtedness.
3. Remedies in Case of an Event of Default.
---------------------------------------
(a) In case of an Event of Default shall have occurred and be
continuing, Holding shall have in each case all of the remedies of a secured
party under the Delaware Uniform Commercial Code, and, without limiting the
foregoing, shall have the right, in its sole discretion, to sell, resell, assign
and deliver all or, from time to time, any part of the Pledged Securities, or
any interest in or option or right to purchase any part thereof, on any
securities exchange on which the Pledged Securities or any of them may be
listed, at any private sale or at public auction, with or without demand of
performance or other demand, advertisement or notice of the time or place of
sale or adjournment thereof or otherwise (except that Holding shall give ten
days' notice to the Pledgor of the time and place of any sale pursuant to this
Section 3), for cash, on credit or for other property, for immediate or future
delivery, and for such price or prices and on such terms as Holding shall, in
its sole discretion, determine, the Pledgor and the Pledgor's Permitted
Transferees hereby waiving and releasing any and all right or equity of
redemption whether before or after sale hereunder. At any such sale Holding may
bid for and purchase the whole or any part of the Pledged Securities so sold
free from any such right or equity of redemption. Holding shall apply the
proceeds of any such sale first to the payment of all costs and expenses,
-----
including reasonable attorneys' fees, incurred by Holding in enforcing its
rights under this Stock Pledge Agreement, second to the payment of accrued and
------
unpaid interest on and then of unpaid principal of the Indebtedness of the
Pledgor and third to any other amounts due on the Indebtedness.
-----
3
<PAGE>
(b) The Pledgor and the Pledgor's Permitted Transferees recognize that
Holding may be unable to effect a public sale of all or a part of the Pledged
Securities by reason of certain prohibitions contained in the Securities Act of
1933, as amended (the "Act"), or in the rules and regulations promulgated
thereunder, or in applicable state securities or "blue sky" laws, but may be
compelled to resort to one or more private sales to a restricted group of
purchasers who will be obliged to agree, among other things, to acquire the
Pledged Securities for their own account, for investment and not with a view to
the distribution or resale thereof. The Pledgor and the Pledgor's Permitted
Transferees agree that private sale so made may be at prices and on other terms
less favorable to the seller and that Holding has no obligation to delay the
sale of the Pledged Securities for the period of time necessary to permit the
registration of the Pledged Securities for public sale under the Act and under
applicable state securities or "blue sky" laws. The Pledgor and the Pledgor's
Permitted Transferees agree that a private sale or sales made under the
foregoing circumstances shall be deemed to have been made in a commercially
reasonable manner.
(c) If any consent, approval or authorization of any state, municipal
or other governmental department, agency or authority should be necessary to
effectuate any sale or disposition by Holding pursuant to this Section 3 of the
Pledged Securities, the Pledgor and each of the Pledgor's Permitted Transferee
will execute all such applications and other instruments as may be required in
connection with securing any such consent, approval or authorization, and will
otherwise use their best efforts to secure the same.
(d) Neither failure nor delay on the part of Holding to exercise any
right, remedy power or privilege provided for herein or by statute or at law or
in equity shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, remedy, power or privilege preclude any other right,
remedy, power or privilege.
4. Pledgor's Obligations Not Affected. The obligations of the Pledgor
----------------------------------
and each of the Pledgor's Permitted Transferees under this Stock Pledge
Agreement shall remain in full force and effect without regard to, and shall not
be impaired or affected by: (a) any subordination, amendment or modification of
or addition or supplement to the Employment Agreement, the Shareholders'
Agreement, or the Indebtedness or any assignment or transfer thereof; (b) any
exercise or non-exercise by Holding of any right, remedy, power or privilege
under or in respect of this Stock Pledge Agreement, the Shareholders' Agreement
or any instrument evidencing any Indebtedness, or any waiver of any such right,
remedy, power or privilege; (c) any waiver, consent, extension indulgence or
other action or inaction in respect of this Stock Pledge Agreement, the
Employment Agreement, the Shareholders' Agreement or any instrument evidencing
any Indebtedness, or any assignment or transfer of any thereof; or (d) any
bankruptcy, insolvency, reorganization arrangement, readjustment, composition,
liquidation or the like, of Holding, whether or not the Pledgor and the
Pledgor's Permitted Transferees shall have notice or knowledge of any of the
foregoing.
5. Transfer by Pledge. The Pledgor and the Pledgor's Permitted
------------------
Transferees will not sell, assign, transfer or otherwise dispose of, grant any
option with respect to, or
4
<PAGE>
mortgage, pledge or otherwise encumber the Pledged Securities or any interest
therein except as provided in the Employment Agreement and the Shareholders'
Agreement. In the event of a sale, assignment, transfer or other disposition of
or mortgage, pledge or other encumbrance of Pledged Securities pursuant to the
Subscription Agreement or the Shareholders' Agreement, the Common Stock so sold,
assigned, transferred or otherwise disposed of or mortgaged, pledged or
otherwise encumbered shall remain subject to the provisions of this Stock Pledge
Agreement and of the Shareholders' Agreement and the purchaser, assignee,
transferee or other acquirer, mortgagee or pledgee shall agree in writing, in
form and substance satisfactory to Holding, to be bound by all the terms of this
Stock Pledge Agreement and of the Shareholders' Agreement with the same force
and effect as if such transferee were a party hereto.
6. Attorney-in-Fact. Holding is hereby appointed the attorney-in-fact of
----------------
the Pledgor and the Pledgor's Transferees for the purpose of carrying out the
provisions of this Stock Pledge Agreement and taking any action and executing
any instrument which Holding reasonably may deem necessary or advisable to
accomplish the purposes hereof, including without limitation, the execution of
the applications and other instruments described in Section 3(c) hereof, which
appointment as attorney-in-fact is irrevocable as one coupled with an interest.
7. Termination. Upon payment in full of the unpaid principal of, accrued
-----------
interest on and all other amounts payable in respect of the Indebtedness, this
Stock Pledge Agreement shall terminate and the Pledgor or the Pledgor's
Permitted Transferees shall be entitled to the return of such of the Pledged
Securities as have not theretofore been sold or otherwise applied pursuant to
the provisions of this Stock Pledge Agreement.
8. Notices. All notices or other communications required or permitted to
-------
be given hereunder shall be deemed delivered when delivered by hand or when sent
by first class, certified mail, postage and fees prepaid, as follows:
(i) If to Holding: Big V Holding Corp.
c/o Thomas H. Lee Company
75 State Street
Boston, Massachusetts 02109
Copy to: Michael J. Riccio, Jr., Esq.
Hutchins, Wheeler & Dittmar
101 Federal Street
Boston, Massachusetts 02110
(ii) If to the Executive: To the address set forth below
unless and until notice of another
or different address shall be
given as provided herein.
5
<PAGE>
9. Binding Effect, Successors and Assigns. This Stock Pledge Agreement
--------------------------------------
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns and nothing herein is intended or shall be
construed to give any other person any right, remedy or claim under, to or in
respect of this Stock Pledge Agreement. No transfer of Pledged Securities of
the Pledgor to the Pledgor's Permitted Transferees shall be permitted hereunder,
and any such transfer shall be null and void, unless and until each such
Permitted Transferee agrees in writing, in form and substance satisfactory to
Big V Supermarkets, Inc. and Holding, to become bound by this Stock Pledge
Agreement with respect to the Pledged Securities so transferred.
10. Miscellaneous. Holding and its assigns shall have no obligation in
-------------
respect of the Pledged Securities, except to hold and dispose of the same in
accordance with the terms of this Stock Pledge Agreement. Neither this Stock
Pledge Agreement nor any provision hereof may be amended, modified, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the amendment, modification, waiver,
discharge or termination is sought. The provisions of this Stock Pledge
Agreement shall be binding upon the successors and assigns of the Pledgor and
each of the Pledgor's Permitted Transferees. The captions in this Stock Pledge
Agreement are for convenience of reference only and shall not limited the
provisions hereof. This Stock Pledge Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware,
without regard to the conflicts of law rules thereof. This Stock Pledge
Agreement may be executed simultaneously in counterparts, each of which is an
original, but all of which together shall constitute one instrument.
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Stock Pledge
Agreement to be executed and delivered on the date first above written.
BIG V HOLDING CORP.
By: /s/ James A. Toopes, Jr.
------------------------
Title: Executive Vice President
/s/ Stephen Hittman
-------------------
Name: Stephen Hittman
Address: 118 Lakeside Drive
Ramsey, NJ 07446
7
<PAGE>
EXHIBIT 10.27
$67,000 April 18, 1997
SECURED PROMISSORY NOTE
FOR VALUE RECEIVED, the undersigned (the "Obligor"), promises to pay
to the order of Big V Holding Corp., a Delaware corporation, with its principal
executive offices located at 75 State Street, Boston, Massachusetts 02109 (the
"Company"), the principal sum of Sixty-Seven Thousand DOLLARS ($67,000) (the
Principal Amount"), together with any amounts which are deemed to be converted
to principal in accordance with the terms hereof ("Converted Amounts", and
collectively with the Principal Amount, sometimes referred to herein as the
"Aggregate Principal Amount") in lawful money of the United States of America,
together with all accrued but unpaid interest, on December 31, 2005 (the
"Maturity Date"), subject to mandatory prepayment and/or acceleration as set
forth herein.
Interest shall accrue on the Principal Amount outstanding from time to
time, and to the extent permitted by applicable law, on the Converted Amounts
outstanding from time to time, at a fluctuating rate per annum (the "Stated
Rate") at all times equal to the rate at which the loans outstanding under the
Company's senior credit facility bear interest, changes in the Stated Rate to
take effect simultaneously with changes in the rate under the senior credit
facility, computed on the basis of a 365- or 366-day year, as the case may be,
from and after the date of this Note and continuing until the date of payment of
the Aggregate Principal Amount in full. Interest shall be payable hereunder
annually on each Interest Payment Date (as defined below), in an amount equal to
the aggregate federal, state and local income tax liability incurred by the
Company as a result of all interest accrued hereunder for the preceding fiscal
year of the Company, as conclusively determined by the Company, and as set forth
in the Interest Notice (as defined below). All interest accrued hereunder and
not required to be paid on the next succeeding Interest Payment Date in
accordance with the terms hereof shall be deemed for all purposes hereunder
converted to principal hereunder and shall be deemed to be a Converted Amount
and shall be due and payable on the Maturity Date, subject to mandatory
prepayment and/or acceleration as set forth below.
If the date set for payment of principal or interest hereunder is a
Saturday, Sunday or legal holiday, then such payment shall be made on the next
succeeding business day.
The terms below shall have the following definitions:
(a) "Interest Notice" as used herein shall mean a written notice sent
by the Company to the Obligor specifying the aggregate amount of federal, state
and local income tax liability incurred by the Company as a result of all
interest accrued hereunder for the preceding fiscal year of the Company.
<PAGE>
(b) "Interest Payment Date" as used herein shall mean a date ten days
after the Obligor receives the Interest Notice. For purposes hereof, the
Obligor shall conclusively be deemed to have received the Interest Notice (i)
three days after the Company sends such notice by certified or registered mail
or the day after the Company sends such notice by certified or registered mail
or the day after the Company sends such notice by a nationally recognized
overnight courier, to the address of the Obligor set forth below the Obligor's
signature hereon or such other address that the Obligor specifies in writing to
the Company at its address set forth above, or (ii) the day the Company delivers
such notice by hand.
(c) "Obligations" as used herein shall mean the Aggregate Principal
Amount outstanding from time to time, all accrued but unpaid interest hereunder
and all other amounts hereunder, whether principal, interest, fees or
otherwise.
Payment of the principal of and interest on this Note is secured pursuant
to the terms of a Stock Pledge Agreement dated as of the date hereof, between
the Obligor and the Company (the "Pledge Agreement"), reference to which is made
for a description of the collateral provided thereby and the rights of the
Company and the holder of this Note in respect of such collateral.
This Note is subject to the following further terms and conditions:
1. Payment and Prepayment.
-----------------------
(a) All payments and prepayments of principal of and interest on this
Note shall be made to the Company or its order, or to the legal holder of this
Note or such holder's order, in lawful money of the United States of America at
the principal offices of the Company (or at such other place as the holder
hereof shall notify the Obligor in writing) upon final payment of principal of
and interest on this Note it shall be surrendered for cancellation.
Concurrently with any prepayment of any portion of the Aggregate Principal
Amount of this Note pursuant to this Section 1, the Company (or other holder of
this Note) shall make a notation of such payment hereon. Any partial prepayment
shall be applied first to accrued and unpaid interest hereof and then to the
unpaid Aggregate Principal Amount.
(b) Voluntary Prepayment. The Obligor may, at its option, prepay this
--------------------
Note in whole or in part at any time or from time to time without penalty or
premium. Any prepayments of any portion of the Aggregate Principal Amount of
this Note shall be accompanied by payment of all interest accrued but unpaid
hereunder.
2
<PAGE>
(c) Mandatory Prepayment.
--------------------
(i) If at any time, or from time to time, after the date hereof
and following the occurrence and during the continuance of an Event of Default
(as that term is defined below) the Obligor or any of the Obligor's Permitted
Transferees (as that term is defined in a an Amended and Restated Shareholders'
Agreement dated as of December 17, 1993 among the Company and its shareholders
(the "Shareholders' Agreement")) shall receive or shall otherwise become
entitled to receive from the Company (or other holder of this Note) any cash
payments, cash dividends or other cash distributions in respect of the Company's
Common Stock, then and in each case the Obligor and any of the Obligor's
Permitted Transferees shall, upon the receipt thereof, return to the Company (or
other holder of this Note) such payments, dividends and distributions, and the
Company (or other holder of this Note) shall apply such amount to the prepayment
of the Obligations in the manner set forth in Section 1(b), and the Company (or
other holder of this Note) shall not be obligated to make any such payment, cash
dividend or other cash distribution not theretofore made to which the Obligor
and any of the Obligor's Permitted Transferees are otherwise entitled in respect
of their Common Stock and may, instead, in lieu thereof, set off the amount of
such cash payment, cash dividend or other cash distribution against the
Obligations.
(ii) If at any time, the Obligor receives any proceeds from the
sale by the Obligor or any of the Obligor's Permitted Transferees of any Common
Stock to anyone, the Net Proceeds (as defined in the Stock Pledge Agreement
dated as of the date hereof between the Obligor and the Company) from such sale
of Common Stock shall be applied to the prepayment of this Note in the manner
provided in the Stock Pledge Agreement.
(iii) In addition to the provisions of subsections (c)(i) and
(c)(ii) above:
(A) If the Obligor voluntarily terminates his employment with
the Company, of if the Company terminates the employment of the Obligor for
Cause (as such term is defined in the Shareholders' Agreement), then the Obligor
shall, without the necessity of any notice or demand by the Company of any kind,
immediately make a mandatory prepayment hereunder in an amount equal to the then
outstanding Obligations.
(B) If the Obligor dies, suffers a disability in accordance
with Section 3.02 of the Employment Agreement or if the Company terminates his
employment without Cause (as such term is defined in the Shareholders'
Agreement) (each an "Involuntary Termination"), then the Obligor shall, without
the necessity of any notice or demand by the Company of any kind, immediately
make a mandatory prepayment hereunder in an amount equal to the then outstanding
Obligations; provided, however, that if upon such Involuntary Termination (I)
either the Company
3
<PAGE>
exercises its Call Option (as defined in the Shareholders' Agreement) or the
Obligor exercises his Put Option (as defined in the Shareholders' Agreement),
and the proceeds of the exercise of such Call Option or Put option, as the case
may be, after first being applied to all of the then outstanding Obligations
other than Converted Amounts, is not sufficient to pay all Converted Amounts, or
(II) neither the Company exercises its Call Option nor the Obligor exercises his
Put Option, then, in the case of subclause (B)(I), such unpaid Converted
Amounts, and in the case of subclause (B)(II), all outstanding Converted
Amounts, shall not be immediately due and payable but shall be due and payable
in equal monthly installments ("Converted Amount Installments") payable on the
first day of each month from the date of the Involuntary Termination until the
Maturity Date. The Converted Amount shall bear interest hereunder at the Stated
Rate and such interest shall be payable with each Converted Amount Installment.
2. Events of Default. Upon the occurrence of any of the following
-----------------
events ("Events of Default"):
(a) Failure to pay any principal of this Note, including any
prepayments required hereunder, when due;
(b) Failure to pay any interest installment due under this Note
which shall remain unremedied for ten days following the date when
such installment was originally due hereunder;
(c) Failure to pay any Converted Amount Installment when
due;
(d) An event of default under any other note evidencing
indebtedness of the Obligor to the Company or its subsidiaries;
(e) Failure of the obligor to perform his obligations under
the terms of his employment with theCompany; or
(f) The filing of a voluntary or involuntary petition for an
order of relief under the Bankruptcy Code by or against the Obligor,
or any filing for relief under any statue or federal insolvency
statute by or against the Obligor;
then, and in any such event, the holder of this Note may declare, by notice of
default given to the Obligor, the entire unpaid Aggregate Principal Amount of
the Note, all Converted Amount Installments, if any, and all accrued and unpaid
interest thereon to be forthwith due and payable whereupon the entire Aggregate
Principal Amount of this Note outstanding, all Converted Amount Installments, if
any, and any accrued and
4
<PAGE>
unpaid interest hereunder shall become due and payable without presentment,
demand, protest, notice of dishonor or other demands and notices of any kind,
all of which are hereby expressly waived. Upon the occurrence of an Event of
Default, the accrued and unpaid interest hereunder shall thereafter bear the
same rate of interest as on the Principal Amount hereunder, but in no event
shall such interest be charged which would violate any applicable usury law. If
an Event of Default shall occur hereunder, the obligor shall, subject to Section
3 hereof, pay costs of collection, including reasonable attorneys'
fees,,incurred by the holder in the enforcement hereof.
No delay or failure by the holder of this Note in the exercise of any right
or remedy shall constitute a waiver thereof, and no single or partial exercise
by the holder hereof of any right or remedy shall preclude other or future
exercise thereof or the exercise of any other right or remedy.
3. Miscellaneous.
--------------
(a) The provisions of this Note shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
conflicts of law rules thereof.
(b) Notwithstanding the terms set forth above, in no event shall the
interest rate on this Note exceed the maximum interest rate permitted by
law.
(c) All notices and other communications (other than the Interest
Notice) hereunder shall be in writing and will be deemed to have been duly
given if delivered or mailed in accordance with the Shareholders'
Agreement.
IN WITNESS WHEREOF, this Note has been duly executed and delivered by
the Obligor on the date first above written.
/s/ Stephen Hittman
-------------------
Name of Obligor:
Address: 118 Lakeside Drive
Ramsey, NJ 07446
5
<PAGE>
EXHIBIT 10.28
MANAGEMENT STOCK SUBSCRIPTION AGREEMENT
---------------------------------------
This Management Stock Subscription Agreement is entered into as of the
24th day of April, 1997, by and between Big V Holding Corp., a Delaware
corporation (the "Company"), and the management investor so indicated on the
signature page hereof (the "Management Investor").
WHEREAS, the Company desires to sell to the Management Investor, and the
Management Investor desires to purchase from the Company, shares of common stock
of the Company on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and conditions set forth in this Agreement, the parties to
this Agreement, intending to be legally bound, mutually agree as follows:
ARTICLE I
Purchase and Sale of Shares
---------------------------
1.1 Sale and Issuance of Shares. Subject to the terms and conditions of
---------------------------
this Agreement, the Management Investor does hereby subscribe for and agrees to
acquire at the Closing (as hereinafter defined), and the Company agrees to issue
to the Management Investor at the Closing, the aggregate number of shares of the
Company's common stock set forth under his name on the signature page hereto
(the "Shares") in exchange for the aggregate consideration set forth on the
signature page hereto (the "Purchase Price"). A portion of the Purchase Price
shall be payable in cash in the amount set forth on the signature page hereto
(the "Cash Amount"), and the balance of the Purchase Price shall be paid by the
Management Investor's issuance to the Company of a Secured Promissory Note in
the principal amount set forth on the signature page hereto (the "Note").
1.2 Closing. The closing (the "Closing") of the purchase and sale of the
-------
Shares being purchased by the Management Investor shall occur at the offices of
the Company, on the date hereof (the "Closing Date"). At the Closing, the
Company shall deliver to the Management Investor a certificate or certificates
representing the Shares purchased hereunder and the Management Investor shall
deliver to the Company (i) the Cash Amount, (ii) the Note, (iii) a Stock Pledge
Agreement executed in favor of the Company, and (iv) a counterpart signature
page to the Amended and Restated Shareholders' Agreement dated as of December
17, 1993 (the "Shareholders' Agreement").
<PAGE>
ARTICLE II
Representations and Warranties of the Company
---------------------------------------------
The Company represents and warrants to the Management Investor that:
2.1 Organization and Standing. The Company is a corporation duly
-------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to carry on its
business as now conducted and as proposed to be conducted.
2.2 Authorization. All corporate action on the part of the Company and its
-------------
officers and directors necessary for the authorization, execution and delivery
of this Agreement and the performance of all obligations of the Company under
this Agreement required to be performed at or prior to the Closing and for the
authorization, issuance and delivery of the Shares being sold under this
Agreement has been taken. This Agreement, when executed and delivered by all
parties hereto, shall constitute the valid and legally binding obligations of
the Company, except to the extent the enforceability thereof may be limited by
bankruptcy laws, insolvency laws, reorganization laws, moratorium laws or other
laws affecting creditors' rights generally or by general equitable principles.
2.3 Validity of Shares. The Shares, when issued, sold and delivered in
------------------
accordance with the terms of this Agreement, shall be duly and validly issued,
fully paid and nonassessable.
ARTICLE III
Representations, Warranties and Agreements of
---------------------------------------------
the Management Investor
-----------------------
3.1 Authorization. The Management Investor represents and warrants that
-------------
this Agreement, when executed and delivered by him, will constitute a valid and
legally binding obligation of the Management Investor, except to the extent the
enforceability thereof may be limited by bankruptcy laws, insolvency laws,
reorganization laws, moratorium laws or other laws affecting creditors' rights
generally or by general equitable principles.
3.2 Investment Representations.
--------------------------
(a) This Agreement is made with the Management Investor in reliance
upon the Management Investor's representation to the Company, which by his
acceptance hereof the Management Investor hereby confirms, that (i) the Shares
to be received by him will be acquired by him, or a trust for the benefit of his
spouse, children or parents, for investment for his own account, and not with a
view to the sale or distribution of any
2
<PAGE>
part thereof in violation of applicable Federal and state securities laws, and
(ii) he has no current intention of selling, granting participation in or
otherwise distributing the same in violation of applicable Federal and state
securities laws. By executing this Agreement, the Management Investor further
represents that he does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to such
person, or to any third person, with respect to any of the Shares in violation
of applicable Federal and state securities laws.
(b) The Management Investor understands that the Shares have not been
registered under the 1933 Act on the basis that the sale provided for in this
Agreement and the issuance of securities hereunder is exempt from registration
under the 1933 Act pursuant to Section 4(2) thereof and regulations issued
thereunder, and that the Company's reliance on such exemption is predicated on
representations of the Management Investor set forth herein.
(c) The Management Investor represents that he has, either alone or
together with his "purchaser representative" as that term is defined in
Regulation D promulgated under the 1933 Act, such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of his investment. The Management Investor further represents that he has
had access, during the course of the transaction and prior to his purchase of
Shares, to information concerning the Company and its assets, liabilities and
prospects, and that he has had, during the course of the transaction and prior
to his purchase of the Shares, the opportunity to ask questions of, and receive
answers from, the Company concerning the terms and conditions of the offering
and to obtain additional information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify the accuracy of any information furnished to him or to which
he had access.
(d) The Management Investor understands that the Shares may not be
sold, transferred or otherwise disposed of without registration under the 1933
Act or an exemption therefrom, and that in the absence of an effective
registration statement covering the Shares or an available exemption from
registration under the 1933 Act, the Shares must be held indefinitely. In
particular, the Management Investor is aware that the Shares may not be sold
pursuant to Rule 144 promulgated under the 1933 Act unless all of the conditions
of that Rule are met. Among the current conditions for use of Rule 144 by
certain holders is the availability to the public of current information about
the Company. Such information is not now available, and the Company has no
current plans to make such information available. Such Management Investor
represents that, in the absence of an effective registration statement covering
the Shares, he will sell, transfer or otherwise dispose of the Shares only in a
manner consistent with his representations set forth herein and then only in
accordance with the Shareholders' Agreement.
3
<PAGE>
(e) Each Management Investor agrees, except with respect to transfers
permitted under the Shareholders' Agreement, that he will not make a
transfer, disposition or pledge of any of the Shares other than pursuant to
an effective registration statement under the 1933 Act, unless and until (i)
the Management Investor shall have notified the Company of the proposed
disposition and shall have furnished the Company with a statement of the
circumstances surrounding the disposition, and (ii) if requested by the
Company, at the expense of the Management Investor or transferee, he shall
have furnished to the Company an opinion of counsel, reasonably satisfactory
to the Company and its counsel, to the effect that such transfer may be made
without registration of the Shares under the 1933 Act.
3.3 Legends; Stop Transfer.
----------------------
(a) The Management Investor acknowledges that all certificates
evidencing the Shares shall bear the following legend:
"TRANSFER RESTRICTED
These securities have not been registered under the Securities Act of
1933, as amended, and may not be sold, offered for sale, pledged or
hypothecated in the absence of an effective registration statement as
to the securities under said Act or an opinion of counsel satisfactory
to the Company and its counsel that such registration is not required.
These securities are subject to the terms and conditions, including
restrictions on transfer, of an Amended and Restated Shareholders'
Agreement dated as of December 17, 1993, as amended from time to time,
a copy of which is on file with the Secretary of the Company."
(b) The certificates evidencing the Shares shall also bear any legend
required by any applicable state securities law.
(c) In addition, the Company shall make a notation regarding the
restrictions on transfer of the Shares in its stock books, and the Shares
shall be transferred on the books of the Company only if transferred or sold
pursuant to an effective registration statement under the 1933 Act covering
such Shares or pursuant to and in compliance with the provisions of Section
3.2(e) hereof. All Common Stock of the Company hereafter issued to the
Management Investor shall bear the same endorsement, shall be subject to all
the terms and conditions of this Agreement, and for all purposes shall be
deemed "Shares" hereunder. A copy of this Agreement, together with any
amendments thereto, shall remain on file with the Secretary of the Company
and shall be available for inspection to any properly interested person
without charge within five (5) days after the Company's receipt of a written
request therefor.
4
<PAGE>
ARTICLE IV
Miscellaneous
-------------
4.1 Notices. All notices and other communications necessary or
-------
contemplated under this Agreement shall be in writing and shall be delivered in
the manner specified herein or, in the absence of such specification, shall be
deemed to have been duly given when delivered by hand or one day after sending
by overnight delivery service, or five days after sending by certified mail,
postage prepaid, return receipt requested: to the Company, at the address of
its principal executive offices, and to the Management Investor, at his address
listed on the signature page hereto.
By notice complying with the foregoing provisions of this Section 4.1, each
party shall have the right to change the mailing address for future notices and
communications to such party.
4.2 Execution of Counterparts. This Agreement may be executed in
-------------------------
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement.
4.3 Binding Effect; Assignment. The rights and obligations of the
--------------------------
Management Investor under this Agreement may not be assigned to any other
person. Except as expressly provided in this Agreement, this Agreement shall
not be construed so as to confer any right or benefit upon any person other than
the parties to this Agreement, and their respective successors and assigns.
This Agreement shall be binding upon the Company and the Management Investor,
and their respective successors and assigns.
4.4 Governing Law. This Agreement shall be deemed to be a contract made
-------------
under the laws of the State of Delaware, and for all purposes shall be construed
in accordance with the laws of said State, without regard to principles of
conflicts of law. Both of the parties hereto agrees to submit to the
jurisdiction of the courts of the State of Delaware in any action or proceeding
arising out of or relating to this Agreement.
4.5 Severability of Provisions. Any provision of this Agreement which is
--------------------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
4.6 Exhibits and Headings. All Exhibits to this Agreement shall be deemed
---------------------
to be a part of this Agreement. The Article and Section headings used or
contained in this Agreement are for convenience of reference only and shall not
affect the construction of this Agreement.
5
<PAGE>
* * *
MANAGEMENT STOCK SUBSCRIPTION AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as an instrument under seal, as of the date first above written.
BIG V HOLDING CORP.
By: /s/ James A. Toopes, Jr.
------------------------
Name: James A. Toopes, Jr.
Title: Executive Vice President
MANAGEMENT INVESTOR
/s/ John Onufer, Jr.
--------------------
Name: John Onufer, Jr.
Number of Shares: 2,200
Aggregate Purchase Price: $77,000
Cash Amount: $5,597.50
Note Amount: $71,402.50
6
<PAGE>
COUNTERPART SIGNATURE PAGE
--------------------------
The undersigned, in connection with the purchase of shares of Common Stock,
par value $.01 per share, of Big V Holding Corp., a Delaware corporation (the
"Company"), hereby agrees to be bound by the terms and conditions of the Amended
and Restated Shareholders' Agreement, dated as of December 17, 1993, by and
among the Company and the investors named therein (the "Shareholders'
Agreement"), as a "Management Investor" (as such term is defined in the
Shareholders' Agreement).
IN WITNESS WHEREOF, the undersigned has executed this Counterpart Signature
Page as of April 24, 1997.
/s/ John Onufer, Jr.
---------------------
Name:
7
<PAGE>
EXHIBIT 10.29
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT dated as of April 24, 1997 is made and entered
into by and between Big V Holding Corp., a Delaware corporation ("Holding") and
John Onufer (the "Pledgor").
RECITALS
--------
A. The Pledgor has entered into a certain Management Stock Subscription
Agreement dated as of April 24, 1997 by and between Holding and the Pledgor (the
"Subscription Agreement") whereby Holding has agreed to issue and sell an
aggregate of 2,200 shares of its common stock, par value $0.01 per share (the
"Common Stock") to the Pledgor. Capitalized terms used herein and not otherwise
defined shall have the same meanings ascribed to them in the Employment
Agreement.
B. On the date hereof the Pledgor is delivering a note or notes of Pledgor
payable to Holding in the principal amount of $71,402.50 as of the date hereof
(the "Indebtedness"), which Indebtedness is being incurred in connection with
the sale of 2,200 shares of Common Stock to the Pledgor.
C. The Pledgor wishes to grant further security and assurance to Holding
in order to secure the payment of the principal and interest on the Indebtedness
and to pledge to Holding all shares of Common Stock to be held by such Pledgor.
AGREEMENT
---------
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
1. Pledge. As collateral security for the full and timely payment of the
------
principal of and interest on the Indebtedness, the Pledgor hereby delivers,
deposits, pledges, transfers and assigns to Holding, in form transferable for
delivery, and creates in Holding a security interest in 2,200 shares of Common
Stock held by the Pledgor and all certificates or other instruments or documents
evidencing the same now or hereafter owned by the Pledgor (together with any
securities or property to be delivered to the Pledgor pursuant to Section 2(c)
hereof, the "Pledged Securities").
The Pledgor hereby delivers to Holding appropriate undated security
transfer powers duly executed in blank for the Pledged Securities set forth
above and will deliver appropriate undated security transfer powers duly
executed in blank for the Pledged Securities to be pledged hereunder from time
to time hereafter.
<PAGE>
2. Administration of Security. The following provisions shall govern the
--------------------------
administration of the Pledged Securities:
(a) So long as an Event of Default has not occurred and is continuing
with respect to any Indebtedness (as used herein, "Event of Default" shall mean
the occurrence of any event of default under any instrument evidencing any
Indebtedness), the Pledgor shall be entitled to act with respect to the Pledged
Securities in any manner not inconsistent with this Stock Pledge Agreement, the
Subscription Agreement, the Amended and Restated Shareholders' Agreement dated
as of December 17, 1993 by and among the Holding and its stockholders (the
"Shareholders' Agreement") or any instrument evidencing any Indebtedness,
including voting the Pledged Securities and receiving all cash distributions
thereon and giving consents, waivers and ratifications in respect thereof;
(b) If at any time, the Pledgor receives any proceeds from the sale
by the Pledgor or any of the Pledgor's Permitted Transferees (as that term is
defined in the Shareholders' Agreement) of any Common Stock to anyone, the Net
Proceeds (as defined below) from such sale of Common Stock shall be applied to
the prepayment first of the accrued and unpaid interest on any Indebtedness and
then to the unpaid principal of any Indebtedness. The term "Net Proceeds" shall
mean the total proceeds received from the sale of Common Stock, minus an amount
-----
equal to the sum of (i) the federal income tax liability that would be payable
in respect of the gain recognized upon such sale, after giving effect to any
state income tax liability described in clause (ii) below, assuming a tax rate
equal to the maximum federal income tax rate on long-term capital gains in
effect at the time of sale, and (ii) any state income tax liability that would
be payable in respect of such gain, assuming the maximum applicable state income
tax rate on sales of such securities.
(c) If, while this Stock Pledge Agreement is in effect, the Pledgor
(or any of the Pledgor's Permitted Transferees) shall become entitled to receive
or shall receive any debt or equity security certificate (including, without
limitation, any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of capital, or
issued in connection with any reorganization), option or right, whether as a
dividend or distribution in respect of, in substitution of, or in exchange for
any Pledged Securities, or otherwise, the Pledgor and each of the Pledgor's
Permitted Transferees agree to accept the same as Holding's agent and to hold
the same in trust on behalf of and for the benefit of Holding and to deliver the
same forthwith to Holding in the exact form received, with the endorsement of
the Pledgor and the Pledgor's Permitted Transferees when necessary and/or
appropriate undated security transfer powers duly executed in blank, to be held
by Holding, subject to the terms of this Stock Pledge Agreement, as additional
collateral security for the Indebtedness. Notwithstanding the foregoing, it is
agreed that the Pledgor or any of the Pledgor's Permitted Transferees may
exercise any option or right received as contemplated in the preceding sentence,
and Holding will exercise any such option or right upon receipt of written
instructions to that effect and any required payments or documents from the
Pledgor or the Pledgor's Permitted Transferees and the securities received upon
such exercise of any such option or right shall thereafter be held by Holding as
contemplated by the preceding sentence.
2
<PAGE>
(d) The Pledgor and each of the Pledgor's Permitted Transferees shall
immediately upon request by Holding and in confirmation of the security
interests hereby created, execute and deliver to Holding such further
instruments, deeds, transfers, assurances and agreements, in form and substance
as Holding shall request, including any financing statements and amendments
thereto, or any other documents, as required under Delaware law and any other
applicable law to protect the security interests created hereunder and to enable
Holding to exercise its rights hereunder.
(e) If at any time, Holding exercises its right as set forth in the
Shareholders' Agreement to purchase the Pledged Securities, or the Pledgor
exercises his right as set forth in the Shareholders' Agreement to require
Holding to purchase the Pledged Securities, then the cash payable for the
Pledged Securities so purchased shall be the difference between the Put Price or
the Call Price, as applicable (as those terms are defined in the Shareholders'
Agreement), and the outstanding principal balance and accrued but unpaid
interest then due in respect of the Indebtedness.
(f) Subject to any sale by Holding or other disposition by Holding of
the Pledged Securities or other property pursuant to this Stock Pledge Agreement
and subject to Section 5 below, the Pledged Securities shall be returned to the
Pledgor or such Pledgor's Permitted Transferees upon payment in full of the
unpaid principal of, accrued interest on and any other amounts due in respect of
the Indebtedness.
3. Remedies in Case of an Event of Default.
---------------------------------------
(a) In case of an Event of Default shall have occurred and be
continuing, Holding shall have in each case all of the remedies of a secured
party under the Delaware Uniform Commercial Code, and, without limiting the
foregoing, shall have the right, in its sole discretion, to sell, resell, assign
and deliver all or, from time to time, any part of the Pledged Securities, or
any interest in or option or right to purchase any part thereof, on any
securities exchange on which the Pledged Securities or any of them may be
listed, at any private sale or at public auction, with or without demand of
performance or other demand, advertisement or notice of the time or place of
sale or adjournment thereof or otherwise (except that Holding shall give ten
days' notice to the Pledgor of the time and place of any sale pursuant to this
Section 3), for cash, on credit or for other property, for immediate or future
delivery, and for such price or prices and on such terms as Holding shall, in
its sole discretion, determine, the Pledgor and the Pledgor's Permitted
Transferees hereby waiving and releasing any and all right or equity of
redemption whether before or after sale hereunder. At any such sale Holding may
bid for and purchase the whole or any part of the Pledged Securities so sold
free from any such right or equity of redemption. Holding shall apply the
proceeds of any such sale first to the payment of all costs and expenses,
-----
including reasonable attorneys' fees, incurred by Holding in enforcing its
rights under this Stock Pledge Agreement, second to the payment of accrued and
------
unpaid interest on and then of unpaid principal of the Indebtedness of the
Pledgor and third to any other amounts due on the Indebtedness.
-----
3
<PAGE>
(b) The Pledgor and the Pledgor's Permitted Transferees recognize
that Holding may be unable to effect a public sale of all or a part of the
Pledged Securities by reason of certain prohibitions contained in the Securities
Act of 1933, as amended (the "Act"), or in the rules and regulations promulgated
thereunder, or in applicable state securities or "blue sky" laws, but may be
compelled to resort to one or more private sales to a restricted group of
purchasers who will be obliged to agree, among other things, to acquire the
Pledged Securities for their own account, for investment and not with a view to
the distribution or resale thereof. The Pledgor and the Pledgor's Permitted
Transferees agree that private sale so made may be at prices and on other terms
less favorable to the seller and that Holding has no obligation to delay the
sale of the Pledged Securities for the period of time necessary to permit the
registration of the Pledged Securities for public sale under the Act and under
applicable state securities or "blue sky" laws. The Pledgor and the Pledgor's
Permitted Transferees agree that a private sale or sales made under the
foregoing circumstances shall be deemed to have been made in a commercially
reasonable manner.
(c) If any consent, approval or authorization of any state, municipal
or other governmental department, agency or authority should be necessary to
effectuate any sale or disposition by Holding pursuant to this Section 3 of the
Pledged Securities, the Pledgor and each of the Pledgor's Permitted Transferee
will execute all such applications and other instruments as may be required in
connection with securing any such consent, approval or authorization, and will
otherwise use their best efforts to secure the same.
(d) Neither failure nor delay on the part of Holding to exercise any
right, remedy power or privilege provided for herein or by statute or at law or
in equity shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, remedy, power or privilege preclude any other right,
remedy, power or privilege.
4. Pledgor's Obligations Not Affected. The obligations of the Pledgor and
----------------------------------
each of the Pledgor's Permitted Transferees under this Stock Pledge Agreement
shall remain in full force and effect without regard to, and shall not be
impaired or affected by: (a) any subordination, amendment or modification of or
addition or supplement to the Employment Agreement, the Shareholders' Agreement,
or the Indebtedness or any assignment or transfer thereof; (b) any exercise or
non-exercise by Holding of any right, remedy, power or privilege under or in
respect of this Stock Pledge Agreement, the Shareholders' Agreement or any
instrument evidencing any Indebtedness, or any waiver of any such right, remedy,
power or privilege; (c) any waiver, consent, extension indulgence or other
action or inaction in respect of this Stock Pledge Agreement, the Employment
Agreement, the Shareholders' Agreement or any instrument evidencing any
Indebtedness, or any assignment or transfer of any thereof; or (d) any
bankruptcy, insolvency, reorganization arrangement, readjustment, composition,
liquidation or the like, of Holding, whether or not the Pledgor and the
Pledgor's Permitted Transferees shall have notice or knowledge of any of the
foregoing.
5. Transfer by Pledge. The Pledgor and the Pledgor's Permitted
------------------
Transferees will not sell, assign, transfer or otherwise dispose of, grant any
option with respect to, or
4
<PAGE>
mortgage, pledge or otherwise encumber the Pledged Securities or any interest
therein except as provided in the Employment Agreement and the Shareholders'
Agreement. In the event of a sale, assignment, transfer or other disposition of
or mortgage, pledge or other encumbrance of Pledged Securities pursuant to the
Subscription Agreement or the Shareholders' Agreement, the Common Stock so sold,
assigned, transferred or otherwise disposed of or mortgaged, pledged or
otherwise encumbered shall remain subject to the provisions of this Stock Pledge
Agreement and of the Shareholders' Agreement and the purchaser, assignee,
transferee or other acquirer, mortgagee or pledgee shall agree in writing, in
form and substance satisfactory to Holding, to be bound by all the terms of this
Stock Pledge Agreement and of the Shareholders' Agreement with the same force
and effect as if such transferee were a party hereto.
6. Attorney-in-Fact. Holding is hereby appointed the attorney-in-fact of
----------------
the Pledgor and the Pledgor's Transferees for the purpose of carrying out the
provisions of this Stock Pledge Agreement and taking any action and executing
any instrument which Holding reasonably may deem necessary or advisable to
accomplish the purposes hereof, including without limitation, the execution of
the applications and other instruments described in Section 3(c) hereof, which
appointment as attorney-in-fact is irrevocable as one coupled with an interest.
7. Termination. Upon payment in full of the unpaid principal of, accrued
-----------
interest on and all other amounts payable in respect of the Indebtedness, this
Stock Pledge Agreement shall terminate and the Pledgor or the Pledgor's
Permitted Transferees shall be entitled to the return of such of the Pledged
Securities as have not theretofore been sold or otherwise applied pursuant to
the provisions of this Stock Pledge Agreement.
8. Notices. All notices or other communications required or permitted to
-------
be given hereunder shall be deemed delivered when delivered by hand or when sent
by first class, certified mail, postage and fees prepaid, as follows:
(i) If to Holding: Big V Holding Corp.
c/o Thomas H. Lee Company
75 State Street
Boston, Massachusetts 02109
Copy to: Michael J. Riccio, Jr., Esq.
Hutchins, Wheeler & Dittmar
101 Federal Street
Boston, Massachusetts 02110
(ii) If to the Executive: To the address set forth below
unless and until notice of another
or different address shall be
given as provided herein.
5
<PAGE>
9. Binding Effect, Successors and Assigns. This Stock Pledge Agreement
--------------------------------------
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns and nothing herein is intended or shall be
construed to give any other person any right, remedy or claim under, to or in
respect of this Stock Pledge Agreement. No transfer of Pledged Securities of
the Pledgor to the Pledgor's Permitted Transferees shall be permitted hereunder,
and any such transfer shall be null and void, unless and until each such
Permitted Transferee agrees in writing, in form and substance satisfactory to
Big V Supermarkets, Inc. and Holding, to become bound by this Stock Pledge
Agreement with respect to the Pledged Securities so transferred.
10. Miscellaneous. Holding and its assigns shall have no obligation in
-------------
respect of the Pledged Securities, except to hold and dispose of the same in
accordance with the terms of this Stock Pledge Agreement. Neither this Stock
Pledge Agreement nor any provision hereof may be amended, modified, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the amendment, modification, waiver,
discharge or termination is sought. The provisions of this Stock Pledge
Agreement shall be binding upon the successors and assigns of the Pledgor and
each of the Pledgor's Permitted Transferees. The captions in this Stock Pledge
Agreement are for convenience of reference only and shall not limited the
provisions hereof. This Stock Pledge Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware,
without regard to the conflicts of law rules thereof. This Stock Pledge
Agreement may be executed simultaneously in counterparts, each of which is an
original, but all of which together shall constitute one instrument.
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Stock Pledge
Agreement to be executed and delivered on the date first above written.
BIG V HOLDING CORP.
By: /s/ James A. Toopes, Jr.
------------------------
Title: Executive Vice President
/s/ John Onufer, Jr.
--------------------
Name: John Onufer, Jr.
Address: 521 Barberry Lane
New Windsor, NY 12553
7
<PAGE>
EXHIBIT 10.30
$71,402.50 April 24, 1997
SECURED PROMISSORY NOTE
FOR VALUE RECEIVED, the undersigned (the "Obligor"), promises to pay
to the order of Big V Holding Corp., a Delaware corporation, with its principal
executive offices located at 75 State Street, Boston, Massachusetts 02109 (the
"Company"), the principal sum of Seventy-One Thousand Four Hundred Two DOLLARS
and 50 cents ($71,402.50) (the Principal Amount"), together with any amounts
which are deemed to be converted to principal in accordance with the terms
hereof ("Converted Amounts", and collectively with the Principal Amount,
sometimes referred to herein as the "Aggregate Principal Amount") in lawful
money of the United States of America, together with all accrued but unpaid
interest, on December 31, 2005 (the "Maturity Date"), subject to mandatory
prepayment and/or acceleration as set forth herein.
Interest shall accrue on the Principal Amount outstanding from time to
time, and to the extent permitted by applicable law, on the Converted Amounts
outstanding from time to time, at a fluctuating rate per annum (the "Stated
Rate") at all times equal to the rate at which the loans outstanding under the
Company's senior credit facility bear interest, changes in the Stated Rate to
take effect simultaneously with changes in the rate under the senior credit
facility, computed on the basis of a 365- or 366-day year, as the case may be,
from and after the date of this Note and continuing until the date of payment of
the Aggregate Principal Amount in full. Interest shall be payable hereunder
annually on each Interest Payment Date (as defined below), in an amount equal to
the aggregate federal, state and local income tax liability incurred by the
Company as a result of all interest accrued hereunder for the preceding fiscal
year of the Company, as conclusively determined by the Company, and as set forth
in the Interest Notice (as defined below). All interest accrued hereunder and
not required to be paid on the next succeeding Interest Payment Date in
accordance with the terms hereof shall be deemed for all purposes hereunder
converted to principal hereunder and shall be deemed to be a Converted Amount
and shall be due and payable on the Maturity Date, subject to mandatory
prepayment and/or acceleration as set forth below.
If the date set for payment of principal or interest hereunder is a
Saturday, Sunday or legal holiday, then such payment shall be made on the next
succeeding business day.
The terms below shall have the following definitions:
(a) "Interest Notice" as used herein shall mean a written notice sent
by the Company to the Obligor specifying the aggregate amount of federal, state
and local income tax liability incurred by the Company as a result of all
interest accrued hereunder for the preceding fiscal year of the Company.
<PAGE>
(b) "Interest Payment Date" as used herein shall mean a date ten days
after the Obligor receives the Interest Notice. For purposes hereof, the
Obligor shall conclusively be deemed to have received the Interest Notice (i)
three days after the Company sends such notice by certified or registered mail
or the day after the Company sends such notice by certified or registered mail
or the day after the Company sends such notice by a nationally recognized
overnight courier, to the address of the Obligor set forth below the Obligor's
signature hereon or such other address that the Obligor specifies in writing to
the Company at its address set forth above, or (ii) the day the Company delivers
such notice by hand.
(c) "Obligations" as used herein shall mean the Aggregate Principal
Amount outstanding from time to time, all accrued but unpaid interest hereunder
and all other amounts hereunder, whether principal, interest, fees or
otherwise.
Payment of the principal of and interest on this Note is secured pursuant
to the terms of a Stock Pledge Agreement dated as of the date hereof, between
the Obligor and the Company (the "Pledge Agreement"), reference to which is made
for a description of the collateral provided thereby and the rights of the
Company and the holder of this Note in respect of such collateral.
This Note is subject to the following further terms and conditions:
1. Payment and Prepayment.
----------------------
(a) All payments and prepayments of principal of and interest on this
Note shall be made to the Company or its order, or to the legal holder of this
Note or such holder's order, in lawful money of the United States of America at
the principal offices of the Company (or at such other place as the holder
hereof shall notify the Obligor in writing) upon final payment of principal of
and interest on this Note it shall be surrendered for cancellation.
Concurrently with any prepayment of any portion of the Aggregate Principal
Amount of this Note pursuant to this Section 1, the Company (or other holder of
this Note) shall make a notation of such payment hereon. Any partial prepayment
shall be applied first to accrued and unpaid interest hereof and then to the
unpaid Aggregate Principal Amount.
(b) Voluntary Prepayment. The Obligor may, at its option, prepay this
--------------------
Note in whole or in part at any time or from time to time without penalty or
premium. Any prepayments of any portion of the Aggregate Principal Amount of
this Note shall be accompanied by payment of all interest accrued but unpaid
hereunder.
2
<PAGE>
(c) Mandatory Prepayment.
--------------------
(i) If at any time, or from time to time, after the date
hereof and following the occurrence and during the continuance of an Event of
Default (as that term is defined below) the Obligor or any of the Obligor's
Permitted Transferees (as that term is defined in a an Amended and Restated
Shareholders' Agreement dated as of December 17, 1993 among the Company and its
shareholders (the "Shareholders' Agreement")) shall receive or shall otherwise
become entitled to receive from the Company (or other holder of this Note) any
cash payments, cash dividends or other cash distributions in respect of the
Company's Common Stock, then and in each case the Obligor and any of the
Obligor's Permitted Transferees shall, upon the receipt thereof, return to the
Company (or other holder of this Note) such payments, dividends and
distributions, and the Company (or other holder of this Note) shall apply such
amount to the prepayment of the Obligations in the manner set forth in Section
1(b), and the Company (or other holder of this Note) shall not be obligated to
make any such payment, cash dividend or other cash distribution not theretofore
made to which the Obligor and any of the Obligor's Permitted Transferees are
otherwise entitled in respect of their Common Stock and may, instead, in lieu
thereof, set off the amount of such cash payment, cash dividend or other cash
distribution against the Obligations.
(ii) If at any time, the Obligor receives any proceeds from the
sale by the Obligor or any of the Obligor's Permitted Transferees of any Common
Stock to anyone, the Net Proceeds (as defined in the Stock Pledge Agreement
dated as of the date hereof between the Obligor and the Company) from such sale
of Common Stock shall be applied to the prepayment of this Note in the manner
provided in the Stock Pledge Agreement.
(iii) In addition to the provisions of subsections (c)(i) and
(c)(ii) above:
(A) If the Obligor voluntarily terminates his employment with
the Company, of if the Company terminates the employment of the Obligor for
Cause (as such term is defined in the Shareholders' Agreement), then the Obligor
shall, without the necessity of any notice or demand by the Company of any kind,
immediately make a mandatory prepayment hereunder in an amount equal to the then
outstanding Obligations.
(B) If the Obligor dies, suffers a disability in accordance
with Section 3.02 of the Employment Agreement or if the Company terminates his
employment without Cause (as such term is defined in the Shareholders'
Agreement) (each an "Involuntary Termination"), then the Obligor shall, without
the necessity of any notice or demand by the Company of any kind, immediately
make a mandatory prepayment hereunder in an amount equal to the then outstanding
Obligations; provided, however, that if upon such Involuntary Termination (I)
either the Company
3
<PAGE>
exercises its Call Option (as defined in the Shareholders' Agreement) or the
Obligor exercises his Put Option (as defined in the Shareholders' Agreement),
and the proceeds of the exercise of such Call Option or Put option, as the case
may be, after first being applied to all of the then outstanding Obligations
other than Converted Amounts, is not sufficient to pay all Converted Amounts, or
(II) neither the Company exercises its Call Option nor the Obligor exercises his
Put Option, then, in the case of subclause (B)(I), such unpaid Converted
Amounts, and in the case of subclause (B)(II), all outstanding Converted
Amounts, shall not be immediately due and payable but shall be due and payable
in equal monthly installments ("Converted Amount Installments") payable on the
first day of each month from the date of the Involuntary Termination until the
Maturity Date. The Converted Amount shall bear interest hereunder at the Stated
Rate and such interest shall be payable with each Converted Amount Installment.
2. Events of Default. Upon the occurrence of any of the following
-----------------
events ("Events of Default"):
(a) Failure to pay any principal of this Note, including
any prepayments required hereunder, when due;
(b) Failure to pay any interest installment due under this
Note which shall remain unremedied for ten days following the date
when such installment was originally due hereunder;
(c) Failure to pay any Converted Amount Installment
when due;
(d) An event of default under any other note
evidencing indebtedness of the Obligor to the Company or its
subsidiaries;
(e) Failure of the obligor to perform his obligations
under the terms of his employment with theCompany; or
(f) The filing of a voluntary or involuntary petition
for an order of relief under the Bankruptcy Code by or against the
Obligor, or any filing for relief under any statue or federal
insolvency statute by or against the Obligor;
then, and in any such event, the holder of this Note may declare, by notice of
default given to the Obligor, the entire unpaid Aggregate Principal Amount of
the Note, all Converted Amount Installments, if any, and all accrued and unpaid
interest thereon to be forthwith due and payable whereupon the entire Aggregate
Principal Amount of this Note outstanding, all Converted Amount Installments, if
any, and any accrued and
4
<PAGE>
unpaid interest hereunder shall become due and payable without presentment,
demand, protest, notice of dishonor or other demands and notices of any kind,
all of which are hereby expressly waived. Upon the occurrence of an Event of
Default, the accrued and unpaid interest hereunder shall thereafter bear the
same rate of interest as on the Principal Amount hereunder, but in no event
shall such interest be charged which would violate any applicable usury law. If
an Event of Default shall occur hereunder, the obligor shall, subject to Section
3 hereof, pay costs of collection, including reasonable attorneys'
fees,,incurred by the holder in the enforcement hereof.
No delay or failure by the holder of this Note in the exercise of any right
or remedy shall constitute a waiver thereof, and no single or partial exercise
by the holder hereof of any right or remedy shall preclude other or future
exercise thereof or the exercise of any other right or remedy.
3. Miscellaneous.
-------------
(a) The provisions of this Note shall be governed by and
construed in accordance with the laws of the State of Delaware, without
regard to the conflicts of law rules thereof.
(b) Notwithstanding the terms set forth above, in no event shall
the interest rate on this Note exceed the maximum interest rate permitted
by law.
(c) All notices and other communications (other than the
Interest Notice) hereunder shall be in writing and will be deemed to have
been duly given if delivered or mailed in accordance with the Shareholders'
Agreement.
IN WITNESS WHEREOF, this Note has been duly executed and
delivered by the Obligor on the date first above written.
/s/ John Onufer, Jr.
--------------------
Name of Obligor:
Address: 521 Barberry Lane
New Windsor, NY 12553
5
<PAGE>
EXHIBIT 10.31
BIG V HOLDING CORP.
1990 TIME ACCELERATED RESTRICTED STOCK OPTION PLAN
--------------------------------------------------
NON-QUALIFIED TIME ACCELERATED
RESTRICTED STOCK OPTION AGREEMENT
with
JOHN ONUFER
<PAGE>
BIG V HOLDING CORP.
STOCK OPTION AGREEMENT
UNDER 1990 TIME ACCELERATED RESTRICTED STOCK OPTION PLAN
NON-QUALIFIED TIME ACCELERATED RESTRICTED STOCK OPTION
------------------------------------------------------
AGREEMENT entered into this 24th day of April, 1997 by and between Big V
Holding Corp., a Delaware corporation (the "Company"), and the undersigned
employee (the "Employee") of the Company (or one of its subsidiaries) (the
Company and its subsidiaries herein together referred to as the "Company").
1. The Company desires to grant the Employee a non-qualified stock option
under the Company's 1990 Time Accelerated Restricted Stock Option Plan (the
"Plan") to acquire shares of the Company's Common Stock, par value $.01 per
share (the "Common Stock").
2. Section 6 of the Plan provides that each option is to be evidenced by
an option agreement, setting forth the terms and conditions of the option.
ACCORDINGLY, in consideration of the premises and of the mutual covenants
and agreements contained herein, the Company and the Employee hereby agree as
follows:
1. Grant of Option. The Company hereby irrevocably grants to the Employee
---------------
a non-qualified stock option (the "Option") to purchase all or any part of an
aggregate of 3,400 shares of Common Stock (the "Shares") on the terms and
conditions hereinafter set forth. This option shall not be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Purchase Price. The purchase price ("Purchase Price") for the Shares
--------------
covered by the Option shall be $35.00 per Share, which Purchase Price is not
less than the fair market value of the Shares on the date hereof.
3. Time of Exercise of Option; Exercisability. Except as provided below,
------------------------------------------
the Option shall not be exercisable prior to nine years and six months from the
date of grant of the Option at which time the Option shall become exercisable in
full. The Option shall become exercisable earlier, however, with respect to the
number of Shares and upon the attainment of certain performance goals on or
prior to the end of certain performance periods, all as shown on Schedule I
----------
attached hereto and incorporated herein.
2
<PAGE>
4. Term of Options; Exercisability.
-------------------------------
(a) Term.
----
(1) Each Option shall expire ten (10) years from the date of the
granting thereof, but shall be subject to earlier termination as provided in
subsections (2) through (4) below.
(2) If the Employee is terminated for Cause (as defined in the
Amended and Restated Shareholders' Agreement among the Company, and its
shareholders dated as of December 17, 1993) or voluntarily terminates his
employment with the Company, at any time, for any reason or for no reason, in
either such case, the option granted to the Employee shall terminate, with
respect to any Shares subject to options exercisable on the date of such
termination, on the fifth day following such termination and, with respect to
any Shares subject to options not exercisable on the date of such termination,
on the date of such termination.
(3) If the Employee is terminated by the Company without Cause,
at any time, the option granted to the Employee shall terminate, with respect to
any Shares subject to options exercisable on the date of such termination, on
the 90th day following such termination and, with respect to any Shares subject
to options not exercisable on the date of such termination, on the date of such
termination.
(4) In the event of the termination of the Employee's employment
with the Company or one of its subsidiaries due to the death or disability of
the Employee, the option granted to the Employee shall terminate, with respect
to any Shares subject to options exercisable on the date of such termination, on
the 365th day following such termination and, with respect to any Shares subject
to options not exercisable on the date of such termination, on the date of such
termination.
(b) Exercisability. If the Employee ceases to be an employee of the
--------------
Company, at any time, for any reason or for no reason, the Option granted to the
Employee hereunder shall be exercisable only to the extent that the right to
purchase Shares under such Option has accrued and is in effect on the date such
Employee ceases to be an employee of the Company or one of its subsidiaries.
5. Manner of Exercise of Option.
----------------------------
(a) To the extent that the right to exercise the Option has accrued
and is in effect, the Option may be exercised in full or in part by giving
written notice to the Company stating the number of Shares exercised and
accompanied by payment in full for such Shares. Payment may be either wholly in
cash or by check payable to the Company. Upon such exercise, delivery of a
certificate for paid-up, non-assessable Shares shall be made at the principal
office of the Company to the person exercising the
3
<PAGE>
Option, not more than thirty (30) days from the date of receipt of the notice by
the Company.
(b) The Company shall at all times during the term of the Option
reserve and keep available such number of Shares of its common stock as will be
sufficient to satisfy the requirements of the Option.
(c) Notwithstanding the provision of Section 5(a) of this Agreement,
the Company may delay the issuance of Shares covered by the exercise of this
Option and the delivery of a certificate for such Shares until one of the
following conditions shall be satisfied:
(i) The Shares with respect to which such Option has been
exercised are at the time of the issue of such Shares effectively
registered or qualified under applicable federal and state securities
acts now in force or as hereafter amended; or
(ii) Counsel for the Company shall have given an opinion, which
opinion shall not be unreasonably conditioned or withheld, that such
Shares are exempt from registration and qualification under applicable
federal and state securities acts now in force or as hereafter
amended.
6. Non-Transferability. The right of the Employee to exercise the Option
-------------------
shall not be assignable or transferable by the Employee otherwise than by will
or the laws of descent and distribution, and the Option may be exercised during
the lifetime of the Employee only by him or her. The Option shall be null and
void and without effect upon the bankruptcy of the Employee or upon any
attempted assignment or transfer, except as hereinabove provided, including
without limitation any purported assignment, whether voluntary or by operation
of law, pledge, hypothecation or other disposition contrary to the provisions
hereof, or levy of execution, attachment, trustee process or similar process,
whether legal or equitable, upon the Option.
7. Shares Subject to Restrictions; Representation Letter and Investment
--------------------------------------------------------------------
Legend.
------
(a) Each of the Shares shall be subject to the restrictions on
transfer imposed on, the terms and conditions requiring the sale or transfer of,
and the rights and the options of the Company and certain stockholders of the
Company to purchase, those shares of Common Stock held by Management Investors
under the terms of the Amended and Restated Shareholders' Agreement Dated as of
December 17, 1993 (the "Restrictions"). The Shares shall be subject to the
Restrictions and the Employee hereby agrees to be bound by and undertakes to
comply with the Restrictions, whether or not the Employee is a party to the
Shareholders' Agreement, in the same manner and to the same extent as a
Management Investor, and agrees and undertakes to execute and deliver any
4
<PAGE>
and all such additional agreements, instruments and other documents deemed
necessary by the Company to effect the provisions of this subparagraph (a).
(b) In the event that for any reason the Shares to be issued upon
exercise of the Option shall not be effectively registered under the Securities
Act of 1933 (the "1933 Act"), upon any date on which the Option is exercised in
whole or in part, the person exercising the Option shall give a written
representation to the Company in the form attached hereto as Exhibit 1 and the
Company shall place an "investment legend", so-called, as described in Exhibit 1
hereto, upon any certificate for the Shares issued by reason of such exercise.
(c) The Company shall be under no obligation to qualify Shares or to
cause a registration statement or a post-effective amendment to any registration
statement to be prepared for the purposes of covering the issue of Shares.
8. Adjustments on Changes in Capitalization. Adjustments or changes in
----------------------------------------
capitalization and the like shall be made in accordance with Section 12 of the
Plan, as in effect on the date of this Agreement.
9. Recapitalizations, Reorganizations, Changes in Control and the Like.
-------------------------------------------------------------------
Adjustments and other matters relating to recapitalizations, reorganizations,
sale of the assets of the Company, changes in control and the like shall be made
and determined in accordance with Section 12 of the Plan, as in effect on the
date of this Agreement (including, but not limited to, the termination and
cancellation of options upon a sale of all or substantially all of the assets of
the Company or a change of control in the Company).
10. No Special Employment Rights. Nothing contained in the Plan or this
----------------------------
Agreement shall be construed or deemed by any person under any circumstances to
bind the Company to continue the employment of the Employee for the period
within which this Option may be exercised. However, during the period of the
Employee's employment, the Employee shall render diligently and faithfully the
services which are assigned to the Employee from time to time by the Board of
Directors or by the executive officers of the Company and shall at no time take
any action which directly or indirectly would be inconsistent with the best
interests of the Company.
11. Rights as a Shareholder. The Employee shall have no rights as a
-----------------------
shareholder with respect to any Shares which may be purchased by exercise of
this Option unless and until a certificate or certificates representing such
Shares are duly issued and delivered to the Employee and the Employee has
executed and delivered to the Company any and all agreements, instruments and
other documents required by the Company pursuant to Section 7(a) hereof. Except
as otherwise expressly provided in the Plan, no adjustment shall be made for
dividends or other rights for which the record date is prior to the date such
stock certificate is issued.
5
<PAGE>
12. Withholding Taxes. Whenever Shares are to be issued upon exercise of
-----------------
this Option, the Company shall have the right to require the Employee to remit
to the Company an amount sufficient to satisfy all Federal, state and local
withholding tax requirements prior to the delivery of any certificate or
certificates for such Shares.
*******************************
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and its corporate seal to be hereto affixed by its officer thereunto duly
authorized, and the Employee has hereunto set his or her hand and seal, all as
of the day and year first above written.
BIG V HOLDING CORP.
By: /s/ James A. Toopes, Jr.
------------------------
Name:
Title: Executive Vice President
EMPLOYEE
/s/ John Onufer, Jr.
--------------------
Address:
Social Security
No.: ###-##-####
-----------
6
<PAGE>
SCHEDULE I
Option Vesting Schedule
-----------------------
(a) The Option will become exercisable with respect to all Shares
subject thereto (the "Performance Shares") in the manner provided below.
(b) If the Company's Cash Flow (as hereinafter defined) is greater
than the Target Cash Flow for the applicable Target Period, as specified in
Schedule A below, then the Option shall become exercisable with respect to
- ----------
twenty-five percent (25%) of the Performance Shares. If the Company's Cash Flow
is less than the Target Cash Flow for the applicable Target Period but at least
ninety percent (90%) of the Target Cash Flow for the Target Period, then the
Option shall become exercisable with respect to two and one-half percent (2.5%)
of the Performance Shares for each one percent (1%) by which the Company's
actual Cash Flow exceeds ninety percent of the Target Cash Flow for the Target
Period, up to a maximum of twenty-five percent (25%) of the Performance Shares
for any one Target Period. An Option shall be so exercisable on or after the
later of the end of the applicable Target Period or the date that the Company's
Cash Flow for such Target Period is certified by the Chief Financial Officer of
the Company.
For the purpose of this Agreement, Cash Flow shall mean the Company's
consolidated income without reduction for non-cash or deferred compensation
expense, interest (except as indicated below), income taxes, depreciation or
amortization but after deduction of: (i) all operating expenses (including up to
$250,000 in management fees payable to Thomas H. Lee Company and J.S.
Frelinghuysen & Co. pursuant to their respective Management Agreements with the
Company), and (ii) other reserves required in connection with the operation of
the Company's business in the ordinary course. The determination of Cash Flow
shall not take into account any income or expense attributable to LIFO reserves,
gains or losses on sales of assets or other extraordinary gains or losses or
non-cash rent expenses. Except as otherwise provided herein, Cash Flow shall be
determined in accordance with generally accepted accounting principles
consistently applied, all as reflected in the Company's most recently available
consolidated audited financial statements for the immediately preceding fiscal
year and as certified by the Chief Financial Officer of the Company.
(c) In addition to the vesting of the Options under paragraph (b)
above, upon the expiration of the four year period ended December 31, 1998, any
of the Options with respect to the Performance Shares which remain unexercisable
(after giving effect to paragraph (b) above) (the "Remaining Shares") may also
become exercisable as follows: (i) if the Company's cumulative Cash Flow for the
four year period ended December 31, 1998 (the "Cumulative Cash Flow") is equal
to or greater than $213 million, then the Option will become exercisable with
respect to all of the Remaining Shares; and (ii) if the Cumulative Cash Flow is
greater than $192 million but less than $213 million, then, the Option will
become exercisable with respect to a portion of the Remaining Shares equal to
(x) four and three-quarters percent (4.75%) of the Performance Shares for each
7
<PAGE>
additional $1,000,000 of Cash Flow in excess of $192 million, less (y) the
----
number of Performance Shares which have vested under paragraph (b) above, such
that the Option will be exercisable in full if the Cumulative Cash Flow is equal
to $213 million. The Option will be exercisable pursuant to this paragraph (c)
on or after the later of the end of the Total Target Period of the date that the
Company's Cumulative Cash Flow is certified by the Chief Financial Officer of
the Company.
(d) The Target Cash Flow levels set forth on Schedule A shall be
----------
adjusted in the manner and to the extent reasonably determined by the Board of
Directors in good faith to take into account (i) material changes in the
Company's method of accounting or (ii) the sale of substantial assets by the
Company or the acquisition of ongoing businesses, whether by merger,
consolidation or otherwise. Any such adjustment shall be made in good faith
with the intent that, after taking into account the nature of the cause of the
adjustment, the measure of the Company's performance established by the Target
Cash Flow levels before and after the adjustment will be as nearly equivalent as
is reasonably possible.
SCHEDULE A
----------
<TABLE>
<CAPTION>
Maximum Percentage
Target Target Cash Flows of Shares Eligible
Period (1,000's) for Early Vesting
- ---------------------------------------------------------------
<S> <C> <C>
1/1/95 to 12/31/95 $ 43,000 25%
1/1/96 to 12/31/96 $ 50,000 25%
1/1/97 to 12/31/97 $ 57,000 25%
1/1/98 to 12/31/98 $ 63,000 25%
Total Target Cash Flow
for Total Target Period $213,000
(1/1/95 to 12/31/98)
</TABLE>
(e) In the event of a Sale of the Company (as hereinafter defined),
then any as yet unvested Shares shall vest if and to the extent they would
otherwise vest hereunder based on the following formula: (i) the Cash Flow for
the Target Period in which the Sale takes place (the "Sale Target Period") shall
be annualized based on the Company's most recently available consolidated
audited financial statements for the portion of the Sale Target Period prior to
the Sale (or, if audited financial statements are not available, unaudited
financial statements prepared in accordance with generally accepted accounting
principles consistently applied subject to year end adjustments and the absence
of notes, as certified by the Chief Financial Officer of the Company) and after
taking into account seasonal adjustment as determined in good faith by the
Company's Board of Directors, and the Company will be deemed to have achieved
such annualized Cash Flow in the Sale Target Period and (ii) the Company will be
deemed to have achieved in any Target Periods occurring after the Sale Target
Period, the average of the percentages of the Target Cash Flows achieved in the
prior Target Periods (based
8
<PAGE>
on the annualized Cash Flow with respect to the Sale Target Period). Any Shares
that would have vested had the Company achieved such deemed Cash Flows shall
vest and become exercisable immediately prior to the Sale of the Company. For
the purposes hereof, a "Sale" of the Company shall mean a sale of all or
substantially all of the assets of the Company or the sale or other transfer of
fifty percent or more of the common stock of the Company held by the
Institutional Investors (as defined in the Shareholders' Agreement) to an
unaffiliated third party or parties.
9
<PAGE>
EXHIBIT 10.32
MANAGEMENT STOCK SUBSCRIPTION AGREEMENT
---------------------------------------
This Management Stock Subscription Agreement is entered into as of the
29th___ day of August, 1997, by and between Big V Holding Corp., a Delaware
corporation (the "Company"), and the management investor so indicated on the
signature page hereof (the "Management Investor").
WHEREAS, the Company desires to sell to the Management Investor, and the
Management Investor desires to purchase from the Company, shares of common stock
of the Company on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and conditions set forth in this Agreement, the parties to
this Agreement, intending to be legally bound, mutually agree as follows:
ARTICLE I
Purchase and Sale of Shares
---------------------------
1.1 Sale and Issuance of Shares. Subject to the terms and conditions of
---------------------------
this Agreement, the Management Investor does hereby subscribe for and agrees to
acquire at the Closing (as hereinafter defined), and the Company agrees to issue
to the Management Investor at the Closing, the aggregate number of shares of the
Company's common stock set forth under his name on the signature page hereto
(the "Shares") in exchange for the aggregate consideration set forth on the
signature page hereto (the "Purchase Price"). A portion of the Purchase Price
shall be payable in cash in the amount set forth on the signature page hereto
(the "Cash Amount"), and the balance of the Purchase Price shall be paid by the
Management Investor's issuance to the Company of a Secured Promissory Note in
the principal amount set forth on the signature page hereto (the "Note").
1.2 Closing. The closing (the "Closing") of the purchase and sale of the
-------
Shares being purchased by the Management Investor shall occur at the offices of
the Company, on the date hereof (the "Closing Date"). At the Closing, the
Company shall deliver to the Management Investor a certificate or certificates
representing the Shares purchased hereunder and the Management Investor shall
deliver to the Company (i) the Cash Amount, (ii) the Note, (iii) a Stock Pledge
Agreement executed in favor of the Company, and (iv) a counterpart signature
page to the Amended and Restated Shareholders' Agreement dated as of December
17, 1993 (the "Shareholders' Agreement").
<PAGE>
ARTICLE II
Representations and Warranties of the Company
---------------------------------------------
The Company represents and warrants to the Management Investor that:
2.1 Organization and Standing. The Company is a corporation duly
-------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to carry on its
business as now conducted and as proposed to be conducted.
2.2 Authorization. All corporate action on the part of the Company and its
-------------
officers and directors necessary for the authorization, execution and delivery
of this Agreement and the performance of all obligations of the Company under
this Agreement required to be performed at or prior to the Closing and for the
authorization, issuance and delivery of the Shares being sold under this
Agreement has been taken. This Agreement, when executed and delivered by all
parties hereto, shall constitute the valid and legally binding obligations of
the Company, except to the extent the enforceability thereof may be limited by
bankruptcy laws, insolvency laws, reorganization laws, moratorium laws or other
laws affecting creditors' rights generally or by general equitable principles.
2.3 Validity of Shares. The Shares, when issued, sold and delivered in
------------------
accordance with the terms of this Agreement, shall be duly and validly issued,
fully paid and nonassessable.
ARTICLE III
Representations, Warranties and Agreements of
---------------------------------------------
the Management Investor
-----------------------
3.1 Authorization. The Management Investor represents and warrants that
-------------
this Agreement, when executed and delivered by him, will constitute a valid and
legally binding obligation of the Management Investor, except to the extent the
enforceability thereof may be limited by bankruptcy laws, insolvency laws,
reorganization laws, moratorium laws or other laws affecting creditors' rights
generally or by general equitable principles.
3.2 Investment Representations.
--------------------------
(a) This Agreement is made with the Management Investor in reliance
upon the Management Investor's representation to the Company, which by his
acceptance hereof the Management Investor hereby confirms, that (i) the Shares
to be received by him will be acquired by him, or a trust for the benefit of his
spouse, children or parents, for investment for his own account, and not with a
view to the sale or distribution of any
2
<PAGE>
part thereof in violation of applicable Federal and state securities laws, and
(ii) he has no current intention of selling, granting participation in or
otherwise distributing the same in violation of applicable Federal and state
securities laws. By executing this Agreement, the Management Investor further
represents that he does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to such
person, or to any third person, with respect to any of the Shares in violation
of applicable Federal and state securities laws.
(b) The Management Investor understands that the Shares have not been
registered under the 1933 Act on the basis that the sale provided for in this
Agreement and the issuance of securities hereunder is exempt from registration
under the 1933 Act pursuant to Section 4(2) thereof and regulations issued
thereunder, and that the Company's reliance on such exemption is predicated on
representations of the Management Investor set forth herein.
(c) The Management Investor represents that he has, either alone or
together with his "purchaser representative" as that term is defined in
Regulation D promulgated under the 1933 Act, such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of his investment. The Management Investor further represents that he has
had access, during the course of the transaction and prior to his purchase of
Shares, to information concerning the Company and its assets, liabilities and
prospects, and that he has had, during the course of the transaction and prior
to his purchase of the Shares, the opportunity to ask questions of, and receive
answers from, the Company concerning the terms and conditions of the offering
and to obtain additional information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify the accuracy of any information furnished to him or to which
he had access.
(d) The Management Investor understands that the Shares may not be
sold, transferred or otherwise disposed of without registration under the 1933
Act or an exemption therefrom, and that in the absence of an effective
registration statement covering the Shares or an available exemption from
registration under the 1933 Act, the Shares must be held indefinitely. In
particular, the Management Investor is aware that the Shares may not be sold
pursuant to Rule 144 promulgated under the 1933 Act unless all of the conditions
of that Rule are met. Among the current conditions for use of Rule 144 by
certain holders is the availability to the public of current information about
the Company. Such information is not now available, and the Company has no
current plans to make such information available. Such Management Investor
represents that, in the absence of an effective registration statement covering
the Shares, he will sell, transfer or otherwise dispose of the Shares only in a
manner consistent with his representations set forth herein and then only in
accordance with the Shareholders' Agreement.
3
<PAGE>
(e) Each Management Investor agrees, except with respect to transfers
permitted under the Shareholders' Agreement, that he will not make a
transfer, disposition or pledge of any of the Shares other than pursuant to
an effective registration statement under the 1933 Act, unless and until (i)
the Management Investor shall have notified the Company of the proposed
disposition and shall have furnished the Company with a statement of the
circumstances surrounding the disposition, and (ii) if requested by the
Company, at the expense of the Management Investor or transferee, he shall
have furnished to the Company an opinion of counsel, reasonably satisfactory
to the Company and its counsel, to the effect that such transfer may be made
without registration of the Shares under the 1933 Act.
3.3 Legends; Stop Transfer.
----------------------
(a) The Management Investor acknowledges that all certificates
evidencing the Shares shall bear the following legend:
"TRANSFER RESTRICTED
These securities have not been registered under the Securities Act of
1933, as amended, and may not be sold, offered for sale, pledged or
hypothecated in the absence of an effective registration statement as
to the securities under said Act or an opinion of counsel satisfactory
to the Company and its counsel that such registration is not required.
These securities are subject to the terms and conditions, including
restrictions on transfer, of an Amended and Restated Shareholders'
Agreement dated as of December 17, 1993, as amended from time to time,
a copy of which is on file with the Secretary of the Company."
(b) The certificates evidencing the Shares shall also bear any legend
required by any applicable state securities law.
(c) In addition, the Company shall make a notation regarding the
restrictions on transfer of the Shares in its stock books, and the Shares
shall be transferred on the books of the Company only if transferred or sold
pursuant to an effective registration statement under the 1933 Act covering
such Shares or pursuant to and in compliance with the provisions of Section
3.2(e) hereof. All Common Stock of the Company hereafter issued to the
Management Investor shall bear the same endorsement, shall be subject to all
the terms and conditions of this Agreement, and for all purposes shall be
deemed "Shares" hereunder. A copy of this Agreement, together with any
amendments thereto, shall remain on file with the Secretary of the Company
and shall be available for inspection to any properly interested person
without charge within five (5) days after the Company's receipt of a written
request therefor.
4
<PAGE>
ARTICLE IV
Miscellaneous
-------------
4.1 Notices. All notices and other communications necessary or
-------
contemplated under this Agreement shall be in writing and shall be delivered in
the manner specified herein or, in the absence of such specification, shall be
deemed to have been duly given when delivered by hand or one day after sending
by overnight delivery service, or five days after sending by certified mail,
postage prepaid, return receipt requested: to the Company, at the address of
its principal executive offices, and to the Management Investor, at his address
listed on the signature page hereto.
By notice complying with the foregoing provisions of this Section 4.1, each
party shall have the right to change the mailing address for future notices and
communications to such party.
4.2 Execution of Counterparts. This Agreement may be executed in
-------------------------
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement.
4.3 Binding Effect; Assignment. The rights and obligations of the
--------------------------
Management Investor under this Agreement may not be assigned to any other
person. Except as expressly provided in this Agreement, this Agreement shall
not be construed so as to confer any right or benefit upon any person other than
the parties to this Agreement, and their respective successors and assigns.
This Agreement shall be binding upon the Company and the Management Investor,
and their respective successors and assigns.
4.4 Governing Law. This Agreement shall be deemed to be a contract made
-------------
under the laws of the State of Delaware, and for all purposes shall be construed
in accordance with the laws of said State, without regard to principles of
conflicts of law. Both of the parties hereto agrees to submit to the
jurisdiction of the courts of the State of Delaware in any action or proceeding
arising out of or relating to this Agreement.
4.5 Severability of Provisions. Any provision of this Agreement which is
--------------------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
4.6 Exhibits and Headings. All Exhibits to this Agreement shall be deemed
---------------------
to be a part of this Agreement. The Article and Section headings used or
contained in this Agreement are for convenience of reference only and shall not
affect the construction of this Agreement.
5
<PAGE>
* * *
MANAGEMENT STOCK SUBSCRIPTION AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as an instrument under seal, as of the date first above written.
BIG V HOLDING CORP.
By: /s/ James A. Toopes, Jr.
------------------------
Name: James A. Toopes, Jr.
Title: Executive Vice President
MANAGEMENT INVESTOR
/s/ Don Trella
---------------
Name: Don Trella
Number of Shares: 3,150
Aggregate Purchase Price: $110,250
Cash Amount: $100,250.00
Note Amount: $10,000.00
6
<PAGE>
COUNTERPART SIGNATURE PAGE
--------------------------
The undersigned, in connection with the purchase of shares of Common Stock,
par value $.01 per share, of Big V Holding Corp., a Delaware corporation (the
"Company"), hereby agrees to be bound by the terms and conditions of the Amended
and Restated Shareholders' Agreement, dated as of December 17, 1993, by and
among the Company and the investors named therein (the "Shareholders'
Agreement"), as a "Management Investor" (as such term is defined in the
Shareholders' Agreement).
IN WITNESS WHEREOF, the undersigned has executed this Counterpart Signature
Page as of August 29, 1997.
/s/ Don Trella
---------------
Name:
7
<PAGE>
EXHIBIT 10.33
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT dated as of August 29, 1997 is made and entered
into by and between Big V Holding Corp., a Delaware corporation ("Holding") and
Don Trella (the "Pledgor").
RECITALS
--------
A. The Pledgor has entered into a certain Management Stock Subscription
Agreement dated as of August 29, 1997 by and between Holding and the Pledgor
(the "Subscription Agreement") whereby Holding has agreed to issue and sell an
aggregate of 3,150 shares of its common stock, par value $0.01 per share (the
"Common Stock") to the Pledgor. Capitalized terms used herein and not otherwise
defined shall have the same meanings ascribed to them in the Employment
Agreement.
B. On the date hereof the Pledgor is delivering a note or notes of
Pledgor payable to Holding in the separate principal amounts of $100,250 and
$10,000 dated as of the date hereof (the "Indebtedness"), which Indebtedness is
being incurred in connection with the sale of 3,150 shares of Common Stock to
the Pledgor.
C. The Pledgor wishes to grant further security and assurance to Holding
in order to secure the payment of the principal and interest on the Indebtedness
and to pledge to Holding all shares of Common Stock to be held by such Pledgor.
AGREEMENT
---------
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
1. Pledge. As collateral security for the full and timely payment of the
------
principal of and interest on the Indebtedness, the Pledgor hereby delivers,
deposits, pledges, transfers and assigns to Holding, in form transferable for
delivery, and creates in Holding a security interest in 3,150 shares of Common
Stock held by the Pledgor and all certificates or other instruments or documents
evidencing the same now or hereafter owned by the Pledgor (together with any
securities or property to be delivered to the Pledgor pursuant to Section 2(c)
hereof, the "Pledged Securities").
The Pledgor hereby delivers to Holding appropriate undated security
transfer powers duly executed in blank for the Pledged Securities set forth
above and will deliver appropriate undated security transfer powers duly
executed in blank for the Pledged Securities to be pledged hereunder from time
to time hereafter.
<PAGE>
2. Administration of Security. The following provisions shall govern the
--------------------------
administration of the Pledged Securities:
(a) So long as an Event of Default has not occurred and is continuing
with respect to any Indebtedness (as used herein, "Event of Default" shall mean
the occurrence of any event of default under any instrument evidencing any
Indebtedness), the Pledgor shall be entitled to act with respect to the Pledged
Securities in any manner not inconsistent with this Stock Pledge Agreement, the
Subscription Agreement, the Amended and Restated Shareholders' Agreement dated
as of December 17, 1993 by and among the Holding and its stockholders (the
"Shareholders' Agreement") or any instrument evidencing any Indebtedness,
including voting the Pledged Securities and receiving all cash distributions
thereon and giving consents, waivers and ratifications in respect thereof;
(b) If at any time, the Pledgor receives any proceeds from the sale by
the Pledgor or any of the Pledgor's Permitted Transferees (as that term is
defined in the Shareholders' Agreement) of any Common Stock to anyone, the Net
Proceeds (as defined below) from such sale of Common Stock shall be applied to
the prepayment first of the accrued and unpaid interest on any Indebtedness and
then to the unpaid principal of any Indebtedness. The term "Net Proceeds" shall
mean the total proceeds received from the sale of Common Stock, minus an amount
-----
equal to the sum of (i) the federal income tax liability that would be payable
in respect of the gain recognized upon such sale, after giving effect to any
state income tax liability described in clause (ii) below, assuming a tax rate
equal to the maximum federal income tax rate on long-term capital gains in
effect at the time of sale, and (ii) any state income tax liability that would
be payable in respect of such gain, assuming the maximum applicable state income
tax rate on sales of such securities.
(c) If, while this Stock Pledge Agreement is in effect, the Pledgor
(or any of the Pledgor's Permitted Transferees) shall become entitled to receive
or shall receive any debt or equity security certificate (including, without
limitation, any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of capital, or
issued in connection with any reorganization), option or right, whether as a
dividend or distribution in respect of, in substitution of, or in exchange for
any Pledged Securities, or otherwise, the Pledgor and each of the Pledgor's
Permitted Transferees agree to accept the same as Holding's agent and to hold
the same in trust on behalf of and for the benefit of Holding and to deliver the
same forthwith to Holding in the exact form received, with the endorsement of
the Pledgor and the Pledgor's Permitted Transferees when necessary and/or
appropriate undated security transfer powers duly executed in blank, to be held
by Holding, subject to the terms of this Stock Pledge Agreement, as additional
collateral security for the Indebtedness. Notwithstanding the foregoing, it is
agreed that the Pledgor or any of the Pledgor's Permitted Transferees may
exercise any option or right received as contemplated in the preceding sentence,
and Holding will exercise any such option or right upon receipt of written
instructions to that effect and any required payments or documents from the
Pledgor or the Pledgor's Permitted Transferees and the securities received upon
such exercise of any such option or right shall thereafter be held by Holding as
contemplated by the preceding sentence.
2
<PAGE>
(d) The Pledgor and each of the Pledgor's Permitted Transferees shall
immediately upon request by Holding and in confirmation of the security
interests hereby created, execute and deliver to Holding such further
instruments, deeds, transfers, assurances and agreements, in form and substance
as Holding shall request, including any financing statements and amendments
thereto, or any other documents, as required under Delaware law and any other
applicable law to protect the security interests created hereunder and to enable
Holding to exercise its rights hereunder.
(e) If at any time, Holding exercises its right as set forth in the
Shareholders' Agreement to purchase the Pledged Securities, or the Pledgor
exercises his right as set forth in the Shareholders' Agreement to require
Holding to purchase the Pledged Securities, then the cash payable for the
Pledged Securities so purchased shall be the difference between the Put Price or
the Call Price, as applicable (as those terms are defined in the Shareholders'
Agreement), and the outstanding principal balance and accrued but unpaid
interest then due in respect of the Indebtedness.
(f) Subject to any sale by Holding or other disposition by Holding of
the Pledged Securities or other property pursuant to this Stock Pledge Agreement
and subject to Section 5 below, the Pledged Securities shall be returned to the
Pledgor or such Pledgor's Permitted Transferees upon payment in full of the
unpaid principal of, accrued interest on and any other amounts due in respect of
the Indebtedness.
3. Remedies in Case of an Event of Default.
---------------------------------------
(a) In case of an Event of Default shall have occurred and be
continuing, Holding shall have in each case all of the remedies of a secured
party under the Delaware Uniform Commercial Code, and, without limiting the
foregoing, shall have the right, in its sole discretion, to sell, resell, assign
and deliver all or, from time to time, any part of the Pledged Securities, or
any interest in or option or right to purchase any part thereof, on any
securities exchange on which the Pledged Securities or any of them may be
listed, at any private sale or at public auction, with or without demand of
performance or other demand, advertisement or notice of the time or place of
sale or adjournment thereof or otherwise (except that Holding shall give ten
days' notice to the Pledgor of the time and place of any sale pursuant to this
Section 3), for cash, on credit or for other property, for immediate or future
delivery, and for such price or prices and on such terms as Holding shall, in
its sole discretion, determine, the Pledgor and the Pledgor's Permitted
Transferees hereby waiving and releasing any and all right or equity of
redemption whether before or after sale hereunder. At any such sale Holding may
bid for and purchase the whole or any part of the Pledged Securities so sold
free from any such right or equity of redemption. Holding shall apply the
proceeds of any such sale first to the payment of all costs and expenses,
-----
including reasonable attorneys' fees, incurred by Holding in enforcing its
rights under this Stock Pledge Agreement, second to the payment of accrued and
------
unpaid interest on and then of unpaid principal of the Indebtedness of the
Pledgor and third to any other amounts due on the Indebtedness.
-----
3
<PAGE>
(b) The Pledgor and the Pledgor's Permitted Transferees recognize that
Holding may be unable to effect a public sale of all or a part of the Pledged
Securities by reason of certain prohibitions contained in the Securities Act of
1933, as amended (the "Act"), or in the rules and regulations promulgated
thereunder, or in applicable state securities or "blue sky" laws, but may be
compelled to resort to one or more private sales to a restricted group of
purchasers who will be obliged to agree, among other things, to acquire the
Pledged Securities for their own account, for investment and not with a view to
the distribution or resale thereof. The Pledgor and the Pledgor's Permitted
Transferees agree that private sale so made may be at prices and on other terms
less favorable to the seller and that Holding has no obligation to delay the
sale of the Pledged Securities for the period of time necessary to permit the
registration of the Pledged Securities for public sale under the Act and under
applicable state securities or "blue sky" laws. The Pledgor and the Pledgor's
Permitted Transferees agree that a private sale or sales made under the
foregoing circumstances shall be deemed to have been made in a commercially
reasonable manner.
(c) If any consent, approval or authorization of any state, municipal
or other governmental department, agency or authority should be necessary to
effectuate any sale or disposition by Holding pursuant to this Section 3 of the
Pledged Securities, the Pledgor and each of the Pledgor's Permitted Transferee
will execute all such applications and other instruments as may be required in
connection with securing any such consent, approval or authorization, and will
otherwise use their best efforts to secure the same.
(d) Neither failure nor delay on the part of Holding to exercise any
right, remedy power or privilege provided for herein or by statute or at law or
in equity shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, remedy, power or privilege preclude any other right,
remedy, power or privilege.
4. Pledgor's Obligations Not Affected. The obligations of the Pledgor
----------------------------------
and each of the Pledgor's Permitted Transferees under this Stock Pledge
Agreement shall remain in full force and effect without regard to, and shall not
be impaired or affected by: (a) any subordination, amendment or modification of
or addition or supplement to the Employment Agreement, the Shareholders'
Agreement, or the Indebtedness or any assignment or transfer thereof; (b) any
exercise or non-exercise by Holding of any right, remedy, power or privilege
under or in respect of this Stock Pledge Agreement, the Shareholders' Agreement
or any instrument evidencing any Indebtedness, or any waiver of any such right,
remedy, power or privilege; (c) any waiver, consent, extension indulgence or
other action or inaction in respect of this Stock Pledge Agreement, the
Employment Agreement, the Shareholders' Agreement or any instrument evidencing
any Indebtedness, or any assignment or transfer of any thereof; or (d) any
bankruptcy, insolvency, reorganization arrangement, readjustment, composition,
liquidation or the like, of Holding, whether or not the Pledgor and the
Pledgor's Permitted Transferees shall have notice or knowledge of any of the
foregoing.
5. Transfer by Pledge. The Pledgor and the Pledgor's Permitted
------------------
Transferees will not sell, assign, transfer or otherwise dispose of, grant any
option with respect to, or
4
<PAGE>
mortgage, pledge or otherwise encumber the Pledged Securities or any interest
therein except as provided in the Employment Agreement and the Shareholders'
Agreement. In the event of a sale, assignment, transfer or other disposition of
or mortgage, pledge or other encumbrance of Pledged Securities pursuant to the
Subscription Agreement or the Shareholders' Agreement, the Common Stock so sold,
assigned, transferred or otherwise disposed of or mortgaged, pledged or
otherwise encumbered shall remain subject to the provisions of this Stock Pledge
Agreement and of the Shareholders' Agreement and the purchaser, assignee,
transferee or other acquirer, mortgagee or pledgee shall agree in writing, in
form and substance satisfactory to Holding, to be bound by all the terms of this
Stock Pledge Agreement and of the Shareholders' Agreement with the same force
and effect as if such transferee were a party hereto.
6. Attorney-in-Fact. Holding is hereby appointed the attorney-in-fact of
----------------
the Pledgor and the Pledgor's Transferees for the purpose of carrying out the
provisions of this Stock Pledge Agreement and taking any action and executing
any instrument which Holding reasonably may deem necessary or advisable to
accomplish the purposes hereof, including without limitation, the execution of
the applications and other instruments described in Section 3(c) hereof, which
appointment as attorney-in-fact is irrevocable as one coupled with an interest.
7. Termination. Upon payment in full of the unpaid principal of, accrued
-----------
interest on and all other amounts payable in respect of the Indebtedness, this
Stock Pledge Agreement shall terminate and the Pledgor or the Pledgor's
Permitted Transferees shall be entitled to the return of such of the Pledged
Securities as have not theretofore been sold or otherwise applied pursuant to
the provisions of this Stock Pledge Agreement.
8. Notices. All notices or other communications required or permitted to
-------
be given hereunder shall be deemed delivered when delivered by hand or when sent
by first class, certified mail, postage and fees prepaid, as follows:
(i) If to Holding: Big V Holding Corp.
` c/o Thomas H. Lee Company
75 State Street
Boston, Massachusetts 02109
Copy to: Michael J. Riccio, Jr., Esq.
Hutchins, Wheeler & Dittmar
101 Federal Street
Boston, Massachusetts 02110
(ii) If to the Executive: To the address set forth below
unless and until notice of another
or different address shall be
given as provided herein.
5
<PAGE>
9. Binding Effect, Successors and Assigns. This Stock Pledge Agreement
--------------------------------------
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns and nothing herein is intended or shall be
construed to give any other person any right, remedy or claim under, to or in
respect of this Stock Pledge Agreement. No transfer of Pledged Securities of
the Pledgor to the Pledgor's Permitted Transferees shall be permitted hereunder,
and any such transfer shall be null and void, unless and until each such
Permitted Transferee agrees in writing, in form and substance satisfactory to
Big V Supermarkets, Inc. and Holding, to become bound by this Stock Pledge
Agreement with respect to the Pledged Securities so transferred.
10. Miscellaneous. Holding and its assigns shall have no obligation in
-------------
respect of the Pledged Securities, except to hold and dispose of the same in
accordance with the terms of this Stock Pledge Agreement. Neither this Stock
Pledge Agreement nor any provision hereof may be amended, modified, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the amendment, modification, waiver,
discharge or termination is sought. The provisions of this Stock Pledge
Agreement shall be binding upon the successors and assigns of the Pledgor and
each of the Pledgor's Permitted Transferees. The captions in this Stock Pledge
Agreement are for convenience of reference only and shall not limited the
provisions hereof. This Stock Pledge Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware,
without regard to the conflicts of law rules thereof. This Stock Pledge
Agreement may be executed simultaneously in counterparts, each of which is an
original, but all of which together shall constitute one instrument.
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Stock Pledge
Agreement to be executed and delivered on the date first above written.
BIG V HOLDING CORP.
By: /s/ James A. Toopes, Jr.
------------------------
Title: Executive Vice President
/s/ Don Trella
--------------
Name: Don Trella
Address: 10 Ridgewood Drive
West Suffield, CT 06098
7
<PAGE>
$100,250 August 29, 1997
SECURED PROMISSORY NOTE
FOR VALUE RECEIVED, the undersigned (the "Obligor"), promises to pay
to the order of Big V Holding Corp., a Delaware corporation, with its principal
executive offices located at 75 State Street, Boston, Massachusetts 02109 (the
"Company"), the principal sum of One Hundred Thousand Two Hundred Fifty DOLLARS
($100,250) (the Principal Amount"), together with any amounts which are deemed
to be converted to principal in accordance with the terms hereof ("Converted
Amounts", and collectively with the Principal Amount, sometimes referred to
herein as the "Aggregate Principal Amount") in lawful money of the United States
of America, together with all accrued but unpaid interest, on December 31, 2005
(the "Maturity Date"), subject to mandatory prepayment and/or acceleration as
set forth herein.
Interest shall accrue on the Principal Amount outstanding from time to
time, and to the extent permitted by applicable law, on the Converted Amounts
outstanding from time to time, at a fluctuating rate per annum (the "Stated
Rate") at all times equal to the rate at which the loans outstanding under the
Company's senior credit facility bear interest, changes in the Stated Rate to
take effect simultaneously with changes in the rate under the senior credit
facility, computed on the basis of a 365- or 366-day year, as the case may be,
from and after the date of this Note and continuing until the date of payment of
the Aggregate Principal Amount in full. Interest shall be payable hereunder
annually on each Interest Payment Date (as defined below), in an amount equal to
the aggregate federal, state and local income tax liability incurred by the
Company as a result of all interest accrued hereunder for the preceding fiscal
year of the Company, as conclusively determined by the Company, and as set forth
in the Interest Notice (as defined below). All interest accrued hereunder and
not required to be paid on the next succeeding Interest Payment Date in
accordance with the terms hereof shall be deemed for all purposes hereunder
converted to principal hereunder and shall be deemed to be a Converted Amount
and shall be due and payable on the Maturity Date, subject to mandatory
prepayment and/or acceleration as set forth below.
If the date set for payment of principal or interest hereunder is a
Saturday, Sunday or legal holiday, then such payment shall be made on the next
succeeding business day.
The terms below shall have the following definitions:
(a) "Interest Notice" as used herein shall mean a written notice sent
by the Company to the Obligor specifying the aggregate amount of federal, state
and local income tax liability incurred by the Company as a result of all
interest accrued hereunder for the preceding fiscal year of the Company.
<PAGE>
(b) "Interest Payment Date" as used herein shall mean a date ten days
after the Obligor receives the Interest Notice. For purposes hereof, the
Obligor shall conclusively be deemed to have received the Interest Notice (i)
three days after the Company sends such notice by certified or registered mail
or the day after the Company sends such notice by certified or registered mail
or the day after the Company sends such notice by a nationally recognized
overnight courier, to the address of the Obligor set forth below the Obligor's
signature hereon or such other address that the Obligor specifies in writing to
the Company at its address set forth above, or (ii) the day the Company delivers
such notice by hand.
(c) "Obligations" as used herein shall mean the Aggregate Principal
Amount outstanding from time to time, all accrued but unpaid interest hereunder
and all other amounts hereunder, whether principal, interest, fees or
otherwise.
Payment of the principal of and interest on this Note is secured pursuant
to the terms of a Stock Pledge Agreement dated as of the date hereof, between
the Obligor and the Company (the "Pledge Agreement"), reference to which is made
for a description of the collateral provided thereby and the rights of the
Company and the holder of this Note in respect of such collateral.
This Note is subject to the following further terms and conditions:
1. Payment and Prepayment.
-----------------------
(a) All payments and prepayments of principal of and interest on this
Note shall be made to the Company or its order, or to the legal holder of this
Note or such holder's order, in lawful money of the United States of America at
the principal offices of the Company (or at such other place as the holder
hereof shall notify the Obligor in writing) upon final payment of principal of
and interest on this Note it shall be surrendered for cancellation.
Concurrently with any prepayment of any portion of the Aggregate Principal
Amount of this Note pursuant to this Section 1, the Company (or other holder of
this Note) shall make a notation of such payment hereon. Any partial prepayment
shall be applied first to accrued and unpaid interest hereof and then to the
unpaid Aggregate Principal Amount.
(b) Voluntary Prepayment. The Obligor may, at its option, prepay this
--------------------
Note in whole or in part at any time or from time to time without penalty or
premium. Any prepayments of any portion of the Aggregate Principal Amount of
this Note shall be accompanied by payment of all interest accrued but unpaid
hereunder.
2
<PAGE>
(c) Mandatory Prepayment.
--------------------
(i) If at any time, or from time to time, after the date
hereof and following the occurrence and during the continuance of an Event of
Default (as that term is defined below) the Obligor or any of the Obligor's
Permitted Transferees (as that term is defined in a an Amended and Restated
Shareholders' Agreement dated as of December 17, 1993 among the Company and its
shareholders (the "Shareholders' Agreement")) shall receive or shall otherwise
become entitled to receive from the Company (or other holder of this Note) any
cash payments, cash dividends or other cash distributions in respect of the
Company's Common Stock, then and in each case the Obligor and any of the
Obligor's Permitted Transferees shall, upon the receipt thereof, return to the
Company (or other holder of this Note) such payments, dividends and
distributions, and the Company (or other holder of this Note) shall apply such
amount to the prepayment of the Obligations in the manner set forth in Section
1(b), and the Company (or other holder of this Note) shall not be obligated to
make any such payment, cash dividend or other cash distribution not theretofore
made to which the Obligor and any of the Obligor's Permitted Transferees are
otherwise entitled in respect of their Common Stock and may, instead, in lieu
thereof, set off the amount of such cash payment, cash dividend or other cash
distribution against the Obligations.
(ii) If at any time, the Obligor receives any proceeds from the
sale by the Obligor or any of the Obligor's Permitted Transferees of any Common
Stock to anyone, the Net Proceeds (as defined in the Stock Pledge Agreement
dated as of the date hereof between the Obligor and the Company) from such sale
of Common Stock shall be applied to the prepayment of this Note in the manner
provided in the Stock Pledge Agreement.
(iii) In addition to the provisions of subsections (c)(i) and
(c)(ii) above:
(A) If the Obligor voluntarily terminates his employment with
the Company, of if the Company terminates the employment of the Obligor for
Cause (as such term is defined in the Shareholders' Agreement), then the Obligor
shall, without the necessity of any notice or demand by the Company of any kind,
immediately make a mandatory prepayment hereunder in an amount equal to the then
outstanding Obligations.
(B) If the Obligor dies, suffers a disability in accordance
with Section 3.02 of the Employment Agreement or if the Company terminates his
employment without Cause (as such term is defined in the Shareholders'
Agreement) (each an "Involuntary Termination"), then the Obligor shall, without
the necessity of any notice or demand by the Company of any kind, immediately
make a mandatory prepayment hereunder in an amount equal to the then outstanding
Obligations; provided, however, that if upon such Involuntary Termination (I)
either the Company
3
<PAGE>
exercises its Call Option (as defined in the Shareholders' Agreement) or the
Obligor exercises his Put Option (as defined in the Shareholders' Agreement),
and the proceeds of the exercise of such Call Option or Put option, as the case
may be, after first being applied to all of the then outstanding Obligations
other than Converted Amounts, is not sufficient to pay all Converted Amounts, or
(II) neither the Company exercises its Call Option nor the Obligor exercises his
Put Option, then, in the case of subclause (B)(I), such unpaid Converted
Amounts, and in the case of subclause (B)(II), all outstanding Converted
Amounts, shall not be immediately due and payable but shall be due and payable
in equal monthly installments ("Converted Amount Installments") payable on the
first day of each month from the date of the Involuntary Termination until the
Maturity Date. The Converted Amount shall bear interest hereunder at the Stated
Rate and such interest shall be payable with each Converted Amount Installment.
2. Events of Default. Upon the occurrence of any of the following
-----------------
events ("Events of Default"):
(a) Failure to pay any principal of this Note, including any
prepayments required hereunder, when due;
(b) Failure to pay any interest installment due under this Note
which shall remain unremedied for ten days following the date when
such installment was originally due hereunder;
(c) Failure to pay any Converted Amount Installment when
due;
(d) An event of default under any other note evidencing
indebtedness of the Obligor to the Company or its subsidiaries;
(e) Failure of the obligor to perform his obligations under
the terms of his employment with the Company; or
(f) The filing of a voluntary or involuntary petition for an
order of relief under the Bankruptcy Code by or against the Obligor,
or any filing for relief under any statue or federal insolvency
statute by or against the Obligor;
then, and in any such event, the holder of this Note may declare, by notice of
default given to the Obligor, the entire unpaid Aggregate Principal Amount of
the Note, all Converted Amount Installments, if any, and all accrued and unpaid
interest thereon to be forthwith due and payable whereupon the entire Aggregate
Principal Amount of this Note outstanding, all Converted Amount Installments, if
any, and any accrued and
4
<PAGE>
unpaid interest hereunder shall become due and payable without presentment,
demand, protest, notice of dishonor or other demands and notices of any kind,
all of which are hereby expressly waived. Upon the occurrence of an Event of
Default, the accrued and unpaid interest hereunder shall thereafter bear the
same rate of interest as on the Principal Amount hereunder, but in no event
shall such interest be charged which would violate any applicable usury law. If
an Event of Default shall occur hereunder, the obligor shall, subject to Section
3 hereof, pay costs of collection, including reasonable attorneys'
fees,,incurred by the holder in the enforcement hereof.
No delay or failure by the holder of this Note in the exercise of any right
or remedy shall constitute a waiver thereof, and no single or partial exercise
by the holder hereof of any right or remedy shall preclude other or future
exercise thereof or the exercise of any other right or remedy.
3. Miscellaneous.
--------------
(a) The provisions of this Note shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
conflicts of law rules thereof.
(b) Notwithstanding the terms set forth above, in no event shall the
interest rate on this Note exceed the maximum interest rate permitted by
law.
(c) All notices and other communications (other than the Interest
Notice) hereunder shall be in writing and will be deemed to have been duly
given if delivered or mailed in accordance with the Shareholders'
Agreement.
IN WITNESS WHEREOF, this Note has been duly executed and delivered by
the Obligor on the date first above written.
/s/ Don Trella
--------------
Name of Obligor:
Address: 10 Ridgewood Drive
West Suffield, CT 06098
5
<PAGE>
Exhibit 10.35
SECURED PROMISSORY NOTE
FOR VALUE RECEIVED, the undersigned (the "Obligor"), promises to pay to the
order of Big V Holding Corp., a Delaware corporation, with its principal
executive offices located at 75 State Street, Boston, Massachusetts 02109 (the
"Company"), the principal sum of TEN THOUSAND AND 00/100 DOLLARS ($10,000) with
----------------------- ------
interest calculated using the Prime Rate as published in the Wall Street
Journal.
Repayment of the principal portion of this note along with all accrued interest
shall occur at any time, or from time to time as said Obligor receives a Bonus
from the Company. A Bonus is hereafter defined as any compensation paid to the
Obligor in excess of said Obligor's regular salary. The Obligor will return the
proceeds of such Bonus (net of withholding taxes as calculated for bonus
payments in accordance with standard Internal Revenue Service and State
Department of Revenue regulations) to the Company within five (5) working days
following the receipt of such Bonus.
Payments will be applied first to outstanding interest with any balance applied
to outstanding principal.
Payment of the principal of and interest on this Note is secured pursuant to the
terms of a Stock Pledge Agreement dated as of the date hereof, between the
Obligor and the Company ("the "Pledge Agreement"), reference to which is made
for a description of the collateral provided thereby and the rights of the
Company and the holder of the Note in respect of such collateral.
This note may be prepaid in whole or in part at any time without penalty.
At the option of the holder, this Note shall become immediately due and payable
without further notice and demand, and notwithstanding any prior waiver of any
breach or default, upon continuing for fifteen (15) days after written notice in
making any payment of principal, interest or other charges due hereunder. Said
notice shall be effective if sent by certified mail to Mr. Donald J. Trella, 10
Ridgewood Drive, West Suffield, CT 06098.
The maker of this note hereby waives presentment, demand for presentment, notice
of dishonor, notice of protest, and all other notices or demand in connection
with the delivery, acceptance, performance, and default of this Note.
Date: August 29, 1997 /s/ Donald J. Trella
--------------------------
DONALD J. TRELLA
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<PAGE>
<ARTICLE> 5
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<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-27-1997
<PERIOD-START> DEC-29-1996
<PERIOD-END> OCT-04-1997
<CASH> 13,144
<SECURITIES> 0
<RECEIVABLES> 15,596
<ALLOWANCES> 180
<INVENTORY> 31,776
<CURRENT-ASSETS> 63,673
<PP&E> 136,796
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<TOTAL-ASSETS> 250,294
<CURRENT-LIABILITIES> 67,625
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0
0
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<INCOME-PRETAX> (89)
<INCOME-TAX> (523)
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