FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For quarter ended May 1, 1994 Commission File No. 33-25621
KASH N' KARRY FOOD STORES, INC.
(Exact name of registrant as specified in charter)
Delaware 95-4161591
(State of incorporation) (IRS employer identification number)
6422 Harney Road, Tampa, Florida 33610
(Address of registrant's principal executive offices)
(813) 621-0200
(Registrant's telephone number, including area code)
The registrant has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
and has been subject to such filing requirements for the past 90 days.
As of June 10, 1994, there were 2,819,589 shares outstanding of the
registrant's common stock, $0.01 par value.
<PAGE>
KASH N' KARRY FOOD STORES, INC.
BALANCE SHEETS
(Dollar Amounts in Thousands, Except Per Share Amounts)
ASSETS
May 1, August 1,
1994 1993
----------- ---------
Current assets: (Unaudited)
Cash and cash equivalents $ 5,551 $ 2,145
Accounts receivable 7,112 10,888
Inventories 84,019 95,385
Prepaid expenses and other current assets 12,698 13,151
--------- ---------
Total current assets 109,380 121,569
Property and equipment, at cost, less
accumulated depreciation 162,730 164,937
Favorable lease interests, less accumulated
amortization of $13,100 and $7,506 12,755 18,349
Deferred financing costs, less accumulated
amortization of $21,812 and $19,622 13,032 15,153
Excess of cost over net assets acquired, less
accumulated amortization of $15,580 and $13,457 97,466 99,589
Other assets 4,301 3,611
--------- ---------
Total assets $399,664 $423,208
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current portion of long-term debt $ 38,308 $ 22,628
Accounts payable 41,046 42,561
Accrued payroll and benefits 5,912 4,492
Accrued interest 8,042 15,080
Taxes, other than income 4,829 5,708
Other accrued expenses 12,605 11,963
--------- ---------
Total current liabilities 110,742 102,432
Long-term debt, less current obligations 324,527 329,262
Other long-term liabilities 12,606 10,023
Series B Cumulative Preferred Stock of $.01 par
value and a stated value of $100 a share.
Authorized 50,000 shares; 38,750 shares outstanding. 3,875 3,875
Series C Convertible Preferred Stock of $.01 par value.
Authorized 100,000 shares; 77,500 shares outstanding. 775 775
Stockholders' deficit:
Common Stock of $.01 par value. Authorized 4,000,000
shares; 2,819,589 shares outstanding. 28 28
Capital in excess of par value 77,695 77,695
Accumulated deficit (130,547) (100,845)
Less cost of treasury stock - 2,437 shares (37) (37)
--------- ---------
Total stockholders' deficit (52,861) (23,159)
--------- ---------
Total liabilities and stockholders' deficit $399,664 $423,208
========= =========
See accompanying notes to condensed financial statements.
<PAGE>
KASH N' KARRY FOOD STORES, INC.
CONDENSED STATEMENTS OF OPERATIONS
(In Thousands)
(Unaudited)
Thirteen Weeks Ended Thirteen Weeks Ended
May 1, 1994 May 2, 1993
-------------------- --------------------
Sales $279,806 $286,974
Cost of sales 221,608 225,422
--------- ---------
Gross profit 58,198 61,552
Selling, general and
administrative expenses 43,719 43,877
Depreciation and amortization 6,055 5,740
--------- ---------
Operating income 8,424 11,935
Interest expense 11,244 11,244
--------- ---------
Net income (loss) (2,820) 691
Undeclared dividends on Preferred Stock 116 116
--------- ---------
Income (loss) attributable to
Common Stock $ (2,936) $ 575
========= =========
Thirty-Nine Weeks Thirty-Nine Weeks
Ended May 1, 1994 Ended May 2, 1993
----------------- -----------------
Sales $814,607 $824,747
Cost of sales 647,524 652,264
--------- ---------
Gross profit 167,083 172,483
Selling, general and
administrative expenses 133,846 129,100
Depreciation and amortization 18,166 16,398
Store closing and other costs 11,016 --
--------- ---------
Operating income 4,055 26,985
Interest expense 33,757 33,131
--------- ---------
Net loss (29,702) (6,146)
Undeclared dividends on Preferred Stock 348 348
--------- ---------
Loss attributable to Common Stock $(30,050) $ (6,494)
========= =========
See accompanying notes to condensed financial statements.
<PAGE>
KASH N' KARRY FOOD STORES, INC.
STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Thirty-Nine Thirty-Nine
Weeks Ended Weeks Ended
May 1, 1994 May 2, 1993
----------- -----------
Net cash flow from operating activities:
Net loss $(29,702) $ (6,146)
Adjustments to reconcile net loss to net
cash provided (used) by operating
activities:
Depreciation and amortization, excluding
deferred financing costs 18,166 16,398
Store closing and other costs 11,016 --
Amortization of deferred financing costs 2,190 2,132
(Increase) decrease in assets:
Accounts receivable 3,591 (2,302)
Inventories 11,366 (10,782)
Prepaid expenses and other assets (418) (6,557)
Increase (decrease) in liabilities:
Accounts payable (1,515) 5,666
Accrued expenses and other liabilities (8,841) (9,551)
--------- ---------
Net cash provided (used) by
operating activities 5,853 (11,142)
--------- ---------
Cash used by investing activities:
Additions to property and equipment (8,322) (9,970)
Leased/financed asset additions (4,519) (17,357)
Proceeds from sale of property and equipment 429 83
--------- ---------
Net cash used by investing
activities (12,412) (27,244)
--------- ---------
Cash provided by financing activities:
Borrowings under revolving loan facility 15,700 36,200
Additions to obligations under capital leases
and notes payable 7,146 9,524
Repayments on revolving loan facility (2,900) (5,000)
Repayments on term loan facility (2,925) (1,721)
Repayments of other long-term liabilities (6,076) (3,625)
Sale of Common Stock -- 40
Repurchase of Common Stock and Preferred Stock -- (40)
Other financing activities (980) (602)
--------- ---------
Net cash provided by financing
activities 9,965 34,776
--------- ---------
Net increase (decrease) in cash and
cash equivalents 3,406 (3,610)
Cash and cash equivalents at beginning of period 2,145 4,479
--------- ---------
Cash and cash equivalents at end of period $ 5,551 $ 869
========= =========
See accompanying notes to condensed financial statements.
<PAGE>
KASH N' KARRY FOOD STORES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(In Thousands)
(Unaudited)
1. The condensed financial statements presented herein have been prepared
in accordance with the instructions to Form 10-Q and do not include all of
the information and note disclosures required by generally accepted
accounting principles. These statements should be read in conjunction with
the fiscal 1993 Form 10-K filed by the Company. The accompanying condensed
financial statements have not been audited by independent accountants in
accordance with generally accepted auditing standards, but in the opinion of
management such condensed financial statements include all adjustments,
consisting only of normal recurring adjustments, necessary to summarize
fairly the Company's financial position and results of operations. The
results of operations for the thirty-nine weeks may not be indicative of the
results that may be expected for the fiscal year ending July 31, 1994.
2. Inventories consist of merchandise held for resale and are stated at the
lower of cost or market; cost is determined using average cost, which
approximates the first-in, first-out (FIFO) method.
3. The Company has reported a pretax loss for all fiscal years since
October 1988 and, consequently, no income tax expense has been reported.
Financial Accounting Standards Board Statement 109 (SFAS 109) was adopted by
the Company as of August 2, 1993. There was no cumulative effect of this
change in accounting for income taxes determined as of August 2, 1993. Prior
years' financial statements have not been restated to apply the provisions of
SFAS 109. The effect on prior years' financial statements of retroactively
implementing SFAS 109 would be immaterial.
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities as of May 1,
1994 are presented below:
Deferred tax assets:
Inventory, principally due to reserves and
additional costs inventoried for tax purposes
pursuant to the Tax Reform Act of 1986 $ 1,100
Insurance and other reserves 5,500
Net operating loss carryforward 33,200
General business credit carryforward 1,100
Charitable contributions carryforward 2,900
Other, net 2,900
---------
Total gross deferred tax assets 46,700
Less valuation allowance (46,700)
---------
Net deferred tax assets $ --
=========
<PAGE>
KASH N' KARRY FOOD STORES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(In Thousands)
(Unaudited)
Upon adoption of SFAS 109, effective August 2, 1993, the Company
determined a valuation allowance requirement in the amount of $36,200. The
valuation allowance as of May 1, 1994 has been determined to be $46,700,
resulting in a change in the valuation allowance in the amount of $10,500.
4. During the first quarter, the Company recorded a non-recurring charge of
$11,016 which reflects expenses associated with a program of closing twelve
underperforming stores, reducing administrative staff, and expensing costs
associated with unsuccessful financing activities.
5. Cumulative undeclared dividends on Preferred Stock are $2,447 from
October 12, 1988 through May 1, 1994.
<PAGE>
KASH N' KARRY FOOD STORES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
This analysis should be read in conjunction with the condensed financial
statements.
Results of Operations
Operating cash flow (earnings before interest, taxes, depreciation and
amortization and store closing and other costs) for the quarter ended May 1,
1994 was $14.5 million versus $17.7 million for the quarter ended May 2,
1993. Operating cash flow for the thirty-nine weeks ended May 1, 1994 was
$33.2 million compared to $43.4 million for the thirty-nine weeks ended May
2, 1993. The decreases in operating cash flow were attributed to the factors
indicated below.
Sales.
Thirteen Weeks Thirty-Nine Weeks
1994 1993 1994 1993
------ ------ ------ ------
Sales (in millions) $279.8 $287.0 $814.6 $824.7
Change in same store sales 1.42% (1.61)%
Average sales per
store week (in thousands) $213 $191 $197 $186
Sales have been favorably impacted by additional advertising and
promotional activities and the continued strong performance of new stores and
recently acquired and remodeled stores. Additionally, the Company continues
to experience the least new store openings by traditional competitors in six
years. However, sales growth continues to be adversely affected by low
overall price inflation and by pricing and promotional changes, particularly
in grocery, initiated by certain competitors over the last year. In
addition, the Company chose to close seventeen underperforming food stores
over the last twelve months as a part of an overall strategic consolidation
and upgrade of its store network. The Company was able to mitigate the sales
impact of these store closings by transferring a portion of the sales of the
closed stores to operating stores.
Gross Profit. The Company had gross profit of $58.2 million, or 20.8%
as a percentage of sales, for the thirteen weeks ended May 1, 1994 and gross
profit of $61.6 million, or 21.4% of sales, for the thirteen weeks ended May
2, 1993. The decrease in gross profit is attributable to the impact of lower
sales volumes (approximately $1.5 million), and elimination of investment in
forward buy inventory (approximately $2.4 million), partially offset by
improved perishable margins and efficiencies in product preparation and
handling costs. Gross profit was 20.5% of sales for the thirty-nine weeks of
operations ended May 1, 1994 and 20.9% of sales for the thirty-nine weeks of
operations ended May 2, 1993. The decrease in gross profit for the
thirty-nine week period is primarily attributable to the factors indicated
above.
<PAGE>
KASH N' KARRY FOOD STORES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Selling, General and Administrative Expenses. The Company had selling,
general and administrative expenses of $43.7 million, or 15.6% as a
percentage of sales, for the thirteen weeks ended May 1, 1994 and $43.9
million, or 15.3% as a percentage of sales, for the thirteen weeks ended May
2, 1993. For the thirty-nine weeks ended May 1, 1994, selling, general and
administrative expenses were $133.8 million, or 16.4% of sales, compared to
$129.1 million, or 15.7% of sales, for the thirty-nine weeks ended May 2,
1993. The increase of $4.7 million for the comparable thirty-nine week
periods is primarily the result of increased occupancy costs and other
expenses related to stores opened, acquired or remodeled, and an increase in
insurance reserves and advertising expenses, offset by reduced operating
costs due to store closings during the last twelve months. The increases as
a percentage of sales for the comparable thirteen and thirty-nine week
periods are attributable to operating costs of comparable stores declining at
a lesser rate than the rate of sales decline in those stores.
Depreciation and Amortization. The Company's depreciation and
amortization expenses were $6.1 million for the quarter ended May 1, 1994
compared to $5.7 million for the quarter ended May 2, 1993. For the
thirty-nine weeks ended May 1, 1994 depreciation and amortization was $18.2
million compared to $16.4 million for the thirty-nine weeks ended May 2,
1993. The increase in depreciation and amortization is primarily
attributable to new stores and major remodels.
Store Closing and Other Costs. As discussed in Footnote 4 to the
condensed financial statements, during its first fiscal quarter the Company
recorded a non-recurring charge of $11.0 million. This charge included $1.9
million of costs associated with unsuccessful financing activities, $4.2
million of favorable lease interests written off in connection with the
closing of twelve underperforming stores, $4.0 million representing an
adjustment to the expected lease liability on closed stores, net of sublease
income, and $.9 million of other store closing and related expenses.
Interest Expense. The Company's net interest expense for the
thirty-nine weeks ended May 1, 1994 was $33.8 million and $33.1 million for
the thirty-nine weeks ended May 2, 1993. The increase in interest expense
was primarily attributable to higher average outstanding working capital and
capital improvement loan balances and increases in capital leases offset
slightly by lower interest rates and decreased interest hedge costs.
Income Taxes. As discussed in Footnote 3 to the condensed financial
statements, Financial Accounting Standards Board Statement No. 109 (SFAS 109)
was adopted by the Company as of August 2, 1993; however, the adoption of
SFAS 109 had no impact on the financial statements of the Company.
<PAGE>
Financial Condition
The Company's Bank Credit Agreement provides for a revolving credit
facility with individual sublimits of $30 million for working capital loans,
$25 million for letters of credit and $13.7 million for capital improvement
loans, with a maximum of $60 million outstanding under the total facility at
any one time. As of May 1, 1994, the Company had $26.9 million borrowed
under the working capital line, $13.7 million in capital improvement loans,
and $18.2 million of letters of credit outstanding. This year, because of
its reduced working capital availability, the Company had to fund its
seasonal inventory build-up during the second and third quarters by divesting
of its profitable investment in forward buy inventories. Additionally, Green
Equity Investors, L.P., the Company's majority shareholder, loaned the
Company $2 million in February to improve the Company's liquidity.
Management believes that the reduction of the Company's investment in forward
buy inventory reduced gross profit by approximately $1.5 million in the
second quarter, approximately $2.4 million in the third quarter, and will
reduce gross profit by between $2.0 million and $2.5 million in each quarter
until this investment can be restored. Additionally, the Company has focused
on improving its cash position by managing working capital as evidenced by an
improvement in net cash provided by operating activities of $17.0 million for
the thirty-nine weeks ended May 1, 1994 compared to the thirty-nine week
period ended May 2, 1993.
As previously disclosed, the Company has been exploring alternatives for
refinancing approximately $30 million of new store costs (land, building and
equipment) that has been advanced through, and therefore significantly
restricted the ongoing availability of, its revolving credit facility. The
Company believes that a significant deleveraging of its balance sheet is
necessary to restore its short-term liquidity and provide it with additional
capital to re-establish its forward buy program and implement its business
plan, which includes opening four to six new stores a year. Therefore, on
May 11, 1994, the Company executed an engagement letter with Donaldson,
Lufkin & Jenrette Securities Corporation ("DLJ"), pursuant to which DLJ is
acting as financial advisor to the Company in connection with a proposed
capital restructuring. On May 12, 1994, the Company met with certain of its
bondholders and proposed a restructuring of the capital structure of the
Company pursuant to which the maturity of the Senior Floating Rate Notes
would be extended from 1996 to 2004; the maturity of the Senior Fixed Rate
Notes would be extended from 1999 to 2004 and the interest rate would be
reduced from 12 3/8% to 9%; and the Company's outstanding indebtedness
represented by the Subordinated Debentures would be exchanged for
approximately 84.6% of the outstanding common stock of the Company.
Additionally, it was proposed that the interest payments due in August 1994
on these debt instruments be added to the principal amount of the
corresponding indebtedness in lieu of cash payments. One existing share-
holder, Green Equity Investors, L.P., would invest an additional $10 million
in cash in exchange for approximately 15.4% of the outstanding common stock
of the Company. The holders of the existing preferred and common stock of
the Company, in exchange for their interest, would receive a warrant to
acquire an aggregate of 5% (on a fully diluted basis) of the common stock of
the Company under certain circumstances. Under the proposal, other existing
obligations of the Company, including trade debt, mortgage debt and
capitalized lease obligations, would be unaffected. The bondholders have
moved quickly to form a single committee of representatives of each of the
tranches of debt, and have engaged financial advisors and legal counsel to
assist in negotiations with the Company.
<PAGE>
The Company believes that it has always maintained an open relationship
with its suppliers and that a key to this has been its willingness to
inform the trade of its operating performance and financial condition on an
ongoing basis. Management of the Company has met with a committee of credit
directors representing the trade, and believes that it has been responsive in
answering questions and addressing concerns regarding the Company's financial
condition. The Company, the bondholders and the financial advisors to the
bondholder committee have emphasized that the Company's suppliers will be
unaffected by its recapitalization. Management expects that credit terms
will remain substantially consistent with past practices during the period of
time it takes to complete the recapitalization; however, if credit with its
major suppliers is curtailed, the Company's liquidity would decrease.
The Company's capital expenditures totalled $12.8 million for the
thirty-nine weeks ended May 1, 1994, the majority of which was funded through
funds generated from operations, borrowings under the working capital line
and through capitalized store equipment leases. During this period the
Company completed one major remodel of an existing store and continued
construction of two new stores begun last summer. One of these stores opened
in early February and the second opened in May. The Company has previously
reported that it will not commence any further new store construction pending
completion of the recapitalization, but it is continuing its maintenance
capital program. In the near term, the Company believes that a reduction or
postponement of its new store program would not substantially impact current
operations. In the long term, if this program was substantially reduced,
management believes that the Company's operations and ultimately its cash
flow would be adversely impacted.
Due to the non-recurring charges incurred during the first quarter as
well as its operating performance, at the end of the third quarter the
Company had breached several financial covenants under its Bank Credit
Agreement. The Company has received all necessary waivers from the banks.
However, certain of the covenants will require revision in order that the
Company be able to comply on an ongoing basis; and it is anticipated that
appropriate revisions will be negotiated in connection with the
recapitalization.
The Company has entered into a series of interest rate hedging
transactions to reduce its exposure to increases in short-term interest rates
on the majority of its floating rate debt. These transactions include swaps
and collars and extend through August 1994. The Company estimates the cost
to liquidate these contacts would be approximately $0.9 million at May 1,
1994.
Effects of Inflation
The Company's primary costs, inventory and labor, are affected by a
number of factors that are beyond its control, including availability and
price of merchandise, the competitive climate and general and regional
economic conditions. As is typical of the supermarket industry, the Company
has generally been able to maintain margins by adjusting its retail prices,
but competitive conditions may from time to time render it unable to do so
while maintaining its market share.
<PAGE>
Part II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 6. Exhibits and Reports on Form 8-K.
(A) Exhibits:
Exhibit No. Description
4.1(a) Indenture entered into between the Company and First
Florida Bank, N.A., relating to the $105 million 14%
Subordinated Debentures due February 1, 2001, dated as of
February 8, 1989 (previously filed as Exhibit 4.2(a) to
the Company's Annual Report on Form 10-K for the period
ended July 30, 1989, which exhibit is hereby incorporated
by reference).
4.1(b) Agreement of Resignation, Appointment and Acceptance
dated as of April 11, 1994, by and among the Company,
Barnett Bank of Tampa (as successor in interest to First
Florida Bank, N.A.), as resigning Trustee, and The Bank
of New York, as successor Trustee.
4.2 Piggyback Registration Rights Agreement between the
Company and Merrill Lynch, Pierce, Fenner & Smith
Incorporated dated February 8, 1989 (previously filed as
Exhibit 4.5 to the Company's Annual Report on Form 10-K
for the period ended July 30, 1989, which exhibit is
hereby incorporated by reference).
4.3 Indenture entered into between the Company and NCNB
National Bank of Florida, as Trustee, relating to the $85
million Senior Floating Rate Notes due August 2, 1996,
dated as of September 14, 1989 (previously filed as
Exhibit 4.6(a) to the Company's Annual Report on Form
10-K for the period ended July 30, 1989, which exhibit is
hereby incorporated by reference).
4.4(a) Indenture entered into between the Company and AmeriTrust
Texas, N.A., as Trustee, relating to the $50 Million
Senior Notes due 1999 dated as of January 29, 1992
(previously filed as Exhibit 4.1 to the Company's
Quarterly Report on Form 10-Q for the period ended
February 2, 1992, which exhibit is hereby incorporated by
reference).
<PAGE>
Exhibit No. Description
4.4(b) Registration Rights Agreement dated as of January 29,
1992, between the Company and the purchasers of the
Senior Notes due 1999 (previously filed as Exhibit 28.1
to the Company's Quarterly Report on Form 10-Q for the
period ended February 2, 1992, which exhibit is hereby
incorporated by reference).
4.4(c) Indenture Amendment No. 1 entered into between the
Company and AmeriTrust Texas, N.A., as Trustee, relating
to the Series B Senior Notes due 1999 dated as of July 2,
1992 (previously filed as Exhibit 4.7(c) to the Company's
Amendment No. 3 to Registration Statement on Form S-1,
Registration No. 33-47324, which exhibit is hereby
incorporated by reference).
10.1(a) Amended and Restated Credit Agreement dated as of
September 14, 1989, among the Company, certain lenders,
and Security Pacific National Bank, as Agent (previously
filed as Exhibit 10.4(g) to the Company's Annual Report
on Form 10-K for the period ended July 30, 1989, which
exhibit is hereby incorporated by reference).
10.1(a)(i) Agreement to Amend and Restate the Credit Agreement,
dated as of October 12, 1988 among the Company, certain
senior lenders, and Security Pacific National Bank, as
Agent, dated as of September 14, 1989, among the Company,
certain senior lenders and Security Pacific National
Bank, as Agent (previously filed as Exhibit 10.1(a)(i) to
the Company's Registration Statement on Form S-1,
Registration No. 33-65070, which exhibit is hereby
incorporated by reference).
10.1(a)(ii) Assignment and Acceptance Agreement among the Company,
Security Pacific National Bank, and California Federal
Bank, dated as of September 14, 1989 (previously filed as
Exhibit 10.1(a)(ii) to the Company's Registration
Statement on Form S-1, Registration No. 33-65070, which
exhibit is hereby incorporated by reference).
10.1(b) First Amendment to Amended and Restated Credit Agreement
and Limited Waiver among the Company, certain lenders,
and Security Pacific National Bank, as Agent, dated
December 28, 1989 (previously filed as Exhibit 10.4(h) to
the Company's Annual Report on Form 10-K for the period
ended July 29, 1990, which exhibit is hereby incorporated
by reference).
10.1(c) Second Amendment to Amended and Restated Credit Agreement
among the Company, certain lenders, and Security Pacific
National Bank, as Agent, dated as of July 10, 1990
(previously filed as Exhibit 10.4(i) to the Company's
Annual Report on Form 10-K for the period ended July 29,
1990, which exhibit is hereby incorporated by reference).
<PAGE>
Exhibit No. Description
10.1(d) Third Amendment to Amended and Restated Credit Agreement
dated as of November 27, 1990, among the Company, certain
lenders, and Security Pacific National Bank, as Agent
(previously filed as Exhibit 28.1 to the Company's
Quarterly Report on Form 10-Q for the period ended April
28, 1991, which exhibit is hereby incorporated by
reference).
10.1(e) Fourth Amendment to Amended and Restated Credit Agreement
and Limited Waiver among the Company, certain senior
lenders, and Security Pacific National Bank, as Agent,
dated as of November 25, 1991 (previously filed as
Exhibit 28.1 to the Company's Quarterly Report on Form
10-Q for the period ended November 3, 1991, which exhibit
is hereby incorporated by reference).
10.1(f) Fifth Amendment to Amended and Restated Credit Agreement
and Limited Waiver and Instruction dated as of January
29, 1992, among the Company, certain lenders, and
Security Pacific National Bank (previously filed as
Exhibit 28.2 to the Company's Quarterly Report on Form
10-Q for the period ended February 2, 1992, which exhibit
is hereby incorporated by reference).
10.1(g) Sixth Amendment to Credit Agreement dated as of January
4, 1993, among the Company, certain lenders, and Bank of
America National Trust and Savings Association, as
successor by merger to Security Pacific National Bank, as
Agent (previously filed as Exhibit 10.1(g) to the
Company's Registration Statement on Form S-1,
Registration No. 33-65070, which exhibit is hereby
incorporated by reference).
10.1(h) Limited Waiver dated as of July 1, 1993, among the
Company, certain lenders, and Bank of America National
Trust and Savings Association, as successor by merger to
Security Pacific National Bank, as Agent (previously
filed as Exhibit 10.1(i) to the Company's Registration
Statement on Form S-1, Registration No. 33-65070, which
exhibit is hereby incorporated by reference).
10.1(i) Limited Waiver dated as of September 22, 1993, among the
Company, certain lenders, and Bank of America National
Trust and Savings Association, as successor by merger to
Security Pacific National Bank, as Agent.
10.1(j) Limited Waiver dated as of December 15, 1993, among the
Company, certain lenders, and Bank of America National
Trust and Savings Association, as successor by merger to
Security Pacific National Bank, as Agent (previously
filed as Exhibit 10.1(i) to the Company's Quarterly
Report on Form 10-Q for the period ended January 30,
1994, which exhibit is hereby incorporated by reference).
<PAGE>
Exhibit No. Description
10.1(k) Seventh Amendment to Credit Agreement dated as of
February 1, 1994, among the Company, certain lenders, and
Bank of America National Trust and Savings Association,
as successor by merger to Security Pacific National Bank,
as Agent.
10.1(l) Limited Waiver dated as of March 11, 1994, among the
Company, certain lenders, and Bank of America National
Trust and Savings Association, as successor by merger to
Security Pacific National Bank, as Agent.
10.1(m) Eighth Amendment to Credit Agreement dated as of April
12, 1994, among the Company, certain lenders, and Bank of
America National Trust and Savings Association, as
successor by merger to Security Pacific National Bank, as
Agent.
10.2 Form of Indemnity Agreement between the Company and its
directors and certain of its officers (previously filed
as Exhibit 10.3 to the Company's Registration Statement
on Form S-1, Registration No. 33-25621, which exhibit is
hereby incorporated by reference).
10.3(a) Restated 1988 Management Stock Option Plan (effective for
the Plan Years beginning on and after July 30, 1990)
(previously filed as Exhibit 10.3(a) to the Company's
Annual Report on Form 10-K for the period ended July 28,
1991, which exhibit is hereby incorporated by reference).
10.3(b) Form of Management Stock Option Agreement to be entered
into between the Company and certain key employees with
respect to options granted for Plan Years beginning on
and after July 30, 1990 (previously filed as Exhibit
10.3(b) to the Company's Annual Report on Form 10-K for
the period ended July 28, 1991, which exhibit is hereby
incorporated by reference).
10.3(c) Form of Amendment to the Management Stock Option
Agreement under the 1988 Restated Management Stock Option
Plan dated as of June 19, 1992, entered into between the
Company and the holder of each outstanding option granted
under the Restated 1988 Management Stock Option Plan
(previously filed as Exhibit 10.3(c) to the Company's
Annual Report on Form 10-K for the period ended August 2,
1992, which exhibit is hereby incorporated by reference).
10.3(d) Form of Second Amendment to Stock Option Agreement dated
December 1988 under Restated 1988 Management Stock Option
Plan, dated as of December 9, 1993, entered into by and
between the Company and the holder of each outstanding
option granted under the Restated 1988 Management Stock
Option Plan for the Plan Year ended July 31, 1989
(previously filed as Exhibit 10.3(d) to the Company's
Quarterly Report on Form 10-Q for the period ended
January 30, 1994, which exhibit is hereby incorporated by
reference).
<PAGE>
Exhibit No. Description
10.3(e) Form of Restricted Stock Agreement to be entered into
between the Company and certain key employees with
respect to stock issued pursuant to options granted under
the Restated 1988 Management Stock Option Plan
(previously filed as Exhibit 10.3(d) to the Company's
Registration Statement on Form S-1, Registration No.
33-65070, which exhibit is hereby incorporated by
reference).
10.4(a) 1991 Management Stock Option Plan (previously filed as
Exhibit 28.2(a) to the Company's Quarterly Report on Form
10-Q for the period ended November 3, 1991, which exhibit
is hereby incorporated by reference).
10.4(b) Form of Stock Option Agreement entered into between the
Company and certain key employees with respect to the
options granted pursuant to the 1991 Management Stock
Option Plan (previously filed as Exhibit 28.2(b) to the
Company's Quarterly Report on Form 10-Q for the period
ended November 3, 1991, which exhibit is hereby
incorporated by reference).
10.4(c) Form of Restricted Stock Agreement to be entered into
among the Company, Green Equity Investors, L.P. ("GEI")
and certain key employees with respect to stock issued
pursuant to options granted pursuant to the 1991
Management Stock Option Plan (previously filed as Exhibit
28.2(c) to the Company's Quarterly Report on Form 10-Q
for the period ended November 3, 1991, which exhibit is
hereby incorporated by reference).
10.5 Amended and Restated Kash n' Karry Retirement Estates and
Trust dated October 14, 1993, effective as of January 1,
1992 (previously filed as Exhibit 10.5 to the Company's
Annual Report on Form 10-K for the period ended August 1,
1993, which exhibit is hereby incorporated by reference).
10.6 Key Employee Stock Purchase Plan (previously filed as
Exhibit 10.6 to the Company's Registration Statement on
Form S-1, Registration No. 33-25621, which exhibit is
hereby incorporated by reference).
10.7 Deferred Compensation Agreement dated October 12, 1988,
between the Company and Ronald J. Floto (previously filed
as Exhibit 10.7 to the Company's Registration Statement
on Form S-1, Registration No. 33-25621, which exhibit is
hereby incorporated by reference).
10.8 Trademark License Agreement dated as of October 12, 1988,
between the Company and Lucky Stores, Inc. (previously
filed as Exhibit 10.11 to the Company's Registration
Statement on Form S-1, Registration No. 33-25621, which
exhibit is hereby incorporated by reference).
<PAGE>
Exhibit No. Description
10.9 Warrant Agreement dated as of October 12, 1988, between
the Company and Lucky Stores, Inc. (previously filed as
Exhibit 10.15 to the Company's Registration Statement on
Form S-1, Registration No. 33-25621, which exhibit is
hereby incorporated by reference).
10.10 Management Bonus Plan (previously filed as Exhibit 10.16
to the Company's Registration Statement on Form S-1,
Registration No. 33-25621, which exhibit is hereby
incorporated by reference).
10.11(a) Mortgage, Fixture Filing, Security Agreement and
Assignment of Rents between the Company, as Mortgagor,
and Sun Life Insurance Co. of America ("Sun Life"), dated
as of September 7, 1989 (previously filed as Exhibit
28.1(a) to the Company's Quarterly Report on Form 10-Q
for the period ended October 29, 1989, which exhibit is
hereby incorporated by reference).
10.11(b) Assignment of Rents and Leases and Other Income between
the Company and Sun Life dated as of September 7, 1989
(previously filed as Exhibit 28.1(b) to the Company's
Quarterly Report on Form 10-Q for the period ended
October 29, 1989, which exhibit is hereby incorporated by
reference).
10.11(c) Fixture Financing Statement between the Company and Sun
Life filed with the Clerk of Hillsborough County,
Florida, on September 11, 1989 (previously filed as
Exhibit 28.1(c) to the Company's Quarterly Report on Form
10-Q for the period ended October 29, 1989, which exhibit
is hereby incorporated by reference).
10.11(d) Partial Release of Mortgage executed by Security Pacific
National Bank as of September 7, 1989 (previously filed
as Exhibit 28.1(d) to the Company's Quarterly Report on
Form 10-Q for the period ended October 29, 1989, which
exhibit is hereby incorporated by reference).
10.12(a) Mortgage between the Company, as Mortgagor, and Ausa Life
Insurance Company ("Ausa"), as Mortgagee, dated as of
November 21, 1989 (previously filed as Exhibit 28.2(a) to
the Company's Quarterly Report on Form 10-Q for the
period ended October 29, 1989, which exhibit is hereby
incorporated by reference).
10.12(b) Conditional Assignment of Leases, Rents and Contracts
between the Company and Ausa dated as of November 21,
1989 (previously filed as Exhibit 28.2(b) to the
Company's Quarterly Report on Form 10-Q for the period
ended October 29, 1989, which exhibit is hereby
incorporated by reference).
<PAGE>
Exhibit No. Description
10.12(c) Financing Statement between the Company and Ausa filed
with the Clerk of Hillsborough County, Florida, on
November 22, 1989 (previously filed as Exhibit 28.2(c) to
the Company's Quarterly Report on Form 10-Q for the
period ended October 29, 1989, which exhibit is hereby
incorporated by reference).
10.13(a) Form of Deferred Compensation Agreement dated as of
December 21, 1989, between the Company and key employees
and a select group of management (KESP) (previously filed
as Exhibit 28.3(a) to the Company's Quarterly Report on
Form 10-Q for the period ended January 28, 1990, which
exhibit is hereby incorporated by reference).
10.13(b) Form of Deferred Compensation Agreement dated as of
December 21, 1989, between the Company and Ronald J.
Floto (KESP) (previously filed as Exhibit 28.3(b) to the
Company's Quarterly Report on Form 10-Q for the period
ended January 28, 1990, which exhibit is hereby
incorporated by reference).
10.13(c) Master First Amendment to Deferred Compensation
Agreements, dated as of November 11, 1991, between the
Company and the key employees party thereto (previously
filed as Exhibit 28.3 to the Company's Quarterly Report
on Form 10-Q for the period ended November 3, 1991, which
exhibit is hereby incorporated by reference).
10.13(d) Master Second Amendment to Deferred Compensation
Agreements, dated as of December 30, 1993, between the
Company and the key employees party thereto (previously
filed as Exhibit 10.13(d) to the Company's Quarterly
Report on Form 10-Q for the period ended January 30,
1994, which exhibit is hereby incorporated by reference).
10.14(a) Stockholders Agreement dated as of November 26, 1991,
among The Fulcrum III Limited Partnership and The Second
Fulcrum III Limited Partnership (collectively, the
"Fulcrum Partnership"), GEI and the Company (previously
filed as Exhibit 28.2 to the Company's Current Report on
Form 8-K dated November 26, 1991, which exhibit is hereby
incorporated by reference).
10.14(b) Stock Purchase Agreement dated as of November 15, 1991,
among the Company, GEI and the Fulcrum Partnerships
(previously filed as Exhibit 10.15(b) to the Company's
Registration Statement on Form S-1, Registration No.
33-65070, which exhibit is hereby incorporated by
reference).
10.15 Stockholders Agreement dated as of June 19, 1992, between
the Company, GEI and certain employee-stockholders
(previously filed as Exhibit 10.17 to the Company's
Annual Report on Form 10-K for the period ended August 2,
1992, which exhibit is hereby incorporated by reference).
<PAGE>
Exhibit No. Description
10.16 Stockholders Agreement dated as of May 3, 1993, between
the Company, GEI and certain employee-stockholders
(previously filed as Exhibit 10.17 to the Company's
Registration Statement on Form S-1, Registration No.
33-65070, which exhibit is hereby incorporated by
reference).
10.17 Leave Agreement dated as of November 30, 1992, between
the Company and Thomas A. Whipple (previously filed as
Exhibit 10.18 to the Company's Registration Statement on
Form S-1, Registration No. 33-65070, which exhibit is
hereby incorporated by reference).
10.18 Ronald J. Floto Severance Pay Agreement dated as of
February 9, 1994, by and between the Company and Ronald
J. Floto (previously filed as Exhibit 10.18 to the
Company's Quarterly Report on Form 10-Q for the period
ended January 30, 1994, which exhibit is hereby
incorporated by reference).
10.19 Form of Senior Management Severance Pay Agreement dated
as of February 9, 1994, by and between the Company and
the key employees party thereto (previously filed as
Exhibit 10.19 to the Company's Quarterly Report on Form
10-Q for the period ended January 30, 1994, which exhibit
is hereby incorporated by reference).
10.20(a) Note and Warrant Purchase Agreement dated as of February
1, 1994, by and between the Company and GEI.
10.20(b) Stock Purchase Warrants dated as of February 2, 1994,
issued by the Company to GEI.
(b) Reports on Form 8-K:
On a Form 8-K dated May 12, 1994, the Company reported on its engagement
of Donaldson, Lufkin & Jenrette Securities Corporation as financial
advisor in connection with a proposed capital restructuring.
<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.
KASH N' KARRY FOOD STORES, INC.
Date: June 15, 1994 /s/ Raymond P. Springer
-------------------------------
Raymond P. Springer
Executive Vice President,
Administration
Date: June 15, 1994 /s/ Richard D. Coleman
-------------------------------
Richard D. Coleman
Vice President, Controller
and Secretary
AGREEMENT OF RESIGNATION, APPOINTMENT AND ACCEPTANCE,
dated as of April 11, 1994 by and among Kash n' Karry Food
Stores, Inc., a corporation duly organized and existing under
the laws of Delaware and having its principal office at 6422
Harney Road, Tampa, Florida 33610 (the "Company"), Barnett
Bank of Tampa, a banking corporation duly organized and existing
under the laws of the state of Florida and having its
principal corporate trust office at 9000 Southside Boulevard,
Building 100, Post Office Box 40200, Jacksonville, Florida
32203 ("Resigning Trustee") and THE BANK OF NEW YORK, a banking
corporation duly organized and existing under the laws of the
State of New York and having its principal corporate trust office
at 101 Barclay Street, New York, New York 10286 ("Successor
Trustee").
RECITALS:
WHEREAS, there was originally authorized and issued
$105,000,000 aggregate principal amount of the Company's 14%
Subordinated Debentures due February 1, 2001 (the "Securi-
ties") under a Trust Indenture dated as of February 8, 1989 by
and between the Company and First Florida Bank, N.A. (the "In-
denture");
WHEREAS, the Resigning Trustee is the successor to First
Florida Bank, N.A. as Trustee under the Indenture;
<PAGE>
WHEREAS, Section 610(b) of the Indenture provides that the
Trustee may at any time resign by giving written notice of such
resignation to the Company, effective upon the acceptance by a
successor Trustee of its appointment as a successor
Trustee;
WHEREAS, Section 610(e) of the Indenture provides that, if
the Trustee shall resign, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee;
WHEREAS, Section 611 of the Indenture provides that any
successor Trustee appointed in accordance with the Indenture
shall execute, acknowledge and deliver to the Company and to
its predecessor trustee an instrument accepting such appointment
under the Indenture, and thereupon the resignation of the
predecessor Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall
become vested with all rights, powers, trusts and duties of
the predecessor trustee;
WHEREAS, pursuant to Sections 305 and 101 of the Indenture,
First Florida Bank, N.A. was appointed Security Registrar
and Paying Agent, respectively;
WHEREAS, the Resigning Trustee is the successor to First
Florida Bank, N.A. as Security Registrar and Paying Agent
under the Indenture;
WHEREAS, the Company desires to appoint Successor Trustee as
Trustee, Paying Agent and Security Registrar to succeed
Resigning Trustee in such capacities under the Indenture; and
<PAGE>
WHEREAS, Successor Trustee is willing to accept such ap-
pointment as successor Trustee, Paying Agent and Security
Registrar under the Indenture;
NOW, THEREFORE, the Company, Resigning Trustee and Suc-
cessor Trustee, for and in consideration of the premises and of
other good and valuable consideration, the receipt and suf-
ficiency of which are hereby acknowledged, hereby consent and
agree as follows:
<PAGE>
ARTICLE I
THE RESIGNING TRUSTEE
SECTION 1.01 Pursuant to Sections 610 and 614 of the
Indenture, Resigning Trustee hereby notifies the Company that
Resigning Trustee is hereby resigning as Trustee, Security
Registrar and Paying Agent under the Indenture.
SECTION 1.02 Resigning Trustee hereby represents and
warrants to Successor Trustee that:
(a) No covenant or condition contained in the Indenture
hasbeen waived by Resigning Trustee or, to the best
knowledge of responsible officers of Resigning
Trustee's corporate trust department, by the Holders of
the percentage in aggregate principal amount of the
Securities required by the Indenture to effect any
such waiver.
(b) There is no action, suit or proceeding pending or, to
the best knowledge of responsible officers of Resigning
Trustee's corporate trust department, threatened against
Resigning Trustee before any court or any governmental
authority arising out of any act or omission of Resigning
Trustee as Trustee under the Indenture.
(c) As of the effective date of this Agreement, Resigning
Trustee will hold no moneys or property under the
Indenture.
<PAGE>
(d) Pursuant to Section 303 of the Indenture, Resigning
Trustee duly authenticated and delivered, on February 8,
1989 $105,000,000 aggregate principal amount of Securities,
of which $105,000,000 are outstanding as of the effective
date hereof.
(e) Each person who so authenticated the Securities was
dulyelected, qualified and acting as an officer of
Resigning
Trustee and empowered to authenticate the Securities at
the respective times of such authentication and the
signature of such person or persons appearing on such
Securities is each such person's genuine signature.
(f) This Agreement has been duly authorized, executed
and delivered on behalf of Resigning Trustee and
constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms.
(g) To the best knowledge of responsible officers of the
Resigning Trustee's corporate trust department, but without
further inquiry, no event has occurred and is continuing
which is, or after notice or lapse of time would become,
an Event of Default under Section 501 of the Indenture.
Notwithstanding anything to the contrary in this subsection
(g), the responsible officers of the Resigning Trustee's
corporate trust department are fully chargeable with
knowledge of the contents of any written statement or
Officers' Certificate delivered by the Company to
<PAGE>
the Resigning Trustee under Section 1013 of the
Indenture before the effective date of this
Agreement.
SECTION 1.03 Resigning Trustee hereby assigns, trans-
fers, delivers and confirms to Successor Trustee all right,
title and interest of Resigning Trustee in and to the trust
under the Indenture, all the rights, powers and trusts of the
Trustee under the Indenture, and all property and money held by
Resigning Trustee under the Indenture. Resigning Trustee shall
execute and deliver such further instruments and shall do such
other things as Successor Trustee may reasonably require so
as to more fully and certainly vest and confirm in Successor
Trustee all the rights, powers and trusts hereby assigned,
transferred, delivered and confirmed to Successor Trustee as
Trustee, Paying Agent and Security Registrar.
SECTION 1. 04 Notwithstanding the foregoing, Resigning
Trustee reserves its rights, if any, to indemnification from
the Company pursuant to Section 607(c) of the Indenture.
<PAGE>
ARTICLE II
THE COMPANY
SECTION 2.01 The Company hereby accepts the resignation of
Resigning Trustee as Trustee, Paying Agent and Security
Registrar under the Indenture.
SECTION 2.02 The Company hereby certifies that Exhibit A
annexed hereto is a copy of the Board Resolution which was duly
adopted by the Board of Directors of the Company, which is in
full force and effect on the date hereof, and which authorizes
certain officers of the Company to: (a) accept Resigning
Trustee's resignation as Trustee, Paying Agent and Security
Registrar under the Indenture; (b) appoint Successor Trustee as
Trustee, Paying Agent and Security Registrar under the Indenture;
and (c) execute and deliver such agreements and other
instruments as may be necessary or desirable to effectuate
the succession of Successor Trustee as Trustee, Paying Agent
and Security Registrar under the Indenture.
SECTION 2.03 The Company hereby appoints Successor
Trustee as Trustee, Paying Agent and Security Registrar under
the Indenture to succeed to, and hereby vests Successor
Trustee with, all the rights, powers, duties and obligations of
Resigning Trustee under the Indenture with like effect as if
originally named as Trustee, Paying Agent and Security
Registrar in the Indenture.
<PAGE>
SECTION 2.04 Promptly after the effective date of this
Agreement, the Company shall cause a notice, substantially in
the form of Exhibit B annexed hereto, to be sent to each
Holder of the Securities in accordance with the provisions of
Sections 610 and 614 of the Indenture.
SECTION 2.05 The Company hereby represents and warrants to
Resigning Trustee and Successor Trustee that:
(a) The Company is a corporation duly and validly orga-
nized and existing pursuant to the laws of the State
of Delaware.
(b) The Indenture was validly and lawfully executed and
delivered by the Company and the Securities were validly
issued by the Company.
(c) The Company has performed or fulfilled prior to the
date hereof, and will continue to perform and fulfill
after the date hereof, each covenant, agreement, condition,
obligation and responsibility under the Indenture.
(d) No event has occurred and is continuing which is, or
after notice or lapse of time would become, an Event of
Default under Section 501 of the Indenture.
<PAGE>
(e) No covenant or condition contained in the Indenture
hasbeen waived by the Company or, to the best of the
Company's knowledge, by Holders of the percentage in
aggregate principal amount of the Securities required to
effect any such waiver.
(f) There is no action, suit or proceeding pending or, to
the best of the Company's knowledge, threatened against
the Company before any court or any governmental authority
arising out of any act or omission of the Company under
the Indenture.
(g) This Agreement has been duly authorized, executed
anddelivered on behalf of the Company and Constitutes its
legal, valid and binding obligation, enforceable in
accordance with its terms.
(h) All conditions precedent relating to the appointment of
The Bank of New York as successor Trustee, Paying Agent
and Security Registrar under the Indenture have been
complied with by the Company.
ARTICLE III
<PAGE>
THE SUCCESSOR TRUSTEE
SECTION 3.01 Successor Trustee hereby represents and
warrants to Resigning Trustee and to the Company that:
a) Successor Trustee is not disqualified under the pro-
visions of Section 608 and is eligible under the
provisions of Section 609 of the Indenture to act as
Trustee under the Indenture.
(b) This Agreement has been duly authorized, executed
anddelivered on behalf of Successor Trustee and
constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms.
SECTION 3.02 Successor Trustee hereby accepts its ap-
pointment as successor Trustee, Paying Agent and Security
Registrar under the Indenture and accepts the rights, powers,
duties and obligations of Resigning Trustee as Trustee, Paying
Agent and Security Registrar under the Indenture, upon the
terms and conditions set forth therein, with like effect as if
originally named as Trustee, Paying Agent and Security
Registrar under the Indenture.
<PAGE>
SECTION 3.03 References in the Indenture to "Principal
Office" or other similar terms shall be deemed to refer to the
principal corporate trust office of Successor Trustee, which is
presently located at 101 Barclay Street, New York, New York
10286.
<PAGE>
ARTICLE IV
MISCELLANEOUS
SECTION 4.01 Except as otherwise expressly provided
herein or unless the context otherwise requires, all terms
used herein which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
SECTION 4.02 This Agreement and the resignation, ap-
pointment and acceptance effected hereby shall be effective as of
the opening of business on April 11, 1994.
SECTION 4.03 Resigning Trustee hereby acknowledges payment
or provision for payment in full by the Company of compensation
for all services rendered by Resigning Trustee under Section 607
of the Indenture and reimbursement in full by the Company of the
expenses, disbursements and advances incurred or made by
Resigning Trustee in accordance with the provisions of the
Indenture. Resigning Trustee acknowledges that it relinquishes
any lien or preference it may have upon or with respect to all
property or funds held or collected by it to secure any
amounts due it pursuant to the provisions of Section 613 of
the Indenture. The Company acknowledges its obligation set
forth in Section 607 of the Indenture to indemnify Resigning
Trustee for, and to hold Resigning Trustee harmless against,
any loss, liability and expense incurred without negligence or
<PAGE>
bad faith on the part of the Resigning Trustee and arising
out of or in connection with the acceptance or
administration of the trust evidenced by the Indenture
(which obligation shall survive the execution hereof). It
is understood and agreed that this Agreement does not constitute
a waiver by any of the parties hereto of any obligation or
liability which the Resigning Trustee may have incurred in
connection with its serving as Trustee, Paying Agent or
Security Registrar under the Indenture.
SECTION 4.04 This Agreement shall be governed by and
construed in accordance with the laws of the State of New
York.
SECTION 4.05 This Agreement may be executed in any number
of counterparts each of which shall be an original, but such
counterparts shall together constitute but one and the same
instrument.
SECTION 4.06 The Company, Resigning Trustee and Successor
Trustee hereby acknowledge receipt of an executed and ac-
knowledged counterpart of this Agreement and the effectiveness
thereof.
<PAGE>
SECTION 4.07 Any and all costs, expenses, charges and
fees incurred in connection with the transfer of the duties
described herein shall be borne by the Resigning Trustee and
the Successor Trustee. The Resigning Trustee and the
Successor Trustee hereby agree that each will be responsible
for its own fees and expenses in connection with the
negotiation and preparation of this Agreement and the transfer of
the duties described herein. In addition, the Resigning
Trustee agrees to pay the costs of the oversilvering of the
existing stock of debentures for the purpose of reflecting the
change of trustee.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement of Resignation, Appointment and Acceptance to be
duly executed and acknowledged and their respective seals to be
affixed hereunto and duly attested all as of the day and year
first above written.
[SEAL] KASH N' KARRY FOOD STORES, INC.
Attest: By: /s/ R. P. Springer
/s/ Richard D. Coleman Name: R. P. Springer
Name: Title: EXECUTIVE VICE
PRESIDENT
Title:
[SEAL]
Attest: BARNETT BANK OF TAMPA,
as Resigning Trustee
/s/ Julia T. Arroyo By: /s/ Lucretia M. Vizcaino
Name: Julia T. Arroyo Name: Lucretia M. Vizcaino
Title:Corporate Trust Title:Assistant Vice President
Specialist
[SEAL]
<PAGE>
Attest: THE BANK OF NEW YORK, as
Successor Trustee
/s/ Barbara E. Bennett By: /s/ T. A. Burrell
Name: Barbara E. Bennett Name: T. A. Burrell
Title:Assistant Treasurer Title:Assistant Vice President
Specialist
STATE OF FLORIDA )
: ss:
COUNTY OF HILLSBOROUGH)
On the 30th day of February, 1994, before me personally
came Raymond P. Springer to me known, who, being by me duly
sworn, did depose and say that he resides at 18210 Clear Lake,
Lutz, FL; that he is Executive Vice President of Kash n' Karry
Food Stores, Inc., one of the corporations described in and
which executed the above instrument; that he knows the corporate
seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by the
authority of the Board of Directors of said corporation;
and that he signed his name thereto by like authority.
/s/ Brenda L. Barrow
Notary Public
<PAGE>
STATE OF FLORIDA )
: ss:
COUNTY OF DUVAL )
On the 7th day of April, 1994, before me personally came
Lucretia M. Vizcaino to me known, who, being by me duly sworn,
did depose and say that he/she resides at 4337 Habana Avenue,
Jacksonville, Florida 32217; that he/she is Assistant Vice
President of Barnett Bank of Tampa, one of the corporations
described in and which executed the above instrument; that he/she
knows the corporate seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so
affixed by the authority of the Board of Directors of said
corporation; and that he/she signed his/her name thereto by like
authority.
/s/ Danny H. Verus
Notary Public
<PAGE>
STATE OF NEW YORK )
: ss :
COUNTY OF NEW YORK )
On the day of April, 1994, before me personally came
T. A. Burrell to me known, who, being by me duly sworn, did
depose and say that he/she resides at 35 Stiles Rd., Edison, N.J,
08817 that he/she is Assistant Vice President of THE BANK OF
NEW YORK, one of the Corporations described in and which executed
the above instrument; that he/she knows the corporate seal of
said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by the authority of
the Board of Directors of said corporation; and that he/she
signed his/her name thereto by like authority.
/s/ Edward Souter
Notary Public
13/SEC.LAW/1994/K6750.AGR.1
LIMITED WAIVER
THIS LIMITED WAIVER, (this "Waiver"), dated as of
September 22, 1993, relates to that certain Credit Agreement
dated as of October 12, 1988, and amended and restated as of
September 14, 1989 among Kash n' Karry Food Stores, Inc.
("Borrower"), the Senior Lenders (as defined in the Credit
Agreement) and Bank of America National Trust and Savings
Association (as successor in interests to Security Pacific
National Bank) as agent for the Senior Lenders (in such capacity,
the "Agent"), as amended by a First Amendment to Amended and
Restated Credit Agreement and Limited Waiver dated as of December
28, 1989, a Second Amendment to Amended and Restated Credit
Agreement dated as of July 10, 1990, a Third Amendment to Amended
and Restated Credit Agreement dated as of November 27, 1990, a
Fourth Amendment to Amended and Restated Credit Agreement and
Limited Waiver dated as of November 25, 1991, a Fifth Amendment
to Amended and Restated Credit Agreement and Limited Waiver and
Instruction dated as of January 29, 1992, and a Sixth Amendment
to Credit Agreement dated as of January 4, 1993 (as so amended,
the "Credit Agreement"). Capitalized terms used but not
otherwise defined herein shall have the meanings ascribed to them
in the Credit Agreement.
NOW, THEREFORE, Borrower, the Senior Lenders and the
Agent agree as follows:
1. Limited Waiver; Revolver Cleandown. Subject to
the terms and conditions set forth herein, the Requisite Senior
Lenders agree that from and after the Effective Date (as defined
herein), Borrower's failure to comply with the provisions of
Section 2.02(a)(v) of the Credit Agreement in respect (and only
in respect) of the Revolver Cleandown scheduled to occur during a
Revolver Cleandown Period in the Fiscal Year ending on August 1,
1993, shall not constitute an Event of Default.
2. Effective Date. This Waiver shall become
effective upon the date (the "Effective Date") on which the Agent
has received counterparts hereof signed by Borrower, the
Requisite Senior Lenders and the Agent.
3. Representations and Warranties. Borrower
represents and warrants that (a) the execution, delivery and
performance by Borrower of this Waiver has been duly authorized
by all necessary corporate action and (b) as of the date hereof
and as of the Effective Date, no Event of Default has occurred or
is continuing, other than the Event of Default described in
Section 1.
<PAGE>
4. Limitation on Waiver. This Waiver shall be
limited solely to the matters expressly set forth herein and
shall not (i) constitute consent to the waiver of or amendment to
any other term or condition of the Credit Agreement, or of any
instruments or agreements referred to therein, (ii) prejudice any
right or rights which any Senior Lender or the Agent may now have
or may have in the future under or in connection with the Credit
Agreement or any instruments or agreements referred to therein,
or (iii) require any Senior Lender or the Agent to execute a
similar consent for a similar circumstance or on a future
occasion. Except to the extent specifically waived herein, the
provisions of the Credit Agreement shall not be amended,
modified, impaired or otherwise affected hereby, and the Credit
Agreement and all of the Obligations are hereby confirmed in full
force and effect.
5. Miscellaneous. This Waiver is a Loan Document and,
together with the Credit Agreement and the other Loan Documents,
comprises the complete and integrated agreement of the parties on
the subject matter hereof. The headings herein are for
convenience of reference only and shall not alter or otherwise
affect the meaning hereof.
6. Counterparts. This Waiver may be executed in any
number of counterparts which, when taken together, shall be
deemed to constitute one and the same instrument.
7. Governing Law. THIS WAIVER AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
WITNESS the due execution hereof as of the date first
above written.
KASH N' KARRY FOOD STORES, INC.,
as Borrower
By: /s/ R. P. Springer
Title: Executive Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
By: /s/ Laura Knight
Title: Vice President
<PAGE>
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Senior
Lender
By: /s/ Laura Ann Marshall
Title: Vice President
WELLS FARGO BANK, N.A.
By: /s/ [illegible]*
Title: Vice President
* Subject to access to Sidley &
Austin with all expenses paid
by Company.
BARNETT BANK OF TAMPA
(as successor to First Florida
Bank, N.A.)
By: /s/ Emily D. Waterman
Title: Vice President
NATIONSBANK OF FLORIDA, N.A.
By: /s/ [illegible]
Title: Senior Vice President
13/sec.law/1994/K6313.LW4
[EXECUTION COPY: 2/1/94]
SEVENTH AMENDMENT AND LIMITED WAIVER
TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS SEVENTH AMENDMENT AND LIMITED WAIVER (the
"Amendment") dated as of February 1, 1994 relates to that certain
Credit Agreement dated as of October 12, 1988, and amended and
restated as of September 14, 1989 (as further amended,
supplemented or modified from time to time through the date
hereof, the "Credit Agreement") among Kash n' Karry Food Stores,
Inc., a Delaware corporation ("Borrower"), the Senior Lenders
referred to therein and Bank of America National Trust and
Savings Association (as successor to Security Pacific National
Bank), as agent for the Senior Lenders (in such capacity, the
"Agent").
RECITALS
WHEREAS, Green Equity Investors, L.P., a Delaware
limited partnership ("GEI"), has agreed to purchase from
Borrower, at face value, debt securities issued by Borrower (the
"GEI Note") in the principal amount of up to $2,000,000;
WHEREAS, the Indebtedness evidenced by the GEI Note is
due and payable by Borrower on May 2, 1994;
WHEREAS, Borrower has requested that Bank of America
National Trust and Savings Association ("Bank of America"), as
Senior Lender, make available an Additional Term Loan (as defined
herein) in the amount required to repay the unpaid principal
amount of the GEI Note at its maturity;
WHEREAS, Bank of America has agreed to make the
Additional Term Loan available on the terms and conditions set
forth herein, including without limitation the condition that GEI
purchase a 100% participation in the Additional Term Loan;
NOW, THEREFORE, in consideration of the foregoing
premises (all of which are incorporated herein as a part of this
Amendment) and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged,
Borrower, the Agent and the Senior Lenders agree as follows:
1. Definitions. Terms defined in the Credit
Agreement and not otherwise defined herein are used herein with
the meanings so defined.
2. Amendments to the Credit Agreement. Upon the
Seventh Amendment Effective Date (as defined herein), the Credit
Agreement is hereby amended as follows:
<PAGE>
2.1 Preamble. The preamble to the Credit
Agreement is hereby amended by deleting the phrase "in
accordance with Section 12.02(a) (together with their
respective successors and assigns, individually, a
'Senior Lender' and, collectively, the 'Senior
Lenders')" and inserting in lieu thereof the phrase "as
a 'Senior Lender' (as defined below)".
2.2 Section 1.01. Section 1.01 of the
Credit Agreement is hereby amended as follows:
(a) By adding the following definitions in proper
alphabetical order:
"Additional Term Lender" shall mean Bank of
America National Trust and Savings Association.
"Additional Term Loan" shall have the meaning
ascribed to such term in Section 2.01(g).
"Additional Term Loan Funding Date" shall
mean May 2, 1994.
"Additional Term Note" shall have the meaning
ascribed to such term in Section 2.01(g).
"GEI" shall mean Green Equity Investors,
L.P., a Delaware limited partnership.
"GEI Note" shall mean a promissory note
payable to the order of GEI in the form of Exhibit A to
the Seventh Amendment.
"GEI Note and Warrant Purchase Agreement"
shall mean the Note and Warrant Purchase Agreement
dated as of February 1, 1994 between Borrower and GEI
in the form of Exhibit B to the Seventh Amendment.
"Seventh Amendment" shall mean the Seventh
Amendment and Limited Waiver to Amended and Restated
Credit Agreement dated as of February 1, 1994.
"Seventh Amendment Effective Date" shall have
the meaning ascribed thereto in the Seventh Amendment.
(b) By amending and restating the following
definitions in their entirety to read as follows:
"Loan" shall mean a Term Loan, an Additional
Term Loan, a Revolving Loan or a Swing Loan.
"Note" shall mean the Term Notes, the
Additional Term Note, the Supplemental Term Notes, the
Capital Improvement Revolving Notes, the Working
Capital Revolving Notes and the Swing Note.
<PAGE>
"Senior Lender" shall mean, at any particular
time, any Person who holds a Facility Commitment at
such time, the Additional Term Lender, the Issuing Bank
and each Person which at any time becomes a Senior
Lender pursuant to Section 12.02(a), together with
their respective successors and assigns.
2.3 Section 2.01(g). Section 2.01 of the Credit
Agreement is hereby amended to add a new subsection (g) thereto
to read as follows:
(g) Additional Term Loan. Subject to the
terms and conditions set forth in this Agreement, the
Additional Term Lender hereby agrees to make to
Borrower a term loan (the "Additional Term Loan") on
May 2, 1994 in an amount requested by Borrower which
amount shall not exceed the lesser of (i) $2,000,000
and (ii) the then unpaid principal amount of the GEI
Note. If Borrower desires to borrow an Additional Term
Loan, it shall deliver to the Agent (who shall notify
the Senior Lenders thereof) no later than noon (New
York time) on the Additional Term Loan Funding Date, a
notice of borrowing which shall specify (A) the
proposed funding date and (B) the then unpaid principal
amount of the GEI Note. The notice of borrowing shall
be irrevocable. Borrower shall deliver to the
Additional Term Lender on the Additional Term Loan
Funding Date a promissory note in the form of Exhibit C
to the Seventh Amendment, with blanks appropriately
completed (the "Additional Term Note"). The Additional
Term Loan shall be a Base Rate Loan. The principal
amount of the Additional Term Loan shall be repaid by
Borrower on the Facilities Termination Date, provided
that the principal amount of all other Loans, together
with interest accrued thereon, shall have then been
paid in full in cash and if the principal amount of all
other Loans, together with interest accrued thereon,
has not been paid in full in cash on the Facilities
Termination Date, then the principal amount of the
Additional Term Loan shall be repaid by Borrower on the
next Business Day after the principal amount of all
other Loans, together with interest accrued thereon,
has been paid in full in cash. The proceeds of the
Additional Term Loan shall be applied by Borrower to
repay in full the principal amount of the GEI Note, and
the obligation of the Additional Term Lender to make
the Additional Term Loan available to Borrower may be
satisfied by tendering the GEI Note to Borrower (or in
accordance with Borrower's written directions) for
cancellation.
<PAGE>
2.4 Section 2.06(a). Section 2.06(a) of the
Credit Agreement is hereby amended by adding the following
sentence at the end thereof:
The Additional Term Loan may not be prepaid prior to
payment in full in cash of all other Loans, together
with interest accrued thereon.
2.5 Section 2.07(b). Section 2.07(b) of the
Credit Agreement is hereby amended by deleting the parenthetical
phrase "(other than Swing Loans)" in each of clauses (iv) and (v)
therein and inserting in lieu thereof the parenthetical phrase
"(other than Swing Loans and the Additional Term Loan)".
2.6 Section 4.04. A new Section 4.04 of the
Credit Agreement is hereby added, to read as follows:
4.04. Conditions Precedent to the Additional Term
Loan. The obligation of the Additional Term Lender to
make the Additional Term Loan requested to be made by
it on any date is subject to the following conditions
precedent as of such date:
(a) The Additional Term Lender shall have
received the Additional Term Note, duly executed by
Borrower, in the amount of the Additional Term Loan.
(b) GEI shall have purchased the GEI Note by a
cash payment to Borrower equal to the face amount of
the GEI Note.
(c) The Agent shall have received in accordance
with the provisions of Section 2.01(g) an original and
duly executed notice of borrowing, together with a
certificate signed by a general partner of GEI
confirming the unpaid principal amount of the GEI Note,
as set forth in the notice of borrowing.
(d) GEI shall have tendered the GEI Note to the
Additional Term Lender in payment for a 100%
participation in the Additional Term Loan, provided
that the participation agreement (i) shall grant GEI
the right to receive payments from the Additional Term
Lender only to the extent that the Additional Term
Lender has received payments which it has applied to
the Additional Term Loan in accordance with the
provisions of the Credit Agreement, (ii) shall not
require the Additional Term Lender to obtain the
approval of the participant prior to any amendment or
waiver of any provisions of the Loan Documents, other
than an amendment or waiver which expressly reduces the
principal amount of, or the interest rate applicable
to, the Additional Term Loan and (iii) shall otherwise
<PAGE>
be in accordance with Section 12.02(e) (other than the
minimum amount requirements of clause (v) thereof) and
in form and substance reasonably satisfactory to the
Additional Term Lender.
(e) No law, regulation, order, judgment or decree
of any Governmental Authority shall, and no litigation
shall be pending or threatened which in the reasonable
judgment of the Additional Term Lender or the Requisite
Senior Lenders would, enjoin, prohibit or restrain the
Additional Term Lender from making the Additional Term
Loan, or impose or result in the imposition of any
material adverse condition upon the Additional Term
Lender as a result of making the Additional Term Loan.
2.7 Section 8.04. Section 8.04 of the Credit
Agreement is hereby amended by deleting the word "and"
immediately preceding clause (vii) thereof and inserting a new
clause (viii) immediately preceding the period at the end thereof
to read as follows:
and (viii) Borrower's indemnification obligations to
GEI under the GEI Note and Warrant Purchase Agreement
2.8 Section 8.07. Section 8.07 of the Credit
Agreement is hereby amended by deleting the word "and"
immediately preceding clause (iii) thereof and inserting a new
clause (iv) immediately preceding the period at the end thereof
to read as follows:
and (iv) enter into the transactions specified in the
GEI Note and Warrant Purchase Agreement, including
without limitation the payment of the fees and expenses
provided for in Section 2 thereof
2.9 Section 8.21. A new Section 8.21 is hereby
added to the Credit Agreement, to read as follows:
8.21. Limitation on Payments on the GEI Note.
Borrower shall not make any payments on or with respect
to the GEI Note upon the occurrence and during the
continuance of an Event of Default or Potential Event
of Default.
3. Limited Waiver. Subject to the terms and
conditions set forth herein, the Requisite Senior Lenders hereby
agree to waive, from the Seventh Amendment Effective Date, the
minimum amount requirements of clause (v) of Section 12.02(e) of
the Credit Agreement as applied to the purchase by GEI of a 100%
participation in the Additional Term Loan.
<PAGE>
4. Representations and Warranties.
(a) The execution, delivery and performance by
Borrower of this Amendment have been duly authorized by all
necessary corporate action;
(b) No Event of Default or Potential Event of
Default has occurred and is continuing; and
(c) The representations and warranties of
Borrower contained in Section 5.03 of the Credit Agreement
and any other Loan Document (other than representations and
warranties which expressly speak as of a different date) are
true, correct and complete in all material respects, except
that such representations and warranties need not be true,
correct and complete to the extent that changes in the facts
and conditions on which such representations and warranties
are based are required or permitted under the Credit
Agreement.
5. Limitation on Amendment. This Amendment shall be
limited solely to the matters expressly set forth herein and
shall not (i) constitute a waiver or amendment of any other term
or condition of the Credit Agreement, or of any instruments or
agreements referred to therein, (ii) prejudice any right or
rights which the Agent or any of the Senior Lenders may now have
or may have in the future under or in connection with the Credit
Agreement or any instruments or agreements referred to therein,
or (iii) require the Senior Lenders to agree to a similar
amendment or waiver or grant a similar waiver for a similar
transaction or on a future occasion. Except to the extent
specifically amended or waived herein, the provisions of the
Credit Agreement shall not be amended, modified, impaired or
otherwise affected hereby, and the Credit Agreement and all of
the Obligations are hereby confirmed in full force and effect.
6. Miscellaneous. This Amendment is a Loan Document
and, together with the Credit Agreement and the other Loan
Documents, comprises the complete and integrated agreement of the
parties on the subject matter hereof. The headings herein are
for convenience of reference only and shall not alter or
otherwise affect the meaning hereof.
7. Seventh Amendment Effective Date. This Amendment
shall become effective upon the date (the "Seventh Amendment
Effective Date") on or before February 2, 1994, on which the
Agent has received counterparts hereof signed by Borrower, the
Agent and each of the Senior Lenders.
8. Governing Law. This Amendment shall be governed
by, and shall be construed and enforced in accordance with, the
laws of the State of New York.
<PAGE>
9. Counterparts. This Amendment may be executed in
any number of counterparts which together shall constitute one
instrument.
WITNESS the due execution hereof as of the date first
above written.
KASH N' KARRY FOOD STORES, INC.,
as Borrower
By: /s/ R. P. Springer
Title: Executive Vice President
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION (as successor
in interest to SECURITY PACIFIC
NATIONAL BANK), as Agent
By: /s/ Laura Knight
Title: Vice President
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION (as successor
in interest to SECURITY PACIFIC
NATIONAL BANK), as a Senior Lender
By: /s/ Daniel McCready
Title: Vice President
WELLS FARGO BANK, N.A.
By: /s/ Kevin Baneth
Title: Vice President
BARNETT BANK OF TAMPA (as successor
in interest to First Florida Bank,
N.A.)
By: /s/ Emily D. Waterman
Title: Vice President
NATIONSBANK OF FLORIDA, N.A.
By: /s/ Beth Ann Lamping
Title: Assistant Vice President
<PAGE>
EXHIBIT A TO SEVENTH AMENDMENT
EXHIBIT A
New York City
$2,000,000 February __, 1994
FOR VALUE RECEIVED, the undersigned, KASH N' KARRY FOOD
STORES, INC., a corporation organized and existing under the laws
of the State of Delaware (the "Company"), hereby absolutely and
unconditionally promises to pay, in immediately available funds,
to the order of GREEN EQUITY INVESTORS, L.P., a Delaware limited
partnership (the "Holder"), at the office of its general partner,
Leonard Green & Partners, L.P. 333 South Grand Avenue, Los
Angeles, California, on May 2, 1994, the principal sum of
$2,000,000 or so much thereof as shall be outstanding, together
with interest on the principal balance outstanding hereunder from
time to time from the date hereof through and including the
maturity hereof on May 2, 1994. The principal balance
outstanding hereunder from time to time shall bear interest from
the date advanced until paid at a rate per annum equal to the
Base Rate plus 1%. The "Base Rate" means the higher of:
(a) the rate of interest publicly announced
from time to time by Bank of America National
Trust and Savings Association, a national banking
association (the "Bank") in San Francisco,
California, as its "reference rate," or
(b) one-half percent per annum above the
latest Federal Funds Rate.
"Federal Funds Rate" means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Board
(including any such successor, "H.15(519)") for such day opposite
the caption "Federal Funds (Effective)." If on any relevant day
such rate is not yet published in H.15(519), the rate for such
day will be the rate set forth in the daily statistical release
designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by
the Federal Reserve Bank of New York (including any such
successor, the "Composite 3:30 p.m. Quotation") for such day
under the caption "Federal Funds Effective Rate." If on any
relevant day the appropriate rate for such previous day is not
yet published in either H.15(519) or the Composite 3:30 p.m.
Quotations, the rate for such day will be the arithmetic mean of
the rates for the last transaction in overnight Federal Funds
arranged prior to 9:00 a.m. (New York time) on that day by each
of three leading brokers of Federal Funds transactions in New
York City selected by the Holder. All computations of interest
<PAGE>
A-1
at all times as the Base Rate is determined by the Bank's
"reference rate" shall be made on the basis of a year of 365 or
366 days, as the case may be, and actual days elapsed. All other
computations of interest shall be made on the basis of a 360-day
year and actual day elapsed. Interest shall accrue during each
period during which interest is computed from the first day
thereof to the last day thereof. This Note is issued pursuant to
a Note and Warrant Purchase Agreement between the Company and the
Holder dated as of February 1, 1994 (the "Loan Agreement") and is
subject to the terms and provisions thereof, which are hereby
incorporated in this Note by reference.
This Note may be prepaid, without premium, in full at
any time and in part, from time to time, on one (1) day's notice
to the Holder provided that no amount so prepaid may be
reborrowed. All prepayments shall be in amounts of $100,000 or
any multiple of $50,000 in excess thereof. All prepayments shall
be accompanied by a payment of accrued interest to the date of
such prepayment on the amount so prepaid. Notwithstanding the
foregoing, no prepayment hereunder may be made if at the time or
as a result thereof, there shall be a Potential Event of Default
or Event of Default (as those terms are defined in the Credit
Agreement, as in turn defined in the Loan Agreement). The entire
unpaid principal balance and all accrued and unpaid interest
shall be paid in full on May 2, 1994. Any overdue principal and
any overdue interest from time to time outstanding shall bear
interest payable on demand at a rate which is 3% per annum in
excess of the Base Rate.
If(x) the Company shall fail to make any payment when
due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) on any indebtedness of the
Company other than under this Note, and the aggregate amount of
such indebtedness is $1,000,000 or more, or (y) any other breach,
default or event of default shall occur under any instrument,
agreement or indenture pertaining to any such indebtedness, and
as a result the holder thereof shall accelerate the maturity of
such indebtedness, the entire unpaid principal amount of this
Note and all of the unpaid interest accrued hereon may be
declared due and, thereupon, shall become immediately payable,
upon notice from the Holder to the Company.
The Company promises to pay all costs and expenses,
including reasonable attorney's fees and disbursements, incurred
in the collection and enforcement of this Note or any appeal of a
judgment rendered thereon. The Company hereby waives
presentment, demand, notice, protest and all other demands and
notices in connection with the delivery, acceptance, performance
and enforcement of this Note, and also hereby assents to
extensions of the time of payment or forbearance or other
indulgences without notice.
<PAGE>
2
This Note and the obligations of the Company hereunder
shall be governed by and interpreted and determined in accordance
with the laws of the State of New York.
IN WITNESS WHEREOF, KASH N' KARRY FOOD STORES, INC. has
caused this Note to be executed by its duly authorized officer on
the ____ day of _____, 1994.
KASH N' KARRY FOOD STORES, INC.
By:____________________________
Name:__________________________
Title:_________________________
A-3
[EXECUTION COPY: 2/1/94]
<PAGE>
[EXECUTION COPY]
EXHIBIT B TO SEVENTH AMENDMENT
NOTE AND WARRANT PURCHASE AGREEMENT
Dated as of February 1, 1994
_________________________________________
By and Between
Kash N' Karry Food Stores, Inc.
and
Green Equity Investors, L.P.
<PAGE>
[EXECUTION COPY: 2/1/94]
NOTE AND WARRANT PURCHASE AGREEMENT
This Note and Warrant Purchase Agreement ("Agreement") is
entered into as of February 1, 1994 by and between Kash N' Karry
Food Stores, Inc., a Delaware corporation (the "Company") and
Green Equity Investors, L.P., a Delaware limited partnership (the
"Purchaser").
In consideration of the mutual covenants and agreements
herein contained, the parties hereto covenant and agree as
follow:
1. Purchase and Sale of Note and Warrants. Subject
to the terms and conditions herein set forth, in case the Company
shall give notice to the Purchaser on or before February 4, 1994,
as hereinafter provided, the Company shall sell to the Purchaser,
and the Purchaser shall purchase from the Company, a note in
substantially the form of Exhibit A hereto (the "Note") in an
aggregate principal amount not exceeding $2,000,000 at a price
equal to the principal amount thereof, together with the Initial
Warrant (as defined in Section 3 below).
Subject to satisfaction of the conditions in
Section 5 hereof, the purchase and delivery of the Note and
Initial Warrant shall take place at the offices of Kramer, Levin,
Naftalis, Nessen, Kamin & Frankel, New York, New York upon the
irrevocable notice (which may be telephonic) of the Company
(which notice must be received by the Purchaser prior to 12:00
noon, New York time) on the requested borrowing date (the
"Closing Date") specifying the amount to be borrowed under the
Note and the account or accounts to which the purchase price
therefor is to be transferred.
2. Fees and Expenses. In consideration of the
commitment of Purchaser to purchase the Note and the Warrants and
its arrangement of financing therefor, concurrently with the
execution hereof, the Company shall pay to the Purchaser, in
immediately available funds, a fee in the amount of $50,000. The
Company hereby agrees in addition to pay, promptly upon receipt
of request therefor, all out-of-pocket fees and expenses (other
than commitment fees) incurred by the Purchaser in connection
with the preparation and negotiation of this Agreement and the
financing therefor (including reasonable attorneys' fees and
expenses) and to pay or reimburse the Purchaser, promptly upon
receipt of request therefor, all costs and expenses (including
reasonable attorneys' fees and expenses) incurred by it in
connection with the enforcement or attempted enforcement of this
Agreement or the Note, and any expenses incurred as a result of
the purchase of a participation contemplated by the Seventh
Amendment to the Credit Agreement.
<PAGE>
3. Issuance of Warrants. In the event the Company
elects to cause the Purchaser to acquire the Note, the Company
shall concurrently issue to the Purchaser, for no additional
consideration, a warrant in substantially the form of Exhibit B
hereto (the "Initial Warrant") to purchase the number of shares
of common stock, $.01 par value, of the Company (the "Shares,"
which term shall include all securities issuable under the
warrant) equal to 2% of the Fully Diluted Shares of the Company
as of the Closing Date. "Fully Diluted Shares" shall mean and
include all shares of common stock outstanding on any relevant
date of determination, and all shares of common stock issuable
upon exercise of warrants, options (including employee stock
options) and any other securities convertible (whether or not
presently convertible or exercisable) into or exercisable for the
purchase of common stock of the Company, including the Shares
issuable upon exercise of the Warrants. If the Closing Date were
the Date hereof and the entire $2,000,000 were borrowed, the
number of Shares purchasable with the Initial Warrant would be
63,235.
In the event the Note is not, for any reason, paid
in full on the date that payment thereunder is due, the Company
hereby agrees to issue, for no additional consideration, an
additional warrant substantially in the form of Exhibit B hereto
(the "Additional Warrant") to purchase such number of Shares as,
when added to the number of Shares purchasable with the Initial
Warrant, is equal to 5% of the Fully Diluted Shares of the
Company. To the extent that less than $2,000,000 is borrowed
pursuant to this Agreement, the number of Shares subject to the
Initial Warrant and Additional Warrant shall be proportionately
reduced.
The Company hereby agrees that the holders of the
Shares issuable pursuant to the Initial Warrant and, if issued,
the Additional Warrant (collectively, the "Warrants") shall have
registration rights with respect to such Shares which are
equivalent to the most favorable such rights as have been, or
hereafter may be, granted to any holder of the common stock (or
other class of securities into which common stock of the Company
may hereafter be converted) of the Company.
4. Representations and Warranties. In order to
induce the Purchaser to enter into this Agreement and to purchase
the Note and the Warrants, the Company represents and warrants to
the Purchaser as follows:
(a) Authority. (i) The Company has the
requisite corporate power and authority to execute, deliver and
perform its obligations under this Agreement, the Note, and the
Warrants. The execution, delivery and performance of this
Agreement, the Note and the Warrants, and the consummation of the
transactions contemplated thereby have been duly authorized by
all necessary corporate action on the part of the Company.
<PAGE>
(ii) Each of the Agreement,
the Note and the Warrants is or will be, as the case may be, duly
executed and delivered by the Company and constitutes a legal,
valid and binding obligation, enforceable against it in
accordance with its terms (except as enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or limiting creditors' rights generally or by
equitable principles relating enforceability).
(b) No Conflict. The execution, delivery and
performance by the Company of this Agreement, the Note and the
Warrants do not and will not (i) conflict with or violate the
Company's certificate of incorporation or bylaws, (ii) conflict
with or result in a breach of or constitute (with or without
notice or lapse of time or both) a default under a Requirement of
Law or material Contractual Obligation of the Company, or require
termination of any material Contractual Obligation, (iii) result
in or require the creation or imposition of any Lien whatsoever
upon any of the properties or assets of the Company or (iv)
require any approval of stockholders of the Company.
(c) Government Consent. The execution, delivery
and performance by the Company of this Agreement, the Note and
the Warrants do not and will not require any registration with,
consent or approval of, or notice to, or other action with or by,
any governmental authority, except filing, consents or notices
which have been, or will in due course be, made, obtained or
given.
(d) Capitalization. On the date hereof, the
capital stock of the Company is as set forth on Exhibit C hereto.
All of such outstanding shares were duly and validly issued and
are fully paid and nonassessable. Except as set forth on Exhibit
C hereto, there are outstanding no rights to subscribe for or
purchase, or any warrants or options for the purchase of, or any
agreements (contingent or otherwise) providing for the issuance
of, or any calls, commitments or claims of any character relating
to any of the Company's capital stock or any securities
convertible into or exchangeable for any of its capital stock.
The Shares to be issued to the Purchaser upon exercise of the
Warrants have been duly authorized for issuance and, when sold
and delivered against payment therefor as provided therein, will
be validly issued, fully paid and nonassessable. There are no
preemptive rights as to any of the outstanding shares of the
Company's capital stock.
(e) Financial Statements and Projections. The
audited financial statements for the fiscal year ended August 1,
1993, and unaudited financial statements for the quarter ended
October 1, 1993 of the Company were prepared in accordance with
GAAP, except as otherwise noted therein, and fairly represent the
consolidated financial position of the Company as of the
respective dates thereof, and the results of operations and
<PAGE>
changes in the financial position of the Company for each of the
periods covered thereby, subject, in the case of any unaudited
interim financial statements, to changes resulting from audit and
normal year-end adjustments. The Company has no material
obligations, contingent liabilities or liabilities for taxes,
long term leases or material or unusual forward or long term
commitments which are not reflected in such financial statements
and the notes thereto. The "Daily Cash Availability/Revolver
Projections" were prepared in a manner consistent with the
current accounting practices of the Company, are based upon
reasonable assumptions, and represent the Company's good faith
estimates as to the matters set forth therein.
(f) Other Representations and Warranties. The
Company hereby incorporates by reference as if set forth herein
in full, and restates to the Purchaser, all of the
representations and warranties set forth in that certain Credit
Agreement dated as of October 12, 1988 among the Company, Bank of
America and the other senior lenders named therein, as amended to
date (the "Credit Agreement"), except to the extent any such
representation or warranty is not required to be restated by the
Company in connection with any reborrowing under the aforesaid
Credit Agreement.
5. Conditions Precedent. The Purchaser's obligation
to purchase and pay for the Note and to acquire the Initial
Warrant shall be subject to fulfillment on or before the Closing
Date of the following conditions:
(a) Opinion of Counsel. The Purchaser shall have
received from Kramer, Levin, Naftalis, Nessen, Kamin & Frankel,
counsel for the Company, an opinion, dated the Closing Date, in
substantially the form of Exhibit D attached hereto.
(b) Financing. The Purchaser shall have
completed arrangements with a financial institution, or shall
have issued a call for and received the requisite capital from
its limited partners, in each case in an amount sufficient to
fund the purchase of the Note at 100% of its face amount.
(c) Representations and Warranties. The
representations and warranties in Section 4 hereof shall be true
and correct in all material respects as if made on the Closing
Date, and the Company shall deliver to the Purchaser a
certificate of its Chief Executive Officer to such effect.
(d) Seventh Amendment. The Seventh Amendment to
the Credit Agreement shall have been executed and delivered by
the parties thereto and shall have become effective by its terms.
<PAGE>
(e) Documents. The Purchaser shall have received
(i) an executed Note in the amount being borrowed, (ii) an
executed Initial Warrant representing the appropriate number of
Shares and (iii) such other documents or instruments as the
Purchaser may reasonably request.
6. General Provisions.
(a) Notices. Except as set forth in Section 1
hereof, all communications provided for hereunder shall be in
writing and delivered by hand or sent by first-class mail or
telecopy to the parties at the addresses set forth underneath
their signatures below. All such communications shall be deemed
to have been given or made when so delivered by hand or telecopy,
or five Business Days after being so mailed.
(b) Governing Law. This Agreement, the Note and
the Warrants shall be construed in accordance with and governed
by the laws of the State of New York.
(c) Indemnification. In consideration of the
execution and delivery of this Agreement by the Purchaser, the
Company hereby agrees to indemnify and hold each of the
Purchaser's affiliates, partners, employees and agents (herein
called the "Indemnitees") free and harmless from and against any
and all actions, cause of action, suits, losses, liabilities and
damages, and expenses in connection herewith, including without
limitation, reasonable counsel fees and disbursement (herein
called the "Indemnified Liabilities") incurred by the Indemnitees
or any of them as a result of, or arising out of, or relating to
the execution, delivery, performance or enforcement of this
Agreement, the Note or the Warrants, provided, however, that the
Indemnified Liabilities shall not include any liabilities arising
on account of any Indemnitee's gross negligence or willful
misconduct.
(d) Representation and Warranty. The Purchaser
represents and warrants to the Company that it is acquiring the
Note and Warrants for its own account and with no intention of
distributing any part thereof in any transaction that would be in
violation of the registration requirements of the Securities Act
of 1933, as amended.
(e) Assignment. Neither party may assign its
obligations hereunder without the prior written consent of the
other. The Purchaser may assign it rights (including the Note
and the Warrants) hereunder, however, without notice to or the
consent of the Company. In connection with any such assignment,
the Company hereby expressly waives and agrees not to assert, as
to the assignee of the Note and/or any Warrant, any defenses,
rights, claims or setoffs it may otherwise have in respect of the
Purchaser.
<PAGE>
(f) Defined Terms. Terms used in this Agreement
without definition shall have the meanings ascribed thereto in
the Credit Agreement.
(g) Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an
original but all of which shall together constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
COMPANY: KASH N' KARRY FOOD STORES, INC.
6422 Harney Road
Tampa, Florida 33610
Attention:_____________________
Telecopy:______________________
By:____________________________
Name:__________________________
Title:_________________________
PURCHASER: GREEN EQUITY INVESTORS, L.P.
333 South Grand Avenue, Suite 5400
Los Angeles, California 90071
Telecopy: (213) 625-2043
By: LEONARD GREEN & PARTNERS, L.P.
By:____________________________
General Partner
[EXECUTION COPY: 2/1/94]
<PAGE>
EXHIBIT A
New York City
$2,000,000 February __, 1994
FOR VALUE RECEIVED, the undersigned, KASH N' KARRY FOOD
STORES, INC., a corporation organized and existing under the laws
of the State of Delaware (the "Company"), hereby absolutely and
unconditionally promises to pay, in immediately available funds,
to the order of GREEN EQUITY INVESTORS, L.P., a Delaware limited
partnership (the "Holder"), at the office of its general partner,
Leonard Green & Partners, L.P. 333 South Grand Avenue, Los
Angeles, California, on May 2, 1994, the principal sum of
$2,000,000 or so much thereof as shall be outstanding, together
with interest on the principal balance outstanding hereunder from
time to time from the date hereof through and including the
maturity hereof on May 2, 1994. The principal balance
outstanding hereunder from time to time shall bear interest from
the date advanced until paid at a rate per annum equal to the
Base Rate plus 1%. The "Base Rate" means the higher of:
(a) the rate of interest publicly announced
from time to time by Bank of America National
Trust and Savings Association, a national banking
association (the "Bank") in San Francisco,
California, as its "reference rate," or
(b) one-half percent per annum above the
latest Federal Funds Rate.
"Federal Funds Rate" means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Board
(including any such successor, "H.15(519)") for such day opposite
the caption "Federal Funds (Effective)." If on any relevant day
such rate is not yet published in H.15(519), the rate for such
day will be the rate set forth in the daily statistical release
designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by
the Federal Reserve Bank of New York (including any such
successor, the "Composite 3:30 p.m. Quotation") for such day
under the caption "Federal Funds Effective Rate." If on any
relevant day the appropriate rate for such previous day is not
yet published in either H.15(519) or the Composite 3:30 p.m.
Quotations, the rate for such day will be the arithmetic mean of
the rates for the last transaction in overnight Federal Funds
arranged prior to 9:00 a.m. (New York time) on that day by each
of three leading brokers of Federal Funds transactions in New
York City selected by the Holder. All computations of interest
A-1
<PAGE>
at all times as the Base Rate is determined by the Bank's
"reference rate" shall be made on the basis of a year of 365 or
366 days, as the case may be, and actual days elapsed. All other
computations of interest shall be made on the basis of a 360-day
year and actual day elapsed. Interest shall accrue during each
period during which interest is computed from the first day
thereof to the last day thereof. This Note is issued pursuant to
a Note and Warrant Purchase Agreement between the Company and the
Holder dated as of February 1, 1994 (the "Loan Agreement") and is
subject to the terms and provisions thereof, which are hereby
incorporated in this Note by reference.
This Note may be prepaid, without premium, in full at
any time and in part, from time to time, on one (1) day's notice
to the Holder provided that no amount so prepaid may be
reborrowed. All prepayments shall be in amounts of $100,000 or
any multiple of $50,000 in excess thereof. All prepayments shall
be accompanied by a payment of accrued interest to the date of
such prepayment on the amount so prepaid. Notwithstanding the
foregoing, no prepayment hereunder may be made if at the time or
as a result thereof, there shall be a Potential Event of Default
or Event of Default (as those terms are defined in the Credit
Agreement, as in turn defined in the Loan Agreement). The entire
unpaid principal balance and all accrued and unpaid interest
shall be paid in full on May 2, 1994. Any overdue principal and
any overdue interest from time to time outstanding shall bear
interest payable on demand at a rate which is 3% per annum in
excess of the Base Rate.
If(x) the Company shall fail to make any payment when
due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) on any indebtedness of the
Company other than under this Note, and the aggregate amount of
such indebtedness is $1,000,000 or more, or (y) any other breach,
default or event of default shall occur under any instrument,
agreement or indenture pertaining to any such indebtedness, and
as a result the holder thereof shall accelerate the maturity of
such indebtedness, the entire unpaid principal amount of this
Note and all of the unpaid interest accrued hereon may be
declared due and, thereupon, shall become immediately payable,
upon notice from the Holder to the Company.
The Company promises to pay all costs and expenses,
including reasonable attorney's fees and disbursements, incurred
in the collection and enforcement of this Note or any appeal of a
judgment rendered thereon. The Company hereby waives
presentment, demand, notice, protest and all other demands and
notices in connection with the delivery, acceptance, performance
and enforcement of this Note, and also hereby assents to
extensions of the time of payment or forbearance or other
indulgences without notice.
<PAGE>
2
This Note and the obligations of the Company hereunder
shall be governed by and interpreted and determined in accordance
with the laws of the State of New York.
IN WITNESS WHEREOF, KASH N' KARRY FOOD STORES, INC. has
caused this Note to be executed by its duly authorized officer on
the ____ day of _____, 1994.
KASH N' KARRY FOOD STORES, INC.
By:____________________________
Name:__________________________
Title:_________________________
A-3
<PAGE>
[EXECUTION COPY: 2/1/94]
EXHIBIT B
[FORM OF WARRANT]
THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES
OF COMMON STOCK OR OTHER SECURITIES ISSUABLE UPON EXERCISE
THEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT, OR (ii) AN
OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY
SATISFACTORY TO COUNSEL FOR THIS CORPORATION, THAT AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
IS AVAILABLE.
No._________ Warrant to Purchase
_________________________
Shares of Common Stock
KASH N' KARRY FOOD STORES, INC.
STOCK PURCHASE WARRANTS
This certifies that, for value received, GREEN EQUITY
INVESTORS, L.P. (the "Holder"), is entitled to purchase from KASH
N' KARRY FOOD STORES, INC., a Delaware corporation (the
"Company"), the aggregate number of shares of Common Stock, at
the option of the Holder, shown above at any time after 9:00
a.m., New York City time, on February ___, 1994 (the "Issue
Date") until 5:00 p.m., New York City time, on the Expiration
Date, at a purchase price per share equal to the Warrant Price.
Section 1. Definitions. As used in this Warrant, and
unless the context requires otherwise, the following terms have
the meaning indicated:
"Common Stock" means the Common Stock of the Company,
par value $.01 per share.
"Expiration Date" means the fifth anniversary of the
Issue Date.
"Warrant Price" has the meaning assigned in Section 8
hereof, subject to adjustment as provided in Section 9.
"Warrant" means this Warrant, as the same may be
amended, supplemented or modified in accordance with the terms
hereof.
"Warrant Shares" means the shares of Common Stock
issued or issuable upon exercise of this Warrant.
<PAGE>
Section 2. Term of Warrant; Exercise of Warrant.
2.1 Term of Warrant. Subject to the terms hereof, the
Holder shall have the right, which may be exercised at any time
from and after 9:00 a.m., New York City time, on the Issue Date
and until 5:00 p.m., New York City time, on the Expiration Date,
to purchase from the Company the number of fully paid and non-
assessable Warrant Shares which the Holder may at the time be
entitled to purchase on exercise hereof. If and to the extent
this Warrant not exercised prior to 5:00 p.m., New York City
time, on the Expiration Date, it shall become void and all rights
hereunder and all rights in respect hereof shall cease as of such
time.
2.2 Exercise of Warrant. The Warrant may be exercised
upon surrender to the Company at its office at 6422 Harney Road,
Tampa, Florida 33610, or such other office as the Company shall
notify the Holder, in writing, of this Warrant, together with the
Purchase Form included herein duly completed and signed and upon
payment to the Company of the Warrant Price (as defined in and
determined in accordance with the provisions of Sections 8 and 9
hereof), for the number of Warrant Shares in respect of which
this Warrant is then being exercised.
Unless otherwise agreed to by the Company, all payments
of such Warrant Price shall be made by certified of official bank
check payable to the order of the Company.
Subject to Section 3 hereof, upon the surrender of the
Warrant and payment of the Warrant Price as aforesaid, the
Company shall cause to be issued and delivered with all
reasonable dispatch to or upon the written order of the Holder
and in such name or names as the Holder may designate, a
certificate or certificates for the number of full Warrant Shares
so purchased upon the exercise of this Warrant, together with
cash, as provided in Section 10 hereof, in respect of any
fractional Warrant Shares otherwise issuable upon surrender. If
permitted by applicable law, such certificate or certificates
shall be deemed to have been issued and any person so designated
to be named therein shall be deemed to have become a holder of
record of such Warrant Shares as of the date of the surrender of
this Warrant and payment of the Warrant Price, as aforesaid.
Each share of Common Stock that may be issued upon exercise of
this Warrant will, upon such issuance, be validly issued, fully
paid, non-assessable, and free from all taxes, liens and charges
with respect to the issue thereof. The rights of purchase
represented by this Warrant shall be exercisable, at the election
of the Holder hereof (subject to Section 2.1 hereof), either in
full or from time to time in part and, in the event that this
Warrant is exercised in respect of less than all of the Warrant
Shares purchasable on such exercise at any time prior to the
Expiration Date, a new Warrant evidencing the right to purchase
the remaining Warrant Shares will be issued.
<PAGE>
2.3 Compliance with Government Regulations. The
Company shall have the right to refuse to honor the exercise of
this Warrant, in whole or any part, unless the Holder shall
represent to the Company in writing that its purchase of stock or
other securities pursuant thereto is for its own account and for
investment purposes only and not with a view to distribution or
resale in violation of the registration requirements of state or
federal securities laws.
The Company shall not be required to issue or deliver
any certificates representing shares of stock or other securities
purchased upon the exercise of this Warrant prior to (a) the
completion at the expense of the Company of any registration or
other qualification of such shares or other securities under any
state or federal law or rules or regulation of any governmental
regulatory body or self-regulatory organization which counsel for
the Company shall reasonably determine to be necessary or
advisable, (b) the obtaining from the Holder of a written
agreement and representations with respect to the disposition of
the shares or other securities, or with respect to any other
matters, which counsel for the Company shall reasonably determine
to be necessary or advisable to comply with the terms on which
the shares or other securities have been qualified or registered
under any such law, rules or regulations or to exempt the shares
from such qualification or registration, and (c) the obtaining at
the expense of the Company of any approval or other clearance
from any governmental regulatory body or self-regulatory
organization which such counsel may reasonably determine to be
necessary or advisable; provided, however, that compliance with
the provisions of clauses (a), (b) and (c) of this sentence shall
not be required for the issuance of such certificates if the
Holder shall deliver to the Company an opinion of counsel, which
counsel shall be reasonably acceptable to the Company and which
opinion shall be in form and substance reasonably satisfactory to
the Company, to that effect. If compliance with the provisions
of clauses (a), (b) and/or (c) or the preceding sentence shall be
required, the Company shall use its best efforts, at its expense,
promptly to effect such compliance.
Section 3. Payment of Taxes. The Company will pay all
documentary stamp and other taxes, if any, attributable to the
initial issuance of Warrant Shares upon the exercise hereof;
provided, however, that the Company shall not be required to pay
any tax or other governmental charge which may be payable in
respect of any transfer involved in the issue or delivery of any
certificates or certificates for Warrant Shares in a name other
than that of the Holder, and the Company shall not register any
such transfer or issue any such certificate until such tax or
governmental charge, if required, shall have been paid.
<PAGE>
Section 4. Transfer. Subject to compliance with the
restrictions on transfer set forth herein and subject to Section
3, this Warrant shall be transferable upon delivery of the
Warrant duly endorsed by the Holder or by his duly authorized
attorney or representative, or accompanied by proper evidence of
succession, assignment or authority to transfer. In all cases of
transfer by an attorney, the original power of attorney, duly
approved, or a copy thereof, duly certified, shall be deposited
and remain with the Company. In case of transfer by executors,
administrators, guardians or other legal representatives, duly
authenticated evidence of their authority shall be produced, and
may be required to be deposited and remain with the Company in
its discretion.
Section 5. Exchange of Warrant Certificates. Subject
to the restrictions on transfer contained herein and to such
requirements as the Company may reasonably request to ensure
compliance with applicable law, this Warrant may be exchanged for
another certificate or certificates entitling the Holder hereof
to purchase a like aggregate number of Warrant Shares as this
Warrant shall then entitle the Holder to purchase. The Holder
shall make such request in writing delivered to the Company, and
shall surrender this Warrant, properly endorsed. Thereupon, the
Company shall countersign and deliver to the Holder a new
certificate or certificates, as the case may be, as so requested.
Section 6. Mutilated or Missing Warrants. In case
this Warrant shall be mutilated, lost, stolen or destroyed, the
Company shall issue, countersign and deliver in exchange or
substitution hereof, a new Warrant of like tenor and representing
an equivalent right or interest, but only upon, in case this
Warrant is lost, stolen or destroyed, receipt of evidence
reasonably satisfactory to the Company of such loss, theft or
destruction and a reasonable indemnity therefor. The Holder
shall also comply with such other reasonable regulations and pay
such other reasonable charges as the Company may prescribe.
Section 7. Reservation of Warrant Shares; Purchase of
Warrants.
7.1 Reservation of Warrant Shares. The Company has
reserved out of its authorized Common Stock the number of shares
of Common Stock set forth on the first page hereof for issuance
upon exercise of this Warrant. The Company shall at all times
hereafter until the Expiration Date keep reserved out of its
authorized Common Stock, for issuance upon exercise of this
Warrant, all of the shares not theretofore issued upon such
exercise. If at any time the number of shares of authorized
Common Stock shall not be sufficient to effect the exercise of
this Warrant, the Company will take such corporate action as may
be necessary to increase its authorized but unissued Common
Stock, to such number of shares as shall be sufficient for such
purpose.
<PAGE>
Section 8. Warrant Price. Subject to Section 9
hereof, the price at which Warrant Shares shall be purchasable
upon exercise of Warrants (the "Warrant Price") shall be $.435
per share.
Section 9. Adjustment of Warrant Price and Number of
Warrant Shares. The number and kind of securities purchasable
upon the exercise of this Warrant and the Warrant Price shall be
subject to adjustment from time to time upon the happening of
certain events, in each case occurring on and after the date
hereof, as hereinafter described.
9.1 Adjustment. The number and kind of securities
purchasable upon the exercise of this Warrant and the Warrant
Price shall be subject to adjustment as follows:
(a) In case the Company shall (i) pay a dividend on
its outstanding Common Stock in shares of Common Stock or make a
distribution to all holders of its outstanding Common Stock in
shares of Common Stock, (ii) subdivide its outstanding shares of
Common Stock into a greater number of shares of Common Stock,
(iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock or (iv) issue by
reclassification of its shares of Common Stock other securities
of the Company (including any such reclassification in connection
with a consolidation or merger in which the Company is the
surviving corporation), the number of Warrant Shares purchasable
upon exercise hereof immediately prior thereto shall be adjusted
so that the Holder upon exercise hereof shall be entitled to
receive the kind and number of such Warrant Shares or other
securities of the Company which it would have owned or have been
entitled to receive after the happening of any of the events
described above had this Warrant been exercised immediately prior
to the happening of such event or any record date with respect
thereto. An adjustment made pursuant to this paragraph (a) shall
become effective on the date of the dividend payment,
subdivision, combination or issuance retroactive to the record
date with respect thereto, if any, for such event. Such
adjustment shall be made successively whenever such an issuance
is made.
(b) In the case the Company shall distribute to all
holders of its outstanding Common Stock evidences of its
indebtedness or assets or securities other than such Common Stock
(excluding regular cash dividends and dividends or distributions
referred to in paragraph (a) above) or rights, options or
warrants, or convertible or exchangeable securities, containing
the right to subscribe for or purchase shares of Common Stock,
then in each case the number of Warrant Shares thereafter
purchasable upon the exercise of this Warrant shall be determined
by multiplying the number of such Warrant Shares theretofore
purchasable upon the exercise of this Warrant by a fraction, of
which the numerator shall be the then current market price per
<PAGE>
share of Common Stock (as determined in accordance with paragraph
(e)(3) below) on the date of such distribution, and of which the
denominator shall be the then current market price per share of
Common Stock, less the then fair value per share of outstanding
Common Stock (as determined by the Board of Directors of the
Company, whose good faith determination shall be conclusive) of
the evidences of indebtedness, assets or securities so
distributed or of such rights, options or warrants, or of such
convertible or exchangeable securities. Such adjustment shall be
made successively whenever any such distribution is made, and
shall become effective on the date of distribution retroactive to
the record date for the determination of stockholders entitled to
receive such distribution. No further adjustment shall be made
for the actual issuance of Common Stock upon the conversion,
exercise or exchange of any rights, options, warrants or other
securities in respect of which adjustment has been made pursuant
to this paragraph (b).
(c) In case the Company shall issue shares of Common
Stock (or rights, options, warrants or other securities
convertible into or exercisable or exchangeable for Common Stock)
(excluding (i) shares of Common Stock issued in or as a result of
any of the transactions described in paragraph (a) or (b) above,
(ii) shares of Common Stock issuable upon exercise of stock
options or similar rights granted or to be granted to directors,
employees, consultants, contractors or other agents,
representatives or professionals of the Company pursuant to a
stock option or similar plan approved by the stockholders of the
Company, (iii) shares of Common Stock issued to directors,
employees, consultants, contractors, licensees or other agents,
representatives or professionals of the Company pursuant to any
compensation plan or agreement approved by the stockholders of
the Company, (iv) shares of Common Stock issued pursuant to a
dividend or interest reinvestment plan, or (v) shares of Common
Stock issued in a public offering at a price per share that is
not less than 95% of the then current market price) at a price
per share below the then current market price, then in each such
case the number of Warrant Shares thereafter purchasable upon the
exercise of this Warrant shall be determined by multiplying the
number of Warrant Shares theretofore purchasable upon the
exercise of this Warrant by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding on the
date of such issuance (including the shares of Common Stock
issued on the date of such issuance) and the denominator of which
shall be an amount equal to the sum of (i) the total number of
shares of Common Stock outstanding immediately prior to such
issuance plus (ii) the number of shares which the aggregate
consideration received for such issuance would purchase at the
current market price per share of Common Stock (as determined in
accordance with paragraph (e)(3) below) at such record date.
<PAGE>
(d) (1) For the purposes of paragraph (c) above, if
the Company shall issue any security, option, warrant or other
right which directly or indirectly may be converted into or
exercised or exchanged for shares of Common Stock, the Common
Stock issuable upon conversion, exercise or exchange of such
securities or rights shall thereupon be deemed to have been
issued and to be outstanding, and the relevant price per share of
Common Stock and the consideration received by the Company upon
conversion, exercise or exchange of such securities or rights
shall be deemed to include the sum of the consideration received
for the issuance of such securities or rights and the minimum
additional consideration payable upon the conversion, exercise or
exchange of such securities or rights. No further adjustment
shall be made for the actual issuance of Common Stock upon the
conversion, exercise or exchange of any such security or right.
(2) For purposes of paragraph (c) above, the
following shall also be applicable: In case the Company shall
issue shares of its Common Stock for a consideration wholly or
partly other than cash, the amount of the consideration other
than cash received by the Company shall be deemed to be the fair
value of such consideration as determined in good faith by the
Board of Directors of the Company. Consideration received by the
Company for issuance of its Common Stock shall be determined in
all cases without deduction therefrom of any expenses,
underwriting commissions or concessions incurred in connection
therewith.
(3) For the purpose of any computation under
paragraph (b) or (c) of this Section, the "current market price
per share" of Common Stock at any date shall be the average of
the daily closing prices for 20 consecutive trading days
commencing 30 trading days before the date of such computation.
The "closing price" for each day shall be the last such reported
sales price regular way or, in case no such reported sale takes
place on such day, the average of the closing bid and asked
prices regular way for such day, in each case on the principal
national securities exchange on which the shares of Common Stock
are listed or admitted to trading or, if not listed or admitted
to trading, the average of the high bid and low asked prices of
the Common Stock in the over-the-counter market as reported by
NASDAQ or any comparable system. In the absence of one or more
such quotations, the Board of Directors of the Company shall in
good faith determine the current market price on the basis of
such quotations or formula as it considers appropriate, which
determination shall be conclusive.
(e) In any case in which this Section 9.1 shall
require that any adjustment in the number of Warrant Shares be
made effective as of immediately after a record date for a
specified event, the Company may elect to defer until the
occurrence of the event the issuing to the Holder of the Warrant
Shares or other capital stock of the Company issuable upon the
exercise over and above the Warrant Shares or other capital stock
<PAGE>
of the Company issuable upon the exercise of this Warrant prior
to such adjustment; provided, however, that the Company shall
deliver to the Holder a due bill or other appropriate instrument
evidencing the Holder's right to receive such additional shares
upon the occurrence of the event requiring such adjustment.
(f) No adjustment in the number of Warrant Shares
purchasable hereunder shall be required unless such adjustment
would require an increase or decrease of at least one percent
(1%) in the number of Warrant Shares purchasable upon the
exercise of this Warrant; provided, however, that any adjustments
which by reason of this paragraph (f) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment. All calculations shall be made to the nearest one
one-hundredth of a share.
(g) Whenever the number of shares of the Warrant
Shares purchasable upon the exercise of this Warrant is adjusted,
as provided in paragraph (a), (b) or (c) of this Section, the
Warrant Price payable upon exercise of this Warrant shall be
adjusted by multiplying such Warrant Price immediately prior to
such adjustment by a fraction, of which the numerator shall be
the number of Warrant Shares purchasable upon the exercise of
this Warrant immediately prior to such adjustment, and of which
the denominator shall be the number of such Warrant Shares
purchasable immediately thereafter; provided, however, that in no
event shall the Warrant Price be less than the par value, if any,
of a share of Common Stock.
(h) No adjustment in the number of Warrant Shares
purchasable upon the exercise of this Warrant need be made under
paragraph (b) of this Section if the Company issues or
distributes to the Holder the rights, options, warrants,
convertible or exchangeable securities, evidences of indebtedness
or assets referred to in those paragraphs which the Holder would
have been entitled to receive had the Warrant been exercised
prior to the happening of such event or the record date with
respect thereto. No adjustment need be made for a change in the
par value of the Warrant Shares.
(i) For the purpose of this subsection 9.1, the term
"shares of Common Stock," shall mean (i) the class of stock
designated as the Common Stock of the Company, par value $.01 per
share, or (ii) any other class of stock resulting from successive
changes or reclassification of such respective classes of shares
consisting solely of changes in par value, or from par value to
no par value, or from no par value to par value. In the event
that at any time, as a result of an adjustment made pursuant to
paragraph (a) above, the Holder shall become entitled to purchase
any securities other than shares of Common Stock, thereafter the
number of such other securities so purchasable upon exercise of
this Warrant and the Warrant Price of such securities shall be
subject to adjustment from time to time in a manner and on terms
<PAGE>
as nearly equivalent as practicable to the provisions with
respect to the Warrant Shares contained in paragraphs (a) through
(h), inclusive, above, and the provisions of Section 3 and
subsections 9.2 through 9.6, inclusive, with respect to the
Warrant Shares, shall apply on like terms to any such other
securities.
9.2 Notice of Adjustment. Whenever the number of
Warrant Shares purchasable upon the exercise of this Warrant or
the Warrant Price of such Warrant Shares is adjusted, as herein
provided, the Company shall promptly mail by first class, postage
prepaid, to the Holder notice of such adjustment or adjustments.
9.3 No Adjustment for Dividends. Except as provided
in subsection 9.1, no adjustment in respect of any dividends or
other payments or distributions made to holders of securities
shall be made during the term of this Warrant or upon the
exercise of this Warrant.
9.4 Preservation of Purchase Rights upon Merger,
Consolidation, etc. In case of any consolidation of the Company
with or merger of the Company with or into another entity
(whether or not the Company is the surviving corporation) or in
case of any sale, transfer or lease to another entity of all or
substantially all the property of the Company, the Company or
such successor or purchasing corporation, as the case may be,
shall execute an agreement that the Holder shall have the right
thereafter upon payment of the Warrant Price in effect
immediately prior to such action to purchase upon exercise of
this Warrant the kind and amount of securities, cash and property
which it would have owned or have been entitled to receive after
the happening of such consolidation, merger, sale, transfer or
lease had this Warrant been exercised immediately prior to such
action. Upon the execution of such agreement, this Warrant shall
be exercisable only for such securities, cash and property. The
Company shall furnish to the Holder notice of the execution of
any such agreement. Such agreement shall provide for
adjustments, which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 9.
The provisions of this subsection 9.4 shall similarly apply to
successive consolidations, mergers, sales, transfers or leases.
9.5 Other Adjustment. If any event occurs as to which
in the reasonable opinion of the Holder, in good faith, the other
provisions of this Section 9 are not strictly applicable but the
lack of any adjustment of the number of Warrant Shares issuable
upon exercise of this Warrant and the Warrant Price would not in
the opinion of the Holder fairly protect the rights of the Holder
in accordance with the basic intent and principles of such
provisions, or if strictly applicable would not fairly protect
the rights of the Holder in accordance with the basic intent and
principles of such provisions, then the Holder may appoint a firm
of independent certified public accountants of recognized
<PAGE>
national standing (which may be the independent auditors of the
Company), which shall give their opinion upon the necessity and
form of any required adjustment to the number of Warrant Shares
issuable upon exercise of this Warrant and the Warrant Price, on
a basis consistent with the basic intent and principles
established in the other provisions of this Section 9 necessary
to preserve, without dilution, the exercise rights of the Holder.
Upon receipt of such opinion, the Company shall forthwith make
the adjustments described therein.
9.6 Statement on Warrant. Irrespective of any
adjustments in the Warrant Price or the number or kind of
securities purchasable upon the exercise of this Warrant, this
Warrant may continue to express the same price and number and
kind of shares as are stated herein.
Section 10. Fractional Interests. The Company shall
not be required to issue fractional Warrant Shares on the
exercise of this Warrant. If (a) any fraction of a Warrant Share
would, except for the provisions of this Section 10, be issuable
on the exercise of this Warrant (or specified portion thereof),
and (b) the Holder shall have paid the amount due upon such
exercise with respect to such fractional share, then the Company
shall return to such Holder the amount so paid with respect to
such fractional Warrant Share.
Section 11. Registration under the Securities Act.
The Holder represents and warrants to the Company that it will
not dispose of this Warrant or any Warrant Shares except pursuant
to (i) an effective registration statement, or (ii) an opinion of
counsel, reasonably satisfactory to counsel for the Company, that
the proposed disposition of the Warrant or Warrant Shares would
not be in violation of the registration requirements of the
Securities Act. The Holder represents and warrants that it is
acquiring the Warrant and will acquire the Warrant Shares for its
own account and with no intention of distributing or reselling
this Warrant or Warrant Shares or any part thereof in any
transaction that would be in violation of the registration
requirements of the securities laws of the United States of
America or any state, without prejudice, however, to its rights,
consistent with the provisions of this Warrant, to sell or
otherwise dispose of all or any part of this Warrant or any
Warrant Shares under an effective registration statement under
the Securities Act or under an exemption from such registration
available under the Securities Act.
Section 12. Certificates to Bear Legends. The Warrant
Shares or other securities issued upon exercise of this Warrant
shall be subject to a stop-transfer order and the certificate or
certificates evidencing any such Warrant Shares or securities
shall bear the following legend by which the Holder thereof shall
be bound:
<PAGE>
"THE SHARES [OR OTHER SECURITIES] REPRESENTED BY THIS
CERTIFICATE MAY NOT BE OFFERED, SOLD OR OTHERWISE EXCEPT PURSUANT
TO (i) AN EFFECTIVE REGISTRATION STATEMENT, OR (ii) AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO COUNSEL FOR THIS CORPORATION,
THAT AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933 IS AVAILABLE."
Section 13. No Rights as Stockholders; Notices to
Holders. Nothing contained in this Warrant shall be construed as
conferring upon the Holder the right to vote or to receive
dividends or to consent or to receive notice as a stockholder in
respect of any meeting of stockholders of the Company for the
election of the directors of the Company or any matter, or any
rights whatsoever as a stockholder of the Company. If, however
at any time prior to the expiration of this Warrant and prior to
its exercise, any of the following events shall occur:
(a) the Company shall declare any dividend payable in
cash or in any securities upon its shares of Common Stock or
make any distribution to the holders of its shares of Common
Stock;
(b) the Company shall offer to all holders of its
shares of Common Stock any additional shares of Common Stock
or securities convertible into or exchangeable for shares of
Common Stock or any right to subscribe for or purchase any
thereof; or
(c) a dissolution, liquidation or winding up of the
Company (other than in connection with a consolidation,
merger, sale, transfer or lease of all or substantially all
of its property, assets and business as an entirety) shall
be proposed;
then in any one or more of said events the Company shall give
notice to the Holder as provided in Section 14 hereof, such
giving of notice to be completed at least 10 days prior to the
record date in the event of a transaction described in clause (a)
above and at least 20 days prior to the record date in the case
of a transaction referred to in clause (b) or (c) above fixed as
a record date or the date of closing the transfer books for the
determination of the stockholders entitled to such dividend,
distribution, or subscription rights, or for the determination of
the stockholders entitled to vote on such proposed dissolution,
liquidation or winding up. Such notice shall specify such record
date or the date of closing the transfer books, as the case may
be. Failure to mail or receive such notice or any defect therein
or in the mailing thereof shall not affect the validity of any
action taken in connection with such dividend, distribution or
subscription rights, or such proposed dissolution, liquidation or
winding up.
<PAGE>
Section 14. Notices. Any notice pursuant to this
Warrant shall be in writing and shall be given by first class,
registered or certified mail, return receipt requested, telecopy,
courier service or personal delivery, if to the Company, at 6422
Harney Road, Tampa, Florida 33610, Attn: Secretary (or such other
address as shall be communicated by the Company to the Holder by
notice in accordance with this Section 14), and if to the Holder,
at such address as shall be communicated by the Holder to the
Company by notice in accordance with this Section 14 (or, in the
absence of such notice, at such address as otherwise appears on
the books and records of the Company).
Section 15. Supplements and Amendments. The
provisions of this Warrant may not be amended, modified or
supplemented, and waiver or consents to departures from the
provisions hereof may not be given, without the written consent
of the Holder.
Section 16. Successors. All the covenants and
provisions of this Warrant by or for the benefit of the Company
and the Holder shall bind and inure to the benefit of their
respective successors and permitted assigns hereunder, provided
that the Company may not assign its rights and obligations
hereunder except by operation of law.
Section 17. Applicable Law. This Warrant shall be
governed by and construed in accordance with the laws of the
State of New York, without giving effect to principles of
conflicts of laws. The United States District Court for the
Southern District of New York or the courts of the State of New
York shall have jurisdiction in any action or proceeding arising
out of or relating to this Warrant.
Section 18. Benefits of this Agreement. Nothing in
this Warrant shall be construed to give to any person or entity
other than the Company and the Holder, any legal or equitable
right, remedy or claim under this Warrant.
Section 19. Captions. The captions of the Sections
and subsections of this Warrant have been inserted for
convenience only and shall have no substantive effect.
[EXECUTION COPY: 2/1/94]
IN WITNESS WHEREOF, this Warrant has been duly
executed, as of February ___, 1994.
KASH N' KARRY FOOD STORES, INC.
By:____________________________
Name:_______________________
Title:______________________
<PAGE>
[EXECUTION COPY: 2/1/94]
ASSIGNMENT
(To be executed only upon assignment of Warrant)
For value received, ___________________ hereby sells,
assigns and transfers unto _________________ this Warrant,
together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint _________________
attorney, to transfer this Warrant on the books of the within-
named Company with respect to the number of Warrant Shares set
forth below, with full power of substitution:
Name(s) of No. of
Assignee(s) Address Warrant Shares
And if said number of Warrant Shares shall not be all
the Warrant Shares issuable upon exercise of this Warrant, a new
certificate is to be issued in the name of said undersigned for
the balance remaining of the Warrant shares issuable upon
exercise of this Warrant.
Dated: ________________________, 19__
___________________________________
Note: The above signature
should correspond exactly
with the name on the face
of this Warrant.
<PAGE>
SUBSCRIPTION FORM
(To be executed upon exercise of Warrant)
Kash n' Karry Food Stores, Inc.:
The undersigned hereby irrevocably elects to exercise
the right of purchase represented by this Warrant for, and to
purchase hereunder, ______ shares of Common Stock, as provided
for herein, and tenders herewith payment of the exercise price in
full in the form of cash or a certified or official bank check in
the amount of $_______________.
Please issue a certificate or certificates for such
shares of Common Stock in the name of:
Name:________________________________
(Please Print Name, Address, and
(Social Security Number)
And if said number of shares shall not be all the
shares issuable under this Warrant, a new certificate is to be
issued in the name of said undersigned for the balance remaining
of the shares issuable thereunder.
Signature:__________________________
NOTE: The above signature should
correspond exactly with the
name on the first page of this
Warrant or with the name of
the assignee appearing in the
assignment form above.
<PAGE>
[EXECUTION COPY: 2/1/94]
EXHIBIT C
The Company's authorized capital stock consists of:
(i) 4,000,000 shares of its Common Stock, $.01 par
value, of which (A) 2,819,589 shares are issued and
outstanding and (B) (w) 146,744 are reserved for
issuance pursuant to the Company's employee stock
option plan, (x) 52,250 are reserved for issuance
pursuant to Warrants outstanding to Lucky Stores, Inc.,
(y) 77,500 are reserved for issuance upon the
conversion of the Company's Series C Preferred Stock
and (z) 2,442 shares are held in treasury and reserved
for issuance to members of management, and
(ii) 150,000 shares of Preferred Stock, $.01 par
value, of which (A) 50,000 shares have been designated
and authorized as Series B Cumulative Preferred Shares,
of which 38,750 shares are issued and outstanding, and
(B) 100,000 shares have been designated and authorized
as Series C Convertible Preferred Shares, of which
77,500 shares are issued and outstanding.
C-1
[EXECUTION COPY: 2/1/94]
<PAGE>
EXHIBIT D
[FORM OF OPINION OF KRAMER, LEVIN,
NAFTALIS, NESSEN, KAMIN & FRANKEL]
[To be subject to customary assumptions and qualifications]
1. The Company is validly existing as a corporation
in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to own and operate
its properties, to carry on its business as conducted, to execute
and deliver the Agreement, the Note and the Warrants and to
perform its obligations thereunder. The execution, delivery and
performance of the Agreement, the Note and the Warrants has been
duly authorized by all necessary corporate action on the part of
the Company. The Agreement, the Note and the Warrants have been
duly executed and delivered by the Company and constitute the
valid and binding obligations of the Company, enforceable against
the Company in accordance with their respective terms.
2. The authorized capital stock of the Company and,
to the best of our knowledge, the issued and outstanding shares
thereof are as described on Exhibit C to the Agreement. To the
best of our knowledge, and except as set forth on Exhibit C,
there are outstanding no rights to subscribe for or purchase, or
any warrants or options for the purchase of, or any agreement
(contingent or otherwise) providing for the issuance of, or any
calls, commitments or claims of any character relating to any of
the Company's capital stock or any securities convertible into or
exchangeable for any of its capital stock. The Shares to be
issued to the Purchaser upon exercise of the Warrants have been
duly authorized for issuance and, when sold and delivered against
payment therefor as provided therein, will be validly issued,
fully paid and nonassessable. There are no preemptive rights as
to any of the outstanding shares of the Company's capital stock.
3. No governmental consents, approvals,
authorizations, registrations, declarations or filings are
required to be obtained by the Company in connection with the
Agreement, the Note or the Warrants or the consummation of the
transactions contemplated thereby.
4. To the best of our knowledge, and without
independent inquiry, there are no actions, suits or proceedings
pending or threatened against the Company, in law or in equity,
before any court, arbitrator or administrative or governmental
body which are reasonably likely (either singly or in the
aggregate) to materially and adversely affect the Company.
<PAGE>
5. None of the execution and delivery of the
Agreement, the Note or the Warrants, the consummation of the
transactions contemplated thereby and compliance with the terms
and conditions thereof (A) conflict with, or result in a breach
or violation of, or constitute a default under, any of the terms,
conditions or provisions of (i) the Certificate of Incorporation
of Bylaws of the Company, (ii) any Material Agreement or (iii)
any statute, rule or regulation binding on the Company, (B)
result in the creation of any lien upon any of the properties or
assets of the Company under any Material Agreement or (C) require
any approval of the stockholders of the Company. A "Material
Agreement" for purposes of this opinion shall mean the material
agreements, instruments and undertakings identified on Exhibit I
to this opinion, which have been identified to us by the Company
as the only such agreements, instruments or undertakings by which
the Company or its property is bound, breaches or defaults or
creation or imposition of Liens under which would affect or
purport to affect the Company's ability to execute, deliver and
perform the Agreement, Note or Warrants.
D-1
[EXECUTION COPY: 2/1/94]
<PAGE>
EXHIBIT C TO SEVENTH AMENDMENT
FORM OF ADDITIONAL TERM NOTE
KASH N' KARRY FOOD STORES, INC.
$_________ 1 May 2, 1994
New York, New York
For value received, the undersigned, KASH N' KARRY FOOD
STORES, INC., a Delaware corporation ("Borrower"), promises to
pay to the order of Bank of America National Trust and Savings
Association (the "Additional Term Lender") the principal amount
of ____________________________________________2 ($ _________)3
loaned by the Additional Term Lender to Borrower under this Note
as the Additional Term Loan under the "Credit Agreement" (as
defined below) on the Facilities Termination Date, provided that
the principal amount of all other Loans, together with interest
accrued thereon, shall have then been paid in full in cash and if
the principal amount of all other Loans, together with interest
accrued thereon, has not been paid in full in cash on the
Facilities Termination Date, then the principal amount of the
Additional Term Loan shall be repaid by Borrower on the next
Business Day after the principal amount of all other Loans,
together with interest accrued thereon, has been paid in full in
cash.
Borrower also promises to pay interest on the unpaid
principal amount borrowed hereunder from the date advanced until
paid at the rates (which shall not exceed the maximum rate
permitted by applicable law) and at the times which shall be
determined in accordance with the provisions of the Credit
Agreement dated as of October 12, 1988, and amended and restated
as of September 14, 1989 (as further amended, supplemented or
modified from time to time, the "Credit Agreement"; terms defined
in the Credit Agreement not otherwise defined herein are used
herein with the meanings so defined) among Borrower, the Senior
Lenders referred to therein and Bank of America National Trust
and Savings Association (as successor to Security Pacific
_________________
1 Insert in arabic numerals an amount equal to the lesser of
(i) $2,000,000 and (ii) the unpaid principal amount of the
GEI Note as of May 2, 1994.
2 Insert in words an amount equal to the lesser of (i)
$2,000,000 and (ii) the unpaid principal amount of the GEI
Note as of May 2, 1994.
3 [Footnote 1].
<PAGE>
National Bank), as agent for the Senior Lenders (in such
capacity, the "Agent").
This Note is the Borrower's Additional Term Note and is
issued pursuant to, and is entitled to the benefits of, the
Credit Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the
Additional Term Loan evidenced hereby is made and is to be
repaid.
All payments of principal and interest in respect of
this Note shall be made to the Agent at such account and place in
New York, New York as the Agent may from time to time designate
in writing to Borrower or at such other location as the Agent may
from time to time designate in writing to Borrower, in lawful
money of the United States of America in same day funds.
This Note may be prepaid at the option of Borrower
subject to the terms and conditions set forth in Section 2.06(a)
of the Credit Agreement.
THE CREDIT AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK.
Upon the occurrence of any one or more of certain Events
of Default, the unpaid balance of the principal amount of this
Note shall become, and upon the occurrence and continuation of
any one or more of certain other Events of Default, such unpaid
balance may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit
Agreement.
No reference herein to the Credit Agreement and no
provision of this Note, the Credit Agreement or the other Loan
Documents shall alter or impair the obligation of Borrower, which
is absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and
in the currency herein prescribed.
Borrower promises to pay all costs and expenses,
including reasonable attorneys' fees and disbursements incurred
in the collection and enforcement of this Note or any appeal of a
judgment rendered thereon. Borrower hereby waives diligence,
presentment, protest, demand and notice of every kind except as
required pursuant to the Credit Agreement and to the full extent
permitted by law the right to plead any statute of limitations as
a defense to any demands hereunder.
<PAGE>
This Note is secured by the Collateral Documents,
including, without limitation, the Security Agreement, the
Trademark Assignment and the Real Estate Collateral Documents,
and reference is made to such Collateral Documents for the terms
and conditions governing the collateral security for the
obligations of Borrower hereunder.
IN WITNESS WHEREOF, Borrower has caused this Note to be
executed and delivered by its duly authorized officer, as of the
day and year and at the place first above written.
KASH N' KARRY FOOD STORES, INC.
By:____________________________
Name:
Title:
13/SEC.LAW/1994/K6313.a7
[Execution Copy: 3/10]
LIMITED WAIVER
THIS LIMITED WAIVER, (this "Waiver"), dated as of March 11,
1994, relates to that certain Credit Agreement dated as of
October 12, 1988, and amended and restated as of September 14,
1989 (as further amended through the date hereof, the "Credit
Agreement"), among Kash n' Karry Food Stores, Inc. (the
"Borrower"), the Senior Lenders referred to therein and Bank of
America National Trust & Savings Association (as successor in
interest to Security Pacific National Bank) as agent (in such
capacity, the "Agent") for the Senior Lenders. Unless otherwise
defined herein, terms defined in the Credit Agreement are used
herein with the same meanings ascribed to them therein. In
addition to the covenants and agreements made in the Credit
Agreement, Borrower, the Senior Lenders and the Agent further
covenant and agree as follows:
1. Limited Waiver. Subject to the terms and
conditions set forth herein, the Requisite Senior Lenders hereby
agree to waive, from the Effective Date (as defined below) to the
Expiration Date (as defined below), the provisions of:
(a) Section 9.01 of the Credit Agreement in
respect (and solely in respect) of Borrower's failure to
comply with the Minimum Net Worth amount set forth therein
for the first and second quarters of the Fiscal Year ending
in 1994 ("Fiscal Year 1994");
(b) Section 9.03 of the Credit Agreement in
respect (and solely in respect) of Borrower's failure to
comply with the Fixed Charge Coverage Ratio set forth
therein for the first and second quarters of Fiscal Year
1994; and
(c) Section 9.04 of the Credit Agreement in
respect (and solely in respect) of Borrower's failure to
comply with the Interest Coverage Ratio set forth therein
for the first and second quarters of Fiscal Year 1994.
Among other things, the effect of this Waiver is to extend, on
the terms and conditions set forth herein, the Limited Waiver
dated as of December 15, 1993 among the Borrower, the Agent and
the Requisite Senior Lenders for the period from the Effective
Date to the Expiration Date. In addition to the foregoing, and
for the duration of this Waiver, none of the Senior Lenders shall
be obligated to make a Fixed Rate Loan.
<PAGE>
2. Effective Date. This Waiver shall become
effective upon the date (the "Effective Date") on or before March
15, 1994, on which the Agent has received each of the following:
(a) Counterparts hereof signed by Borrower, the
Requisite Senior Lenders and the Agent;
(b) Financial statements and certificates required
by Section 6.01 of the Credit Agreement (including without
limitation Sections 6.01(b) and 6.01(f) thereof) with
respect to the second quarter of Fiscal Year 1994 which
shall demonstrate, among other things, compliance with the
following revised covenant levels:
(i) Minimum Net Worth (Section 9.01) of at least
$54,000,000;
(ii) Fixed Charge Coverage Ratio (Section 9.03) of
at least 0.80:1.0;
(iii) Interest Coverage Ratio (Section 9.04) of at
least 1.05:1.0; and
(b) Payment in cash in same day funds in the
amount of $60,000 (as a waiver fee and as reimbursement for
certain travel costs of the Senior Lenders) to be shared pro
rata among the Senior Lenders.
3. Termination Date. This Waiver shall expire and
cease to be of any force or effect automatically (without any
action by the Agent or any Senior Lender) at 5:00 p.m., Los
Angeles time, on the date (the "Termination Date") which is the
earlier of (a) June 30, 1994 and (b) the earliest date on which
any of the conditions set forth below fails to be satisfied:
(i) No Event of Default or Potential Event of
Default (including without limitation failure to pay costs
and expenses upon demand in accordance with Section 12.03 of
the Credit Agreement) shall have occurred (other than those
expressly waived by this Waiver); and
(ii) No event shall have occurred and be
continuing (for at least two Business Days after notice
thereof from Agent to Borrower) which materially adversely
affects the business, condition, properties or prospects of
Borrower and any Subsidiary of Borrower, taken as a whole.
4. Representations and Warranties. The Borrower
hereby represents and warrants that, as of the date hereof, and
after giving effect to this Waiver:
<PAGE>
(a) The execution, delivery and performance by
Borrower of this Waiver has been duly authorized by all
necessary corporate action;
(b) No Event of Default or Potential Event of
Default (other than those expressly waived by this Waiver)
has occurred or is continuing; and
(c) The representations and warranties of Borrower
contained in Section 5.03 of the Credit Agreement and any
other Loan Document (other than representations and
warranties which expressly speak as of a different date) are
true, correct and complete in all material respects, except
that such representations and warranties need not be true,
correct and complete to the extent that changes in the facts
and conditions on which such representations and warranties
are based are required or permitted under the Credit
Agreement.
5. Limitation on Waiver. This Waiver shall be
limited solely to the matters expressly set forth herein and
shall not (i) constitute a waiver or amendment of any other term
or condition of the Credit Agreement, or of any instruments or
agreements referred to therein, (ii) prejudice any right or
rights which the Agent or any of the Senior Lenders may now have
or may have in the future under or in connection with the Credit
Agreement or any instruments or agreements referred to therein,
or (iii) require the Senior Lenders to agree to a similar waiver
or grant a similar waiver for a similar transaction or on a
future occasion. Except to the extent specifically waived
herein, the provisions of the Credit Agreement shall not be
amended, modified, impaired or otherwise affected hereby, and the
Credit Agreement and all of the Obligations are hereby confirmed
in full force and effect.
6. Miscellaneous. This Waiver is a Loan Document and,
together with the Credit Agreement and the other Loan Documents,
comprises the complete and integrated agreement of the parties on
the subject matter hereof. The headings herein are for
convenience of reference only and shall not alter or otherwise
affect the meaning hereof.
7. Governing Law. This Amendment shall be governed
by, and shall be construed and enforced in accordance with, the
laws of the State of New York.
<PAGE>
[Execution Copy: 3/10]
8. Counterparts. This Amendment may be executed in
any number of counterparts which, when taken together, shall be
deemed to constitute one and the same instrument.
WITNESS the due execution hereof as of the date first
above written.
KASH N' KARRY FOOD STORES, INC.,
as Borrower
By: /s/ R. P. Springer
Title: Executive Vice President
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION (as successor
in interest to SECURITY PACIFIC
NATIONAL BANK), as Agent
By: /s/ Laura Knight
Title: Vice President
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION (as successor
in interest to SECURITY PACIFIC
NATIONAL BANK), as a Senior Lender
By: /s/ Daniel McCready
Title: Vice President
WELLS FARGO BANK, N.A.
By: /s/ Jeffrey [illegible]
Title: Vice President
<PAGE>
[Execution Copy: 3/10]
BARNETT BANK OF TAMPA (as successor
in interest to First Florida Bank,
N.A.), by BARNETT BANKS, INC., as
attorney-in-fact for Barnett Bank
of Tampa
By: /s/ Julie M. Smith
Title: Vice President
NATIONSBANK OF FLORIDA, N.A.
By: /s/ Beth Lamping
Title: Assistant Vice President
13/sec.law/1994/K6313.LW3
[EXECUTION COPY: 4/13/94]
EIGHTH AMENDMENT AND LIMITED WAIVER
TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS EIGHTH AMENDMENT AND LIMITED WAIVER (the
"Amendment"), dated as of April 12, 1994, relates to that certain
Credit Agreement dated as of October 12, 1988, and amended and
restated as of September 14, 1989 (as further amended through the
date hereof, the "Credit Agreement"), among Kash n' Karry Food
Stores, Inc. ("Borrower"), the Senior Lenders referred to therein
and Bank of America National Trust & Savings Association (as
successor in interest to Security Pacific National Bank) as agent
for the Senior Lenders (in such capacity, the "Agent"). Unless
otherwise defined herein, terms defined in the Credit Agreement
are used herein with the same meanings ascribed to them therein.
In addition to the covenants and agreements made in the Credit
Agreement, Borrower, the Senior Lenders and the Agent further
covenant and agree as follows:
1. Amendments to the Credit Agreement. Upon the
Effective Date (as defined herein), the Credit Agreement is
hereby amended as follows:
1.1 Section 1.01 of the Credit Agreement is
hereby amended to add the following new definition after the
definition of "Holders of Secured Obligations":
"HP Finance Documents" shall mean (i) the
Financing Agreement dated as of April 15, 1994 by and
between the Borrower and HP Finance Corp., (ii) the
Mortgage Note dated April 15, 1994 in the principal
amount of $3,500,000 executed by Borrower in favor of
HP Finance Corp., and (iii) the Mortgage and Security
Agreement dated April 15, 1994 by and between the
Borrower and HP Finance Corp, in each case in the form
delivered to and approved by the Requisite Senior
Lenders.
1.2 Section 8.02(b) of the Credit Agreement is
hereby amended to delete the word "and" at the end of
subsection (xiii), to add the word "and" at the end of
subsection (xiv), to replace the period at the end of
subsection (xiv) with a ";" and to add a new subsection (xv)
to read as follows:
(xv) The Lien created pursuant to the HP
Finance Documents and subject to the Intercreditor
Agreement dated as of April 15, 1994 by and among the
Agent, the Collateral Co-Agent and HP Finance Corp.
1.3 Section 8.21 of the Credit Agreement (as
added by the Seventh Amendment) is hereby amended and
restated in its entirety to read as follows:
<PAGE>
8.21. Limitation on Payments on the GEI
Note. Borrower shall not make any payments on or with
respect to the GEI Note.
1.4 A new Section 8.22 is hereby added to the
Credit Agreement, to read as follows:
8.22. Amendment of HP Finance Documents.
Borrower shall not amend, modify or supplement in any
material respect any of the HP Finance Documents
without the prior written consent of the Requisite
Senior Lenders.
2. Additional Amendments to the Credit Agreement. Upon
the Supplemental Effective Date (as defined herein), the Credit
Agreement is hereby amended as follows:
2.1 Section 1.01 of the Credit Agreement is
hereby amended by amending and restating the definition of
"Capital Improvement Subcommitment" to read as follows:
"Capital Improvement Subcommitment" shall
have the meaning ascribed to such term in paragraph (B)
of Section 2.02(a)(i), and, with respect to each Senior
Lender, shall not exceed the Senior Lender's Pro Rata
Share of $13,700,000, and "Capital Improvement
Subcommitments" shall mean the aggregate amount of the
Capital Improvement Subcommitments of all Senior
Lenders, in a maximum amount not to exceed $13,700,000.
2.2 Section 2.02 of the Credit Agreement is
hereby amended by deleting each reference to the number
"$20,000,000" in Section 2.02(a)(i)(B) and inserting in lieu
thereof the number "$13,700,000."
2.3 Each reference to Schedule AmA in the Credit
Agreement (including, without limitation, in the definitions
of "CD Lending Office," "Domestic Lending Office" and
"Eurodollar Lending Office" and in Section 2.10(a)) shall be
deleted and a reference to Schedule A inserted in lieu
thereof. (Schedule A was amended in the Fourth Amendment
and, as amended, is still referred to in the Credit
Agreement as Schedule A.)
3. Execution of Intercreditor Agreement and Approval
of HP Finance Documents. The Requisite Senior Lenders hereby
approve the HP Finance Documents in the form attached hereto as
Exhibit A and, pursuant to Section 11.08(b) of the Credit
Agreement, hereby instruct, direct and confirm the Agent's and
the Collateral Co-Agent's authority to enter into the
Intercreditor Agreement and Memorandum of Intercreditor Agreement
(in substantially the forms attached hereto as Exhibit B), each
dated as of April 15, 1994, by and among the Agent, the
Collateral Co-Agent and HP Finance Corp.
<PAGE>
4. Effective Date. This Amendment (other than
Section 2 hereof) shall become effective upon the date (the
"Effective Date") on which the Agent has received counterparts
hereof signed by Borrower, the Requisite Senior Lenders and the
Agent. Section 2 of this Amendment shall become effective upon
the date (the "Supplemental Effective Date") on which the Agent
has received counterparts hereof which are effective with respect
to Section 2 signed by Borrower, each Senior Lender and the
Agent.
5. Representations and Warranties. Borrower hereby
represents and warrants that, as of the date hereof, and after
giving effect to this Amendment:
(a) The execution, delivery and performance by
Borrower of this Amendment have been duly authorized by all
necessary corporate action;
(b) No Event of Default or Potential Event of
Default has occurred or is continuing; and
(c) The representations and warranties of
Borrower contained in Section 5.03 of the Credit Agreement
and any other Loan Document (other than representations and
warranties which expressly speak as of a different date) are
true, correct and complete in all material respects, except
that such representations and warranties need not be true,
correct and complete to the extent that changes in the facts
and conditions on which such representations and warranties
are based are required or permitted under the Credit
Agreement.
6. Limitation on Amendment. This Amendment shall be
limited solely to the matters expressly set forth herein and
shall not (i) constitute a waiver or amendment of any other term
or condition of the Credit Agreement, or of any instruments or
agreements referred to therein, (ii) prejudice any right or
rights which the Agent or any of the Senior Lenders may now have
or may have in the future under or in connection with the Credit
Agreement or any instruments or agreements referred to therein,
or (iii) require the Senior Lenders to agree to a similar waiver
or grant a similar waiver for a similar transaction or on a
future occasion. Except to the extent specifically waived
herein, the provisions of the Credit Agreement shall not be
amended, modified, impaired or otherwise affected hereby, and the
Credit Agreement and all of the Obligations are hereby confirmed
in full force and effect.
7. Miscellaneous. This Amendment is a Loan Document
and, together with the Credit Agreement and the other Loan
Documents, comprises the complete and integrated agreement of the
parties on the subject matter hereof. The headings herein are
for convenience of reference only and shall not alter or
otherwise affect the meaning hereof.
8. Governing Law. This Amendment shall be governed
by, and shall be construed and enforced in accordance with, the
laws of the State of New York.
9. Counterparts. This Amendment may be executed in
any number of counterparts which, when taken together, shall be
deemed to constitute one and the same instrument.
WITNESS the due execution hereof as of the date first
above written.
<PAGE>
KASH N' KARRY FOOD STORES, INC.,as
Borrower
By: /s/ Richard D. Coleman
Title: V.P. Controller
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION (as successor
in interest to SECURITY PACIFIC
NATIONAL BANK), as Agent
By: /s/ Laura Knight
Title: Vice President
[EXECUTION COPY: 4/13/94]
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION (as successor in
interest to SECURITY PACIFIC
NATIONAL BANK), as a Senior Lender
By: /s/ Daniel D. McCready
Title: Vice President
WELLS FARGO BANK, N.A.
By: /s/ Jeffrey P. [illegible]
Title Vice President
BARNETT BANK OF TAMPA (as successor
in interest to First Florida Bank,
N.A.), as a Senior Lender, by
BARNETT BANKS, INC., as attorney
in-fact for Barnett Bank of Tampa
By: /s/ Julie M. Smith
Title: Sr. Loan Workout Officer
The following signature is not
effective with respect to
Sections 1 and 3 hereof:
<PAGE>
NATIONSBANK OF FLORIDA, N.A.
By: /s/ Beth A. Lamping
Title: Vice President
MORTGAGE NOTE
$3,500,000.00 Orlando, Florida
April 15, 1994
FOR VALUE RECEIVED, KASH n' KARRY FOOD STORES, INC., a
Delaware corporation (the "Maker"), promises to pay to the order
of HP FINANCE CORP., a Florida corporation (the "Holder"), the
principal sum of THREE MILLION FIVE HUNDRED THOUSAND AND NO/100
DOLLARS ($3,500,000.00), together with interest on the principal
balance of this Mortgage Note (the "Note") from time to time
remaining unpaid, from the date hereof at the applicable interest
rate hereinafter set forth, in lawful money of the United States
of America which shall be legal tender in payment of all debts at
the time of such payment. Both principal and interest and all
other sums due hereunder shall be payable at 5364 Ehrlich Road,
#125, Tampa, Florida 33625, at or at such other place either
within or without the State of Florida, as the Holder hereof may
from time to time designate. Said principal and interest shall be
paid over a term, at the times, and in the manner set forth
below, as follows:
Payment Provision:
I. Installments of interest only on the unpaid principal
balance of this Note shall be due and payable in
consecutive monthly installments commencing on the
first day of the second calendar month following the
date hereof and continuing on the first day of each
calendar month thereafter until this Note is paid in
full, at the rate and in the amount as follows:
A. From the date hereof through April 30, 1997
interest shall accrue at the rate of eleven
and one-half percent (11.5 %) per annum and
shall be due and payable in monthly
installments of $33,541.67 through May 1,
1997.
B. From May 1, 1997 through April 30, 2000
interest shall accrue at the rate of fourteen
and one-half percent (14.5%) per annum and
shall be due and payable in monthly
installments of $42,291.67 beginning on June
1, 1997 and continuing through May 1, 2000.
<PAGE>
C. From and after May 1, 2000 interest shall
accrue at the rate of seventeen and one-half
percent (17.5%) per annum and shall be due
and payable in monthly installments of
$51,041.67 beginning on June 1, 2000 and
continuing through May 1, 2004.
Maturity:
The unpaid principal balance of this Note and all accrued
unpaid interest thereon, if not sooner paid, shall be due and
payable in full on May 1, 2004 (the "Maturity Date").
Application of Payments:
All payments shall be applied first to the payment of
accrued unpaid interest hereon and the balance, if any, shall be
applied to the reduction of the outstanding principal balance of
this Note. Interest due hereunder shall be calculated on the
basis of a 360-day year. This Note may be prepaid at any time
without any prepayment penalty or fee whatsoever.
Late Payment Charge:
The Holder of this Note may collect a late payment charge,
prior to the acceleration of this Note, in an amount equal to
five percent (5%) of the aggregate monthly installment which is
not received within five (5) days of the due date, for the
purpose of covering the extra expenses involved in handling
delinquent installments. Any payment which is postmarked by the
due date shall not be considered delinquent and a late payment
charge shall not be assessed.
Additional Conditions:
This Note is secured by (among other things) a Mortgage and
Security Agreement (as amended from time to time, the "Mortgage")
of even date herewith encumbering certain real property located
in the County of Hillsborough, State of Florida and other
property as more particularly described in the Mortgage. The
Mortgage contains terms and provisions which provide grounds for
acceleration of the indebtedness evidenced by this Note together
with additional remedies in the event of default hereunder or
thereunder. Failure on the part of the Holder hereof to exercise
any right granted herein or in the aforesaid Mortgage shall not
constitute a waiver of such right or preclude the subsequent
exercise and enforcement thereof.
All parties to this Note, including endorsers, sureties and
guarantors, hereby waive presentment for payment, demand,
protest, notice of nonpayment or dishonor and of protest, and any
and all other notices and demands whatsoever, and agree to remain
bound hereby until the principal and interest of this Note are
paid in full, notwithstanding any extensions of time for payment
which may be granted by the Holder, even though the period of
extension be indefinite, and notwithstanding any inaction by, or
failure to assert any legal rights available to the Holder of
this Note.
<PAGE>
If the obligations evidenced by this Note, or any part
thereof, are placed in the hands of an attorney for collection,
whether by suit or otherwise, at any time, or from time to time,
the Maker shall be liable to the Holder, in each instance, for
all costs and expenses incurred in connection therewith,
including, without limitation, reasonable attorneys' fees
incurred prior to trial, at trial and in connection with all
appellate and bankruptcy proceedings.
Default:
If default shall be made in the payment of principal and/or
interest (or either) as stipulated above or in the payment of any
other sums due hereunder or under the Mortgage or under the
Financing Agreement between the Maker and the Holder of even date
herewith (as amended from time to time, the "Financing Agreement"
and, together with the Mortgage and this Note, the "Other Loan
Documents"), or should any default be made in the performance of
any of the terms, covenants and conditions contained herein, in
the Mortgage, or in any of the Other Loan Documents, then in any
or all of such events, at the option of the Holder of this Note,
the entire outstanding principal balance of this Note, together
with all sums advanced by the Holder on behalf of the Maker shall
become and be immediately due and payable then or thereafter as
the Holder may elect, regardless of the Maturity Date hereof. All
such amounts shall bear interest at the rate of eighteen percent
(18%) per annum.
During the existence of any default, the Holder of this
Note may apply any sums received, including but not limited to,
insurance proceeds or condemnation awards, to any amount then due
and owing hereunder or under the terms of any instrument now or
hereafter evidencing or securing this Note as the Holder may
determine. Neither the right nor the exercise of the right herein
granted unto the Holder to apply such payments as aforesaid shall
preclude the Holder from exercising its option to cause the
entire indebtedness evidenced by this Note to become immediately
due and payable by reason of the Maker's default under the terms
of this Note, the Mortgage, or any other instrument evidencing or
securing this Note.
Notwithstanding any provisions herein to the contrary, the
Holder's right, power and privilege to accelerate the maturity of
the indebtedness evidenced hereby shall be conditioned upon, with
respect to any Non-Monetary Default (as hereinafter defined), the
Holder giving the Maker written notice of such Non-Monetary
Default and a thirty (30) day period after the date of such
notice within which to cure such Non-Monetary Default. Any notice
required hereunder shall be given as provided in the Mortgage.
The Holder shall have no obligation to give the Maker notice of
any Monetary Default (as hereinafter defined), or any notice of
or period to cure any Incurable Default (as hereinafter defined),
prior to exercising its right, power and privilege to accelerate
the maturity of the indebtedness evidenced hereby and to declare
the same to be immediately due and payable and to exercise all
other rights and remedies herein granted or otherwise available
to the Holder at law or in equity. Notwithstanding the foregoing,
a Monetary Default shall be deemed to have occurred hereunder
<PAGE>
only if any sums due hereunder or under the Mortgage or the Other
Loan Documents are not either postmarked by the due date therefor
or received within five (5) days after the due date therefor. As
used herein, the term "Monetary Default" shall mean any failure
to timely make any payment of principal or interest hereunder or
any other payments required hereby or by the Mortgage or any of
the Other Loan Documents. As used herein, the term "Non-Monetary
Default" shall mean any Event of Default (as defined in the
Mortgage or in any of the Other Loan Documents) which is not a
Monetary Default or an Incurable Default. As used herein, the
term "Incurable Default" shall mean any voluntary or involuntary
sale, assignment, mortgaging or transfer of any collateral or
security for
this Note in violation of the covenants of the Mortgage or of any
of the Other Loan Documents, after the expiration of any
applicable notice
and grace periods therefor or any event of default defined as an
Incurable Default under the Mortgage or any of the Other Loan
Documents.
Savings Clause:
Notwithstanding any provisions herein or in the Mortgage to
the contrary, the total liability for payments in the nature of
interest, default interest and late fees shall not exceed the
limits imposed by the laws of the State of Florida or the United
States of America relating to maximum allowable charges of
interest. The Holder shall not be entitled to receive, collect or
apply, as interest on the indebtedness evidenced hereby, any
amount in excess of the maximum allowable legal rate of interest
permitted to be charged by applicable law. In the event the
Holder ever receives, collects or applies, as interest, any such
excess, such amount which would be excessive interest shall be
applied to reduce the unpaid principal balance of the
indebtedness evidenced hereby. If the unpaid principal balance of
such indebtedness is paid in full, any remaining excess shall be
forthwith paid to the Maker hereof.
The provisions of this Note shall be governed by the laws
of the State of Florida and of the United States of America and
shall be binding upon the Maker, its successors and assigns and
shall inure to the benefit of the Holder, its successors and
assigns.
(SIGNATURE BLOCK ON ATTACHED PAGE)
IN WITNESS WHEREOF, the undersigned has executed this Note
under seal as of the day and year first above written.
KASH N' KARRY FOOD STORES, INC., a
Delaware corporation
<PAGE>
By: /s/ Raymond P. Springer
Raymond P. Springer,
Executive Vice President
(CORPORATE SEAL)
Documentary stamp tax in the amount of $12,250.00 has been
affixed to the original Mortgage of even date herewith which
secures this Note.
Prepared By & Return To:
William R. Bird, Jr., Esquire
Lowndes, Drosdick, Doster, Kantor
& Reed, P.A.
215 North Eola Drive
Orlando, Florida 32802
MORTGAGE AND SECURITY AGREEMENT
THIS MORTGAGE AND SECURITY AGREEMENT (hereinafter referred
to as the "Mortgage") executed the 15th day of April, 1994 by and
between KASH n' KARRY FOOD STORES, INC., a Delaware corporation,
whose address for notice purposes under this Mortgage is 6422
Harney Road, Tampa, Florida 33610 (hereinafter referred to as
"Borrower"), to and in favor of HP FINANCE CORP., a Florida
corporation (hereinafter referred to as "Lender").
<PAGE>
WITNESSETH:
That for good and valuable considerations and to secure the
payment of an indebtedness in the aggregate sum of THREE MILLION
FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($3,500,000.00), or so
much thereof as may be advanced, to be paid in accordance with a
mortgage note of even date herewith (hereinafter referred to as
the "Note") which has a maturity date of May 1, 2004 together
with interest thereon and any and all sums due or which may
become due hereunder from Borrower to Lender, Borrower does
hereby grant, bargain, sell, alien, remise, release, convey and
confirm unto Lender, its successors and assigns:
(i) Borrower's leasehold estate in and to that certain
tract of land of which Borrower is now seized and possessed
and in actual possession, situate in the County of
Hillsborough, State of Florida, which is more fully
described in Exhibit "A" attached hereto and made a part
hereof (hereinafter referred to as the "Premises"), which
leasehold estate exists pursuant to that certain Lease
Agreement executed by Eli Blumenfeld, as landlord, and
Borrower, as tenant, dated December 16, 1991 a short form of
which is recorded in Official Records Book 6473, Page 1630,
as modified by that certain First Modification of Lease
recorded in Official Records Book 7103, Page 1217, both
among the Public Records of Hillsborough County, Florida
(hereinafter referred to collectively as the "Lease");
(ii) all leasehold estate, and all right, title and
interest of Borrower in and to the Lease and all leases or
subleases covering the Premises or any portion thereof now
or hereafter existing or entered into, and all right, title
and interest of Borrower thereunder, including, without
limitation, all cash or security deposits, advance rentals,
and deposits or payments of similar nature and all options,
credits and privileges thereunder.
(iii) all right, title and interest of Borrower in and
to all options to purchase the Premises or any portion
thereof or interest therein, and any greater estate in the
Premises owned or hereafter acquired;
(iv) all right, title and interest of Borrower in and
to all easements, streets, ways, alleys, rights-of-way and
rights used in connection with the Premises or as a means of
access thereto, and all tenements, hereditaments and
appurtenances thereof and thereto, and all water rights;
(v) all right, title and interest of Borrower in and
to any and all buildings, fixtures, structures and
improvements (other than equipment and machinery) now or
hereafter erected on the Premises (sometimes hereinafter
referred to, not including the items specifically excluded
in this clause (v), as the "Improvements"), excluding the
fixtures, attachments, appliances, equipment, machinery, and
other articles attached to said buildings, structures and
<PAGE>
improvements in which a security interest is held by Heller
Financial Inc. as evidenced by that UCC Financing Statement
recorded in Official Records Book 7055, Page 1981, of the
Public Records of Hillsborough County, Florida;
(vi) all awards and proceeds of condemnation for the
Premises or any part thereof to which Borrower is entitled
for any taking of all or any part of the Premises by
condemnation or exercise of the right of eminent domain. All
such awards and condemnation proceeds are hereby assigned to
Lender and Lender is hereby authorized, subject to the
provisions contained in this Mortgage, to apply such awards
and condemnation proceeds or any part thereof, after
deducting therefrom any expenses incurred by Lender in the
collection or handling thereof, toward the payment, in full
or in part, of the Note, notwithstanding the fact that the
amount owing thereon may not then be due and payable;
(vii) all right, title and interest in and to any
payments under any performance or payment bonds issued with
respect to the Premises or for the construction of
improvements thereon, to which Borrower is entitled;
(viii) all rents, issues and profits of the Premises
and all the estate, right, title and interest of every
nature whatsoever of Borrower in and to the same;
(ix) all right, title and interest of Borrower in and
to all proceeds and choses in action arising under any
casualty insurance policies maintained with respect to all
or any part of the Mortgaged Property; and,
(x) all proceeds, products, replacements, additions,
substitutions, renewals andaccessions of any of the foregoing
items.
All of the foregoing real and personal property, and all rights,
privileges and franchises are collectively referred to as the
"Mortgaged Property."
TO HAVE AND TO HOLD all and singular the Mortgaged Property
hereby conveyed, and the tenements, hereditaments and
appurtenances thereunto belonging or in anywise appertaining, and
the reversion and reversions, remainder and remainders, rents,
issues and profits thereof and also all the estate, right, title,
interest, property, possession, claim and demand whatsoever as
well in law as in equity of Borrower in and to the same and every
part and parcel thereof unto Lender.
PROVIDED ALWAYS that if Borrower shall pay to Lender any and
all indebtedness due by Borrower to Lender (including the
indebtedness evidenced by the Note and any and all renewals of
the same) and shall perform, comply with and abide by each and
every stipulation, agreement, condition, and covenant of the Note
and of this Mortgage; then this Mortgage and the estate hereby
created shall cease and be null and void. Provided, it is further
covenanted and agreed by the parties hereto that this Mortgage
also secures any disbursements made for the payment of tax,
levies or insurance on the Mortgaged Property, with interest on
such disbursements at the Default Rate as hereinafter defined.
<PAGE>
To protect the security of this Mortgage, Borrower further
covenants, warrants and agrees with Lender as follows:
ARTICLE I
COVENANTS AND AGREEMENTS OF BORROWER
1.01 Payment of Secured Obligations. Borrower shall pay when
due the principal of, and the interest on, the indebtedness
evidenced by the Note, and the charges and fees secured by this
Mortgage and shall otherwise comply with all the terms of the
Note and this Mortgage.
1.02 Warranties and Representations. Borrower hereby
covenants with Lender that Borrower is indefeasibly seized of the
Mortgaged Property; that Borrower has full power and lawful right
to convey the same; that it shall be lawful for Borrower at all
times peaceably and quietly to enter upon, hold, occupy and enjoy
said Mortgaged Property and every part thereof; that Borrower
will make such further assurances to perfect the lien interest in
the Mortgaged Property in Lender, as may reasonably be required;
and that Borrower does hereby fully warrant the title to the
Mortgaged Property (subject only to those exceptions identified
in Exhibit "B" attached hereto (hereinafter referred to as the
"Permitted Encumbrances") and every part thereof and will defend
the same against the lawful claims of all persons whomsoever.
Borrower further represents and warrants to Lender that all
information, reports, paper and data given to Lender with respect
to Borrower, and with respect to the Note and Mortgage, are
accurate and correct in all material respects and complete
insofar as may be necessary to give Lender a true and accurate
knowledge of the subject matter.
1.03 Ground Leases, Leases, Subleases and Easements.
Borrower, at Borrower's sole cost and expense, shall maintain and
cause to be performed all of the covenants, agreements, terms,
conditions and provisions on its part to be kept, observed and
performed under the Lease and any other lease, sublease or
easements which may constitute a portion of or an interest in the
Premises; shall require its landlords, tenants and subtenants to
keep, observe and perform all the covenants, agreements, terms,
conditions and provisions on their part to be kept, observed or
performed under the Lease and any and all other leases, subleases
or easements; and shall not suffer or permit any breach or
default to occur with respect to the foregoing; and in default
thereof Lender shall have the right to perform or to require
performance of any such covenants, agreements, terms, conditions
and provisions of the Lease and of any such other lease, sublease
or easements and to add any expense incurred in connection
therewith to the debt secured hereby, which such expense shall
bear interest from the date of payment to the date of recovery by
Lender at the Default Rate, as hereinafter defined. Any such
payment by Lender with interest thereon shall be immediately due
and payable. Borrower shall not, without the written consent of
Lender, consent to any modification, amendment, cancellation,
termination or surrender of the Lease or of any such other lease,
sublease, or easement.
<PAGE>
No release or forbearance of any of Borrower's obligations
under the Lease or any such other lease, sublease, or easement
shall release Borrower from any of its obligations under this
Mortgage.
1.04 Required Insurance. Borrower will, at Borrower's sole
cost and expense, maintain or cause to be maintained with respect
to the Mortgaged Property, and each part thereof, the following
insurance:
(a) Insurance against loss or damage to the
Improvements by fire and all of the risks covered by
insurance of the type known as "fire and extended coverage"
in an amount not less than the original amount of the Note
or the full replacement cost of the Improvements, whichever
is less; and
(b) Comprehensive general liability insurance,
insuring against personal injury, death and property damage
occurring on, in or about the Premises or in connection with
the operation of the Mortgaged Property, naming Lender as an
additional insured and in such amounts as are acceptable to
Lender.
(c) Such other insurance, and in such amounts, as may
from time to time be required by Lender against the same or
other hazards.
All policies of insurance required by the terms of this
Mortgage shall contain an endorsement or agreement by the insurer
that any loss shall be payable in accordance with the terms of
such policy notwithstanding any act or negligence of Borrower
which might otherwise result in forfeiture of said insurance and
the further agreement of the insurer waiving all rights of set
off, counterclaim or deductions against Borrower.
Borrower may effect for its own account any insurance not
required under this Section 1.04, but any such insurance effected
by Borrower on the Premises, whether or not so required, shall be
for the mutual benefit of Borrower and Lender.
1.05 Delivery of Policies, Payment of Premiums. All policies
of insurance shall be issued by companies and in amounts in each
company satisfactory to Lender. All policies of casualty
insurance shall have attached thereto a lender's loss payment
endorsement for the benefit of Lender in form satisfactory to
Lender. Borrower shall furnish Lender with an original policy of
all policies of required insurance. If Lender consents to
Borrower providing any of the required insurance through blanket
policies carried by Borrower and covering more than one location,
then Borrower shall furnish Lender with a certificate of
insurance for each such policy setting forth the coverage, the
limits of liability, the name of the carrier, the policy number,
and the expiration date. At least thirty (30) days prior to the
expiration of each such policy, Borrower shall furnish Lender
with evidence satisfactory to Lender of the Payment of premium
and the reissuance of a policy continuing insurance in force as
required by this Mortgage. All such policies shall contain a
provision that such policies will not be canceled or materially
<PAGE>
amended, which term shall include any reduction in the scope or
limits of coverage, without at least thirty (30) days prior
written notice to Lender. In the event Borrower fails to provide,
maintain, keep in force or deliver and furnish to Lender the
policies of insurance required by this Section, Lender may
procure such insurance or single interest insurance for such
risks covering Lender's interest, and Borrower will pay all
premiums thereon promptly upon demand by Lender, and until such
payment is made by Borrower the amount of all such premiums
together with interest thereon at the rate of interest after
maturity or default provided in the Note or the maximum rate
permitted by Florida law, whichever is less (the "Default Rate"),
and shall be deemed to be a part of the indebtedness secured by
this Mortgage.
1.06 Insurance Proceeds. After the happening of any casualty
to the Mortgaged Property or any part thereof, Borrower shall
give prompt written notice thereof to Lender.
(a) In the event of any damage to or destruction of
the Mortgaged Property, Lender shall have the option in its
sole discretion of applying or paying all or part of the
insurance proceeds (i) to any indebtedness secured hereby
and in such order as Lender may determine, or (ii) to the
restoration of the improvements, or (iii) to Borrower.
Notwithstanding the foregoing sentence, and provided that no
Event of Default (as herein defined) has occurred as is
continuing, Lender agrees to apply such insurance proceeds,
or to make the same available (on reasonable terms) for
Borrower's application, toward restoration of the
Improvements.
(b) In the event of such loss or damage, all proceeds
of insurance shall be payable to Lender, and Borrower hereby
authorizes and directs any affected insurance company to
make payment of such proceeds directly to Lender. Lender is
hereby authorized and empowered by Borrower to settle,
adjust or compromise any claims for loss, damage or
destruction under any policy or policies of insurance.
(c) Except to the extent that insurance proceeds are
received by Lender and applied to the indebtedness secured
hereby, nothing herein contained shall be deemed to Borrower
from repairing or maintaining the Mortgaged Property as
provided in this Mortgage or restoring all damage or
destruction to the Mortgaged Property, regardless of whether
or not there are insurance proceeds available or whether any
such proceeds are sufficient in amount, and the application
or release by Lender of any shall not cure or waive any
default or notice of default under this Mortgage or
invalidate any act done pursuant to such notice.
1.07 Assignment of Policies Upon Foreclosure. In the event
of foreclosure of this Mortgage or other transfer of title or
assignment of the Mortgaged Property in extinguishment, in whole
or in part, of the debt secured hereby, all right, title and
interest of Borrower in and to all policies of insurance required
by this Section shall inure to the benefit of and pass to the
<PAGE>
successor in interest of Lender or the purchaser or grantee of
the Mortgaged Property. Borrower hereby appoints Lender its
attorney-in-fact to endorse any cheeks, drafts or other
instruments representing any proceeds of such insurance, whether
payable by reason of loss thereunder or otherwise.
1.08Taxes. Utilities and Impositions. Borrower will pay, or
cause to be paid and discharged, on or before the last day on
which they may be paid without penalty or interest, all such
duties, taxes, sewer rents, charges for water, or for setting or
repairing of meters, and all other utilities on the Mortgaged
Property or any part thereof, and any assessments and payments,
usual or unusual, extraordinary or ordinary, which shall be
imposed upon or become due and payable or become a lien upon the
Premises or any part thereof and the sidewalks or streets in
front thereof and any vaults therein by virtue of any present or
future law of the United States or of the State, County, or City
wherein the Premises are located (all of the foregoing being
herein collectively called "Impositions"). In default of any such
payment of any Imposition, Lender may pay the same and the amount
so paid by Lender shall, at Lender's option, become immediately
due and payable with interest at the Default Rate and shall be
deemed part of the indebtedness secured by this Mortgage.
If at any time there shall be assessed or imposed (i) a tax
or assessment on the Premises in lieu of or in addition to the
Impositions payable by Borrower pursuant to this Section or (ii)
a license fee, tax or assessment imposed on Lender and measured
by or based in whole or in part upon the amount of the
outstanding obligations secured hereby, then all such taxes,
assessments or fees shall be deemed to be included within the
term "Impositions" as defined in this Section, and Borrower shall
pay and discharge the same as herein provided with respect to the
payment of Impositions or at the option of Lender, all
obligations secured hereby, together with all accrued interest
thereon, shall immediately become due and payable. Anything to
the contrary herein notwithstanding, Borrower shall have no
obligation to pay any franchise, estate, inheritance, income,
excess profits or similar tax levied on Lender in connection with
the obligations secured hereby.
Borrower will pay all mortgage recording taxes and fees
payable with respect to this Mortgage or other mortgage or
transfer taxes due on account of this Mortgage or the Note
secured hereby.
Borrower will exhibit to Lender the original receipts or
other reasonably satisfactory proof of the payment of all
Impositions which may affect the Mortgaged Property or any part
thereof or the lien of the Mortgage promptly following the last
date on which each Imposition is payable hereunder.
Notwithstanding the foregoing, Borrower shall have the
right, after prior written notice to Lender, to contest at its
own expense the amount and validity of any Imposition affecting
the Mortgaged Property by appropriate proceedings conducted in
good faith and with due diligence and to postpone or defer
payment thereof, if and so long as:
(a) Such proceedings shall operate to suspend the
collection of such Impositionfrom Borrower or the Mortgaged
Property; or
<PAGE>
(b) Neither the Mortgaged Property nor any part
thereof would be inimmediate danger of being forfeited or lost by
reason of such proceedings, postponementor deferment; and
(c) In the case of any Imposition affecting the
Mortgaged Property whichmight be or become a lien, encumbrance or
charge upon or result in any forfeiture or lossof the Mortgaged
Property or any part thereof, or which might result in loss or
damageto Borrower or Lender, Borrower, prior to the date such
Imposition would becomedelinquent, shall have furnished Lender
with security satisfactory to Lender, and, in theevent that such
security is furnished, Lender shall not have the right during the
periodof the contest to pay, remove or discharge the Imposition.
1.09 Maintenance, Repairs, Alterations. Borrower shall keep
the Mortgaged Property, or cause the same to be kept, in good
condition and repair and fully protected from the elements to the
satisfaction of Lender, normal wear and tear excepted; Borrower
shall not commit nor permit to be committed waste thereon and
shall not do nor permit to be done any act by which the Mortgaged
Property shall become less valuable; Borrower will not remove,
demolish or structurally alter any of the Improvements (except
such alterations as maybe required by laws,
ordinances or regulations) without the prior written permission
of Lender; Borrower shall complete promptly and in good and
workmanlike manner any building or other improvement
which may be constructed on the Premises and promptly restore in
like manner any Improvements which may be damaged or destroyed
thereon and will pay when due all claims for labor performed and
materials furnished therefor; Borrower shall use and operate, and
shall require its lessees or licensees to use or operate, the
Mortgaged Property in compliance with all applicable laws,
ordinances, regulations, covenants, conditions and restrictions,
and with all applicable requirements of the Lease and any other
lease or sublease now or hereafter affecting the Premises or any
part thereof. Unless required by law or unless Lender has
otherwise agreed in writing, Borrower shall not allow changes in
the stated use of Mortgaged Property from that which was
disclosed to Lender at the time of execution hereof. Borrower
shall not initiate or acquiesce to a zoning change of the
Mortgaged Property without the prior notice to and consent of
Lender. Lender and its representatives shall have access to the
Premises at all reasonable times to determine whether Borrower is
complying with its obligations under this Mortgage, including,
but not limited to, those set out in this Section.
1.10 Eminent Domain. Should the mortgaged Property, or any
part thereof or interest therein, be taken or damaged by reason
of any public use or improvement or condemnation proceeding, or
in any other manner ("Condemnation"), or should Borrower receive
any notice or other information regarding such Condemnation,
Borrower shall give prompt written notice thereof to Lender.
(a) Subject to the provisions of the Lease, Lender
shall be entitled to all compensation, awards and other
payments or relief granted in connection with such
Condemnation, and shall be entitled, at its option, to
<PAGE>
commence, appear in and prosecute in its own name any action
or proceedings relating thereto. Lender shall also be
entitled to make any compromise or settlement in connection
with such taking or damage. All such compensation, awards,
damages, rights of action and proceeds awarded to Borrower
(the "Proceeds") are hereby assigned to Lender and Borrower
agrees to execute such further assignments of the Proceeds
as Lender may require.
(b) In the event any portion of the Mortgaged Property
is so taken or damaged, Lender shall have the option in its
sole and absolute discretion, to apply all such Proceeds,
after deducting therefrom all costs and expenses (regardless
of the particular nature thereof and whether incurred with
or without suit), including attorneys' fees, incurred by it
in connection with such Proceeds, upon any indebtedness
secured hereby, or to apply all such Proceeds, after such
deductions, to the restoration of the Mortgaged Property
upon such conditions as Lender may determine.
Notwithstanding the foregoing, and provided that no Event of
Default has occurred and is continuing, Lender agrees to
apply such Proceeds, or to make the same available (on
reasonable terms) for application by Borrower, toward
restoration of the Mortgaged Property, if such restoration
shall, in Lender's judgment, be practicable. Such
application or release shall not cure or waive any default
or notice of default hereunder or invalidate any act done
pursuant to such notice.
(c) Any amounts received by Lender hereunder (after
payment of any costs in connection with obtaining same),
shall, if retained by Lender, be applied in payment of any
accrued interest and then in reduction of the then
outstanding principal sum of the Note, notwithstanding that
the same may not then be due and payable.
(d) Except to the extent that such Proceeds are
received by Lender and applied to the indebtedness secured
hereby, nothing herein contained shall be deemed to excuse
Borrower from restoring the Mortgaged Property, regardless
of whether such Proceeds are available or sufficient in
amount, unless Lender and Borrower agree that the remainder
of the Mortgaged Property will be insufficient for the
continued operation of Borrower's business thereon.
1.11 Actions by Lender to Preserve the Security of this
Mortgage. If Borrower fails to make any payment or to do any act
as and in the manner provided for in this Mortgage or the Note,
Lender, in its own discretion, without obligation so to do and
without notice to or demand upon Borrower and without releasing
Borrower from any obligation, may make or do the same in such
manner and to such extent as Lender may deem necessary to protect
the security hereof. Borrower will pay upon demand all expenses
incurred or paid by Lender (including, but not limited to,
reasonable attorneys' fees and court costs including those of
appellate and bankruptcy proceedings) on account of the exercise
of any of the aforesaid rights or privileges or on account of any
litigation which may arise in connection with this Mortgage or
<PAGE>
the Note or on account of any attempt, without litigation, to
enforce the terms of this Mortgage or said Note. In case the
Mortgaged Property or any part thereof shall be advertised for
foreclosure sale and not sold, Borrower shall pay all costs in
connection therewith.
In the event that Lender pays any sums of money to protect
this Mortgage and the Note as aforesaid, all monies advanced or
due hereunder shall become immediately due and payable, together
with interest at the Default Rate, computed from the date of such
advance to the date of the actual receipt of payment thereof by
Lender.
1.12 Cost of Collection. In the event this Mortgage is
placed in the hands of an attorney for the collection of any sum
payable hereunder, Borrower agrees to pay all costs of
collection, including reasonable attorneys fees including those
in all appellate and bankruptcy proceedings, incurred by Lender,
either with or without the institution of any action or
proceeding, and in addition to all costs, disbursements and
allowances provided by law. All such costs so incurred shall be
secured by this Mortgage.
1.13 Survival of Warranties. All representations, warranties
and covenants of Borrower contained herein or incorporated by
reference shall survive the execution and delivery of the Note
and this Mortgage and shall remain continuing obligations,
warranties and representations of Borrower during any time when
any portion of the obligations secured by this Mortgage remain
outstanding.
1.14 Additional Security. In the event Lender at any time
holds additional security for any of the obligations secured
hereby, it may enforce the sale thereof or otherwise realize upon
the same, at its option, either before or concurrently herewith
or after a sale is made hereunder.
1.15 Inspections. Lender, or its agents, representatives or
workmen, are authorized to enter at any reasonable time upon or
on any part of the Premises for the purpose of inspecting the
same, and for the purpose of performing any of the acts it is
authorized to perform under the terms of this Mortgage.
1.16 Liens. Borrower shall pay and promptly discharge, at
Borrower's cost and expense, all liens, encumbrances and charges
upon the Mortgaged Property or any part thereof or interest
therein other than the Permitted Encumbrances. With respect to
the Permitted Encumbrances, Borrower shall promptly pay and
discharge all of its obligations thereunder such that no Events
of Default shall occur thereunder and be continuing. Borrower
shall have the right to contest in good faith the validity of any
such lien, encumbrance or charge, provided Borrower shall first
deposit with Lender a bond or other security satisfactory to
Lender in such amounts as Lender shall reasonably require, and
provided further that Borrower shall thereafter diligently
proceed to cause such lien, encumbrance or charge to be removed
and discharged. If Borrower shall fail to discharge any such
lien, encumbrance or charge, then, in addition to any other right
<PAGE>
or remedy of Lender, Lender may, but shall not be obligated to,
discharge the same, either by paying the amount claimed to be
due, or by procuring the discharge of such lien by depositing in
court a bond for the amount claimed or otherwise giving security
for such claim, or in such manner as is or may be prescribed by
law. Any amount so paid by Lender shall, at Lender's option,
become immediately due and payable with interest at the Default
Rate, and shall be deemed part of the indebtedness secured by
this Mortgage.
1.17 Future Advances. This Mortgage is given to secure only
the existing indebtedness under the Note, and such other sums as
may become due hereunder, but shall not secure any future
advances.
ARTICLE II
ASSIGNMENT OF LEASES, SUBLEASES,
FRANCHISES, RENTS, ISSUES AND PROFITS
2.01 Assignment of Rents. Borrower hereby collaterally
assigns and transfers to Lender all the leases, subleases,
franchises, rents, issues and profits of the Mortgaged Property,
and hereby gives to and confers upon Lender the right, power and
authority to collect such rents, issues and profits as herein set
forth. Borrower irrevocably appoints Lender its true and lawful
attorney-in-fact. If an Event of Default shall occur and be
continuing under the Note or this Mortgage, Lender shall have the
right, at its option, immediately and without further legal
action being necessary, to demand, receive and enforce payment,
to give receipts, releases and satisfactions, and to sue, in the
name of Borrower or Lender, for all such rents, issues and
profits and apply the same to the indebtedness secured hereby;
provided, however, that Borrower shall have the right to collect
such rents, issues and profits (but not more than one month in
advance) prior to or so long as no Event of Default has occurred
and is continuing.
2.02 Collection Upon Default. If an Event of Default has
occurred and is continuing, Lender may, at any time without
notice, either in person, by agent or by a receiver appointed by
a court, and without regard to the adequacy of any security for
the indebtedness hereby secured, enter upon and take possession
of the Mortgaged Property, or any part thereof, in its own name,
sue for or otherwise collect such rents, issues and profits,
including those past due and unpaid, and apply the same, less
costs and expenses of operation and collection, including
attorneys' fees, upon any indebtedness secured hereby, and in
such order as Lender may determine. The collection of such rents,
issues and profits, or the entering upon and taking possession of
the Mortgaged Property, or the application thereof as aforesaid,
shall not cure or waive any Event of Default or notice of default
hereunder or invalidate any act done in response to any Event of
Default or pursuant to such notice of default.
2.03 Restriction on Further Assignments,. etc. Except as
hereinafter specifically provided or provided in any Permitted
Encumbrances, Borrower shall not, without the prior written
consent of Lender, assign the rents, issues or profits, or any
<PAGE>
part thereof, from the Mortgaged Property or any part thereof,
and shall not consent to the modification, cancellation or
surrender of any lease or sublease covering the Mortgaged
Property. An action of Borrower in violation of the terms of this
Section shall be void as against Lender in addition to being an
Event of Default under this Mortgage.
Borrower shall not, without the consent of Lender, consent
to the cancellation or surrender of, or accept prepayment of
rents, issues or profits (other than rent paid at the signing of
a lease or sublease) under, any lease or sublease now or
hereafter covering the Mortgaged Property or any part thereof,
nor modify any such lease or sublease so as to shorten the term,
decrease the rent, accelerate the payment of rent, or change the
terms of any renewal option; and any such purported assignment,
cancellation, surrender, prepayment or modification made without
the written consent of Lender shall be void as against Lender.
Borrower shall, upon demand of Lender, enter into an agreement
with Lender with respect to the provisions contained in the
preceding provision regarding any lease or sublease covering said
Mortgaged Property or any part thereof, and Borrower hereby
appoints Lender attorney-in-fact of Borrower to execute and
deliver any such agreement on behalf of Borrower and deliver
written notice thereof to the tenant to whose lease such
agreement relates.
Borrower agrees to furnish to Lender a copy of any
modification of any lease presently in effect and copies of all
future leases affecting the Mortgaged Property covered by this
Mortgage, and failure to furnish to Lender a copy of any
modification of a lease or a copy of any future lease affecting
said Mortgaged Property (as approved by Lender, if Lender's
approval is required) within thirty (30) days after the execution
thereof, shall be deemed a default under this Mortgage and the
Note, for which the holder of this Mortgage may, at its option,
declare the entire unpaid balance of the subject Mortgage and
Note to be immediately due and payable.
All leases or subleases hereafter entered into by Borrower
with respect to the Mortgaged Property or any part thereof, shall
be subordinate to the lien of this Mortgage unless expressly made
superior to this Mortgage in the manner hereinafter provided. At
any time or times Lender may execute and record in the
appropriate Office of the Register or County Clerk of the County
where the Premises are situated, a Notice of Subordination
reciting that the lease or leases therein described shall be
superior to the lien of this Mortgage. From and after the
recordation of such Notice of Subordination, the lease or leases
therein described shall be superior to the lien of this Mortgage
and shall not be extinguished by any foreclosure sale hereunder.
ARTICLE III
ENVIRONMENTAL CONDITION OF PREMISES
3.01 Environmental Condition of Property. Borrower hereby
warrants and represents to Lender that, to the best of its
knowledge:
<PAGE>
(a) except as set forth in subparagraph (b) below, the
Premises are now and at all times hereafter will continue to
be in full compliance with all Federal, State and local
environmental laws and regulations, including but not
limited to, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (CERCLA), Public Law
No. 96-510, 94 Stat. 2767, and the Superfund Amendments and
Reauthorization Act of 1986 (SARA), Public law No. 99-499,
100 Stat. 1613, and
(b) as of the date hereof there are no hazardous
materials, substances, waste or other environmentally
regulated substances (including without limitation, any
materials containing asbestos) located on, in or under the
Premises or used in connection therewith, except as set
forth in that certain Preliminary Contamination Assessment
Report dated October, 1992 and in that certain Work Plan For
A Supplemental Preliminary Contamination Assessment dated
March, 1994, both of which were prepared by Law
Environmental, Inc. (the "Contamination"). Borrower has
obtained and will maintain all licenses, permits and
approvals required with respect thereto, and is and will
remain in full compliance with all of the terms, conditions
and requirements of such licenses, permits and approvals.
Borrower further warrants and represents that it will
promptly notify Lender of any change in the environmental
condition of the Premises or in the nature or extent of any
hazardous materials, substances or wastes maintained on, in
or under the Premises or used in connection therewith, and
will immediately transmit to Lender copies of all citations,
orders, notices, correspondence, remediation plans and other
communications received or submitted by Borrower with
respect to the Contamination or any other hazardous
materials, substances, waste or other environmentally
regulated substance affecting the Premises.
Borrower hereby indemnifies and holds harmless Lender from
and against any and all damages, penalties, fines, claims, suits,
liabilities, costs, judgments and expenses (including attorneys',
consultant's or expert's fees) of every kind and nature incurred,
suffered by or asserted against Lender as a direct or indirect
result of:
(c) any warranty or representation made by Borrower in
this paragraph being or becoming false or untrue in any
material respect or
(d) any requirement under the law, regulation or
ordinance, local, state or federal, regarding the removal or
elimination of any hazardous materials, substances, waste or
other environmentally regulated substances, including but
not limited to the Contamination.
Borrower's obligations hereunder shall not be limited to any
extent by the term of the Note, and, as to any act or occurrence
prior to payment in full and satisfaction of said Note which
gives rise to liability hereunder, shall continue, survive and
remain in full force and effect notwithstanding foreclosure of
<PAGE>
this Mortgage, where Lender is the purchaser at the foreclosure
sale, or delivery of a deed in lieu of foreclosure to Lender, but
such obligations shall not inure to the benefit of any grantee of
Lender after foreclosure sale or delivery of a deed in lieu of
foreclosure to Lender.
ARTICLE IV
REMEDIES UPON DEFAULT
4.01 Events of Default. Any one or more of the following
shall, subject to applicable grace periods, if any, and notice
periods, if any, under the Note, constitute an Event of Default
under this Mortgage and the Note hereby secured:
(a) Failure of Borrower to make one or more payments
required by said Note on the due date thereof.
(b) Failure of Borrower to pay the amount of any
costs, expenses and fees (including reasonable counsel fees)
of Lender, with interest thereon, as required by any
provision of this Mortgage.
(c) Failure to exhibit to Lender, within ten (10) days
after written demand, receipts showing payment of real
estate taxes and assessments on the Premises.
(d) Except as hereinbefore permitted or beyond the
control of Borrower, the actual or threatened alteration,
demolition or removal of the grocery store on the Premises
without written consent of Lender, the actual alteration,
demolition or removal of which shall constitute an Incurable
Default under the Note if the same affects a substantial
part of said grocery store.
(e) Failure to maintain the Improvements on the
Premises as herein required, free of any liens other than
the Permitted Encumbrances.
(f) Failure to comply with any order or notice of
violation of law or ordinance issued by any governmental
department claiming jurisdiction over the Mortgaged Property
within three (3) months from the issuance thereof (if
failure to so comply would have a material adverse effect on
the Premises or on the business of Borrower), or before any
such violation becomes a lien against the Mortgaged
Property, whichever first occurs.
(g) Failure of Borrower or others to comply with or
perform any other covenant or agreement contained herein, in
the Note, or in the Financing Agreement between Borrower and
Lender of even date herewith (the "Financing Agreement").
(h) If any representation or warranty of Borrower
contained in this Mortgage, in the Note or in the Financing
Agreement shall be false or misleading in any material
respect on the date as of which made.
(i) The institution of any bankruptcy, reorganization
or insolvency proceedings against the then owner or Borrower
in possession of the Mortgaged Property, or any guarantor,
<PAGE>
or the appointment of a receiver or a similar official with
respect to all or a substantial part of the properties of
the then owner or Borrower in possession of the Mortgaged
Property and a failure to have such proceedings dismissed or
such appointment vacated within a period of forty-five (45)
days, which shall constitute an Incurable Default under the
Note.
(j) The making of a general assignment by Borrower for
the benefit of its creditors, or the institution of any
voluntary bankruptcy, reorganization or insolvency
proceedings by the then owner or Borrower in possession of
the Mortgaged Property, or any guarantor, or the appointment
of a receiver or a similar official with respect to all or a
substantial part of the properties of the then owner or
Borrower in possession of the Mortgaged Property at the
instance of the then owner or Borrower in possession of the
Mortgaged Property, any of which shall constitute an
Incurable Default under the Note.
(k) The making of any general levy, seizure,
forfeiture action, enforcement or attempted enforcement of
any mechanic's or materialman's lien or attachment on the
Mortgaged Property or any part thereof.
(l) If default shall occur (i) under the Lease and be
continuing following the expiration of any notice and cure
periods thereunder; or (ii) under any loan or credit
agreement now or hereafter in existence between Lender and
Borrower or their respective affiliates or any other loan or
indebtedness owed by Borrower to Lender or its affiliates,
and as a result of the default the party thereto other than
Borrower accelerates the maturity of more than $500,000.00
in principal amount of indebtedness owed to that party by
Borrower.
(m) The occurrence of any Event of Default (as defined
therein) under the Note or the Financing Agreement whether
or not such event is specifically set forth herein.
(n) Any default shall occur and be continuing under
the mortgage in favor of Security Pacific National Bank and
First Florida Bank, N.A. referred to in item 1 of Exhibit
"B" hereto and, as a result thereof, the mortgagee thereof
shall either (i) exercise any of the remedies against the
Premises provided in the mortgage or (ii) accelerate the
maturity of more than $500,000.00 in principal amount of
indebtedness secured by the mortgage.
(o) In the event that either:
(i) all or substantially all of the Premises is
sold, conveyed, leased, assigned, encumbered or otherwise
transferred by Borrower, without Lender's prior written
consent (which shall not be unreasonably withheld),
(ii) Borrower issues, after the date hereof, newly
issued shares (or shares held in treasury) which are shares
<PAGE>
of voting common stock of Borrower (other than shares of
voting common stock issued pursuant to any compensatory plan
or agreement for the benefit of any employee of Borrower)
representing in excess of twenty percent (20%) of the
aggregate voting power of the shares of voting common stock
of Borrower which are issued and outstanding (including
shares issuable upon exercise of options, warrants and other
rights to acquire shares of voting common stock which are
then outstanding) immediately prior to the new issuance (or
reissuance) and Borrower receives net cash proceeds from the
new issuance (or reissuance) of at least $20,000,000, or
(iii) debentures with an aggregate principal
amount of at least $70,000,000 and which were issued under
either (a) the Indenture dated as of September 14, 1989
between Borrower and NCNB National Bank of Florida, (b) the
Indenture dated as of January 29, 1992 between Borrower and
Ameritrust Texas, N.A. or (c) the Indenture dated as of
February 8, 1989 between Borrower and First Florida Bank,
N.A. (such debentures being referred to herein as the "Debt
Securities") are amended (or the indentures governing the
terms of the Debt Securities are amended) to reduce the
interest rates applicable thereto or extend the payment
terms thereof and, as a result of or in connection with the
amendment, Borrower has available to it additional debt
financing of at least $10,000,000 which is committed for a
term of one year or more, any of which shall, at Lender's
option, constitute an Incurable Default under the Note.
4.02 Default Rate. The Default Rate shall be eighteen
percent (18%) per annum; provided, however, that at no time shall
any interest or charges in the nature of interest be taken,
exacted, received or collected which would exceed the maximum
rate permitted by law.
4.03 Acceleration Upon Default. Additional Remedies. In the
event that one or more Events of Default shall occur and be
continuing, the remedies available to Lender shall include, but
not necessarily be limited to, any one or more of the following:
(a) Lender may declare the entire unpaid balance of
the Note immediately due and payable by written notice to
Debtor (except with respect to an Event of Default under
Section 4.01(i) or 4.01(j), for which no notice of such
acceleration shall be required), without presentment,
demand, or protest or other requirements of any kind
(including without limitation, valuation and appraisement,
diligence, presentment, notice of intent to demand or
accelerate and of acceleration), all of which are hereby
waived by Debtor.
(b) Lender may take immediate possession of the
Mortgaged Property or any part thereof (which Borrower
agrees to surrender to Lender) and manage, control or lease
the same to such person or persons and at such rental as it
may deem proper and collect all rents, issues and profits
therefrom, including those past due as well as those
thereafter accruing, with the right in Lender to cancel any
lease or sublease for any cause which would entitle Borrower
<PAGE>
to cancel the same; to make such expenditures for
maintenance, repairs and costs of operation as it may deem
advisable; and after deducting the cost thereof and a
commission of five (5%) parent upon the gross amount of
rents collected, to apply the residue to the payment of any
sums which are unpaid hereunder or under the Note. The
taking of possession under this paragraph shall not prevent
concurrent or later proceedings for the foreclosure sale of
the Mortgaged Property as provided elsewhere herein.
(c) Lender may apply to any court of competent
jurisdiction for the appointment of a receiver or similar
official to manage and operate the Mortgaged Property, or
any part thereof, and to apply the net rents and profits
therefrom to the payment of the interest and/or principal of
said Note and/or any other obligations of Borrower to Lender
hereunder. In event of such application, Borrower agrees to
consent to the appointment of such receiver or similar
official, and agrees that such receiver or similar official
may be appointed without notice to Borrower without regard
to the adequacy of any security for the debts and without
regard to the solvency of Borrower or any other person, firm
or corporation who or which may be liable for the payment of
the Note or any other obligation of Borrower hereunder.
(d) Without declaring the entire unpaid principal
balance due, Lender may foreclose only as to the sum past
due, without injury to this Mortgage or the displacement or
impairment of the remainder of the lien thereof, and at such
foreclosure sale the property shall be sold subject to all
remaining items of indebtedness; and Lender may again
foreclose, in the same manner, as often as there may be any
sum past due.
4.04 Additional Provisions. Borrower expressly agrees, on
behalf of itself, its successors and assigns and any future owner
of the Mortgaged Property, or any part thereof or interest
therein, as follows:
(a) All remedies available to Lender with respect to
this Mortgage shall be cumulative and may be pursued
concurrently or successively. No delay by Lender in
exercising any such remedy shall operate as a waiver thereof
or preclude the exercise thereof during the continuance of
that or any subsequent default.
(b) The obtaining of a judgment or decree on the Note,
whether in the State of Florida or elsewhere, shall not in
any manner affect the lien of this Mortgage upon the
Mortgaged Property covered hereby, any judgment or decree so
obtained shall be secured to the same extent as said Note is
now secured.
(c) In the event of any foreclosure sale hereunder,
all net proceeds shall be available for application to the
indebtedness hereby secured whether or not such proceeds may
exceed the value of the Mortgaged Property for unpaid taxes,
liens, assessments and any other costs relating to the
Mortgaged Property.
<PAGE>
(d) The only limitation upon the foregoing agreements
as to the exercise of Lender's remedies is that there shall
be but one full and complete satisfaction of the
indebtedness secured hereby.
(e) Borrower shall duly, promptly and fully perform
each and every term and provision of any document which has
been executed and delivered by the parties hereto in
connection with the execution and delivery hereof, the terms
of which are incorporated herein by reference. The lien of
this Mortgage secures the payment of all sums payable to
Lender and the performance of all covenants and agreements
of Borrower under the terms of any such other documents.
4.05 Remedies Not Exclusive. Lender shall be entitled to
enforce payment and performance of any indebtedness or
obligations secured hereby and to exercise all rights and powers
under this Mortgage or the Note or under any other agreement or
any laws now or hereafter in force, notwithstanding some or all
of the said indebtedness and obligations secured hereby may now
or hereafter be otherwise secured, whether by mortgage, deed of
trust, pledge, lien, assignment or otherwise. Neither the
acceptance of this Mortgage nor its enforcement shall prejudice
or in any manner affect Lender's right to realize upon or enforce
any other security now or hereafter held by Lender, it being
agreed that Lender shall be entitled to enforce this Mortgage and
any other security now or hereafter held by Lender in such order
and manner as Lender may in its absolute discretion determine. No
remedy herein conferred upon or reserved to Lender is intended to
be exclusive of any other remedy herein or by law provided or
permitted, but each shall be cumulative and shall be in addition
to every other remedy given hereunder or now or hereafter
existing at law or in equity or by statute. Every power or remedy
given to Lender or to which it may be otherwise entitled may be
exercised, concurrently or independently, from time to time and
as often as may be deemed expedient by Lender and it may pursue
inconsistent remedies.
ARTICLE V
MISCELLANEOUS
5.01 Corporate Existence. Borrower shall at all times
maintain its corporate existence and shall be fully authorized to
do business in the State of Florida and shall maintain in the
State of Florida a duly authorized registered agent for the
service of process. Failure to comply with such obligations shall
be a default under this Mortgage. Within ninety (90) days after
the expiration of the time for filing its annual report and the
payment of the appropriate corporate taxes in the State of
Florida, Borrower will furnish to Lender a certificate of good
standing or other evidence satisfactory to Lender to show
compliance with the provisions of this Section.
5.02 Statements by Borrower. Borrower, within three (3) days
after request in person or within ten (10) days after request by
mail, will furnish to Lender or any person, firm or corporation
designated by Lender, a duly acknowledged written statement
setting forth the amount of the debt secured by this Mortgage,
and stating either that no offsets or defenses exist against such
debt, or, if such offsets or defenses are alleged to exist, full
information with respect to such alleged offsets and/or defenses.
<PAGE>
5.03 Successors and Assigns. The provisions hereof shall be
binding upon and shall inure to the benefit of Borrower, its
successors and assigns, including without limitation subsequent
owners of the Premises or the leasehold estate of the Premises or
any part thereof; shall be binding upon and shall inure to the
benefit of Lender, its successors and assigns and any future
holder of the Note, and any successors or assigns of any future
holder of the Note; provided, however, that Lender shall not
assign the Note or this Mortgage, other than to an entity owned
(directly or indirectly) wholly by the sole stockholder or a
wholly-owned subsidiary of Lender, without Borrower's prior
written consent. In the event the ownership of the Mortgaged
Property or any leasehold estate that may be covered by this
Mortgage, becomes vested in a person other than Borrower, Lender
may, without notice to Borrower, deal with such successor or
successors in interest with reference to this instrument and the
Note in the same manner as with Borrower, and may alter the
interest rate and/or alter or extend the terms of payment of the
Note without notice to Borrower hereunder or under the Note
hereby secured or the lien or priority of this Mortgage with
respect to any part of the Mortgaged Property covered hereby, but
nothing herein contained shall serve to relieve Borrower of any
liability under the Note or this Mortgage (or any other agreement
executed in conjunction therewith) unless Lender shall expressly
release Borrower in writing. Borrower and any transferee or
assignee shall be jointly and severally liable for any
documentation or intangible taxes imposed as a result of any
transfer or assumption.
5.04 Notice. All notices, demands and requests given by
either party hereto to the other party shall be in writing. All
notices, demands and requests by Lender to Borrower shall be
deemed to have been properly given if sent by United States
registered or certified mail, postage prepaid or via overnight
courier requiring receipt to the address of Borrower set forth in
the heading hereof. All notices, demands and requests by Borrower
to Lender shall be deemed to have been properly given if sent by
United States registered or certified mail, postage prepaid or
via overnight courier requiring receipt, addressed to Lender at
5364 Ehrlich Road #125, Tampa, Florida 33625. Notice shall be
sent to such other addresses as the parties may from time to time
designate by written notice to the other as herein required.
Borrower shall deliver to Lender, promptly upon receipt of
same, copies of all notices, certificates, documents and
instruments received by it which materially affect any part of
the Mortgaged Property covered hereby, including, without
limitation, notices from the lessor under the Lease and any
lessee or sublessee claiming that Borrower is in default under
any terms of the Lease or of any lease or sublease.
5.05 Modifications in Writing. This Mortgage may not be
changed, terminated or modified orally or in any other manner
than by an instrument in writing signed by the party against whom
enforcement is sought.
5.06 Captions. The captions or headings at the beginning of
each Section hereof are for the convenience of the parties and
are not a part of this Mortgage.
<PAGE>
5.07 Invalidity of Certain Provisions. If the lien of this
Mortgage is invalid or unenforceable as to any part of the debt,
or if the lien is invalid or unenforceable as to any part of the
Mortgaged Property, the unsecured portion of the debt shall be
completely paid prior to the payments of the secured portion of
the debt, and all payments made on the debt, whether voluntary or
otherwise, shall be considered to have been first paid on and
applied to the full payment of that portion of the debt which is
not secured or fully secured by the lien of this Mortgage.
5.08 No Merger. If both the lessor's and lessee's estates
under any lease or any portion thereof which constitutes a part
of the Mortgaged Property shall at any time become vested in one
owner, this Mortgage and the lien created hereby shall not be
destroyed or terminated by application of the doctrine of merger
and, in such event, Lender shall continue to have and enjoy all
of the rights and privileges of Lender as to the separate
estates. In addition, upon the foreclosure of the lien created by
this Mortgage on the Mortgaged Property pursuant to the
provisions hereof, any leases or subleases then existing and
created by Borrower shall not be destroyed or terminated by
application of the law of merger or as a result of such
foreclosure sale unless Lender shall so elect. No act by or on
behalf of Lender or any such purchaser shall constitute a
termination of any lease or sublease unless Lender or such
purchaser shall give written notice thereof to such tenant or
subtenant.
5.09 Governing Law and Construction of Clauses. This
Mortgage shall be governed and construed by the laws of the State
of Florida. No act of Lender shall be construed as an election to
proceed under any one provision of the Mortgage or of the
applicable statutes of the State of Florida to the exclusion of
any other such provision, anything herein or otherwise to the
contrary notwithstanding.
5.10 Books and Records. Borrower shall furnish quarterly to
Lender complete, true and accurate books of accounts and records
reflecting the results of the operation of the Mortgaged
Property, as well as a copy of Borrower's balance sheet and a
statement of income and expenses, both in reasonable detail,
prepared in a form acceptable to Lender.
5.11 Financial Statements. If requested by Lender, Borrower
will within ninety (90) days after the end of each fiscal year,
furnish to Lender a complete financial statement including profit
and loss, balance sheet and reconciliation of surplus which
statement shall, at Lender's option, be certified without
qualification by audit of the certified public accountant
regularly serving Borrower. The cost of such audit shall be paid
by Borrower. Borrower shall further furnish to Lender copies of
all quarterly reports filed with the federal Securities and
Exchange Commission as the same are filed.
5.12 WAIVER OF JURY TRIAL. BY THE EXECUTION HEREOF, BORROWER
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY AGREES, THAT:
(A) NEITHER BORROWER NOR ANY ASSIGNEE, SUCCESSOR, HEIR OR
LEGAL REPRESENTATIVE OF ANY OF THE SAME SHALL SEEK A JURY TRIAL
IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER LITIGATION
<PAGE>
PROCEDURE ARISING FROM OR BASED UPON THIS MORTGAGE, THE NOTE, ANY
OTHER LOAN AGREEMENT OR ANY LOAN DOCUMENT EVIDENCING, SECURING OR
RELATING TO THE OBLIGATIONS OR TO THE DEALINGS OR RELATIONSHIP
BETWEEN OR AMONG THE PARTIES THERETO;
(B) NEITHER BORROWER NOR LENDER WILL SEEK TO CONSOLIDATE
ANY SUCH ACTION, IN WHICH A JURY TRIAL HAS BEEN WAIVED, WITH ANY
OTHER ACTION IN WHICH A JURY TRIAL HAS NOT BEEN OR CANNOT BE
WAIVED;
(C) THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY
NEGOTIATED BY THE PARTIES HERETO, AND THESE PROVISIONS SHALL BE
SUBJECT TO NO EXCEPTIONS;
(D) NEITHER BORROWER NOR LENDER HAS IN ANY WAY AGREED WITH
OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS
PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES; AND
(E) THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER TO
ENTER INTO THIS TRANSACTION.
(SIGNATURE BLOCK ON ATTACHED PAGE)
IN WITNESS WHEREOF. Borrower has executed this Mortgage as
of the day and year first hereinbefore written.
Signed, sealed and delivered KASH n' KARRY FOOD STORES, INC.
in the presence of:
/s/ Leslie Wager Hudock By: /s/ Raymond P. Springer
Name: Leslie Wager Hudock Raymond P. Springer,
Executive Vice President
(SEAL)
/s/ William R. Bird, Jr.
Name: William R. Bird, Jr.
STATE OF FLORIDA
COUNTY OF HILLSBOROUGH
The foregoing instrument was acknowledged before me this
14th day of April, 1993 by Raymond P. Springer, as Executive Vice
President of KASH N' KARRY FOOD STORES, INC., a Delaware
corporation, on behalf of the corporation. He is personally known
to me and did not take an oath.
<PAGE>
/s/ Leslie Wager Hudock
Notary Signature
Leslie Wager Hudock
Printed Notary Name
NOTARY PUBLIC, STATE OF FLORIDA
Commission Number:
My Commission Expires:
<PAGE>
EXHIBIT "A"
(Store #722 - Swann Ave.)
PARCEL I
That part of Block 2 of SWANN AND HOWARD AVENUES SUBDIVISION,
according to the map or plat thereof as recorded in Plat Book 9,
Page 59, of the Public Records of Hillsborough County, Florida,
described as follows:
BEGINNING at the Northeast corner of Lot 18 of said Block 2, run
thence South (assumed bearing), 440.50 feet, along the East
boundary of said Block 2 (West right-of-way line of ALBANY
AVENUE), to the Southeast corner of Lot 10 of said Block 2;
thence .89DEG.54'24"W., 270.09 feet, along the South boundary of
said Block 2 (North right-of-way line of INMAN AVENUE), to a
point 13.28 feet East of the Southwest corner of Lot 9 of said
Block 2; thence N.00DEG.02'13"W., 325.00 feet to a point 15.50
feet South of the North boundary and 13.07 feet East of the West
boundary of Lot 3 of said Block 2; thence N.89DEG.54'24"W., 13.07
feet, parallel with the North boundary of said Lot 3, to the West
boundary of said Block 2; thence North, 65.50 feet, along the
West boundary of said Block 2 (East right-of-way line of WESTLAND
AVENUE), to the Northwest corner of Lot 2 of said Block 2; thence
S.89DEG.54'24"E., 141.685 feet, along the North boundary of said
Lot 2 and an Easterly extension thereof to the centerline of the
platted alley (now closed) in said Block 2; thence North, 50.89
feet, along the centerline of said platted alley, to the South
right-of-way line of SWANN AVENUE; thence S.89DEG.32'47"E.,
141.685 feet, along the North boundary of said Lot 18 and a
Westerly extension thereof (South right-of-way line of SWANN
AVENUE), to the POINT OF BEGINNING.
LESS the following described real property:
That part of Lot 2 and 3, Block 2, SWANN AND HOWARD AVENUES
SUBDIVISION, according to the map or plat thereof as recorded in
Plat Book 9, Page 59, of the Public Records of Hillsborough
County, Florida, described as follows:
BEGINNING at the Northwest corner of Lot 2, Block 2, of said
SWANN AND HOWARD AVENUES SUBDIVISION, run thence S. 89DEG.
54'24"E., 13.03 feet, along the North boundary of said Lot 2
(South boundary of Lot 1 of said Block 2); thence S. 00DEG.
02'13"E., 50.00 feet to the South boundary of said Lot 2;
continue S. 00DEG.02'13"E. 15.50 feet to the South boundary of
the North 15.50 feet of said Lot 3; then N. 89DEG.54'24"W.,
13.07 feet, along the South boundary of the North 15.50 feet of
said Lot 3, to the West boundary of said Lot 3; thence North,
65.50 feet, along the West boundary of said Lots 3 and 2 (East
right-of-way line of WESTLAND AVENUE), to the POINT OF BEGINNING.
<PAGE>
PARCEL II
That part of Block 3 of Swann and Howard Avenues Subdivision,
according to the map or plat thereof as recorded in Plat Book 9,
Page 59 of the Public Records of Hillsborough County, Florida,
described as follows:
Beginning at the Northeast corner of Lot 13 of said Block 3, run
thence South (assumed bearing), 140.50 feet, along the East
boundary of said Block 3 (West right-of-way line of Albany
Avenue), to the Southeast corner of Lot 11 of said Block 3;
thence North 89DEG.54'24" West, 269.97 feet, along the South
boundary of said Block 3, to a point on the South boundary of Lot
8 of said Block 3; thence North 00DEG.02'13" West, 140.50 feet to
a point on the North boundary of said Lot 8; thence South 89DEG.
54'24" East, 270.06 feet, along the North boundary of said Block
3 (South right-of-way line of Inman Avenue), to the Point
of Beginning.
Page 1 of 2
EXHIBIT "A"
(Store #722 - Swann Ave.)
PARCEL III
Lot 1, Block 2, SWANN AND HOWARD AVENUES SUBDIVISION, together
with that part of the West 1/2 of vacated alley lying between the
North and South line of said Lot 1 extended, according to the map
or plat thereof recorded in Plat Book 9, Page 59, Public Records
of Hillsborough County, Florida.
LESS the following described real property:
BEGINNING at the Northwest corner of Lot 1, Block 2 of said SWANN
AND HOWARD AVENUES SUBDIVISION, run thence S. 89DEG.32'47"E.,
12.99 feet, along the North boundary of said Lot 1 (South right-
of-way line of SWANN AVENUE); thence S.00DEG.02'13"E. 51.70 feet
to the South boundary of said Lot 1; thence N. 89DEG.54'24"W.,
13.03 feet, along the South boundary of said Lot 1, to the
Southwest corner thereof; thence North, 51.78 feet, along the
West boundary of said Lot 1 (East right-of-way line of WESTLAND
AVENUE), to the POINT OF BEGINNING.
VACATED PROPERTY:
<PAGE>
PARCEL IV
That part of INMAN AVENUE described as follows:
BEGINNING at the intersection of the centerline of INMAN AVENUE
with the West right-of-way line of ALBANY AVENUE, run thence
SOUTH (assumed bearing), 25.00 feet to the Northeast corner of
Lot 13, Block 3 of SWANN AND HOWARD AVENUES SUBDIVISION,
according to the map or plat thereof as recorded in Plat Book 9,
Page 59, of the Public Records of Hillsborough County, Florida;
thence N.89DEG.54'24"W., 270.06 feet along the North boundary of
said Block 3, to a point on the North boundary of Lot 8 of said
Block 3; thence N. 00DEG.02'13"W., 25.00 feet to the centerline
of INMAN AVENUE, thence S.89DEG.54'24"E., 270.07 feet, along
said centerline, to the POINT OF BEGINNING.
BASIS OF BEARINGS: For purposes of this description, the East
boundary of SWANN AND HOWARD AVENUES SUBDIVISION, according to
the map or plat thereof as recorded in Plat Book 9, Page 59, of
the Public Records of Hillsborough County, Florida, is assumed to
have a bearing of SOUTH.
PARCEL V
That part of INMAN AVENUE described as follows:
BEGINNING at the Southeast corner of Lot 10, Block 2 of SWANN AND
HOWARD AVENUES SUBDIVISION, according to the map or plat thereof
as recorded in Plat Book 9, Page 59, of the Public Records of
Hillsborough County, Florida, run thence South (assumed bearing),
25.00 feet to the intersection of the centerline of INMAN AVENUE
with the West right-of-way line of ALBANY AVENUE; thence
N89DEG.54'24"W., 270.07 feet along said centerline; thence
N00DEG.02'13"W., 25.00 feet to a point on the South boundary of
Lot 9 of Block 2, thence S.89DEG.54'24"E., 270.09 feet, along the
South boundary of Block 2, to the POINT OF BEGINNING.
BASIS OF BEARINGS: For purposes of this description, the East
boundary of SWANN AND HOWARD AVENUES SUBDIVISION, according to
the map or plat thereof as recorded in Plat Book 9, Page S5, of
the Public Records of Hillsborough County, Florida, is assumed to
have a bearing of SOUTH.
Page 2 of 2
<PAGE>
EXHIBIT "B"
1. That certain mortgage from Kash n' Karry Food Stores,
Inc., a Delaware corporation, to Security Pacific
National Bank and First Florida Bank, N.A. dated
October 12, 1988 and recorded October 13, 1988 in
Official Records Book 5526, Page 923, of the Public
Records of Hillsborough County, Florida in the original
principal amount of $2,200,000.00, as modified by
instrument recorded in Official Records Book 5786, Page
1085 and re-recorded in Official Records Book 5807,
Page 433, and by that Future Advance Notice and
Mortgage Modification Agreement Recorded July 16, 1990
in Official Records Book 6029, Page 238, and by that
Future Advance Notice and Mortgage Correction Agreement
recorded December 14, 1992 in Official Records Book
6824, Page 297 and Mortgage Modification, Fixture
Filing and Spreader Agreement recorded January 22, 1993
in Official Records Book 6862, Page 1873, and by that
Mortgage Modification, Fixture Filing and Spreader
Agreement recorded April 15, 1994 in Official Records
Book 7360, Page 1184, all among the Public Records of
Hillsborough County, Florida, as the same may be
amended from time to time.
2. Sanitary Sewer Maintenance Agreement by and between
City of Tampa and Inman Plaza, Swann Plaza and Eli
Blumenfeld, as contained in instrument dated November
30, 1990 and recorded August 30, 1991 in Official
Records Book 6350, Page 312, of the Public Records of
Hillsborough County, Florida.
3. That certain unrecorded Ground Lease, dated December
26, 1991 between Eli Blumenfeld, Landlord and Kash n'
Karry Food Stores, Inc., a Delaware corporation,
Tenant, pursuant to which a Short Form of Lease was
filed December 27, 1991 in Official Records Book 6473,.
Page 1630, as modified by First Modification of Lease
filed September 2, 1993 in Official Records Book 7103,
Page 1217, all of the Public Records of Hillsborough
County, Florida.
4. That certain Easement granted to Tampa Electric Company
contained in instrument dated September 14, 1992 and
recorded November 3, 1992 in Official Records Book
6781, Page 800, of the Public Records of Hillsborough
County, Florida.
5. That certain Easement and Declaration of Restrictions
Agreement dated September 1, 1993 and recorded
September 17, 1993 in Official Records Book 7120, Page
691, of the Public Records of Hillsborough County,
Florida.
<PAGE>
6 That certain Easement between and among Eli Blumenfeld
and Kash n' Karry Food Stores, Inc., a Delaware
corporation, and Swann Plaza, a Florida general
partnership, and Inman Plaza, a Florida general
partnership, contained in instrument dated September 1,
1993 and recorded September 17, 1993 in Official
Records Book 7120, Page 711, of the Public Records of
Hillsborough County, Florida.
108005\ROCKGX
2
<PAGE>
FINANCING AGREEMENT
THIS FINANCING AGREEMENT (hereinafter referred to as the
"Agreement") is made and entered into as of the l5th day of
April, 1994 by and between KASH n' KARRY FOOD STORES, INC., a
Delaware corporation (hereinafter referred to as "Debtor"), and
HP FINANCE CORP., a Florida corporation (hereinafter referred to
as "Secured Party").
W I T N E S S E T H:
THAT WHEREAS, Secured Party and Debtor have agreed to enter
into a secured transaction involving a debt owed by Debtor to
Secured Party in the amount of THREE MILLION FIVE HUNDRED
THOUSAND AND NO/100 DOLLARS ($3,500,000.00) (hereinafter referred
to as the "Loan"), which is evidenced and secured by a Mortgage
Note (hereinafter referred to as the "Note"), a Mortgage and
Security Agreement (hereinafter referred to as the "Mortgage")
and other documents (hereinafter referred to together with the
Note, the Mortgage and this Agreement as the "Loan Documents");
and
WHEREAS, Secured Party and Debtor desire to set forth
certain terms, covenants, conditions and representations with
respect to the Loan.
NOW THEREFORE, for and in consideration of the mutual
covenants, conditions, representations and undertakings set forth
herein, and in the other Loan Documents, and for other good and
valuable considerations, the receipt and sufficiency of which are
hereby acknowledged, Secured Party and Debtor hereby covenant,
stipulate, represent and agree as follows:
<PAGE>
1. Basis of Loan. Secured Party is a wholly-owned
subsidiary of a trade supplier of Debtor to whom Debtor is
indebted for products supplied in the ordinary course of Debtor's
business. Debtor has agreed to repay such trade indebtedness (in
the principal amount of the Loan) on the terms set forth in the
Note, and to secure its obligation to repay that amount of the
indebtedness (together with interest thereon and other sums due
as provided in the Mortgage) by the lien granted under the
Mortgage. Pursuant to an assignment of even date herewith,
Secured Party has acquired from its parent (the aforesaid trade
supplier) all of the parent's rights under and in connection with
(i) the trade debt owed to it and incurred by Debtor in the
ordinary course of its business (in an amount equal to the
principal amount of the Loan), and (ii) Debtor's commitment and
agreement to enter into the Mortgage and to grant the liens and
encumbrances provided for therein. Debtor acknowledges, covenants
and agrees that the repayment of the Loan pursuant to the terms
of the Note (instead of the repayment of the outstanding debt
under the terms established therefor), together with various
forbearances, extensions and other valuable benefits provided to
Debtor, constitutes good and valuable consideration for the
execution and delivery of the Loan Documents by Debtor, and that
Debtor will not challenge, question or assert as a defense to the
enforceability of the Loan Documents, a lack of consideration to
Debtor for the execution and delivery of the same.
2. Representations of Debtor. Debtor represents and
warrants to Secured Party as of the date hereof and continuing
throughout the term of the Loan as follows:
<PAGE>
Section 2.1. Lease. Debtor owns and holds leasehold
title to the property described in Exhibit "A" attached hereto
and made a part hereof (hereinafter referred to as the
"Property") pursuant to that certain Lease Agreement executed by
Eli Blumenfeld, as landlord, and by Debtor, as tenant, dated
December 26, 1991 a short form of which is recorded in Official
Records Book 6473, Page 1630, as modified by that certain First
Modification of Lease recorded in Official Records Book 7103,
Page 1217, both among the Public Records of Hillsborough County,
Florida (hereinafter referred to together as the "Lease"), free
and clear of all liens and encumbrances except those identified
in Exhibit "B" attached hereto (hereinafter referred to as
the"Permitted Encumbrances").
Section 2.2. Authority.Debtor is a corporation duly
organized and validly existing under the laws of the State of
Delaware, is qualified as a foreign corporation in the State of
Florida and has full right, power and authority to enter into the
Loan Documents, to own the Mortgaged Property (as defined in the
Mortgage), to execute, deliver, and comply with the terms of the
Lease, and to execute, deliver, and comply with the terms of the
Loan Documents, for which no approval or consent of any other
third party, organization or court is required which has not been
obtained.
Section 2.3. Other Agreements.There are no provisions
(other than provisions for which a waiver is in effect) in any
indenture, contract, agreement, or other document controlling or
affecting Debtor or to which Debtor is a party or by which Debtor
is bound which prohibit the execution and delivery by Debtor of
this Agreement or the other Loan Documents or the observance and
<PAGE>
performance by Debtor of any other terms and conditions of this
Agreement or the other Loan Documents.
Section 2.4. No Violation.Neither the execution and
delivery of the Loan Documents by Debtor, nor the performance of
its obligations thereunder, will violate or constitute a default
under any provision of law presently in effect and applicable to
Debtor, or under any indenture, contract, agreement, or other
document to which Debtor is a party, including but not limited to
the Lease and the Permitted Encumbrances.
Section 2.5. Enforceable Documents. The Mortgage
constitutes a good and valid mortgage lien against the Mortgaged
Property, subject only to the Perrnitted Encumbrances, and this
Agreement and the other Loan Documents constitute valid, legal,
and binding obligations of Debtor and will be enforceable against
Debtor in accordance with their terms (subject as to enforcement
of remedies to any debtor relief laws or principles of equity
affecting the enforcement of creditors' rights generally).
Section 2.6. Litigation. As of the date hereof, there
is no litigation pending or threatened against Debtor that could
have a material adverse effect upon Secured Party's rights under
the Loan Documents.
Section 2.7. No Default. As of the date hereof Debtor
is not in default, except for defaults that have been waived, (a)
under any instrument or agreement under or subject to which any
debt for borrowed money has been issued, or (b) under any
mortgage, deed of trust, lease, loan or credit agreement,
partnership agreement or other instrument to which Debtor is a
party or by which Debtor is bound or affected, and, to the best
of Debtor's knowledge, no event has occurred under the provisions
<PAGE>
of any such instrument which, with or without the lapse of time
or the giving of notice or both, constitutes or will constitute
an event of default thereunder.
Section 2.8. Approval and Consent. No approval,
authorization, or consent of any court, board, agency or
governmental instrumentality is required for the proper
execution, delivery, and performance of this Agreement and the
other Loan Documents by Debtor.
Section 2.9. Flood Plain. No portion of the Property
is located within a designated flood hazard area.
Section 2.10. Taxes. All federal, state, foreign, and
other tax returns of Debtor required to be filed as of the date
hereof have been filed, and all federal, state, foreign, and
other taxes imposed upon Debtor which are due and payable have
been paid other than taxes reserved against in accordance with
generally accepted accounting principles and which are being
contested in good faith under appropriate proceedings.
Section 2.11. Legal Requirements.As of the date
hereof, to the best knowledge of Debtor, and except as set forth
in Section 2.13 hereof, (i) no violation of any laws exists with
respect to the Property, (ii) Debtor's use and operation of the
Property complies with all public and private legal requirements,
including, without limitation, building codes, zoning (if any),
and private covenants appealable to the Property generally, and
(iii) all such legal requirements have been satisfied.
Section 2.12. Solvency. As of the date hereof, there
are no proceedings under bankruptcy or any debtor relief laws
pending or contemplated by, or, to the knowledge of Debtor,
against, Debtor.
<PAGE>
Section 2.13. Real Property Environmental Matters. As
of the date hereof, to the best of Debtor's knowledge, and except
as has been disclosed to Secured Party in writing; (a) the
Property and the operations conducted thereon do not violate any
order of any court or tribunal or any laws, rules or regulations
governing the generation, storage, handling, transport or
disposal of any materials or substances defined as hazardous or
toxic under any such federal or state laws, rules or regulations
or any petroleum or petroleum based products (hereinafter
referred to as "Hazardous Materials") (all such orders, laws,
rules, and regulations governing the generation, handling,
storage, transport or disposal of any Hazardous Materials are
hereinafter referred to as "Environmental Laws"); (b) without
limitation of clause (a) above, neither the Property nor the
operations currently conducted thereon nor any operations
conducted by any prior owner or operator of the Property are in
violation of or subject to any existing, pending or threatened
action, suit, investigation, inquiry or proceeding by or before
any court or tribunal, or in violation of any remedial
obligations under any Environmental Laws, except as has been
disclosed to Secured Party in writing; (c) all notices, permits,
licenses and similar authorizations, if any, required to be
obtained or filed in connection with the operation and use of the
Property and relating to past or present treatment, storage,
disposal or release of any Hazardous Materials into the
environment, have been duly obtained or filed; (d) no Hazardous
Materials have been disposed of or otherwise released and there
has been no threatened releases of any Hazardous Materials on or
to the Property or, to the extent that any such disposition or
<PAGE>
release of Hazardous Materials has previously occurred, such
matters have been resolved and remedied, or are being resolved
and remedied and will continue to be diligently resolved and
remedied, in compliance with all applicable Environmental Laws;
and (e) Debtor has no material contingent liability in connection
with any release or threatened release of any Hazardous Materials
into the environment from or with respect to the Property. Debtor
will pursue with all due diligence the assessment and remediation
of the Contamination on the Property (as described in the
Mortgage) in accordance with all Environmental Laws and orders of
the Florida Department of Environmental Protection.
Section 2.14. General. There are no facts or
conditions relating to the Loan Documents, the Mortgaged
Property, and/or the financial condition and business of Debtor
that would cause a material adverse effect thereto that are known
to Debtor as of the date hereof and that have not been
communicated, in writing, to Secured Party, and all writings
heretofore and hereafter exhibited or delivered to Secured Party
by or on behalf of Debtor under or in connection with the Loan
Documents are and will be genuine in all respects and are what
they purport and appear to be.
Section 2.15. Financial Condition. The financial
statements of Debtor filed with the Securities and Exchange
Commission for the period ended January 31, 1994, copies of-which
have been delivered to Secured Party, were prepared in accordance
with generally accepted accounting principles, consistently
applied, and fully and accurately reflect the financial condition
and changes in financial position of Debtor as of the date or
dates and for the period or periods stated. No change, either in
<PAGE>
any case or in the aggregate, has since occurred in the
condition, financial or otherwise, of Debtor as reflected in the
above-described financial statements that would have a material
adverse effect upon the condition, financial or otherwise, of
Debtor or upon its ability to perform its obligations under the
Loan Documents. Debtor has not made investments in, advances to
or guaranties of the obligations of any person, except as
reflected in Debtor's financial statements or disclosed to
Secured Party in writing.
Section 2.16. No Debt. As of the date hereof, Debtor
has no debt obligations of any kind or nature to any person with
respect to the Mortgaged Property other than the Loan, the
Permitted Encumbrances, the obligations secured by that certain
UCC- l Financing Statement naming Heller Financial, Inc. as
Secured Party recorded in Official Records Book 7055, Page 1981
of the Public Records of Hillsborough County, Florida, and
current obligations for property and services purchased for and
in connection with the operation of Debtor's grocery store on the
Property.
Section 2.17. Improvements. To the best of Debtor's
knowledge, all buildings, structures and improvements on the
Property have been constructed substantially in accordance with
the plans, specifications and permits prepared and issued
therefor, and in accordance with all applicable laws, rules and
regulations, including but not limited to the Americans With
Disabilities Act, and all operating systems within such
improvements or otherwise forming a part of the Property,
including but not limited to all plumbing, mechanical, electrical
and drainage systems (and the roof), are in good working order
and condition.
<PAGE>
Section 2.18. Operations. Debtor shall continue to
operate its grocery store on the Property, in a manner and on a
basis substantially similar to that in which the same is
currently being operated.
3. Default
Section 3.01 Events of Default. Any one or more of the
following shall, subject to applicable grace periods, if any, and
applicable notice requirements and cure periods, if any, set
forth in the Note, constitute an Event of Default under this
Agreement and under the Mortgage and the Note:
(a) Failure of Debtor to make one or more payments
required by the Note on the due date thereof.
(b) Failure of Debtor to pay the amount of any costs,
expenses and fees (includingreasonable counsel fees) of
Secured Party, with interest thereon, as required by any
provision of this Agreement or the Mortgage.
(c) Failure to exhibit to Secured Party, within ten
(10) days after demand, receipts showing payment of real
estate taxes and assessments on the Property.
(d) Except as permitted in the Mortgage or beyond the
control of Debtor, the actual or threatened alteration,
demolition or removal of any building on the Property
without the written consent of Debtor.
(e) Failure to maintain any improvements on the
Property as required under the Mortgage, free of any liens
other than the Permitted Encumbrances.
(f) Failure to comply with any requirements or order
or notice of violation of law or ordinance issued by any
governmental department claiming jurisdiction over the
<PAGE>
Property within three (3) months from the issuance thereof
(if failure to so comply would have a material adverse
effect on the Property or on the business of Debtor), or
before any such violation becomes a lien against the
Property, whichever first occurs.
(g) Failure of Debtor or others to comply with or
perform any covenant or agreement contained herein, in the
Note, the Mortgage or in any other document executed by
Debtor in connection with this transaction.
(h) If any warranty or representation of Debtor
contained in this Agreement, in the Mortgage or in the Note
shall be false or misleading in any material respect on the
date as of which made.
(i) The institution of any bankruptcy, reorganization
or insolvency proceedings against the then owner or Debtor
in possession of the Mortgaged Property, or any guarantor,
or the appointment of a receiver or a similar official with
respect to all or a substantial part of the properties of
the then owner or Debtor in possession of the Mortgaged
Property and a failure to have such proceedings dismissed or
such appointment vacated within a period of forty-five (45)
days.
(j) The institution of any voluntary bankruptcy,
reorganization or insolvency proceedings by the then owner
or Debtor in possession of the Mortgaged Property, or any
guarantor, or the appointment of a receiver or a similar
official with respect to all or a substantial part of the
properties of the then owner or Debtor in possession of the
Mortgaged Property at the instance of the then owner or
Debtor in possession of the Property.
<PAGE>
(k) The making of any levy, seizure, forfeiture
action, enforcement or attempted enforcement of any
mechanic's or materialman's lien or attachment on the
Mortgaged Property or any part thereof.
(l) If default shall occur (i) under the Lease and be
continuing following the expiration of any notice and cure
periods thereunder; or (ii) under any loan or credit
agreement now or hereafter in existence between Secured
Party and Debtor or their respective affiliates, and as a
result of the default the party thereto other than Debtor
accelerates the maturity of more than $500,000.00 in
principal amount of indebtedness owed to that party by
Debtor.
(m) The occurrence of any Event of Default (as defined
therein) under the Note or the Mortgage, whether or not such
event is specifically set forth herein.
(n) Failure of Debtor to continue to operate its
grocery store on the Property, which shall constitute an
Incurable Default under the Note.
(o) Any default shall occur and be continuing under
the mortgage in favor of Security Pacific National Bank and
First Florida Bank, N.A. referred to in item 1 of Exhibit
"B" hereto and, as a result thereof, the mortgagee thereof
shall either (i) exercise any of the remedies against the
Property provided in said mortgage or (ii) accelerate the
maturity of more than $500,000.00 in principal amount of
indebtedness secured by said mortgage.
(p) In the event that either
(i) all or substantially all of the Property is sold,
conveyed, leased, assigned, encumbered or otherwise
<PAGE>
transferred by Debtor, without Secured Party's prior written
consent (which shall not be unreasonably withheld),
(ii) Debtor issues, after the date hereof, newly issued
shares (or shares held in treasury) which are shares of
voting common stock of Debtor (other than shares of voting
common stock issued pursuant to any compensatory plan or
agreement for the benefit of any employee of Debtor)
representing in excess of twenty percent (20%) of the
aggregate voting power of the shares of voting common stock
of Debtor which are issued and outstanding (including shares
issuable upon exercise of options, warrants and other rights
to acquire shares of voting common stock which are then
outstanding) immediately prior to the new issuance (or
reissuance) and Debtor receives net cash proceeds from the
new issuance (or reissuance) of at least $20,000,000, or
(iii)debentures with an aggregate principal amount of
at least $70,000,000 and which were issued under either (a)
the Indenture dated as of September 14, 1989 between Debtor
and NCNB National Bank of Florida, (b) the Indenture dated
as of January 29, 1992 between Debtor and Ameritrust Texas,
N.A. or (c) the Indenture dated as of February 8, 1989
between Debtor and First Florida Bank, N.A. (such debentures
being referred to herein as the "Debt Securities) are
amended (or the indentures governing the terms of the Debt
Securities are amended) to reduce the interest rates
applicable thereto or extend the payment terms thereof and,
as a result of or in connection with the amendment, Debtor
has available to it additional debt financing of at least
$10,000,000 which is committed for a term of one year or
more,
<PAGE>
any of which events described in this clause (p) shall, at
Secured Party's option, constitute an Incurable Default
under the Note.
3.02 Acceleration Upon Default, Additional Remedies. In
the event that one or more Events of Default shall occur and
be continuing, the remedies available to Secured Party shall
include, but not necessarily be limited to, (a) the right to
declare the entire unpaid balance of the Note immediately
due and payable by written notice to Debtor (except with
respect to an Event of Default under Section 3.01(i) or
3.01(j), for which no notice of such acceleration shall be
required), without presentment, demand, or protest or other
requirements of any kind (including without limitation,
valuation and appraisement, diligence, presentment, notice
of intent to demand or accelerate and of acceleration), all
of which are hereby waived by Debtor, (b) the right to take
immediate possession of the Property or any part thereof
(which Debtor agrees to surrender to Secured Party) and
manage, control or lease the same to such person or persons
and at such rental as it may deem proper and collect all
rents, issues and profits, therefrom, including those past
due as well as those thereafter accruing, and (c) to
exercise all such other rights and remedies available to
Secured Party under this Agreement, the Note, the Mortgage,
or at law or in equity, all of which shall be cumulative and
not exclusive.
4. Miscellaneous.
Section 4.1 Headings. The headings, captions, and
arrangements used in any of the Loan Documents are, unless
<PAGE>
specified otherwise, for convenience only and shall not be deemed
to limit, amplify, or modify the terms of the Loan Documents, nor
affect the meaning thereof.
Section 4.2 Survival. All covenants, agreements,
undertakings, representations, and warranties made in any of the
Loan Documents shall survive all closings under the Loan
Documents and, except as other vise indicated, shall not be
affected by any investigation made by any party.
Section 4.3 Governing Law. This Agreement and all
other Loan Documents shall be governed by and interpreted in
accordance with the laws of the State of Florida.
Section 4.4 Invalid Provisions. If any provision of
any of the Loan Documents is held to be illegal, invalid, or
unenforceable under present or future laws effective during the
term thereof, such provision shall be fully severable; the
appropriate Loan Document shall be construed and enforced as if
such illegal, invalid, or unenforceable provision had never
comprised a part thereof; and the remaining provisions thereof
shall remain in full force and effect and shall not be affected
by the illegal, invalid, or unenforceable provision or by its
severance therefrom. Furthermore, in lieu of such illegal,
invalid, or unenforceable provision, there shall be added
automatically as a part of such Loan Document a provision as
similar in terms to such illegal, invalid, or unenforceable
provision as may be possible and be legal, valid and enforceable.
Section 4.5 Entirety and Amendments. This Agreement
and the other Loan Documents embody the entire agreement between
the parties relating to the subject matter hereof, supersede all
prior agreements and understandings, if any, relating to the
subject matter hereof, and may be amended only by an instrument
in writing executed jointly by Debtor and Seeured Party, and
<PAGE>
supplemented only by documents delivered or to be delivered in
accordance with the express terms hereof.
Section 4.6 Multiple Counterparts. This Agreement may
be executed in a number of identical counterparts, each of which
constitutes an original and all of which constitutes,
collectively, one agreement; but in making proof of this
Agreement, it shall not be necessary to produce or account for
more than one such counterpart.
Section 4.7 Parties Bound. This Agreement shall be
binding upon and inure to the benefit of Debtor and Secured
Party, and their respective successors and assigns; provided that
Debtor may not, without the prior written consent of Secured
Party, assign or delegate any rights, duties or obligations
hereunder or under any of the other Loan Documents; provided
further, however, that Secured Party shall not assign its rights
hereunder or under any of the other Loan Documents, other than to
an entity owned (directly or indirectly) wholly by a parent or
subsidiary of Secured Party, without the prior written consent of
Debtor. No term or provision of this Agreement shall inure to the
benefit of any person other than Debtor and Secured Party, and
their respective successors, affiliates and assigns;
consequently, no other person shall be entitled to rely upon, or
to raise as a defense, in any manner whatsoever, the failure of
Debtor or Secured Party to perform, observe, or comply with any
such term or provision.
Section 4.8 Time of the Essence. It is expressly
agreed by the parties hereto that time is of the essence with
respect to this Agreement.
<PAGE>
Section 4.9 Secured Party's Name. Debtor shall not use
the name of Secured Party or its affiliates or its or their
representatives or refer directly or indirectly to Secured Party
or its affiliates or its or their representatives in connection
with any public or private announcement, brochure, disclosure,
syndication prospectus or placement memorandum, article, or other
material without Secured Party's prior written consent, except to
the extent necessary for Debtor to comply with the reporting or
disclosure requirements under applicable laws or agreements.
Section 4.10 Relationship of the Parties. Nothing in
this Agreement or in the Loan Documents shall be construed to
make the parties hereto partners or joint venturers or to render
either party hereto liable for any obligation of the other.
Section 4.11 Construction of Agreement. Should any
provision of this Agreement require interpretation or
construction in any judicial, administrative, or other proceeding
or circumstance, it is agreed that the parties hereto intend that
the court, administrative body, or other entity interpreting or
construing the same shall not apply a presumption that the
provisions hereof shall be more strictly construed against one
party by reason of the rule of construction that a document is to
be construed more strictly against the party who itself or
through its agents prepared the same, it being agreed that the
agents of both parties hereto have fully participated in the
preparation of all provisions of this Agreement and all of the
other Loan Documents.
Section 4.12 Repudiation of Fiduciary Relationship. No
provision of this Agreement or any of the other Loan Documents is
intended to create a fiduciary or quasifiduciary relationship
<PAGE>
between Secured Party and Debtor. It is intended that the only
relationship established pursuant to the Loan is the contractual
relationship established by the Loan Documents.
Section 4.13 No Waiver. No delay by Secured Party in
exercising any rights or remedies available to it hereunder or
under any of the other Loan Documents shall operate as a waiver
thereof or preclude the exercise of any or all of such rights and
remedies during the continuance of a default or the occurrence of
a subsequent default.
SIGNATURE BLOCKS ON ATTACHED PAGE
IN WITNESS WHEREOF, the parties hereof have executed
this Financing Agreement as of the day and year first above
written.
KASH n' KARRY FOOD STORES, INC., a
Delaware corporation
By: /s/ Raymond P. Springer
Name: Raymond P. Springer
As Its:Executive Vice President
"Debtor"
HP FINANCE CORP.,
a Florida corporation
By: /s/ Lesa Monday
Name: Lesa Monday
As Its: President
"Secured Party"
106194\ROCKGX
<PAGE>
EXHIBIT "A"
(Store #722 - Swann Ave.)
PARCEL I
That part of Block 2 of SWANN AND HOWARD AVENUES SUBDIVISION,
according to the map or plat thereof as recorded in Plat Book 9,
Page 59, of the Public Records of Hillsborough County, Florida,
described as follows:
BEGINNING at the Northeast corner of Lot 18 of said Block 2, run
thence South (assumed bearing), 440.50 feet, along the East
boundary of said Block 2 (West right-of-way line of ALBANY
AVENUE), to the Southeast corner of Lot 10 of said Block 2;
thence .89DEG.54'24"W., 270.09 feet, along the South boundary of
said Block 2 (North right-of-way line of INMAN AVENUE), to a
point 13.28 feet East of the Southwest corner of Lot 9 of said
Block 2; thence N.00DEG.02'13"W., 325.00 feet to a point 15.50
feet South of the North boundary and 13.07 feet East of the West
boundary of Lot 3 of said Block 2; thence N.89DEG.54'24"W., 13.07
feet, parallel with the North boundary of said Lot 3, to the West
boundary of said Block 2; thence North, 65.50 feet, along the
West boundary of said Block 2 (East right-of-way line of WESTLAND
AVENUE), to the Northwest corner of Lot 2 of said Block 2; thence
S. 89DEG.54'24"E., 141.685 feet, along the North boundary of said
Lot 2 and an Easterly extension thereof to the centerline of the
platted alley (now closed) in said Block 2; thence North, 50.89
feet, along the centerline of said platted alley, to the South
right-of-way line of SWANN AVENUE; thence S.89DEG.32'47"E.,
141.685 feet, along the North boundary of said Lot 18 and a
Westerly extension thereof (South right-of-way line of SWANN
AVENUE), to the POINT OF BEGINNING.
LESS the following described real property:
That part of Lot 2 and 3, Block 2, SWANN AND HOWARD AVENUES
SUBDIVISION, according to the map or plat thereof as recorded in
Plat Book 9, Page 59, of the Public Records of Hillsborough
County, Florida, described as follows:
BEGINNING at the Northwest corner of Lot 2, Block 2, of said
SWANN AND HOWARD AVENUES SUBDIVISION, run thence S. 89DEG.54'24"E.,
13.03 feet, along the North boundary of said Lot 2 (South
boundary of Lot 1 of said Block 2); thence S. 00DEG.02'13"E., 50.00
feet to the South boundary of said Lot 2; continue S. 00DEG.02'13"E.
15.50 feet to the South boundary of the North 15.50 feet of said
Lot 3; then N. 89DEG.54'24"W., 13.07 feet, along the South boundary
of the North 15.50 feet of said Lot 3, to the West boundary of
said Lot 3; thence North, 65.50 feet, along the West boundary of
said Lots 3 and 2 (East right-of-way line of WESTLAND AVENUE), to
the POINT OF BEGINNING.
PARCEL II
That part of Block 3 of Swann and Howard Avenues Subdivision,
according to the map or plat thereof as recorded in Plat Book 9,
Page 59 of the Public Records of Hillsborough County, Florida,
described as follows:
<PAGE>
Beginning at the Northeast corner of Lot 13 of said Block 3, run
thence South (assumed bearing), 140.50 feet, along the East
boundary of said Block 3 (West right-of-way line of Albany
Avenue), to the Southeast corner of Lot 11 of said Block 3;
thence North 89DEG.54'24" West, 269.97 feet, along the South
boundary of said Block 3, to a point on the South boundary of Lot
8 of said Block 3; thence North 00DEG.02'13" West, 140.50 feet to a
point on the North boundary of said Lot 8; thence South 89DEG.
54'24" East, 270.06 feet, along the North boundary of said Block 3
(South right-of-way line of Inman Avenue), to the Point of
Beginning.
Page 1 of 2
EXHIBIT "A"
(Store #722 - Swann Ave.)
PARCEL III
Lot 1, Block 2, SWANN AND HOWARD AVENUES SUBDIVISION, together
with that part of the West 1/2 of vacated alley lying between the
North and South line of said Lot 1 extended, according to the map
or plat thereof recorded in Plat Book 9, Page 59, Public Records
of Hillsborough County, Florida.
LESS the following described real property:
BEGINNING at the Northwest corner of Lot 1, Block 2 of said SWANN
AND HOWARD AVENUES SUBDIVISION, run thence S.89DEG.32'47"E., 12.99
feet, along the North boundary of said Lot 1 (South right-of-way
line of SWANN AVENUE); thence S.00DEG.02'13"E. 51.70 feet to the
South boundary of said Lot 1; thence N.89DEG.54'24"W., 13.03
feet,along the South boundary of said Lot 1, to the Southwest
corner thereof; thence North, 51.78 feet, along the West boundary
of said Lot 1 (East right-of-way line of WESTLAND AVENUE), to the
POINT OF BEGINNING.
VACATED PROPERTY:
PARCEL IV
That part of INMAN AVENUE described as follows:
BEGINNING at the intersection of the centerline of INMAN AVENUE
with the West right-of-way line of ALBANY AVENUE, run thence
SOUTH (assumed bearing), 25.00 feet to the Northeast corner of
Lot 13, Block 3 of SWANN AND HOWARD AVENUES SUBDIVISION,
according to the map or plat thereof as recorded in Plat Book 9,
Page 59, of the Public Records of Hillsborough County, Florida;
thence N.89DEG.54'24"W., 270.06 feet along the North boundary of
said Block 3, to a point on the North boundary of Lot 8 of said
Block 3; thence N. 00DEG.02'13"W., 25.00 feet to the centerline of
INMAN AVENUE, thence S.89DEG.54'24"E., 270.07 feet, along said
centerline, to the POINT OF BEGINNING.
<PAGE>
BASIS OF BEARINGS: For purposes of this description, the East
boundary of SWANN AND HOWARD AVENUES SUBDIVISION, according to
the map or plat thereof as recorded in Plat Book 9, Page 59, of
the Public Records of Hillsborough County, Florida, is assumed to
have a bearing of SOUTH.
PARCEL V
That part of INMAN AVENUE described as follows:
BEGINNING at the Southeast corner of Lot 10, Block 2 of SWANN AND
HOWARD AVENUES SUBDIVISION, according to the map or plat thereof
as recorded in Plat Book 9, Page 59, of the Public Records of
Hillsborough County, Florida, run thence South (assumed bearing),
25.00 feet to the intersection of the centerline of INMAN AVENUE
with the West right-of-way line of ALBANY AVENUE; thence
N89DEG.54'24"W., 270.07 feet along said centerline; thence
N00DEG.02'13"W., 25.00 feet to a point on the South boundary of Lot
9 of Block 2, thence S.89DEG.54'24"E., 270.09 feet, along the South
boundary of Block 2, to the POINT OF BEGINNING.
BASIS OF BEARINGS: For purposes of this description, the East
boundary of SWANN AND HOWARD AVENUES SUBDIVISION, according to
the map or plat thereof as recorded in Plat Book 9, Page S5, of
the Public Records of Hillsborough County, Florida, is assumed to
have a bearing of SOUTH.
Page 2 of 2
EXHIBIT "B"
1. That certain mortgage from Kash n' Karry Food Stores,
Inc., a Delaware corporation, to Security Pacific
National Bank and First Florida Bank, N.A. dated
October 12, 1988 and recorded October 13, 1988 in
Official Records Book 5526, Page 923, of the Public
Records of Hillsborough County, Florida in the original
principal amount of $2,200,000.00, as modified by
instrument recorded in Official Records Book 5786, Page
1085 and re-recorded in Official Records Book 5807,
Page 433, and by that Future Advance Notice and
Mortgage Modification Agreement Recorded July 16, 1990
in Official Records Book 6029, Page 238, and by that
Future Advance Notice and Mortgage Correction Agreement
recorded December 14, 1992 in Official Records Book
6824, Page 297 and Mortgage Modification, Fixture
Filing and Spreader Agreement recorded January 22, 1993
in Official Records Book 6862, Page 1873, and by that
Mortgage Modification, Fixture Filing and Spreader
Agreement recorded April 15, 1994 in Official Records
Book 7360, Page 1184, all among the Public Records of
Hillsborough County, Florida, as the same may be
amended from time to time.
<PAGE>
2. Sanitary Sewer Maintenance Agreement by and between
City of Tampa and Inman Plaza, Swann Plaza and Eli
Blumenfeld, as contained in instrument dated November
30, 1990 and recorded August 30, 1991 in Official
Records Book 6350, Page 312, of the Public Records of
Hillsborough County, Florida.
3. That certain unrecorded Ground Lease, dated December
26, 1991 between Eli Blumenfeld, Landlord and Kash n'
Karry Food Stores, Inc., a Delaware corporation,
Tenant, pursuant to which a Short Form of Lease was
filed December 27, 1991 in Official Records Book 6473,.
Page 1630, as modified by First Modification of Lease
filed September 2, 1993 in Official Records Book 7103,
Page 1217, all of the Public Records of Hillsborough
County, Florida.
4. That certain Easement granted to Tampa Electric Company
contained in instrument dated September 14, 1992 and
recorded November 3, 1992 in Official Records Book
6781, Page 800, of the Public Records of Hillsborough
County, Florida.
5. That certain Easement and Declaration of Restrictions
Agreement dated September 1, 1993 and recorded
September 17, 1993 in Official Records Book 7120, Page
691, of the Public Records of Hillsborough County,
Florida.
<PAGE>
6 That certain Easement between and among Eli Blumenfeld
and Kash n' Karry Food Stores, Inc., a Delaware
corporation, and Swann Plaza, a Florida general
partnership, and Inman Plaza, a Florida general
partnership, contained in instrument dated September 1,
1993 and recorded September 17, 1993 in Official
Records Book 7120, Page 711, of the Public Records of
Hillsborough County, Florida.
08005\ROCKGX
2
<PAGE>
[EXECUTION COPY 4/13/94]
INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT (this "Agreement"), dated
as of April , 1994, is made by and between (i) BANK OF AMERICA
NATIONAL TRUST & SAVINGS ASSOCIATION (as successor in interest to
Security Pacific National Bank), as agent for the "Holders of
Secured Obligations" under the "Bank Credit Agreement" each as
defined below (in such capacity, the "Agent") and BARNETT BANK OF
TAMPA (as successor in interest to First Florida Bank, N.A.), as
Collateral Co-Agent under such Bank Credit Agreement (the
"Collateral Co-Agent" and, together with the Agent and the
Holders of Secured Obligations, collectively, the "Existing
Secured Parties") and (ii) HP FINANCE CORP., a Florida
corporation ("HPFC").
RECITALS:
A. Kash n' Karry Food Stores, Inc., a Delaware
corporation (the "Company"), has entered into a Credit Agreement
dated as of October 12, 1988, and amended and restated as of
September 14, 1989 (as further amended through the date hereof,
the "Bank Credit Agreement") with the Agent and the Senior
Lenders referred to therein, pursuant to which the Company
executed as security for the "Obligations" under (and as defined
in) the Bank Credit Agreement (the "Bank Obligations"), that
certain First Mortgage, Security Agreement, Financing Statement
and Assignment of Rents dated as of October 12, 1988, recorded in
Official Records Book 5526, Page 923, of the Public Records of
Hillsborough County, Florida, as modified by a Mortgage
Modification Agreement dated as of September 14, 1989, recorded
in Official Records Book 5807, Page 433, of the Public Records of
Hillsborough County, Florida, as modified by a Future Advance
Notice and Mortgage Modification Agreement dated as of July 13,
1990, recorded in Official Records Book 6029, Page 238, of the
Public Records of Hillsborough County, Florida, as modified by a
Future Advance Notice and Mortgage Correction Agreement dated as
of December 10, 1992, recorded in Official Records Book 6824,
Page 297, of the Public Records of Hillsborough County, Florida,
as modified by a Mortgage Modification, Fixture Filing and
Spreader Agreement dated as of January 13, 19 9 3, recorded in
Official Records Book 6862, Page 1873, of the Public Records of
Hillsborough County, Florida, as supplemented by a Uniform
Commercial Code Statement of Change recorded in Official Records
Book 7147, Page 709, of the Public Records of Hillsborough
County, Florida, as modified by a Mortgage Modification, Fixture
Filing and Spreader Agreement dated as of April 15, 1994 to be
recorded in the Public Records of Hillsborough County, Florida
(as so modified, supplemented and corrected, and as further
amended, modified, supplemented or corrected from time to time,
the "Bank Mortgage").
<PAGE>
B. The Company has an open account with the sole
stockholder of HPFC (the "Supplier") pursuant to which the
Supplier sells the Company food products on credit. As of the
date hereof, the trade payables arising in the ordinary course of
business between the Company and the Supplier on account of such
sales exceed $3,500,000.
C. Pursuant to a letter of even date herewith between
the Company and the Supplier, the Company has agreed to execute a
mortgage in favor of the Supplier to secure up to $3,500,000 of
such trade payable existing as of the date hereof.
D. Pursuant to an assignment of even date herewith
between the Supplier and HPFC, the Supplier has agreed to assign
to HPFC all of the Supplier's right, title and interest in that
portion of the existing trade payable not to exceed $3,500,000 in
amount and representing amounts due and owing to the Supplier for
food products delivered to the Company on and prior to the date
hereof, together with the obligation of the Company to execute
and deliver a mortgage to secure the repayment thereof.
E. The Company has executed the following documents
in favor of HPFC: (i) a Mortgage Note of even date herewith (the
"HPFC Mortgage Note"), (ii) a Financing Agreement of even date
herewith (the "HPFC Financing Agreement") and (ii) a Mortgage and
Security Agreement of even date herewith (the "HPFC Mortgage"
and, together with the HPFC Mortgage Note and the HPFC Financing
Agreement, the "HPFC Loan Documents").
F. The HPFC Mortgage encumbers the "Mortgaged
Property" (as defined therein), including, without limitation,
the Company's leasehold estate in and to that certain tract of
land in the County of Hillsborough, State of Florida, which is
more particularly described on Exhibit A attached hereto and made
a part hereof, together with the improvements and fixtures
thereon.
G. All of the Mortgaged Property is subject to the
Bank Mortgage.
H. The Existing Secured Parties have consented to the
transactions contemplated by the HPFC Loan Documents subject to
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing, the
parties hereto hereby agree as follows:
<PAGE>
[EXECUTION COPY 4/13/94]
AGREEMENT
1. Incorporation of Premises. Each of the foregoing
premises is incorporated by reference herein as if fully set
forth in this Agreement.
2. Definitions. The following terms used in this
Agreement shall have the following meanings (such meanings to be
applicable both to the singular and the plural forms of the terms
defined):
"Agent" is defined in the preamble hereto.
"Agreement" is defined in the preamble hereto.
"Bank Credit Agreement" is defined in Recital A hereto.
"Bank Loan Documents" shall mean the Bank Credit
Agreement, the Bank Mortgage and the other "Loan Documents"
(as defined in the Bank Credit Agreement).
"Bank Mortgage" is defined in Recital A hereto.
"Bank Obligations" is defined in Recital A hereto.
"Bankruptcy Event" shall mean (i) the entry of an order
for relief with respect to the Company (or the commencement
of a case in which the Company is a debtor) under any
applicable bankruptcy, insolvency or other similar law now
or hereafter in effect, (ii) the appointment of or taking of
possession by a receiver, trustee or other custodian for all
or a substantial part of the Company's property or (iii) a
general assignment by the Company for the benefit of its
creditors.
"Collateral Co-Agent" is defined in the preamble
hereto.
"Company" is defined in Recital A hereto.
"Existing Secured Parties" is defined in the preamble
hereto.
"Holders of Secured Obligations" shall have the meaning
ascribed to such term in the Bank Credit Agreement.
"HPFC" is defined in the preamble hereto.
"HPFC Financinq Aqreement" is defined in Recital E
hereto.
"HPFC Loan Documents" is defined in Recital E hereto.
<PAGE>
"HPFC Mortgage" is defined in Recital E hereto.
"HPFC Mortgage Note" is defined in Recital E hereto.
"HPFC Obligations" shall mean the obligations under the
HPFC Loan Documents to pay (i) $3,500,000, which is the
amount due and owing under the HPFC Mortgage Note as of the
date hereof (which amount, if repaid, may not be
reborrowed), plus (ii) reasonable disbursements made by HPFC
under the HPFC Mortgage in respect of taxes, levies,
insurance, recording fees, attorneys' fees and other amounts
expended to protect the security interest of HPFC under the
HPFC Mortgage, plus (iii) interest accrued on the amounts
set forth in clauses (i) and (ii) above at the rates set
forth in the HPFC Mortgage Note as in effect on the date
hereof, minus (iv) any payments received by HPFC in respect
of, or applied to, any of the foregoing.
"Initial Period" shall mean the period commencing on
the date of this Agreement and ending on the ninetieth
(9Oth) day thereafter, provided that if a Bankruptcy Event
has occurred on or before the ninetieth day after the date
of this Agreement, the Initial Period shall continue until
the date this Agreement terminates in accordance with its
terms.
"Mortgaged Property" shall have the meaning ascribed to
such term in the HPFC Mortgage, provided that "Mortgaged
Property" shall not include any of the Company's accounts,
equipment, inventory, general intangibles, documents,
instruments or chattel paper (as such terms are defined in
the Uniform Commercial Code as in effect in the State of
Florida) except to the extent (and only to the extent) the
same constitute proceeds of the Company's leasehold estate
in and to the tract of land described on Exhibit A and the
improvements and fixtures thereon.
"Senior Mortgagee" shall mean (i) during the Initial
Period, the Existing Secured Parties and (ii) during the
Subsequent Period, HPFC.
"Senior Secured Obligations" shall mean (i) during the
Initial Period, the Bank Obligations and (ii) during the
Subsequent Period, the HPFC Obligations.
"Subordinate Mortgagee" shall mean (i) during the
Initial Period, HPFC and (ii) during the Subsequent Period,
the Existing Secured Parties.
"Subordinate Secured Obligations" shall mean (i) during
the Initial Period, the HPFC Obligations and (ii) during the
Subsequent Period, the Bank Obligations.
"Subsequent Period" shall mean the period commencing on
the last day of the Initial Period and ending on the date
this Agreement terminates in accordance with its terms.
"Supplier" is defined in Recital B hereto.
<PAGE>
3. Lien Subordination.
(a) During the Initial Period, the liens and
security interests of HPFC with respect to the Mortgaged
Property, as evidenced by the HPFC Mortgage, are hereby made
junior in rank and priority and subordinate to the liens, rights
and interests of the Existing Secured Parties under the Bank
Mortgage to the extent, and only to the extent, such liens and
security interests secure the payment and performance of the Bank
Obligations, without regard to the order of recordation of the
Bank Mortgage and the HPFC Mortgage or any other agreement,
document or instrument evidencing the respective liens and
security interests of the Existing Secured Parties or HPFC (as
applicable) in the Mortgaged Property.
(b) During the Subsequent Period, the liens and
security interests of the Existing Secured Parties with respect
to the Mortgaged Property, as evidenced by the Bank Mortgage, are
hereby made junior in rank and priority and subordinate to the
liens, rights and interests of HPFC under the HPFC Mortgage to
the extent, and only to the extent, such liens and security
interests secure the payment and performance of the HPFC
Obligations, without regard to the order of recordation of the
Bank Mortgage and the HPFC Mortgage or any other agreement,
document or instrument evidencing the respective liens and
security interests of the Existing Secured Parties or HPFC (as
applicable) in the Mortgaged Property. In furtherance, and not
in limitation of the preceding sentence, no modification to any
document between HPFC and the Company shall be effective against
the Existing Secured Parties to increase the HPFC Obligations,
including, without limitation, any modification or amendment to
such agreements to effect any increase in the rate of interest as
set forth in the Mortgage Note as in effect on the date hereof,
any additional advance of principal, or any earlier maturity
date.
(c) The lien subordinations provided in this
Section 3 shall be limited to liens and security interests to the
extent and only to the extent such liens secure Senior Secured
Obligations and such liens are not avoided, invalidated or
subordinated; provided, however, that to the extent that the
Senior Mortgagee receives payments on, or proceeds of collateral
for, the Senior Secured Obligations which are subsequently
invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other
party under any bankruptcy law, state or federal laws, common
law, or equitable cause, then, to the extent of such payment or
proceeds received, such Senior Secured Obligations, or part
thereof, intended to be satisfied shall be reinstated and
continue in full force and effect as if such payments or proceeds
had not been received by the Senior Mortgagee.
4. Acknowledgement of Liens: Prohibition on
Contesting Liens.
<PAGE>
(a) Each of the Existing Secured Parties hereby
acknowledges and consents to the lien and security interest of
HPFC in the Mortgaged Property as security for the HPFC
Obligations and agrees that the existence and continuation of
such lien and security interest shall not constitute an "Event of
Default" under (and as defined) in the Bank Credit Agreement or a
breach of any of the other Bank Loan Documents, except to the
extent that there exists a default under the documents governing
such lien and security interest in favor of HPFC which
constitutes an "Event of Default" under (and as defined) in the
Bank Credit Agreement. HPFC hereby acknowledges and agrees that
the existence and continuation of the lien and security interest
of the Existing Secured Parties in the Mortgaged Property as
security for the Bank Obligations shall not constitute a default
under any of the HPFC Loan Documents or any other agreement
between HPFC and the Company, except to the extent that there
exists a default under the documents governing such lien and
security interest in favor of the Existing Secured Parties which
constitutes a default under the HPFC Financing Agreement.
(b) Each of the Existing Secured Parties agrees
not to contest, or support any other person in contesting, in any
proceeding, the priority (except as to liens and security
interests securing the Bank Obligations during the Initial
Period), validity or enforceability of any lien or security
interest in the Mortgaged Property securing the HPFC Obligations.
HPFC agrees not to contest, or support any other person in
contesting, in any proceeding, the priority (except as to liens
and security interests securing the HPFC Obligations during the
Subsequent Period), validity or enforceability of any lien or
security interest in the Mortgaged Property securing the Bank
Obligations. Notwithstanding the foregoing, HPFC or any of the
Existing Secured Parties may respond to lawful process or give
testimony in response to lawful process, and such actions shall
not be deemed to constitute a violation of the provisions of this
Section 4.
5. Application of Proceeds of Mortgaged Property. In
the event of any disposition, division or sale, partial or
complete, voluntary or involuntary, by operation of law or
otherwise, of all or any part of the Mortgaged Property, the
proceeds thereof shall be applied in the following order of
priorities:
(a) first, to the payment of any expenses of such
disposition, division or sale of, or other realization on,
or with respect to, the Mortgaged Property, including all
expenses, liabilities and advances incurred or made by the
Senior Mortgagee or the Subordinate Mortgagee in connection
therewith, including attorneys' fees;
(b) second, to the payment of any unpaid Senior
Secured Obligations;
(c) third, to the payment of any unpaid
Subordinate Secured Obligations; and
<PAGE>
(d) fourth, subject to the prior payment in full
of all Senior Secured Obligations and Subordinate Secured
Obligations, to pay to the Company or its representatives or
as a court of competent jurisdiction may direct, any surplus
then remaining from such proceeds.
Such order of application shall be binding on any receiver acting
on behalf of any Senior Mortgagee or Subordinate Mortgagee.
6. Proceeds to be Held in Trust.
(a) Should any proceeds from the sale, partial or
complete, voluntary or involuntary, by operation of law or
otherwise, of all or any part of the Mortgaged Property be
received by any Subordinate Mortgagee upon or with respect to the
Subordinate Secured Obligations prior to the payment in full in
cash of the Senior Secured Obligations, such Subordinate
Mortgagee shall receive and hold the same in trust, as trustee,
for the benefit of the Senior Mortgagee and shall forthwith
deliver the same to the Senior Mortgagee in precisely the form
received (except for the endorsement or assignment of such
Subordinate Mortgagee where necessary), for application on the
Senior Secured Obligations, due or not due, and, until so
delivered, the same shall be held in trust by such Subordinate
Mortgagee as the property of the Senior Mortgagee.
(b) Should any proceeds from the sale, partial or
complete, voluntary or involuntary, by operation of law or
otherwise, of all or any part of the Mortgaged Property be
received by HPFC in an amount in excess of the then amount of the
HPFC Obligations prior to the payment in full in cash of the Bank
Obligations, HPFC shall receive and hold the excess amount in
trust, as trustee, for the benefit of Existing Secured Parties
and shall forthwith deliver the same to the Agent, for the
benefit of the Existing Secured Parties, in precisely the form
received (except for the endorsement or assignment of HPFC where
necessary), for application on the Bank Obligations, due or not
due, and, until so delivered, the same shall be held in trust by
HPFC as the property of the Existing Secured Parties.
7. Release of Insurance and Condemnation Proceeds. If
to facilitate or permit restoration of any portion of the
Mortgaged Property, the Senior Mortgagee shall release or
otherwise permit the use of any proceeds of insurance, awards in
condemnation proceedings, compensation for damage, destruction,
taking, or loss, or any payment in lieu of any of the foregoing,
then the Subordinate Mortgagee likewise for such purpose shall
release any right, title, interest, and lien in, to, or upon any
of the same, and the Senior Mortgagee likewise shall so permit
the use of the same for such purpose.
8. Special Notice Requirements.
(a) Promptly after the Agent's obtaining
knowledge thereof, the Agent agrees to notify HPFC of any
"Potential Event of Default" under (and as defined in) the Bank
Credit Agreement. The Agent further agrees to furnish HPFC with
copies of any notices of default, accelerations, demands or
foreclosure notices with respect to the Mortgaged Property or any
other notice pertaining to the exercise of remedies by or on
behalf of the Existing Secured Parties with respect to the
Mortgaged Property.
<PAGE>
(b) Promptly after HPFC's obtaining knowledge
thereof, HPFC agrees to notify the Agent of any default under
(and as defined in) any of the HPFC Loan Documents (including,
without limitation, any event which, with the passage of time or
giving of notice or both, would become a "Monetary Default",
"Non-Monetary Default" or "Incurable Default" (as defined in the
Mortgage Note). HPFC further agrees to furnish the Agent with
copies of any notices of default, accelerations, demands or
foreclosure notices with respect to the Mortgaged Property or any
other notice pertaining to the exercise of remedies by or on
behalf of HPFC with respect to the Mortgaged Property.
9. Right to Cure; Standstill; Application for
Appointment of Receiver.
(a) The Existing Secured Parties shall have the
right, but not the obligation, to cure any default under the HPFC
Loan Documents (including, without limitation, any "Monetary
Default", "Non-Monetary Default" or "Incurable Default" (each as
defined in the Mortgage Note)) within (i) five (5) days after the
Agent's receipt of notice from HPFC that an event which, with the
passage of time or giving of notice or both, would become a
"Monetary Default" or "Incurable Default" has occurred or (ii)
thirty (30) days after the Agent's receipt of notice from HPFC
that an event which, with the passage of time or giving of notice
or both, would become a "Non-Monetary Default" has occurred, and
HPFC hereby agrees that it shall take no action with respect to
any such default until the earlier of (x) expiration of such
period and (y) the receipt of written notice from the Agent that
the Existing Secured Parties shall not exercise their right to
cure such default.
(b) HPFC shall have the right, but not the
obligation, to cure any "Potential Event of Default" under the
Bank Credit Agreement within (i) five (5) days after HPFC's
receipt of notice from the Agent that a "Potential Event of
Default" with respect to non-payment of any of the Bank
Obligations has occurred or (ii) thirty (30) days after HPFC's
receipt of notice from the Agent that any other "Potential Event
of Default" has occurred, and the Agent hereby agrees that it
shall take no action under the Bank Mortgage with respect to the
Mortgaged Property by reason of any such default until the
earlier of (x) expiration of such period and (y) the receipt of
written notice from HPFC that HPFC shall not exercise its right
to cure such "Potential Event of Default".
(c) In any action to foreclose the liens and
security interests on the Mortgaged Property securing the
Subordinate Secured Obligations, the Subordinate Mortgagee shall
apply promptly to a court of competent jurisdiction for the
appointment of a receiver and shall give written notice of such
application and the appointment of such receiver, if any, to the
Senior Mortgagee.
10. Reliance; Waivers. The HPFC Obligations shall be
deemed to have been made or incurred, and the Existing Secured
Parties' consent to such making or incurrence and to the
existence of the liens and security interests securing the same
<PAGE>
shall be deemed to have been given, in reliance upon this
Agreement. Each Subordinate Mortgagee expressly waives all
notice of the acceptance by each Senior Mortgagee of the
subordination and other provisions of this Agreement and all
other notices not specifically required pursuant to the terms of
this Agreement whatsoever. Each of the Existing Secured Parties
agrees that HPFC has not made any warranties or representations
with respect to the due execution, legality, validity,
completeness or enforceability of the HPFC Loan Documents or the
collectability of the HPFC Obligations. HPFC agrees that none of
the Existing Secured Parties has made any warranties or
representations with respect to the due execution, legality,
validity, completeness or enforceability of the Bank Loan
Documents or the collectability of the Bank Obligations.
11. No Waiver of Subordination Provisions. No right
of any Senior Mortgagee to enforce the subordination of liens as
provided in this Agreement shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part
of the Company or by any act or failure to act by any Senior
Mortgagee or by any noncompliance by the Company with the terms,
provisions and covenants of any of the agreements, documents or
instruments evidencing Senior Secured Obligations, regardless of
any knowledge thereof which any Senior Mortgagee may have or be
otherwise charged with. No Senior Mortgagee shall have any duty
to any Subordinate Mortgagee with respect to the preservation or
maintenance of the Mortgaged Property or the manner in which any
Senior Mortgagee enforces its rights in such the Mortgaged
Property or to preserve or maintain the rights of any person in
the Mortgaged Property, and each Subordinate Mortgagee hereby
waives all claims which such Subordinate Mortgagee may now or
hereafter have against any Senior Mortgagee which (x) arise
solely as a result of the existence of the liens held by, or for
the benefit of, such Subordinate Mortgagee in the Mortgaged
Property and (y) relate to such preservation, maintenance or
enforcement. Each Subordinate Mortgagee agrees not to assert and
hereby waives, to the fullest extent permitted by law, any right
to demand, request, plead or otherwise assert or otherwise claim
the benefit of, any marshalling, appraisement, valuation or other
similar right that may otherwise be available under applicable
law or any other similar rights a junior secured creditor may
have under applicable law. Without limiting the generality of
the foregoing:
(a) Except as set forth in Sections 8 and 9, the
Senior Mortgagee, at its option, may take any action in
accordance with applicable law to enforce any of its rights
with respect to, or foreclose, liquidate or realize upon,
the Mortgaged Property, without the consent (whether before
or after the taking of any such action) of, without notice
to and without accounting to, any Subordinate Mortgagee.
(b) The Senior Mortgagee may dispose of the Mortgaged
Property in any manner and for any price deemed appropriate
by the Senior Mortgagee, in its sole discretion, whether in
a public or private sale, without the consent of the
Subordinate Mortgagee, and any disposition so made shall be
deemed to be commercially reasonable in all respects
<PAGE>
(including, without limitation, for purposes of Section
9-507 of the Uniform Commercial Code as enacted in any
applicable jurisdiction).
(c) The Senior Mortgagee shall have no duty as to the
collection of any Mortgaged Property and shall have no duty
or liability to preserve rights against third parties.
(d) The Senior Mortgagee shall have the right to do
any or all of the following (in each case without regard to
the junior priority lien of the Subordinate Mortgagee in the
Mortgaged Property): (i) compromise, settle, adjust and in
general deal in any manner, and upon such terms and
conditions (including the length of time incidental
thereto), which the Senior Mortgagee may deem appropriate,
with the Mortgaged Property, (ii) subject to Sections 3, 8,
and 9, renew, extend, modify, accelerate, compromise, waive,
surrender or release any or all of the Senior Secured
Obligations, (iii) subject to any requirement of commercial
reasonableness which may apply, dispose of the Mortgaged
Property in whatever condition it then exists, or with such
modifications or completions thereto as the Senior Mortgagee
may deem appropriate, in each case upon such terms and
conditions (including the length of time incidental
thereto), which the Senior Mortgagee may deem appropriate,
(iv) engage such persons or entities to assist the Senior
Mortgagee in the effectuation of any of the foregoing, upon
such terms and conditions which the Senior Mortgagee may
deem appropriate, and (v) incur such out-of-pocket costs and
expenses (including, without limitation, attorneys' fees) in
connection with any of the foregoing, all such costs and
expenses being secured by the Mortgaged Property and
constituting Senior Secured Obligations.
12. Further Assurances. Upon the reasonable request
of the Senior Mortgagee, the Subordinate Mortgagee shall execute
and deliver such further documents or instruments in order to
fully effect the purposes of this Agreement.
13. Notices. Any notices required or permitted to be
given in connection with this Agreement shall be in writing,
shall be sent by United States, certified or registered mail, by
overnight delivery service or by telecopier and shall be deemed
to have been validly served, given or delivered five (5) days
following deposit in the United States mails, on the day
following delivery to the overnight delivery service, or upon
confirmation of receipt of the telecopy, whichever is applicable,
addressed to the party so notified as follows:
(a) If to the Existing Secured Parties:
c/o Bank of America National Trust & Savings
Association
Department 5596
1455 Market Street,12th Floor
San Francisco, California 94103
Attention: Laura J. Knight
Telecopier: (415) 622-4894
<PAGE>
with copies to:
Bank of America National Trust & Savings
Association
Unit #3078
335 Madison Avenue
New York, New York 10017
Attention: Daniel D. McCready
Telecopier: (212) 503-7066
and
Sidley & Austin
555 West Fifth Street
Suite 4000
Los Angeles, California 90013
Attention: Edward D. Eddy, III, Esq.
Telecopier: (213) 896-6600
(b) If to HPFC:
HP Finance Corp.
5364 Ehrlich Road #125
Tampa, Florida 33625
Attention: Lesa Monday
Telecopier: (813) 968-7098
with to a copy to:
Lowndes Drosdick Doster Kantor & Reed, P.A.
215 North Eola Drive
P.O. Box 2809
Orlando, Florida 32802
Attention: William R. Bird, Jr., Esq.
Telecopier: (407) 423-4495
14. No Termination: Successors and Assigns. This
Agreement shall be effective and may not be terminated or
otherwise revoked by any Subordinate Mortgagee until the Senior
Mortgagee has received payment in full in cash of the Senior
Secured Obligations. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and
shall inure to the benefit of the parties hereto and their
respective successors and assigns.
<PAGE>
15. Severability. Wherever possible, each provision
of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of
this Agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of
such provision of the remaining provisions of this Agreement.
16. Governing Law. This Agreement shall be construed
and enforced in accordance with the laws of the State of Florida.
17. Integration: Amendments. This Agreement is the
complete and only agreement of the parties pertaining to the
subject matter hereof. To the extent that any provisions of any
document or instrument by or between the parties or with the
Company are inconsistent with any provision set forth herein,
this Agreement shall control. All prior negotiations, drafts,
and agreements pertaining to the matters set forth herein are
merged herein and, to the extent inconsistent herewith,
superseded hereby. This Agreement shall not be modified or
amended except by a writing executed by the Agent and HPFC, which
identifies this Agreement with particularity and expressly states
its intention to modify the provisions hereof.
18. Headings. The headings herein are for convenience
of reference only and shall not alter or otherwise affect the
meaning hereof.
19. Counterparts. This Agreement may be executed in
any number of counterparts which, when taken together, shall be
deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, this instrument has been executed
and delivered on the date first above written.
HP FINANCE CORP.
By:
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION (as
successor in interest toSecurity
Pacific National Bank), as Agent
for the Holders of Secured
Obligations under the BankCredit
Agreement
By:
Title:
BARNETT BANK OF TAMPA (as successor
in interest to First Florida Bank,
N.A.), as Collateral Co-Agent under
the Bank Credit Agreement
By:
Title:
<PAGE>
[EXECUTION COPY 4/13/94]
ACKNOWLEDGEMENT
The undersigned consents to the foregoing Intercreditor
Agreement and its recordation in the Official Records of
Hillsborough County, Florida affecting the Mortgaged Property,
and hereby disclaim any rights under such Intercreditor
Agreement. The undersigned agrees and affirms that the HPFC Loan
Agreement, the HPFC Mortgage Note, the HPFC Mortgage (each as
defined in such Intercreditor Agreement) and the other
agreements, documents and instruments executed in connection
therewith are in full force and effect, and are binding upon and
enforceable against the undersigned in accordance with their
terms. The undersigned agrees and affirms that the Bank Loan
Documents (as defined in such Intercreditor Agreement) are in
full force and effect, and are binding upon and enforceable
against the undersigned in accordance with their terms.
KASH N' KARRY FOOD STORES, INC.
By:
Title:
Notary Public
MDW94A24.413
<PAGE>
EXHIBIT "A"
(Store #722 - Swann Ave.)
PARCEL I
That part of Block 2 of SWANN AND HOWARD AVENUES SUBDIVISION,
according to the map or plat thereof as recorded in Plat Book 9,
Page 59, of the Public Records of Hillsborough County, Florida,
described as follows:
BEGINNING at the Northeast corner of Lot 18 of said Block 2, run
thence South (assumed bearing), 440.50 feet, along the East
boundary of said Block 2 (West right-of-way line of ALBANY
AVENUE), to the Southeast corner of Lot 10 of said Block 2;
thence .89DEG.54'24"W., 270.09 feet, along the South boundary of
said Block 2 (North right-of-way line of INMAN AVENUE), to a
point 13.28 feet East of the Southwest corner of Lot 9 of said
Block 2; thence N.00DEG.02'13"W., 325.00 feet to a point 15.50 feet
South of the North boundary and 13.07 feet East of the West
boundary of Lot 3 of said Block 2; thence N.89DEG.54'24"W., 13.07
feet, parallel with the North boundary of said Lot 3, to the West
boundary of said Block 2; thence North, 65.50 feet, along the
West boundary of said Block 2 (East right-of-way line of WESTLAND
AVENUE), to the Northwest corner of Lot 2 of said Block 2; thence
S. 89DEG.54'24"E., 141.685 feet, along the North boundary of said
Lot 2 and an Easterly extension thereof to the centerline of the
platted alley (now closed) in said Block 2; thence North, 50.89
feet, along the centerline of said platted alley, to the South
right-of-way line of SWANN AVENUE; thence S.89DEG.32'47"E., 141.685
feet, along the North boundary of said Lot 18 and a Westerly
extension thereof (South right-of-way line of SWANN AVENUE), to
the POINT OF BEGINNING.
LESS the following described real property:
That part of Lot 2 and 3, Block 2, SWANN AND HOWARD AVENUES
SUBDIVISION, according to the map or plat thereof as recorded in
Plat Book 9, Page 59, of the Public Records of Hillsborough
County, Florida, described as follows:
BEGINNING at the Northwest corner of Lot 2, Block 2, of said
SWANN AND HOWARD AVENUES SUBDIVISION, run thence S. 89DEG.54'24"E.,
13.03 feet, along the North boundary of said Lot 2 (South
boundary of Lot 1 of said Block 2); thence S. 00DEG.02'13"E., 50.00
feet to the South boundary of said Lot 2; continue S. 00DEG.02'13"E.
15.50 feet to the South boundary of the North 15.50 feet of said
Lot 3; then N. 89DEG.54'24"W., 13.07 feet, along the South boundary
of the North 15.50 feet of said Lot 3, to the West boundary of
said Lot 3; thence North, 65.50 feet, along the West boundary of
said Lots 3 and 2 (East right-of-way line of WESTLAND AVENUE), to
the POINT OF BEGINNING.
<PAGE>
PARCEL II
That part of Block 3 of Swann and Howard Avenues Subdivision,
according to the map or plat thereof as recorded in Plat Book 9,
Page 59 of the Public Records of Hillsborough County, Florida,
described as follows:
Beginning at the Northeast corner of Lot 13 of said Block 3, run
thence South (assumed bearing), 140.50 feet, along the East
boundary of said Block 3 (West right-of-way line of Albany
Avenue), to the Southeast corner of Lot 11 of said Block 3;
thence North 89DEG.54'24" West, 269.97 feet, along the South
boundary of said Block 3, to a point on the South boundary of Lot
8 of said Block 3; thence North 00DEG.02'13" West, 140.50 feet to a
point on the North boundary of said Lot 8; thence South 89DEG.54'24"
East, 270.06 feet, along the North boundary of said Block 3
(South right-of-way line of Inman Avenue), to the Point of
Beginning.
Page 1 of 2
<PAGE>
EXHIBIT "A"
(Store #722 - Swann Ave.)
PARCEL III
Lot 1, Block 2, SWANN AND HOWARD AVENUES SUBDIVISION, together
with that part of the West 1/2 of vacated alley lying between the
North and South line of said Lot 1 extended, according to the map
or plat thereof recorded in Plat Book 9, Page 59, Public Records
of Hillsborough County, Florida.
LESS the following described real property:
BEGINNING at the Northwest corner of Lot 1, Block 2 of said SWANN
AND HOWARD AVENUES SUBDIVISION, run thence S.89DEG.32'47"E., 12.99
feet, along the North boundary of said Lot 1 (South right-of-way
line of SWANN AVENUE); thence S.00DEG.02'13"E. 51.70 feet to the
South boundary of said Lot 1; thence N.89DEG.54'24"W., 13.03
feet,along the South boundary of said Lot 1, to the Southwest
corner thereof; thence North, 51.78 feet, along the West boundary
of said Lot 1 (East right-of-way line of WESTLAND AVENUE), to the
POINT OF BEGINNING.
VACATED PROPERTY:
PARCEL IV
That part of INMAN AVENUE described as follows:
BEGINNING at the intersection of the centerline of INMAN AVENUE
with the West right-of-way line of ALBANY AVENUE, run thence
SOUTH (assumed bearing), 25.00 feet to the Northeast corner of
Lot 13, Block 3 of SWANN AND HOWARD AVENUES SUBDIVISION,
according to the map or plat thereof as recorded in Plat Book 9,
Page 59, of the Public Records of Hillsborough County, Florida;
thence N.89DEG.54'24"W., 270.06 feet along the North boundary of
said Block 3, to a point on the North boundary of Lot 8 of said
Block 3; thence N. 00DEG.02'13"W., 25.00 feet to the centerline of
INMAN AVENUE, thence S.89DEG.54'24"E., 270.07 feet, along said
centerline, to the POINT OF BEGINNING.
BASIS OF BEARINGS: For purposes of this description, the East
boundary of SWANN AND HOWARD AVENUES SUBDIVISION, according to
the map or plat thereof as recorded in Plat Book 9, Page 59, of
the Public Records of Hillsborough County, Florida, is assumed to
have a bearing of SOUTH.
<PAGE>
PARCEL V
That part of INMAN AVENUE described as follows:
BEGINNING at the Southeast corner of Lot 10, Block 2 of SWANN AND
HOWARD AVENUES SUBDIVISION, according to the map or plat thereof
as recorded in Plat Book 9, Page 59, of the Public Records of
Hillsborough County, Florida, run thence South (assumed bearing),
25.00 feet to the intersection of the centerline of INMAN AVENUE
with the West right-of-way line of ALBANY AVENUE; thence
N89DEG.54'24"W., 270.07 feet along said centerline; thence
N00DEG.02'13"W., 25.00 feet to a point on the South boundary of Lot
9 of Block 2, thence S.89DEG.54'24"E., 270.09 feet, along the South
boundary of Block 2, to the POINT OF BEGINNING.
BASIS OF BEARINGS: For purposes of this description, the East
boundary of SWANN AND HOWARD AVENUES SUBDIVISION, according to
the map or plat thereof as recorded in Plat Book 9, Page S5, of
the Public Records of Hillsborough County, Florida, is assumed to
have a bearing of SOUTH.
Page 2 of 2
<PAGE>
MEMORANDUM OF INTERCREDITOR AGREEMENT
THIS MEMORANDUM OF INTERCREDITOR AGREEMENT (this
"Memorandum"), dated as of April 15, 1994, is made by and between
(i) BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION (as
successor in interest to Security Pacific National Bank), as
agent for the "Holders of Secured Obligations" under the "Bank
Credit Agreement" each as defined below (in such capacity, the
"Agent") and BARNETT BANK OF TAMPA (as successor in interest to
First Florida Bank, N.A.), as Collateral Co-Agent under such Bank
Credit Agreement (the "Collateral Co-Agent" and, together with
the Agent and the Holders of Secured Obligations, collectively,
the "Existing Secured Parties"), whose address is c/o Bank of
America National Trust & Savings Association, Department 5596,
1455 Market Street, 12th Floor, San Francisco, CA 94103,
Attention Laura J. Knight, and (ii) HP FINANCE CORP., a Florida
corporation, whose address is 5364 Ehrlich Road #125, Tampa,
Florida 33625 ("HPFC").
RECITALS:
A. Kash N' Karry Food Stores, Inc., a Delaware corporation
(the "Company"), has entered into a Credit Agreement dated as of
October 12, 1988, and amended and restated as of September 14,
1989 (as further amended through the date hereof, the "Bank
Credit Agreement") with the Agent and the Senior Lenders referred
to therein, pursuant to which the Company executed as security
for the "Obligations" under (and as defined in) the Bank Credit
Agreement (the "Bank Obligations"), that certain First Mortgage,
Security Agreement, Financing Statement and Assignment of Rents
dated as of October 12, 1988, recorded in Official Records Book
5526, Page 923, of the Public Records of Hillsborough County,
Florida, as modified by a Mortgage Modification Agreement dated
as of September 14, 1989, recorded in Official Records Book 5807,
Page 433, of the Public Records of Hillsborough County, Florida,
as modified by a Future Advance Notice and Mortgage Modification
Agreement dated as of July 13, 1990, recorded in Official Records
<PAGE>
Book 6029, Page 238, of the Public Records of Hillsborough
County, Florida, as modified by a Future Advance Notice and
Mortgage Correction Agreement dated as of December 10, 1992,
recorded in Official Records Book 6824, Page 297, of the Public
Records of Hillsborough County, Florida, as modified by a
Mortgage Modification, Fixture Filing and Spreader Agreement
dated as of January 13, 1993, recorded in Official Records Book
6862, Page 1873, of the Public Records of Hillsborough County,
Florida, as supplemented by a Uniform Commercial Code Statement
of Change recorded in Official Records Book 7147, Page 709, of
the Public Records of Hillsborough County, Florida (as so
modified, supplemented and corrected, and as further amended,
modified, supplemented or corrected from time to time, the "Bank
Mortgage"); and
WHEREAS, the Company has executed in favor of HPFC a
Mortgage and Security Agreement of even date herewith recorded in
Official Records Book , Page of the Public Records of
Hillsborough County, Florida (the "HPFC Mortgage") as security
for the obligations set forth therein; and
WHEREAS, the parties now desire to execute and file of
record this Memorandum for the purpose of providing record notice
of the existence of an Intercreditor Agreement between them of
even date herewith (the "Inter creditor Agreement").
NOW THEREFORE, KNOW ALL MEN BY THESE PRESENTS, that the
Intercreditor Agreement contains various terms, covenants and
conditions governing the priority of the Bank Mortgage vis-a-vis
the HPFC Mortgage and certain rights and obligations of the
parties with respect thereto; reference should be made to the
Intercreditor Agreement for the specific terms thereof.
SIGNATURE BLOCKS ON ATTACHED PAGE
<PAGE>
IN WITNESS WHEREOF, this instrument has been executed and
delivered on the date first above written.
Signed, sealed and deliveredHP FINANCE CORP.
in the presence of:
/s/ Geraldine Rock By: /s/ Lesa Monday
Name: Geraldine Rock Name: Lesa Monday
Title: President
/s/ William R. Bird, Jr.
Name: William R. Bird, Jr.
BANK OF AMERICA NATIONAL TRUST & SAVINGS
ASSOCIATION (as successor in interest
to Security Pacific National Bank),
as Agent for the Holders of Secured
Obligations under the Bank Credit
Agreement
/s/ Bobby Curva By: /s/ Laura Knight
Name: Bobby Curva Name: Laura Knight
Title: Vice President
/s/ Michelle Anderson
Name: Michelle Anderson
BARNETT BANK OF TAMPA (assuccessor in
interest to First Florida Bank, N.A.),
as Collateral Co-Agent under the
Bank Credit Agreement
By:
Name: Name:
Title:
Name:
<PAGE>
ACKNOWLEDGEMENT
The undersigned consents to the foregoing Memorandum of
Intercreditor Agreement and its recordation in the Official
Records of Hillsborough County, Florida affecting the property
described in the HPFC Mortgage.
KASH N' KARRY FOOD STORES, INC.
By: /s/ Raymond P. Springer
Name: Raymond P. Springer
Title:Executive Vice President
STATE OF FLORIDA
COUNTY OF HILLSBOROUGH
The foregoing Acknowledgment was acknowledged before me this 14
day of April , 1994 by Raymond P. Springer, as Executive
Vice President of KASH N' KARRY FOOD STORES, INC., a Florida
corporation, on behalf of the corporation.
He/she is personally known to me and did not take an oath.
/s/ Leslie Wager Hudock
Notary Public
Leslie Wager Hudock
Name (Printed or Typed)
Commission No.
My Commission Expires:
(NOTARY SEAL)
108651.wp
<PAGE>
STATE OF FLORIDA
COUNTY OF ORANGE
The foregoing instrument was acknowledged before me this
13th day of April, 1994 by LESA MONDAY, as President of HP
FINANCE CORP, a Florida corporation, on behalf of the
corporation. He/she is personally known to me or has produced
as identification and did/did not take an oath.
/s/ William R. Bird, Jr.
Notary Public
__________________________
Name (Printed or Typed)
Commission No.
My Commission Expires:
(NOTARY SEAL)
STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO
The foregoing instrument was acknowledged before me this
19th day of April, 1994 by LAURA KNIGHT , as VICE
PRESIDENT of BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION
(as successor in interest to Security Pacific National Bank), as
Agent for the Holders of Secured Obligations under the Bank
Credit Agreement, on behalf of the association. He/she is
personally known to me or has produced as
identification and did/did not take an oath.
/s/ JAMES B. ROUSEY
Notary Public
JAMES B. ROUSEY
Name (Printed or Typed)
Commission No. 975464
My Commission
Expires:10/15/96.
(NOTARY SEAL)
108651.wp
13/SEC.LAW/1994/K6313.a8
[EXECUTION COPY]
NOTE AND WARRANT PURCHASE AGREEMENT
Dated as of February 1, 1994
_________________________________________
By and Between
Kash N' Karry Food Stores, Inc.
and
Green Equity Investors, L.P.
<PAGE>
NOTE AND WARRANT PURCHASE AGREEMENT
This Note and Warrant Purchase Agreement ("Agreement") is
entered into as of February 1, 1994 by and between Kash N' Karry
Food Stores, Inc., a Delaware corporation (the "Company") and
Green Equity Investors, L.P., a Delaware limited partnership (the
"Purchaser").
In consideration of the mutual covenants and agreements
herein contained, the parties hereto covenant and agree as
follow:
1. Purchase and Sale of Note and Warrants. Subject
to the terms and conditions herein set forth, in case the Company
shall give notice to the Purchaser on or before February 4, 1994,
as hereinafter provided, the Company shall sell to the Purchaser,
and the Purchaser shall purchase from the Company, a note in
substantially the form of Exhibit A hereto (the "Note") in an
aggregate principal amount not exceeding $2,000,000 at a price
equal to the principal amount thereof, together with the Initial
Warrant (as defined in Section 3 below).
Subject to satisfaction of the conditions in
Section 5 hereof, the purchase and delivery of the Note and
Initial Warrant shall take place at the offices of Kramer, Levin,
Naftalis, Nessen, Kamin & Frankel, New York, New York upon the
irrevocable notice (which may be telephonic) of the Company
(which notice must be received by the Purchaser prior to 12:00
noon, New York time) on the requested borrowing date (the
"Closing Date") specifying the amount to be borrowed under the
Note and the account or accounts to which the purchase price
therefor is to be transferred.
2. Fees and Expenses. In consideration of the
commitment of Purchaser to purchase the Note and the Warrants and
its arrangement of financing therefor, concurrently with the
execution hereof, the Company shall pay to the Purchaser, in
immediately available funds, a fee in the amount of $50,000. The
Company hereby agrees in addition to pay, promptly upon receipt
of request therefor, all out-of-pocket fees and expenses (other
than commitment fees) incurred by the Purchaser in connection
with the preparation and negotiation of this Agreement and the
financing therefor (including reasonable attorneys' fees and
expenses) and to pay or reimburse the Purchaser, promptly upon
receipt of request therefor, all costs and expenses (including
reasonable attorneys' fees and expenses) incurred by it in
connection with the enforcement or attempted enforcement of this
Agreement or the Note, and any expenses incurred as a result of
the purchase of a participation contemplated by the Seventh
Amendment to the Credit Agreement.
3. Issuance of Warrants. In the event the Company
elects to cause the Purchaser to acquire the Note, the Company
<PAGE>
shall concurrently issue to the Purchaser, for no additional
consideration, a warrant in substantially the form of Exhibit B
hereto (the "Initial Warrant") to purchase the number of shares
of common stock, $.01 par value, of the Company (the "Shares,"
which term shall include all securities issuable under the
warrant) equal to 2% of the Fully Diluted Shares of the Company
as of the Closing Date. "Fully Diluted Shares" shall mean and
include all shares of common stock outstanding on any relevant
date of determination, and all shares of common stock issuable
upon exercise of warrants, options (including employee stock
options) and any other securities convertible (whether or not
presently convertible or exercisable) into or exercisable for the
purchase of common stock of the Company, including the Shares
issuable upon exercise of the Warrants. If the Closing Date were
the Date hereof and the entire $2,000,000 were borrowed, the
number of Shares purchasable with the Initial Warrant would be
63,235.
In the event the Note is not, for any reason, paid
in full on the date that payment thereunder is due, the Company
hereby agrees to issue, for no additional consideration, an
additional warrant substantially in the form of Exhibit B hereto
(the "Additional Warrant") to purchase such number of Shares as,
when added to the number of Shares purchasable with the Initial
Warrant, is equal to 5% of the Fully Diluted Shares of the
Company. To the extent that less than $2,000,000 is borrowed
pursuant to this Agreement, the number of Shares subject to the
Initial Warrant and Additional Warrant shall be proportionately
reduced.
The Company hereby agrees that the holders of the
Shares issuable pursuant to the Initial Warrant and, if issued,
the Additional Warrant (collectively, the "Warrants") shall have
registration rights with respect to such Shares which are
equivalent to the most favorable such rights as have been, or
hereafter may be, granted to any holder of the common stock (or
other class of securities into which common stock of the Company
may hereafter be converted) of the Company.
4. Representations and Warranties. In order to
induce the Purchaser to enter into this Agreement and to purchase
the Note and the Warrants, the Company represents and warrants to
the Purchaser as follows:
(a) Authority. (i) The Company has the
requisite corporate power and authority to execute, deliver and
perform its obligations under this Agreement, the Note, and the
Warrants. The execution, delivery and performance of this
Agreement, the Note and the Warrants, and the consummation of the
transactions contemplated thereby have been duly authorized by
all necessary corporate action on the part of the Company.
(ii) Each of the Agreement,
the Note and the Warrants is or will be, as the case may be, duly
<PAGE>
executed and delivered by the Company and constitutes a legal,
valid and binding obligation, enforceable against it in
accordance with its terms (except as enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or limiting creditors' rights generally or by
equitable principles relating enforceability).
(b) No Conflict. The execution, delivery and
performance by the Company of this Agreement, the Note and the
Warrants do not and will not (i) conflict with or violate the
Company's certificate of incorporation or bylaws, (ii) conflict
with or result in a breach of or constitute (with or without
notice or lapse of time or both) a default under a Requirement of
Law or material Contractual Obligation of the Company, or require
termination of any material Contractual Obligation, (iii) result
in or require the creation or imposition of any Lien whatsoever
upon any of the properties or assets of the Company or (iv)
require any approval of stockholders of the Company.
(c) Government Consent. The execution, delivery
and performance by the Company of this Agreement, the Note and
the Warrants do not and will not require any registration with,
consent or approval of, or notice to, or other action with or by,
any governmental authority, except filing, consents or notices
which have been, or will in due course be, made, obtained or
given.
(d) Capitalization. On the date hereof, the
capital stock of the Company is as set forth on Exhibit C hereto.
All of such outstanding shares were duly and validly issued and
are fully paid and nonassessable. Except as set forth on Exhibit
C hereto, there are outstanding no rights to subscribe for or
purchase, or any warrants or options for the purchase of, or any
agreements (contingent or otherwise) providing for the issuance
of, or any calls, commitments or claims of any character relating
to any of the Company's capital stock or any securities
convertible into or exchangeable for any of its capital stock.
The Shares to be issued to the Purchaser upon exercise of the
Warrants have been duly authorized for issuance and, when sold
and delivered against payment therefor as provided therein, will
be validly issued, fully paid and nonassessable. There are no
preemptive rights as to any of the outstanding shares of the
Company's capital stock.
(e) Financial Statements and Projections. The
audited financial statements for the fiscal year ended August 1,
1993, and unaudited financial statements for the quarter ended
October 1, 1993 of the Company were prepared in accordance with
GAAP, except as otherwise noted therein, and fairly represent the
consolidated financial position of the Company as of the
respective dates thereof, and the results of operations and
changes in the financial position of the Company for each of the
periods covered thereby, subject, in the case of any unaudited
interim financial statements, to changes resulting from audit and
<PAGE>
normal year-end adjustments. The Company has no material
obligations, contingent liabilities or liabilities for taxes,
long term leases or material or unusual forward or long term
commitments which are not reflected in such financial statements
and the notes thereto. The "Daily Cash Availability/Revolver
Projections" were prepared in a manner consistent with the
current accounting practices of the Company, are based upon
reasonable assumptions, and represent the Company's good faith
estimates as to the matters set forth therein.
(f) Other Representations and Warranties. The
Company hereby incorporates by reference as if set forth herein
in full, and restates to the Purchaser, all of the
representations and warranties set forth in that certain Credit
Agreement dated as of October 12, 1988 among the Company, Bank of
America and the other senior lenders named therein, as amended to
date (the "Credit Agreement"), except to the extent any such
representation or warranty is not required to be restated by the
Company in connection with any reborrowing under the aforesaid
Credit Agreement.
5. Conditions Precedent. The Purchaser's obligation
to purchase and pay for the Note and to acquire the Initial
Warrant shall be subject to fulfillment on or before the Closing
Date of the following conditions:
(a) Opinion of Counsel. The Purchaser shall have
received from Kramer, Levin, Naftalis, Nessen, Kamin & Frankel,
counsel for the Company, an opinion, dated the Closing Date, in
substantially the form of Exhibit D attached hereto.
(b) Financing. The Purchaser shall have
completed arrangements with a financial institution, or shall
have issued a call for and received the requisite capital from
its limited partners, in each case in an amount sufficient to
fund the purchase of the Note at 100% of its face amount.
(c) Representations and Warranties. The
representations and warranties in Section 4 hereof shall be true
and correct in all material respects as if made on the Closing
Date, and the Company shall deliver to the Purchaser a
certificate of its Chief Executive Officer to such effect.
(d) Seventh Amendment. The Seventh Amendment to
the Credit Agreement shall have been executed and delivered by
the parties thereto and shall have become effective by its terms.
(e) Documents. The Purchaser shall have received
(i) an executed Note in the amount being borrowed, (ii) an
executed Initial Warrant representing the appropriate number of
Shares and (iii) such other documents or instruments as the
Purchaser may reasonably request.
<PAGE>
6. General Provisions.
(a) Notices. Except as set forth in Section 1
hereof, all communications provided for hereunder shall be in
writing and delivered by hand or sent by first-class mail or
telecopy to the parties at the addresses set forth underneath
their signatures below. All such communications shall be deemed
to have been given or made when so delivered by hand or telecopy,
or five Business Days after being so mailed.
(b) Governing Law. This Agreement, the Note and
the Warrants shall be construed in accordance with and governed
by the laws of the State of New York.
(c) Indemnification. In consideration of the
execution and delivery of this Agreement by the Purchaser, the
Company hereby agrees to indemnify and hold each of the
Purchaser's affiliates, partners, employees and agents (herein
called the "Indemnitees") free and harmless from and against any
and all actions, cause of action, suits, losses, liabilities and
damages, and expenses in connection herewith, including without
limitation, reasonable counsel fees and disbursement (herein
called the "Indemnified Liabilities") incurred by the Indemnitees
or any of them as a result of, or arising out of, or relating to
the execution, delivery, performance or enforcement of this
Agreement, the Note or the Warrants, provided, however, that the
Indemnified Liabilities shall not include any liabilities arising
on account of any Indemnitee's gross negligence or willful
misconduct.
(d) Representation and Warranty. The Purchaser
represents and warrants to the Company that it is acquiring the
Note and Warrants for its own account and with no intention of
distributing any part thereof in any transaction that would be in
violation of the registration requirements of the Securities Act
of 1933, as amended.
(e) Assignment. Neither party may assign its
obligations hereunder without the prior written consent of the
other. The Purchaser may assign it rights (including the Note
and the Warrants) hereunder, however, without notice to or the
consent of the Company. In connection with any such assignment,
the Company hereby expressly waives and agrees not to assert, as
to the assignee of the Note and/or any Warrant, any defenses,
rights, claims or setoffs it may otherwise have in respect of the
Purchaser.
(f) Defined Terms. Terms used in this Agreement
without definition shall have the meanings ascribed thereto in
the Credit Agreement.
(g) Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an
<PAGE>
original but all of which shall together constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
COMPANY: KASH N' KARRY FOOD STORES, INC.
6422 Harney Road
Tampa, Florida 33610
Attention: Raymond P. Springer
Telecopy: 813-626-9550
By: /s/ R.P. Springer
Name: R.P. Springer
Title: Executive Vice President
PURCHASER: GREEN EQUITY INVESTORS, L.P.
333 South Grand Avenue, Suite 5400
Los Angeles, California 90071
Telecopy: (213) 625-2043
By: LEONARD GREEN & PARTNERS, L.P.
By: /s/
General Partner
<PAGE>
EXHIBIT A
New York City
$2,000,000 February __, 1994
FOR VALUE RECEIVED, the undersigned, KASH N' KARRY FOOD
STORES, INC., a corporation organized and existing under the laws
of the State of Delaware (the "Company"), hereby absolutely and
unconditionally promises to pay, in immediately available funds,
to the order of GREEN EQUITY INVESTORS, L.P., a Delaware limited
partnership (the "Holder"), at the office of its general partner,
Leonard Green & Partners, L.P. 333 South Grand Avenue, Los
Angeles, California, on May 2, 1994, the principal sum of
$2,000,000 or so much thereof as shall be outstanding, together
with interest on the principal balance outstanding hereunder from
time to time from the date hereof through and including the
maturity hereof on May 2, 1994. The principal balance
outstanding hereunder from time to time shall bear interest from
the date advanced until paid at a rate per annum equal to the
Base Rate plus 1%. The "Base Rate" means the higher of:
(a) the rate of interest publicly announced
from time to time by Bank of America National
Trust and Savings Association, a national banking
association (the "Bank") in San Francisco,
California, as its "reference rate," or
(b) one-half percent per annum above the
latest Federal Funds Rate.
"Federal Funds Rate" means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Board
(including any such successor, "H.15(519)") for such day opposite
the caption "Federal Funds (Effective)." If on any relevant day
such rate is not yet published in H.15(519), the rate for such
day will be the rate set forth in the daily statistical release
designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by
the Federal Reserve Bank of New York (including any such
successor, the "Composite 3:30 p.m. Quotation") for such day
under the caption "Federal Funds Effective Rate." If on any
relevant day the appropriate rate for such previous day is not
yet published in either H.15(519) or the Composite 3:30 p.m.
Quotations, the rate for such day will be the arithmetic mean of
the rates for the last transaction in overnight Federal Funds
arranged prior to 9:00 a.m. (New York time) on that day by each
of three leading brokers of Federal Funds transactions in New
York City selected by the Holder. All computations of interest
A-1
<PAGE>
at all times as the Base Rate is determined by the Bank's
"reference rate" shall be made on the basis of a year of 365 or
366 days, as the case may be, and actual days elapsed. All other
computations of interest shall be made on the basis of a 360-day
year and actual day elapsed. Interest shall accrue during each
period during which interest is computed from the first day
thereof to the last day thereof. This Note is issued pursuant to
a Note and Warrant Purchase Agreement between the Company and the
Holder dated as of February 1, 1994 (the "Loan Agreement") and is
subject to the terms and provisions thereof, which are hereby
incorporated in this Note by reference.
This Note may be prepaid, without premium, in full at
any time and in part, from time to time, on one (1) day's notice
to the Holder provided that no amount so prepaid may be
reborrowed. All prepayments shall be in amounts of $100,000 or
any multiple of $50,000 in excess thereof. All prepayments shall
be accompanied by a payment of accrued interest to the date of
such prepayment on the amount so prepaid. Notwithstanding the
foregoing, no prepayment hereunder may be made if at the time or
as a result thereof, there shall be a Potential Event of Default
or Event of Default (as those terms are defined in the Credit
Agreement, as in turn defined in the Loan Agreement). The entire
unpaid principal balance and all accrued and unpaid interest
shall be paid in full on May 2, 1994. Any overdue principal and
any overdue interest from time to time outstanding shall bear
interest payable on demand at a rate which is 3% per annum in
excess of the Base Rate.
If(x) the Company shall fail to make any payment when
due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) on any indebtedness of the
Company other than under this Note, and the aggregate amount of
such indebtedness is $1,000,000 or more, or (y) any other breach,
default or event of default shall occur under any instrument,
agreement or indenture pertaining to any such indebtedness, and
as a result the holder thereof shall accelerate the maturity of
such indebtedness, the entire unpaid principal amount of this
Note and all of the unpaid interest accrued hereon may be
declared due and, thereupon, shall become immediately payable,
upon notice from the Holder to the Company.
The Company promises to pay all costs and expenses,
including reasonable attorney's fees and disbursements, incurred
in the collection and enforcement of this Note or any appeal of a
judgment rendered thereon. The Company hereby waives
presentment, demand, notice, protest and all other demands and
notices in connection with the delivery, acceptance, performance
and enforcement of this Note, and also hereby assents to
extensions of the time of payment or forbearance or other
indulgences without notice.
This Note and the obligations of the Company hereunder
shall be governed by and interpreted and determined in accordance
with the laws of the State of New York.
A-2
<PAGE>
IN WITNESS WHEREOF, KASH N' KARRY FOOD STORES, INC. has
caused this Note to be executed by its duly authorized officer on
the ____ day of _____, 1994.
KASH N' KARRY FOOD STORES, INC.
By:____________________________
Name:__________________________
Title:_________________________
A-3
<PAGE>
EXHIBIT B
[FORM OF WARRANT]
THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES
OF COMMON STOCK OR OTHER SECURITIES ISSUABLE UPON EXERCISE
THEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT, OR (ii) AN
OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY
SATISFACTORY TO COUNSEL FOR THIS CORPORATION, THAT AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
IS AVAILABLE.
No._________ Warrant to Purchase
_________________________
Shares of Common Stock
KASH N' KARRY FOOD STORES, INC.
STOCK PURCHASE WARRANTS
This certifies that, for value received, GREEN EQUITY
INVESTORS, L.P. (the "Holder"), is entitled to purchase from KASH
N' KARRY FOOD STORES, INC., a Delaware corporation (the
"Company"), the aggregate number of shares of Common Stock, at
the option of the Holder, shown above at any time after 9:00
a.m., New York City time, on February ___, 1994 (the "Issue
Date") until 5:00 p.m., New York City time, on the Expiration
Date, at a purchase price per share equal to the Warrant Price.
Section 1. Definitions. As used in this Warrant, and
unless the context requires otherwise, the following terms have
the meaning indicated:
"Common Stock" means the Common Stock of the Company,
par value $.01 per share.
"Expiration Date" means the fifth anniversary of the
Issue Date.
"Warrant Price" has the meaning assigned in Section 8
hereof, subject to adjustment as provided in Section 9.
"Warrant" means this Warrant, as the same may be
amended, supplemented or modified in accordance with the terms
hereof.
"Warrant Shares" means the shares of Common Stock
issued or issuable upon exercise of this Warrant.
<PAGE>
Section 2. Term of Warrant; Exercise of Warrant.
2.1 Term of Warrant. Subject to the terms hereof, the
Holder shall have the right, which may be exercised at any time
from and after 9:00 a.m., New York City time, on the Issue Date
and until 5:00 p.m., New York City time, on the Expiration Date,
to purchase from the Company the number of fully paid and non-
assessable Warrant Shares which the Holder may at the time be
entitled to purchase on exercise hereof. If and to the extent
this Warrant not exercised prior to 5:00 p.m., New York City
time, on the Expiration Date, it shall become void and all rights
hereunder and all rights in respect hereof shall cease as of such
time.
2.2 Exercise of Warrant. The Warrant may be exercised
upon surrender to the Company at its office at 6422 Harney Road,
Tampa, Florida 33610, or such other office as the Company shall
notify the Holder, in writing, of this Warrant, together with the
Purchase Form included herein duly completed and signed and upon
payment to the Company of the Warrant Price (as defined in and
determined in accordance with the provisions of Sections 8 and 9
hereof), for the number of Warrant Shares in respect of which
this Warrant is then being exercised.
Unless otherwise agreed to by the Company, all payments
of such Warrant Price shall be made by certified of official bank
check payable to the order of the Company.
Subject to Section 3 hereof, upon the surrender of the
Warrant and payment of the Warrant Price as aforesaid, the
Company shall cause to be issued and delivered with all
reasonable dispatch to or upon the written order of the Holder
and in such name or names as the Holder may designate, a
certificate or certificates for the number of full Warrant Shares
so purchased upon the exercise of this Warrant, together with
cash, as provided in Section 10 hereof, in respect of any
fractional Warrant Shares otherwise issuable upon surrender. If
permitted by applicable law, such certificate or certificates
shall be deemed to have been issued and any person so designated
to be named therein shall be deemed to have become a holder of
record of such Warrant Shares as of the date of the surrender of
this Warrant and payment of the Warrant Price, as aforesaid.
Each share of Common Stock that may be issued upon exercise of
this Warrant will, upon such issuance, be validly issued, fully
paid, non-assessable, and free from all taxes, liens and charges
with respect to the issue thereof. The rights of purchase
represented by this Warrant shall be exercisable, at the election
of the Holder hereof (subject to Section 2.1 hereof), either in
full or from time to time in part and, in the event that this
Warrant is exercised in respect of less than all of the Warrant
Shares purchasable on such exercise at any time prior to the
Expiration Date, a new Warrant evidencing the right to purchase
the remaining Warrant Shares will be issued.
2.3 Compliance with Government Regulations. The
Company shall have the right to refuse to honor the exercise of
<PAGE>
this Warrant, in whole or any part, unless the Holder shall
represent to the Company in writing that its purchase of stock or
other securities pursuant thereto is for its own account and for
investment purposes only and not with a view to distribution or
resale in violation of the registration requirements of state or
federal securities laws.
The Company shall not be required to issue or deliver
any certificates representing shares of stock or other securities
purchased upon the exercise of this Warrant prior to (a) the
completion at the expense of the Company of any registration or
other qualification of such shares or other securities under any
state or federal law or rules or regulation of any governmental
regulatory body or self-regulatory organization which counsel for
the Company shall reasonably determine to be necessary or
advisable, (b) the obtaining from the Holder of a written
agreement and representations with respect to the disposition of
the shares or other securities, or with respect to any other
matters, which counsel for the Company shall reasonably determine
to be necessary or advisable to comply with the terms on which
the shares or other securities have been qualified or registered
under any such law, rules or regulations or to exempt the shares
from such qualification or registration, and (c) the obtaining at
the expense of the Company of any approval or other clearance
from any governmental regulatory body or self-regulatory
organization which such counsel may reasonably determine to be
necessary or advisable; provided, however, that compliance with
the provisions of clauses (a), (b) and (c) of this sentence shall
not be required for the issuance of such certificates if the
Holder shall deliver to the Company an opinion of counsel, which
counsel shall be reasonably acceptable to the Company and which
opinion shall be in form and substance reasonably satisfactory to
the Company, to that effect. If compliance with the provisions
of clauses (a), (b) and/or (c) or the preceding sentence shall be
required, the Company shall use its best efforts, at its expense,
promptly to effect such compliance.
Section 3. Payment of Taxes. The Company will pay all
documentary stamp and other taxes, if any, attributable to the
initial issuance of Warrant Shares upon the exercise hereof;
provided, however, that the Company shall not be required to pay
any tax or other governmental charge which may be payable in
respect of any transfer involved in the issue or delivery of any
certificates or certificates for Warrant Shares in a name other
than that of the Holder, and the Company shall not register any
such transfer or issue any such certificate until such tax or
governmental charge, if required, shall have been paid.
Section 4. Transfer. Subject to compliance with the
restrictions on transfer set forth herein and subject to Section
3, this Warrant shall be transferable upon delivery of the
Warrant duly endorsed by the Holder or by his duly authorized
attorney or representative, or accompanied by proper evidence of
<PAGE>
succession, assignment or authority to transfer. In all cases of
transfer by an attorney, the original power of attorney, duly
approved, or a copy thereof, duly certified, shall be deposited
and remain with the Company. In case of transfer by executors,
administrators, guardians or other legal representatives, duly
authenticated evidence of their authority shall be produced, and
may be required to be deposited and remain with the Company in
its discretion.
Section 5. Exchange of Warrant Certificates. Subject
to the restrictions on transfer contained herein and to such
requirements as the Company may reasonably request to ensure
compliance with applicable law, this Warrant may be exchanged for
another certificate or certificates entitling the Holder hereof
to purchase a like aggregate number of Warrant Shares as this
Warrant shall then entitle the Holder to purchase. The Holder
shall make such request in writing delivered to the Company, and
shall surrender this Warrant, properly endorsed. Thereupon, the
Company shall countersign and deliver to the Holder a new
certificate or certificates, as the case may be, as so requested.
Section 6. Mutilated or Missing Warrants. In case
this Warrant shall be mutilated, lost, stolen or destroyed, the
Company shall issue, countersign and deliver in exchange or
substitution hereof, a new Warrant of like tenor and representing
an equivalent right or interest, but only upon, in case this
Warrant is lost, stolen or destroyed, receipt of evidence
reasonably satisfactory to the Company of such loss, theft or
destruction and a reasonable indemnity therefor. The Holder
shall also comply with such other reasonable regulations and pay
such other reasonable charges as the Company may prescribe.
Section 7. Reservation of Warrant Shares; Purchase of
Warrants.
7.1 Reservation of Warrant Shares. The Company has
reserved out of its authorized Common Stock the number of shares
of Common Stock set forth on the first page hereof for issuance
upon exercise of this Warrant. The Company shall at all times
hereafter until the Expiration Date keep reserved out of its
authorized Common Stock, for issuance upon exercise of this
Warrant, all of the shares not theretofore issued upon such
exercise. If at any time the number of shares of authorized
Common Stock shall not be sufficient to effect the exercise of
this Warrant, the Company will take such corporate action as may
be necessary to increase its authorized but unissued Common
Stock, to such number of shares as shall be sufficient for such
purpose.
Section 8. Warrant Price. Subject to Section 9
hereof, the price at which Warrant Shares shall be purchasable
upon exercise of Warrants (the "Warrant Price") shall be $.435
per share.
Section 9. Adjustment of Warrant Price and Number of
Warrant Shares. The number and kind of securities purchasable
upon the exercise of this Warrant and the Warrant Price shall be
subject to adjustment from time to time upon the happening of
<PAGE>
certain events, in each case occurring on and after the date
hereof, as hereinafter described.
9.1 Adjustment. The number and kind of securities
purchasable upon the exercise of this Warrant and the Warrant
Price shall be subject to adjustment as follows:
(a) In case the Company shall (i) pay a dividend on
its outstanding Common Stock in shares of Common Stock or make a
distribution to all holders of its outstanding Common Stock in
shares of Common Stock, (ii) subdivide its outstanding shares of
Common Stock into a greater number of shares of Common Stock,
(iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock or (iv) issue by
reclassification of its shares of Common Stock other securities
of the Company (including any such reclassification in connection
with a consolidation or merger in which the Company is the
surviving corporation), the number of Warrant Shares purchasable
upon exercise hereof immediately prior thereto shall be adjusted
so that the Holder upon exercise hereof shall be entitled to
receive the kind and number of such Warrant Shares or other
securities of the Company which it would have owned or have been
entitled to receive after the happening of any of the events
described above had this Warrant been exercised immediately prior
to the happening of such event or any record date with respect
thereto. An adjustment made pursuant to this paragraph (a) shall
become effective on the date of the dividend payment,
subdivision, combination or issuance retroactive to the record
date with respect thereto, if any, for such event. Such
adjustment shall be made successively whenever such an issuance
is made.
(b) In the case the Company shall distribute to all
holders of its outstanding Common Stock evidences of its
indebtedness or assets or securities other than such Common Stock
(excluding regular cash dividends and dividends or distributions
referred to in paragraph (a) above) or rights, options or
warrants, or convertible or exchangeable securities, containing
the right to subscribe for or purchase shares of Common Stock,
then in each case the number of Warrant Shares thereafter
purchasable upon the exercise of this Warrant shall be determined
by multiplying the number of such Warrant Shares theretofore
purchasable upon the exercise of this Warrant by a fraction, of
which the numerator shall be the then current market price per
share of Common Stock (as determined in accordance with paragraph
(e)(3) below) on the date of such distribution, and of which the
denominator shall be the then current market price per share of
Common Stock, less the then fair value per share of outstanding
Common Stock (as determined by the Board of Directors of the
Company, whose good faith determination shall be conclusive) of
the evidences of indebtedness, assets or securities so
distributed or of such rights, options or warrants, or of such
convertible or exchangeable securities. Such adjustment shall be
made successively whenever any such distribution is made, and
shall become effective on the date of distribution retroactive to
<PAGE>
the record date for the determination of stockholders entitled to
receive such distribution. No further adjustment shall be made
for the actual issuance of Common Stock upon the conversion,
exercise or exchange of any rights, options, warrants or other
securities in respect of which adjustment has been made pursuant
to this paragraph (b).
(c) In case the Company shall issue shares of Common
Stock (or rights, options, warrants or other securities
convertible into or exercisable or exchangeable for Common Stock)
(excluding (i) shares of Common Stock issued in or as a result of
any of the transactions described in paragraph (a) or (b) above,
(ii) shares of Common Stock issuable upon exercise of stock
options or similar rights granted or to be granted to directors,
employees, consultants, contractors or other agents,
representatives or professionals of the Company pursuant to a
stock option or similar plan approved by the stockholders of the
Company, (iii) shares of Common Stock issued to directors,
employees, consultants, contractors, licensees or other agents,
representatives or professionals of the Company pursuant to any
compensation plan or agreement approved by the stockholders of
the Company, (iv) shares of Common Stock issued pursuant to a
dividend or interest reinvestment plan, or (v) shares of Common
Stock issued in a public offering at a price per share that is
not less than 95% of the then current market price) at a price
per share below the then current market price, then in each such
case the number of Warrant Shares thereafter purchasable upon the
exercise of this Warrant shall be determined by multiplying the
number of Warrant Shares theretofore purchasable upon the
exercise of this Warrant by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding on the
date of such issuance (including the shares of Common Stock
issued on the date of such issuance) and the denominator of which
shall be an amount equal to the sum of (i) the total number of
shares of Common Stock outstanding immediately prior to such
issuance plus (ii) the number of shares which the aggregate
consideration received for such issuance would purchase at the
current market price per share of Common Stock (as determined in
accordance with paragraph (e)(3) below) at such record date.
(d) (1) For the purposes of paragraph (c) above, if
the Company shall issue any security, option, warrant or other
right which directly or indirectly may be converted into or
exercised or exchanged for shares of Common Stock, the Common
Stock issuable upon conversion, exercise or exchange of such
securities or rights shall thereupon be deemed to have been
issued and to be outstanding, and the relevant price per share of
Common Stock and the consideration received by the Company upon
conversion, exercise or exchange of such securities or rights
shall be deemed to include the sum of the consideration received
for the issuance of such securities or rights and the minimum
additional consideration payable upon the conversion, exercise or
exchange of such securities or rights. No further adjustment
shall be made for the actual issuance of Common Stock upon the
conversion, exercise or exchange of any such security or right.
<PAGE>
(2) For purposes of paragraph (c) above, the
following shall also be applicable: In case the Company shall
issue shares of its Common Stock for a consideration wholly or
partly other than cash, the amount of the consideration other
than cash received by the Company shall be deemed to be the fair
value of such consideration as determined in good faith by the
Board of Directors of the Company. Consideration received by the
Company for issuance of its Common Stock shall be determined in
all cases without deduction therefrom of any expenses,
underwriting commissions or concessions incurred in connection
therewith.
(3) For the purpose of any computation under
paragraph (b) or (c) of this Section, the "current market price
per share" of Common Stock at any date shall be the average of
the daily closing prices for 20 consecutive trading days
commencing 30 trading days before the date of such computation.
The "closing price" for each day shall be the last such reported
sales price regular way or, in case no such reported sale takes
place on such day, the average of the closing bid and asked
prices regular way for such day, in each case on the principal
national securities exchange on which the shares of Common Stock
are listed or admitted to trading or, if not listed or admitted
to trading, the average of the high bid and low asked prices of
the Common Stock in the over-the-counter market as reported by
NASDAQ or any comparable system. In the absence of one or more
such quotations, the Board of Directors of the Company shall in
good faith determine the current market price on the basis of
such quotations or formula as it considers appropriate, which
determination shall be conclusive.
(e) In any case in which this Section 9.1 shall
require that any adjustment in the number of Warrant Shares be
made effective as of immediately after a record date for a
specified event, the Company may elect to defer until the
occurrence of the event the issuing to the Holder of the Warrant
Shares or other capital stock of the Company issuable upon the
exercise over and above the Warrant Shares or other capital stock
of the Company issuable upon the exercise of this Warrant prior
to such adjustment; provided, however, that the Company shall
deliver to the Holder a due bill or other appropriate instrument
evidencing the Holder's right to receive such additional shares
upon the occurrence of the event requiring such adjustment.
(f) No adjustment in the number of Warrant Shares
purchasable hereunder shall be required unless such adjustment
would require an increase or decrease of at least one percent
(1%) in the number of Warrant Shares purchasable upon the
exercise of this Warrant; provided, however, that any adjustments
which by reason of this paragraph (f) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment. All calculations shall be made to the nearest one
one-hundredth of a share.
(g) Whenever the number of shares of the Warrant
Shares purchasable upon the exercise of this Warrant is adjusted,
<PAGE>
as provided in paragraph (a), (b) or (c) of this Section, the
Warrant Price payable upon exercise of this Warrant shall be
adjusted by multiplying such Warrant Price immediately prior to
such adjustment by a fraction, of which the numerator shall be
the number of Warrant Shares purchasable upon the exercise of
this Warrant immediately prior to such adjustment, and of which
the denominator shall be the number of such Warrant Shares
purchasable immediately thereafter; provided, however, that in no
event shall the Warrant Price be less than the par value, if any,
of a share of Common Stock.
(h) No adjustment in the number of Warrant Shares
purchasable upon the exercise of this Warrant need be made under
paragraph (b) of this Section if the Company issues or
distributes to the Holder the rights, options, warrants,
convertible or exchangeable securities, evidences of indebtedness
or assets referred to in those paragraphs which the Holder would
have been entitled to receive had the Warrant been exercised
prior to the happening of such event or the record date with
respect thereto. No adjustment need be made for a change in the
par value of the Warrant Shares.
(i) For the purpose of this subsection 9.1, the term
"shares of Common Stock," shall mean (i) the class of stock
designated as the Common Stock of the Company, par value $.01 per
share, or (ii) any other class of stock resulting from successive
changes or reclassification of such respective classes of shares
consisting solely of changes in par value, or from par value to
no par value, or from no par value to par value. In the event
that at any time, as a result of an adjustment made pursuant to
paragraph (a) above, the Holder shall become entitled to purchase
any securities other than shares of Common Stock, thereafter the
number of such other securities so purchasable upon exercise of
this Warrant and the Warrant Price of such securities shall be
subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with
respect to the Warrant Shares contained in paragraphs (a) through
(h), inclusive, above, and the provisions of Section 3 and
subsections 9.2 through 9.6, inclusive, with respect to the
Warrant Shares, shall apply on like terms to any such other
securities.
9.2 Notice of Adjustment. Whenever the number of
Warrant Shares purchasable upon the exercise of this Warrant or
the Warrant Price of such Warrant Shares is adjusted, as herein
provided, the Company shall promptly mail by first class, postage
prepaid, to the Holder notice of such adjustment or adjustments.
9.3 No Adjustment for Dividends. Except as provided
in subsection 9.1, no adjustment in respect of any dividends or
other payments or distributions made to holders of securities
shall be made during the term of this Warrant or upon the
exercise of this Warrant.
<PAGE>
9.4 Preservation of Purchase Rights upon Merger,
Consolidation, etc. In case of any consolidation of the Company
with or merger of the Company with or into another entity
(whether or not the Company is the surviving corporation) or in
case of any sale, transfer or lease to another entity of all or
substantially all the property of the Company, the Company or
such successor or purchasing corporation, as the case may be,
shall execute an agreement that the Holder shall have the right
thereafter upon payment of the Warrant Price in effect
immediately prior to such action to purchase upon exercise of
this Warrant the kind and amount of securities, cash and property
which it would have owned or have been entitled to receive after
the happening of such consolidation, merger, sale, transfer or
lease had this Warrant been exercised immediately prior to such
action. Upon the execution of such agreement, this Warrant shall
be exercisable only for such securities, cash and property. The
Company shall furnish to the Holder notice of the execution of
any such agreement. Such agreement shall provide for
adjustments, which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 9.
The provisions of this subsection 9.4 shall similarly apply to
successive consolidations, mergers, sales, transfers or leases.
9.5 Other Adjustment. If any event occurs as to which
in the reasonable opinion of the Holder, in good faith, the other
provisions of this Section 9 are not strictly applicable but the
lack of any adjustment of the number of Warrant Shares issuable
upon exercise of this Warrant and the Warrant Price would not in
the opinion of the Holder fairly protect the rights of the Holder
in accordance with the basic intent and principles of such
provisions, or if strictly applicable would not fairly protect
the rights of the Holder in accordance with the basic intent and
principles of such provisions, then the Holder may appoint a firm
of independent certified public accountants of recognized
national standing (which may be the independent auditors of the
Company), which shall give their opinion upon the necessity and
form of any required adjustment to the number of Warrant Shares
issuable upon exercise of this Warrant and the Warrant Price, on
a basis consistent with the basic intent and principles
established in the other provisions of this Section 9 necessary
to preserve, without dilution, the exercise rights of the Holder.
Upon receipt of such opinion, the Company shall forthwith make
the adjustments described therein.
9.6 Statement on Warrant. Irrespective of any
adjustments in the Warrant Price or the number or kind of
securities purchasable upon the exercise of this Warrant, this
Warrant may continue to express the same price and number and
kind of shares as are stated herein.
Section 10. Fractional Interests. The Company shall
not be required to issue fractional Warrant Shares on the
exercise of this Warrant. If (a) any fraction of a Warrant Share
would, except for the provisions of this Section 10, be issuable
<PAGE>
on the exercise of this Warrant (or specified portion thereof),
and (b) the Holder shall have paid the amount due upon such
exercise with respect to such fractional share, then the Company
shall return to such Holder the amount so paid with respect to
such fractional Warrant Share.
Section 11. Registration under the Securities Act.
The Holder represents and warrants to the Company that it will
not dispose of this Warrant or any Warrant Shares except pursuant
to (i) an effective registration statement, or (ii) an opinion of
counsel, reasonably satisfactory to counsel for the Company, that
the proposed disposition of the Warrant or Warrant Shares would
not be in violation of the registration requirements of the
Securities Act. The Holder represents and warrants that it is
acquiring the Warrant and will acquire the Warrant Shares for its
own account and with no intention of distributing or reselling
this Warrant or Warrant Shares or any part thereof in any
transaction that would be in violation of the registration
requirements of the securities laws of the United States of
America or any state, without prejudice, however, to its rights,
consistent with the provisions of this Warrant, to sell or
otherwise dispose of all or any part of this Warrant or any
Warrant Shares under an effective registration statement under
the Securities Act or under an exemption from such registration
available under the Securities Act.
Section 12. Certificates to Bear Legends. The Warrant
Shares or other securities issued upon exercise of this Warrant
shall be subject to a stop-transfer order and the certificate or
certificates evidencing any such Warrant Shares or securities
shall bear the following legend by which the Holder thereof shall
be bound:
"THE SHARES [OR OTHER SECURITIES] REPRESENTED BY THIS
CERTIFICATE MAY NOT BE OFFERED, SOLD OR OTHERWISE EXCEPT PURSUANT
TO (i) AN EFFECTIVE REGISTRATION STATEMENT, OR (ii) AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO COUNSEL FOR THIS CORPORATION,
THAT AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933 IS AVAILABLE."
Section 13. No Rights as Stockholders; Notices to
Holders. Nothing contained in this Warrant shall be construed as
conferring upon the Holder the right to vote or to receive
dividends or to consent or to receive notice as a stockholder in
respect of any meeting of stockholders of the Company for the
election of the directors of the Company or any matter, or any
rights whatsoever as a stockholder of the Company. If, however
at any time prior to the expiration of this Warrant and prior to
its exercise, any of the following events shall occur:
(a) the Company shall declare any dividend payable in
cash or in any securities upon its shares of Common Stock or
make any distribution to the holders of its shares of Common
Stock;
<PAGE>
(b) the Company shall offer to all holders of its
shares of Common Stock any additional shares of Common Stock
or securities convertible into or exchangeable for shares of
Common Stock or any right to subscribe for or purchase any
thereof; or
(c) a dissolution, liquidation or winding up of the
Company (other than in connection with a consolidation,
merger, sale, transfer or lease of all or substantially all
of its property, assets and business as an entirety) shall
be proposed;
then in any one or more of said events the Company shall give
notice to the Holder as provided in Section 14 hereof, such
giving of notice to be completed at least 10 days prior to the
record date in the event of a transaction described in clause (a)
above and at least 20 days prior to the record date in the case
of a transaction referred to in clause (b) or (c) above fixed as
a record date or the date of closing the transfer books for the
determination of the stockholders entitled to such dividend,
distribution, or subscription rights, or for the determination of
the stockholders entitled to vote on such proposed dissolution,
liquidation or winding up. Such notice shall specify such record
date or the date of closing the transfer books, as the case may
be. Failure to mail or receive such notice or any defect therein
or in the mailing thereof shall not affect the validity of any
action taken in connection with such dividend, distribution or
subscription rights, or such proposed dissolution, liquidation or
winding up.
Section 14. Notices. Any notice pursuant to this
Warrant shall be in writing and shall be given by first class,
registered or certified mail, return receipt requested, telecopy,
courier service or personal delivery, if to the Company, at 6422
Harney Road, Tampa, Florida 33610, Attn: Secretary (or such other
address as shall be communicated by the Company to the Holder by
notice in accordance with this Section 14), and if to the Holder,
at such address as shall be communicated by the Holder to the
Company by notice in accordance with this Section 14 (or, in the
absence of such notice, at such address as otherwise appears on
the books and records of the Company).
Section 15. Supplements and Amendments. The
provisions of this Warrant may not be amended, modified or
supplemented, and waiver or consents to departures from the
provisions hereof may not be given, without the written consent
of the Holder.
Section 16. Successors. All the covenants and
provisions of this Warrant by or for the benefit of the Company
and the Holder shall bind and inure to the benefit of their
respective successors and permitted assigns hereunder, provided
that the Company may not assign its rights and obligations
hereunder except by operation of law.
<PAGE>
Section 17. Applicable Law. This Warrant shall be
governed by and construed in accordance with the laws of the
State of New York, without giving effect to principles of
conflicts of laws. The United States District Court for the
Southern District of New York or the courts of the State of New
York shall have jurisdiction in any action or proceeding arising
out of or relating to this Warrant.
Section 18. Benefits of this Agreement. Nothing in
this Warrant shall be construed to give to any person or entity
other than the Company and the Holder, any legal or equitable
right, remedy or claim under this Warrant.
Section 19. Captions. The captions of the Sections
and subsections of this Warrant have been inserted for
convenience only and shall have no substantive effect.
IN WITNESS WHEREOF, this Warrant has been duly
executed, as of February ___, 1994.
KASH N' KARRY FOOD STORES, INC.
By:____________________________
Name:_______________________
Title:______________________
<PAGE>
ASSIGNMENT
(To be executed only upon assignment of Warrant)
For value received, ___________________ hereby sells,
assigns and transfers unto _________________ this Warrant,
together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint _________________
attorney, to transfer this Warrant on the books of the within-
named Company with respect to the number of Warrant Shares set
forth below, with full power of substitution:
Name(s) of No. of
Assignee(s) Address Warrant Shares
And if said number of Warrant Shares shall not be all
the Warrant Shares issuable upon exercise of this Warrant, a new
certificate is to be issued in the name of said undersigned for
the balance remaining of the Warrant shares issuable upon
exercise of this Warrant.
Dated: ________________________, 19__
___________________________________
Note: The above signature
should correspond exactly
with the name on the face
of this Warrant.
<PAGE>
SUBSCRIPTION FORM
(To be executed upon exercise of Warrant)
Kash n' Karry Food Stores, Inc.:
The undersigned hereby irrevocably elects to exercise
the right of purchase represented by this Warrant for, and to
purchase hereunder, ______ shares of Common Stock, as provided
for herein, and tenders herewith payment of the exercise price in
full in the form of cash or a certified or official bank check in
the amount of $_______________.
Please issue a certificate or certificates for such
shares of Common Stock in the name of:
Name:________________________________
(Please Print Name, Address, and
(Social Security Number)
And if said number of shares shall not be all the
shares issuable under this Warrant, a new certificate is to be
issued in the name of said undersigned for the balance remaining
of the shares issuable thereunder.
Signature:__________________________
NOTE: The above signature should
correspond exactly with the
name on the first page of this
Warrant or with the name of
the assignee appearing in the
assignment form above.
<PAGE>
EXHIBIT C
The Company's authorized capital stock consists of:
(i) 4,000,000 shares of its Common Stock, $.01 par
value, of which (A) 2,819,589 shares are issued and
outstanding and (B) (w) 146,744 are reserved for
issuance pursuant to the Company's employee stock
option plan, (x) 52,250 are reserved for issuance
pursuant to Warrants outstanding to Lucky Stores, Inc.,
(y) 77,500 are reserved for issuance upon the
conversion of the Company's Series C Preferred Stock
and (z) 2,442 shares are held in treasury and reserved
for issuance to members of management, and
(ii) 150,000 shares of Preferred Stock, $.01 par
value, of which (A) 50,000 shares have been designated
and authorized as Series B Cumulative Preferred Shares,
of which 38,750 shares are issued and outstanding, and
(B) 100,000 shares have been designated and authorized
as Series C Convertible Preferred Shares, of which
77,500 shares are issued and outstanding.
<PAGE>
C-1
EXHIBIT D
[FORM OF OPINION OF KRAMER, LEVIN,
NAFTALIS, NESSEN, KAMIN & FRANKEL]
[To be subject to customary assumptions and qualifications]
1. The Company is validly existing as a corporation
in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to own and operate
its properties, to carry on its business as conducted, to execute
and deliver the Agreement, the Note and the Warrants and to
perform its obligations thereunder. The execution, delivery and
performance of the Agreement, the Note and the Warrants has been
duly authorized by all necessary corporate action on the part of
the Company. The Agreement, the Note and the Warrants have been
duly executed and delivered by the Company and constitute the
valid and binding obligations of the Company, enforceable against
the Company in accordance with their respective terms.
2. The authorized capital stock of the Company and,
to the best of our knowledge, the issued and outstanding shares
thereof are as described on Exhibit C to the Agreement. To the
best of our knowledge, and except as set forth on Exhibit C,
there are outstanding no rights to subscribe for or purchase, or
any warrants or options for the purchase of, or any agreement
(contingent or otherwise) providing for the issuance of, or any
calls, commitments or claims of any character relating to any of
the Company's capital stock or any securities convertible into or
exchangeable for any of its capital stock. The Shares to be
issued to the Purchaser upon exercise of the Warrants have been
duly authorized for issuance and, when sold and delivered against
payment therefor as provided therein, will be validly issued,
fully paid and nonassessable. There are no preemptive rights as
to any of the outstanding shares of the Company's capital stock.
3. No governmental consents, approvals,
authorizations, registrations, declarations or filings are
required to be obtained by the Company in connection with the
Agreement, the Note or the Warrants or the consummation of the
transactions contemplated thereby.
4. To the best of our knowledge, and without
independent inquiry, there are no actions, suits or proceedings
pending or threatened against the Company, in law or in equity,
before any court, arbitrator or administrative or governmental
body which are reasonably likely (either singly or in the
aggregate) to materially and adversely affect the Company.
5. None of the execution and delivery of the
Agreement, the Note or the Warrants, the consummation of the
<PAGE>
transactions contemplated thereby and compliance with the terms
and conditions thereof (A) conflict with, or result in a breach
or violation of, or constitute a default under, any of the terms,
conditions or provisions of (i) the Certificate of Incorporation
of Bylaws of the Company, (ii) any Material Agreement or (iii)
any statute, rule or regulation binding on the Company, (B)
result in the creation of any lien upon any of the properties or
assets of the Company under any Material Agreement or (C) require
any approval of the stockholders of the Company. A "Material
Agreement" for purposes of this opinion shall mean the material
agreements, instruments and undertakings identified on Exhibit I
to this opinion, which have been identified to us by the Company
as the only such agreements, instruments or undertakings by which
the Company or its property is bound, breaches or defaults or
creation or imposition of Liens under which would affect or
purport to affect the Company's ability to execute, deliver and
perform the Agreement, Note or Warrants.
D-1
THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES
OF COMMON STOCK OR OTHER SECURITIES ISSUABLE UPON EXERCISE
THEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT, OR (ii) AN
OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY
SATISFACTORY TO COUNSEL FOR THIS CORPORATION, THAT AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
IS AVAILABLE.
No. 1 Warrant to Purchase
63,235
Shares of Common Stock
KASH N' KARRY FOOD STORES, INC.
STOCK PURCHASE WARRANTS
This certifies that, for value received, GREEN EQUITY
INVESTORS, L.P. (the "Holder"), is entitled to purchase from KASH
N' KARRY FOOD STORES, INC., a Delaware corporation (the
"Company"), the aggregate number of shares of Common Stock, at
the option of the Holder, shown above at any time after 9:00
a.m., New York City time, on February 2, 1994 (the "Issue Date")
until 5:00 p.m., New York City time, on the Expiration Date, at a
purchase price per share equal to the Warrant Price.
Section 1. Definitions. As used in this Warrant, and
unless the context requires otherwise, the following terms have
the meaning indicated:
"Common Stock" means the Common Stock of the Company,
par value $.01 per share.
"Expiration Date" means the fifth anniversary of the
Issue Date.
"Warrant Price" has the meaning assigned in Section 8
hereof, subject to adjustment as provided in Section 9.
"Warrant" means this Warrant, as the same may be
amended, supplemented or modified in accordance with the terms
hereof.
"Warrant Shares" means the shares of Common Stock
issued or issuable upon exercise of this Warrant.
<PAGE>
Section 2. Term of Warrant; Exercise of Warrant.
2.1 Term of Warrant. Subject to the terms hereof, the
Holder shall have the right, which may be exercised at any time
from and after 9:00 a.m., New York City time, on the Issue Date
and until 5:00 p.m., New York City time, on the Expiration Date,
to purchase from the Company the number of fully paid and non-
assessable Warrant Shares which the Holder may at the time be
entitled to purchase on exercise hereof. If and to the extent
this Warrant not exercised prior to 5:00 p.m., New York City
time, on the Expiration Date, it shall become void and all rights
hereunder and all rights in respect hereof shall cease as of such
time.
2.2 Exercise of Warrant. The Warrant may be exercised
upon surrender to the Company at its office at 6422 Harney Road,
Tampa, Florida 33610, or such other office as the Company shall
notify the Holder, in writing, of this Warrant, together with the
Purchase Form included herein duly completed and signed and upon
payment to the Company of the Warrant Price (as defined in and
determined in accordance with the provisions of Sections 8 and 9
hereof), for the number of Warrant Shares in respect of which
this Warrant is then being exercised.
Unless otherwise agreed to by the Company, all payments
of such Warrant Price shall be made by certified of official bank
check payable to the order of the Company.
Subject to Section 3 hereof, upon the surrender of the
Warrant and payment of the Warrant Price as aforesaid, the
Company shall cause to be issued and delivered with all
reasonable dispatch to or upon the written order of the Holder
and in such name or names as the Holder may designate, a
certificate or certificates for the number of full Warrant Shares
so purchased upon the exercise of this Warrant, together with
cash, as provided in Section 10 hereof, in respect of any
fractional Warrant Shares otherwise issuable upon surrender. If
permitted by applicable law, such certificate or certificates
shall be deemed to have been issued and any person so designated
to be named therein shall be deemed to have become a holder of
record of such Warrant Shares as of the date of the surrender of
this Warrant and payment of the Warrant Price, as aforesaid.
Each share of Common Stock that may be issued upon exercise of
this Warrant will, upon such issuance, be validly issued, fully
paid, non-assessable, and free from all taxes, liens and charges
with respect to the issue thereof. The rights of purchase
represented by this Warrant shall be exercisable, at the election
of the Holder hereof (subject to Section 2.1 hereof), either in
full or from time to time in part and, in the event that this
Warrant is exercised in respect of less than all of the Warrant
Shares purchasable on such exercise at any time prior to the
Expiration Date, a new Warrant evidencing the right to purchase
the remaining Warrant Shares will be issued.
<PAGE>
2.3 Compliance with Government Regulations. The
Company shall have the right to refuse to honor the exercise of
this Warrant, in whole or any part, unless the Holder shall
represent to the Company in writing that its purchase of stock or
other securities pursuant thereto is for its own account and for
investment purposes only and not with a view to distribution or
resale in violation of the registration requirements of state or
federal securities laws.
The Company shall not be required to issue or deliver
any certificates representing shares of stock or other securities
purchased upon the exercise of this Warrant prior to (a) the
completion at the expense of the Company of any registration or
other qualification of such shares or other securities under any
state or federal law or rules or regulation of any governmental
regulatory body or self-regulatory organization which counsel for
the Company shall reasonably determine to be necessary or
advisable, (b) the obtaining from the Holder of a written
agreement and representations with respect to the disposition of
the shares or other securities, or with respect to any other
matters, which counsel for the Company shall reasonably determine
to be necessary or advisable to comply with the terms on which
the shares or other securities have been qualified or registered
under any such law, rules or regulations or to exempt the shares
from such qualification or registration, and (c) the obtaining at
the expense of the Company of any approval or other clearance
from any governmental regulatory body or self-regulatory
organization which such counsel may reasonably determine to be
necessary or advisable; provided, however, that compliance with
the provisions of clauses (a), (b) and (c) of this sentence shall
not be required for the issuance of such certificates if the
Holder shall deliver to the Company an opinion of counsel, which
counsel shall be reasonably acceptable to the Company and which
opinion shall be in form and substance reasonably satisfactory to
the Company, to that effect. If compliance with the provisions
of clauses (a), (b) and/or (c) or the preceding sentence shall be
required, the Company shall use its best efforts, at its expense,
promptly to effect such compliance.
Section 3. Payment of Taxes. The Company will pay all
documentary stamp and other taxes, if any, attributable to the
initial issuance of Warrant Shares upon the exercise hereof;
provided, however, that the Company shall not be required to pay
any tax or other governmental charge which may be payable in
respect of any transfer involved in the issue or delivery of any
certificates or certificates for Warrant Shares in a name other
than that of the Holder, and the Company shall not register any
such transfer or issue any such certificate until such tax or
governmental charge, if required, shall have been paid.
Section 4. Transfer. Subject to compliance with the
restrictions on transfer set forth herein and subject to Section
3, this Warrant shall be transferable upon delivery of the
<PAGE>
Warrant duly endorsed by the Holder or by his duly authorized
attorney or representative, or accompanied by proper evidence of
succession, assignment or authority to transfer. In all cases of
transfer by an attorney, the original power of attorney, duly
approved, or a copy thereof, duly certified, shall be deposited
and remain with the Company. In case of transfer by executors,
administrators, guardians or other legal representatives, duly
authenticated evidence of their authority shall be produced, and
may be required to be deposited and remain with the Company in
its discretion.
Section 5. Exchange of Warrant Certificates. Subject
to the restrictions on transfer contained herein and to such
requirements as the Company may reasonably request to ensure
compliance with applicable law, this Warrant may be exchanged for
another certificate or certificates entitling the Holder hereof
to purchase a like aggregate number of Warrant Shares as this
Warrant shall then entitle the Holder to purchase. The Holder
shall make such request in writing delivered to the Company, and
shall surrender this Warrant, properly endorsed. Thereupon, the
Company shall countersign and deliver to the Holder a new
certificate or certificates, as the case may be, as so requested.
Section 6. Mutilated or Missing Warrants. In case
this Warrant shall be mutilated, lost, stolen or destroyed, the
Company shall issue, countersign and deliver in exchange or
substitution hereof, a new Warrant of like tenor and representing
an equivalent right or interest, but only upon, in case this
Warrant is lost, stolen or destroyed, receipt of evidence
reasonably satisfactory to the Company of such loss, theft or
destruction and a reasonable indemnity therefor. The Holder
shall also comply with such other reasonable regulations and pay
such other reasonable charges as the Company may prescribe.
Section 7. Reservation of Warrant Shares; Purchase of
Warrants.
7.1 Reservation of Warrant Shares. The Company has
reserved out of its authorized Common Stock the number of shares
of Common Stock set forth on the first page hereof for issuance
upon exercise of this Warrant. The Company shall at all times
hereafter until the Expiration Date keep reserved out of its
authorized Common Stock, for issuance upon exercise of this
Warrant, all of the shares not theretofore issued upon such
exercise. If at any time the number of shares of authorized
Common Stock shall not be sufficient to effect the exercise of
this Warrant, the Company will take such corporate action as may
be necessary to increase its authorized but unissued Common
Stock, to such number of shares as shall be sufficient for such
purpose.
Section 8. Warrant Price. Subject to Section 9
hereof, the price at which Warrant Shares shall be purchasable
<PAGE>
upon exercise of Warrants (the "Warrant Price") shall be $.435
per share.
Section 9. Adjustment of Warrant Price and Number of
Warrant Shares. The number and kind of securities purchasable
upon the exercise of this Warrant and the Warrant Price shall be
subject to adjustment from time to time upon the happening of
certain events, in each case occurring on and after the date
hereof, as hereinafter described.
9.1 Adjustment. The number and kind of securities
purchasable upon the exercise of this Warrant and the Warrant
Price shall be subject to adjustment as follows:
(a) In case the Company shall (i) pay a dividend on
its outstanding Common Stock in shares of Common Stock or make a
distribution to all holders of its outstanding Common Stock in
shares of Common Stock, (ii) subdivide its outstanding shares of
Common Stock into a greater number of shares of Common Stock,
(iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock or (iv) issue by
reclassification of its shares of Common Stock other securities
of the Company (including any such reclassification in connection
with a consolidation or merger in which the Company is the
surviving corporation), the number of Warrant Shares purchasable
upon exercise hereof immediately prior thereto shall be adjusted
so that the Holder upon exercise hereof shall be entitled to
receive the kind and number of such Warrant Shares or other
securities of the Company which it would have owned or have been
entitled to receive after the happening of any of the events
described above had this Warrant been exercised immediately prior
to the happening of such event or any record date with respect
thereto. An adjustment made pursuant to this paragraph (a) shall
become effective on the date of the dividend payment,
subdivision, combination or issuance retroactive to the record
date with respect thereto, if any, for such event. Such
adjustment shall be made successively whenever such an issuance
is made.
(b) In the case the Company shall distribute to all
holders of its outstanding Common Stock evidences of its
indebtedness or assets or securities other than such Common Stock
(excluding regular cash dividends and dividends or distributions
referred to in paragraph (a) above) or rights, options or
warrants, or convertible or exchangeable securities, containing
the right to subscribe for or purchase shares of Common Stock,
then in each case the number of Warrant Shares thereafter
purchasable upon the exercise of this Warrant shall be determined
by multiplying the number of such Warrant Shares theretofore
purchasable upon the exercise of this Warrant by a fraction, of
which the numerator shall be the then current market price per
share of Common Stock (as determined in accordance with paragraph
(e)(3) below) on the date of such distribution, and of which the
<PAGE>
denominator shall be the then current market price per share of
Common Stock, less the then fair value per share of outstanding
Common Stock (as determined by the Board of Directors of the
Company, whose good faith determination shall be conclusive) of
the evidences of indebtedness, assets or securities so
distributed or of such rights, options or warrants, or of such
convertible or exchangeable securities. Such adjustment shall be
made successively whenever any such distribution is made, and
shall become effective on the date of distribution retroactive to
the record date for the determination of stockholders entitled to
receive such distribution. No further adjustment shall be made
for the actual issuance of Common Stock upon the conversion,
exercise or exchange of any rights, options, warrants or other
securities in respect of which adjustment has been made pursuant
to this paragraph (b).
(c) In case the Company shall issue shares of Common
Stock (or rights, options, warrants or other securities
convertible into or exercisable or exchangeable for Common Stock)
(excluding (i) shares of Common Stock issued in or as a result of
any of the transactions described in paragraph (a) or (b) above,
(ii) shares of Common Stock issuable upon exercise of stock
options or similar rights granted or to be granted to directors,
employees, consultants, contractors or other agents,
representatives or professionals of the Company pursuant to a
stock option or similar plan approved by the stockholders of the
Company, (iii) shares of Common Stock issued to directors,
employees, consultants, contractors, licensees or other agents,
representatives or professionals of the Company pursuant to any
compensation plan or agreement approved by the stockholders of
the Company, (iv) shares of Common Stock issued pursuant to a
dividend or interest reinvestment plan, or (v) shares of Common
Stock issued in a public offering at a price per share that is
not less than 95% of the then current market price) at a price
per share below the then current market price, then in each such
case the number of Warrant Shares thereafter purchasable upon the
exercise of this Warrant shall be determined by multiplying the
number of Warrant Shares theretofore purchasable upon the
exercise of this Warrant by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding on the
date of such issuance (including the shares of Common Stock
issued on the date of such issuance) and the denominator of which
shall be an amount equal to the sum of (i) the total number of
shares of Common Stock outstanding immediately prior to such
issuance plus (ii) the number of shares which the aggregate
consideration received for such issuance would purchase at the
current market price per share of Common Stock (as determined in
accordance with paragraph (e)(3) below) at such record date.
(d) (1) For the purposes of paragraph (c) above, if
the Company shall issue any security, option, warrant or other
right which directly or indirectly may be converted into or
exercised or exchanged for shares of Common Stock, the Common
<PAGE>
Stock issuable upon conversion, exercise or exchange of such
securities or rights shall thereupon be deemed to have been
issued and to be outstanding, and the relevant price per share of
Common Stock and the consideration received by the Company upon
conversion, exercise or exchange of such securities or rights
shall be deemed to include the sum of the consideration received
for the issuance of such securities or rights and the minimum
additional consideration payable upon the conversion, exercise or
exchange of such securities or rights. No further adjustment
shall be made for the actual issuance of Common Stock upon the
conversion, exercise or exchange of any such security or right.
(2) For purposes of paragraph (c) above, the
following shall also be applicable: In case the Company shall
issue shares of its Common Stock for a consideration wholly or
partly other than cash, the amount of the consideration other
than cash received by the Company shall be deemed to be the fair
value of such consideration as determined in good faith by the
Board of Directors of the Company. Consideration received by the
Company for issuance of its Common Stock shall be determined in
all cases without deduction therefrom of any expenses,
underwriting commissions or concessions incurred in connection
therewith.
(3) For the purpose of any computation under
paragraph (b) or (c) of this Section, the "current market price
per share" of Common Stock at any date shall be the average of
the daily closing prices for 20 consecutive trading days
commencing 30 trading days before the date of such computation.
The "closing price" for each day shall be the last such reported
sales price regular way or, in case no such reported sale takes
place on such day, the average of the closing bid and asked
prices regular way for such day, in each case on the principal
national securities exchange on which the shares of Common Stock
are listed or admitted to trading or, if not listed or admitted
to trading, the average of the high bid and low asked prices of
the Common Stock in the over-the-counter market as reported by
NASDAQ or any comparable system. In the absence of one or more
such quotations, the Board of Directors of the Company shall in
good faith determine the current market price on the basis of
such quotations or formula as it considers appropriate, which
determination shall be conclusive.
(e) In any case in which this Section 9.1 shall
require that any adjustment in the number of Warrant Shares be
made effective as of immediately after a record date for a
specified event, the Company may elect to defer until the
occurrence of the event the issuing to the Holder of the Warrant
Shares or other capital stock of the Company issuable upon the
exercise over and above the Warrant Shares or other capital stock
of the Company issuable upon the exercise of this Warrant prior
to such adjustment; provided, however, that the Company shall
deliver to the Holder a due bill or other appropriate instrument
evidencing the Holder's right to receive such additional shares
upon the occurrence of the event requiring such adjustment.
<PAGE>
(f) No adjustment in the number of Warrant Shares
purchasable hereunder shall be required unless such adjustment
would require an increase or decrease of at least one percent
(1%) in the number of Warrant Shares purchasable upon the
exercise of this Warrant; provided, however, that any adjustments
which by reason of this paragraph (f) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment. All calculations shall be made to the nearest one
one-hundredth of a share.
(g) Whenever the number of shares of the Warrant
Shares purchasable upon the exercise of this Warrant is adjusted,
as provided in paragraph (a), (b) or (c) of this Section, the
Warrant Price payable upon exercise of this Warrant shall be
adjusted by multiplying such Warrant Price immediately prior to
such adjustment by a fraction, of which the numerator shall be
the number of Warrant Shares purchasable upon the exercise of
this Warrant immediately prior to such adjustment, and of which
the denominator shall be the number of such Warrant Shares
purchasable immediately thereafter; provided, however, that in no
event shall the Warrant Price be less than the par value, if any,
of a share of Common Stock.
(h) No adjustment in the number of Warrant Shares
purchasable upon the exercise of this Warrant need be made under
paragraph (b) of this Section if the Company issues or
distributes to the Holder the rights, options, warrants,
convertible or exchangeable securities, evidences of indebtedness
or assets referred to in those paragraphs which the Holder would
have been entitled to receive had the Warrant been exercised
prior to the happening of such event or the record date with
respect thereto. No adjustment need be made for a change in the
par value of the Warrant Shares.
(i) For the purpose of this subsection 9.1, the term
"shares of Common Stock," shall mean (i) the class of stock
designated as the Common Stock of the Company, par value $.01 per
share, or (ii) any other class of stock resulting from successive
changes or reclassification of such respective classes of shares
consisting solely of changes in par value, or from par value to
no par value, or from no par value to par value. In the event
that at any time, as a result of an adjustment made pursuant to
paragraph (a) above, the Holder shall become entitled to purchase
any securities other than shares of Common Stock, thereafter the
number of such other securities so purchasable upon exercise of
this Warrant and the Warrant Price of such securities shall be
subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with
respect to the Warrant Shares contained in paragraphs (a) through
(h), inclusive, above, and the provisions of Section 3 and
subsections 9.2 through 9.6, inclusive, with respect to the
Warrant Shares, shall apply on like terms to any such other
securities.
<PAGE>
9.2 Notice of Adjustment. Whenever the number of
Warrant Shares purchasable upon the exercise of this Warrant or
the Warrant Price of such Warrant Shares is adjusted, as herein
provided, the Company shall promptly mail by first class, postage
prepaid, to the Holder notice of such adjustment or adjustments.
9.3 No Adjustment for Dividends. Except as provided
in subsection 9.1, no adjustment in respect of any dividends or
other payments or distributions made to holders of securities
shall be made during the term of this Warrant or upon the
exercise of this Warrant.
9.4 Preservation of Purchase Rights upon Merger,
Consolidation, etc. In case of any consolidation of the Company
with or merger of the Company with or into another entity
(whether or not the Company is the surviving corporation) or in
case of any sale, transfer or lease to another entity of all or
substantially all the property of the Company, the Company or
such successor or purchasing corporation, as the case may be,
shall execute an agreement that the Holder shall have the right
thereafter upon payment of the Warrant Price in effect
immediately prior to such action to purchase upon exercise of
this Warrant the kind and amount of securities, cash and property
which it would have owned or have been entitled to receive after
the happening of such consolidation, merger, sale, transfer or
lease had this Warrant been exercised immediately prior to such
action. Upon the execution of such agreement, this Warrant shall
be exercisable only for such securities, cash and property. The
Company shall furnish to the Holder notice of the execution of
any such agreement. Such agreement shall provide for
adjustments, which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 9.
The provisions of this subsection 9.4 shall similarly apply to
successive consolidations, mergers, sales, transfers or leases.
9.5 Other Adjustment. If any event occurs as to which
in the reasonable opinion of the Holder, in good faith, the other
provisions of this Section 9 are not strictly applicable but the
lack of any adjustment of the number of Warrant Shares issuable
upon exercise of this Warrant and the Warrant Price would not in
the opinion of the Holder fairly protect the rights of the Holder
in accordance with the basic intent and principles of such
provisions, or if strictly applicable would not fairly protect
the rights of the Holder in accordance with the basic intent and
principles of such provisions, then the Holder may appoint a firm
of independent certified public accountants of recognized
national standing (which may be the independent auditors of the
Company), which shall give their opinion upon the necessity and
form of any required adjustment to the number of Warrant Shares
issuable upon exercise of this Warrant and the Warrant Price, on
a basis consistent with the basic intent and principles
established in the other provisions of this Section 9 necessary
<PAGE>
to preserve, without dilution, the exercise rights of the Holder.
Upon receipt of such opinion, the Company shall forthwith make
the adjustments described therein.
9.6 Statement on Warrant. Irrespective of any
adjustments in the Warrant Price or the number or kind of
securities purchasable upon the exercise of this Warrant, this
Warrant may continue to express the same price and number and
kind of shares as are stated herein.
Section 10. Fractional Interests. The Company shall
not be required to issue fractional Warrant Shares on the
exercise of this Warrant. If (a) any fraction of a Warrant Share
would, except for the provisions of this Section 10, be issuable
on the exercise of this Warrant (or specified portion thereof),
and (b) the Holder shall have paid the amount due upon such
exercise with respect to such fractional share, then the Company
shall return to such Holder the amount so paid with respect to
such fractional Warrant Share.
Section 11. Registration under the Securities Act.
The Holder represents and warrants to the Company that it will
not dispose of this Warrant or any Warrant Shares except pursuant
to (i) an effective registration statement, or (ii) an opinion of
counsel, reasonably satisfactory to counsel for the Company, that
the proposed disposition of the Warrant or Warrant Shares would
not be in violation of the registration requirements of the
Securities Act. The Holder represents and warrants that it is
acquiring the Warrant and will acquire the Warrant Shares for its
own account and with no intention of distributing or reselling
this Warrant or Warrant Shares or any part thereof in any
transaction that would be in violation of the registration
requirements of the securities laws of the United States of
America or any state, without prejudice, however, to its rights,
consistent with the provisions of this Warrant, to sell or
otherwise dispose of all or any part of this Warrant or any
Warrant Shares under an effective registration statement under
the Securities Act or under an exemption from such registration
available under the Securities Act.
Section 12. Certificates to Bear Legends. The Warrant
Shares or other securities issued upon exercise of this Warrant
shall be subject to a stop-transfer order and the certificate or
certificates evidencing any such Warrant Shares or securities
shall bear the following legend by which the Holder thereof shall
be bound:
"THE SHARES [OR OTHER SECURITIES] REPRESENTED BY THIS
CERTIFICATE MAY NOT BE OFFERED, SOLD OR OTHERWISE EXCEPT PURSUANT
TO (i) AN EFFECTIVE REGISTRATION STATEMENT, OR (ii) AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO COUNSEL FOR THIS CORPORATION,
THAT AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933 IS AVAILABLE."
<PAGE>
Section 13. No Rights as Stockholders; Notices to
Holders. Nothing contained in this Warrant shall be construed as
conferring upon the Holder the right to vote or to receive
dividends or to consent or to receive notice as a stockholder in
respect of any meeting of stockholders of the Company for the
election of the directors of the Company or any matter, or any
rights whatsoever as a stockholder of the Company. If, however
at any time prior to the expiration of this Warrant and prior to
its exercise, any of the following events shall occur:
(a) the Company shall declare any dividend payable in
cash or in any securities upon its shares of Common Stock or
make any distribution to the holders of its shares of Common
Stock;
(b) the Company shall offer to all holders of its
shares of Common Stock any additional shares of Common Stock
or securities convertible into or exchangeable for shares of
Common Stock or any right to subscribe for or purchase any
thereof; or
(c) a dissolution, liquidation or winding up of the
Company (other than in connection with a consolidation,
merger, sale, transfer or lease of all or substantially all
of its property, assets and business as an entirety) shall
be proposed;
then in any one or more of said events the Company shall give
notice to the Holder as provided in Section 14 hereof, such
giving of notice to be completed at least 10 days prior to the
record date in the event of a transaction described in clause (a)
above and at least 20 days prior to the record date in the case
of a transaction referred to in clause (b) or (c) above fixed as
a record date or the date of closing the transfer books for the
determination of the stockholders entitled to such dividend,
distribution, or subscription rights, or for the determination of
the stockholders entitled to vote on such proposed dissolution,
liquidation or winding up. Such notice shall specify such record
date or the date of closing the transfer books, as the case may
be. Failure to mail or receive such notice or any defect therein
or in the mailing thereof shall not affect the validity of any
action taken in connection with such dividend, distribution or
subscription rights, or such proposed dissolution, liquidation or
winding up.
Section 14. Notices. Any notice pursuant to this
Warrant shall be in writing and shall be given by first class,
registered or certified mail, return receipt requested, telecopy,
courier service or personal delivery, if to the Company, at 6422
Harney Road, Tampa, Florida 33610, Attn: Secretary (or such other
address as shall be communicated by the Company to the Holder by
notice in accordance with this Section 14), and if to the Holder,
at such address as shall be communicated by the Holder to the
<PAGE>
Company by notice in accordance with this Section 14 (or, in the
absence of such notice, at such address as otherwise appears on
the books and records of the Company).
Section 15. Supplements and Amendments. The
provisions of this Warrant may not be amended, modified or
supplemented, and waiver or consents to departures from the
provisions hereof may not be given, without the written consent
of the Holder.
Section 16. Successors. All the covenants and
provisions of this Warrant by or for the benefit of the Company
and the Holder shall bind and inure to the benefit of their
respective successors and permitted assigns hereunder, provided
that the Company may not assign its rights and obligations
hereunder except by operation of law.
Section 17. Applicable Law. This Warrant shall be
governed by and construed in accordance with the laws of the
State of New York, without giving effect to principles of
conflicts of laws. The United States District Court for the
Southern District of New York or the courts of the State of New
York shall have jurisdiction in any action or proceeding arising
out of or relating to this Warrant.
Section 18. Benefits of this Agreement. Nothing in
this Warrant shall be construed to give to any person or entity
other than the Company and the Holder, any legal or equitable
right, remedy or claim under this Warrant.
Section 19. Captions. The captions of the Sections
and subsections of this Warrant have been inserted for
convenience only and shall have no substantive effect.
IN WITNESS WHEREOF, this Warrant has been duly
executed, as of February 2, 1994.
KASH N' KARRY FOOD STORES, INC.
By: /s/ R.P. Springer
Name: R.P. Springer
Title: Executive Vice
President
