Exhibit 10.1
AMENDMENT No. 5 dated as of February
21, 2003, to (a) the Credit
Agreement dated as of February 23,
2001, as amended (the "Credit
Agreement"), among THE GREAT
ATLANTIC & PACIFIC TEA COMPANY,
INC., a Maryland corporation (the
"Company"), THE GREAT ATLANTIC &
PACIFIC COMPANY OF CANADA, LIMITED,
a Canadian corporation (the
"Canadian Borrower"), Compass Foods,
Inc., Borman's, Inc., Kohl's Food
Stores, Inc., Shopwell, Inc.,
Waldbaum, Inc., Super Fresh Food
Markets, Inc. and Super Market
Service Corp.(together with the
Company, the "U.S. Borrowers" and
the U.S. Borrowers together with the
Canadian Borrower, the "Borrowers"),
the banks party thereto (the
"Lenders"), JPMORGAN CHASE BANK
(successor to The Chase Manhattan
Bank), a New York banking
corporation ("JPMCB"), as agent for
the U.S. Lenders (in such capacity,
the "U.S. Administrative Agent"),
and J. P. MORGAN BANK CANADA,
formerly known as The Chase
Manhattan Bank of Canada, a Canadian
chartered bank ("JPMorgan Bank
Canada"), as agent for the Canadian
Lenders (in such capacity, the
"Canadian Administrative Agent"),
(b) the U.S. Security Agreement
dated as of February 23, 2001 (the
"U.S. Security Agreement"), among
the Company, the Subsidiaries of the
Company named therein (such
Subsidiaries and the Company,
collectively, the "Grantors") and
JPMCB, as collateral agent (in such
capacity, the "Collateral Agent")
and (c) the Canadian Security
Agreement dated as of February 23,
2001 (the "Canadian Security
Agreement" and together with the
U.S. Security Agreement, the
"Security Agreements"), among the
Canadian Borrower, the Great
Atlantic and Pacific Tea Company,
Limited ("Canadian Holdco"), each
Subsidiary of the Canadian Borrower
named therein (such Subsidiaries,
the Canadian Borrower and Canadian
Holdco, collectively, the "Canadian
Grantors") and JP Morgan Bank
Canada, as Canadian collateral agent
(in such capacity, the "Canadian
Collateral Agent").
A. Pursuant to the Credit Agreement, the Lenders have extended
credit to the Borrowers, and have agreed to extend credit to the Borrowers, in
each case pursuant to the terms and subject to the conditions set forth therein.
B. Pursuant to (i) the Security Agreement, the Grantors have
granted security interests in favor of the Collateral Agent and (ii) the
Canadian Security Agreement, the Grantors have granted security interests in
favor of the Canadian Collateral Agent.
C. The Borrowers have requested that the Lenders agree to
amend certain provisions of the Credit Agreement and the
Security Agreements as set forth herein.
D. The undersigned Lenders are willing to so amend the Credit
Agreement and the Security Agreements, in each case pursuant to the terms and
subject to the conditions set forth herein.
E. Capitalized terms used and not otherwise defined herein
shall have the meanings assigned thereto in the Credit Agreement and the
Security Agreements.
In consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto hereby agree, on
the terms and subject to the conditions set forth herein, as follows:
SECTION 1. Amendments. (a) Section 1.01 of the Credit
Agreement is hereby amended by (i) deleting the table set
forth in the definition of the term "Applicable Rate" and substituting in lieu
thereof the following:
Index Debt Eurodollar Canadian Prime Acceptance Fee
Ratings ABR Spread Spread Spread Rate
Category 1
$BB+/Ba1 1.50% 2.50% 1.50% 2.50%
Category 2
BB/Ba2 1.75% 2.75% 1.75% 2.75%
Category 3
BB-/Ba3 2.00% 3.00% 2.00% 3.00%
Category 4
B+/B1 2.25% 3.25% 2.25% 3.25%
Category 5
#B/B2 2.50% 3.50% 2.50% 3.50%
(ii) amending the definition of the term "U.S. Borrowing Base" by (A)
deleting the word "and" appearing at the end of clause (b)(iii) thereof and
substituting in lieu thereof a comma and (B) adding following clause (b)(iv)
thereof the following: "and (v) $50,000,000", and
(iii) adding the following defined terms in proper alphabetical order:
"Amendment No. 5 Effective Date" means the date that
Amendment No. 5 dated as of February 21, 2003 to this
Agreement and the Security Agreements becomes effective in
accordance with its terms.
"Consolidated Net Tangible Assets" has the meaning set forth
in the Indenture dated as of January 1, 1991, between the
Company and JPMCB, as successor to Manufacturers Hanover Trust
Company, as Trustee, as amended and supplemented.
"2003 Net Proceeds Event" means the receipt by the Company of
Net Proceeds of at least $140,000,000 from sales of fixed or
capital assets pursuant to transactions permitted by clause
(c) of Section 6.05 on or prior to the last day of the second
fiscal quarter of the fiscal year ending on or about February
22, 2004.
(b) Section 5.01 of the Credit Agreement is hereby amended by
(i) adding following clause (g) thereof the following:
(h) within 90 days after the Amendment No. 5 Effective Date, a
reasonably detailed consolidated budget for the last three
quarters of the fiscal year ending on or about February 22,
2004 and the first fiscal quarter of the fiscal year ending on
or about February 22, 2005 ( including a projected
consolidated balance sheet and related statements of projected
operations and cash flow as of the end of and for each fiscal
quarter during such period and setting forth the assumptions
used for purposes of preparing such budget) and promptly when
available, any significant revisions of such budget;
(i) within seven days after any sale, transfer or other
disposition of assets permitted by clause (c) of Section 6.05,
a complete description of such sale, transfer or other
disposition, together with any significant revisions to the
budget previously delivered pursuant to clause (g) of this
Section;
and (ii) relettering clauses "(h)" and "(i)" of such Section as clauses "(j)"
and "(k)", respectively.
(c) Section 6.07 of the Credit Agreement is hereby amended
by deleting the following in its entirety:
, other than (a)(i) Currency and Commodity Hedging Agreements
and (ii) Interest Rate Hedging Agreements that have the effect
of converting the interest rate of the associated Indebtedness
from a floating rate to a fixed rate, in each case entered
into in the ordinary course of business to hedge or mitigate
risks to which the Company or any Subsidiary is exposed in the
conduct of its business or the management of its liabilities;
and
(b) Interest Rate Hedging Agreements with respect to no more
than $150,000,000 of the Company's long-term Indebtedness,
that have the effect of converting the interest rate on such
long-term Indebtedness from a fixed rate to a floating rate.
and substituting in lieu thereof a period.
(d) Section 6.08 of the Credit Agreement is hereby amended by
(i) deleting the comma at the end of clause (a)(i) thereof and substituting in
lieu thereof the word "and", (ii) deleting the comma at the end of clause
(a)(ii) thereof and substituting in lieu thereof a period, (iii) deleting
clauses (a)(iii) and (iv) and the proviso in clause (a) thereof in their
entirety, (iv) adding, following the first appearance of the words "provided
that" in clause (b) thereof, the following: ", following receipt of the
financial statements with respect to the second fiscal quarter of the fiscal
year ending on or about February 22, 2005 pursuant to Section 5.01(b)," and (v)
deleting the last proviso contained in clause (b) thereof in its entirety.
(e) Section 6.12 of the Credit Agreement is hereby amended by
(i) deleting table set forth therein in its entirety and substituting in lieu
thereof the following:
Period Ratio
Amendment No. 5 Effective Date through
the first fiscal quarter of the fiscal year ending
on or about February 22, 2005 1.15 to 1.00
Second fiscal quarter of the fiscal year
ending on or about February 22, 2005 and
thereafter 1.40 to 1.00
; provided that if the 2003 Net Proceeds Event does not occur, such ratio shall
be 1.25 to 1.00, commencing with the period of four fiscal quarters ending on
the last day of the third fiscal quarter of the fiscal year ending on or about
February 22, 2004 through the period of four fiscal quarters ending on the last
day of the first fiscal quarter of the fiscal year ending on or about February
22, 2005.
(f) Section 6.13 of the Credit Agreement is hereby amended by
deleting such Section in its entirety and substituting in lieu thereof the
following:
SECTION 6.13. Senior Secured Indebtedness to Consolidated
EBITDA Ratio; Total Funded Debt to Consolidated EBITDA Ratio.
(a) The Company will not permit the ratio of (i) the aggregate
principal amount of Indebtedness of the Borrowers under this
Agreement outstanding as of any date on or prior to the last
day of the first fiscal quarter of the fiscal year ending on
or about February 22, 2005 to (ii) Consolidated EBITDA for the
period of four consecutive fiscal quarters most recently ended
on or prior to such date, to exceed the ratio of 1.80 to 1.00.
(b) The Company will not permit the ratio of (i) the aggregate
principal amount of (i) Total Funded Debt as of any date on or
after the first day of the second fiscal quarter of the fiscal
year ending on or about February 22, 2005 to (ii) Consolidated
EBITDA for the period of four consecutive fiscal quarters most
recently ended on or prior to such date, to exceed the ratio
of 3.50 to 1.00.
(g) Section 6.14 of the Credit Agreement is hereby amended by
deleting such Section in its entirety and substituting in lieu thereof the
following:
SECTION 6.14. Limitation on Capital Expenditures. The Company
will not permit the aggregate amount of Capital Expenditures
made by the Company and the Subsidiaries during any fiscal
year set forth below to exceed the sum of, without duplication
and to the extent not already deducted in determining Capital
Expenditures, (a) an amount equal to 25% of the amount of Net
Proceeds received during such fiscal year from sales of fixed
or capital assets pursuant to transactions permitted by clause
(c) of Section 6.05, plus (b) the amount set forth below
opposite such year:
Year Amount
Fiscal year ending on or $245,000,000
about February 22, 2003
Fiscal year ending on or $135,000,000
about February 22, 2004
and each fiscal
year thereafter
; provided that (i) no Default shall have occurred and be
continuing after giving effect to any such Capital
Expenditure, (ii) no Capital Expenditures may be made pursuant
to clause (a) of this Section unless (x) the Loans have been
prepaid to the extent required by clause (c) of Section 2.10
and (y) after giving effect to any such Capital Expenditures,
additional Loans could be borrowed and additional Letters of
Credit could be issued under this Agreement at the time such
Capital Expenditures are made in an aggregate principal and
face amount of at least U.S.$250,000,000, (iii) the sum of all
Capital Expenditures pursuant to clauses (a) and (b) of this
Section in any fiscal year shall not exceed $210,000,000 and
(iv) the amount set forth in the table above opposite the year
"Fiscal year ending on or about February 22, 2004 and each
fiscal year thereafter" shall be reduced from "$135,000,000"
to "100,000,000" in the event that the 2003 Net Proceeds Event
has not occurred.
(h) Article VI of the Credit Agreement is hereby amended by
adding at the end thereof the following:
SECTION 6.17. Minimum Consolidated EBITDA. The Company will
not permit Consolidated EBITDA for any period of four
consecutive fiscal quarters ending during any period set forth
below to be less than the amount set forth below opposite such
period:
Period Amount
First fiscal quarter of the fiscal year $165,000,000
ending on or about February 22, 2004
Second fiscal quarter of the fiscal year $150,000,000
ending on or about February 22, 2004 and
thereafter
; provided that if the 2003 Net Proceeds Event does not occur, the table set
forth above for periods ending on or after the third fiscal quarter of the
fiscal year ending on or about February 22, 2004 shall be replaced with the
following:
Period Amount
Third fiscal quarter of the fiscal year $175,000,000
ending on or about February 22, 2004
Fourth fiscal quarter of the fiscal year $180,000,000
ending on or about February 22, 2004 and
thereafter
(i) Section 4.14 of the Security Agreement is hereby amended
by adding at the end thereof the following:
Within 30 days following the Amendment No. 5 Effective Date,
the Collateral Agent shall have received a fully executed
amendment to (a) each Collection Deposit Letter Agreement
entered into prior to the Amendment No. 5 Effective Date
providing that, if (i) on or after any five consecutive
Business Days the Borrowers could not borrow Loans or have
Letters of Credit issued under the Credit Agreement in an
aggregate amount of at least (A) U.S.$100,000,000 at any time
prior to the last day of the second fiscal quarter of the
fiscal year ending on or about February 22, 2004 or (B)
U.S.$150,000,000 at any time thereafter or (ii) on or after
any date the Borrowers could not borrow Loans or have Letters
of Credit issued under the Credit Agreement in an aggregate
amount of at least (A) U.S.$75,000,000 at any time prior to
the last day of the second fiscal quarter of the fiscal year
ending on or about February 22, 2004 or (B) U.S.$125,000,000
at any time thereafter (any such date, a "Trigger Date"), the
Collateral Agent may give notice to the applicable collection
deposit bank that such collection deposit bank shall no longer
permit withdrawals from the Collection Deposit Account to be
made by the applicable Grantor but all funds in the Collection
Deposit Account shall be transmitted to the Cash Concentration
Account and (b) the Cash Concentration Letter Agreement
providing that, on or after any Trigger Date, the Collateral
Agent may give notice to the Cash Concentration Bank that the
Cash Concentration Bank shall no longer permit withdrawals
from the Cash Concentration Account but all funds in the Cash
Concentration Account shall be transmitted to the Collateral
Agent. Any Collection Deposit Letter Agreement entered into
following the Amendment No. 5 Effective Date shall contain the
same provisions described in the amendments set forth in
clause (a) of the next preceding sentence.
(j) Section 7.14 of the U.S. Security Agreement is hereby
amended by adding at the end thereof the following:
Upon any sale or other transfer by any Grantor of any
Collateral that is permitted under the Credit Agreement to any
person that is not a Grantor, or, upon the effectiveness of
any written consent to the release of the security interest
granted hereby in any Collateral pursuant to Section 9.02(b)
of the Credit Agreement, the security interest in such
Collateral shall be automatically released.
(k) Section 5.01 of the Canadian Security Agreement is hereby
amended by (i) adding at the end of paragraph (a) thereof the following:
Within 30 days following the Amendment No. 5 Effective Date,
the Canadian Collateral Agent shall have received a fully
executed amendment to (a) each Blocked Account Agreement
entered into prior to the Amendment No. 5 Effective Date
providing that, if (i) on or after any five consecutive
Business Days the Borrowers could not borrow Loans or have
Letters of Credit issued under the Credit Agreement in an
aggregate amount of at least (A) U.S.$100,000,000 at any time
prior to the last day of the second fiscal quarter of the
fiscal year ending on or about February 22, 2004 or (B)
U.S.$150,000,000 at any time thereafter or (ii) on or after
any date the Borrowers could not borrow Loans or have Letters
of Credit issued under the Credit Agreement in an aggregate
amount of at least (A) U.S.$75,000,000 at any time prior to
the last day of the second fiscal quarter of the fiscal year
ending on or about February 22, 2004 or (B) U.S.$125,000,000
at any time thereafter (any such date, a "Trigger Date"), the
Canadian Collateral Agent may give notice to the applicable
Relationship Bank that such Relationship Bank shall no longer
permit withdrawals from the Blocked Account to be made by the
applicable Canadian Grantor but all funds in the Blocked
Account shall be applied as provided in Section 6.02 of the
Canadian Security Agreement. Any Collection Deposit Letter
Agreement entered into following the Amendment No. 5 Effective
Date shall contain the same provisions described in the
amendments set forth in the next preceding sentence.
and (ii) adding following the words "Event of Default" appearing in paragraph
(b) thereof the following: "or on or after any Trigger
Date".
(l) Section 7.14 of the Canadian Security Agreement is hereby
amended by adding at the end thereof the following:
Upon any sale or other transfer by any Grantor of any
Collateral that is permitted under the Credit Agreement to any
person that is not a Grantor, or, upon the effectiveness of
any written consent to the release of the security interest
granted hereby in any Collateral pursuant to Section 9.02(b)
of the Credit Agreement, the security interest in such
Collateral shall be automatically released.
SECTION 2. Representations and Warranties. Each of the Borrowers
and other Loan Parties represents and warrants to the Agents and the Lenders
that:
(a) This Amendment has been duly executed and delivered by it
and constitutes its legal, valid and binding obligation
enforceable against it in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting
creditors' rights generally and except as enforceability may
be limited by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in
equity or at law).
(b) After giving effect to this Amendment, the representations
and warranties set forth in Article III of each of the Credit
Agreement and the Security Agreements are true and correct in
all material respects with the same effect as if made on the
date hereof, except to the extent such representations and
warranties expressly relate to an earlier date.
(c) After giving effect to this Amendment, no Event of
Default, or event that with notice or lapse of time or both
would constitute an Event of Default, has occurred and is
continuing.
SECTION 3. Conditions to Effectiveness. This Amendment shall
become effective (as of the date first written above) on the date (the
"Amendment Effective Date") when (i) the Agents (or their counsel) shall have
received counterparts of this Amendment that, when taken together, bear the
signatures of the Borrowers, the Grantors, the Canadian Grantors and the
Required Lenders, the Collateral Agent and the Canadian Collateral Agent and
(ii) the Agents shall have received payment of the amendment fees, including
those payable under Section 4 below, and any out-of-pocket expenses of the
Agents payable by the Borrowers that have been invoiced before the Amendment
Effective Date.
SECTION 4. Fees. The Borrowers agree to pay to each Lender
that executes and delivers a copy of this Amendment to the Agents (or their
counsel) on or prior to 5:00 p.m. on February 21, 2003, an amendment fee in an
amount equal to 0.25% of such Lender's Commitment (whether used or unused), in
each case as of the Amendment Effective Date; provided that the Borrowers shall
have no liability for any such amendment fee if this Amendment does not become
effective pursuant to Section 3. Such amendment fee shall be payable (i) on the
Amendment Effective Date, to each Lender entitled to receive such fee as of the
Amendment Effective Date and (ii) in the case of any Lender that becomes
entitled to such fee after the Amendment Effective Date, within two Business
Days after such Lender becomes entitled to such fee.
SECTION 5. Expenses. The Borrowers shall reimburse the Agents
for their reasonable out-of-pocket expenses incurred in connection with this
Amendment, including the reasonable fees and expenses of Cravath, Swaine &
Moore, counsel for the Agents, and McMillan Binch, Canadian counsel for the
Agents.
SECTION 6. Effect of Amendment. Except as expressly set forth
herein, this Amendment shall not by implication or otherwise limit, impair,
constitute a waiver of, or otherwise affect the rights and remedies of the
Agents or the Lenders under the Credit Agreement or the Security Agreements, and
shall not alter, modify, amend or in any way affect the terms, conditions,
obligations, covenants or agreements contained in the Credit Agreement or either
Security Agreement, all of which are ratified and affirmed in all respects and
shall continue in full force and effect. Nothing herein shall be deemed to
entitle the Borrowers to a consent to, or a waiver, amendment, modification or
other change of, any terms, conditions, obligations, covenants or agreements
contained in the Credit Agreement or either Security Agreement in similar or
different circumstances. This Amendment shall apply and be effective only with
respect to the provisions of the Credit Agreement and the Security Agreements
specifically referred to herein.
SECTION 7. Credit Agreement and Security Agreements. Except as
specifically amended hereby, the Credit Agreement and the Security Agreements
shall continue in full force and effect in accordance with the provisions
thereof as in existence on the date hereof. After the date hereof, any reference
to the Credit Agreement shall mean the Credit Agreement as amended hereby and
any reference to either of the Security Agreements shall mean such Security
Agreement as amended hereby. This Amendment shall constitute a Loan Document for
all purposes under the Credit Agreement.
SECTION 8. Applicable Law. THIS AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
SECTION 9. Counterparts. This Amendment may be executed in two
or more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract. Delivery of an
executed signature page of this Amendment by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof.
SECTION 10. Headings. The Section headings used herein are for
convenience of reference only, are not part of this Amendment and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their respective authorized officers as of the
day and year first written above.
13
THE GREAT ATLANTIC & PACIFIC
TEA COMPANY, INC.,
by
Name:
Title:
THE GREAT ATLANTIC & PACIFIC
COMPANY OF CANADA, LIMITED,
by
Name:
Title:
by
Name:
Title:
JPMORGAN CHASE BANK,
individually and as U.S. Administrative Agent and Collateral Agent,
by
Name:
Title:
J.P. MORGAN BANK CANADA, as Canadian Administrative Agent
and Canadian Collateral Agent,
by
Name:
Title:
JPMORGAN CHASE BANK, TORONTO BRANCH, as a Lender,
by
Name:
Title:
COMPASS FOODS, INC.,
by
Name:
Title:
BORMAN'S, INC.,
by
Name:
Title:
KOHL'S FOOD STORES, INC.,
by
Name:
Title:
SHOPWELL, INC.,
by
Name:
Title:
WALDBAUM, INC.,
by
Name:
Title:
SUPER FRESH FOOD MARKETS, INC.,
by
Name:
Title:
SUPER MARKET SERVICE CORP.,
by
Name:
Title:
EACH OF THE OTHER LOAN PARTIES LISTED ON SCHEDULE I TO THE U.S.
SECURITY AGREEMENT,
by
Name:
Title:
THE GREAT ATLANTIC AND PACIFIC TEA COMPANY, LIMITED,
by
Name:
Title:
by
Name:
Title:
NEW DOMINION STORES (1986), INC.,
by
Name:
Title:
by
Name:
Title:
3399486 CANADA INC.,
by
Name:
Title:
by
Name:
Title:
3467210 CANADA INC.,
by
Name:
Title:
by
Name:
Title:
3499031 CANADA INC.,
by
Name:
Title:
by
Name:
Title:
G.A. LOVE FOODS INC.,
by
Name:
Title:
by
Name:
Title:
LOVE'S YORK PROPERTIES INC.,
by
Name:
Title:
by
Name:
Title:
A & P PROPERTIES LIMITED,
by
Name:
Title:
by
Name:
Title:
SIGNATURE PAGE TO AMENDMENT NO. 5 DATED AS OF FEBRUARY 21, 2003, TO
(a) THE CREDIT AGREEMENT DATED AS OF FEBRUARY 23, 2001, as
amended, among THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC., THE GREAT
ATLANTIC & PACIFIC COMPANY OF CANADA, LIMITED, THE OTHER
BORROWERS PARTY THERETO, THE LENDERS, JPMORGAN CHASE BANK, as U.S.
Administrative Agent, and J. P. MORGAN BANK CANADA, as Canadian
Administrative Agent, (b) the U.S. SECURITY AGREEMENT and (c) the CANADIAN
SECURITY AGREEMENT
Name of Institution: ___________________
By:
-------------------------------
Name:
Title: