Stater Bros.Holding Inc., Exhibit 10.33



 



Exhibit 10.33



STATER BROS. MARKETS

STATER BROS. HOLDINGS INC.



FOURTH AMENDMENT

TO CREDIT AGREEMENT



     This FOURTH AMENDMENT TO CREDIT AGREEMENT (this “Fourth Amendment”) is
dated as of February 4, 2003 entered into by and among STATER BROS. MARKETS, a
California corporation (“Borrower”), STATER BROS. HOLDINGS, INC., a Delaware
corporation (“Holdings”), the financial institutions listed on the signature
pages hereof (“Lenders”) and BANK OF AMERICA, N.A., as administrative agent for
Lenders (“Administrative Agent”), and Issuing Lender, and, for purposes of
Section 3 hereof, the Credit Support Party (as defined in Section 3 hereof)
listed on the signature pages hereof, and is made with reference to that
certain Credit Agreement dated as of August 6, 1999, as amended by the First
Amendment dated as of September 15, 2000, the Second Amendment dated as of
December 13, 2001 and the Third Amendment dated as of January 18, 2002 (as
amended, modified or supplemented from time to time, the “Credit Agreement”),
by and among Borrower, Holdings, Lenders, Administrative Agent, and Issuing
Lender. Capitalized terms used herein without definition shall have the same
meanings herein as set forth in the Credit Agreement.


RECITALS



     WHEREAS, Borrower, Holdings, Lenders and Issuing Lender desire to amend
the Credit Agreement as set forth below;


     NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:



	 	Section 1. 	 	AMENDMENTS TO THE CREDIT AGREEMENT
	 
	 	1.1	 	Amendments to Section 1: Definitions and Accounting Terms.



     A.     Subsection 1.01 of the Credit Agreement is hereby amended by deleting
the definitions of “Applicable Amount,” “Commitments,” “Letter of Credit
Commitment,” “Letter of Credit Expiration Date,” “Maturity Date,” and “Minimum
Amount” therefrom in their entirety and substituting the following therefor:


     “Applicable Amount” means a per annum rate equal to:


     (a)  with respect to Base Rate Loans, 1.00 percent;


     (b)  with respect to Offshore Rate Loans, 1.75 percent;


     (c)  with respect to the Commitment fee, 0.25 percent; and


     (d)  with respect to standby Letters of Credit, 1.25 percent.



     “Commitments” means, as to each Lender, the Revolving Loan Commitment of
such Lender, and the “combined Commitments” means such commitments collectively
of all Lenders in the aggregate.


 






 


     “Letter of Credit Sublimit” means an amount equal to the lesser of (a) the
Revolving Loan Commitment and (b) $50,000,000. The Letter of Credit Sublimit
is part of, and not in addition to, the Revolving Loan Commitment.


     “Letter of Credit Expiration Date” means the Maturity Date.


     “Maturity Date” means March 31, 2005, as it may be earlier terminated in
accordance with the terms hereof.


     “Minimum Amount” means, with respect to each of the following actions, the
minimum amount and any multiples in excess thereof set forth opposite such
action:



	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Multiples in
	Type of Action	 	Minimum Amount	 	excess thereof
	
	 	
	 	

	Borrowing of, prepayment of,
or Conversion into, Base Rate Loans
	 	$	100,000	 	 	$	500,000	 
	Borrowing of, prepayment of,
Continuation of, or Conversion
into, Offshore Rate Loans
	 	$	5,000,000	 	 	$	1,000,000	 
	Reduction in Commitments
and Letter of Credit Sublimit
	 	$	1,000,000	 	 	$	500,000	 
	Assignments
	 	$	1,000,000	 	 	 	N.A.”	 



     B.     Subsection 1.01 of the Credit Agreement is hereby further amended by
deleting the definitions of “Revolving Loan Commitment L/C Sublimit” and
“Letter of Credit Commitment Termination Date.”



	 	1.2	 	Amendments to Section 2: The Commitments and Extensions of Credit.



     A.     Subsection 2.04(a) of the Credit Agreement is hereby amended by
deleting such subsection in its entirety and substituting the following
therefor:



	 	2.04	 	“Letters of Credit.




		
	 	     (a) The Letter of Credit Sublimit. Subject to the terms and
conditions hereof, at any time and from time to time from the Closing
Date through the Letter of Credit Expiration Date, Issuing Lender shall
take such Letter of Credit Actions as Borrower may request; provided,
however, that the Issuing Lender shall not be obligated to take any
Letter of Credit Action with respect to any Letter of Credit, and no
Lender shall be obligated to participate in any Letter of Credit if as of
the date of such Letter of Credit Action, the aggregate outstanding
Letter of Credit Usage would exceed the Letter of Credit Sublimit or the
aggregate outstanding principal amount of all Loans plus the Letter of
Credit Usage would exceed the combined Commitments. Each Letter of
Credit Action shall be in a form acceptable to Issuing Lender and shall
not violate any policies 



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	 	of Issuing Lender. Standby Letters of Credit
shall be issued only for the purpose of (i) securing workers’
compensation and other insurance coverages for Borrower and its
Subsidiaries in an amount not at any time to exceed the minimum amount
required by Holdings’, Borrower’s, or any of Borrower’s Subsidiaries’
insurance carriers or applicable regulatory agencies and (ii) supporting
obligations of Borrower and its Subsidiaries incurred in the construction of stores and related
shopping centers and (iii) securing payment of monetary losses suffered
by Texas Eastern in the event Texas Eastern is required to make payments
under the Texas Eastern Guaranty with respect to the Jaclane Leases and
the Carlane Leases to the extent (and only to the extent) that such
issuance is required by Texas Eastern; provided that such standby Letters
of Credit shall not be issued prior to (a) the date on which all of the
amounts held in escrow under that certain escrow agreement dated
September 19, 1985 with First Interstate Bank of California as escrow
agent (now Wells Fargo Bank) (which amount was approximately $12,911,000
as of June 25, 2000) shall have been released from escrow and returned to
Borrower, (b) the date on which all of the guaranties of Texas Eastern
guarantying the obligations of Borrower and its Subsidiaries under leases
pursuant to which Borrower or one of its Subsidiaries is the lessee
(other than the Jaclane Leases and the Carlane Leases) shall have been
released, (c) or concurrently with the occurrence of the Closing (as
defined in the Redemption Agreement dated as of November 27, 2000 between
Borrower and Texas Eastern), and (d) the date on which Borrower shall
have delivered a certificate certifying that the conditions set forth in
clauses (a), (b) and (c) have been satisfied. Commercial Letters of
Credit shall only be issued for the purpose of supporting the purchase of
inventory by Borrower and its Subsidiaries. The obligation of the
Issuing Lender to take any Letter of Credit Action and the obligation of
the Lenders to participate in the Letter of Credit subject to such Letter
of Credit Action shall be subject to the following limitations:




		
	 	     (i) The Letter of Credit Usage in respect of standby Letters
of Credit issued to support obligations of Borrower and its
Subsidiaries incurred in the construction of stores and related
shopping centers shall not exceed $2,000,000.




		
	 	     (ii) The Letter of Credit Usage in respect of all Letters of
Credit other than Permitted Workers Compensation Letters of Credit
and Permitted Guaranty Lease Repayment Letters of Credit shall not
exceed $5,000,000.




		
	 	     (iii) The Outstanding Obligations on the last day of each
fiscal month shall not exceed an amount equal to 45% of the
aggregate book value of the inventory of Borrower and its
Subsidiaries on such day, measured on a consolidated basis, using
the first-in, first out method, in accordance with GAAP.




		
	 	     (iv) No standby Letter of Credit shall expire more than 12
months after the issuance thereof. No commercial Letter of Credit
shall expire more than 180 days after the issuance thereof. No
Letter of Credit shall expire after the Letter of Credit Expiration
Date. If any Letter of Credit Usage remains outstanding after the
Letter of Credit Expiration Date, Borrower shall, not later than
the Letter of Credit Expiration Date, deposit cash in an amount
equal to such Letter of Credit Usage in a Letter of Credit Cash
Collateral Account.”



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	 	     (v) The Letter of Credit Usage in respect of all Permitted
Guaranty Lease Repayment Letters of Credit shall not exceed
$7,500,000.”



     B.     Section 2.04(j) of the Credit Agreement is hereby amended by deleting
such subsection in its entirety and substituting the following therefor:



		
	 	“(j) Standby Letter of Credit Fee. On each Quarterly Payment Date
and on the Letter of Credit Expiration Date, Borrower shall pay to
Administrative Agent in arrears, for the account of each Lender in
accordance with its Pro Rata Share, a Letter of Credit fee equal to
the Applicable Amount for Letters of Credit times the actual daily
maximum amount available to be drawn under each standby Letter of
Credit since the later of the Closing Date and the previous
Quarterly Payment Date.”



     C.     Subsection 2.05(c) of the Credit Agreement is hereby amended by
deleting such subsection in its entirety and substituting the following
therefor:



		
	 	“(c) If for any reason the Letter of Credit Usage at any time
exceeds the Letter of Credit Sublimit as in effect or as reduced,
or gives effect to the limitations set forth in Section 2.04(a), or
because of any other limitation set forth in this Agreement or
otherwise, Borrower shall immediately deposit cash in a Letter of
Credit Cash Collateral Account in an aggregate amount equal to such
excess.”



     D.     Section 2.06 of the Credit Agreement is hereby amended by deleting such
section in its entirety and substituting the following therefor:



		
	 	“2.06 Reduction or Termination of Commitments. Upon Requisite
Notice to Administrative Agent not later than the Requisite Time
therefor, Borrower may at any time and from time to time, without
premium or penalty, permanently and irrevocably (a) reduce the
Revolving Loan Commitments or the Letter of Credit Sublimit in a
Minimum Amount therefor to an amount not less than the aggregate
outstanding principal amount of all Loans and the Letter of Credit
Usage, with respect to a reduction of Revolving Loan Commitments
and to an amount not less than the Letter of Credit Usage at such
time with respect to a reduction in the Letter of Credit Sublimit,
or (b) terminate the Revolving Loan Commitments. Any such
reduction or termination shall be accompanied by payment of all
accrued and unpaid commitment fees with respect to the portion of
the Revolving Loan Commitments being reduced or terminated.
Administrative Agent shall promptly notify Lenders of any such
request for reduction or termination of the Revolving Loan
Commitments and the Letter of Credit Sublimit. Each Lender’s
Revolving Loan Commitment and Letter of Credit Sublimit shall be
reduced by an amount equal to such Lender’s Pro Rata Share times
the amount of such reduction.”



     E.     Section 2.08(a) of the Credit Agreement is hereby amended by deleting
the first sentence in such subsection in its entirety and substituting the
following therefor:



		
	 	“Borrower shall pay to Administrative Agent for the account of each
Lender pro rata according to its Pro Rata Share, a Commitment fee
equal to the Applicable 



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	 	Amount times the actual daily amount by
which the combined Revolving Loan Commitments exceed the sum of the
aggregate principal amount of outstanding Loans plus the Letter of
Credit Usage in respect of standby Letters of Credit.”




	 	1.4	 	Substitution of Schedule.



     Schedule 2.01 to the Credit Agreement is hereby amended by deleting it in
its entirety and substituting in place thereof Schedule 2.01 in the form of
Annex I to this Amendment.



	 	Section 2. 	 	REPRESENTATIONS AND WARRANTIES



     In order to induce Lenders and Issuing Lender to enter into this Fourth
Amendment and to amend the Credit Agreement in the manner provided herein, each
of Borrower and Holdings represents and warrants to each Lender and Issuing
Lender that the following statements are true, correct and complete:


     A.     Existence and Qualification; Power; Compliance with Laws. Each
Borrower Party is a corporation duly organized or formed, validly existing and
in good standing under the Laws of the state of its incorporation or
organization, has the power and authority and the legal right to own and
operate its properties, to lease the properties it operates and to conduct its
business, is duly qualified and in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification, and is in compliance with
all Laws except to the extent that noncompliance does not have a Material
Adverse Effect.


     B.     Power; Authorization; Enforceable Obligations. Each Borrower Party has
the power and authority and the legal right to make, deliver and perform this
Fourth Amendment and, in the case of Holdings and Borrower, to perform its
obligations under the Credit Agreement as amended by this Fourth Amendment (the
“Amended Agreement”), and has taken all necessary action to authorize the
execution, delivery and performance of this Fourth Amendment and to authorize
the performance under the Amended Agreement. No consent or authorization of,
filing with, or other act by or in respect of any Governmental Authority, is
required in connection with the execution, delivery, performance, validity or
enforceability of this Fourth Amendment or the Amended Agreement. This Fourth
Amendment has been duly executed and delivered by each Borrower Party, and this
Fourth Amendment and the Amended Agreement constitute a legal, valid and
binding obligation of each Borrower Party party thereto, enforceable against
each Borrower Party party thereto in accordance with their respective terms.


     C.     No Legal Bar. The execution, delivery, and performance by each
Borrower Party of this Fourth Amendment and the performance by each Borrower
Party party thereto of the Amended Agreement and compliance with the provisions
hereof and thereof have been duly authorized by all requisite action on the
part of such Borrower Party and do not and will not (a) violate or conflict
with, or result in a breach of, or require any consent under (i) any
Organization Documents of such Borrower Party or any of its Subsidiaries, (ii)
any applicable Laws, rules, or regulations or any order, writ, injunction, or
decree of any Governmental Authority or arbitrator, or (iii) any Contractual
Obligation of such Borrower Party or any of its Subsidiaries or by which any of
them or any of their property is bound or subject, (b) constitute a


5






 




default
under any such agreement or instrument, (c) result in, or require, the creation
or imposition of any Lien on any of the properties of such Borrower Party or
any of its Subsidiaries, or (d) require any approval of stockholders or any
approval or consent of any Person of any Contractual Obligation of any Borrower
Party.


     D.     Incorporation of Representations and Warranties From Credit Agreement.
The representations and warranties contained in Section 5 of the Credit
Agreement are and will be true, correct and complete in all material respects
on and as of the date of this Fourth Amendment to the same extent as though
made on and as of that date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.


     E.     Absence of Default. No event has occurred and is continuing or will
result from the consummation of the transactions contemplated by this Fourth
Amendment that would constitute an Event of Default or a Default.



	 	Section 3. 	 	ACKNOWLEDGEMENT AND CONSENT



     Development is a party to the Development Guaranty, as amended, pursuant
to which Development has guaranteed the Obligations. Development is referred
to herein as the “Credit Support Party,” and the Development Guaranty is
referred to herein as the “Credit Support Document”.


     The Credit Support Party hereby acknowledges that it has reviewed the
terms and provisions of the Credit Agreement and this Fourth Amendment and
consents to the amendment of the Credit Agreement effected pursuant to this
Fourth Amendment. The Credit Support Party hereby confirms that the Credit
Support Document to which it is a party or otherwise bound will continue to
guaranty, to the fullest extent possible the payment and performance of all
Guarantied Obligations (as such term is defined in the Credit Support
Document), including without limitation the payment and performance of all such
Guarantied Obligations in respect of the Obligations of Borrower and Holdings
now or hereafter existing under or in respect of the Amended Agreement and the
Notes defined therein.


     The Credit Support Party acknowledges and agrees that the Credit Support
Document to which it is a party or otherwise bound shall continue in full force
and effect and that all of its obligations thereunder shall be valid and
enforceable and shall not be impaired or limited by the execution or
effectiveness of this Fourth Amendment. The Credit Support Party represents
and warrants that all representations and warranties contained in the Amended
Agreement and the Credit Support Document to which it is a party or otherwise
bound are true, correct and complete in all material respects on and as of the
date of this Fourth Amendment to the same extent as though made on and as of
that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects on and as of such earlier date.


     The Credit Support Party acknowledges and agrees that the Credit Support
Party is not required by the terms of the Credit Agreement or any other Loan
Document to consent to the amendments to the Credit Agreement effected pursuant
to this Fourth Amendment and nothing in the Credit Agreement, this Fourth
Amendment or any other Loan Document shall be


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deemed to require the consent of
the Credit Support Party to any future amendments to the Credit Agreement.



	 	Section 4. 	 	MISCELLANEOUS




     A.     Reference to and Effect on the Credit Agreement and the Other Loan Documents.




		
	 	(i) On and after the date of this Fourth Amendment, each reference
in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”,
“herein” or words of like import referring to the Credit Agreement,
and each reference in the other Loan Documents to the “Credit
Agreement”, “thereunder”, “thereof” or words of like import
referring to the Credit Agreement shall mean and be a reference to
the Amended Agreement.
	 
	 	(ii) Except as specifically amended by this Fourth Amendment, the
Credit Agreement and the other Loan Documents shall remain in full
force and effect and are hereby ratified and confirmed.
	 
	 	(iii) The execution, delivery and performance of this Fourth
Amendment shall not, except as expressly provided herein,
constitute a waiver of any provision of, or operate as a waiver of
any right, power or remedy of Administrative Agent, any Lender or
the Issuing Lender under, the Credit Agreement or any of the other
Loan Documents.



     B.     Fees and Expenses. Borrower acknowledges that all costs, fees and
expenses as described in subsection 11.03 of the Credit Agreement incurred by
Administrative Agent and its counsel with respect to this Fourth Amendment and
the documents and transactions contemplated hereby shall be for the account of
Borrower.


     C.     Headings. Section and subsection headings in this Fourth Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Fourth Amendment for any other purpose or be given any substantive
effect.


     D.     Applicable Law. THIS FOURTH AMENDMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA
(INCLUDING WITHOUT LIMITATION SECTION 1646.5 OF THE CIVIL CODE OF THE STATE OF
CALIFORNIA), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.


     E.     Counterparts; Effectiveness. This Fourth Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Fourth Amendment shall
become effective upon the execution of a counterpart hereof by Borrower,
Holdings, Requisite Lenders and the Credit Support Party, payment by Borrower
to Administrative Agent of a renewal fee in the amount of


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$75,000, and receipt
by Borrower and Administrative Agent of written or telephonic notification of
such execution and authorization of delivery thereof.


[Remainder of page intentionally left blank]


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     IN WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.



	 	 	 
	 	 	
STATER BROS. MARKETS
	 
	 	 	 
	 
	 	 	
By:________________________________________
	 
	 	 	
Title:_______________________________________
	 
	 	 	 
	 
	 	 	
STATER BROS. HOLDINGS, INC.
	 
	 	 	 
	 
	 	 	
By:________________________________________
	 
	 	 	
Title:_______________________________________
	 
	 	 	 
	 
	 	 	
STATER BROS. DEVELOPMENT, INC. (for purposes of Section 3), as a Credit Support Party
	 
	 	 	 
	 
	 	 	
By:________________________________________
	 
	 	 	
Title:_______________________________________



S-1






 




	 	 	 
	 	 	
BANK OF AMERICA, N.A., as Administrative
Agent
	 	 	 
	 
	 	 	
By:________________________________________
	 
	 	 	
Title:_______________________________________
	 	 	 
	 
	 
	 	 	
BANK OF AMERICA, N.A., as Issuing Lender
and a Lender
	 
	 	 	 
	 	 	
By:________________________________________
	 
	 	 	
Title:_______________________________________



S-2






 



SCHEDULE 2.01



ANNEX I




	 	 	 	 	 	 	 	 	 	 
	 	 	 	Revolving Loan	 	 	 	 
	Lender	 	Commitment	 	Pro Rata Share
	
	 	
	 	

	BANK OF AMERICA, N.A
	 	 	 	 	 	 	 	 
	 	Total
	 	$	75,000,000.00	 	 	 	100.000000000	%



Schedule 2.01-1