UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
Quarterly report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly period ended February 2, 2002
Commission file number 1-5745-1
FOODARAMA SUPERMARKETS, INC.
-------------------------------------------------
(Exact name of Registrant as specified in its charter)
New Jersey 21-0717108
------------------------------- -----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
922 Highway 33, Freehold, N.J. 07728
-----------------------------------------
(Address of principal executive offices)
Telephone #732-462-4700
---------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months and
(2) has been subject to the filing requirements for at least the
past 90 days.
Yes X No
------ ------
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the close of the latest practicable
date.
OUTSTANDING AT
CLASS March 8, 2002
------------ ---------------
Common Stock 1,073,927 shares
$1 par value
1
FOODARAMA SUPERMARKETS, INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Consolidated Condensed Balance
Sheets February 2, 2002 and November 3, 2001
Unaudited Consolidated Condensed Statements
of Operations for the thirteen weeks ended
February 2, 2002 and January 27, 2001
Unaudited Consolidated Condensed Statements
of Cash Flows for the thirteen weeks ended
February 2, 2002 and January 27, 2001
Notes to the Unaudited Consolidated
Condensed Financial Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations
PART II. OTHER INFORMATION
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Disclosure Concerning Forward-Looking Statements
All statements, other than statements of historical fact, included in this Form
10-Q, including without limitation the statements under "Management's Discussion
and Analysis of Financial Condition and Results of Operations", are, or may be
deemed to be, "forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such
forward-looking statements involve assumptions, known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of Foodarama Supermarkets, Inc. (the "Company", which may be
referred to as we, us or our) to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements contained in this Form 10-Q. Such potential risks and
uncertainties, include without limitation, competitive pressures from other
supermarket operators and warehouse club stores, economic conditions in the
Company's primary markets, consumer spending patterns, availability of capital,
cost of labor, cost of goods sold including increased costs from the Company's
cooperative supplier, Wakefern Food Corporation ("Wakefern"), and other risk
factors detailed herein and in other of the Company's Securities and Exchange
Commission filings. The forward-looking statements are made as of the date of
this Form 10-Q and the Company assumes no obligation to update the
forward-looking statements or to update the reasons actual results could differ
from those projected in such forward-looking statements.
2
PART I FINANCIAL INFORMATION
FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(in thousands)
February 2, November 3,
2002 2001
(Unaudited) (1)
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 5,714 $ 4,219
Merchandise inventories 45,626 42,827
Receivables and other current assets 6,762 5,466
Prepaid income taxes 113 --
Related party receivables - Wakefern 4,549 8,970
Related party receivables - other 8 7
-------- --------
62,772 61,489
-------- --------
Property and equipment:
Land 308 308
Buildings and improvements 1,220 1,220
Leasehold improvements 40,853 39,589
Equipment 110,177 103,394
Property under capital leases 69,867 59,909
Construction in progress 2,463 6,787
-------- --------
224,888 211,207
Less accumulated depreciation and
amortization 101,615 98,218
-------- --------
123,273 112,989
-------- --------
Other assets:
Investments in related parties 12,758 12,758
Intangibles 3,048 3,136
Other 2,918 2,550
Related party receivables - Wakefern 1,632 1,593
Related party receivables - other 11 11
-------- --------
20,367 20,048
-------- --------
$206,412 $194,526
======== ========
(continued)
(1) Derived from the Audited Consolidated Financial Statements for the year
ended November 3, 2001.
See accompanying notes to the consolidated condensed financial statements.
3
FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(in thousands except share data)
February 2, November 3,
2002 2001
(Unaudited) (1)
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 5,869 $ 5,390
Current portion of long-term debt,
related party 831 902
Current portion of obligations under
capital leases 1,033 899
Current income taxes payable - 704
Deferred income taxes 1,079 1,079
Accounts payable:
Related party-Wakefern 40,123 35,988
Others 8,073 8,780
Accrued expenses 12,716 14,654
--------- ---------
69,724 68,396
---------- ----------
Long-term debt 19,359 19,294
Long-term debt, related party 1,129 1,310
Obligations under capital leases 64,475 54,949
Deferred income taxes 1,401 1,201
Other long-term liabilities 10,913 10,883
---------- ----------
97,277 87,637
---------- ----------
Shareholders' equity:
Common stock, $1.00 par; authorized
2,500,000 shares; issued 1,621,767
shares; outstanding 1,077,810 shares
February 2, 2002; 1,088,220 shares
November 3, 2001 1,622 1,622
Capital in excess of par 4,168 4,168
Deferred Compensation (1,603) (1,696)
Retained earnings 45,283 44,016
Accumulated other comprehensive income:
Minimum pension liability (1,920) (1,920)
---------- ----------
47,550 46,190
Less 543,957 shares February 2, 2002;
533,547 shares November 3, 2001,
held in treasury, at cost 8,139 7,697
---------- ----------
39,411 38,493
---------- ----------
$ 206,412 $ 194,526
========== ==========
(1) Derived from the Audited Consolidated Financial Statements for the year
ended November 3, 2001.
See accompanying notes to the consolidated condensed financial statements.
4
FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Operations - Unaudited
(in thousands - except share data)
13 Weeks Ended
----------------------------
February 2, January 27,
2002 2001
------------- -------------
Sales $ 252,027 $ 238,594
Cost of goods sold 188,635 180,765
----------- -----------
Gross profit 63,392 57,829
Selling, general and
administrative expenses 59,412 53,877
----------- -----------
Earnings from operations 3,980 3,952
----------- -----------
Other income (expense):
Interest expense (1,907) (2,083)
Interest income 40 79
------------ -----------
(1,867) (2,004)
------------ -----------
Earnings before income tax provision 2,113 1,948
Income tax provision (846) (780)
----------- -----------
Net income $ 1,267 $ 1,168
=========== ===========
Per share information:
Net income per common share:
Basic $ 1.17 $ 1.05
=========== ===========
Diluted $ 1.12 $ 1.05
=========== ===========
Weighted average shares outstanding:
Basic 1,079,675 1,117,290
=========== ===========
Diluted 1,133,528 1,117,290
=========== ===========
Dividends per common share -0- -0-
=========== ===========
See accompanying notes to the consolidated condensed financial statements.
5
FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows - Unaudited
(in thousands)
13 Weeks Ended
-------------------------------
February 2, January 27,
2002 2001
----------------------------------
Cash flows from operating activities:
Net income $ 1,267 $ 1,168
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 3,405 3,056
Amortization, intangibles 88 88
Amortization, deferred financing costs 75 64
Amortization, deferred rent escalation (58) (15)
Provision to value inventory at LIFO 100 142
Deferred income taxes 200 182
Amortization of deferred compensation 81 -
(Increase) decrease in
Merchandise inventories (2,899) (999)
Receivables and other current assets (1,296) (516)
Prepaid income taxes (113) 398
Other assets (443) 213
Related party receivables-Wakefern 4,382 3,143
Increase (decrease) in
Accounts payable 3,428 5,418
Income taxes payable (704) 181
Other liabilities (1,838) (695)
---------- --------
5,675 11,828
---------- --------
Cash flows from investing activities:
Cash paid for the purchase of property
and equipment (3,470) (1,284)
Cash paid for construction in progress (261) (106)
Increase in related party receivables-other (1) (43)
----------- --------
(3,732) (1,433)
----------- --------
Cash flows from financing activities:
Proceeds from issuance of debt 4,000 -
Principal payments under long-term debt (3,456) (4,318)
Principal payments under capital
lease obligations (298) (157)
Principal payments under long-term
debt, related party (252) (214)
Repurchase of common stock (442) -
---------- --------
(448) (4,689)
---------- --------
NET CHANGE IN CASH AND CASH EQUIVALENTS 1,495 5,706
CASH AND CASH EQUIVALENTS, BEGINNING OF
THE PERIOD 4,219 3,977
---------- --------
CASH AND CASH EQUIVALENTS, END OF THE PERIOD $ 5,714 $ 9,683
========== ========
See accompanying notes to the consolidated condensed financial statements.
6
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)
Note 1 Basis of Presentation
The unaudited Consolidated Condensed Financial Statements as of or for the
period ending February 2, 2002, have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-Q and rule 10-01. The balance sheet at November 3, 2001
has been taken from the audited financial statements at that date. In the
opinion of the management of the Company, all adjustments (consisting only of
normal recurring accruals) which are considered necessary for a fair
presentation of the results of operations for the period have been made. Certain
financial information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. The reader is referred to the consolidated
financial statements and notes thereto included in the Company's annual report
on Form 10-K for the year ended November 3, 2001.
At both February 2, 2002 and November 3, 2001, approximately 83% of merchandise
inventories are valued by the Last-In-First-Out ("LIFO") method of inventory
valuation while the balance of inventories are valued by the First-In-First-Out
("FIFO") method. If the FIFO method had been used for the entire inventory,
inventories would have been $1,723,000 and $1,623,000 higher than reported at
February 2, 2002 and November 3, 2001, respectively.
Certain reclassifications have been made to prior year financial statements in
order to conform to the current year presentation.
These results are not necessarily indicative of the results for the entire
fiscal year.
Note 2 Adoption of New Accounting Standards
Accounting for the Impairment or Disposal of Long-Lived Assets
Effective November 4, 2001 the Company adopted Statement of Financial Accounting
Standards No. 144 ("SFAS 144"), "Accounting for the Impairment or Disposal of
Long-Lived Assets". SFAS 144 requires, among other things, the application of
one accounting model for long-lived assets that are impaired or to be disposed
of by sale. There was no significant impact from the adopting of SFAS 144 in the
quarter ended February 2, 2002.
Accounting for Goodwill and Other Intangible Assets
In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 142 ("SFAS 142"), "Accounting for Goodwill
and Other Intangible Assets" which is effective for fiscal years beginning after
December 15, 2001. SFAS 142 discontinues the practice of amortizing goodwill and
indefinite lived intangible assets and initiates an annual review for
impairment. Impairment would be examined more frequently if certain indicators
are encountered. Intangible assets with a determinable useful life will continue
to be amortized over that period. The Company is currently assessing, but has
7
not yet determined, the impact of SFAS 142 on its financial position and results
of operations. The Company plans to adopt SFAS 142 in the first quarter of
fiscal year 2003.
Part I - Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations
Financial Condition and Liquidity
The Company is a party to a Second Amended and Restated Revolving Credit and
Term Loan Agreement (the "Credit Agreement") with three financial institutions.
The Credit Agreement is secured by substantially all of the Company's assets and
provided for a total commitment of up to $58,000,000, including a revolving
credit facility (the "Revolving Note") of up to $28,000,000, a term loan ("the
Term Loan") in the amount of $10,000,000 and a capital expenditures facility
(the "Capex Facility") of up to $20,000,000. As of January 30, 2002, the Company
and its lenders amended the Credit Agreement to increase the number of shares of
common stock which the Company could repurchase from related parties from 25,000
shares to 35,000 shares. Other terms and conditions of the Credit Agreement
previously reported upon by the Company have not been modified. As of February
2, 2002 the Company owed $6,000,000 on the Term Loan and $11,306,772 under the
Capex Facility. The Term Loan is to be paid in quarterly principal payments of
$500,000 through December 31, 2004. The revolving credit facility also matures
December 31, 2004 and the Capex Facility provides for the payment of interest
only on its outstanding balance, an unused facility fee of .50% for the first 30
months of this loan and fixed quarterly principal payments thereafter based on a
seven year amortization schedule with a balloon payment due December 31, 2004.
Interest rates float on the revolving credit facility, Term Loan and Capex
Facility at the Base Rate (defined below) plus .50%, .75% and .75%,
respectively. The Base Rate is the rate which is the greater of (i) the bank
prime loan rate as published by the Board of Governors of the Federal Reserve
System, or (ii) the Federal Funds rate, plus .50%. Additionally, the Company has
the ability to use the London Interbank Offered Rate ("LIBOR") plus 2.50% to
determine the interest rate on the revolving credit facility and LIBOR plus
2.75% to determine the interest rate on the Term Loan and Capex Facility. The
Credit Agreement contains certain affirmative and negative covenants which,
among other matters, will (i) restrict capital expenditures and the amount
ofadditional indebtedness that the Company may incur, (ii) require the
maintenance of certain levels of earnings before interest, taxes, depreciation
and amortization less rent payments for capitalized lease locations and changes
in the LIFO reserve ("Adjusted EBITDA") and (iii) require debt service coverage
and leverage ratios to be maintained.
The Company's compliance with the major financial covenants under the Credit
Agreement was as follows as of February 2, 2002:
Actual
Financial Credit (As defined in the
Covenant Agreement Credit Agreement)
--------- --------- ---------------------
Adjusted EBITDA (1) Greater than $16,000,000 $ 22,012,000
Leverage Ratio (1) Less than 3.2 to 1.00 1.24 to 1.00
Debt Service Coverage
Ratio Greater than 1.00 to 1.00 1.84 to 1.00
Adjusted Capex (2) Less than $5,600,000 (3) $ 1,126,000 (4)
Store Project Capex Less than $4,500,000 (3) $ 2,605,000 (4)
8
(1) Excludes obligations under capitalized leases, interest expense and
depreciation expense attributable to capitalized leases and changes in the
LIFO reserve.
(2) Adjusted Capex is all capital expenditures other than New/Replacement Store
Project Capex.
(3) Represents limitations on capital expenditures for fiscal 2002.
(4) Represents capital expenditures for the quarter ended February 2, 2002.
No cash dividends have been paid on the Common Stock since 1979, and the Company
has no present intentions or ability to pay any dividends in the near future on
its Common Stock. The Credit Agreement does not permit the payment of any cash
dividends on our Common Stock.
Working Capital
At February 2, 2002, the Company had a working capital deficiency of $6,952,000
compared to deficiencies of $6,907,000 at November 3, 2001 and $2,257,000 at
January 27, 2001. Since the end of fiscal 2001 cash and cash equivalents
improved as the result of timing differences in cash deposits; increases in
inventory as the result of the inventory for the new Middletown store and
promotional buy-ins; related party receivables from Wakefern decreased due to
the collection of the fiscal 2001 patronage dividend receivable; and related
party accounts payable to Wakefern increased as the result of increased sales,
the inventory for the new Middletown store and the deferral of payment for
Wakefern promotional programs.
The Company normally requires small amounts of working capital since inventory
is generally sold at approximately the same time that payments to Wakefern and
other suppliers are due and most sales are for cash or cash equivalents.
Working capital ratios were as follows:
February 2, 2002 .90 to 1.0
November 3, 2001 .90 to 1.0
January 27, 2000 .97 to 1.0
Cash flows (in millions) were as follows:
Thirteen Weeks Ended
2/2/02 1/27/01
------ -------
Operating activities... $ 5.7 $ 11.8
Investing activities... (3.7) (1.4)
Financing activities... ( .5) (4.7)
------ -----
Totals $ 1.5 $ 5.7
====== ======
The Company had $22,100,000 of available credit, at February 2, 2002, under its
revolving credit facility. The amounts available under the Credit Agreement will
adequately meet our operating needs, scheduled capital expenditures and debt
service for fiscal 2002.
For the 13 weeks ended February 2, 2002 depreciation was $3,405,000 while
capital expenditures totaled $3,731,000, compared to $3,056,000 and $1,390,000,
respectively, in the prior year period. The increase in depreciation was the
result of the purchase of equipment and leasehold improvements for the three
locations remodeled in fiscal 2001, the new location opened in Middletown, New
9
Jersey in November 2001, as well as one additional capitalized real estate
lease. The increase in capital expenditures was due to the acquisition of
equipment and leasehold improvements for the location opened in the first
quarter of fiscal 2002 with no comparable expenditures in fiscal 2001.
During the quarter ended February 2, 2002, the Company repurchased a total of
10,410 shares of Common Stock under the stock repurchase program announced on
June 8, 2001. 9,310 of these shares were purchased in privately negotiated
transactions. $441,903, or an average of $42.45 per share, was expended for the
purchase of the 10,410 shares. Since the announcement of the stock repurchase
program, the Company has repurchased 43,363 shares for $1,650,624 or an average
of $38.07 per share.
Results of Operations (13 weeks ended February 2, 2002 compared to 13
weeks ended January 27, 2001)
Sales:
Sales for the current period totaled $252.0 million as compared to $238.6
million in the prior year period. Same store sales from the twenty one stores in
operation in both periods increased 3.6%.
Sales for the current quarter included the operations of the new location opened
in November 2001 in Middletown, New Jersey which replaced an older, smaller
store in the same shopping center.
Gross Profit:
Gross profit as a percent of sales increased to 25.2% of sales compared to 24.2%
in the prior year period. Patronage dividends, applied as a reduction of the
cost of merchandise sold, were $1.7 million in the current year period compared
to $1.6 million in the prior year period. Gross profit as a percentage of sales
increased primarily as a result of improved product mix, a reduction in product
loss through improved shrink control and the contribution of the new location.
Operating Expenses:
Selling, general and administrative expenses as a percent of sales were 23.6%
versus 22.6% in the prior year period. The increase in selling, general and
administrative expenses as a percent of sales was primarily due to increases in
certain expense categories as a percentage of sales. As a percentage of sales,
labor and related fringe benefits increased .83%, other store expenses, which
included Wakefern support services and debit/credit card fees, increased .07%,
supplies increased .05%, depreciation, including depreciation on capitalized
leases, increased .07%, administrative expense increased .13% and pre-opening
costs increased .08%. These increases were partially offset by a decrease in
occupancy expense of .20%. The increase in labor and related fringe benefits was
the result of additional personnel for the new Middletown store, increased sales
in service intensive departments and contractual increases in fringe benefits.
Pre-opening costs were for the new Middletown store opened in November 2001.
Interest Expense:
Interest expense decreased to $1,907,000 from $2,083,000, while interest income
was $40,000 compared to $79,000 for the prior year period. The decrease in
interest expense for the current year period was due to a net decrease in
10
average outstanding debt, including capitalized lease obligations, and a
decrease in the average interest rate paid on debt.
Income Taxes:
An income tax rate of 40% has been used in both the current and prior year
periods based on the expected effective tax rates.
Net Income:
Net income was $1,267,000 in the current year period compared to $1,168,000 in
the prior year period. Earnings before interest, taxes, depreciation and
amortization ("EBITDA") for the current period were $7,490,000 as compared to
$7,145,000 in the prior year period. Net income per common share on a diluted
basis was $1.12 in the current period compared to $1.05 in the prior year
period. Per share calculations are based on 1,133,528 shares outstanding in the
current year period and 1,117,290 shares outstanding in the prior year period .
11
PART II
OTHER INFORMATION
Item 5. Other Information
As previously reported, another member of Wakefern Food
Corporation ("Wakefern"), Big V Supermarkets, Inc.
("Big V"), filed for reorganization under Chapter 11 and
indicated its intent to depart from Wakefern. The Company
owns a 12.3% interest in Wakefern, which provides
purchasing, warehousing and distribution services on a
cooperative basis to its shareholder members, all of which
are operators of ShopRite supermarkets. Big V, which is
similar in sales volume to the Company, was unsuccessful
in challenging provisions in its agreements with Wakefern
which require that withdrawing members make a payment to
Wakefern to make up for the resulting loss of volume to
the cooperative. On November 16, 2001 Big V reported that
it had entered into a term sheet, and has subsequently
entered into definitive agreements, to sell substantially
all of its assets to Wakefern. On February 22, 2002 the
Bankruptcy Court Judge ruled that a competing offer
submitted by a competitor, Stop & Shop, and supported by
agreements with several creditor groups, could also be
presented to the Court. Following this approval, Pathmark
Stores, Inc. reported that it entered into an agreement
with Stop & Shop whereby Pathmark agreed to purchase nine
Big V stores from Stop & Shop for $71 million. These
transactions are subject to bankruptcy court review and
approval. It is not possible to predict at this time what
effect the reported transactions will have on our
Company or Wakefern.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit (99) - (a) Letter Amendment to Second Amended
and Restated Revolving Credit and Term Loan Agreement
(b) Letter Amendment to Second Amended
and Restated Revolving Credit and Term Loan Agreement
(b) Reports on Form 8-K
December 6, 2001 - Foodarama Supermarkets, Inc. issued
a press release discussing the potential sale of Big V
Supermarkets, Inc., a member of Wakefern Food Corporation
- press release dated November 30, 2001 filed as an
exhibit
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
FOODARAMA SUPERMARKETS, INC.
(Registrant)
Date: March 15, 2002 /S/ MICHAEL SHAPIRO
-----------------------------
(Signature)
Michael Shapiro
Senior Vice President
Chief Financial Officer
Date: March 15, 2002 /S/ THOMAS H. FLYNN
----------------------------
(Signature)
Thomas H. Flynn
Director of Accounting
Principal Accounting Officer
13
GMAC BUSINESS CREDIT, LLC
461 FIFTH AVENUE, 21ST FLOOR
NEW YORK, NEW YORK 10117
January __, 2002
NEW LINDEN PRICE RITE, INC.
SHOP RITE OF READING, INC.
SHOP RITE OF MALVERNE, INC.
FOODARAMA SUPERMARKETS, INC.
922 Highway 33, Building 6, Suite 1
Freehold, New Jersey 07728
Ladies and Gentlemen:
Reference is made to that certain Second Amended and Restated Revolving
Credit and Term Loan Agreement dated as of January 7, 2000 (as amended,
supplemented, restated or otherwise modified from time to time, the "Loan
Agreement"), by and among GMAC BUSINESS CREDIT, LLC. ("GMAC"), NEW LINDEN PRICE
RITE, INC., a New Jersey corporation ("New Linden"), FOODARAMA SUPERMARKETS,
INC., a New Jersey corporation ("Parent") (New Linden and Parent, each a
"Borrower" and jointly "Borrowers"), the Guarantors signatory hereto, the
lenders set forth on the signature pages hereto (collectively with their
respective permitted successors and assigns, each a "Lender" and collectively,
"Lenders") and GMAC as agent for Lenders (in such capacity together with any
successor thereto in such capacity, the "Agent"). All capitalized terms not
otherwise defined herein shall have the meanings assigned to them in the Loan
Agreement.
Subject to Agent's receipt of (i) this letter amendment ("Letter
Amendment") duly acknowledged and agreed to by the Borrowers, the Guarantors and
the Required Lenders; (ii) a UCC fixture filing to be filed, registered or
recorded in order to create, in favor of Agent, a first priority perfected
security interest in or lien upon the fixtures located on the 1361 Route 35,
Middletown, New Jersey 07748 location ("New Middletown Location") of Borrowers;
and (iii) a landlord waiver and consent, satisfactory to Agent, with respect to
the New Middletown Location, Borrowers and Agent, on behalf of Lenders, hereby
agree as follows:
1. Schedule 5.01(A) of the Loan Agreement is deleted in its entirety
and replaced with Schedule 5.01(A) to this Letter Amendment.
Borrowers shall make best efforts to deliver to Agent a leasehold mortgage
and related documents on the New Middletown Location (in each case, in form and
substance satisfactory to Agent) within one (1) year from the execution of this
Letter Amendment by the Borrowers and Guarantors.
Except as expressly provided herein, the execution, delivery and
effectiveness of this Letter Amendment shall not operate as a waiver of any of
14
our rights, powers or remedies, nor constitute a waiver of any provision of the
Loan Agreement, or any other documents, instruments or agreements executed
and/or delivered thereunder or in connection therewith and all other documents,
instruments and agreements executed and/or delivered in connection therewith,
shall remain in full force and effect, and are hereby ratified and confirmed.
Each reference in the Loan Agreement to "this Agreement," "hereunder,"
"hereof," "herein" or words of like import shall mean and be a reference to the
Loan Agreement as amended hereby.
This Letter Amendment may be executed by the parties hereto in one or more
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute one and the same Letter Amendment. Any signature
delivered by a party by facsimile transmission shall be deemed to be an original
signature hereto.
Very truly yours,
GMAC BUSINESS CREDIT, LLC, as a
Lender and as Agent
By:___________________________
Its:___________________________
AGREED AND ACCEPTED:
NEW LINDEN PRICE RITE, INC.,
as Borrower and as Guarantor
By:______________________
Title:
FOODARAMA SUPERMARKETS, INC.,
as Borrower and as Guarantor
By:_________________________
Title:
GMAC BUSINESS CREDIT, LLC,
as Agent and Lender
By: _________________________
Title:
15
JP MORGAN CHASE BANK,
(formerly known as THE CHASE MANHATTAN BANK)
as Lender
By: __________________________
Title:
CITIZENS BUSINESS CREDIT COMPANY,
as Lender
By: __________________________
Title:
CONSENTED AND AGREED TO:
SHOP RITE OF READING, INC.,
as Guarantor
By: ________________________
Title:
SHOP RITE OF MALVERNE, INC.,
as Guarantor
By: __________________________
Title:
16
Schedule 5.01(A)
Capital Expenditure Loans
Store #628
Location: Middletown
*Note: items listed below are not subject to 180 day limitation as detailed
in Section 5.01(A)(b).
Invoice Invoice Billed
Vendor Date Amount Description
A & J Fixtures 1077 3/7/99 $30,836 Penthouse and racks
A & J Fixtures 19004 12/16/99 $277,526 Penthouse and racks
Adelco 42731 3/28/00 $70,100 Condensers
Atlantic Food Bars 16141 3/8/00 $7,996 Salad bar
Atlantic Food Bars 16439 7/20/00 $46,430 Salad/grain bar
Atlantic Food Bars 16179 3/22/00 $17,224 Hen houses, bar
Atlantic Food Bars 15572 6/23/99 $29,740 Deposit for bars
Beroc, Inc. 5571 6/21/99 $5,250 Cleveland Tilting Kettle
Corbo Hotel & Restaurant 41984 1/31/00 $4,000 Bread slicer
John Weldon 1 6/26/96 $6,500 Bakers Pride Pizza Oven
Liberty Safes of NJ 11906 1/26/99 $2,505 Washington safe & shelf
interiors
Mosler J013363 5/20/00 $3,758 Safe
Mosler J006703 2/29/00 $3,758 Safe
Sun Coast Sales & Service 3481 1/1/00 $31,021 Grinder, tenderier, saw
Vaporlux 5452 6/18/99 $1,230 Cleaning systems
------------------------------------------------------------------------------
Total Requested $537,874
------------------------------------------------------------------------------
17
Schedule 5.01(A)
Capital Expenditure Loans
Store #524
Location: North Brunswick*
*Note: items listed below are not subject to 45 day limitation as detailed in
Section 5.01(A)(b).
With regard to any items purchased for the North Brunswick location, the 45 day
limitation will commence upon installation.
Invoice Invoice Billed
Vendor Date Amount Description
------ ---- ------ -----------
CMP Refrigeration 2085 9/13/99 $15,762 Meat case
Engo Co. 12523 5/21/99 $500 CRC desk
Sun Coast 1576 7/30/99 $4,500 Rebuilt patty machine
------------------------------------------------------------------------------
Total Requested $20,762
------------------------------------------------------------------------------
18
GMAC BUSINESS CREDIT, LLC
461 FIFTH AVENUE, 21ST FLOOR
NEW YORK, NEW YORK 10117
January __, 2002
NEW LINDEN PRICE RITE, INC.
SHOP RITE OF READING, INC.
SHOP RITE OF MALVERNE, INC.
FOODARAMA SUPERMARKETS, INC.
922 Highway 33, Building 6, Suite 1
Freehold, New Jersey 07728
Ladies and Gentlemen:
Reference is made to that certain Second Amended and Restated Revolving
Credit and Term Loan Agreement dated as of January 7, 2000 (as amended,
supplemented, restated or otherwise modified from time to time, the "Loan
Agreement"), by and among GMAC BUSINESS CREDIT, LLC. ("GMAC"), NEW LINDEN PRICE
RITE, INC., a New Jersey corporation ("New Linden"), FOODARAMA SUPERMARKETS,
INC., a New Jersey corporation ("Parent") (New Linden and Parent, each a
"Borrower" and jointly "Borrowers"), the Guarantors signatory hereto, the
lenders set forth on the signature pages hereto (collectively with their
respective permitted successors and assigns, each a "Lender" and collectively,
"Lenders") and GMAC as agent for Lenders (in such capacity together with any
successor thereto in such capacity, the "Agent"). All capitalized terms not
otherwise defined herein shall have the meanings assigned to them in the Loan
Agreement.
Subject to Agent's receipt of this letter amendment ("Letter Amendment")
duly acknowledged and agreed to by the Borrowers, the Guarantors and the
Required Lenders, Borrowers and Agent, on behalf of Lenders, hereby agree as
follows:
1. Subsection (c) of Section 7.04 of the Loan Agreement is hereby
amended by deleting the reference to "25,000" and inserting "35,000"
in its place and stead.
Except as expressly provided herein, the execution, delivery and effectiveness
of this Letter Amendment shall not operate as a waiver of any of our rights,
powers or remedies, nor constitute a waiver of any provision of the Loan
Agreement, or any other documents, instruments or agreements executed and/or
delivered thereunder or in connection therewith and all other documents,
instruments and agreements executed and/or delivered in connection therewith,
shall remain in full force and effect, and are hereby ratified and confirmed.
Each reference in the Loan Agreement to "this Agreement," "hereunder," "hereof,"
"herein" or words of like import shall mean and be a reference to the Loan
Agreement as amended hereby.
19
This Letter Amendment may be executed by the parties hereto in one or more
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute one and the same Letter Amendment. Any signature
delivered by a party by facsimile transmission shall be deemed to be an original
signature hereto.
Very truly yours,
GMAC BUSINESS CREDIT, LLC, as a
Lender and as Agent
By:___________________________
Its:___________________________
AGREED AND ACCEPTED:
NEW LINDEN PRICE RITE, INC.,
as Borrower and as Guarantor
By:______________________
Title:
FOODARAMA SUPERMARKETS, INC.,
as Borrower and as Guarantor
By:_________________________
Title:
GMAC BUSINESS CREDIT, LLC,
as Agent and Lender
By: _________________________
Title:
20
JP MORGAN CHASE BANK
(formerly known as THE CHASE MANHATTAN BANK),
as Lender
By: __________________________
Title:
CITIZENS BUSINESS CREDIT COMPANY,
as Lender
By: __________________________
Title:
CONSENTED AND AGREED TO:
SHOP RITE OF READING, INC.,
as Guarantor
By: ________________________
Title:
SHOP RITE OF MALVERNE, INC.,
as Guarantor
By: __________________________
Title:
21