-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, lC7NYuwWjUQLJ3dDFkcYesk0ntPGmhvQJWBAaANgEpiXxxIItXT/juj2Kx66D39J aPsiOAtqcC6Pg6b8Jv007Q== 0000842913-94-000006.txt : 19940617 0000842913-94-000006.hdr.sgml : 19940617 ACCESSION NUMBER: 0000842913-94-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19940501 FILED AS OF DATE: 19940615 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KASH N KARRY FOOD STORES INC CENTRAL INDEX KEY: 0000842913 STANDARD INDUSTRIAL CLASSIFICATION: 5411 IRS NUMBER: 954161591 STATE OF INCORPORATION: DE FISCAL YEAR END: 0730 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-25621 FILM NUMBER: 94534416 BUSINESS ADDRESS: STREET 1: 6422 HARNEY RD CITY: TAMPA STATE: FL ZIP: 33610 BUSINESS PHONE: 8136210276 10-Q 1 FORM 10-Q FOR PERIOD ENDING MAY 1, 1994 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. 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. 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. 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. 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 $ -- ========= 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. 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. 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. 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. 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. 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). 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). 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). 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). 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). 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). 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). 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. 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 EX-4 2 EXHIBIT 4.1(B) TO 10-Q PERIOD ENDING MAY 1, 1994 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; 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 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: 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. (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 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. 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. 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. (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 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. 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. 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 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. 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] 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 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 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 EX-10 3 EXHIBIT 10.1(I) TO 10-Q PERIOD ENDING MAY 1, 1994 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. 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 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 EX-10 4 EXHIBIT 10.1(K) TO 10-Q PERIOD ENDING MAY 1, 1994 [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: 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. "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. 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 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. 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. 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 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 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. 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] [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. [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. 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. (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 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. (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. (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] 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 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. 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] 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. 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 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 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 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 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. (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, 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. 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 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; (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. 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:______________________ [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. 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. [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] 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 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] 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]. 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. 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 EX-10 5 EXHIBIT 10.1(L) TO 10-Q PERIOD ENDING MAY 1, 1994 [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. 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: (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. [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 [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 EX-10 6 EXHIBIT 10.1(M) TO 10-Q PERIOD ENDING MAY 1, 1994 [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: 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. 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. 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: 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. 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. 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 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 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"). 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 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. 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. 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 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 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 (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 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 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 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 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: (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 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, 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 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 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. (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. 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. 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 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. /s/ Leslie Wager Hudock Notary Signature Leslie Wager Hudock Printed Notary Name NOTARY PUBLIC, STATE OF FLORIDA Commission Number: My Commission Expires: 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: 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. 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. 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. 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 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: 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: 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 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 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. 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 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 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. 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 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. (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 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, 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 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 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. 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 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 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: 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. 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. 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. 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 [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"). 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: [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. "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. 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. (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 (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. (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 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 (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 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. 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: [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 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: 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. 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 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 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 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: 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 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 EX-10 7 EXHIBIT 10.20(A) TO 10-Q PERIOD ENDING MAY 1, 1994 [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. 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 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 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 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. 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 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 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 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 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 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. 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 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 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 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 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. (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, 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. 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 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; (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. 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:______________________ 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. 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. 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 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 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 EX-10 8 EXHIBIT 10.20(B) TO 10-Q PERIOD ENDING MAY 1, 1994 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. 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 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 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 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 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. (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, 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. 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 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; (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. 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 -----END PRIVACY-ENHANCED MESSAGE-----