Annual Report — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K Form 10K for Year Ended January 1, 1994 19± 92K
6: EX-10.11 Material Contract 7± 29K
7: EX-10.17 Material Contract 53± 230K
2: EX-10.3 Material Contract 1 8K
3: EX-10.6 Material Contract 36± 132K
4: EX-10.8 Material Contract 2± 10K
5: EX-10.9 Material Contract 9± 38K
8: EX-13.1 Annual or Quarterly Report to Security Holders 18± 79K
9: EX-22.1 Published Report Regarding Matters Submitted to a 1 5K
Vote of Security Holders
10: EX-23.1 Consent of Experts or Counsel 1 7K
EX-10.9 — Material Contract
Smith's Food & Drug Centers, Inc.
Page 4
EXHIBIT 10.9
October 15, 1993
SMITH'S FOOD & DRUG CENTERS, INC.
1550 South Redwood Road
Salt Lake City, Utah 84104
Attn: Mr. Casey Jones
Director of Capital Development and Banking
Gentlemen:
We are pleased to confirm to you by this letter agreement
(the "Agreement") that a new unsecured revolving credit facility
has been placed at the disposal of SMITH'S FOOD & DRUG CENTERS,
INC. (the "Company") for general corporate purposes under the
following terms and conditions. This facility replaces the
existing $15,000,000 revolving credit facility with Credit Suisse
dated September 15, 1992.
1. THE REVOLVING CREDIT
1.1 Amount and General Terms: Subject to the terms hereof,
we will make loans to the Company as you may request from time to
time from the date hereof (the "Effective Date") to June 30, 1996
(the "Commitment Termination Date"), up to but not exceeding
$15,000,000.00 in aggregate principal amount at any time
outstanding (the "Commitment"). The Company may borrow, repay,
and reborrow hereunder, from the date of its acceptance of this
Agreement until the commitment Termination Date, either the full
amount of the Commitment or any lesser sum which is $1,000,000 or
a multiple thereof, by means of the borrowing options outlined
below, provided that all loans will be repaid to us on the
Commitment Termination Date.
1.2 Borrowing Options and Interest Rates: Interest on the
principal balance of the loan, from time to time outstanding,
will be payable at the Company's option at the following rates
per annum:
(a) For periods of one, two, three or six
months, London Interbank Offered Rate (LIBOR) plus
a margin of 50.0 basis points.
(b) For periods of one to twenty-nine days,
Credit Suisse Base Rate. "Base Rate" means the
higher of (1) the base commercial lending rate
announced by us from time to time or (2) the rate
of interest quoted to us from time to time for the
purchase by us from other banks or dealers of
United States Federal Funds on an overnight basis
in an amount comparable to the principal amount of
the relevant loan plus 50 basis points. Any
change in such Base Rate shall be effective on the
date specified in the public announcement of such
change.
(c) For periods of one to twenty-nine days,
bid option at negotiated rates.
Interest is payable on the last business day of the interest
period of the relevant borrowing and if such interest period is
longer than three months, at intervals of three months after the
first day thereof, and at a maturity of the relevant borrowing.
Interest shall be computed on the actual number of days elapsed
on a 360-day year basis.
Overdue payments of principal and interest shall bear
interest, payable on demand, at a rate equal to the Base Rate
plus 1% per annum until paid in full.
All borrowing under this Commitment will be evidenced by one
Revolving Promissory Note (attached) duly executed by the
Company.
1.3 Borrowing Notices, Payments and Prepayments:
(a) Request for Base Rate borrowing and bid
option should be made before 11:00 A.M. Los
Angeles time on the date of such request.
(b) Request for LIBOR borrowing should be
made three business days prior to the intended
drawing as it is customary that the rate
applicable to the specific borrowing period be
fixed two London business days preceding the date
of borrowing.
All loans will be paid free and clear of all taxes now
imposed, or those that will affect any change in the basis of
taxation of any amounts payable to the Bank (other than Federal,
State and Local income taxes imposed on the Bank).
Loans based on Base Rate may be prepaid without penalty.
Prepayment of loans granted on a LIBOR basis will be subject to a
prepayment penalty equal to the amount of any loss incurred by us
in liquidating and/or re-employing the amounts borrowed by us to
fund the loans, plus related reasonable expenses.
1.4 Commitment Fees. From and after the date hereof, until
the Commitment Termination Date, the Company will pay us a
commitment fee equal to 25.0 basis points per annum on the
average daily undisbursed amount of the Commitment, from the
Effective Date up to and including the Commitment Termination
Date, payable quarterly in arrears, commencing on December 31,
1993. The commitment fee shall be calculated on the basis of
actual days elapsed and a year of 360 days.
All disbursements and payments hereunder are to be made in
U.S. dollars in immediately available funds. All payments by or
on behalf of the Company to us under this Agreement shall be made
prior or 12:00 P.M. Los Angeles time on the date due to us at
offices at 12 East 49th Street, New York, NY 10017 (Attn: Loan
Department).
2. YIELD PROTECTION AND ILLEGALITY
2.1 Additional Costs. In the event that by reason of the
provisions of Federal Reserve Board Regulation D as presently in
effect or by reason of any amendment or change in said regulation
or in any other applicable banking law or regulations or the
interpretation thereof or by reason of any requirements or
directives of any governmental authority whatsoever, we incur
reserve costs on, or on account of, any advance or commitment, we
shall inform the Company accordingly and shall from time to time
charge the Company for such reserve costs.
2.2 Capital Adequacy. In addition, the Company agrees to
pay us on demand such amounts as we reasonably determine are
necessary to compensate us for any increased costs or reduction
in rates of return attributable to this Agreement and resulting
from the applications of any law, regulation, directive or
request becoming effective after the date of this Agreement
(regardless if earlier promulgated or announced) and applicable
to the Bank regarding any reserve, assessment, capital adequacy
or capital maintenance or similar requirement relating to this
Agreement.
2.3 Illegality. Notwithstanding any other provision in
this Agreement, in the event that it becomes unlawful for us to
honor our obligations to make or maintain LIBOR loans hereunder,
the we shall promptly notify the Company thereof and our
obligation to make, maintain or to convert into LIBOR loans
hereunder shall be suspended until such time as we may again make
and maintain LIBOR loans. In such event, we shall make every
effort to provide an alterative hereunder to such LIBOR loans
which is reasonably comparable thereto.
3. REPRESENTATIONS AND WARRANTIES
The Company hereby represents to us that:
3.1 Corporate Organization and Authority. (i) The Company
has the power, authority and capacity to execute, deliver and
perform this Agreement and all other documents executed in
connection herewith and (ii) this Agreement and the documents
executed in connection herewith constitute the valid and binding
obligations of the Company and are enforceable in accordance with
their respective terms.
3.2 Financial Condition. The Company represents and
warrants that the financial statements of the Company dated March
31, 1991 furnished to the Bank fairly present the Company's
financial position as of the date of such statements and the
results of its operations and the changes in such financial
position for the period then ended in accordance with generally
accepted accounting principles consistently applied. As of the
date of this Agreement and the date of any borrowing hereunder,
the Company represents that no material adverse change has
occurred since March 31, 1991, with respect to the ability of the
Company to perform under this facility.
The Company will furnish the Bank audited financial
statements within 120 days after the closing of the Company's
fiscal year, and unaudited financial statements within 60 days
after the closing of each of the first three fiscal quarters.
The Company will also provide any additional information as the
Bank may reasonably request and will allow the Bank reasonable
access to its books and records.
Accompanying the annual financial statements, the Company
will provide an opinion of an independent certified public
accountant of recognized national standing, which opinion shall
state that said consolidated financial statements fairly present
the consolidated financial condition and results of operations of
the Company as at the end of, and for, such fiscal year, and a
certificate of such accountants stating that, in making the
examination necessary for their opinion, they obtained no
knowledge, except as specifically stated, of any Default.
Promptly after the Company knows or has reason to know that
any Default has occurred or any event which with notice or lapse
of time or both would become an Event of Default, a notice of
such Default describing the same in reasonable detail and,
together with such notice or as soon thereafter as possible, a
description of the action that the Company has taken and proposes
to take with respect thereto; and
The Company will furnish, at the time it furnishes each set
of financial statements, a certificate of a senior financial
officer of the Company (i) to the effect that no Default has
occurred and is continuing (or, if any Default has occurred and
is continuing, describing the same in reasonable detail and
describing the action that the Company has taken and proposes to
take with respect thereto) and (ii) setting forth in reasonable
detail the computations necessary to determine whether the
Company is in compliance with the covenants per 4.1.
3.3 Restriction on Fundamental Changes. The Company will
not, and will not permit any of its subsidiaries to, enter into
any transaction of merger or consolidation or liquidate, wind up
or dissolve itself or convey, sell, lease, transfer or otherwise
dispose of all or substantially all its assets to any other
Person, except in the ordinary course of its business, provided
that the Company may merge with another Person if (i) the Company
is the corporation surviving such merger and (ii) immediately
after giving effect to such merger, no Default shall have
occurred and be continuing.
4 COVENANTS
4.1 Financial Covenants. The Company covenants and agrees
that so long as this facility shall remain available, and until
the full and final payment of all indebtedness incurred
hereunder, it will, unless we waive compliance in writing:
(a) Maintain a Fixed Charge Coverage ratio of not less
than 1.5 to 1, measured at the end of each fiscal
quarter. "Fixed Charge Coverage" means the sum of net
income plus income taxes plus fixed charges (interest
plus net rents) divided by fixed charges.
(b) Maintain a Tangible Net Worth of not less than the
sum of $400 million, plus 30% of net income after taxes
on a quarterly basis, plus 100% of any increase in
shareholder's equity other than the quarterly income
increases, measured at the end of each fiscal quarter,
commencing with the quarter ending September 30, 1992.
(c) Maintain a Leverage Ratio not to exceed 2.0 to 1,
measured at the of each fiscal quarter. As used
herein, "Leverage Ratio" means the ratio of total debt
to tangible net worth. Total debt includes all
borrowed money and lease obligations (including capital
leases and operating leases, the latter to be
calculated as six times the annual amount owed.)
4.2 Negative Pledge. The Company will cause the payment
obligations under this Agreement at all times to rank at least
equally and rateably in all respects with all its other unsecured
and unsubordinated indebtedness, and the Company will not, nor
will it permit any of its subsidiaries to, create, incur, assume
or suffer to exist any Lien upon any of its inventory, whether
now owned or hereafter acquired, unless the benefit of the
relevant security, or of alternative security satisfactory to us,
is at the same time and in a manner satisfactory to us extended
equally and rateably to the loans made and/or to be made and all
other sums payable by the Company under this Agreement.
5. EVENTS OF DEFAULT
In the event of any of the following defaults, the Bank may
without presentment, demand, protest or notice of any kind, all
of which are hereby expressly waived by the Company, declare the
principal of all drawings plus accrued interest to be immediately
due and payable and terminate this line of credit:
5.1 Failure to pay principal, interest or fees under this
Agreement within 10 days after such becomes due.
5.2 Failure to comply with any other covenants or
obligation in this Agreement for 30 days.
5.3 If any material representation made by the Company to
us concerning the Company's business or financial condition shall
prove to have been incorrect when made.
5.4 If the Company shall default in the performance or
observance of any provision or covenant contained within any
existing loan agreement other than this Agreement which the
Company may have in effect with any other lender, other than to
us, during the tenor of this Agreement, and such default shall
continue unremedied for a period of 20 calendar days.
5.5 If the Company shall admit its inability to pay its
debts as they mature, or shall make an assignment for the benefit
of any of its creditors, or proceedings are instituted by or
against the Company under any bankruptcy, reorganization or
insolvency law or other law for the relief of debtors.
5.6 If the Company shall suffer final judgment for the
payment of money aggregating in excess of US$5,000,000 and shall
not discharge the same within a period of 30 days unless, pending
further proceedings, execution has not been commenced or if
commenced has been effectively stayed.
5.7 The Company shall fail to meet any of its obligations
under the Employment Retirement Income Security Act of 1974
("ERISA") or notice of a proceeding to terminate any "plan" under
ERISA to appoint a trustee of a "plan" is not dismissed within 60
days of such notice.
Upon the occurrence of any of the above listed events of
default, we may, without prior notice, set off and apply any and
all deposits maintained with us and any other indebtedness owing
by us to the Company against any and all obligations of the
Company hereunder.
6 EXPENSES
The Company agrees to reimburse us for all out-of-pocket
expenses that we may incur relating to any default, dispute or
enforcement of these terms and conditions or of the Revolving
Promissory Note, including reasonable attorneys' fees, and all
costs of collection.
The party prevailing with respect to any action brought by
the other party with respect to the enforceability of this
Agreement in any court of competent jurisdiction shall be
reimbursed by the non-prevailing party for all reasonable costs
and expenses, including reasonable attorney fees, with respect to
this Agreement.
7. DOCUMENTATION
Our obligation to extend credit under this line of credit is
conditioned upon the receipt of all of the following documents,
dated as of a recent date and in a form and substance
satisfactory to us:
- A certified copy of a Resolution of the Board of
Directors of the Company authorizing the execution,
delivery, and performance of all documents relative to
the commitment contemplated herein, and the making of
the credit. Such Resolution will be certified by the
Secretary or any other appropriate officer of the
Company.
- A certified copy of the Articles of Incorporation
and By-laws of the Company
- Specimen Signature Records of the Company
- Revolving Promissory Note (enclosed)
8. MISCELLANEOUS
8.1 This Agreement is governed by California law, and may
not be amended except by instrument in writing signed by the
Company and us.
8.2 We may assign, negotiate, pledge or otherwise
hypothecate all or any portion of this Agreement, or grant
participation herein or in any of our rights and security
hereunder.
8.3 Nothing herein shall prohibit us from pledging or
assigning the Revolving Promissory Note to any Federal Reserve
Bank in accordance with applicable law.
If the foregoing meets with your approval, please sign and
return to us the enclosed copy of this letter agreement to
signify your agreement with the terms and conditions stipulated
therein.
It is our pleasure to make this line available to you, and
we look forward to a long and mutually satisfactory relationship.
Very truly yours,
CREDIT SUISSE
David J. Worthington Edward Siegel
Member of Senior Management Associate
Credit Suisse Telephone No.: (213) 955-8200
800 Wilshire Blvd. Telex No.: 67227
Los Angeles, CA 90017 Telefax No. (213) 955-8245
Read, Agreed & Accepted:
By: ______________________
Title: ___________________
SMITH'S FOOD & DRUG CENTERS, INC.
Telephone No.: __________________________
Telex No.: __________________________
Telefax No.: __________________________
REVOLVING PROMISSORY NOTE
October 15, 1993
US$15,000,000.00
FOR VALUE RECEIVED, SMITH'S FOOD & DRUG CENTERS, INC., a
Delaware Corporation (the "Company"), hereby promises to pay to
Credit Suisse, (the "Bank"), or order, at the office of the Bank
at 12 East 49th Street, New York, N.Y. 10017 the principal sum of
US$15,000,000 (USDOLLAR FIFTEEN MILLION) or such lesser amount as
shall equal the aggregate unpaid principal amount of the loans
made by the Bank to the Company under the letter agreement dated
as of October 15, 1993 between the Company and the Bank (the
"Agreement"), in lawful money of the United States of America and
in immediately available funds, on the dates and in the amounts
specified in the Agreement and to pay interest on the principal
amount of each such loan, at such office, in like money and
funds, for the period commencing on the date of such loan until
such loan shall be paid in full, at the rates per annum and on
the dates provided in the Agreement.
The books and accounts of the Bank shall be conclusive
evidence, absent manifest error, of the amounts of all loans,
interest, fees and other charges advanced, due, outstanding or
paid pursuant to the Agreement and this Note.
This Note is the Revolving Promissory Note referred to in
the Agreement under Section 1.2 and evidences loans made by the
Bank thereunder. This Note is entitled to the benefits of the
Agreement, which Agreement, among other things, contains
provisions for acceleration of the maturity hereof upon the
happening of certain stated events. This Note shall remain valid
and in force despite the fact that there may be times when no
indebtedness is owing hereunder.
If payment is not made when due, then the unpaid principal
and any accrued interest which are past due shall bear interest
at the Bank's Base Rate (as defined in the Agreement) plus 1% per
annum until paid in full.
Presentment, demand, protest and diligence and notices of
protest, dishonor and non-payment of this Note and all notices of
every kind are hereby waived by the Company and each endorser,
guarantor and surety of this Note.
This Note shall be governed by and construed in accordance
with the laws of the State of California.
SMITH'S FOOD & DRUG CENTERS, INC.
By: ______________________________
Its __________________________
Dates Referenced Herein and Documents Incorporated by Reference
This ‘10-K’ Filing | | Date | | Other Filings |
---|
| | |
| | 6/30/96 |
Filed on: | | 3/28/94 |
For Period End: | | 1/1/94 | | DEF 14A |
| | 12/31/93 |
| | 10/15/93 |
| | 9/30/92 |
| | 9/15/92 |
| List all Filings |
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