EXHIBIT 10.65
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AMENDMENT NO. 2
Dated as of March 2, 1998
to
CREDIT AGREEMENT
Dated as of November 20, 1995
THIS AMENDMENT NO. 2 ("Amendment") dated as of March 2, 1998, is
entered into among Smart & Final Inc. (the "Company"), the Banks (as defined in
the Credit Agreement referred to below) and Credit Lyonnais Los Angeles Branch,
in its individual capacity as a Bank and in its capacity as Agent for the Banks
(in such capacity, the "Agent").
PRELIMINARY STATEMENT. The Agent, the Banks and the Company are
parties to that certain Credit Agreement dated as of November 20, 1995 and that
certain Amendment No. 1 to Credit Agreement dated as of May 10, 1996 (as so
amended, the "Credit Agreement"). The Company has requested that the Banks
agree to further amend the Credit Agreement as provided herein. Capitalized
terms used herein without definition are used herein as defined in the Credit
Agreement.
SECTION 1. Amendments to the Credit Agreement.
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Effective as of the date of this Amendment and subject to the
satisfaction (or waiver) of the conditions precedent set forth in Section 2 of
this Amendment, the Credit Agreement is hereby amended as follows:
1.1 The definition of "Cash Flow" as set forth in Section 1.01 of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:
" 'Cash Flow' shall mean, at any date and for any period, the sum of
net income (excluding pre-tax special charges recorded in the fourth
quarter of fiscal year 1997 in an amount not to exceed $8.9 million,
and non-cash unusual items and minority interest in earnings), plus
interest expense, income taxes, depreciation, amortization and lease
expense (to the extent deducted in determining net income) for such
period."
1.2 The definition of "Calculated Debt" as set forth in Section 1.01
of the Credit Agreement is hereby amended and restated in its entirety to read
as follows:
" 'Calculated Debt' shall mean, as to any Person, at any date, for any
period and without duplication, the sum of (i) all obligations of such
Person for borrowed money, excluding obligations under synthetic
leases to the extent that operating lease expenses for such synthetic
leases are included in the calculation of (iv) thereafter, (ii) all
obligations of such Person
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evidenced by bonds, debentures, notes or similar instruments, (iii)
all obligations of such Person as lessee under capital leases, and
(iv) the product of (1) eight and (2) operating lease expense of such
Person (determined in accordance with generally accepted accounting
principles) for the period in question."
1.3 Section 6.13 of the Credit Agreement is hereby amended and
restated to read in its entirety as follows:
"The Company will not permit its Tangible Net Worth at any time of
determination to be less than (A) for the period commencing on January
1, 1995 and ending on the last day of the 3rd quarter of fiscal 1997,
the sum of (i) $100,000,000 and (ii) fifty percent (50%) of the net
income (but only to the extent that such net income is a positive
number) of the Company; (B) as of fiscal year ended January 4, 1998,
$150,000,000; and (C) thereafter, the sum of (i) $150,000,000 and (ii)
fifty percent (50%) of the net income earned in those fiscal quarters
for which net income of the Company is positive, and which end after
January 4, 1998."
1.4 Section 6.14 of the Credit Agreement is hereby amended and
restated to read in its entirety as follows:
"The Company will not permit the Cash Flow Ratio, as of the last day
of the following fiscal quarters of the Company and determined with
respect to the four (4) fiscal quarters of the Company then ended, to
be greater than the ratio set forth opposite such period:
Period Maximum Ratio
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4th Quarter of Fiscal 1995 4.00 to 1
1st Quarter of Fiscal 1996 4.00 to 1
2nd Quarter of Fiscal 1996 4.00 to 1
3rd Quarter of Fiscal 1996 4.00 to 1
4th Quarter of Fiscal 1996 4.00 to 1
1st Quarter of Fiscal 1997 4.00 to 1
2nd Quarter of Fiscal 1997 4.00 to 1
3rd Quarter of Fiscal 1997 4.00 to 1
4th Quarter of Fiscal 1997 5.00 to 1
1st Quarter of Fiscal 1998 5.00 to 1
2nd Quarter of Fiscal 1998 5.00 to 1
3rd Quarter of Fiscal 1998 5.00 to 1
4th Quarter of Fiscal 1998 4.50 to 1
Thereafter 4.25 to 1"
SECTION 2. Conditions Precedent; Effectiveness. This Amendment shall
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become effective and be deemed effective as of the date hereof, if, and only if,
the Agent
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shall have received on or before midnight (Los Angeles time) on the date hereof
executed counterparts of this Amendment executed by the Company, the Majority
Banks and the Agent.
SECTION 3. Covenants, Representations and Warranties of the Company.
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3.1 On the date of its execution hereof, the Company hereby reaffirms
all covenants, representations and warranties made by it in the Credit Agreement
(except for any such representations and warranties which are stated to be made
as of a specific date) and all such covenants, representations and warranties
shall be deemed to have been remade as of the date of the Company's execution
hereof.
3.2 The Company represents and warrants that this Amendment
constitutes a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.
SECTION 4. Reference to and Effect on the Credit Agreement.
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4.1 Upon the effectiveness of this Amendment, each reference in the
Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or words
of like import shall mean and be a reference to the Credit Agreement, as amended
hereby, and each reference to the Credit Agreement in any other document,
instrument or agreement executed and/or delivered in connection with the Credit
Agreement shall mean and be a reference to the Credit Agreement as amended
hereby.
4.2 Except as specifically amended or waived above, the Credit
Agreement, the Notes and all other loan documents executed in connection
therewith shall remain in full force and effect and are hereby ratified and
confirmed.
4.3 The execution, delivery and effectiveness of this Amendment shall
not operate as a waiver of any right, power or remedy of any Bank or the Agent
under the Credit Agreement, the Notes or any other loan document, nor constitute
a waiver of any provision contained therein, except as specifically set forth
herein.
SECTION 5. Execution in Counterpart. This Amendment may be executed
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in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument.
SECTION 6. Governing Law. This Amendment shall be governed by and
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construed in accordance with the internal laws of the State of California
without regard to its conflicts of law rules.
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SECTION 7. Headings. Section headings in this Amendment are included
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herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized as of the
date first above written.
SMART & FINAL INC.
By: /s/ XXXXXX X. XXXXXXXX
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Name: Xxxxxx X. Xxxxxxxx
Title: Secretary
CREDIT LYONNAIS
LOS ANGELES BRANCH,
as Agent and as Bank
By: /s/ XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx
Title: Vice President & Manager
CREDIT LYONNAIS
CAYMAN ISLAND BRANCH,
as Bank
By: /s/ XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx
Title: Authorized Signatory
NATIONSBANK OF TEXAS, N.A.,
as Bank
By: /s/ XXXX X. XXXXXXX
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Name: Xxxx X. XxXxxxx
Title: Senior Vice President
XXXXX FARGO BANK, N.A.,
as successor of First Interstate
Bank of California, as Bank
By: /s/ XXXX X. XXXXXXXX
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Name: Xxxx X. Xxxxxxxx
Title: Vice President
Name: Xxxxxx Xxxxxxx
Title: Vice President
FIRST HAWAIIAN BANK,
as Bank
By: /s/ XXXXX X. XXXXX
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Name: Xxxxx X. Xxxxx
Title: Assistant Vice President
National Corporate Banking
