[BNP LETTERHEAD]
Smith's Food & Drug Centers, Inc. May 31, 1995
1550 South Redwood Road
Salt Lake City, UT 84104
Attn: Mr. Casey Jones
Director of Capital Development & Banking
Ladies and Gentlemen:
Banque Nationale de Paris ("BNP") is pleased to advise you that
we have approved the following facility for your use:
Borrower: Smith's Food & Drug Centers, Inc.
Facility: Committed line of credit for one or more advances (the
"Advance(s)"). The maximum aggregate principal amount available
under this Facility at any one time is $10,000,000 (the
"Commitment"), the minimum amount of any one Advance is
$1,000,000.
Repayment: The principal amount of all Advances outstanding
on the Expiration Date, together with all accrued but unpaid
interest thereon, shall be repaid in full on the Expiration Date.
Commitment Fee: Borrower agrees to pay to the Bank a
commitment fee on the average daily unused portion of the
Commitment from the date of this Agreement until the Expiration
date at the rate of 12.5 basis points (one eighth of one
percent), payable on the last day of each March, June, September
and December during the term of the Commitment and on the
Expiration Date, commencing on the last day of September 1995
(for the period beginning on the date of this Letter Agreement),
and ending on the Expiration Date.
Interest: Interest shall be computed in respect of amounts drawn
under this Facility at rates quoted by the Bank and accepted by
the customer at the time of utilization. In any event, the rate
quoted by the Bank shall not exceed the Eurodollar Offered Side
of the market for periods of overnight one, two, three or six
months plus a margin of 35 basis points (0.35 per cent) per
annum. Interest shall be computed on the actual number of days
elapsed and on the basis of a 360 day year. Interest is payable
on the maturity date of each Advance, or if the maturity date for
an Advance is more than three months from the date of the
Advance, then interest shall be payable at least quarterly in
arrears. In any event, all accrued but unpaid interest shall be
paid on the Expiration Date.
Term of Facility: This line of credit is committed for a period
of eighteen months plus one day to include an "evergreen" clause
for the automatic renewal of same each six months, barring notice
of cancellation by yourselves or ourselves of the evergreen
feature. The commitment currently expires on December 1, 1996,
but on November 30, 1995 (i.e. the first business day prior to
the end of the month, referred to as "Renewal Date"), the
expiration extends to June 1, 1997 automatically unless one of
the parties gives notice to the other prior to renewal date that
it does not wish to continue the commitment (as so extended from
time to time, the "Expiration Date").
Requests for Advances: Requests for Advances may be addressed
to Don Hart or Debra McAdam in writing or by telephone and may be
made by any of your Designated Officers (as that term is used in
the Borrowing Certificate referred to below). Requests for
Advances shall be irrevocable and shall be given not later than
10:00 a.m. (San Francisco time) on the date such request is made.
Each Request for Advance shall specify at least the following:
(1) the date and amount of such Advance; (2) the term of the
Advance; and (3) the duration of the interest period.
Terms of Advance: For each Advance made under this agreement,
BNP will maintain a record of the terms and conditions of such
Advance (the "Terms of Advance"). BNP's records of such terms and
conditions shall be binding upon Borrower absent manifest error.
BNP will make a copy of the Terms of Advance available to
Borrower.
Documentation: Prior to the funding of the first Advance to be
made hereunder, Borrower will deliver to BNP: (a) this agreement
(b) a Borrowing Certificate, and (c) a Promissory Note (the
"Note"), each fully executed and in a form acceptable to BNP.
Forms of Borrowing Certificate and Note are attached.
Representations: Borrower represents and warrants that (a)
this agreement and, when executed and delivered to us, the note
(including any substitute or additional Note), has been duly
authorized, executed and delivered by Borrower and constitutes
legally binding and enforceable obligations of Borrower in
accordance with its respective terms, and (b) all financial
information which Borrower has submitted or will submit to BNP in
connection with this agreement or any request for an advance is
(or will be at the time submitted) true and complete, fairly
presents the financial condition of Borrower as of the date
indicated and has been prepared in accordance with generally
accepted accounting principles. Upon the making of each request
for an advance under this Facility and upon receipt of each such
Advance, Borrower will be deemed to have restated and reaffirmed,
as of the date of each such request and receipt, each
representation and warranty made above.
Notices: All notices required or permitted by this agreement or
any Note shall be made by telephone or in writing (but if by
telephone, shall promptly be confirmed in writing) and addressed
to Borrower at 1550 South Redwood Road, Salt Lake City, UT 84104;
(801) 974-1400; telefax number: (801) 973-1892; and to BNP at:
180 Montgomery Street San Francisco, CA 94104; telephone number:
(415) 956-2511; telefax number: (415) 989-9041 ; unless either
party gives notice to the other of a change in address.
Kindly indicate your acceptance of this letter agreement by
signing and returning to us the original of this letter. The
enclosed duplicate is for your files. Unless accepted or extended
in writing, this offer will expire on our close of business June
15, 1995. We are delighted to offer this Facility and look
forward to continuing our mutually satisfactory relationship.
Sincerely,
BANQUE NATIONALE DE PARIS
/s/ D. Guy Gibb /s/ William J. La Herran
D. Guy Gibb William J. La Herran
Vice President Assistant Vice President
ACCEPTED AND AGREED AS OF THIS 1ST DAY OF June, 1995.
SMITH'S FOOD & DRUG CENTERS, INC.
By: /s/ Paul Tezak
Title: V.P. Finance & Treasurer
PROMISSORY NOTE
$10,000,000 June 1, 1995
San Francisco, California
FOR VALUE RECEIVED. Smith's Food & Drug Centers, Inc.
("Borrower"), hereby- promises to pay to the order of Banque
Nationale de Paris ("BNP") or the holder hereof the principal sum
of Ten Million Dollars ($10,000,000). or such lesser amount(s) as
shall have been loaned by BNP to Borrower from time to time in
one or more advances (each an "Advance") pursuant to that certain
letter agreement addressed by BNP to Borrower on May 31, 1995 and
accepted by Borrower (the "Agreement"). Each Advance shall be
payable upon the terms stated in the Terms of Advance defined
below. Each Advance shall bear interest from the date made until
paid in full at the rate(s) of interest to be agreed upon by
Borrower and BNP at the time that such Advance is made. Interest
shall be payable with respect to each advance at the time(s) to
be agreed upon by Borrower and BNP at the time that such ,advance
is made; but in any event not less frequently than quarterly as
provided in the Terms of Advance. If Borrower fails to make any
payment due in connection with this Note (including payments of
principal. interest, expenses or any other charges) such due but
unpaid amount shall bear interest from the date due until such
amount is paid in full at a rate equal to the Prime Rate plus two
percent (2.0%) per annum. As used in this Note the term "Prime
Rate" shall mean that fluctuating rate of interest determined
from time to time by the San Francisco office of BNP to be in
effect as its prime rate. Any change in the Prime Rate shall take
effect on the day determined by BNP.
For each Advance made under this Note, BNP shall maintain a
record as more fully described in the Agreement (the "Terms of
Advance"). The Terms of Advance shall be maintained by BNP in
such format including computer records, as BNP shall determine.
and the Terms of Advance shall be binding upon Borrower absent
manifest error by BNP in respect to such records; provided,
however. that failure by BNP to maintain the Terms of Advance
shall not affect the obligations of Borrower to pay amounts due
under this Note.
In the event that any Advance is made hereunder. any and
each of the following shall constitute an "event of default"
under this Note: (a) Borrower's failure promptly to make any
payment under this Note in accordance with its terms; (b)
Borrower's failure to perform any of its obligations contained in
this Note or in the Agreement; (c) the filing of a petition in
bankruptcy, or for the appointment of a receiver in liquidation
or a trustee, by or against Borrower or for any of Borrower's
property or the filing of the petition or other proceeding by or
against Borrower for reorganization compromise, adjustment or
other relief under the laws of the United States or of any state
relating to the relief of debtor which petition or other
proceeding is in any event not dismissed set aside, or withdrawn
or ceases to be in effect within ten (10) days following the
filing thereof; (d) Borrower's making any general assignment for
the benefit of creditors or otherwise making or attempting an
assignment of all or substantially all of its assets; (e) any
representation or warranty of the Borrower in the Agreement or
the Note shall prove to have been false or misleading in any
material respect when made or when deemed made; or (f) Borrower's
(i) failure to pay any indebtedness in a principal amount in
excess of $5,000,000 or any interest or premium thereon, when due
(whether by scheduled maturity, required prepayment acceleration,
demand, otherwise),or(ii) failure to perform or observe any term,
covenant, or condition on its part to be performed or observed
under any agreement or instrument relating to any such
indebtedness, in excess of $5,000,000 when required to be
performed or observed, if the effect of such failure to perform
or observe is to accelerate or to permit the acceleration after
the giving of notice or passage of time or both, of the maturity,
of such indebtedness, whether or not such failure to perform or
observe shall be waived by the holder of such indebtedness, or
(iii) any such indebtedness shall be declared to be due and
payable or required to be prepaid prior to the stated maturity
thereof and Borrower shall have failed to pay such indebtedness
or cure such default within thirty (30) days. BNP may take any
legal action available to collect all sums owing hereunder.
Borrower may prepay an Advance prior to its maturity date,
or any portion thereof at any time without penalty, provided,
however, that each prepayment shall (a) be in an amount not less
than $100,000, (b) include payment of all accrued interest to the
date of the prepayment with respect to all prepaid principal and
(c) in the case of prepayments of Advances or portions of
Advances which bear interest at a rate which does not fluctuate
on a daily basis, include an amount determined by BNP in its sole
discretion, equal to the losses and expenses incurred by BNP in
connection with such prepayment (BNP's calculation of such losses
and expenses shall be binding upon Borrower absent manifest error
on the part of BNP in making such calculation).
Payments due under this Note shall be made not later than
11:00 a.m. (San Francisco time) on the day each such payment is
due. All payments shall be made in lawful money of the United
States of America by wire transfer of immediately available funds
into the following account or such other account as BNP shall
designate to Borrower in writing : Federal Reserve Bank of San
Francisco, Account Number: 121027234, Reference: Smith's Food &
Drug Centers, lnc. All payments shall be made free and clear of,
and without deduction for or other withholding on account of,
taxes. All payments made hereunder shall be credited first
against accrued and unpaid costs and expenses of BNP, if any,
then against accrued but unpaid interest and finally against
principal. Computations of interest (including default interest)
and fees shall be made by BNP on the basis of a year consisting
of 360 days for the actual number of days elapsed (including the
first day but excluding the last). In the absence of manifest
error, BNP's determination of the amount owed hereunder shall be
conclusive and binding upon the Borrower.
Neither the acceptance of any partial or delinquent payment
by BNP nor BNP's failure to exercise any rights or remedies upon
the occurrence and continuance of any default shall, in and of
itself, constitute a waiver of such default, a modification of
Borrower's obligations under this Note or a waiver of any
subsequent default. This Note, together with the Agreement and
the Terms of Advance with respect to each Advance sets forth the
entire agreement between Borrower and BNP with regard to the
matters referred to herein. No alteration, amendment or extension
of any provision of this Note nor consent to any departure by
Borrower from the terms hereof shall be effective unless the same
shall be in writing and signed by BNP, and then such waiver or
consent shall be effective only in the specific instance and for
the specific purpose for which given. Should any action or
proceeding be brought to construe or enforce the terms and
conditions of this Note, the Agreement or any Terms of Advance,
or the rights of the parties hereunder or thereunder, the party
prevailing in such action or proceeding shall be entitled to
recover from the other party all court costs and reasonable
attorneys' fees to be set by the court, as well as the costs and
fees incurred in enforcing any judgment entered thereon. All
rights of BNP hereunder shall inure to the benefit of its
successors and assigns: all obligations of Borrowers shall bind
its successors and assigns. Borrower's obligations under this
Note are not assignable. The construction of this Note and the
rights and liabilities of the parties hereto, shall be governed
by the laws of the State of California.
IN WITNESS WHEREOF, Borrower has caused this Note to be
executed as of the date and year first written above.
SMITH'S FOOD & DRUG CENTERS, INC.
a Delaware corporation
By: /s/ Paul Tezak Title: VP Finance & Treasurer
BORROWING CERTIFICATE
Designated Officers
The undersigned, being the duly appointed Asst. Sec. of
Smith's Food & Drug Centers, Inc. Delaware corporation(the
"Corporation"),being familiar with the letter agreement, dated
May 31 , 1995 (the"Agreement") between the Corporation and Banque
Nationale de Paris ("BNP"), with the Promissory Note in the
maximum amount of Ten Million Dollars ($10,000,000) to be made by
the Corporation to the order of BNP (the "Note") and with the
matters herein certified does hereby certify to BNP that s/he is
authorized to execute and deliver this Certificate in the name
and on behalf of the Corporation, and that:
1. Attached hereto as Annex A is a true, correct and
complete copy of resolutions duly adopted at a meeting of the
Board of Directors of the Corporation held on April 26, 1995
which authorize the Sr. VP, CEO, VP Finance Treasury, or
Controller of the Corporation to borrow funds on behalf of and in
the name of the Corporation in amounts not to exceed Ten Million
and No/100 Dollars ($10,000,000 ). Such resolutions have not been
amended or rescinded and are in full force and effect on the date
hereof. BNP is hereby authorized to assume that such resolutions
are and continue to be in full force and effect until otherwise
notified in writing by the Corporation.
2. The persons list below (the "Designated Officers") are
duly elected, qualified and acting officers of the Corporation
and occupy the offices indicated opposite their names. The
signatures set opposite their names are the true signatures of
said officers and such officers, acting singly or otherwise, are
authorized by the Corporation (a) to execute and deliver the
Agreement and the Note, (b) to request advances pursuant to the
terms of the Agreement and the Note and agree to the terms and
conditions of such advances, and (c) to perform such other acts
and execute such other instruments and documents as may be
incidental to the transactions described in the Agreement or any
Note. BNP is hereby authorized to assume that each person listed
below has and shall continue to have the authority stated in this
paragraph until otherwise notified in writing by the Corporation.
NAME OFFICE SIGNATURE
MATTHEW G. TEZAK SENIOR VP C.F.O. /s/ Matthew G. Tezak
PAUL TEZAK V.P. FINANCE TREASURY /s/ Paul Tezak
ROBERT DIMOND CONTROLLER /s/ Robert Dimond
IN WITNESS WHEREOF, I have hereunto set my hand and the seal
of the Corporation, on behalf of the Corporation, as of the 2nd
day of June 1995.
SMITH'S FOOD & DRUG CENTERS, INC.
By: Peter H. Barth
Title: Asst. Secretary
[SEAL]