EXHIBIT 10.1
[LETTERHEAD OF THE CIT GROUP]
August 5 , 1996
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Buttrey Food and Drug Company
601 6th Street S.W.
Great Falls, MT. 59404
Gentlemen:
Reference is made to the Financing Agreement between you and the Lenders party
thereto dated September 7, 1995, as the same may be amended from time to time
(the "Financing Agreement"). Capitalized terms used herein and defined in the
Financing Agreement shall have the same meanings as set forth therein unless
otherwise specifically defined herein.
You have advised us that on or about the June 11, 1996, you purchased a "Dan's
Supermarket" in Cheyenne, Wyoming. You have requested that the Lenders extend to
you an additional term loan in the principal amount of $5,000,000, and the
Lenders have agreed to make such additional term loan subject to, and in
accordance with, the terms, provisions and conditions set forth herein.
Effective immediately upon fulfillment to the Lenders' satisfaction of the
Conditions Precedent (as defined below) the Financing Agreement shall be, and
hereby is, amended as follows:
1. (a) Section 1 of the Financing Agreement is hereby amended by deleting the
definitions of "Line of Credit", "Promissory Notes" and "Term Loans" and
substituting the following in lieu thereof:
"LINE OF CREDIT shall mean the aggregate commitment of the Lenders to make
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loans and advances pursuant to Section 3, 4 and 5 of this Financing
Agreement, to the Company in the aggregate amount of $47,800,000."
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"PROMISSORY NOTE(S) shall mean the notes, in the forms of Exhibits A, B, C
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and E attached hereto, delivered by the Company to the Agent on behalf of
the Lenders to evidence the Term Loans pursuant to, and repayable in
accordance with, the provisions of Section 4 and the Revolving Loans
pursuant to Section 3 of this Financing Agreement."
"TERM LOANS shall mean the term loans in the aggregate original principal
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amount of $17,800,000, consisting of Term Loan I in the original principal
amount of the $8,100,000, Term Loan II in the original principal amount of
$4,700,000, and Term Loan III in the original principal amount of
$5,000,000 each made by the Agent on behalf of the Lenders pursuant to, and
repayable in accordance with, the provisions of Section 4 of this Financing
Agreement."
(b) Section 1 of the Financing Agreement shall be, and hereby is, amended by
the addition thereto of the following new definitions:
"TERM LOAN III shall mean the loan in the original principal amount of
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$5,000,000 made by the Lenders pursuant to, and repayable in accordance
with the provisions of Section 4(c) of this Financing Agreement."
2. Section 4 of the Financing Agreement shall be, and hereby is, amended and
restated in its entirety as of the date hereof as follows:
"SECTION 4. TERM LOANS
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A. TERM LOAN I
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4.1 The Company hereby agrees to execute and deliver to the Agent on
behalf of the Lenders the Promissory Note, in the form of Exhibit A
attached hereto, to evidence Term Loan I to be extended by the Lenders.
4.2 Upon receipt of such Promissory Note, the Agent on behalf of the
Lenders hereby agrees to extend to the Company Term Loan I in the principal
amount of $8,100,000.00.
4.3 The principal amount of Term Loan I shall be repaid to the Agent
on behalf of the Lenders by the Company by eighty four (84) equal monthly
principal installments of $96,428.58 each whereof the first installment
shall be due and payable on October 1, 1995 and the subsequent installments
shall be due and payable on the first business day of each month thereafter
until paid in full.
B. TERM LOAN II
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4.4 The Company hereby agrees to execute and deliver to the Agent on behalf
of the Lenders within thirty (30) days of the Closing Date (and upon repayment
of the FINOVA Indebtedness) the Promissory Note, in the form of Exhibit B
attached hereto, to evidence Term Loan II to be extended by the Lenders.
4.5 Upon receipt of such Promissory Note, the Agent on behalf of the
Lenders hereby agrees to extend to the Company Term Loan II in the principal
amount of $4,700,000.
4.6 The principal amount of Term Loan II shall be repaid to the Agent on
behalf of the Lenders by the Company by eighty four (84) equal monthly principal
installments of $55,952.39 each, whereof the first installment shall be due and
payable on October 1, 1995 and the subsequent installments shall be due and
payable on the first business day of each month thereafter until paid in full.
C. TERM LOAN III
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4.7 The Company hereby agrees to execute and deliver to the Agent on behalf
of the Lenders the Promissory Note, in the form of Exhibit E attached hereto, to
evidence Term Loan III to be extended by the Lenders.
4.8 Upon receipt of such Promissory Note, the Agent on behalf of the
Lenders hereby agrees to extend to the Company Term Loan III in the principal
amount of $5,000,000.00
4.9 The principal amount of Term Loan III shall be repaid to the Agent on
behalf of the Lenders by the Company by sixty (60) monthly principal
installments of $83,333.34 each whereof the first installment shall be due and
payable on September 1, 1996 and the subsequent installments shall be due and
payable on the first business day of each month thereafter until paid in full.
D. TERM LOANS
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4.10 In the event this Financing Agreement or the Line of Credit is
terminated by either the Agent, the Required Lenders or the Company for any
reason whatsoever, the Term Loans shall become due and payable on the effective
date of such termination notwithstanding any provisions to the contrary in the
Promissory Note or this Financing Agreement.
4.11 The Company may prepay at any time, at its option, in whole or in
part, the Term Loans, provided that on each such prepayment, the Company
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shall pay accrued interest on the principal so prepaid to the date of such
prepayment and any such voluntary prepayments may be applied as the Company
directs or upon the occurrence of an Event of Default, as the Agent may
otherwise direct.
4.12 In the event the Company has Surplus Cash in any fiscal year
beginning with fiscal year ending January 31, 1998 in excess of
$3,000,000.00, the Company must make a Mandatory Prepayment of the Term
Loans within ninety (90) days of any such fiscal year end by an amount
equal to fifty percent (50%) of said Surplus Cash in excess of
$3,000,000.00; whereof any such prepayments shall first be applied to Term
Loan II, in inverse order of maturity and upon payment in full thereof to
Term Loan I in inverse order of maturity and upon repayment in full
thereof, to Term Loan III in inverse order of maturity, or upon the
occurrence of any Default or Event of Default in such order as the Agent
may determine.
4.13 The Company hereby authorizes the Agent to charge its revolving
loan account with the amount of all amounts due under this Section 4 as
such amounts become due. The Company confirms that any charges which the
Agent may so make to its account as herein provided will be made as an
accommodation to the Company and solely at the Agent's discretion."
3. Subparagraphs 7.11(a) and (b) of Section 7 of the Financing Agreement are
hereby amended by:
(a) with respect to subparagraph 7.11(a), inserting the following
after the amount of "$15,000,000" therein:
"provided that, for fiscal year ending February 1, 1997 Capital
Expenditures shall be limited to $22,000,000"; and
(b) with respect to subparagraph 7.11(b), renumbering subsection
"(ii)" thereof as "(iii)" and inserting a new subsection "(ii)" at the end of
"(i)" thereof as follows:
", (ii) $16,000,000 for fiscal year ending February 1, 1997 (which
amount does not include any "carry over" amounts permitted
hereinbelow)".
4. (a) Section 8, paragraph 8.2 of the Financing Agreement shall be, and hereby
is deleted, and the following paragraph 8.2 shall be, and hereby is, substituted
in lieu thereof as follows:
"8.2 (a) Interest at the Chemical Bank Rate on Term Loan I, shall be
payable monthly as of the end of each month on the unpaid balance or
on payment in full
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prior to maturity thereof in an amount equal to one percent (1%) plus the
Chemical Bank Rate (or any successor thereof). In the event of any change
in said Chemical Bank Rate, the rate hereunder shall change as of the first
of the month following any such change so as to remain one percent (1%)
above the Chemical Bank Rate. The rate hereunder shall be calculated based
on a 365 day year. The Agent shall be entitled to charge the Company's
account at the rate provided for herein when due until all Obligations have
been paid in full."
"(b) Interest at the Chemical Bank Rate on Term Loan II, shall be
payable monthly as of the end of each month on the unpaid balance or on
payment in full prior to maturity thereof in an amount equal to one and
one-half percent (1.5%) plus the Chemical Bank Rate (or any successor
thereof). In the event of any change in said Chemical Bank Rate, the rate
hereunder shall change as of the first of the month following any such
change so as to remain one and one-half percent (1.5%) above the Chemical
Bank Rate. The rate hereunder shall be calculated based on a 365 day year.
The Agent shall be entitled to charge the Company's account at the rate
provided for herein when due until all Obligations have been paid in full."
"(c) Interest, at the Chemical Bank Rate, on Term Loan III shall be
payable monthly as of the end of each month on the unpaid balance or on
payment in full prior to maturity thereof in an amount equal to one and one
half percent (1.5%) plus the Chemical Bank Rate (or any successor thereof).
The rate hereunder shall be calculated based on a 365 day year. In the
Event of any change in said Chemical Bank Rate the rate hereunder shall
change as of the first of the month following any such change so as to
remain one and one-half percent (1.5%) above the Chemical Bank Rate. The
Agent shall be entitled to charge the Company's account at the rate
provided for herein when due until all Obligations have been paid in full."
"(d) Interest on Term Loan I, II and/or III at the LIBO Rate shall be
payable in accordance with paragraphs 8.14 et seq.
(b) Section 8, subparagraph 8.14(a)(ii) is hereby deleted and the following
subparagraph is hereby substituted in lieu thereof:
"(ii) 2.25% with respect to Term Loan I and III; and"
5. Section 8 is hereby further amended by the addition of the following
Eurodollar Loan paragraphs designated as "8.22, 8.23 and 8.24" as of the end of
paragraph 8.21 as follows:
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"8.22 APPLICATION OF PROCEEDS
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Notwithstanding anything to the contrary contained herein, the Agent
shall apply all proceeds of Collateral, including the Accounts, and
all other amounts received by it from or on behalf of the Company (i)
initially to the Chemical Bank Rate Loans and (ii) subsequently to
Eurodollar Loans, provided, however, x) absent the occurrence of any
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of the events set forth in (y) through (z) below, with respect to
clause (ii) above, at the Agents reasonable discretion, in the event
proceeds of Collateral are received in excess of Chemical Bank Rate
Loans, such proceeds may be (A) held in the Company's account and
applied to subsequent Chemical Rate Loans or as otherwise provided in
this Financing Agreement, (B) the Company may request (at such time)
that such proceeds be transferred to its operating account, or (C)
applied to the outstanding Eurodollar Loans (provided however that the
Agent shall take into consideration the outstanding tranches of
Eurodollar Loans and the breakage fee with respect to each such
tranche in determining which tranche(s) shall be prepaid); y) upon the
occurrence of an Event of Default; and/or z) any requested LIBO Rate
Loan exceeds the Borrowing Base, the Agent may apply all such amounts
received by it to the payment of Obligations in such manner and in
such order as the Agent may elect in its reasonable business judgment.
In the event that any such amounts are applied to Revolving Loans
which are LIBO Rate Loans such application shall be treated as a
prepayment of such loans and the Agent shall be entitled to the LIBO
Rate prepayment penalty with respect thereto."
"8.23 PREPAYMENT
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The Company may prepay at its option at any time, in whole or in part
LIBO Rate Loans upon prior written notice, provided that, on each such
prepayment, the Company shall pay x) accrued interest, on the
principal so prepaid to the date of such prepayment and y) the LIBO
Rate prepayment penalty, if applicable."
"8.24 TERMINATION
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As further set forth in Section 10 hereof, the Agent may terminate the
Financing Agreement upon the occurrence of an Event of Default, and
the Company shall be obligated to pay the LIBO Rate prepayment
penalty, if applicable.
6. In addition, it is hereby agreed that:
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(a) The terms "Obligations" and "Term Loan(s)" as used in the Financing
Agreement shall also include, without limitation, all indebtedness,
liabilities and obligations of the Company to the Agent and the
Lenders pursuant to Term Loan III (herein the "Term Loan III
Obligations") which Term Loan III Obligations shall be and hereby are
secured by all Collateral under the Financing Agreement and any of the
ancillary security agreements executed in connection therewith.
(b) The form of Promissory Note attached hereto shall be
attached to the Financing Agreement as Exhibit E and shall
constitute Promissory Note E thereunder.
7. The effectiveness of all of the amendments and/or waivers set forth above and
the extension of Term Loan III shall be, and hereby is, subject to the
fulfillment to the Agent's satisfaction of the Conditions Precedent. The
"Conditions Precedent" shall mean each of the following:
(i) the execution and delivery to the Agent of all documentation requested
by the Agent to validly perfect the Agent's first lien upon the Company's
Real Estate to secure the Term Loan III Obligations (subject to such liens
and encumbrances as may be satisfactory to the Agent in its sole
discretion), including, without limitation, mortgages (in form and
substance satisfactory to the Agent), title insurance policies and surveys
or updates thereof so that the survey exception is removed from all such
title insurance policies (all of which shall be acceptable to the Agent in
its sole discretion) and any other documentation reasonably requested by
the Agent in connection therewith;
(ii) the absence of (x) any Default and/or Event of Default after giving
effect to Term Loan III and (y) any material adverse change in the
financial condition, business, prospects, profitability, assets or
operations of the Companies;
(iii) The Agent's receipt of copies of the asset purchase agreement with
respect to the Cheyenne, Wyoming facility and any related expenditures for
Capital Expenditures (purchased with the proceeds of Term Loan III), and
which purchase agreement and related documents must indicate values for
such assets which are acceptable to the Agent.
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(iv) the Company shall pay (x) all Out-of-Pocket Expenses incurred by the
Agent in connection with this amendment agreement and Term Loan III, and
(y) a Documentation Fee of $2,500; and
(v) The Agent's receipt of a secretary's certificate certifying Board of
Directors Resolutions authorizing the execution, delivery and performance
by the Company of this amendment agreement and all documents and
transactions contemplated hereby.
Except to the extent set forth herein, no other waiver of, or change in any of
the terms, provisions or conditions of the Financing Agreement is intended or
implied.
This agreement may be executed in two (2) or more counterparts, each of which
shall constitute an original but all of which when taken together shall
constitute but one (1) agreement, and shall become effective when copies hereof
which, when taken together, bear the original signatures of each of the parties
hereto are delivered to the Agent. It is hereby further agreed that with
respect to this agreement and any other documents contemplated hereby, as may
be amended, signed faxed documents shall be deemed to be of the same force and
effect as an original of a manually signed copy, and the Company hereby further
agrees to obtain and deliver original documents to the Agent and each Lender
(provided that the failure to deliver such original documents shall not be
deemed to modify the foregoing).
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If the foregoing is in accordance with your understanding of our agreement,
kindly so indicate by signing and returning the enclosed copy of this letter.
Very truly yours,
THE CIT GROUP/BUSINESS
CREDIT, INC., as Agent and Lender
By: /s/ Bonnie Schain
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Title: Assistant Vice President
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THE CIT GROUP/EQUIPMENT
FINANCING, INC., as Lender
By: /s/ Norm Hall
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Title: Vice President
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Read and Agreed to:
BUTTREY FOOD AND DRUG COMPANY
By: /s/ Wayne S. Peterson
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Title: SVP & CFO
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