Exhibit 10.56
WAIVER AND AMENDMENT NO.
8
This Waiver and Amendment No. 8
dated as of May 3, 2005 (this “ Waiver and Amendment
”) is among the Persons that have executed this Waiver and
Amendment (the “ Parties ”). Capitalized terms
used, but not defined, in this Waiver and Amendment are used as
defined in the Lease Agreement, dated as of November 30, 2001 (the
“ Lease ”), between Wells Fargo Bank Northwest,
National Association, as Owner Trustee under S&F Trust 1998-1,
as lessor, and Smart & Final Inc., as lessee (“
Lessee ”), as modified by (i) Waiver and Amendment
Agreement No. 1, dated as of June 4, 2002, (ii) Waiver and
Amendment Agreement No. 2, dated as of February 14, 2003, (iii)
Amendment Agreement No. 3, dated as of June 1, 2003, (iv) Waiver
and Amendment Agreement, No. 4, dated as of July 11, 2003, (v)
Consent, Waiver, Collateral Release and Amendment Agreement No. 5A,
dated as of September 3, 2003, (vi) First Supplement to Consent,
Waiver, Collateral Release and Amendment Agreement No. 5A, dated as
of September 5, 2003, (vii) Consent, Waiver and Amendment Agreement
No. 5B, dated as of September 26, 2003, (viii) Sixth Amendment and
Waiver to Lease Agreement, dated as of September 12, 2003, (ix)
Amendment Agreement No. 7, dated as of October 21, 2003, (x)
Consent and Waiver, dated as of March 8, 2004, and (xi) Consent and
Waiver, dated as of May 1, 2004.
RECITALS
A. Lessee has informed the Agent
that it exceeded the Capital Expenditures limitation set forth
Section 28.5(e) of the Lease for the quarter ending March 27, 2005.
Such occurrence is a Lease Event of Default pursuant to Section
17.1 of the Lease.
B. Lessee has requested and the
Majority Secured Parties, on the terms and subject to the
conditions of this Waiver and Amendment, have agreed to waive the
Lease Event of Default described above (“ Waived
Default ”).
C. The Credit Agreement, dated as of
November 30, 2001, among the Lessee, certain financial institutions
and BNP Paribas as administrative agent was amended and restated as
of November 18, 2004 (the “ Amended and Restated Credit
Agreement ”). Certain financial covenants in the Amended
and Restated Credit Agreement were changed from the original Credit
Agreement.
D. Lessee has requested that the
financial covenants in the Lease be amended to be made consistent
with the financial covenants in the Amended and Restated Credit
Agreement.
NOW, THEREFORE, for good and
valuable consideration received, the Parties hereto agree as
follows:
1. Waiver . The Majority
Secured Parties, on the terms and subject to the conditions of this
Waiver and Amendment, hereby waive the Waived Default.
2. Amendments .
(a) The following definitions in
Appendix A of the Participation Agreement are amended to read as
follows:
“Adjusted EBITDA” means,
for any period, determined for the Lessee and its Subsidiaries on a
Consolidated basis, EBITDA.
1
“EBITDA” means, for any
period, net income (or net loss) excluding all non-cash
extraordinary items of gain or loss, plus, to the extent deducted
in determining such net income (or net loss), the sum of (a)
interest expense, (b) income tax expense, (c) depreciation expense,
(d) amortization expense and (e) all other non-cash charges
(including impairment charges with respect to assets and goodwill,
but excluding any non-cash charge that results in an accrual of a
reserve for cash charges in any future period).
“Fixed Charge Coverage
Ratio” means, as of any date of determination, determined for
the period of four consecutive fiscal quarters ending as of the
last day of each fiscal quarter of the Lessee, the ratio of (a) the
sum of Consolidated EBITDA of the Lessee and its Subsidiaries and
(ii) rent expense for the Borrower and its Subsidiaries on a
Consolidated basis for the four most recently completed fiscal
quarters of the Borrower to (b) the sum of Consolidated Interest
Expense of the Lessee and its Subsidiaries, (ii) rent expense for
the Lessee and its Subsidiaries on a Consolidated basis for the
four most recently completed fiscal quarters of the Borrower and
(iii) dividends paid by the Lessee that are permitted under Section
28.3(f) of the Lease.”
(b) Section 28.3(f)(ii) of the Lease
is amended and restated in its entirety to read as
follows:
“(ii) Lessee may declare and
pay cash dividends to its stockholders pursuant in an amount not to
exceed $10,000,000 per fiscal year of the Lessee commencing with
fiscal year 2005;”
(c) Section 28.5 of the Lease is
amended and restated in its entirety to read as follows:
“So long as the Advance or any
other Obligation of any Credit Party under any Operative Agreement
shall remain unpaid, Lessee will:
(a) Net Worth . Maintain at
all times a Consolidated Net Worth of not less than the sum of (i)
$210,000,000 (beginning October 4, 2004) plus (ii) 50% of positive
cumulative Consolidated Net Income for the fiscal quarter ending
January 2, 2005 and each fiscal quarter thereafter (but without any
deduction for any period in which Consolidated Net Income is a
negative number) plus (iii) 100% of the amount of all cash proceeds
of any equity issuances by Lessee or any of its Subsidiaries after
the date of the Waiver and Amendment No. 8 to this Agreement;
provided , however , that changes in other
comprehensive income shall be disregarded in calculating
Consolidated Net Worth.
(b) Senior Leverage Ratio .
Not permit the Senior Leverage Ratio at the end of any fiscal
quarter of the Lessee commencing with the second fiscal quarter of
fiscal year 2005 to exce
