EXHIBIT 00.xx
AMENDMENT NO. 9
THIS AMENDMENT NO. 9 (the "Amendment") dated as of May 25, 2000, to the
Credit Agreement referenced below, is by and among MACSAVER FINANCIAL SERVICES,
INC., a Delaware corporation, (the "Borrower"), XXXXXX-XXXXXX COMPANY, a
Virginia corporation (the "Company"), the Lenders identified therein, WACHOVIA
BANK, N.A. (formerly, Wachovia Bank of Georgia, N.A.), as Administrative Agent,
BANK OF AMERICA, N.A. (formerly NationsBank, N.A.), as Documentation Agent, and
CRESTAR BANK and FIRST UNION NATIONAL BANK (formerly, First Union National Bank
of Virginia), as Co-Agents. Terms used but not otherwise defined shall have the
meanings provided in the Credit Agreement.
W I T N E S S E T H
WHEREAS, the Lenders established a $400 million credit facility (the "Bank
Credit Facility") for the benefit of the Borrower pursuant to the terms of that
Credit Agreement dated as of July 18, 1995 (as amended and modified, the "Credit
Agreement") among the Borrower, the Company, the Lenders identified therein and
Wachovia Bank of Georgia, N.A., as Administrative Agent;
WHEREAS, the commitments under the Credit Agreement have been permanently
reduced to $200 million and will be further reduced as provided herein;
WHEREAS, the Company has requested extension of the Termination Date and
certain other modifications to the Credit Agreement;
WHEREAS, the requested consents and modifications require the consent of
the Lenders;
WHEREAS, the Lenders have consented to the requested modifications on the
terms and conditions set forth herein;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. The Credit Agreement is amended and modified in the following respects:
1.1 The following definitions are amended or added in Section 1.1 to
read as follows:
"Amendment No. 9" means Amendment No. 9 to this Credit Agreement dated
as of May 25, 2000.
"Assignment of LOC Cash Collateral Account" means that Assignment of
LOC Cash Collateral Account dated as of the date of Amendment No. 9, as
amended and modified, given by the Borrower to the Administrative Agent.
"Assignment of Non-Operating Cash Escrow Account" means that
Assignment of Non-Operating Cash Escrow Account dated as of the date of
Amendment No. 9, as amended and modified, given by the Borrower to Wachovia
Bank, N.A., as Collateral Agent for the Senior Creditors (as defined in the
Sharing Agreement).
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"Assignment of Operating Cash Escrow Account" means that Assignment of
Operating Cash Escrow Account dated as of the date of Amendment No. 9, as
amended and modified, given by the Borrower to Wachovia Bank, N.A., as
Collateral Agent for the Senior Creditors (as defined in the Sharing
Agreement).
"Credit Documents" means this Credit Agreement, the Notes, the Fee
Letter, the Sharing Agreement, the Security Agreement, the Mortgage
Instruments, the Assignment of Non-Operating Cash Escrow Account, the
Assignment of Operating Cash Escrow Account, the Assignment of LOC Cash
Collateral Account, the Pledge Agreement and all other related agreements
and documents issued or delivered thereunder or pursuant hereto or thereto.
"LOC Cash Collateral Account" has the meaning specified in Section
2.3(m).
"MFS Master Account" means the operating account maintained by the
Borrower with Wachovia Bank, N.A. (account #8735029195) and any successor
account established by the Borrower in accordance with this Credit
Agreement.
"Mortgage Instruments" means those mortgages, deeds of trust, security
deeds and like instruments given for the ratable benefit of the Senior
Creditors (as defined in the Sharing Agreement) to secure the Secured
Obligations (as defined in the Sharing Agreement), in each case as amended
and modified.
"Non-Operating Cash Escrow Account" has the meaning specified in the
Sharing Agreement.
"Non-Operating Cash Flow" has the meaning specified in the Sharing
Agreement.
"Operating Cash" means all cash received by the Company or any of its
subsidiaries that does not constitute Non-Operating Cash Flow.
"Operating Cash Escrow Account" has the meaning specified in the
Sharing Agreement.
"Permitted Liens" means:
(i) Liens to secure the Secured Obligations (including the loans and
obligations owing hereunder), as referenced and defined in, and as provided
in, the Sharing Agreement;
(ii) Liens (other than Liens created or imposed under Title IV of
ERISA) for taxes, assessments or governmental charges or levies not yet due
or Liens for taxes being contested in good faith by appropriate proceedings
for which adequate reserves determined in accordance with GAAP have been
established (and as to which the property subject to any such Lien is not
yet subject to foreclosure, sale or loss on account thereof);
(iii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other Liens imposed
by law or pursuant to customary reservations or retentions of title arising
in the ordinary course of business, provided that such Liens (i) secure
only amounts not yet due and payable or, if due and payable, are unfiled
and no other action has been taken to enforce the same or (ii) are being
contested in good faith by appropriate proceedings for which adequate
reserves determined in accordance with GAAP have been established (and as
to which the property subject to any such Lien is not yet subject to
foreclosure, sale or loss on account thereof);
(iv) Liens (other than Liens created or imposed under Title IV of
ERISA) incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
types of social security, or to secure the performance of tenders,
statutory obligations, bids, leases, government contracts, performance and
return-of-money bonds, utilities and other similar obligations (exclusive
of obligations for the payment of borrowed money);
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(v) Liens in connection with attachments or judgments (including
judgment or appeal bonds) provided that the judgments secured shall, within
30 days after the entry thereof, have been discharged or execution thereof
stayed pending appeal, or shall have been discharged within 30 days after
the expiration of any such stay;
(vi) easements, conditions, rights-of-way, restrictions (including
zoning restrictions), minor defects or irregularities in title and other
similar charges or encumbrances not, in any material respect, impairing the
use of the encumbered property for its intended purposes;
(vii) Liens on property which is the subject of purchase money
Indebtedness (including Capital Leases and Synthetic Leases) incurred to
finance or refinance the purchase, construction or other acquisition of
assets; provided that (i) any such Lien shall attach concurrently with or
within 30 days after the acquisition and shall be limited to the asset
which is the subject of the financing, and (ii) at the time of the
acquisition of such asset, the amount remaining unpaid on the Indebtedness
secured by such Lien shall not exceed 90% (or 100% in the case of a Capital
Lease or Synthetic Lease) of the lesser of the total purchase price or fair
market value thereof;
(viii) leases or subleases granted to others not interfering in any
material respect with the business of the lessor or sublessor;
(ix) any interest or title of a lessor under, and Liens arising from
UCC financing statements (or equivalent filings, registrations or
agreements in foreign jurisdictions) relating to, Capital Leases,
sale-and-leaseback transactions, credit-tenant leases, Synthetic Leases and
other leases permitted hereunder;
(x) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(xi) Liens created or deemed to exist in connection with Permitted
Receivables Financings or other securitization transactions permitted
hereunder (including any related filings of any financing statements), but
only to the extent that any such Lien relates to the applicable receivables
actually sold, contributed, financed or otherwise conveyed or pledged
pursuant to such financing or transaction or to any related property
customarily subject to a Lien in connection with such financing or
transaction;
(xii) Liens deemed to exist in connection with investments in
repurchase agreements which constitute investments permitted hereunder;
(xiii) normal and customary rights of setoff upon deposits of cash in
favor of banks or other depository institutions;
(xiv) Liens of a collecting bank arising under Section 4-210 of the
Uniform Commercial Code on items in the course of collection;
(xv) Liens securing Indebtedness otherwise permitted hereunder in an
aggregate amount not greater than $1 million; provided that (A) such Liens
shall be limited to specified collateral and shall not be blanket liens and
(B) the fair market value of the collateral shall not exceed the amount of
Indebtedness secured thereby; and
(xvi) Liens existing as of the date of Amendment No. 9 and set forth
on Schedule 8.2; provided that (a) no such Lien shall at any time be
extended to or cover any property other than the property subject thereto
on the date of Amendment No. 9, and (b) the principal amount of the
Indebtedness secured by such Liens shall not be increased.
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"Pledge Agreement" means that certain Pledge Agreement dated as of the
date of Amendment No. 9, as amended and modified, among the Borrower and
Wachovia Bank, N.A., as Collateral Agent for the Senior Creditors (as
defined in the Sharing Agreement).
"Security Agreement" means that certain Security Agreement dated as of
the date of Amendment No. 9, as amended and modified, among the Borrower,
the Company and certain of their respective subsidiaries, and Wachovia
Bank, N.A., as Collateral Agent for the Senior Creditors (as defined in the
Sharing Agreement).
"Sharing Agreement" means that Intercreditor and Sharing Agreement
dated as of May 25, 2000 (being the date of Amendment No. 9), as amended
and modified, among the Lenders and Administrative Agent under the Credit
Agreement, the holders of the Prudential Notes identified therein, Wachovia
Bank, N.A. and certain affiliates in connection with the Wachovia Lease
Financing identified therein, First Union National Bank in connection with
the FUNB Lease Financing identified therein, the Borrower, the Company, and
certain of their respective subsidiaries, and Wachovia Bank, N.A., as
Collateral Agent.
"Spread Account" has the meaning specified in Section 6.11.
"Synthetic Lease" means any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing
product where such transaction is considered borrowed money indebtedness
for tax purposes, but is classified as an operating lease under GAAP (it
being understood that the term "Synthetic Lease" shall not include any
sale-and-leaseback transaction, credit-tenant lease or other operating
lease or off-balance sheet arrangement or financing that is classified as
an operating lease under GAAP but is not treated as borrowed money
indebtedness for tax purposes).
"Termination Date" means the earlier of:
(i) May 24, 2001 (being the date 364 days following the date of
Amendment No. 9), subject to a day-by-day extension of the applicable
Termination Date for each day following the date of Amendment No. 9 to
the date 364 days then following, unless and until the Administrative
Agent shall give notice of termination of the "extension provision" at
the direction of the Required Lenders in their discretion, provided
that the Termination Date shall not in any event be extended beyond
July 17, 2001 without the written consent of each Lender affected
thereby; and
(ii) the date on which the Commitments shall terminate in
accordance with the provisions of the Credit Agreement.
1.2 In Section 1.1 with respect to the definition of "Consolidated
EBITDA", clause (B) of the second sentence is amended to read as follows:
(B) in the case of the sale or disposition for value of all or
any portion of Xxxxxxx, Mattress Discounters, Xxxxxx or other
operating subsidiaries, divisions or assets (other than assets sold in
Permitted Receivables Financings), Consolidated EBITDA and its
components shall be adjusted to exclude for the applicable period
provided in the foregoing clause (A), income statement items directly
attributable to the assets, property and/or operations which were the
subject of such sale or disposition.
1.3 In Section 1.1 with respect to the definition of "Consolidated
Funded Debt" there shall be added to the end of such definition the
following:
, but excluding for purposes hereof amounts advanced hereunder in
respect of the Spread Account under Section 6.11(ii).
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1.4 In Section 1.1 with respect to the definition of "Consolidated Net
Income", in the proviso of the first sentence, the "and" immediately
preceding clause (iii) is deleted, and a new clause (iv) is added to read
as follows:
and (iv) for purposes of determining compliance with the
Consolidated Leverage Ratio in Section 7.9(b) and the Consolidated
Adjusted Fixed Charge Coverage Ratio in Section 7.9(c), there shall be
excluded (A) special non-cash charges of up to $28 million (excluding,
for purposes hereof, in any event the portion of such charges relating
to Xxxxxxx, subject to satisfactory documentation) in connection with
implementation of requirements of Securities and Exchange Commission
Staff Accounting Bulletin 101 regarding recognition of revenue in
certain retail transactions and (B) special cash restructuring and
severance charges of up to $2 million cumulative, part of which may be
taken in the first fiscal quarter of 2000 and part of which may be
taken in the second fiscal quarter of 2000.
1.5 In Section 1.1 with respect to the definition of "Indebtedness",
the "and" immediately preceding clause (x) is deleted, and the following is
inserted at the end of the definition:
, (xi) all obligations of such Person under Synthetic Leases (it
being understood that such obligations shall not constitute Funded
Debt or Secured Debt) (xii) Indebtedness of any partnership or
unincorporated joint venture in which such Person is a general partner
or joint venturer to the extent of recourse to such Person, and (xiii)
all obligations of such Person in respect of Permitted Receivables
Financings (it being understood that such obligations shall not
constitute Funded Debt or Secured Debt).
1.6 In Section 2.1(a), clause (ii) is amended to read as follows:
"(ii) With regard to the Lenders collectively, the aggregate
amount of outstanding Committed Loans plus the aggregate amount of
outstanding Competitive Loans shall not exceed TWO HUNDRED MILLION
DOLLARS ($200,000,000) until July 18, 2000, then ONE HUNDRED FORTY
MILLION DOLLARS ($140,000,000) from such date and thereafter, unless
already reduced by such date to such level or a lesser level in
connection with the mandatory commitment reduction provisions of
Section 2.3(n) or Section 3.3(c)(ii) (as such aggregate maximum amount
may be reduced from time to time, the "Revolving Committed Amount")."
1.7 In Section 2.1(d) clauses (i) and (ii) are amended to read as
follows:
(i) Base Rate Loans. During such periods as Revolving Loans shall
be comprised of Base Rate Loans, the sum of the Base Rate plus 200
basis points (2.0%);
(ii) Eurodollar Loans. During such periods as Revolving Loans
shall be comprised of Eurodollar Loans, the sum of the Adjusted
Eurodollar Rate plus 287.5 basis points (2.875%).
1.8 New subsections (g) and (h) are added to Section 2.1 to read as
follows:
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(g) Application of Excess Operating Cash. At the end of each
Business Day, the Borrower shall withdraw from the MFS Master Account
and apply in accordance with this Section 2.1(g) the amount, if any,
by which the Operating Cash then on deposit in the MFS Master Account
(which amount shall reflect all transfers to and disbursements from
the MFS Master Account made on such Business Day) exceeds $5 million.
The Borrower shall apply each amount withdrawn from the MFS Master
Account pursuant to this Section 2.1(g) as follows: first, such amount
shall be applied to repay the outstanding Loans until the outstanding
Loans shall have been paid in full; and second, any remaining portion
of such amount shall be transferred to the Operating Cash Escrow
Account. The application of Operating Cash pursuant to this Section
2.1(g) shall not reduce the aggregate Commitments hereunder. The
Borrower shall not terminate or replace the MFS Master Account or
otherwise change its cash management procedures in any material
respect without the prior written consent of the Administrative Agent.
(h) Borrowings from Operating Cash Escrow Account. The Borrower
may request, from time to time, one or more withdrawals from the
Operating Cash Escrow Account. Each such request shall be treated as
(and be subject to the same restrictions and limitations applicable
to, including the conditions to extensions of credit under Section 5.2
and the limitations on use of proceeds under Section 6.11) a request
for a Revolving Loan, and each withdrawal from the Operating Cash
Escrow Account pursuant to this Section 2.1(h) shall be treated as a
Revolving Loan. The Borrower shall not be entitled to request a
Revolving Loan under Section 2.1(b) unless the amount on deposit in
the Operating Cash Escrow Account has been reduced to zero.
1.9 The LOC Committed Amount referred to in Section 2.3(a)(i) is
amended and increased from "FORTY FIVE MILLION DOLLARS ($45,000,000)" to
"FIFTY FIVE MILLION DOLLARS ($55,000,000)".
1.10 New subsections (m) and (n) are added to Section 2.3 to read as
follows:
(m) Establishment of LOC Cash Collateral Account. The Borrower
shall establish and maintain with the Administrative Agent, for the
benefit of the Lenders and the Issuing Lender, a segregated account
designated as the LOC Cash Collateral Account (the "LOC Cash
Collateral Account"). The Administrative Agent, for the benefit of the
Lenders and the Issuing Lender, shall exercise sole dominion and
control over, and shall possess all right, title and interest in and
to all funds on deposit from time to time in, the LOC Cash Collateral
Account. All funds on deposit in the LOC Cash Collateral Account shall
be invested by the Administrative Agent, at the written direction of
the Borrower, in investments reasonably acceptable to the
Administrative Agent. All interest and other investment earnings (net
of losses and investment expenses) on funds on deposit in the LOC Cash
Collateral Account shall be retained in the LOC Cash Collateral
Account until applied in accordance with this Credit Agreement. On the
date on which the loans and obligations (including the LOC
Obligations) owing under this Credit Agreement have been paid in full
and the commitments hereunder have been terminated, the Administrative
Agent shall withdraw from the LOC Cash Collateral Account and pay to
the Borrower all funds, if any, then on deposit in the LOC Cash
Collateral Account and such account shall be deemed to have terminated
for all purposes of this Credit Agreement.
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(n) Withdrawals from LOC Cash Collateral Account. If the Borrower
fails to reimburse the Issuing Lender as required by Section 2.3(d),
the Issuing Lender may instruct the Administrative Agent to withdraw
from the LOC Cash Collateral Account and pay to the Issuing Lender an
amount equal to all or a portion of the unpaid reimbursement
obligation. The Issuing Lender shall use each amount withdrawn from
the LOC Cash Collateral Account pursuant to this Section 2.3(n) to
satisfy, to the extent of such amount, all unpaid reimbursement
obligations. In addition, the Borrower will use its reasonable best
efforts to use cash collateral to replace or otherwise reduce the
stated amount of Letters of Credit as soon as practicable, but in any
event within four (4) weeks of receipt of any such cash collateral,
and the Borrower may instruct the Administrative Agent to use all or a
portion of the amount on deposit in the LOC Cash Collateral Account to
reduce the stated amount of one or more Letters of Credit (through
payments to one or more beneficiaries under the Letters of Credit or
through one or more other arrangements). If, but only to the extent
that, the Borrower is not able to use cash collateral to replace or
otherwise reduce the stated amount of Letters of Credit, the cash
collateral will be retained in the LOC Cash Collateral Account. The
use of amounts on deposit in the LOC Cash Collateral Account to
satisfy reimbursement obligations pursuant to this Section 2.3(n)
shall permanently reduce the aggregate Commitments hereunder and the
LOC Committed Amount unless the Borrower shall promptly (but in any
event within one Business Day) make restitution to the Administrative
Agent of amounts so used from the LOC Cash Collateral Account;
provided, however, that the portion of the aggregate Commitments
available for Loans for general working capital purposes under Section
6.11(i) hereof shall not be reduced below $45,000,000 as provided in
Section 3.3(c)(ii) hereof. The use of amounts on deposit in the LOC
Cash Collateral Account to reduce the stated amount of one or more
Letters of Credit pursuant to this Section 2.3(n) shall permanently
reduce the aggregate Commitments hereunder and the LOC Committed
Amount. The Borrower shall not be entitled to request withdrawals from
the LOC Cash Collateral Account other than to reduce the stated amount
of one or more Letters of Credit.
1.11 In Section 3.1, the reference to "2% greater than the Base Rate"
is amended to read "4% greater than the Base Rate".
1.12 Clause (ii) of Section 3.3(c) regarding Mandatory Prepayments is
amended to read as follows:
(ii) In Respect of Non-Operating Cash Flow. The Borrower and the
Company shall apply, or shall cause their subsidiaries to apply, all
Non-Operating Cash Flow allocated to the Lenders pursuant to Section 5
or Section 6 of the Sharing Agreement as follows: first, such
Non-Operating Cash Flow shall be applied to repay the outstanding
Loans until the outstanding Loans shall have been paid in full; then,
any remaining portion of such Non-Operating Cash Flow shall be used to
reduce the stated amount of one or more Letters of Credit (through
payments to one or more beneficiaries under the Letters of Credit or
through one or more other arrangements) or, if that is not
practicable, shall be transferred to the LOC Cash Collateral Account
as provided in Section 2.3(n), until the LOC Obligations (net of
amounts held in the LOC Cash Collateral Account) have been reduced to
zero; and third, any remaining portion of Non-Operating Cash Flow
shall be transferred to the Operating Cash Escrow Account. The
application of Non-Operating Cash Flow to repay the outstanding Loans
pursuant to this Section 3.3(c)(ii) shall permanently reduce the
aggregate Commitments hereunder; provided, however, that the portion
of the aggregate Commitments available for Loans for general working
capital purposes under Section 6.11(i) hereof shall not be reduced
below $45,000,000 pursuant to this sentence. The use of Non-Operating
Cash Flow to reduce the stated amount of one or more Letters of Credit
pursuant to this Section 3.3(c)(ii) or to satisfy reimbursement
obligations pursuant to Section 2.3(n) shall permanently reduce the
aggregate Commitments hereunder and the LOC Committed Amount. The
transfer of Non-Operating Cash Flow to the LOC Cash Collateral Account
pursuant to this Section 3.3(c)(ii) shall not reduce the aggregate
Commitments hereunder or the LOC Committed Amount until such time as
they are withdrawn or disbursed therefrom to replace or otherwise
reduce the stated amount of Letters of Credit or to satisfy
reimbursement obligations as provided in Section 2.3(n).
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1.13 Section 3.4(a) is amended to read as follows:
(a) Facility Fee. In consideration of the Commitments by the
Lenders hereunder, the Borrower agrees to pay to the Administrative
Agent for the ratable benefit of the Lenders a facility fee (the
"Facility Fee") equal to 62.5 basis points (.625%) per annum on the
aggregate Revolving Committed Amount in effect from time to time for
the applicable period. The Facility Fee shall be payable quarterly in
arrears on the 15th day following the end of each calendar quarter.
1.14 Section 6.11 is amended in its entirety to read as follows:
Section 6.11. Purpose of Loans and Letters of Credit. The
proceeds of the Loans may be used as follows:
(i) subject to the following sentence, up to $105 million in
Loans hereunder may be used for general working capital purposes
in the ordinary course of business consistent with past practices
of the Company and consistent with the Company's 2001 operating
plan. For purposes of this clause (i), "general working capital
purposes" shall include capital expenditures, but shall not
include (A) the funding of acquisitions, (B) the payment of
dividends (other than regular quarterly dividends on common
stock), (C) the payment of other Funded Debt (other than
scheduled payment or payment at maturity of up to $1.5 million
per annum of Funded Debt not subject to the Sharing Agreement),
or (D) the funding of any working capital shortfall resulting
from the termination of, or accumulation or amortization under,
any securitization program;
(ii) up to an additional $40 million in Loans hereunder may
be used solely for general working capital purposes (as described
in clause (i) above) in the event the funding of spread accounts
(collectively, the "Spread Accounts") is required under existing
securitization programs because the long-term senior unsecured
debt rating of the Company, or, if the Company is not so rated,
the Borrower, is reduced below Ba3 by Xxxxx'x Investors Service,
Inc. or below BB- by Standard & Poor's; provided, however, that
up to $20 million in Loans under this clause (ii) (with such $20
million maximum amount reduced by any amounts withdrawn from the
Non-Operating Cash Escrow Account and either used for working
capital or applied to the Secured Obligations pursuant to the
Sharing Agreement) may be used for general working capital
purposes (as described in clause (i) above) to the extent that
the full amount of availability under clause (i) above has been
utilized; and
(iii) up to $55 million in Letters of Credit hereunder (or
in Loans hereunder advanced to repay reimbursement obligations
arising on account of a drawing under Letters of Credit) may be
issued to support workers' compensation programs or industrial
revenue bond financings.
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The amount described in clause (i) above shall be permanently reduced
by the amount of any permanent reduction in the aggregate Commitments
resulting from the application of Non-Operating Cash Flow to repay the
outstanding Loans pursuant to Section 3.3(c)(ii). The amount described
in clause (iii) above shall be permanently reduced by any permanent
reduction in the aggregate Commitments resulting from the use of
amounts on deposit in the LOC Cash Collateral Account to replace or
otherwise reduce the stated amount of Letters of Credit or to satisfy
reimbursement obligations pursuant to Section 2.3(n). The amount
described in clause (iii) above shall not be reduced by amounts
deposited into the LOC Cash Collateral Account until such time as they
are withdrawn or disbursed therefrom to replace or otherwise reduce
the stated amount of Letters of Credit or to satisfy reimbursement
obligations as provided in Section 2.3(n). Notwithstanding anything to
the contrary contained herein, the amount described in clause (i)
above shall be permanently reduced to $45 million (if not previously
reduced to $45 million as a result of the application of Non-Operating
Cash Flow or the use of amounts on deposit in the LOC Cash Collateral
Account) on July 18, 2000.
1.15 In Section 7.2, subsection (d) is renumbered as subsection "(i)",
and new subsections (d), (e), (f), (g) and (h) are added to read as
follows:
(d) engagement within 30 days of the date of Amendment No. 9 of
Ernst & Young or another independent firm approved by the Required
Lenders in their reasonable discretion to review internal
accounting/reporting procedures and related matters in connection with
developing appropriate cash flow report and forecast forms for use in
monitoring the Company's liquidity position;
(e) delivery of the first such cash flow report and forecast by
the Company within 90 days of the date of Amendment No. 9 and
thereafter not later than the 15th Business Day of each succeeding
month;
(f) delivery within 5 Business Days of receipt of the annual
independent accountants' servicing report delivered in connection with
the Company's securitization programs;
(g) delivery within 15 Business Days after the end of each month
of an accounts receivable and accounts payable aging report in form
and detail acceptable to the Administrative Agent in its reasonable
discretion;
(h) immediate notice to the Administrative Agent of the
occurrence of an event which would result in unscheduled amortization
under any securitization transaction;
1.16 Section 7.9 is amended in its entirety to read as follows:
7.9 Financial Covenants.
(a) Consolidated Net Worth. There shall be maintained at all
times a Consolidated Net Worth of not less than the sum of eighty
percent (80%) of actual Consolidated Net Worth as of February 29,
2000, plus, on May 31, 2000 and on the last day of each fiscal quarter
thereafter, an amount equal to fifty percent (50%) of Consolidated Net
Income for the fiscal quarter then ending (but not less than zero),
such increases to be cumulative.
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(b) Consolidated Leverage Ratio. As of the end of each fiscal
quarter to occur after February 29, 2000, there shall be maintained a
Consolidated Leverage Ratio of not greater 5.25:1.0.
(c) Consolidated Adjusted Fixed Charge Coverage Ratio. There
shall be maintained a Consolidated Adjusted Fixed Charge Coverage
Ratio of not less than 1.1:1.0 as of the end of the fiscal quarters
ending May 31, 2000 and August 31, 2000, and 1.15:1.0 as of the end of
each fiscal quarter ending thereafter
(d) Minimum Monthly Cash Flow. Maintenance of minimum monthly
cash flow from operations at levels to be determined by the
Administrative Agent and approved by the Required Lenders based as a
percentage (not to exceed 85%) of estimated monthly operating cash
flow in the cash flow forecast report provided pursuant to the
provisions of Section 7.2(d) hereof.
1.17 Sections 8.1 regarding the incurrence and existence of
Indebtedness and Section 8.2 regarding the incurrence and existence of
Liens are amended to read as follows:
8.1 Indebtedness. The Company will not, nor will it permit any of
its Subsidiaries (including the Borrower and the Furniture Company)
to, contract, create, incur, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness existing or arising under this Credit
Agreement or the other Credit Documents;
(b) Indebtedness existing as of the date of Amendment No. 9
and set forth on Schedule 8.1; and renewals, refinancings and
extensions thereof that do not increase the outstanding principal
amount thereof;
(c) purchase money Indebtedness (including obligations in
respect of Capital Leases and Synthetic Leases) incurred to
finance or refinance the purchase, construction or other
acquisition of fixed assets, subject to the terms and limitations
provided therefor in the definition of "Permitted Liens";
(d) obligations owing under interest rate, commodities and
foreign currency exchange protection agreements entered into in
the ordinary course of business to manage existing or anticipated
risks and not for speculative purposes;
(e) unsecured intercompany Indebtedness owing by and between
the Company or its Subsidiaries;
(f) obligations incurred or arising in connection with
securitization transactions, sale-and-leaseback transactions,
credit-tenant leases and Synthetic Lease transactions, so long as
the net proceeds realized therefrom are applied to the Secured
Obligations, as referenced and defined in, and as provided in,
the Sharing Agreement, or are applied to reduce the invested
amount of other securitization transactions or to fund the
accumulation or amortization of other securitization
transactions;
69
(g) other unsecured Indebtedness of the Borrower or the
Company in an aggregate amount not to exceed $750,000 at any time
outstanding; and
(h) Guarantee Obligations of the Company in respect of
Indebtedness permitted under this Section 8.1;
8.2 Liens. The Company will not, nor will it permit any of its
Subsidiaries (including the Borrower and the Furniture Company) to,
create, incur, assume or permit to exist any Liens with respect to any
of its property or assets of any kind (whether real or personal,
tangible or intangible), whether now owned or after acquired, other
than Permitted Liens.
1.18 In Section 9, subsection (m) is deleted and replaced with a new
subsection (m) and a new subsection (n) is added to read as follows:
(m) The Borrower shall fail to implement a plan reasonably
acceptable to the Administrative Agent and the Required Lenders by the
date 60 days prior to the then scheduled commencement of accumulation
or amortization under the existing securitization programs (with
verification of the date of accumulation or amortization is scheduled
to begin) and to accommodate such accumulation or amortization without
access to this Agreement; or
(n) The commitment termination date shall occur with respect to
the Xxxxxx-Xxxxxx Master Trust Series 1997-1 Variable Funding
Certificates;
2. The Lenders hereby confirm that they have waived the requirements of
Sections 7.9(b) and 7.9(c) of the Credit Agreement for the fiscal year ending
February 29, 2000.
3. The Borrower and the Company hereby acknowledge and agree that (i) the
aggregate Commitments under the Credit Agreement have been permanently reduced
to $200 million as of the date hereof, (ii) the aggregate Commitments under the
Credit Agreement will be further permanently reduced on a dollar-for-dollar
basis by amounts received from Non-Operating Cash Flow for application to the
loans and obligations under the Credit Agreement as provided in Section 5 or
Section 6 of the Sharing Agreement, (iii) the aggregate Commitments under the
Credit Agreement will be permanently reduced to $140 million on July 18, 2000
(unless the Commitments shall have been previously reduced to such level or a
lesser level in connection with the mandatory commitment reductions referenced
in the foregoing clause (ii) hereof), (iv) the subfacility for Swingline Loans
is eliminated and the commitments thereunder and relating thereto are hereby
terminated, and (v) Competitive Loans are no longer available under the Credit
Agreement.
4. Release of Claims. The Company and the Borrower hereby release the
Administrative Agent and the Lenders, and their affiliates, directors, officers,
employees, attorneys and representatives (collectively, the "Released Parties")
from the following to the extent arising from or in connection with the Credit
Agreement, the loans or obligations thereunder or any of the Credit Documents or
other documents relating thereto: (i) damages, claims, liabilities, causes of
action, contracts, or controversies of any type, kind, nature, description or
character, (ii) breaches of contract or duty of any type of relationship, (iii)
acts or omissions, and (iv) commitments or promises of any type made prior to
the date hereof (the matters described in the preceding clauses (i) through (iv)
(being referred to collectively as the "Claims"), whether or not the Claims are
now know, unknown, or unforeseen, or are liquidated or unliquidated, which in
any way arise out of, or relate to, the Credit Agreement, the loans or
obligations thereunder or any of the Credit Documents or other documents
relating thereto or any failure of any of the Released Parties to honor any
prior commitment or any documents, agreements or other instruments in any way
related to the Credit Agreement, the loans or obligations thereunder or any of
the Credit Documents or other documents relating thereto.
70
5. In consideration of the extension of Termination Date and other
accommodations made hereby, the Borrower hereby agrees to pay the Administrative
Agent for the benefit of the Lenders an extension fee (the "Extension Fee") as
follows:
(i) First Stage. An amount equal to twenty-five basis points
(0.25%) on the aggregate Commitments in effect on the effective date
of this Amendment payable on the effective date of this Amendment.
(ii) Second Stage. An amount equal to fifty basis points (0.50%)
on the aggregate Commitments then in effect on the date 90 days
following the date of this Amendment.
6. This Amendment shall be effective upon satisfaction of the following
conditions:
(a) execution of this Amendment by the Borrower, the Company, the
Administrative Agent and the Lenders;
(b) receipt of copies of fully executed amendments of the Prudential
Notes, the Wachovia Lease Financing documentation and the FUNB Lease
Financing documentation consistent with the Term Sheet dated March 31,
2000;
(c) receipt of a fully executed copy of the Sharing Agreement, the
Security Agreement, the Mortgage Instruments, the Assignment of
Non-Operating Cash Escrow Account, the Assignment of Operating Cash
Account, the Assignment of LOC Collateral Account, the Pledge Agreement and
the delivery of the collateral required to be delivered thereunder and UCC
financing statements relating thereto (including the mortgage instruments
and other collateral instruments relating to the real property);
(d) receipt of legal opinions of counsel for the Company and the
Borrower in form and substance reasonably satisfactory to the
Administrative Agent and the Required Lenders, including enforceability and
no conflicts opinions;
(e) receipt by the Administrative Agent for the benefit of the Lenders
of:
(i) the First Stage portion of the Extension Fee referenced in
Section 5(i) above; and
(ii) an amendment fee (the "Amendment Fee") in an amount equal to
twenty-five basis points (0.25%) on the aggregate Commitments in
effect.
7. The Company and the Borrower hereby affirm that the representations and
warranties set out in Section 6 of the Credit Agreement are true and correct in
all material respects as of the date hereof (except those which expressly relate
to an earlier period or date).
8. Except as modified hereby, all of the terms and provisions of the Credit
Agreement (including Schedules and Exhibits) shall remain in full force and
effect.
9. The Borrower agrees to pay all reasonable costs and expenses of the
Administrative Agent in connection with the preparation, execution and delivery
of this Amendment, including without limitation the reasonable fees and expenses
of Xxxxx & Xxx Xxxxx, PLLC.
10. This Amendment may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed an original, and it shall
not be necessary in making proof of this Amendment to produce or account for
more than one such counterpart.
11. This Amendment shall be deemed to be a contract made under, and for all
purposes shall be construed in accordance with, the laws of the State of North
Carolina.
[Remainder of Page Intentionally Left Blank]
71
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Amendment to be duly executed and delivered as of the date and year
first above written.
BORROWER: MACSAVER FINANCIAL SERVICES, INC., a Delaware corporation
By: /s/Dossi X. Xxxxxxxxx
----------------------------
Name: Dossi X. Xxxxxxxxx
Title: Vice President
COMPANY: XXXXXX-XXXXXX COMPANY, a Virginia corporation
By: /s/Xxx X. Xxxxxxx
----------------------------
Name: Xxx X. Xxxxxxx
Title: Executive Vice President
LENDERS: WACHOVIA BANK, N.A., as Administrative Agent for the Bank
Lenders under the Credit Agreement and as a Lender under
the Credit Agreement
By: /s/Xxxxxxxxxxx X. Xxxxx
----------------------------
Name: Xxxxxxxxxxx X. Xxxxx
Title: Senior Vice President
BANK OF AMERICA, N.A.
By: /s/Xxxxxxx Xxxxxxxx
----------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Managing Director
FIRST UNION NATIONAL BANK
By: /s/X.X. Xxxxxxx
----------------------------
Name: X.X. Xxxxxxx
Title: Senior Vice President
CRESTAR BANK
By: /s/Xxxx X. Xxxxxx
----------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
SUNTRUST BANK
By: /s/Xxxx X. Xxxxxx
----------------------------
Name: Xxxx X. Xxxxxx
Title: Director
THE FUJI BANK, LIMITED
By: /s/Xxxxxxx Xxxxxxx
---------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President and Manager
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/Xxxxxxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxxxxxx X. Xxxxxxx
Title: First Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/Xxx X. Xxxxx
---------------------------
Name: Xxx X. Xxxxx
Title: Vice President
THE BANK OF TOKYO-MITSUBISHI, LTD.
By: /s/Xxxx X. Xxxxxxx
---------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President and Manager
MLO CLO XIX Sterling (Cayman) Ltd.
By: Sterling Asset Manager, L.L.C.,
As its Investment Advisor
By: signature illegible
Name:
Title: Executive Vice President
PNC BANK, National Association
By: /s/Xxx XxXxxx
-----------------------------
Name: Xxx XxXxxx
Title:
72
Schedule 8.1
Indebtedness Existing as of the Date of Amendment No. 9
DESCRIPTION/LENDER AMOUNT
7.60% notes due 2007 175,000,000
7.88% notes due 2003 200,000,000
7.40% notes due 2002 100,000,000
Prudential Series A Notes 60,000,000
FANB - Nashville 319,146
Nationsbank - IDB Russellville 259,638
Small Business Administration 103,498
Xxxx Xxxx (Richmond) 36,291
FANB - Kingsport 29,991
Home Beneficial Mortgage 240 7,920
Home Beneficial Mortgage 230 7,590
Capitalized leases:
Xxxxxxxxxxxxxx, XX 000,000
Xxxxxxxx, XX 96,478
Franklin, KY 288,857
Roomstore West-Data General 130,936
Roomstore West-Pioneer 33,624
73
Schedule 8.2
Liens Existing as of the Date of Amendment No. 9
LIENHOLDER AMOUNT OF LIEN
FANB - Nashville 319,146
Nationsbank - IDB Russellville 259,638
Small Business Administration 103,498
Xxxx Xxxx (Richmond) 36,291
FANB - Kingsport 29,991
Home Beneficial Mortgage 240 7,920
Home Beneficial Mortgage 230 7,590
74
