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EXHIBIT 99.2
SECOND WAIVER TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
SECOND WAIVER TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(this "Waiver") dated as of March 16, 1999, among SERVICE MERCHANDISE COMPANY,
INC., a Tennessee corporation (the "Borrower"), the financial institutions and
other entities listed on the signature pages of this Waiver (collectively, the
"Lenders" and each individually, a "Lender"), CITICORP USA, INC., a Delaware
corporation, as collateral and administrative agent for the Lenders (in such
capacity, the "Administrative Agent"), and BANKBOSTON, N.A., a national banking
capacity, the "Administrative Agent"), and BANKBOSTON, N.A., a national banking
association, as documentation agent and collateral monitoring agent for the
Lenders.
WITNESSETH:
WHEREAS, pursuant to the Second Amended and Restated Credit
Agreement dated as of January 20, 1999, as amended by the First Amendment and
Waiver thereto dated as of February 25, 1999 (as amended, the "Credit
Agreement") the Lenders have agreed to make, and have made, Loans to the
borrower and have issued Letters of Credit for the account of the Borrower.
WHEREAS, certain creditors of the Borrower commenced an
involuntary case under chapter 11 of the United State Bankruptcy Code concerning
the Borrower on March 15, 1999 by filing a petition against the Borrower under
said chapter 11 (the "Involuntary Petition") and the Borrower announced that its
Board of Directors had authorized the company to commence a voluntary case under
said chapter as soon as practicable (said resolution and any action taken to
implement same, the "Board Action"); and
WHEREAS, the Borrower has requested that the Lenders waive the
Default that has arisen as a result of the Involuntary Petition and the Board
Action, such waiver to be effective until the earlier to occur of (i) the date
on which an order for relief under chapter 11 of the United States Bankruptcy
Code is entered or deemed entered in a case under said chapter concerning the
Borrower or any of its Restricted Subsidiaries and (ii) April 5, 1999 (the
"Waiver Termination Date");
NOW, THEREFORE, for and in consideration of the premises and
the mutual covenants and provisions hereinafter contained, the parties hereto
hereby agree as follows:
1. DEFINED TERMS. Capitalized items used herein and not
otherwise defined are used herein as defined in the Credit Agreement.
2. WAIVER IN RESPECT OF SECTION 9(F)(II). The Lenders
hereby waive the Default which exists solely as the result of the Involuntary
Petition and the Board Action,
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provided that such Waiver shall only be effective until the Waiver Termination
Date (as such term is defined in the recitals to this Waiver).
3. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS
WAIVER. This Amendment shall become effective as of the date hereof on the date
(the "Waiver Effective Date") when the following conditions precedent have been
satisfied;
(a) Certain Documents. The Administrative Agent
shall have received, on or before the Waiver Effective Date, all of the
following, all of which shall be in form and substance satisfactory to
the Administrative Agent, in sufficient originally executed copies for
each of the Lenders:
(i) this Waiver, executed by the
Borrower and the Lenders constituting the Majority Lenders and
the Majority Revolving Credit Lenders;
(ii) an Acknowledgment substantially in
the form of Exhibit B attached hereto executed by each
Subsidiary Guarantor; and
(iii) such additional documentation as
the Agents or the Majority Revolving Credit Lenders may
reasonably require.
(b) Representations and Warranties. Except as
waived hereby, each of the representations and warranties made by the
Borrowers or the Subsidiary Guarantors in or pursuant to the Credit
Agreement, and the other Loan Documents to which the Borrower or any of
the Subsidiary Guarantors is bound, shall be true and correct in all
material respects on and as of the Waiver Effective Date (other than
representations and warranties in any such Loan Document which
expressly speak as of a different date).
(c) Corporate and Other Proceedings. All
corporate and other proceedings, and all documents, instruments and
other legal matters in connection with the transactions contemplated by
this Waiver shall be satisfactory in all respects in form and substance
to the Administrative Agent and the [Majority Lenders and] the Majority
Revolving Credit Lenders.
(d) No Event of Default. After giving effect to
the waivers in Section 2 hereof, no Event of Default or Default shall
have occurred and be continuing on the Waiver Effective Date.
9. Representations and Warranties. On and as of the date
hereof after giving effect to this Waiver, the Borrower hereby represents and
warrants to the Lenders as follows:
(a) Each of the representations and warranties
contained in Section 5 of the Credit Agreement or in any certificate,
document or financial or other statement furnished at any time under or
in connection therewith are true and correct in all material respects
on and as of the such date as if made on and as of such date, except to
the extent
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that such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date;
(b) No Default or Event of Default has occurred and is
continuing.
10. CONTINUING EFFECT: NO OTHER AMENDMENTS. Except as
expressly waived hereby, all of the terms and provisions of the Credit Agreement
and the other Loan Documents are and shall remain in full force and effect. The
waiver contained herein shall not constitute a waiver of any other provision of
the Credit Agreement or the other Loan Documents or for any other purpose except
as expressly set forth herein.
11. FEES, COSTS AND EXPENSES. The borrower agrees to pay
on demand in accordance with the terms of Section 11.5 of the Credit Agreement
all costs and expenses of the Administrative Agent in connection with the
preparation, reproduction, execution and delivery of this Waiver, including the
reasonable fees and expenses of counsel for the Administrative Agent with
respect thereto.
12. GOVERNING LAW: COUNTERPARTS: MISCELLANEOUS.
(a) THIS WAIVER SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK.
(b) This Waiver may be executed in any number of
counterparts and by the different parties on separate counterparts,
each of which counterparts when executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.
(c) Section captions used in this Waiver are for
conveniences only and shall not affect the construction of this
Amendment.
(d) From and after the effective date hereof,
all references in the Credit Agreement to the "Agreement" shall be
deemed to be references to such Agreement as modified hereby.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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EXHIBIT B
ACKNOWLEDGMENT
Reference is hereby made to the Subsidiaries Guarantee (as defined in
the Credit Agreement) to which each of the undersigned is a party. Each of the
undersigned hereby consents to the terms of the foregoing First Amendment and
Waiver to Second Amended and Restated Credit Agreement and agrees that the terms
thereof shall not affect in any way its obligations and liabilities under the
undersigneds' Subsidiaries Guarantee or any other Loan Document, all of which
obligations and liabilities shall remain in full force and effect and each of
which is hereby affirmed.
X.X. XXXXX, INC.
X.X. XXXXXX CO., INC.
X.X. XXXXXX CO. REALTY, INC.
HOMEOWNERS WAREHOUSE, INC.
SERVICE MERCHANDISE CO. BROAD, INC.
SERVICE MERCHANDISE COMPANY OF IOWA, INC.
SERVICE MERCHANDISE CO. NO. 30, INC.
SERVICE MERCHANDISE CO. NO. 34, INC.
SERVICE MERCHANDISE CO. NO. 35, INC.
SERVICE MERCHANDISE CO. NO. 51, INC.
SERVICE MERCHANDISE CO. NO. 93, INC.
SERVICE MERCHANDISE CO. NO. 99, INC.
SERVICE MERCHANDISE FINANCIAL CO, INC.
SERVICE MERCHANDISE INDIANA PARTNERS (by its
Partners, Service Merchandise Co., Xx. 00, Xxx., xxx
Xxxxxxx Xxxxxxxxxxx Xx. Xx. 00, Inc.)
SERVICE MERCHANDISE OF TENNESSEE LIMITED PARTNERSHIP
(by its General Partner, Service Merchandise
Company, Inc.)
SERVICE MERCHANDISE OF TEXAS LIMITED
PARTNERSHIP (by its General Partner, Service
Merchandise Company, Inc.)
SMC-HC, INC.
THE TOY STORE, INC.
WHOLESALE SUPPLY COMPANY, INC.
By: /s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
CEO
ACKNOWLEDGMENT TO
FIRST AMENDMENT AND WAIVER TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
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CITICORP USA, INC.
as Administrative Agent, as a Lender
By: /s/
-----------------------------------------
Xxxxx X. Xxxxxx
Vice President
CITIBANK, N.A.
as an Issuing Bank
By: /s/
-----------------------------------------
Xxxxx X. Xxxxxx
Vice President
SIGNATURE PAGE TO
SECOND WAIVER TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
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BANKBOSTON, N.A.,
as Documentation Agent and Collateral Monitoring
Agent, as a Lender, and as an Issuing Bank
By: /s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
Vice President
SIGNATURE PAGE TO
SECOND WAIVER TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
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NATIONAL CITY COMMERCIAL FINANCE,
INC., as a Lender
By: /s/ Xxxxxxxxx X. Xxxxx
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Name:
Title:
SIGNATURE PAGE TO
SECOND WAIVER TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
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XXXXXX FINANCIAL, INC.
as a Lender
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------
Name:
Title:
SIGNATURE PAGE TO
SECOND WAIVER TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
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FOOTHILL INCOME TRUST, L.P.,
as a Lender
By: FIT GP, LLC,
its general partner
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: Managing Member
FOOTHILL CAPITAL CORPORATION
as a Lender
By: /s/ Xxxxxxx X. Xxxxxxxxxx
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Name:
Title:
SIGNATURE PAGE TO
SECOND WAIVER TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
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XXXXXXX NATIONAL LIFE INSURANCE
COMPANY, as a Lender
By: PRM FINANCE, INC.,
its general partner
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Name:
Title: Attorney-in-Fact
SIGNATURE PAGE TO
SECOND WAIVER TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
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IN WITNESS WHEREOF, the undersigned parties have executed this SECOND
WAIVER TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT to be effective for all
purposes as of the Effective Date.
SERVICE MERCHANDISE COMPANY, INC.,
as the Borrower
By: /s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
CEO
SIGNATURE PAGE TO
SECOND WAIVER TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
