EXHIBIT 4-H
FIRST AMENDMENT TO
LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT ("First Amendment")
is made as of the 19th day of March, 2004 by and among TruServ Corporation, a
Delaware corporation ("TruServ"), TruServ Acceptance Company, an Illinois
corporation ("TruServ Acceptance"), TruServ Logistics Company, an Illinois
corporation ("TruServ Logistics"), General Paint & Manufacturing Company
("General Paint") and True Xxxxx.xxx Corporation, a Delaware corporation ("True
Xxxxx.xxx"), Bank of America N.A., as Syndication Agent ("Syndication Agent")
and Congress Financial Corporation (Central), Xxxxxxx Xxxxx Capital, a Division
of Xxxxxxx Xxxxx Business Financial Services, Inc., and LaSalle Business Credit,
LLC as Co-Documentation Agents ("Co-Documentation Agents"), the lenders who are
signatories hereto ("Lenders"), and Fleet Capital Corporation, a Rhode Island
corporation ("FCC"), as agent for Lenders hereunder (FCC, in such capacity,
being "Agent"). TruServ, TruServ Acceptance, TruServ Logistics, General Paint
and True Xxxxx.xxx are sometimes hereinafter referred to individually as a
"Borrower" and collectively as "Borrowers."
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Borrowers, Syndication Agent, Co-Documentation Agents, Agent
and Lenders entered into a certain Loan and Security Agreement dated as of
August 29, 2003 (said Loan and Security Agreement is hereinafter referred to as
the "Loan Agreement"); and
WHEREAS, Borrowers desire to amend and modify certain provisions of the
Loan Agreement and, subject to the terms hereof, Agent and Lenders are willing
to agree to such amendments and modifications;
NOW THEREFORE, in consideration of the premises, the mutual covenants
and agreements herein contained, and any extension of credit heretofore, now or
hereafter made by Agent and Lenders to Borrowers, the parties hereto hereby
agree as follows:
1. Definitions. All capitalized terms used herein without definition
shall have the meaning given to them in the Loan Agreement.
2. Added Definitions. Appendix A of the Loan Agreement is hereby
amended to insert the following new definitions of "Deferred Redemption Reserve"
and "First Amendment" in their appropriate alphabetical order:
"Deferred Redemption Reserve - a reserve established by Agent
for Distributions to be made to satisfy deferred liabilities in respect
of Class A or Class B Common Stock presented for redemption during the
period commencing March of 2000, such reserve to equal the aggregate
amount of the initial cash payment with respect to such deferred
liabilities to be made to each Member on or after the date that the
Board of Directors of TruServ establishes as the effective date of the
end to the moratorium on stock
redemptions, as such aggregate amount is reflected from time to time on
TruServ's books and records and to be reported on and adjusted monthly
concurrently with the delivery of each Borrowing Base Certificate
delivered pursuant to Section 8.1.4. The Deferred Redemption Reserve
shall be reduced on a dollar-for-dollar basis for any payment to any
Member described in this definition to the extent such payment is
reflected in the amount of Deferred Redemption Reserve contained in
subsequent Borrowing Base Certificates.
First Amendment - that certain First Amendment to Loan and
Security Agreement dated as of March 19th, 2004 by and among Agent,
Borrowers, Syndication Agent, Co-Documentation Agents and the Lenders
party thereto."
3. Amended Definitions. The definitions of "Closing Reserve,"
"Consolidated Net Income (Loss)," "Eligible Inventory" and "Indebtedness"
contained in Appendix A to the Loan Agreement or Exhibit 8.3 to the Loan
Agreement are hereby deleted and the following are inserted in their stead:
"Closing Reserve - a reserve established by Agent on the
Closing Date in the initial amount of $4,900,000 for Distributions or
Subordinated Debt Payments, which amount has been reduced to $0 on or
prior to the date of the First Amendment.
Consolidated Net Income (Loss) - with respect to any period,
the net income (or loss) of Borrowers determined in accordance with
GAAP on a Consolidated basis; provided, however, Consolidated Net
Income shall not include: (a) the income (or loss) of any Person (other
than a Subsidiary of a Borrower) in which such Borrower or any of its
wholly-owned Subsidiaries has an ownership interest unless received in
a cash distribution or requiring the payment of cash; (b) the income
(or loss) of any Person accrued prior to the date it became a
Subsidiary of a Borrower or is merged into or consolidated with a
Borrower; (c) all amounts included in determining net income (or loss)
in respect of the write-up of assets on or after the Closing Date,
including the subsequent amortization or expensing of the written-up
portion of the assets; (d) extraordinary gains as defined under GAAP;
(e) gains from asset dispositions (other than sales of inventory); (f)
any non-cash gain amortization resulting from Borrowers' sale and
leaseback transaction; and (g) any revenue realized from any sale where
the sales proceeds are paid with notes, instruments or Equity
Interests, to the extent such sales proceeds have not been written off
as a bad debt expense; and provided, further, that rent expense for any
period shall be adjusted to reflect the actual cash rent paid within
the applicable period.
Eligible Inventory - Inventory of any Borrower (other than
packaging materials and supplies, tooling, samples and literature),
which Agent, in its reasonable credit judgment deems to be Eligible
Inventory. Without limiting the generality of the foregoing, no
Inventory shall be Eligible Inventory if:
(i) it is not in good, new and saleable condition; or
(ii) it is slow-moving, obsolete or unmerchantable;
or
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(iii) it does not meet all standards imposed by any
governmental agency or authority; or
(iv) it does not conform in all respects to any
covenants, warranties and representations set forth in the
Agreement; or
(v) it is not at all times subject to Agent's duly
perfected, first priority security interest (subject to
Permitted Liens) or is subject to a Lien that is not a
Permitted Lien; or
(vi) it is not situated at a location in compliance
with the Agreement, provided that Inventory situated at a
location not owned by such Borrower will be Eligible Inventory
only if Agent has received a satisfactory Collateral Access
Agreement in a form substantially similar to the form
delivered by Agent to Borrowers on or prior to the Closing
Date with such revisions thereto as reasonably agreed to by
Agent, with respect to such location; or
(vii) it is Inventory on consignment (other than to
Agent or a Person with an agency relationship with Agent); or
(viii) it is Inventory in transit unless either (a)
it is in transit from a distribution center of a Borrower to a
Member's store or other location or (b) it satisfies the
conditions set forth in clause (ix) below; or
(ix) it is Inventory which is located outside the
United States of America unless it is in transit to either the
premises of a Customs Broker in the United States or premises
of a Borrower in the United States of America which are either
owned and controlled by a Borrower or leased by a Borrower, as
the case may be, provided that, (a) title to such Inventory is
evidenced by negotiable bills of lading (within the meaning of
the UCC) made to the order of Agent (or as otherwise directed
by Agent) and Agent has a first priority perfected security
interest in and lien upon, and control and possession of, one
(1) original (or all originals of such documents with respect
to Inventory purchased pursuant to documentary letter of
credit arrangements) of such documents of title with respect
to such Inventory (either directly or through a Customs Broker
as contemplated in Section 8.1.11 hereof), (b) such Inventory
would otherwise be Eligible Inventory hereunder and title to
such Inventory is in the name of a Borrower, and (c) Agent has
received (i) with respect to Inventory in transit to a Customs
Broker, a Collateral Access Agreement, duly authorized,
executed and delivered by such Customs Broker to Agent
(provided, that, for this purpose, if Agent has established
reserves for amounts due or to become due to such Customs
Broker, then an agreement from such Customs Broker that would
otherwise constitute a Collateral Access Agreement except that
it provides for such Customs Broker to retain an interest in
any documents of title with respect to any Collateral to
secure unpaid fees and charges owing to such Customs Broker,
shall be deemed a Collateral Access Agreement), (ii) with
respect to Inventory in transit to premises leased by a
Borrower, a Collateral Access Agreement, duly authorized,
executed
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and delivered by the applicable lessor to Agent, (iii) a copy
of the certificate of marine cargo insurance in connection
therewith in which Agent has been named as an additional
insured and loss payee in a manner, and in all other respects,
acceptable to Agent, (iv) a copy of the invoice (if any),
manifest and any other shipping documents with respect
thereto, and (v) other evidence required by Agent evidencing
title of a Loan Party in such Inventory.
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Indebtedness - as applied to a Person means, without
duplication:
(i) all items which in accordance with GAAP would be
included in determining total liabilities as shown on the
liability side of a balance sheet of such Person as at the
date as of which Indebtedness is to be determined, including,
without limitation, Capitalized Lease Obligations;
(ii) all obligations of other Persons which such
Person has guaranteed;
(iii) all reimbursement obligations in connection
with letters of credit or letter of credit guaranties issued
for the account of such Person;
(iv) Derivative Obligations; and
(v) in the case of Borrowers (without duplication),
the Obligations.
The foregoing notwithstanding, Indebtedness shall not include
obligations of a Person owing with respect to capital stock or other
forms of equity issued by such Person which obligations are classified
as debt or indebtedness solely as a result of the application of FASB
150."
4. Leases. Section 8.2.18 of the Loan Agreement is hereby deleted and
the following is inserted in its stead:
"8.2.18 Leases. (a) Except for leases entered into in
connection with a sale and leaseback transaction in which the proceeds
of the sale are used to repay the Revolving Credit Loans, leases
existing on the Closing Date that are listed on Exhibit 7.1.22 (as
amended by the First Amendment) and extensions, renewals and
replacements thereof, become, or permit any of their Restricted
Subsidiaries to become, a lessee under any operating lease (other than
a lease under which a Borrower or any of its Restricted Subsidiaries is
lessor) of Property is the aggregate Rentals payable during any current
or future period of twelve (12) consecutive months under the lease in
question and all other leases under which Borrowers or any of their
Restricted Subsidiaries is then lessee would exceed $3,000,000. The
term "Rentals" means, as of nay date of determination, all scheduled
rental payments.
(b) Exhibit 7.1.22 to the Loan Agreement is hereby deleted and
replaced with the new Exhibit 7.1.22 attached to this First Amendment."
5. Deferred Redemption Reserve. Other than the references to "Closing
Reserve" contained in Section 9.4 of the Loan Agreement and the definition of
"Closing Reserve" in Appendix A of the Loan Agreement, each reference to
"Closing Reserve" contained in the Loan Agreement shall be deleted and replaced
with a reference to "Deferred Redemption Reserve."
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6. Financial Covenants. Section 8.3 of the Loan Agreement is hereby
amended to insert the following sentence at the end of such Section 8.3.
"Notwithstanding the foregoing, the financial covenants
contained in Exhibit 8.3 shall be calculated without regard to the
effects of EITF 02-16 and FAS 150."
7. Execution in Counterparts. This First Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
8. Continuing Effect. Except as otherwise specifically set out herein,
the provisions of the Loan Agreement shall remain in full force and effect.
9. Successors and Assigns. This First Amendment shall be binding upon
and inure to the benefit of the successors and assigns of each Borrower, Agent
and each Lender permitted under Section 11.9 of the Loan Agreement.
10. Governing Law. This First Amendment shall be governed by and
construed in accordance with the laws of the State of Illinois.
(SIGNATURE PAGE FOLLOWS)
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(SIGNATURE PAGE TO FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT)
IN WITNESS WHEREOF, this First Amendment has been duly executed as of
the day and year specified at the beginning hereof.
TRUSERV CORPORATION, as a Borrower
By: /s/ XXXXXXX X. XXXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President and Treasurer
TRUSERV ACCEPTANCE COMPANY, as a Borrower
By: /s/ XXXXXXX X. XXXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President and Treasurer
TRUSERV LOGISTICS COMPANY, as a Borrower
By: /s/ XXXXXXX X. XXXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President and Treasurer
GENERAL PAINT & MANUFACTURING
COMPANY, as a Borrower
By: /s/ XXXXXXX X. XXXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President and Treasurer
TRUE XXXXX.XXX CORPORATION, as
a Borrower
By: /s/ XXXXXXX X. XXXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President and Treasurer
(SIGNATURE PAGE TO FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT)
FLEET CAPITAL CORPORATION, as Agent
and as a Lender
By: /s/ XXXXXX X. XXXXX
---------------------------
Name: Xxxxxx X. Xxxxx
Title: Sr. Vice President
(SIGNATURE PAGE TO FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT)
CONGRESS FINANCIAL CORPORATION
(CENTRAL), as Co-Documentation Agent
and as a Lender
By: /s/ XXXXXXX XXXXXXXX
--------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: First Vice President
(SIGNATURE PAGE TO FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT)
BANK OF AMERICA, N.A., as
Syndication Agent and as a Lender
By: /s/ XXXXXX XXXXXXXXXX
------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Vice President
(SIGNATURE PAGE TO FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT)
XXXXXXX XXXXX CAPITAL, a Division of
Xxxxxxx Xxxxx Business Financial
Service, Inc., as Co-Documentation
Agent and as a Lender
By: /s/ XXXXXXX XXXXXXX
----------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
(SIGNATURE PAGE TO FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT)
LASALLE BUSINESS CREDIT, LLC, as
Co-Documentation Agent and as a Lender
By: /s/ XXX XXXX
-------------------------------
Name: Xxx Xxxx
Title: First Vice President
(SIGNATURE PAGE TO FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT)
THE CIT GROUP/BUSINESS CREDIT, INC.,
as a Lender
By: /s/ XXXX XXXXX
------------------------------
Name: Xxxx Xxxxx
Title: Vice President
(SIGNATURE PAGE TO FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT)
M & I XXXXXXXX & ILSLEY BANK, as a
Lender
By: /s/ XXX X XXXXXXX
----------------------------
Name: Xxx X Xxxxxxx
Title: Vice President
By: /s/ XXXXX X XXXXXX
----------------------------
Name: Xxxxx X Xxxxxx
Title: Vice President
