EXHIBIT 10.57
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FIFTH AMENDMENT TO AMENDED, RESTATED
AND CONSOLIDATED LOAN AND SECURITY AGREEMENT AND FIRST
AMENDMENT TO SUBORDINATION AGREEMENT
This Fifth Amendment to Amended, Restated and Consolidated Loan
and Security Agreement and First Amendment to Subordination Agreement
("Amendment") is made as of the 12th day of May, 2003 by and among
Fleet Capital Corporation, a Rhode Island corporation with an office
at 000 Xxxxxxxxxxx Xxxx, Xxxxxxxxxxx, XX 00000 ("Lender"); and
JEH/Eagle Supply, Inc., a Delaware corporation with its executive
office and principal place of business at 0000 X.X. 000, Xxxxxxxxx,
Xxxxx 00000 (formerly located at 000 Xxxx 00xx Xxxxxx, Xxxxx 0000, Xxx
Xxxx, XX 10168) ("JEH"); Eagle Supply, Inc., a Florida corporation
with its executive office and principal place of business at 0000 X.X.
000, Xxxxxxxxx, Xxxxx 00000 (formerly located at 000 Xxxx 00xx Xxxxxx,
Xxxxx 0000, Xxx Xxxx, XX 10168) ("Eagle"); and JEH/Eagle, L.P. a Texas
limited partnership with its executive office and principal place of
business at 0000 X.X. 000, Xxxxxxxxx, Xxxxx 00000 (formerly located at
000 Xxxx 00xx Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX 10168) ("LP", and
collectively with JEH and Eagle referred to as "Borrowers", and
sometimes each individually is also referred to as "Borrower"); and
Eagle Supply Group, Inc., a Delaware corporation with its executive
office and principal place of business at 000 Xxxx 00xx Xxxxxx, Xxxxx
0000, Xxx Xxxx, XX 10168) ("Eagle Group").
BACKGROUND
A. Borrowers and Lender are parties to a certain Amended,
Restated and Consolidated Loan and Security Agreement dated June 20,
2000, as same has been, and may be, modified, amended, restated or
supplemented from time to time, including by that certain Joinder to
Amended, Restated and Consolidated Loan and Security Agreement dated
July 1, 2000 (collectively referred to as the "Loan Agreement")
pursuant to which Lender established certain financing arrangements
for the benefit of Borrowers. The Loan Agreement and all instruments,
documents and agreements executed in connection therewith, or related
thereto, are referred to herein collectively as the "Existing Loan
Documents". All capitalized terms not otherwise defined herein shall
have the meaning ascribed thereto in the Loan Agreement.
B. Borrowers and Lender have agreed to modify certain terms and
conditions set forth in the Loan Agreement.
C. An Event of Default as set forth on Exhibit A attached
hereto and made part hereof has occurred under the Loan Agreement
("Existing Default") and Borrowers have requested that Lender waive
the Existing Default.
D. Lender has agreed, subject to the terms and conditions set
forth below, to waive the Existing Default and amend the Loan
Agreement.
NOW, THEREFORE, with the foregoing Background incorporated herein
by reference and made a part hereof and intending to be legally bound,
the parties agree as follows:
1. Acknowledgment and Waiver of Events of Default. Borrowers
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hereby acknowledge and confirm that the Existing Default has occurred
under the Loan Agreement. Upon the effectiveness of this Amendment,
Lender shall be deemed to have waived the Existing Default; provided
that Lender's waiver shall not be deemed to be a waiver of any
subsequent violations of any of the covenants referenced on Exhibit A
or a waiver of any other Events of Defaults which may have occurred
but which are not specifically referred to on Exhibit A.
2. Amendment to Loan Agreement.
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2.1 Section 8.2.9 of the Loan Agreement shall be deleted
in its entirety and replaced as follows:
8.2.9 Leases. Become, or permit any of their
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Subsidiaries to become, a lessee under any operating
lease (other than a lease under which Borrowers or any
of their Subsidiaries are lessor) of Property if the
aggregate Rentals payable during any current or future
period of twelve (12) consecutive months under the
lease in question and all other operating leases under
which Borrowers or any of their Subsidiaries are then
lessee would exceed Seven Million Dollars
($7,000,000). The term "Rentals" means, as of the
date of determination, all payments which the lessee
is required to make by the terms of any lease,
exclusive of occupancy costs.
2.2 Section 8.3.2 of the Loan Agreement shall be deleted
in its entirety and replaced as follows:
8.3.2 Fixed Charge Coverage Ratio. Maintain at all
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times a Fixed Charge Coverage Ratio of not less than
the ratio shown below for the period corresponding
thereto:
Trailing Twelve (12)-Month
Period Ending: Ratio
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May 31, 2003 .05:1;
June 30, 2003 .70:1;
July 31, 2003 and
the last day of each month thereafter 1.10:1.
3. Amendments to Appendix A General Definitions.
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3.1 The definition of Applicable Inventory Sublimit shall
be deleted in its entirety and replaced as follows:
Applicable Inventory Sublimit - (i) for the period
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commencing on the date hereof and continuing through
July 31, 2003, an amount equal to $22,500,000; and (ii)
at all times thereafter, an amount equal to
$20,000,000.
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3.2 A new definition of EBITDA shall be added to the
Appendix as follows:
EBITDA - the Borrowers' net income, plus interest
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expense, plus taxes, plus depreciation, plus non-cash
charges resulting from changes in accounting
principles and amortization, plus non-cash inter-
company management fees and other non-cash inter-
company charges, calculated on a Consolidated basis
and determined in accordance with GAAP.
3.3 A new definition of Fixed Charge Coverage Ratio shall
be added to the Appendix as follows:
Fixed Charge Coverage Ratio - with respect to any
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period, the ratio of (a) EBITDA, less unfinanced
capital expenditures (for purposes hereof, use of a
Revolving Credit Loan for a capital expenditure will
be considered an unfinanced capital expenditure) made
during such period, less cash payments for taxes made
during such period to (b) all scheduled principal
payments and accrued interest expense (excluding
interest expense on all inter-company obligations) on
account of Money Borrowed, to be calculated on a
trailing twelve (12)-month basis.
4. Additional Agreements and Covenants. Borrowers agree to pay
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Lender an Amendment Fee equal to $25,000 (the "Amendment Fee"). As
additional consideration for the amendments contained herein, such
Amendment Fee shall be deemed fully earned and payable upon execution
of this Amendment.
5. Amendment To Subordination Agreement. Section 2. of that
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certain Subordination Agreement executed by Eagle Group in favor of
Lender dated February 14, 2001 is deleted in its entirety and replaced
as follows:
Until the Senior Debt is paid in full, Borrowers shall not pay,
and undersigned shall not accept, payments of any kind (including
prepayments) on the Subordinated Debt; provided, however, that so
long as Borrowers achieve a Fixed Charge Coverage Ratio of 1.10:1
or greater on a trailing twelve (12)-month basis as shown on
Borrowers' financial statements required to be delivered pursuant
to the Loan Agreement, and no Event of Default or Default under
the Loan Agreement has occurred and is continuing, or would
result from the making of any such payment(s), Borrowers may pay
and the undersigned may accept payments on the Subordinated Debt.
Notwithstanding the foregoing, upon the occurrence of an Event
of Default, or a Default, under the Loan Agreement, Borrowers
shall not make and the undersigned shall not receive, any
payments on the Subordinated Debt, without Lender's prior written
consent until such Event of Default or Default is cured or
waived.
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6. Representations and Warranties. Each Borrower represents
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and warrants to Lender that following execution of this Amendment
that:
6.1 Other than the Existing Default, no Event of Default
or Default has occurred and is continuing.
6.2 All warranties and representations made to Lender
under the Loan Agreement and the Existing Loan Documents are true and
correct as to the date hereof.
6.3 The execution and delivery by each Borrower of this
Amendment and the performance by it of the transactions herein
contemplated (i) are and will be within its powers, (ii) have been
authorized by all necessary corporate or partnership action, and (iii)
are not and will not be in contravention of any order of any court or
other agency of government, of law or any other indenture, agreement
or undertaking to which such Borrower is a party or by which the
property of such Borrower is bound, or be in conflict with, result in
a breach of, or constitute (with due notice and/or lapse of time) a
default under any such indenture, agreement or undertaking or result
in the imposition of any lien, charge or encumbrance of any nature on
any of the properties of such Borrower.
6.4 This Amendment and any instrument, document, or
agreement executed and delivered in connection herewith, will be
valid, binding and enforceable in accordance with its respective
terms.
7. Confirmation of Indebtedness. Borrowers hereby acknowledge
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and confirm that as of the close of business on May 7, 2003, they are
each, jointly and severally, indebted to Lender, without defense,
setoff, claim or counterclaim under the Existing Loan Documents, in
the aggregate principal amount of $38,382,915.09, comprised of
$36,948,361.49, outstanding with respect to the Revolving Credit
Loans, $1,434,553.60 outstanding with respect to the Equipment Term
Loan and the Acquisition Term Loan, plus all fees, costs and expenses
(including attorneys' fees) incurred to date in connection with the
Existing Loan Documents.
8. Ratification of Existing Loan Documents. Except as
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expressly set forth herein, all of the terms and conditions of the
Loan Agreement and Existing Loan Documents are hereby ratified and
confirmed and continue unchanged and in full force and effect. All
references to the Loan Agreement shall mean the Loan Agreement as
modified by this Amendment. Borrowers confirm that the entities
designated as "Borrowers" and "Guarantor" on the signature pages
hereto constitute all of the Borrowers and Guarantors which are
parties to the Loan Agreement.
9. Collateral. Borrowers and Guarantor each hereby confirm and
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agree that all security interests and Liens granted to Lender continue
in full force and effect and shall continue to secure the Obligations.
All Collateral remains free and clear of any Liens other than
Permitted Liens or Liens in favor of Lender. Nothing herein contained
is intended to in any way impair or limit the validity, priority and
extent of Lender's existing security interest in and Liens upon the
Collateral.
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10. Acknowledgment of Guarantor. Guarantor, by execution
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hereof, accepts and approves the terms and conditions of this
Amendment and hereby covenants and agrees that the Amended and
Restated Surety Agreement dated June 20, 2000 from Guarantor to Lender
remains unchanged and in full force and effect and continues to cover
the amount of any and all Obligations outstanding from time to time
under the Loan Agreement as amended hereby.
11. Governing Law. This Amendment shall be governed by,
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construed and enforced in accordance with the laws of the State of New
York.
12. Counterparts. This Amendment may be executed in any number
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of counterparts, each of which when so executed shall be deemed to be
an original, and such counterparts together shall constitute one and
the same respective agreement.
[SIGNATURES TO FOLLOW ON SEPARATE PAGES]
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IN WITNESS WHEREOF, the parties have executed this Fifth
Amendment to Amended, Restated and Consolidated Loan and Security
Agreement as of the day and year first above written.
BORROWERS:
JEH/EAGLE SUPPLY, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxxx
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Xxxxxxxxx X. Xxxxxxxx,
Executive Vice President &
Treasurer
EAGLE SUPPLY, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxxx
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Xxxxxxxxx X. Xxxxxxxx,
Executive Vice President &
Treasurer
JEH/EAGLE, L.P.
By: JEH/Eagle Supply, Inc.
Its General Partner
By: /s/ Xxxxxxxxx X. Xxxxxxxx
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Xxxxxxxxx X. Xxxxxxxx,
Executive Vice President &
Treasurer
LENDER:
FLEET CAPITAL CORPORATION
By: /s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx, Vice President
Signature Page to Fifth Amendment
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AGREED TO AND ACKNOWLEDGED, INTENDING
TO BE LEGALLY BOUND:
GUARANTOR:
EAGLE SUPPLY GROUP, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxxx
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Xxxxxxxxx X. Xxxxxxxx,
Executive Vice President &
Treasurer
Signature Page to Fifth Amendment
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EXHIBIT "A"
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Existing Default
1) Failure to achieve a cash flow as required by Section 8.3.2
of the Loan Agreement for the period ending March 31, 2003.
