Exhibit 4-Q
TRUSERV CORPORATION
$105,000,000
AMENDED AND RESTATED SENIOR SECURED NOTES DUE 2008
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AMENDMENT TO THE
AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
DATED AS OF APRIL 11, 2002
TRUSERV CORPORATION
0000 Xxxx Xxxx Xxxx
Xxxxxx Xxxxxxx, Xxxxxxxx 00000
April 11, 2002
To Each of the Purchasers
Listed in the Attached Schedule 1
(each, a "PURCHASER")
Ladies and Gentlemen:
Re: AMENDMENT TO THE AMENDED AND RESTATED NOTE PURCHASE AGREEMENTS
(the "APRIL 2002 MODIFICATION")
The undersigned, TruServ Corporation, a Delaware corporation formerly
known as Xxxxxx & Company (herein called the "COMPANY"), hereby agrees and
acknowledges that:
A. The Company and each of you are parties (the "PURCHASERS") to
separate Note Purchase Agreement each dated as of September
10, 1998, as each were amended by Amendment No. 1 to Note
Purchase Agreements dated as of April 1, 1999 and as each were
further amended and restated by the Amended and Restated Note
Purchase Agreements each dated as of April 14, 2000
(collectively, the "ORIGINAL NPAS" and individually each an
"ORIGINAL NPA").
B. Pursuant to the Original NPAs, the Company issued and sold to
each of you $105,000,000 aggregate principal amount of its
6.85% Senior Notes due 2008 (the "NOTES").
C. Each of you and the Company desire to amend the Original NPAs
as hereinafter set forth (the Original NPAs as amended by this
April 2002 Modification is referred to herein collectively as
the "NPAS" and individually as an "NPA"). Reference is made to
the Original NPA for definitions of capitalized terms used
herein and not otherwise defined herein.
Pursuant to the request of the Company and in accordance with the
provisions of Section 15 of the Original NPAs, the parties hereto consent to the
amendment of the Original NPAs and agree as follows:
SECTION 1. Amendment. From and after the date this April 2002
Modification becomes effective in accordance with its terms, each Original NPA
shall be amended as follows:
1.01 Amendment to Exhibit G. Exhibit G--the Intercreditor Agreement to
the Original NPA is deleted in its entirety and replaced with Exhibit G--the
Intercreditor Agreement attached to this April 2002 Modification.
1.02 Amendment to Paragraph 5A. Paragraph 5A Financial Statements is
amended to: (a) amend and restate clauses (i), (ii) and (iii) as follows:
(i) as soon as available, but not later than 120 days after
the end of each fiscal year, a copy of the audited consolidated balance
sheet of the Company and its Subsidiaries as at the end of such year
and the related consolidated statements of income or operations,
shareholders' equity and cash flows for such year, setting forth in
each case in comparative form the figures for the previous fiscal year,
and accompanied by the opinion of PriceWaterhouseCoopers LLP or another
nationally-recognized independent public accounting firm ("INDEPENDENT
AUDITOR") which report (x) shall state that such consolidated financial
statements present fairly the financial position for the periods
indicated in conformity with GAAP applied on a basis consistent with
prior years and (y) shall not be qualified or limited because of a
restricted or limited examination by the Independent Auditor of any
material portion of the Company's or any Subsidiary's records;
(ii) as soon as available, but not later than 60 days after
the end of each of the first three fiscal quarters of each fiscal year,
a copy of the unaudited consolidated balance sheet of the Company and
its Subsidiaries as of the end of such quarter and the related
consolidated statements of income, shareholders' equity and cash flows
for the period commencing on the first day and ending on the last day
of such quarter, and certified by a Responsible Officer as fairly
presenting, in accordance with GAAP (subject to the absence of
footnotes and ordinary, good faith year-end audit adjustments), the
financial position and the results of operations of the Company and the
Subsidiaries; and
(iii) as soon as available, but not later than 30 days after
the end of each fiscal month (or 60 days after the end of December of
each year), a copy of the financial report delivered to the Board of
Directors of the Company (or, if no such report is delivered to the
Board of Directors of the Company for any month, a copy of a
substantially similar financial report for such month), including
unaudited consolidated balance sheet of the Company and its
Subsidiaries as of the end of such month and the related consolidated
statements of income and cash flows for the period commencing on the
first day and ending on the last day of such month, and certified by a
Responsible Officer as fairly presenting, in accordance with GAAP
(subject to the absence of footnotes and ordinary, good faith year-end
audit adjustments), the financial position and the results of
operations of the Company and the Subsidiaries.
(b) delete the "and" at the end of clause (xi) and replace the "." at the end of
clause (xii) with the word "and"; and
(c) to insert at the end of clause (xii) ";" and the following provisions:
(xiii) as soon as available, but not later than 15 days after
delivery of the financial report under clause (iii) above, and at the
Company's expense, a report from Xxxxx Xxxxxx or other financial
consultants acceptable to the Required Holder(s) on the performance of
the Company as set forth in such financial report as against the
Business Plan; and
(xiv) concurrently with the delivery of the financial
statements referred to in Section 5A(i) for the year ended December 31,
2002 and each year thereafter, to the extent not prohibited by
applicable accounting guidelines, a certificate of the Independent
Auditor stating that in making the examination necessary therefor no
knowledge was obtained of any Event of Default or Unmatured Event of
Default, except as specified in such certificate.
1.03 Amendment to Paragraph 5K. Paragraph 5K Further Assurances is
amended by deleting such paragraph and replacing it with the following:
5K. FURTHER ASSURANCES. The Company shall (a) cause all
Subsidiaries to guarantee the obligations of the Company hereunder
pursuant to the Guaranty (and in furtherance of the foregoing,
immediately upon the creation or acquisition of any Subsidiary, cause
such Subsidiary to execute and deliver a counterpart of the Guaranty,
together with such other documents, including resolutions and opinions
of counsel, as the Required Holder(s) may reasonably request),
provided, however, that (i) none of TruServ Specialty Company LLC nor
any Inactive Subsidiary or Foreign Subsidiary shall have an obligation
to execute a counterpart of the Guaranty; and (ii) if Advocate
Services, Inc., Servistar Paint Company, or the Canadian Subsidiary
shall still be in existence on the 180th day following the Amendment
Effective Date, then each such entity still in existence shall execute
and deliver a counterpart of the Guaranty on such day; and (b) take,
and cause each of Guarantors to take, such actions as are necessary or
as the Required Holder(s) may reasonably request from time to time
(including the execution and delivery of security agreements, pledge
agreements, financing statements, mortgages, deeds of trust and other
documents, the filing or recording of any of the foregoing, the
delivery of stock certificates and other collateral with respect to
which perfection is obtained solely by possession, the notation of the
Collateral Agent's Liens on certificates of title for vehicles and the
delivery of opinions of counsel) to ensure that the obligations of the
Company and each Guarantor hereunder and under the Guaranty, as
applicable, are secured by perfected security interests in
substantially all of the personal property of each such entity, and
provided further that neither the Company nor any Guarantor shall be
required to pledge more than 65% of the stock of any Foreign
Subsidiary.
1.04 Amendment to Paragraph 5G. Paragraph 5G Payment of Taxes and
Claims is amended by deleting the proviso in such paragraph and replacing it
with the following:
provided that neither the Company nor any Subsidiary need pay any such
tax or assessment or claims if (i) the amount, applicability or
validity thereof is contested by the Company or such Subsidiary on a
timely basis in good faith and in appropriate proceedings, and the
Company or such Subsidiary has established adequate reserves therefor
in accordance with GAAP on the books of the Company or such Subsidiary,
or (ii) the non-payment of such tax or assessment or claims (a) could
not be reasonably expected to have a material adverse effect on the
business, condition (financial or otherwise) or operations of the
Company and its Subsidiaries taken as whole and (b) does not result in
the creation of any Lien other than Liens permitted by paragraph 6A(1).
1.05 Amendment to Paragraph 5H. Paragraph 5H Corporate Existence, etc.
is amended to insert at the end of the last sentence "or any Canadian
Subsidiary".
1.06 Addition of Paragraph 5M, 5N, 5O and 5P. Paragraph 5 is amended by
adding the following paragraphs 5M, 5N, 5O and 5P after paragraph 5L:
5M. ANNIVERSARY FEE. The Company shall pay ratably to each
Purchaser a fee calculated on the then unpaid balance of the aggregate
principal amount of the Notes held by such Purchaser of (a) 0.50% on
the earlier of (x) the first anniversary of the Amendment Effective
Date and (y) the Termination Date and (b) if the Termination Date has
not occurred prior to the first anniversary of the Amendment Effective
Date, 0.25% on the earlier of (x) the second anniversary of the
Amendment Effective Date and (y) the Termination Date.
5N. SUPPLEMENTAL FUNDING FEE. The Company shall pay ratably to
each Purchaser a quarterly supplemental funding fee from February 28,
2002 until the Termination Date on the average unpaid balance of the
aggregate principal amount of the Notes held by such Purchaser during
each quarter at the rate equal to the Supplemental Funding Fee Rate.
Such supplemental funding fee shall be computed on the basis of the
actual days elapsed over a 360-day year for each respective preceding
three month period ending on the last day of March, June, September and
December, and shall be payable on the first Business Day of each April,
July, October and January; provided that the first supplemental funding
fee shall accrue from February 28, 2002 through March 31, 2002 and be
payable on the Amendment Effective Date and the second supplemental
funding fee shall accrue from April 1, 2002 through June 30, 2002 and
be payable on July 1, 2002.
5O. CERTAIN PAYMENTS.
5O(1). EXCESS CASH FLOW. The Company shall pay ratably to each
Purchaser, within 90 days after the end of each fiscal year of the
Company in an amount equal to the Excess Cash Flow of the Company for
such prior fiscal year, commencing with the fiscal year ended for 2002,
together with interest on such principal amount so paid accrued to the
payment date plus the Make-Whole Amount determined for the payment date
with respect to such paid principal
amount; provided, that for so long as the Intercreditor Agreement is in
effect, the Notes shall be subject to mandatory pro rata payment within
90 days after the end of each fiscal year of the Company in an amount
equal to that portion of Excess Cash Proceeds (as defined in the
Intercreditor Agreement) for such prior fiscal year to which the
Purchasers are entitled to under the Intercreditor Agreement; provided,
further, that for so long as the Intercreditor Agreement is in effect,
the Make-Whole Amount shall be based upon the principal amount paid as
required under the Intercreditor Agreement (as opposed to the amount
that would have been required to be paid had the Intercreditor
Agreement not been in effect).
5O(2). PROCEEDS RECAPTURE. The Company shall pay ratably to
each Purchaser payments from (i) all cash proceeds received in
connection with the Lumber Note, (ii) all Net Disposition Proceeds and
Net Debt Proceeds, and (iii) without duplication of mandatory payments
made pursuant to paragraph 5O(1) or other payments made pursuant to
paragraph 5O(2), Interim Proceeds and Final Proceeds, each as defined
in the Intercreditor Agreement; in each case of clauses (i) through
(iii), together with interest on such principal amount so paid accrued
to the payment date plus the Make-Whole Amount determined for the
payment date with respect to such paid principal amount; provided, that
for so long as the Intercreditor Agreement is in effect, the Notes
shall be subject to mandatory pro rata payment in an amount equal to
that portion of the amounts in clauses (i) through (iii) above to which
the Purchasers are entitled to under the Intercreditor Agreement;
provided, further, that so long as the Intercreditor Agreement is in
effect, the Make-Whole Amount shall be based upon the principal amount
paid as required under the Intercreditor Agreement (as opposed to the
amount that would have been required to be paid had the Intercreditor
Agreement not been in effect).
5O(3). INTERCREDITOR DISTRIBUTIONS. For so long as the
Intercreditor Agreement is in effect, amounts required to be paid under
this paragraph 5O shall be paid (subject to the true-up provisions set
forth therein), shared and distributed in accordance with the
Intercreditor Agreement and, to the extent provided for in the
Intercreditor Agreement, the Company's obligation to pay any Make-Whole
Amount may be paid prior to the Final True-Up Date (as defined in the
Intercreditor Agreement) by the issuance of Make-Whole Original Notes
and Make-Whole Delta Notes (each as defined in the Intercreditor
Agreement). Upon the termination of the Intercreditor Agreement,
payments shall be made pro rata to the Purchasers hereunder and all Net
Disposition Proceeds, Net Debt Proceeds and notes received in
connection with any Asset Sales shall be delivered to the Purchasers.
5O(4). APPLICATION OF PROCEEDS. Under this paragraph 5O, such
mandatory pro rata payments shall be applied, except to the extent that
such payments are otherwise required to be applied under the
Intercreditor Agreement, as follows: first, to the Make-Whole Amount
determined for the payment date with respect to such principal amount;
second, to interest on the principal amount
so prepaid accrued to the payment date; and third, to the principal
amount so prepaid.
5O(5). ALLOCATION OF PARTIAL PAYMENTS. In the case of each
partial payment of the Notes, the principal amount of the Notes to be
prepaid shall be allocated among all of the Notes at the time
outstanding in proportion, as nearly as practicable, to the respective
unpaid principal amounts thereof not theretofore called for payment.
5O(6). MATURITY; SURRENDER, ETC. In the case of each payment
of Notes pursuant to this paragraph 5O, the principal amount of each
Note to be prepaid shall mature and become due and payable on the date
fixed for such payment, together with interest on such principal amount
accrued to such date and the applicable Make-Whole Amount, if any. From
and after such date unless the Company shall fail to pay such principal
amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal
amount shall cease to accrue. Any Note paid or prepaid in full shall be
surrendered to the Company and canceled and shall not be reissued, and
no Note shall be reissued in lieu of any prepaid principal amount of
any Note.
5O(7). MAKE-WHOLE AMOUNT. For purposes of this paragraph 5O,
the term "MAKE-WHOLE AMOUNT" means, with respect to any Note, an amount
equal to the excess, if any, of the Discounted Value of the Remaining
Scheduled Payments with respect to the Called Principal of such Note
over the amount of such Called Principal, provided that the Make-Whole
Amount may in no event be less than zero. For the purposes of
determining the Make-Whole Amount under this paragraph 5O, the
following terms have the following meanings:
"CALLED PRINCIPAL" means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to paragraph 5O
or has become or is declared to be immediately due and payable pursuant
to paragraph 7A, as the context requires.
"DISCOUNTED VALUE" means, with respect to the Called Principal
of any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
"REINVESTMENT YIELD" means, with respect to the Called
Principal of any Note, 0.50% over the yield to maturity implied by (i)
the yields reported, as of 11:00 A.M. (New York City time) on the
second Business Day preceding the Settlement Date with respect to such
Called Principal, on page "USD" of the
Bloomberg Financial Markets Services Screen (or, if not available, any
other nationally recognized trading screen reporting on-line intraday
trading in United States government securities) for actively traded
U.S. Treasury securities having a maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement Date, or
(ii) if such yields are not reported as of such time or the yields
reported as of such time are not ascertainable, the Treasury Constant
Maturity Series Yields reported, for the latest day for which such
yields have been so reported as of the second Business Day preceding
the Settlement Date with respect to such Called Principal, in Federal
Reserve Statistical Release H.15 (519) (or any comparable successor
publication) for actively traded U.S. Treasury securities having a
constant maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date. Such implied yield will be
determined, if necessary, by (a) converting U.S. Treasury bill
quotations to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between (1) the
actively traded U.S. Treasury security with the duration closest to and
greater than the Remaining Average Life and (2) the actively traded
U.S. Treasury security with the duration closest to and less than the
Remaining Average Life.
"REMAINING AVERAGE LIFE" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) the principal component of
each Remaining Scheduled Payment with respect to such Called Principal
by (b) the number of years (calculated to the nearest one-twelfth year)
that will elapse between the Settlement Date with respect to such
Called Principal and the scheduled due date of such Remaining Scheduled
Payment.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date (it being understood and
agreed that the interest rate on the Notes, for purposes of this
calculation, shall be the interest rate that applies to the Notes on
the third Business Day immediately preceding such Settlement Date),
provided that if such Settlement Date is not a date on which interest
payments are due to be made under the terms of the Notes, then the
amount of the next succeeding scheduled interest payment will be
reduced by the amount of interest accrued to such Settlement Date and
required to be paid on such Settlement Date pursuant to paragraph 5O or
paragraph 7A.
"SETTLEMENT DATE" means, with respect to the Called Principal
of any Note, the date on which such Called Principal is to be prepaid
pursuant to paragraph 5O or has become or is declared to be immediately
due and payable pursuant to paragraph 7A, as the context requires.
5P. INTEREST FEE. The Company shall pay ratably to each Purchaser a
quarterly interest fee during each quarter at the rate per annum equal to the
Applicable Interest Rate on (a) the unpaid balance of the aggregate principal
amount of the Notes held by such Purchaser, and (b) to the extent permitted by
law, on (i) any overdue payment (whether by acceleration or otherwise and
including any overdue prepayment) of principal, (ii) any overdue payment of
interest and (iii) any overdue payment of any Make-Whole Amount due under
paragraph 4. Such interest fee shall be computed on the basis of the actual days
elapsed over a 360-day year of twelve 30-day months, and shall be payable on the
last Business Day of each calendar quarter, commencing with the last Business
Day of June 2002. Such interest fee shall be applied as follows: first, to the
accrued interest on the unpaid balance of the aggregate principal amount of the
Notes held by the applicable Purchaser; second, to any overdue payment of
principal; third, to any overdue payment of interest; fourth, to any overdue
payment of any Make-Whole Amount due under paragraph 4.
1.07 Amendment to Paragraph 6A(1). Paragraph 6A(1) Liens is amended to
amend and restate clause (ix) as provided below and insert after clause (x)
(which shall not be amended hereby but shall continue to read as provided below)
clauses (xi), (xii), (xiii), (xiv), (xv) and (xvi) as provided below:
(ix) other Liens (including Liens arising under Capitalized
Lease Obligations), in addition to the Liens permitted by clauses (i)
through (viii) above and clauses (x) through (xvi) below, securing
Indebtedness of the Company or any Subsidiary (other than Indebtedness
that constitutes Subordinated Debt); provided, however, that (i) such
Indebtedness is permitted by the provisions of Section 6A(2), (ii) the
aggregate outstanding principal amount of all such Indebtedness (other
than Indebtedness listed on Schedule 6A(1)(ix)) does not at any time
exceed $25,000,000 and (iii) no Default or Event of Default shall exist
or result therefrom;
(x) Liens in favor of the Collateral Agent, provided that the
Intercreditor Agreement shall be in full force and effect;
(xi) any interest or title of a lessor in property subject to
any lease other than (i) subject to clause (vii) above, a Capitalized
Lease Obligation, (ii) a lease entered into as part of a sale and
leaseback transaction or (iii) except as permitted by clause (xv)
below, a Synthetic Lease;
(xii) any interest of a lessee or a sublessee in property
owned or leased by the Company or any Subsidiary;
(xiii) any escrow, holdback or similar arrangement in
connection with any sale, lease, transfer or other disposition of any
asset not prohibited hereunder (including any sale of the Paint
Business);
(xiv) Liens in respect of mortgages on properties listed on
Schedule 6A(1)(xiv) (the "Specified Facilities");
(xv) Liens in effect on the Amendment Effective Date listed on
Schedule 6A(1)(xv); and
(xvi) Liens in favor of the Collateral Agent on cash
collateral not to exceed $4,000,000 in the aggregate for the Cash
Management Bank (as such term is defined in the Intercreditor
Agreement) and other cash management services provided with respect
thereto (including, without limitation, the services provided by Fleet
National Bank) and Liens in favor of the Collateral Agent on cash
collateral not to exceed $30,000,000 in the aggregate for letters of
credit issued and outstanding on behalf of the Company by the
Collateral Agent.
1.08 Amendment to Paragraph 6A(2). Paragraph 6A(2) Debt is amended and
restated in its entirety to read as follows:
6A(2). DEBT. The Company will not and will not permit any
Subsidiary to create, incur, assume or suffer to exist any Debt,
except:
(i) Senior Funded Debt,
(ii) Subordinated Debt,
(iii) Debt under the Guaranty, and
(iv) Short Term Debt of the Company.
1.09 Amendment to Paragraph 6A(3)(i). Paragraph 6A(3)(i) Sale of Assets
is amended by (a) adding the phrase "or paid to the Collateral Agent to be
distributed in accordance with the Intercreditor Agreement" at the end of clause
(i); and (b) adding the following sentence to the end of paragraph 6A(3)(i):
Notwithstanding the foregoing, an Asset Sale shall not include (i) the
sale, lease, assignment, transfer or other disposition of value (each a
"DISPOSITION") of inventory in the ordinary course of business, (ii)
the Disposition of inventory or receivables to a Guarantor or to the
Company, (iii) leases or subleases entered into in the ordinary course
of business, (iv) the licensing of intellectual property by the Company
or any Subsidiary in the ordinary course of business (so long as such
licensing does not prevent the Company or such Subsidiary from using
intellectual property material to the business of the Company or such
Subsidiary) or (v) the Disposition of other assets having a value not
exceeding $250,000 in the aggregate in any fiscal year.
1.10 Amendment to Paragraph 6B. Paragraph 6B Restricted Investments is
amended to insert in clause (f) the word "Amendment" between the words "the" and
"Effective" and to delete the word "and" after clause (g) and the "." after
clause (h) and insert after clause (h) ";" as well as the following provisions:
(i) enter into escrow, seller note, holdback or similar
arrangements in connection with any sale, lease, transfer or other
disposition of any asset not prohibited hereunder (including any sale
of the Paint Business); and
(ii) maintain investment accounts for the cash collateral held
in connection with its cash management services and in support of its
outstanding letters of credit.
1.11 Amendment to Paragraph 6C. Paragraph 6C Restricted Payments is
amended and restated in its entirety to read as follows:
(a) The Company will not, and will not permit any Subsidiary
to, pay or declare cash dividends or cash patronage dividends or
dividends on any class of its stock (other than dividends in kind) or
redeem, purchase or otherwise acquire, or make any redemptions,
purchase, or other acquisition of any of its stock or apply
miscellaneous deductions in lieu of patronage dividends, or make or
permit any Subsidiary to make any Restricted Investment (each a
"RESTRICTED PAYMENT") except that the Company or any Subsidiary may pay
cash patronage source dividends to members up to the minimum percentage
of patronage source income required to be paid pursuant to the
applicable regulations of the Internal Revenue Service for
cooperatives; provided that if Adjusted EBITDA for the fiscal year most
recently ended is at least equal to the amount set forth on Schedule 6C
for such fiscal year, the Company may pay cash patronage source
dividends in an amount not to exceed 30% of the patronage source income
attributable to patronage source income other than income resulting
from gains on Asset Sales plus 20% of patronage source income resulting
from gains on Asset Sales; provided, however, none of the foregoing
dividends based on Adjusted EBITDA shall be paid unless on a pro forma
basis the Company can demonstrate it has sufficient liquidity to meet
its obligations for the six months following such proposed payments.
(b) The Company may not redeem or purchase any shares of stock
except for Hardship Case Payments.
1.12 Amendment to Paragraph 6D. Paragraph 6D Compliance with ERISA is
amended by inserting the phrase "(other than a Multiemployer Plan)" after the
words "terminate or withdraw from any Plan" appearing therein.
1.13 Amendment to Paragraph 6E. Paragraph 6E No Change in Subordination
Terms, No Optional Prepayments etc. is amended by (a) adding the words "except
to the extent of Hardship Case Payments" to the end of clause (b) therein; (b)
deleting the words "that do not trigger a reduction in any commitments of the
lenders thereunder"; (c) and adding the words "Synthetic Lease Obligations,
Shelf Notes and the" immediately prior to the words "Senior Note Obligations" in
clause (ii) in the second sentence thereof; and (d) deleting the words "pursuant
to the terms hereof" at the end of clause (ii); and (f) adding a final sentence
thereto as follows:
All such optional and voluntary prepayments shall be made in accordance
with the terms of the Intercreditor Agreement, and in the absence
thereof, in conformance with all the other terms hereof.
1.14 Amendment to Paragraph 6F. Paragraph 6F Nature of the Business. is
amended and restated in its entirety to read as follows:
6F. NATURE OF BUSINESS. The Company will not and will not
permit any Subsidiary to engage in the business of underwriting risks
for insurance purposes, or in any other aspect of insurance related
business other than in the ordinary course of business in accordance
with its practices as of the Amendment Effective Date; or purchase and
sell real estate (other than on an agency basis) for purposes other
than those relating directly to its principal business except for (i)
purchases and sales of store locations in the ordinary course of
business which in the aggregate for the Company and its Subsidiaries
taken as a whole do not exceed $10,000,000 during any rolling
consecutive five year period and (ii) sales of the Specified
Facilities.
1.15 Amendment to Paragraph 6G. Paragraph 6G Ratio of Asset Base to
Debt is amended and restated in its entirety to read as follows:
6G. [INTENTIONALLY OMITTED.].
1.16 Amendment to Paragraph 6H. Paragraph 6H Fixed Charge Coverage
Ratio is amended and restated in its entirety to read as follows:
6H. FIXED CHARGE COVERAGE RATIO. The Company shall not permit
the Fixed Charge Coverage Ratio as of the end of any fiscal quarter set
forth below to be less than the applicable ratio set forth below for
such period:
Fiscal Period(s) ending on or about Ratio
------------------------------------------ ----------
quarter ending March 2002 0.80:1.0
two quarters ending June 2002 0.90:1.0
three quarters ending September 2002 0.90:1.0
four quarters ending December 2002 0.70:1.0
four quarters ending March 2003 0.70:1.0
four quarters ending June 2003 0.70:1.0
four quarters ending September 2003 0.60:1.0
four quarters ending December 2003 0.75:1.0
four quarters ending March 2004 0.70:1.0
four quarters ending June 2004 0.65:1.0
each four quarter period thereafter 0.65:1.0
1.17 Amendment to Paragraph 6I. Paragraph 6I Minimum EBITDA is amended
and restated in its entirety to read as follows:
6I. MINIMUM ADJUSTED EBITDA. The Company shall not permit
Adjusted EBITDA as of the end of any fiscal period set forth below to
be less than the respective amount set forth below:
Fiscal Period(s) ending on or about Amount
----------------------------------- ------
three months ended 3/31/02 $ 20,000,000
four months ended 4/30/02 $ 25,000,000
five months ended 5/31/02 $ 35,000,000
six months ended 6/30/02 $ 50,000,000
seven months ended 7/31/02 $ 60,000,000
eight months ended 8/31/02 $ 65,000,000
nine months ended 9/30/02 $ 80,000,000
ten months ended 10/31/02 $ 90,000,000
eleven months ended 11/30/02 $ 95,000,000
twelve months ended 12/31/02 $100,000,000
twelve months ended 1/31/03 $100,000,000
twelve months ended 2/28/03 $100,000,000
twelve months ended 3/31/03 $100,000,000
twelve months ended 4/30/03 $ 95,000,000
twelve months ended 5/31/03 $ 95,000,000
twelve months ended 6/30/03 $ 95,000,000
twelve months ended 7/31/03 $ 90,000,000
twelve months ended 8/31/03 $ 90,000,000
twelve months ended 9/30/03 $ 80,000,000
twelve months ended 10/31/03 $ 80,000,000
twelve months ended 11/30/03 $ 80,000,000
twelve months ended 12/31/03 $ 80,000,000
twelve months ended 1/31/04 $ 75,000,000
twelve months ended 2/29/04 $ 75,000,000
twelve months ended 3/31/04 $ 70,000,000
twelve months ended 4/30/04 $ 70,000,000
twelve months ended 5/31/04 $ 65,000,000
twelve months ended 6/30/04 $ 60,000,000
and the twelve month period $ 60,000,000
ended on the last day
of each month thereafter
1.18 Amendment to Paragraph 6K. Paragraph 6K is amended and restated to
read as follows:
6K. AMENDMENTS TO FINANCING AGREEMENTS. The Company covenants
that, without the consent of the Required Holders, it will not, and
will not permit any Subsidiary to, amend, modify, supplement, or
restate, any Financing Agreement; provided, however, that
notwithstanding the foregoing, the Company covenants that, without the
consent of the holder or holders of 95% of the
aggregate principal amount of the Notes from time to time outstanding
(exclusive of Notes then owned by the Company or any of its
Affiliates), it will not, and will not permit any Subsidiary to, amend,
modify, supplement, or restate the BA Credit Agreements to extend the
maturity date of the credit facilities thereunder beyond September 28,
2004. The Company will not deliver any certificate to the Collateral
Agent pursuant to Section 3(f) of the Intercreditor Agreement unless it
shall have furnished a copy thereof to each holder of Notes at least
ten days prior to the date that it proposes to deliver such certificate
to the Collateral Agent. The Company will not, and will not permit, any
Subsidiary to, request to reduce its commitment under the BA Credit
Agreements to less than $100,000,000.
1.19 Addition of Paragraphs 6L, 6M, 6N, 6O, 6P, 6Q, 6R and 6S.
Paragraph 6 is amended by adding the following paragraphs 6L, 6M, 6N, 6O, 6P,
6Q, 6R and 6S immediately after paragraph 6K:
6L. MINIMUM GROSS SALES. The Company shall not permit the
Gross Sales as of the end of any fiscal period set forth below to be
less than the applicable amount set forth below:
Fiscal Period(s) ending on or about Amount
----------------------------------- ------
three months ended 3/31/02 $460,000,000
four months ended 4/30/02 $625,000,000
five months ended 5/31/02 $805,000,000
six months ended 6/30/02 $990,000,000
seven months ended 7/31/02 $1,200,000,000
eight months ended 8/31/02 $1,340,000,000
nine months ended 9/30/02 $1,520,000,000
ten months ended 10/31/02 $1,670,000,000
eleven months ended 11/30/02 $1,815,000,000
twelve months ended 12/31/02 $1,975,000,000
twelve months ended 1/31/03 $1,965,000,000
twelve months ended 2/28/03 $1,955,000,000
twelve months ended 3/31/03 $1,945,000,000
twelve months ended 4/30/03 $1,930,000,000
twelve months ended 5/31/03 $1,920,000,000
twelve months ended 6/30/03 $1,910,000,000
twelve months ended 7/31/03 $1,900,000,000
twelve months ended 8/31/03 $1,890,000,000
twelve months ended 9/30/03 $1,875,000,000
twelve months ended 10/31/03 $1,870,000,000
twelve months ended 11/30/03 $1,865,000,000
twelve months ended 12/31/03 $1,860,000,000
twelve months ended 1/31/04 $1,850,000,000
twelve months ended 2/29/04 $1,840,000,000
twelve months ended 3/31/04 $1,830,000,000
twelve months ended 4/30/04 $1,820,000,000
twelve months ended 5/31/04 $1,805,000,000
twelve months ended 6/30/04 $1,795,000,000
and the twelve month period $1,700,000,000
ended on the last day
of each month thereafter
6M. MINIMUM INTEREST COVERAGE RATIO. The Company shall not
permit the Interest Coverage Ratio as of the end of any fiscal period
set forth below to be less than the applicable ratio set forth below:
Fiscal Period(s) Ratio
------------------------------------------ ----------
quarter ending March 2002 1.20:1.0
two quarters ending June 2002 1.50:1.0
three quarters ending September 2002 1.70:1.0
four quarters ending December 2002 1.70:1.0
four quarters ending March 2003 1.70:1.0
four quarters ending June 2003 1.75:1.0
four quarters ending September 2003 1.65:1.0
four quarters ending December 2003 1.70:1.0
four quarters ending March 2004 1.65:1.0
four quarters ending June 2004 1.50:1.0
and the four quarter period ended on
the last day of each month thereafter 1.50:1.0
6N. MAXIMUM CAPITAL EXPENDITURES. The Company will not permit
Capital Expenditures to be greater than the following amounts in the
following fiscal periods of the Company:
First day of applicable fiscal year through fiscal Cumulative Amount
--------------------------------------------------- -----------------
quarter ending on or about
--------------------------
March 31, 2002 $6,400,000
June 30, 2002 $11,200,000
September 30, 2002 $13,600,000
December 31, 2002 $16,000,000
March 31, 2003 $6,400,000
June 30, 2003 $11,200,000
December 31, 2003 $16,000,000
March 31, 2004 $6,400,000
June 30, 2004 $11,200,000
Thereafter per fiscal year $16,000,000
6O. ADJUSTMENTS TO FINANCIAL COVENANTS. The financial
covenants contained herein may be adjusted upon the mutual agreement of
the Company and the Purchasers to reflect (1) an acceleration of the
sale of the Paint Business if the closing of such sale occurs prior to
June 30, 2003 as contemplated in the Business Plan; and (2) Asset Sales
not currently contemplated in the Business Plan, including, but not
limited to sale-lease back transactions; provided, however, that if the
parties cannot reach agreement within sixty days of the commencement of
their negotiations, such covenant shall remain unchanged.
6P. SUBORDINATED NOTES. The Company will discontinue the
Variable Denomination Subordinated Floating Rate Demand Notes program
on or before July 31, 2002, and no new TIP Notes will be issued after
the date hereof without the approval of the Required Holders.
6Q. CHIEF EXECUTIVE OFFICER. Any appointment by the Company of
a chief executive officer will be subject to the consent of the
Required Holders.
6R. SALE OF HAGERSTOWN FACILITY. The Hagerstown Facility shall
not be sold unless (a) the requisite Synthetic Lease Lenders (as
defined in the Intercreditor Agreement) approve such sale in writing
and (b) the Net Disposition Proceeds of such sale are applied to reduce
the balance of the Synthetic Lease Obligations (as defined in the
Intercreditor Agreement to the extent permitted by the Intercreditor
Agreement).
6S. ASSETS SALES PROHIBITION. Notwithstanding paragraph
6A(3)(i), the Company shall not sell, lease or transfer or otherwise
dispose of any assets of the Company or any Subsidiary other than in
the ordinary course of business without the consent of the Required
Holders; provided that the Company and its Subsidiaries may sell,
lease, transfer or otherwise dispose of assets (a) to the extent that
such sale, lease, transfer or disposition relates to a Designated
Permitted Asset Sale as set forth on Schedule 6S, (b) in connection
with the sale and leaseback of distribution centers owned by the
Company or any Subsidiary, (c) in connection with the dissolution of
any Inactive Subsidiary, and (d) outside the ordinary course of
business so long as (1) the aggregate amount of all assets sold,
leased, transferred or otherwise disposed of outside the ordinary
course of business for the thirty-six months preceding such proposed
sale added together, without duplication, with (x) any shares of stock
or Debt of any Subsidiary sold or otherwise disposed of, or with
respect to which the Company or any Subsidiary has parted control of,
except to the Company or another Subsidiary, during such period and (y)
any assets then proposed to be sold outside of the ordinary course of
business, do not constitute more than 10% of the total assets of the
Company and its Subsidiaries on a consolidated basis as of the end of
the most recent fiscal quarter for which the Company has delivered
financial statements pursuant to
paragraph 5A and (2) any such sale of assets is not in excess of
$2,500,000 per sale; and, provided, further, that, in the case of (a)
through (d) above, all such assets have been sold, leased, transferred
or otherwise disposed of for fair market value and the Net Disposition
Proceeds paid, and all notes received in respect thereto delivered, to
the Collateral Agent to be distributed in accordance with the
Intercreditor Agreement and as set forth in paragraph 5O(4).
1.20 Amendment to Paragraph 7A. Paragraph 7A Acceleration is amended
by: (a) adding the parenthetical phrase "(other than an Inactive Subsidiary or a
Canadian Subsidiary)" after the word "Subsidiary" in clause (vii) therein; (b)
adding the phrase "or a Canadian Subsidiary" after the phrase "other than an
Inactive Subsidiary" in clauses (viii), (ix) and (x) therein; (c) replacing
clause (xix) therein with the following clause:
(xix) the Company shall, on any date, not have in effect the
BA Credit Agreements providing for a revolving loan facility to the
Company with a commitment in the amount of at least $200,000,000 as
such amount may be reduced by the application of Interim Proceeds as
provided in the Intercreditor Agreement and as such amount may be
voluntarily reduced by the Company in accordance with the BA Credit
Agreements so long as voluntary reductions of the revolving loan
facility do not exceed $50,000,000 in the aggregate; or
(d) adding the following new clauses:
(xxi) on June 30, 2003 (1) the aggregate outstanding principal
balance (exclusive of any Make-Whole Obligations) of the Shelf Notes,
the Senior Notes, the Hagerstown Note and the BA Credit Agreement is
more than $270,000,000 and (2) the aggregate outstanding principal
balance (exclusive of any Make-Whole Obligations) of the Shelf Notes,
the Senior Notes, and the Hagerstown Note plus the aggregate amount of
all the commitments under the BA Credit Agreement (less $30,000,000
which amount represents the "Unusable Amount" under the BA Credit
Agreement for such date) exceeds $320,000,000; or;
(xxii) the Company or a Subsidiary shall make any principal
payment of any Subordinated Debt other than, so long as no Default or
Event of Default exists or would be created thereby and the Company has
met or exceeded its Minimum Adjusted EBITDA covenant set forth in
paragraph 6I as of the most recent fiscal period for which such
covenant is applicable, (x) up to an aggregate of $2,800,000 in
principal amounts of variable denomination floating rate subordinated
notes after the Amendment Effective Date, (y) up to an aggregate of
$24,000,000 in principal amounts due in fiscal 2002, and (z) up to an
aggregate of $14,000,000 in principal amounts due in fiscal 2003; or
(xxiii) the Company fails to cause the appointment to its
Board of Directors of: (1) at least two independent outside directors
by May 31, 2002, (2) at least two additional independent outside
directors by September 1, 2002 (raising
the aggregate number of independent outside directors to no less than
four by that time) and (3) at least one additional independent outside
director by November 1, 2002 (raising the aggregate number of
independent outside directors to no less than five by that time and
thereafter); or
(xxiv) the Intercreditor Agreement shall cease to be in full
force and effect; or
(xxv) the Company defaults in the payment of any principal or
Make-Whole Amount, if any, payable with respect to any Note, including
without limitation the Make-Whole Notes, when the same shall become
due, either by the terms thereof or otherwise as herein provided
(including, without limitation, paragraph 4A or paragraph 5O); or
(xxvi) the Company defaults in the payment of any interest on
any Note payable with respect to any Note, including without limitation
the Make-Whole Notes, or the Company or any Subsidiary defaults in the
payment of any other amount payable hereunder or under any other Note
Document, for more than 3 days after the date due; or
(xxvii) after the occurrence and during the continuation of an
Event of Default, the Company makes any payments (whether principal,
interest, premium, make-whole, or other amounts) of any Subordinated
Debt;
and (e) adding the following sentence after the end of clause (c) to the final
paragraph of 7A :
Notwithstanding the foregoing, if such event is an Event of Default
specified in clauses (xxv), (xxvi) and (xxvii) of this paragraph 7A,
any holder of any Note may at its option during the continuance of such
Event of Default, by notice in writing to the Company, declare all of
the Notes held by such holder to be and become, and all of the Notes
held by such holder shall thereupon be and become, immediately due and
payable at par together with interest accrued thereon and together
with, to the full extent permitted by applicable law, the Make-Whole
Amount, if any, with respect to such Notes, without presentment,
demand, protest or notice of any kind all of which are hereby waived by
the Company.
1.21 Amendment to Paragraph 10A Defined Terms. Paragraph 10A Defined
Terms is amended to (a) add the words "or losses" immediately before the first
parenthetical in clause (a) of the proviso contained in the definition of
"Consolidated Net Earnings" and (b) add ", notes payable to Members and other
Subordinated Debt" to first parenthetical in the definition of "Funded Debt"
immediately after the words "Capitalized Lease Obligations" and to delete the
phrase "and excluding borrowings under any revolving credit facility (including,
without limitation, any BA Credit Agreement" and to delete ", so long as no
event has occurred the result of which would be to cause or permit such
Indebtedness to become due prior to any stated maturity" at the end thereof.
1.22 Amendment to Paragraph 10A Defined Terms. Paragraph 10A Defined
Terms is amended to (1) delete the defined term "Year 2000 Problem", (2) to add
the phrase ", notes payable to Members and other Subordinated Debt" to the first
parenthetical in the definition of "Funded Debt" immediately after the words
"Capitalized Lease Obligations"; and (3) to amend and restate the following
defined terms or, if such definitions are not in the Original NPA, to add such
defined terms, in the appropriate alphabetical order:
"ADJUSTED CASH FLOW" shall mean, with respect to any period,
Consolidated Net Earnings for such period less (a) the sum of (i) to
extent not already deducted in the calculation of Consolidated Net
Earnings, gains from Asset Sales realized during such period, (ii)
Capital Expenditures during such period, (iii) amortization of all
Indebtedness (including amortization of Indebtedness from payments of
Excess Cash Flow but excluding amortization of Indebtedness from the
proceeds of Asset Sales) for such period, (iv) patronage dividends
accrued in the current fiscal year to be paid in the following fiscal
year, (v) any increase in restricted cash during such period and (vi)
Restructuring Charges taken during such period; plus (b) the sum of (i)
to the extent deducted in the calculation of Consolidated Net Earnings,
losses from Asset Sales realized during such period, (ii) depreciation
and amortization expense for such period, (iii) non-cash income tax
expense for such period and (iv) any decrease in restricted cash during
such period.
"ADJUSTED EBITDA" shall mean, for any period, EBITDA plus
Restructuring Charges to the extent taken in such period.
"ADJUSTED WORKING CAPITAL" shall mean, at any date of
determination, the result of (a) current assets of the Company and its
Subsidiaries at such date, minus (b) without duplication, cash and
restricted cash of the Company and its Subsidiaries at such date, minus
(c) current liabilities of the Company and its Subsidiaries at such
date plus (d) the sum of (i) the current portion of Subordinated Debt
and other Debt at such date, (ii) accrued and unpaid patronage
dividends at such date, (iii) the value of current assets purchased,
transferred or assumed in connection with Asset Sales consummated
during such period, minus (e) the value of current liabilities
purchased, transferred or assumed in connection with Asset Sales
consummated during such period.
"ADJUSTED WORKING CAPITAL CHANGE" shall mean, for any fiscal
year, the result of (a) Adjusted Working Capital for such fiscal year
minus (b) Adjusted Working Capital for the fiscal year immediately
preceding such fiscal year.
"AMENDMENT EFFECTIVE DATE" shall mean April 11, 2002.
"APRIL 2002 MODIFICATION" shall mean that certain Amendment to
the Amended and Restated
Note Purchase Agreement, dated as of April 11,
2002, between the Company and the Purchasers who are signatories
thereto.
"BUSINESS PLAN" shall mean the business plan of the Company
dated March 1, 2002 which was delivered by the Company to the
Purchasers.
"CANADIAN SUBSIDIARY" shall mean Xxxxxx Canada Hardware and
Variety Company, Inc.
"CAPITAL EXPENDITURES" shall mean, for any period, the sum
without duplication of (a) the aggregate amount of all expenditures of
the Company and its Subsidiaries for fixed or capital assets made
during such period which, in accordance with GAAP, would be classified
as capital expenditures; and (b) the aggregate amount of all
Capitalized Lease Obligations incurred during such period excluding, in
each case, (i) expenditures made in connection with replacement, repair
or restoration of fixed assets from insurance proceeds not to exceed
$1,000,000 in the aggregate per loss and (ii) refinancings or renewals
of the Capitalized Lease Obligations in effect on the Amendment
Effective Date.
"DESIGNATED PERMITTED ASSET SALE" shall mean the sale or other
disposition of the properties set forth on Schedule 6S.
"DISPOSITION" shall have the meaning ascribed to such term in
paragraph 6A(3)(i).
"EBITDA" shall mean, for any period, Consolidated Net Earnings
for such period plus, to the extent deducted in computing such
Consolidated Net Earnings, interest expense (including rent expense
with respect to Synthetic Leases), taxes, depreciation and
amortization.
"EXCESS CASH FLOW" shall mean, for any period, 80% of the sum
of (a) Adjusted Cash Flow for such period, plus (b) any negative
Adjusted Working Capital Change for such period, minus (c) any positive
Adjusted Working Capital Change for such period.
"FIXED CHARGE COVERAGE RATIO" shall mean, as of the last day
of any fiscal quarter, the ratio of
(a) result, for the period of four consecutive fiscal quarters
ending on such day, of the (i) Consolidated Net Earnings, plus (ii) to
the extent deducted in determining such Consolidated Net Earnings,
interest expense (including rent expense with respect to Synthetic
Leases), taxes, depreciation and amortization, plus (iii) Restructuring
Charges taken during such period, minus (iv) gains from Asset Sales
realized during such period, to the extent included in determining
Consolidated Net Earnings, plus (v) losses from Asset Sales realized
during such period, to the extent deducted in determining Consolidated
Net Earnings
to
(b) the sum for such period of (i) scheduled payments of
principal with respect to the Shelf Notes and the Notes, (ii) interest
expense (including rent expense with respect to Synthetic Leases and
excluding interest expense with respect to Make-Whole Obligations and
new Make-Whole Obligations of principal arising in such period) and
(iii) Capital Expenditures;
each as determined for the Company and its Subsidiaries on a
consolidated basis. The amount in each of clauses (a) and (b) shall be
calculated for the period ending (x) March 31, 2002 based upon such
period and then multiplied by four, (y) June 30, 2002 based upon the
period of two consecutive fiscal quarters ending on such date and then
multiplied by two and (z) September 30, 2002 based upon the period of
three consecutive fiscal quarters ending on such date and then
multiplied by one and one-third.
"FOREIGN SUBSIDIARIES" shall mean each Subsidiary of the
Company which is organized under the law of any jurisdiction, other
than and which is conducting the majority of its business, outside of
the United States or any state thereof.
"GROSS SALES" shall mean the consolidated gross sales for the
Company and its Subsidiaries.
"HAGERSTOWN FACILITY" shall mean the distribution center
located at 00000 Xxxxxxx Xxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx.
"HAGERSTOWN NOTE" shall mean the "Synthetic Maximum Shortfall"
as defined in the Intercreditor Agreement.
"HARDSHIP CASE PAYMENT" shall mean the payment to any
stockholder that has notified the Company of his termination and
requested an accelerated redemption payment of any portion of his stock
and/or Subordinated Debt investment pursuant to a hardship case request
authorized in the by-laws of the Company, in an aggregate amount for
all stockholders not to exceed $2,000,000 in any fiscal year. Such
redemption payments must be administered by a Responsible Officer and
made according to the Company's hardship case guidelines.
"INACTIVE SUBSIDIARY" shall mean any Subsidiary which does not
actively conduct business and which has less than $100,000 in assets.
"INDEBTEDNESS" shall mean, with respect to any Person, without
duplication, (i) all items (excluding items of contingency reserves or
of reserves for deferred income taxes) which in accordance with
generally accepted accounting principles would be included in
determining total liabilities as shown on the liability side of a
balance sheet of such Person as of the date on which Indebtedness is to
be determined, (ii) all indebtedness secured by any Lien on any
property or asset owned or held by such Person subject thereto, whether
or not the indebtedness secured thereby shall have been assumed, (iii)
all indebtedness of others with respect to which such Person has become
liable by way of any Guaranty and (iv) obligations of such Person with
respect to Synthetic Leases.
"INDEPENDENT AUDITOR" shall have the meaning ascribed to such
term in paragraph 5A.
"INSOLVENCY PROCEEDING" shall mean, with respect to any
Person, (a) any case, action or proceeding with respect to such Person
before any court or other Governmental Authority relating to
bankruptcy, reorganization, insolvency, liquidation, receivership,
dissolution, winding-up or relief of debtors, or (b) any general
assignment for the benefit of creditors, composition, marshalling of
assets for creditors, or other, similar arrangement in respect of its
creditors generally or any substantial portion of its creditors
undertaken under U.S. Federal, state or foreign law, including the
Bankruptcy Code.
"INTERCREDITOR AGREEMENT" shall mean the First Amended and
Restated Intercreditor Agreement dated as of April 11, 2002 among Bank
of America, N.A. as agent under the BA Credit Agreements, the
Collateral Agent, the Purchasers, The Prudential Insurance Company of
America and various other parties substantially in the form of Exhibit
G, as amended from time to time in accordance with its terms.
"INTEREST COVERAGE RATIO" shall mean, as of the last day of
any fiscal quarter, the ratio of (a) the sum, for the period of four
consecutive fiscal quarters ending on such day, of (i) Consolidated Net
Earnings plus (ii) to the extent deducted in determining such
Consolidated Net Earnings, interest expense, taxes, depreciation and
amortization, plus (iii) Restructuring Charges less (iv) gains from
Asset Sales, to the extent included in determining Consolidated Net
Earnings plus (v) losses from Asset Sales, to the extent deducted in
determining Consolidated Net Earnings to (b) interest expense for such
period (including rent expense with respect to Synthetic Lease
Obligations but excluding interest expense with respect to Make-Whole
Obligations and new Make-Whole Obligations of principal arising in such
period); each as determined for the Company and its Subsidiaries on a
consolidated basis. Notwithstanding the foregoing, the amount in each
of clauses (a) and (b) shall be calculated for the period ending (x)
March 31, 2002 based upon such period and then multiplied by four, (y)
June 30, 2002 based upon the period of two consecutive fiscal quarters
ending on such date and then multiplied by two and (z) September 30,
2002 based upon the period of three consecutive fiscal quarters ending
on such date and then multiplied by one and one-third.
"LUMBER NOTE" shall mean the $19,500,000 promissory note of
Builder Marts of America, Inc. dated as of December 29, 2000 payable to
the Company.
"MAKE-WHOLE NOTES" shall mean those notes issued to the
Purchasers under Section 4 of the Intercreditor Agreement.
"MAKE-WHOLE OBLIGATIONS" shall have the meaning ascribed to
such term under the Intercreditor Agreement.
"MEMBERS" shall mean any Person which is a member of the
Company.
"NET DEBT PROCEEDS" shall mean, as to any issuance of
Indebtedness for borrowed money (other than any such Indebtedness
incurred to refinance existing Indebtedness, provided that the
principal amount of such existing Indebtedness is not increased) by any
Person, cash proceeds received by such Person in connection therewith,
net of reasonable out-of-pocket costs and expenses paid or incurred in
connection therewith in favor of any Person not an Affiliate of such
Person, such costs and expenses not to exceed 5% of the gross proceeds
of such issuance.
"NET DISPOSITION PROCEEDS" shall mean, as to any Asset Sale,
proceeds in cash, checks or other cash equivalent financial instruments
and proceeds from notes, each as and when received by such Person, net
of: (a) the direct costs relating to such disposition, excluding
amounts payable to such Person or any Affiliate of such Person, (b) an
estimate of cash taxes paid or payable by such Person within nine
months of the disposition as a direct result of such Asset Sale and (c)
amounts required to be applied to repay principal, interest and
prepayment premiums and penalties on purchase money liens on the asset
which is the subject of such Asset Sale, and in the case of proceeds
from the sale of the Hagerstown Facility, net of the amount required to
satisfy the obligations with respect to its Synthetic Lease. Net
Disposition Proceeds shall include any insurance proceeds received upon
the loss of, damage to, or destruction of property, except to the
extent such insurance proceeds are applied to replace, repair, restore
or rebuild such property up to an aggregate in proceeds per loss of
$1,000,000; provided, with the prior written consent of the Required
Holders, the Company may reinvest proceeds in excess of $1,000,000 to
replace, repair, restore or rebuild such property.
"PAINT BUSINESS" shall mean the manufacturing portion of the
business classified as the "Paint Segment" in the Company's Form 10-K
for the fiscal year ended December 31, 2000.
"RESPONSIBLE OFFICER" means the chief executive officer, chief
operating officer, chief financial officer, treasurer or chief
accounting officer of the Company, the general counsel of the Company
or any other officer of the Company involved principally in its
financial administration or its controllership function.
"RESTRUCTURING CHARGES" shall mean any charges recorded under
"Emerging Issues Task Force 94-3: Liability Recognition for Certain
Employee Benefits and Other Costs to Exit an Activity (including
certain costs incurred in a Restructuring)" issued by the American
Institute of Certified Public Accounts; provided that any such charges
in excess of $2,000,000 in the aggregate after the date hereof may not
be taken by the Company or its Subsidiaries for purposes of covenant
calculations and related definitions without the prior written consent
of the Required Holders. Such charges include, but are not limited to,
costs related to employee benefits, such as severance and termination
benefits, costs associated with the elimination and reduction of
product lines, costs to consolidate or relocate facilities, costs for
new systems development or acquisition, costs to retrain employees to
use newly-deployed systems, costs incurred to reduce excess inventory
(defined to be inventory on hand in excess of 180 days' worth of
supply), costs incurred to dispose of any remaining inventory on hand
at the time of closure of a facility, and losses and asset impairments
and disposals of assets.
"SHELF NOTES" shall mean the Shelf Notes issued pursuant to
the Prudential Agreement.
"SHORT TERM DEBT" shall mean, as of any date of determination
with respect to any Person, (i) all Indebtedness of such Person of a
borrowed money other than Funded Debt of such Person and (ii)
Guarantees by such Person of Short Term Debt of Persons other than
Members.
"SPECIFIED FACILITIES" shall have the meaning specified in
paragraph 6A(1)(xiv).
"SUPPLEMENTAL FUNDING FEE RATE" shall mean 0.765% per quarter.
"SYNTHETIC LEASE" shall mean (a) a so-called synthetic,
off-balance sheet or tax retention, lease or (b) an agreement for the
use or possession of property creating obligations that do not appear
on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as the indebtedness
of such Person (without regard to accounting treatment).
"TERMINATION DATE" shall mean the date on which all of the
obligations due hereunder have been paid in full and this Agreement has
been terminated.
"TIP NOTES" shall mean the registered subordinated debt
securities, as amended from time to time, issued under the Company's
investment program and designated "Variable Denomination Redeemable
Subordinated Fixed Rate Term Notes."
"UNMATURED EVENT OF DEFAULT" shall mean any event or
circumstance which, with the giving of notice, the lapse of time, or
both, would (if not cured or otherwise remedied during such time)
constitute an Event of Default.
1.23 Amendment to Paragraph 12A. Paragraph 12A Place of Payment is
amended by adding the phrase "and subject to the provisions of the Intercreditor
Agreement" after the reference to "paragraph 12B" in the first sentence.
1.24 Addition of Paragraph 13D and Paragraph 13E. Paragraph 13 is
amended by adding the following paragraph 13D and paragraph 13E after paragraph
13C:
13D. NOTE PAYMENTS. Notwithstanding any agreement to the
contrary herein or in the Notes, the Company hereby agrees that, to the
extent any obligation (or part thereof) hereunder or under the Notes
which was originally intended to be satisfied in whole or in part is
rescinded or must otherwise be restored whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, such
obligation (or part thereof), and all Liens, rights and remedies
therefor and in respect thereof, shall be deemed revived and continued
in full force and effect as if such original payment had not been made.
The Company agrees that the books and records of each Purchaser showing
the outstanding amount of the Notes and including amounts of principal,
interest and other obligations of the Company to such Purchaser shall
constitute rebuttably presumptive proof thereof, irrespective of
whether any principal or other obligation is or should be evidenced by
a promissory note or other instrument.
This provision shall supersede any action taken by a Purchaser in
reliance upon any payments received or proceeds applied and all such
actions taken are deemed hereby to be conditioned upon such payments or
applications of proceeds being final and irrevocable and not subject to
this paragraph 13D. The Company hereby indemnifies each Purchaser for
all reasonable costs and expenses incurred by such Purchaser in
connection with any rescission or restoration, including any costs and
expenses incurred in defending against any claim alleging that such
payment constituted a preference, fraudulent transfer or similar
payment under any bankruptcy, insolvency or similar law.
13E. SCHEDULES AND EXHIBITS. The Schedules and Exhibits attached
hereto are an integral part of this Agreement.
1.25 Addition of Paragraph 20M. Paragraph 20 is amended by adding the
following paragraph 20M after paragraph 20L:
20M. NON-CONSENTING HOLDER. (a) Notwithstanding anything to the
contrary contained elsewhere herein, one Purchaser, Xxxxxxx X.
Xxxxxxxx, has not consented to the April 2002 Modification, and
therefore, (i) solely for the purposes of amounts to be paid to Xxxxxxx
Xxxxxxxx or his successors, assigns and transferees, the amount of any
prepayment or payment of principal of, or the rate of payment or method
of computation of interest or of the Make-Whole Amount (as such term is
used in paragraph 4) on, the Notes that he receives under the
NPAs shall not in any event be less than that which he was entitled to
receive under his Original NPA and (ii) solely for the purposes of
timing of the amounts to be paid to Xxxxxxx Xxxxxxxx or his successors,
assigns and transferees, the time of any prepayment or payment of
principal of, or time of payment or method of computation of interest
or of the Make-Whole Amount (as such term is used in paragraph 4) on,
the Notes that he receives under the NPAs shall not in any event be
different than that which he was entitled to receive under his Original
NPA. (b) Notwithstanding the foregoing, the April 2002 Modification
shall be fully enforceable as between the Purchasers signatories
hereto, their successors, assigns and transferees. Each of the
Purchasers executing the April 2002 Modification hereby releases each
of the other Purchasers executing the April 2002 Modification from any
and all claims arising from any purported invalidity of the April 2002
Modification due to the lack of Xxxxxxx Xxxxxxxx'x consent and
signature hereto.
1.26 Amendment to Schedules. Schedule 1--Purchasers and Schedule
6B--Investments are deleted in their entirety and replaced with Schedule
1--Purchasers and Schedule 6B--Investments, attached to this April 2002
Modification and any new schedules attached hereto shall be an integral part of
the NPAs.
SECTION 2. Pricing. Effective as of February 28, 2002, any principal,
Make-Whole Amount, premium and interest which was accruing interest at the
Overdue Rate under paragraph 1A of the Original NPAs shall cease to bear
interest at the Overdue Rate and shall bear interest at the Applicable Interest
Rate as if no Event of Default had occurred or was continuing, provided,
however, that upon any subsequent Event of Default the interest rate on the
Notes shall be determined by application of the appropriate clause in the
definition of the Applicable Interest Rate and paragraph 1A of the NPAs and the
terms of the Notes.
SECTION 3. Representations and Warranties. The Company represents,
covenants and warrants to each of the Purchasers that, after giving effect
hereto as though all conditions of effectiveness have been met, (a) each
representation and warranty set forth below is true and correct as of the date
of execution and delivery of this Amendment by the Company with the same effect
as if made on such date (except to the extent such representations and
warranties expressly refer to an earlier date, in which case they were true and
correct as of such earlier date) and (b) except for the Events of Default
arising from non-compliance with financial covenants contained in paragraph 6
under the Original NPA being waived in Section 8 below and the defaults
disclosed in that certain letter from the Company to the Purchasers dated April
11, 2002 (the "DEFAULT LETTER"), no Event of Default or Default exists:
3A. ORGANIZATION; QUALIFICATIONS; CORPORATE POWER. The Company is a
corporation duly organized and existing in good standing under the laws of the
State of Delaware, each Subsidiary is duly organized and existing in good
standing under the laws of the jurisdiction in which it is formed and the
Company and each of its Subsidiaries is duly qualified as a foreign corporation
or entity and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions in which the
failure to be so qualified could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The Company has and
each Subsidiary has the power to own their respective properties and to carry on
their respective businesses as now being conducted. No Subsidiary has
outstanding any shares of stock of a class which has priority over any other
class as to dividends or in liquidation (except as otherwise disclosed on
Schedule 3A). Each of the Company and each Subsidiary has the power and
authority to execute and deliver this Agreement, the Other Agreements, the
Guaranty, the Collateral Documents, the Notes and all other Note Documents to
which it is a party and to perform the provisions hereof and thereof.
3B. AUTHORIZATION, ETC. This Agreement, the Other Agreements, the
Guaranty, the Collateral Documents, the Notes and all other Note Documents have
been duly authorized by all necessary action on the part of the Company and each
Subsidiary party thereto and this Agreement, the Other Agreements, the Guaranty,
the Collateral Documents and all other Note Documents constitute, and upon
execution and delivery thereof each Note will constitute, a legal, valid and
binding obligation of the Company and each Subsidiary party thereto enforceable
against the Company and each such Subsidiary in accordance with its terms,
except as such enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
3C. ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES; AFFILIATES.
(a) Schedule 3C contains complete and correct lists (i) of the Company's
Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the
jurisdiction of its organization, the percentage of shares of each class of its
capital stock or similar equity interests outstanding owned by the Company and
each other Subsidiary, (ii) of the Company's Affiliates, other than
Subsidiaries, and (iii) of the Company's directors and senior officers.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 3C as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in Schedule 3C).
(c) No Subsidiary is a party to, or otherwise subject to any legal
restriction or any agreement (other than this Agreement, the agreements listed
on Schedule 3C and customary limitations imposed by corporate law statutes)
restricting the ability of such Subsidiary to pay dividends out of profits or
make any other similar distributions of profits to the Company or any of its
Subsidiaries that owns outstanding shares of capital stock or similar equity
interests of such Subsidiary.
(d) Except as otherwise provided in paragraph 5K of the NPAs (after
giving effect to the April 2002 Modification), the Subsidiaries that are parties
to the Guaranty and the Security Agreement constitute all of the Subsidiaries of
the Company. Except as otherwise provided in
paragraph 5K of the NPAs (after giving effect to the April 2002 Modification),
the Company has pledged, pursuant to the Pledge Agreement, all of the capital
stock of each Subsidiary.
3D. FINANCIAL STATEMENTS. (a) The Company has furnished you and each
Other Purchaser of any Note with the following financial statements, identified
by a Senior Financial Officer of the Company: (i) a consolidated balance sheet
of the Company and its Subsidiaries as at fiscal year end in each of the three
fiscal years of the Company most recently completed prior to the date as of
which this representation is made or repeated to such Purchaser (other than
fiscal years completed within 90 days prior to such date for which audited
financial statements have not been released) and consolidated statements of
operations and cash flows and a consolidated statement of capital stock and
retained earnings of the Company and its Subsidiaries for each such year, all
reported on by Ernst & Young (or any independent public accounting firm of
recognized national standing) and (ii) a consolidated balance sheet of the
Company and its Subsidiaries as at the end of the quarterly period (if any) most
recently completed prior to such date and after the end of such fiscal year
(other than quarterly periods completed within 60 days prior to such date for
which financial statements have not been released) and the comparable quarterly
period in the preceding fiscal year and consolidated statements of operations
and cash flows and a consolidated statement of capital stock and retained
earnings for the periods from the beginning of the fiscal years in which such
quarterly periods are included to the end of such quarterly periods, prepared by
the Company. Such financial statements (including any related schedules and/or
notes) are true and correct in all material respects (subject as to interim
statements to changes resulting from audits and year-end adjustments), have been
prepared in accordance with GAAP consistently followed throughout the periods
involved and show all liabilities, direct and contingent, of the Company and its
Subsidiaries required to be shown in accordance with such principles. The
balance sheets fairly present the condition of the Company and its Subsidiaries
as at the dates thereof, and the statements of operations, capital stock and
retained earnings and cash flows fairly present the results of the operations of
the Company and its Subsidiaries and their cash flows for the periods indicated.
(b) There has been no material adverse change in the business,
operations, condition (financial or otherwise), assets, properties or
prospects of the Company and its Subsidiaries taken as a whole since
the end of the most recent fiscal year for which such audited financial
statements have been furnished other than as has been previously
disclosed by the Company to the Purchasers for any changes through the
Amendment Effective Date. The Business Plan relating to the Company and
its Subsidiaries for the period January 1, 2002-June 30, 2004, a copy
of which was delivered previously to the Purchasers, discloses all
material assumptions used in formulating such projections. The Company
is not aware of any facts that (individually or in the aggregate) would
result in any material change in the Business Plan. It was prepared on
the basis of the assumptions stated therein (all of which were made by
the Company in good faith), and reflect the reasonable estimates of the
Company of the financial condition, results of operations and other
information projected therein.
3E. ACTIONS PENDING. Except as described in reasonable detail on
Schedule 3E, there is no action, suit, investigation or proceeding pending or,
to the knowledge of the Company, threatened against the Company or any of its
Subsidiaries, or any properties or rights of the Company or any of its
Subsidiaries, by or before any court, arbitrator or administrative or
governmental body which could be reasonably expected to have a Material Adverse
Effect.
3F. OUTSTANDING DEBT. Neither the Company nor any of its Subsidiaries
has outstanding any Debt except as permitted by paragraph 6A(2) of the NPAs
(after giving effect to the April 2002 Modification). There exists no default
under the provisions of any instrument (as defined in the UCC) or agreement
evidencing Debt of the Company or any of its Subsidiaries in an amount greater
than $250,000 or of any agreement relating thereto (it being understood that the
representation and warranty in this sentence is made after giving effect to the
April 2002 Modification and the amendments prior thereto).
3G. TITLE TO PROPERTIES. The Company has and each of its Subsidiaries
has good and marketable title to its respective real properties (other than
properties which it leases) and good title to all of its other respective
properties and assets, including the properties and assets reflected in the most
recent audited balance sheet referred to in paragraph 3D (other than properties
and assets disposed of in the ordinary course of business), subject to no Lien
of any kind except Liens permitted by paragraph 6A(1) of the NPAs. All leases
necessary in any material respect for the conduct of the respective businesses
of the Company and its Subsidiaries are valid and subsisting and are in full
force and effect. The security interests granted under the Security Agreement by
the Company and its Subsidiaries (the "Security Interests") are granted as
security only and shall not subject the Collateral Agent or any holder of the
Notes to, or transfer or in any way affect or modify, any obligation or
liability of the Company or any other Debtor (as defined in the Security
Agreement) with respect to any of the Collateral (as defined in the Security
Agreement) or any transaction in connection therewith. The Security Interests
constitute valid security interests under the Uniform Commercial Code as in
effect from time to time in the State of Illinois ("UCC") securing the
Liabilities (as defined in the Security Agreement). The Security Interests
constitute perfected security interests in the Collateral (as defined in the
Security Agreement) (except inventory in transit) to the extent that a security
interest therein may be perfected by filing pursuant to the UCC, prior to all
other liens, claims and rights of others therein except for Permitted Liens (as
defined in the Security Agreement).
3H. TAXES. The Company has and each of its Subsidiaries has filed all
federal, state and other tax returns which are required to be filed, and each
has paid all taxes as shown on such returns and on all assessments received by
it to the extent that such taxes have become due, except such unfiled returns
and unpaid taxes (i) as are being contested in good faith by appropriate
proceedings for which adequate reserves have been established in accordance with
GAAP or (ii) the non-filing or non-payment of which (a) could not be reasonably
expected to have a Material Adverse Effect and (b) does not result in the
creation of any Lien other than Liens permitted by paragraph 6A(l)(i) of the
NPAs.
3I. CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the Company nor
any of its Subsidiaries is a party to any contract or agreement or subject to
any charter or other corporate
restriction which could have a Material Adverse Effect. Neither the execution
nor delivery of this Agreement, the Other Agreements, the Guaranty, the
Collateral Documents, the Notes or any of the other Note Documents, nor the
offering, issuance and sale of the Notes, nor fulfillment of nor compliance with
the terms and provisions hereof and thereof and of the Notes will conflict with,
or result in a breach of the terms, conditions or provisions of, or constitute a
default under, or result in any violation of, or result in the creation of any
Lien (other than the Liens created by the Collateral Documents) upon any of the
properties or assets of the Company or any of its Subsidiaries pursuant to, the
charter or by-laws of the Company or any of its Subsidiaries, any award of any
arbitrator or any agreement (including any agreement with stockholders),
instrument, order, judgment, decree, statute, law, rule or regulation to which
the Company or any of its Subsidiaries is subject. Neither the Company nor any
of its Subsidiaries is a party to, or otherwise subject to any provision
contained in, any instrument evidencing Indebtedness of the Company or such
Subsidiary, any agreement relating thereto or any other contract or agreement
(including its charter) which limits the amount of, or otherwise imposes
restrictions on the incurring of, Debt of the Company of the type to be
evidenced by the Notes except as set forth in the agreements listed in Schedule
3I attached hereto (as such Schedule 3I may have been modified from time to time
by written supplements thereto delivered by the Company and accepted in writing
by the Required Holders).
3J. ERISA. No contribution required to have been made to any Plan by
the Company or any Subsidiary under the provisions of the Plan or ERISA remains
unpaid and no accumulated funding deficiency (as defined in section 302 of ERISA
and section 412 of the Code), whether or not waived, exists with respect to any
Plan (other than a Multiemployer Plan). No liability to the PBGC has been or is
expected by the Company or any ERISA Affiliate to be incurred with respect to
any Plan (other than a Multiemployer Plan) by the Company, any Subsidiary or any
ERISA Affiliate which has caused or could cause a Material Adverse Effect. None
of the Company, any Subsidiary or any ERISA Affiliate has incurred or presently
expects to incur any withdrawal liability under Title IV of ERISA with respect
to any Multiemployer Plan which has caused or could cause a Material Adverse
Effect.
3K. GOVERNMENTAL CONSENT. Neither the nature of the Company or of any
Subsidiary, nor any of their respective businesses or properties, nor any
relationship between the Company or any Subsidiary and any other Person, nor any
circumstance in connection with the offering, issuance, sale or delivery of the
Notes is such as to require any authorization, consent, approval, exemption or
any action by or notice to or filing with any court or administrative or
governmental body (other than routine filings after the Effective Date for any
Notes with the Securities and Exchange Commission and/or state Blue Sky
authorities) in connection with the execution and delivery of this Agreement,
the offering, issuance, sale or delivery of the Notes or fulfillment of or
compliance with the terms and provisions hereof or of the Notes.
3L. ENVIRONMENTAL COMPLIANCE. The Company and its Subsidiaries and all
of their respective properties and facilities have complied at all times and in
all respects with all Environmental Laws, except, in any such case, where
failure to so comply could not reasonably be expected to result in a Material
Adverse Effect.
3M. SECTION 144A. The Notes are not of the same class as securities, if
any, of the Company listed on a national securities exchange registered under
Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer
quotation system.
3N. STATUS UNDER CERTAIN STATUTES. Neither the Company nor any
Subsidiary is subject to regulation under the investment Company Act of 1940, as
amended, the Public Utility Holding Company Act of 1935, as amended, the
Interstate Commerce Act, as amended, or the Federal Power Act, as amended.
3O. PRIORITY OF NOTES; BENEFITED OBLIGATIONS. The Notes constitute
"Superior Indebtedness" as such term is defined in the Company's Promissory
(subordinated) Notes, the form of which is attached hereto as Exhibit A and the
Subordinated Debt is subordinated to the Indebtedness owing from time to time by
the Company to the holders of the Notes in connection with this Agreement.
Schedule 3O lists, as of the date hereof, the principal or face amount of each
of the Benefited Obligations held by a Benefited Party and the amount thereof
constituting First Tier Benefited Obligations.
3P. LICENSES, PERMITS, ETC.
Except as disclosed in Schedule 3P,
(i) the Company and its Subsidiaries own or possess all
licenses, permits, franchises, authorizations, patents, copyrights, service
marks, trademarks and trade names, or rights thereto, that individually or in
the aggregate are Material, without known conflict with the rights of others; .
(ii) to the best knowledge of the Company, no product of the
Company infringes in any material respect any license, permit, franchise,
authorization, patent, copyright, service mark, trademark, trade name or other
right owned by any other Person; and
(iii) to the best knowledge of the Company, there is no
Material violation by any Person of any right of the Company or any of its
Subsidiaries with respect to any patent, copyright, service mark, trademark,
trade name or other right owned or used by the Company or any of its
Subsidiaries.
SECTION 4. Effectiveness. The amendments described in Section 1 above
and the waiver in Section 7 below shall become effective as of the date upon
which each Purchaser has received the following (the "AMENDMENT EFFECTIVE
DATE"):
(a) Amendment. A copy of this Amendment duly executed by each
party hereto;
(b) Resolutions; Incumbency; Certificate of Incorporation;
Bylaws.
(i) Copies of the resolutions of the board of directors of
the Company and each Guarantor authorizing the transactions
contemplated hereby, certified as of the date hereof by the Secretary
or an Assistant Secretary of the Company;
(ii) a certificate of the Secretary or Assistant Secretary
of the Company certifying the names and true signatures of the officers
of the Company authorized to execute and deliver this Agreement and the
Intercreditor Agreement to be delivered by it hereunder; and
(iii) copies of the certificate of incorporation and
by-laws (or other organizational documents) of the Company, certified
by the Secretary or an Assistant Secretary of the Company.
(c) Good Standing. A copy of a good standing certificate as of
a recent date for the Company from the Secretary of State (or similar,
applicable Governmental Authority) of its state of incorporation.
(d) Legal Opinion. An opinion of counsel to the Company in
form and substance reasonably acceptable to the Purchasers.
(e) Payment of Fees. Evidence of payment by the Company of all
accrued and unpaid fees, costs and reasonable expenses to the extent then due
and payable on Amendment Effective Date, together with Attorney Costs of the
Purchasers to the extent invoiced prior to or on the Amendment Effective Date,
plus such additional amounts of Attorney Costs as shall constitute the
Purchasers' reasonable estimate of Attorney Costs incurred or to be incurred by
it through the closing proceedings (provided that such estimate shall not
thereafter preclude final settling of accounts between the Company and the
Purchasers), including any such costs, fees and reasonable expenses arising
under or referenced in paragraphs 1C and 1D in the NPAs and Section 5 hereto.
(f) Certificate. A certificate signed by a Responsible
Officer, dated as of the Amendment Effective Date, stating that:
(i) the representations and warranties are true and
correct as provided in Section 3 above;
(ii) no Event of Default or Unmatured Event of Default
exists or would result from the execution and delivery of this
Amendment; and
(iii) since December 31, 2000, no event or circumstance
has occurred that has resulted or could reasonably be expected to
result in a Material Adverse Effect, except as set forth on Schedule
4.1(f).
(g) Consent. The Consent, signed by each Guarantor.
(h) Intercreditor Agreement. The Intercreditor Agreement in
the form attached hereto as Exhibit G, signed by the parties thereto and
consented to by the Company and the Guarantors.
(i) Amendment of Certain Agreements. Evidence, satisfactory to
the Purchasers, that each of the "Operative Documents" as defined in the
Synthetic Lease Guaranty (as defined in the Intercreditor Agreement), the BA
Credit Agreements and each Prudential Agreement has been amended to conform in
all material respects with the representations, warranties, covenants and
defaults contained in this Agreement.
(j) Service Agreement. A copy of that certain Three Party
Blocked Account Service Agreement dated as of December 10, 2001, duly executed
by XxxXxxx, the Collateral Agent and Fleet National Bank.
(k) Other Documents. Such other approvals, opinions, documents
or materials as the Purchasers may reasonably request.
4.2 Other Conditions to Effectiveness. All proceeds by the Collateral
Agent shall have been applied as set forth under the Intercreditor Agreement.
SECTION 5. Amendment Fees. In consideration of the Purchasers entering
into this Amendment, the Company agrees to pay, on or before the Amendment
Effective Date, ratably to each Purchaser, an aggregate fee of $1,312,500.
SECTION 6. Reference to and Effect on Original NPA. Upon the
effectiveness of this Amendment as set forth in Section 4 above, each reference
to the Original NPAs in any other document, instrument or agreement shall mean
and be a reference to such agreement as modified by this Amendment. Except as
specifically set forth in and in conformity with Section 1 above, each Original
NPA shall remain in full force and effect and each is hereby ratified and
confirmed in all respects.
SECTION 7. Company Indemnification. Whether or not the transactions
contemplated hereby are consummated, the Company shall indemnify and hold each
of the Purchasers and each of their respective officers, directors, employees,
counsel, agents and attorneys-in-fact (each an "Indemnified Person") harmless
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, charges, expenses and disbursements
(including Attorney Costs) of any kind or nature whatsoever which may at any
time (including at any time following repayment of the obligations hereunder) be
imposed on, incurred by or asserted against any such Indemnified Person in any
way relating to or arising out of this Amendment or any document contemplated by
or referred to herein, or the transactions contemplated hereby or thereby, or
any action taken or omitted by any such Indemnified Person, including any
Purchaser failing to consent to this Amendment, under or in connection with any
of the foregoing, including with respect to any investigation, litigation or
proceeding (including any Insolvency Proceeding or appellate proceeding) related
to or arising out of this Amendment or the Notes the Intercreditor Agreement,
the BA Credit Agreements, the Shelf Notes, the Prudential Agreement, or the
"Operative Documents" (as defined in the Intercreditor Agreement)
or the use of the proceeds thereof, whether or not any Indemnified Person is a
party hereto or thereto (all the foregoing, collectively, the "Indemnified
Liabilities"); provided that the Company shall have no obligation hereunder to
any Indemnified Person with respect to Indemnified Liabilities resulting solely
and directly from the gross negligence or willful misconduct of such Indemnified
Person. The agreements in this Section shall survive payment of all other
obligations hereunder and the termination of this Amendment.
SECTION 8. Waiver. Effective on the Amendment Effective Date, the
Purchasers waive any Default or Event of Default arising from non-compliance
with the financial covenants contained in paragraph 6 of the Original NPA and
the defaults specifically disclosed in the Default Letter. Except as
specifically set forth in the preceding sentence, nothing contained herein shall
be construed as a waiver of or consent to any other violation of the Original
NPA or any other Default or Event of Default under the Original NPA.
SECTION 9. Governing Law. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the law of the State of
New York, excluding choice-of-law principles of the law
in such State that would require the application of the laws of a jurisdiction
other than such State.
SECTION 10. WAIVER OF JURY TRIAL. EACH OF THE COMPANY AND EACH HOLDER
OF NOTES HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AMENDMENT, THE ORIGINAL NPA,
THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY
SECTION 11. Counterparts; Section Titles. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which when taken together shall constitute
but one and the same instrument. The section titles contained in this letter
agreement are and shall be without substance, meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
[SIGNATURES ON FOLLOWING PAGE]
* * * * *
If you are in agreement with the foregoing, please sign this Amendment and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.
Very truly yours,
TRUSERV CORPORATION
By: /s/ XXXXXXX XXXXXX
Name: Xxxxxxx Xxxxxx
Title: Vice President and Treasurer
The foregoing Amendment is
hereby accepted as of the
date first above written.
ALLSTATE INSURANCE COMPANY
By: /s/ XXXXXX XXXXXX
Name: Xxxxxx Xxxxxx
Title: Senior Portfolio Manager
By: /s/ XXXXXX XXXXXX
Name: Xxxxxx Xxxxxx
Title: Managing Director
* * * * *
If you are in agreement with the foregoing, please sign this Amendment and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.
Very truly yours,
TRUSERV CORPORATION
By: /s/ XXXXXXX XXXXXX
Name: Xxxxxxx Xxxxxx
Title: Vice President and Treasurer
The foregoing Amendment is
hereby accepted as of the
date first above written.
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ XXXXXX XXXXXX
Name: Xxxxxx Xxxxxx
Title: Senior Portfolio Manager
By: /s/ XXXXXX XXXXXX
Name: Xxxxxx Xxxxxx
Title: Managing Director
* * * * *
If you are in agreement with the foregoing, please sign this Amendment and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.
Very truly yours,
TRUSERV CORPORATION
By: /s/ XXXXXXX XXXXXX
Name: Xxxxxxx Xxxxxx
Title: Vice President and Treasurer
The foregoing Amendment is
hereby accepted as of the
date first above written.
KEYPORT LIFE INSURANCE COMPANY
BY XXXXX XXX & XXXXXXX INCORPORATED AS AGENT
By: /s/ XXXXXXX X. XXXXXXX
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
* * * * *
If you are in agreement with the foregoing, please sign this Amendment and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.
Very truly yours,
TRUSERV CORPORATION
By: /s/ XXXXXXX XXXXXX
Name: Xxxxxxx Xxxxxx
Title: Vice President and Treasurer
The foregoing Amendment is
hereby accepted as of the
date first above written.
AID ASSOCIATION FOR LUTHERANS
By: /s/ X. XXXXX XXXXXX
Name: X. Xxxxx Xxxxxx
Title: Second Vice President-Securities
By: /s/ XXXX XXXXXXXX
Name: Xxxx Xxxxxxxx
Title: Portfolio Manager
* * * * *
If you are in agreement with the foregoing, please sign this Amendment and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.
Very truly yours,
TRUSERV CORPORATION
By: /s/ XXXXXXX XXXXXX
Name: Xxxxxxx Xxxxxx
Title: Vice President and Treasurer
The foregoing Amendment is
hereby accepted as of the
date first above written.
NATIONWIDE LIFE INSURANCE COMPANY
By: /s/ XXXX X. XXXXXXXXXX
Name: Xxxx X. Xxxxxxxxxx
Title: Associate Vice President
* * * * *
If you are in agreement with the foregoing, please sign this Amendment and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.
Very truly yours,
TRUSERV CORPORATION
By: /s/ XXXXXXX XXXXXX
Name: Xxxxxxx Xxxxxx
Title: Vice President and Treasurer
The foregoing Amendment is
hereby accepted as of the
date first above written.
FEDERATED LIFE INSURANCE COMPANY
By: /s/ XXXX X. XXXX
Name: Xxxx X. Xxxx
Title: Vice President
* * * * *
If you are in agreement with the foregoing, please sign this Amendment and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.
Very truly yours,
TRUSERV CORPORATION
By: /s/ XXXXXXX XXXXXX
Name: Xxxxxxx Xxxxxx
Title: Vice President and Treasurer
The foregoing Amendment is
hereby accepted as of the
date first above written.
FEDERATED MUTUAL INSURANCE COMPANY
By: /s/ XXXX X. XXXX
Name: Xxxx X. Xxxx
Title: Vice President
* * * * *
If you are in agreement with the foregoing, please sign this Amendment and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.
Very truly yours,
TRUSERV CORPORATION
By: /s/ XXXXXXX XXXXXX
Name: Xxxxxxx Xxxxxx
Title: Vice President and Treasurer
The foregoing Amendment is
hereby accepted as of the
date first above written.
MODERN WOODMEN OF AMERICA
By: /s/ XXXX X. XXXXXXX
Name: Xxxx X. Xxxxxxx
Title: Director, Treasurer and Investment Manager
* * * * *
If you are in agreement with the foregoing, please sign this Amendment and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.
Very truly yours,
TRUSERV CORPORATION
By: /s/ XXXXXXX XXXXXX
Name: Xxxxxxx Xxxxxx
Title: Vice President and Treasurer
The foregoing Amendment is
hereby accepted as of the
date first above written.
AMERITAS LIFE INSURANCE CORP.
BY AMERITAS INVESTMENT ADVISORS, INC. AS AGENT
By: /s/ XXXXXX X. XXXXX
Name: Xxxxxx X. Xxxxx
Title: Vice President
* * * * *
If you are in agreement with the foregoing, please sign this Amendment and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.
Very truly yours,
TRUSERV CORPORATION
By: /s/ XXXXXXX XXXXXX
Name: Xxxxxxx Xxxxxx
Title: Vice President and Treasurer
The foregoing Amendment is
hereby accepted as of the
date first above written.
NATIONAL GUARDIAN LIFE INSURANCE COMPANY
By: X.X. XXXXX
Name: X.X. Xxxxx
Title: Vice President and Treasurer
* * * * *
If you are in agreement with the foregoing, please sign this Amendment and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.
Very truly yours,
TRUSERV CORPORATION
By: /s/ XXXXXXX XXXXXX
Name: Xxxxxxx Xxxxxx
Title: Vice President and Treasurer
The foregoing Amendment is
hereby accepted as of the
date first above written.
FOOTHILL PARTNERS IV, L.P.
By: X. XXXXXXX XXXXXXXX
Name: X. Xxxxxxx Xxxxxxxx
Title: Managing Member
* * * * *
If you are in agreement with the foregoing, please sign this Amendment and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.
Very truly yours,
TRUSERV CORPORATION
By: /s/ XXXXXXX XXXXXX
Name: Xxxxxxx Xxxxxx
Title: Vice President and Treasurer
The foregoing Amendment is
hereby accepted as of the
date first above written.
EVEREST CAPITAL SENIOR DEBT FUND
By: XXXXX XXXXX
Name: Xxxxx Xxxxx
Title: Chief Financial Officer
By: XXXX XXXXXX
Name: Xxxx Xxxxxx
Title: Vice President
* * * * *
If you are in agreement with the foregoing, please sign this Amendment and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.
Very truly yours,
TRUSERV CORPORATION
By: /s/ XXXXXXX XXXXXX
Name: Xxxxxxx Xxxxxx
Title: Vice President and Treasurer
The foregoing Amendment is
hereby accepted as of the
date first above written.
XXXXXX CAPITAL, LLC
By: /s/ XXXXX XXXXXX
Name: Xxxxx Xxxxxx
Title: Managing Member
* * * * *
If you are in agreement with the foregoing, please sign this Amendment and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.
Very truly yours,
TRUSERV CORPORATION
By: /s/ XXXXXXX XXXXXX
Name: Xxxxxxx Xxxxxx
Title: Vice President and Treasurer
The foregoing Amendment is
hereby accepted as of the
date first above written.
U. S. BANCORP LIBRA, A TRADE NAME OF
U. S. BANCORP INVESTMENTS, INC.
By: /s/ XXXXXX X. XXXXXXX
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
* * * * *
If you are in agreement with the foregoing, please sign this Amendment and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.
Very truly yours,
TRUSERV CORPORATION
By: /s/ XXXXXXX XXXXXX
Name: Xxxxxxx Xxxxxx
Title: Vice President and Treasurer
The foregoing Amendment is
hereby accepted as of the
date first above written.
RAVICH REVOCABLE TRUST OF 1989
By: /s/ XXXX XXXXXX
Name: Xxxx Xxxxxx
Title: Trustee
EXHIBIT G
INTERCREDITOR AGREEMENT
Please see attached.
EXHIBIT A
TO
NOTE AMENDMENT
FORM OF PROMISSORY (SUBORDINATED) NOTES
Please see attached.
