FIRST AMENDMENT TO AMENDED AND RESTATED
CREDIT AGREEMENT
This first amendment to amended and restated credit agreement
("Amendment") is dated as of December 6, 1996, and entered into by and among
EAGLE HARDWARE & GARDEN, INC., a Washington corporation ("Borrower"), the
financial institutions listed on the signature pages hereof (each individually
referred to as a "Lender" and collectively as "Lenders"), and U. S. BANK OF
WASHINGTON, NATIONAL ASSOCIATION, as agent for Lenders (in such capacity
"Agent").
RECITALS:
WHEREAS Borrower, Lenders, and Agent are parties to an amended and
restated credit agreement dated as of May 28, 1996 (as amended, the "Credit
Agreement"; capitalized terms used herein without definition shall have the
meaning set forth in the Credit Agreement), pursuant to which Agent and Lenders
have extended certain credit facilities to Borrower;
WHEREAS Borrower desires to amend the Credit Agreement so as to (a)
provide for the release by Agent of the Liens granted to Agent on certain assets
of Borrower, (b) provide for the elimination of the Borrowing Base requirement,
and (c) amend certain fees, interest rates, and financial tests.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I. AMENDMENTS
1.1 TERMS DEFINED. On and after (but not before) the Effective Date,
Section 1. 1 of the Credit Agreement is amended by (a) deleting the definitions
of "Borrowing Base," "Eligible Accounts Receivable," and "Eligible Inventory,"
(b) amending the definition of "Applicable Margin" as set forth below, and (c)
adding a new definition of "Adjusted Current Liabilities" to read as follows:
"Adjusted Current Liabilities" means Current Liabilities less the
amount of effective commitments for long term mortgage financing obtained by
Borrower that are not yet funded (provided that copies of the commitment letters
evidencing such commitments have been received by Agent).
"Applicable Margin" shall be determined as of the end of each Fiscal
Quarter based on the Borrower's Capital Ratio for such Fiscal Quarter in
accordance with the table set forth below and shall be effective as of the first
day of the Fiscal Quarter following the Borrower's delivery of the financial
statements required under Section 5.1(c) herein:
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Capital Ratio Applicable Margin
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Greater than 0.9:1.0 2% per annum
Less than or equal to 0.9:1.0 Greater than or equal to 0.8:1.0 1.75% per annum
Less than 0.8:1.0 Greater than or equal to 0.5:1.0 1.5% per annum
Less than 0.5:1.0 Greater than or equal to 0.33:1.0 1.25% per annum
Less than 0.33:1.0 0.75% per annum
where:
Greater than means greater than
Less than means less than
Greater than or equal to means greater than or equal to
Less than or equal to means lesser than or equal to
Notwithstanding the foregoing, (a) if Borrower's senior debt rating from
Standard Poor's Corporation is BB (or equivalent rating from a comparable rating
agency) or better at the end of a Fiscal Quarter, then effective as of the first
day of the following Fiscal Quarter the Applicable Margin shall be 0.75 % per
annum and (b) if Borrower's senior debt rating from Standard Poor's Corporation
is BBB (or equivalent rating from a comparable rating agency) or better at the
end of a Fiscal Quarter, then effective as of the first day of the following
Fiscal Quarter the Applicable Margin shall be 0.55% per annum.
1.2 On and after (but not before) the Effective Date, Section 2.1(a)
of the Credit Agreement is amended to read as follows:
(a) Subject to and upon the terms and conditions set forth herein,
and in reliance upon the representations, warranties, and covenants of Borrower
contained herein or made pursuant hereto, each Lender severally and not jointly
agrees to make loans (individually, a "Revolving Credit Loan"; collectively, the
"Revolving Credit Loans") to Borrower from time to time during the Revolving
Credit Commitment Period, provided that the aggregate principal amount of the
Revolving Credit Loans made by such Lender to Borrower at any one time
outstanding shall not exceed an amount equal to Lender's Revolving Credit
Commitment as set forth opposite such Lender's name on SCHEDULE 1.1.2, provided,
further, that the aggregate principal amount of all Revolving Credit Loans at
any one time outstanding to Borrower shall not exceed, in the aggregate, as to
all Lenders, the Total Revolving Credit Commitment less (i) the aggregate face
amount of Letters of Credit then outstanding, less (ii) all Unreimbursed L/C
Payments at such time, and less (iii) the aggregate face amount of all
commercial paper of Borrower then outstanding.
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1.3 LETTER OF CREDIT FEES. On and after (but not before),the
Effective Date, (a) Section 2.3(a) of the Credit Agreement is amended by
substituting "1.0" for "l.25", and (b) Section 2.3(b) of the Credit Agreement is
amended by substituting "0.25" for "0.375."
1.4 BORROWING BASE. On and after (but not before) the Effective
Date, Section 2.19 of the Credit Agreement is deleted.
1.5 COLLATERAL. On and after (but not before) the Effective Date,
Section 3.10 of the Credit Agreement is deleted.
1.6 FURTHER ASSURANCES. On and after (but not before) the Effective
Date, Section 4.2(f) of the Credit Agreement is amended to read as follows:
(f) To the extent not previously delivered, all other documents,
agreements, and instruments from or with respect to Borrower or any other
Person that may be called for hereunder shall be duly executed and
delivered to Agent. For the purposes of this Agreement, the waiver of
delivery of any document, agreement, or instrument from or with respect to
Borrower or any other Person does not constitute a continuing waiver with
respect to the obligation to fulfill the conditions precedent to the making
or renewal of each Loan and the issuance of each Letter of Credit
hereunder.
1.7 INSURANCE. On and after (but not before) the Effective Date,
Section 5.5 of the Credit Agreement is amended by deleting subsection
5.5(a)(iii).
1.8 MAINTENANCE OF LIENS. On and after (but not before) the
Effective Date, Section 5.12 of the Credit Agreement is hereby deleted.
1.9 AFTER-ACQUIRED COLLATERAL. On and after (but not before) the
Effective Date, Section 5.14 of the Credit Agreement is deleted.
1.10 GUARANTIES AND SECURITY AGREEMENTS FROM SUBSIDIARIES. On and
after (but not before) the Effective Date, Section 5.17 of the Credit Agreement
is hereby amended to read as follows:
5.17 GUARANTIES FROM SUBSIDIARIES. Subject to SECTION 6.9 herein, as
promptly as possible after any entity becomes a Subsidiary of Borrower,
such Subsidiary shall execute and deliver to Agent (a) a guaranty
unconditionally guaranteeing all of the Obligations and (b) such other
documents and agreements as Agent may reasonably request. All of the
foregoing documents shall be in form and substance satisfactory to Agent.
1.11 OTHER INDEBTEDNESS. On or after (but not before) the Effective
Date, Section 6.3 of the Credit Agreement is hereby amended to read as follows:
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6.3 OTHER INDEBTEDNESS. Create, incur, assume, or suffer to exist,
contingently or otherwise, any Indebtedness except (a) Indebtedness
represented by the Note; (b) trade accounts and other current payables
arising from the ordinary course of business, (c) unsecured commercial
paper, and (d) additional Indebtedness outstanding or committed to at any
time (including without limitation, Indebtedness evidenced by notes, bonds,
debentures, leases, purchase agreements, and other contractual obligations)
incurred in the ordinary course of business of Borrower and its
Subsidiaries for the purchase, lease, or other acquisition of capital
assets or leasehold interests required for the operation of the retail
stores, warehouses, an other supporting facilities of Borrower and its
Subsidiaries. Except as allowed in SECTION 6.4 herein, none of the
Indebtedness described in this SECTION 6.3 shall be secured by any of the
assets or rights of Borrower or its Subsidiaries.
1.12 CHANGE OF CHIEF EXECUTIVE OFFICER NAME. On and after (but not
before) the Effective Date, Section 6.11 of the Credit Agreement is hereby
amended to read as follows:
6.11 CHANGE OF CHIEF EXECUTIVE OFFICE OR NAME. Change the location of
the chief executive office of Borrower, or Borrower's name, or adopt or use
any trade name without prior written notice to Agent.
1.13 WORKING CAPITAL. On and after (but not before) the Effective
Date, Section 6.20 of the Credit Agreement is hereby amended to read as follows:
6.20 WORKING CAPITAL. Commencing with the Fiscal Quarter ending
closest to January 31, 1997, and for each Fiscal Quarter thereafter, permit
the positive difference between Current Assets and Adjusted Current
Liabilities at the end of any Fiscal Quarter to be less than $45,000,000 or
the Aggregate Current Amount, whichever is greater.
1.14 CAPITAL EXPENDITURES. On and after (but not before) the
Effective Date, Section 6.21 of the Credit Agreement is hereby amended to read
as follows:
6.21 CAPITAL EXPENDITURES. Permit the aggregate amount of Borrower's
Consolidated Capital Expenditures (a) to exceed $85,000,000 for the Fiscal
Year ending January 31, 1997, and (b) to exceed $95,000,000 for Fiscal Year
ending closest to January 31, 1998.
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF BORROWER
In order to induce Lenders and Agent to enter into this Amendment,
Borrower represents and warrants to each Lender and to Agent that the following
statements are true, correct, and complete:
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2.1 CORPORATE POWER AND AUTHORITY. Borrower has all corporate power
and authority to enter into this Amendment and carry out the transactions
contemplated hereby, and perform its obligations under the Credit Agreement.
2.2 INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Article VII of the
Credit Agreement are and will be true, correct, and complete in all material
respects on and as of the date of the Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which they were true,
correct, and complete in all material respects on and as of such earlier date.
2.3 ABSENCE OF DEFAULT. No event has occurred and is continuing that
will constitute a Default or an Event of Default.
ARTICLE III. CONDITIONS TO EFFECTIVENESS
Article I of this Amendment shall become effective as of December 1,
1996 (the "Effective Date"), provided that (a) all representations and
warranties contained herein are true and correct as of the Effective Date, and
(b) Agent shall have received each of the following, dated the date hereof (or
such other date satisfactory to Agent), and in form and substance satisfactory
to Agent.
3.1 AMENDMENT. A duly executed original (or, if elected by Agent, an
executed facsimile copy) of this Amendment, duly executed by Borrower and the
Requisite Lenders.
3.2 FURTHER ASSURANCES. All corporate and other proceedings taken or
to be taken in connection with the transactions contemplated by this Amendment
and all documents relating thereto shall be reasonably satisfactory in form and
substance to Agent and Agent shall have received all counterpart originals or
certified copies of such documents as it may reasonably request.
ARTICLE IV. MISCELLANEOUS
4.1 RESERVATION OF RIGHTS. Borrower acknowledges and agrees that the
execution and delivery by Agent and Lenders of this Amendment, shall not be
deemed to create a course of dealing or otherwise obligate Agent or Lenders to
give similar amendments in the future.
4.2 REAFFIRMATION. Except as hereby expressly amended, all terms,
covenants, and provisions of the Credit Agreement are and shall remain in full
force and effect and all references therein and in the other Loan Documents to
such Credit Agreement shall henceforth refer to the Credit Agreement as amended
by this Amendment. This Amendment shall be deemed incorporated into, and a part
of, the Credit Agreement.
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4.3 SUPERSESSION. This Amendment, together with the Credit
Agreement, contains the entire and exclusive agreement of the parties hereto
with reference to the matters discussed herein and therein. This Amendment
supersedes all prior drafts and communications with respect thereto. This
Amendment may not be amended except in accordance with the provisions of Section
10.8 of the Credit Agreement.
4.4 CONSENT TO RELEASE OF COLLATERAL. The Requisite Lenders hereby
authorize and direct Agent to release any and all Liens of Agent on the
Collateral.
4.5 FEES AND EXPENSES. Borrower acknowledges that all reasonable
costs, fees, and expenses as described in Section 10.2 of the Credit Agreement
incurred by Agent and its counsel with respect to this Amendment and the
documents and transactions contemplated hereby shall be for the account of
Borrower.
4.6 INVALIDITY. If any term or provision of this Amendment shall be
deemed prohibited by or invalid under any applicable law, such provision shall
be invalidated without affecting the remaining provisions of this Amendment or
the Credit Agreement, respectively.
4.7 GOVERNING LAW. This Amendment and the rights and obligations of
the parties hereunder shall be governed by, and shall be construed and enforced
in accordance with the internal laws of the state of Washington, without regard
to conflicts of laws principles.
4.8 HEADINGS. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
4.9 SUCCESSORS. This Amendment shall be binding upon and inure to
the benefit of the parties hereto and thereto and their respective successors
and assigns. No third-party beneficiaries are intended in connection with this
Amendment.
4.10 COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
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IN WITNESS WHEREOF, each of the parties hereto have caused this Amendment
to be duly executed and delivered by their respective officers therein to duly
authorized as of the date first above written.
BORROWER:
EAGLE HARDWARE & GARDEN, INC.
By /s/ Xxxxxx X. Xxxxxxxxx
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Title EXEC. V.P. FINANCE/C.F.O.
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LENDERS:
U.S. BANK OF WASHINGTON,
NATIONAL ASSOCIATION
By
--------------------------------
Title
--------------------------------
FIRST HAWAIIAN BANK
By
--------------------------------
Title
--------------------------------
UNITED STATES NATIONAL BANK
OF OREGON
By
--------------------------------
Title
--------------------------------
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IN WITNESS WHEREOF, each of the parties hereto have caused this Amendment
to be duly executed and delivered by their respective officers therein to duly
authorized as of the date first above written.
BORROWER:
EAGLE HARDWARE & GARDEN, INC.
By
--------------------------------
Title
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LENDERS:
U.S. BANK OF WASHINGTON,
NATIONAL ASSOCIATION
By /s/ Xxxxx Xxxxxxxx
--------------------------------
Title Vice President
--------------------------------
FIRST HAWAIIAN BANK
By
--------------------------------
Title
--------------------------------
UNITED STATES NATIONAL BANK
OF OREGON
By /s/ Xxxx Xxxxx
--------------------------------
Title VICE PRESIDENT
--------------------------------
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IN WITNESS WHEREOF, each of the parties hereto have caused this Amendment
to be duly executed and delivered by their respective officers therein to duly
authorized as of the date first above written.
BORROWER:
EAGLE HARDWARE & GARDEN, INC.
By
--------------------------------
Title
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LENDERS:
U.S. BANK OF WASHINGTON,
NATIONAL ASSOCIATION
By
--------------------------------
Title
--------------------------------
FIRST HAWAIIAN BANK
By /s/ Xxxxxx X. Xxxxxxx, III
--------------------------------
Xxxxxx X. Xxxxxxx, III
Title Vice President
--------------------------------
UNITED STATES NATIONAL BANK
OF OREGON
By
--------------------------------
Title
--------------------------------
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KEY BANK OF WASHINGTON
By /s/ Xxxxxxxx Xxxxxxxx
--------------------------------
Title Vice President
--------------------------------
THE SUMITOMO BANK, LIMITED
By
--------------------------------
Title
--------------------------------
By
--------------------------------
Title
--------------------------------
FIRST SECURITY BANK OF IDAHO, N.A.
By
--------------------------------
Title
--------------------------------
AGENT:
U.S. BANK OF WASHINGTON,
NATIONAL ASSOCIATION
By /s/ Xxxxx Xxxxxxxx
--------------------------------
Title Vice President
--------------------------------
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KEY BANK OF WASHINGTON
By
--------------------------------
Title
--------------------------------
THE SUMITOMO BANK, LIMITED
By /s/ J. Xxxxxxx Xxxxxx
--------------------------------
J. Xxxxxxx Xxxxxx
Title Vice President
--------------------------------
By /s/ Xxxxxx X. Xxxxx
--------------------------------
Xxxxxx X. Xxxxx
Title Vice President
--------------------------------
FIRST SECURITY BANK OF IDAHO, N.A.
By
--------------------------------
Title
--------------------------------
AGENT:
U.S. BANK OF WASHINGTON,
NATIONAL ASSOCIATION
By
--------------------------------
Title
--------------------------------
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KEY BANK OF WASHINGTON
By
--------------------------------
Title
--------------------------------
THE SUMITOMO BANK, LIMITED
By
--------------------------------
Title
--------------------------------
By
--------------------------------
Title
--------------------------------
FIRST SECURITY BANK OF IDAHO, N.A.
By /s/ Xxxxx X. Xxxx
--------------------------------
Title Vice President
--------------------------------
AGENT:
U.S. BANK OF WASHINGTON,
NATIONAL ASSOCIATION
By
--------------------------------
Title
--------------------------------
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