XXXX-XXXXX COMPANY
SECOND AMENDMENT TO CREDIT AGREEMENT
Xxxxxx Trust and Savings Bank, PNC Bank, National Association,
as Administrative Agent Chicago, Illinois
Chicago, Illinois
Other Banks party to the
Credit Agreement
Ladies and Gentlemen:
We refer to the Credit Agreement dated as of October 8, 1996 (such Credit
Agreement, as heretofore amended and as may be amended from time to time,
being hereinafter referred to as the "CREDIT AGREEMENT") and currently in
effect between you and us. Capitalized terms used without definition below
shall have the same meanings herein as they have in the Credit Agreement.
The Borrower has requested that the Banks make certain modifications to
the borrowing arrangements provided for in the Credit Agreement and the Banks
have agreed to accommodate such request by the Borrower on the terms and
conditions herein set forth.
1. AMENDMENTS
Upon satisfaction of the conditions precedent to effectiveness set forth
below, the Credit Agreement shall be amended as follows:
SECTION 1.01. LEVERAGE RATIO. The definition of the term "LEVERAGE
RATIO" in Section 6.1 of the Credit Agreement shall be amended by inserting
the following immediately at the end thereof:
"The foregoing to the contrary notwithstanding, for
purposes of determining the Leverage Ratio for each
period which includes the third fiscal quarter of the
Borrower for its 1997 fiscal year, EBITDA for such fiscal
quarter shall be computed so as not to give effect to the
special charge (not to exceed $35,000,000 in the
aggregate) recorded by the Borrower (the "THIRD QUARTER
1997 CHARGE") in accordance with GAAP against its
earnings for such fiscal quarter representing (i)
closing, downsizing and consolidation of warehouse
facilities (such charge expected by the Borrower to range
between $1O,OOO,OOO and $15,00O,000), (ii) closing of
certain retail locations (such charge expected by the
Borrower to range between $4,00O,OOO and $6,OOO,000) and
(iii) write-down to market value of certain warehouse and
retail
store locations, certain assets owned by the Xxxx XxXxxx
subsidiary, the so-called Alfa investment, the so-called
Legacy computer systems and other certain assets (such
charge expected by the Borrower to range between
$11,000,000 and $14,000,000)."
SECTION 1.02. INTEREST COVERAGE RATIO. The definition of the term
"INTEREST COVERAGE RATIO" in Section 6.1 of the Credit Agreement shall be
amended by inserting the following immediately at the end thereof:
"The foregoing to the contrary notwithstanding, for
purposes of determining the Interest Coverage Ratio for
each period which includes the third fiscal quarter of
the Borrower for its 1997 fiscal year, EBIT shall be
computed so as not to give effect to the Third Quarter
1997 Charge."
SECTION 1.03. NO CONSOLIDATING FINANCIAL STATEMENTS. Section 9.5 of the
Credit Agreement shall be amended by inserting the following immediately at
the end thereof:
"Notwithstanding anything in this Section 9.5 to the
contrary, the Borrower shall not be required to furnish
consolidating financial statements to the Agents, any
Bank or any other party unless and to the extent
reasonably requested by the Administrative Agent."
SECTION 1.04. NEW LEVERAGE RATIO LEVELS. Section 9.9 shall be amended and
as so amended shall be restated in its entirety to read as follows:
"SECTION 9.9. LEVERAGE RATIO. The Borrower shall not, as
of the close of any fiscal quarter of the Borrower set forth
below, permit the Leverage Ratio to be more than the amount set
forth to the right of such quarter:
As of Close of each Fiscal Quarter:
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Leverage Ratio Shall
From and Including To and Including Not be More Than:
------------------ ---------------- ----------------
1st fiscal quarter of 3rd fiscal quarter of 4.00 to 1
fiscal year 1997 fiscal year 1997
4th fiscal quarter of 4th fiscal quarter of 4.00 to 1
fiscal year 1997 fiscal year 1998
1st fiscal quarter 1st fiscal quarter of 3.50 to 1
of fiscal year 1999 fiscal year 1999
2nd fiscal quarter of 1st fiscal quarter of 3.25 to 1
fiscal year 1999 2000 fiscal year
2d fiscal quarter of each fiscal quarter 3.00 to 1
fiscal year 2000 thereafter
4. CONDITIONS PRECEDENT.
The effectiveness of this Amendment is subject to the satisfaction of all
of the following conditions precedent:
(a) The Borrower and the Required Banks shall have executed this
Amendment.
(b) Legal matters incident to the execution and delivery of this
Amendment shall be satisfactory to the Banks and their counsel.
5. REPRESENTATIONS REAFFIRMED.
In order to induce the Banks to execute and deliver this Agreement, the
Borrower hereby represents to the Banks that as of the date hereof and as of
the time that this Amendment becomes effective, each of the representations
and warranties set forth in Section 7 of the Credit Agreement, after giving
effect to the amendments made hereby, are and shall be true and correct
(except that the representations contained in Section 7.4 shall be deemed to
refer to the most recent financial statements of the Borrower delivered to
the Banks).
6. MISCELLANEOUS.
This Amendment may be executed in any number of counterparts and by
different parties hereto on separate counterparts, each of which when so
executed shall be an original but all of which shall constitute one and the
same instrument. Except as specifically amended and modified hereby, all of
the terms and conditions of the Credit Agreement shall stand and
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remain unchanged and in full force and effect. No reference to this Amendment
need be made in any note, instrument or other document making reference to
the Credit Agreement, any reference to the Credit Agreement in any such note,
instrument or other document to be deemed to be a reference to the Credit
Agreement as amended hereby. The Borrower confirms its agreement to pay the
reasonable fees and disbursements of Messrs. Xxxxxxx and Xxxxxx, counsel to
the Administrative Agent, in connection with the preparation, execution and
delivery of this Amendment and the transactions and documents contemplated
hereby. This instrument shall be construed and governed by and in accordance
with the laws of the State of Illinois (without regard to principles of
conflicts of laws).
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Dated as of this 10 day of November, 1997.
XXXX-XXXXX COMPANY
By /s/ XXXX X. XXXXXXX
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Name: Xxxx X. Xxxxxxx
Title: Vice President and CFO
Accepted and agreed to as of the date last above written.
XXXXXX TRUST AND SAVINGS BANK, in its
individual capacity as a Bank and as
Administrative Agent
By /s/ XXXX X. XXXXX
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Its Vice President
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PNC BANK, NATIONAL ASSOCIATION
By
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Its
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ABN AMRO BANK N.V.
By
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Its
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By
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Its
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THE BANK OF TOKYO-MITSUBISHI, LTD.,
CHICAGO BRANCH
By
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Its
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CIBC Inc.
By /s/ [illegible]
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Its Director, CIBC Xxxxxxxxxxx
Corp., AS AGENT
ISTITUTO BANCARIO SANPAOLO DI
TORINO SPA
By
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Its
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KEYBANK, N.A.
By
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Its
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COMMERZBANK AKTIENGESELLSCHAFT
CHICAGO BRANCH
By
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Its
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By
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Its
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CREDIT LYONNAIS, CHICAGO BRANCH
By
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Its
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THE FUJI BANK, LIMITED
By
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Its
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CAISSE NATIONALE DE CREDIT AGRICOLE
By
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Its
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FIRST BANK NATIONAL ASSOCIATION
By /s/ [illegible]
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Its Vice President
MELLON BANK, N.A.
By
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Its
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THE SAKURA BANK, LIMITED
By
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Its
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SUNTRUST BANK, ATLANTA
By
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Its
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THE MITSUBISHI TRUST AND BANKING
CORPORATION
By
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Its
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NATIONAL CITY BANK OF COLUMBUS
By
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Its
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THE SANWA BANK, LIMITED
By /s/ Xxxxxx X. Holtley
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Its Vice President & Manager
THE SUMITOMO BANK, LIMITED
By
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Its
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YASUDA TRUST & BANKING CO., LTD.
By
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Its
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THE BANK OF NEW YORK
By
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Its
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MITSUI TRUST AND BANKING COMPANY,
LIMITED
By
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Its
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