TENTH AMENDMENT
to
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
This Tenth Amendment to Amended and Restated Loan and Security Agreement
(this "Amendment"), effective as of November 3, 1997 (the "Effective Date"),
is entered into among American Builders & Contractors Supply Co., Inc., a
Delaware corporation (such corporation, including its predecessor in interest,
the "Borrower") with its chief executive office located at Xxx XXX Xxxxxxx,
Xxxxxx, Xxxxxxxxx, the financial institutions listed on the signature pages
hereof (individually, a "Lender" and collectively, the "Lenders") and
NationsBank of Texas, N.A. ("NationsBank"), as Agent for the Lenders (in such
capacity, the "Agent"):
W I T N E S S E T H
WHEREAS, the Borrower, the Lenders and ANB are party to that certain
Amended and Restated Loan and Security Agreement (the "Original Loan
Agreement") dated as of July 1, 1993, as amended by that certain First
Amendment to Amended and Restated Loan and Security Agreement dated as of
September 2, 1994 (the "First Amendment"), that certain Waiver and Second
Amendment to Amended and Restated Loan and Security Agreement dated June 19,
1995 (the "Second Amendment"), that certain Third Amendment to Amended and
Restated Loan and Security Agreement dated as of September 18, 1995 (the
"Third Amendment"), that certain Waiver and Fourth Amendment to Amended and
Restated Loan and Security Agreement dated as of September 30, 1995 (the
"Fourth Amendment"); that certain Waiver and Fifth Amendment to Amended and
Restated Loan and Security Agreement dated as of December 29, 1995 (the "Fifth
Amendment"), that certain Waiver and Sixth Amendment to Amended and Restated
Loan and Security Agreement dated as of February 8, 1996 (the "Sixth
Amendment"), that certain Waiver and Seventh Amendment to Amended and Restated
Loan and Security Agreement undated but entered into as of September 30, 1996
(the "Seventh Amendment"), that certain Waiver and Eighth Amendment to Amended
and Restated Loan and Security Agreement entered into as of March 27, 1997
(the "Eighth Amendment") and that certain Ninth Amendment to Amended and
Restated Loan and Security Agreement entered into as of May 7, 1997 (the
"Ninth Amendment") (the Original Loan Agreement, as amended by the First
Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment,
the Fifth Amendment, the Sixth Amendment, the Seventh Amendment, Eighth
Amendment and the Ninth Amendment, is referred to hereinafter as the "Loan
Agreement") pursuant to which Lenders have agreed to make certain loans and
extend certain other financial accommodations to the Borrower in an aggregate
principal amount of up to Two Hundred Million Dollars ($200,000,000.00) as
provided therein;
WHEREAS, the Borrower has requested the Agent and the Lenders to modify
the Loan Agreement in certain respects and the Agent has agreed to do so
subject to the terms and conditions contained herein, and subject to
confirmation of consent by Requisite Lenders as required by Section 10.15 of
the Loan Agreement;
NOW, THEREFORE, in consideration of the terms and conditions contained
herein, and of any loans or financial accommodations heretofore, now or
hereafter made to or for the benefit of the Borrower by the Lenders, it hereby
is agreed as follows:
1. Amendment to Section 8.17 of the Loan Agreement. Section 8.17
("Minimum Tangible Net Worth") of the Loan Agreement is hereby amended and
restated to read in its entirety as follows:
"8.17 Minimum Tangible Net Worth. Tangible Net Worth, as determined
as of each date set forth below, shall not be less than the amount set
forth below opposite such date:
Date Amount
---- ------
December 31, 1997 $60,000,000.00
December 31, 1998 $60,000,000.00
Each fiscal year-end thereafter $75,000,000.00
2. Amendment to Section 8.18 of the Loan Agreement. Section 8.18
("Minimum Cash Flow") of the Loan Agreement is hereby deleted in its entirety
and replaced with the following:
"8.18 Maximum Funded Debt to EBITDA. The ratio of Funded Debt to
EBITDA, determined as of the last day of each calendar quarter and
measured for the preceding period of four calendar quarters, shall not
exceed the following prescribed amounts, as applicable:
Date Ratio
---- -----
December 31, 1997 8.50 to 1.0
March 31, 1998 8.50 to 1.0
June 30, 1998 8.00 to 1.0
September 30, 1998 7.00 to 1.0
December 31, 1998 6.30 to 1.0
March 31, 1999 6.20 to 1.0
June 30, 1999 6.80 to 1.0
September 30, 1999 6.50 to 1.0
December 31, 1999 6.30 to 1.0
March 31, 2000 5.90 to 1.0
June 30, 2000 6.80 to 1.0
3. Consent to Acquisition of Additional Store. The Borrower
previously has notified Agent and the Lenders that the Borrower intended to
enter into an agreement (such agreement, together with all exhibits, schedules
and related agreements, collectively the "Acquisition Agreement") with Champ
Industries, Inc. ("Champ"), and perhaps also one or more of its subsidiaries
(collectively, "Seller"), pursuant to which the Borrower would purchase
(collectively the "Acquisition") all of the capital stock and/or assets of
each of Perfection Roofing Materials, Inc,
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Xxxxxxxx Roofing Supply, Inc., Stone Metal Products, Inc., SHR Roofing Supply,
Inc. and United Building Supply, Inc., respectively (collectively the
"Acquired Companies"). The purchase price (as defined by Section 8.3 of the
Loan and Security Agreement) in respect of the Acquisition is in the aggregate
amount of $104,000,000 (the "Acquisition Purchase Price"). Promptly following
consummation of the Acquisition, the Borrower would cause each of the Acquired
Companies' whose capital stock was acquired to be merged (the "Mergers") into
the Borrower, such that upon consummation of the foregoing, the Borrower would
be the sole owner and operator of all of the assets and business of each of
the Acquired Companies. Section 8.3 ("Consolidations, Mergers or
Acquisitions") of the Loan and Security Agreement prescribes limitations with
respect to the maximum purchase price of an Additional Store, both
individually and in the aggregate during any calendar year. The Acquisition,
if consummated, would constitute the acquisition of an Additional Store,
subject to such limitations of Section 8.3 and the Acquisition Purchase Price
would cause the aggregate purchase price limitations prescribed therein to be
exceeded for the calendar year ending December 31, 1997. The Borrower has
requested Agent and the Lenders to (a) consent to the Acquisition and the
Mergers and the incurrence and payment of the Acquisition Purchase Price, and
(b) implement a temporary increase in the maximum purchase price limitations
for Additional Stores prescribed by clause (c) of Section 8.3 of the Loan and
Security Agreement for the calendar year ending December 31, 1997. Conditioned
as provided in subparagraphs 3.3, 3.4 and 3.5 under the proviso following,
Agent and the Lenders hereby agree as follows:
3.1. Agent and the Lenders hereby consent to the Acquisition and the
Mergers, and the incurrence and payment by the Borrower of the Acquisition
Purchase Price;
3.2. Agent and the Lenders hereby agree that notwithstanding the
provisions of clause (c) of Section 8.3 of the Loan and Security Agreement,
but otherwise subject to the Loan and Security Agreement, the Borrower may
exceed the aggregate purchase price limitation prescribed by such clause (c)
applicable to the calendar year ending December 31, 1997, provided, that not
more than $20,000,000 of such aggregate purchase price may be incurred
during the period November 4, 1997 through December 31, 1997;
provided and conditioned, however, that:
3.3. No Default or Event of Default shall have occurred as of the
date of consummation of the Acquisition or at the time of any payment on the
Acquisition Purchase Price, and no Default or Event of Default shall result
therefrom, respectively;
3.4. The Acquisition Purchase Price shall not exceed $104,000,000, of
which $60,000,000 shall be payable in cash and $44,000,000 will be comprised
of assumption of existing payable obligations owing by the Acquired
Companies, and not more than $37,000,000 of such Acquisition Purchase Price
may be in consideration for good will;
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3.5 The Borrower will not report any Accounts or Inventory acquired
in respect of the Acquisitions as Eligible Accounts or Eligible Inventory
unless and until (i) the Acquisition and the Mergers have been fully
consummated and the Borrower is the absolute owner of such Accounts and
Inventory, respectively, (ii) the Borrower has complied with each of the
other requirements of Section 8.3 of the Loan and Security Agreement (as
amended by this Amendment) applicable to the Acquisition, (iii) the Borrower
has furnished to Agent a copy of the executed xxxx of sale or other evidence
of transfer of title to the Borrower in all such Accounts and Inventory
purchased by the Borrower, and a certified copy of a certificate of merger
in respect of each of the Mergers, (iv) the Agent has received a lien search
report (including without limitation in the name of each Seller), or other
evidence satisfactory to Agent, verifying that such Accounts and Inventory
are free of any prior security interests or liens except as may be expressly
allowed by the Loan and Security Agreement,
3.6. Except as expressly provided otherwise herein, all other
requirements of Section 8.3 of the Loan and Security Agreement shall remain
in full force and effect.
The Borrower expressly acknowledges, agrees, represents and warrants that (i)
Borrower has made its own independent review and analysis with respect to the
Acquisition and has relied solely upon such review and analysis in making its
decision to enter into and consummate the Acquisition, (ii) the Borrower at
all relevant times has known and been aware of the fact that NationsBank of
Texas, N.A. ("NationsBank"), prior to the Acquisition, has had a financing
relationship with Champ and/or one or more of the Acquired Companies, and
neither NationsBank or any of its affiliates (including without limitation
NationsBanc Capital Markets, Inc.), or the Agent, the Co-Agent or any Lender
has made any representation, warranty or recommendation to the Borrower, or
made any information, financial or otherwise, available to the Borrower, in
respect of the Acquired Companies or the Acquisition, and in making its
decision to enter into and consulate the Acquisition, the Borrower has made no
reliance whatsoever on the fact of such prior financing relationship of
NationsBank or any other statements made by NationsBank or any of its
affiliates (including without limitation NationsBanc Capital Markets, Inc.),
or the Agent, the Co-Agent or any Lender.
4. Representation and Warranties of Borrower. The Borrower hereby
represents and warrants that as of the date of this Amendment (a) no event has
occurred and is continuing which, after giving effect to this Amendment,
constitutes a Default or an Event of Default, (b) the representations and
warranties of the Borrower contained in the Loan Agreement and the other
Financing Agreements are true and correct on and as of the date hereof to the
same extent as though made on and as of the date hereof, except to the extent
such representations and warranties specifically relate to an earlier date, in
which case they are true and correct as of such earlier date, (c) the
execution and delivery by the Borrower of this Amendment and the performance
by the Borrower of the Loan Agreement, as amended by this Amendment, are
within its corporate power and have been duly authorized by all necessary
corporate action, (d) this Amendment and the Loan Agreement, as amended by
this Amendment, are legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their terms, (e) the
execution and delivery by the Borrower of this Amendment and the performance
by the Borrower of the Loan Agreement, as amended by this Amendment, do not
require the consent of any Person and do not
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contravene the terms of the Borrower's Articles of Incorporation or By-Laws or
any indenture, agreement or undertaking to which the Borrower is a party or by
which the Borrower or any of its property is bound, and (f) except as
disclosed on Schedule 1 attached hereto, all schedules attached to the Loan
Agreement remain true, correct and complete.
5. Reference to and Effect on the Loan Agreement. Except as
expressly provided herein, the Loan Agreement and all other Financing
Agreements shall remain unmodified and in full force and effect and are hereby
ratified and confirmed. The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver or forbearance of (a) any right, power
or remedy of the Lenders under the Loan Agreement or any of the other
Financing Agreements, or (b) any Default or Event of Default. This Amendment
shall constitute a Financing Agreement.
6. Fees, Costs and Expenses. The Borrower agrees to pay on demand
all costs and expenses of the Agent in connection with the preparation,
negotiation, execution and delivery and closing of this Amendment and all
related documentation, including the fees and out-of-pocket expenses of
counsel for the Agent with respect thereto.
7. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto as separate counterparts, each of
which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, when taken together, shall constitute
but one and the same agreement. A telecopy of any such executed counterpart
shall be deemed valid and may be relied upon as an original.
8. Effectiveness. This Amendment shall be deemed effective
prospectively as of the Effective Date specified in the preamble upon
execution by the Borrower, the Agent, the Co-Agent and each of the Lenders
whose names appear on the signature pages below (subject, however, to the
prior satisfaction of all conditions for effectiveness as specified by this
Amendment).
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the day and year first written above.
AMERICAN BUILDERS &
ATTEST: CONTRACTORS SUPPLY CO., INC.
By: By:
------------------------- ----------------------------
Name: Name:
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Title: Title:
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NATIONSBANK OF TEXAS, N.A.
In its capacity as Agent
By:
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Name:
--------------------------
Title:
-------------------------
Address for Notice:
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Business Credit/Regional Manager:
URGENT
AMERICAN NATIONAL BANK AND
TRUST COMPANY OF CHICAGO
In its capacity as Co-Agent
By:
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Name:
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Title:
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Address for Notices:
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Attention:
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NATIONSBANK OF TEXAS, N.A.
In its capacity as a Lender
Pro Rata Share: By:
17.50% -----------------------------
Name:
---------------------------
Title:
--------------------------
Address for Notice:
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Business Credit/Regional Manager:
URGENT
AMERICAN NATIONAL BANK AND
TRUST COMPANY OF CHICAGO
In its capacity as a Lender
Pro Rata Share: By:
12.50% -----------------------------
Name:
---------------------------
Title:
--------------------------
Address for Notices:
--------------------------------
--------------------------------
Attention:
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BANKAMERICA BUSINESS CREDIT, INC.
Pro Rata Share: By:
17.50% -----------------------------
Name:
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Title:
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Address for Notices:
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Attention:
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LASALLE BUSINESS CREDIT, INC.
Pro Rata Share: By:
11.25% -----------------------------
Name:
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Title:
--------------------------
Address for Notices:
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Attention:
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XXXXXX TRUST AND SAVINGS BANK
Pro Rata Share: By:
11.25% -----------------------------
Name:
---------------------------
Title:
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Address for Notices:
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Attention:
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FLEET CAPITAL CORPORATION
Pro Rata Share: By:
11.25% -----------------------------
Name:
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Title:
--------------------------
Address for Notices:
--------------------------------
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Attention:
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SANWA BUSINESS CREDIT CORPORATION
Pro Rata Share: By:
13.75% -----------------------------
Name:
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Title:
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Address for Notices:
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Attention:
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CONSENT AND AGREEMENT BY VALIDITY GUARANTORS
Each of the undersigned consents to the foregoing Tenth Amendment to
Amended and Restated Loan and Security Agreement ("Amendment") and each of the
undersigned agrees to the continued effectiveness of the Validity
Certification, respectively, originally executed and delivered to American
National Bank and Trust Company of Chicago by the undersigned, as the case may
be, on July 1, 1993. All references in the each Validity Certification,
respectively, to the Amended and Restated Loan and Security Agreement shall be
deemed to be to the Amended and Restated Loan and Security Agreement as
amended by the Amendment and all prior and subsequent amendments thereto.
This agreement has been executed as of the Effective Date specified in the
Amendment.
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Xxxxxxx X. Xxxxxxxxx
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Xxxxxx X. Story
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SCHEDULE 1
to
TENTH AMENDMENT
to
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
among
AMERICAN BUILDERS & CONTRACTORS SUPPLY CO., INC.,
NATIONSBANK OF TEXAS, N.A., AS AGENT
AND THE CO-AGENT AND LENDERS PARTY THERETO
ADDITIONAL SCHEDULE INFORMATION
[insert, if any]
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