Contract
EXHIBIT
10.08
EXECUTION
COPY
SECOND
AMENDMENT, dated as of September 10, 2007 (“Amendment”), to and under
CREDIT AND SECURITY AGREEMENT, dated as of July 28, 2004 (as
amended from time to time, the “Credit Agreement”), by and among
AMERICAN/UNIVERSAL SUPPLY, INC., a New York corporation
(“American”), THE RAL SUPPLY GROUP, INC., a New York
corporation (“RAL”), UNIVERSAL SUPPLY GROUP, INC., a New York
corporation (“Universal”; American, RAL and Universal are each individually
referred to as a “Borrower” and are collectively referred to as the
“Borrowers”), S&A PURCHASING CORP., a New York corporation,
to be renamed S&A Supply, Inc. immediately following the consummation of the
transactions contemplated by the Purchase Agreement (as defined below)
(“S&A”; each Borrower and S&A are individually referred to as a “Loan
Party” and are collectively referred to as the “Loan Parties”), and
XXXXX FARGO BANK, NATIONAL ASSOCIATION, acting through its
Xxxxx Fargo Business Credit operating division, as successor to Xxxxx Fargo
Business Credit, Inc. (the “Lender”). Terms which are capitalized in
this Amendment and not otherwise defined shall have the meanings ascribed to
such terms in the Credit Agreement.
WHEREAS,
the Borrowers and Colonial have made in favor of the Lender that
certain Guaranty By Corporations, dated as of July 28, 2004 (as amended,
modified, supplemented or restated from time to time, the
“Guaranty”);
WHEREAS,
S&A is party to that certain Asset Purchase Agreement dated as of
September 10, 2007 (the “Purchase Agreement”), among S&A, S&A Supply,
Inc., a Massachusetts corporation, S&A Realty, Inc., a Massachusetts
corporation, S&A Management, Inc., a Massachusetts corporation, Xxxxx X.
Xxxx (“Xxxxx”), Xxxxx and Xxxxxx X. Xxxx, as trustees of The Discretionary Trust
under The Xxxxxx X. Xxxx Revocable Trust, dated January 12, 1999, Xxxxx Xxxx,
Xxxxx Xxxx, Xxxx Xxxx and Colonial, pursuant to which S&A shall purchase
certain assets of S&A Supply, Inc. and S&A Management,
Inc.;
WHEREAS,
S&A desires to become a party to the Credit Agreement, the Guaranty
and the other Loan Documents to which any Borrower is a party; and
WHEREAS,
the Loan Parties have requested, among other things, that the Lender
(i) increase the Maximum Line to Twenty-Five Million Dollars ($25,000,000)
and
the inventory sublimit to Thirteen Million Five Hundred Thousand Dollars
($13,500,000), (ii) provide the Borrowers with an overadvance sublimit up to
Five Hundred Thousand Dollars ($500,000) and a Structural Sublimit up to One
Million Dollars ($1,000,000) and (iii) extend the maturity date of the Credit
Agreement, and the Lender has agreed to the foregoing requests, on the terms
and
conditions set forth herein.
NOW,
THEREFORE, in consideration of the mutual promises contained herein,
and for other good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, the Loan Parties and the Lender hereby agree
as
follows:
Section
One. Addition of S&A as a
Borrower. Effective upon satisfaction
of the conditions precedent set forth in Section Four hereof, S&A hereby
agrees with the Lender as follows:
(i) S&A
hereby acknowledges, agrees and confirms that, by its execution of this
Amendment, S&A will be deemed to be a party to the Credit Agreement, the
Guaranty and each of the other Loan Documents to which any Borrower is a party
and a “Borrower” and a “Guarantor” for all purposes of the Credit Agreement, the
Guaranty and such other Loan Documents, and shall have all of the obligations
of
a Borrower or a Guarantor, as the case may be, thereunder as if it had executed
the Credit Agreement, the Guaranty and such other Loan Documents on the
respective dates thereof. S&A hereby ratifies, as of the date
hereof, and agrees to be bound by, all of the terms, provisions and conditions
applicable to the Borrowers and the Guarantors, as the case may be, contained
in
the Credit Agreement, the Guaranty and such other Loan Documents.
(ii) Without
limiting generality of the foregoing terms of paragraph (i), S&A hereby
pledges, assigns and grants to the Lender a security interest in and a Lien
upon
all of the Collateral, as security for the payment and performance of the
Obligations. S&A acknowledges and agrees that, in applying the
law of any jurisdiction and the provisions of Article 9 of the Uniform
Commercial Code of any jurisdiction, the defined term Collateral covers all
assets of S&A. The Lender may at any time and from time to time
file, pursuant to the provisions of Section 3.9 of the Credit Agreement,
financing and continuation statements and amendments thereto reflecting the
same.
(iii) S&A
hereby represents and warrants to the Lender that:
(a) During
its existence, S&A has done business solely under the names set forth in
Schedule 1 hereto. S&A’s chief executive office and
principal place of business is, and after giving effect to the transactions
contemplated by the Purchase Agreement will be, located at the address set
forth
in Schedule 1 hereto, and all of S&A’s records relating to its
business or the Collateral are kept at that location. All Inventory
and Equipment is, and after giving effect to the transactions contemplated
by
the Purchase Agreement will be, located at that location or at one of the other
locations set forth in Schedule 1 hereto, which such locations are owned
or leased by S&A, as indicated on Schedule 1
hereto. S&A’s tax identification number is correctly set forth in
Schedule 1 hereto.
(b) Set
forth on Schedule 2 hereto is a list of all Subsidiaries of
S&A.
(c) Set
forth on Schedule 3 is a list of all actions, suits or proceedings
pending, or to the knowledge of S&A, threatened against or affecting S&A
or the properties of S&A before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
which, if determined adversely to S&A, could have a Material Adverse
Effect.
(d) To
the best of S&A’s knowledge, except as disclosed on Schedule 4
hereto, the Premises are not and never have been listed on the National
Priorities List, the Comprehensive Environmental Response, Compensation and
Liability Information System or any similar federal, state or local list,
schedule, log, inventory or database.
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(e) The
exact legal name and jurisdiction of formation of S&A on the date hereof is
as set forth in the first paragraph of this Amendment.
(f) Except
as set forth on Schedule 5 hereto, S&A has not during the five years
preceding the date hereof (i) changed its legal name, (ii) changed its
jurisdiction of formation or (iii) been party to a merger, consolidation or
other change in structure.
(g) S&A
possesses all of the licenses, permits, patents, copyrights, trademarks and
tradenames necessary to conduct its business, there has been no assertion or
claim of violation or infringement with respect thereto and all such licenses,
permits, patents, copyrights, trademarks and tradenames are listed on
Schedule 6 hereto. S&A has paid all licensing and permit
fees required to maintain all of the licenses and permits necessary for it
to
conduct its business as presently conducted.
(h) Except
as set forth on Schedule 7 hereto and except for Permitted Liens, there
are no Liens upon any of S&A’s assets.
(i) Debt
of S&A in existence on the date hereof and after giving effect to the
transactions contemplated by the Purchase Agreement is listed on
Schedule 8 hereto.
(j) Guaranties,
endorsements and other direct or contingent liabilities in connection with
the
obligations of other Persons, in existence on the date hereof and after giving
effect to the transactions contemplated by the Purchase Agreement are listed
on
Schedule 9 hereto.
(k) Loans
and advances to, and investments and other interests in, any other Person in
existence on the date hereof and after giving effect to the transactions
contemplated by the Purchase Agreement are listed on Schedule 10
hereto.
Section
Two. Amendments to Credit
Agreement. Effective upon satisfaction
of the conditions precedent set forth in Section Four
hereof, the Credit Agreement is hereby amended as
follows:
(i) Section
1.1. Definitions. (1) The
following defined terms contained in Section 1.1 of the Credit Agreement are
amended and restated as follows:
“Banking
Day” means a day on which the Lender is open for business that is not a
Saturday, Sunday or other day on which banks are required or permitted to be
closed in Minneapolis, Minnesota, or New York, New York and, if such day relates
to a LIBOR Advance, a day on which dealings are carried on in the London
interbank eurodollar market.
“Borrowing
Base” means, with respect to any Borrower at any time, and subject to
change from time to time in the Lender’s sole discretion, which discretion shall
be exercised in a commercially reasonable manner, the lesser
of:
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(a) the
Maximum Line, minus the L/C Amount, minus the aggregate principal
amount of outstanding Advances made to the other Borrowers; or
(b) the
sum of:
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(i)
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eighty-five
percent (85%) of such Borrower’s Eligible Accounts,
plus
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(ii)
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the
lesser of: (A) up to fifty-seven percent (57%) of the lower of the
cost or
fair market value, as determined in accordance with GAAP, of such
Borrower’s Eligible Inventory, but in no event to exceed Thirteen Million
Five Hundred Thousand Dollars ($13,500,000.00), minus the aggregate
principal amount of outstanding Advances made to the other Borrowers
pursuant to this clause (ii), and (B) up to ninety-five percent (95%)
of
the liquidation value of such Borrower’s Eligible Inventory, net of
liquidation and other related expenses, as determined by the Lender
in its
sole discretion, which discretion shall be exercised in a commercially
reasonable manner, but in no event to exceed Thirteen Million Five
Hundred
Thousand Dollars ($13,500,000.00), minus the aggregate principal
amount of outstanding Advances made to the other Borrowers pursuant
to
this clause (ii), plus
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(iii)
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the
amount of the Structural Sublimit then in effect, minus the
aggregate principal amount of outstanding Advances made to the other
Borrowers pursuant to this clause (iii),
plus
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(iv)
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the
amount of the Overadvance Sublimit then in effect, minus the
aggregate principal amount of outstanding Advances made to the other
Borrowers pursuant to this clause (iv),
minus
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(v)
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the
amount of the Landlord Reserve then in effect, apportioned among
the
Borrowers in such manner as the Lender may determine from time to
time in
its sole discretion, which discretion shall be exercised in a commercially
reasonable manner, minus
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(vi)
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the
amount of the Availability Reserve then in effect, apportioned among
the
Borrowers in such manner as the Lender may determine from time to
time in
its sole discretion, which discretion shall be exercised in a commercially
reasonable manner, minus
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(vii)
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the
portion of the L/C Amount relating to Letters of Credit issued for
such
Borrower’s account, plus, the aggregate L/C Amount relating to
Letters of Credit issued for the other Borrowers,
minus
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(viii)
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such
other reserves as the Lender may establish from time to time in its
sole
discretion, which discretion shall be exercised in a commercially
reasonable manner.
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Notwithstanding
the foregoing, in the event that dilution for all Accounts during any ninety
(90) consecutive day period, expressed as a percentage, as determined by the
Lender in its sole discretion, exercised in a commercially reasonable manner,
pursuant to its periodic examination of the Borrowers’ collateral reports and/or
books and records, exceeds four percent (4%), then the Lender, in its sole
discretion, may implement and maintain such reserves and/or reduce the advance
percentages used in determining the Borrowing Base to adjust for such
excess.
“Default
Rate” means an annual interest rate in effect during a Default Period
or following the Termination Date, which interest rate shall be equal to three
percent (3%) over the applicable Floating Rate or the LIBOR Advance Rate, as
the
case may be, as such rate may change from time to time.
“Floating
Rate” means, with respect to all Floating Rate Advances, an annual rate
equal to the Prime Rate minus one-quarter of one percent (¼ of 1%);
provided, that if the Borrowers’ Net Income for the fiscal year ending on
or about December 31, 2007 exceeds One Million Dollars ($1,000,000), the
Floating Rate shall be an annual rate equal to the Prime Rate minus
one-half of one percent (½ of 1%), which annual rate, in each case, shall change
when and as the Prime Rate changes. Such reduction, if any, in the
Floating Rate shall become effective on the first calendar day of the month
following the month of receipt by the Lender of the unaudited financial
statements for the fiscal year ending on or about December 31, 2007 as required
under Section 6.1(a); provided, however, that such reduction shall
become effective, retroactive, as of the first calendar day of the month of
receipt by the Lender of such financial statements, if such financial statements
are received by the Lender prior to the 25th day of
such month;
provided, further, that (i) no such reduction in the Floating Rate
will be made if a Default Period exists at the time that such reduction would
otherwise be made and (ii) if such financial statements are amended or restated
and such amended or restated financial statements do not indicate that the
Borrowers’ Net Income for the fiscal year ending on or about December 31, 2007
exceeded One Million Dollars ($1,000,000), the Floating Rate shall be increased
to the Prime Rate minus one-quarter of one percent (¼ of 1%) effective as
of the date on which the Floating Rate was previously reduced and the Borrowers
shall immediately pay to the Lender interest on the outstanding Advances at
such
higher Floating Rate from the effective date of such increase to the extent
such
interest has not been paid.
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“Original
Maturity Date” means August 1, 2012.
“Overadvance
Sublimit” means, from the period beginning on April 1 and ending on
July 31 of each calendar year during the term of this Agreement, the amount
of
Five Hundred Thousand Dollars ($500,000), which amount shall be automatically
reduced each week by the amount of One Hundred Thousand Dollars ($100,000)
on
August 1 of such calendar year and on each corresponding day of each
following week thereafter, until reduced to zero (-0-).
“Structural
Sublimit” means, on the Acquisition Date, the sum of One Million
Dollars ($1,000,000), which amount shall be automatically and permanently
reduced on the first day of each month, beginning with the month of November
2007, by the sum of Forty-One Thousand Six Hundred Sixty-Six Dollars and
Sixty-Seven Cents ($41,666.67), until reduced to zero (-0-).
(2) The
following defined terms are added to Section 1.1 of the Credit Agreement in
their proper alphabetical sequence:
“Acquisition
Date” means the Closing Date as defined in the Purchase
Agreement.
“Floating
Rate Advance” means an Advance bearing interest at the Floating
Rate.
“Interest
Period” means the period that commences on (and includes) the Banking
Day on which either a LIBOR Advance is made or continued, or on which a Floating
Rate Advance is converted to a LIBOR Advance, and ending on (but excluding)
the
Banking Day numerically corresponding to such date that is one, three, six,
or
twelve months thereafter as designated by the Borrower, during which period
the
outstanding principal balance of the LIBOR Advance shall bear interest at the
LIBOR Advance Rate; provided, however, that:
(a)
no
Interest Period may be selected for an Advance for a principal amount less
than
Five Hundred Thousand Dollars ($500,000), and no more than three (3) different
Interest Periods may be outstanding at any one time;
(b)
if an
Interest Period would otherwise end on a day which is not a Banking Day, then
the Interest Period shall end on the next Banking Day thereafter, unless that
Banking Day is the first Banking Day of a month, in which case the Interest
Period shall end on the last Banking Day of the preceding
month;
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(c)
no
Interest Period may end later than the Original Maturity Date; and
(d)
in no
event shall the Borrower select Interest Periods with respect to Advances which,
in the aggregate, would require payment of a contracted funds breakage fee
under
this Agreement in order to make required principal payments.
“LIBOR”
means the rate per annum (rounded upward, if necessary, to the nearest
whole 1/16th of one percent (1%)) determined pursuant to the following
formula:
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LIBOR
=
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Base
LIBOR
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100%
- LIBOR Reserve Percentage
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(i)
“Base LIBOR” means the rate per annum for United States dollar
deposits quoted by the Lender as the Inter-Bank Market Offered Rate, with the
understanding that such rate is quoted by the Lender for the purpose of
calculating effective rates of interest for loans making reference thereto,
on
the first day of an Interest Period for delivery of funds on said date for
a
period of time approximately equal to the number of days in such Interest Period
and in an amount approximately equal to the principal amount to which such
Interest Period applies. The Borrowers understand and agree that the
Lender may base its quotation of the Inter-Bank Market Offered Rate upon such
offers or other market indicators of the Inter-Bank Market as the Lender in
its
discretion deems appropriate including the rate offered for U.S. dollar deposits
on the London Inter-Bank Market.
(ii)
“LIBOR Reserve Percentage” means the reserve percentage
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for “Eurocurrency Liabilities” (as defined in Regulation D of the
Federal Reserve Board, as amended), adjusted by the Lender for expected changes
in such reserve percentage during the applicable Interest Period.
“LIBOR
Advance” means an Advance bearing interest at the LIBOR Advance
Rate.
“LIBOR
Advance Rate” means, with respect to all LIBOR Advances, an annual
interest rate equal to the sum of LIBOR plus two and one-half of one
percent (2.5%); provided, that if the Borrowers’ Net Income for the
fiscal year ending on or about December 31, 2007 exceeds One Million Dollars
($1,000,000), the LIBOR Advance Rate shall be an annual rate equal to the sum
of
LIBOR plus two and one-quarter of one percent (2.25%), such reduction, if
any, in the LIBOR Advance Rate to become effective on the first calendar day
of
the month following the month of receipt by the Lender of the unaudited
financial statement for the fiscal year ending on or about December 31, 2007
as
required under Section 6.1(a); provided, however, that such
reduction shall become effective, retroactive, as of the first calendar day
of
the month of receipt by the Lender of such financial statements, if such
financial statements are received by the Lender prior to the 25th day of
such month;
provided, further, that (i) no such reduction in the LIBOR Advance
Rate will be made if a Default Period exists at the time that such reduction
would otherwise be made and (ii) if such financial statement is amended or
restated and such amended or restated financial statement does not indicate
that
the Borrowers’ Net Income for the fiscal year ending on or about December 31,
2007 exceeded One Million Dollars ($1,000,000), the Lender may increase the
LIBOR Advance Rate to LIBOR plus two and one-half of one percent (2.5%)
effective as of the date on which the LIBOR Advance Rate was previously reduced
and the Borrowers shall immediately pay to the Lender interest on the
outstanding Advances at such higher LIBOR Advance Rate from the effective date
of such increase to the extent such interest has not been paid.
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“Purchase
Agreement” means that certain Asset Purchase Agreement dated as of
September 10, 2007, among S&A Purchasing Corp., a New York corporation,
S&A Supply, Inc., a Massachusetts corporation, S&A Realty, Inc., a
Massachusetts corporation, S&A Management, Inc., a Massachusetts
corporation, Xxxxx X. Xxxx (“Xxxxx”), Xxxxx and Xxxxxx X. Xxxx, as trustees of
The Discretionary Trust under The Xxxxxx X. Xxxx Revocable Trust, dated January
12, 1999, Xxxxx Xxxx, Xxxxx Xxxx, Xxxx Xxxx and Colonial, pursuant to which
S&A shall purchase certain assets of S&A Supply, Inc.
(ii) Section
2.1. Revolving
Advances. Sections 2.1(a) and (b) of
the Credit Agreement are amended and restated as follows:
(a)
The
Borrowing Agent will not request any Advance on behalf of a Borrower under
this
Section 2.1 if, after giving effect to such requested Advance, the sum of the
outstanding and unpaid Advances made to such Borrower under this Section 2.1
would exceed such Borrower’s Borrowing Base. Each Advance shall be
funded as either a Floating Rate Advance or a LIBOR Advance, as the Borrowing
Agent shall specify in a request delivered to the Lender conforming to the
requirements of Section 2.2(b); Floating Rate Advances and LIBOR Advances may
be
outstanding at the same time. Each request for a LIBOR Advance shall
be in multiples of One Hundred Thousand Dollars ($100,000), with a minimum
request of at least Five Hundred Thousand Dollars ($500,000), provided
that the Borrowing Agent may not request a LIBOR Advance if after giving effect
thereto the aggregate principal amount of outstanding LIBOR Advances would
exceed seventy-five percent (75%) of the aggregate principal amount of all
outstanding Advances. LIBOR Advances shall not be available during
Default Periods.
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(b)
Each
request by the Borrowing Agent for an Advance from the Lender shall be made
before 11:00 a.m. (New York time) of the day of the requested Advance. Requests
may be made in writing or by telephone, specifying the Borrower on behalf of
which such Advance is being requested, the date of the requested
Advance, the amount thereof, whether the Advance shall be a Floating
Rate Advance or a LIBOR Advance and, with respect to any LIBOR Advance, the
Interest Period applicable thereto. Each request shall be made by (A)
any Authorized Officer of the Borrowing Agent; or (B) any person
designated as the Borrowing Agent’s agent by any Authorized Officer of the
Borrowing Agent in a writing delivered to the Lender; or (C) any person whom
the
Lender reasonably believes to be an Authorized Officer of the Borrowing Agent
or
such a designated agent.
(iii) Section
2.3. Reduction of Structural
Sublimit; Mandatory Prepayment of Structural Sublimit
Advances. Section 2.3 of the Credit Agreement is amended
and restated as follows:
Section
2.3 [RESERVED]
(iv) Section
2.7. Interest; Default
Interest; Usury. Section 2.7(a) of the
Credit Agreement is amended and restated as follows:
(a)
Interest. Except as set forth in
paragraphs (b) and (c) below and in Section 2.21, the outstanding principal
amount of the Advances shall bear interest at the Floating Rate.
(v) Section
2.8. Fees. Sections
2.8(b) and (c) of the Credit Agreement are amended and restated as
follows:
(b)
Collateral Monitoring Fees. The Borrowers
jointly and severally agree to pay the Lender a monthly collateral monitoring
fee of $500 per month. Such fee shall be payable and charged to the
Borrowers’ accounts on the first day of each month with respect to the prior
month.
(c)
Unused Line Fee. In the event the average closing daily
unpaid aggregate balance of all Advances hereunder during any calendar month
is
less than Twenty Million Dollars ($20,000,000), the Borrowers jointly and
severally agree to pay to the Lender a fee at a rate per annum equal to
one-quarter of one percent (¼ of 1%) on the amount by which Twenty Million
Dollars ($20,000,000) exceeds such average daily unpaid aggregate balance.
Such
fee shall be payable and charged to the Borrowers’ accounts on the first day of
each month with respect to the prior month. In the event that the
Credit Facility is terminated on any day other than the first day of a month,
the unused line fee for the month in which the Credit Facility is terminated
shall be calculated for the portion of that month which elapsed prior to
termination and shall be payable on the Termination Date.
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(vi)
Section
2.9. Computation of Interest
and Fees; When Interest Due and Payable. Section 2.9 of
the Credit Agreement is amended and restated as follows:
Section
2.9 Computation of Interest and Fees; When Interest Due and
Payable. Interest accruing on the outstanding principal balance
of the Advances and fees hereunder outstanding from time to time shall be
computed on the basis of actual number of days elapsed in a year of 360
days. Interest shall be payable in arrears on the first day of each
month and on the Termination Date (each an “Interest Payment Date”), or if any
such day is not a Banking Day, on the next succeeding Banking
Day. Interest will accrue from the most recent date to which interest
has been paid or, if no interest has been paid, from the date of advance to
the
Interest Payment Date. If an Interest Payment Date is not a Banking
Day, payment shall be made on the next succeeding Banking
Day. Interest accruing on each LIBOR Advance shall be due
and payable on the last day of the applicable Interest Period; provided,
however, for Interest Periods that are longer than one month, interest
shall nevertheless be due and payable monthly on the last day of each month,
and
on the last day of the Interest Period.
(vii) Section
2.11. Prepayment;
Termination of Credit Facility by the Borrowers; Termination Fees; Breakage
Fees. Section 2.11 of the Credit
Agreement is amended by (i) amending and restating paragraph (a) and (ii) adding
a new paragraph (d) to the end thereof as follows:
(a)
Termination by the Borrowers. Upon
termination of the Credit Facility on the Maturity Date, the Borrowers shall
provide the Lender with an executed release, in form and substance satisfactory
to the Lender, of any and all claims which each Borrower may have or thereafter
have under this Agreement, any Loan Document or otherwise. The
Borrowers may terminate the Credit Facility at any time by: (A) giving at least
thirty (30) days’ prior written notice to the Lender of their intention to
terminate the Credit Facility; (B) paying the Lender termination fees and
contracted funds breakage fees in accordance with subsections (b) and (d),
respectively, below if the Borrowers terminate the Credit Facility effective
as
of any date other than the Maturity Date; and (C) providing the Lender with
an
executed release in form and substance satisfactory to the Lender, of any and
all claims which each Borrower may have or thereafter have under this Agreement,
any Loan Document or otherwise.
(d)
Breakage Fees. The Borrowers may prepay the
principal amount of the Revolving Note at any time in any amount, whether
voluntarily or by acceleration, provided, however, that if the
principal amount of any LIBOR Advance is prepaid, the Borrowers shall pay to
the
Lender immediately upon demand a contracted funds breakage fee equal to the
sum
of the discounted monthly differences for each month from the month of
prepayment through the month in which the related Interest Period ends,
calculated as follows for each such month:
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(i)
Determine
the amount of interest which would have accrued each month on the amount prepaid
at the interest rate applicable to such amount had it remained outstanding
until
the last day of the applicable Interest Period.
(ii) Subtract
from the amount determined in (i) above the amount of interest which would
have
accrued for the same month on the amount prepaid for the remaining term of
such
Interest Period at LIBOR in effect on the date of prepayment for new loans
made
for such term in a principal amount equal to the amount prepaid.
(iii) If
the result obtained in (ii) for any month is greater than zero, discount that
difference by LIBOR used in (ii) above.
The
Borrowers acknowledge that prepayment of the Revolving Note and any LIBOR
Advance may result in the Lender incurring additional costs, expenses or
liabilities, and that it is difficult to ascertain the full extent of such
costs, expenses or liabilities. The Borrowers therefore agree to pay
the above-described contracted funds breakage fee and agrees that said amount
represents a reasonable estimate of the contracted funds breakage costs,
expenses and/or liabilities of the Lender.
(viii)
Section 2.12. Section 2.12 of the
Credit Agreement is amended and restated as follows:
Section
2.12 Mandatory
Prepayments. Without notice or demand, if the outstanding
principal balance of the Advances made to any Borrower, plus the L/C Amount
allocable to such Borrower, shall at any time exceed such Borrower’s Borrowing
Base, the Borrowers shall immediately repay the Advances to the extent necessary
to eliminate such excess. Any payment received by the Lender under
this Section 2.12 or under Section 2.11 may be applied to the
Advances, including interest thereon and any fees, commissions, costs and
expenses hereunder and under the other Loan Documents, in such order and in
such
amounts as the Lender, in its discretion, may from time to time
determine. In furtherance and not in limitation of Section 2.3, the
Borrowers jointly and severally agree to permanently repay the aggregate
principal balance of the Structural Sublimit Advances (i) on the first Banking
Day of each month, beginning with the month of November 2007, by an
amount equal to Forty-One Thousand Six Hundred Sixty-Six Dollars and Sixty-Seven
Cents ($41,666.67), until the aggregate principal balance of the Structural
Sublimit Advances shall be reduced to zero (-0-). In furtherance and
not in limitation of Section 2.3, the Borrowers jointly and severally agree
to
repay the aggregate principal balance of the outstanding Overadvances, if any,
weekly by an amount equal to One Hundred Thousand Dollars ($100,000.00)
beginning on August 1 of each year and on the corresponding day of each week
thereafter, until the aggregate principal balance of the Overadvances shall
be
reduced to zero (-0-).
-
11 -
(ix) Section
2.13. Payments. Section
2.13 of the Credit Agreement is amended and restated as follows:
Section
2.13 Payments. Any
payments of principal, interest, fees or any other amounts payable hereunder
or
under any other Loan Document shall be made to the Lender prior to 12:00 noon
New York time on the due date thereof in immediately available
funds. All payments to the Lender shall be made in immediately
available funds. For purposes of determining the balance of the Advances
outstanding, the Lender will credit (conditional upon final collection) all
such
payments to the account of the Borrowers upon receipt by the Lender
of good funds in dollars of the United States of America in the Lender’s
account, provided, however, for purposes of computing interest on the
Obligations, the Lender will credit (conditional upon final collection) all
such
payments to the Borrowers’ account one (1) day after receipt by Lender of such
immediately available funds in dollars of the United States of America in the
Lender’s account. Any amount received by the Lender after 12:00 noon
New York time on any Banking Day shall be deemed received on the next Banking
Day. The Lender may hold all payments not constituting immediately
available funds for one (1) additional day before applying them to the
Obligations. Notwithstanding anything in Section 2.1, the Borrowers hereby
authorize the Lender, in its discretion at any time or from time to time,
without the request of any Borrower or the Borrowing Agent and even if the
conditions set forth in Section 4.2 would not be satisfied, to make an Advance
in an amount equal to the portion of the Obligations from time to time due
and
payable. Any sums expended by the Lender due to the failure of any Borrower
to
perform or comply with its obligations under this Agreement or any other Loan
Document, including, but not limited to the payment of taxes, Liens, insurance
premiums or leasehold obligations, shall be charged to the account of the
Borrowers as an Advance and added to the Obligations; provided, that the Lender
shall have no obligation to make any such payment and shall not by so doing
be
deemed to have assumed any obligation or liability of any Borrower.
(x) Article
II. Amount and Terms of the
Credit Facility. Article II of the
Credit Agreement is amended by adding a new Section 2.21 thereto as
follows:
Section
2.21 LIBOR
Advances.
(a)
Converting Floating Rate Advances to LIBOR Advances;
Procedures. So long as no Default Period is in effect,
the Borrowers may convert all or any part of the principal amount of any
outstanding Floating Rate Advance into a LIBOR Advance by requesting that the
Lender convert the same no later than 11:00 a.m. (New York time) on the Banking
Day on which the Borrowers wish the conversion to become effective;
provided that the Borrowers may not convert any outstanding Floating Rate
Advance into a LIBOR Advance (i) if after giving effect thereto the aggregate
principal amount of outstanding LIBOR Advances would exceed seventy-five percent
(75%) of the aggregate principal amount of all outstanding Advances or
(ii) during Default Periods. Each request that conforms to
the terms of this Agreement shall be effective upon receipt by the Lender and
shall be confirmed in writing if the Lender so requests by any Officer or
designated agent identified in Section 2.1(b) or a Person reasonably believed
by
the Lender to be such an Officer or designated agent, which request shall
specify the Banking Day on which the conversion is to occur, the total amount
of
the Floating Rate Advance to be converted, and the applicable Interest
Period. Each such conversion shall occur on a Banking Day, and the
aggregate amount of Floating Rate Advances converted to LIBOR Advances shall
be
in multiples of One Hundred Thousand Dollars ($100,000), with a
minimum conversion amount of at least Five Hundred Thousand Dollars
($500,000).
-
12 -
(b)
Procedures at End of an Interest
Period. Unless the Borrowers request a new LIBOR
Advance in accordance with the procedures set forth below, or prepay the
principal of an outstanding LIBOR Advance at the expiration of an Interest
Period, the Lender shall automatically and without request of the Borrowers
convert each LIBOR Advance to a Floating Rate Advance on the last day of the
relevant Interest Period. So long as no Default exists, the Borrowers
may cause all or any part of any maturing LIBOR Advance to be renewed as a
new
LIBOR Advance by requesting that the Lender continue the maturing Advance as
a
LIBOR Advance no later than the Cut-off Time on the Banking Day constituting
the
first day of the new Interest Period; provided that the Borrowers may not
continue a LIBOR Advance as such (i) if after giving effect thereto the
aggregate principal amount of outstanding LIBOR Advances would exceed
seventy-five percent (75%) of the aggregate principal amount of all outstanding
Advances or (ii) during Default Periods. Each such request shall be
confirmed in writing upon the Lender’s request by any Officer or designated
agent identified in Section 2.1(b) or a Person reasonably believed by the Lender
to be such an Officer or designated agent, which confirmation shall specify
the
amount of the expiring LIBOR Advance to be continued and the applicable Interest
Period. Each new Interest Period shall begin on a Banking Day and the
amount of each LIBOR Advance shall be in multiples of One Hundred Thousand
Dollars ($100,000), with a minimum Advance of at least Five Hundred Thousand
Dollars ($500,000).
(c)
Setting and Notice of Rates. The Lender
shall, with respect to any request for a LIBOR Advance under Section 2.1 or
a
conversion or renewal of a LIBOR Advance under this Section 2.21, provide the
Borrowers with a LIBOR quote for each Interest Period identified by the
Borrowers on the Banking Day on which the request was made, if the request
is
received by the Lender prior 11:00 a.m. (New York time), or for requests
received by the Lender after 11:00 a.m. (New York time), on the next Banking
Day
or on the Banking Day on which the Borrowers have requested that the LIBOR
Advance be made effective. If the Borrowers do not immediately accept a LIBOR
quote, the quoted rate shall expire and any subsequent request from the
Borrowers for a LIBOR quote shall be subject to redetermination by the Lender
of
the applicable LIBOR for the LIBOR Advance.
-
13 -
(d)
Taxes and Regulatory Costs. The Borrowers
shall pay the Lender with respect to any LIBOR Advance, upon demand and in
addition to any other amounts due or to become due hereunder, any and all (i)
withholdings, interest equalization taxes, stamp taxes or other taxes (except
income and franchise taxes) imposed by any domestic or foreign governmental
authority and related in any manner to LIBOR, and (ii) future, supplemental,
emergency or other changes in the LIBOR Reserve Percentage, assessment rates
imposed by the Federal Deposit Insurance Corporation, or similar requirements
or
costs imposed by any domestic or foreign governmental authority or resulting
from compliance by the Lender with any request or directive (whether or not
having the force of law) from any central bank or other governmental authority
and related in any manner to LIBOR to the extent they are not included in the
calculation of LIBOR. In determining which of the foregoing are
attributable to any LIBOR option available to the Borrowers hereunder, any
reasonable allocation made by the Lender among its operations shall be
conclusive and binding upon the Borrowers.
(xi) Schedules
to Credit Agreement. Schedule
5.1, Schedule 5.4, Schedule 5.6, Schedule 5.12,
Schedule 5.16, Schedule 7.1, Schedule 7.2, Schedule
7.3 and Schedule 7.4 of the Credit Agreement are amended by annexing
thereto and making a part thereof Schedule 1, Schedule 2,
Schedule 3, Schedule 4, Schedule 6, Schedule 7,
Schedule 8, Schedule 9 and Schedule
10 hereto,
respectively.
Section
Three. Representations and
Warranties. To induce the Lender to
enter into this Amendment, each Loan Party warrants and represents to the Lender
as follows:
(i)
all of the representations and warranties contained in the Credit Agreement
and
each other Loan Document, in each case, after giving effect to this Amendment,
continue to be true and correct in all material respects as of the date hereof,
as if repeated as of the date hereof, except for such representations and
warranties which, by their terms, are only made as of a previous
date;
(ii)
the execution, delivery and performance by each Loan Party of this Amendment,
the consummation of the transactions herein contemplated and the compliance
with
the provisions hereof have been duly authorized by all necessary corporate
action and do not and will not (A) require any consent or approval of such
Loan
Party’s stockholders; (B) require any authorization, consent, license, permit or
approval by, or registration, declaration or filing with, or notice to, any
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, or any third party, except such authorization, consent,
license, permit, approval, registration, declaration, filing or notice as has
been obtained, accomplished or given prior to the date hereof and such filings
with the Securities and Exchange Commission as are required by applicable law;
(C) violate any provision of any law, rule or regulation (including, without
limitation, Regulation X of the Board of Governors of the Federal Reserve
System) or of any order, writ, injunction or decree presently in effect having
applicability to such Loan Party or of such Loan Party’s articles of
incorporation or bylaws; (D) result in a breach of or constitute a default
under
any indenture or loan or credit agreement or any other material agreement,
lease
or instrument to which such Loan Party is a party or by which it or its
properties may be bound or affected; or (E) result in, or require, the creation
or imposition of any Lien (other than in favor of the Lender) upon or with
respect to any of the properties now owned or hereafter acquired by such Loan
Party;
-
14 -
(iii)
upon its execution, this Amendment shall constitute the legal, valid and binding
obligation of each Loan Party, enforceable against each Loan Party in accordance
with its terms;
(iv) no
Default or Event of Default has occurred and is continuing; and
(v)
since the date of the audited financial statements of the Borrowers for the
fiscal year ended December 31, 2006, there has been no material adverse change
in any Borrower’s business, properties or condition (financial or
otherwise).
Section
Four. Conditions
Precedent. The addition of S&A as a
Borrower and a Guarantor under and party to the Credit Agreement, the Guaranty
and the other Loan Documents pursuant to Section One hereof and the amendments
to the Credit Agreement set forth in Section Two hereof shall become effective
upon the date on which all of the following events shall have
occurred:
(i)
the Lender shall have received this Amendment, duly executed by each Loan
Party;
(ii)
the Lender shall have received payment of all fees and disbursements incurred
by
the Lender in connection with the preparation, negotiation and closing of this
Amendment and the transactions contemplated to occur hereunder;
(iii)
no event has occurred and is continuing which constitutes a Default or an Event
of Default, and no event or development which has had or is reasonably likely
to
have a Material Adverse Effect shall have occurred since the date of the
Borrowers’ audited financial statements for the fiscal year ended December 31,
2006;
(iv)
the Lender shall have received a certificate of each Loan Party’s Secretary or
Assistant Secretary certifying as to (A) the resolutions of such Loan Party’s
directors and, if required, shareholders, authorizing the execution, delivery
and performance of this Amendment, (B) such Loan Party’s articles of
incorporation and bylaws, and (C) the signatures of such Loan Party’s officers
or agents authorized to execute and deliver this Amendment and other
instruments, agreements and certificates to be delivered in connection with
this
Amendment on such Loan Party’s behalf;
-
15 -
(v)
the Lender shall have received a current good standing certificate issued
by the Secretary of State of each Loan Party’s state of incorporation certifying
that such Loan Party is in good standing in such state;
(vi)
the Lender shall have received a Revolving Note in the principal amount of
Twenty-Five Million Dollars ($25,000,000) duly executed and delivered by each
Loan Party, in exchange for the Revolving Note dated July 28, 2004, in the
principal amount of Fifteen Million Dollars ($15,000,000);
(vii)
the Lender shall have received true and correct copies of all
leases pursuant to which S&A is leasing any of the Premises, together with a
landlord’s waiver and consent with respect to each such lease;
(viii) the
Lender shall have received true and correct copies of any and all mortgages
pursuant to which S&A has mortgaged any of the Premises, together with a
mortgagee’s disclaimer and consent with respect to each such
mortgage;
(ix)
the Lender shall have received true and correct copies of any and all
agreements pursuant to which S&A’s property is in the possession of any
Person other than S&A together with (a) an acknowledgment and waiver of
liens from each bailee, processor and subcontractor who has possession of
S&A’s goods from time to time, (b) UCC financing statements sufficient
to protect S&A’s and the Lender’s interests in such goods, and (c) UCC
searches showing that no other secured party has filed a financing statement
covering such Person’s property other than S&A, or if there exists any such
secured party, evidence that each such secured party has received notice from
S&A and the Lender sufficient to protect S&A’s and the Lender’s
interests in S&A’s goods from any claim by such secured party;
(x)
the Lender shall have received from Xxxxxxx Xxxxxx a duly executed
original (or an executed facsimile copy) of the Support Agreement Confirmation
in substantially the form attached hereto as Exhibit C;
(xi)
the Lender shall have received an amendment to the Stock Pledge
Agreement, dated as of July 28, 2004, made by Colonial in favor of the Lender,
duly executed and delivered by Colonial, together with the stock certificates
for all of the shares of issued and outstanding common stock of S&A,
together with undated stock powers;
(xii)
the Lender shall have received a duly executed original (or an
executed facsimile copy) Post-Closing Undertaking Letter, dated as of the dated
hereof, made by S&A in favor of the Lender;
(xiii) the
Lender’s
Credit Committee shall have given its final credit approval to the transactions
contemplated to occur hereunder;
(xiv) the
Lender
shall have completed to its satisfaction an examination and inspection of the
Collateral in which S&A has rights and the books and records of S&A, and
the results thereof shall be satisfactory to the Lender;
-
16 -
(xv) the
Lender shall have received the results of current searches of appropriate filing
offices showing that (a) no state or federal tax liens have been filed and
remain in effect against S&A, (b) no financing statements have been filed
and remain in effect against S&A, and (c) the Lender has duly filed all
financing statements necessary to perfect the Liens of the Lender under the
Loan
Documents with respect to the Collateral in which S&A has rights, to the
extent such Liens are capable of being perfected by filing;
(xvi) the
Lender shall have received evidence that S&A is duly licensed or qualified
to transact business in all jurisdictions where the character of the property
owned or leased or the nature of the business transacted by it makes such
licensing or qualification necessary;
(xvii) the
Lender shall have received a certificate of an officer of S&A confirming the
representations and warranties set forth in Article V of the Credit Agreement,
after giving effect to this Amendment;
(xviii) the
Lender shall have received an opinion of counsel to each Loan Party, addressed
to the Lender;
(xix) the
Lender shall have received certificates of the insurance required under the
Credit Agreement with respect to S&A, with all casualty, loss and hazard
insurance policies containing the Lender’s loss payable endorsement in the
Lender’s favor and with all liability insurance naming the Lender as an
additional insured;
(xx)
the Lender shall have received a copy of the fully executed Purchase Agreement,
together with the exhibits and schedules thereto, which shall be satisfactory
to
the Lender;
(xxi) the
Lender shall have received from each Guarantor (including S&A) a duly
executed original (or an executed facsimile copy) of the Guarantor
Acknowledgment and Consent in substantially the form attached hereto as Exhibit
A;
(xxii) the
Lender shall have received from each holder of Subordinated Debt a duly executed
original (or an executed facsimile copy) of the Subordinated Lender
Acknowledgment and Consent in substantially the form attached hereto as Exhibit
B; and
(xxiii) the
Lender shall have received such other documents as the Lender in its sole
discretion, which discretion shall be exercised in a commercially reasonable
manner, may require.
Section
Five. General Provisions.
(i) Except
as herein expressly amended, the Credit Agreement, the Guaranty and all of
the
other Loan Documents are ratified and confirmed in all respects and shall remain
in full force and effect in accordance with their respective
terms.
-
17 -
(ii) All
references to the Credit Agreement, the Guaranty and the other Loan Documents
in
the Loan Documents shall mean the Credit Agreement, the Guaranty and the other
Loan Documents as amended as of the effective date hereof, and as amended hereby
and as hereafter amended, supplemented and modified from time to
time.
(iii) This
Amendment embodies the entire agreement between the parties hereto with respect
to the subject matter hereof and supercedes all prior agreements, commitments,
arrangements, negotiations or understandings, whether written or oral, of the
parties with respect thereto.
(iv) This
Amendment shall be governed by and construed in accordance with the internal
laws of the State of New York, without regard to the conflicts of law principles
thereof.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
-
18 -
IN
WITNESS WHEREOF, the Loan Parties and the Lender have signed below to
indicate their agreement with the foregoing and their intent to be bound
thereby.
|
AMERICAN/UNIVERSAL
SUPPLY, INC.
|
||
|
By:
|
/s/
Xxxxxxx Xxxxxx
|
|
|
Name:
Xxxxxxx Xxxxxx
|
||
|
Title:
Vice President
|
||
|
THE
RAL SUPPLY GROUP, INC.
|
||
|
By:
|
/s/
Xxxxxxx Xxxxxx
|
|
|
Name:
Xxxxxxx Xxxxxx
|
||
|
Title:
Executive Vice President
|
||
|
UNIVERSAL
SUPPLY GROUP, INC.
|
||
|
By:
|
/s/
Xxxxxxx Xxxxxx
|
|
|
Name:
Xxxxxxx Xxxxxx
|
||
|
Title:
President
|
||
|
S&A
PURCHASING CORP.
|
||
|
By:
|
/s/
Xxxxxxx Xxxxxx
|
|
|
Name:
Xxxxxxx Xxxxxx
|
||
|
Title:
President
|
||
|
XXXXX
FARGO BANK, NATIONAL ASSOCIATION, acting through its Xxxxx Fargo
Business
Credit operating division
|
||
|
By:
|
/s/
Xxxxxx Xxxxxxx
|
|
|
Name:
Xxxxxx Xxxxxxx
|
||
|
Title:
Vice President
|
||
Schedule
1
Names,
Chief Executive Offices and Collateral Locations
Name:
S&A
Purchasing Corp.
Chief
Executive Office:
S&A
Purchasing Corp.
000
Xxxxxxx Xxxx
Xxxxxxxxx,
XX 00000
Collateral
Locations:
S&A
Purchasing Corp.
20
&
00 Xxxxx Xxxxxx
Xxxxx
Xxxxxxxxxx, XX 00000
S&A
Purchasing Corp.
0000
Xxxx
Xxxxxx
Xxxxxxxxxx,
XX 00000
S&A
Purchasing Corp.
000
Xxxxxxxxxxxxx Xxxxxx
Xxxxx
Xxxxx, XX 00000
Tax
ID
Number:
00-0000000
Schedule
2
Subsidiaries
None
Schedule
3
Litigation
None
Schedule
4
Environmental
Citations
None
Schedule
5
Name
and Structural Changes
None
Schedule
6
Licenses,
Permits and Intellectual Property
None
Schedule
7
Existing
Liens
See
Schedule 8
Schedule
8
Existing
Debt
S&A
SUPPLY, INC.
VEHICLE
LOANS PAYABLE (Per 7/31/07 TB)
7/31/07
|
|
|
|
|
|
|
Proj.
|
|
|
|
|
|
|
|
Bal.
|
|
G/L
|
Bank
|
Vehicle
|
CI
|
LT
|
T
|
9/10/07
|
|
|
|
|
|
|
|
|
|
242003
260603
|
Legacy
|
Ford
F-650 Box Truck
|
9,934
|
21,841
|
31,775
|
30,823
|
|
|
|
|
|
|
|
|
|
242901
260901
|
Greylock
|
’05
Toyota Tundra
|
3,862
|
5,492
|
9,354
|
8,974
|
|
|
|
|
|
|
|
|
|
243001
267501
|
GMAC
|
’04
GMC Rack Body
|
6,470
|
4,461
|
10,931
|
10,391
|
|
|
|
|
|
|
|
|
|
243201
269001
|
GMAC
|
’04
Chevy Colorado
|
4,975
|
3,732
|
8,707
|
7,878
|
|
|
|
|
|
|
|
|
|
243203
267503
|
Greylock
|
’07
Toyota Tundra
|
7,111
|
17,182
|
24,293
|
23,817
|
|
|
|
|
|
|
|
|
|
243401
261501
|
GMAC
|
’04
Chev. PU/w/plow
(Silverado)
|
6,754
|
2,030
|
8,784
|
8,216
|
|
|
|
|
|
|
|
|
|
244501
267801
|
Greylock
|
'05
Chev. ¾ ton (Silverado)
|
5,583
|
4,713
|
10,296
|
9,293
|
|
|
|
|
|
|
|
|
|
245005
267905
|
Greylock
|
’06
Ford F350 Rack
|
2,973
|
18,134
|
21,107
|
20,509
|
|
|
|
|
|
|
|
|
|
248603
|
Berkshire
|
’03
Chev.
|
493
|
|
493
|
-0-
|
|
|
|
|
|
|
|
|
|
248703
262003
|
Greylock
|
’05
Chev. ½ ton (Silverado)
|
5,401
|
4,543
|
9,944
|
8,954
|
|
|
|
|
|
|
|
|
|
249003
270003
|
Greylock
|
’06
Ford F250 WH/RE
|
3,538
|
11,552
|
15,090
|
14,421
|
|
|
|
|
|
|
|
|
|
249203
268003
|
Ford
Credit
|
’03
Xxxx XX Van (E-150)
|
3,799
|
(1,891)
|
1,908
|
772
|
|
|
|
|
|
|
|
|
|
250103
267303
|
Berkshire
|
’06
GMC ExCab (K-25)
|
4,794
|
11,414
|
16,208
|
15,022
|
|
|
|
|
|
|
|
|
|
251001
268101
|
Legacy
|
’05
Ford F650 Box Truck
|
9,934
|
21,841
|
31,775
|
30,823
|
|
|
|
|
|
|
|
|
|
######
260503
|
Ford
Credit
|
’03
Ford F-250
|
-
|
(753)
|
(753)
|
-0-
|
|
|
|
|
|
|
|
|
|
######
267403
|
Berkshire
|
’07
GMC 3500 Rack
|
-
|
24,442
|
24,442
|
25,119
|
|
|
|
|
|
|
|
|
|
######
267603
|
Berkshire
|
’07
GMC 2500 P/UP
|
-
|
23,563
|
23,563
|
24,003
|
|
|
|
Total
|
|
|
247,917
|
239,015
|
Schedule
9
Existing
Guaranties and Contingent
Liabilities
None
Schedule
10
Existing
Investments and Loans
See
Schedule 8
Exhibit
A
Guarantor
Acknowledgment and Consent
The
undersigned, each a guarantor with respect to the obligations of
American/Universal Supply, Inc., a New York corporation (“American”), The RAL
Supply Group, Inc., a New York corporation (“RAL”), Universal Supply Group,
Inc., a New York corporation (“Universal”; American, RAL and Universal are
collectively referred to as, the “Existing Borrowers”) and S&A Purchasing
Corp., a New York corporation (the “New Borrower”; the Existing Borrowers and
the New Borrower are collectively referred to as the “Borrowers”), to Xxxxx
Fargo Bank, National Association, acting through its Xxxxx Fargo Business Credit
operating division, as successor to Xxxxx Fargo Business Credit, Inc. (the
“Lender”), under the Credit and Security Agreement, dated as of
July 28, 2004, as amended by the First Amendment, dated as of May 11, 2006
(as
further amended from time to time, the “Credit Agreement”), by and among the
Borrowers and the Lender, hereby (i) acknowledges and consents to the execution,
delivery and performance by the Borrowers of the Second Amendment, dated as
of
September 10, 2007 (the “Amendment”), to and under the Credit and Security
Agreement, by and among, the Borrowers and the Lender, attached hereto as Annex
A, (ii) reaffirms and agrees that the Guaranty by Corporations, dated as of
July
28, 2004, as supplemented by the Guarantor Acknowledgment and Consent, dated
as
of May 11, 2006 (as further supplemented or amended from time to time, the
“Guaranty”), made by the undersigned (other than New Borrower) for the benefit
of the Lender is in full force and effect, without defense, offset or
counterclaim, and will remain in full force and effect from and after the
effective date of the Amendment, and the undersigned acknowledges and guarantees
the Indebtedness (as defined in the Guaranty), including, without limiting
the
generality of the foregoing, the obligations of the Borrowers under the Credit
Agreement, as amended by the Amendment; and (iii) represents and warrants that
the execution, delivery and performance of this Guarantor Acknowledgment and
the
performance of the Guaranty as supplemented by this Consent have been duly
authorized by all necessary corporate action and do not and will not require
any
consent or approval of such undersigned’s stockholders, or require any
authorization, consent, license, permit or approval by, or registration,
declaration or filing with, or notice to, any governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
or
any third party, except such authorization, consent, license, permit, approval,
registration, declaration, filing or notice as has been obtained, accomplished
or given prior to the date hereof, in order for this Consent or the Guaranty,
as
amended and supplemented by this Consent, to be effective and enforceable
against the undersigned with respect to all of the Indebtedness (as defined
in
the Guaranty).
In
addition to the foregoing, Colonial Commercial Corp. (“Colonial”) hereby (i)
reaffirms and agrees that each of the General Security Agreement, dated as
of
July 28, 2004 (as amended from time to time, the “Security Agreement”), entered
into by Colonial and the Lender and the Securities Pledge Agreement, dated
as of
July 28, 2004, as amended by the First Amendment to the Securities Pledge
Agreement, dated as of September 10, 2007 (as further amended from time to
time,
the “Pledge Agreement” and, together with the Security Agreement, the
“Collateral Documents”), made by Colonial in favor of the Lender is in full
force and effect, and will remain in full force and effect from and after the
effective date of the Amendment, and acknowledges that the Collateral (as
defined in the Security Agreement) and the Pledged Collateral (as defined in
the
Pledge Agreement) will secure the Indebtedness (as defined in the Guaranty),
and
(ii) represents and warrants to the Lender that as of the date hereof, all
of
the representations and warranties of Colonial contained in the Collateral
Documents, as supplemented by this Consent, continue to be true and correct
in
all material respects as of the date hereof, as if repeated as of the date
hereof, except for such representations and warranties which, by their terms,
are only made as of a previous date. Unless otherwise specified herein,
capitalized terms used herein have the meanings specified in the
Amendment.
|
AMERICAN/UNIVERSAL
SUPPLY, INC.
|
||
|
By:
|
/s/
Xxxxxxx Xxxxxx
|
|
|
Name:
Xxxxxxx Xxxxxx
|
||
|
Title:
Vice President
|
||
|
THE
RAL SUPPLY GROUP, INC.
|
||
|
By:
|
/s/
Xxxxxxx Xxxxxx
|
|
|
Name:
Xxxxxxx Xxxxxx
|
||
|
Title:
Executive Vice President
|
||
|
UNIVERSAL
SUPPLY GROUP, INC.
|
||
|
By:
|
/s/
Xxxxxxx Xxxxxx
|
|
|
Name:
Xxxxxxx Xxxxxx
|
||
|
Title:
President
|
||
|
S&A
PURCHASING CORP.
|
||
|
By:
|
/s/
Xxxxxxx Xxxxxx
|
|
|
Name:
Xxxxxxx Xxxxxx
|
||
|
Title:
President
|
||
|
COLONIAL
COMMERCIAL CORP.
|
||
|
By:
|
/s/
Xxxxxxx Xxxxxx
|
|
|
Name:
Xxxxxxx Xxxxxx
|
||
|
Title:
Chief Executive Officer
|
||
Annex
A
to Guarantor
Acknowledgment
and Consent
Second
Amendment
Exhibit
B
Subordinated
Lender Acknowledgment and Consent
The
undersigned, each a holder of Subordinated Debt (as defined in the Credit and
Security Agreement, dated as of July 28, 2004 (as amended from time to time,
the
“Credit Agreement”)), by and among American/Universal Supply, Inc., a New York
corporation (“American”), The RAL Supply Group, Inc., a New York corporation
(“RAL”), Universal Supply Group, Inc., a New York corporation (“Universal”), and
S&A Purchasing Corp., a New York corporation (“S&A”; American together
with RAL, Universal and S&A are collectively referred to as, the
“Borrowers”), and Xxxxx Fargo Bank, National Association, acting through its
Xxxxx Fargo Business Credit operating division, as successor to Xxxxx Fargo
Business Credit, Inc., hereby (i) acknowledges and consents to the execution,
delivery and performance by the Borrowers of the Second Amendment, dated as
of
September 10, 2007 (the “Amendment”), to and under the Credit Agreement,
attached hereto as Annex A, (ii) reaffirms and agrees that the Subordination
Agreement set forth on Annex B attached hereto to which it is a party (each
as
amended from time to time, the “Subordination Agreement”), is in full force and
effect, and will remain in full force and effect from and after the effective
date of the Amendment, and (iii) acknowledges that the execution, delivery
and
performance of this Subordinated Lender Acknowledgment and Consent (the
“Consent”) and the performance of the Subordination Agreement, as amended and
supplemented by this Consent, do not and will not require any consent or
approval of any other Person, or require any authorization, consent, license,
permit or approval by, or registration, declaration or filing with, or notice
to, any governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, or any third party, except such
authorization, consent, license, permit, approval, registration, declaration,
filing or notice as has been obtained, accomplished or given prior to the date
hereof, in order for this Consent or the Subordination Agreement, as amended
and
supplemented by this Consent, to be effective and enforceable against the
undersigned. Unless otherwise specified herein, capitalized terms used herein
have the meanings specified in the Amendment.
|
XXXXXXXXXXX
PROPERTIES, LLC
|
||
|
By:
|
/s/
Xxxx X. Xxxxxxxxxxx
|
|
|
Name:
Xxxx X. Xxxxxxxxxxx
|
||
|
Title:
|
||
|
/s/
Xxxx X. Xxxxxxxxxxx
|
||
|
Xxxx
X. Xxxxxxxxxxx
|
||
|
COLONIAL
COMMERCIAL CORP.
|
||
|
By:
|
/s/
Xxxxxxx Xxxxxx
|
|
|
Name:
Xxxxxxx Xxxxxx
|
||
|
Title:
Chief Executive Officer
|
||
|
XXXXXXX
ASSOCIATES OF NEW YORK, INC.
|
||
|
By:
|
/s/
Xxxxxxx Xxxxxxx-Xxxxxxxx
|
|
|
Name:
Xxxxxxx Xxxxxxx-Xxxxxxxx
|
||
|
Title:
Vice President of Operations
|
||
|
For
Xxxx Xxxxxx, Xxxxxxx Xxxxxx, Xxxx X. Xxxxxxxxxxx, Xxxx X. Xxxxxxxxxxx,
Xxxxxx Xxxxxxx, Xxxxxxx Xxxxx, Xxxxx Xxxxxx, Xxxxxxx X. Xxxxxxxxx
and
Xxxxxxxx Xxxxxxxxx by Power of Attorney
|
||
|
/s/
Xxxxxxx Xxxxxx
|
||
|
Xxxxxxx
Xxxxxx, Attorney-in-Fact
|
||
Annex
A
to Subordinated Lender
Acknowledgment
and Consent
Second
Amendment
Annex
B
to Subordinated Lender
Acknowledgment
and Consent
Subordination
Agreements
Subordination
Agreement, dated as of the 28th day of
July, 2004,
as amended from time to time, made by Xxxxxxxxxxx Properties, LLC, for the
benefit of Xxxxx Fargo Business Credit, Inc.
Subordination
Agreement, dated as of the 28th day of
July, 2004,
as amended from time to time, made by Xxxx X. Xxxxxxxxxxx, for the benefit
of
Xxxxx Fargo Business Credit, Inc.
Subordination
Agreement, dated as of the 28th day of
July, 2004,
as amended from time to time, made by Colonial Commercial Corp. for the benefit
of Xxxxx Fargo Business Credit, Inc.
Subordination
Agreement, dated as of the 28th day of
July, 2004,
as amended from time to time, made by Xxxxxxx Associates of New York, Inc.,
a
New York corporation, for the benefit of Xxxxx Fargo Business Credit,
Inc.
Subordination
Agreement, dated as of the 28th day of July, 2004, as amended from time to
time,
made by Xxxx Xxxxxx, Xxxxxxx Xxxxxx, Xxxx X. Xxxxxxxxxxx, Xxxx X. Xxxxxxxxxxx,
Xxxxxx Xxxxxxx, Xxxxxxx Xxxxx, Xxxxx Xxxxxx, Xxxxxxx X. Xxxxxxxxx and Xxxxxxxx
Xxxxxxxxx, for the benefit of Xxxxx Fargo Business Credit, Inc.
Exhibit
C
Support
Agreement Confirmation
The
undersigned, each a party to that certain Support Agreement, dated as July
28,
2004 (as the same may be amended from time to time, the “Support Agreement”), by
and among American/Universal Supply, Inc. (“American”), The RAL Supply Group,
Inc. (“RAL”), Universal Supply Group, Inc. (“Universal”), and S&A Purchasing
Corp., a New York corporation (“New Borrower”; American together with RAL,
Universal and New Borrower are collectively referred to as, the “Borrowers”) and
Xxxxx Fargo Bank, National Association, acting through its Xxxxx Fargo Business
Credit operating division, as successor to Xxxxx Fargo Business Credit, Inc.
(the “Lender”), hereby (i) acknowledges and consents to the execution, delivery
and performance by the Borrowers of the Second Amendment, dated as of September
10, 2007 (the “Amendment”), to and under the Credit and Security Agreement, by
and among, the Borrowers and the Lender, attached hereto as Annex A, and (ii)
reaffirms and agrees that the Support Agreement, made by the undersigned for
the
benefit of the Lender is in full force and effect, and will remain in full
force
and effect from and after the effective date of the Amendment. Unless otherwise
specified herein, capitalized terms used herein have the meanings specified
in
the Amendment.
|
/s/
Xxxxxxx Xxxxxx
|
||
|
Xxxxxxx
Xxxxxx
|
||
|
AMERICAN/UNIVERSAL
SUPPLY, INC.
|
||
|
By:
|
/s/
Xxxxxxx Xxxxxx
|
|
|
Name:
Xxxxxxx Xxxxxx
|
||
|
Title:
Vice President
|
||
|
THE
RAL SUPPLY GROUP, INC.
|
||
|
By:
|
/s/
Xxxxxxx Xxxxxx
|
|
|
Name:
Xxxxxxx Xxxxxx
|
||
|
Title:
Executive Vice President
|
||
|
UNIVERSAL
SUPPLY GROUP, INC.
|
||
|
By:
|
/s/
Xxxxxxx Xxxxxx
|
|
|
Name:
Xxxxxxx Xxxxxx
|
||
|
Title:
President
|
||
|
S&A
PURCHASING CORP.
|
||
|
By:
|
/s/
Xxxxxxx Xxxxxx
|
|
|
Name:
Xxxxxxx Xxxxxx
|
||
|
Title:
President
|
||
Annex
A
to Support Agreement
Confirmation
Second
Amendment
