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EXHIBIT 4.19
EXECUTION COPY
FIRST AMENDMENT TO
POST-PETITION CREDIT AGREEMENT AND
MASTER SECURITY AGREEMENT
FIRST AMENDMENT (this "Amendment"), dated as of May 6, 1999, to
POST-PETITION CREDIT AGREEMENT dated as of March 29, 1999, among SERVICE
MERCHANDISE COMPANY, INC., a Tennessee corporation and a debtor and
debtor-in-possession under chapter 11 of the Bankruptcy Code (as defined in the
Credit Agreement referenced below) (the "Borrower"), the financial institutions
and other entities identified from time to time parties thereto as a Lender (as
defined in the Credit Agreement referenced below), CITICORP USA, INC., a
Delaware corporation ("Citicorp"), as collateral agent and administrative agent
for the Lenders (in such capacity, the "Administrative Agent"), and BANKBOSTON,
N.A., a national banking association ("BankBoston"), as documentation agent and
collateral monitoring agent for the Lenders (in such capacities, the "Collateral
Monitoring Agent") and to MASTER SECURITY AGREEMENT dated as of March 29, 1999,
by and among the Borrower, the Subsidiaries of the Borrower party thereto (the
"Grantors"), and the Administrative Agent.
W I T N E S S E T H:
WHEREAS, pursuant to the above-referenced Post-Petition Credit
Agreement (as, supplemented or otherwise modified from time to time, the "Credit
Agreement") the Lenders have agreed to make, and have made, Loans to the
Borrower and have issued Letters of Credit for the account of the Borrower; and
WHEREAS, pursuant to the above-referenced Master Security Agreement
(as, supplemented or otherwise modified from time to time, the "Security
Agreement") (i) the Grantors guaranteed the prompt and complete payment and
performance by the Borrower of the Credit Agreement Obligations, (ii) as
security for the Grantors' obligations, the Grantors granted the Administrative
Agent, for the benefit of the Secured Parties, a security interest in
substantially all of their tangible and intangible property and (iii) as
security for the Borrower's Credit Agreement Obligations, the Borrower granted
the Administrative Agent, for the benefit of the Secured Parties, a security
interest in substantially all of its tangible and intangible property; and
WHEREAS, the Borrower and the Lenders have agreed to amend certain of
the provisions of the Credit Agreement and the Security Agreement, upon the
terms and subject to the conditions set forth below;
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NOW, THEREFORE, in consideration of the premises and the mutual
covenants and provisions hereinafter contained, the parties hereto hereby agree
as follows:
1. DEFINED TERMS. Capitalized terms used herein and not defined
herein but defined in the Credit Agreement are used herein as defined in the
Credit Agreement.
2. AMENDMENT TO SUBSECTION 1.1.
(a) The definition of "Notes" in subsection 1.1 of the Credit
Agreement is hereby amended by inserting the words, "Term Notes" immediately
after the words "Revolving Credit Notes."
(b) Clause (i) of the definition of "Permitted Expenses" in
subsection 1.1 of the Credit Agreement is hereby amended by deleting such
clause in its entirety and inserting in its place the following clause (i):
"(i)(A) allowed professional fees and disbursements incurred by the
professionals (the "Professionals") retained, pursuant to sections 327(a)
or (e) of the Bankruptcy Code under a general retainer (excepting ordinary
course professionals) or 1103(a), by the Loan Parties and up to two
statutory committees (each, a "Committee") appointed in the Reorganization
Cases and (B) the expenses of any member of any such committee allowed
under section 503(b)(3)(F) of the Bankruptcy Code, which collectively may
not exceed the sum of $3,000,000 in the aggregate, inclusive of any
holdbacks required by the Bankruptcy Court, for post-default services, plus
professional fees and disbursements previously incurred, accrued or
invoiced prior to such Event of Default and the delivery of notice as
provided below, to the extent previously or subsequently allowed, and"
(e) The definition of "Real Property Amortization Amount" in
subsection 1.1 of the Credit Agreement is hereby amended by deleting the
definition thereof in its entirety and inserting in its place following
definition:
"Real Property Amortization Amount;" with respect to all Eligible
Mortgaged Real Property at any time, an amount equal to (a) $500,000 times
(b) the number of full three-month periods that have been elapsed since the
Effective Date.
3. AMENDMENT TO SUBSECTION 3.1(A). The first sentence of subsection
3.1(a) of the Credit Agreement is hereby amended by adding the words "(the
"Interim Maximum Amount")" before the period but after the words "the Borrowing
Base at such time and $500,000,000."
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4. AMENDMENT TO SUBSECTION 4.1(c). Subsection 4.1(c) of the Credit
Agreement is hereby amended and restated in its entirety as follows:
"(c) The Borrower shall repay the Term Loans and the Revolving Loans
within three Business Days after the receipt by the Borrower or any
Restricted Subsidiary of any Asset Sale Proceeds in respect of the
Collateral other than (i) Collateral related to the Initial GOB Stores in
an amount equal to such Asset Sale Proceeds and (ii) other Collateral from
additional GOB stores in an aggregate amount in any Fiscal Year not to
exceed $15,000,000, such payment to be applied to Term Loans and Revolving
Loans pro rata in accordance with the aggregate principal amount of Term
Loans then outstanding and Revolving Credit Commitments then in effect. The
Borrower shall repay the Revolving Loans within three business days after
the receipt by the Borrower or any Restricted Subsidiary of any other Asset
Sale Proceeds in an amount equal to such Asset Sale Proceeds. The
application of any repayment pursuant to this subsection 4.1(c) shall be
made first to ABR Loans and second to Eurodollar Loans. Amounts prepaid on
account of the Term Loans shall be applied to installments of the Term
Loans in the inverse order of their maturity and may not be reborrowed."
5. AMENDMENT TO SUBSECTION 8.11. The cross-reference in subsection 8.11
to "subsection 8.5(e)" is hereby revised to be a cross-reference to "subsection
8.5(f)".
6. AMENDMENT TO SUBSECTION 9(m). Subsection 9(m) of the Credit
Agreement is hereby amended and restated in its entirety as follows:
"Any of the Reorganization Cases shall be dismissed, suspended or
converted to a case under chapter 7 of the Bankruptcy Code (which, in the
case of a conversion, such Reorganization Case(s) individually or together
with any Reorganization Case that was previously or is simultaneously
converted own or possess assets whose value exceeds $2,000,000, which value
shall be determined by reference to the schedule of assets and liabilities
filed with the Bankruptcy Court (unless such conversion occurs prior to the
filing of such schedules, in which case any conversion shall constitute an
Event of Default) or a trustee shall be appointed in any of the
Reorganization Cases, or an application shall be filed by a Loan Party for
the approval of, or there shall arise, any other claim having priority
senior to or pari passu with the claims of the Administrative Agent and the
Lenders under the Loan Documents or any other claim having priority over
any or all administrative expenses of the kind specified in sections 503(b)
or 507(b) of the Bankruptcy Code (other than Permitted Expenses); provided
that (i) upon the occurrence of an Event of Default caused by the
appointment of a chapter 11 trustee and (ii) provided no other Event of
Default shall have occurred, the Lenders will in good faith negotiate a
stipulation with such trustee, the terms and conditions of which are
reasonably acceptable to the Lenders and the Agents, for the use of such
collateral for a period of not less than five Business Days; or
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7. AMENDMENT TO SUBSECTION 9(r)(v). Clause (v) of subsection
9(r) of the Credit Agreement is hereby amended by adding the words "if such
motion is not dismissed within 60 days of the filing thereof" before the
semicolon but immediately following the words "under section 506(e) of the
Bankruptcy Code."
8. AMENDMENT TO SUBSECTION 11.1.
(a) Clause (i) of Subsection 11.1 of the Credit Agreement is
hereby amended and restated in its entirety as follows:
"reduce the amount or extend the scheduled date of maturity of any Loan or
of any installment thereof, or reduce the stated rate of any interest or
fee payable hereunder, or extend the scheduled date of any payment thereof,
increase the amount or extend the expiration date of any Lender's
Commitment, or amend subsection 4.1(c) or the definitions of "Initial GOB
Stores" or "Asset Sale Proceeds" as used in subsection 4.1(c), in each case
without the consent of each Lender adversely affected thereby."
(b) A new clause (vii) in inserted therein (and the present
clauses (vii) through (x) are renumbered accordingly) as follows:
"(vii) amend or modify the definitions of Majority Lenders or
Required Lenders without the consent of all the Lenders,"
9. AMENDMENT TO SUBSECTION 11.6(c). Subsection 11.6(c) of the
Credit Agreement is hereby amended by:
(i) capitalizing the word "affiliate" in the first sentence
thereof and adding the words "or for the purposes of the Term Loans, engaged in
the business of investing in loans" after the words "or other entity that is
then engaged in the business of lending money"; and
(ii) amending and restating clause (d) of the first proviso
thereto in its entirety as follows:
"(d) any Lender may make an assignment consisting solely of Term Loans
(without regard to the requirements of clause (a) above) so long as the
aggregate principal amount of Term Loans so assigned (if less than the
Assignor's entire interest) is at least $5,000,000, and"
10. AMENDMENT TO SUBSECTION 11.6(e). Subsection 11.6(e) of the
Credit Agreement is hereby amended capitalizing the word "affiliate" in the
first sentence thereof.
11. AMENDMENT TO SUBSECTION 3.6(a). Subsection 3.6(a) of the
Security Agreement is hereby amended by deleting the words "five days' notice"
in the sixth sentence thereof and replacing therefor the words "five Business
Days notice".
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12. AMENDMENT TO SUBSECTION 3.7. Subsection 3.7 of the Security
Agreement is hereby amended by deleting the words "five days' notice" in the
first sentence thereof and replacing therefor the words "five Business Days
notice".
13. AMENDMENT TO SUBSECTION 11.1(a). Subsection 11.1(a) of the
Security Agreement is hereby amended by adding the words "or subsection
5.5(b)" immediately after the words "subsection 3.5" in the proviso thereto.
14. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS AMENDMENT. This
Amendment shall become effective as of the date hereof on the date (the
"Amendment Effective Date") when the following conditions precedent have been
satisfied:
(a) Certain Documents. The Administrative Agent shall have received,
on or before the Amendment Effective Date, all of the following, all of which
shall be in form and substance satisfactory to the Administrative Agent, in
sufficient originally executed copies for each of the Lenders:
(i) this Amendment, executed by the Borrower and the
Lenders constituting the Required Lenders;
(ii) the Acknowledgement attached hereto executed by each
Subsidiary Guarantor, and
(iii) such additional documentation as the Agents or the
Required Lenders may reasonably require.
(b) Representations and Warranties. Each of the representations and
warranties made by the Borrowers or the Subsidiary Guarantors in or pursuant to
the Credit Agreement, as amended hereby, and the other Loan Documents to which
the Borrower or any of the Subsidiary Guarantors is a party or by which the
Borrower or any of the Subsidiary Guarantors is bound, shall be true and
correct in all material respects on and as of the Amendment Effective Date
(other than representations and warranties in any such Loan Document which
expressly speak as of a different date).
(c) Corporate and Other Proceedings. All corporate and other
proceedings, and all documents, instruments and other legal matters in
connection with the transactions contemplated by this Amendment shall be
satisfactory in all respects in form and substance to the Administrative Agent
and the Required Lenders.
(d) No Event of Default. No Event of Default or Default shall have
occurred and be continuing on the Amendment Effective Date.
15. REPRESENTATIONS AND WARRANTIES. On and as of the date hereof
after giving effect to this Amendment, the Borrower hereby represents and
warrants to the Lenders as follows:
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(a) Each of the representations and warranties contained in Section 5
of the Credit Agreement or in any certificate, document or financial or other
statement furnished at any time under or in connection therewith are true and
correct in all material respects on and as of the such date as if made on and as
of such date, except to the extent that such representations and warranties
specifically relate to an earlier date, in which case such representations and
warranties shall be true and correct in all material respects as of such earlier
date; provided that references therein to the "Credit Agreement" shall be deemed
to include this Amendment;
(b) No Default or Event of Default has occurred and is continuing.
16. CONTINUING EFFECT; NO OTHER AMENDMENTS. Except as expressly amended
hereby, all of the terms and provisions of the Credit Agreement and the other
Loan Documents are and shall remain in full force and effect. The amendments
contained herein shall not constitute an amendment of any other provision of the
Credit Agreement or the other Loan Documents or for any other purpose except as
expressly set forth herein.
17. GOVERNING LAW; COUNTERPARTS; MISCELLANEOUS.
(a) THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b) This Amendment may be executed in any number of counterparts and by
the different parties on separate counterparts, each of which counterparts when
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
(c) Section captions used in this Amendment are for convenience only
and shall not affect the construction of this Amendment.
(d) From and after the effective date hereof, all references in the
Credit Agreement to the "Agreement" shall be deemed to be references to such
Agreement as modified hereby.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned parties have executed this FIRST
AMENDMENT TO POST-PETITION CREDIT AGREEMENT and MASTER SECURITY AGREEMENT to be
effective for all purposes as of the Amendment Effective Date.
SERVICE MERCHANDISE COMPANY, INC.
as the Borrower
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
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Name: Xxxxxx X. Xxxxxxx, Xx.
Title: CFO
SIGNATURE PAGE TO
FIRST AMENDMENT TO POST-PETITION CREDIT AGREEMENT
AND MASTER SECURITY AGREEMENT
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CITICORP USA, INC.,
as Administrative Agent, as a Lender
By: /s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
Vice President
CITIBANK, N.A.
as an Issuing Bank
By: /s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
Vice President
SIGNATURE PAGE TO
FIRST AMENDMENT TO POST-PETITION CREDIT AGREEMENT
AND MASTER SECURITY AGREEMENT
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BANKBOSTON, N.A.,
as Documentation Agent and Collateral
Monitoring Agent, as a Lender, and as
an Issuing Bank
By: /s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
Vice President
SIGNATURE PAGE TO
FIRST AMENDMENT TO POST-PETITION CREDIT AGREEMENT
AND MASTER SECURITY AGREEMENT
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NATIONAL CITY COMMERCIAL FINANCE, INC.,
as a Lender
By: /s/ Xxxxxx X. Xxx
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Name: Xxxxxx X. Xxx
Title: President & CEO,
National City Commercial Finance
SIGNATURE PAGE TO
FIRST AMENDMENT TO POST-PETITION CREDIT AGREEMENT
AND MASTER SECURITY AGREEMENT
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XXXXXX FINANCIAL, INC.
as a Lender
By: /s/ T. Bukoroski
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Name: T. Bukoroski
Title: Sr. Vice President
SIGNATURE PAGE TO
FIRST AMENDMENT TO POST-PETITION CREDIT AGREEMENT
AND MASTER SECURITY AGREEMENT
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FOOTHILL CAPITAL CORPORATION
as a Lender
By: /s/ Xxxxxxx X. Baranocoski
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Name: Xxxxxxx X. Baranocoski
Title: Vice President
SIGNATURE PAGE TO
FIRST AMENDMENT TO POST-PETITION CREDIT AGREEMENT
AND MASTER SECURITY AGREEMENT
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XXXXXXX NATIONAL LIFE INSURANCE
COMPANY, as a Lender
By: PFM FINANCE, INC.,
its Attorney-in-Fact
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
Attorney-in-Fact
SIGNATURE PAGE TO
FIRST AMENDMENT TO POST-PETITION CREDIT AGREEMENT
AND MASTER SECURITY AGREEMENT
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ACKNOWLEDGMENT
Reference is hereby made to the Master Security Agreement (as defined
in the Credit Agreement) to which each of the undersigned is a party. Each of
the undersigned hereby consents to the terms of the foregoing First Amendment
to Post-Petition Credit Agreement and agrees that the terms thereof shall not
affect in any way its obligations and liabilities under the Master Security
Agreement or any other Loan Document, all of which obligations and liabilities
shall remain in full force and effect and each of which is hereby affirmed.
X.X. XXXXX, INC.
X.X. XXXXXX CO., INC.
X.X. XXXXXX CO. REALTY, INC.
HOMEOWNERS WAREHOUSE, INC.
SERVICE MERCHANDISE CO. BROAD, INC.
SERVICE MERCHANDISE COMPANY OF IOWA, INC.
SERVICE MERCHANDISE COMPANY OF KANSAS, INC.
SERVICE MERCHANDISE CO. NO 30, INC.
SERVICE MERCHANDISE CO. NO 34, INC.
SERVICE MERCHANDISE CO. NO 35, INC.
SERVICE MERCHANDISE CO. NO 51, INC.
SERVICE MERCHANDISE CO. NO 93, INC.
SERVICE MERCHANDISE CO. NO 99, INC.
SERVICE MERCHANDISE FINANCIAL CO., INC.
SERVICE MERCHANDISE INDIANA PARTNERS (by its
Partners Service Merchandise Co. No. 34, Inc.,
and Service Merchandise Co. No. 35, Inc.)
SERVICE MERCHANDISE OF TENNESSEE LIMITED
PARTNERSHIP (by its General Partner, Service
Merchandise Company, Inc.)
SERVICE MERCHANDISE OF TEXAS LIMITED
PARTNERSHIP (by its General Partner, Service
Merchandise Company, Inc.)
SMC-HC, INC.
THE TOY STORE, INC.
WHOLESALE SUPPLY COMPANY, INC.
A.F.S. MARKETING SERVICES, INC.
SERVICE MERCHANDISE OF NEW YORK, INC.
SERVICE MERCHANDISE OFFICE SUPPLY, INC.
SERVICE MERCHANDISE SHOWROOMS, INC.
SERVICE MERCHANDISE RM, INC.
THE XxXXXXX SUPPLY COMPANY
TRAVEL MANAGEMENT CONSULTANTS, INC.
PROMOTABLES, INC.
as Guarantors
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
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Name: Xxxxxx X. Xxxxxxx, Xx.
Title: CFO
ACKNOWLEDGMENT TO
FIRST AMENDMENT TO POST-PETITION CREDIT AGREEMENT
AND MASTER SECURITY AGREEMENT
