EXHIBIT 4-Y
FIFTH AMENDMENT TO PARTICIPATION AGREEMENT
THIS FIFTH AMENDMENT dated as of December 30, 2002 (this "Amendment")
amends the Participation Agreement dated as of April 30, 1998 (as previously
amended, the "Participation Agreement") by and among MARYGREEN, LLC, a Delaware
limited liability company, as the Lessee (together with any permitted successors
and assigns, the "Lessee"); TRUSERV CORPORATION, a Delaware corporation, as the
Lessee Agent, Construction Agent and Guarantor (in its capacity as Lessee Agent,
the "Lessee Agent"; in its capacity as Construction Agent, the "Construction
Agent"; and in its capacity as Guarantor, the "Guarantor"); TRUSERV 1998 TRUST,
a Delaware business trust, as the Lessor Trust (the "Lessor Trust"); WILMINGTON
TRUST COMPANY, a Delaware banking corporation, individually as set forth herein
and as Trustee under the Lessor Trust ("Owner Trustee"); BMO GLOBAL CAPITAL
SOLUTIONS, INC., a Delaware corporation formerly known as BMO Leasing (U.S.),
Inc., as a Certificate Holder (together with any permitted successors and
assigns thereto, each a "Certificate Holder" and collectively the "Certificate
Holders"); BMO GLOBAL CAPITAL SOLUTIONS, INC., a Delaware corporation formerly
known as BMO Leasing (U.S.), Inc., as Agent Certificate Holder for the
Certificate Holders (in such capacity, the "Agent Certificate Holder"); BANK OF
MONTREAL, a Canadian banking organization ("BMO"), and the other various
financial institutions as are or may from time to time become lenders (the
"Lenders") under the Loan Agreement; and BMO as Administrative Agent (in such
capacity, the "Administrative Agent") for the Lenders and as Arranger (in such
capacity, the "Arranger"). Terms defined in the Participation Agreement are,
unless otherwise defined herein or the context otherwise requires, used herein
as defined therein.
WHEREAS, the Lessee, the Guarantor, the Lessor Trust, the Owner Trustee,
the Certificate Holders, the Agent Certificate Holder, the Lenders, the
Administrative Agent and the Arranger have entered into the Participation
Agreement; and
WHEREAS, the parties hereto desire to amend the Participation Agreement
and Appendix A to the Participation Agreement as more fully set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Amendment to Participation Agreement and Appendix A. Effective
on (and subject to the occurrence of) the Amendment Effective Date (as defined
below), the Participation Agreement and Appendix A shall be amended in
accordance with this Section:
Section 1.1. The definition of "Existing Credit Agreement" appearing in
Appendix A is hereby amended by inserting the following phrase at the end
thereof: ", as amended by the First Amendment thereto dated as of December 30,
2002".
Section 1.2. Administrative Agent and each of the Participants hereby
approve, for purposes of Section G of Appendix A, the new definitions and
amendments to definitions set forth in the Existing Credit Agreement and such
new definitions and changes to definitions shall be incorporated in Appendix A.
Section 1.3. The second parenthetical phrase set forth in Section 8.2(g)
is amended in its entirety to read as follows:
(other than properties and assets disposed of (x) in the ordinary
course of business, (y) in connection with the sale of the Brookings
regional distribution center or (z) pursuant to the Designated
Sale-Leaseback Transaction).
Section 1.4. Addition of Section 10.1(q). The following new Section
10.1(q) is added to the Participation Agreement in appropriate sequence to read
as follows:
(q) Amendments to Financial Covenants. If the sale-leaseback of the
regional distribution center located at 000 Xxxxxx Xxxx, Xxxxxxxxxx,
Xxx Xxxxxxxxx (the "Manchester RDC") does not occur by February 15,
2003, the Lessee and Guarantor shall cause the financial covenant
levels set forth in Section 10.2 to be amended to reflect the
exclusion of the Manchester RDC sale-leaseback from the Business
Plan in a manner satisfactory to the Required Participants in their
sole discretion, and such financial covenant levels will be
established in a manner reasonably satisfactory to the Required
Participants on the basis of the same methodologies used in
preparing the covenant levels incorporated in the Fifth Amendment to
Participation Agreement dated as of December 30, 2002.
Section 1.5. The table set forth in Section 10.2(a) is amended in its
entirety to read as follows:
Fiscal quarter ending on or about Minimum Fixed Charge Coverage Ratio
--------------------------------- -----------------------------------
December 31, 2002 0.70 to 1
March 31, 2003 0.70 to 1
June 30, 2003 0.65 to 1
September 30, 2003 0.65 to 1
December 31, 2003 0.90 to 1
March 31, 2004 0.90 to 1
June 30, 2004 0.90 to 1
Section 1.6. Section 10.2(b)(viii)(B) is amended in its entirety to read
as follows: (B) a lease entered into as part of a sale and leaseback transaction
(other than the Designated Sale-Leaseback Transaction provided that such
interest or title attaches only to the property being leased in connection
therewith).
Section 1.7. Section 10.2(d)(ii) is amended in its entirety to read as
follows:
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(ii) in connection with (A) the sale and leaseback of distribution
centers owned by the Guarantor of any Subsidiary and (B) any sublease of,
or assignment by the Guarantor of its interest as lessee in, any
Designated Sale-Leaseback Transaction, provided, that any such sublease or
assignment, as the case may be, shall be on an arm's length basis, shall
have reasonable and normal commercial terms and shall provide for no less
frequently than quarterly payment of rent
Section 1.8. Section 10.2(k)(viii) is amended in its entirety to read as
follows:
(viii) (A) maintain the Special Company Account; provided that as of
the close of business on any day on which the Total Outstandings (as
defined in the Existing Credit Agreement) are greater than zero or during
the existence of an Event of Default (as defined in the Existing Credit
Agreement) after the commencement of an Enforcement (as defined in the
Intercreditor Agreement), the amount maintained in the Special Company
Account shall not be greater than zero; and (B) maintain other deposit
accounts with financial institutions in the ordinary course of business;
provided that the amount maintained in deposit accounts with financial
institutions other than the Lenders under the Existing Credit Agreement
shall not exceed (x) in the case of any one such account, $200,000 for
more than three consecutive Business Days; and (y) in the case of all such
accounts in the aggregate, $600,000 for more than two consecutive Business
Days.
Section 1.9. Section 10.2(b) is hereby amended by (i) deleting the word
"and" at the end of Section 10.2(b)(xii), (ii) substituting the word ";
and" for the "." at the end of Section 10.2(b)(xiii) and (iii) by adding a
new Section 10.2(b)(xiv) to read as follows: "(xiv) Liens in favor of Bank
of America on the Special Company Account with respect to services
provided by Bank of America."
Section 1.10. The table set forth in Section 10.2(n) is amended in its
entirety to read as follows:
Fiscal quarter ending on or about Minimum Interest Coverage Ratio
--------------------------------- -------------------------------
December 31, 2002 1.75 to 1
March 31, 2003 1.75 to 1
June 30, 2003 2.00 to 1
September 30, 2003 2.00 to 1
December 31, 2003 3.00 to 1
March 31, 2004 3.00 to 1
June 30, 2004 3.00 to 1
Section 1.11. The table set forth in Section 10.2(o) is amended in its
entirety to read as follows:
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Twelve Month Period ending on or about Minimum Amount
-------------------------------------- --------------
December 31, 2002 $1,975,000,000
January 31, 2003 $1,820,000,000
February 28, 2003 $1,780,000,000
March 31, 2003 $1,740,000,000
April 30, 2003 $1,725,000,000
May 31, 2003 $1,740,000,000
June 30, 2003 $1,720,000,000
July 31, 2003 $1,715,000,000
August 31, 2003 $1,710,000,000
September 30, 2003 $1,700,000,000
October 31, 2003 $1,715,000,000
November 30, 2003 $1,695,000,000
December 31, 2003 $1,700,000,000
January 31, 2004 $1,700,000,000
February 29, 2004 $1,695,000,000
March 31, 2004 $1,690,000,000
April 30, 2004 $1,690,000,000
May 31, 2004 $1,680,000,000
June 30, 2004 $1,670,000,000
Section 1.12. Section 10.2(p) is amended by inserting the following phrase
immediately before the sentence set forth below the table therein:
; provided that the aggregate amount of Capital Expenditures made
during any Fiscal Year ending after December 31, 2002 may be
increased by an amount equal to the lesser of (a) $2,000,000 and (b)
the excess of the maximum amount of Capital Expenditures permitted
to be made in the prior fiscal year over the actual amount of
Capital Expenditures made during such prior fiscal year. Such
increased permitted Capital Expenditures may be made in any fiscal
quarter or fiscal quarters of such fiscal year."
Section 1.13. The table set forth in Section 10.2(q) is amended in its
entirety to read as follows:
Twelve Month Period ending on or about Minimum Adjusted EBITDA
-------------------------------------- -----------------------
December 31, 2002 $100,000,000
January 31, 2003 $95,000,000
February 28, 2003 $95,000,000
March 31, 2003 $90,000,000
April 30, 2003 $90,000,000
May 31, 2003 $85,000,000
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June 30, 2003 $80,000,000
July 31, 2003 $75,000,000
August 31, 2003 $70,000,000
September 30, 2003 $70,000,000
October 31, 2003 $70,000,000
November 30, 2003 $70,000,000
December 31, 2003 $70,000,000
January 31, 2004 $70,000,000
February 29, 2004 $70,000,000
March 31, 2004 $70,000,000
April 30, 2004 $70,000,000
May 31, 2004 $70,000,000
June 30, 2004 $70,000,000
Section 2. Representations and Warranties. The Guarantor represents and
warrants to the Administrative Agent and the Participants that, after giving
effect hereto, (a) each representation and warranty (as amended hereby) set
forth in Section 8.2 of the Participation Agreement (except for those set forth
in Sections 8.2(j), 8.2(l), 8.2(q) and 8.2(t)), is true and correct as of the
date of the execution and delivery of this Amendment by the Guarantor with the
same effect as if made on such date (except to the extent such representations
and warranties expressly refer to an earlier date, in which case they were true
and correct as of such earlier date), provided that the representations and
warranties contained in Section 8.2(n) shall be deemed to be made in light of
the letter dated August 26, 2002 by the Guarantor to each of the Benefited
Parties (as defined in the Intercreditor Agreement) and (b) no Event of Default
or Unmatured Event of Default exists.
Section 3. Effectiveness. The amendments set forth in Section 1 above
shall become effective on the date (the "Amendment Effective Date") when the
Administrative Agent shall have received (a) to the extent then billed, all
costs and expenses of the Administrative Agent in connection with this Amendment
(including reasonable attorneys' fees and charges and all costs, expenses and
charges for a field examination) and (b) each of the following documents, each
in form and substance satisfactory to the Administrative Agent:
(a) counterparts of this Amendment executed by the Guarantor, the
Lessee and the Required Participants;
(b) evidence that the Designated Sale - Leaseback Transaction has
occurred and that the proceeds thereof have been applied in accordance
with the terms of the Intercreditor Agreement; and
(c) an executed amendment to the Intercreditor Agreement acceptable
to Administrative Agent.
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Section 4. Miscellaneous.
Section 4.1. Continuing Effectiveness, etc. As herein amended, the
Participation Agreement shall remain in full force and effect and is hereby
ratified and confirmed in all respects. After the Amendment Effective Date, all
references in the Participation Agreement and the other Operative Documents to
"Participation Agreement", or similar terms shall refer to the Participation
Agreement, as amended hereby.
Section 4.2. Counterparts. This Amendment may be executed in any number of
counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original but all such counterparts
shall together constitute one and the same Amendment.
Section 4.3. Governing Law. This Amendment shall be a contract made under
and governed by the laws of the State of Illinois.
Section 4.4. Successors and Assigns. This Amendment shall be binding upon
the Lessee, the Guarantor, the Lessor Trust, the Owner Trustee, the Certificate
Holders, the Agent Certificate Holder, the Lenders, the Administrative Agent and
the Arranger and their respective successors and assigns, and shall inure to the
benefit of the Lessee, Guarantor the Lessor Trust, the Owner Trustee, the
Certificate Holders, the Agent Certificate Holder, the Lenders and the
Administrative Agent and the respective successors and assigns of the Lessor
Trust, the Owner Trustee, the Certificate Holders, the Agent Certificate Holder,
the Lenders and the Administrative Agent.
Section 4.5. Participation of Guaranty. By execution of this Amendment,
Guarantor hereby restates, ratifies and reaffirms in full its obligations under
the Guaranty.
Section 4.6. Consents. Notwithstanding any provision in the Operative
Documents to the contrary, each signatory hereto hereby consents to (a)
amendments to the Financing Agreements set forth as Exhibits D, E and F to the
First Amendment to the Existing Credit Agreement, (b) the consummation of the
Designated Sale-Leaseback Transaction and (c) the release of collateral by the
Collateral Agent to the extent subject to the Designated Sale-Leaseback
Transaction.
Section 4.7. Further Assurances. Upon the request of the Required
Participants, the Guarantor agrees to provide and cause its Subsidiaries to
provide to the Participants such additional amendments, consents, reaffirmations
and ancillary documentation as is necessary or advisable, in the sole reasonable
discretion of the Required Participants, to ensure that the Collateral Documents
are in full force and effect in all respects.
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Delivered at Chicago, Illinois, as of the day and year first above
written.
TRUSERV CORPORATION, as Lessee Agent,
Construction Agent and Guarantor
By: /s/ XXXX XXXXXXXX
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Its Senior Vice President and Chief
Financial Officer
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XXXX XXXXX, LLC, as Lessee
By: TruServ Corporation, its sole member
By: /s/ XXXXXX XXXXXX
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Its Corporate Secretary
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BMO GLOBAL CAPITAL SOLUTIONS, INC., formerly
known as BMO Leasing (U.S.), Inc., as
Agent Certificate Holder and as a
Certificate Holder
By: /s/ XXXXXXX X. XXXXX
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Its President
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BANK OF MONTREAL, as Administrative Agent,
Arranger and as a Lender
By: /s/ XXXX X. XXXX
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Its Vice President
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WILMINGTON TRUST COMPANY, not in its
individual capacity, except as expressly
provided herein, but solely as Owner
Trustee
By: /s/ XXXXXXXXX XXXXXX
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Its Senior Financial Services Officer
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TRUSERV 1998 TRUST, as Lessor Trust
By: Wilmington Trust Company, not in its
individual capacity but solely as
Owner Trustee
By: /s/ XXXXXXXXX XXXXXX
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Its Senior Financial Services Officer
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