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EXHIBIT 10.2
FIRST AMENDMENT TO
LOAN AND SECURITY AGREEMENT
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FLEET RETAIL FINANCE INC.
ADMINISTRATIVE AGENT
COLLATERAL AGENT
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AmSouth Bank
Fleet Retail Finance Inc.
The CIT Group Business Credit, Inc.
FINOVA Capital Corporation
Foothill Capital Corporation
Xxxxxx Financial, Inc.
IBJ Whitehall Business Credit Corporation
Xxxxxxx National Life Insurance Company
LaSalle Business Credit, Inc.
The Provident Bank
WORKING CAPITAL LENDERS
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BACK BAY CAPITAL FUNDING LLC
TERM LENDER
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HOMEPLACE OF AMERICA, INC.
Lead Borrower for
HOMEPLACE OF AMERICA, INC.
HOMEPLACE STORES, INC.
HOMEPLACE STORES TWO, INC.
HOMEPLACE MANAGEMENT, INC.
THE BORROWERS
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May 12, 2000
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This First Amendment (hereinafter, this "AMENDMENT") is made as of this
12th day of May, 2000 to that Loan and Security Agreement dated June 15, 1999
(hereinafter, the "LOAN AGREEMENT"). (Capitalized terms used herein and not
otherwise defined shall have the meanings as defined in the Loan Agreement).
This First Amendment is made by and among:
FLEET RETAIL FINANCE INC. formerly known as BankBoston Retail
Finance Inc., a Delaware corporation with its principal executive offices
at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, as Agent for the ratable
benefit of the "LENDERS" (individually, a "LENDER") who are, at present:
Fleet Retail Finance Inc. formerly known as BankBoston Retail
Finance Inc. (in such capacity, the "ADMINISTRATIVE AGENT") a
Delaware corporation with its principal executive offices at 00
Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, as Administrative Agent for
the ratable benefit of the Working Capital Lenders and the Term
Lender;
and
Fleet Retail Finance Inc. formerly known as BankBoston Retail
Finance Inc. (in such capacity, the "COLLATERAL AGENT"), as agent
for the ratable benefit of the Administrative Agent, the Working
Capital Lenders, and the Term Lender;
and
Back Bay Capital Funding LLC (in such capacity, the "TERM
LENDER"), a limited liability company with offices at 00 Xxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
and
HomePlace of America, Inc., a Delaware corporation with its
principal executive offices at 0000 Xxxxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxx
Xxxxxxxx 00000 (in such capacity, the "LEAD BORROWER") as agent for the
following borrowers (individually, a "BORROWER" and collectively, the
"BORROWERS"):
HomePlace of America, Inc. (a Delaware corporation with its
principal executive offices at 0000 Xxxxxxx Xxxxx, Xxxxxx Xxxxx,
Xxxxx Xxxxxxxx 00000 );
HomePlace Stores, Inc. (a Delaware corporation with its
principal executive offices at 0000 Xxxxxxx Xxxxx, Xxxxxx Xxxxx,
Xxxxx Xxxxxxxx 00000 );
HomePlace Stores Two, Inc. (a Delaware corporation with its
principal executive offices at 0000 Xxxxxxx Xxxxx, Xxxxxx Xxxxx,
Xxxxx Xxxxxxxx 00000 ); and
HomePlace Management, Inc. (an Ohio corporation with its
principal executive offices at 0000 Xxxxxxx Xxxxx, Xxxxxx Xxxxx,
Xxxxx Xxxxxxxx 00000 );
in consideration of the mutual covenants contained herein and benefits to be
derived herefrom.
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BACKGROUND:
On June 15, 1999, the Administrative Agent, the Collateral Agent, the
Working Capital Lenders, the Term Lender, the Lead Borrower, and the Borrowers
entered into the Loan Agreement. The Borrowers have advised the Working Capital
Lenders and the Term Lender that the Borrowers will have insufficient liquidity
to satisfy certain of the Financial Performance Covenants, and have requested
that the Working Capital Lenders and the Term Lender amend certain provisions of
the Loan Agreement. The Working Capital Lenders and the Term Lender are willing
to do so, but only upon the terms and conditions set forth herein.
Accordingly, at this time the Administrative Agent, the Collateral Agent,
the Working Capital Lenders, the Term Lender, the Lead Borrower, and the
Borrowers hereby amend the Loan Agreement and otherwise agree as follows:
1. The definition of "BASE MARGIN" on page 4 of the Loan Agreement is
hereby deleted, and the following is substituted in its place:
"BASE MARGIN": (a) Until Section (b) of this Definition is in effect:
0.25
(b) Commencing with the first day of the Borrower's third
fiscal quarter in calendar year 2000, the Base Margin shall
be reset quarterly (commencing with the Business Day after
the Administrative Agent's receipt of the Pricing
Certificate (Section 6-7(b)) based on the Pricing Grid. The
Base Margin for Tiers I, II, or IV of the Pricing Grid
shall apply in the event that both criteria applicable to
that Tier are satisfied. In all other circumstances, the
Base Margin for Tier III of the Pricing Grid shall apply.
2. The definition of "L/C MARGIN" on page 15 of the Loan Agreement is
hereby amended by deleting the term "1.5%" in subparagraph (a)
thereof, and inserting the term "1.75%" in its place.
3. The definition of "LIBOR MARGIN" on page 17 of the Loan Agreement
is hereby amended by deleting the term "2.25%" in subparagraph (a)
thereof, and inserting the term "2.50%" in its place.
4. The definition of "OVERALL INVENTORY APPRAISAL CAP" on page 18 of
the Loan Agreement is hereby deleted, and the following is
inserted in its place:
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"OVERALL INVENTORY APPRAISAL CAP": The following percentage during the
periods indicated:
Through and including August 31, 2000: 95%
From and after September 1, 2000: 92%
5. The definition of "PRICING GRID" on page 19 of the Loan Agreement
is hereby deleted, and the following is inserted in its place:
"PRICING GRID": The following:
PRICING GRID
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Tier Minimum 12 month Consolidated 12 month Libor Base L/C Margin
trailing average trailing Consolidated Margin Margin
Availability Adjusted EBITDA
/ Total Interest
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I $30 Million Greater than or Equal to 2.00% 0.00 1.25%
2.25 to 1.0
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II $25 Million Greater than or Equal to 2.25% 0.00 1.50%
1.75 to 1.0, but less than
2.25 to 1.0
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III Not Applicable Greater than or Equal to 2.50 % 0.25% 1.75%
1.25 to 1.0, but less than
1.75 to 1.0
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IV Not Applicable Less than 1.25 to 1.0 2.75 % 0.50% 2.00%
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6. The definition of "CURRENT PAY INTEREST MARGIN", to read as
follows, is hereby added to Article 1 of the Loan Agreement:
"CURRENT PAY INTEREST MARGIN": (a) Until Section (b) of this Definition
is in effect: 12.50%
(b) Commencing with the first day of the Borrower's third fiscal
quarter in calendar year 2000, the Current Pay Interest Margin
shall be reset quarterly (commencing with the Business Day after
the Administrative Agent's receipt of the Pricing Certificate
(Section 6-7(b)) based on the Current Pay Interest Pricing Grid.
The Current Pay Interest Margin for Tier I of the Current Pay
Interest
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Pricing Grid shall apply in the event that both criteria
applicable to that Tier are satisfied. In all other circumstances,
the Current Pay Interest Margin for Tier II of the Current Pay
Interest Pricing Grid shall apply.
7. The definition of "CURRENT PAY INTEREST PRICING GRID", to read as
follows, is hereby added to Article 1 of the Loan Agreement:
"CURRENT PAY INTEREST PRICING GRID": The following:
CURRENT PAY INTEREST PRICING GRID
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Tier Minimum 12 month Consolidated 12 month Current Pay Interest
trailing average trailing Consolidated
Availability Adjusted EBITDA
/ Total Interest
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I $25 Million Greater than or Equal to 12.00 %
1.75 to 1.0
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II Not Applicable Not Applicable 12.50 %
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8. Section 3-4 is hereby deleted in its entirety and the following is
substituted in its place:
3-4. Interest.
(a) The unpaid principal balance of the Term Loan shall bear
interest, until repaid, floating at the per annum rate equivalent to the
aggregate of the then applicable per annum interest rate of the Current
Pay Interest plus 3.00%, determined and payable as follows:
(i) Interest on the unpaid principal balance of the Term Loan,
equal to that per annum rate determined by reference to the
Current Pay Interest Margin ("CURRENT PAY INTEREST") shall be
payable monthly in arrears, on the first day of each month, and on
the Maturity Date.
(ii) Accrued Interest on the unpaid principal balance of the Term
Loan, equal to 3.0% per annum ("PIK INTEREST"), shall be added to
the then unpaid principal balance of the Term Note monthly, on the
first day of each month, commencing with July 1, 1999. The
aggregate balance of PIK Interest so added to the Term Note shall
bear interest at the then applicable per annum interest rate of
the Current Pay Interest.
(b) Following the occurrence of any Event of Default (and whether
or not the Lender exercises any of the Lender's rights on account of such
Event of Default), Current Pay Interest shall be that per annum interest
rate which is the aggregate of the then applicable per annum interest
rate determined by reference to the Current Pay Interest Margin plus
2.00% and PIK Interest shall be equal to 5% per annum.
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9. Section 6-7(b) is hereby deleted in its entirety and the following
is substituted in its place:
(b) Commencing with the Borrowers' third fiscal quarter in 2000,
the Lead Borrower shall provide the Administrative Agent with the
financial statements furnished in accordance with Section 6-7(a), an
original counterpart of a Certificate (signed by the Borrowers' President
or Chief Financial Officer) in the form of EXHIBIT 6-7(B), annexed hereto
(the "PRICING CERTIFICATE"), as such form reasonably may be revised from
time to time hereafter, on which shall be indicated (with supporting
calculations) the Borrowers' performance with respect to those criteria
included in the definition of the applicable margin as set forth in the
Pricing Grid and in the Current Pay Interest Pricing Grid.
10. Exhibit 6-12(a), Financial Performance Covenants, is hereby
amended by deleting Paragraph 1 thereof and inserting the
following in its place:
EBITDA: The Borrowers shall not permit or suffer their Consolidated
Adjusted EBITDA, tested as of the last day of each fiscal quarter on the
basis set forth below, to be less than the following:
MINIMUM CONSOLIDATED EBITDA:
"<>" Denotes Negative
BASIS TESTED MINIMUM CONSOLIDATED ADJUSTED
EBITDA
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Quarter Ending August, 1999 $<3,000,000>
Two Quarters Ending November, 1999 <5,000,000>
Three Quarters Ending February, 2000 <1,000,000>
Four Quarters Ending May, 2000 <2,000,000>
Four Quarters Ending August, 2000 2,500,000
Four Quarters Ending November, 2000 16,500,000
Four Quarters Ending February, 2001 27,000,000
Four Quarters Ending May, 2001 35,000,000
Four Quarters Ending August, 2001 35,000,000
Four Quarters Ending November, 2001 40,000,000
Four Quarters Ending February, 2002 40,000,000
Four Quarters Ending May, 2002 40,000,000
11. Conditions Precedent. This Amendment and the obligations of the
Administrative Agent, the Collateral Agent, the Working Capital
Lenders, and the Term Lender hereunder are conditional upon
payment of amendment fees in the amount of (i) $200,000.00 to the
Administrative Agent, for the ratable benefit of the Working
Capital Lenders, and (ii) $50,000.00 to the Term Lender. The
Administrative Agent is hereby authorized to debit the Loan
Account for the purpose
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of paying the amendment fees to the Working Capital Lenders and
the Term Lender, respectively.
12. Ratification of Loan Documents. Except as provided herein, all
terms and conditions of the Loan Agreement and all of the other
Loan Documents shall remain in full force and effect and are
hereby ratified, confirmed, and reaffirmed.
13. Waiver of Claims. The Lead Borrower and each of the Borrowers
hereby acknowledges and agrees that none of them has any offsets,
defenses, claims, or counterclaims against the Administrative
Agent, the Collateral Agent, the Working Capital Lenders, or the
Term Lender, or their respective officers, directors, employees,
attorneys, representatives, parents, affiliates, predecessors,
successors, or assigns with respect to the Liabilities, or
otherwise, and that if the Lead Borrower or any of the Borrowers
now has, or ever did have, any offsets, defenses, claims, or
counterclaims against the Administrative Agent, the Collateral
Agent, the Working Capital Lenders, or the Term Lender or their
respective officers, directors, employees, attorneys,
representatives, affiliates, predecessors, successors, or assigns,
whether known or unknown, at law or in equity, from the beginning
of the world through this date and through the time of execution
of this Amendment, all of them are hereby expressly WAIVED, and
the Lead Borrower and each Borrower hereby RELEASES the
Administrative Agent, the Collateral Agent, the Working Capital
Lenders, and the Term Lender and their respective officers,
directors, employees, attorneys, representatives, affiliates,
predecessors, successors, and assigns from any liability therefor.
14. Miscellaneous.
(a) The Lead Borrower and each Borrower shall execute and
deliver to the Administrative Agent and the Collateral
Agent whatever additional documents, instruments, and
agreements that the Administrative Agent and/or the
Collateral Agent may require in order to give effect to,
and implement the terms and conditions of this Amendment.
(b) This Amendment may be executed in several counterparts and
by each party on a separate counterpart, each of which when
so executed and delivered shall be an original, and all of
which together shall constitute one instrument.
(c) This Amendment expresses the entire understanding of the
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parties with respect to the transactions contemplated
hereby. No prior negotiations or discussions shall limit,
modify, or otherwise affect the provisions hereof.
(d) The Borrower shall pay on demand all reasonable costs and
expenses of the Administrative Agent, the Collateral Agent,
the Working Capital Lenders, and the Term Lender,
including, without limitation, reasonable attorneys' fees
in connection with the preparation, negotiation, execution,
and delivery of this Amendment.
IN WITNESS WHEREOF, the parties have executed this First Amendment to
Loan and Security Agreement by their respective duly authorized officers.
HOMEPLACE OF AMERICA, INC.
THE LEAD BORROWER
By /s/ Xxxxx X. Xxxxx
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Print Name: Xxxxx X. Xxxxx
Title: Senior Vice Pres. Finance
THE BORROWERS
HOMEPLACE OF AMERICA, INC. HOMEPLACE STORES, INC.
By /s/ Xxxxx X. Xxxxx By /s/ Xxxxx X. Xxxxx
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Print Name: Xxxxx X. Xxxxx Print Name: Xxxxx X. Xxxxx
Title: Senior Vice Pres. Finance Title: Senior Vice Pres. Finance
HOMEPLACE HOLDINGS, INC. HOMEPLACE STORES TWO, INC.
By /s/ Xxxxx X. Xxxxx By /s/ Xxxxx X. Xxxxx
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Print Name: Xxxxx X. Xxxxx Print Name: Xxxxx X. Xxxxx
Title: Senior Vice Pres. Finance Title: Senior Vice Pres. Finance
HOMEPLACE MANAGEMENT, INC.
By /s/ Xxxxx X. Xxxxx
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Print Name: Xxxxx X. Xxxxx
Title: Senior Vice Pres. Finance
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FLEET RETAIL FINANCE INC.
ADMINISTRATIVE AGENT
COLLATERAL AGENT
By /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx, Vice President
THE WORKING CAPITAL LENDERS
AMSOUTH BANK
By /s/ Xxxxxxxx X. Xxxxxxxxx
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Attorney-In-Fact
Notice Address:
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxx
Fax (000) 000-0000
FLEET RETAIL FINANCE INC.
By /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx, Vice President
Notice Address:
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention:
Fax
THE CIT GROUP BUSINESS CREDIT, INC.
By /s/ Xxxxxxxxxxx Xxxx
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Notice Address:
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: R. Chimanti
Fax (000) 000-0000
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FINOVA CAPITAL CORPORATION
By /s/ Xxxxx Mattel
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Notice Address:
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Mattel
Fax 000-000-0000
FOOTHILL CAPITAL CORPORATION
By /s/ Xxxx X. Nakahoto
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Notice Address:
00000 Xxxxx Xxxxxx Xxxx., Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxx X. Nakahoto
Fax 000-000-0000
XXXXXX FINANCIAL, INC.
By /s/ Xxxxxx Xxxxxx
----------------------------
Notice Address:
000 Xxxx 00x Street, 7th Floor
New York, New York 10017
Attention: Xxxxxx Xxxxxx
Fax 000-000-0000
IBJ WHITEHALL BUSINESS CREDIT CORPORATION
By illegible
----------------------------
Notice Address:
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxx
Fax 000-000-000
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XXXXXXX NATIONAL LIFE INSURANCE COMPANY
By illegible
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Notice Address:
c/o PPM America
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention:
Fax
LASALLE BUSINESS CREDIT, INC.
By /s/ Xxxxx X. Xxxx
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Notice Address:
000 Xxxxx XxXxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxx
Fax (000) 000-0000
THE PROVIDENT BANK
By /s/ Xxxx X. Xxxxx
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Notice Address:
Xxx Xxxx Xxxxxx Xxxxxx, 000X
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxx
Fax (000) 000-0000
THE TERM LENDER
BACK BAY CAPITAL FUNDING LLC
By /s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx, Managing Director
Notice Address:
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention:
Fax
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