EXHIBIT 4-X
FIRST AMENDMENT
THIS FIRST AMENDMENT dated as of December 30, 2002 (this "Amendment")
amends the Second Amended and Restated Credit Agreement dated as of April 11,
2002 (the "Credit Agreement") among TruServ Corporation (the "Company"), various
financial institutions from time to time party thereto (the "Lenders") and Bank
of America, N.A., as agent for the Lenders (in such capacity, the "Agent").
Capitalized terms used but not otherwise defined herein have the respective
meanings given to them in the Credit Agreement.
WHEREAS, the Company, the Lenders and the Agent have entered into the
Credit Agreement; and
WHEREAS, the parties hereto desire to amend the Credit Agreement as more
fully set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1 Amendments. Effective on (and subject to the occurrence of) the
Amendment Effective Date (as defined below), the Credit Agreement shall be
amended as set forth below:
1.1 Addition of Definitions. The following new definitions are added to
Section 1.1 in appropriate sequence:
Designated Sale-Leaseback Transaction means the sale by the Company
of the regional distribution centers listed on Schedule 1.1(c) and the
concurrent lease, as lessee, of such properties by the Company and/or one
or more Subsidiaries pursuant to documentation substantially in the form
previously delivered to the Agent.
First Amendment means the First Amendment to this Agreement dated as
of December 30, 2002.
Special Company Account has the meaning specified in the Security
Agreement.
1.2 Amendments to Definitions.
(a) Clause (a) of the definition of "Adjusted Cash Flow" is amended by (i)
redesignating clause "(vi)" as clause "(vii)" and (ii) inserting a comma
followed by the following new clause (vi) in appropriate sequence: "(vi) for the
period ended December 31, 2002, $7,500,000,".
(b) The definition of "Asset Sale" is amended by (i) redesignating clause
"(v)" as clause "(vi)" and (ii) inserting a comma followed by the following new
clause (v) in appropriate sequence: "(v) any sublease of, or assignment by the
Company of its interest as lessee in, properties sold pursuant to the 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
frequent than quarterly payment of rent."
(c) The definition of "Business Plan" is amended in its entirety to read
as follows:
Business Plan means the business plan of the Company which was
delivered by the Company to the Agent on December 18, 2002; provided that,
with respect to financial reports relating to the periods prior to 2003,
"Business Plan" means the Business Plan of the Company dated March 20,
2002 which was delivered by the Company to the Agent.
(d) The definition of "Intercreditor Agreement" is amended in its entirety
to read as follows:
Intercreditor Agreement means the First Amended and Restated
Intercreditor Agreement dated as of April 11, 2002, among the Agent, the
Collateral Agent and various other parties, substantially in the form of
Exhibit N, as amended by the First Amendment thereto dated December 30,
2002.
(e) The definition of "Security Agreement" is amended in its entirety to
read as follows:
Security Agreement means the Security Agreement among the Company,
various Subsidiaries and the Collateral Agent dated April 14, 2000, as
amended by the First Amendment thereto dated as of April 11, 2002 and the
Second Amendment thereto dated as of December 30, 2002.
(f) The definition of "Unusable Amount" is amended in its entirety to read
as follows:
Unusable Amount means the following amounts during the following periods:
Minimum Unusable
Period Commitment
------ ----------------
12/31/02 $70,000,000
1/1/03-6/29/03 $ 0
6/30/03 $25,000,000
7/1/03-7/31/03 $15,000,000
8/1/03-8/31/03 $15,000,000
9/1/03-9/29/03 $ 5,000,000
9/30/03-11/29/03 $ 0
11/30/03-12/30/03 $10,000,000
12/31/03 $45,000,000
1/1/04-6/30/04 $ 0
2
1.3 Amendment to Section 2.4.2. Section 2.4.2 is amended in its entirety
to read as follows:
2.4.2 Mandatory Reductions of Commitments.
(a) The Commitments shall be reduced by an aggregate amount of
$5,000,000 on each of June 30, 2003, September 30, 2003 and December 31,
2003.
(b) In addition to the reductions described in clause (a) above,
upon any required prepayment under Section 2.5.2(b), (c) or (d), the
aggregate Commitments shall be reduced by the amount of the required
prepayment, even if such reduction is in excess of the outstanding amount
of the Loans prior to such required prepayment. Upon the effectiveness of
the First Amendment to this Agreement dated as of December 30, 2002 and
the repayment related to the Designated Sale-Leaseback Transaction, the
Commitments shall be reduced permanently by the amount of such repayment.
1.4 Amendment to Section 5.5. The second parenthetical phrase set forth in
Section 5.5 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)". Schedule 5.5 is hereby
amended to state as set forth as Schedule 5.5 hereto.
1.5 Addition of Section 6.17. The following new Section 6.17 is added to
the Credit Agreement in appropriate sequence to read as follows:
6.17 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
Company shall cause the financial covenant levels set forth in Article VII
to be amended to reflect the exclusion of the Manchester RDC
sale-leaseback from the Business Plan in a manner satisfactory to the
Required Lenders in their sole discretion, and such financial covenant
levels will be established in a manner reasonably satisfactory to the
Required Lenders on the basis of the same methodologies used in preparing
the covenant levels incorporated in the First Amendment.
1.6 Amendment to Section 7.1. The table set forth in Section 7.1 is
amended in its entirety to read as follows:
3
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
1.7 Amendment to Section 7.2(h). Section 7.2(h)(ii) is amended in its
entirety to read as follows: "(ii) 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)".
1.8 Amendment to Sections 7.2. Section 7.2 is amended by (a) deleting the
word "and" at the end of clause (l), (b) redesignating clause "(m)" as clause
"(n)" and (c) inserting the following new clause (m) in appropriate sequence:
"(m) Liens in favor of BofA on the Special Company Account with respect to
services provided by BofA, and".
1.9 Amendment to Section 7.11. Section 7.11(h) is amended in its entirety
to read as follows:
(h) (i) maintain the Special Company Account; provided that as of
the close of business on any day on which the Total Outstandings are
greater than zero or during the existence of an Event of Default 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 (ii) 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 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.
1.10 Amendment to Section 7.14. The table set forth in Section 7.14 is
amended in its entirety to read as follows:
4
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
1.11 Amendment to Section 7.15. The table set forth in Section 7.15 is
amended in its entirety to read as follows:
Fiscal 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
1.12 Amendment to Section 7.16. Section 7.16 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."
5
1.13 Amendment to Section 7.17. The table set forth in Section 7.17 is
amended in its entirety to read as follows:
Fiscal 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
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.
1.14 Addition of new Schedule 1.1(c). A new Schedule 1.1(c) is added to
the Credit Agreement in the form of Schedule 1.1(c) hereto.
SECTION 2 Representations and Warranties. The Company represents and
warrants to the Agent and the Lenders that, after giving effect hereto, (a) each
representation and warranty set forth in Article V of the Credit Agreement is
true and correct as of the date of the execution and delivery of this Amendment
by the Company 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) subject, in
the case of the representations and warranties contained in Sections 5.2 and
5.12 of the Credit Agreement, to the matters disclosed in the waiver letter
dated October 3, 2002 executed by the Lenders, 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 Agent
shall have received the following:
(a) to the extent then billed, all costs and expenses of the Agent in
connection with this Amendment (including reasonable attorneys' fees and charges
and all costs, expenses and charges for a field examination);
6
(b) counterparts of this Amendment executed by the Company and the
Required Lenders;
(c) a Confirmation, substantially in the form of Exhibit A, signed by the
Company and each Guarantor;
(d) an executed amendment to the Security Agreement substantially in the
form of Exhibit B;
(e) an executed amendment to the Intercreditor Agreement substantially in
the form of Exhibit C;
(f) 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
(g) evidence that the Company shall have entered into amendments to the
Senior Note Agreements and the Shelf Note Agreement (each as defined in the
Intercreditor Agreement) in form and substance reasonably satisfactory to the
Agent, including an agreement by the applicable Noteholders (as defined in the
Intercreditor Agreement) (i) to waive payment by the Company of the Make-Whole
Delta Amount (as defined in the Intercreditor Agreement) in respect to any
payment made with the proceeds of the Designated Sale-Leaseback Transaction and
(ii) that the remaining Make-Whole Amount (as defined in the Intercreditor
Agreement) shall be payable in two equal installments on January 10, 2003 and
June 30, 2003.
SECTION 4 Miscellaneous.
4.1 Continuing Effectiveness, etc. As herein amended, the Credit 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 Credit
Agreement and the other Loan Documents to "this Agreement", "the Credit
Agreement" or similar terms shall refer to the Credit Agreement as amended
hereby.
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.
4.3 Governing Law. This Amendment shall be a contract made under and
governed by the laws of the State of Illinois applicable to contracts made and
to be performed entirely within such state.
4.4 Successors and Assigns. This Amendment shall be binding upon the
Company, the Lenders and the Agent and their respective successors and assigns,
and shall inure to the benefit of the Company, the Lenders and the Agent and the
respective successors and assigns of the Lenders and the Agent.
7
4.5 Consents. Notwithstanding any provision in the Credit Agreement to the
contrary, the Required Lenders consent to (a) the amendments to the Financing
Agreements set forth as Exhibits D, E and F hereto (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.
4.6 Further Assurances. Upon the request of the Required Lenders, the
Company agrees to provide and cause its Subsidiaries to provide to the Lenders
such additional amendments, consents, reaffirmations and ancillary documentation
as is necessary or advisable, in the sole reasonable discretion of the Required
Lenders, to ensure that the Collateral Documents are in full force and effect in
all respects.
8
Delivered at Chicago, Illinois, as of the day and year first above
written.
TRUSERV CORPORATION
By: /s/ XXXX XXXXXXXX
-----------------------------------------
Title: Senior Vice President & Chief
Financial Officer
--------------------------------------
BANK OF AMERICA, N.A., as Agent
By: /s/ XXXXXX XXXXXX
----------------------------------------
Title: Senior Vice President
-------------------------------------
BANK OF AMERICA, N.A., as a Lender
By: /s/ XXXXXX XXXXXX
----------------------------------------
Title: Senior Vice President
-------------------------------------
9
BANK OF MONTREAL
By: /s/ XXXX X. XXXX
----------------------------------------
Title: Vice President
-------------------------------------
10
BANK ONE, NA (Main Office Chicago)
By: /s/ XXXXXXX XXXXXXX
----------------------------------------
Title: First Vice President
-------------------------------------
11
PNC BANK, NATIONAL ASSOCIATION
By: /s/ XXXX X. BEST
----------------------------------------
Title: Vice President
-------------------------------------
12
WACHOVIA BANK, N.A.
By: /s/ XXXXX XXXXXX
----------------------------------------
Title: Director
-------------------------------------
13
THE NORTHERN TRUST COMPANY
By: /s/ XXXX XXXXXXXX
----------------------------------------
Title: Vice President
-------------------------------------
14
ABN AMRO BANK N.V.
By: /s/ XXXXXX X. XXXXXXXX
----------------------------------------
Title: Group Senior Vice President
-------------------------------------
By: /s/ XXXXXXX X. XXXXXXX, XX.
----------------------------------------
Title: Group Vice President
-------------------------------------
15
NATIONAL CONSUMER COOPERATIVE BANK
By: /s/ XXXX X. XXXXX
----------------------------------------
Title: Managing Director
-------------------------------------
16
UMB BANK, N.A.
By: /s/ XXXXX XXXXXX
----------------------------------------
Title: Senior Vice President
-------------------------------------
17
SCHEDULE 1.1(c)
REGIONAL DISTRIBUTION CENTERS
PROPERTY ADDRESS
-------- -------
Allentown 0000 Xxxxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Atlanta 0000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Corsicana 0000 Xxxx Xxxxxxx 00
Xxxxxxxxx, XX 00000
Kansas City 00000 XX Xxxxxxx 00
Xxxxxx Xxxx, XX 00000
Kingman 0000 Xxxxxx Xxxxxxx Xx.
Xxxxxxx, XX 00000
Springfield 0000 Xxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Woodland 000 X. Xxxxxxx Xxxx.
Xxxxxxxx, XX 00000
18
SCHEDULE 5.5
REAL ESTATE
PROPERTY TYPE ADDRESS OWNERSHIP
-------- ---- ------- ---------
Allentown Distribution Center 0000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Allentown Garage Hickory Lane Lease
Wescoesville, PA
Allentown Storage Facility 6829B & 0000X Xxxxxxxxxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Allentown Storage Facility 0000 Xxxxxxxxx Xxxx Lease
Upper Mac Township, PA
Atlanta Distribution Center 0000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Blackhawk Manufacturing Facility 000 X. Xxxxxxxxx Xx. Xxx
Xxxxxxx, XX 00000
Xxxxxx Administration Xxx XxxXxxx Xxx Xxx
Xxxx Xxxxxx, XX 00000
Cary Manufacturing Facility 000 Xxxxxx Xx. Xxx
Xxxx, XX 00000
Cleveland (Westlake) Distribution Center 00000 Xxxxx Xx. Xxx
Xxxxxxxx, XX 00000
Cleveland (Westlake) Storage Facility 0000 Xxxxxx Xx. Lease
Northern Xxxx Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000
Corsicana Distribution Center 0000 Xxxx Xxxxxxx 00 Xxxxx
Xxxxxxxxx, XX 00000
Denver Distribution Center 00000 X. 00xx Xxxxxx Xxxxx
Xxxxxx, XX 00000
Fort Xxxxx Unoccupied 0000 Xxxxxxx 00 Xxxxx
Xxxx Xxxxx, XX 00000
Greenville Garage Greenville, SC Lease
Hagerstown Distribution Center 00000 Xxxxxxx Xxxxx Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Harvard Distribution Center 306, 308 & 000 X. Xxxxxxxx Xx. Xxxxx
Xxxxxxx, XX 00000
Kansas City Distribution Center 00000 XX Xxxxxxx 00 Xxxxx
Xxxxxx Xxxx, XX 00000
Kansas City Storage Facility 000 XX Xxxxx Xxxxxxxxxx Xxxxx Lease
Xxx Summit, MO
19
PROPERTY TYPE ADDRESS OWNERSHIP
-------- ---- ------- ---------
Kingman Distribution Center 4005 Mohave Airport Dr. Lease
Xxxxxxx, XX 00000
Kingman Storage Facility Xxxxxx/Xxx LLC Lease
0000 Xxxxxxxxxx Xxx
Xxxxxxx, XX 00000
Manchester Distribution Center 000 Xxxxxx Xx. Xxx
Xxxxxxxxxx XX 00000
Mankato Distribution Center 0000 0xx Xxx. Xxx
Xxxxxxx, XX 00000
Mankato Storage Facility 0000 Xxxxx Xxxxxxxxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
Parkesburg Garage R. D. 0 Xxxxxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Peachtree City Unoccupied Hwy. 74 South Lease
Xxxxxxxxx Xxxx, XX 00000
President's Plaza Administration 0000 Xxxx Xxxx Xxxx Xxx. Xxxxx
Xxxxxxx, XX 00000
Springfield Distribution Center 0000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Springfield Garage 000 X Xxxxxx Xxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Woodland Distribution Center 000 X. Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Woodland Storage Facility 000 X. Xxxxxxx Xxx. Lease
Woodland, CA
20
EXHIBIT A
CONFIRMATION
Dated as of December 30, 2002
To: Bank of America, N.A., individually and as Collateral Agent, and the other
"Benefited Parties" as defined in the Intercreditor Agreement referred to
below
Please refer to: (a) the First Amended and Restated Intercreditor
Agreement dated as of April 11, 2002 (the "Intercreditor Agreement"; capitalized
terms used but not defined herein have the respective meanings ascribed thereto
in the Intercreditor Agreement) among various creditors of TruServ Corporation
and Bank of America, N.A., as Collateral Agent; (b) the First Amendment dated as
of the date hereof to the Credit Agreement; (c) the First Amendments dated as of
the date hereof to the Senior Note Agreements; and (d) the First Amendment dated
as of the date hereof to the Shelf Note Agreement.
Each of the undersigned hereby confirms to the Collateral Agent and each
of the other Benefited Parties that, after giving effect to First Amendments
referred to in clauses (b), (c) and (d) of the preceding paragraph and the
transactions contemplated thereby, the Guaranty and each Collateral Document to
which such undersigned is a party continues in full force and effect and is the
legal, valid and binding obligation of such undersigned, enforceable against
such undersigned in accordance with its terms.
TRUSERV ACCEPTANCE COMPANY
TRUSERV LOGISTICS COMPANY
GENERAL PAINT & MANUFACTURING COMPANY
MARYGREEN, LLC
TRUE XXXXX.XXX CORPORATION
XXXXXX CANADA HARDWARE & VARIETY COMPANY, INC.
ADVOCATE SERVICES, INC.
SERVISTAR PAINT COMPANY
By:___________________________________________
Name Printed:_________________________________
Title:________________________________________
21
EXHIBIT B
FORM OF AMENDMENT TO SECURITY AGREEMENT
Please see attached.
22
EXHIBIT C
FORM OF AMENDMENT TO INTERCREDITOR AGREEMENT
Please see attached.
23
EXHIBITS D-F
AMENDMENTS TO FINANCING AGREEMENTS
Please see attached.
24
