FIRST AMENDMENT TO CREDIT AGREEMENT
This FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is dated as
of October 28, 1997 by and among HOMEBASE, INC., THE FIRST NATIONAL BANK OF
CHICAGO, BANKBOSTON, N.A., XXXXX FARGO BANK, N.A. and THE SUMITOMO BANK,
LIMITED.
RECITALS
WHEREAS, the parties hereto are parties to that certain Credit
Agreement dated as of July 9, 1997 (as from time to time amended, restated,
supplemented or otherwise modified, the "Credit Agreement"; capitalized terms
used but not otherwise defined herein having the definitions provided therefor
in the Credit Agreement); and
WHEREAS, the parties hereto desire to amend the Credit
Agreement on the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter contained, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Amendment to Credit Agreement. Subject to the terms and conditions set forth
in Section 2 of this Amendment, upon the Effective Date (as hereinafter
defined), the Credit Agreement shall be hereby amended as follows:
(i) The definition of "EBITR" set forth in Article I of the
Credit Agreement is hereby amended by deleting such definition in its
entirety and inserting the following in its stead:
"EBITR" means, for any period, earnings before
interest expense, income taxes and Rentals, all
determined on a consolidated basis for the Borrower
and Subsidiaries; provided, however, there shall be
excluded from such calculation a special charge to
earnings taken by the Borrower in the third fiscal
quarter of 1998 in the aggregate amount of Twenty
Seven Million Dollars ($27,000,000) incurred
primarily due to the closure of three stores of the
Borrower.
(ii) Section 2.7 of the Credit Agreement is hereby amended by
deleting the fifth sentence of such Section in its entirety and inserting the
following in its stead:
Notwithstanding anything to the contrary contained
herein, the Borrower's Status (i) from the Execution
Date until the end of the third fiscal quarter of
1998 of the Borrower shall be Level III Status and
(ii) for the fourth fiscal quarter of 1998 and the
first, second and third fiscal quarters of 1999 of
the Borrower shall be Level IV Status.
(iii) Paragraph (d) of Section 6.13 of the Credit Agreement is
hereby renumbered to be paragraph (e) and a new paragraph (d) is inserted in
Section 6.13 in its stead which shall read as follows:
(d) the sale or other disposition of Inventory having
a book value of less than Twelve Million Dollars
($12,000,000) in the aggregate, which sale or
disposition was made due to the closure of up to
three stores of the Borrower.
2. Conditions. The effectiveness of the amendments stated in this Amendment is
subject to on or prior to the date hereof, that the following conditions shall
have been satisfied in a manner, and in form and substance, as the case may be,
reasonably acceptable to Lenders:
(i) Amendment. This Amendment shall have been duly executed by
all parties hereto and delivered to Agent.
(ii) No Default. No Default or Event of Default under the
Credit Agreement, as amended hereby, shall have occurred and be
continuing.
(iii) Warranties and Representations. The warranties and
representations of the Borrower contained in this Amendment, the Credit
Agreement, as amended hereby, and the other Loan Documents shall be
true and correct as of the date hereof, with the same effect as though
made on such date, except to the extent that such warranties and
representations expressly relate to an earlier date, in which case such
warranties and representations shall have been true and correct as of
such earlier date.
(iv) Work Fee. The Borrower shall have paid to the Agent, for
the ratable account of the Lenders in accordance with their Percentages, a fee
in the aggregate amount of Sixty Two Thousand Five Hundred Dollars ($62,500).
(v) Reaffirmation of Guaranty. Each Real Estate Subsidiary and
Operating Subsidiary shall have executed the Reaffirmation of Guaranty in the
form of Exhibit A hereto.
The date on which all of the above events have occurred is the "Effective Date".
If the Effective Date has not occurred by October 31, 1997, this Amendment shall
be of no force and effect.
3. Collateralization. Notwithstanding this Amendment, and effective upon the
effectiveness of the Amendment, the parties hereto agree that the
Collateralization Date (as defined in the Credit Agreement) shall have occurred.
The Borrower agrees, at its expense, to execute, acknowledge and deliver and
take such further action, including without limitation, the delivery of opinions
of counsel and establishing an appropriate reserve in the Borrowing Base, as
reasonably requested by the Agent to assure, preserve, protect and perfect the
first priority, perfected security interest granted by the Loan Documents and
the practical ability to obtain and enforce the rights and remedies created
thereby. Failure to comply with this covenant shall be considered a Default
under the Credit Agreement if not remedied within 20 days after written notice
from the Agent.
4. Continuing Credits. Notwithstanding this Amendment, the Loans owing to
Lenders by Borrower under the Credit Agreement that remain outstanding as of the
date hereof shall constitute continuing Obligations of the Borrower under the
Credit Agreement and this Amendment shall not be deemed to evidence or result in
a novation, or a repayment or reborrowing, of such Loans.
5. Miscellaneous.
(a) Captions. Section captions used in this Amendment are for
convenience only, and shall not affect the construction of this Amendment.
(b) Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
ILLINOIS, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES BUT GIVING EFFECT TO
FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. Whenever possible each provision of
this Amendment shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Amendment shall be prohibited
by or invalid under such law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Amendment.
(c) 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 but one and the same instrument.
(d) Successors and Assigns. This Amendment shall be binding upon, and
shall inure to the sole benefit of the Borrower, Agent and Lenders, and their
respective successors and assigns.
(e) References. Any reference to the Credit Agreement contained in any
notice, request, certificate, or other document executed concurrently with or
after the execution and delivery of this Amendment shall be deemed to include
this Amendment unless the context shall otherwise require.
(f) Continued Effectiveness. Notwithstanding anything contained herein,
the terms of this Amendment are not intended to and do not serve to effect a
novation of the Credit Agreement; instead, it is the express intention of the
parties hereto to reaffirm the Obligations created under the Credit Agreement
which is evidenced by the Notes. The Credit Agreement, as amended hereby, and
each of the other Loan Documents remain in full force and effect.
(g) Costs and Expenses. Borrower affirms and acknowledges that Section
9.7 of the Credit Agreement applies to this Amendment and the transactions and
agreements and documents contemplated hereunder.
5. Representations and Warranties. The Borrower represents and warrants to Agent
and Lenders that the execution, delivery and performance by the Borrower of this
Amendment are within the Borrower's corporate powers, have been duly authorized
by all necessary corporate action (including, without limitation, all necessary
shareholder approval) of the Borrower, do not require any governmental
approvals, consents or filings and do not and will not contravene or conflict
with any provision of law applicable to the Borrower, the certificate of
incorporation or bylaws of the Borrower or any order, judgment or decree of any
court or other agency of government or any contractual obligation binding upon
the Borrower, and this Amendment, the Credit Agreement, as amended hereby, and
each Loan Document is the legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with its terms and that the
conditions set forth in Sections 2(ii) and (iii) hereof are true, correct and
complete as of the Effective Date.
[signature pages follow]
IN WITNESS WHEREOF, this First Amendment to Credit Agreement has been
duly executed and delivered as of the day and year first above written.
HOMEBASE, INC.
By:________________________________
Print Name: _________________________
Title: ______________________________
0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
THE FIRST NATIONAL BANK OF CHICAGO,
Individually and as Agent
By:________________________________
Print Name: _________________________
Title: ______________________________
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Managing Director
BANKBOSTON, N.A.,
Individually and as Syndication Agent
By: _________________________
Print Name: Xxxxx Xxxxxx
Title: Managing Director
000 Xxxxxxx Xxxxxx
Mail Stop 01-09-05
Xxxxxx, Xxxxxxxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
XXXXX FARGO BANK, N.A.
Individually and as Documentation Agent
By:
Print Name: Xxxxxxxx Xxxxxx
Title: Vice President
By:_______________________________
Name:_____________________________
Title:______________________________
000 Xxxxxxxx Xxxxxxxxx, 16th Floor
MAC 2818-163
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
THE SUMITOMO BANK, LIMITED
By:
Print Name:__________________
Title:
By:
Print Name:__________________
Title:
EXHIBIT A
REAFFIRMATION OF GUARANTY
Each of the undersigned acknowledges receipt of a copy of the
First Amendment to the Credit Agreement (the "Amendment") dated as of October
28, 1997, consents to such amendment, and each of the transactions referenced
therein and hereby reaffirms its obligations under the Subsidiary Guaranty dated
as of July 9, 1997 in favor of The First National Bank of Chicago, as Agent, and
the Lenders (as defined in the Amendment).
Dated as of October 28, 1997
[GUARANTOR]
By:
Title:
