WAIVER TO
POST-PETITION LOAN AND GUARANTY AGREEMENT
WAIVER TO POST-PETITION LOAN AND GUARANTY AGREEMENT, dated effective
as of August 12, 1997 (this "Waiver"), among MONTGOMERY WARD & CO.,
------
INCORPORATED, an Illinois corporation and a debtor and debtor in possession
("Borrower Representative"), MONTGOMERY WARD HOLDING CORP., a Delaware
-----------------------
corporation and a debtor and debtor in possession ("Parent" or "Guarantor"), as
---------
Guarantor, the other Guarantors signatory hereto (together with Parent and the
Borrower Representative, the "Credit Parties"), GENERAL ELECTRIC CAPITAL
--------------
CORPORATION, a New York corporation (in its individual capacity, "GE Capital"),
----------
for itself, as Lender, and as Agent (the "Agent") for Lenders, and the other
-----
Lenders signatory hereto.
RECITALS
--------
WHEREAS, the Borrower Representative, the Guarantors, the Lenders and
the Agent are parties to that certain Post-Petition Loan and Guaranty Agreement,
dated as of July 8, 1997 (as amended by the terms of the Waiver and First
Amendment to Post-Petition Loan and Guaranty Agreement and as further amended,
supplemented or modified, the "Loan Agreement"). The Borrower Representative
--------------
and the Guarantors have requested that the Lenders agree to waive, for the
limited purposes set forth herein, certain provisions of the Loan Agreement. The
Borrower Representative, the Guarantors, the Lenders and the Agent have agreed,
upon the terms and conditions specified herein, to waive such provisions as
hereinafter 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 are acknowledged, the parties hereto agree
as follows:
SECTION 1. Defined Terms and Interpretation.
--------------------------------
(a) The capitalized terms used herein which are defined in the Loan
Agreement, shall have the respective meanings assigned to them in the Loan
Agreement except as otherwise provided herein or unless the context otherwise
requires.
(b) Section headings in this Waiver are included herein for
convenience of reference only and shall not constitute a part of this Waiver for
any other purpose.
(c) No provision in this Waiver shall be interpreted or construed
against any Person because that Person or its legal representative drafted such
provision
SECTION 2. Waiver In Connection With Liquidation Sales. As of the
-------------------------------------------
date of this Waiver, Lenders hereby agree to waive the provisions of Section 6.3
of the Loan Agreement, for the limited purpose and solely in connection with,
the granting by Lechmere or the Borrower Representative of any Lien in favor of
any Person acting as a liquidation
1
agent of such Credit Party in connection with the liquidation or sale of
substantially all the assets of Lechmere or the assets and properties used in
connection with the business conducted by Borrower Representative under the name
"Electric Avenue and More" pursuant to a valid and enforceable order of the
Bankruptcy Court; provided that any such Lien shall not extend to any assets or
properties other than those being liquidated or sold and shall only secure the
fees and obligations owed to such Person by such Credit Party.
SECTION 3. Representations and Warranties True; No Default or Event
--------------------------------------------------------
of Default. The Credit Parties represent and warrant to the Agent and the
- ----------
Lenders that on the date of and after giving effect to the execution and
delivery of this Waiver (a) the representations and warranties set forth in the
Loan Agreement are true and correct in all material respects on the date hereof
as though made on and as of such date (unless any such representation or
warranty expressly relates to an earlier date); and (b) neither any Default nor
Event of Default has occurred and is continuing as of the date hereof.
SECTION 4. Reference to this Waiver and Effect on Loan Documents.
-----------------------------------------------------
(a) From and after the date hereof, each reference in the Loan
Agreement (including in any Exhibit thereto) to "this Agreement," "hereunder,"
"herein" or words of like import shall mean and be a reference to the Loan
Agreement, as affected hereby.
(b) From and after the date of this Waiver, each reference in the
Loan Documents to the Loan Agreement shall mean and be a reference to the Loan
Agreement, as affected hereby.
(c) The Loan Agreement, the Notes and the other Loan Documents, as
affected hereby, shall remain in full force and effect and the Loan Documents
are hereby ratified and confirmed in all respects.
(d) The effectiveness of the waiver evidenced by Section 2 hereof,
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of the Lenders or the Agent under the Loan Agreement, or
constitute a waiver of any other provision of the Loan Agreement or any other
Loan Document.
SECTION 5. Governing Law; Binding Effect. In all respects, including
-----------------------------
all matters of construction, validity and performance, this Waiver shall be
governed by, and construed and enforced in accordance with, the internal laws of
the State of New York (without regard to conflict of law provisions) and any
applicable laws of the United States of America, and shall be binding upon the
parties hereto and their respective successors and permitted assigns.
SECTION 6. Execution in Counterparts. This Waiver may be executed in
-------------------------
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
2
SECTION 7. Consent of Guarantors. By their execution and delivery of
---------------------
this Waiver, each Guarantor hereby consents to all of the terms and provisions
of this Waiver and ratifies and confirms that each of the Loan Documents to
which it is a party remains in full force and effect and enforceable in
accordance with their respective terms.
3
IN WITNESS WHEREOF, this Waiver has been duly executed as of the date first
written above.
BORROWER:
MONTGOMERY WARD & CO.,
INCORPORATED
By: /s/ Douglas V. Gathany
---------------------------------------
Name: Douglas V. Gathany
Title: Treasurer
GUARANTORS:
LECHMERE, INC.
By: /s/ Douglas V. Gathany
---------------------------------------
Name: Douglas V. Gathany
Title: Treasurer
AMERICAN DELIVERY SERVICE COMPANY
By: /s/ Philip D.Delk
---------------------------------------
Name: Philip D. Delk
Title: Vice President, Secretary and
Assistant Treasurer
CONTINENTAL TRANSPORTATION, INC.
By: /s/ Philip D. Delk
---------------------------------------
Name: Philip D. Delk
Title: Vice President and Assistant
Secretary
JRI DISTRIBUTING, INC.
STANDARD T CHEMICAL COMPANY, INC.
WFL REALTY, INC.
By: /s/ Philip D.Delk
---------------------------------------
Name: Philip D. Delk
Title: Vice President and Secretary
M-W PRESTRESS, INC.
MW DIRECT GENERAL, INC.
4
MW DIRECT LIMITED, INC.
By: /s/ Philip D.Delk
---------------------------------------
Name: Philip D. Delk
Title: Secretary
MONTGOMERY WARD
INTERNATIONAL, INC.
MPI, INC.
By: /s/ Philip D.Delk
---------------------------------------
Name: Philip D. Delk
Title: Assistant Secretary
BARRETWARD PROPERTIES CO., INC.
BRANDYWINE DC, INC.
BRANDYWINE PROPERTIES, INC.
BRETTWARD PROPERTIES CO., INC.
FIRST MONT CORPORATION
FOURTH WYCOMBE PROPERTIES, INC.
GABEWARD PROPERTIES CORPORATION
GARDEN GROVE DEVELOPMENT
CORPORATION HUGA REALTY INC.
JOSHWARD PROPERTIES CORPORATION
LECHMERE DEVELOPMENT CORPORATION
M-W FAIRFAX PROPERTIES, INC.
M-W PROPERTIES CORPORATION
M-W RESTAURANTS REALTY CORPORATION
MARCOR HOUSING SYSTEMS, INC.
MARYWARD PROPERTIES CORPORATION
MF NEVADA INVESTMENTS, INC.
MICHAELWARD PROPERTIES CO., INC.
MONTGOMERY WARD DEVELOPMENT CORPORATION
MONTGOMERY WARD LAND CORPORATION
MONTGOMERY WARD PROPERTIES CORPORATION
5
MONTGOMERY WARD REALTY CORPORATION
MW LAND CORPORATION
NATIONAL HOMEFINDING SERVICE, INC.
998 MONROE CORPORATION
PAULWARD PROPERTIES CO., INC.
ROBERTWARD PROPERTIES CORPORATION
SACWARD PROPERTIES, INC.
SECOND MONT CORPORATION
7TH & CARROLL CORPORATION
SEVENTH MONT CORPORATION
618 CORPORATION
619 CORPORATION
THE 535 CORPORATION
THIRD WYCOMBE PROPERTIES, INC.
2825 DEVELOPMENT CORPORATION
2825 REALTY CORPORATION
UNIVERSITY AVENUE MARKETPLACE, INC.
WFL DEVELOPMENT CORPORATION
WYCOMBE PROPERTIES, INC.
By: /s/ G. Tad Morgan
------------------------------------------
Name: G. Tad Morgan
Title: Vice President and Secretary
GOODE FURNITURE COMPANIES, INC.
MONTGOMERY WARD SECURITIES, INC.
R M P DEVELOPMENT CORPORATION
By: /s/ G. Tad Morgan
-----------------------------------------
Name: G. Tad Morgan
Title: Secretary
MONTGOMERY WARD HOLDING CORP.
By: /s/ G. Tad Morgan
-----------------------------------------
Name: G. Tad Morgan
Title: Assistant Secretary
6
JEFFERSON STORES, INC.
By: /s/ G. Tad Morgan
------------------------------------
Name: G. Tad Morgan
Title: Vice President and Treasurer
AGENT AND AS LENDER
GENERAL ELECTRIC CAPITAL
CORPORATION
By: /s/ James C. Ungari
------------------------------------
Name: James C. Ungari
Title: Its Authorized Signatory
LENDERS:
THE CHASE MANHATTAN BANK CORPORATION
By: /s/ William Repko
------------------------------------
Name: William Repko
Title: Managing Director
BANKAMERICA BUSINESS CREDIT, INC.
By: /s/ Thomas Sullivan
------------------------------------
Name: Thomas Sullivan
Title: Vice President
CITIBANK, N.A.
By: /s/ Claudia Slacik
------------------------------------
Name: Claudia Slacik
Title: Vice President
CITICORP USA, INC.
By: /s/ John Abate
------------------------------------
Name: John Abate
Title: Vice President
7
GBFC, INC.
By: /s/ Michael L. Pizette
----------------------------------
Name: Michael L. Pizette
Title: Vice President
GOLDMAN SACHS CREDIT
PARTNERS L.P.
By: /s/ Stephen McGuiness
----------------------------------
Name: Stephen McGuiness
Title: Vice President
HELLER FINANCIAL, INC.
By: /s/ John Buff
----------------------------------
Name: John Buff
Title: Vice President
JACKSON NATIONAL LIFE
INSURANCE COMPANY
By: PPM FINANCE, INC.
Its Attorney-in-fact
By: /s/ Jeffrey Podwika
----------------------------------
Name: Jeffrey Podwika
Title: Vice President
8