WAIVER TO
POST-PETITION LOAN AND GUARANTY AGREEMENT
WAIVER TO POST-PETITION LOAN AND GUARANTY AGREEMENT, dated September 24,
1997 (this "Waiver"), among MONTGOMERY WARD & CO., INCORPORATED, an Illinois
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corporation and a debtor and debtor in possession ("Borrower Representative"),
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MONTGOMERY WARD HOLDING CORP., a Delaware corporation and a debtor and debtor in
possession ("Parent" or "Guarantor"), as Guarantor, the other Guarantors
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signatory hereto (together with Parent and the Borrower Representative, the
"Credit Parties"), GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation
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(in its individual capacity, "GE Capital"), for itself, as Lender, and as Agent
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(the "Agent") for Lenders, and the other Lenders signatory hereto.
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RECITALS
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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 dated July 30, 1997 and
the Waiver to Post-Petition Loan and Guaranty Agreement dated effective as of
August 12, 1997 and as further amended, supplemented or modified, the "Loan
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Agreement"). The Borrower Representative and the Guarantors have requested that
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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.
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(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. Lenders hereby agree to waive the following:
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(a) the provisions of Section 8.1(b) of the Loan Agreement, for the
limited purpose and solely in connection with, honoring consignment agreements
entered into prior to the Petition Date in accordance with an order of the
Bankruptcy Court, substantially in the form of Exhibit "B" to the Motion of
Debtors and Debtors in Possession for an Order Authorizing Them to Implement A
Consigned Jewelry Program, dated September 23, 1997; and
(b) the provisions of Section 8.1(b) of the Loan Agreement, for the
limited purpose and solely in connection with, the payment of severance claims
in accordance with Section IV.A. of that certain Order and Findings of Fact and
Conclusions of Law (a) Authorizing Montgomery Ward & Co., Incorporated and
Lechmere, Inc. to Sell Assets Pursuant to a Purchase Agreement, (B) Authorizing
the Closing of All Lechmere and Home Image Stores, (C) Permitting the Purchaser
to Conduct Store Closing Sales, (D) Approving Certain Lease Assumption and
Rejection Procedures and (E) Permitting the Debtors to Pay Severance Claims,
dated August 14, 1997.
SECTION 3. Representations and Warranties True; No Default or Event
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of Default. The Credit Parties represent and warrant to the Agent and the
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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.
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(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. Effectiveness. This Waiver shall become effective upon
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receipt by the Agent of executed counterparts of this Waiver from the requisite
number of Lenders that comprise the Requisite Lenders.
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SECTION 6. Governing Law; Binding Effect. In all respects,
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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 7. Execution in Counterparts. This Waiver may be executed
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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.
SECTION 8. Consent of Guarantors. By their execution and delivery
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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.
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
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Name: Douglas V. Gathany
Title: Vice President and Treasurer
GUARANTORS:
LECHMERE, INC.
By: /s/ Douglas V. Gathany
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Name: Douglas V. Gathany
Title: Assistant Treasurer
AMERICAN DELIVERY SERVICE COMPANY
By: /s/ Philip D.Delk
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Name: Philip D. Delk
Title: Vice President, Secretary and
Assistant Treasurer
CONTINENTAL TRANSPORTATION, INC.
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By: /s/ Philip D. Delk
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Name: Philip D. Delk
Title: Vice President and Assistant
Treasurer
JRI DISTRIBUTING, INC.
STANDARD T CHEMICAL COMPANY, INC.
WFL REALTY, INC.
By: /s/ Philip D.Delk
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Name: Philip D. Delk
Title: Vice President and Secretary
M-W PRESTRESS, INC.
MW DIRECT GENERAL, INC.
MW DIRECT LIMITED, INC.
By: /s/ Philip D.Delk
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Name: Philip D. Delk
Title: Secretary
MONTGOMERY WARD INTERNATIONAL, INC.
MPI, INC.
By: /s/ Philip D.Delk
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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
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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
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
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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
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Name: G. Tad Morgan
Title: Secretary
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MONTGOMERY WARD HOLDING CORP.
By: /s/ G. Tad Morgan
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Name: G. Tad Morgan
Title: Assistant Secretary
JEFFERSON STORES, INC.
By: /s/ G. Tad Morgan
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Name: G. Tad Morgan
Title: Vice President and Treasurer
AGENT AND AS LENDER
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ James C. Ungari
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Name: James C. Ungari
Title: Its Authorized Signatory
LENDERS:
THE CHASE MANHATTAN BANK
By: /s/ William Repko
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Name: William Repko
Title: Managing Director
BANKAMERICA BUSINESS CREDIT, INC.
By: /s/ Thomas Sullivan
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Name: Thomas Sullivan
Title: Vice President
CITIBANK, N.A.
By: /s/ John Abate
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Name: John Abate
Title: Attorney-in-fact
CITICORP USA, INC.
/s/ Claudia Slacik
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Name: Claudia Slacik
Title: Vice President
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BANKBOSTON RETAIL FINANCE INC.
(f/k/a GBFC, INC.)
By: /s/ Michael L. Pizette
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Name: Michael L. Pizette
Title: Director/Vice President
GOLDMAN SACHS CREDIT PARTNERS L.P.
By: /s/ John Urban
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Name: John Urban
Title: Authorized Signatory
HELLER FINANCIAL, INC.
By: /s/ Tara Hopkins
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Name: Tara Hopkins
Title: Assistant Vice President
JACKSON NATIONAL LIFE INSURANCE COMPANY
By: PPM FINANCE, INC.
Its: Attorney-in-fact
By: /s/ Jeffrey Podwika
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Name: Jeffrey Podwika
Title: Vice President
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