Exhibit 10.1
CONSENT AND SECOND AMENDMENT
to
SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
This Consent and Second Amendment to Second Amended and Restated Loan and
Security Agreement ("Amendment"), dated effective as of May 5, 1999 (the
"Effective Date"), is entered into among American Builders & Contractors Supply
Co., Inc., a Delaware corporation ("Borrower") with its chief executive office
located at One ABC Parkway, Beloit, Wisconsin, the financial institutions listed
on the signature pages hereof (individually, a "Lender" and collectively, the
"Lenders") and NationsBank, N.A. ("NationsBank"), as Agent for the Lenders (in
such capacity, the "Agent"):
Recitals
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a. The Borrower, the Lenders and Agent are party to that certain Second
Amended and Restated Loan and Security Agreement dated as of May 12, 1998, as
amended by the First Amendment to Second Amended and Restated Loan and Security
Agreement dated effective as of January 15, 1999 (the "Loan Agreement") pursuant
to which Lenders have agreed to make certain loans and extend certain other
financial accommodations to the Borrower as provided therein (terms defined by
the Loan Agreement, where used in this Amendment, shall have the same meanings
in this Amendment as are prescribed by the Loan Agreement).
b. The Borrower has informed the Agent that Borrower proposes to use the
proceeds of Revolving Loans to repurchase and reacquire, at a discount, up to
$10,000,000 face amount of Senior Subordinated Notes (collectively referred to
hereinbelow as the "Proposed Actions"). The Proposed Actions are prohibited by
(without limitation) Section 7.12 ("Use of Proceeds"), Section 8.4 ("Investments
or Loans") and Section 8.21 ("Senior Subordinated Notes and Related Guaranties")
of the Loan Agreement without the prior consent of Agent Requisite Lenders as
required by Section 10.15 ("Entire Agreement; Amendments") of the Loan
Agreement. The Borrower has requested the Agent to consent to the Proposed
Actions and amend the Loan Agreement in certain respects, and the Agent is
willing to do so, subject to consent by Requisite Lenders and the other terms
and conditions contained herein.
NOW, THEREFORE, in consideration of the terms and conditions contained
herein, and of any loans or financial accommodations heretofore, now or
hereafter made to or for the benefit of the Borrower by the Lenders, it hereby
is agreed as follows:
ARTICLE I
AMENDMENT TO LOAN AGREEMENT
1.1. Amendments to Section 1.1 of the Loan Agreement. Section 1.1
("Definitions") of the Loan Agreement is hereby amended as follows:
a. A new definition of "Outstanding Senior Subordinated Notes" and a new
definition of "Repurchased Senior Subordinated Notes" each hereby is added,
which shall be deemed inserted into Section 1.1 alphabetically and which
shall read as follows, respectively:
"Outstanding Senior Subordinated Notes" means Senior Subordinated
Notes other than Repurchased Senior Subordinated Notes.
"Repurchased Senior Subordinated Notes" means Senior Subordinated
Notes that are held by Borrower following repurchase thereof not
prohibited by this Agreement.
b. The first sentence of the definition of "Tangible Net Worth" hereby is
amended and restated to read as follows:
"Tangible Net Worth" means, at any time, total assets minus total
liabilities (excluding from such total liabilities the Outstanding
Senior Subordinated Notes and the Subordinated Seller Obligations, if
any) decreased by the Affiliates Investments Limit and decreased by
the book value of all intangible assets (other than Accounts),
including without limitation, patents, brand names, trademarks,
licenses, goodwill, customer lists, mailing lists, subscription lists,
organization expenses, and deferred costs, determined as of such time
on a consolidated basis for the Borrower and its Subsidiaries in
accordance with GAAP.
The remaining portion of such definition shall remain unchanged.
1.2. Amendment to Section 2.9 of the Loan Agreement. Section 2.9
("Optional Prepayments") of the Loan Agreement is hereby amended and restated to
read in its entirety as follows:
2.9 Optional Prepayments. The Borrower may, at its option, prepay at
any time during the Initial Term or any subsequent Term all or any portion
of the Liabilities. Subject to Section 2.10 and the requirements of
Section 2.11(c), prepayments of a portion of the Liabilities may be made by
the Borrower without incurring a premium or prepayment fee; provided, if
the Borrower prepays all of the Liabilities in full and terminates this
Agreement as of an effective time prior to June 30, 2000, the Borrower
shall pay the Agent, for the account of the Lenders, as liquidated damages
and compensation for the costs of the Lenders' being prepared to make funds
available to the Borrower under this Agreement, a prepayment fee equal to
one quarter of one percent (.25%) of the Maximum Facility. Notwithstanding
the foregoing, no fee shall be payable under this Section 2.9 with respect
to a prepayment occurring (i) after the Revolving Loans have been
accelerated or (ii) after the Agent, on behalf of the Lenders, has
requested in writing that the Borrower attempt to prepay the Revolving
Loans.
1.3. Amendment to Section 8.8 of the Loan Agreement. Section 8.8 ("Capital
Expenditures Limitation") of the Loan Agreement is hereby amended and restated
to read in its entirety as follows:
8.8 Capital Expenditure Limitations. The Borrower and its
Subsidiaries, if any, shall not purchase, invest in or otherwise acquire,
additional real estate, Equipment, Rolling Stock or other fixed assets,
which, in the aggregate, cost the Borrower and its Subsidiaries, if any,
more than Twenty Six Million Five Hundred Thousand Dollars ($26,500,000.00)
during the calendar year ending December 31, 1997, Twenty Seven Million
Dollars ($27,000,000.00) during the calendar year ending December 31, 1998,
and Twenty Million Dollars ($20,000,000.00) during the calendar year ending
December 31, 1999 and any calendar year thereafter. For purposes of the
foregoing, there shall be excluded therefrom capital expenditures made to
finance Store Acquisitions pursuant to Section 8.3.
1.4. Amendment to Section 8.17 of the Loan Agreement. Section 8.17
("Minimum Tangible Net Worth") of the Loan Agreement is hereby amended and
restated to read in its entirety as follows:
8.17 Minimum Tangible Net Worth. Tangible Net Worth, as determined
as of each date set forth below, shall not be less than the amount set
forth below opposite such date:
Date Amount
---- ------
December 31, 1998 $60,000,000.00
Each fiscal year-end thereafter An amount, determined as of the end of
any such fiscal year end, equal to
$75,000,000.00 less the aggregate face
amount, if any, of Repurchased Senior
Subordinated Notes
1.5. Amendment to Section 8.20 of the Loan Agreement. Section 8.20
("Minimum Average Unused Availability") of the Loan Agreement is hereby amended
and restated to read in its entirety as follows:
8.20 Minimum Average Unused Availability. The Borrower will not
permit Average Unused Availability for any of the following specified
calendar months of each year to be less than the following prescribed
amount for such calendar month:
Specified Calendar Month Minimum Average Unused Availability
------------------------ -----------------------------------
January $ 5,000,000
February $ 5,000,000
March $ 5,000,000
April $ 5,000,000
May $10,000,000
June $15,000,000
July $15,000,000
August $15,000,000
September $15,000,000
October $15,000,000
November $10,000,000
December $ 5,000,000
ARTICLE II
CONSENT TO PROPOSED ACTIONS
2.1. Consent to Proposed Actions. Subject to the terms hereof and
conditioned as provided by Section 2.2, the Agent hereby consents to the
Borrower (a) using the proceeds of Revolving Loans to finance (b) the repurchase
and reacquire up to $10,000,000 face amount of Senior Subordinated Notes.
2.2. Conditions. The Agent's consent under Section 2.1 is expressly
conditioned on satisfaction of each of the following conditions precedent:
a. No Event of Default or Default shall be in existence as of the time
of such repurchase, or would result therefrom;
b. The maximum aggregate face amount of Senior Subordinated Notes
repurchased by the Borrower shall not exceed $10,000,000;
c. The maximum aggregate consideration paid by the Borrower in respect
of such repurchase and reacquisition, including cash and all other forms,
if any, of consideration, shall not exceed $9,000,000 plus unpaid accrued
interest payable at the time of such repurchase;
d. Such repurchase shall be in compliance with all applicable laws and
regulations and shall not be prohibited by the Indenture; and
e. Promptly upon consummating such repurchase the Borrower shall give the
Agent written notice thereof, therein specifying the aggregate face amount
of Senior Subordinated Notes repurchased and the aggregate consideration
paid by the Borrower therefor and certifying to the Lender that all
conditions specified by this Section 2.2 have been satisfied.
2.3 Limitation. The consent granted by the Agent pursuant to Section 2.1
is expressly limited as provided herein and shall not extend to any other
actions or proposed actions or impair any provision of any of the Financing
Agreements. Nothing in this Amendment shall constitute a waiver of any rights of
Agent or the Lenders under any of the Financing Agreements.
ARTICLE III
MISCELLANEOUS
3.1. Conditions to Effectiveness. This Amendment, including the
amendments, consent and other terms set forth herein, shall become effective as
of the Effective Date upon the satisfaction of each the following conditions
precedent, all of which must be satisfied and acceptable in form and substance
to the Agent and each Lender signatory hereto in each of their sole discretion.
a. Execution and Delivery. This Amendment shall have been executed and
delivered by each of the Borrower, the Agent and Requisite Lenders.
b. Consent and Agreement of Guarantors. Each of Amcraft Building
Products Co., Inc. and Mule-Hide Products Co., Inc. shall have executed the
Consent and Agreement of Guarantors which is attached to and made a part of
this Amendment, in form and substance satisfactory to the Agent.
c. Consent and Agreement by Validity Guarantors. Each of Kendra A. Story
and Kenneth A. Hendricks shall have executed the Consent and Agreement by
Validity Guarantors which is attached to and made a part of this Amendment,
in form and substance satisfactory to the Agent.
d. Other. The Borrower shall have executed and delivered all other
agreements, documents, certifications or opinions as the Agent may
reasonably request in connection with implementation of this Amendment.
3.2. Representations, Warranties, Covenants of Borrower. The Borrower
hereby represents and warrants that as of the date of this Amendment and after
giving effect thereto (a) no event has occurred and is continuing which, after
giving effect to this Amendment, constitutes a Default or an Event of Default,
(b) the representations and warranties of the Borrower contained in the Loan
Agreement and the other Financing Agreements are true and correct on and as of
the date hereof to the same extent as though made on and as of the date hereof,
except to the extent such representations and warranties specifically relate to
an earlier date, in which case they are true and correct as of such earlier
date, (c) the execution and delivery by the Borrower of this Amendment and the
performance by the Borrower of the Loan Agreement, as amended by this Amendment,
are within its corporate power and have been duly authorized by all necessary
corporate action, (d) this Amendment and the Loan Agreement, as amended by this
Amendment, are legal, valid and binding obligations of the Borrower enforceable
against the Borrower in accordance with their terms and (e) the execution and
delivery by the Borrower of this Amendment and the performance by the Borrower
of the Loan Agreement, as amended by this Amendment, do not require the consent
of any Person and do not contravene the terms of the Borrower's Articles of
Incorporation or By-Laws or any indenture, agreement or undertaking to which the
Borrower is a party or by which the Borrower or any of its property is bound.
The Borrower covenants and agrees that, as of the effective time of any
repurchase of any Senior Subordinated Notes, each such repurchase as
contemplated by this Agreement will be in compliance with all applicable laws
and regulations and will not be prohibited by the Indenture.
3.3. Reference to and Effect on the Loan Agreement. Except as expressly
provided herein, the Loan Agreement and all other Financing Agreements shall
remain unmodified and in full force and effect and are hereby ratified and
confirmed. The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver or forbearance of (a) any right, power or remedy of the
Lenders under the Loan Agreement or any of the other Financing Agreements, or
(b) any Default or Event of Default. This Amendment shall constitute a Financing
Agreement.
3.4. Fees, Costs and Expenses. The Borrower agrees to pay on demand all
costs and expenses of the Agent in connection with the preparation, negotiation,
execution and delivery and closing of this Amendment and all related
documentation, including the fees and out-of-pocket expenses of counsel for the
Agent with respect thereto.
3.5. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto as separate counterparts, each of
which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, when taken together, shall constitute
but one and the same agreement. A telecopy of any such executed counterpart
shall be deemed valid and may be relied upon as an original.
3.6. Effectiveness. This Amendment shall be deemed effective
prospectively as of the Effective Date specified in the preamble upon execution
by the Borrower, the Agent and sufficient of the Lenders whose names appear on
the signature pages below to constitute Requisite Lenders (subject, however, to
the prior satisfaction of all other conditions for effectiveness as specified by
Section 3.1).
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the day and year first written above.
[SIGNATURES FOLLOW]
AMERICAN BUILDERS &
ATTEST: CONTRACTORS SUPPLY CO., INC.
By:___________________________ By:____________________________________
Name:_________________________ Kendra A. Story, Chief Financial Officer
Title:________________________
NATIONSBANK, N.A.
In its capacity as Agent
By:____________________________________
Doug Motl, Vice President
AMERICAN NATIONAL BANK AND
TRUST COMPANY OF CHICAGO
In its capacity as Co-Agent
By:____________________________________
Name:__________________________________
Title:_________________________________
NATIONSBANK, N.A.
In its capacity as a Lender
By:____________________________________
Doug Motl, Vice President
AMERICAN NATIONAL BANK AND
TRUST COMPANY OF CHICAGO
In its capacity as a Lender
By:____________________________________
Name:__________________________________
Title:_________________________________
LASALLE BUSINESS CREDIT, INC.
By:____________________________________
Name:__________________________________
Title:_________________________________
HARRIS TRUST AND SAVINGS BANK
By:____________________________________
Name:__________________________________
Title:_________________________________
FLEET CAPITAL CORPORATION
By:____________________________________
Name:__________________________________
Title:_________________________________
FLEET BUSINESS CREDIT CORPORATION
By:____________________________________
Name:__________________________________
Title:_________________________________
CONSENT AND AGREEMENT BY GUARANTORS
Each of the undersigned consents to the foregoing Amendment and each of the
undersigned agrees to the continued effectiveness of the Amended and Restated
Guaranty Agreement dated as of May 12, 1998, executed and delivered by each of
the undersigned, respectively, to the Agent for the benefit of the Lenders. All
references in each such Guaranty, respectively, to the Loan Agreement shall be
deemed to be to the Loan Agreement as amended by the foregoing Amendment and all
prior and subsequent amendments thereof. This Consent and Agreement is executed
as of the Effective Date specified in the Amendment.
AMCRAFT BUILDING PRODUCTS CO., INC.
By:__________________________________
Name:________________________________
Title:_______________________________
MULE-HIDE PRODUCTS CO., INC.
By:__________________________________
Name:________________________________
Title:_______________________________
CONSENT AND AGREEMENT BY VALIDITY GUARANTORS
Each of the undersigned consents to the foregoing Amendment and each of the
undersigned agrees to the continued effectiveness of the Validity Certification
dated as of May 12, 1998, executed and delivered by each of the undersigned,
respectively, to the Agent for the benefit of the Lenders. All references in
each such Validity Certification, respectively, to the Loan Agreement shall be
deemed to be to the Loan Agreement as amended by the foregoing Amendment and all
prior and subsequent amendments thereof. This Consent and Agreement is executed
as of the Effective Date specified in the Amendment.
_____________________________________
Kenneth A. Hendricks
____________________________________
Kendra A. Story
FINANCIAL DATA SCHEDULE
EXHIBIT 27
AMERICAN BUILDERS & CONTRACTORS SUPPLY CO., INC.
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ABC SUPPLY'S
CONSOLIDATED BALANCE SHEET AT MARCH 31, 1999, AND CONSOLIDATED STATEMENT OF
OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.