Exhibit 4-J
EXECUTION COPY
FIFTH AMENDMENT TO
LOAN AND SECURITY AGREEMENT
THIS FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT ("Fifth Amendment") is
made as of the 13th day of February, 2006 by and among True Value Company, a
Delaware corporation (f/k/a TruServ Corporation and herein "True Value" or
"TruServ"), TruServ Acceptance Company, an Illinois corporation ("TruServ
Acceptance"), TruServ Logistics Company, an Illinois corporation ("TruServ
Logistics"), General Paint & Manufacturing Company ("General Paint") and True
Value.com Corporation, a Delaware corporation ("True Value.com"), Bank of
America, N.A., a national banking association ("BofA"), as successor-in-interest
to Fleet Capital Corporation ("FCC"), as agent for Lenders hereunder (BofA, in
such capacity, being "Agent"), Wachovia Capital Financial Corporation (Central)
(f/k/a Congress Financial Corporation), Merrill Lynch Capital, a Division of
Merrill Lynch Business Financial Services, Inc., LaSalle Business Credit, LLC as
Co-Documentation Agents ("Co-Documentation Agents") and the lenders who are
signatories hereto ("Lenders"). True Value, TruServ Acceptance, TruServ
Logistics, General Paint and True Value.com are sometimes hereinafter referred
to individually as a "Borrower" and collectively as "Borrowers."
WITNESSETH:
WHEREAS, Borrowers, Bank of America, N.A., as Syndication Agent (Bank of
America, N.A. has assigned all of its interests to FCC which, in turn, has
assigned all of its interests, either directly or indirectly, through an
Affiliate of BofA to BofA), Co-Documentation Agents, Agent and Lenders entered
into a certain Loan and Security Agreement dated as of August 29, 2003, as
amended by a certain First Amendment to Loan and Security Agreement by and among
Borrowers, Bank of America, N.A., as Syndication Agent, Co-Documentation Agents,
Agent and Lenders dated as of March 19, 2004, by a certain Second Amendment to
Loan and Security Agreement by and among Borrowers, Bank of America, N.A., as
Syndication Agent, Co-Documentation Agents, Agents and Lenders dated as of
October 26, 2004, by a certain Third Amendment to Loan and Security Agreement by
and among Borrowers, Co-Documentation Agents, Agent and Lenders dated as of May
6, 2005 and by a certain Fourth Amendment to Loan and Security Agreement by and
among Borrowers, Co-Documentation Agents, Agent and Lenders dated as of December
28, 2005 (said Loan and Security Agreement, as so amended, is hereinafter
referred to as the "Loan Agreement"); and
WHEREAS, Borrowers desire to amend and modify certain provisions of the
Loan Agreement and, subject to the terms hereof, Agent and Lenders are willing
to agree to such amendments and modifications;
NOW THEREFORE, in consideration of the premises, the mutual covenants and
agreements herein contained, and any extension of credit heretofore, now or
hereafter made by Agent and Lenders to Borrowers, the parties hereto hereby
agree as follows:
1. Definitions. All capitalized terms used herein without definition shall
have the meaning given to them in the Loan Agreement.
2. Added and Amended Definitions. Appendix A of the Loan Agreement is
hereby amended to insert the following new definitions of "Fifth Amendment" and
"Fifth Amendment Effective Date" in their appropriate alphabetical order; and
the definition of "Borrowing Base" contained in Appendix A to the Loan Agreement
and the definition of "Fixed Charge Coverage Ratio" contained in Exhibit 8.3 of
the Loan Agreement are hereby deleted and the following are inserted in their
stead:
"Borrowing Base - as at any date of determination thereof, an amount
equal to the lesser of:
(i) the Revolving Credit Maximum Amount; or
(ii) an amount equal to the sum of
(a) 85% of the net amount of Eligible Accounts outstanding
at such date; plus
(b) the least of
(1) $175,000,000,
(2) 65% of the value of Eligible Inventory (other than
that portion of Eligible Inventory consisting of Eligible
On-Water Inventory) on such date plus the lesser of (x) the
"Maximum On-Water Amount" (as defined below) or (y) 65% of the
value of Eligible On-Water Inventory on such date; and
(3) 85% (90% during the Seasonal Advance Months) of the
Net Appraised Orderly Liquidation Value of Eligible Inventory at
such date plus
(c) an amount (the "Fixed Asset Sublimit") the lesser of (i)
$25,000,000 reduced by $218,774.18 on October 1, 2003 and the
first day of each month thereafter or (ii) the sum of (x) the
product of the Equipment Percentage multiplied by 80% multiplied
by the Net Appraisal Orderly Liquidation Value of Borrowers'
Equipment plus (y) the product of the Real Property Percentage
multiplied by 65% of the Net Appraised Fair Market Value of
Borrowers' real Property.
For purposes hereof, (1) the net amount of Eligible Accounts at any
time shall be the face amount of such Eligible Accounts less any and all
returns, rebates, discounts (which may, at Agent's option, be calculated on
shortest terms), credits, allowances or excise taxes of any nature at any
time issued, owing, claimed by Account Debtors, granted, outstanding or
payable in connection with such Accounts at such time, (2) the amount of
Eligible Inventory shall be determined on a first-in, first-out, lower of
cost or market basis in accordance with GAAP and (3) the Maximum On-Water
Amount shall be equal to $40,000,000.
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Fifth Amendment - that certain Fifth Amendment to Loan and Security
Agreement dated as of February 13, 2006 by and among Borrowers,
Co-Documentation Agents, Agent and the Lenders party thereto.
Fifth Amendment Effective Date - shall have the meaning contained in
Section 7 of this Fifth Amendment.
Fixed Charge Coverage Ratio - with respect to any period, the ratio of
(i) EBITDA for such period plus, with respect to fiscal periods ending on
or prior to December 31, 2006, to the extent recognized within the
applicable period, the amount of gain ("Blackhawk Gain") realized from the
sale of the Blackhawk Facility (in an amount not to exceed $9,100,000),
minus the sum of (a) any provision for income taxes payable in cash and
included in the determination of net earnings for such period plus (b)
Capital Expenditures (excluding Blackhawk Capital Expenditures) during such
period, to (ii) Fixed Charges for such period, all as determined for
Borrowers and their Subsidiaries on a Consolidated basis and in accordance
with GAAP. The foregoing notwithstanding, for purposes of the definition of
Applicable Margin, Fixed Charge Coverage Ratio shall be determined without
adding to EBITDA the Blackhawk Gain."
3. Loans. Subsection 8.2.2 of the Loan Agreement is hereby deleted and the
following is inserted in its stead:
"8.2.2 Loans. Make, or permit any Restricted Subsidiary of any
Borrower to make, any loans or other advances of money to any Person, other
than (i) for salary, travel, relocation and entertainment advances,
advances against commissions and other similar advances to employees in the
ordinary course of business, (ii) extensions of trade credit and advance
payments on leases, licenses and other contracts, in each case, in the
ordinary course of business, (iii) deposits with financial institutions and
securities intermediaries permitted or required under this Agreement, (iv)
prepaid expenses, including, without limitation, lease prepayments, (v)
loans or advances from any Borrower to any other Borrower or to any
Restricted Subsidiary, (vi) loans or advances from any Restricted
Subsidiary to any Borrower or any other Restricted Subsidiary, (vii) loans
existing on the date hereof and set forth on Exhibit 8.2.2, (viii) Member
Loans in an aggregate amount outstanding at any time not to exceed (x)
$10,000,000 with respect to fiscal year 2006, (y) $20,000,000 with respect
to fiscal year 2007, or (z) $30,000,000 with respect to fiscal year 2008,
less, for each fiscal year, the aggregate amount of Member Guaranties
outstanding at such time, and (ix) any loan that consists of an Account
from a former Member that is converted in the ordinary course of business
into a loan and does not involve the advance of money."
4. Leases. Section 8.2.18 of the Loan Agreement is hereby deleted and the
following is inserted in its stead:
"8.2.18 Intentionally Omitted."
5. Fee. In order to induce Agent and Lenders to enter into this Fifth
Amendment, Borrowers agree to pay to Agent, for the ratable benefit of Lenders,
an amendment fee in the
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amount of $16,500. Said amendment fee shall be due, payable, fully earned and
non-refundable on the date of this Fifth Amendment.
6. Fifth Amendment Effective Date. This Fifth Amendment shall become
effective when (x) Borrowers, Agent and all Lenders shall have executed and
delivered to each other this Fifth Amendment and (y) Borrowers shall have paid
to Agent, for the ratable benefit of Lenders, the amendment fee referred to in
Section 5. The date on which such foregoing condition is satisfied shall be
referred to as the "Fifth Amendment Effective Date."
7. Execution in Counterparts. This Fifth Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
8. Continuing Effect. Except as otherwise specifically set out herein, the
provisions of the Loan Agreement shall remain in full force and effect.
9. Successors and Assigns. This Fifth Amendment shall be binding upon and
inure to the benefit of the successors and assigns of each Borrower, Agent and
each Lender permitted under Section 11.9 of the Loan Agreement.
10. Governing Law. This Fifth Amendment shall be governed by and construed
in accordance with the laws of the State of Illinois.
(SIGNATURE PAGE FOLLOWS)
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(SIGNATURE PAGE TO FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT)
IN WITNESS WHEREOF, this Fifth Amendment has been duly executed as of the
day and year specified at the beginning hereof.
TRUE VALUE COMPANY, as a Borrower
By: /s/ BARBARA L. WAGNER
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Name: Barbara L. Wagner
Title: Vice President and Treasurer
TRUSERV ACCEPTANCE COMPANY, as
a Borrower
By: /s/ BARBARA L. WAGNER
------------------------------------
Name: Barbara L. Wagner
Title: Vice President and Treasurer
TRUSERV LOGISTICS COMPANY, as a Borrower
By: /s/ BARBARA L. WAGNER
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Name: Barbara L. Wagner
Title: Vice President and Treasurer
GENERAL PAINT & MANUFACTURING COMPANY,
as a Borrower
By: /s/ BARBARA L. WAGNER
------------------------------------
Name: Barbara L. Wagner
Title: Vice President and Treasurer
TRUE VALUE.COM CORPORATION, as a
Borrower
By: /s/ BARBARA L. WAGNER
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Name: Barbara L. Wagner
Title: Vice President and Treasurer
(SIGNATURE PAGE TO FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT)
BANK OF AMERICA, N.A., as Agent and
as a Lender
By: /s/ DEBRA A. RATHBERGER
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Name: Debra A. Rathberger
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Title: Senior Vice President
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(SIGNATURE PAGE TO FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT)
WACHOVIA CAPITAL FINANCE CORPORATION
(CENTRAL) (FORMERLY KNOWN AS
CONGRESS FINANCIAL CORPORATION
(CENTRAL)), as Co-Documentation
Agent and as a Lender
By: /s/ BARRY FELKER
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Name: Barry Felker
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Title: Associate
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(SIGNATURE PAGE TO FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT)
MERRILL LYNCH CAPITAL, a Division of
Merrill Lynch Business Financial
Services, Inc., as Co-Documentation
Agent and as a Lender
By: /s/ EDWARD SHUSTER
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Name: Edward Shuster
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Title: Assistant Vice President
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(SIGNATURE PAGE TO FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT)
LASALLE BUSINESS CREDIT, LLC, as
Co-Documentation Agent and as a
Lender
By: /s/ STEVEN BUFORD
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Name: Steven Buford
Title: Vice President
(SIGNATURE PAGE TO FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT)
THE CIT GROUP/BUSINESS CREDIT, INC.,
as a Lender
By: /s/ EUSTACHIO BRUNO
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Name: Eustachio Bruno
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Title: Assistant Vice President
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(SIGNATURE PAGE TO FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT)
M & I MARSHALL & ILSLEY BANK, as
a Lender
By: /s/ RONALD J. CAREY
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Name: Ronald J. Carey
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Title: Vice President
---------------------------------
By: /s/ JAMES R. MILLER
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Name: James R. Miller
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Title: Vice President
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