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SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT AND WAIVER

Waiver Agreement

SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT AND WAIVER | Document Parties: BUILDING MATERIALS HOLDING CORP | A-1 BUILDING COMPONENTS, LLC | BMC WEST CORPORATION | C CONSTRUCTION, INC TWF CONSTRUCTION, INC | JP MORGAN SECURITIES INC | JPMORGAN CHASE BANK, NA | KBI STUCCO, INC | KBI WINDOWS, INC | MECHANICAL, LLC | OTHER FINANCIAL | SELECTBUILD ARIZONA, LLC | SELECTBUILD CONSTRUCTION, INC | SELECTBUILD DISTRIBUTION, INC | SELECTBUILD FLORIDA, LLC | SELECTBUILD ILLINOIS, LLC | SELECTBUILD MID-ATLANTIC, LLC | SELECTBUILD NEVADA, INC | SELECTBUILD NORTHERN CALIFORNIA, INC | SELECTBUILD SOUTHERN CALIFORNIA, INC | SELECTBUILD TRIM, LLC | WELLS FARGO BANK, NATIONAL ASSOCIATION You are currently viewing:
This Waiver Agreement involves

BUILDING MATERIALS HOLDING CORP | A-1 BUILDING COMPONENTS, LLC | BMC WEST CORPORATION | C CONSTRUCTION, INC TWF CONSTRUCTION, INC | JP MORGAN SECURITIES INC | JPMORGAN CHASE BANK, NA | KBI STUCCO, INC | KBI WINDOWS, INC | MECHANICAL, LLC | OTHER FINANCIAL | SELECTBUILD ARIZONA, LLC | SELECTBUILD CONSTRUCTION, INC | SELECTBUILD DISTRIBUTION, INC | SELECTBUILD FLORIDA, LLC | SELECTBUILD ILLINOIS, LLC | SELECTBUILD MID-ATLANTIC, LLC | SELECTBUILD NEVADA, INC | SELECTBUILD NORTHERN CALIFORNIA, INC | SELECTBUILD SOUTHERN CALIFORNIA, INC | SELECTBUILD TRIM, LLC | WELLS FARGO BANK, NATIONAL ASSOCIATION

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Title: SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT AND WAIVER
Governing Law: California     Date: 10/1/2008
Industry: Retail (Home Improvement)     Law Firm: Gibson Dunn     Sector: Services

SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT AND WAIVER, Parties: building materials holding corp , a-1 building components  llc , bmc west corporation , c construction  inc twf construction  inc , jp morgan securities inc , jpmorgan chase bank  na , kbi stucco  inc , kbi windows  inc , mechanical  llc , other financial , selectbuild arizona  llc , selectbuild construction  inc , selectbuild distribution  inc , selectbuild florida  llc , selectbuild illinois  llc , selectbuild mid-atlantic  llc , selectbuild nevada  inc , selectbuild northern california  inc , selectbuild southern california  inc , selectbuild trim  llc , wells fargo bank  national association
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EXHIBIT 10.10.2

 


 

SECOND AMENDMENT

TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT AND WAIVER

 

Dated as of September 30, 2008

 

among

 

BUILDING MATERIALS HOLDING CORPORATION,

 

BMC WEST CORPORATION

AND OTHER SUBSIDIARY GUARANTORS,

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent, Joint Lead Arranger, Joint Book Manager, Swingline Lender and

L/C Issuer,

 

JPMORGAN CHASE BANK, N.A.,

as Documentation Agent

 

and

 

THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO

 

J.P. MORGAN SECURITIES INC.,

Joint Lead Arranger and Joint Book Manager

 


 

 

SECOND AMENDMENT

TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT AND WAIVER

 

This SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT AND WAIVER (this “ Amendment ”) dated as of September 30, 2008, by and among (i) BUILDING MATERIALS HOLDING CORPORATION, a Delaware corporation (“ Holdings ”), as borrower, (ii) BMC WEST CORPORATION, a Delaware corporation (the “ Company ”), and certain other affiliates of Holdings, as guarantors, (iii) the Lenders party to the Credit Agreement referenced below, (iv) JPMORGAN CHASE BANK, N.A., as Documentation Agent, and (v) WELLS FARGO BANK, NATIONAL ASSOCIATION (“ Wells Fargo ”), as L/C Issuer, Swingline Lender, Joint Lead Arranger, Joint Book Manager and Administrative Agent.

 

A. WHEREAS, Holdings, the Company and the other Guarantors, the Lenders and the Administrative Agent are parties to a Second Amended and Restated Credit Agreement, dated as of November 10, 2006, as amended by a First Amendment to Second Amended and Restated Credit Agreement and Waiver, dated as of February 29, 2008 (as so amended, the “ Credit Agreement ”).

 

B. WHEREAS, by written notice dated July 29, 2008 (the “ Notice Letter ”), Holdings notified the Administrative Agent of certain Defaults under the Credit Agreement as more specifically described in such Notice Letter (such Defaults specified in the Notice Letter, the “ Specified Defaults ”).

 

C. WHEREAS, in light of the Specified Defaults, Holdings has requested that the Majority Lenders agree to certain amendments to the Credit Agreement.

 

D. WHEREAS, the Majority Lenders have agreed to such request, subject to the terms and conditions hereof.

 

Accordingly, the parties hereto agree as follows:

 

SECTION 1. Definitions; Interpretation .

 

(a) Terms Defined in Credit Agreement . All capitalized terms used in this Amendment (including in the preamble and recitals hereof) and not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement.

 

(b) Interpretation . The rules of interpretation set forth in Section 1.02 of the Credit Agreement shall be applicable to this Amendment and are incorporated herein by this reference.

 

SECTION 2. Amendments to the Credit Agreement; Waiver of Specified Defaults .

 

(a) Amendments . The Credit Agreement shall be amended as follows, effective as of the date of satisfaction of the conditions set forth in Section 3 of this Amendment:

 


 

 

(i)

Section 1.01 of the Credit Agreement (captioned “ Certain Defined Terms ”) shall be amended as follows:

 

 

(A)

The defined term “ Account ” shall be amended and restated in its entirety as follows:

 

““ Account ” means an account (as that term is defined in the UCC).”

 

 

(B)

A new defined term “ Account Debtor ” shall be inserted in alphabetical order as follows:

 

““ Account Debtor ” means any Person who is obligated on an Account.”

 

 

(C)

The defined term “ Applicable Fee Amount ” shall be amended and restated in its entirety as follows:

 

““ Applicable Fee Amount ” means, with respect to the Commitment Fees, 0.50%, and, with respect to the Standby Letter of Credit fees payable hereunder, 5.25%.”

 

 

(D)

The defined term “ Applicable Margin ” shall be amended and restated in its entirety as follows:

 

““ Applicable Margin ” means, with respect to Base Rate Loans, 3.25%, and, with respect to Offshore Rate Loans, 5.25%.”

 

(A) A new defined term “Appraised Value of Real Estate Collateral” shall be inserted in alphabetical order as follows:

 

 

(E)

““ Appraised Value of Real Estate Collateral ” means the appraised Dollar value of the Mortgaged Property that is subject to a valid and perfected first priority Lien in favor of the Administrative Agent (subject only to Permitted Liens), such Dollar value to be as determined from time to time by an appraisal company selected by the Administrative Agent. As of the Second Amendment Effective Date, the most recent Appraised Value of Real Estate Collateral is $218,908,002, as reflected on the schedule attached to the Borrowing Base Certificate delivered on the Second Amendment Effective Date.”

 

 

(F)

A new defined term “ BMCI ” shall be inserted in alphabetical order as follows:

 

““ BMCI ” means BMC Insurance, Inc., a Hawaii corporation.”

 

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(G)

A new defined term “ BMCI Liquidation ” shall be inserted in alphabetical order as follows:

 

““ BMCI Liquidation ” means (i) the liquidation of BMCI, (ii) the distribution or other transfer of all cash, cash equivalents and other securities held by BMCI to Holdings, (iii) the conversion of all such cash equivalents and other securities to cash through the orderly disposition thereof and (iv) the wind down and cessation of operations of BMCI.”

 

 

(H)

The defined term “ Borrowing Base ” shall be amended and restated in its entirety as follows:

 

““ Borrowing Base ” means, as of any date of determination, the result of:

 

a. 70% of the (A) amount of Eligible Accounts less the (B) Warranty Reserve less (C) the Gift Certificate Reserve, plus

 

b. 50% of (A) the value of Eligible Inventory (other than Truss and Millwork Inventory) less (B) the Inventory Vendor Discount Reserve less (C) the Inventory Volume Rebate Reserve, plus

 

c. 25% of (A) the value of Eligible Truss and Millwork Inventory less (B) the Truss and Millwork Vendor Discount Reserve less (C) the Truss and Millwork Volume Rebate Reserve, plus

 

d. 75% of the Fixed Assets Orderly Liquidation Value (or 60% of net book value of Eligible Fixed Assets (which as of the Second Amendment Effective Date is $_________)), prior to receipt by Administrative Agent of the first appraisal determining the Fixed Assets Orderly Liquidation Value), plus

 

e. 50% of the Appraised Value of Real Estate Collateral, minus

 

f. the Rent Reserve plus the aggregate amount of other reserves, if any, established by the Administrative Agent in the exercise of its Permitted Discretion.”

 

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(I)

A new defined term “ Cash Balance ” shall be inserted in alphabetical order as follows:

 

““ Cash Balance ” means, at any time, the aggregate Dollar amount of all cash and cash equivalents of Holdings and its Subsidiaries held in deposit accounts, securities accounts or otherwise, as determined in accordance with GAAP, but including, without limitation, any cash or cash equivalents held in a Cash Collateral Account without regard to how the account balance is accounted for on Holdings’ financial statements.”

 

 

(J)

A new defined term “ Cash Collateral Account ” shall be inserted in alphabetical order as follows:

 

““ Cash Collateral Account ” means that certain securities account with account number _____ held at _____ (or such other interest-bearing deposit accounts held at Wells Fargo Bank, N.A. or its Affiliates satisfactory to the Administrative Agent) in the name of the Administrative Agent, for itself and on behalf of and for the benefit of the Lenders, in which cash shall from time to time be deposited pursuant to the Loan Documents as additional collateral for the Obligations.”

 

 

(K)

The defined term “ Cash Collateralize ” shall be amended and restated in its entirety as follows:

 

““ Cash Collateralize ” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the Administrative Agent, the L/C Issuer and the applicable Lenders, as additional collateral for the L/C Obligations or the Obligations, as the case may be, pursuant to the Loan Documents, cash or deposit account balances. Derivatives of such term shall have corresponding meaning.

 

 

(L)

A new defined term “ Collateral Access Agreement ” shall be inserted in alphabetical order as follows:

 

““ Collateral Access Agreement ” means a landlord waiver, bailee letter, or acknowledgement agreement of any lessor, warehouseman, processor, consignee, or other Person in possession of, having a Lien upon, or having rights or interests in Holdings’ or its Subsidiaries’ books and records, Inventory or equipment, in each case, in form and substance reasonably satisfactory to Administrative Agent.”

 

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(M)

A new defined term “ Collected and Available Cash ” shall be inserted in alphabetical order as follows:

 

““ Collected and Available Cash ” means, at any time, the aggregate Dollar amount of all cash and cash equivalents constituting good and available funds of Holdings and its Subsidiaries, deposited into deposit accounts and concentrated into concentration accounts of Holdings and its Subsidiaries.”

 

 

(N)

The defined term “ Commercial Letter of Credit ” shall be amended by deleting the text “ordinary course of business” and replacing it with the text “Ordinary Course of Business”.

 

 

(O)

The defined terms “ Consolidated Net Income ”, “ Consolidated Net Worth ”, and “ Consolidated Total Assets ” shall be deleted.

 

 

(P)

A new defined term “ Costs of Goods Sold From Continuing Operations ” shall be inserted in alphabetical order as follows:

 

““ Costs of Goods Sold From Continuing Operations ” means, for any period, costs of goods sold of Holdings and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, but exclusive of costs of goods sold of the Wind-Down Business Units.”

 

 

(Q)

A new defined term “ Costs of Goods Sold From Wind-Down Business Units ” shall be inserted in alphabetical order as follows:

 

““ Costs of Goods Sold From Wind-Down Business Units ” means, for any period, costs of goods sold of the Wind-Down Business Units for such period determined in accordance with GAAP.”

 

 

(R)

The defined term “ Disposition ” shall be amended by adding an additional sentence at the end of the definition thereof as follows:

 

““For purposes of Section 2.08(a)(iii) , a Disposition shall not include the sale, lease, conveyance or other disposition of property (other than real estate and other fixed assets) of the Wind-Down Business Units.”

 

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(S)

The defined term “ EBITDA ” shall be amended and restated in its entirety as follows:

 

““ EBITDA From Continuing Operations ” means, for any period, the sum of Gross Profit From Continuing Operations for such period minus Selling, General and Administrative Expenses From Continuing Operations for such period plus (to the extent deducted in determining Gross Profit From Continuing Operations pursuant to clause (b) of the definition thereof or to the extent included in Selling, General and Administrative Expenses From Continuing Operations, and without duplication) (i) depreciation expense and amortization expense for such period, (ii) restructuring, charges relating to the shutdown or relocation of facilities and other like charges and professional fees and costs attributable to the restructuring of Holdings’ consolidated operations; provided , however , that such charges shall not exceed $700,000 per month, (iii) other nonrecurring items attributable to the restructuring of Holdings’ consolidated operations as may from time to time be agreed to by the Administrative Agent and the Documentation Agent in their reasonable discretion, (iv) non-cash impairment charges of goodwill and other intangibles, (v) non-cash share based compensation costs; provided , however , that such costs shall not exceed $750,000 per month, (vi) severance and early retirement costs attributable to the restructuring of Holdings’ consolidated operations; provided , however , that such costs shall not exceed $500,000 per month; (vii) the write-off or write-down of fixed assets attributable to the restructuring of Holdings’ consolidated operations; (viii) the write-off or write-down of operating leases attributable to the restructuring of Holdings’ consolidated operations; and (ix) fees and costs of attorneys and other professional advisors relating to the negotiation and documentation of the Second Amendment; all calculated for Holdings and its Subsidiaries on a consolidated basis for such period in accordance with GAAP.”

 

 

(T)

A new defined term “ EBITDA From Wind-Down Business Units ” shall be inserted in alphabetical order as follows:

 

““ EBITDA From Wind-Down Business Units ” means, for any period, the sum of Gross Profit From Wind-Down Business Units for such period minus Selling, General and Administrative Expenses From Wind-Down Business Units for such period plus (to the extent deducted in determining Gross Profit From Wind-Down Business Units pursuant to clause (b) of the definition thereof or to the extent included in Selling, General and Administrative Expenses From Wind-Down Business Units, and without duplication) (i) depreciation expense and amortization expense for such period, (ii) non-cash impairment charges of goodwill and other intangibles, (iii) the write-off or write down of fixed assets at “wind down” locations; (iv) the write-off, write down or reserves for bad debt of operating leases at “wind down” locations; (v) the write-off or write down of receivables at “wind down” locations; and the (vi) the write-off or write down of inventory at “wind down” locations; all calculated for the Wind-Down Business Units for such period in accordance with GAAP.”

 

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(U)

A new defined term “ Eligible Accounts ” shall be inserted in alphabetical order as follows:

 

““ Eligible Accounts ” means those Accounts created by Holdings or any Guarantor in the ordinary course of its business, that arise out of such Person’s sale of goods or rendition of services, that comply with each of the representations and warranties respecting Eligible Accounts made in the Loan Documents, and that are not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided , however , that such criteria may be revised from time to time by Administrative Agent in Administrative Agent’s Permitted Discretion to address the results of any audit performed by Administrative Agent from time to time after the Second Amendment Effective Date. Eligible Accounts shall not include the following (unless the Administrative Agent has imposed a reserve in the respect of the relevant Accounts), without duplication:

 

a. Accounts that the Account Debtor has failed to pay within 60 days of original due date or Accounts with selling terms of more than 30 days,

 

b. Accounts owed by an Account Debtor (or its Affiliates) where 20% or more of all Accounts owed by that Account Debtor (or its Affiliates) are deemed ineligible under clause (a) above,

 

c. Accounts with respect to which the Account Debtor is owed a credit by Holdings or any Guarantor, to the extent of such credit,

 

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d. Accounts consisting of late fees or similar finance charges with respect to Accounts deemed ineligible under clause (a) above,

 

e. Accounts subject to a contra account or with respect to which the Account Debtor is otherwise a creditor of Holdings or any Guarantor, has or has asserted a right of setoff, or has disputed its obligation to pay all or any portion of the Account, to the extent of such contra account, claim, right of setoff, or dispute,

 

f. Accounts with respect to which the Account Debtor is subject to an Insolvency Proceeding, is not Solvent, has gone out of business, or as to which Holdings or any Guarantor has received notice of an imminent Insolvency Proceeding or a material impairment of the financial condition of such Account Debtor,

 

g. Accounts with respect to which the Account Debtor has made a deposit or other advance payment, to the extent of such deposit or advance payment,

 

h. Accounts with respect to which the Account Debtor is owed premiums by Holdings or any Guarantor for WRAP insurance, to the extent of such premiums,

 

i. Accounts arising from services subject to a performance bond or other Surety Instrument,

 

j. Accounts with respect to which the Account Debtor is an Affiliate of Holdings or an employee or agent of Holdings or any Affiliate of Holdings,

 

k. Accounts with cash-on-delivery, cash-in-advance or similar selling terms,

 

l. Accounts with respect to which the Account Debtor is a school, school district or other similar payor,

 

m. Accounts with respect to which the Account Debtor is either (i) the United States or any department, agency, or instrumentality of the United States (exclusive, however, of Accounts with respect to which Holdings has complied, to the reasonable satisfaction of Administrative Agent, with the Assignment of Claims Act, 31 USC §3727), or (ii) any state of the United States,

 

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n. Accounts with respect to which the Account Debtor has earned an allowance or rebate, to the extent of such allowance or rebate,

 

o. Accounts evidenced by a promissory note or other instrument,

 

p. Accounts evidencing billings in excess of costs, to the extent of such excess,

 

q. Accounts arising in a transaction wherein goods are placed on consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale on approval, a bill and hold, or any other terms by reason of which the payment by the Account Debtor may be conditional,

 

r. Accounts that are not payable in Dollars,

 

s. Accounts with respect to which the Account Debtor either (i) does not maintain its chief executive office in the United States, or (ii) is not organized under the laws of the United States or any state thereof, or (iii) is the government of any foreign country or sovereign state, or of any state, province, municipality, or other political subdivision thereof, or of any department, agency, public corporation, or other instrumentality thereof, unless (y) the Account is supported by an irrevocable letter of credit reasonably satisfactory to Administrative Agent (as to form, substance, and issuer or domestic confirming bank) that has been delivered to Administrative Agent and is directly drawable by Administrative Agent, or (z) the Account is covered by credit insurance in form, substance, and amount, and by an insurer, reasonably satisfactory to Administrative Agent,

 

t. Accounts with respect to an Account Debtor whose total obligations owing to Holdings and the Guarantors exceed 20% (such percentage, as applied to a particular Account Debtor, being subject to reduction by Administrative Agent in its Permitted Discretion if the creditworthiness of such Account Debtor deteriorates) of all Eligible Accounts, to the extent of the obligations owing by such Account Debtor in excess of such percentage; provided , however , that, in each case, the amount of Eligible Accounts that are excluded because they exceed the foregoing percentage shall be determined by Administrative Agent based on all of the otherwise Eligible Accounts prior to giving effect to any eliminations based upon the foregoing concentration limit,

 

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u. Accounts, the collection of which Administrative Agent, in its Permitted Discretion, believes to be doubtful by reason of the Account Debtor’s financial condition,

 

v. Accounts that are not subject to a valid and perfected first priority Lien in favor of the Administrative Agent,

 

w. Accounts with respect to which (i) the goods giving rise to such Account have not been shipped and billed to the Account Debtor, or (ii) the services giving rise to such Account have not been performed and billed to the Account Debtor,

 

x. Accounts with respect to which the Account Debtor is a Sanctioned Person or Sanctioned Entity”

 

 

(V)

A new defined term “ Eligible Fixed Assets ” shall be inserted in alphabetical order as follows:

 

““ Eligible Fixed Assets ” means the fixed assets (other than real estate) of Holdings and the Guarantors that comply with each of the representations and warranties respecting Eligible Fixed Assets made in the Loan Documents and that are not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided , however , that such criteria may be revised from time to time by Administrative Agent in Administrative Agent’s Permitted Discretion to address the results of any audit or appraisal performed by Administrative Agent from time to time after the Second Amendment Effective Date. An item of fixed assets shall not be included in Eligible Fixed Assets (unless the Administrative Agent has imposed a reserve in the respect of the relevant fixed assets), without duplication, if:

 

a. Holdings or any Guarantor does not have good, valid, and marketable title thereto,

 

b. it is not located at one of the locations in the continental United States set forth on Schedule 1.01A, as such Schedule may be amended from time to time (or in-transit from one such location to another such location),

 

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c. it is located on real property leased by Holdings or any Guarantor or in a contract warehouse, in each case, unless either (1) it is subject to a Collateral Access Agreement executed by the lessor or warehouseman, as the case may be, and unless it is segregated or otherwise separately identifiable from goods of others, if any, stored on the premises, or (2) a Rent Reserve has been imposed in respect of the Fixed Assets located at such location,

 

d. it is not subject to a valid and perfected first priority Lien in favor of the Administrative Agent.

 

 

(W)

A new defined term “ Eligible Inventory ” shall be inserted in alphabetical order as follows:

 

““ Eligible Inventory ” means Inventory consisting of first quality finished goods held for sale in the ordinary course of Holdings’ or any Guarantor’s business, that complies with each of the representations and warranties respecting Eligible Inventory made in the Loan Documents, and that is not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided , however , that such criteria may be revised from time to time by Administrative Agent in Administrative Agent’s Permitted Discretion to address the results of any audit or appraisal performed by Administrative Agent from time to time after the Second Amendment Effective Date. In determining the amount to be so included, Inventory shall be valued at the lower of cost or market on a basis consistent with Holdings’ historical accounting practices. An item of Inventory shall not be included in Eligible Inventory if (unless the Administrative Agent has imposed a reserve in the respect of the relevant Inventory), without duplication:

 

a. Holdings or any Guarantor does not have good, valid, and marketable title thereto,

 

b. it is not located at one of the locations in the continental United States set forth on Schedule 1.01A, as such Schedule may be amended from time to time (or in-transit from one such location to another such location),

 

c. it is located on real property leased by Holdings or any Guarantor or in a contract warehouse, in each case, unless (1) it is subject to a Collateral Access Agreement executed by the lessor or warehouseman, as the case may be, and unless it is segregated or otherwise separately identifiable from goods of others, if any, stored on the premises, or (2) a Rent Reserve has been imposed in respect of the Inventory located at such location,

 

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d. it is not subject to a valid and perfected first priority Lien in favor of the Administrative Agent,

 

e. it consists of goods returned or rejected by Holdings’ or any Guarantor’s customers,

 

f. it consists of goods that are obsolete or slow moving, restrictive or custom items, work-in-process (other than Truss and Millwork Inventory), raw materials, or goods that constitute spare parts, packaging and shipping materials, supplies used or consumed in Holdings’ or any Guarantor’s business, bill and hold goods, defective goods, “seconds,” or Inventory acquired on consignment,

 

g.   it consists of non-perpetual Inventory,

 

h.   it consists of special order Inventory, or

 

i.   it consists of racks and pallets Inventory.

 

 

(X)

A new defined term “ Eligible Truss and Millwork Inventory ” shall be inserted in alphabetical order as follows:

 

““ Eligible Truss and Millwork Inventory ” means Eligible Inventory consisting of Truss and Millwork Inventory.”

 

 

(Y)

A new defined term “ Excess Cash Flow ” shall be inserted in alphabetical order as follows:

 

““ Excess Cash Flow ” means, for any period, (i) EBITDA From Continuing Operations for such period minus (ii) the sum of (A) Capital Expenditures for such period to the extent permitted under Section 8.21 , (B) taxes paid in cash during such period and (C) payments of principal and interest paid in cash during such period in respect of Indebtedness permitted under Section 8.05 , in each case, for Holdings and its Subsidiaries on a consolidated basis in accordance with GAAP.”

 

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(Z)

A new defined term “ Fixed Assets Orderly Liquidation Value ” shall be inserted in alphabetical order as follows:

 

““ Fixed Assets Orderly Liquidation Value ” means the Dollar amount that is estimated to be recoverable in an orderly liquidation of the Eligible Fixed Assets net of all associated costs and expenses of such liquidation, such Dollar amount to be as determined from time to time by an appraisal company selected by the Administrative Agent.”

 

 

(AA)

A new defined term “ Gift Certificate Reserve ” shall be inserted in alphabetical order as follows:

 

““ Gift Certificate Reserve ” means, as of any date of determination, a Dollar amount equal to Holdings’ and its Subsidiaries’ accrued liabilities for outstanding gift certificates as of such date.”

 

 

(BB)

A new defined term “ Gross Profit From Continuing Operations ” shall be inserted in alphabetical order as follows:

 

““ Gross Profit From Continuing Operations ” means, for any period, (a) Total Sales From Continuing Operations for such period minus (b) Costs of Goods Sold From Continuing Operations for such period.”

 

 

(CC)

A new defined term “ Gross Profit From Wind-Down Business Units ” shall be inserted in alphabetical order as follows:

 

““ Gross Profit From Wind-Down Business Units ” means, for any period, (a) Total Sales From Wind-Down Business Units for such period minus (b) Costs of Goods Sold From Wind-Down Business Units for such period.”

 

 

(DD)

The defined term “ Indebtedness ” shall be amended by deleting the text “ordinary course of business” and replacing it with the text “Ordinary Course of Business”.

 

 

(EE)

A new defined term “ Interest Coverage Ratio ” shall be inserted in alphabetical order as follows:

 

““ Interest Coverage Ratio ” means, as of the last day of any fiscal quarter, the ratio of (i) EBITDA From Continuing Operations to (ii) Interest Expense paid in cash, in each case, for the period of four fiscal quarters ended on such date.”

 

 

(FF)

A new defined term “ Inventory ” shall be inserted in alphabetical order as follows:

 

““ Inventory ” means inventory (as that term is defined in the UCC).”

 

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(GG)

A new defined term “ Inventory Vendor Discount Reserve ” shall be inserted in alphabetical order as follows:

 

““ Inventory Vendor Discount Reserve ” means, as of any date of determination, (i) 100% minus the Truss and Millwork Inventory Percentage multiplied by (ii) the amount of reserves that Holdings has recorded in its books as of such date, in accordance with GAAP, in respect of vendor discounts earned on Holdings’ and its Subsidiaries’ Inventory.”

 

 

(HH)

A new defined term “ Inventory Volume Rebate Reserve ” shall be inserted in alphabetical order as follows:

 

““ Inventory Volume Rebate Reserve ” means, as of any date of determination, (i) 100% minus the Truss and Millwork Inventory Percentage multiplied by (ii) the amount of reserves that Holdings has recorded in its books as of such date, in accordance with GAAP, in respect of rebates earned by vendors relating to volume purchases of Holdings’ and its Subsidiaries’ Inventory.”

 

 

(II)

A new defined term “ L/C Cash Collateral Account ” shall be inserted in alphabetical order as follows:

 

““ L/C Cash Collateral Account ” means one or more non-interest bearing deposit accounts held at Wells Fargo Bank, N.A. in the name of the Administrative Agent, for itself and on behalf of and for the benefit of the L/C Issuer and the Revolving Lenders, in which cash shall from time to time be deposited pursuant to the Loan Documents as additional collateral for the L/C Obligations.

 

 

(JJ)

A new defined term “ Leverage Ratio ” shall be inserted in alphabetical order as follows:

 

““ Leverage Ratio ” means, as of the last day of any fiscal quarter, the ratio of (i) Total Funded Debt on such date to (ii) EBITDA From Continuing Operations for the period of four fiscal quarters ended on such date.”

 

 

(KK)

A new defined term “ Liquidity ” shall be inserted in   alphabetical order as follows:

 

““ Liquidity ” means, at any time, a Dollar amount equal to (i)(A) the Borrowing Base then in effect plus (B) (to the extent a positive number) (1) the Cash Balance at such time minus (2) $15,000,000, minus (ii) the Effective Amount of all Revolving Loans, Swingline Loans and L/C Obligations at such time.”

 

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(LL)

A new defined term “ OFAC ” shall be inserted in alphabetical order as follows:

 

““ OFAC ” means The Office of Foreign Assets Control of the U.S. Department of the Treasury.”

 

 

(MM)

A new defined term “ Ordinary Course of Business ” shall be inserted in alphabetical order as follows:

 

““ Ordinary Course of Business ” means, in respect of any transaction involving a Loan Party, the ordinary course of such Loan Party’s business, and undertaken by such Loan Party in good faith and not for purposes of evading any covenant or restriction in any Loan Document.”

 

 

(NN)

A new defined term “ Permitted Discretion ” shall be inserted in alphabetical order as follows:

 

““ Permitted Discretion ” means a determination made in the exercise of reasonable (from the perspective of a secured lender) business judgment.”

 

 

(OO)

The defined term “ Permitted Swap Obligations ” shall be amended by (A) inserting the word “Specified” before the phrase “Swap Contracts”, and (B) deleting the text “ordinary course of business” and replacing it with the text “Ordinary Course of Business.”

 

 

(PP)

A new defined term “ PIK Interest ” shall be inserted in alphabetical order as follows:

 

““ PIK Interest ” has the meaning specified in Section 2.10(a) .”

 

 

(QQ)

A new defined term “ PIK Margin ” shall be inserted in alphabetical order as follows:

 

““ PIK Margin ” means 2.75%.”

 

 

(RR)

A new defined term “ Rent Reserve ” shall be inserted in alphabetical order as follows:

 

““ Rent Reserve ” means, as of any date of determination and without duplication for multiple classes of eligible assets held at any particular location, a Dollar amount equal to (i) three multiplied by (ii) the aggregate monthly rent payable by Holdings and its Subsidiaries in respect of all real property leased by Holdings and its Subsidiaries and all contract warehouses, in each case, where Eligible Inventory or Eligible Fixed Assets are located.”

 

15


 

 

(SS)

A new defined term “ Sanctioned Entity ” shall be inserted in alphabetical order as follows:

 

““ Sanctioned Entity ” means (a) a country or a government of a country, (b) an agency of the government of a country, (c) an organization directly or indirectly controlled by a country or its government, (d) a Person resident in or determined to be resident in a country, in each case, that is subject to a country sanctions program administered and enforced by OFAC.”

 

 

(TT)

A new defined term “ Sanctioned Person ” shall be inserted in alphabetical order as follows:

 

““ Sanctioned Person ” means a person named on the list of Specially Designated Nationals maintained by OFAC.”

 

 

(UU)

A new defined term “ Solvent ” shall be inserted in alphabetical order as follows:

 

““ Solvent ” means, with respect to any Person on a particular date, that, at fair valuations, the sum of such Person’s assets is greater than all of such Person’s debts.”

 

 

(VV)

A new defined term “ Second Amendment ” shall be inserted in alphabetical order as follows:

 

““ Second Amendment ” shall mean the Second Amendment to Second Amended and Restated Credit Agreement and Waiver dated as of September __, 2008, among Holdings, the Guarantors, the Lenders and the Administrative Agent.”

 

 

(WW)

A new defined term “ Second Amendment Effective Date ” shall be inserted in alphabetical order as follows:

 

““ Second Amendment Effective Date ” means the “Effective Date” under and as defined in the Second Amendment.”

 

16


 

 

(XX)

A new defined term “ Selling, General and Administrative Expenses From Continuing Operations ” shall be inserted in alphabetical order as follows:

 

““ Selling, General and Administrative Expenses From Continuing Operations” means, for any period, selling, general and administrative expenses of Holdings and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, but exclusive of selling, general and administrative expenses of the Wind-Down Business Units.”

 

 

(YY)

A new defined term “ Selling, General and Administrative Expenses From Wind-Down Business Units ” shall be inserted in alphabetical order as follows:

 

““ Selling, General and Administrative Expenses From Wind-Down Business Units” means, for any period, selling, general and administrative expenses of the Wind-Down Business Units for such period determined in accordance with GAAP.”

 

 

(ZZ)

The defined term “ Subsidiary ” shall be amended by inserting the text “ 7.19 , ” immediately before the text “ 8.03 ”.

 

 

(AAA)

The defined term “ Surety Bond Reserve ” shall be deleted.

 

 

(BBB)

A new defined term “ Swap Provider ” shall be inserted in alphabetical order as follows:

 

““ Swap Provider ” means any Person that at the time such Person entered into a Specified Swap Contract with Holdings was a Lender or any Affiliate of any Lender.

 

 

(CCC)

A new defined term “ Total Funded Debt ” shall be inserted in alphabetical order as follows:

 

““ Total Funded Debt ” means, as of any date of determination, all (i) indebtedness for borrowed money as of such date (excluding any capitalized interest), plus (ii) obligations in respect of Capital Leases as of such date, in each case, of Holdings and its Subsidiaries on a consolidated basis in accordance with GAAP, including all Term B Loans, Revolving Loans, Swingline Loans and L/C Obligations.”

 

17


 

 

(DDD)

A new defined term “ Total Sales From Continuing Operations ” shall be inserted in alphabetical order as follows:

 

““ Total Sales From Continuing Operations ” means, for any period, total sales of Holdings and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, but exclusive of total sales of the Wind-Down Business Units.”

 

 

(EEE)

A new defined term “ Total Sales From Wind-Down Business Units ” shall be inserted in alphabetical order as follows:

 

““ Total Sales From Wind-Down Business Units ” means, for any period, total sales of the Wind-Down Business Units for such period determined in accordance with GAAP.”

 

 

(FFF)

A new defined term “ Truss and Millwork Inventory ” shall be inserted in alphabetical order as follows:

 

““ Truss and Millwork Inventory ” means Inventory consisting of trusses and millwork.”

 

 

(GGG)

A new defined term “ Truss and Millwork Inventory Percentage ” shall be inserted in alphabetical order as follows:

 

““ Truss and Millwork Inventory Percentage ” means, as of any date of determination, the percentage of Holdings’ and its Subsidiaries’ total Inventory consisting of Truss and Millwork Inventory as of such date.”

 

 

(HHH)

A new defined term “ Truss and Millwork Vendor Discount Reserve ” shall be inserted in alphabetical order as follows:

 

““ Truss and Millwork Vendor Discount Reserve ” means, as of any date of determination, (i) the Truss and Millwork Inventory Percentage multiplied by (ii) the amount of reserves that Holdings has recorded in its books as of such date, in accordance with GAAP, in respect of vendor discounts earned on Holdings’ and its Subsidiaries’ Inventory.”

 

 

(III)

A new defined term “ Truss and Millwork Volume Rebate Reserve ” shall be inserted in alphabetical order as follows:

 

““ Truss and Millwork Volume Rebate Reserve ” means, as of any date of determination, (i) the Truss and Millwork Inventory Percentage multiplied by (ii) the amount of reserves that Holdings has recorded in its books as of such date, in accordance with GAAP, in respect of rebates earned by vendors relating to volume purchases of Holdings’ and its Subsidiaries’ Inventory.”

 

18


 

 

(JJJ)

A new defined term “ Warranty Reserve ” shall be inserted in alphabetical order as follows:

 

““ Warranty Reserve ” means, as of any date of determination, the amount of reserves that Holdings has recorded in its books as of such date, in accordance with GAAP, in respect of actual or estimated warranty claims relating to products or services provided by Holdings and its Subsidiaries.”

 

 

(KKK)

A new defined term “ Wind-Down Business Units ” shall be inserted in alphabetical order as follows:

 

““ Wind-Down Business Units ” means the business units identified on Schedule 1.01B.”

 

 

(LLL)

A new defined term “ Wind-Down of Non-Core Operations ” shall be inserted in alphabetical order as follows:

 

““ Wind-Down of Non-Core Operations ” means the termination or transfer of all employees and the cessation of business operations (within the meaning of Section 165 of the Code) of the Wind-Down Business Units.”

 

 

(ii)

Section 2.01 of the Credit Agreement (captioned “ Amounts and Terms of Commitment and Loans ”) shall be amended by amending and restating the first two sentences of Section 2.01(b) as follows:

 

“On the terms and subject to the conditions of this Agreement, each Revolving Lender severally agrees to advance to Holdings from time to time during the period beginning on the Effective Date and ending on the Revolving Loan Maturity Date such loans (each such loan, a “ Revolving Loan ”) in Dollars as Holdings may request under this Section 2.01(b) ; provided , however , that (i) after giving effect to any Borrowing of Revolving Loans, (A) the Effective Amount of all Revolving Loans and Swingline Loans and the Effective Amount of all L/C Obligations shall not exceed the combined Revolving Commitments of the Revolving Lenders, (B) the Effective Amount of the Revolving Loans of any Revolving Lender plus the participation of such Revolving Lender in the Effective Amount of all L/C Obligations and in the Effective Amount of all Swingline Loans shall not at any time exceed such Revolving Lender’s Revolving Commitment and (C) the Effective Amount of all Revolving Loans, Swingline Loans and L/C Obligations shall not exceed the Borrowing Base then in effect. Within the limits of each Revolving Lender’s Revolving Commitment, and subject to the other terms and conditions hereof, Holdings may borrow under this Section 2.01(b) , prepay under Section 2.07 and reborrow under this Section 2.01(b) .”

 

19


 

 

(iii)

Section 2.05 of the Credit Agreement (captioned “ Termination or Reduction of Commitments ”) shall be amended by deleting the parenthetical “(except pursuant to Section 2.01(f))”.

 

 

(iv)

Section 2.06 of the Credit Agreement (captioned “ Swingline Loans ”) shall be amended by amending and restating the proviso in the first sentence thereof as follows:

 

provided that at no time shall (i) the sum of the Effective Amount of all Swingline Loans plus the Effective Amount of all Revolving Loans plus the Effective Amount of all L/C Obligations exceed the combined Revolving Commitments of the Revolving Lenders, (ii) the Effective Amount of all Swingline Loans exceed the Swingline Commitment and (iii) the Effective Amount of all Revolving Loans, Swingline Loans and L/C Obligations exceed the Borrowing Base then in effect.”

 

 

(v)

Section 2.08 of the Credit Agreement (captioned “ Mandatory Prepayments of Loans; Mandatory Commitment Reductions ”) shall be amended as follows:

 

 

 

(A)

Section 2.08(a)(ii) shall be amended and restated in its entirety as follows:

 

“(ii) If at any time the Effective Amount of all Revolving Loans and Swingline Loans plus the Effective Amount of all L/C Obligations exceeds the combined Revolving Commitments of the Revolving Lenders, Holdings shall immediately, and without notice or demand, prepay the outstanding principal amount of the Revolving Loans, Swingline Loans and L/C Borrowings by an amount equal to the applicable excess in the following order of priority: first, Holdings shall prepay any L/C Borrowings then outstanding up to an amount equal to the applicable excess; second, Holdings shall prepay the Swingline Loans then outstanding up to an amount equal to any remaining excess; and third, Holdings shall prepay the Revolving Loans then outstanding up to an amount equal to any remaining excess.”

 

20


 

 

(B)

Section 2.08(a)(iii) shall be amended and restated in its entirety as follows:

 

“(iii) If Holdings, the Company or any other Subsidiary shall at any time make or agree to make a Disposition, then (A) Holdings shall promptly notify the Administrative Agent of such Disposition (including notice of the amount of the estimated Net Proceeds to be received by Holdings, the Company or such other Subsidiary in respect thereof), and (B) promptly upon, and in no event later than one (1) Business Day after, receipt by Holdings, the Company or such other Subsidiary of the Net Proceeds of such Disposition, Holdings shall prepay the Term B Loans in an aggregate amount equal to 100% of the amount of the Net Proceeds of such Disposition; provided , however , that with respect to any Non-Wholly-Owned Subsidiary, Holdings shall only be required to prepay the Term B Loans as provided above in an amount equal to the ratable portion of the Net Proceeds received by such Non-Wholly-Owned Subsidiary based on Holdings’ direct or indirect interest in such Non-Wholly-Owned Subsidiary; and provided further , however , that if the Net Proceeds of any Disposition are less than $100,000, then Holdings may delay the prepayment of the Term B Loans required under this Section 2.08(a)(iii) until such time as aggregate Net Proceeds from Dispositions in respect of which a prepayment under this Section 2.08(a)(iii) has not been made exceed $100,000.”

 

 

(C)

Section 2.08(a)(v) shall be amended and restated in its entirety as follows:

 

“(v) If at any time the Effective Amount of all Revolving Loans and Swingline Loans plus the Effective Amount of all L/C Obligations exceeds the Borrowing Base then in effect, Holdings shall immediately, and without notice or demand, prepay the outstanding principal amount of the Revolving Loans, Swingline Loans and L/C Borrowings and Cash Collateralize the L/C Obligations by an amount equal to the applicable excess in the following order of priority: first, Holdings shall prepay any L/C Borrowings then outstanding up to an amount equal to the applicable excess; second, Holdings shall prepay the Swingline Loans then outstanding up to an amount equal to any remaining excess; third, Holdings shall prepay the Revolving Loans then outstanding up to an amount equal to any remaining excess; and fourth, Holdings shall Cash Collateralize the L/C Obligations then outstanding up to an amount equal to any remaining excess in accordance with Section 3.07 .”

 

21


 

 

(D)

Section 2.08(a)(vii) shall be amended by (1) re-designating such Section as Section 2.08(a)(xi) and (2) amending and restating such Section in its entirety as follows:

 

“(xi) Any prepayments pursuant to this Section 2.08 shall be subject to Section 4.04 and applied, first, to any Base Rate Loans then outstanding and then to Offshore Rate Loans with the shortest Interest Periods remaining. Holdings shall pay, together with each prepayment under this Section 2.08 , accrued interest (other than PIK Interest, except as otherwise provided in Section 2.10(b) ) on the amount of any Loans prepaid and any amounts required pursuant to Section 4.04 . Prepayments of Term B Loans shall be applied to reduce the Term B Loans with respect to each remaining installment of principal pro rata in accordance with the then remaining installments payable under Section 2.09(a) .”

 

 

(E)

New Sections 2.08(a)(vii), 2.08(a)(viii), 2.08(a)(ix) and 2.08(a)(x) shall be inserted as follows:

 

“(vii) If Holdings, the Company or any other Subsidiary shall at any time or from time to time receive cash, checks or other cash equivalent financial instruments in respect of the BMCI Liquidation (other than any such items received on or prior to the Second Amendment Effective Date and applied to prepay the Term B Loans) (“ BMCI Liquidation Proceeds ”), then promptly upon, and in no event later than one (1) Business Day after, receipt by Holdings, the Company or such other Subsidiary of BMCI Liquidation Proceeds, Holdings shall prepay the outstanding principal amount of the Revolving Loans, Swingline Loans and L/C Borrowings and Cash Collateralize the Obligations by an aggregate amount equal to 100% of the Dollar amount of such BMCI Liquidation Proceeds in the following order of priority: first, Holdings shall prepay any L/C Borrowings to the extent L/C Borrowings in a sufficient amount are then outstanding; second, Holdings shall prepay the Swingline Loans to the extent Swingline Loans in a sufficient amount are then outstanding; third, Holdings shall prepay the Revolving Loans to the extent Revolving Loans in a sufficient amount are then outstanding; and fourth, Holdings shall Cash Collateralize the Obligations in accordance with Section 2.17 .

 

22


 

(viii) If Holdings, the Company or any other Subsidiary shall at any time or from time to time receive cash, checks or other cash equivalent financial instruments from any Governmental Authority in respect of the anticipated federal tax refunds for tax years 2006 and 2007 and the state tax refunds for a tax year 2008 net operating loss carryback (all such amounts net of settlement payments for open audit years, “ Tax Refund Proceeds ”), then promptly upon, and in no event later than one (1) Business Day after, receipt by Holdings, the Company or such other Subsidiary of Tax Refund Proceeds, Holdings shall (A) prepay the Term B Loans in an aggregate amount equal to 70% of the Dollar amount of such Tax Refund Proceeds and (B) prepay the outstanding principal amount of the Revolving Loans, Swingline Loans and L/C Borrowings and Cash Collateralize the Obligations by an aggregate amount equal to 30% of the Dollar amount of such Tax Refund Proceeds in the following order of priority: first, Holdings shall prepay any L/C Borrowings to the extent L/C Borrowings in a sufficient amount are then outstanding; second, Holdings shall prepay the Swingline Loans to the extent Swingline Loans in a sufficient amount are then outstanding; third, Holdings shall prepay the Revolving Loans to the extent Revolving Loans in a sufficient amount are then outstanding; and fourth, Holdings shall Cash Collateralize the Obligations in accordance with Section 2.17 .

 

(ix) If as of the close of business on any Business Day the balance in the Cash Collateral Account on such day exceeds $25,000,000, then Holdings shall within one (1) Business Day, and without notice or demand, prepay the outstanding principal amount of the Revolving Loans, Swingline Loans and L/C Borrowings and Cash Collateralize the Obligations by an amount equal to the applicable excess in the following order of priority: first, Holdings shall prepay any L/C Borrowings then outstanding up to an amount equal to the applicable excess; second, Holdings shall prepay the Swingline Loans then outstanding up to an amount equal to any remaining excess; third, Holdings shall prepay the Revolving Loans then outstanding up to an amount equal to any remaining excess; and fourth, Holdings shall Cash Collateralize the Obligations in accordance with Section 2.17 .

 

23


 

(x) Following the end of each fiscal year of Holdings, commencing with the fiscal year ending December 31, 2010, Holdings shall prepay the Term B Loans in an aggregate amount equal to 75% of Excess Cash Flow for such fiscal year. Each prepayment pursuant to this Section 2.08(a)(x) shall be made on or prior to the date that is five Business Days after the date on which financial statements are delivered pursuant to Section 7.01 with respect to the fiscal year for which Excess Cash Flow is being calculated.”

 

 

(F)

Section 2.08(c) shall be amended by deleting the text “ Section 2.01(a)(iii), 2.01(a)(iv), 2.01(a)(v) or 2.01(a)(vi) ” and replacing with the text “ Section 2.08(a) .”

 

 

(vi)

Section 2.10 of the Credit Agreement (captioned “ Interest ”) shall be amended as follows:

 

 

(A)

Section 2.10(a) shall be amended and restated in its entirety as follows:

 

“(a) (i) Subject to Section 2.10(c) below, each Revolving Loan and Term B Loan shall bear interest on the outstanding principal amount thereof from the applicable Borrowing Date at a rate per annum equal to (A) the greater of the Offshore Rate and 3.00% or (B) the Base Rate, as the case may be (and subject to Holdings’ right to convert to other Types of Loans under Section 2.04 ), plus the Applicable Margin; and (ii) each Swingline Loan shall bear interest on the outstanding principal amount thereof from the applicable Borrowing Date at a rate per annum equal to the Base Rate plus the Applicable Margin (for Base Rate Loans), or at such other rate as may be agreed to by the Swingline Lender. Each Term B Loan shall bear additional interest on the outstanding principal amount thereof from the Second Amendment Effective Date at a rate per annum equal to the PIK Margin (such additional interest, the “ PIK Interest ”).”

 

24


 

 

(B)

Section 2.10(b) shall be amended and restated in its entirety as follows:

 

“(b) Interest (other than PIK Interest) on each Revolving Loan, Term B Loan and Swingline Loan shall be paid in arrears on each Interest Payment Date. PIK Interest on each Term B Loan shall be paid in arrears on the date of maturity of the Term B Loans (whether at maturity, upon acceleration, or otherwise). Interest shall also be paid on the date of any prepayment of the Loans under Section 2.07 or Section 2.08 for the portion of such Loans so prepaid and upon payment (including prepayment) in full thereof, and on the Revolving Loan Maturity Date or Term B Loan Maturity Date, as applicable; provided , however , that PIK Interest need not be paid on the date of any prepayment of the Loans under Section 2.07 or Section 2.08 except upon payment (including prepayment) in full of the Term B Loans. During the existence of any Event of Default, interest (other than PIK Interest) shall be paid on demand of the Administrative Agent at the request or with the consent of the Majority Lenders.”

 

 

(vii)

Section 2.11 of the Credit Agreement (captioned “ Fees ”) shall be amended by (A) amending Section 2.11(a) to (1) delete the word “and” immediately prior to clause (v) and replacing it with a comma, and (2) inserting a new clause (vi) immediately prior to the parenthetical at the end of such Section as follows: “and (vi) that certain letter agreement among Holdings, Wells Fargo and JPMorgan Chase Bank, N.A. dated [September 26], 2008”, and (B) adding a new Section 2.11(c) as follows:

 

“(c) In lieu of and in substitution for PIK Interest, each Term B Lender may, by irrevocable written election made to the Administrative Agent on or prior to the date that is 30 days after the Second Amendment Effective Date, elect to have its Term B Loans accrue a daily fee from the Second Amendment Effective Date at a rate per annum equal to the PIK Margin (the “ PIK Fee ”). The PIK Fee on each Term B Loan shall be paid in arrears on the date of maturity of the Term B Loans (whether at maturity, upon acceleration, or otherwise) and upon payment (including prepayment) in full of the Term B Loans.”

 

 

(viii)

A new Section 2.16 shall be added to the Credit Agreement as follows:

 

“2.16 Warrants . On the Second Amendment Effective Date, Holdings shall issue to each Lender warrants in substantially the form of Exhibit L hereto to purchase such Lender’s Proportionate Share of 2,824,732 shares of Holdings’ common stock, par value $0.001 per share.”

 

25


 

 

(ix)

A new Section 2.17 shall be added to the Credit Agreement as follows:

 

“2.17 Cash Collateral . Upon the occurrence of the circumstances described in Sections 2.08(a)(vii) , (viii) or (ix) requiring Holdings to Cash Collateralize the Obligations, then Holdings shall immediately Cash Collateralize the Obligations in the applicable amount required under Sections 2.08(a)(vii) , (viii) and (ix) . Cash collateral held under this Section 2.17 shall be maintained in the Cash Collateral Account pursuant to the Security Agreement. Unless an Event of Default has occurred and is continuing, Holdings shall have access to the funds in the Cash Collateral Account and Holdings may from time to time give instructions to the depository bank directing the disposition of the funds in the Cash Collateral Account. If an Event of Default has occurred and is continuing, Holdings shall not have access to the funds in the Cash Collateral Account and may not direct the disposition of the funds in the Cash Collateral Account, except with the consent of the Administrative Agent.”

 

 

(x)

Section 3.01 of the Credit Agreement (captioned “The Letter of Credit Subfacility ”) shall be amended by amending and restating the proviso in the first sentence of Section 3.01(a) as follows:

 

provided that the L/C Issuer shall not be obligated to Issue, and no Revolving Lender shall be obligated to participate in, any Letter of Credit if such Letter of Credit is not denominated in Dollars or if as of the date of Issuance of such Letter of Credit (the “ Issuance Date ”) and after giving effect thereto (w) the Effective Amount of all L/C Obligations plus the Effective Amount of all Revolving Loans and Swingline Loans shall exceed the combined Revolving Commitments, (x) the participation of any Revolving Lender in the Effective Amount of all L/C Obligations and in the Effective Amount of all Swingline Loans plus the Effective Amount of the Revolving Loans of such Revolving Lender shall exceed such Revolving Lender’s Revolving Commitment, (y) the Effective Amount of L/C Obligations shall exceed the L/C Commitment or (z) the Effective Amount of all Revolving Loans, Swingline Loans and L/C Obligations shall exceed the Borrowing Base then in effect.”

 

 

(xi)

Section 3.02 of the Credit Agreement (captioned “ Issuance, Amendment and Renewal of Letters of Credit ”) shall be amended by deleting the text “clauses (x) through (z)” in Section 3.02(b) and replacing it with the text “clauses (w) through (z)”.

 

26


 

 

(xii)

Section 3.07 of the Credit Agreement (captioned “ Cash Collateral Pledge ”) shall be amended and restated in its entirety as follows:

 

“3.07 Cash Collateral Pledge . (a) Upon the request of the Administrative Agent, if the L/C Issuer has honored any full or partial drawing request on any Letter of Credit and such drawing has resulted in an L/C Borrowing hereunder, or (b) if, as of the Revolving Loan Maturity Date, any Letters of Credit may for any reason remain outstanding and partially or wholly undrawn, or (c) the occurrence of the circumstances described in Sections 2.08(a)(i) or (v) requiring Holdings to Cash Collateralize Letters of Credit, then Holdings shall immediately Cash Collateralize the L/C Obligations in an amount equal to such L/C Obligations, or in such other applicable amount required under Sections 2.08(a)(i) and (v) . Holdings shall, to the extent necessary, make such addi


 
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