SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
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This Second Amendment to Amended and Restated Credit Agreement is made as
of this ___ day of August, 2001 by and among
WICKES INC. (formerly Wickes Lumber Company), a Delaware corporation, as
Lead Borrower (the "Lead Borrower") for the "Borrowers" which are said
WICKES, INC and WICKES LUMBER L.P., a Delaware limited partnership, and
each of those financial institutions identified as Lenders on Annex I
hereto (together with each of their successors and assigns, referred to
individually as a "Lender" and collectively as the "Lenders"), and
FLEET RETAIL FINANCE INC., acting as agent for the Lenders in the manner
and to the extent described in Article 11 hereof (in such capacity, the
"Agent"), and
BANK OF AMERICA, N.A., as Documentation Agent (the "Documentation Agent"),
and
FLEET NATIONAL BANK, as issuer of letters of credit (in such capacity, the
"Issuing Bank")
in consideration of the mutual covenants herein contained and benefits to
be derived herefrom.
W I T N E S S E T H
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A. Reference is made to the Amended and Restated Credit Agreement (as
amended and in effect, the "Credit Agreement") dated as of December
13, 2000 by and among the Lead Borrower, the Lenders, the Agent, the
Documentation Agent and the Issuing Bank.
B. The Lead Borrower is contemporaneously herewith (i) transferring and
contributing its assets located in the states of Michigan and Indiana
to Wickes Lumber L.P., subject to the Liens in favor of the Agent
under the Loan Documents, in consideration of the Lead Borrower's
receipt of the general partner's interest (entitling the Lead Borrower
to a one percent economic interest) and a limited partnership interest
(entitling the Lead Borrower to a 98% economic interest) in said
Wickes Lumber L.P., and (ii) in a series of transactions, transferring
its limited partnership interest and $1,000 in cash to Wickes Midwest,
Inc. in consideration of the issuance of 100% of the capital stock of
said Wickes Midwest, Inc. to the Lead Borrower. Wickes Midwest, Inc.
will contribute $1,000 in cash to Wickes Lumber, L.P. in consideration
of the issuance of an additional 1% limited partnership interest in
Wickes Lumber, L.P. to Wickes Midwest, Inc.
▇. ▇▇▇▇▇▇ Lumber L.P. desires to become a borrower under the Credit
Agreement and to jointly and severally with the Lead Borrower, assume
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all Obligations thereunder (whether now existing or hereafter arising)
and will appoint the Lead Borrower as its agent for purposes of
requesting Revolving Loans under the Credit Agreement and otherwise
dealing with the Agent thereunder.
Accordingly, the Agent, the Lenders, the Documentation Agent, the
Issuing Bank, the Lead Borrower and Wickes Lumber L.P. agree as
follows:
1. Definitions. (a) Capitalized terms used herein and not otherwise
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defined herein shall have the meanings assigned to such terms in
the Credit Agreement.
2. Amendments to Article 1 of the Credit Agreement. The provisions
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of Article 1 of the Credit Agreement are hereby amended as
follows:
a. The definition of "Borrower" is hereby deleted in its
entirety and the following substituted in its stead:
Borrower shall mean individually and collectively, as
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applicable, Wickes, Inc., a Delaware corporation, and Wickes
Lumber L.P., a Delaware limited partnership and any
permitted successor or assign of either of the foregoing.
b. The following new definitions are hereby added to Article 1:
Average: The actual amount of outstanding Revolving Loans
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and Letter of Credit Obligations for the period of
measurement divided by the actual number of days elapsed in
such period.
Bank Projections. The management prepared projections dated
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August 7, 2001 of the Borrower's operations for the period
through October 31, 2001, and any similar projections for
periods after October 31, 2001, which projections shall be
reasonably acceptable to the Majority Lenders.
Lead Borrower shall mean Wickes, Inc., a Delaware
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corporation.
Realty Reserves shall mean an amount equal to 20% of the
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Fair Market Value of any Eligible Real Estate, provided that
no Realty Reserve shall be established unless there are
fewer than twenty properties constituting Eligible Real
Estate.
c. The definition of "Consolidated Net Worth" is hereby deleted
in its entirety.
3. Amendment to Add New Article. The Credit Agreement is hereby
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amended to add the following new Article 1A immediately
following Article 1:
ARTICLE 1A DESIGNATION OF LEAD BORROWER AS BORROWERS' AGENT.
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1A.1 Appointment of Lead Borrower.
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Each Borrower hereby irrevocably designates and appoints the
Lead Borrower as that Borrower's agent to obtain Loans and
Letters of Credit hereunder, the proceeds of which shall be
available to each Borrower for those uses as those set forth
herein. As the disclosed principal for its agent, each
Borrower shall be obligated to the Agent and each Lender on
account of Loans so made and Letters of Credit so issued
hereunder as if made directly by the Lenders to that
Borrower, notwithstanding the manner by which such Loans and
Letters of Credit are recorded on the books and records of
the Lead Borrower and of any Borrower.
1A.2 Assumption of Obligations.
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Each Borrower recognizes that credit available to it
hereunder is in excess of and on better terms than it
otherwise could obtain on and for its own account and that
one of the reasons therefor is its joining in the credit
facility contemplated herein with all other Borrowers.
Consequently, each Borrower hereby assumes and agrees to
discharge all Obligations of all other Borrowers as if the
Borrower so assuming were each other Borrower.
1A.3 Procedures for Obtaining Loans and Letters of Credit.
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(a) The Lead Borrower shall act as a conduit for each
Borrower (including itself, as a "Borrower") on whose behalf
the Lead Borrower has requested a Loan. In that regard and
without limiting, the following references to "Borrower" in
the Credit Agreement shall mean and refer to the "Lead
Borrower":
(i) Definition of Interest Period.
(ii) Sections 2.2(a) and 2.2(b)(ii) with respect
to Notices of Borrowing.
(iii) Section 2.2(c)(i) with respect to
instructions from the Borrower.
(iv) Sections 2.2(d)(ii) and (iii).
(v) Section 2.6(b).
(vi) Section 2.9(b).
(vii) Section 3.1 regarding requests for Letters of
Credit.
(viii) Section 3.2.
(ix) Section 3.4 regarding Letter of Credit
Requests.
(x) Section 4.4(f) with respect to instructions 3
from the Borrower.
(xi) Section 4.5 with respect to notices of
prepayments and instructions from the Borrower
(xii) Sections 5.7(a) and 5.7(b) with respect to
Notices of Continuation and Notices of
Conversion.
(xiii) Section 5.7(c).
(b) The Lead Borrower shall cause the transfer of the
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proceeds of each Loan to the (those) Borrower(s) on whose
behalf such Loan was obtained. Neither the Agent nor any
Lender shall have any obligation to see to the application
of such proceeds.
(c) If, for any reason, and at any time during the term of
this Agreement,
(i) any Borrower, including the Lead Borrower, as agent
for the Borrowers, shall be unable to, or prohibited from
carrying out the terms and conditions of this Agreement (as
determined by the Agent in the Agent's sole and absolute
discretion); or
(ii) the Agent deems it inexpedient (in the Agent's
sole and absolute discretion) to continue making Loans and
cause Letters of Credit to be issued to or for the account
of any particular Borrower, or to channel such Loans and
Letters of Credit through the Lead Borrower,
then the Lenders shall make Loans directly to, and cause the
issuance of Letters of Credit directly for the account of such of
the Borrowers as the Agent determines to be expedient, which
Loans shall be made and Letters of Credit may be issued without
regard to the procedures otherwise included herein.
(d) In the event that the Agent determines to forgo the
procedures included herein pursuant to which Loans and Letters of
Credit are to be channeled through the Lead Borrower, then the
Agent may designate one or more of the Borrowers to fulfill the
financial and other reporting requirements otherwise imposed
herein upon the Lead Borrower.
(e) Each of the Borrowers shall remain liable to the Agent and
the Lenders for the payment and performance of all Obligations
(which payment and performance shall continue to be secured by
all Collateral granted by each of the Borrowers) notwithstanding
any determination by the Agent to cease making Loans or causing
Letters of Credit to be issued to or for the benefit of any
Borrower.
1A.4 Continuation of Authority.
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The authority of the Lead Borrower to request Loans and Letters
of Credit on behalf of, and to bind, the Borrowers, shall
continue unless and until the Agent acts as provided in Section
1A.3, above, or the Agent actually receives
(a) written notice of: (i) the termination of such
authority, and (ii) the subsequent appointment of a
successor Lead Borrower, which notice is signed by the
respective Presidents of each Borrower (other than the
President of the Lead Borrower being replaced) then eligible
for borrowing under this Agreement; and
(b) written notice from such successive Lead Borrower (i)
accepting such appointment; (ii) acknowledging that such
removal and appointment has been effected by the respective
Presidents of such Borrowers eligible for borrowing under
this Agreement; and (iii) acknowledging that from and after
the date of such appointment, the newly appointed Lead
Borrower shall be bound by the terms hereof, and that as
used herein, the term "Lead Borrower" shall mean and include
the newly appointed Lead Borrower.
4. Amendments to Article 2. The provisions of Article 2 of the Credit
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Agreement are hereby amended as follows:
a. The provisions of Section 2.1 of the Credit Agreement are hereby
amended by adding the following new provision immediately before
the final paragraph thereof:
Notwithstanding anything to the contrary herein contained, from
and after August 13, 2001, the Average outstanding Revolving
Loans and Letter of Credit Obligations during any calendar month
shall not exceed 115% of the amounts projected on the Bank
Projections.
b. The provisions of Section 2.2(d) of the Credit Agreement are
hereby amended by deleting the words "3:00 p.m. Boston time" in
the fourth line thereof and substituting the words "2:00 p.m.
Boston time" in their stead.
5. Amendments to Article 3. The provisions of Section 3.1 of the
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Credit Agreement are hereby amended by adding the following new
provision immediately at the end of subparagraph (a) thereof:
Notwithstanding anything to the contrary herein contained,
from and after August 13, 2001, the Average outstanding
Revolving Loans and Letter of Credit Obligations during any
calendar month shall not exceed 115% of the amounts
projected on the Bank Projections;
6. Amendments to Article 4. The provisions of Article 4 of the
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Credit Agreement are hereby amended as follows:
a. The provisions of Section 4.4(b) of the Credit Agreement are
hereby deleted in their entirety
and the following substituted in their stead:
(b) If the Borrower or any of its Subsidiaries receives after
the Initial Closing Date any proceeds from any Asset Sale
(other than as set forth in Section 9.6(i), (ii), and (iii)
hereof), the Borrower shall pay to the Agent, as and when
received by the Borrower or such Subsidiary and as a mandatory
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prepayment a sum equal to (i) one hundred percent (100%) of the
Net Cash Proceeds thereof if the property which is the subject of
the Asset Sale does not consist of Eligible Real Estate, and (ii)
the lesser of (A) the Net Cash Proceeds from any Asset Sale which
consists of Eligible Real Estate or (B) eighty percent (80%) of
the Fair Market Value of any Eligible Real Estate which is the
subject of an Asset Sale (with the balance of the Net Cash
Proceeds to be applied in reduction of the outstanding Revolving
Loans). The mandatory prepayment contained in this clause (b)
shall not constitute a consent by the Lenders to any Asset Sale
otherwise prohibited by this Agreement.
b. The provisions of Section 4.4(e) of the Credit Agreement are
hereby deleted in their entirety and the following substituted in
their stead:
The outstanding principal balance of the Term Loans shall at
no time exceed (i) sixty per cent (60%) of the Fair Market
Value of Eligible Real Estate, less (ii) Realty Reserves. If
the principal balance of the Term Loans exceeds such
percentage, the Borrower, within three (3) days after notice
from the Agent, shall repay the Term Loans in such amount as
may be necessary so that such percentage is not exceeded.
7. Amendments to Article 5. The provisions of Section 5.7(c)(vi) of
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the Credit Agreement are hereby deleted in their entirety and the
following substituted in their stead:
(vi) There shall not be outstanding at any one time more
than an aggregate of eight (8) Revolving Loans or three (3)
Term Loans which consist of Eurodollar Rate Loans.
8. Amendments to Article 7. The provisions of Article 7 of the
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Credit Agreement are hereby amended as follows:
a. The provisions of Section 7.1 (i) are hereby amended by adding
(i) the words "or limited partnership" after the word
"corporation", and (ii) the words "or organization" at the end
thereof.
b. The provisions of Section 7.2 are hereby amended by adding the
words "or partnership" after the word "corporate" whether same
appears.
9. Amendments to Article 8. The provisions of Article 8 of the
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Credit Agreement are hereby amended as follows:
a. The provisions of Section 8.4 of the Credit Agreement are hereby
amended by adding the words "or limited partnership" after the
word "corporate" in clause (i) thereof.
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b. The provisions of Section 8.14(a) of the Credit Agreement are
hereby amended by deleting the words "one time" in clause (y)
thereof and substituting the words "three times" in their stead.
10. Amendments to Article 9. The provisions of Article 9 of the
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Credit Agreement are hereby amended as follows:
a The provisions of Section 9.2 are hereby deleted in their
entirety.
b. The provisions of Section 9.4 are hereby amended by adding the
following new clauses:
(g) Indebtedness owing to the Lead Borrower by any other
Borrower.
(h) Subordinated Indebtedness from Wickes Lumber, L.P. owing to
Wickes Midwest, Inc. in the principal amount not to exceed
$55,000,000.
c. The provisions of Section 9.6 are hereby amended by adding the
following new clauses at the end thereof:
(v) transfers by the Lead Borrower to Wickes Midwest, Inc. and/or
Wickes Lumber L.P. in connection with the initial capitalization
of such Persons, and (vi) transfers by and between the Borrowers.
d. The provisions of Section 9.9 are hereby amended by adding the
following new provision at the end thereof:
Notwithstanding anything to the contrary herein contained, the
Borrower shall not make any payments, prepayments, redemptions,
or distributions under this Section 9.9 (even if otherwise
permitted by the terms hereof) until after August 31, 2002.
e. The provisions of Section 9.10 are hereby amended by adding the
following new clauses:
(i) Investments by the Lead Borrower in any other Borrower.
(j) Existing Investments by the Lead Borrower in Wickes Midwest,
Inc.
(k) Investments for the purchase of certain Real Estate in
Kenvil, New Jersey, which acquisition shall be on terms and
conditions reasonably acceptable to the Administrative Agent
and immediately upon which acquisition the Borrower shall
grant the Administrative Agent a mortgage on such property
to secure the Obligations.
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f. The provisions of Article 9 are hereby amended by adding the
following new section thereto:
9.20 Additional Availability Block. Notwithstanding the
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provisions of Section 9.1 hereof, until the Administrative Agent
otherwise agrees, the Borrower shall not permit Unused
Availability (as reflected in the Borrowing Base Certificate most
recently delivered from time to time hereunder) to be less than
$25,000,000 at any time that the most recently delivered
quarterly Financial Statements show the Interest Coverage Ratio
was greater than or equal to 1.25 to 1.00 for the four
consecutive fiscal quarters ended on the date of such Financial
Statements.
7. Amendments to Article 12. Article 12 of the Credit Agreement is
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hereby amended by adding the following new section:
12.19 Additional Waivers.
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(a) The Obligations are the joint and several obligations of each
Borrower. To the fullest extent permitted by applicable law, the
obligations of each Borrower hereunder shall not be affected by
(i) the failure of any Agent or any Lender to assert any claim or
demand or to enforce or exercise any right or remedy against any
other Borrower under the provisions of this Agreement, any other
Credit Document or otherwise, (ii) any rescission, waiver,
amendment or modification of, or any release from any of the
terms or provisions of, this Agreement, any other Credit
Document, or any other agreement, including with respect to any
other Borrower of the Obligations under this Agreement, or (iii)
the failure to perfect any security interest in, or the release
of, any of the security held by or on behalf of the Agent or any
other Lender.
(b) The obligations of each Borrower hereunder shall not be
subject to any reduction, limitation, impairment or termination
for any reason (other than the indefeasible payment in full in
cash of the Obligations), including any claim of waiver, release,
surrender, alteration or compromise of any of the Obligations,
and shall not be subject to any defense or set-off, counterclaim,
recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Obligations or otherwise.
Without limiting the generality of the foregoing, the obligations
of each Borrower hereunder shall not be discharged or impaired or
otherwise affected by the failure of the Agent or any other
Lender to assert any claim or demand or to enforce any remedy
under this Agreement, any other Credit Document or any other
agreement, by any waiver or modification of any provision of any
thereof, by any default, failure or delay, wilful or otherwise,
in the performance of the Obligations, or by any other act or
omission that may or might in any manner or to any extent vary
the risk of any Borrower or that would otherwise operate as a
discharge of any Borrower as a matter of law or equity (other
than the indefeasible payment in full in cash of all the
Obligations).
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(c) To the fullest extent permitted by applicable law, each
Borrower waives any defense based on or arising out of any
defense of any other Borrower or the unenforceability of the
Obligations or any part thereof from any cause, or the cessation
from any cause of the liability of any other Borrower, other than
the indefeasible payment in full in cash of all the Obligations.
The Agent and the other Lenders may, at their election, foreclose
on any security held by one or more of them by one or more
judicial or nonjudicial sales, accept an assignment of any such
security in lieu of foreclosure, compromise or adjust any part of
the Obligations, make any other accommodation with any other
Borrower, or exercise any other right or remedy available to them
against any other Borrower, without affecting or impairing in any
way the liability of any Borrower hereunder except to the extent
that all the Obligations have been indefeasibly paid in full in
cash. Pursuant to applicable law, each Borrower waives any
defense arising out of any such election even though such
election operates, pursuant to applicable law, to impair or to
extinguish any right of reimbursement or subrogation or other
right or remedy of such Borrower against any other Borrower, as
the case may be, or any security.
(d) Upon payment by any Borrower of any Obligations, all rights
of such Borrower against any other Borrower arising as a result
thereof by way of right of subrogation, contribution,
reimbursement, indemnity or otherwise shall in all respects be
subordinate and junior in right of payment to the prior
indefeasible payment in full in cash of all the Obligations. In
addition, any indebtedness of any Borrower now or hereafter held
by any other Borrower is hereby subordinated in right of payment
to the prior payment in full of the Obligations. None of the
Borrowers will demand, ▇▇▇ for, or otherwise attempt to collect
any such indebtedness. If any amount shall erroneously be paid to
any Borrower on account of (a) such subrogation, contribution,
reimbursement, indemnity or similar right or (b) any such
indebtedness of any Borrower, such amount shall be held in trust
for the benefit of the Lenders and shall forthwith be paid to the
Agent to be credited against the payment of the Obligations,
whether matured or unmatured, in accordance with the terms of the
Credit Documents.
8. Amendments to Schedules. Schedule B to the Credit Agreement is
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hereby amended by adding Wickes Midwest, Inc. to Section 7.7
thereof.
9. Assumption of Obligations. Wickes Lumber L.P.. hereby assumes and
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agrees to pay and perform all Obligations as a Borrower under the
Credit Agreement and the other Credit Documents.
10. Conditions Precedent to Effectiveness. This Second Amendment
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shall not be effective until each of the following conditions
precedent have been fulfilled to the satisfaction of the Agent:
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a. This Second Amendment shall have been duly executed and delivered
by the respective parties hereto and, shall be in full force and
effect and shall be in form and substance satisfactory to the
Agent and the Lenders.
b. All action on the part of the Borrowers necessary for the valid
execution, delivery and performance by the Borrowers of this
Second Amendment shall have been duly and effectively taken and
evidence thereof satisfactory to the Agent shall have been
provided to the Agent.
c. The Agent, on behalf of the Lenders, shall have received duly
executed originals of each of the agreements, opinions, reports,
approvals, consents, certificates and other documents set forth
on Rider A hereto.
d. Except for (i) the filing of Uniform Commercial Code financing
statements and recordation of amendments to the Mortgages, (ii)
consents or authorizations which have been obtained or filings
which have been made, and which in either case are in full force
and effect or (iii) consents or authorizations the failure to
obtain or filings the failure to make could not reasonably be
expected to have a Material Adverse Effect, no consent or
authorization of, permit from, filing with or other act by or in
respect of, any Governmental Authority or any other Person shall
be required in connection with the transactions contemplated
hereunder, the grant of the Liens pursuant to the Credit
Documents, or the continuing operations of the Borrower, the
enforcement of the Agent's or the Lenders' rights under the
Credit Documents, or with the execution, delivery, performance,
validity or enforceability of the Credit Agreement, the other
Credit Documents, the Indenture or any other documents executed
in connection herewith or therewith.
e. The Collateral Documents shall be effective to create in favor of
the Agent for the benefit of the Lenders legal, valid and
enforceable first (except for Liens permitted under Section 9.5
of the Credit Agreement which are entitled to priority under
applicable law) security and mortgage interests in the
Collateral. All filings, recordings, deliveries of instruments
and other actions necessary or desirable in the opinion of the
Agent to protect and preserve such security and mortgage
interests shall have been duly effected. The Agent shall have
received evidence thereof in form and substance satisfactory to
the Agent.
f. The Borrower shall have paid to the Agent (i) an amendment fee,
for the pro rata account of the Lenders based on their respective
Commitment Percentages, in an amount equal to 0.075% of the total
Commitments, and (ii) an execution fee, for the account of the
Lenders executing this Second Amendment on or prior to the
effective date hereof, in an amount equal to 0.125% of each such
Lender's Commitment. The amendment fee and execution fee shall be
fully earned upon the effectiveness of this Second Amendment and
shall not be subject to refund or rebate under any circumstances.
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g. The Borrower shall have provided such additional instruments and
documents to the Agent as the Agent and Agent's counsel may have
reasonably requested.
11. Miscellaneous.
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a. This Second Amendment may be executed in several counterparts and
by each party on a separate counterpart, each of which when so
executed and delivered shall be an original, and all of which
together shall constitute one instrument.
b. This Second Amendment expresses the entire understanding of the
parties with respect to the transactions contemplated hereby. No
prior negotiations or discussions shall limit, modify, or
otherwise affect the provisions hereof.
d. Any determination that any provision of this Second Amendment or
any application hereof is invalid, illegal or unenforceable in
any respect and in any instance shall not effect the validity,
legality, or enforceability of such provision in any other
instance, or the validity, legality or enforceability of any
other provisions of this Second Amendment.
e. The Borrower shall pay on demand all costs and expenses of the
Agent, including, without limitation, reasonable attorneys' fees
in connection with the preparation, negotiation, execution and
delivery of this Second Amendment.
f. The Borrower warrants and represents that the Borrower has
consulted with independent legal counsel of the Borrower's
selection in connection with this Second Amendment and is not
relying on any representations or warranties of the Agent or its
counsel in entering into this Second Amendment.
IN WITNESS WHEREOF, the parties have duly executed this Second
Amendment as of the day and year first above written.
WICKES, INC.
by____________________________________
Name:
Title:
Address:
WICKES LUMBER L.P.
By its General Partner
Wickes, Inc.
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by____________________________________
Name:
Title:
Address:
FLEET RETAIL FINANCE INC., as Agent and Lender,
by____________________________________
Name:
Title:
FOOTHILL CAPITAL CORPORATION
by____________________________________
Name:
Title:
BANK OF AMERICA, N.A.
by____________________________________
Name:
Title:
LASALLE BANK NATIONAL ASSOCIATION
by____________________________________
Name:
Title:
THE CIT GROUP/BUSINESS CREDIT, INC.
by____________________________________
Name:
Title:
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CONGRESS FINANCIAL CORPORATION (CENTRAL)
by____________________________________
Name:
Title:
AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO
by____________________________________
Name:
Title:
▇▇▇▇▇▇ FINANCIAL, INC.
by____________________________________
Name:
Title:
COMERICA BANK
by____________________________________
Name:
Title:
debis FINANCIAL SERVICES, INC.
by____________________________________
Name:
Title:
THE PROVIDENT BANK
by____________________________________
Name:
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Title:
636157.8