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EXHIBIT 10.1
AMENDMENT NO. 2
TO
SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
This Amendment No. 2 (the "Amendment"), dated as of January 27, 1997 is
by and among BARRY'S JEWELERS, INC., a California corporation (the "Borrower"),
THE FIRST NATIONAL BANK OF BOSTON and the other lending institutions which may
become party to the Credit Agreement (as defined herein) (collectively, the
"Lenders") and THE FIRST NATIONAL BANK OF BOSTON, as Agent for the Lenders (the
"Agent"). Capitalized terms used herein unless otherwise defined shall have the
respective meanings set forth in the Credit Agreement.
WHEREAS, the Borrower, the Lenders and the Agent are parties to that
certain Second Amended and Restated Revolving Credit Agreement, dated as of
August 30, 1996 (as so amended and as further amended and in effect from time to
time, the "Credit Agreement"); and
WHEREAS, the Borrower, the Lenders and the Agent are agreeable to making
certain amendments to the Credit Agreement upon the terms and conditions
described herein;
NOW, THEREFORE, in consideration of the foregoing premises, the parties
hereby agree as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT. The Credit Agreement
is hereby amended as follows:
(a) The definition of "Borrowing Base" set forth in
Section 1.1 of the Credit Agreement is amended by inserting after
paragraph (c) thereof the following new paragraph (d):
"minus (d) (i) until March 31, 1997, $1,250,000, and (ii) at
all times after March 31, 1997, $1,500,000."
(b) The definition of "Borrowing Base Report" set forth in
Section 1.1 of the Credit Agreement is amended by deleting such
definition in its entirety and substituting therefor the following
definition:
"Borrowing Base Report. A Borrowing Base Report signed
by the chief financial officer of the Borrower in such form and
including such supporting documentation as the Agent may require from
time to time."
(c) The definition of "Consolidated EBITDA" set forth in
Section 1.1 of the Credit Agreement is amended by deleting such
definition in its entirety and substituting therefor the following
definition:
"Consolidated EBITDA. Consolidated EBIT for any period
plus (a) depreciation for such period, plus (b) amortization for
such period, plus (c) the amount of 1997 Restructuring Charges
for such period to the extent taken into account in connection
with
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the calculation of EBIT during such period, all determined in accordance
with generally accepted accounting principles."
(d) Section 1.1 of the Credit Agreement is amended by
adding the following definition:
"GBFC. GBFC, Inc., an affiliate of the Agent."
(e) The definition of "Shareholders Equity" set forth in
ss.1.1 of the Credit Agreement is amended by deleting such definition in
its entirety and substituting therefor the following definition:
"Shareholders Equity. An amount equal to
Consolidated Total Assets less Consolidated Total Liabilities plus 1997
Restructuring Charges."
(f) The definition of "Total Commitment" set forth in
Section 1.1 of the Credit Agreement is amended by deleting such
definition in its entirety and substituting therefor the following
definition:
"Total Commitment. The sum of the Commitments of the
Lenders which, (i) from the Closing Date through January 26,
1997 is $85,000,000, from January 27, 1997 through May 31,
1997 is $70,000,000 and (iii) after May 31, 1997 is
$65,000,000, as the same may be reduced from time to time in
accordance with the provisions hereof, or if the Commitments
are terminated pursuant to the provisions hereof, zero."
(g) Section 1.1 of the Credit Agreement is amended by
adding the following definition:
"1997 Restructuring Charges. Restructuring charges
taken by the Borrower in its fiscal year ending May 31, 1997
relating to the closing of up to 36 retail locations of the
Borrower; provided, however, that the aggregate amount of
such restructuring charges shall not exceed $13,000,000 and
the cash amount of such restructuring charges shall not
exceed $6,000,000."
(h) Section 8.4 of the Credit Agreement is amended by
deleting sub paragraphs (f) and (g) thereof in their entirety and
substituting therefor the following:
"(f) within three (3) Business Days after the end
of each calendar week or at such earlier time as the Agent
may reasonably request, a Borrowing Base Report;
(g) INTENTIONALLY OMITTED."
(i) Section 10.1 of the Credit Agreement is amended by
deleting the table set forth therein in its entirety and substituting
therefor the following:
Quarter Ending Amount for 2 Quarters Amount for 1 Quarter
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11/30/96 ($ 5,000,000) ($ 2,500,000)
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02/28/97 $ 3,800,000 $ 6,200,000
05/31/97 $ 8,200,000 $ 2,000,000
08/31/97 $ 4,000,000 $ 2,000,000
11/30/97 $ 6,100,000 $ 4,000,000
02/28/98 $14,700,000 $10,650,000
05/31/98 $14,200,000 $ 3,550,000
08/31/98 $ 3,000,000 $ 1,200,000
11/30/98 $ 3,400,000 $ 2,200,000
02/28/99 $12,000,000 $ 9,300,000
05/31/99 $11,500,000 $ 2,000,000
(j) Section 10.3 of the Credit Agreement is amended by
deleting the table set forth therein in its entirety and substituting
therefor the following:
Quarter Ending Ratio
-------------- -----
11/30/96 7.00:1.00
02/28/97 7.00:1.00
05/31/97 6.60:1.00
08/31/97 6.90:1.00
11/30/97 7.30:1.00
02/28/98 5.70.1.00
05/31/98 and quarters
ending thereafter 5.50:1.00
(k) Section 10.5 of the Credit Agreement is amended by adding
the following subparagraph (d):
"(d) Notwithstanding anything to the contrary contained
herein, the Borrower will not open any new retail store locations
during its 1998 fiscal year; provided, however, the Borrower may
open up to four (4) new retail stores in substitution for
existing retail stores which are closed to the extent that as of
January 27, 1997 the Borrower has entered into binding agreements
to open such stores."
(l) Section 13.1 of the Credit Agreement is amended by adding
the following subparagraph (o):
"(o) the physical count of the Borrower's inventory in
March, 1997 shall yield a dollar valuation which is less than 90%
of the Borrower's inventory as carried on the Borrower's books as
of the end of the Borrower's February, 1997 or March, 1997 fiscal
months, all determined in accordance with generally accepted
accounting principles."
SECTION 2. MODIFICATIONS TO THE BORROWING BASE. The Borrower and the
Lenders acknowledge and agree that notwithstanding any provision in the Credit
Agreement to the contrary, (a) the Agent may rely on GBFC in connection with
determining the Borrowing Base, the components thereof, and the form of the
Borrowing Base Report and (b) following the execution of this Amendment the
Agent, GBFC and their representatives will conduct periodic reviews of the
Borrowing Base components and, as a result of any such reviews, the Agent may,
in its discretion, consistent with the Agent's usual business practices
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and polices, change the Borrowing Base, the AR Advance Rate, the advance rate
for inventory, or those items considered Eligible Accounts Receivable or
Eligible Inventory; provided, however, without the consent of all of the
Lenders, the Agent will not make any changes to such items which would result in
the Borrowing Base being greater than the Borrowing Base as calculated in the
Credit Agreement.
SECTION 3. CONDITIONS TO EFFECTIVENESS. The effectiveness of this
Amendment shall be conditioned upon the satisfaction of the following conditions
precedent:
SECTION 3.1. DELIVERY OF DOCUMENTS. This Amendment shall have
been authorized, executed and delivered to the Agent by the Borrower, the
Lenders and the Agent.
SECTION 3.2. PAYMENT OF AMENDMENT FEE. The Borrower shall have
paid to the Agent, for the pro rata accounts of the Lenders, an amendment fee of
$325,000.
SECTION 3.3. PROCEEDINGS AND DOCUMENTS. All proceedings in
connection with the transactions contemplated by this Amendment and all
documents incidental thereto shall be in form and substance satisfactory to the
Lenders, the Agent and the Agent's special counsel and the Lenders, the Agent
and such counsel shall have received all information and such counterpart
originals or certified or other copies of all such documents as the Agent shall
have reasonably requested.
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Borrower hereby
represents and warrants to the Lenders as follows:
(a) The representations and warranties of the Borrower
contained in the Credit Agreement, as amended hereby, the other Loan Documents
or in any document or instrument delivered pursuant to or in connection with the
Credit Agreement were true and correct when made and continue to be true and
correct on the date hereof (except that the financial statements referred to
therein shall be the financial statements of the Borrower most recently
delivered to the Agent, and except as such representations and warranties are
affected by the transactions contemplated hereby and changes occurring in the
ordinary course of business that singly or in the aggregate are not materially
adverse, and to the extent that such representations and warranties relate
expressly to an earlier date) and no Default or Event of Default has occurred
and is continuing;
(b) The execution, delivery and performance by the Borrower
of this Amendment and the transactions contemplated hereby (i) are within the
corporate authority of the Borrower, (ii) have been duly authorized by all
necessary corporate proceedings, (iii) do not conflict with or result in any
breach or contravention of any provision of law, statute, rule or regulation to
which the Borrower or any of its Subsidiaries is subject or any judgment, order,
writ, injunction, license or permit applicable to the Borrower or any of its
Subsidiaries and (iv) do not conflict with any provision of the corporate
charter or bylaws of, or any agreement or other instrument binding upon, the
Borrower or any of its Subsidiaries.
(c) This Amendment, the Credit Agreement as amended hereby,
and the other Loan Documents constitute the legal, valid and binding obligations
of the Borrower, enforceable against the Borrower in accordance with their
respective terms, provided that (i) enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
application affecting the rights and remedies of creditors, and (ii) enforcement
may be subject to general principles of equity, and the availability of the
remedies of specific performance and injunctive relief may be subject to the
discretion of the court before which any proceeding for such remedies may be
brought.
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SECTION 5. CONFIRMATION OF SECURITY DOCUMENTS. The Borrower hereby
ratifies and confirms each of the respective Security Documents and pledges of
security interests granted thereby to secure the obligations of the Borrower
under the Credit Agreement, as amended hereby, and the Notes.
SECTION 6. NO OTHER AMENDMENTS. Except as expressly provided in
this Amendment, all of the terms and conditions of the Credit Agreement and the
other Loan Documents shall remain in full force and effect.
SECTION 7. EXECUTION IN COUNTERPARTS. This Amendment may be
executed in any number of counterparts and by each party on a separate
counterpart, each of which when so executed and delivered shall be an original,
but all of which together shall constitute one instrument. In proving this
Amendment, it shall not be necessary to produce or account for more than one
such counterpart signed by the party against whom enforcement is sought.
SECTION 8. EFFECTIVE DATE. Subject to the satisfaction of the
conditions precedent set forth in ss.2 hereof, this Amendment shall be deemed to
be effective as of the date hereof (the "Effective Date").
SECTION 9. MISCELLANEOUS. This Amendment is intended to take
effect as a sealed instrument and shall for all purposes be governed by, and
construed in accordance with the laws of The Commonwealth of Massachusetts
(without reference to conflicts of law).
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IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have duly
executed this Amendment as of the date first above written.
BARRY'S JEWELERS, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Title: Vice Chairman and CFO
THE FIRST NATIONAL BANK
OF BOSTON, individually and as Agent
By: /s/ Xxxxxxx Xxxxxxx
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Title: Vice President
THE CIT GROUP/BUSINESS
CREDIT, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Title: Vice President
SANWA BUSINESS CREDIT
CORPORATION
By: /s/ Xxxxxx Xxxxxxx
----------------------------------
Title: Vice President
XXXXXXX NATIONAL LIFE INSURANCE
COMPANY
By: PPM America, Inc., as its
attorney-in-fact
By: /s/ Xxxxxxx X. Xxxx
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Title: Vice President
