EXHIBIT 10.38
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FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT
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THIS FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT (this
"Amendment") is made and entered into as of the 20th day of July,
2001, by and among CPI CORP., a Delaware corporation (the
"Borrower"), FIRSTAR BANK, N.A. (which is the successor by merger
to Firstar Bank Missouri, National Association) and COMMERCE BANK,
NATIONAL ASSOCIATION (collectively, the "Banks") and FIRSTAR BANK,"
N.A. (which is the successor by merger to Firstar Bank Missouri,
National Association), as agent for the Banks (in such capacity,
the "Agent").
WITNESSETH:
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WHEREAS, Borrower, the Banks and the Agent are parties to that
certain Revolving Credit Agreement dated as of June 27, 2000 (the
"Revolving Credit Agreement"; all capitalized terms used and not
otherwise defined in this Amendment shall have the respective
meanings ascribed to them in the Revolving Credit Agreement as
amended by this Amendment); and
WHEREAS, Borrower, the Banks and the Agent desire to amend the
Revolving Credit Agreement in the manner hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Borrower, the Banks and the Agent
hereby agree as follows:
1. All references in the Revolving Credit Agreement and the
other Transaction Documents to Firstar Bank Missouri, National
Association and any other references of similar import shall
henceforth mean Firstar Bank, N.A. (which is the successor by
merger to Firstar Bank Missouri, National Association).
2. The definition of "Consolidated EBITDA" set forth in
Section 1.10 of the Revolving Credit Agreement is hereby deleted in
its entirety and the following substituted in lieu thereof:
"CONSOLIDATED EBITDA shall mean, for the period in
question, the sum of (a) Consolidated Net Income during such
period PLUS (b) to the extent deducted in determining such
Consolidated Net Income (but without duplication), the sum of
(i) Consolidated Interest Expense during such period, PLUS
(ii) all provisions for any Federal, state, local and/or
foreign income taxes made by Borrower and its Subsidiaries
during such period (whether paid or deferred), PLUS (iii)
all depreciation and amortization expenses of Borrower and
its Subsidiaries during such period, plus (iv) any
extraordinary losses during such period PLUS (v) any losses
from the sale or other disposition of Property other than in
the ordinary course of business during such period (excluding,
however, any losses incurred during such period as a result of
the write-down of any assets of Prints Plus) PLUS (vi) any
losses incurred during such period for or in connection with
litigation and/or transaction costs related to the failed
merger between Borrower and American Securities Capital
Partners (provided, however, that the maximum amount of such
losses which Borrower may add back for purposes of this
definition of EBITDA shall not exceed $10,000,000.00 in the
aggregate for all periods) MINUS (c) to the extent added in
determining such Consolidated Net Income (but without
duplication), the sum of (i) any extraordinary gains
during such period PLUS (ii) any gains from the sale or other
disposition of Property other than in the ordinary course of
business during such period, all determined on a consolidated
basis and in accordance with GAAP."
3. The definition of "Consolidated Fixed Charges" set forth
in Section 1.10 of the Revolving Credit Agreement is hereby deleted
in its entirety and the following substituted in lieu thereof:
"CONSOLIDATED FIXED CHARGES shall mean, for the period in
question, the sum of (a) the aggregate amount of all principal
payments required to be made by Borrower and its Subsidiaries
on all Debt during such period (including the principal
portion of payments in respect of Capitalized Leases but
excluding principal payments on the Loans), plus (b)
Consolidated Interest Expense during such period,
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PLUS (b) Consolidated Operating Lease Expense during such
period, PLUS (d) the lesser of (i) all Capital Expenditures
made by Borrower and its Subsidiaries during such period
(net of any Debt incurred by Borrower or such Subsidiary
(other than Loans) to finance such Capital Expenditure) or
(ii) $10,000,000.00 plus (e) all provisions for any Federal,
state, local and/or foreign income taxes made by Borrower and
its Subsidiaries during such period (whether paid or deferred)
PLUS (f) all dividends paid by Borrower on or with respect to
any of its capital stock during such period, all determined
on a consolidated basis and in accordance with GAAP."
4. Sections 5.02(o)(i) and 5.02(o)(ii) of the Revolving
Credit Agreement are hereby deleted in their entirety and the
following substituted in lieu thereof:
"(i) MINIMUM CONSOLIDATED EBITDA. Borrower will have a
Consolidated EBITDA of at least $39,000,000.00 during each
four (4) consecutive fiscal quarter period of Borrower
commencing with the four (4) consecutive fiscal quarter
period ending July 21, 2001.
(ii) MINIMUM CONSOLIDATED FIXED CHARGE COVERAGE2 RATIO.
Borrower will have a Consolidated Fixed Charge Coverage
Ratio of at least 1.15 to 1.0 for each four (4) consecutive
fiscal quarter period of Borrower commencing with the four
(4) consecutive fiscal quarter period ending July 21,
2001."
5. Section 5.02(o)(iv) of the Revolving Credit Agreement is
hereby deleted in its entirety and the following substituted in
lieu thereof:
"(iv) MINIMUM CONSOLIDATED NET WORTH. Borrower will,
as of the last day of each fiscal quarter of Borrower, have a
Consolidated Net Worth of at least the sum of (i)
$50,000,000.00 PLUS (ii) Fifty Percent (50%) of Consolidated
Net Income (with no deductions for losses) for each fiscal
quarter of Borrower ending on or after July 21, 2001,
such required increases to be cumulative for each such fiscal
quarter."
6. EXHIBIT G attached to the Revolving Credit Agreement is
hereby deleted in its entirety and the Exhibit G attached to this
Amendment is substituted in lieu thereof.
7. Borrower hereby agrees to reimburse the Agent upon demand
for all out-of-pocket costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses) incurred by
the Agent in the preparation, negotiation and execution of this
Amendment and any and all other agreements, documents, instruments
and/or certificates relating to the amendment of Borrower's
existing credit facilities with the Agent and the Banks
(collectively, the "Loan Documents"). Borrower further agrees to
pay or reimburse the Agent and the Banks for (a) any stamp or other
taxes (excluding income or gross receipts taxes) which may be
payable with respect to the execution, delivery, filing and/or
recording of any of the Loan Documents and (b) the cost of any
filings and searches, including, without limitation, Uniform
Commercial Code filings and searches. All of the obligations of
Borrower under this paragraph shall survive the payment of the
Borrower's Obligations and the termination of the Revolving Credit
Agreement.
8. All references in the Revolving Credit Agreement to "this
Agreement" and any other references of similar import shall
henceforth mean the Revolving Credit Agreement as amended by this
Amendment.
9. Except to the extent specifically amended by this
Amendment, all of the terms, provisions, conditions, covenants,
representations and warranties contained in the Revolving Credit
Agreement shall be and remain in full force and effect and the same
are hereby ratified and confirmed.
10. This Amendment shall be binding upon and inure to the
benefit of Borrower, the Banks and the Agent and their respective
successors and assigns, except that Borrower may not assign,
transfer or delegate any of its rights or obligations under the
Revolving Credit Agreement as amended by this Amendment.
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11. Borrower hereby represents and warrants to the Agent and
each of the Banks that:
(a) the execution, delivery and performance by Borrower
of this Amendment are within the corporate powers of Borrower,
have been duly authorized by all necessary corporate action
and require no action by or in respect of, consent or approval
of or filing or recording with, any governmental or regulatory
body, instrumentality, authority, agency or official or any
other Person;
(b) the execution, delivery and performance by Borrower
of this Amendment do not conflict with, or result in a breach
of the terms, conditions or provisions of, or constitute a
default under or result in any violation of, the terms of the
Articles of Incorporation or By-Laws of Borrower, any
applicable law, rule, regulation, order, writ, judgment or
decree of any court or governmental or regulatory body,
instrumentality, authority, agency or official or any
agreement, document or instrument to which Borrower is a party
or by which Borrower or any of its Property or assets is bound
or to which Borrower or any of its Property or assets is
subject;
(c) this Amendment has been duly executed and delivered
by Borrower and constitutes the legal, valid and binding
obligation of Borrower enforceable against Borrower in
accordance with its terms, except as such enforceability may
be limited by (i) applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally
and (ii) general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or
at law);
(d) all of the representations and warranties made by
Borrower and/or any other Obligor in the Revolving Credit
Agreement and/or in any other Transaction Document are true
and correct in all material respects on and as of the date of
this Amendment as if made on and as of the date of this
Amendment; and
(e) as of the date of this Amendment and after giving
effect to this Amendment, no Default or Event of Default under
or within the meaning of the Revolving Credit Agreement has
occurred and is continuing.
12. In the event of any inconsistency or conflict between
this Amendment and the Revolving Credit Agreement, the terms,
provisions and conditions contained in this Amendment shall govern
and control.
13. This Amendment shall be governed by and construed in
accordance with the substantive laws of the State of Missouri
(without reference to conflict of law principles).
14. ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND
CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT, INCLUDING
PROMISES TO EXTEND OR RENEW SUCH DEBT, ARE NOT ENFORCEABLE. TO
PROTECT BORROWER, THE BANKS AND THE AGENT FROM MISUNDERSTANDING OR
DISAPPOINTMENT, ANY AGREEMENTS REACHED BY BORROWER, THE BANKS AND
THE AGENT COVERING SUCH MATTERS ARE CONTAINED IN THE REVOLVING
CREDIT AGREEMENT AS AMENDED BY THIS AMENDMENT AND THE OTHER
TRANSACTION DOCUMENTS, WHICH REVOLVING CREDIT AGREEMENT AS AMENDED
BY THIS AMENDMENT AND OTHER TRANSACTION DOCUMENTS ARE A COMPLETE
AND EXCLUSIVE STATEMENT OF THE AGREEMENTS AMONG BORROWER, THE BANKS
AND THE AGENT, EXCEPT AS BORROWER, THE BANKS AND THE AGENT MAY
LATER AGREE IN WRITING TO MODIFY THEM.
15. Notwithstanding any provision contained in this Amendment
to the contrary, this Amendment shall not be effective unless and
until the Agent shall have received:
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(a) this Amendment, duly executed by Borrower and each
of the Banks;
(b) a copy of resolutions of the Board of Directors of
Borrower, duly adopted, which authorize the execution,
delivery and performance of this Amendment;
(c) an incumbency certificate, executed by the Secretary
of Borrower, which shall identify by name and title and bear
the signatures of all of the officers of Borrower executing
this Amendment; and
(d) certificates of corporate good standing of Borrower
issued by the Secretaries of States of the States of Delaware
and Missouri.
IN WITNESS WHEREOF, Borrower, the Banks and the Agent have
executed this First Amendment to Revolving Credit Agreement as of
the 20th day of July, 2001.
CPI CORP.
By /s/ Xxxxx Xxxxxx
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Title: Executive Vice President, Finance
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FIRSTAR BANK, N.A.
By /s/_Joseph X. Xxxxxx,Xx.
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Title: Vice President
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COMMERCE BANK, NATIONAL ASSOCIATION
By /s/ Xxxxxx X. Xxxxxx
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Title: Assistant Vice President
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FIRSTAR BANK, N.A., as Agent
By /s/ Xxxxxx X. Xxxxxx, Xx.
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Title: Vice President
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EXHIBIT G
[Date]
Firstar Bank, N.A., as Agent
Xxx Xxxxxxx Xxxxx
00xx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
The Banks from time to time party to the Revolving Credit Agreement
referred to below
Ladies and Gentlemen:
Reference is hereby made to that certain Revolving Credit
Agreement dated as of June 27, 2000, by and among the undersigned,
the Banks from time to time parties thereto and Firstar Bank, N.A.
(which is the successor by merger to Firstar Bank Missouri,
National Association), as Agent for the Banks, as the same may from
time to time be amended, modified, extended, renewed or restated
(the "Revolving Credit Agreement"). All capitalized terms used and
not otherwise defined herein shall have the respective meanings
ascribed to them in the Revolving Credit Agreement.
The undersigned hereby certifies to you that:
(a) except as set forth below, all of the representations and
warranties made by Borrower and/or any other Obligor in the
Revolving Credit Agreement and/or in any other Transaction Document
are true and correct in all material respects on and as of the date
hereof as if made on and as of the date hereof:
Exceptions: ;
(b) except as set forth below, no Default or Event of Default
under or within the meaning of the Revolving Credit Agreement has
occurred and is continuing:
Exceptions:
;
(c) the financial statements of Borrower and its Subsidiaries
delivered to you with this letter are true, correct and complete
and have been prepared in accordance with generally accepted
accounting principles consistently applied; and
(d) Schedule 1 to this letter is a determination of
Borrower's compliance with the financial covenants set forth in
Section 5.01(o) of the Revolving Credit Agreement as of ,
, in each case calculated in accordance with the Revolving Credit
Agreement.
Very truly yours,
CPI CORP.
By /s/ Xxxxx Xxxxxx
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Title: Executive Vice President, Finance
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SCHEDULE 1
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FINANCIAL COVENANT COMPLIANCE SCHEDULE
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A. MINIMUM CONSOLIDATED EBITDA
(for the four consecutive fiscal quarter period
of Borrower ended , 20 )
1. Consolidated Net Income $
2. Consolidated Interest Expense $
3. Consolidated income tax expense $
4. Consolidated depreciation and amortization
expense $
5. Extraordinary non-cash losses $
6. Losses from the sale or other disposition of
Property other than in the ordinary course of
business (excluding, however, any losses
incurred during such period as a result of
the write-down of any assets of Prints Plus) $
7. Any losses incurred during such period for or
in connection with litigation and/or
transaction costs related to the failed merger
between Borrower and American Securities
Capital Partners $
8. Extraordinary non-cash gains $
9. Gains from the sale or other disposition of
Property other than in the ordinary course of
Business $
10. Consolidated EBITDA [Line A.1 plus Line A.2
PLUS Line A.3 PLUS Line A.4 PLUS Line A.5 PLUS
Line A.6 PLUS Line A.7 MINUS Line A.8 MINUS
Line A.9] $
11. Minimum Consolidated EBITDA required by
Section 5.01(o)(i) $39,000,000.00
IN COMPLIANCE: YES ___ ; NO ___.
B. MINIMUM CONSOLIDATED FIXED CHARGE COVERAGE RATIO
(for the four consecutive fiscal quarter period
of Borrower ended , )
1. Consolidated EBITDA [Line A.10 above] $
2. Consolidated Operating Lease Expense $
3. Consolidated EBITDAR [Line B.1 plus Line B.2] $
4. Required principal payments on Debt (including
the principal portion of payments in respect
of Capitalized Leases but excluding principal
Payments on the Loans) $
5. Consolidated Interest Expense $
6. Consolidated Operating Lease Expense $
7. Lesser of (a) Capital Expenditures (net of any
Debt (other than Loans) incurred to finance
such Capital Expenditures) and (b)
$10,000,000.00 $
8. Consolidated income tax expense $
9. Dividends $
10. Consolidated Fixed Charges [Sum of Line B.4
PLUS Line B.5 PLUS Line B.6 PLUS Line B.7
PLUS Line B.8 plus Line B.9] $
11. Consolidated Fixed Charge Coverage Ratio
[Line B.3 DIVIDED by Line B.10] --- to 1.0
12. Minimum Consolidated Fixed Charge Coverage
Ratio required by Section 5.01(o)(ii) 1.15 to 1.0
IN COMPLIANCE: YES ___; NO ___ .
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C. MAXIMUM CONSOLIDATED DEBT TO CONSOLIDATED EBITDA RATIO
(as of , 20 )
1. Consolidated Debt $
2. Consolidated EBITDA [Line A.10 above] $
3. Consolidated Debt to Consolidated EBITDA Ratio
[Line C.1 DIVIDED by Line C.2] ___ to 1.0
4. Maximum Consolidated Debt to Consolidated
EBITDA Ratio permitted by Section 5.01(o)(iii) ___ to 1.0
IN COMPLIANCE: YES ___; NO ___ .
D. MINIMUM CONSOLIDATED NET WORTH
(as of , 20 )
1. Consolidated Net Worth $
2. Minimum Consolidated Net Worth required by
Section 5.01(o)(iv) [$50,000,000.00 PLUS 50%
of Consolidated Net Income (with no deductions
for losses) for each fiscal quarter of Borrower
ending on or after July , 2001] (such
required increases to be cumulative for each
such fiscal quarter) $
IN COMPLIANCE: YES ___ ; NO ___ .
E. MAXIMUM CAPITAL EXPENDITURES
(for the prior beginning , 20 ,
and ending , 20 )
1. Total Capital Expenditures for current Fiscal
Year-to-Date $
4. Maximum Capital Expenditures permitted by
Section 5.02(o)(v) $30,000,000.00
IN COMPLIANCE: YES ___ ; NO ___ .
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