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EXHIBIT 10.15
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XX-XXX STORES, INC.
AS THE BORROWER
THE LENDERS NAMED HEREIN
AS LENDERS
BANK ONE, NA
AS DOCUMENTATION AGENT
COMERICA BANK
NATIONAL CITY BANK
AS CO-AGENTS
[KEYBANK LOGO]
KEYBANK NATIONAL ASSOCIATION,
AS A LENDER, THE SWING LINE LENDER, THE ISSUING BANK AND
AS ADMINISTRATIVE AGENT
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AMENDMENT NO. 3
DATED AS OF
MARCH 22, 2000
TO
CREDIT AGREEMENT
DATED AS OF
MAY 5, 1999
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AMENDMENT NO. 3 TO CREDIT AGREEMENT
THIS AMENDMENT NO. 3 TO CREDIT AGREEMENT, dated as of March 22, 2000 ("THIS
AMENDMENT"), among:
(i) XX-XXX STORES, INC., an Ohio corporation (herein, together with
its successors and assigns, the "BORROWER");
(ii) the Lenders party hereto (the "LENDERS");
(iii) BANK ONE, NA, as Documentation Agent; and COMERICA BANK and
NATIONAL CITY BANK, as Co-Agents; and
(iv) KEYBANK NATIONAL ASSOCIATION, a national banking association, as
a Lender, the Swing Line Lender, the Issuing Bank and as the Administrative
Agent under the Credit Agreement:
PRELIMINARY STATEMENTS:
(1) The Borrower, the Lenders named therein, and the Administrative Agent
entered into the Credit Agreement, dated as of May 5, 1999, as amended by
Amendment No. 1 thereto, dated as of December 14, 1999, and Amendment No. 2
thereto, dated as of March 7, 2000 (as so amended, the "CREDIT AGREEMENT").
Capitalized terms used herein without definition shall have the respective
meanings ascribed thereto in the Credit Agreement.
(2) The Borrower, the Lenders party hereto and the Administrative Agent
desire to amend certain of the provisions of the Credit Agreement, all as more
fully set forth below.
NOW, THEREFORE, the parties hereby agree as follows:
SECTION 1. AMENDMENTS, ETC.
1.1. PERMITTED DEBT FOR WEST COAST DISTRIBUTION FACILITY. Effective on the
Effective Date of this Amendment provided for in section 4 hereof, the dollar
amount which appears in section 9.4(d) of the Credit Agreement is changed from
"$30,000,000" to "$40,000,000".
1.2. CONSOLIDATED NET WORTH COVENANT. Effective on the Effective Date of
this Amendment provided for in section 4 hereof, section 9.6 of the Credit
Agreement is amended to read in its entirety as follows:
9.6. MINIMUM CONSOLIDATED NET WORTH; SHARE REPURCHASES. (A)
CONSOLIDATED NET WORTH COVENANT. The Borrower will not permit its
Consolidated Net Worth as of the end of any fiscal quarter to be less than
$240,000,000, EXCEPT that
(i) effective as of the end of the Borrower's fiscal quarter
ended on or nearest to April 30, 2000, and as of the end of each
fiscal quarter thereafter, the foregoing amount (as it may from time
to time be increased as herein provided), shall be increased by 50% of
the Consolidated Net Income of the Borrower and its Subsidiaries for
the fiscal quarter ended on such date, if any, as determined in
conformity with GAAP (there being no reduction in the case of any such
Consolidated Net Income which reflects a deficit),
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(ii) the foregoing amount (as it may from time to time be
increased as herein provided), shall be increased by an amount equal
to 100% of the cash proceeds (net of underwriting discounts and
commissions and other customary fees and costs associated therewith)
from any sale or issuance of equity (other than Redeemable Stock) by
the Borrower after the end of the Borrower's fiscal quarter ended on
or nearest to January 31, 2000 (other than any sale or issuance to
management or employees pursuant to employee benefit plans of general
application),
(iii) the foregoing amount (as it may from time to time be
increased as herein provided), shall be increased by an amount equal
to 100% of (x) the principal amount of Indebtedness or (y) the higher
of stated value or liquidation value of Redeemable Stock, as the case
may be, held by any person other than the Borrower or any of its
Subsidiaries, which is converted or exchanged after the end of the
Borrower's fiscal quarter ended on or nearest to January 31, 2000 into
common stock of the Borrower or any of its Subsidiaries, and
(iv) the foregoing amount (as it may from time to time be
increased as herein provided), shall be increased by an amount equal
to 100% of the increase in Consolidated Net Worth attributable to the
issuance of common stock or other equity interests subsequent to the
end of the Borrower's fiscal quarter ended on or nearest to January
31, 2000 as consideration in any Acquisitions permitted under section
9.2.
(b) SHARE REPURCHASES. The Borrower will not directly or indirectly
make, and will not permit any of its Subsidiaries to directly or indirectly
make, any purchase, redemption, retirement or other acquisition of (i) any
shares of capital stock of any class of the Borrower or (ii) any warrants,
rights or options to acquire, or any securities convertible into or
exchangeable for, any such shares, EXCEPT that if no Event of Default shall
have occurred and be continuing or would result therefrom, the Borrower
shall be permitted to expend up to $2,500,000 (the "ANNUAL SHARE REPURCHASE
BASKET") for such purpose during any fiscal year, subject to increase in
the Annual Share Repurchase Basket in accordance with the following
provisions. Beginning with the Borrower's fiscal year ended on or nearest
to January 31, 2001, and annually as of the end of each fiscal year
thereafter, if the Borrower's Fixed Charge Coverage Ratio was at least 1.60
to 1.00 for the Testing Period ended with such fiscal year, then the Annual
Share Repurchase Basket for the following fiscal year shall be increased to
$5,000,000, or if the Borrower's Fixed Charge Coverage Ratio was at least
1.675 to 1.00 for the Testing Period ended with such fiscal year, then the
Annual Share Repurchase Basket for the following fiscal year shall be
increased to $7,500,000. The Annual Share Repurchase Basket for any fiscal
year shall also be increased by the proceeds received by the Borrower
during such fiscal year from sales of common stock pursuant to employee
benefit plans.
1.3. LEVERAGE RATIO AND CONSOLIDATED CAPITAL EXPENDITURE COVENANTS.
Effective on the Effective Date of this Amendment provided for in section 4
hereof, sections 9.7 and 9.8 of the Credit Agreement, containing senior and
total leverage covenants, are replaced by new sections 9.7 and 9.8, containing
senior and total leverage ratios and a new consolidated capital expenditures
covenant, which new sections 9.7 and 9.8 read in their entirety as follows:
9.7. LEVERAGE RATIOS. (A) SENIOR LEVERAGE RATIO. The Borrower will not
permit the ratio of (i) the amount of its Consolidated Total Senior Balance
Sheet Debt as of the end of any fiscal quarter, TO (ii) its Consolidated
Total Capital as of the end of such fiscal quarter, to exceed (i) .27 to
1.00 as of the end of its first fiscal quarter ended on or nearest to April
30, 2000, or .25 to 1.00 as of the end of the first fiscal quarter of any
subsequent fiscal year, (ii) .30 to 1.00
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as of the end of the second fiscal quarter of any fiscal year, (iii) .40 to
1.00 as of the end of the third fiscal quarter of any fiscal year, or (iv)
.20 to 1.00 as of the end of the fourth fiscal quarter of any fiscal year.
(b) TOTAL LEVERAGE RATIO. The Borrower will not permit the ratio of
(iii) the amount of its Consolidated Total Balance Sheet Debt as of the end
of any fiscal quarter, TO (iv) its Consolidated Total Capital as of the end
of such fiscal quarter, to exceed the ratio specified below for such fiscal
quarter:
--------------- ------------------ -------------------- ------------------- -----------------
FQ1 FQ2 FQ3 FQ4
OF SUCH FY OF SUCH FY OF SUCH FY OF SUCH FY
--------------- ------------------ -------------------- ------------------- -----------------
Fiscal Year .50 to 1.00 .55 to 1.00 .60 to 1.00 .485 to 1.00
2000
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Fiscal Year .535 to 1.00 .55 to 1.00 .57 to 1.00 .45 to 1.00
2001
--------------- ------------------ -------------------- ------------------- -----------------
Any Fiscal .45 to 1.00 .55 to 1.00 .55 to 1.00 .40 to 1.00
Year thereafter
--------------- ------------------ -------------------- ------------------- -----------------
9.8. CONSOLIDATED CAPITAL EXPENDITURES. (a) The Borrower will not use
any proceeds of Loans hereunder to purchase or otherwise acquire the West
Coast Distribution Facility referred to in section 9.4(d), exclusive of up
to $2,000,000 for land acquisition. Nothing in the preceding sentence shall
be considered to prohibit any use of proceeds of Loans hereunder to finance
the costs and expenses of Consolidated Capital Expenditures made after the
date the West Coast Distribution Facility opens for business for new,
replacement or additional equipment, or for leasehold alterations,
additions or improvements, in each case which are associated with the West
Coast Distribution Facility.
(b) If as of the end of any fiscal year, the Borrower's ratio of (x)
Consolidated Total Debt to (y) Consolidated Total Capital, expressed as a
percentage, is greater than 40.00%, THEN as of the end of each of the
succeeding four fiscal quarters the Borrower will not permit the ratio of
(i) Consolidated Net Income PLUS Consolidated Depreciation Expense PLUS
Consolidated Amortization Expense, for the four fiscal quarter Testing
Period then ended, to (ii) Consolidated Capital Expenditures for such
Testing Period, to be less than 1.00 to 1.00; PROVIDED, that if the
Borrower is otherwise in compliance with all other financial covenants
contained in sections 9.6, 9.7, 9.9, 9.10 and 9.11, THEN the Borrower shall
not be considered to have breached the covenant contained in this section
9.8(b) unless such ratio shall have been less than 1.00 to 1.00 for Testing
Periods ended on two consecutive fiscal quarters.
1.4. CURRENT LIABILITIES AND DEBT COVERAGE COVENANT. Effective on the
Effective Date of this Amendment provided for in section 4 hereof, section 9.10
of the Credit Agreement is amended to read in its entirety as follows:
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9.10. RATIO OF CONSOLIDATED CURRENT ASSETS/CONSOLIDATED CURRENT
LIABILITIES PLUS CONSOLIDATED TOTAL SENIOR BALANCE SHEET DEBT. The Borrower
will not permit the ratio, as of the end of any fiscal quarter, of (i) its
Consolidated Current Assets, TO (ii) the sum of (x) its Current
Consolidated Liabilities, PLUS (y) its Consolidated Total Senior Balance
Sheet Debt, to be less than the ratio indicated below:
--------------- ------------------ -------------------- ------------------- -----------------
FQ1 FQ2 FQ3 FQ4
OF SUCH FY OF SUCH FY OF SUCH FY OF SUCH FY
--------------- ------------------ -------------------- ------------------- -----------------
Fiscal Year 1.40 to 1.00 1.32 to 1.00 1.36 to 1.00 1.50 to 1.00
2001
--------------- ------------------ -------------------- ------------------- -----------------
Fiscal Year 1.50 to 1.00 1.40 to 1.00 1.40 to 1.00 1.50 to 1.00
2002 and any
Fiscal Year
thereafter
--------------- ------------------ -------------------- ------------------- -----------------
1.5. ANNUAL CLEAN DOWN COVENANT. Effective on the Effective Date of this
Amendment provided for in section 4 hereof, section 9.11 of the Credit Agreement
is amended to read in its entirety as follows:
9.11. ANNUAL CLEAN DOWN. The Borrower will not, on any day during
at least one period of 30 consecutive days occurring during a period
identified below, permit its Consolidated Total Senior Balance Sheet
Debt to exceed the amount shown below:
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PERIOD AMOUNT
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Three Consecutive Calendar Months Ended $85,000,000
February 28, 2001
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Three Consecutive Calendar Months Ended $100,000,000
February 28, 2002
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Three Consecutive Calendar Months Ended Add $15,000,000 to the
February 28 or 29 of any subsequent year amount for the end of the
preceding year
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SECTION 2. REPRESENTATIONS AND WARRANTIES.
The Borrower hereby represents and warrants to the Administrative Agent and
the Lenders as follows:
2.1. AUTHORIZATION, VALIDITY AND BINDING EFFECT. This Amendment has been
duly authorized by all necessary corporate action on the part of the Borrower,
has been duly executed and delivered by a duly authorized officer or officers of
the Borrower, and constitutes the valid and binding agreement of the Borrower,
enforceable against the Borrower in accordance with its terms.
2.2. REPRESENTATIONS AND WARRANTIES TRUE AND CORRECT. The representations
and warranties of the Borrower contained in the Credit Agreement, as amended
hereby, are true and correct on and as of the date hereof as though made on and
as of the date hereof, except to the extent that such representations and
warranties expressly relate to a specified date, in which case such
representations and warranties are hereby reaffirmed as true and correct when
made.
2.3. NO EVENT OF DEFAULT, ETC. No condition or event has occurred or exists
which constitutes or which, after notice or lapse of time or both, would
constitute an Event of Default.
2.4. COMPLIANCE. The Borrower is in full compliance with all covenants and
agreements contained in the Credit Agreement, as amended hereby.
SECTION 3. RATIFICATIONS.
The terms and provisions set forth in this Amendment shall modify and
supersede all inconsistent terms and provisions set forth in the Credit
Agreement, and except as expressly modified and superseded by this Amendment,
the terms and provisions of the Credit Agreement are ratified and confirmed and
shall continue in full force and effect.
SECTION 4. EFFECTIVENESS.
The amendments to the Credit Agreement provided for in this Amendment shall
become effective on March 31, 2000 (the "EFFECTIVE DATE") if on or prior to the
Effective Date the following conditions shall have been satisfied:
(a) this Amendment shall have been executed by the Borrower and the
Administrative Agent and counterparts hereof as so executed shall have been
delivered to the Administrative Agent;
(b) the Acknowledgment and Consent appended hereto shall have been
executed by the Subsidiary Guarantors named therein, and counterparts
thereof as so executed shall have been delivered to the Administrative
Agent;
(c) the Administrative Agent shall have been notified by all of the
Lenders that such Lenders have executed this Amendment (which notification
may be by facsimile or other written confirmation of such execution); and
(d) the Borrower shall have paid to the Administrative Agent, for
immediate distribution to the Lenders pro rata based on their respective
General Revolving Commitments, an amendment fee at a rate previously agreed
to by the Borrower, the Administrative Agent and such Lenders.
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After this Amendment becomes effective as provided herein, the Administrative
Agent will promptly furnish a copy of this Amendment to each Lender and the
Borrower and confirm the specific Effective Date hereof.
SECTION 5. MISCELLANEOUS.
5.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made in this Amendment shall survive the execution and delivery of
this Amendment, and no investigation by the Administrative Agent or any Lender
or any subsequent Loan or other Credit Event shall affect the representations
and warranties or the right of the Administrative Agent or any Lender to rely
upon them.
5.2. REFERENCE TO CREDIT AGREEMENT. The Credit Agreement and any and all
other agreements, instruments or documentation now or hereafter executed and
delivered pursuant to the terms of the Credit Agreement as amended hereby, are
hereby amended so that any reference therein to the Credit Agreement shall mean
a reference to the Credit Agreement as amended hereby.
5.3. EXPENSES. As provided in the Credit Agreement, but without limiting
any terms or provisions thereof, the Borrower agrees to pay on demand all costs
and expenses incurred by the Administrative Agent in connection with the
preparation, negotiation, and execution of this Amendment, including without
limitation the costs and fees of the Administrative Agent's special legal
counsel, regardless of whether the amendments to the Credit Agreement
contemplated by this Amendment become effective in accordance with the terms
hereof, and all costs and expenses incurred by the Administrative Agent or any
Lender in connection with the enforcement or preservation of any rights under
the Credit Agreement, as amended hereby.
5.4. SEVERABILITY. Any term or provision of this Amendment held by a court
of competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the term or provision so held to be invalid or unenforceable.
5.5. APPLICABLE LAW. This Amendment shall be governed by and construed in
accordance with the laws of the State of Ohio.
5.6. HEADINGS. The headings, captions and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
5.7. ENTIRE AGREEMENT. This Amendment is specifically limited to the
matters expressly set forth herein. This Amendment and all other instruments,
agreements and documentation executed and delivered in connection with this
Amendment embody the final, entire agreement among the parties hereto with
respect to the subject matter hereof and supersede any and all prior
commitments, agreements, representations and understandings, whether written or
oral, relating to the matters covered by this Amendment, and may not be
contradicted or varied by evidence of prior, contemporaneous or subsequent oral
agreements or discussions of the parties hereto. There are no oral agreements
among the parties hereto relating to the subject matter hereof or any other
subject matter relating to the Credit Agreement.
5.8. COUNTERPARTS. This Amendment may be executed by the parties hereto
separately in one or more counterparts, each of which when so executed shall be
deemed to be an original, but all of which when taken together shall constitute
one and the same agreement.
[The balance of this page is intentionally blank.]
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IN WITNESS WHEREOF, this Amendment has been duly executed and delivered as
of the date first above written.
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XX-XXX STORES, INC. KEYBANK NATIONAL ASSOCIATION,
INDIVIDUALLY AS A LENDER, THE ISSUING
BANK AND THE ADMINISTRATIVE AGENT
BY: /s/ XXXXX X. XXXXXX
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EXECUTIVE VICE PRESIDENT BY: /s/ XXXXXX X. XXXXXXX
& CHIEF FINANCIAL OFFICER ---------------------
TITLE: VICE PRESIDENT
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BANK ONE, NA (FORMERLY KNOWN AS THE FIRST NATIONAL CITY BANK,
NATIONAL BANK OF CHICAGO), INDIVIDUALLY AS A LENDER AND
INDIVIDUALLY AS A LENDER AND AS A CO-AGENT
AS DOCUMENTATION AGENT
BY: /s/ XXXXXX X. XXXXX
BY: /s/ XXXXXX X. XXXXXXXX -------------------
---------------------- TITLE: VICE PRESIDENT AND
TITLE: VICE PRESIDENT SENIOR LENDING OFFICER
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COMERICA BANK, FIRSTAR BANK, N. A.
INDIVIDUALLY AS A LENDER AND
AS A CO-AGENT
BY: /s/ XXXXX X. XXXXXXXXXXX
BY: /s/ XXXXXXX X. JUDGE ------------------------
-------------------- TITLE: VICE PRESIDENT
TITLE: VICE PRESIDENT
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FLEET NATIONAL BANK UNION BANK OF CALIFORNIA, N. A.
BY: /s/ XXXXX XXXXXX BY: /s/ XXXXXXX X. XXXXX
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TITLE: VICE PRESIDENT TITLE: VICE PRESIDENT
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XXXXXX TRUST AND SAVINGS BANK MERCANTILE BANK NATIONAL ASSOCIATION
BY: /s/ XXXXX X. LAW BY: /s/ XXXXXX XXXXX
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TITLE: VICE PRESIDENT TITLE: BANKING OFFICER
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MELLON BANK, N. A. THE HUNTINGTON NATIONAL BANK
BY: /s/ XXXXXXX X. XXXXXXX BY: /s/ XXXXX XXXXXX
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TITLE: VICE PRESIDENT TITLE: VICE PRESIDENT
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FIFTH THIRD BANK, NORTHEASTERN OHIO
BY: /s/ XXX X. XXXXXXX
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TITLE: VICE PRESIDENT
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