EXHIBIT 10
FIFTH AMENDMENT TO REVOLVING CREDIT AGREEMENT
This Fifth Amendment to Revolving Credit Agreement (this "Amendment"),
made as of the 12th of June, 1998, among LOT$OFF CORPORATION, 50-OFF TEXAS
STORES, L.P., 50-OFF OPERATING COMPANY, AND 50-OFF MULTISTATE OPERATIONS, INC.,
as Borrowers (collectively, the "Borrowers"), and GENERAL ELECTRIC CAPITAL
CORPORATION, as Lender (the "Lender"),
W I T N E S S E T H:
WHEREAS, the Borrowers and the Lender are parties to that certain
Revolving Credit Agreement dated as of June 16, 1997, as amended by that certain
First Amendment to Revolving Credit Agreement dated as of August 28, 1997, by
that certain Second Amendment to Revolving Credit Agreement dated as of December
22, 1997, by that certain Third Amendment to Revolving Credit Agreement dated as
of February 15, 1998 and by that certain Fourth Amendment to Revolving Credit
Agreement dated as of April 17, 1998 (as further amended, modified, restated or
supplemented from time to time, the "Credit Agreement"); and
WHEREAS, the Borrowers have requested that certain terms of the Credit
Agreement be amended, and the Lender has agreed to the requested amendments on
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises set forth above, the
terms and conditions contained herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
that all capitalized terms used but not otherwise defined herein shall have the
meanings ascribed thereto in the Credit Agreement, and further agree as follows:
1. AMENDMENT TO ARTICLE 1. Article 1 of the Credit Agreement
is hereby amended by adding the following definition of "Fifth Amendment Date"
in appropriate alphabetical order:
"'FIFTH AMENDMENT DATE' shall mean June 12, 1998."
2. Amendment to Section 5.1. Section 5.1 of the Credit Agreement
is hereby amended by deleting subsection thereof in its entirety and by
replacing such subsection with the following:
"(c) Within thirty (30) days prior to the close of each Fiscal Year,
the monthly projections of Parent's (on a consolidated basis with its
Subsidiaries) balance sheet, income statement, cash flow statement,
capital expenditures and depreciation for each Fiscal Period of Parent
and its Subsidiaries for the current Fiscal Year, together with a
certification of the Controller, Chief Accounting Officer or Chief
Financial Officer of Parent stating that such projections have been
approved by Parent's board of directors; provided, however, that Borrower
Representative shall deliver such projections with respect to Fiscal Year
2000 within sixty (60) days prior to the close of Fiscal Year 1999."
3. AMENDMENT TO SECTION 6.19. Section 6.19 of the Credit
Agreement is hereby amended by deleting Section 6.19 thereof in its entirety and
by replacing such section with the following:
"6.19 MINIMUM AVAILABILITY. Borrowers shall maintain at all times
after the Fifth Amendment Date, and demonstrate to Lender upon Lender's
request that Borrowers have, Availability of not less than $500,000."
4. AMENDMENTS TO ARTICLE 7. Article 7 of the Credit Agreement is
hereby amended by deleting Sections 7.17, 7.18, 7.19, 7.20, 7.21 and 7.27
thereof in their entirety and replacing such sections, respectively, with
the following:
"7.17 CONSOLIDATED EBITDA.
(A) Borrowers will not permit cumulative Consolidated EBITDA,
calculated on a Fiscal Year-to-date basis for Fiscal Year 1999, for any
period ending on the last day of any Fiscal Period set forth below to be
less than the amount set forth opposite such Fiscal Period:
Fiscal Period/year Amount
------------------ ------
May 1998 ($3,200,000)
June 1998 ($3,800,000)
July 1998 ($4,400,000)
August 1998 ($4,800,000)
September 1998 ($5,400,000)
October 1998 ($5,800,000)
November 1998 ($6,000,000)
December 1998 ($5,100,000)
January 1999 ($5,900,000)
7.18 [INTENTIONALLY OMITTED].
7.19 [INTENTIONALLY OMITTED].
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7.20 [INTENTIONALLY OMITTED].
7.21 MINIMUM CONSOLIDATED WORKING CAPITAL RATIO.
Borrowers will not permit the Consolidated Working Capital Ratio on
the last day of any Fiscal Period, (i) commencing with Fiscal Period May
1998 through Fiscal Period September 1998, to be less than 1.50 to 1.00,
(ii) commencing with Fiscal Period October 1998 through Fiscal Period
December 1998, to be less than 1.25 to 1.00 and (iii) commencing with
Fiscal Period January 1999 and each Fiscal Period ended thereafter, to be
less than 1.50 to 1.00.
7.27 Covenant Revisions. On or before the end of Fiscal Year 1999,
Borrowers and Lender shall agree to establish appropriate financial
covenant levels (including but not limited to, setting a minimum
consolidated EBITDA threshold for each Fiscal Period for Fiscal Year
2000, in Section 7.17 of this Agreement) which levels shall be based upon
the projections delivered to Lender pursuant to Section 5.1(c) hereof with
respect to Fiscal Year 2000."
5. WAIVERS. The Lender hereby waives (i) each Event of Default
listed on Schedule 1 attached hereto and (ii) all of its rights and remedies
under the Credit Agreement which may arise as a result of such Events of
Default; provided, that the waivers expressly set forth herein shall not
hinder, restrict or otherwise modify the rights and remedies of the Lender
following the occurrence of any other Default or Event of Default under the
Credit Agreement. Except for the waiver set forth in the immediately preceding
sentence, the text of the Credit Agreement and the other Loan Documents shall
remain in full force and effect, and the Lender hereby reserves the right to
require strict compliance in the future with all terms and conditions of the
Credit Agreement and the other Loan Documents.
6. NO OTHER AMENDMENT. Except for the amendments expressly
set forth above, the text of the Credit Agreement and all other Loan
Documents shall remain unchanged and in full force and effect. The Borrowers
acknowledge and expressly agree that the Lender reserves the right to, and
does in fact, require strict compliance with all terms and provisions of the
Credit Agreement and the other Loan Documents.
7. REPRESENTATIONS AND WARRANTIES. Each Borrower hereby
represents and warrants in favor of the Lender as follows:
(a) Such Borrower has the corporate power and authority (i) to
enter into this Amendment and (ii) to do all acts and things as are
required or contemplated hereunder to be done, observed and performed
by it;
(b) This Amendment has been duly authorized, validly executed and
delivered by one or more authorized signatories of such Borrower, and
constitutes the legal, valid and binding obligation of such Borrower,
enforceable against it in accordance with its terms;
(c) The execution and delivery of this Amendment and performance
by such Borrower under the Credit Agreement, as amended hereby, do not
and will not require the consent or approval of any regulatory authority
or governmental authority or agency having jurisdiction over such Borrower
which has not already been obtained, nor
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contravene or conflict with the charter documents of such Borrower, or the
provision of any statute, judgment, order, indenture, instrument,
agreement, or undertaking, to which such Borrower is party or by which any
of its properties are or may become bound;
(d) As of the date hereof, and after giving effect to this
Amendment (i) no Default or Event of Default exists under the Credit
Agreement or is caused by this Amendment, and (ii) to the best of the
Borrowers' knowledge, each representation and warranty set forth in
Article 4 of the Credit Agreement is true and correct in all material
respects, except (x) to the extent previously fulfilled in accordance
with the terms of the Credit Agreement, as amended hereby, or (y) to the
extent relating specifically to the Closing Date.
8. CONDITIONS PRECEDENT TO EFFECTIVENESS. This Amendment shall
become effective on the date that the Lender shall have received a duly
executed original signature page to this Amendment from the Borrowers.
9. GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of Georgia, without
reference to the conflicts or choice of law principles thereof.
10. LOAN DOCUMENT. This Amendment shall be deemed to be a
Loan Document for all purposes.
11. EXPENSES. The Borrowers agree to pay all reasonable
expenses to the Lender incurred in connection with this Amendment, including,
without limitation, all fees and expenses of counsel to the Lender.
12. COUNTERPARTS. This Amendment may be executed by one or
more of the parties hereto on any number of separate counterparts, each of
which shall be deemed an original and all of which, taken together, shall be
deemed to constitute one and the same instrument. Delivery of an executed
counterpart of this Amendment by facsimile transmission shall be as effective
as delivery of a manually executed counterpart hereof.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused their respective
duly authorized officers or representatives to execute and deliver this
Amendment as of the day and year first written above.
BORROWERS: LOT$OFF CORPORATION, a Delaware
corporation
By: /s/ XXXXXXX X. XXXXXXXX XX
-------------------------------------------
Xxxxxxx X. Xxxxxxxx XX
President
50-OFF MULTISTATE OPERATIONS, INC., a
Nevada corporation
By: /s/ XXXXXXX X. XXXXXXXX XX
-------------------------------------------
Xxxxxxx X. Xxxxxxxx XX
President
50-OFF OPERATING COMPANY, a Nevada
corporation
By: /s/ XXXXXXX X. XXXXXXXX XX
-------------------------------------------
Xxxxxxx X. Xxxxxxxx XX
President
50-OFF TEXAS STORES, L.P., a Texas
limited partnership
By: 50-OFF Texas Management, Inc.,
a Nevada corporation,
its managing general partner
By: /s/ XXXXXXX X. XXXXXXXX XX
-------------------------------------------
Xxxxxxx X. Xxxxxxxx XX
President
FIFTH AMENDMENT TO REVOLVING CREDIT AGREEMENT
LENDER: GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------------
Its: SENIOR VICE PRESIDENT OF GE CAPITAL
COMMERCIAL FINANCE, INC., BEING DULY
AUTHORIZED
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FIFTH AMENDMENT TO REVOLVING CREDIT AGREEMENT
SCHEDULE 1
FOR THE FISCAL MONTH ENDED MAY 1, 1998
SECTION 6.19 AFFIRMATIVE COVENANTS-MINIMUM AVAILABILITY.
LOT$OFF Corporation's Availability has been less than $1,500,000 beginning on
and since June 8, 1998.
SECTION 7.19 NEGATIVE COVENANTS-MINIMUM GROSS MARGIN.
LOT$OFF Corporation generated a Gross Margin of 28.57% for the trailing 6
months through May 1 versus a covenant minimum of 32.00%.
