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EXHIBIT 10.3
FIRST AMENDMENT TO
CREDIT AGREEMENT
This Amendment is agreed to as of the 14th day of November, 1997, by
and among Xxxxxx-Xxxx Inc., a Georgia corporation, and Xxxxxx-Xxxx International
L.L.C., a Georgia general partnership (the "Borrowers"); Norwest Bank Minnesota,
National Association, a national banking association, as Agent under the Credit
Agreement described below (in such capacity, the "Agent"); and Norwest Bank
Minnesota, National Association, a national banking association, SunTrust Bank,
Atlanta, a Georgia banking corporation, The Sumitomo Bank, Limited, a Japanese
banking corporation, a Southtrust Bank of Georgia, N.A., a national banking
association, as Banks (the "Banks").
The Borrower, the Agent and the Banks are each parties to a Credit
Agreement dated as of July 16, 1996 (together with all amendments, modifications
and restatements thereof, the "Credit Agreement")
The Borrowers, the Agent and the Banks wish to amend certain covenants
in the Credit Agreement.
ACCORDINGLY, in consideration of the mutual covenants contained in the
Credit Agreement and herein, the parties hereby agree as follows:
1. Definitions. All terms defined in the Credit Agreement that
are not otherwise defined herein shall have the meanings given them in the
Credit Agreement.
2. Amendment. The Credit Agreement is hereby amended as follows:
(a) The following phrase is hereby inserted immediately
after the words, "for borrowed money", in clause (i) of the definition
of "Total Funded Debt" in Section 1.1 of the Credit Agreement:
(including, but not limited to all indebtedness under this
Agreement, whether on account of Advances to or Letters of
Credit for the account of the Company, Advances to or Letters
of Credit for the account of LJ International under this
Agreement, or otherwise)
(b) The following is inserted at the end of the
definition of "Total-Funded-Debt-to-EBITDAR Ratio" In Section 1.1 of
the Credit Agreement:
In determining EBITDAR of the Company with respect to any
period in which the Company has effected a Permitted
Acquisition, the financial performance of the target of such
Permitted Acquisition (as set forth in the financial
statements to be delivered pursuant to clause (v) of the
definition of "Permitted Acquisition" above) shall be
attributed to the Company with respect to the period preceding
such Permitted Acquisition. Such attribution shall be made
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without regard to any expense reductions or other changes
realized by the Company as a result of consolidating
operations with such target.
(c) The table in Section 2.7(b) of the Credit Agreement
is hereby deleted, and the following us substituted therefor:
Total-Funded-Debt-to-EBITDAR Ratio LIBO Rate Margin
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Less than 1.50 to 1 0.75%
1.50 to 1 or greater, but less than 2.00 to 1 1.00%
2.00 to 1 or greater, but less than 3.00 to 1 1.25%
3.00 to 1 or greater, but less than 3.50 to 1 1.50%
3.50 to 1 or greater 1.65%
(d) Section 5.1(f) of the Credit Agreement is hereby
amended in its entirety to read as follows:
(f) Concurrent with the delivery of any
financial statements under paragraph (a) or (b), (i) a
Compliance Certificate, duly executed by the chief financial
officer of the Company, and (ii) if the Company effected any
Permitted Acquisition during the last fiscal quarter covered
by such financial statements of the Company, financial
statements with respect to the target of such Permitted
Acquisition during the period of 24 months preceding such
Permitted Acquisition, certified by the chief financial
officer of the Company to be those financial statements
believed by the Company in good faith to be the most accurate
financial statements available to the Company with respect to
such target (whether such financial statements are audited,
reviewed, compiled or internally generated)
(e) Section 5.9 of the Credit Agreement is hereby amended
in its entirety to read as follows:
Section 5.9 Total-Funded-Debt-To-EBITDAR
Ratio. The Company will at all times maintain its
Total-Funded-Debt-To-EBITDAR Ratio, determined as at
the end of the second and fourth quarters of each
fiscal year of the Company (and, in addition, as of
April 30, 1998), at not more than the amount set
forth below opposite the period in which the date of
such determination occurs.
Period Ratio
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On or before April 29, 1998 3.65 to 1
On or after April 30, 1998 3.50 to 1
Not later than May 22, 1998, the Company shall deliver to the
Agent a certificate, executed by the chief financial officer
of the Company, certifying
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that the Company was in compliance with this Section as of
April 30, 1998, together with such supporting documentation as
the Agent or the Required Banks may reasonably require.
(f) The phrase, "Varying amount up to limitation
described in Section 2.8", in Schedule 6.3 of the Credit Agreement is
hereby deleted, and the phrase, "Varying amount up to the limitation
described in Section 2.9", is substituted therefor.
3. Interim LIBO Rate Margin. Notwithstanding Section 2.7 of the
Credit Agreement, the LIBO Rate Margin from the date hereof until the first
adjustment hereafter in accordance with Section 2.7(b) of the Credit Agreement
shall be 1.50%.
4. Representations and Warranties. The Borrowers hereby represent
and warrant to the Agent and the Banks as follows:
(a) The Borrowers have all requisite power and authority,
corporate or otherwise, to execute and deliver this Amendment and to
perform this Amendment and the Credit Agreement as amended hereby. This
Amendment has been duly and validly executed and delivered to the Agent
and the Banks by the Borrowers, and this Amendment and the Credit
Agreement as amended hereby constitute the Borrowers' legal, valid and
binding obligations enforceable in accordance with their terms.
(b) The execution, delivery and performance by the
Borrowers of this Amendment, and the performance of the Credit
Agreement as amended hereby, have been duly authorized by all necessary
corporate action and do not and will not (i) require any authorization,
consent or approval by any governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, (ii) violate
the Borrowers' articles of incorporation or bylaws or any provision of
any law, rule, regulation or order presently in effect having
applicability to the Borrowers, or (iii) result in a breach of or
constitute a default under any indenture or agreement to which the
Borrowers are a party or by which the Borrowers or their properties may
be bound or affected.
(c) All of the representations and warranties contained
in Article IV of the Credit Agreement are correct on and as of the date
hereof as though made on and as of such date, except to the extent that
such representations and warranties relate solely to an earlier date.
5. Conditions. The amendments set forth in paragraph 2 shall be
effective only if the Agent has received (or waived the receipt of) each of the
following, in form and substance satisfactory to the Agent, on or before the
date hereof (or such later date as the Required Banks may agree in writing):
(a) This Amendment, duly executed by the Borrowers and
each Bank.
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(b) A certificate of the secretary or assistant secretary
of the Company (i) certifying as accurate resolutions of the board of
directors of the Company evidencing approval of this Amendment, the
Credit Agreement as amended hereby, and the other matters contemplated
hereby, (ii) stating that there have been no amendments to or
restatements of the articles of incorporation or bylaws of the Company
as furnished to the Agent in connection with the execution and delivery
of the Credit Agreement other than those that may be attached to the
certificate, and (iii) certifying the names of the managers of LJ
International that are authorized to sign this Amendment and the
Replacements Notes, together with the true signature of such officers.
(c) A certificate of the managing member, secretary or
assistant secretary of LJ International (i) certifying that such person
is the keeper of or otherwise responsible for the maintenance of the
minute books of LJ International, (ii) certifying that this Amendment
and the Credit Agreement as amended hereby have been duly approved by
all necessary action of the managing member of LJ International and
attaching true and correct copies of the applicable resolutions
granting such approval, (iii) stating that there have been no
amendments to or restatements of the Organizational Documents of LJ
International as furnished to the Agent in connection with the
execution and delivery of the Credit Agreement other than those that
may be attached to the certificate, and (iv) certifying the names of
the officers of the Company that are authorized to sign this Amendment
and the Replacements Notes, together with the true signatures of such
officers.
(d) A signed copy of the opinion of counsel for the
Borrowers, addressed to the Agent and the Banks, confirming the matters
set forth in paragraph 3 hereof (other than paragraph (c) thereof), and
such other matters as the Required Banks may in their sole discretion
request.
6. Miscellaneous. The Borrowers shall pay all costs and expenses
of the Agent, including attorneys' fees, incurred in connection with the
drafting and preparation of this Amendment and any related documents. Except as
amended by this Amendment, all of the terms and conditions of the Credit
Agreement shall remain in full force and effect. This Amendment may be executed
in any number of counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which counterparts of this
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Amendment, taken together, shall constitute but one and the same instrument.
This Amendment shall be governed by the substantive law of the State of
Minnesota.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first above written.
XXXXXX-XXXX, INC. XXXXXX-XXXX INTERNATIONAL LLC
By: /s/ Xxxxx X. Xxxxxxxxxx By: /s/ Xxxxx X. Xxxxxxxxxx
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Its VP - Finance Its VP - Finance
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NORWEST BANK MINNESOTA, SUNTRUST BANK, ATLANTA
NATIONAL ASSOCIATION, AS
AGENT AND AS A BANK
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxx
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Its Vice President Its A.V.P.
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By: /s/ X. X. Xxxxxx
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Its V.P.
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THE SUMITOMO BANK, LIMITED SOUTHTRUST BANK OF XXXXXX,
N.A.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxxx
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Its Vice President & Mgr. Its V.P.
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By: /s/ Xxxxxx X. Xxxxxxxx
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Its Asst. Vice President
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