AMENDMENT NO. 1
Dated as of September 11, 1997
to the
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of May 23, 1996
WHEREAS, LECHTERS, INC. ("the Borrower"), the BANKS listed
on signature pages to the Amended and Restated Credit Agreement
(the "Banks") and THE BANK OF MONTREAL, as Agent (the "Agent")
are parties to the Amended and Restated Credit Agreement, dated
as of May 23, 1996 (the "Credit Agreement"); and
WHEREAS, the Borrower, the Banks and the Agent wish to amend
the Credit Agreement in the manner hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants,
agreements, and promises herein contained and for good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Borrower, the Banks and the Agent agree
as follows:
Section 1. Definitions. Terms used in this Amendment No. 1
that are defined in the Credit Agreement are used with the
meanings therein ascribed to them.
Section 2. Amendments. Upon and after the Effective Date
(as defined in Section 3 hereof), the Credit Agreement shall be
amended as follows:
(a) Section 1.7(b) shall be amended by inserting the
words "or amendment" immediately after the words "90 days
after the issuance" appearing in line 14 thereof;
(b) Section 4.11 shall be deleted in its entirety and
the following substituted therefor:
"Section 4.11. Dividends, Stock Purchases.
(a) Declare or pay any dividends, either in
cash or property, on any shares of its capital
stock of any class (except dividends or other
distributions payable solely in shares of common
stock of the Borrower); or
(b) Directly or indirectly, or through any
Subsidiary, purchase, redeem or retire any shares
of its capital stock of any class or any warrants,
rights or options to purchase or acquire any
shares of its capital stock; or
(c) Make any other payment or distribution,
either directly or indirectly or through any
Subsidiary, in respect of capital stock of the
Borrower; or
(d) Make, directly or indirectly, or permit
any Subsidiary to make, any Restricted Investment;
except that the Borrower may (A) declare and pay
preferred dividends not to exceed 6% per annum in
respect of the Perpetual Convertible Preferred
Stock, and (B) during such time as no Default or
Event of Default has occurred and is continuing,
purchase, redeem or retire up to one million
shares in the aggregate of its common stock
subsequent to the Effective Date.";
(c) Section 10.1 shall be amended by deleting the
definition of "Consolidated Fixed Charges" in its entirety
and substituting therefor the following definition:
"'Consolidated Fixed Charges' means, for any
period, the sum of (a) the aggregate amount of
principal payments of Indebtedness scheduled to
have been made by the Borrower and the
Consolidated Subsidiaries during such period,
determined on a consolidated basis, (b) to the
extent deducted in determining Consolidated Net
Income for such period, interest expense and rent
expense, (c) capital expenditures and (d) the
aggregate amount expended to purchase, redeem or
retire the common stock of the Borrower.";
(d) Section 10.1 shall be amended by deleting the
definition of "Restricted Investment" in its entirety and
substituting therefor the following definition:
"'Restricted Investment" means all
investments in or loans, advances or extensions of
credit to any Person by the Borrower or its
Subsidiaries except the following:
(a) investments, loans and advances by
the Borrower and its Subsidiaries in and to
Subsidiaries, including any investment in a
corporation which, after giving effect
thereto, will become a Subsidiary;
(b) investments in property to be used
in the ordinary course of business of the
Borrower and its Subsidiaries;
(c) investment in direct obligations
of, or obligations guaranteed by, the United
States of America or an agency thereof,
maturing within three years from the date of
acquisition thereof;
(d) (x) investments in municipal
securities, maturing within three years from
the date of acquisition thereof, which are
rated in one of the top two rating
classifications by Standard & Poor's
Corporation, Xxxxx'x Investors Services, Inc.
or other nationally recognized credit rating
agency of similar standing, and (y)
investments in debt securities of
corporations which are headquartered in the
United States, the senior debt securities of
which are rated at or above A- by Standard &
Poor's Corporation or at A3 or above by
Xxxxx'x Investors Services, Inc. (or another
nationally recognized credit rating agency of
similar standing if neither of such two named
agencies shall rate such securities);
(e) investments in certificates of
deposit, eurodollar time deposits or banker's
acceptances maturing within one year from the
date of origin, issued by, and bank accounts
with, commercial banks organized under the
laws of the United States or any state
thereof or Canada or any province thereof,
and having capital, surplus and undivided
profits aggregating at least $100,000,000;
(f) investments in commercial paper
maturing within 270 days or less from the
date of issuance and rated in one of the top
two rating classifications by Standard &
Poor's Corporation, Xxxxx'x Investors
Services, Inc. or other nationally recognized
credit rating agency of similar standing;
(g) investments in any investment
company having (at the time of investment)
assets of not less than $500,000,000 and a
substantial portion of the assets of which
are limited to investments of a character
which would be permitted to be made by the
Borrower pursuant to the provisions of
paragraphs (c), (d), (e) and (f) of this
definition and which shares under GAAP are
classified as current assets;
(h) investments in certain issues of
preferred stock known by various terms such
as "dutch-auction preferred", "capital-market
preferred", "remarketed preferred", and
"variable rate preferred", or similar terms
which, at the time of acquisition by the
Borrower or any Subsidiary is rated in one of
the top two rating classifications by
Standard & Poor's Corporation or Xxxxx'x
Investors Services, Inc.;
(i) other investments existing as of
May 16, 1991, provided that any such
investments which are not described in the
foregoing paragraphs of this definition are
disclosed to the Agent in writing on or prior
to the Agreement Date; and
(j) loans to employees of the Borrower
or its Subsidiaries, provided that the
aggregate outstanding principal amount of
such loans shall at no time exceed
$1,500,000."
Section 3. Effective Date. This Amendment No. 1 shall be
effective as of September 11, 1997 (the "Effective Date") when
each of the following shall have occurred:
(a) the Borrower, the Banks and the Agent shall have
executed and delivered this Amendment No. 1; and
(b) each Representation and Warranty shall be true and
correct in all material respects at and as of the Effective
Date after giving effect to this Amendment No. 1.
Section 4. Representations and Warranties. The Borrower
hereby represents and warrants to the Banks and the Agent that:
(a) this Amendment No. 1 has been duly authorized,
executed and delivered by the Borrower and constitutes a
legal, valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its
terms;
(b) the execution, delivery and performance of this
Amendment No. 1 does not require any Governmental Approval;
and
(c) no Default or Event of Default has occurred and is
continuing at and as of the Effective Date after giving
effect to this Amendment No. 1.
Section 5. Counterparts. This Amendment No. 1 may be
executed in any number of counterparts, each of which shall be
deemed to be an original, but all such separate counterparts
shall together constitute one and the same instrument.
Section 6. Ratification. Except to the extent hereby
amended, the Credit Agreement is and shall continue to be in full
force and effect and is hereby in all respects confirmed,
approved and ratified.
Section 7. Captions. Section captions in this Amendment
No. 1 are included herein for convenience of reference only and
shall not constitute a part of this Amendment No. 1 for any other
purpose or in any way affect the meaning or construction of any
provisions of this Amendment No. 1.
Section 8. Governing Law. This Amendment No. 1 shall be
construed in accordance with and governed by the law of the State
of New York (without giving effect to its choice of law
principles).
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 1 to the Credit Agreement to be executed and
delivered by their duly authorized officers as of the day first
written above.
LECHTERS, INC.
By:/s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Senior Vice President &
Chief Financial Officer
BANK OF MONTREAL,
as Agent and as a Bank
By:/s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Director
THE CHASE MANHATTAN BANK
(formerly known as
CHEMICAL BANK NEW JERSEY, N.A.),
as a Bank
By:/s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Vice President
