EXHIBIT 10.14.4
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS DOCUMENT is entered into as of April 24, 2002, between PIER 1
IMPORTS, INC., a Delaware corporation ("BORROWER"), those Lenders (defined
below) who have signed a signature page to this document, BANK OF AMERICA, N.A.
(as Administrative Agent for Lenders), and BANK ONE, N.A., (assignee of Bank
One, Texas, N.A.) and XXXXX FARGO BANK (TEXAS), NATIONAL ASSOCIATION, as
Co-Agents for Lenders.
Borrower, Lenders, Administrative Agent, and Co-Agents are party to the
Credit Agreement (as it may have been renewed, extended, and amended through the
date of this document, the "CREDIT AGREEMENT") dated as of November 12, 1998.
Borrower and certain Lenders have agreed, upon the following terms and
conditions, to amend the Credit Agreement as provided in PARAGRAPH 2 below.
Accordingly, for adequate and sufficient consideration, Borrower, Required
Lenders, and Administrative Agent agree as follows:
1. TERMS AND REFERENCES. Unless otherwise stated in this document (A)
terms defined in the Credit Agreement have the same meanings when used in this
document and (B) references to "SECTIONS," "SCHEDULES," and "EXHIBITS" are to
the Credit Agreement's sections, schedules, and exhibits.
2. AMENDMENT.
(i) The table included in the definition of "Applicable Percentage" is
entirely amended to read as follows:
BASED UPON THE BETTER OF APPLICABLE PERCENTAGE
-------------------------------------- --------------------------------
HIGHER OF DEBT COMMITMENT
CATEGORY RATINGS BY EURODOLLAR-RATE FEES UNDER
Y LEVERAGE RATIO S&P/XXXXX'X BORROWINGS SECTION 4.3
-------- -------------- -------------- --------------- -----------
1 N/A BBB/BAA2 OR HIGHER 0.900% 0.15%
2 LESS THAN 1.5 TO 1.0 BBB-/BAA3 1.000% 0.17%
GREATER THAN OR EQUAL TO
1.5 TO 1.0 BUT LESS THAN
3 2.0 TO 1.0 BB+/BA1 1.125% 0.20%
GREATER THAN OR EQUAL TO
2.0 TO 1.0 BUT LESS THAN
4 2.5 TO 1.0 BB/BA2 1.250% 0.25%
GREATER THAN OR EQUAL TO
2.5 TO 1.0 BUT LESS THAN
5 3.0 TO 1.0 BB-/BA3 1.500% 0.30%
GREATER THAN OR EQUAL TO
6 3.0 TO 1.0 NA 1.750% 0.35%
(ii) The definitions of "Permitted Distributions", "Permitted
Investment" and "Restricted Payment" in SECTION 1.1 are entirely amended as
follows:
"PERMITTED DISTRIBUTIONS" MEANS DISTRIBUTIONS THAT ARE DECLARED, MADE,
OR PAID (a) IN THE FORM OF ADDITIONAL EQUITY THAT IS NOT MANDATORILY REDEEMABLE,
(b) TO BORROWER BY ANY OF ITS SUBSIDIARIES, (c) TO ANY
GUARANTOR BY ANY OF ITS SUBSIDIARIES, (d) TO ANY UNRESTRICTED COMPANY BY ANY
OTHER UNRESTRICTED COMPANY, (e) IN THE FORM OF BORROWER'S REDEMPTION OF ITS OWN
STOCK FOR VESTED BUT UNEXERCISED EMPLOYEE STOCK OPTIONS AND EMPLOYEE STOCK
OPTIONS VESTING WITHIN ONE YEAR AND THE REQUIREMENTS OF THE PIER 1 IMPORTS
EMPLOYEE STOCK PURCHASE PLAN AND THE PIER 1 IMPORTS DIRECT STOCK PURCHASE AND
DIVIDEND REINVESTMENT PLAN, OR (f) OTHERWISE BY BORROWER IN CASH IF (i) THE
TOTAL OF SUCH DISTRIBUTIONS DOES NOT EXCEED $20,000,000 ACTUALLY PAID DURING ANY
FISCAL YEAR OF BORROWER, (ii) SUCH DISTRIBUTIONS ARE PAID WITHIN 90 DAYS AFTER
BEING DECLARED, AND (iii) SUCH DISTRIBUTIONS ARE NOT DECLARED WHILE A DEFAULT
CONDITION EXISTED.
"PERMITTED INVESTMENT" MEANS THE FOLLOWING:
(a) GOVERNMENT SECURITIES.
(b) COLLECTIVE INVESTMENT FUNDS CREATED PURSUANT TO REGULATION
9 OF THE OFFICE OF THE COMPTROLLER OF THE CURRENCY OF THE UNITED
STATES, RATED AAA BY S&P OR Aaa BY XXXXX'X AND IN COMPLIANCE WITH
SECURITIES AND EXCHANGE COMMISSION RULE 2(a)7, THAT ARE INVESTED SOLELY
IN ONE OR MORE SECURITIES OF THE UNITED STATES GOVERNMENT, SECURITIES
ISSUED BY ONE OR MORE AGENCIES OF THE UNITED STATES GOVERNMENT,
REPURCHASE AGREEMENTS, REVERSE REPURCHASE AGREEMENTS, AND INDIVIDUAL
CORPORATE SECURITIES RATED AAA BY S&P OR Aaa BY XXXXX'X.
(c) CERTIFICATES OF DEPOSIT, EURODOLLAR CERTIFICATES OF
DEPOSIT, DEMAND AND TIME DEPOSITS, AND PRIME BANKERS ACCEPTANCES ISSUED
BY ANY FINANCIAL INSTITUTION ORGANIZED AND EXISTING UNDER THE LAWS OF
THE UNITED STATES OF AMERICA OR ANY OF ITS STATES AND HAVING ON THE
DATE OF THE INVESTMENT AN S&P RATING OF AT LEAST A- OR A-1 OR A XXXXX'X
RATING OF AT LEAST A-3 OR P-1, IN EACH CASE DUE WITHIN ONE YEAR AFTER
THE DATE OF THE MAKING OF THE INVESTMENT.
(d) FULLY COLLATERALIZED REPURCHASE AGREEMENTS, WITH A
FINANCIAL INSTITUTION DESCRIBED IN CLAUSE (c) ABOVE, HAVING A DEFINED
TERMINATION DATE, FULLY SECURED BY OBLIGATIONS OF THE UNITED STATES
GOVERNMENT, OR ITS AGENCIES, AND DUE WITHIN ONE YEAR AFTER THE DATE OF
THE MAKING OF THE INVESTMENT.
(e) TAX-EXEMPT MUTUAL FUNDS THAT INVEST IN MUNICIPAL
SECURITIES RATED A1 OR HIGHER OR AA OR HIGHER BY S&P OR P1 OR HIGHER OR
AA OR HIGHER BY XXXXX'X AND IN COMPLIANCE WITH SECURITIES AND EXCHANGE
COMMISSION RULE 2(a)7.
(f) VARIABLE-RATE TAX-EXEMPT DEMAND NOTES ISSUED BY
MUNICIPALITIES AND RATED AA OR HIGHER BY S&P OR AA OR HIGHER BY
XXXXX'X AND DUE WITHIN ONE YEAR AFTER THE DATE OF THE MAKING OF THE
INVESTMENT.
(g) COMMERCIAL PAPER ISSUED BY CORPORATIONS AND RATED A2 OR
HIGHER BY S&P OR P2 OR HIGHER BY XXXXX'X AND CORPORATE DEBT OBLIGATIONS
RATED BBB OR HIGHER BY S&P OR BAA2 OR HIGHER BY XXXXX'X. SO LONG AS THE
INSTRUMENT IS RATED A1 OR HIGHER OR A- OR HIGHER BY S&P OR P1 OR HIGHER
OR A3 OR HIGHER BY XXXXX'X IT MUST BE DUE WITHIN ONE YEAR AFTER THE
DATE OF THE MAKING OF THE INVESTMENT, OTHERWISE IT SHALL BE DUE WITHIN
90 DAYS AFTER THE DATE OF THE MAKING OF THE INVESTMENT.
(h) LOAN PARTICIPATIONS THROUGH A FINANCIAL INSTITUTION
DESCRIBED IN CLAUSE (c) ABOVE PROVIDED THE UNDERLYING CORPORATE CREDIT
IS RATED A2 OR HIGHER BY S&P AND P2 OR HIGHER BY XXXXX'X AND PROVIDED
SUCH LOAN PARTICIPATIONS ARE LIMITED IN DURATION TO OVERNIGHT
INVESTMENTS.
(i) PURCHASES OF A MAJORITY OF THE OUTSTANDING CAPITAL STOCK
OF ANY CORPORATION.
(j) INVESTMENTS BY ANY ONE OR MORE COMPANIES IN BORROWER OR
ANY GUARANTOR IF THERE IS NO RELATED DEFAULT CONDITION.
(k) WORKING-CAPITAL ADVANCES FROM BORROWER TO THE PIER RETAIL
GROUP LIMITED THAT ARE NOT OUTSTANDING MORE THAN 90 DAYS AND THAT NEVER
EXCEED A TOTAL OF $5,000,000 PRINCIPAL AMOUNT OUTSTANDING AT ANY TIME.
(l) BORROWER'S OWNERSHIP OF BENEFICIAL INTERESTS IN
SECURITIZED RECEIVABLES OR IN ANY MASTER TRUST ESTABLISHED IN
CONNECTION WITH THE SALE OF ACCOUNTS RECEIVABLE FOR AN ACCOUNTS
RECEIVABLE FINANCING OR SECURITIZATION FACILITY.
(m) LOANS OR ADVANCES TO DIRECTORS, OFFICERS, AND EMPLOYEES OF
THE COMPANIES THAT NEVER EXCEED A TOTAL OF $10,000,000 OUTSTANDING FOR
ALL OF THE COMPANIES.
(n) INDEBTEDNESS OF CUSTOMERS CREATED IN ANY COMPANY'S
ORDINARY COURSE OF BUSINESS IN A MANNER CONSISTENT WITH ITS PRESENT
PRACTICES.
(o) HEDGING AGREEMENTS.
"RESTRICTED PAYMENT" means (a) Distributions that are not Permitted
Distributions, (b) Investments that are not Permitted Investments, and (c)
prepayments or purchases of any subordinated Debt of the Companies before the
respective scheduled maturity dates that exceed a total of $50,000,000.
(iii) SECTION 9.2 is entirely amended to read as follows:
9.2 RESTRICTED PAYMENTS. No Company may declare, make, or pay any
Restricted Payment (a) while any Default Condition exists or (b) that
would cause the total Restricted Payments by all Companies during any
fiscal year of the Companies to exceed $80,000,000 for all of the
Companies.
3. CONDITIONS PRECEDENT. Notwithstanding any contrary provision, the
foregoing paragraph is not effective unless and until (A) the representations
and warranties in this document are true and correct and (B) Administrative
Agent receives (1) counterparts of this document executed by Borrower, Required
Lenders, and each Guarantor, (2) officer's certificates executed by officers of
Borrower and each Guarantor, certifying to incumbency of certain officers and
certifying that there have been no changes to the articles of incorporation and
bylaws, or other appropriate formation documents, as applicable, of each
Company, (3) an amendment fee for each Lender who has executed the document and
delivered it to Administrative Agent by 5:00 p.m. Dallas time on April 30, 2002,
in an amount equal to the product of (i) such Lender's Commitment and (ii) 0.05,
which amendment fees Administrative Agent shall promptly pay to such Lenders
upon closing of this amendment, and (4) payment of fees of counsel to
Administrative Agent.
4. RATIFICATIONS. To induce Lenders to enter into this document,
Borrower (A) ratifies and confirms all provisions of the Credit Documents as
amended by this document, (B) ratifies and confirms that all guaranties, and
assurances granted, conveyed, or assigned to Administrative Agent or any Lender
under the Credit Documents (as they may have been renewed, extended, and
amended) are not released, reduced, or otherwise adversely affected by this
document and continue to guarantee and assure full payment and performance of
the present and future Obligation, and (C) agrees to perform those acts and duly
authorize, execute, acknowledge, deliver, file, and record those additional
documents, and certificates as Administrative Agent or any Lender may request in
order to create, perfect, preserve, and protect those guaranties, and
assurances.
5. REPRESENTATIONS. To induce Lenders to enter into this document,
Borrower represents and warrants to Lenders that as of the date of this document
(A) all representations and warranties in the Credit Documents are true and
correct in all material respects except to the extent that (1) any of them speak
to a different specific date or (2) the facts on which any of them were based
have been changed by transactions contemplated or permitted by the
Credit
Agreement, and (B) no Material-Adverse Event, Event of Default, or Potential
Default exists.
6. EXPENSES. Borrower shall pay all costs, fees, and expenses paid or
incurred by Administrative Agent incident to this document, including, without
limitation, the reasonable fees and expenses of Administrative Agent's counsel
in connection with the negotiation, preparation, delivery, and execution of this
document and any related documents.
7. MISCELLANEOUS. All references in the Credit Documents to the "
Credit
Agreement" refer to the
Credit Agreement as amended by this document. This
document is a "Credit Document" referred to in the
Credit Agreement; therefore,
the provisions relating to Credit Documents in SECTIONS 1 and 14 are
incorporated
in this document by reference. Except as specifically amended and modified in
this document, the Credit Agreement is unchanged and continues in full force and
effect. This document may be executed in any number of counterparts with the
same effect as if all signatories had signed the same document. All counterparts
must be construed together to constitute one and the same instrument. This
document binds and inures to each of the undersigned and their respective
successors and permitted assigns, subject to SECTION 14.10. THIS DOCUMENT AND
THE OTHER CREDIT DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES IN
RESPECT OF THE MATTERS COVERED BY THE CREDIT DOCUMENTS AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS BY THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGES FOLLOW.
EXECUTED as of the date first stated above in this Third Amendment to
Credit Agreement.
PIER 1 IMPORTS, INC., as Borrower BANK OF AMERICA, N.A., (formerly
NationsBank, N.A.), as Administrative Agent
and a Lender
By /s/ Xxxxxxx X. Xxxxxx By /s/ Xxx Xxxxxxxxxx
Xxxxxxx X. Xxxxxx Xxx X. Xxxxxxxxxx, Vice President
Executive VP Finance, CFO and
Treasurer
BANK ONE, N.A., (assignee of Bank One, Texas, XXXXX FARGO BANK (TEXAS),
N.A.), as a Co-Agent and a Lender NATIONAL ASSOCIATION, as a Co-Agent
and a Lender
By /s/ Xxxxxx Xxxxxxxxx By /s/ Xxxxx Xxxxxx
Xxxxxx Xxxxxxxxx Xxxxx Xxxxxx
Vice President Vice President
THE BANK OF TOKYO-MITSUBISHI, JPMORGAN CHASE BANK, as a Lender
LTD., as a Lender
By /s/ Xxxxxx Trader
Xxxxxx Trader By /s/ Xxxx Xxxxxxxxx
Banking Officer Xxxx Xxxxxxxxx
Vice President
/s/ Xxxx X. Xxxxxx
VP & Manager
FLEET NATIONAL BANK, as a Lender CREDIT LYONNAIS, NEW YORK
BRANCH, as a Lender
By /s/ Xxxxxx Xxx
By /s/ Xxxxxx Xxxxx Xxxxxx Xxx
Xxxxxx Xxxxx Senior Vice President
Director
CONSENT AND AGREEMENT
To induce Lenders to enter into this document, the undersigned jointly
and severally (a) consent and agree to this document's execution and delivery,
(b) ratify and confirm that all guaranties, assurances, and subordinations
granted, conveyed, or assigned to Administrative Agent or any Lender under the
Credit Documents (as they may have been renewed, extended, and amended) are not
released, diminished, impaired, reduced, or otherwise adversely affected by this
document and continue to guarantee, assure, and subordinate other debt to the
full payment and performance of all present and future Obligation, (c) agree to
perform those acts and duly authorize, execute, acknowledge, deliver, file, and
record those additional guaranties, and other agreements, documents,
instruments, and certificates as Lender may reasonably deem necessary or
appropriate in order to create, perfect, preserve, and protect those guaranties,
assurances, and subordinations, and (d) waive notice of acceptance of this
consent and agreement, which consent and agreement binds the undersigned and
their successors and permitted assigns and inures to each Lender and its
successors and permitted assigns.
PIER 1 SERVICES COMPANY, XXXX 0 XXXXXX, X.X.
as a Guarantor PIER 1 LICENSING, INC.
PIER 1 HOLDINGS, INC.
By: PIER 1 HOLDINGS, INC., PIER 1 IMPORTS, (U.S.), INC., as Guarantor
Managing Trustee
By /s/ Xxxxxxx X. Xxxxxx By /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx Xxxxxxx X. Xxxxxx
Executive VP and CFO Executive VP and CFO
