1
EXHIBIT 10.16
2
EXHIBIT 10.16
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT dated as of June 18, 1999
("this Amendment") is entered into by BOOKS-A-MILLION, INC., a Delaware
corporation ("BAM"), AMERICAN WHOLESALE BOOK COMPANY, INC., an Alabama
corporation ("AWBC"; BAM and AWBC are sometimes together referred to as the
"Borrowers"), AMSOUTH BANK, an Alabama banking corporation formerly known as
AmSouth Bank of Alabama ("AmSouth"), SUNTRUST BANK, ATLANTA, a Georgia banking
corporation, NATIONSBANK, N.A., a national banking association, successor by
merger to NationsBank, N.A. (South), a national banking association formerly
known as NationsBank of Georgia, N.A., and SOUTHTRUST BANK, NATIONAL
ASSOCIATION, a national banking association (collectively, the "Lenders"), and
AMSOUTH BANK, an Alabama banking corporation formerly known as AmSouth Bank of
Alabama, as agent for the Lenders (the "Agent").
RECITALS
A. The Borrowers, the Agent and the Lenders are parties to that
certain Credit Agreement dated October 27, 1995 as amended by a First Amendment
thereto dated June 4, 1997 and a Second Amendment thereto dated June 19, 1998
(collectively, the "Agreement") pursuant to which the Lenders have made
available to the Borrowers a revolving credit facility in an aggregate principal
amount outstanding not to exceed $90,000,000, the proceeds of which are to be
used by the Borrowers for general corporate purposes.
B. The Borrowers have applied to the Lenders for a modification
to the definition of "Net Income Available for Debt Service" and the financial
covenant set forth in Section 7.8(1) of the Agreement.
C. The Lenders are willing to make such modification as requested
only if, among other things, the Borrowers enter into this Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals, the
Borrowers, the Lenders and the Agent hereby agree as follows:
Capitalized terms used in this Amendment and not otherwise defined
herein have the respective meanings attributed thereto in the Agreement.
The definition of "Net Income Available for Debt Service" set forth in
Section 1.1 of the Agreement is hereby amended to read, in its entirety, as
follows:
Net Income Available for Debt Service for any period shall
mean Consolidated Net Income (or the net deficit, if expenses and
charges exceed revenues and other proper income credits) for such
period, plus amounts that have been deducted for (i) Interest Expense,
(ii) Operating Lease Payments, (iii) depreciation, (iv) amortization
and (v) income and profit taxes in determining Consolidated Net Income
for such period.
Section 7.8(1) of the Agreement is hereby amended to read, in its
entirety, as follows:
(1) Coverage Ratio. The ratio of Net Income Available for
Debt Service for the preceding four quarters to Interest Expense and
Operating Lease Payments of BAM and the Consolidated Entities on a
consolidated basis for such period shall not be less than 1.50 to 1.0
at any time.
As consideration for the Lenders' agreement to make the modification
set forth in this Amendment, the Borrowers shall pay a fee in the amount of
$45,000 to the Agent for the account of each of the Lenders. This fee shall be
due and payable upon the execution of this Amendment and shall be fully earned
and non-refundable.
3
Notwithstanding the execution of this Amendment, all of the
indebtedness evidenced by each of the Notes shall remain in full force and
effect, as modified hereby, and nothing contained in this Amendment shall be
construed to constitute a novation of the indebtedness evidenced by any of the
Notes or to release, satisfy, discharge, terminate or otherwise affect or impair
in any manner whatsoever (a) the validity or enforceability of the indebtedness
evidenced by any of the Notes; (b) the liens, security interests, assignments
and conveyances effected by the Agreement or the Loan Documents, or the priority
thereof; (c) the liability of any maker, endorser, surety, guarantor or other
person that may now or hereafter be liable under or on account of any of the
Notes or the Agreement or the Loan Documents; or (d) any other security or
instrument now or hereafter held by the Agent or the Lenders as security for or
as evidence of any of the above-described indebtedness.
All references in the Loan Documents to "Credit Agreement" shall refer
to the Agreement as amended by this Amendment, and as the Agreement may be
further amended from time to time.
The Borrowers hereby certify that the organizational documents of the
Borrowers have not been amended since October 27, 1995.
The Borrowers hereby represent and warrant to the Agent and the Lenders
that all representations and warranties contained in the Agreement are true and
correct as of the date hereof; and the Borrowers hereby certify that no Event of
Default nor any event that, upon notice or lapse of time or both, would
constitute an Event of Default, has occurred and is continuing.
Except as hereby amended, the Agreement shall remain in full force and
effect as written. This Amendment may be executed in one or more counterparts,
each of which shall be deemed an original, and all of which when taken together
shall constitute one and the same instrument. The covenants and agreements
contained in this Amendment shall apply to and inure to the benefit of and be
binding upon the parties hereto and their respective successors and permitted
assigns.
Nothing contained herein shall be construed as a waiver, acknowledgment
or consent to any breach of or Event of Default under the Agreement and the Loan
Documents not specifically mentioned herein.
This Amendment shall be governed by the laws of the State of Alabama.
[Remainder of this page intentionally blank]
2
4
IN WITNESS WHEREOF, each of the Borrowers, the Lenders and the Agent
has caused this Amendment to be executed and delivered by its duly authorized
corporate officer as of the day and year first above written.
BOOKS-A-MILLION, INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Its Executive Vice President & Chief Financial Officer
AMERICAN WHOLESALE BOOK COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Its Executive Vice President & Chief Financial Officer
5
AMSOUTH BANK
By: /s/ Xxxxx X. Xxxxxxx
--------------------
Its Senior Vice President
6
SUNTRUST BANK, ATLANTA
By: /s/ Xxxxx X. Edge
-----------------
Its Vice President
By: /s/ Xxxxxxx X. XxXxxxxx
-----------------------
Its Corporate Banking Officer
7
NATIONSBANK, N.A.
By: /s/ Xxxxx Xxxxxxx
------------------
Its Senior Vice President
8
SOUTHTRUST BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxx Xxxx
---------------
Its Commercial Loan Officer
9
AMSOUTH BANK, as Agent
By: /s/ Xxxxx X. Xxxxxxx
Its Senior Vice President
