EXHIBIT 10.3
FIRST AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT
AND WAIVER OF DEFAULTS
THIS FIRST AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT AND
WAIVER OF DEFAULTS (this "Amendment") is entered into as of November 11, 2002,
by and between GADZOOKS, INC., a Texas corporation ("Borrower"), and XXXXX FARGO
BANK TEXAS, NATIONAL ASSOCIATION ("Bank").
RECITALS
WHEREAS, Borrower is currently indebted to Bank pursuant to the terms
and conditions of that certain FIRST Amended And Restated Credit Agreement
between Borrower and Bank dated as of June 1, 2002, as amended from time to time
("Credit Agreement").
WHEREAS, Borrower is in default of certain provisions of the Credit
Agreement.
WHEREAS, Bank and Borrower have agreed to certain changes in the terms
and conditions set forth in the Credit Agreement and have agreed to amend the
Credit Agreement to reflect said changes.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree that the Credit
Agreement shall be amended as follows:
1. The following is hereby added to the Credit Agreement as Section
1.1(e):
"(e) Required Audit. Should the outstanding
borrowings under the Line of Credit (inclusive of the face
amount of any Letters of Credit) exceed $10,000,000, Bank will
perform an audit within 30 days of such event."
2. Borrower has notified Bank of breach of the following breach of the
terms of the Credit Agreement:
Failure to maintain the net income required by Section 4.9(c).
Subject to the terms and conditions that follow, Bank agrees to waive
its default rights with respect to this breach for the quarter ending November
2, 2002. Bank and Borrower expressly agree that this waiver applies only to the
specific instance described above. This waiver is not a waiver of any subsequent
breach of the same provisions of the Credit Agreement, nor is it a waiver of any
breach of any other provision of the Credit Agreement.
Except as expressly stated in this Amendment, Bank reserves all of the
rights, powers and remedies available to Bank under the Credit Agreement and any
other contracts or instruments between Bank and Borrower, including the right to
cease making advances to and the right to accelerate any of Borrower's
indebtedness, if any subsequent breach of the same provisions or any other
provision of the Credit Agreement should occur.
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3. In consideration of the changes set forth herein and as a condition
of the amendments made in this Amendment and the waivers contained herein,
Borrower will pay to Bank a fee of $5,000, which fee shall be due and payable
upon the execution of this Amendment.
4. Except as specifically provided herein, all terms and conditions of
the Credit Agreement remain in full force and effect, without waiver or
modification. All terms defined in the Credit Agreement shall have the same
meaning when used in this Amendment. This Amendment and the Credit Agreement
shall be read together, as one document.
5. Borrower hereby remakes all representations and warranties contained
in the Credit Agreement and reaffirms all covenants set forth therein. Borrower
further certifies that as of the date of this Amendment, and after giving effect
to the waivers contained in Section 2 above, there exists no Event of Default as
defined in the Credit Agreement, nor any condition, act or event which with the
giving of notice or the passage of time or both would constitute any such Event
of Default.
NOTICE: THIS DOCUMENT AND ALL OTHER DOCUMENTS RELATING TO THE INDEBTEDNESS
CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES RELATING TO THE INDEBTEDNESS.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first written above.
XXXXX FARGO BANK TEXAS,
GADZOOKS, INC. NATIONAL ASSOCIATION
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxx Xxxx X. Xxxxxxxx
Title: Vice President and CFO Title: Vice President
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