EXHIBIT 10.5
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[Letterhead of The CIT Group/Business Credit, Inc.]
Date: October 4, 1999
Weiner's Stores, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xx. Xxxxxxx X. Xxxxxx
Executive Vice President and Chief Operating Officer
Reference is made to that certain Revolving Credit Agreement dated as
of August 26, 1997 (as amended, modified or supplemented from time to time, the
"Credit Agreement"), among Weiner's Stores, Inc., a Delaware corporation (the
"Borrower"), the financial institutions from time to time party thereto
(collectively, the "Lenders" and individually, a "Lender"), and The CIT
Group/Business Credit, Inc., as a Lender and as agent for the Lenders (in such
capacity, the "Agent"). Capitalized terms used but not otherwise defined herein
shall have the same meanings ascribed to such terms in the Credit Agreement.
The Borrower, the Lenders, and the Agent desire to amend certain
provisions of the Credit Agreement. Accordingly, in accordance with Section
10.03 of the Credit Agreement, the Borrower, the Lenders, and the Agent hereby
agree as follows:
1. Capital Expenditures. Section 8.08 of the Credit Agreement
is hereby amended to read in its entirety as follows:
"Make or be committed to make, or permit any of its
Subsidiaries to make or be committed to make, any
expenditure (by purchase or capitalized lease) for fixed
or capital assets other than expenditures (including
obligations under Capitalized Leases) which would not
cause the aggregate amount of all such expenditures to
exceed (i) $7,000,000 for the fiscal year of the Borrower
ending January 29, 2000, (ii) $8,500,000 for each of the
fiscal years ending February 3, 2001, February 2, 2002,
and February 1, 2003, respectively, or (iii) $5,000,000
for the period beginning on February 2, 2003 and ending on
August 30, 2003 and each fiscal year thereafter."
2. Cumulative FIFO EBITDA. Section 8.12 of the Credit
Agreement is hereby amended to read in its entirety as
follows:
"Permit Cumulative FIFO EBITDA for any fiscal quarter
(calculated on a rolling twelve (12) month basis) of the
Borrower ending on the dates set forth below to be less
than the amount specified opposite each such fiscal
quarter.
Fiscal Quarter Amount
-------------- ------
October 30, 1999 $875,000
January 29, 2000 875,000
April 29, 2000 875,000
July 29, 2000 1,375,000
October 28, 2000 1,875,000
February 3, 2001 2,375,000
May 5, 2001 2,875,000
August 4, 2001 2,875,000
November 3, 2001 2,875,000
February 2, 2002 3,375,000
May 4, 2002 3,875,000
August 3, 2002 3,875,000
November 2, 2002 3,875,000
February 1, 2003 4,375,000
May 3, 2003 4,875,000
August 2, 2003 4,875,000"
3. Amendment to Definition of Cumulative FIFO EBITDA. The
definition of the term "Cumulative FIFO EBITDA" in Section
1.01 of the Credit Agreement is hereby amended to read in
its entirety as follows:
"Cumulative FIFO EBITDA" shall mean with respect to the
fiscal quarter ending on October 30, 1999 and each fiscal
quarter thereafter, the aggregate FIFO EBITDA for such
fiscal quarter and the preceding three fiscal quarters
(i.e., a rolling twelve (12) month basis)."
4. Maintenance of Inventory. Section 8.16 of the Credit
Agreement is hereby amended to read in its entirety as
follows:
"The Borrower shall not permit the aggregate amount of its
Inventory (valued at Book Value) at the end of each fiscal
quarter ending on the dates set forth below to be more
than the amounts specified opposite each such fiscal
quarter set forth below:
Fiscal Quarter Maximum Amount
-------------- --------------
October 30, 1999 90,000,000
January 29, 2000 90,000,000
April 29, 2000 90,000,000
July 29, 2000 90,000,000
October 28, 2000 90,000,000
February 3, 2001 90,000,000
May 5, 2001 96,000,000
August 4, 2001 96,000,000
November 3, 2001 96,000,000
2
February 2, 2002 96,000,000
May 4, 2002 102,000,000
August 3, 2002 102,000,000
November 2, 2002 102,000,000
February 1, 2003 102,000,000
May 3, 2003 108,000,000
August 2, 2003 and each
fiscal year thereafter. 108,000,000"
5. The last sentence in paragraph 2.01(a) is deleted in its
entirety and replaced with the following text:
"The Termination Date means the earlier of (i) the date on
which the Revolving Credit Commitment of each Lender
expires, which shall be August 30, 2003 and (ii) the date
on which the Revolving Credit Commitment is terminated by
the Borrower pursuant to Section 2.04 hereof."
6. Subject to receipt and satisfaction with an inventory
appraisal, by the Agent, as of the effective date of this
Amendment, and as may be required from time to time
hereafter, subsection (i) (A) of the definition of
"Borrowing Base" is hereby deleted and the following is
substituted in lieu thereof:
"(A) The aggregate of 65% of the Book Value of Eligible
Inventory for the months of June, July and November of
each calendar year, and 60% of the Book Value of Eligible
Inventory for each other month of each calendar year, and
..."
7. Early Termination Fee. Section 2.08(h) of the Credit
Agreement is hereby amended to read in its entirety as
follows:
"If the Borrower elects to terminate the Revolving Credit
Commitment pursuant to Section 2.04(a) hereof, or if an
Event of Default described in subsections (g) or (h) of
Section 9.01 hereof has occurred, or if the Agent elects
to declare the Revolving Credit Commitment terminated
pursuant to Section 9.02(a) hereof, in view of the
impracticality and extreme difficulty of ascertaining
actual damages and by mutual agreement of the parties as
to a reasonable calculation of the Lenders' lost profits
as a result thereof, the Borrower shall pay to the Agent,
for the account of each Lender in accordance with such
Lender's Pro Rata Share, an early termination fee in an
amount set forth below if such termination is effective in
the period indicated:
3
Amount Period
------ ------
(i) 2% of the Revolving Credit any date on or prior to
Commitment August 26, 2000
(ii) 1.50% of the Revolving Credit any date from August 26, 2000
Commitment through August 26, 2001
(iii) 1% of the Revolving Credit any date from August 26, 2001
Commitment through August 26, 2002
(iv) 0.50% of the Revolving Credit any date from August 26, 2002
Commitment through August 30, 2003"
8. Pursuant to mutual agreement, we shall charge you a
one-time Facility Fee in the amount of $30,000.00 for this
accommodation, which fee shall be in addition to other
fees we are entitled to charge you under the Credit
Agreement and shall be due and charged to your loan
account upon execution of this agreement. You hereby
confirm that we may charge your loan account with any such
amount.
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Except as specifically set forth herein, no other change in the terms or
conditions of the Credit Agreement is intended or implied. If the foregoing is
in accordance with your understanding, please so indicate by signing and
returning to us the enclosed copy of this letter.
Very truly yours,
THE CIT GROUP/BUSINESS
CREDIT, INC., as Agent and Lender
By: /s/ Xxxxx Xxxxx
-------------------------------
Name: Xxxxx Xxxxx
Title: Assistant Vice President
GENERAL ELECTRIC CAPITAL
CORPORATION, a Lender
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Duly Authorized Signatory
Read and Agreed to:
WEINER'S STORES, INC., Borrower
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President and Chief Operating Officer
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