Exhibit 10.1
Exhibit 10.1
FIRST AMENDMENT TO CREDIT AGREEMENT
This First Amendment to Credit Agreement (this First Amendment) is made as of the
4th day of March, 2011 by and among A.C. MOORE INCORPORATED, a Virginia corporation,
for itself and as Lead Borrower (in such capacity, the Lead Borrower) for the Borrowers party
hereto (individually, a Borrower and, collectively, the Borrowers), (ii) the Borrowers party
hereto, (iii) the Guarantors party hereto, (iv) Wells Fargo Bank, National Association, as
successor to Wells Fargo Retail Finance, LLC, as administrative agent (in such capacity, the
Administrative Agent) for its own benefit and the benefit of the other Credit Parties, and (v)
Wells Fargo Bank, National Association, successor to Wells Fargo Retail Finance, LLC, as collateral
agent (in such capacity, the Collateral Agent) for its own benefit and the benefit of the other
Credit Parties, in consideration of the mutual covenants herein contained and benefits to be
derived herefrom. All capitalized terms used herein and not otherwise defined shall have the same
meaning herein as in the Credit Agreement.
WITNESSETH
WHEREAS, the Lead Borrower, the Borrowers, the Guarantors, the Lenders, the Administrative
Agent and the Collateral Agent entered into a Credit Agreement dated as of January 15, 2009 (as
amended, modified, supplemented, restated or otherwise modified and in effect from time to time,
the Credit Agreement); and
WHEREAS, the parties desire to amend the terms and conditions of the Credit Amendment as set
forth herein.
NOW THEREFORE, it is hereby agreed as follows:
1. |
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Definitions. All capitalized terms used herein and not otherwise defined shall have
the same meaning herein as in the Credit Agreement. |
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2. |
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Amendment to Article I. the following definitions contained in Section 1.01 of the
Credit Agreement are hereby amended and restated in their entirety to read as follows: |
Applicable Margin means:
From and after March 4, 2011 until the first Adjustment Date, the percentages set
forth in Level I of the pricing grid below; and
On the first Adjustment Date, and on each Adjustment Date thereafter, the Applicable
Margin shall be determined from the following pricing grid based upon the Average Excess
Availability as of the Fiscal Quarter ended immediately preceding such Adjustment Date;
provided, however, that notwithstanding anything to the contrary set forth
herein, upon the occurrence and during the continuance of an Event of Default, the
Administrative Agent may, and at the direction of the Required Lenders shall,
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immediately increase the Applicable Margin to that set forth in Level III (even if the
Average Excess Availability requirements for a different Level have been met) and interest
shall accrue at the Default Rate; provided, further if any of the financial
statements delivered pursuant to Section 6.01 of this Agreement or any Borrowing
Base Certificate is at any time restated or otherwise revised (including as a result of an
audit) or if the information set forth in any such financial statements or Borrowing Base
Certificate otherwise proves to be false or incorrect such that the Applicable Margin would
have been higher than was otherwise in effect during any period, without constituting a
waiver of any Default or Event of Default arising as a result thereof, interest due under
this Agreement shall be immediately recalculated at such higher rate for any applicable
periods and shall be due and payable on demand.
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LIBOR |
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Base Rate |
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Commitment |
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Level |
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Average Excess Availability |
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Margin |
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Margin |
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Fee Margin |
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I |
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Greater than or equal to 50% |
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of the Loan Cap |
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2.25 |
% |
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2.25 |
% |
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0.50 |
% |
II |
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Less than 50% of the Loan |
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Cap but greater than or |
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equal to 25% of the Loan Cap |
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2.50 |
% |
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2.50 |
% |
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0.375 |
% |
III |
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Less than 25% of the Loan Cap |
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2.75 |
% |
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2.75 |
% |
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0.375 |
% |
Base Rate means, for any day, a fluctuating rate per annum equal to the
highest of (a) the Federal Funds Rate, as in effect from time to time, plus one-half of one
percent (0.50%), (b) the Adjusted LIBO Rate plus one percent (1.00%), or (c) the rate of
interest in effect for such day as publicly announced from time to time by Wells Fargo as
its prime rate. The prime rate is a rate set by Wells Fargo based upon various factors
including Wells Fargos costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be priced at,
above, or below such announced rate. Any change in such rate announced by Wells Fargo shall
take effect at the opening of business on the day specified in the public announcement of
such change.
Cash Dominion Event means either (i) the occurrence and continuance of an
Event of Default, or (ii) the failure of the Borrowers to maintain Availability in an amount
equal to at least 30% of the then applicable Loan Cap for a period in excess of five (5)
consecutive days, or (iii) the failure of the Borrowers, at any time, to maintain
Availability in an amount equal to at least 20% of the then applicable Loan Cap. For
purposes of this Agreement, the occurrence of a Cash Dominion Event shall be
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deemed
continuing at the Administrative Agents option (a) so long
as such Event of Default has not been waived, and/or (b) if the Cash Dominion Event arises as a result of the
Borrowers failure to achieve Availability as required hereunder, until the Borrowers
maintain Availability in an amount equal to at least 30% of the then applicable Loan Cap for
forty-five (45) consecutive days, in which case such Cash Dominion Event shall no longer be
deemed to be continuing for purposes of this Agreement; provided that a Cash
Dominion Event shall be deemed continuing (even if an Event of Default is no longer
continuing and/or Availability exceeds the required amount for forty-five (45) consecutive
days) at all times after a Cash Dominion Event has occurred and been discontinued on two (2)
previous occasion(s) after March 4, 2011.
Maturity Date means March 4, 2016.
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Amendment to Article I. The definition of Change of Control contained in Section
1.01 of the Credit Agreement is hereby amended by the addition of the following at the end
thereof: |
Notwithstanding the foregoing, (i) if any person or group acquires an option
right described in the preceding clause (a), or, (ii) any Person or two or more Persons
acting in concert enter into (but do not consummate) any contract or arrangement described
in the preceding clause (c), in either case described in (i) or (ii) above, in order to
effect a Strategic Alternatives Transaction in cooperation with the Loan Parties, the same
will not, in and of itself, constitute a Change of Control.
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Amendment to Article I. The definition of Material Adverse Effect contained in
Section 1.01 of the Credit Agreement is hereby amended by the addition of the following at the
end thereof: |
The Administrative Agent and the Lenders acknowledge that none of the following events,
individually or in combination with one another, will, in and of themselves, result in, or
be deemed to constitute, a Material Adverse Effect: (a) the Loan Parties announcement of a
Strategic Alternatives Transaction or any development related to any potential Strategic
Alternatives Transaction, (b) the Loan Parties, or any of their Subsidiaries, entry into
any Contractual Obligation in order to effect a Strategic Alternatives Transaction (or the
performance by any Loan Party or Subsidiary of its obligation thereunder), to the extent
that such Contractual Obligation is permitted under Section 7.04, and (c) a decline
in the price (or a change in the trading volume) of the Parents common stock.
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Amendment to Article I. The following definition is hereby added to Section 1.01 of
the Credit Agreement in alphabetical order therein: |
Strategic Alternatives Transaction means any transaction or series of related
transactions in which Parent or the Lead Borrower (a) reclassifies its Equity Interests or
issues Equity Interests in connection with an actual or intended Change of
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Control, (b)
effects a Change of Control, (c) effects a Disposition or
conditional sale of more than 50% of its property, assets or business, (d) merges or consolidates with or into
another Person, or recapitalizes or (e) creates a purchase option, call or similar right
with respect to more than 5% of its securities in connection with an actual or intended
Change of Control.
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Amendment to Article VII. Section 7.04 of the Credit Agreement is hereby amended by
the addition of the following new paragraph at the end thereof: |
Notwithstanding anything to the contrary contained in the Credit Agreement or the other
Loan Documents (including, without limitation, Sections 5.13, 7.01,
7.02, 7.04, 7.05 and 8.01(n)), any Loan Party, and any
Subsidiary of any Loan Party, may enter into, and perform its obligations under, any
Contractual Obligation in order to effect a Strategic Alternatives Transaction, it being
agreed that the consummation of any such Strategic Alternatives Transaction is subject to
satisfaction of the terms of the proviso set forth immediately below; provided,
however, that nothing contained herein shall constitute the Required Lenders consent
to the consummation of a Strategic Alternatives Transaction, it being agreed that, in order
to consummate a Strategic Alternatives Transaction, such Loan Party or Subsidiary shall
either (A) obtain the Required Lenders prior written consent to such consummation, or (B)
cause the following conditions to be satisfied prior to, or concurrently with, such
consummation: (i) the Aggregate Commitments shall have been terminated, (ii) all of the
Secured Obligations (other than contingent indemnification obligations for which no claim
has been asserted and any Other Liabilities which are not by their terms then due and
payable provided that the Agents shall have received such indemnities and collateral
security as they shall have required in accordance with the terms of Section 10.11
of the Credit Agreement) shall have been paid in full in cash, (iii) all L/C Obligations
shall have been reduced to zero (or fully Cash Collateralized or supported by another letter
of credit in a manner reasonably satisfactory to the L/C Issuer and the Administrative
Agent), and (iv) any obligation of the Administrative Agent to endeavor to cause the L/C
Issuer to issue Letters of Credit under the Credit Agreement shall have been terminated (and
the Administrative Agent and the L/C Issuer will cooperate with the Loan Parties to
accomplish such termination if requested by the Loan Parties).
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Conditions to Effectiveness. This First Amendment shall not be effective until each
of the following conditions precedent have been fulfilled to the satisfaction of the
Administrative Agent: |
(a) This First Amendment shall have been duly executed and delivered by the Borrowers,
the Guarantors, the Administrative Agent, the Collateral Agent and the Lenders. The
Administrative Agent shall have received a fully executed copy hereof and of each other
document required hereunder.
(b) No Default or Event of Default shall have occurred and be continuing, both before
and immediately after giving effect to the execution of this First Amendment.
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(c) The Borrowers and the Guarantors shall have executed and delivered to the
Administrative Agent a fee letter dated as of March 4, 2011, and paid all amounts required
to be paid thereunder.
(a) Except as provided herein, all terms and conditions of the Credit Agreement and the
other Loan Documents remain in full force and effect. The Loan Parties hereby ratify,
confirm, and reaffirm (i) that all of the representations and warranties contained in
Article V of the Credit Agreement and the other Loan Documents are true and correct in all
material respects on the date hereof (except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they shall be true and
correct as of such earlier date), and (ii) all covenants therein contained.
(b) This First Amendment may be executed in several counterparts and by each party on a
separate counterpart, each of which when so executed and delivered, shall be an original,
and all of which together shall constitute one instrument.
(c) This First Amendment expresses the entire understanding of the parties with respect
to the matters set forth herein and supersedes all prior discussions or negotiations hereon.
(d) By executing this First Amendment, the undersigned Guarantors hereby consent to the
First Amendment to Credit Agreement and acknowledge that their Facility Guaranty remains in
full force and effect.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be executed
and their seals to be hereto affixed as the date first above written.
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Borrowers:
A.C. MOORE INCORPORATED
as Lead Borrower and a Borrower
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By: |
/s/
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Name: |
Rodney Schriver |
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Title: |
Vice President |
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Guarantors:
A.C. MOORE ARTS & CRAFTS, INC.
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By: |
/s/
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Name: |
Rodney Schriver |
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Title: |
Vice President |
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MOORESTOWN FINANCE, INC.
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By: |
/s/
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Name: |
Rodney Schriver |
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Title: |
Vice President |
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BLACKWOOD ASSETS, INC.
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By: |
/s/
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Name: |
Rodney Schriver |
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Title: |
Vice President |
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Signature Page to First Amendment to Credit Agreement
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Agents:
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent and Collateral Agent
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By: |
/s/
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Name: |
Michele L. Ayou |
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Title: |
Authorized Signatory |
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Lenders:
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Lender and Swing Line Lender
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By: |
/s/
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Name: |
Michele L. Ayou |
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Title: |
Authorized Signatory |
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Signature Page to First Amendment to Credit Agreement