EXHIBIT (10)(t)
EXECUTION COPY
FIRST AMENDMENT AND CONSENT
This FIRST AMENDMENT AND CONSENT, dated as of February 1, 2002 (this
"Amendment"), is made by and among (a) CLAIRE'S STORES, INC, a Florida
corporation (the "Borrower"), (b) the lending institutions listed on the
signature pages hereto (collectively, the "Lenders") (c) FLEET NATIONAL BANK, a
national banking association, as administrative agent (in such capacity the
"Administrative Agent") for the Lenders, and (d) SUNTRUST BANK (F/K/A/ SUNTRUST
BANK, SOUTH FLORIDA, N.A.), as documentation agent (in such capacity, the
"Documentation Agent", and together with the Administrative Agent, the
"Agents"). Capitalized terms used herein without definition shall have the
respective meanings herein assigned to such terms in the Credit Agreement
referred to below.
WHEREAS, the Borrower, the Lenders, the Administrative Agent and the
Documentation Agent are parties to that certain Credit Agreement, dated as of
December 1, 1999 (as in effect on the date hereof, the "Credit Agreement");
WHEREAS, the Borrower has informed the Administrative Agent that it
wishes to dispose of the operations of Lux Corporation, a Washington corporation
and a Wholly Owned Subsidiary Guarantor ("Lux"), by way of sale, lease,
assignment, conveyance, dissolution, transfer, or otherwise (the "Lux
Disposition"), subject to the terms and conditions contained herein;
WHEREAS, the Borrower has requested that the Lenders (a) consent to the
Lux Disposition, and (b) amend certain terms of the Credit Agreement in
connection with the Lux Disposition and otherwise in order to, among other
things, (1) provide for certain adjustments to the definition of Consolidated
EBITDA set forth therein, and (2) amend certain financial and negative covenants
contained therein; and
WHEREAS, the Lenders have agreed, subject to the terms and conditions
set forth in this Amendment, to (a) consent to the Lux Disposition and (b) amend
the Credit Agreement as hereinafter provided;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained in the Credit Agreement and in this Amendment and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. AMENDMENTS TO THE CREDIT AGREEMENT. Subject to the
satisfaction of the conditions set forth in Section 4 of this Amendment, the
Credit Agreement is hereby amended as follows:
(a) AMENDMENTS TO DEFINITIONS. Section 1.1 of the Credit
Agreement is hereby amended as follows:
(i) The definition of "Consolidated EBITDA" is amended and
restated in its entirety as follows:
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"CONSOLIDATED EBITDA": for any period of four consecutive
fiscal quarters of the Borrower, Consolidated Net Income for such
period plus, without duplication and to the extent reflected as a
charge in the statement of such Consolidated Net Income for such
period, the sum of (a) income tax expense, (b) Consolidated Interest
Expense, (c) depreciation and amortization expense, (d) amortization of
intangibles (including, but not limited to, goodwill) and organization
costs, (e) up to $15,000,000 of any extraordinary, unusual or
non-recurring expenses or losses incurred on or prior to January 31,
2001 (including, whether or not otherwise includable as a separate item
in the statement of such Consolidated Net Income for such period,
non-cash losses on sales of assets outside of the ordinary course of
business), (f) up to $25,000,000 of non-recurring, non-cash, after-tax
charges incurred by the Borrower in connection with the Lux
Disposition, and (g) the amount of actual operating losses sustained by
Lux during the fiscal year ended February 2, 2002 and thereafter until
consummation of the Lux Disposition, and minus, to the extent included
in the statement of such Consolidated Net Income for such period, any
extraordinary, unusual or non-recurring income or gains (including,
whether or not otherwise includable as a separate item in the statement
of such Consolidated Net Income for such period, gains on the sales of
assets outside of the ordinary course of business), as determined on a
consolidated basis."
(ii) The definition of "Consolidated Fixed Charges" is hereby amended
by deleting clause (d) set forth in such definition in its entirety and
replacing it with the following new clause (d):
"(d) any and all scheduled repayments of principal made during
such period with respect to Indebtedness of the Borrower or any of its
Subsidiaries (including the scheduled principal payments in respect of
the Term Loans as set forth in Section 2.3); provided that, solely for
purposes of calculating the Fixed Charge Coverage Ratio, the prepayment
of principal made in respect of the Term Loan on the First Amendment
Effective Date shall be treated as having been made on the regularly
scheduled installment dates, and in the corresponding principal
amounts, as set forth in Section 2.3, as such Section was in effect
prior to the First Amendment Effective Date."
(iii) The definition of "Consolidated Total Net Debt" is amended and
restated in its entirety as follows:
"Consolidated Total Debt": at any time, the aggregate
principal amount of all Indebtedness of the Borrower and its
Subsidiaries (excluding all obligations of the Borrower and its
Subsidiaries in respect of undrawn letters of credit) as such date, as
determined on a consolidated basis in accordance with GAAP."
(iv) The following new definitions shall be inserted in Section 1.1 in
their appropriate places in the alphabetical order:
"First Amendment Effective Date": February 1, 2002.
"Lux": shall refer to Lux Corporation, a Washington
corporation and a Wholly-Owned Subsidiary of the Borrower.
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"Lux Disposition": shall refer to the Borrower's
disposition of the operations of Lux by way of sale, lease,
assignment, conveyance, transfer, dissolution (whether in
connection with a proceeding under bankruptcy related law or
by resolution of its shareholders or otherwise)."
(b) AMENDMENT TO SECTION 2.3. Section 2.3 of the Credit Agreement
is hereby amended by deleting the table of installments dates and amounts set
forth in such Section 2.3 and replacing it with the following new table:
Installment Date Principal Amount
---------------- ----------------
February 1, 2002 $20,000,000
March 31, 2002 $ 0
June 30, 2002 $ 0
September 30, 2002 $ 0
December 31, 2002 $20,000,000
March 31, 2003 $ 3,333,333
June 30, 2003 $ 3,333,333
September 30, 2003 $ 3,333,333
December 31, 2003 $30,000,000
March 31, 2004 $ 3,750,000
June 30, 2004 $ 3,750,000
September 30, 2004 $ 3,750,000
December 1, 2004 $33,750,000
(c) AMENDMENTS TO FINANCIAL AND NEGATIVE COVENANTS. Section 7 of
the Credit Agreement is hereby amended as follows:
(i) Section 7.1(a) of the Credit Agreement is amended and
restated in its entirety as follows:
"(a) Consolidated Leverage Ratio. Permit the
Consolidated Leverage Ratio as at any date to exceed the ratio
set forth in the table below opposite the period in which such
test date falls:
Period Consolidated Leverage Ratio
------ ---------------------------
on or prior to January 31, 2003 1.50 to 1.00
February 1, 2003 through January 30, 2004 1.25 to 1.00
January 31, 2004 and all times thereafter 0.75 to 1.00
(ii) Section 7.1(b) of the Credit Agreement is hereby amended
by replacing the ratio "1.50 to 1.00" with the ratio "1.25 to 1.00".
(iii) Section 7.6(b) of the Credit Agreement is hereby amended
by deleting the following words contained in such Section, "the greater
of (i) 20% of Consolidated Net Income for the immediate preceding
fiscal year and (ii)".
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(iv) Section 7.6(c) of the Credit Agreement is hereby amended by
inserting the following proviso immediately before the period contained at the
end of such Section, "provided that, after giving effect to any such purchase,
Consolidated Excess Liquid Assets must be greater than the then outstanding
principal amount of the Term Loan".
(v) Section 7.7(e) of the Credit Agreement is hereby amended by
inserting a comma immediately before the semicolon at the end of such paragraph
(e) followed by the words, "and (iii) in the case of any such Investment that
results in the creation or acquisition of a Domestic Subsidiary, after giving
effect to such Investment, Consolidated Excess Liquid Assets must be greater
than the then outstanding principal amount of the Term Loan".
(vi) Section 7.7 of the Credit Agreement is hereby amended by
replacing the period following clause (g) of such Section with a semicolon and
inserting the following new clause (h) immediately thereafter:
"(h) any bond, debenture or other debt or equity security of
any Person issued to or in favor of the Borrower, in all cases
pursuant to the terms of the Lux Disposition."
(d) AMENDMENT TO ANNEX A. Annex A to the Credit Agreement is hereby
amended by deleting the table set forth in such Annex in its entirety and
replacing it with the following new table:
>2.00 to 1.00 1.00% 0.00%
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>1.75 to 1.00 1.125% 0.125%
-
>1.50 to 1.00 1.25% 0.25%
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<1.50 to 1.00 1.50% 0.50%
2. CONSENT TO DISPOSITION OF LUX; WAIVER; RELEASE OF SUBSIDIARY GUARANTOR.
(a) Subject to the terms and conditions set forth herein, the Agents
and the Lenders hereby consent to the Lux Disposition; provided that such
Disposition shall not (i) result in the incurrence of any Indebtedness by the
Borrower and/or its Affiliates, (ii) involve the disposition of Lux assets
consisting of cash other than xxxxx cash in an aggregate amount not to exceed
one million dollars ($1,000,000), or (iii) result in the incurrence by the
Borrower of a non-recurring, non-cash, after-tax charge in excess of
$25,000,000.
(b) Subject to the terms and conditions set forth herein, including
those set forth in Section 2(a) above, the Agents and the Lenders hereby waive
any Default or Event of Default under the Credit Agreement (as amended hereby)
solely to the extent that such Default or Event of Default arises in connection
with the Lux Disposition.
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(c) Subject to the satisfaction of the terms and conditions set forth
herein and upon consummation of the Lux Disposition, the Administrative Agent,
on behalf of the Agents and the Lenders, shall release Lux from its obligations
as a Subsidiary Guarantor under that certain Guarantee, dated as of December 1,
1999 (the "Guarantee"), by and among the Subsidiary Guarantors and the
Administrative Agent; and the Guarantee shall have no further force and effect
with respect to Lux. Nothing contained herein shall impair or otherwise
adversely affect the rights of the Agents and the Lenders under or in respect
of the Guarantee with respect to each of the Subsidiary Guarantors other than
Lux.
3. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents,
warrants and covenants to each of the Agents and the Lenders as follows:
(a) each of the representations and warranties of the
Borrower contained in the Credit Agreement was true in all material
respects as of the date as of which it was made, and, except to the
extent of changes resulting from transactions contemplated or permitted
by the Credit Agreement (as amended hereby) and the other Loan
Documents and changes occurring in the ordinary course of business that
singly or in the aggregate are not materially adverse or to the extent
that such representations and warranties relate expressly to an earlier
date, such representations and warranties also are true in all material
respects as of the date of this Amendment, and no Default or Event of
Default has occurred and is continuing as of the date of this Amendment
after giving effect to this Amendment;
(b) this Amendment has been duly authorized, executed and
delivered by the Borrower and each of the Subsidiary Guarantors and is
in full force and effect;
(c) upon the execution and delivery of this Amendment by the
respective parties hereto, this Amendment shall constitute the legal,
valid and binding obligation of the Borrower and the subsidiary
Guarantors, enforceable in accordance with its terms, except as
enforceability may be limited by any applicable bankruptcy,
reorganization, insolvency or other laws affecting creditors' rights
generally; and
(d) the Borrower's 2003 and 2004 fiscal years will end on
February 1, 2003 and January 31, 2004, respectively.
4. CONDITIONS TO EFFECTIVENESS. This Amendment shall become
effective on the date on which the last of each of the following conditions
precedent have been satisfied (the "Closing Date"):
(a) This Amendment shall have been duly executed and
delivered by each of the Borrower, the Subsidiary Guarantors, the
Agents and the Required Lenders.
(b) The Administrative Agent shall have received twenty
million Dollars ($20,000,000) in immediately available funds (the
"Closing Date Payment"), for direct application by the Administrative
Agent against the scheduled installments of principal due on the Term
Loan in the 2002 calendar year as set forth in Section 2.3 of the
Credit Agreement (prior to giving effect to this Amendment), to be
credited to the Lenders on a pro rata basis in accordance with their
respective Term Commitments.
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(c) The Administrative Agent shall have received an opinion of
counsel to the Borrower addressed to the Administrative Agent and the
Lenders in form and substance reasonably satisfactory to the
Administrative Agent.
(d) The Administrative Agent shall have received the Amendment
Fee (as such term is defined in Section 5 below).
5. AMENDMENT FEE. On the Closing Date, the Borrower shall pay to the
Administrative Agent in immediately available funds for the pro rata account of
the Approving Lenders (as such term is defined below) an amendment fee in the
amount of 0.15% of the Commitment of each of the Approving Lenders (as
calculated after giving effect to the Closing Date Payment) (the "Amendment
Fee"). The "Approving Lenders" shall be all of the Lenders who have executed and
delivered this Amendment to the Administrative Agent on or before 5:00 p.m.
(Boston time) on the Closing Date, provided that no Lender shall be an
"Approving Lender" unless this Amendment becomes effective.
6. RATIFICATION, ETC. The Credit Agreement, as amended hereby, and
all documents, instruments and agreements related thereto are hereby ratified
and confirmed in all respects. All references in the Loan Documents or any
related agreement or instrument to the "Credit Agreement" shall hereafter refer
to the Credit Agreement as amended by this Amendment. This Amendment and the
Credit Agreement shall be read and construed as one instrument.
7. NO IMPLIED WAIVER. Nothing contained in this Amendment shall be
construed to imply a willingness on the part of the Agents and the Lenders to
enter into or grant any similar or other future amendments, consents or waivers.
The amendments, consent, waiver and release contained in this Amendment are
limited strictly to their terms, shall apply only to the specific matters and
events described herein, shall not extend to or affect any of the Borrower's or
Subsidiary Guarantors' other obligations contained in the Credit Agreement or
any other Loan Document. Subject to Sections 2(b) and (c) hereof, nothing
contained in this Amendment shall be deemed to be a waiver of, or shall in any
way impair or prejudice, any rights of the Agents or the Lenders under the
Credit Agreement or any other Loan Document.
8. EXPENSES. The Borrower hereby agrees that all reasonable
out-of-pocket costs and expenses incurred or sustained by the Administrative
Agent in connection with the preparation and negotiation of this Amendment
(including reasonable legal fees) are for the account of the Borrower, in
accordance with the provisions of Section 10.5 of the Credit Agreement.
9. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but which together shall
constitute one and the same instrument.
10. GOVERNING LAW. THIS AMENDMENT SHALL FOR ALL PURPOSES BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the undersigned have duly executed this Amendment
as a sealed instrument as of the date first above written.
CLAIRE'S STORES, INC., as Borrower
By: /s/ Xxx X. Xxxxxx
----------------------------------
Name: Xxx X. Xxxxxx
Title: Senior Vice President
FLEET NATIONAL BANK, as Administrative
Agent and as a Lender
By: /s/ Xxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxx
Title: Assistant Vice President
SUNTRUST BANK (f/k/a Suntrust Bank, South
Florida, N.A.), as Documentation Agent
and as a Lender
By: /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director
LaSALLE BANK NATIONAL ASSOCIATION,
as a Lender
By: /s/ Xxxxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxxxx Xxxxx
Title: Assistant Vice President
UNION BANK OF CALIFORNIA, as a Lender
By: /s/ Xxxx Xxxxx
----------------------------------
Name: Xxxx Xxxxx
Title: Credit Officer
BANKATLANTIC, A FEDERAL SAVINGS
BANK, as a Lender
By: Xxxxxxx Xxxxx
--------------------------
Name: Xxxxxxx Xxxxx
Title: S.V.P.
BANK LEUMI USA, as a Lender
By: Xxxx Xxxxxxxxxxx
--------------------------
Name: Xxxx Xxxxxxxxxxx
Title: First Vice President
Xxxxx X. Xxxxxxxx
--------------------------
Bank Officer
BANK ONE, N.A., as a Lender
By: /s/ Xxxxxxx X. Henchels
---------------------------------------
Name: Xxxxxxx X. Henchels
Title: Director
THE ROYAL BANK OF SCOTLAND plc, as a
Lender
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Deputy Regional Corporate
Director
ISRAEL DISCOUNT BANK OF NEW YORK
By: /s/ Xxxxx Xxxx
-------------------------------
Name: Xxxxx Xxxx
Title: Assistant Manager
By: /s/ Xxxxxx X. Rorckvanni
--------------------------------
Name: Xxxxxx X. Rorckvanni
Title: First Vice President
RZB - FINANCE LLC, as a Lender
By: /s/ Xxxx X. Xxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
/s/ Xxxxx X. Xxxxx
------------------------------
XXXXX X. XXXXX
First Vice President
NORDEA BANK OF FINLAND PLC, as a Lender
By: /s/ Xxxxxxx X. Xxxxx
----------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
/s/ Xxxxx Xxxxx
--------------------------------
Xxxxx Xxxxx
Vice President
Acknowledged, accepted and agreed to by
each of the Subsidiary Guarantors as of the
date first above written:
LUX CORPORATION
By: /s/ Xxx X. Xxxxxx
--------------------------------
Name: Xxx X. Xxxxxx
Title: Vice President
CLAIRE'S BOUTIQUES, INC.
By: /s/ Xxx X. Xxxxxx
--------------------------------
Name: Xxx X. Xxxxxx
Title: Vice President
CSL, INC.
By: /s/ Xxx X. Xxxxxx
--------------------------------
Name: Xxx X. Xxxxxx
Title: Vice President
CBI DISTRIBUTING CORP.
By: /s/ Xxx X. Xxxxxx
--------------------------------
Name: Xxx X. Xxxxxx
Title: Vice President
CLAIRE'S PUERTO RICO CORP.
By: /s/ Xxx X. Xxxxxx
--------------------------------
Name: Xxx X. Xxxxxx
Title: Vice President
CLAIRE'S CANADA CORP.
By: /s/ Xxx X. Xxxxxx
--------------------------------
Name: Xxx X. Xxxxxx
Title: Vice President
SASSY DOO!, INC.
By: /s/ Xxx X. Xxxxxx
--------------------------------
Name: Xxx X. Xxxxxx
Title: Vice President
