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EXHIBIT 10.1
FIFTH AMENDMENT TO LETTER OF CREDIT AGREEMENT
This Amendment dated as of September 22, 1999 is between Bank of America,
N.A., formerly known as Bank of America National Trust and Savings Association
(the "Bank") and Xxxxxxxx-Sonoma, Inc. (the "Borrower").
RECITALS
A. The Bank and the Borrower entered into a certain Letter of Credit
Agreement dated as of June 1, 1997 (as previously amended, the "Agreement").
B. The Bank and the Borrower desire to amend the Agreement.
AGREEMENT
1. Definitions. Capitalized terms used but not defined in this Amendment
shall have the meanings given to them in the Agreement.
2. Amendment. A new Article 2A is added to the Agreement as follows:
2A.1 Line of Credit Amount. From the effective date of the Fifth
Amendment to this Agreement until November 1, 1999 (the "Revolver
Expiration Date"), the Bank will provide a line of credit to the Borrower.
The amount of the line of credit (the "Revolver Commitment") is Fifty
Million Dollars ($50,000,000). This is a revolving line of credit providing
for cash advances. During the availability period, the Borrower may repay
principal amounts and reborrow them. The Borrower agrees not to permit the
outstanding principal balance of advances under the line of credit to
exceed the Revolver Commitment. Amounts advanced under this line of credit
shall be used for seasonal working capital needs of the Borrower and its
subsidiaries.
2A.2 Interest Rate. Unless the Borrower elects an optional interest
rate as described below, principal amounts outstanding under this line of
credit shall bear interest at the Base Rate (as defined in the Syndicated
Credit Agreement) plus the Applicable Margin (as defined below).
2A.3 Repayment Terms. The Borrower will pay interest on each Interest
Payment Date, as defined in the Syndicated Credit Agreement, until payment
in full of any principal outstanding under this line of credit. The
Borrower will repay in full all principal and any unpaid interest or other
charges outstanding under this line of credit no later than the Revolver
Expiration Date. Any interest period for an optional interest rate (as
described below) shall expire no later than the Revolver Expiration Date.
2A.4 Optional Interest Rates. Instead of the interest rate based on
the Base Rate, the Borrower may elect to have all or portions of the
principal amount outstanding under this facility bear interest at the
London Rate plus the Applicable Margin or the Cayman Rate plus the
Applicable Margin. The London Rate and Cayman Rate shall have the meanings
as defined in the Syndicated Credit Agreement.
2A.5 Fees. The Borrower agrees to pay a fee on any difference between
the Revolver Commitment and the amount of credit it actually uses under
this facility,
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determined by the weighted average credit outstanding during the specified
period. The fee will be calculated at the rates indicated in paragraph 2A.6
below, and shall be paid at the end of each calendar quarter in arrears. In
addition, the Borrower shall pay a commitment fee as described in the
Bank's fee letter dated September 9, 1999.
2A.6 Applicable Margin and Fee. The Applicable Margin shall be the
following amounts per annum:
Applicable Margin
(in basis points per annum)
Unused Fee ------------------------------------
(basis points) Base Rate + London/Cayman Rate +
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17.5 0 87.5
The Applicable Margin with respect to London and Cayman Rates shall be
increased above the amounts stated in the foregoing table in the following
cases: (a) During any period in which the principal amount outstanding
under this facility exceeds 33% of the Revolver Commitment, the Applicable
Margin shall be increased by 12.5 basis points; and (b) during any period
in which the principal amount outstanding under this facility exceeds 66%
of the Revolver Commitment, the Applicable Margin shall be increased by
25.0 basis points.
2A.7 Incorporation of Terms. The terms and conditions specified in
paragraphs 2.04(a), 2.05(a), (b) and (c), 2.12 and Article 3 of the
Syndicated Credit Agreement are incorporated by reference as though fully
set forth in this Agreement; provided, however, that each reference to the
Agent in such paragraphs shall be deemed to refer to the Bank in its
individual capacity as a lender; and provided that the terms "Base Rate
Loan," "Cayman Rate Loan" and "London Rate Loan" shall refer to amounts
outstanding under this Agreement which are bearing interest at the
respective interest rates.
2A.8 Default Rate. While any Event of Default exists or after
acceleration, the Borrower shall, at the Bank's option, pay interest at a
rate which is two (2.0) percentage points higher than the rate which would
otherwise apply under this Agreement.
3. Representations and Warranties. When the Borrower signs this
Amendment, the Borrower represents and warrants to the Bank that the
representations and warranties in Article 5 of the Agreement, as applied to the
Agreement as amended hereby, are true and correct as of the date of this
Amendment as if made on the date of this Amendment.
4. Conditions. This Amendment will be effective when the Bank receives
the following items. In form and content acceptable to the Bank:
(a) Evidence that the execution, delivery, and performance by the
Borrower of this Amendment and any Instrument or agreement required under
this Amendment have been duly authorized;
(b) A Guarantor Acknowledgement and Consent in the form attached
hereto.
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(c) An amendment from the Banks party to the Syndicated Credit
Agreement (as defined in the Agreement).
5. Effect of Amendment. Except as provided in this Amendment, all
of the terms and conditions of the Agreement shall remain in full force and
effect.
This Amendment is executed as of the date first stated above.
BANK OF AMERICA, X.X. XXXXXXXX-SONOMA, INC.
By /s/ H. P. XXXXXX By /s/ XXXXX X. X. XXXXXXX
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Xxxxx Xxxxxx Title V.P. Finance Asst Secretary
Senior Vice President ---------------------------
By /s/ XXXX X. XXXX
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Title CFO
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GUARANTOR ACKNOWLEDGMENT
AND CONSENT
The undersigned, each a guarantor with respect to the Borrower's obligations to
the Bank under the Agreement, each hereby (i) acknowledge and consent to the
execution, delivery and performance by the Borrower of the foregoing Fifth
Amendment to Letter of Credit Agreement, and (ii) reaffirm and agree that
the guaranty to which the undersigned is party is in full force and effect, and
guaranties all of the obligations of the Borrower under the Agreement, as
amended.
Dated as of September 22, 1999 XXXXXXXX-SONOMA, INC.
By /s/ XXXXX X. X. XXXXXXX
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Xxxxx X. X. Xxxxxxx
Assistant Secretary
HOLD EVERYTHING, INC.
By /s/ XXXXX X. X. XXXXXXX
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Xxxxx X. X. Xxxxxxx
Assistant Secretary
XXXXXXXX CATALOG COMPANY, INC.
By /s/ XXXXX X. X. XXXXXXX
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Xxxxx X. X. Xxxxxxx
Assistant Secretary
POTTERY BARN EAST, INC.
By /s/ XXXXX X. X. XXXXXXX
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Xxxxx X. X. Xxxxxxx
Assistant Secretary
XXXXXXXX-SONOMA STORES, LLC
By Xxxxxxxx-Sonoma, Inc., its sole
member
By /s/ XXXXX X. X. XXXXXXX
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Xxxxx X. X. Xxxxxxx, its President
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