EXHIBIT 10.1
[LETTERHEAD OF CIT BUSINESS CREDIT]
July 18, 2000
Weiner's Stores, Inc.
6005 Westview Drive
Houston, Texas 77055
Attn: Mr. Raymond J. Miller
Chairman, President and
Chief Executive Officer
Dear Mr. Miller:
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) $6,500,000 for the fiscal year of the Borrower ending
February 3, 2001, (ii) $8,500,000 for each of the fiscal years ending
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."
<PAGE>
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
-------------- ------
July 29, 2000 (5,500,000)
October 28, 2000 (1,300,000)
February 3, 2001 2,100,000
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"
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<PAGE>
3. The following definitions of "Applicable Eurodollar Margin,"
"Applicable Prime Margin," and "Maximum Legal Rate" are hereby added
to the definitions in Section 1.01 of the Credit Agreement:
"APPLICABLE EURODOLLAR MARGIN shall mean the increment over the
Eurodollar rate as determined at the beginning of each Fiscal Quarter
after the Agent's receipt of the Borrower's financial statements as
required under Section 7, hereof for the prior Fiscal Quarter based
upon the FIFO EBITDA amount through February 3, 2001 and a
Indebtedness to FIFO EBITDA ratio subsequent to February 3, 2001 set
forth below as at the end of the prior Fiscal Quarter for rolling 12
months and shall be equal to:
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FIFO EBITDA EURODOLLAR MARGIN +
-------------------------------------------- -----------------------
12 months ended 7/29/00
============================================ -----------------------
Greater than ($4,300,000) 2.50
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Less than ($4,300,000) 2.75
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12 months ended 10/28/00
============================================ -----------------------
Greater than $750,000 2.50
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Greater than 0 less than $750,000 2.75
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Less than 0 3.00
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12 months ended 2/3/01
============================================ -----------------------
Greater than $3,000,000 2.50
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Greater than $2,600,000 less than $3,000,000 2.75
-------------------------------------------- -----------------------
Greater than $2,100,000 less than $2,600,000 3.00
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Less than $2,100,000 3.25
-------------------------------------------- -----------------------
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INDEBTEDNESS TO FIFO EBITDA EURODOLLAR MARGIN +
RATIO-SUBSEQUENT TO 2/3/01
-------------------------------------------- -----------------------
-------------------------------------------- -----------------------
Less than 2.0 2.25
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Greater than 2.0 less than 4.0 2.50
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Greater than 4.0 less than 6.0 2.75
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Greater than 6.0 less than 8.0 3.00
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Greater than 8.0 3.25
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For purposes of calculations the Indebtedness to FIFO EBITDA Ratio
herein above, "Indebtedness" shall mean all obligations under the
Credit Agreement, excluding the outstanding amount of any Letters of
Credit issued pursuant thereto.
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<PAGE>
"APPLICABLE PRIME MARGIN shall mean the increment over the Reference
Rate as determined at the beginning of each Fiscal Quarter after the
Agent's receipt of the Borrower's financial statements as required
under Section 7.01 hereof for the prior Fiscal Quarter based upon the
FIFO EBITDA amount set forth below through February 3, 2001 and
Indebtedness to FIFO EBITDA subsequent to February 3, 2001 as at the
end of the prior Fiscal Quarter and shall be equal to:
--------------------------------------------- ---------------------
FIFO EBITDA PRIME
MARGIN +
--------------------------------------------- ---------------------
12 months ended 7/29/00
============================================= ---------------------
Greater than ($4,300,000) 0.50
--------------------------------------------- ---------------------
Less than ($4,300,000) 0.75
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--------------------------------------------- ---------------------
12 months ended 10/28/00
============================================= ---------------------
Greater than $750,000 0.50
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Greater than 0 less than $750,000 0.75
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Less than 0 1.00
--------------------------------------------- ---------------------
--------------------------------------------- ---------------------
12 months ended 2/3/01
============================================= ---------------------
Greater than $3,000,000 0.50
--------------------------------------------- ---------------------
Greater than $2,600,000 less than $3,000,000 0.75
--------------------------------------------- ---------------------
Greater than $2,100,000 less than $2,600,000 1.00
--------------------------------------------- ---------------------
Less than $2,100,000 1.25
--------------------------------------------- ---------------------
--------------------------------------------- ---------------------
INDEBTEDNESS TO FIFO EBITDA PRIME
RATIO-SUBSEQUENT TO 2/3/01 MARGIN +
--------------------------------------------- ---------------------
--------------------------------------------- ---------------------
Less than 2.0 0.25
--------------------------------------------- ---------------------
Greater than 2.0 less than 4.0 0.50
--------------------------------------------- ---------------------
Greater than 4.0 less than 6.0 0.75
--------------------------------------------- ---------------------
Greater than 6.0 less than 8.0 1.00
--------------------------------------------- ---------------------
Greater than 8.0 1.25
--------------------------------------------- ---------------------
--------------------------------------------- ---------------------
For purposes of calculations the Indebtedness to FIFO EBITDA Ratio
herein above, "Indebtedness" shall mean all obligations under the
Credit Agreement, excluding the outstanding amount of any Letters of
Credit issued pursuant thereto.
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<PAGE>
"MAXIMUM LEGAL RATE shall mean the maximum lawful interest rate which
may be contracted for, charged, taken, received or reserved under
this Credit Agreement or the Loan Documents by CIT in accordance with
applicable state or federal law (whichever provides for the highest
permitted rate), taking into account all items contracted for,
charged, or received in connection with the Obligations evidenced
hereby which are treated as interest under the applicable state or
federal law, as such rate may change from time to time. The Maximum
Legal Rate shall be calculated in a manner that takes into account
any and all fees, payments and other charges in respect of the Loan
Documents that constitute interest under applicable law. Each change
in any interest rate provided for herein based upon the Maximum Legal
Rate resulting from a change in the Maximum Legal Rate shall take
effect without notice to the Company at the time of such change in
the Maximum Legal Rate. For purposes of determining the Maximum Legal
Rate under Texas law, the applicable rate ceiling shall be: (a) the
"weekly ceiling" described in and computed in accordance with the
provisions of Section 303.003 of the Texas Finance Code, as amended;
or (b) if the parties subsequently contract as allowed by Texas law,
the quarterly ceiling or the annualized ceiling computed pursuant to
Section 303.008 of the Texas Finance Code, as amended; provided,
however, that at any time the "weekly ceiling", the quarterly ceiling
or the annualized ceiling shall be less than 18% per annum or more
than 24% per annum, the provisions of Section 303.009(a) and Section
303.009(b) of the Texas Finance Code, as amended, shall control for
purposes of such determination, as applicable."
4. Section 2.05 ("Interest Rate") is hereby deleted and the following is
substituted in lieu thereof.
"2.05 (a) Interest on the Revolving Loan shall be payable
on each Interest Payment Date applicable thereto and shall be an
amount equal to (a) at the Borrower's election (i) for each Reference
Loan, the Applicable Prime Margin plus Reference Rate (Prime) per
annum on the average of the net balances owing by the Borrower to the
Agent and/or the Lenders in the Borrower's Revolving Loan Account at
the close of each day during such month or balances other than
Eurodollar Loans or (ii) for each Eurodollar Loan, the Applicable
Libor Margin plus the Eurodollar Rate or any Eurodollar Loan, on a
per annum basis, on the average of the net balances owing by the
Borrower to the Agent and/or the Lenders in the Borrower's Revolving
Loan Account at the close of each day during such month or (b)
interest computed in accordance with the provisions of clause (a) but
at the Maximum Legal Rate. In the event of any change in said
Applicable Prime Margin, the rate under clause (a)(i) above shall
change, as of the first of the month following any change, so as to
remain equal to the Applicable Prime Margin. The rate hereunder shall
be calculated based on a 360-day year. The Agent and the Lenders
shall be entitled to charge the Borrower's Revolving Loan Account at
the rate provided for herein when due until all Obligations have been
paid in full. Said Rates shall be together with any additional
interest owing pursuant to Section 2.14 hereof.
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<PAGE>
(b) In conjunction with the determination of the
Applicable Prime and Eurodollar Margin, the Borrower shall deliver to
the Agent as soon as possible:
(i) the financial statements and officer
certification as required under Section 7, Paragraph
7.01(b) hereof for each Fiscal Quarter commencing with the
Fiscal Quarter ending on July 29, 2000 and each Fiscal
Quarter thereafter.
(ii) a certificate of the Borrower's Chief
Financial Officer certifying:
(x) the computation of the proper
Applicable Prime and/or Eurodollar Margin; and
(y) the absence of any Default or
Event of Default.
(c) In the event that the Borrower does not deliver the
foregoing documents to the Agent prior to any scheduled interest
calculation date, the Agent at its election may, in addition to its
other rights and remedies, charge interest computed at the highest
applicable Eurodollar Margin or Prime Margin for any existing
Eurodollar Loans. Notwithstanding the foregoing, no reduction in any
Applicable Eurodollar Margin or Prime Margin shall be effective if a
Default or Event of Default has occurred hereunder, which has not
been waived by the Required Lenders or cured to the Required Lender's
satisfaction, the Borrower may not request any additional Eurodollar
Loans and nothing contained herein shall limit, restrict or prohibit
the Agent and the Lenders charging the Default Rate of Interest
subject to and in accordance with the provisions of this Credit
Agreement."
Pursuant to mutual agreement, we shall charge you a one-time Facility
Fee in the amount of $40,000.00 for this accommodation, which fee shall be in
addition to all 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
such amount.
In consideration of the use of our in-house legal department and
facilities in documenting this amendment, you hereby agree to pay us a
Documentation Fee equal to $750.00. Said amount shall be due and payable upon
the date hereof and will be charged to your loan account under the Credit
Agreement.
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<PAGE>
Except as specifically set forth herein, no other charge 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/ Grant Weiss
---------------
Name: Grant Weiss
Title: Assistant Vice President
GENERAL ELECTRIC CAPITAL CORPORATION, a Lender
By: /s/ Martin Greenberg
--------------------
Name: Martin Greenberg
Title: Duly Authorized Signatory
Read and Agreed to:
WEINER'S STORES, INC., Borrower
By: /s/ Raymond J. Miller
---------------------
Name: Raymond J. Miller
Title: Chairman, President, and
Chief Executive Officer
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