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EXHIBIT 10.35
THIRD AMENDMENT TO THIRD AMENDED AND
RESTATED CREDIT AGREEMENT
THIS THIRD AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
(the "Amendment") is dated as of December 8, 1998, between CHICO'S FAS, INC., a
Florida corporation (the "Borrower"), and NATIONSBANK, N.A., a national banking
association (successor by merger to NCNB National Bank of Florida, NationsBank
of Florida, N.A. and NationsBank, N.A. (South)) (the "Bank").
BACKGROUND
Borrower and Bank executed a Third Amended and Restated Credit
Agreement dated December 30, 1995 and a First Amendment thereto dated September
15, 1996 and a Second Amendment thereto dated December 7, 1997 (collectively,
the "Agreement"). Pursuant to the provisions of the Agreement, Bank established
a $2,000,000.00 renewal working capital line of credit (the "Renewal First
Working Capital Line") and a $4,000,000.00 renewal documentary letter of credit
facility (the "Letter of Credit Line").
Borrower has now requested the: (1) renewal of the Renewal First
Working Capital Line, and (2) renewal of the Letter of Credit Line. Bank has
agreed to the request of Borrower on the terms and conditions of this
Amendment.
TERMS
NOW, THEREFORE, in consideration of the foregoing and the promises
contained herein, the parties agree as follows:
1. DEFINED TERMS. Any capitalized terms used but not defined herein
shall have the meanings set forth in the Agreement.
2. RENEWAL FIRST WORKING CAPITAL LINE. Subject to the terms and
conditions of the Agreement, as amended by this Amendment, the Renewal First
Working Capital Line is hereby renewed in the maximum principal amount of
$2,000,000.00. The Renewal First Working Capital Line will expire on May 31,
2000, at which time all indebtedness thereunder will be due and payable in
full. Interest shall be payable monthly in arrears. The Renewal First Working
Capital Line will be evidenced by a $2,000,000.00 renewal promissory note of
Borrower in form and substance satisfactory to Bank (the "Renewal First Working
Capital Line Note").
3. RENEWAL LETTER OF CREDIT LINE. Subject to the terms and conditions
of the Agreement, as amended by this Amendment, the Letter of Credit Line is
hereby renewed in the maximum principal amount of $4,000,000.00 (the "Renewal
Letter of Credit Line"). The Renewal Letter of Credit Line will expire on May
31, 2000, at which time all indebtedness thereunder will be due and payable in
full. Interest shall be payable monthly in arrears. The Renewal Letter of
Credit Line shall be evidenced by a $4,000,000.00 renewal promissory note of
Borrower in form and substance satisfactory to Bank (the "Renewal Letter of
Credit Line Note"). Bank will not make any Advances of funds to Borrower under
the Renewal Letter of Credit Line unless the Renewal First Working Capital Line
is fully funded. Subject to the foregoing, the Bank agrees to make Advances of
funds to Borrower under the Renewal Letter of Credit Line upon receipt of
written request therefor from Borrower, upon and subject to the terms and
conditions set forth herein and in the Agreement, so long as (a) the Renewal
First Working Capital Line is fully funded, (b) there has occurred no Default
or Event of
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Default, and (c) the sum of all outstanding unpaid Advances does not exceed the
Borrowing Base.
4. AFFIRMATION OF COLLATERAL DOCUMENTS. Payment of the Renewal First
Working Capital Line Note and the Renewal Letter of Credit Line Note shall be
and is hereby secured by all Collateral described in Article III of the
Agreement. Borrower ratifies and confirms the provisions of the Agreement and
the Security Agreement with respect to the Collateral and agrees to execute or
otherwise provide to Bank any and all modifications, financing statements, and
other agreements or consents reasonably required by Bank now or in the future
in connection therewith. Borrower will execute or otherwise provide to Bank any
and all modifications, financing statements, and other agreements or consents
required by Bank now or in the future in connection therewith.
5. AMENDED PROVISIONS. Subject to the conditions set forth in
paragraph 7 hereof, the Agreement shall be and hereby is further amended,
effective as of the date hereof, as follows:
(a) The definition of "Certificate of Deposit" in Section 1.1 of
the Agreement is hereby deleted.
(b) The definition of "Collateral" in Section 1.1 of the
Agreement is hereby replaced with the following definition:
"Collateral" means, collectively (i) Accounts, (ii) Inventory,
(iii) Equipment, (iv) the Advance Account, and (v) all products and
proceeds of the foregoing, including without limitation all insurance
proceeds of the foregoing, including without limitation all insurance
proceeds and condemnation awards.
(c) The definition of "Loan Documents" in Section 1.1 of the
Agreement is hereby replaced with the following definition:
"Loan Documents" means, collectively this Agreement, the Notes,
the LC Applications, the Consolidated Amendment, the Security
Agreement, and all other instruments and documents executed or
delivered to and in favor of the Bank in connection with the Loans or
the Letters of Credit, as the same may be amended, modified or
supplemented from time to time.
(d) The definition of "Pledge" in Section 1.1 of the Agreement is
hereby deleted.
(e) The definition of "Termination Date" in Section 1.1 of the
Agreement is hereby replaced with the following definition:
"Termination Date" means May 31, 2000, with respect to the
indebtedness evidenced by the Renewal First Working Capital Line Note
and the Renewal Letter of Credit Line Note.
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(f) The definition of "Applicable Margin" in Section 1.1 of the
Agreement is hereby replaced with the following definition:
"Applicable Margin" means the following per annum percentages
applicable in the following situations:
Applicability Applicable Margin
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(i) If the Consolidated Debt Coverage 0%
Ratio is greater than or equal to 1.75,
and the Current Ratio is greater than or
equal to 1.75
(ii) If the Consolidated Debt Coverage 0.50%
Ratio is greater than or equal to 1.5
but is less than 1.75, and the Current
Ratio is greater than or equal to 1.5
but is less than 1.75
(iii) If the Consolidated Debt Coverage 1.00%
Ratio is greater than or equal to
1.25 but is less than 1.5, and the
Current Ratio is greater than or equal
to 1.5 but is less than 1.75
The Applicable Margin payable by the Borrower shall be subject to
reduction or increase, as applicable and as set forth in the table
above, on a quarterly basis according to the performance of the
Borrower as tested by the relevant ratios. Any such change shall occur
effective as of the first day of the first month following the subject
fiscal quarter for which such ratios are calculated.
(g) Each reference to "Letter of Credit Line" shall be deemed to
refer to the Renewal Letter of Credit Line, wherever such reference appears in
the Agreement. Each reference to "Letter of Credit Line Note" shall be deemed
to refer to the Renewal Letter of Credit Line Note, wherever such reference
appears in the Agreement.
(h) Section 3.3 of the Agreement is hereby deleted.
(i) Section 6.18 of the Agreement is hereby replaced with the
following:
6.18 Consolidated Net Worth.
(a) As of January 30, 1999, maintain a Consolidated Net Worth of
at least $22,500,000.00.
(b) At the end of each fiscal year thereafter, maintain a
Consolidated Net Worth
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at least equal to the sum of: (i) the required Consolidated
Net Worth for the immediately preceding fiscal year end plus
(ii) fifty percent (50%) of Borrower's net income for the
current fiscal year.
(c) At the end of each fiscal quarter, maintain a Consolidated
Net Worth at least equal to the required Consolidated Net
Worth for the immediately preceding fiscal year end.
6. EXPENSES. Without limiting the provisions of the Agreement,
Borrower covenants and agrees to pay all costs and expenses of Bank in
connection with the closing of the transactions evidenced hereby, including,
but not limited to, Bank's reasonable attorneys' fees, recording or filing
costs or expenses, intangible taxes, documentary stamps, surtax and other
revenue fees, and similar items.
7. LOAN AGREEMENT, RATIFICATION, NO NOVATION. The Renewal First
Working Capital Line Note and the Renewal Letter of Credit Line Note each shall
be deemed issued pursuant to and shall be subject to the terms of the
Agreement, as amended hereby, except as may be expressly modified or
supplemented hereby or by the terms of such notes, together with this
Amendment, shall each be deemed to be a "Loan Document" for the purposes of the
Agreement and hereof. Except as expressly modified or supplemented hereby, the
Loan Documents and all agreements, instruments, and documents executed or
delivered pursuant thereto have remained and shall remain at all times in full
force and effect in accordance with their respective terms, and have not been
novated by the provisions of this Amendment.
8. REPRESENTATIONS AND WARRANTIES. To induce Bank to enter into this
Amendment and to perform the transactions described herein, Borrower hereby
represents and warrants to Bank that Borrower has re-examined the Agreement and
on and as of the date hereof:
(a) The representations and warranties made by the Borrower in
Article V of the Agreement (except that the financial statements referred to in
Section 5.03 shall be those most recently furnished to the Bank pursuant to
Section 6.01) are correct and complete as of the date of this Amendment, except
to the extent written waivers have been provided by the Bank;
(b) There has been no material adverse change in the condition,
financial or otherwise, of the Borrower since the date of the most recent
financial reports of the Borrower received by the Bank under Section 6.01
thereof, other than changes in the ordinary course of business; and
(c) No event has occurred and no condition exists that, upon the
consummation of the transaction contemplated hereby, constitutes a default or
an Event of Default on the part of the Borrower under the Agreement or any
Note, either immediately or with the lapse of time or the giving of notice, or
both.
9. CONDITIONS PRECEDENT. The obligation of the Bank to continue to
make the Loans from and after the date of this Amendment and to continue to
issue Letters of Credit under the Agreement are subject to the conditions
precedent set forth in the Agreement and the additional conditions precedent
that the Bank shall have received, on the date of this Amendment in form and
substance satisfactory to the Bank, the following:
(a) Executed originals of each of the Loan Documents, together
with all schedules and
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exhibits thereto in form and substance satisfactory to the Bank (it being
understood that the Loan Documents shall also include this Amendment, the
Renewal First Working Capital Line Note and the Renewal Letter of Credit Line
Note);
(b) Favorable written opinion of counsel to the Borrower dated
the date of this Amendment, addressed to the Bank and satisfactory to Holland &
Knight LLP, counsel to the Bank;
(c) Resolutions of the board of directors of the Borrower
certified by its secretary or assistant secretary as of the date of this
Amendment, approving and adopting the Loan Documents to be executed by the
Borrower in connection with this Amendment;
(d) All fees payable by the Borrower on the date of this
Amendment to Bank; and
(e) Such other documents, instruments, certificates, and opinions
as the Bank may reasonably request on or before the date of this Amendment in
connection with the consummation of the transactions contemplated hereby.
10. NO WAIVER BY BANK. The execution of this Amendment and the new
Loan Documents shall not constitute a waiver of any default or Event of Default
in the Agreement or any other Loan Document existing on the date hereof, nor
shall it eliminate any right which Bank may otherwise have to accelerate the
indebtedness subject to the Agreement by virtue of any default or Event of
Default.
11. RELIANCE UPON, SURVIVAL OF, AND MATERIALITY OF REPRESENTATIONS AND
WARRANTIES, AGREEMENTS, AND COVENANTS. All representations and warranties,
agreements, and covenants made by Borrower herein are material and shall be
deemed to have been relied upon by Bank, notwithstanding any investigation
heretofore or hereafter made by Bank, shall survive the execution and delivery
of this Amendment, and shall continue in full force and effect so long as any
indebtedness is owed by Borrower to Bank.
12. COOPERATION, FURTHER ASSURANCES. Borrower agrees to cooperate with
Bank so that the interests of Bank are protected and the intent of the Loan
Documents and this Amendment can be effectuated. Borrower agrees to execute
whatever further documents and to provide whatever further assurances Bank may
reasonably request or deem necessary to effectuate the terms of the Renewal
First Working Capital Line, the Renewal Letter of Credit Line, and this
Amendment.
13. ESTOPPEL AND RELEASE. Borrower hereby acknowledges and agrees
that, as of the date hereof, there exists no right of offset, defense,
counterclaim, claim, or objection in favor of such party as against Bank with
respect to any of the Loan Documents, any collateral therefor, or any other
aspect of the transactions contemplated by the Agreement or the Loan Documents.
In connection with the foregoing, Borrower hereby releases and discharges Bank,
its subsidiaries, affiliates, directors, officers, employees, attorneys,
agents, successors, and assigns from any and all rights, claims, demands,
actions, causes of action, suits, proceedings, agreements, contracts,
judgments, damages, debts, duties, liabilities, or obligations of any kind or
character, including without limitation such claims and defenses as fraud,
mistake, and usury, whether in law or in equity, known or unknown, choate or
inchoate, which it has had, now has, or hereafter may have, arising under or in
any manner relating to, whether directly or indirectly, the Loan Documents, any
collateral therefor or guaranties thereof, or any other aspect of the
transactions contemplated thereby, from the beginning of time until the date
hereof.
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14. COURSE OF DEALING; AMENDMENT; SUPPLEMENTAL AGREEMENTS. No course
of dealing between the parties hereto shall be effective to amend, modify, or
change any provision of this Amendment or the other Loan Documents. This
Amendment, the Agreement and the other Loan Documents may not be amended,
modified, or changed in any respect except by an agreement in writing signed by
the party against whom such change is to be enforced. The parties hereto may,
subject to the provisions of this Section, from time to time, enter into
written agreements supplemental hereto for the purpose of adding any provision
to this Amendment or the other Loan Documents or changing in any manner the
rights and obligations of the parties hereunder. Any such supplemental
agreement in writing shall be binding upon the parties thereto.
15. HEADINGS. The titles and headings preceding the text of the
paragraphs of this Amendment have been inserted solely for convenience of
reference and shall neither constitute a part of this Amendment nor affect its
meaning, interpretation, or effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
day and year first above written.
WITNESSES: CHICO'S FAS, INC.,
a Florida corporation
/s/ By: /s/ Charles J. Kleman
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Charles J. Kleman,
/s/ Executive Vice President--Finance
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NATIONSBANK, N.A.,
a national banking association
By: /s/ James G. Allgood
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James G. Allgood,
Senior Vice President
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