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.  
Definitions. All capitalized terms used herein and not otherwise defined shall
have the same meaning herein as in the Credit Agreement.
  2.  
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.

                                      LIBOR     Base Rate     Commitment   Level
  Average Excess Availability   Margin     Margin     Fee Margin  
I
  Greater than or equal to 50%                        
 
  of the Loan Cap     2.25 %     2.25 %     0.50 %
II
  Less than 50% of the Loan                        
 
  Cap but greater than or                        
 
  equal to 25% of the Loan Cap     2.50 %     2.50 %     0.375 %
III
  Less than 25% of the Loan Cap     2.75 %     2.75 %     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 Fargo’s
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 Agent’s 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.

3.  
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.

4.  
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 Parent’s
common stock.

5.  
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.

6.  
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).

7.  
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.

8.  
Miscellaneous.

(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.

           

Borrowers:

A.C. MOORE INCORPORATED
as Lead Borrower and a Borrower
      By:   /s/       Name:   Rodney Schriver      Title:   Vice President     
  Guarantors:

A.C. MOORE ARTS & CRAFTS, INC.
      By:   /s/       Name:   Rodney Schriver      Title:   Vice President     
  MOORESTOWN FINANCE, INC.
      By:   /s/       Name:   Rodney Schriver      Title:   Vice President     
  BLACKWOOD ASSETS, INC.
      By:   /s/       Name:   Rodney Schriver      Title:   Vice President     

Signature Page to First Amendment to Credit Agreement

 

 

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            Agents:

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent and Collateral Agent
      By:   /s/       Name:   Michele L. Ayou      Title:   Authorized
Signatory        Lenders:

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Lender and Swing Line Lender
      By:   /s/       Name:   Michele L. Ayou      Title:   Authorized
Signatory     

Signature Page to First Amendment to Credit Agreement