Document:

Amendment No. 1 to Credit Agreement

 

Exhibit 10.1

AMENDMENT NO. 1 TO CREDIT AGREEMENT 

     This AMENDMENT NO. 1 TO CREDIT AGREEMENT (this “Amendment”) is entered into as of
January 7, 2005 by and among INSTEEL WIRE PRODUCTS COMPANY, a North Carolina corporation
(“Borrower”), the other Credit Parties signatory hereto, GENERAL ELECTRIC CAPITAL
CORPORATION, a Delaware corporation (in its individual capacity, “GE Capital”), for itself,
as Lender, and as Agent for Lenders, and the other Lenders signatory hereto. Unless otherwise
specified herein, capitalized terms used in this Amendment shall have the meanings ascribed to them
in Annex A to the Credit Agreement (as hereinafter defined).

R E C I T A L S:

     WHEREAS, Borrower, the other Credit Parties, the Agent and the Lenders entered into that
certain Credit Agreement dated as of June 2, 2004 (as amended, supplemented, restated or otherwise
modified from time to time prior to the date hereof, the “Credit Agreement”); and

     WHEREAS, Borrower has requested that the Agent and the Lenders amend certain provisions of the
Credit Agreement; and

     WHEREAS, Borrower has prepaid the Term Loan B in full pursuant to Section 1.3(b)(iii)
of the Credit Agreement.

     NOW, THEREFORE, in consideration of the premises contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

     1 Amendments. The Credit Agreement is hereby amended as follows:

     (a) The last sentence of Section 1.9(c) of the Credit Agreement is hereby
amended and restated to read in its entirety as follows:

“Notwithstanding the foregoing, no prepayment fee shall be payable
by Borrower (A) upon prepayments of the Term Loan A pursuant to and
in accordance with Section 1.3(a) as long as such
prepayments do not exceed $625,000 in the aggregate during each of
the one-year periods following the Closing Date and Reference
Availability exceeds $10,000,000 after giving effect to such
prepayment, (B) upon one or more permanent reductions of the
Revolving Loan Commitment pursuant to and in accordance with
Section 1.3(a) during the period commencing on and including
July 1, 2005 and ending on but excluding June 30, 2006 as long as
(i) such reductions do not exceed $15,000,000 in the aggregate
during such period and (ii) Borrower does not terminate the
Revolving Loan Commitment upon any such reduction, and (C) upon a
mandatory prepayment made pursuant to Sections 1.3(b) or
1.16(c); provided, that Borrower does not permanently reduce or
terminate the Revolving Loan Commitment upon any such prepayment
and, in the case of prepayments made pursuant to

 

 

Section 1.3(b)(ii), the transaction giving rise to the
applicable prepayment is expressly permitted under Section
6.”

     (b) Annex A to the Credit Agreement is hereby amended as follows:

     (A) Definition of the term “Revolving Loan Commitment” is
hereby amended by replacing the phrase “Sixty Million Dollars ($60,000,000)
on the Closing Date” therein with the phrase “Seventy-Five Million Dollars
($75,000,000) on January 7, 2005”.

     (B) Clause (b)(ii) of the definition of the term “Borrowing
Base” is hereby amended and restated to read in its entirety as follows:

“(ii) the lesser of (x) $45,000,000 and (y) the greater of
(A) 60% of the Maximum Amount in effect at such time and (B)
$35,000,000;”

     (c) Annex J to the Credit Agreement is hereby amended by replacing
“$60,000,000” therein with “$75,000,000”.

     2 Conditions to Effectiveness. This Amendment shall be effective on the date on which
this Amendment shall have been duly executed and delivered by the Borrowers, each other Credit
Party, the Agent and the Lenders. Agent hereby acknowledges that, as of the date hereof, GE Capital
is the sole Lender.

     3 Representations and Warranties. In order to induce the Agent and the Lenders to
enter into this Amendment, the Borrowers and each other Credit Party represents and warrants to the
Agent and each Lender (which representations and warranties shall survive the execution and
delivery of this Amendment), that:

     (a) the execution, delivery and performance by each Credit Party of this Amendment has
been duly authorized by all necessary corporate action and this Amendment is a legal, valid
and binding obligation of such Credit Party enforceable against such Credit Party in
accordance with its terms, except as the enforcement thereof may be subject to (i) the
effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law
affecting creditors’ rights generally and (ii) general principles of equity (regardless of
whether such enforcement is sought in a proceeding in equity or at law);

     (b) upon the effectiveness of this Amendment, all of the representations and warranties
contained in the Credit Agreement and in the other Loan Documents (other than those which
speak expressly only as of an earlier date) are true and correct in all material respects on
and as of the date of the effectiveness of this Amendment after giving effect to this
Amendment and the transactions contemplated hereby; and

     (c) no Default or Event of Default exists or will result after giving effect to this
Amendment and the transactions contemplated hereby.

2

 

     4 Miscellaneous.

4.1 Effect; Ratification.

     (a) Except as specifically set forth above, the Credit Agreement and the other Loan
Documents shall remain in full force and effect and are hereby ratified and confirmed.

     (b) The execution, delivery and effectiveness of this Amendment shall not operate as a
waiver of any right, power or remedy of the Agent or any Lender under the Credit Agreement
or any other Loan Document, nor constitute amendment of any provision of the Credit
Agreement or any other Loan Document, except as specifically set forth herein. Upon the
effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”,
“hereunder”, “hereof”, “herein” or words of similar import shall mean and be a reference to
the Credit Agreement as amended hereby.

     (c) Each Credit Party acknowledges and agrees that the amendments set forth herein are
effective solely for the purposes set forth herein and that the execution and delivery by
the Agent and the Requisite Lenders of this Amendment shall not be deemed (i) except as
expressly provided in this Amendment, to be a consent to any amendment, waiver or
modification of any term or condition of the Credit Agreement or of any other Loan Document,
(ii) to create a course of dealing or otherwise obligate the Agent or the Lenders to
forbear, waive, consent or execute similar amendments under the same or similar
circumstances in the future, or (iii) to amend, prejudice, relinquish or impair any right of
the Agent or the Lenders to receive any indemnity or similar payment from any Person or
entity as a result of any matter arising from or relating to this Amendment.

          4.2 Counterparts and Signatures by Fax. This Amendment may be executed in any
number of counterparts, each such counterpart constituting an original but all together one
and the same instrument. Any party delivering an executed counterpart of this Amendment by
fax shall also deliver an original executed counterpart, but the failure to do so shall not
affect the validity, enforceability or binding effect of this Amendment.

          4.3 Severability. In case any provision in or obligation under this Amendment
shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision or
obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

          4.4 Costs and Expenses. Borrowers agree to reimburse the Agent for all fees,
costs and expenses, including the reasonable fees, costs and expenses of counsel or other
advisors for advice, assistance, or other representation in connection with this Amendment.

          4.5 Loan Document. This Amendment shall be deemed to be a Loan Document.

3

 

          4.6 Reaffirmation. Each of the Credit Parties signatory hereto as Guarantor
hereby acknowledges and reaffirms all of its obligations and undertakings under each of the
Loan Documents to which it is a party and acknowledges and agrees that subsequent to, and
after taking account of the provisions of this Amendment, each such Loan Document is and
shall remain in full force and effect in accordance with the terms thereof.

          4.7 GOVERNING LAW. THIS WAIVER AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK.

<Signature Pages Follow>

4

 

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first above
written.

	 	 	 	 	 
	 	 	BORROWER:
	 
	 	 	 	 
	 
	 	INSTEEL WIRE PRODUCTS
COMPANY,
a North Carolina corporation
	

	 	By:	 	/s/ Michael C. Gazmarian
	

	 	 	 	 
	

	 	Name:	 	Michael C. Gazmarian
	

	 	 	 	 
	

	 	Title:	 	CFO and Treasurer
	

	 	 	 	 
	 
	 	 	 	 
	 	 	AGENT AND LENDERS:
	 
	 	 	 	 
	
	 	GENERAL ELECTRIC
CAPITAL
CORPORATION, as Agent and Lender
	 
	 	 	 	 
	

	 	By:	 	/s/ Brian Deck
	

	 	 	 	 
	

	 	 	 	Duly Authorized Signatory

[Signature Page to Amendment No. 1

to Credit Agreement]

 

 

     The following Persons are signatories to this Amendment in their capacity as Credit Parties
and not as Borrowers.

	 	 	 	 	 
	 	 	INSTEEL INDUSTRIES, INC., a North Carolina corporation
	 
	 	 	 	 
	

	 	By:
	 	/s/ Michael C. Gazmarian
	

	 	 	 	 
	

	 	Name:
	 	Michael C. Gazmarian
	

	 	 	 	 
	

	 	Title:
	 	CFO and Treasurer
	

	 	 	 	 
	 
	 	 	 	 
	 	 	INTERCONTINENTAL
METALS CORPORATION, a North Carolina corporation
	 
	 	 	 	 
	

	 	By:
	 	/s/ Michael C. Gazmarian
	

	 	 	 	 
	

	 	Name:
	 	Michael C. Gazmarian
	

	 	 	 	 
	

	 	Title:
	 	CFO and Treasurer
	

	 	 	 	 

[Signature Page to Amendment No. 1

to Credit Agreement]Revolving Credit & Security Agreement

 

Exhibit 10.2

FIRST AMENDMENT TO 

REVOLVING CREDIT, TRANCHE B LOAN AND SECURITY AGREEMENT

     FIRST AMENDMENT TO REVOLVING CREDIT, TRANCHE B LOAN AND SECURITY AGREEMENT, dated as of June
6, 2003 (“Amendment”), by and among MAYOR’S JEWELERS, INC., a Delaware corporation, MAYOR’S
JEWELERS, INC., a Florida corporation, and each of the other Domestic Subsidiaries parties thereto
(collectively, the “Borrowers”), FLEET RETAIL FINANCE INC. (“FRFI”), GMAC BUSINESS
CREDIT, LLC (“GMACBC”), as syndication agent (the “Syndication Agent”),
BACK BAY CAPITAL FUNDING LLC (the “Tranche B Lender” and collectively with
FRFI and GMACBC, the “Lenders”), and FLEET RETAIL FINANCE INC., as administrative agent for
itself and the Lenders (the “Administrative Agent”).

     WHEREAS, the Borrowers, the Lenders, and the Administrative Agent are parties to a Revolving
Credit, Tranche B Loan and Security Agreement, dated as of August 20, 2002 (as amended and in
effect from time to time, the “Credit Agreement,” capitalized terms defined therein having the same
meanings herein as therein), pursuant to which the Lenders have extended credit to the Borrowers on
the terms and subject to the conditions set forth therein; and

     WHEREAS, the Borrowers, the Lenders, and the Administrative Agent have agreed to amend and
waive certain provisions of the Credit Agreement as set forth herein;

     NOW, THEREFORE, in consideration of the foregoing, 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.

     §1.1 Amendment to §1.1 of the Credit Agreement. §1.1 of
the Credit Agreement is hereby amended as follows:

     (a) The definition of “Fiscal” is hereby amended by deleting the word “January” and
inserting in lieu thereof the word “March” in the penultimate line thereof and adding the
following sentence immediately at the end of such definition:

“The fiscal year ended March 29, 2003 shall be comprised of five fiscal quarters.
The fifth fiscal quarter shall commence on February 2, 2003 and end on March 29,
2003 and any reference to a “Fifth 2002 Fiscal Quarter” shall constitute a
reference to such period commencing February 2, 2003 and ending on March 29, 2003.”

 

 

     (b) The definition of “EBITDA” is hereby amended by inserting, immediately before the
period (“.”) at the end thereof, the following text:

”; provided further, that any extraordinary charges resulting from any change to
the fiscal year of Mayor’s or its Subsidiaries shall be excluded from the
calculation of EBITDA.”

     (c) The table set forth below the definition of “Minimum EBITDA” in §1.1 of the
Credit Agreement is hereby replaced in its entirety with the table below:

	 	 	 	 	 
	Reference Period Ended
	 	Minimum EBITDA

	Fourth 2002 Fiscal Quarter ended February 2, 2003
	 	 	($441,000	)
	 
	 	 	 	 
	Fifth 2002 Fiscal Quarter ended March 29, 2003
	 	 	($3,636,000	)
	 
	 	 	 	 
	First 2003 Fiscal Quarter ended June 28, 2003
	 	 	($7,577,000	)
	 
	 	 	 	 
	Second 2003 Fiscal Quarter ended September 27, 2003
	 	 	($9,564,000	)
	 
	 	 	 	 
	Third 2003 Fiscal Quarter ended December 27, 2003
	 	 	($7,603,000	)
	 
	 	 	 	 
	Fourth 2003 Fiscal Quarter ended April 3, 2004
	 	 	($6,074,000	)
	 
	 	 	 	 
	First 2004 Fiscal Quarter ended July 3, 2004
	 	 	($4,053,000	)
	 
	 	 	 	 
	Second 2004 Fiscal Quarter ended October 2, 2004
	 	 	($1,191,000	)
	 
	 	 	 	 
	Third 2004 Fiscal Quarter ended January 1, 2005
	 	$	3,725,000	 
	 
	 	 	 	 
	Fourth 2004 Fiscal Quarter ended April 2, 2005
	 	$	5,426,000	 
	 
	 	 	 	 
	First 2005 Fiscal Quarter ended July 2, 2005
	 	$	6,840,000	 

2

 

     (d) The definition of “Reference Period” is hereby amended by (i) inserting
immediately after the text “provided, however,” the text “(i)”, and
(ii) inserting immediately before the period (“.”) at the end thereof, the following
text:

“and (ii) that the Fifth 2002 Fiscal Quarter which shall commence on February 2, 2003
and end on March 29, 2003 shall be deemed a fiscal quarter for purpose of calculation of
the Reference Period.”

     §1.2 Amendment to §7.4.1 of the Credit Agreement. §7.4.1
of the Credit Agreement is hereby amended by deleting the text “Saturday of each year
closest to January 31” and inserting in its place the text “Saturday of each year closest
to March 31”

     §1.3 Amendment to §10.2 of the Credit Agreement. §10.2
of the Credit Agreement is hereby amended by replacing the table therein with the table
below:

	 	 	 	 	 
	Fiscal Quarter
	 	Percentage

	Fourth 2002 Fiscal Quarter ended February 2, 2003
	 	 	3.0	%
	 
	 	 	 	 
	Fifth 2002 Fiscal Quarter ended March 29, 2003
	 	 	9.4	%
	 
	 	 	 	 
	First 2003 Fiscal Quarter ended June 28, 2003
	 	 	8.9	%
	 
	 	 	 	 
	Second 2003 Fiscal Quarter ended September 27, 2003
	 	 	8.5	%
	 
	 	 	 	 
	Third 2003 Fiscal Quarter ended December 27, 2003
	 	 	10.1	%
	 
	 	 	 	 
	Fourth 2003 Fiscal Quarter ended April 3, 2004
	 	 	11.4	%
	 
	 	 	 	 
	First 2004 Fiscal Quarter ended July 3, 2004
	 	 	10.9	%
	 
	 	 	 	 
	Second 2004 Fiscal Quarter ended October 2, 2004
	 	 	10.5	%
	 
	 	 	 	 
	Third 2004 Fiscal Quarter ended January 1, 2005
	 	 	10.1	%
	 
	 	 	 	 
	Fourth 2004 Fiscal Quarter ended April 2, 2005
	 	 	11.4	%
	 
	 	 	 	 
	First 2005 Fiscal Quarter ended July 2, 2005
	 	 	10.9	%

3

 

     §2. Limited Waiver. The Borrowers have informed the Lenders that they wish to
change the date of the end of their fiscal year from the Saturday of each year closest to January
31 to the Saturday of each year closest to March 31. In response to the Borrowers’ request, the
Lenders hereby waive compliance with section 9.10 of the Credit Agreement solely to the extent
necessary to permit such change to the fiscal year end date of [? the Saturday closest to ?]March
31. Nothing contained in this waiver shall be construed to imply a willingness on the part of the
Lenders to grant any similar or other future waivers of any of the terms and conditions of the
Credit Agreement or the other Loan Documents.

     §3. Representations and Warranties. Each of the Borrowers hereby represents
and warrants to the Administrative Agent and the Lenders as of the date hereof, and as of any date
on which the conditions set forth in §4 below are met, as follows:

     (a) The execution and delivery by each of the Borrowers of this Amendment and all other
instruments and agreements required to be executed and delivered by such Borrower in connection
with the transactions contemplated hereby or referred to herein (collectively, the “Amendment
Documents”), and the performance by each of the Borrowers of any of its obligations and agreements
under the Amendment Documents and the Credit Agreement and the other Loan Documents, as amended
hereby, are within the corporate or other authority of such Borrower, have been authorized by all
necessary corporate proceedings on behalf of such Borrower and do not and will not contravene any
provision of law or such Borrower’s charter, other incorporation or organizational papers, by-laws
or any stock provision or any amendment thereof or of any indenture, agreement, instrument or
undertaking binding upon such Borrower.

     (b) Each of the Amendment Documents and the Credit Agreement and other Loan Documents, as
amended hereby, to which any Borrower is a party constitute legal, valid and binding obligations of
such Person, enforceable in accordance with their terms, except as limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or affecting generally the
enforcement of creditors’ rights.

     (c) No approval or consent of, or filing with, any governmental agency or authority is
required to make valid and legally binding the execution, delivery or performance by the Borrowers
of the Amendment Documents or the Credit Agreement or other Loan Documents, as amended hereby, or
the consummation by the Borrowers of the transactions among the parties contemplated hereby and
thereby or referred to herein.

     (d) The representations and warranties contained in §7 of the Credit Agreement and in
the other Loan Documents were true and correct as of the date made. Except to the extent of
changes resulting from transactions contemplated or permitted by the Credit Agreement and the other
Loan
Documents, changes occurring in the ordinary course of business (which changes, either singly or in
the aggregate, have not been materially adverse) and to the extent that such representations and
warranties relate expressly to an earlier date and after giving effect to the provisions hereof,
such representations and warranties, after giving effect to this Amendment, also are correct as of
the date hereof.

4

 

     (e) Each of the Borrowers has performed and complied in all material respects with all terms
and conditions herein required to be performed or complied with by it prior to or at the time
hereof, and as of the date hereof, after giving effect to the provisions of this Amendment and the
other Amendment Documents, there exists no Event of Default or Default.

     (f) Each of the Borrowers acknowledges and agrees that the representations and warranties
contained in this Amendment shall constitute representations and warranties referred to in Section
13.1(e) of the Credit Agreement, a breach of which shall constitute an Event of Default.

     §4. Effectiveness. This Amendment shall become effective as of the date first
written above (the “Effective Date) upon the satisfaction of each of the following
conditions, in each case in a manner satisfactory in form and substance to the Administrative Agent
and the Lenders:

     (a) This Amendment shall have been duly executed and delivered by each of the parties thereto
and shall be in full force and effect;

     (b) The Administrative Agent shall have received such other items, documents, agreements,
items or actions as the Administrative Agent may reasonably request in order to effectuate the
transactions contemplated hereby.

     §5. MiscellaneousProvisions.

     (a) Each of the Borrowers hereby ratifies and confirms all of its Obligations to the
Administrative Agent and the Lenders under the Credit Agreement, as amended hereby, and the other
Loan Documents, including, without limitation, the Loans, and each of the Borrowers hereby affirms
its absolute and unconditional promise to pay to the Lenders and the Administrative Agent the
Loans, reimbursement obligations and all other amounts due or to become due and payable to the
Lenders and the Administrative Agent under the Credit Agreement and the other Loan Documents, as
amended hereby. Except as expressly amended hereby, each of the Credit Agreement and the other
Loan Documents shall continue in full force and effect. This Amendment and the Credit Agreement
shall hereafter be read and construed together as a single document, and all references in the
Credit Agreement, any other Loan Document or any agreement or instrument related to the Credit
Agreement shall hereafter refer to the Credit Agreement as amended by this Amendment.

     (b) Without limiting the expense reimbursement requirements set forth in §16.2 of the
Credit Agreement, the Borrower agrees to pay on
demand all costs and expenses, including reasonable attorneys’ fees, of the Administrative Agent
incurred in connection with this Amendment.

5

 

     (c) THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS (WITHOUT REFERENCE TO CONFLICT OF LAWS) AND SHALL TAKE EFFECT AS A
SEALED INSTRUMENT IN ACCORDANCE WITH SUCH LAWS.

     (d) This Amendment may be executed in any number of counterparts, and all such counterparts
shall together constitute but one instrument. In making proof of this Amendment it shall not be
necessary to produce or account for more than one counterpart signed by each party hereto by and
against which enforcement hereof is sought.

[Remainder of page intentionally left blank.]

6

 

     IN WITNESS WHEREOF, the undersigned have duly executed this Amendment as a sealed instrument
as of the date first set forth above.

	 	 	 	 	 
	 	MAYOR’S JEWELERS, INC.

 	 
	 	By:  	
 	 
	 	 	Name:  	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	MAYOR’S JEWELERS, INC.

 	 
	 	By:  	
 	 
	 	 	Name:  	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	JBM RETAIL COMPANY, INC.

 	 
	 	By:  	
 	 
	 	 	Name:  	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	JBM VENTURE CO., INC.

 	 
	 	By:  	
 	 
	 	 	Name:  	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	MAYOR’S JEWELERS INTELLECTUAL

PROPERTY HOLDING
COMPANY

 	 
	 	By:  	
 	 
	 	 	Name:  	 
	 	 	Title:  	 	 

7

 

	 	 	 	 	 

	 	 	 	 	 
	 	“ADMINISTRATIVE AGENT”

FLEET RETAIL FINANCE INC.

 	 
	 	By:  	
 	 
	 	 	Name:  	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	“SYNDICATION AGENT”

GMAC BUSINESS CREDIT, LLC

 	 
	 	By:  	
 	 
	 	 	Name:  	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	“REVOLVING CREDIT LENDERS”

FLEET RETAIL FINANCE INC.

 	 
	 	By:  	
 	 
	 	 	Name:  	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	GMAC BUSINESS CREDIT, LLC

 	 
	 	By:  	
 	 
	 	 	Name:  	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	“TRANCHE B LENDER” BACK 

BAY CAPITAL FUNDING LLC

 	 
	 	By:  	
 	 
	 	 	Name:  	 
	 	 	Title:  	 	 
	 

8

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