Document:

LETTER OF MODIFICATION OF OBLIGATION DATED 9-11-2003

 EXHIBIT 10.67 
  
 September 11, 2003 
  

Mr. Charles R. Tutterow 
 Executive Vice President 
 JPS Industries, Inc. 
 555 North Pleasantburg Drive, Suite 202 
 Greenville, South Carolina 29607 
  
 Re: Modification of Obligation # 1331016 in name of JPS Industries, Inc. 
  
 Dear Chuck: 
  
 In conjunction with the covenant waiver of same date from Wachovia Bank, National Association (hereafter “Wachovia” or “Bank”) to JPS Industries, Inc.
(the “Borrower”), Wachovia and Borrower agree to the following modification of the terms and conditions of Obligation # 1331016 ($25,000,000 revolver): 
  
 REVOLVER AVAILABILITY: 
  
 Advances shall be governed by a borrowing base to be received monthly or more frequently as determined by Wachovia. The aggregate principal balance of cash advances and
letters of credit to be made by Wachovia from time to time pursuant to this facility shall not exceed the lesser of $25,000,000 or the Borrowing Base (as defined herein “Borrowing Base” means (1) up to 85% of the net amount of Eligible
Non-Factored Accounts plus (2) up to 90% of the net amount of Eligible Factored Accounts plus (3) up to 60% of Eligible Raw Materials Inventory plus (4) up to 30% of Eligible Work-in-Progress Inventory plus (5) up to 50% of Eligible Finished Goods
Inventory, plus an allowance for fixed assets to be determined. The advance rates on trading assets will be subject to a field exam to be performed by Wachovia, and the allowance for fixed assets will be subject to an appraisal if deemed necessary
by Wachovia, all at Borrower’s expense. Eligibility of accounts receivable and inventory shall be determined pursuant to Wachovia’s standard eligibility criteria which shall apply and be further defined in the loan agreement. 

 
 REPORTING: 
  
 Borrower shall submit a Borrowing Base Certificate, with supporting schedules including Accounts Receivable and Accounts Payable aging
reports and Inventory detail reports monthly or more frequently as determined by Wachovia, satisfactory to Wachovia in all respects. 
  
 ANNUAL FINANCIAL STATEMENTS: 
  
 Borrower shall deliver to Wachovia, within 90 days after the close of each fiscal year, audited financial statements reflecting its operations during such fiscal year,
including, without limitation, a 
  

 19 

 balance sheet, profit and loss statement and statement of cash flows, with supporting schedules; all on a consolidated
and consolidating basis and in reasonable detail. 
  
 PERIODIC FINANCIAL
STATEMENTS: 
  
 Borrower shall deliver to Wachovia, within 30 days of prior
month end, unaudited financial statements reflecting its operations during such fiscal year, including, without limitation, a balance sheet, profit and loss statement and statement of cash flows, with supporting schedules; all on a consolidated and
consolidating basis and in reasonable detail. 
  
 FIELD EXAMINATIONS:

  
 Field examinations will be performed quarterly (or less frequently if
deemed appropriate by Wachovia, but no less frequent than annually) by Wachovia, at Borrower’s expense. Field examination results must be satisfactory to Wachovia in all respects. 
  
 ACQUISITIONS: 
  
 Borrower shall not make any acquisitions without prior written consent of Wachovia. 
  
 DOCUMENTS: 
  
 The facility will be evidenced by documents prepared by and acceptable to Wachovia, containing such representations, warranties, affirmative and negative covenants,
indemnities, closing conditions, defaults and remedies as are typically required by Wachovia and/or are customary in this type of transaction. The failure of Borrower and Wachovia to reach agreement on the loan documents shall not be deemed a breach
by Wachovia of this modification. Unless Wachovia agrees otherwise in writing, completion of all documents is a condition of closing. 
  
 COSTS: 
  
 On or before the closing Borrower shall pay all costs, expenses and fees (including, without limitation, any appraisal, field examination, searches, recording and attorneys’ fees) associated with this
transaction. Wachovia is not providing legal advice or services to Borrower. 
  
 EVENT OF DEFAULT: 
  
 The modifications discussed above are to be
completed by October 15, 2003. Failure of Borrower to enter into these modifications by this date will be an event of default. 
  
 All other terms and conditions of Obligation # 1331016 will remain in effect. 
  
 Wachovia’s obligations under this modification are conditioned on the fulfillment to Wachovia’s sole satisfaction of each term and condition referenced by this
modification letter. These terms and conditions are not exhaustive, and this modification is subject to certain other terms and closing conditions customarily required by Wachovia for similar transactions and may be supplemented prior to closing
based upon Wachovia’s investigation and/or as disclosure of Borrower’s circumstances so dictate. 
  

 20 

 Please indicate your acceptance of the terms and conditions contained herein by signing below and returning one executed
copy of this modification letter and the covenant waiver letter of same date to the undersigned by September 15, 2003. 
  
 Sincerely, 
  

	 WACHOVIA BANK, NATIONAL ASSOCIATION

		
	 By:
	 	 /s/ James K. Baumgardner

	 	 	 James K. Baumgardner
         Senior Vice President

  
 The above modification is agreed
to and accepted on the terms and conditions provided in this letter. 
  
 JPS
INDUSTRIES, INC. 
  

	 By: /s/  Charles R. Tutterow

	  	 September 11, 2003

	             Charles R. Tutterow
	  	 Date

	             Executive Vice President
	  	 

  

 21AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMENT

 Exhibit 10.36 
  
 BROOKSTONE, INC. 
 BROOKSTONE COMPANY, INC. 
 BROOKSTONE STORES, INC. 
 BROOKSTONE PURCHASING, INC. 
 GARDENERS EDEN BY MAIL, INC. 
 GARDENERS EDEN COMPANY, INC. 
 GARDENERS EDEN
PURCHASING, INC. 
  
 Dated as of: July 31, 2003 
  
 Fleet National Bank 
 Individually and as Agent 
 100 Federal Street 
 Boston, Massachusetts 02110 
  
 Citizens Bank of Massachusetts, 
 Individually and as Documentation Agent 
 28 State Street 
 Boston, Massachusetts 02109 
  
 BankNorth, N.A. 
 7 New England Executive Park 
 Suite 700 
 Burlington, Massachusetts 01803 
  
 National City Bank 
 One South Broad Street, 15th Floor 
 Philadelphia, Pennsylvania 19107

  
 Sovereign Bank 
 75 State Street - sst 04-10 
 Boston, Massachusetts 02109 
  
 Re: Amendment No. 1 to Amended and Restated Credit Agreement 
  
 Ladies and Gentlemen: 
  
 We refer to the Amended and Restated Credit Agreement, dated as of February 21, 2002 (the “Agreement”), among
Brookstone, Inc. (the “Parent”), Brookstone Company, Inc. (the “Company”), Brookstone Stores, Inc. (“Stores”), Brookstone Purchasing, Inc. (“Purchasing”), Gardeners Eden Company, Inc. (“GE”),
Gardeners Eden Purchasing, Inc. (“GE Purchasing”), Gardeners Eden By Mail, Inc. (“GE Mail”), the lenders party thereto (collectively, the “Lenders”), Fleet National Bank as agent for the Lenders (“Fleet” or
the “Agent”), and Citizens Bank of Massachusetts as documentation agent (the “Documentation Agent”). Upon the terms and subject to the conditions contained in the Agreement, you agreed to make Loans and to issue Letters of Credit
for the Borrowers. 
  
 Terms used in this letter agreement (this
“Amendment No. 1”) which are not defined herein, but which are defined in the Agreement, shall have the same respective meanings herein as therein. 
  
 We have requested that you make certain amendments to the Agreement and certain related Lender Agreements. You have advised us that you are prepared and
would be willing to make the amendments so requested by us on the condition that we join with you in this Amendment No. 1. 
  
 Accordingly, in consideration of these premises, the promises, mutual covenants and agreements contained in this Amendment No. 1, and fully intending to
be legally bound by this Amendment No. 1, we hereby agree with you as follows: 

 ARTICLE I 
  

AMENDMENTS TO AGREEMENT 
  
 Effective as of July 31, 2003 (herein, the “Modification Date”), the Agreement is amended as follows: 
  
 (a) The second paragraph of the definition of “Fixed Charge
Coverage” contained in Section 1.1 of the Agreement is amended to read in its entirety as follows: 
  
 “For purposes of the foregoing calculation, and without prejudice to the provisions of Section 6.10, there shall not be deducted as Capital
Expenditures expenditures up to an aggregate amount of $24,000,000, but only to the extent that $14,000,000 of such amount is used for the expansion of its existing distribution facility and $10,000,000 of such amount is used for the construction of
a new headquarters.” 
  
 (b) The definition of “Lender
Agreements” contained in Section 1.1 of the Agreement shall, wherever used in the Agreement or any of the other Lender Agreements, be deemed to also mean and include this Amendment No. 1. 
  
 (c) The definition of “Revolving Credit Termination Date”
contained in Section 1.1 of the Agreement is amended by deleting the reference to “February 21, 2005” contained in the first line thereof, and inserting in lieu thereof the following: “February 21, 2006.” 
  
 (d) Clause (c) of Section 2.1 of the Agreement is amended by deleting the
reference to “$10,000,000” contained in the fourth line thereof, and inserting in lieu thereof the following: “$7,000,000.” 
  
 (e) Clause (d) of Section 6.1 of the Agreement is amended to read in its entirety as follows: 
  
 “(d) Indebtedness of the Company to the City of Mexico, Missouri
evidenced by a capitalized lease of the Company’s facility in the City of Mexico, Missouri in an aggregate amount not to exceed $2,500,000, Indebtedness (including a capital lease or mortgage financing) incurred in connection with the expansion
of the Company’s existing distribution facility in an aggregate amount not exceeding $14,000,000, and Indebtedness (including a capital lease or mortgage financing) incurred in connection with the construction of a new headquarters in an
aggregate amount not exceeding $10,000,000”. 
  
 (f) Clause
(k) of Section 6.4 of the Agreement is amended to read in its entirety as follows: 
  
 “(k) rights of a lessor under a capital lease with a Borrower, or a mortgagor in respect of mortgage financing with a Borrower, in either case to the extent such financing (i) is used for the expansion of the
existing distribution facility and is not in excess of $14,000,000 in the aggregate, or (ii) is used for the construction of a new headquarters and is not in excess of $10,000,000 in the aggregate, and also, in either such case, to the extent the
liens created in respect thereof extend only to such distribution facility and/or headquarters, as applicable.” 
  
 (g) Section 6.10 of the Agreement is amended to read in its entirety as follows: 
  
 “6.10. Capital Expenditures. The Parent and its Subsidiaries shall not make Capital Expenditures in an aggregate
amount in any fiscal year exceeding the sum of (a) $11,500,000 for the fiscal year ending February 1, 2003, (b) $16,000,000 for the fiscal year ending January 31, 2004, (c) $18,500,000 for the fiscal year ending January 29, 2005, and (d) $20,000,000
for the fiscal year ending January 28, 2006. Up to $4,000,000 of the amount (if any) of Capital Expenditures not used in any fiscal year may be used in the next succeeding fiscal year, provided that the amount (if any) of Capital Expenditures
unused in the fiscal year ending February 1, 2003 shall not be permitted to be used in any other fiscal year. 
  
 In addition to the foregoing, the Borrowers may make additional Capital Expenditures of (a) $11,500,000 for the fiscal year ending January 31, 2004 (of
which $7,000,000 is available solely for the expansion of the Borrowers’ existing distribution facility and $4,500,000 is available solely for the construction of the Borrowers’ new headquarters), and (b) $12,500,000 for the fiscal year
ending January 29, 2005 (of which $7,000,000 is 

 
available solely for the expansion of the Borrowers’ existing distribution facility and $5,500,000 is available solely for the construction of the
Borrowers’ new headquarters). Notwithstanding the limitations contained in clauses (a) and (b) of the immediately preceding sentence, it is agreed that the Borrowers may aggregate their Capital Expenditures for their distribution facility in
either the fiscal year ending January 31, 2004 or January 29, 2005, and also for their new headquarters in either such fiscal year, provided that in the case of such distribution facility and/or new headquarters, as applicable, (i) such
Capital Expenditures are funded through cash-on-hand or third party financing (which may include a capital lease, but which shall not include any Loans hereunder), (ii) if such aggregation causes the limitation on Capital Expenditures to be exceeded
in either such fiscal year, then the amount of such excess shall reduce the limitation on Capital Expenditures for the other fiscal year on a dollar-for-dollar basis, and (iii) the total amount expended for the distribution facility expansion shall
not exceed $14,000,000 in the aggregate and for the new headquarters construction shall not exceed $10,000,000 in the aggregate.” 
  
 (h) The Table set forth in the first paragraph of Schedule 1.2 to the Agreement (the Pricing Schedule) is amended to read in its entirety as follows:

  

	 Status

	 	 Level I

	 	 Level II

	 	 Level III

	 	 Level IV

	Applicable LIBOR Margin	 	2.00	 	1.75	 	1.50	 	1.25
	Applicable Base Rate Margin	 	0.50	 	0.25	 	0.00	 	0.00
	Documentary Letter of Credit Fee	 	1.00	 	0.875	 	0.75	 	0.625
	Commitment Fee	 	0.625	 	0.50	 	0.50	 	0.375

  
 (i) The definitions
of “Level I Status”, “Level II Status”, “Level III Status” and “Level IV Status” contained in the second paragraph of Schedule 1.2 to the Agreement (the Pricing Schedule) are respectively amended to read in
their entirety as follows: 
  
 ‘“Level
I Status” exists at any date if, at such date, the Fixed Charge Coverage ratio for the four consecutive quarters then ending is greater than or equal to 1.35-to-1.0 and less than 1.4-to-1.0 and no Default exists. 
  
 “Level II Status” exists at any date if, at such
date, the Fixed Charge Coverage ratio for the four consecutive quarters then ending is greater than or equal to 1.4-to-1.0 and less than 1.60-to-1.0 and no Default exists. 
  
 “Level III Status” exists at any date if, at such date, the Fixed Charge Coverage ratio for the
four consecutive quarters then ending is greater than or equal to 1.60-to-1.0 and less than 1.80-to-1.0 and no Default exists. 
  
 “Level IV Status” exists at any date if, at such date, the Fixed Charge Coverage ratio for the four consecutive quarters then
ending is greater than or equal to 1.80-to-1.0 and no Default exists.” 

 (j) It is acknowledged by the Lenders and the Agent that the extension of the Revolving Credit
Termination Date contained herein shall not limit or impair the Company’s right to request further such extensions pursuant to (and subject to the conditions of) Section 2.23 of the Agreement. 
  
 ARTICLE II 
  
 AMENDMENTS TO NOTES 
  
 Effective as of the Modification Date, each of the Notes is amended by
deleting the reference to “February 21, 2005” contained in the first paragraph thereof, and inserting in lieu thereof the following: “February 21, 2006.” 
  
 ARTICLE III 
  
 REPRESENTATIONS AND WARRANTIES 
  
 The Borrowers hereby jointly and severally represent and warrant to you as follows: 
  
 (a) Representations in Agreement. Each of the representations and warranties made by the Borrowers to you in the
Agreement was true, correct and complete when made and is true, correct and complete with respect to the Borrowers on and as of the date hereof with the same full force and effect as if each of such representations and warranties had been made by
the Borrowers on the date hereof and in this Amendment No. 1. 
  
 (b) No Defaults or Events of Default. No Default or Event of Default exists on the date of this Amendment No. 1 (after giving effect to all of the arrangements and transactions contemplated by this Amendment No. 1). 
  
 (c) Binding Effect of Documents. This Amendment No. 1 has been duly
executed and delivered to you by the Borrowers and is in full force and effect as of the date hereof, and the agreements and obligations of the Borrowers contained herein constitute legal, valid and binding obligations of the Borrowers enforceable
against the Borrowers in accordance with their respective terms. 
  
 ARTICLE IV 
  
 PROVISIONS OF GENERAL
APPLICATION 
  
 (a) No Other Changes. Except to the
extent specifically amended and supplemented hereby, all of the terms, conditions and the provisions of the Agreement and the other Lender Agreements shall remain unmodified, and the Agreement and the other Lender Agreements, as amended and
supplemented by this Amendment No. 1, are confirmed as being in full force and effect. 
  
 (b) Governing Law. This Amendment No. 1 is intended to take effect as a sealed instrument and shall be deemed to be a contract under the laws of the Commonwealth of Massachusetts. This Amendment No. 1 and the
rights and obligations of each of the parties hereto shall be governed by and interpreted and determined in accordance with the laws of the Commonwealth of Massachusetts. 
  
 (c) Binding Effect; Assignment. This Amendment No. 1 shall be binding upon and inure to the benefit of each of the
parties hereto and their respective successors in title and assigns. 
  
 (d) Counterparts. This Amendment No. 1 may be executed in any number of counterparts, each of which when executed and delivered shall be deemed an original, but all of which together shall constitute one instrument. In making proof
of this Amendment No. 1, it shall not be necessary to produce or account for more than one counterpart thereof signed by each of the parties hereto. 
  
 (e) Conflict with Other Agreements. If any of the terms of this Amendment No. 1 shall conflict in any respect with any of the terms of any of the
Agreement or any other Lender Agreements, the terms of this Amendment No. 1 shall be controlling. 
  
 (f) Conditions Precedent. This Amendment No. 1 shall become and be 

 
effective as of the Modification Date, but only if (i) the Borrowers shall have delivered to the Agent, fully executed and duly authorized, this Amendment
No. 1, (ii) the form of acceptance at the end of this Amendment No. 1 shall be signed by the Agent and the Lenders, (iii) the form of guarantor consent at the end of this Amendment No. 1 shall be signed by the Brookstone Subsidiaries, (iv) the Agent
shall have received from each Borrower a copy, certified by a duly authorized officer of such Borrower to be true and complete on the Modification Date, of records of all corporate action taken by such Borrower to authorize (A) its execution and
delivery of this Amendment No. 1 and any other document to which it is a party delivered in connection with this Amendment No. 1 (together with Amendment No. 1, the “Amendment Documents”), (B) its performance of all of its agreements and
obligations under each of such documents, and (C) any transactions contemplated by the Amendment Documents to which it is a party, and the Agent shall also have received good standing certificates as of a recent date for each Borrower, (v) the
Borrowers shall have paid in full an amendment fee equal to $80,000, and (vi) the Borrowers shall have paid all legal fees incurred in connection with this Amendment No. 1. 
  
 If you are in agreement with the foregoing, please sign the form of acceptance on the enclosed counterpart of this Amendment
No. 1 and return such counterpart to the undersigned along with the closing items referenced in clause (f) above, whereupon this Amendment No. 1, as so accepted by you, shall become a binding agreement among you and the undersigned. 
  

	 Very truly yours,

	
	 BROOKSTONE, INC.

		
	 By:
	 	  

	 	 	 Title:

	
	 BROOKSTONE COMPANY, INC.

		
	 By:
	 	  

	 	 	 Title:

	
	 BROOKSTONE STORES, INC.

		
	 By:
	 	  

	 	 	 Title:

  
 (Signatures
continued on next page) 

	 BROOKSTONE PURCHASING, INC.

		
	 By:
	 	  

	 	 	 Title:

	
	 GARDENERS EDEN BY MAIL, INC.

		
	 By:
	 	  

	 	 	 Title:

	
	 GARDENERS EDEN COMPANY, INC.

		
	 By:
	 	  

	 	 	 Title:

	
	 GARDENERS EDEN PURCHASING, INC.

		
	 By:
	 	  

	 	 	 Title:

  
 (Signatures
continued on next page) 

 The foregoing Amendment No. 1 is hereby accepted by the undersigned as of July 31, 2003. 
  
 FLEET NATIONAL BANK, 
  

	 	 	 Individually and as Agent

		
	 By:
	 	  

	 	 	 Title:

	
	 CITIZENS BANK OF MASSACHUSETTS,
Individually and as Documentation Agent

		
	 By:
	 	  

	 	 	 Title:

	
	 BANKNORTH, N.A.

		
	 By:
	 	  

	 	 	 Title:

	
	 NATIONAL CITY BANK

		
	 By:
	 	  

	 	 	 Title:

	
	 SOVEREIGN BANK

		
	 By:
	 	  

	 	 	 Title:

 CONSENT OF GUARANTORS 
  
 Each of Brookstone Properties, Inc., Brookstone Holdings, Inc., Brookstone Retail Puerto-Rico, Inc. and Brookstone By Mail,
Inc. (collectively referred to herein as the “Guarantors”) has jointly and severally guaranteed the Obligations of the Borrowers under the Agreement by executing an Amended and Restated Unlimited Guaranty dated as of February 21, 2002 (the
“Unlimited Guaranty”). By executing this letter, each of the Guarantors hereby absolutely and unconditionally reaffirms the Unlimited Guaranty, and acknowledges and agrees to the terms and conditions of this letter and the Agreement as
amended hereby. 
  

	 BROOKSTONE PROPERTIES, INC.

	 BROOKSTONE HOLDINGS, INC.

	 BROOKSTONE RETAIL PUERTO-RICO, INC.

	 BROOKSTONE BY MAIL, INC.

		
	 By:
	 	  

	 	 	 Philip Roizin, Treasurer

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