Exhibit 10.35
[8/09/01]
AMENDMENT NO. 8 TO
AMENDED AND RESTATED CREDIT AGREEMENT
Amendment ("Amendment No. 8") dated as of August __, 2001 by and among
xXXxX*s Group Inc., a Delaware corporation, formerly known as xXXxX*s Inc.
("xXXxX*s"), the Subsidiaries of xXXxX*s set forth on Schedule 1 attached hereto
(collectively, the "Subsidiary Borrowers"), xXXxX*s Corp., a Delaware
corporation, formerly known as iTurf, Inc. ("Parent"), its wholly owned
subsidiary, iTurf Finance Company ("iFC", and together with xXXxX*s, the
Subsidiary Borrowers and Parent, each individually a "Borrower", and
collectively, "Borrowers") and Congress Financial Corporation, a Delaware
corporation ("Lender").
W I T N E S S E T H
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WHEREAS, Borrowers and Lender have entered into financing
arrangements pursuant to which Lender has made and may make loans and
advances and provide other financial accommodations to Borrowers as set forth
in the Amended and Restated Credit Agreement, dated April 28, 2000, by and
among Lender and Borrowers, as amended by Amendment No. 1 to Amended and
Restated Credit Agreement, dated as of July 31, 2000, by and among Borrowers
and Lender, Amendment No. 2 to Amended and Restated Credit Agreement, dated
as of November 10, 2000, by and among Borrowers and Lender, Amendment No. 3
to Amended and Restated Credit Agreement, dated as of November 20, 2000, by
and among Borrowers and Lender, Amendment No. 4 to Amended and Restated
Credit Agreement, dated as of January 19, 2001, by and among Borrowers and
Lender, Amendment No. 5 to Amended and Restated Credit Agreement, dated as of
February 2, 2001, by and among Borrowers and Lender, Amendment No. 6 to
Amended and Restated Credit Agreement, dated as of May 4, 2001, by and among
Borrowers and Lender and Amendment No. 7 to Amended and Restated Credit
Agreement, dated as of June 12, 2001, by and among Borrowers and Lender (as
amended hereby and as the same may hereafter be further amended, modified,
supplemented, extended, renewed, restated or replaced, the "Credit
Agreement") and the other agreements, documents and instruments referred to
therein or at any time executed and/or delivered in connection therewith or
related thereto, including this Amendment No. 8 (all of the foregoing,
including the Credit Agreement, as the same now exist or may hereafter be
further amended, modified, supplemented, extended, renewed, restated or
replaced, being collectively referred to herein as the "Financing
Agreements");
WHEREAS, Borrowers have requested that Lender agree to certain
amendments to the Credit Agreement and Lender is willing to agree to such
amendments, subject to the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual conditions and
agreements and covenants set forth herein, and for other good and valuable
consideration, the adequacy and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
Section 1. DEFINITIONS.
1.1 ADDITIONAL DEFINITION. As used herein, the following terms shall
have the respective meanings given to them below and the Credit Agreement shall
be deemed and is hereby amended to include, in addition and not in limitation
of, the following definition:
"AMENDMENT NO. 8" means this Amendment No. 8 to Amended and Restated
Credit Agreement, by and among Lenders, Parent and the other Borrowers, as the
same now exists or may hereafter be further amended, modified, supplemented,
extended, renewed, restated or replaced.
"CONSOLIDATED NET SALES" means, with respect any Person for any period,
the aggregate of the net sales of Inventory of such Person and its Subsidiaries,
on a consolidated basis, for such period.
1.2 INTERPRETATION. For purposes of this Amendment, all terms used
herein, including but not limited to, those terms used and/or defined herein or
in the recitals hereto shall have the respective meanings assigned thereto in
the Credit Agreement, unless otherwise defined herein.
Section 2. AMENDMENTS.
2.1 INTEREST RATE. The definition of "Interest Rate" set forth in the
Credit Agreement shall be deleted and replaced with the following:
"Interest Rate" means:
(a) Subject to clauses (b) below, (i) as to Prime
Rate Loans, a rate equal to three-quarters percent (3/4%) per
annum in excess of the Prime Rate and (ii) as to Libor Loans,
a rate equal to two and three-quarter percent (2 3/4%) per
annum in excess of the Adjusted Libor Rate (based on the
Adjusted Libor Rate applicable for the Interest Period
selected by Parent on behalf of Borrowers as in effect three
(3) Business Days after the date of receipt by Lender of the
request of Parent for such Libor Loans in accordance with the
terms hereof, whether such rate is higher or lower than any
rate previously quoted to Parent or any other Borrower).
(b) Notwithstanding anything to the contrary set
forth in clause (a) above, the Interest Rate shall mean, as to
Prime Rate Loans, a rate equal to one-quarter percent (1/4%)
per annum in
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excess of the Prime Rate per annum and as to Libor Loans, a
rate equal to two and one-quarter percent (2 1/4%) per annum
in excess of the Adjusted Libor Rate (calculated as described
in clause (a)(ii) above), in each case, effective as of the
first day of the month after each of the following conditions
is satisfied as determined by Lender in good faith: (i) the
Consolidated Pre-Tax Net Income of Parent and its Subsidiaries
(other than Screeem! Inc., Storybook Inc., TSI Soccer
Corporation and TSI Retail Company) for the immediately
preceding twelve (12) month fiscal year (commencing with the
fiscal year ending on February 2, 2002) calculated based on
the audited financial statements of Parent and its
Subsidiaries for such fiscal year delivered to Lender,
together with the unqualified opinion of the independent
certified accountants, in accordance with Section 6.2 hereof,
shall be not less than ($13,830,445) (ii) the Consolidated Net
Sales of Parent and its Subsidiaries (other than Screeem!
Inc., Storybook Inc., TSI Soccer Corporation and TSI Retail
Company) for the immediately preceding twelve (12) month
fiscal year (commencing with the fiscal year ending on
February 2, 2002) calculated based on audited financial
statements of Parent and its Subsidiaries (other than Screeem!
Inc., Storybook Inc., TSI Soccer Corporation and TSI Retail
Company) described in clause (b)(i) hereof, shall be not less
than $160,256,020 and (iii) no Default or Event of Default
shall exist or have occurred and be continuing; PROVIDED,
THAT, in the event that the Interest Rate is reduced as
provided in this clause (b), if in any subsequent fiscal year
thereafter the condition set forth in clause (b)(i) and
(b)(ii) are not satisfied, effective as of the first day of
the month after the receipt by Lender of the audited financial
statements of Parent and its Subsidiaries for such fiscal
year, the Interest Rate shall increase to those rates set
forth in clause (a) above.
(c) Notwithstanding anything to the contrary
contained in clause (a) or clause (b) above, the Interest Rate
shall mean, at Lender's option, as to Prime Rate Loans, the
rate of two and one- quarter percent (2 1/4%) per annum in
excess of the Prime Rate, and as to Libor Loans, the rate of
four and one-quarter percent (4 1/4%) per annum in excess of
the Adjusted Libor Rate, without notice, (i) for the period
(A) from and after the date of termination or non-renewal
hereof until Lender has received full and final payment of all
Obligations (notwithstanding entry of a judgment against any
Borrower) and (B) from and after the date of the occurrence of
an Event of Default for so long as such Event of Default is
continuing,
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and (ii) on the Loans to any Borrower at any time outstanding
in excess of the Borrowing Base (whether or not such
excess(es), arise or are made with or without Lender's
knowledge or consent and whether made before or after an Event
of Default)."
2.2 LETTER OF CREDIT ACCOMMODATIONS. Section 2.2(b) of the Credit
Agreement is hereby deleted and replaced with the following:
"(b) In addition to any charges, fees or expenses
charged by any bank or issuer in connection with the Letter of
Credit Accommodations, Borrowers shall pay to Lender a letter
of credit fee at a rate equal to one and one-quarter percent
(1 1/4%) per annum on the daily outstanding balance of the
Letter of Credit Accommodations for the immediately preceding
month (or part thereof), payable in arrears as of the first
day of each succeeding month, except that Borrowers shall pay
to Lender such letter of credit fee, at Lender's option,
without notice, at a rate equal to three and three-quarters
percent (3 3/4%) per annum on such daily outstanding balance
for: (i) the period from and after the date of termination or
non-renewal hereof until Lender has received full and final
payment of all Obligations (notwithstanding entry of a
judgment against any Borrower) and (ii) the period from and
after the date of the occurrence of an Event of Default for so
long as such Event of Default is continuing as determined by
Lender. Such letter of credit fee shall be calculated on the
basis of a three hundred sixty (360) day year and actual days
elapsed and the obligation of Borrowers to pay such fee shall
survive the termination or non-renewal of this Agreement."
2.3 Section 6.7 of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
"6.7 ADJUSTED NET WORTH. Maintain an Adjusted Net
Worth of Parent and its consolidated Subsidiaries of not less
than $30,000,000 for the period from and including the date of
Amendment No. 8 and at all times thereafter."
2.4 Section 6 of the Credit Agreement is amended such that:
(a) a new subsection 6.17 is added on to the end of
Section 6 as follows:
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"6.17 Directly or indirectly, make, whether through
purchase, capital leases or otherwise, Capital Expenditures on
a non-cumulative basis (such that Capital Expenditures not
made in any one fiscal year may not be made in any following
fiscal year), in excess of $5,000,000, in the fiscal year of
Parent and its Subsidiaries ending on or before February 2,
2002, and such covenant shall be reset by Lender for each
fiscal year ending thereafter based upon projections delivered
by Borrowers to Lender."
(b) a new subsection 6.18 is added on the end of
Section 6 as follows:
"6.18 Borrowers shall, no less frequently than
quarterly, at its expense, deliver or cause to be delivered to
Lender written appraisals as to the Inventory in form, scope
and methodology acceptable to Lender and by an appraiser
acceptable to Lender, addressed to Lender and upon which
Lender is expressly permitted to rely (and to the extent
possible, Lender shall use reasonable efforts to have the same
appraisal firm as had previously done appraisals of the
Inventory of Borrowers conduct any such subsequent appraisals,
so long as it does not result in any material delay);
PROVIDED, THAT (i) so long as no Obligations are outstanding
and no Event of Default exists or has occurred Borrowers shall
deliver such appraisals to Lender no less frequently than
twice in any twelve (12) consecutive month period; and (ii) at
any time an Event of Default exists or has occurred Lender may
request such additional appraisals as Lender may deem
necessary or desirable."
Section 3. SPECIAL AVAILABILITY RESERVES. Without limiting any rights
or remedies of Lender under the Credit Agreement or any of the other Financing
Agreements with respect to the establishment of Reserves or otherwise, but
subject to the terms and conditions thereof, Lender hereby agrees to terminate:
3.1 the Special Availability Reserve in the amount of $300,000
established pursuant to Section 3 of Amendment No. 5; and
3.2 the Special Availability Reserve in the amount of $3,000,000
established pursuant to Section 2(c) of Amendment No. 6.
Section 4. REPRESENTATIONS AND WARRANTIES. In addition to the
continuing representations, warranties and covenants heretofore or hereafter
made by Borrowers to Lender pursuant to the other Financing Agreements, each
Borrower, jointly and severally, hereby
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represents, warrants and covenants with and to Lender as follows (which
representations, warranties and covenants are continuing and shall survive the
execution and delivery hereof and shall be incorporated into and made a part of
the Financing Agreements):
4.1 CORPORATE POWER AND AUTHORITY. This Amendment No. 8 has been
duly authorized, executed and delivered by all necessary action on the part
of each Borrower which is a party hereto and thereto and, if necessary, its
stockholders, and is in full force and effect as of the date hereof, as the
case may be, and the agreements and obligations of each Borrower contained
herein and therein constitute legal, valid and binding obligations of such
Borrower enforceable against it in accordance with their terms.
4.2 CONSENTS; APPROVALS. No action of, or filing with, or consent of
any Governmental Authority, and no approval or consent of any other party, is
required to authorize, or is otherwise required in connection with, the
execution, delivery and performance of this Amendment.
4.3 NO EVENT OF DEFAULT. As of the date hereof, and after giving effect
to the provisions of this Amendment, no Event of Default, and no condition or
event which, with the giving of notice or lapse of time, or both, would
constitute an Event of Default, exists or has occurred and is continuing. All of
the representations and warranties set forth in the Credit Agreement and the
other Financing Agreements, each as amended hereby, are true and correct in all
material respects on and as of the date hereof as if made on the date hereof,
except to the extent any such representation or warranty is made as of a
specified date, in which case such representation or warranty shall have been
true and correct as of such date.
Section 5. CONDITIONS PRECEDENT. This Amendment No. 8 shall only be
effective upon the satisfaction of each of the following conditions precedent in
a manner satisfactory to Lender:
5.1 Lender shall have received an original of this Amendment, duly
authorized, executed and delivered by Borrowers, and
5.2 No Event of Default shall exist or have occurred and be continuing
and no event shall have occurred or condition be existing and continuing which,
with notice or passage of time or both, would constitute an Event of Default.
Section 6. ADDITIONAL EVENTS OF DEFAULT. The parties hereto
acknowledge, confirm and agree that the failure of Borrowers to comply with the
covenants and agreements contained herein, shall in each case constitute an
Event of Default under the Financing Agreements, subject to the applicable cure
period, if any, with respect thereto provided for in the Credit Agreement or
herein.
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Section 7. PROVISIONS OF GENERAL APPLICATION.
7.1 EFFECT OF THIS AMENDMENT. Except as modified pursuant hereto, no
other changes or modifications to the Financing Agreements are intended or
implied and in all other respects the Financing Agreements are hereby
specifically ratified, restated and confirmed by all parties hereto as of the
effective date hereof. To the extent of conflict between the terms of this
Amendment No. 8 and the other Financing Agreements, the terms of this
Amendment No. 8 shall control.
7.2 GOVERNING LAW. The rights and obligations hereunder of each of the
parties hereto shall be governed by and interpreted and determined in accordance
with the laws of the State of New York.
7.3 BINDING EFFECT. This Amendment No. 8 shall be binding upon and
inure to the benefit of each of the parties hereto and their respective
successors and assigns.
7.4 COUNTERPARTS. This Amendment No. 8 may be executed in any number
of counterparts, but all of such counterparts shall together constitute but
one and the same agreement. In making proof of this Amendment, it shall not
be necessary to produce or account for more than one counterpart thereof
signed by each of the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No.
8 to be duly executed and delivered by their authorized officers as of the date
and year first above written.
xXXxX*s GROUP INC., formerly known as
xXXxX*s INC.
xXXxX*s DISTRIBUTION COMPANY
xXXxX*s FOREIGN SALES CORPORATION
xXXxX*s OPERATING COMPANY
xXXxX*s PROPERTIES INC.
xXXxX*s RETAIL COMPANY
SCREEEM! INC.
STORYBOOK INC.
TSI SOCCER CORPORATION
TSI RETAIL COMPANY
xXXxX*s CORP., formerly known as iTURF, INC.
iTURF FINANCE COMPANY
By:
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Title:
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AGREED TO:
CONGRESS FINANCIAL CORPORATION
By:
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Title:
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SCHEDULE 1
SUBSIDIARY BORROWERS
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xXXxX*s Distribution Company
xXXxX*s Foreign Sales Corporation
xXXxX*s Operating Company
xXXxX*s Properties Inc.
xXXxX*s Retail Company
Screeem! Inc.
Storybook Inc.
TSI Soccer Corporation
TSI Retail Company
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