Exhibit 99.1
EXECUTION
MERRY-GO-ROUND ENTERPRISES, INC.
MGR DISTRIBUTION CORPORATION
WORTHS STORES CORP.
FIRST AMENDMENT
TO
DEBTOR-IN-POSSESSION CREDIT AGREEMENT
THIS FIRST AMENDMENT TO DEBTOR-IN-POSSESSION CREDIT AGREE
MENT (this ``Amendment'') is dated as of November 10, 1995, and
entered into by and among MERRY-GO-ROUND ENTERPRISES, INC., a
Maryland corporation, as debtor and debtor-in-possession
(``MGRE''), MGR DISTRIBUTION CORPORATION, a Maryland corporation,
as debtor and debtor-in-possession (``MGRD''), WORTHS STORES
CORP., a Delaware corporation, as debtor and debtor-in-possession
(``Worths'' and, together with MGRE and MDRD, each individually
referred to herein as a ``Borrower'' and collectively as
``Borrowers''), the financial institutions listed on the
signature pages hereof (``Lenders''), GENERAL ELECTRIC CAPITAL
CORPORATION (``GE Capital''), as Co-Agent for Lenders (``GE Co-
Agent'') and Citicorp U.S.A. (``CUSA''), as Co-Agent for Lenders
(in such capacity ``CUSA Co-Agent''; and together with GE Co-
Agent, the ``Co-Agents''), and is made with reference to that
certain Debtor-In-Possession Credit Agreement, dated as of July
18, 1995 (the ``Credit Agreement''), by and among the Borrowers,
Lenders and Co-Agents. Capitalized terms used herein without
definition shall have the same meanings herein as set forth in
the Credit Agreement.
RECITALS
WHEREAS, Borrowers have requested Lenders to increase the
``Advance Percentage'' under the Credit Agreement for a limited
period of time and Lenders have agreed to such amendment; and
WHEREAS, Borrowers have requested the addition of a term
loan facility to be provided by Belmont Capital Partners II, L.P.
(``Belmont'') under the Credit Agreement and Lenders have agreed
to such Amendment;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the
parties hereto agree as follows:
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1. COMPLIANCE
Subject to the terms and conditions set forth herein and in
reliance on the representations and warranties of Borrowers
herein contained, Lenders hereby waive (i) compliance with the
provisions of subsection 7.6B to the extent, and only to the
extent, that Consolidated Adjusted EBITDA for the fiscal quarter
ending October 28, 1995 is a minimum of $3,000,000 rather than
the minimum of $6,500,000 required by subsection 7.6B and
(ii) any Potential Event of Default resulting from Borrowers
noncompliance with subsection 7.6C prior to but not including
February 3, 1996.
2. LIMITATION OF SECTION 1
Without limiting the generality of the provisions of
subsection 10.6 of the Credit Agreement, the waiver set forth in
Section 1 hereof shall be limited precisely as written and
relates solely to the noncompliance by Borrowers with the
provisions of subsection 7.6 of the Credit Agreement in the
manner and to the extent described above, and nothing herein
shall be deemed to:
(a) Constitute a waiver of compliance by
Borrowers with respect to (i) subsection 7.6 of the
Credit Agreement in any other instance or (ii) any
other term, provision or condition of the Credit
Agreement or any other instrument or agreement referred
to therein; or
(b) Prejudice any right or remedy that Co-Agents
or that any Lender may now have (except to the extent
such right or remedy was or is based upon existing
defaults that will not exist after giving effect to the
waiver provided in Section 1 hereof) or may have in the
future under or in connection with the Credit Agreement
or any other instrument or agreement referred to
herein.
Except as expressly set forth herein, the terms, provisions
and conditions of the Credit Agreement and the other Loan
Documents shall remain in full force and effect and in all other
respects are hereby ratified and confirmed.
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3. AMENDMENTS TO THE CREDIT AGREEMENT
3.1 Amendments to Subsection 1.1: Definitions.
(a) Subsection 1.1 of the Credit Agreement is hereby
amended by amending the definitions of ``Advance Percentage'',
``Agreement'', ``Commitment'', ``Loans'', ``Loan Documents'' and
``Pro Rata Share'' to read in their entirety as follows:
``Advance Percentage'' means 55% for the fiscal
month of November 1995 and 50% at all other times
during the term of this Agreement; provided that (i)
the Advance Percentage shall be 60% for the period
commencing on the First Amendment Effective Date
through December 22, 1995, (ii) if Borrower shall fail
to deliver to Co-Agents by November 20, 1995, a plan,
in form and substance satisfactory to Co-Agents,
providing for the closing of not less than 350 stores
to be completed by no later than January 31, 1996, the
60% Advance Percentage set forth in clause (i) of this
definition shall revert to 55% through the end of the
fiscal month of November 1995 and to 50% thereafter and
(iii) in the event the increase in the Advance
Percentage pursuant to clause (i) of this definition
results in an increase in the Borrowing Base in excess
of $7,500,000, then notwithstanding the provisions of
clause (i) of this definition, the Borrowing Base shall
only be increased by $7,500,000.
``Agreement'' mean this Debtor-in-Possession
Credit Agreement dated as of July 18, 1995, as it may
be amended, supplemented or otherwise modified from
time to time.
``Commitment'' means the commitment of a Lender to
make Loans to Borrowers pursuant to subsection 2.1A
only (and does not include the Term Loan Commitment),
and ``Commitments'' means such commitments of all
Lenders in the aggregate.
``Loans'' means the loans made by Lenders to
Borrowers pursuant to subsection 2.1A only (and does
not include the Term Loans).
``Loan Documents'' means (i) this Agreement, (ii)
the Notes and the Term Note, (iii) the Letters of
Credit (and any applications for, or reimbursement
agreements or other documents or certificates executed
by any Borrower in favor of Issuing Lender relating to
the Letters of Credit), (iv) the Guaranty, (v) the
Collateral Documents, (vi) any Interest Rate Agreement
and (vii) any other agreements entered into between
Credit Parties and Co-Agents relating to or in
connection with the Cash Management System.
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``Pro Rata Share'' means (i) with respect to
all payments, computations and other matters relating
to the Commitments or the Loans of any Lender or any
Letters of Credit issued, the percentage obtained by
dividing (a) the Credit Exposure of that Lender by (b)
the aggregate Credit Exposure of all Lenders, and (ii)
for all other purposes with respect to each Lender, the
percentage obtained by dividing (a) the sum of the
Credit Exposure or, at any time all or any portion of
the Term Loans remain outstanding and the Commitments
have not been terminated, the Adjusted Credit Exposure
of that Lender plus the outstanding Term Loans made by
that Lender by (b) the sum of the aggregate Credit
Exposure or Adjusted Credit Exposure, as applicable, of
all Lenders plus the aggregate outstanding Term Loans,
in each such case as the applicable percentage may be
adjusted by assignments permitted pursuant to
subsection 10.1. The Pro Rata Share of each Lender as
of the First Amendment Effective Date for purposes of
each of clauses (i) and (ii) of the preceding sentence
is set forth opposite the name of that Lender in
Schedule 2.1 annexed hereto.
(b) Subsection 1.1 of the Credit Agreement is hereby
further amended by adding the following definitions thereto,
which shall be inserted in proper alphabetical order:
``Adjusted Credit Exposure'' means with respect to
any Lender as of any date of determination prior to the
termination of the Commitments, an amount equal to (i)
such Lender's Commitment minus (ii) an amount equal to
such Lender's Pro Rata Share as defined in clause (i)
of the definition of Pro Rata Share times the aggregate
amount of Term Loans outstanding.
``First Amendment Effective Date'' means the date
upon which all of the conditions set forth in Section
6.6 of the First Amendment to this Agreement, dated as
of November 10, 1995, shall have been satisfied or
waived.''
``Term Loans'' means loans made by the Term Loan
Lender to Borrowers pursuant to subsection 10.22A.
``Term Loan Commitment'' means the commitment of
the Term Loan Lender to make term loans to Borrowers
pursuant to subsection 10.22A in the aggregate maximum
amount of $15,000,000.
``Term Loan Lender'' means Belmont Capital
Partners II, L.P.
``Term Loan Maturity Date'' means January 17,
1996.
``Term Note'' means the promissory note of
Borrowers issued pursuant to subsection 10.22B on the
First Amendment Effective Date to the Term Loan Lender.
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(c) Subsection 1.1 of the Credit Agreement is hereby
further amended by amending the definition of ``Eligible
Inventory'' to add the following sentence at the end thereof:
``Notwithstanding anything herein to the contrary,
``Eligible Inventory'' shall not include any Inventory
held on or after January 15, 1996 in any of the stores
included in the plan of store closings delivered to Co-
Agents on or before November 20, 1995.
3.2 Amendment to Subsection 2.1A: Commitments. Subsection
2.1A is hereby amended by deleting the ``.'' at the end of the
last sentence thereof and substituting ``; and'' therefor, and
adding the following clause (iii) thereto:
``(iii) in no event shall the Total Utilization
of Commitments plus the aggregate amount of outstanding
Term Loans exceed the aggregate Commitments as then in
effect.''
3.3 Amendment to Subsection 6.1: Financial Statements and
Other Reports. Subsection 6.1(xvii) is hereby amended by adding
the following proviso at the end thereof:
``, provided, however, for the period commencing on the
First Amendment Effective Date through December 31,
1995, Borrowers shall deliver a Borrowing Base
Certificate, in form and substance reasonably
satisfactory to Co-Agents, on a daily basis, and
provided, further, Borrowers shall deliver on
January 17, 1996, a Borrowing Base Certificate, dated
as of January 16, 1996, in form and substance
reasonably satisfactory to Co-Agents;''
3.4 Amendment to Subsection 6.9: Borrowing Base.
Subsection 6.9(i) is hereby amended by amending the second
sentence thereof to read in its entirety as follows:
``Thereafter Borrowers shall deliver Borrowing Base
Certificates on a weekly basis on or before the last
Business Day of each week, each such Borrowing Base
Certificate to be dated as of the last day of the
immediately preceding week; provided, however, for the
period commencing on the First Amendment Effective Date
through December 31, 1995, Borrowers shall deliver
Borrowing Base Certificates on a daily basis on or
before the close of business on each Business Day, each
such Borrowing Base Certificate to be dated as of the
immediately preceding Business Day.''
3.5 Amendment to Subsection 7.6: Financial Covenants.
Subsection 7.6 is hereby amended by adding the following new
subsection 7.6D thereto:
``D. Minimum Availability. Borrowers shall not permit
the sum of (i) the Borrowing Base minus the Total
Utilization of Commitments plus (ii) the amount of Cash
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in the Collection Account to be less than $10,000,000 at any
time during the period from and including January 18, 1996
through January 31, 1996.''
3.6 Amendment to Subsection 7.7: Restriction on
Fundamental Changes in Asset Sales. Subsection 7.7(iii) is
hereby amended to read in its entirety as follows:
``(iii) Credit Parties and their
Subsidiaries may sell or otherwise dispose of assets in
connection with the closing of stores; provided that
(a) Co-Agent shall be given seven days prior written
notice of each such closing, (b) not more than 425
stores shall be closed during the term of this Agree
ment, and (c) with respect to any store closings in
excess of 130, Co-Agents shall have approved a plan of
store closings with respect to such store closings;''
3.7 Amendment to Subsection 7.19: Restructuring Charges.
Subsection 7.19 (ii) is hereby amended to read in its entirety as
follows:
``(ii) all other cash restructuring disbursements
(``Other Disbursements'') in connection with the Chapter 11
Cases shall not in the aggregate exceed (a) $4,500,000
(excluding severance costs incurred in connection with store
closings not to exceed $5,000,000 in the aggregate, provided
that the aggregate amount of such severance costs plus Other
Disbursements shall not exceed $8,500,000) for the four-
fiscal quarter period ended August 3, 1996 or (b) $6,000,000
(excluding severance costs incurred in connection with store
closings not to exceed $5,000,000 in the aggregate, provided
that the aggregate amount of such severance costs plus Other
Disbursements shall not exceed $10,000,000) during the term
of this Agreement.''
3.8 Amendment to Subsection 8.1: Failure to Make Payments
When Due. Subsection 8.1 of the Credit Agreement is hereby
amended by adding ``or any Term Loan'' following the reference to
``Loan'' contained therein.
3.9 Addition of New Subsection 10.22. The Credit Agreement
is hereby amended by adding the following new subsection 10.22
thereto:
``10.22 Term Loan.
A. Term Loan. Subject to the terms of this
Agreement and satisfaction of the conditions set forth
in subsection 4.2B and in reliance upon the repre
sentations and warranties of each Borrower, herein set
forth, Term Loan Lender agrees to make Term Loans to
Borrowers, as joint and several obligors, on or after
the First Amendment Effective Date but prior to the
Term Loan Maturity Date, as follows: (i) upon request
of Borrowers, Term Loan Lender shall make a Term Loan
to Borrowers in an amount equal to $7,500,000; and
(ii) following the making of the initial Term Loan,
Borrowers may request one additional borrowing
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under the Term Loan Commitment in an amount up to
$7,500,000 and Term Loan Lender may in its sole
discretion (but shall not be obligated to) make such
Term Loan. In the event Borrowers desire to request
such additional Term Loan, Borrowers shall deliver to
Term Loan Lender and each Co-Agent a written notice not
later than 11:00 A.M., two Business Days prior to the
proposed funding date of such Term Loan, indicating the
amount of the Term Loan requested and the proposed
funding date. If Term Loan Lender determines in its
discretion to make such Term Loan, Term Loan Lender
shall notify Borrowers and Co-Agents in writing on or
prior to the proposed funding date. Term Loans shall
be made to Borrowers by Term Loan Lender by wire
transfer of immediately available funds to Borrowers'
Account. Borrowers may make only two borrowings under
the Term Loan Commitment. Amounts borrowed under this
subsection 10.22A and subsequently repaid may not be
reborrowed.
B. Term Note. Borrower shall execute and
deliver on the First Amendment Effective Date to Term
Loan Lender a Term Note substantially in the form of
Exhibit XVI annexed hereto to evidence the Term Loans.
C. Interest on Term Loans. Subject to the
provisions of the next succeeding sentence, the Term
Loans shall bear interest on the unpaid principal
amount thereof from the date made through maturity
(whether by acceleration or otherwise) at a rate per
annum equal to the Base Rate plus four percent (4.00%)
per annum, payable in arrears on the first Business Day
of each month and upon any payment of principal of a
Term Loan. Upon the occurrence and during the
continuation of any Potential Event of Default or Event
of Default, the outstanding principal amount of the
Term Loans and, to the extent permitted by applicable
law, any interest payments thereon not paid when due
and any fees and other amounts then due and payable
hereunder with respect to the Term Loans, shall
thereafter bear interest payable upon demand at a rate
per annum equal to 14% (the ``Default Rate''); provided
that if a Potential Event of Default is cured prior to
becoming an Event of Default, Borrower shall not be
required to pay any default rate of interest accrued as
a result of said Potential Event of Default. Payment
or acceptance of the increased rates of interest
provided for in the preceding sentence is not a
permitted alternative to timely payment and shall not
constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of
Co-Agents, Term Loan Lender or any other Lender.
Payment of increased rates of interest by Borrowers
hereunder shall not be deemed an admission of the
existence of an Event of Default. Interest on the Term
Loans shall be computed on the basis of a 360-day year,
in each case for the actual number of days elapsed in
the period during which it accrues. In computing
interest on the Term Loans, the date of making of a
Term Loan shall be included, and the date of payment of
a Term Loan shall be excluded.
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D. Additional Interest. Borrowers hereby agree
to pay to Term Loan Lender, additional interest equal
to two percent (2%) of the aggregate amount of the Term
Loans made by the Term Loan Lender payable as follows:
(i) an amount equal to two percent (2%) of the
initial $7,500,000 Term Loan shall be payable upon the
date of funding of the initial Term Loan; and
(ii) an amount equal to two percent (2%) of
the amount of any subsequent Term Loan shall be payable
on the date such subsequent Term Loan is made, it being
understood that no fee shall be payable pursuant to
this clause (ii) if no subsequent Term Loan is made.
E. Use of Proceeds. The proceeds of the Term
Loan shall be applied by Borrowers for working capital
and general corporate purposes.
F. Application of Proceeds Under Guaranty and
Collateral Documents. Except as otherwise expressly
provided in subsection 10.22G, payments and proceeds
received by Secured Party under the Guaranty and the
Collateral Documents shall be applied to the payment of
the Term Loan and any other Obligations to the Term
Loan Lender hereunder only after all other
``Obligations'', ``Guarantied Obligations'' (as defined
in the Guaranty) and ``Secured Obligations'' (as
defined in the Collateral Documents) as the case may be
have been paid in full in cash (including the cash
collateralization of outstanding Letters of Credit), in
each case other than inchoate indemnification
obligations with respect to claims, losses or
liabilities which have not yet arisen.
G. Maturity and Repayment of Term Loan. The
Term Loans may not be prepaid by Borrowers prior to the
Term Loan Maturity Date. The Term Loans and all other
amounts owed hereunder with respect to the Term Loans
shall be due and payable in full on the Term Loan
Maturity Date; provided that Borrowers may only repay
the Term Loans on the Term Loan Maturity Date or any
date thereafter if and to the extent that (i) no Event
of Default under subsection 8.1 shall have occurred and
be continuing on such date as a result of Borrowers'
failure to pay any installment of principal of or
interest on any Loan when due (whether by stated
maturity, by acceleration, by notice of prepayment or
otherwise) or failure to pay when due any amount
payable to Issuing Lender in reimbursement of any
drawing under a Letter of Credit and (ii) as of such
date, the sum of (a) the Borrowing Base minus Total
Utilization of Commitments (excluding Obligations with
respect to Letters of Credit to the extent such
Obligations are fully cash collateralized in accordance
with the terms of this Agreement) plus (b) Borrowers'
Cash on hand irrespective of outstanding checks shall
exceed $10,000,000, after giving effect to the
repayment of the Term Loans. To the extent Borrowers
are not permitted to repay all or any portion of the
Term Loans on the Term Loan Maturity
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Date as a result of the failure to meet the conditions
set forth in the preceding clauses (i) and (ii), such
outstanding amount of the Term Loans shall bear
interest at the Default Rate set forth in subsec
tion 10.22C; provided, however, that notwithstanding
anything else contained in this Agreement to the
contrary, Borrowers shall immediately repay the
outstanding Term Loans on the date on which the
conditions set forth in clauses (i) and (ii) above are
satisfied. All unpaid Obligations in respect of the
Term Loans shall in any event be due and payable no
later than the Commitment Termination Date; provided
that on and after the Commitment Termination date no
Obligations in respect of the Term Loans shall be paid
until all other Obligations hereunder (other than
inchoate indemnification obligations with respect to
claims, losses or liabilities which have not yet
arisen) shall have been paid or cash collateralized or
the payment thereof has been otherwise adequately
provided for to the satisfaction of Co-Agents in their
sole discretion.
H. Assignments and Participations.
Notwithstanding anything in subsection 10.1 to the
contrary, Term Loan Lender shall not sell, assign or
transfer, or sell any participation in, all or any
portion of the Term Loan Commitment or the Term Loans,
except that Term Loan Lender may sell participations in
the Term Loan Commitment and Term Loans to Affiliates
of the Term Loan Lender.
I. Amendments and Waivers. Notwithstanding
anything in subsection 10.6 to the contrary, the
consent of Term Loan Lender shall not be required for
any amendment, modification, termination or waiver of
any provision of this Agreement or any of the Loan
Documents, except to the extent such amendment,
modification, termination or waiver (i) extends the
maturity date of any portion of the principal amount of
or interest or fees on the Term Loans, (ii) reduces the
principal amount of or the rate of interest or fees
payable on the Term Loans, (iii) amends the definition
of ``Pro Rata Share'' or any provision of, or any
defined term used in (and any defined term (``Reference
Definitions'') contained in such defined terms or any
defined terms used in the Reference Definitions), this
subsection 10.22 or subsection 8.1 or (iv) releases all
or substantially all of the Collateral and at the time
of such release the Commitments have been terminated
and all Obligations hereunder (other than Obligations
in respect of the Term Loans) have been paid in full or
cash collateralized or the payment thereof has been
otherwise adequately provided for to the satisfaction
of Co-Agents in their sole discretion.''
3.10 Exhibits and Schedules. The Credit Agreement is hereby
amended by adding thereto a new Exhibit XVI in the form of
Exhibit A hereto and a new Schedule 2.1 in the form of Exhibit B
hereto.
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4. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and
to amend the Credit Agreement in the manner provided herein, each
Credit Party represents and warrants to each Lender that the
following statements are true, correct and complete:
4.1 Corporate Power and Authority. Subject to compliance
with any applicable provisions of the Bankruptcy Code, each
Credit Party has all requisite corporate power and authority to
enter into this Amendment and to carry out the transactions
contemplated by, and perform its obligations under, the Credit
Agreement as amended by this Amendment (the ``Amended
Agreement'').
4.2 Authorization of Agreements. The execution and
delivery of this Amendment and the performance of the Amended
Agreement have been duly authorized by all necessary corporate
action on the part of each Credit Party.
4.3 No Conflict. The execution and delivery by each Credit
Party of this Amendment and the performance by each Credit Party
of the Amended Agreement do not and will not (i) subject to Court
approval, violate any provision of any law or any governmental
rule or regulation applicable to any Credit Party or any of its
Subsidiaries, the Certificate or Articles of Incorporation or
Bylaws of any Credit Party or any of its Subsidiaries or any
order, judgment or decree of any court or other agency of
government binding on any Credit Party or any of its
Subsidiaries, (ii) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default
under any material Contractual Obligation of any Credit Party or
any of its Subsidiaries (performance or enforceability of which
has not been excused by the Bankruptcy Code or an applicable
order of the Court), (iii) result in or require the creation or
imposition of any Lien upon any of the properties or assets of
any Credit Party or any of its Subsidiaries (other than any Liens
in favor of Secured Party for the benefit of Lenders), or
(iv) require any approval of stockholders or any approval or
consent of any Person under any Contractual Obligation of any
Credit Party or any of its Subsidiaries (performance or
enforceability of which has not been excused by the Bankruptcy
Code or an applicable order of the Court) except for such
approvals or consents which have been obtained on or before the
First Amendment Effective Date (as hereinafter defined in Section
6.6) or which are not required to be obtained under the
Bankruptcy Code or an applicable order of the Court.
4.4 Governmental Consents. The execution, delivery and
performance by each Credit Party of this Amendment and the
Amended Agreement do not and will not require any registration
with, consent or approval of, or notice to, or action to, with or
by, any Federal, state or other governmental authority or
regulatory body, except for the Court.
4.5 Binding Obligation. This Amendment and the Amended
Agreement have been duly executed and delivered by each Credit
Party which is a party thereto and are the legally valid and
binding obligations of each such Credit Party, enforceable
against each such Credit Party in accordance with their
respective terms, except as may be limited by bankruptcy,
insolvency,
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reorganization, moratorium or similar laws relating to or
limiting creditors' rights generally or by equitable principles
relating to enforceability.
4.6 Incorporation of Representations and Warranties From
Credit Agreement. The representations and warranties contained
in Section 5 of the Credit Agreement are and will be true,
correct and complete in all material respects on and as of the
First Amendment Effective Date to the same extent as though made
on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which
case they were true, correct and complete in all material
respects on and as of such earlier date.
4.7 Absence of Default. As of the date hereof, no event
has occurred and is continuing or will result from the
consummation of the transactions contemplated by this Amendment
that would constitute an Event of Default or a Potential Event of
Default.
5. ACKNOWLEDGEMENT AND CONSENT
Each of the Credit Parties (other than Borrowers) is a
party to the Guaranty pursuant to which each such Subsidiary has
guarantied certain Obligations under the Credit Agreement. Each
of the Credit Parties is a party to certain Collateral Documents
pursuant to which the Credit Parties have granted Liens on
certain Collateral to the Secured Party for the benefit of
Lenders. The Guaranty and the Collateral Documents are
collectively referred to herein as the ``Credit Support Docu
ments''.
Each Credit Party hereby acknowledges that it has reviewed
the terms and provisions of the Credit Agreement and this
Amendment and consents to the amendment of the Credit Agreement
effected pursuant to this Amendment. Each Credit Party hereby
confirms that each Credit Support Document to which it is a party
or otherwise bound and all Collateral encumbered thereby will
continue to guaranty or secure, as the case may be, to the
fullest extent possible the payment and performance of all
``Obligations'', ``Guarantied Obligations'' and ``Secured
Obligations'', as the case may be (in each case as such terms are
defined in the applicable Credit Support Document), including
without limitation the payment and performance of all such
``Guarantied Obligations'' or ``Secured Obligations'', as the
case may be, in respect of the Obligations now or hereafter
existing under or in respect of the Amended Agreement.
Each Credit Party acknowledges and agrees that any of the
Credit Support Documents to which it is a party or otherwise
bound shall continue in full force and effect and that all of its
obligations thereunder shall be valid and enforceable and shall
not be impaired or limited by the execution or effectiveness of
this Amendment. Each Credit Party represents and warrants that
all representations and warranties contained in the Amended
Agreement and the Credit Support Documents to which it is a party
or otherwise bound are true, correct and complete in all material
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respects on and as of the First Amendment Effective Date to the
same extent as though made on and as of that date, except to the
extent such representations and warranties specifically relate to
an earlier date, in which case they were true, correct and
complete in all material respects on and as of such earlier date.
Each Credit Party (other than Borrowers) acknowledges and
agrees that (i) notwithstanding the conditions to effectiveness
set forth in this Amendment, such Credit Party is not required by
the terms of the Credit Agreement or any other Loan Document to
consent to the amendments to the Credit Agreement effected
pursuant to this Amendment and (ii) nothing in the Credit
Agreement, this Amendment or any other Loan Document shall be
deemed to require the consent of such Credit Party to any future
amendments to the Credit Agreement.
6. MISCELLANEOUS
6.1 Reference to and Effect on the Credit Agreement and
the Other Loan Documents.
(a) On and after the First Amendment Effective Date, each
reference in the Credit Agreement to ``this Agreement'',
``hereunder'', ``hereof'', ``herein'' or words of like import
referring to the Credit Agreement, and each reference in the
other Loan Documents to the ``Credit Agreement'', ``thereunder'',
``thereof'' or words of like import referring to the Credit
Agreement shall mean and be a reference to the Amended Agreement.
(b) Except as specifically amended by this Amendment, the
Credit Agreement and the other Loan Documents shall remain in
full force and effect and are hereby ratified and confirmed.
(c) The execution, delivery and performance of this
Amendment shall not, except as expressly provided herein,
constitute a waiver of any provision of, or operate as a waiver
of any right, power or remedy of Co-Agents, the Secured Party or
any Lender under, the Credit Agreement or any of the other Loan
Documents.
(d) As of the First Amendment Effective Date, Belmont, as
the Term Loan Lender, shall be a party to the Credit Agreement
and shall have all the rights and obligations under the Loan
Documents of, and shall be deemed to have made all of the
covenants and agreements contained in the Loan Documents made by,
a Lender, subject to the terms and provisions of the Credit
Agreement.
6.2 Fees and Expenses. Borrowers acknowledge that all
reasonable costs, fees and expenses as described in subsection
10.2 of the Credit Agreement incurred by Co-Agents Belmont and
their counsel with respect to this Amendment and the documents
and transactions contemplated hereby shall be for the account of
Borrowers.
6.3 Amendment Fee. Concurrently with the execution of this
Amendment, Borrowers shall pay an amendment fee in the amount of
$450,000 to CUSA Co-Agent, for distribution to each
12
Co-Agent ratably in accordance with such Co-Agent's Clause (i)
Pro Rata Share as set forth on Schedule 2.1 annexed hereto as
Exhibit A.
6.4 Applicable Law. THIS AMENDMENT SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT
LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE
STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.
6.5 Severability. In case any provision in or obligation
under this Amendment shall be invalid, illegal or unenforceable
(including by reason of the Court or any other court failing to
enter appropriate orders to approve this Amendment or vacating or
modifying any orders approving this Amendment), the parties
hereby agree that the validity, legality and enforceability of
the remaining provisions or obligations hereunder shall not be
affected or impaired thereby and shall be given full effect in
accordance with the intent of the parties as expressed herein.
6.6 Counterparts; Effectiveness. This Amendment may be
executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed
and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same
instrument; signature pages may be detached from multiple
separate counterparts and attached to a single counterpart so
that all signature pages are physically attached to the same
document. This Amendment shall become effective (the ``First
Amendment Effective Date'') upon (i) execution of a counterpart
hereof by each Credit Party, Co-Agents and each Lender and
receipt by Borrowers and Co-Agents of written or telephonic
notification of such execution and authorization of delivery
thereof, (ii) receipt by CUSA Co-Agent of the amendment fee set
forth in Section 6.2 hereof, (iii) receipt by Belmont of a duly
executed Term Note in the form of Exhibit A hereto, and
(iv) receipt by Co-Agents and Belmont of appropriate orders of
the Court approving this Amendment, in form and substance
satisfactory to Co-Agents and Belmont, which orders shall not
have been vacated, stayed, or modified without consent of Co-
Agents and Belmont.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first written
above.
LENDERS:
GENERAL ELECTRIC CAPITAL CORPORATION,
individually and as a Co-Agent and as
Secured Party
By: /s/ Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxx
Duly Authorized Signatory
CITICORP U.S.A.,
individually and as a Co-Agent
By: /s/ Xxxxxx Xxxxxx
Xxxxxx Xxxxxx
Attorney-in-Fact
CITIBANK, N.A.,
as Issuing Lender
By: /s/ Xxxxxx Xxxxxx
Xxxxxx Xxxxxx
Attorney-in-Fact
BELMONT CAPITAL PARTNERS II, L.P.,
as Term Loan Lender
By: Fidelity Capital Partners II
Corp.,
as General Partner
By: /s/ Xxxx X Xxxxxxx
Xxxx X. Xxxxxxx
Vice President
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BORROWERS:
MERRY-GO-ROUND ENTERPRISES, INC.,
as Debtor and Debtor-In-Possession
By: /s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
Executive Vice President
MGR DISTRIBUTION CORPORATION,
as Debtor and Debtor-In-Possession
By: /s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
Vice President
WORTHS STORES CORP.,
as Debtor and Debtor-In-Possession
By: /s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
President
GUARANTORS:
MGRR, INC.,
as Debtor and Debtor-In-Possession
By: /s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
Vice President
15
ROSEDALE CHESS KING, INC.,
as Debtor and Debtor-In-Possession
MGRE 1001, INC., as Debtor and Debtor-In-
Possession
MGRE 1005, INC., as Debtor and Debtor-In-
Possession
MGRE 1006, INC., as Debtor and Debtor-In-
Possession
By: /s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
President of each of the foregoing
CENTURY PLAZA-B'HAM CHESS KING, INC.
PARK MALL-TUCSON CHESS KING, INC.
FIESTA CHESS KING, INC.
NORTHWEST ARKANSAS CHESS KING, INC.
MCCAIN MALL CHESS KING, INC.
PARKWAY PLAZA GARAGE, INC.
GALLERIA GLENDALE CHESS KING, INC.
LARWIN-ORANGE CHESS KING, INC.
XXXXXX GARAGE, INC.
FRESNO FAIR CHESS KING, INC.
SOUTHLAND-HAYWARD CHESS KING, INC.
NORTHGATE CHESS KING, INC.
LOS CERRITOS CHESS KING, INC.
BUENA PARK CHESS KING, INC.
XXXXXX MALL CHESS KING, INC.
VINTAGE FAIRE CHESS KING, INC.
MARKET ST.-SAN XXXX CHESS XXXX INC.
NORTHRIDGE CHESS KING, INC.
WESTMINSTER (COLO.) CHESS KING, INC.
BUCKINGHAM CHESS KING, INC.
WESTFARMS FREE FALL, INC.
BUCKLAND HILLS CHESS KING, INC.
CRYSTAL WATERFORD CHESS KING, INC.
NAUGATUCK CHESS KING, INC.
CHRISTIANA CHESS KING, INC.
VOLUSIA CHESS KING, INC.
PADDOCK MALL CHESS KING, INC.
ORLANDO CHESS KING, INC.
TALLAHASSEE-XXXX CHESS XXXX, INC.
16
COUNTRYSIDE CHESS KING, INC.
AVENTURA CHESS KING, INC.
NAPLES CHESS KING, INC.
ORANGE PARK (FLA.) CHESS KING, INC.
PALM BEACH MALL CHESS KING, INC.
CLEARWATER CHESS KING, INC.
UNIVERSITY-TAMPA CHESS KING, INC.
MELBOURNE SQUARE CHESS KING, INC.
SAWGRASS CHESS KING GARAGE, INC.
AUGUSTA GA. CHESS KING, INC.
MACON MALL CHESS KING, INC.
ATLANTA SOUTHLAKE CHESS KING, INC.
SOUTH DEKALB CHESS KING, INC.
CENTER AT XXXX CHESS XXXX, INC.
XXXXXXX-XXXXXXXX CHESS KING, INC.
FORD CITY CHESS KING, INC.
CHICAGO RIDGE CHESS KING, INC.
LOUIS JOLIET CHESS KING, INC.
LOMBARD CHESS KING, INC.
PERU MALL CHESS KING, INC.
QUINCY CHESS KING, INC.
MACHESNEY CHESS KING, INC.
HARLEM-IRVING CHESS KING, INC.
NORTH RIVERSIDE CHESS KING, INC.
XXXXXX CHESS XXXX, INC.
GREEN TREE CHESS KING, INC.
GLENBROOK (IND.) CHESS KING,INC.
GREENWOOD PARK CHESS KING, INC.
WASHINGTON SQ. (IND.) CHESS KING, INC.
SCOTTSDALE MALL CHESS KING, INC.
ELKHART CHESS KING, INC.
MARQUETTE CHESS KING, INC.
SO. BEND-UNIVERSITY CHESS KING, INC.
SIOUXLAND CHESS KING, INC.
FAYETTE CHESS KING, INC.
KENTUCKY OAKS CHESS KING, INC.
OAKWOOD CHESS KING
XXXXXXX CHESS XXXX, INC.
NORTHGATE LAFAYETTE CHESS KING, INC.
SOUTH PARK-SHREVEPORT CHESS KING, INC.
XXXXX LAKE CHESS KING, INC.
17
SLIDELL CHESS KING, INC.
AUBURN MALL (ME.) CHESS KING, INC.
SOUTH PORTLAND CHESS KING, INC.
MARYLAND CUMBERLAND CHESS KING, INC.
GOLDEN RING CHESS KING, INC.
FORESTVILLE CHESS KING, INC.
WESTGATE CHESS KING GARAGE, INC.
HANOVER MALL CHESS KING, INC.
LEOMINSTER CHESS KING, INC.
BRAINTREE CHESS KING, INC.
CAMBRIDGE GALLERIA CHESS KING, INC.
DEDHAM CHESS KING, INC.
DARTMOUTH CHESS KING, INC.
ASSEMBLY SQUARE CHESS KING, INC.
ARSENAL CHESS KING, INC.
AUBURN CHESS KING, INC.
WESTGATE-BROCKTON CHESS KING, INC.
METHUEN CHESS KING, INC.
EMERALD SQUARE CHESS KING, INC.
NATICK MALL CHESS KING, INC.
GREENDALE MALL CHESS KING, INC.
EMERALD SQUARE CHESS KING GARAGE, INC.
COURT MALL CHESS KING, INC.
LANSING CHESS KING, INC.
XXXXXX TOWNSHIP CHESS KING, INC.
ORCHARDS MALL CHESS KING, INC.
UNIVERSAL-MICH. CHESS KING, INC.
SINGING CHESS KING, INC.
METRO NORTH CENTER CHESS KING, INC.
LINCOLN (NE) CHESS KING, INC.
BOULEVARD MALL CHESS KING, INC.
THE XXXXXXX CHESS XXXX, INC.
PHEASANT CHESS KING, INC.
FOX RUN CHESS KING, INC.
STEEPLEGATE CHESS KING, INC.
MALL OF MANCHESTER CHESS KING, INC.
XXXXXXXXXX MALL CHESS KING, INC.
PARAMUS PARK CHESS KING, INC.
ROUTE 22 N.J. CHESS KING, INC.
BERGENLINE CHESS KING, INC.
DEPTFORD CHESS KING, INC.
18
EATONTOWN CHESS KING, INC.
MENLO PARK CHESS KING, INC.
WILLOWBROOK CHESS KING, INC.
WOODBRIDGE MALL CHESS KING, INC.
NEWPORT CITY FREE FALL, INC.
QUAKER BRIDGE CHESS KING, INC.
WILLOWBROOK FREE FALL, INC.
WOODBRIDGE FREE FALL, INC.
MESILLA CHESS KING, INC.
AVIATION MALL CHESS KING, INC.,
as Debtor and Debtor-in-Possession
ITHACA MALL CHESS KING, INC.,
as Debtor and Debtor-in-Possession
OLEAN CHESS KING, INC.
PYRAMID-UTICA CHESS KING, INC.,
as Debtor and Debtor-in-Possession
FINGERLAKES CHESS KING, INC.
KINGS PLAZA CHESS KING, INC.
EASTERN HILLS CHESS KING, INC.
AMHERST CHESS KING, INC.
XXXXXXX SARATOGA CHESS KING, INC.
FLUSHING CHESS KING, INC.
XXXXX CHESS XXXX, INC.
MASSAPEQUA CHESS KING, INC.
NEWBURGH CHESS KING, INC.
XXXXXXXXX CHESS XXXX, INC.
LONG RIDGE CHESS KING, INC.
RD. SQUARE CHESS KING, INC.
GREEN ACRES CHESS KING, INC.
KINGS PLAZA FREE FALL, INC.
COLONIE CHESS KING, INC.
STEINWAY STREET CHESS KING, INC.
BAYSHORE CHESS KING, INC.
86TH ST. CHESS KING, INC.
BROOKLYN CHESS KING, INC.
MAIN PLACE CHESS KING, INC.
GARDEN CITY CHESS KING, INC.
IRONDEQUOIT CHESS KING, INC.
XXXXXXX HTS. CHESS KING, INC.
THE SANDS CHESS KING GARAGE, INC.
STATEN ISLAND CHESS KING, INC.
19
CROSS COUNTY N.Y. CHESS KING, INC.
JEFFERSON YORKTOWN CHESS KING, INC.
NORTHGATE-DURHAM CHESS KING, INC.
XXXXXXXX MALL CHESS KING, INC.
WILMINGTON CHESS KING, INC.
VALLEY HILLS (N.C.) CHESS KING, INC.
CHAPEL HILL CHESS KING, INC.
WESTLAND-COLUMBUS CHESS KING, INC.
DAYTON MALL CHESS KING, INC.
NEW TOWNE SQ. CHESS KING, INC.
RICHLAND CHESS KING, INC.
SOUTHERN PARK CHESS KING, INC.
GREAT LAKES CHESS KING, INC.
FRANKLIN PARK CHESS KING, INC.
NILES CHESS KING, INC.
GREAT NORTHERN CHESS KING, INC.
XXXXXX CHESS XXXX, INC.
SALEM-OREGON CHESS KING, INC.
INDIANA CHESS KING, INC.
FAIRGROUNDS SQ. CHESS KING, INC.
BERKSHIRE MALL CHESS KING, INC.
EXTON CHESS KING, INC.
CHELTENHAM CHESS KING, INC.
HARRISBURG CHESS KING, INC.
PARK CITY LANCASTER CHESS KING, INC.
XXXXXXXX XXXXX CHESS XXXX GARAGE, INC.
CAMP HILL CHESS KING, INC.
BEAVER MALL CHESS KING, INC.
WARWICK CHESS KING, INC.
LINCOLN MALL (R.I.) CHESS KING, INC.
PROVIDENCE CHESS KING, INC.
TENNESSEE CHESS KING, INC.
MEMPHIS MALL CHESS KING, INC.
AMIGOLAND CHESS KING, INC.
PADRE STAPLES CHESS KING, INC.
XXXXX VISTA CHESS KING, INC.
GULFGATE CHESS KING, INC.
KILLEEN CHESS KING, INC.
BRAZOS MALL CHESS KING, INC.
XXXXX CENTER CHESS KING, INC.
PARKDALE-BEAUMONT CHESS KING INC.
20
DEL SOL CHESS KING, INC.
EAGLE PASS CHESS KING, INC.
IRVING CHESS KING, INC.
PORT XXXXXX CHESS XXXX, INC.
JACINTO CHESS KING, INC.
AUSTIN CHESS KING, INC.
CORPUS CHRISTI CHESS KING, INC.
NORTHLINE CHESS KING, INC.
LA PLAZA CHESS KING, INC.
SOUTH PARK-SAN ANTONIO CHESS KING, INC.
WACO CHESS KING, INC.
GREENSGATE-HOUSTON CHESS KING, INC.
BROWNSVILLE CHESS KING, INC.
XXXXXX CHESS XXXX, INC.
XXXXX CHESS KING, INC.
OREM CHESS KING, INC.
CROSSROADS CHESS KING, INC.
CHARLOTTESVILLE MALL CHESS KING, INC.
SPOTSYLVANIA CHESS KING, INC.
VIRGINIA VALLEY CHESS KING, INC.
TANGLEWOOD MALL CHESS KING, INC.
LYNCHBURG CHESS KING, INC.
MILITARY CIRCLE CHESS KING, INC.
WILLOW LAWN CHESS KING, INC.
ROANOKE CHESS KING, INC.
SPRINGFIELD MALL (VA.) CHESS KING, INC.
LYNNHAVEN CHESS KING, INC. (VIRGINIA)
POTOMAC XXXXX CHESS KING, INC. (VIR
GINIA)
CLOVERLEAF MALL CHESS KING, INC.
VERMONT BURLINGTON CHESS KING, INC.
XXXXXXX CHESS XXXX, INC.
EAST TOWNE CHESS KING, INC.
PORT PLAZA (WISC.) CHESS KING, INC.
WEST TOWNE CHESS KING, INC.
By: /s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
President of each of the foregoing
Grantors
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