AMENDMENT NO. 1 TO CREDIT AGREEMENT
AMENDMENT
NO. 1 TO CREDIT AGREEMENT
AMENDMENT
NO. 1, dated as of May 25, 2007 (this “Amendment”),
to
the Credit Agreement, dated as of October 24, 2006 (the “Credit
Agreement”),
by
and among The Bombay Company, Inc., BBA Holdings, LLC, Bombay International,
Inc., The Bombay Furniture Company of Canada Inc., as borrowers (the
“Borrowers”),
the
lenders signatory thereto from time to time (the “Lenders”),
General Electric Capital Corporation, for itself, as Lender, and as
administrative agent and collateral agent for the Lenders (in such capacity,
the
“Agent”)
and GE
Canada Finance Holding Company as Canadian agent (in such capacity, the
“Canadian
Agent”).
W
I T N E
S S E T H :
WHEREAS,
the Borrowers have requested that the Lenders amend the Credit Agreement to
permit the Borrowers to incur additional debt under a secured term loan from
GB
Merchant Partners LLC (the “Term
Agent”)
in the
aggregate principal amount of $10,000,000 pursuant to the Term Loan Agreement
(as defined below);
WHEREAS,
the Lenders have agreed to amend the provisions of the Credit Agreement but
only
on the terms and subject to the conditions herein provided;
NOW,
THEREFORE, in consideration of the premises and the agreements hereinafter
contained, the parties hereto agree as follows:
1. Defined
Terms.
Capitalized terms used herein but not defined herein have the respective
meanings ascribed thereto in the Credit Agreement.
“Amendment
Fee Letter”
means
the letter agreement, dated as of May 25, 2007, addressed to the Borrowers
from
the Agent and accepted by the Borrowers, with respect to certain fees to be
paid
to the Agent.
“Intercreditor
Agreement”
means
the Intercreditor Agreement dated as of June 5, 2007 among Agent, Term Agent
and
the Borrowers, in form and substance acceptable to the Agent.
“Security
Agreements”
means,
collectively (a) Amendment No. 1 dated as of June 5, 2007 to the Guaranty and
Security Agreement dated as of October 24, 2006 and (b) the Amended and Restated
Canadian Security Agreement dated as of June 5, 2007.
“Term
Loan Agent”
means
GB Merchant Partners, LLC, as agent, and its successors.
“Term
Loan Agreement”
means
the Term Loan Agreement dated as of the date hereof among the Term Agent, the
Term Loan Lenders and the Borrowers, in form and substance acceptable to the
Agent, as amended, restated, supplemented, replaced or otherwise modified from
time to time in accordance with the terms of the Intercreditor
Agreement.
“Term
Loan Documents”
means,
collectively, the Term Loan Agreement and the Term Loan Guaranty and Security
Agreement.
“Term
Loan Guaranty and Security Agreement”
means
the Guaranty and Security Agreement dated as of June 5, 2007 by and among Term
Agent and Term Loan Lenders and Grantors, in form and substance acceptable
to
the Agent, as amended, restated, supplemented, replaced or otherwise modified
from time to time.
“Term
Loan Lenders”
means
the term lenders under the Term Loan Agreement.
2. Amendments.
(a) Section
1.1 (Defined Terms).
Section
1.1 (Defined Terms) is hereby amended as follows:
(i) The
following definition of “Amendment No. 1 Effective Date” shall be inserted in
its proper alphabetical order:
“Amendment
No. 1 Effective Date”
shall
mean June 5, 2007.
(ii) The
definition of “Availability” shall be amended and restated in its entirety as
follows:
“Availability”
means,
as of any date of determination, if such date is a Business Day, and determined
at the close of business on the immediately preceding Business Day, if such
date
of determination is not a Business Day, the amount as determined by the
Administrative Agent at any time, in its Permitted Discretion equal to (a)
the
lesser of (i) the Maximum Revolver Amount and (ii) the Aggregate Borrowing
Base,
minus
(b) the
sum of the U.S. Revolving Credit Out standings and the Canadian Revolving Credit
Outstanding (in each case, determined after giving effect to all sublimits
and
Reserves then applicable hereunder).
(iii) The
definition of “Cash Dominion Event” shall be amended and restated in its
entirety as follows:
“Cash
Dominion Event”
means
(a) the occurrence and continuance of any Event of Default, or (b) the period
commencing with each failure by the Borrowers to maintain Adjusted Availability
in an amount of greater than (i) ten percent (10%) of the Aggregate Borrowing
Base for a period of 5 consecutive Business Days or (ii) five percent (5%)
of
the Aggregate Borrowing Base at any time and, in each case, ending with the
occurrence of a Cash Dominion Reversion; provided,
however
that (y)
no more than 2 Cash Dominion Reversions may occur in any 12 month period and
(z)
if an additional Cash Dominion Event occurs during such 12 month period, no
further Cash Dominion Reversions may occur through and including the Scheduled
Maturity Date.
(iv) The
definition of “Minimum Availability Amount” shall be amended and restated in its
entirety as follows:
“Minimum
Availability Amount”
means,
as of any date of determination, the greater of (a) 7.5% of the Aggregate
Borrowing Base and (b) the Term Loan Reserve Amount.
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(v) The
definition of “Permitted Liens” shall be amended by deleting “and” at the end of
clause (m) and inserting the following new clause (o) at the end thereof
immediately before the period:
“,and
(o)
Liens securing the Permitted Term Debt”.
(vi) The
following definition of “Permitted Term Debt” shall be inserted in its proper
alphabetical order:
“Permitted
Term Debt”
means
all “Obligations”, as defined in the Term Loan Agreement.
(vii) The
following definition of “Term Loan Agent” shall be inserted in its proper
alphabetical order:
“Term
Loan Agent”
means
GB Merchant Partners LLC, as agent, and its successors.
(viii) The
following definition of “Term Loan Agreement” shall be inserted in its proper
alphabetical order:
“Term
Loan Agreement”
means
the Term Loan Agreement dated as of May 25, 2007 among the Term Loan Agent,
the
lenders party thereto and the Borrowers, as in effect on the Amendment No.
1
Effective Date, as amended, restated, supplemented, replaced or otherwise
modified from time to time in accordance with the terms of the Intercreditor
Agreement.
(ix) The
following definition of “Term Loan Documents” shall be inserted in its proper
alphabetical order:
“Term
Loan Documents”
means
the Term Loan Agreement , together with all other documents and agreements
contemplated thereunder and executed in connection therewith.
(x) The
following definition of “Term Loan Lenders” shall be inserted in its proper
alphabetical order:
“Term
Loan Lenders”
means
the term lenders under the Term Loan Agreement.
(xi) The
following definition of “Term Loan Reserve” shall be inserted in its proper
alphabetical order:
“Term
Loan Reserve Amount”
means
the lesser of (i) $10,000,000, provided,
that as
of December 31st
of each
Fiscal Year, this amount shall equal the greater of the then Term Loan Reserve
Amount or $15,000,000 until such time as the Borrower provides Projections
acceptable to the Agent and Term Loan Agent and (ii) 10% of the Aggregate
Borrowing Base.
(b) Section
2.5 of the Credit Agreement.
Section
2.5 of the Credit Agreement is hereby amended by inserting the following clause
(c) at the end thereof:
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“(c) Prepayment
Fee.
In the
event that the Commitments are terminated and reduced to 0 under this
Section
2.5
on or
before the second anniversary of the Amendment No. 1 Effective Date, the
Borrowers shall pay to the Administrative Agent and the Canadian Agent, as
the
case may be, a premium (to be paid to the Lenders, as liquidated damages and
compensation for the costs of being prepared to make funds available hereunder)
in an amount equal to $200,000; provided,
however,
that no
such prepayment fee shall be payable under this Section
2.5(c)
if the
Commitments are terminated in connection with a refinancing whereby the Agent
is
the administrative agent under the new facility.”
(c) Section
5.3(d) of the Credit Agreement.
Section
5.3(d) of the Credit Agreement is hereby amended by inserting the following
into
clause (iv), immediately preceding “generally”:
“or
by
the Borrowers to the Term Loan Agent ”
(d) Section
5.4(b) of the Credit Agreement.
Section
5.4(b) of the Credit Agreement is hereby amended as follows:
(i) The
last
sentence of clause (i) shall be deleted and replaced with the
following:
“Prior
to
the occurrence of an Event of Default, the Administrative Agent, in its
Permitted Discretion, may (and shall at the Required Lender’s direction), cause
one (1) additional inventory per Fiscal Year to be taken at the expense of
the
Borrowers. Following the occurrence and during the continuance of an Event
of
Default, the Administrative Agent, in its Permitted Discretion, may (and shall
at the Required Lender’s direction), cause additional inventories to be taken at
the expense of the Borrowers.”
(ii) Clause
(ii) shall be amended and restated as follows:
“(ii) At
the
Borrowers’ expense, upon the request of the Administrative Agent from time to
time, the Borrowers will obtain and deliver to the Administrative Agent, or,
if
the Administrative Agent so elects, will cooperate with the Administrative
Agent
in the Administrative Agent’s obtaining, a report of an independent collateral
auditor satisfactory to the Administrative Agent (which may be affiliated with
one of Lenders) with respect to the Books and Accounts and inventory components
included in the Aggregate Borrowing Base, which report shall indicate whether
or
not the information set forth in the Borrowing Base Certificate most recently
delivered is accurate and complete in all material respects based upon a review
by such auditors of the Accounts (including verification with respect to the
amount, aging, identity and credit of the respective account debtors and the
billing practices of the Borrowers) and inventory (including verification as
to
the value, location and respective types); provided,
however,
that
the Borrowers shall not be obligated to pay for more than 4 commercial finance
exams in any 12 month period; provided,
further,
that
the Borrower shall be obligated to pay for any additional commercial finance
exams conducted in connection with the Borrowers request to add Eligible
Accounts of Wholesale, Accounts with respect to private label credit cards,
or
Accounts with respect to Permitted Acquisitions to the U.S. Borrowing
Base.”
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(iii) The
following shall be added to the end of clause (iii), immediately preceding
the
period:
“;
provided,
further,
that
following the occurrence and during the continuance of an Event of Default,
the
Borrowers shall be obligated to pay for such additional appraisals as the
Administrative Agent may, in its Permitted Discretion, require”
(iv) Clause
(iv) shall be amended by deleting “1 real property appraisal in any 12 month
period”, in the fourth line and replacing it with the following:
“real
property appraisals or “desktop” review of the most recent real estate appraisal
as the Administrative Agent may, in its Permitted Discretion,
require”
(e) Section
6.14(a) of the Credit Agreement.
Section
6.14(a) of the Credit Agreement is hereby amended as follows:
(i) The
following shall be added to the end of clause (iv), immediately preceding the
semicolon
“,
including, without limitation, the delivery of any notice to the Term Loan
Agent
(or any Term Loan Lender) of any “defaults” or “events of default” under the
Term Loan Agreement or the other Term Loan Documents”
(ii) Clauses
(v) and (vi) shall be renumbered as clauses (vii) and (viii)
respectively.
(iii) The
following clauses (v) and (vi) shall be inserted immediately preceding clause
(vii) (previously clause (v)):
“(v) The
occurrence of any Property Loss Event involving Collateral having a fair market
value in excess of $500,000;
(vi) Any
prepayment of Permitted Term Debt;”
(f) Section
7.1 of the Credit Agreement.
Section
7.1 of the Credit Agreement is hereby amended by deleting “and” at the end of
clause (i) and inserting the following new clause (k) at the end thereof
immediately before the period:
“;
and
(k) Permitted
Term Debt”
(g) Section
7.3 of the Credit Agreement.
Section
7.3 of the Credit Agreement is hereby amended as follows:
(i) By
deleting all of the language between the parentheses in clause (a) and replacing
it with the following:
“excluding
this Agreement, the other Loan Documents and the Term Loan
Documents”.
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(ii) By
deleting all of the language between the parentheses in clause (b) and replacing
it with the following:
“excluding
this Agreement, the other Loan Documents and the Term Loan
Documents”.
(h) Section
7.21 of the Credit Agreement.
Section
7.21 shall be inserted immediately following Section 7.20 of the Credit
Agreement and shall read as follows:
“Section
7.21 Amendments
to Term Loan Agreement.
The
Borrowers will not agree to any amendment, modification, waiver or supplement
to
the Term Loan Agreement or any other agreement executed in connection therewith
which contravenes the provisions of the Intercreditor Agreement.”
(i) Section
7.22 of the Credit Agreement.
Section
7.2 shall be inserted immediately following Section 7.21 of the Credit Agreement
and shall read as follows:
“Section
7.22 Maximum
Indebtedness.
The
Borrowers shall not permit or suffer to exist the aggregate of (i) all payment
Obligations hereunder, plus (ii) all Permitted Term Debt, to be greater than
60%
of the sum of the Eligible Inventory (valued at Cost) owned by the U.S.
Borrowers and Eligible Inventory (valued at Cost) owned by Bombay Canada, tested
as of December 31, 2007.”
(j) Section
8.1 of the Credit Agreement.
Section
8.1 of the Credit Agreement is hereby amended by deleting “or” at the end of
clause (m) and inserting the following new clause (o) at the end thereof
immediately before the period:
“;
or
(o) any
“Event of Default” under and as defined in the Term Loan Agreement shall have
occurred and be continuing”
(k) Section
10.19 of the Credit Agreement.
Section
10.19 of the Credit Agreement is hereby amended by inserting the following
at
the end thereof:
“
The
Borrowers hereby consent to the publication (including, without limitation,
by
way of press release or other public announcement), from time to time, by the
Administrative Agent or any Lender of advertising material relating to the
financing transactions contemplated by this Agreement and the other Loan
Documents using any Borrower’s name, product photographs, logo or trademark,
provided such publication shall not occur prior to the earlier of (i) the
Amendment No. 1 Effective Date and (ii) any Borrower’s public announcement of
such financing transactions.”
(l) Section
10.23 of the Credit Agreement.
Section
10.23 shall be inserted immediately following Section 10.22 of the Credit
Agreement and shall read as follows:
“Section
10.23 Intercreditor
Agreement.
In the
event of any conflict between any provision in this Agreement and any provision
in the Intercreditor Agreement, such
6
provision
in the Intercreditor Agreement shall control and such provision of this
Agreement shall be deemed to have been complied with or satisfied to the extent
of such conflict.”
3. Conditions
to Effectiveness of this Amendment.
This
Amendment shall become effective as of the date first written above upon the
satisfaction of the following conditions precedent:
(a) The
Agent
shall have received a duly executed counterpart of this Amendment, executed
by
each of the Borrowers and the Lenders;
(b) The
Agent
shall have received a duly executed counterpart of each of the Security
Agreements, executed by each Borrower and Guarantor party thereto, together
with
copies of amendments to UCC and PPSA filings, executed by each of the Borrowers
and the Lenders if necessary;
(c) The
Agent
shall have received a duly executed counterpart of the Intercreditor Agreement,
executed by each party thereto;
(d) The
Agent
shall have received a duly executed counterpart of each Term Loan Document,
executed by each of the Borrowers, Term Agent and the Term Loan
Lenders.
(e) The
Agent
shall have received favorable opinions of counsel to the Borrowers from (a)
Xxxxxxxx & Xxxxxx LLP, special U.S. counsel to the Borrowers and (b) Fraser
Xxxxxx Casgrain LLP, special Canadian counsel to the Borrowers, each addressed
to the Agent and the Canadian Agent, the L/C Issuers and the Lenders and
addressing such matters as the Agent may reasonably request;
(f) The
Agent
shall have received a certificate of the secretary or other Responsible Officer
of each Borrower in charge of maintaining Books and records of such Borrower
certifying as to (A) the names and signatures of each officer of such Borrower
authorized to execute and deliver any of this Agreement, the Security
Agreements, the Intercreditor Agreement and the Term Loan Documents, to which
such Borrower is a party, (B) the Governing Documents of such Borrower attached
to such certificate are complete and correct copies of such Governing Documents
as in effect on the date of such certification (or, for any such Governing
Document delivered to the Agent on the Closing Date, that there have been no
changes from such Governing Document so delivered) and (C) the resolutions
of
such Borrower’s board of directors or other appropriate governing body approving
and authorizing the execution, delivery and performance of each of this
Agreement, the Security Agreements, the Intercreditor Agreement and the Term
Loan Documents or any other agreement, to which such Borrower is a
party;
(g) The
Agent
and the Lenders shall have received (i) payment of the arrangement fee set
forth in the Amendment Fee Letter and (ii) all other fees and costs
(including reasonable attorneys fees) incurred in connection with the
negotiation, preparation and execution of this Amendment; and
(h) The
Agent
shall have received from the Borrowers such other documents and information
as
it may reasonably request.
4. Representations
and Warranties.
Each
Borrower represents and warrants to the Agent and the Lenders as
follows:
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(a) The
execution, delivery and performance by such Borrower of this Amendment is within
such Borrower’s corporate powers or limited liability company powers, as
applicable, and has been duly authorized by all necessary corporate or limited
liability company, and, if required, stockholder or member action, as
applicable. This Amendment has been duly executed and delivered by such Borrower
and constitutes a legal, valid and binding obligation of such Borrower,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity regardless of whether
considered in a proceeding in equity or at law.
(b) No
consent or approval of any Governmental Authority or any other Person is
required for any of the Borrowers to execute, deliver and perform this
Amendment.
(c) After
giving effect to this Amendment, the Agent has continuing, perfected liens
in
the Collateral.
5. Miscellaneous.
(a)As
of the
date hereof, each reference in the Credit Agreement to “this Agreement,”
“hereunder,” “hereof,” “herein,” or words of like import, and each reference in
the other Loan Documents to the Credit Agreement (including, without limitation,
by means of words like “thereunder”, “thereof” and words of like import), shall
mean and be a reference to the Credit Agreement as modified hereby, and this
Amendment and the Credit Agreement shall be read together and construed as
a
single agreement.
(b)The
execution, delivery and effectiveness of this Amendment shall not, except as
expressly provided herein, operate as a waiver of any right, power or remedy
of
the Lenders or the Agent under any of the Loan Documents, nor constitute a
waiver or amendment of any other provision of any of the Loan Documents or
for
any purpose except as expressly set forth herein.
(c)This
Amendment shall be deemed a Loan Document.
(d) The
Section titles contained in this Amendment are and shall be without substantive
meaning or content of any kind whatsoever and are not a part of the agreement
between the parties hereto.
(e) Except
as
expressly provided herein, the Credit Agreement and the other Loan Documents
shall continue in full force and effect, and the terms and conditions of the
Credit Agreement are expressly incorporated herein and ratified and confirmed
in
all respects.
(f) The
fact
that any term or provision of this Amendment is held invalid, illegal or
unenforceable as to any person in any situation in any jurisdiction shall not
affect the validity, enforceability or legality of the remaining terms or
provisions hereof or the validity, enforceability or legality of such offending
term or provision in any other situation or jurisdiction or as applied to any
person.
(g) This
Amendment may be executed in any number of counterparts, all of which, taken
together, shall constitute one and the same agreement and any party may enter
into this Amendment by executing a counterpart. Transmission by facsimile of
an
executed counterpart of this Amendment shall be deemed to constitute due and
sufficient
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(h) Each
of
the parties hereto irrevocably waives trial by jury in any action or proceeding
with respect to this Amendment or any other Loan Document.
(i) This
Amendment shall be governed by, and construed in accordance with, the laws
of
the State of New York.
(j) The
terms
of this Amendment shall be binding upon and shall inure to the benefit of the
parties and their respective successors and assigns.
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IN
WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
date
first written above.
THE
BOMBAY COMPANY, INC.
By:___________________________
Name:
Title:
BBA
HOLDINGS, LLC
By:___________________________
Name:
Title:
BOMBAY
INTERNATIONAL, INC.
By:___________________________
Name:
Title:
THE
BOMBAY FURNITURE COMPANY OF CANADA INC.
By:___________________________
Name:
Title:
GENERAL
ELECTRIC CAPITAL CORPORATION, as Lender and Administrative Agent
By:___________________________________
Name:
Title:
Duly Authorized Signatory
GE
CANADA
FINANCE HOLDING COMPANY, as Canadian Agent and as Canadian Lender
By:___________________________________
Name:
Title:
Duly Authorized Signatory
