Exhibit 10.22
EIGHTH AMENDMENT TO DEBTOR IN POSSESSION
LOAN AND SECURITY AGREEMENT
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THIS EIGHTH AMENDMENT TO DEBTOR IN POSSESSION LOAN AND SECURITY AGREEMENT
(this "Eighth Amendment") is entered into and effective as of March 19, 2001, by
and among Factory Card Outlet of America Ltd., an Illinois corporation and a
debtor and debtor in possession (the "Borrower"), on the one hand, and Xxxxx
Fargo Retail Finance, LLC (successor in interest to Foothill Capital Corporation
and Paragon Capital, LLC) ("WFRF"), as Agent and Lender, and the financial
institutions listed on the signature page of the Loan Agreement referred to
below (such financial institutions, together with their respective successors
and assigns, are collectively referred to herein as the ("Lenders"), on the
other hand. This Eighth Amendment amends certain provisions of the Debtor in
Possession Loan and Security Agreement dated as of March 23, 1999 by and among
the Borrower and WFRF, as Agent, and the Lenders (as amended by and through the
date of this Eighth Amendment, and as hereafter amended and/or restated from
time to time, the "Loan Agreement"). Capitalized terms used herein and not
otherwise defined shall have the same meanings herein as in the Loan Agreement.
BACKGROUND
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This Eighth Amendment is entered into to amend the Maturity Date of the
Commitment and to amend certain of the provisions governing the availability of
"Special Sub-Line Advances" under the Loan Agreement, in accordance with the
terms and conditions hereof.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower, the Agent and the
Lenders hereby agree as follows:
1. Amendments to Loan Agreement.
(a) Amendments to Subsection 1.1.
(i) Subsection 1.1 of the Loan Agreement is hereby amended by deleting
the term "Maximum Revolving Amount" appearing in the definition of "Average
Unused Portion of Maximum Revolving Amount" and inserting in lieu thereof
the term "$32,500,000".
(ii) Subsection 1.1 of the Loan Agreement is hereby amended by
deleting the existing subsection (i) of the definition of "Maturity Date"
appearing therein and inserting in lieu thereof the following:
(i) July 31, 2001.
(b) Amendment to Subsection 2.1 (a)(ii). Subsection 2.1 (a)(ii) of the Loan
Agreement is hereby amended by deleting such subsection in its entirety and
inserting in lieu thereof the following:
(a)(ii) Special Sub-Line Advances. The term "Borrowing Base" shall
also include amounts available in respect of the Special Sub-Line Advances
in accordance with this Section 2.1 (a)(ii). Subject to the terms and
conditions of this Agreement, each Lender agrees to make special sub-line
advances ("Special Sub-Line Advances") to Borrower in an amount at any one
time outstanding not to exceed such Lender's Pro Rata Share of an amount
equal to 13% of the Cost Value of Eligible Inventory, provided, however,
that in no event will Advances (on a combined basis under Sections 2.1
(a)(i)(y) and 2.1 (a)(ii)) exceed 87.5% of the Net Retail Liquidation Value
of Eligible Inventory.
(c) Limitation on Borrowing. The Borrower, the Agent and the Lenders
hereby agree that, notwithstanding anything to the contrary in the Loan
Agreement, the Lenders shall have no obligation to make Advances under the Loan
Agreement to the extent they would cause the aggregate amount of Advances plus
the outstanding balance of all undrawn or unreimbursed Letters of Credit to
exceed $32,500,000.
(d) Amendment to Subsection 2.12(a)(ii). Subsection 2.12(a)(ii) of the
Loan Agreement is hereby amended by deleting the term "Maximum Revolving Amount"
appearing therein and inserting in lieu thereof the term "$32,500,000".
2. Representations and Warranties; Confirmation of Representations,
Warranties.
This Eighth Amendment has been duly authorized, executed and delivered by
the Borrower. The Loan Agreement, as amended hereby, and each of the other Loan
Documents, as amended by and through the date hereof, constitute legal, valid
and binding obligations of the Borrower, enforceable against the Borrower in
accordance with their respective terms. The Borrower, by execution of this
Eighth Amendment, certifies to the Agent and each of the Lenders that each of
the representations and warranties set forth in the Loan Agreement and the other
Loan Documents is true and correct as of the date hereof, except to the extent
such representations and warranties expressly relate to an earlier date, as if
fully set forth in this Eighth Amendment, and that, as of the date hereof, no
Default or Event of Default has occurred and is continuing under the Loan
Agreement or any other Loan Document. The Borrower acknowledges and agrees that
this Eighth Amendment shall become a part of the Loan Agreement and shall be a
Loan Document.
3. Waiver of Events of Default. The Agent and the Lenders hereby waive all
Events of Default, if any, that shall exist at time of this amendment.
4. Conditions Precedent. The obligation of the Agent and the Lenders to
execute this Eighth Amendment and make the accommodations to the Borrower
described herein is subject to the following conditions, as determined by the
Agent and the Lenders in their sole discretion:
(a) This Eighth Amendment shall have been executed and delivered by each of
the parties hereto;
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(b) The Borrower by its execution hereof shall have agreed to pay to the
Agent, for the benefit of the Lenders, an amendment fee of $100,000 (the
"Amendment Fee"). The Amendment Fee shall be fully earned upon the execution of
this Eighth Amendment and shall be due and payable on the earlier to occur of
the Maturity Date or the date of the acceleration of the Borrower's Obligations
(the earlier of such dates being referred to as the "Termination Date").
5. No Novation; Effect; Counterparts; Governing Law.
Except to the extent specifically amended hereby, the Loan Agreement and
each of the other Loan Documents shall be unaffected hereby and shall remain in
full force and effect; this Eighth Amendment shall not be deemed a novation of
the Loan Agreement or any other Loan Document. The Borrower hereby
acknowledges, confirms and ratifies its obligations under the Loan Agreement and
each of the other Loan Documents. This Eighth Amendment may be executed in any
number of counterparts, and by the different parties on separate counterparts,
each of which, when so executed and delivered, shall be an original, but all the
counterparts shall together constitute one instrument. This Eighth Amendment
shall be governed by the internal laws of The Commonwealth of Massachusetts
(without reference to conflicts of law principles) and the United States
Bankruptcy Code and shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. The
Borrower acknowledges that the reasonable out-of-pocket expenses of the Agent
and the Lenders incurred in connection with the preparation, execution and
delivery of this Eighth Amendment shall be "Lender Group Expenses", as such term
is defined in the Loan Agreement.
6. Construction.
The Borrower, by execution hereof, acknowledges and confirms that for all
purposes of the Loan Agreement and the other Loan documents, the term "Loan
Agreement" shall mean the Loan Agreement as amended by and through the date of
this Eighth Amendment and as further amended and/or restated from time to time
hereafter.
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IN WITNESS WHEREOF, the parties hereto have executed this Eighth Amendment
to Loan and Security Agreement as a sealed instrument as of the date first above
written.
FACTORY CARD OUTLET OF AMERICA, LTD.
By: /s/ Xxxxx X. Xxxxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxxxx
Title: Senior Vice President and CFO
FOOTHILL CAPITAL CORPORATION, for itself and as
Agent for the Lenders
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Vice President
PARAGON CAPITAL, LLC, as a Lender
By: /s/ Xxxxxx
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Name:
Title: Executive Vice President
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