FIRST AMENDMENT TO AMENDED AND RESTATED
TERM LOAN AGREEMENT AND OTHER
RESTRUCTURED LOAN DOCUMENTS
This First Amendment to Amended and Restated Term Loan
Agreement and other Restructured Loan Documents ("First
Amendment") is made and dated as of October 11, 1995, by and
among BROADWAY STORES, INC., formerly known as XXXXXX XXXXXX XXXX
STORES, INC., a Delaware corporation (the "Company" or "CHH"),
BARCLAYS BANK PLC, a bank organized under the laws of the United
Kingdom, THE TOKAI BANK LIMITED, a bank organized under the laws
of Japan, acting through its Los Angeles Agency, BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking
association (collectively, "Banks," and individually, a "Bank"),
and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a
national banking association, as agent for Banks (in such
capacity, "Agent").
RECITALS
Company, Banks and Agent are parties to that certain
Amended and Restated Term Loan Agreement, dated as of October 8, 1992
(the "Amended and Restated Term Loan Agreement"). Capitalized
terms used here without definition have the meanings given to
them in the Amended and Restated Term Loan Agreement.
Pursuant to an Agreement and Plan of Merger dated as of
August 14, 1995 (the "Merger Agreement") among the Company,
Federated Department Stores, Inc. ("Federated") and Nomo Company,
Inc., a wholly owned subsidiary of Federated ("Merger Sub"),
Merger Sub intends to merge with and into the Company, with the
Company being the surviving corporation of such merger (such
transaction hereinafter called the "Merger"), with the common and
preferred stockholders of the Company receiving shares of the
common stock of Federated in exchange for their shares of the
Company's common stock. In addition, pursuant to a Stock
Agreement dated as of August 14, 1995 between Federated and
Xxxx/Chilmark Fund, L.P. ("Z/C"), Federated has acquired an
option (the "Option") to purchase all of the outstanding common
stock of the Company held by Z/C for the same Federated common
stock consideration that would otherwise be provided to the
holders of the common stock of the Company in connection with the
Merger. The foregoing transactions, together with each and every
transaction, agreement and other arrangement relating thereto,
are collectively referred to herein as the "Merger Transactions."
Subject to the terms and conditions contained in that
certain letter, dated August 13, 1995, delivered to the Company
and Federated by the Agent, on behalf of itself and the Majority
Banks (the "Merger Consent Letter") the Agent, on behalf of
itself and the Majority Banks consented to the change of
ownership of the stock of the Company resulting from the Company,
Merger Sub and Federated entering into and consummating each of
the Merger Transactions, and permanently and irrevocably waived
any Default or Event of Default under the Amended and Restated
Term Loan Agreement or any other of the Restructured Loan
Documents that could arise solely as a result of a violation of
Section 8.03 of the Amended and Restated Term Loan Agreement and
analogous provisions of the other Restructured Loan Documents as
a result of the Company, Merger Sub and Federated entering into
and consummating each of the Merger Transactions.
The Company, Agent and Banks desire to enter into this First
Amendment in order to implement certain terms and conditions of
the Merger Consent Letter.
NOW THEREFORE, in consideration of the foregoing
recitals and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the
parties hereby agree as follows:
ARTICLE I
Conditions to Effectiveness
1.1 Conditions Precedent. The following shall
constitute the conditions precedent to the effectiveness of the
modifications of the Amended and Restated Term Loan Agreement and
the other Restructured Loan Documents provided for herein:
(a) Company shall have executed and delivered to
Agent this First Amendment, together with a certificate in the
form attached hereto as Exhibit A (the "Modification
Certificate").
(b) All representations and warranties of Company
set forth herein shall be true and correct on and as of the date
hereof and on and as of the Effective Date (as defined below).
(c) No Default or Event of Default shall have
occurred and be continuing on and as of the date hereof or, after
giving effect to the Merger Transactions (assuming the
effectiveness of the amendments to the Amended and Restated Term
Loan Agreement set forth herein), on and as of the Effective
Date.
(d) Agent shall have received true and correct
copies of all modifications of the Organizational Documents of
the Company entered into in connection with the Merger
Transactions.
(e) Agent shall have received evidence of the
consummation of the Merger Transactions and shall have received
true and correct copies of all instruments, contracts, agreements
and documents entered into by the Company, Federated or any
Affiliate of the Company or Federated with Prudential or GE
Capital in connection with the Merger Transactions, which
instruments, contracts, agreements and documents shall be
consistent in all material respects with the instruments,
contracts, agreements and documents entered into by the Company,
Federated or any Affiliate of the Company or Federated with
Prudential or GE Capital in connection with the Merger
Transactions and disclosed in writing to the Agent prior to the
date hereof.
.(f) Agent shall have received such endorsements
to the Mortgagee's Title Policies as Agent may require insuring
that the priority of liens of the Mortgages has not been affected
as a result of the delivery of this First Amendment and showing
no exceptions other than Permitted Exceptions.
(g) Agent shall have received such amendments to
and supplements of the Restructured Loan Documents, reflecting
the terms hereof, as Agent or Majority Banks may require.
(h) Federated or its Affiliates and the Company
shall have delivered to the Agent the Federated License Agreement
(as defined below).
(i) If any portion of the $200,000,000 payable to
Prudential under Section 1.2.1 of the Prudential Purchase
Agreement (as defined below) shall be paid to Prudential in cash
(the cash portion of such payment being referred to herein as the
"Prudential cash payment"), the Company shall have prepaid the
Amended and Restated Term Loan in an amount which bears the same
ratio to the outstanding principal balance due under the Amended
and Restated Term Loan as the amount of the Prudential cash
payment bears to the outstanding principal balance under the
Prudential Loan Documents; to the extent such prepayment relates
to any Offshore Rate Portion, it shall be accompanied by the
amounts necessary to reimburse each Bank for any loss resulting
from the payment of such Portion on a date other than the last
day of the relevant Offshore Rate Period, including, without
limitation, the amount of any loss incurred in liquidating
deposits from third parties and loss of profit for the remainder
of such Offshore Rate Period.
(j) The Company shall have paid to Agent (for the
benefit of the appropriate parties) (i) all unreimbursed fees and
expenses (including, without limitation, attorneys' fees and
expenses) previously incurred by Agent and/or any Bank and
invoiced to the Company and (ii) all fees, costs and other
expenses incurred by Agent and/or any Bank (including, but not
limited to, all reasonable attorneys' fees and expenses and title
insurance premiums) in connection with the Merger Transactions,
the Merger Consent Letter, this First Amendment and the
consummation of transactions hereunder, to the extent invoiced
prior to the Effective Date, and without limiting the obligations
of the Company under Section 5.4 below .
(k) The Company shall have delivered to Agent a
release in a form satisfactory to Agent and Banks, which shall
release Agent and Banks from all potential claims arising under
the Amended and Restated Term Loan Agreement prior to the
Effective Date.
(l) The Company shall have cured all existing
Defaults and Events of Defaults under the Restructured Loan
Documents.
(m) Agent shall have received opinions of counsel
to Company, as to the matters identified on Exhibit B attached
hereto, in form and substance satisfactory to Agent.
1.2 Effective Date. As used herein, the term
"Effective Date" shall mean the date all conditions set forth in
Section 1.1 above have been satisfied. This First Amendment
shall be null and void and of no further force or effect if the
Effective Date shall not have occurred on or prior to
February 29, 1996.
ARTICLE II
Amendments to Amended and Restated Term Loan Agreement
Upon the Effective Date, Company, Agent and Banks
hereby amend the Amended and Restated Term Loan Agreement as
follows:
2.1 Definitions.
(a) All references in the Amended and Restated
Term Loan Agreement and in the Restructured Loan Documents to the
Amended and Restated Term Loan Agreement or to any Restructured
Loan Documents shall mean the Amended and Restated Term Loan
Agreement and such Restructured Loan Documents, in each case as
modified pursuant to this First Amendment.
(b) To the extent that any Restructured Loan
Document utilizes any term which is defined by reference to the
definition of that term which appears in the Amended and Restated
Term Loan Agreement, and that term in the Amended and Restated
Term Loan Agreement is modified by this First Amendment, then the
definition of that term in all other Restructured Loan Documents
is likewise hereby so amended.
(c) The terms "Federated," "Merger," "Merger
Consent Letter," "Merger Sub," "Merger Transactions," "Option"
and "Z/C," each as hereinabove defined, are each hereby added as
defined terms in the Amended and Restated Term Loan Agreement.
(d) The following new defined terms are hereby
added to the defined terms in Schedule 4 of the Amended and
Restated Term Loan Agreement:
(i) "Federated License Agreement" shall mean that
certain License Agreement by and among Federated
(and/or its Affiliates Xxxxxxx'x, Inc. or Macy's West,
Inc.), the Company, Agent and Banks, as it may be
amended, supplemented, restated, extended or otherwise
modified from time to time, in the form of Exhibit C
attached hereto.
(ii) "Federated License Date" shall mean the
earlier of (a) sixty (60) days after the effective date
under the First Amendment to this Amended and Restated
Term Loan Agreement or (b) the date on which Federated
or its Affiliates Xxxxxxx'x, Inc. or Macy's West, Inc.
grants to Prudential a license to use the "Xxxxxxx'x"
or "Macy's" name.
(iii) "Prudential Purchase Agreement" means
that certain Purchase Agreement, dated as of August 14,
1995, among Prudential, Federated and Federated
Noteholding Corporation II
(iv) "Prudential Stock Repurchase" shall mean any
redemption, purchase, repurchase or other acquisition
for value (whether in cash, property or otherwise) by
Federated or any of its Affiliates of any of the common
stock of Federated acquired by Prudential pursuant to
Section 1.2 of the Prudential Purchase Agreement."
(e) All references to "CHH" in the Amended and
Restated Term Loan Agreement and the Restructured Loan Documents
shall mean the Company.
2.2 Prudential Stock Repurchase
The following sentence is hereby added at the end of
Section 2.07 of the Amended and Restated Term Loan Agreement:
"Within five (5) days after the occurrence of any Prudential
Stock Repurchase, CHH shall prepay the Amended and Restated Term
Loan in an amount which bears the same ratio to the then
outstanding principal balance of the Amended and Restated Term
Loan as the amount of the cash or value of property received by
Prudential in connection with the Prudential Stock Repurchase
bears to the then outstanding principal balance under the
Prudential Loan Documents; to the extent such prepayment relates
to any Offshore Rate Portion, it shall be accompanied by the
amounts necessary to reimburse each Bank for any loss resulting
from the payment of such Portion on a date other than the last
day of the relevant Offshore Rate Period, including, without
limitation, the amount of any loss incurred in liquidating
deposits from third parties and loss of profit for the remainder
of such Offshore Rate Period"
2.3 Collateral Security.
Section 3.01E of the Amended and Restated Term Loan
Agreement is hereby amended and restated in its entirety as
follows:
"E. Amended and Restated License.
(1) CHH hereby agrees to execute and deliver
and to cause, on or before the Federated License
Date, Federated (or its Affiliates Xxxxxxx'x, Inc.
and Macy's West, Inc.) to execute and deliver to
Agent, for the ratable benefit of Agent and Banks,
the Amended and Restated License Agreement in
substantially the form of Exhibit I hereto (in the
case of CHH) and a Federated License Agreement in
the form of Exhibit I-2 attached hereto (in the
case of Federated or its Affiliates). On or prior
to the Federated License Date, CHH shall use best
efforts to cause Prudential to deliver to the Bank
an intercreditor agreement with respect to the
licenses granted by Federated or its Affiliates on
the same terms as the Intercreditor Agreement.
CHH hereby grants to Agent and Banks a present
license to use the "Broadway" or "Broadway
Southwest" or "Weinstocks" name, as the case may
be, and shall cause Federated, on or before the
Federated License Date, to grant to Agent and
Banks a present license to use the "Xxxxxxx'x" or
"Macy's" name, at the applicable Store, provided
that the Banks' rights to use such name shall be
effective only if:
(a) any Shopping Center Document
requires that all or any part of a Store be
operated as a "Broadway", a "Broadway Southwest",
or a "Weinstocks", a "Xxxxxxx'x" or a "Macy's" (or
any such similar covenant) ("Operating Covenant"),
and such requirement could reasonably be
interpreted to bind Agent or Banks or subsequent
transferees of Agent or Banks, as the case may be,
upon the conveyance of title to Agent (for the
ratable benefit of Agent and Banks), or upon any
such subsequent transfers, in which event such
rights shall be for the term of such Operating
Covenant, if such Operating Covenant would be
applicable to such subsequent transferee upon such
conveyance, and, subject to the foregoing, may be
transferred by Agent or Banks to a purchaser of
the applicable Store at a foreclosure sale or at a
sale upon the exercise of a right of power of
sale, or (if Agent or Banks acquire title to the
Store by deed (or other transfer) in lieu of
foreclosure) to a subsequent purchaser, or
(b) Agent (for the ratable benefit of
Agent and Banks) (or a court-appointed receiver)
obtains possession of such Store through a court
order or acquires the Store through power of sale
or foreclosure or deed (or other transfer) in lieu
of foreclosure of the applicable Store, in which
case such rights shall expire only upon the sale
of the applicable Store by Agent (for the ratable
benefit of Agent and Banks).
(2) With respect to the rights described in
clause (1)(a) above, it is understood and agreed
that:
(a) Such rights may only be exercised
upon the conveyance of title to the applicable
Store to Agent (for the ratable benefit of Agent
and Banks), or the taking of possession of the
Store by Agent (for the ratable benefit of Agent
and Banks) (or a court-appointed receiver), or its
designees, successors and assigns, and
(b) If, after the Effective Date, CHH or
Federated (or its Affiliates Xxxxxxx'x or Macy's
West, Inc.) delivers to Agent a fully executed
amendment to the applicable Shopping Center
Document (satisfactory in form and substance to
Agent and Majority Banks), which either effects a
deletion of the applicable Operating Covenant or
renders the applicable Operating Covenant
inapplicable to Agent and Banks and their
designees, successors and assigns, then such
rights shall automatically be deemed terminated
with respect to the applicable Store.
(3) With respect to the rights described in
clause (1) above, (a) CHH agrees (and shall cause
Federated and/or its Affiliates Xxxxxxx'x, Inc.
and Macy's West, Inc. to agree, prior to the
Federated License Date) that, in the event that
CHH (or Federated and/or its Affiliates Xxxxxxx'x,
Inc. and Macy's West, Inc.) grants to any party,
other than the lenders party to the Intercreditor
Agreement, a security interest in the trade names,
trademarks or trade styles used by CHH (or
Federated and/or its Affiliates Xxxxxxx'x, Inc.
and Macy's West, Inc.) in connection with any of
the Stores subject to the Amended and Restated
License Agreement or the Federated License
Agreement, CHH agrees to provide (or to cause
Federated and/or its Affiliates Xxxxxxx'x, Inc.
and Macy's West, Inc. to provide) to Agent and
Banks, prior to or concurrently with such grant of
security interest, a Nondisturbance Letter in
substantially the form of Exhibit G hereto,
executed by such parties (and with appropriate
revisions therein reflecting Federated and/or its
Affiliates Xxxxxxx'x, Inc. and Macy's West, Inc.
as a party if it is a party thereto), and
(b) Banks agree that (i) if Agent (for the ratable
benefit of Agent and Banks) acquires title to, or
possession (whether through a court-appointed
receiver or otherwise) of, a Store and operates
such Store under the applicable name pursuant to
the terms of the foregoing, Banks and their
successors shall use reasonable efforts to cause
such Store to be operated in such manner (x) as is
consistent with the quality of other stores then
bearing such name, and (y) as will not materially
adversely affect the reputation of any other
stores then bearing such name, and (ii) if Agent
(for the ratable benefit of Agent and Banks)
acquires title to, or possession (whether through
a court-appointed receiver or otherwise) of, a
Store and operates such Store as anything other
than a retail department store which, after a
reasonable start-up time, is of a quality
reasonably consistent with the quality of other
stores then bearing such name, Banks and their
successors shall, after written notice from CHH,
Federated and/or its Affiliates Xxxxxxx'x, Inc.
and Macy's West, Inc. and continued failure by
Banks or their successors within the next sixty
(60) days to commence to operate the Store at the
required level of quality, cease to operate such
Store under the applicable name.
(4) In the event that Banks and/or their
successors cease to operate any such Store in
accordance with the requirements of clause (3)
above, neither CHH, nor Federated, nor its
Affiliates Xxxxxxx'x, Inc. and Macy's West, Inc.
shall be entitled to pursue any legal or equitable
remedy against Banks other than the enforcement of
the agreement of the Banks and/or their successors
to cease operation of such Store under the
applicable name as provided in said clause (3).
Exhibit I-2 is hereby attached to the Amended and
Restated Term Loan Agreement in the form of Exhibit C attached
hereto.
2.4 Modified Reporting Obligations.
(a) Section 6.01 B of the Amended and Restated Loan
Agreement is hereby amended and restated in its entirety to read
as follows:
"B. within forty-five (45) days after the
end of each of CHH's first three (3) fiscal quarters during each
of CHH's fiscal years an unaudited quarterly balance sheet and
income statement for such fiscal quarter; within ninety (90)
days after the end of each of CHH's fourth fiscal quarters during
each of CHH's fiscal years, unaudited annual balance sheet and
income statement for the fiscal year ending with such fiscal
quarter (each such quarterly and annual financial statement shall
be certified by the Chief Financial Officer of CHH as accurately
reflecting the financial condition of CHH as of the date thereof,
and each such certificate shall certify as to the material
respects in which such statements have not been prepared in
conformity with GAAP, shall certify as to whether CHH is in
compliance with Section 7.02 below (and shall provide detail as
to any non-compliance); and shall be in such reasonable detail as
may be required by the Agent and the Banks); and promptly upon
their becoming available, copies of all press releases and other
statements made available generally concerning CHH and its
Subsidiaries;".
(b) The following is hereby added after the word "CHH"
in the fourth line of Section 6.01H of the Amended and Restated
Term Loan Agreement: ", together with such additional
information with respect to the Stores as is provided to
Prudential on a quarterly basis with respect to the collateral
under the Prudential Loan Documents."
(c) The period at the end of Section 6.01 I of the
Amended and Restated Term Loan Agreement is hereby changed to a
comma, and the following new subsections J, K, L and M are hereby
added to Section 6.01 of the Amended and Restated Term Loan
Agreement, as follows:
"J. On or before each March 8 and September 1
until the Amended and Restated Loan has been paid in full, copies
of those portions of the seasonal operating plan of Federated
both on a consolidated basis and separately for its Macy's West
division in the form delivered to Federated's working capital
lenders; and on or before each April 30 until the Amended and
Restated Loan has been paid in full, copies of those portions of
the annual plan of Federated both on a consolidated basis and
separately for its Macy's West division in the form delivered to
Federated's working capital lenders; and within fifteen (15) days
after its adoption by the Board of Directors of Federated, a copy
of any business plan of Federated both on a consolidated basis
and separately for its Macy's West division in the form delivered
to Federated's working capital lenders, it being understood that
the information delivered pursuant to this Section 6.01 J shall
be Confidential Information subject to the terms and conditions
set forth in Section 11.23 of the Amended and Restated Loan
Agreement;
K. promptly upon their becoming available copies
of: (1) all financial statements, reports, notices and proxy
statements sent or made available generally by Federated to its
security holders; (2) all regular and periodic reports and all
registration statements and prospectuses, if any, filed by
Federated or any of its Subsidiaries with any securities exchange
or with the Securities Exchange Commission or any governmental
authority succeeding to its functions; and (3) all press releases
and other statements made available concerning Federated and its
Subsidiaries;
L. Within five (5) days after execution thereof,
copies of any agreement containing any material modification of
the Prudential Purchase Agreement, and within five (5) days after
the occurrence of the same, written notice of the occurrence of
any Prudential Stock Repurchase which notice shall specify the
amount of the cash or value of property received by Prudential in
connection with the Prudential Stock Repurchase and the then
outstanding principal balance under the Prudential Loan
Documents; and
M. Promptly upon their becoming available,
copies of all financial information delivered by CHH to
Prudential or GE Capital (except for information exclusively
relating to the collateral described in the Prudential Loan
Documents or in the documents securing the Accounts Receivable
Facility and the Working Capital Facility)."
2.5 Repayment of Subordinated Notes. A new Section
6.11 is hereby added to the Amended and Restated Term Loan
Agreement, as follows:
"Section 6.11. Repayment of Senior Subordinated Notes.
In connection with the Merger, CHH shall cause its 6-1/4%
senior subordinated notes due 2000 to be paid in full
through an equity infusion by Federated, and not
through the incurrence of debt."
2.6 Dividends. The second sentence of Section 7.01 of
the Amended and Restated Term Loan Agreement is hereby deleted.
2.7 Contracts With Affiliates. A new Section 7.02 is
hereby added to the Amended and Restated Term Loan Agreement as
follows:
"7.02 Transactions with Affiliates.
(a) CHH shall not enter into any transaction or
agreement (including, without limitation, any agreement
for management, administrative or other services or the
sharing of overhead or general or administrative
expenses) with any Affiliate of CHH, with Federated, or
with any Affiliate of Federated, except (i) for the
consummation of the transactions included within the
Merger Transactions, or (ii) in the ordinary course of
business and pursuant to the reasonable requirements of
the business of CHH; upon fair and reasonable terms no
less favorable to CHH than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate
of CHH or of Federated.
(b) CHH shall not create, incur, assume or suffer
to exist any contingent obligations for indebtedness or
contractual obligations or tax obligations of Federated
or any Affiliate of Federated except for those
obligations with respect to tax liabilities arising by
operation of law as a result of CHH's membership in the
Federated consolidated group.
(c) CHH shall not purchase or acquire, or make
any commitment therefor, any capital stock, equity
interest, all or substantially all of the assets of, or
any obligations or other securities of, or any interest
in, Federated or any Affiliate of Federated, or make
any advance, loan, extension of credit or capital
contribution to or any other investment in, Federated
or any Affiliate of Federated, except for intercompany
indebtedness incurred in the ordinary course of
business under Federated's cash management system.
(d) CHH shall not enter into any lease or
agreement to lease any portion of a Store to Federated
or any Affiliate of Federated.
(e) CHH shall obtain from Federated and/or its
Affiliates Xxxxxxx'x, Inc. and Macy's West, Inc. and
keep in effect such licenses as may be required to
operate under the Xxxxxxx'x or Macy's names any Store
using such names."
2.8 Financial and Operating Covenants. A new Section
7.03 is hereby added to the Amended and Restated Term Loan
Agreement as follows:
"Section 7.03 Financial and Operating Covenants.
(a) Minimum Tangible Net Worth. CHH shall
not permit, at any time, its tangible net worth
(as determined in accordance with GAAP) to be less
than two (2) times the outstanding principal
balance of the Amended and Restated Term Loan at
such time.
(b) Operating Covenant. Unless required to
do so by a final, non-appealable order of the
California Attorney General or of another
Governmental Authority, CHH shall not cease to be
engaged in the business of owning and operating
not fewer than thirty (30) retail department
stores substantially in accordance with its past
practices or the past practices of Federated, and
shall operate, unless and until each Store is duly
released as collateral in compliance with the
provisions of Sections 3.02A or 8.03A, at each
Store a retail department store which is of a
quality reasonably consistent with the quality of
other stores then bearing such name."
2.9 Transfer of Interests in CHH.
(a) Section 8.03B of the Amended and Restated
Term Loan Agreement is hereby amended and restated in its
entirety as follows:
"B. Interests in CHH. CHH acknowledges that
Agent and Banks are making the Amended and Restated Term
Loan in reliance on the expertise, skill and experience of
CHH; thus, the Amended and Restated Term Loan includes
material elements similar in nature to a personal service
contract. Accordingly, if at any time after the effective
date under the First Amendment to this Agreement and during
the term of the Amended and Restated Term Loan any of the
following events described in (1) and (2) below shall occur:
(1) any person or group (as such terms are
defined in the Exchange Act) except Merger Sub,
Federated or a Qualified Federated Subsidiary, acquires
beneficial ownership (as defined in the Exchange Act)
of voting stock of CHH that constitutes, immediately
following such acquisition, more than forty-eight
percent (48%) of the outstanding voting stock of CHH;
or
(2) CHH shall be merged with, or
consolidated into, any other corporation (unless the
beneficial owners of one hundred percent (100%) in the
aggregate of CHH's voting stock immediately prior to
the consummation of such a transaction beneficially own
at least fifty-one percent (51%), in the aggregate, of
the voting stock of the resulting or surviving
corporation immediately following the consummation of
the transaction);
THEN an Event of Default shall be deemed to exist
hereunder. For purposes hereof, a "Qualified Federated
Subsidiary" shall mean Macy's West, Inc., or any successor
thereto, so long as Macy's West, Inc. or such successor (i)
is a wholly-owned Subsidiary of Federated, (ii) has a net
worth, immediately upon its acquisition of the voting stock
of CHH, in an amount at least equal to that of CHH
immediately before such acquisition and in no event less
than the amount required under Section 7.03, and (iii) has
delivered to the Agent such documents as the Agent may
require in connection with such acquisition, including,
without limitation, transfer and assumption documents
whereby such Subsidiary assumes, on a recourse basis, all of
the Obligations of CHH under this Amended and Restated Loan
Agreement and under all other Restructured Loan Documents,
and organizational documents and documents evidencing the
authority of such Subsidiary to enter into and perform such
acquisition and assumption."
(b) Section 8.03C of the Amended and Restated
Term Loan Agreement is hereby deleted.
2.10 Licensed Names. Section 8.04 of the Amended and
Restated Term Loan Agreement is hereby amended and restated in
its entirety as follows:
"Section 8.04 Enforcement of Restrictions on
Licensed Names. Following a judicial or nonjudicial
foreclosure sale under any Mortgage, or any deed in lieu of
foreclosure, and for so long as the Banks' rights under
Section 3.01E above and the Amended and Restated License
Agreement or Federated License Agreement shall remain in
effect, CHH shall enforce (or shall cause Federated and/or
its Affiliates Xxxxxxx'x, Inc. and Macy's West, Inc. to
enforce) all restrictions on the use of the "Broadway",
"Broadway Southwest", "Weinstocks", "Xxxxxxx'x" or "Macy's"
name, as the case may be, or on the operation of any store
then bearing such name, which apply to any other party who
has been granted a right to use such name. CHH acknowledges
that its failure to enforce (or to cause Federated and/or
its Affiliates Xxxxxxx'x, Inc. and Macy's West, Inc. to
enforce) such restrictions could cause irreparable harm to
the Banks and their successors, and that monetary damages
would not be an adequate remedy for such breach, and CHH and
Banks accordingly agree that the Banks and their successors
shall enforce the foregoing restrictions exclusively through
injunctions, restraining orders, declaratory and other
equitable relief. The foregoing obligations shall survive
any judicial or nonjudicial foreclosure under any or all of
the Mortgages or any deed in lieu of foreclosure."
2.11 Nondisturbance Letter. Section 9.06 of the
Amended and Restated Term Loan Agreement is hereby amended and
restated in its entirety as follows:
"Section 9.06 Failure to Deliver Nondisturbance
Letter. Failure by CHH or Federated and/or its Affiliates
Xxxxxxx'x, Inc. and Macy's West, Inc. to deliver to Agent
and Banks the Nondisturbance Letters required by Section
3.01E(3)(a) in the event that CHH or Federated and/or its
Affiliates Xxxxxxx'x, Inc. and Macy's West, Inc. grants to
any party, other than the lenders party to the Intercreditor
Agreement, a security interest in the trade names,
trademarks or trade styles used in connection with any of
the Stores subject to the Amended and Restated License
Agreement or the Federated License Agreement; or"
2.12 Appraisal Costs. The following sentence is hereby
added to Section 11.06 of the Amended and Restated Term Loan
Agreement:
"Notwithstanding anything to the contrary set forth
herein (including, without limitation, in clause (a) of
this Section 11.06 or in Section 3.02), CHH shall pay
all costs and expenses incurred by the Agent or any
Bank in connection with the appraisal of any one or
more of the Stores (i) no more frequently than once
annually or (ii) at any time after the occurrence of
any Event of Default."
2.13 Recourse. Section 11.22 of the Amended and
Restated Term Loan Agreement, and each reference thereto
contained in the Restructured Loan Documents, is hereby deleted,
it being understood and agreed that, notwithstanding anything to
the contrary set forth in the Amended and Restated Term Loan
Agreement or the Restructured Loan Documents, the obligations of
CHH under the Amended and Restated Term Loan Agreement and all
Restructured Loan Documents shall be personal, recourse
obligations of CHH.
ARTICLE III
AMENDMENTS TO OTHER RESTRUCTURED LOAN DOCUMENTS
Upon the Effective Date, Company, Agent and Banks
hereby amend the other Restructured Loan Documents as follows:
3.1 Amendments to Notes. The Master Principal Note
and the Master Capitalized Interest Note are each hereby amended
by deleting therefrom the sentence which reads as follows: "The
obligations of Borrower hereunder are non-recourse obligations
except as described in Section 11.22 of the Agreement and Section
4.06 of the Deeds of Trust, which provisions govern the
limitations on the rights of Agent and Banks to seek a personal
or deficiency judgment on this Note."
3.2 Amendments to Security Documents.
(a) Each of the Mortgages are amended as
follows:
(i) Section 1.10(b) of each Mortgage is
amended by deleting therefrom the clause ",
subject to the provisions of Section 4.06 hereof
and Section 11.22 of the Loan Agreement".
(ii) Section 1.12(g) of each Mortgage is
amended by replacing "Pursuant to Section 10.18 of
the Loan Agreement and Section 4.06 hereof, the"
with "The".
(iii) Section 4.06 of each Mortgage,
and each reference thereto contained in the
Restructured Loan Documents, is hereby deleted, it
being understood and agreed that notwithstanding
anything to the contrary set forth in the Amended
and Restated Term Loan Agreement or the
Restructured Loan Documents, the obligations of
CHH under the Amended and Restated Term Loan
Agreement and all Restructured Loan Documents
shall be personal, recourse obligations of CHH.
(b) Section 17 of each Assignment of Leases,
Occupancy Agreements, Licenses and Concession
Agreements is hereby deleted.
(c) Section 11 of each Assignment of
Warranties, Personal Property Leases and Service
Contracts is hereby deleted.
(d) Section 15 of each Assignment of Options
and Security Agreement is hereby deleted.
ARTICLE IV
Representations and Warranties
In order to induce Agent and Banks to enter into this
First Amendment, Company hereby represents and warrants to Bank
as follows, which representations and warranties shall be true
and correct as of the date hereof and as of the Effective Date,
after giving effect to the Merger Transactions:
4.1 Authorization. The execution, delivery and
performance of this First Amendment and the consummation of the
Merger Transactions have been duly authorized by all necessary
action of Company, Federated and Merger Sub.
4.2 No Conflict. The execution, delivery and
performance by Company of this First Amendment and consummation
of the Merger Transactions do not and will not (a) violate any
Legal Requirements applicable to Company, Federated or Merger Sub
or their respective organizational documents, (b) conflict with,
result in a breach of or constitute (with due notice or lapse of
time or both) a default under any contractual obligation or
indebtedness of the Company, or (c) result in or require the
creation or imposition of any lien upon any of the properties of
Company other than those created or permitted by the Restructured
Loan Documents, as amended pursuant hereto.
4.3 Consents. The execution, delivery and performance
by Company of this First Amendment and the consummation of the
Merger Transactions do not and will not require any registration
with, consent or approval of, or notice to, or other action by,
any governmental authority, or any trustee or holder of any
indebtedness or obligation of Company, Federated or Merger Sub,
or other Person, or if required, such registration has been made,
such consent or approval given, such notice given or such other
appropriate action taken, and certified copies of the same have
been delivered to Agent.
4.4 Binding Obligation. This First Amendment is the
legal, valid and binding obligation of Company, enforceable
against it in accordance with its terms.
4.5 Representations and Warranties in Loan Documents.
The representations and warranties of Company contained in the
Restructured Loan Documents, as amended pursuant hereto, are true
and correct on and as of the date hereof as though made on and as
of the date hereof, and will be true and correct on and as of the
Effective Date as though made on and as of that date and no
Default or Event of Default has occurred and is continuing as of
the date hereof or will have occurred and be continuing as of the
Effective Date or has resulted or will result herefrom or, upon
the Effective Date, from consummation of the Merger Transactions
(assuming the effectiveness of the amendments to the Amended and
Restated Term Loan Agreement contained herein).
4.6 No Offset. Company has no claims, offsets or
defenses with respect to the payment of any sums or performance
of any obligations due under the Restructured Loan Documents.
ARTICLE V
Miscellaneous
5.1 Ratification of Loan Documents. Except as
expressly amended or terminated hereby or pursuant hereto, the
Amended and Restated Term Loan Agreement and the other
Restructured Loan Documents shall remain in full force and effect
in accordance with their terms, and hereby in all respects
ratified and confirmed. Nothing in this First Amendment shall
impair the first priority liens of the Mortgages on any
unreleased collateral. The consent and waiver set forth in the
Merger Consent Letter apply and are effective only with respect
to any Default or Event of Default that arises or could arise
solely as a result of a violation of Section 8.03 of the Amended
and Restated Term Loan Agreement and analogous provisions of the
other Restructured Loan Documents as a result of the Company,
Merger Sub and Federated entering into and consummating each of
the Merger Transactions. The Agent and Banks hereby reserve all
rights provided under the Restructured Loan Documents, as amended
hereby, with respect to any other or future transactions and with
respect to any other existing Defaults or Events of Default, if
any. The Company affirms and agrees that the Security Documents,
as amended hereby, secure the full performance of each and every
obligation under the Master Principal Note, the Master
Capitalized Interest Note, the Amended and Restated Term Loan
Agreement and the Obligations as defined therein, and that the
Security Documents continue to be effective as, and to
constitute, first and prior liens and charges on the Stores to
the full extent of all obligations secured thereby.
5.2 Waiver of One Form of Action and Anti-Deficiency
Rules. In consideration of the Agent's and Banks' entering into
this First Amendment, the Company hereby expressly and
irrevocably waives all rights, privileges, benefits and defenses
that the Company may have under, arising out of, or based on
California Code of Civil Procedure Sections 580a, 580d and 726.
Without limiting the foregoing, the Company agrees not to plead
or assert California Code of Civil Procedure Section 580a, 580d
or 726 as an affirmative claim or a defense to, or in connection
with, any action or other proceeding (including, but not limited
to, any judicial or nonjudicial foreclosure under any of the
Mortgages). The Company hereby represents, warrants, and
acknowledges that (a) the modifications of the Amended and
Restated Term Loan herein constitute a revision or modification
and do not constitute a renewal of the Amended and Restated Term
Loan; and (b) the Agent and Banks are relying upon such waivers
and the foregoing representations, warranties and acknowledgments
in entering into this First Amendment, and without such waivers,
representations, warranties and acknowledgments, the Agent and
Banks would not do so.
5.3 Counterparts. This First Amendment may be
executed in any number of counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to
be an original, and all such counterparts together shall
constitute but one and the same instrument.
5.4 Fees and Expenses. Whether or not the
transactions contemplated hereby are consummated, Company shall
pay promptly upon demand all reasonable fees, expenses and
disbursements of counsel (including reasonably allocated costs of
in-house counsel), and other out-of-pocket costs incurred by the
Agent and any Bank in connection with the negotiation,
documentation and closing of the transactions contemplated
hereby.
5.5 Integration. The Restructured Loan Documents,
including this First Amendment: (a) integrate all the terms and
conditions mentioned in or incidental to the Restructured Loan
Documents, (b) supersede all oral negotiations and prior and
other writings with respect to their subject matter, and (c) are
intended by the parties as the final expression of their
agreement with respect to the terms and conditions set forth in
the Restructured Loan Documents and as the complete and exclusive
statement of the terms agreed to by the parties. If there is any
conflict between the terms, conditions and provisions of this
First Amendment and those of any other Restructured Loan
Documents, the terms, conditions and provisions of this First
Amendment shall prevail.
5.6 Separability. If any court of competent
jurisdiction determines any provision of this First Amendment or
any of the other Restructured Loan Documents to be invalid,
illegal or unenforceable, that portion shall be deemed severed
from the rest, which shall remain in full force and effect as
though the invalid, illegal or unenforceable portion had never
been a part of the Restructured Loan Documents. This First
Amendment shall be governed by California law. This First
Amendment is a Restructured Loan Document.
WITNESS the due execution of this First Amendment by
the respective duly authorized officers of the undersigned as of
the date first written above.
Company/CHH: BROADWAY STORES, INC. (formerly
known as XXXXXX XXXXXX XXXX STORES,
INC.), a Delaware corporation
By: \s\ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Treasurer
Agent and Banks: BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, a national
banking association, as Agent
By: \s\ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, a national
banking association, as a Bank
By: \s\ Xxxxx Xxxx Strand
Name: Xxxxx Xxxx Strand
Title: Vice President
BARCLAYS BANK PLC, as a Bank
By: \s\ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President
THE TOKAI BANK LIMITED, as a Bank
By: \s\ Mosahiko Saito
Name: Mosahiko Saito
Title: Assistant General Manager
Exhibit A
CERTIFICATE OF BROADWAY STORES, INC.
(Pursuant to Section 1.1(a) of the
First Amendment of the Amended and Restated Term Loan Agreement )
Pursuant to Section 1.1(a) of that certain First
Amendment to Amended and Restated Term Loan Agreement, dated as
of October 11, 1995 among BROADWAY STORES, INC., formerly known
as XXXXXX XXXXXX XXXX STORES, INC., a Delaware corporation (the
"Company" or "CHH"), BARCLAYS BANK PLC, a bank organized under
the laws of the United Kingdom, THE TOKAI BANK LIMITED, a bank
organized under the laws of Japan, acting through its Los Angeles
Agency, and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, a national banking association (collectively,
"Banks," and individually, a "Bank"), and BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking
association, as agent for Banks (in such capacity, "Agent") (the
"First Amendment") which First Amendment amends the Amended and
Restated Term Loan Agreement, dated as of October 8, 1992, among
Company, Agent and Banks (the "Amended and Restated Term Loan
Agreement"; all capitalized terms used but not defined herein
having the meanings set forth in the Amended and Restated Term
Loan Agreement), Company represents, warrants, certifies and
covenants in favor of Agent and Banks as follows:
1. The Merger Transactions (as defined in the First
Amendment) have been consummated in accordance with the terms
previously disclosed in writing to Agent and Bank.
2. The representations and warranties of Company
contained in the First Amendment are true and correct as of the
date hereof and after giving effect to the Merger Transactions
(assuming the effectiveness of the First Amendment).
3. No Default or Event of Default has occurred and is
continuing on the date hereof after giving effect to the Merger
Transactions (assuming the effectiveness of the First Amendment).
4. Attached hereto are true and correct copies of:
(i) any modifications of the organizational documents of the
Company, any Subsidiary entered into in connection with the
Merger Transactions and (ii) all instruments, contracts,
agreements and documents entered into by the Company, Federated
or any Affiliate of the Company or Federated with Prudential or
GE Capital in connection with the Merger Transactions.
5. All conditions precedent set forth in Section 1.1
of the First Amendment have been satisfied.
IN WITNESS WHEREOF, the undersigned, being duly
authorized, have executed this Certificate on behalf of Company
as of this 11th day of October, 1995.
BROADWAY STORES, INC., formerly
known as XXXXXX XXXXXX XXXX STORES,
INC.,
a Delaware corporation
By:
Name:
Title:
By:
Name:
Title:
Exhibit B
OPINIONS TO BE RENDERED IN THE LEGAL
OPINIONS TO BE DELIVERED PURSUANT TO SECTION 1.1(j)
1. That the execution, delivery, and performance of this First
Amendment have been duly authorized by all necessary corporate
action on the part of the Company.
2. That this First Amendment has been duly executed and
delivered by the Company.
3. That this First Amendment is a valid and binding obligation
of the Company, enforceable in accordance with its terms.
4. That the execution, delivery, and performance of this First
Amendment do not (a) violate the organizational documents of the
Company, or (b) violate, or require any consents, approvals,
authorizations, registrations, declarations or filings by the
Company under, any federal statute or the corporate or
partnership laws of the state under which the Company is
organized.
Exhibit C
Form of Federated License Agreement
LICENSE AGREEMENT
THIS LICENSE AGREEMENT ("Agreement") is made and dated
as of _________, by and between _________ ("Licensor"), Bank of
America National Trust and Savings Association, a national
banking association as agent (in such capacity, "Agent") for the
ratable benefit of Agent and Barclays Bank, P.L.C., The Tokai
Bank Limited, Bank of America National Trust and Savings
Association and the banks ("Banks") that are from time to time
party to the Loan Agreement (as defined below).
RECITALS
A. Broadway Stores, Inc. (formerly known as Xxxxxx Xxxxxx
Xxxxx Stores, Inc.), a Delaware corporation ("CHH"), Banks and
Agent are parties to that certain Amended and Restated Term Loan
Agreement dated as of October 8, 1992 (as amended, the "Loan
Agreement"), as amended by that certain First Amendment to
Amended and Restated Term Loan Agreement dated as of _________
(the "First Amendment to the Loan Agreement"). Capitalized terms
not otherwise defined herein have the defined meanings given in
the Loan Agreement as amended. The Obligations under the Loan
Agreement are secured primarily by first mortgage liens in favor
of Agent (for the ratable benefit of Agent and Banks) on a total
of nine (9) retail department stores[, as to certain of which
Licensor may be granting to CHH a license to use certain names
and marks described below] (collectively, "Stores," and
individually, a "Store"). As hereinafter used in this Agreement,
the terms "Agent" and "Banks" shall mean and include Agent or
such Bank, any subsidiary or affiliate of Agent or such Bank
designated by Agent or such Bank to hold title to or possession
or control of any Store in connection with the exercise of
Agent's or such Bank's rights and remedies under the Restructured
Loan Documents, any assignee (to the extent permitted under the
Loan Agreement, as amended) of, or successor to, Agent's or such
Bank's right, title and interest in or under the Loan Agreement,
as amended, or any Mortgage, and any subsidiary or affiliate of
such assignee or successor designated by Agent or such Bank to
hold title to or possession or control of any Store in connection
with the exercise of Agent's or such Bank's rights and remedies
under the Restructured Loan Documents.
B. Pursuant to the First Amendment to the Loan Agreement,
Licensor has agreed to grant to Agent (for the ratable benefit of
Agent and Banks) the right under certain circumstances
hereinafter described to use the "Xxxxxxx'x" and "Macy's" names
and certain other names, marks and other rights relating to the
operation of the Stores, subject in all respects to the terms and
conditions set forth below.
NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:
AGREEMENT
Grant of License.
Licensor hereby grants to Agent (for the ratable
benefit of Agent and Banks) and Agent (for the ratable benefit of
Agent and Banks) hereby accepts from Licensor a non-exclusive
right, privilege and license (the "License") to adopt and use,
with respect to each Store during the License Term (as
hereinafter defined), if any, applicable thereto, the names which
are used by Licensor in connection with the operation of such
Store at the time it becomes a Non-Performing Store (as such term
is hereinafter defined), and all other names, logos, marks and
derivations thereof used by Licensor at the time each such Store
becomes a Non-Performing Store to identify its goods sold in such
Non-Performing Stores (including all departments thereof),
including, without limitation, the state and federally registered
trademarks and service marks listed in Schedule A attached hereto
(collectively called the "Marks") then so used, for the sole
purpose of operating each Non-Performing Store as a retail
department store. Agent and Banks shall have no obligation to
pay any royalty, fee or other monetary consideration to Licensor
or any other person or entity for or in connection with the
rights granted to it under this Agreement, except as provided in
Paragraph 7. Licensor shall also take all such action as may be
reasonably necessary to permit its licensed manufacturers and
distributors of goods sold under any label or house brand name
belonging to the Licensor to sell to Agent (for the ratable
benefit of Agent and Banks) and their Permitted Assignees (as
hereinafter defined) such goods as would be regularly sold by
Licensor under private labels or brand names to retail customers
of any Non-Performing Stores during the respective License Terms
pertaining thereto.
License Term.
The term "License Term" shall mean the following with
respect to each Store:
(i)In the case of each Store which is subject to one
or more Operating Covenants, the License Term with
respect to that Store shall commence at the time
such Store becomes a Non-Performing Store and
shall continue, notwithstanding one or more
subsequent sales or transfers of the Store, until
the earlier of (i) the date the Operating Covenant
expires or sooner terminates and (ii) the date
Agent receives a fully executed amendment to the
applicable Shopping Center Document (satisfactory
in form and substance to Agent), which either
effects a deletion of the applicable Operating
Covenant or renders the applicable Operating
Covenant inapplicable to Agent and Banks and their
designees, successors and assigns.
(ii) In the case of any Store not subject to an
Operating Covenant, and in the case of a Store
subject to an Operating Covenant which expires or
terminates on or prior to the date such Store
becomes a Non-Performing Store, the License Term
of that Store shall commence at the time such
Store becomes a Non-Performing Store and shall
expire upon the sale or transfer by Agent (for the
ratable benefit of Agent and Banks) of any
interest in such Store which includes the right to
operate such Store.
As used herein, the term "Non-Performing Store" means
any Store which (i) has been acquired by Agent (for the ratable
benefit of Agent and Banks) or its designee through foreclosure,
deed (or other transfer) in lieu of foreclosure, sale pursuant to
a power of sale, or any other sale or transfer in connection with
Agent's and Banks' exercise of their rights and/or pursuit of
their remedies under the Restructured Loan Documents or (ii) as
to which Agent (for the ratable benefit of Agent and Banks) or a
receiver appointed under the Security Documents has gained lawful
possession through foreclosure proceedings or otherwise in
connection with Agent's and Banks' exercise of their rights
and/or pursuit of their remedies under the Restructured Loan
Documents.
Term of Agreement.
This Agreement shall become effective on the date
hereof and shall continue in effect until such time as both of
the following shall have occurred:
A. Agent and Banks shall cease to have any lien,
mortgage, encumbrance or security interest of any kind or
nature in or with respect to any of the Stores; and
B. The License Terms with respect to all Non-
Performing Stores have expired.
Nonexclusive License.
During the License Term with respect to each Store,
Agent (for the ratable benefit of Agent and Banks) (or, if such
Store shall have been sold or transferred to a Permitted Assignee
(as hereinafter defined), then that Permitted Assignee) shall
have an exclusive License to use the Marks, with respect to that
Store, in connection with the operation of that Store. Except as
provided in the foregoing sentence, this License shall be
nonexclusive.
Representations, Warranties and Covenants.
A. Licensor represents and warrants that it has, and
will have at all times during any License Term, the right to
use the Marks with respect to the Stores; that Licensor
owns, and will own at all times during any License Term, the
Marks free and clear of all liens and encumbrances of every
kind and nature, except (i) liens and security interests
securing obligations of CHH or its affiliates pursuant to
that certain Working Capital Facility by and among CHH and
GE Capital and that certain Trademark Security Agreement,
executed and delivered in connection therewith; (ii) that
certain License Agreement, dated as of August 27, 1987, by
and among CHH, Thalhimer Brothers, Inc. and The Prudential
Insurance Company of America ("Prudential"), as amended,
modified or restated from time to time; (iii) liens,
encumbrances and licenses in respect of the use of the Marks
on property other than the Stores; and (iv) licenses, liens
and security interests securing obligations of CHH or its
Affiliates pursuant to any and all refinancings,
replacements and/or substitutions of the Working Capital
Facility, the Accounts Receivable Facility, or of the loans
evidenced by the Prudential Loan Documents (provided,
however, that any agent, lender or lenders under any such
refinancing, replacement or substitution acquiring such a
lien or security interest shall execute and deliver to Agent
the Non-Disturbance Letter as provided in Section 3.01E(a)
of the Loan Agreement); that there are no claims, actions or
suits pending or, to the best of Licensor's knowledge,
threatened which challenge Licensor's rights in and to the
Marks; that no infringement action has been brought or, to
the best of Licensor's knowledge, threatened, with respect
to Licensor's use of the Marks, or any of them; that
Licensor does not know or have reason to know of any fact
which could give rise to a claim of infringement by any
person or entity relating to Licensor's ownership, licensing
(including, without limitation, this License, the rights of
the lenders under the Working Capital Facility or the rights
of Prudential under the Prudential License) or use of the
Marks; that there are no presently effective determinations
of the U.S. Trademark Administrator or the administrator of
any state or court and there are no pending interference,
opposition or cancellation proceedings or any pending
litigation that could adversely affect Agent's and Bank's
use of the Marks as provided herein; that there is not, and
will not be at any time during any License Term, any
agreement to which Licensor is a party which prohibits or
limits (other than in connection with a reasonable
settlement of an infringement contest) the rights of
Licensor to use or license the use of the Marks in respect
of the Stores as provided herein; and that the registered
trademarks and service marks listed on Schedule A hereto,
constitute all of the trademarks and service marks material
to the operation of any Store.
B. Licensor covenants and agrees that at all times
during the term of this Agreement, it shall use reasonable
efforts to protect each and every right which Agent and
Banks have under this Agreement, at Licensor's sole cost and
expense. Without limiting the foregoing, Licensor shall use
reasonable efforts to pursue any infringement (except for a
trivial or insignificant infringement) of the Marks of which
Licensor has knowledge; provided, however, that if Licensor
fails to pursue any such infringement which affects Agent's
and Banks' rights hereunder in any material respect, then,
in addition to any right or remedy which Agent and Banks may
have against Licensor, Agent and Banks shall have the right
to bring suit, or to commence other legal proceedings, on
behalf of Agent and Banks and Licensor, to enjoin any such
infringement, to seek damages on account thereof, and to
obtain any other remedy available at law or in equity.
Protection of Marks.
A. Agent and Banks hereby agree that (i) if Agent
(for the ratable benefit of Agent and Banks) operates any
Non-Performing Store under the applicable licensed name
pursuant to the terms of this License, Agent and Banks shall
use reasonable efforts to cause such Store to be operated in
such manner (x) as is consistent with the quality of other
stores then bearing such name, and (y) as will not
materially adversely affect the reputation of any other
stores then bearing such name, and (ii) if Agent (for the
ratable benefit of Agent and Banks) operates any Non-
Performing Store as anything other than a retail department
store which, after a reasonable start-up time, is of a
quality reasonably consistent with the quality of other
stores then bearing such licensed name, Agent and Banks
shall, after written notice from Licensor and continued
failure within the next sixty (60) days to commence to
operate the Store at the required level of quality, cease to
operate such Store under the applicable licensed name, and
the License Term applicable to such Store shall terminate;
provided, however, that (i) Agent and Banks shall not be
entitled to an additional thirty (30) day cure period under
paragraph 9, after the expiration of said sixty (60) days
period, and (ii) Agent and Banks shall not be responsible or
liable under any circumstances whatsoever for or on account
of any act or omission of Licensor or any of its
Subsidiaries or Affiliates, or of any employee, officer, or
agent of any thereof.
B. Agent and Banks acknowledge and agree that any
goodwill arising from the use of the Marks by Agent (for the
ratable benefit of Agent and Banks) belongs solely to
Licensor and that Agent and Banks have no rights therein or
thereto either during or after the License Terms. Agent and
Banks shall not, either during or after any License Term,
directly or indirectly do or assist any person or entity to
do anything which would in any material respect infringe
upon, harm, or contest the rights of Licensor in the Marks.
C. Agent (for the ratable benefit of Agent and
Banks) shall use the Marks only in conjunction with the
operation of the Non-Performing Stores and only in the form
and manner previously used at such Stores by Licensor.
Agent (for the ratable benefit of Agent and Banks) shall not
(i) add any other names, words or marks to the Marks; (ii)
make any variations in the use of the Marks; or (iii) use
the Marks to create new "private label" goods unless
approved first, in writing, by Licensor.
Licensor's Agreement to Operate.
If, at any time during one or more of the License
Terms, Licensor is then engaged in the business of owning and
operating retail department stores, and Agent (for the ratable
benefit of Agent and Banks) or any Permitted Assignee is then
operating one or more Stores under the "Xxxxxxx'x" or "Macy's"
names, then, for the balance of the applicable License Terms (or
such shorter period as Agent may designate), Licensor shall, upon
the written request of Agent, (a) manage the applicable Store or
Stores, using all of its know-how, expertise and best efforts,
and (b) in connection therewith use reasonable efforts to make
available to Agent (for the ratable benefit of Agent and Banks)
Licensor's private labels and other products then sold in
Xxxxxxx'x or Macy's stores, all upon terms and conditions
reasonably satisfactory to Licensor, Agent and Banks. The
foregoing notwithstanding, the referenced terms and conditions
shall not be more onerous to Agent and Banks than they would be
to other third parties for whom Licensor would provide similar
services and make such products available, and with respect to
the management fee and other associated costs payable to Licensor
by Agent and Banks, shall be comparable to the fees and costs
other third parties with experience and expertise comparable to
that of Licensor would reasonably be expected to charge therefor.
In no event shall the lenders under the Working Capital Credit
Facility be obligated to undertake any of the obligations of CHH
under this Paragraph 7.
Post-Term Obligations.
Upon termination of the License Term for any Store,
Agent and Banks shall:
A. Immediately and permanently cease to use, directly
or indirectly, any of the Marks (and anything confusingly
similar) at that Store; and
B. Promptly remove from such Store all stationery,
letterheads, forms, printed matter, promotional displays, signs
and advertising containing any of the Marks.
Remedies.
In the event Agent or Banks breach any covenant of this
Agreement, Licensor shall provide Agent with written notice
thereof, specifying therein the nature of such breach and the
manner in which such breach may be cured. If Banks fail to
commence to cure such breach within thirty (30) days of its
receipt of Licensor's written notice, Licensor shall have the
right to terminate Banks' use of the Marks only in connection
with the operation of the Store or Stores with respect to which
such breach occurred, and shall not have the right to terminate
this Agreement or Agent's use of the Marks in connection with the
operation of any other Store. Licensor agrees that it shall not
be entitled to pursue any legal or equitable remedy against Agent
and Bank other than the enforcement of the agreement of Banks to
cease use of the Marks as described above upon the breach of any
covenant of this Agreement by Agent and Bank.
Assignment.
This Agreement shall be binding upon and inure to the
benefit of the parties hereto, their respective legal
representatives, successors and permitted assigns. Except as may
be permitted by the Loan Agreement, CHH shall be prohibited from
assigning this Agreement or any of its rights hereunder and from
delegating any of its obligations under this Agreement without
the prior written consent of Agent and Majority Banks, which may
be withheld in Agent's and Majority Banks' sole discretion except
that Licensor's rights and obligations under Paragraph 7 hereof
may not be assigned or delegated under any circumstances. A
"Permitted Assignee" shall mean any person or entity who acquires
title to or possession or control from Agent (for the ratable
benefit of Agent and Banks) directly or indirectly through one or
more Permitted Assignees of one or more Stores which are then
subject to Operating Covenants. Except in the case of the rights
and obligations described or referred to in Paragraph 7 of this
Agreement, Agent (for the ratable benefit of Agent and Banks) and
any Permitted Assignee may assign this Agreement and any or all
of their respective rights hereunder (other than the rights
granted in paragraph 2(ii) hereof, which may not be assigned to a
Permitted Assignee), and may delegate any or all of the
respective obligations under this Agreement to one or more
Permitted Assignees, but only to the extent that such rights and
obligations pertain to the Stores respectively sold or
transferred to such Permitted Assignees; provided that each such
Permitted Assignee shall execute and deliver to Licensor a
written agreement to be bound by the provisions hereof (except
the provisions of Paragraph 7). Upon any sale or transfer of a
Store or Stores by Agent (for the ratable benefit of Agent and
Banks) or a Permitted Assignee to any Permitted Assignee, the
selling or transferring party shall thereupon be relieved of any
obligation hereunder to Licensor relating to the Store or Stores
so sold or transferred, except for obligations relating to
periods prior to such sale or transfer, if any. Except as
provided in this Paragraph 10, and except in connection with (i)
a sale or transfer of Agent's (for the ratable benefit of Agent
and Banks) interest as mortgagee of a Store in accordance with
the terms and provisions of the Loan Agreement, or (ii) a
transfer by Agent (for the ratable benefit of Agent and Banks) to
one of its affiliates, Agent may not assign this Agreement or its
rights hereunder or delegate its obligations hereunder without
the prior written consent of Licensor.
Terminology.
All terms and words used in this Agreement, regardless
of the number and gender in which they are used, shall be deemed
and construed to include any other number and any other gender as
the context of this Agreement requires.
Enforcement.
The rights granted to Agent and Banks under this
Agreement are part of the essential basis of the bargain in
connection with the First Amendment to the Loan Agreement, and
Agent and Banks would not have made the First Amendment to the
Loan Agreement without this Agreement. Accordingly, the terms of
this Agreement shall be strictly enforced.
Miscellaneous.
A. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of
California.
B. The paragraph captions appearing herein are solely
for convenience of reference and shall not affect the
interpretation or application of any of the provisions
hereof.
C. This Agreement may be executed in any number of
counterparts and by the respective parties hereto in
separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together
shall be constitute one and the same agreement.
D. This Agreement, together with the provisions of
Section 3.01E of the Loan Agreement, is intended by the
parties as a final expression and a complete and exclusive
statement of the agreement and understanding of the parties
hereto in respect of the subject matter hereof. There are
no agreements, promises, understandings, representations,
warranties, undertakings or restrictions with respect to
such subject matter except those set forth herein. This
Agreement supersedes all contemporary and prior oral and
written agreements and understandings among the parties with
respect to such subject matter.
E. This Agreement may be amended, modified or
supplemented only by a subsequent written agreement executed
by all of the parties hereto.
F. Whenever and so often as requested by Agent or a
Permitted Assignee, Borrower will (i) promptly execute and
deliver or cause to be executed and delivered all such other
and further instruments, documents or assurances (including,
without limitation, Uniform Commercial Code financing
statements evidencing the rights and interests created
hereunder), and (ii) promptly do or cause to be done all
such other and further things (in the case of both (i) and
(ii) above) as may be necessary and reasonably required in
order to give public notice of, or to further and more fully
vest in Agent for the ratable benefit of Agent and Banks, or
such Permitted Assignee, all rights, interests, powers,
benefits, privileges and advantages conferred or intended to
be conferred by this Agreement.
G. Licensor hereby waives any right to require Agent
or Banks to (i) proceed against CHH, (ii) proceed against or
exhaust any security held from CHH, or (iii) pursue any
other remedy in Agent's or Banks' power whatsoever.
Licensor waives any defense because of any disability, any
modification of the Obligations under the Loan Agreement or
other defense or cessation of liability of CHH or any other
person and waives any right of subrogation or any right to
participate in any security for the Obligations under the
Loan Agreement. Agent and Banks may, at their election and
in their sole discretion, exercise any right or remedy they
may have against CHH or any security held by them.
IN WITNESS WHEREOF, the parties have executed this
License Agreement on the date first above written.
LICENSOR
,
a
By:
Name:
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, a national
banking association, as Agent
By:
Name:
Title:
BARCLAYS BANK, P.L.C.,
as a Bank
By:
Name:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
a national banking association,
as a Bank
By:
Name:
Title:
THE TOKAI BANK LIMITED,
as a Bank
By:
Name:
Title:
SCHEDULE A
TO
LICENSE AGREEMENT
Federal Registration
Registration
Xxxx Number Date Issued
XXXXXXX'X
MACY'S
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