THIRD AMENDMENT TO SECOND AMENDED AND RESTATED FINANCING AGREEMENT
Exhibit 10.26
THIRD AMENDMENT TO SECOND AMENDED AND
RESTATED FINANCING AGREEMENT
RESTATED FINANCING AGREEMENT
This THIRD AMENDMENT TO SECOND AMENDED AND RESTATED FINANCING AGREEMENT (this “Amendment”) is
entered into as of February 8, 2008, by and among BIG 5 CORP., a Delaware corporation (hereinafter
referred to as “Big 5”), BIG 5 SERVICES CORP., a Virginia corporation (hereinafter referred to as
“Big 5 Services”; and, together with Big 5, collectively, the “Companies”, and each individually a
“Company”), the Lenders party hereto and THE CIT GROUP/BUSINESS CREDIT, INC., a New York
corporation, as agent for the Lenders (in such capacity, the “Agent”).
RECITALS:
A. The Companies, the Lenders, and Agent have previously entered into that certain Second
Amended and Restated Financing Agreement dated as of December 15, 2004 (as amended, restated or
otherwise modified from time to time, the “Financing Agreement”).
B. The Companies, the Required Lenders, and Agent have agreed to amend the Financing Agreement
on the terms and subject to the conditions set forth below.
AGREEMENTS:
Accordingly, in consideration of the premises and the mutual covenants contained herein, and
for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. Definitions Incorporated. Initially capitalized terms used but not defined in this
Amendment have the respective meanings set forth in the Financing Agreement.
2. Amendments to Financing Agreement. The Financing Agreement is hereby amended as
follows:
(a) Amended and Restated Definitions. Each of the following definitions set
forth in Section 1 of the Financing Agreement is hereby amended and restated in their
entirety to read as follows:
Availability Reserve shall mean at any time of determination an amount
equal to the sum of: (a) the then undrawn amount of all outstanding Letters of
Credit, (b) the amount of all past due sales taxes due any state, and (c) the amount
of any reserve which the Agent may establish from time to time pursuant to the
express terms of this Financing Agreement, including, without limitation, reserves
in an amount equal to all or a portion of any tax liens outstanding at any time,
including for all interest and penalties thereon as described in Section 6.6.
Fixed Charge Coverage Ratio shall mean, for the twelve (12) month
period then ending, the ratio determined by dividing EBITDA by the sum of: (i)
Capital Expenditures, (ii) Interest Expense, (iii) scheduled amortization of any
Indebtedness of the Companies, (iv) all federal, state and local income tax expenses
paid or accrued, and (v) payments of dividends and distributions in respect of the
capital stock of the Companies (without duplication of the items set forth in the
foregoing clause (iv)); provided however, any such payments up to
$25,000,000 of dividends and distributions that were used by the Parent to
repurchase, acquire or redeem its issued and outstanding capital stock during its
fiscal years ending December 2007 and December 2008 shall not be included in
calculating the amount under this clause (v).
(b) New Definition. The following definition is hereby added to Section 1 of
the Financing Agreement in proper alphabetical order:
Gross Availability shall mean at any time of determination, the
Borrowing Base, less the sum of: (x) the outstanding aggregate amount of all
Obligations (excluding all Obligations in respect of the outstanding amounts of any
Letters of Credit and outstanding principal amount of the Term Loan) and (y) the
Availability Reserve.
(c) Section 6.2. The following is hereby added to the end of Section 6.2 of
the Financing Agreement:
Each Company further agrees to use its best efforts to promptly obtain waivers in
favor of the Agent from its landlords and warehouse operators, in form and substance
satisfactory to the Agent.
(d) Section 6.12. Section 6.12 of the Financing Agreement is hereby amended
and restated to read in its entirety as follows:
6.12. Until termination of the Financing Agreement and payment and
satisfaction in full of all Obligations hereunder, Big 5 and its
Subsidiaries, on a consolidated basis, shall maintain at the end of each
fiscal quarter during which the average daily Gross Availability is less
than $40,000,000, a Fixed Charge Coverage Ratio of not less than 1.0 to 1.0.
(e) Section 13.7. The following is hereby added to the end of Section 13.7 of the Financing Agreement:
The parties to this Financing Agreement prefer that any dispute between or
among them be resolved in litigation subject to the jury trial waiver as set forth
above in this Section 13.7. If a pre-dispute jury trial waiver of the type
provided for in this Section 13.7 is unenforceable in litigation to resolve
any dispute, claim, cause of action or controversy under this Financing Agreement or
any other Financing Document (each, a “Claim”) in the venue where the Claim is being
brought pursuant to the terms of this Financing Agreement, then, upon the written
request of any party, such Claim, including any and all questions of law or fact
relating thereto, shall be determined exclusively by a judicial reference
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AND RESTATED FINANCING AGREEMENT
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proceeding. Except as otherwise provided in this Section 13.7, venue for
any such reference proceeding shall be in the state or federal court in the County
or District where venue is appropriate under applicable law (the “Court”). The
parties shall select a single neutral referee, who shall be a retired state or
federal judge. If the parties cannot agree upon a referee within 15 days, the Court
shall appoint the referee. The referee shall report a statement of decision to the
Court. Notwithstanding the foregoing, nothing in this paragraph shall limit the
right of any party at any time to exercise self-help remedies, foreclose against
collateral or obtain provisional remedies (including without limitation, requests
for temporary restraining orders, preliminary injunctions, writs of possession,
writs of attachment, appointment of a receiver, or any orders that a court may issue
to preserve the status quo, to prevent irreparable injury or to allow a party to
enforce its liens and security interests). The parties shall bear the fees and
expenses of the referee equally unless the referee orders otherwise. The referee
also shall determine all issues relating to the applicability, interpretation, and
enforceability of this Section 13.7. The parties acknowledge that any Claim
determined by reference pursuant to this Section 13.7 shall not be
adjudicated by a jury.
3. Conditions Precedent. The obligations of Agent and of the Lenders hereunder will
be effective only upon satisfaction of each of the following conditions precedent, each in a manner
in form and substance acceptable to Agent:
(a) Receipt by Agent of this Amendment, duly executed by the Companies, the Parent and
the Required Lenders;
(b) No Defaults or Events of Default shall have occurred or be continuing and there
shall not have been any material adverse change in the financial condition, business,
prospects, profitability, assets or operations of the Companies; and
(c) Agent shall have received such other documents, certificates, opinions, and
information that Agent shall require, each in form and substance satisfactory to Agent in
its sole discretion.
4. Companies’ Representations and Warranties. To induce Agent and the Lenders to
enter into this Amendment, each of the Companies hereby represents and warrants to Agent and each
of the Lenders as of the date hereof as follows:
(a) This Amendment has been duly executed and delivered by such Company, constitutes a
legal and valid binding obligation of such Company enforceable against such Company in
accordance with its terms and has been duly authorized by all necessary corporate action.
(b) The representations and warranties contained in the Financing Agreement are, both
before and after giving effect to this Amendment, true and correct in all material respects
except to the extent any such representation or warranty is expressly stated to have been
made as of a specific date, in which case each such representation and
THIRD AMENDMENT TO SECOND AMENDED
AND RESTATED FINANCING AGREEMENT
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warranty is true and
correct as of such specific date, and no Default or Event of Default has occurred and is
continuing.
5. Documentation Fee. In accordance with Section 7.6 of the Financing Agreement, the
Companies hereby agree to pay to the Agent for its sole account, a Documentation Fee with respect
to this Amendment in the amount of $10,000, which fee shall be due and payable by the Companies,
fully earned by the Agent and charged to the Companies’ revolving loan account as of the date
hereof.
6. Reaffirmation. Except as specifically modified by this Amendment, the Financing
Agreement and the other Financing Documents shall remain in full force and effect in accordance
with their respective terms and are hereby ratified, reaffirmed and confirmed by the Companies.
7. Failure to Comply. Any failure to comply with the terms and conditions of this
Amendment will constitute an Event of Default under the Financing Agreement.
8. Counterparts. This Amendment may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one and the same
instrument. Delivery of a signed counterpart of this Amendment by facsimile or electronic file
image is as effective as delivery of an original, ink-signed counterpart.
9. Governing Law; Successors and Assigns. The validity, interpretation and
enforcement of this Amendment shall be governed by the laws of the State of California. This
Amendment shall be binding upon and shall inure to the benefit of the Companies, the Lenders, the
Agent, and their respective successors and assigns.
10. Waiver of Jury Trial. Each of the Companies, Agent and the Lenders hereby
waives any right to a trial by jury in any action or proceeding arising out of or relating to this
Amendment or the transactions contemplated hereunder.
11. Judicial Reference. The parties to this Amendment prefer that any dispute between
or among them be resolved in litigation subject to a jury trial waiver as set forth in Section
10 above and in Section 13.7 of the Financing Agreement. If a pre-dispute jury trial waiver of
the type provided for in Section 10 above and in Section 13.7 of the Financing Agreement is
unenforceable in litigation to resolve any dispute, claim, cause of action or controversy under
this Amendment, the Financing Agreement or any other Financing Document (each, a “Claim”) in the
venue where the Claim is being brought pursuant to the terms of the Financing Agreement (as amended
hereby), then, upon the written request of any party, such Claim, including any and all questions
of law or fact relating thereto, shall be determined exclusively by a judicial reference
proceeding. Except as otherwise provided in Section 13.7 of the Financing Agreement, venue for any
such reference proceeding shall be in the state or federal
court in the County or District where venue is appropriate under applicable law (the “Court”).
The parties shall select a single neutral referee, who shall be a retired state or federal judge.
If the parties cannot agree upon a referee within 15 days, the Court shall appoint the referee.
The referee shall report a statement of decision to the Court. Notwithstanding the foregoing,
nothing
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AND RESTATED FINANCING AGREEMENT
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in this paragraph shall limit the right of any party at any time to exercise self-help
remedies, foreclose against collateral or obtain provisional remedies (including without
limitation, requests for temporary restraining orders, preliminary injunctions, writs of
possession, writs of attachment, appointment of a receiver, or any orders that a court may issue to
preserve the status quo, to prevent irreparable injury or to allow a party to enforce its liens and
security interests). The parties shall bear the fees and expenses of the referee equally unless
the referee orders otherwise. The referee also shall determine all issues relating to the
applicability, interpretation, and enforceability of this Section 11. The parties
acknowledge that any Claim determined by reference pursuant to this Section 11 shall not be
adjudicated by a jury.
12. Attorneys’ Fees; Costs. The Company agrees to pay, on demand, all attorneys’ fees
and costs incurred in connection with the negotiation, documentation and execution of this
Amendment. Except as expressly provided by Section 11 above to the contrary in connection
with a judicial referee, if any legal action or proceeding shall be commenced at any time by any
party to this Amendment in connection with its interpretation or enforcement, the prevailing party
or parties in such action or proceeding shall be entitled to reimbursement of its reasonable
attorneys’ fees and costs in connection therewith, in addition to all other relief to which the
prevailing party or parties may be entitled.
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THIRD AMENDMENT TO SECOND AMENDED
AND RESTATED FINANCING AGREEMENT
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IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the date first
written above.
| BIG 5 CORP., a Delaware corporation |
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| By: | /s/ Xxxxx X. Xxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxx | |||
| Title: | Senior Vice President and | |||
| Chief Financial Officer | ||||
| BIG 5 SERVICES CORP., a Virginia corporation |
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| By: | /s/ Xxxxx X. Xxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxx | |||
| Title: | Senior Vice President and | |||
| Chief Financial Officer | ||||
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AND RESTATED FINANCING AGREEMENT — Signature Pages
AND RESTATED FINANCING AGREEMENT — Signature Pages
| THE CIT GROUP/BUSINESS CREDIT, INC., (as a Lender and as Agent) |
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| By: | /s/ Xxxxxx Xxxxxx | |||
| Name: | Xxxxxx Xxxxxx | |||
| Title: | Vice President | |||
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AND RESTATED FINANCING AGREEMENT — Signature Pages
AND RESTATED FINANCING AGREEMENT — Signature Pages
| BANK OF AMERICA, N.A., (as a Lender) |
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| By: | /s/ Xxxxxxx Xxxx | |||
| Name: | Xxxxxxx Xxxx | |||
| Title: | Senior Vice President | |||
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AND RESTATED FINANCING AGREEMENT — Signature Pages
AND RESTATED FINANCING AGREEMENT — Signature Pages
| PNC BANK, NATIONAL ASSOCIATION (as a Lender) |
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| By: | /s/ Xxxxxx Shakenyon | |||
| Name: | Xxxxxx Shakenyon | |||
| Title: | Vice President | |||
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AND RESTATED FINANCING AGREEMENT — Signature Pages
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| GE BUSINESS CAPITAL CORPORATION f/k/a Transamerica Business Capital Corporation (as a Lender) |
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| By: | /s/ Xxxxxxx X. Xxxx | |||
| Name: | Xxxxxxx X. Xxxx | |||
| Title: | Authorized Signatory | |||
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AND RESTATED FINANCING AGREEMENT — Signature Pages
AND RESTATED FINANCING AGREEMENT — Signature Pages
The undersigned hereby consents to and acknowledges the terms and conditions of the foregoing
Amendment and agrees that its Guaranty and each other document executed by it in favor of Agent and
the Lenders remains in full force and effect.
| BIG 5 SPORTING GOODS CORPORATION, a Delaware corporation |
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| By: | /s/ Xxxxx X. Xxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxx | |||
| Title: | Senior Vice President and | |||
| Chief Financial Officer | ||||
THIRD AMENDMENT TO SECOND AMENDED
AND RESTATED FINANCING AGREEMENT — Signature Pages
AND RESTATED FINANCING AGREEMENT — Signature Pages
