EXHIBIT 10.21
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
This Second Amendment to Loan and Security Agreement (the "SECOND
AMENDMENT") is made as of this 9th day of December, 2003 by and among:
Fleet Retail Group, Inc. (formerly known as Fleet Retail Finance Inc.)
(the "AGENT"), a Delaware corporation with its principal executive offices at 00
Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, for the Revolving Credit Lenders party to
the Agreement (defined below), and
The CIT Group/Business Credit, Inc. (the "CO-AGENT"), a New York
corporation with offices at 0000 XXX Xxxxxxx (Xxxxx 000), Xxxxxx, Xxxxx, and
The Revolving Credit Lenders party to the Agreement, and
Hastings Entertainment, Inc. (the "BORROWER"), a Texas corporation with
its principal executive offices at 0000 Xxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxx 00000
in consideration of the mutual covenants herein contained and benefits to be
derived herefrom.
W I T N E S S E T H:
WHEREAS, on August 29, 2000, the Agent, the Co-Agent, the Revolving
Credit Lenders and the Borrower entered in a certain Loan and Security Agreement
which was amended pursuant to a certain First Amendment to Loan and Security
Agreement dated August 23, 2002 (as amended and in effect, the "AGREEMENT"); and
WHEREAS, the Agent, the Co-Agent, the Revolving Credit Lenders and the
Borrower desire to modify certain provisions of the Agreement as set forth
herein.
NOW, THEREFORE, it is hereby agreed among the Agent, the Co-Agent, the
Revolving Credit Lenders and the Borrower as follows:
1. Capitalized Terms. All capitalized terms used herein and not
otherwise defined shall have the same meaning herein as in the
Agreement.
2. Amendments to Article 1. The provisions of Article 1 of the
Agreement are hereby amended as follows:
(a) The definition of "Base Margin" is hereby deleted in
its entirety, and the following substituted in its
stead:
"BASE MARGIN": Shall mean as of November 1, 2003
through January 31, 2004, one half (.5%) percent
(notwithstanding that Average Availability
requirements for another Level may have been
satisfied). Thereafter, commencing February 1, 2004,
and on the first day of each fiscal quarter the Base
Margin shall be the following percentages based upon
the following criteria:
LEVEL AVERAGE AVAILABILITY BASE MARGIN
-----------------------------------------------------
I Greater than $25,000,000 0.00%
-------------------------------------------------
II Greater than $ 15,000,000 and .25%
less than or equal to
$25,000,000
-------------------------------------------------
III less than or equal to .5%
$15,000,000
-------------------------------------------------
On the first day of each fiscal quarter, the Base
Margin shall be adjusted based upon the Borrower's
aggregate daily Average Availability for the
immediately preceding quarter divided by the total
number of days in such immediately preceding fiscal
quarter. Provided, however, upon the occurrence of an
Event of Default, the Base Margin shall be
immediately increased to the percentage set forth in
Level III above (even if the Average Availability
requirements for another Level have been met), and
interest shall be determined in the manner set forth
in Section 2-11 (f).
(b) The definition of "Libor Margin" is hereby deleted in
its entirety, and the following substituted in its
stead:
"LIBOR MARGIN": Shall mean as of November 1, 2003
through January 31, 2004, two and one
quarter (2.25%) percent (notwithstanding
that Average Availability requirements for
another Level may have been satisfied).
Thereafter, commencing February 1, 2004, and
on the first day of each fiscal quarter the
Libor Margin shall be the following
percentages based upon the following
criteria:
LEVEL AVERAGE AVAILABILITY LIBOR MARGIN
----------------------------------------------------------
I Greater than $25,000,000 1.75%
------------------------------------------------------
II Greater than $15,000,000 and less
than or equal to $25.000,000 2.00%
------------------------------------------------------
III less than or equal to $15,000,000 2.25%
------------------------------------------------------
On the first day of each fiscal quarter, the Libor
Margin shall be adjusted based upon the Borrower's
aggregate daily Average Availability for the
immediately preceding fiscal quarter divided by the
total number of days in such immediately preceding
fiscal quarter. Provided, however, upon the
occurrence of an Event of Default, the Libor Margin
shall be immediately
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increased to the percentage set forth in Level III
above (even if the Average Availability requirements
for another Level have been met), and interest shall
be determined in the manner set forth in Section 2-11
(f).
(c) The definition of "Maturity Date" is hereby deleted
in its entirety, and the following substituted in its
stead:
August 29, 2007
3. Amendments to Article 2. The provisions of Article 2 are
hereby amended as follows:
(a) Section 2-15 of the Agreement is hereby deleted in
its entirety, and the following substituted in its
stead:
EARLY TERMINATION FEE. In the event that the
Termination Date occurs, for any reason (other than
an account of a refinancing provided by the Agent or
an affiliate of the Agent), prior to December 9,
2004, the Borrower shall pay to the Agent, for the
benefit of the Revolving Credit Lenders, the
"REVOLVING CREDIT EARLY TERMINATION FEE" (so referred
to herein) equal to one percent of the Revolving
Credit Ceiling.
4. Amendment Fee. As compensation for the commitments of the
Revolving Credit Lenders to enter into this Second Amendment
with the Borrower and to continue to make loans and advances
to the Borrower and as compensation for such Revolving Credit
Lenders' respective maintenance of sufficient funds available
for such purpose, such Revolving Credit Lenders have earned an
Amendment Fee (the "AMENDMENT FEE") in the amount of
$160,000.00 which shall be due and payable upon the execution
of this Second Amendment by the Borrower. The Amendment Fee
shall be deemed fully earned upon the execution hereof and
shall not be subject to refund or rebate under any
circumstances.
5. Ratification of Loan Documents. Except as provided herein, all
terms and conditions of the Agreement and the other Loan
Documents remain in full force and effect. The Borrower hereby
ratifies, confirms, and reaffirms all representations,
warranties, and covenants contained therein and hereby
represents that no Events of Default exist under the Loan
Documents. The Borrower further ratifies and confirms that any
and all Collateral previously granted to the Agent for the
ratable benefit of the Revolving Credit Lenders continues to
secure the existing Liabilities as well as the Liabilities as
amended hereby, and any future Liabilities.
6. Conditions to Effectiveness. This Second Amendment shall be
become effective upon the satisfaction of the following
conditions precedent:
(a) This Second Amendment shall have been duly executed
and delivered by each of the Borrower, the Revolving
Credit Lenders and the Agent and shall be in full
force and effect.
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(b) The Borrower shall have paid to the Agent the
Amendment Fee.
(c) The Borrower shall have delivered to the Agent its
Secretary's Certificate with certified copies of (i)
Incumbency Certificate; (ii) Specimen Signatures; and
(iii) Resolutions.
(d) All proceedings in connection with the transactions
contemplated by this Second Amendment and all
documents incident thereto shall be reasonably
satisfactory in substance and form to the Agent, and
the Agent shall have received all information and
such counterpart originals or certified or other
copies of such documents as the Agent may reasonably
request. Further, the Borrower shall have delivered
to the Agent such additional documents which the
Agent may reasonably request, including, without
limitation, a ratification by each guarantor of their
respective guaranties.
(e) The Borrower shall have paid all reasonable costs and
expenses of the Agent including, without limitation,
all attorneys' fees and expenses incurred by the
Agent in connection with the Agreement, the Loan
Documents, and the preparation, negotiation and
execution of this Second Amendment.
7. Miscellaneous.
(a) This Second Amendment may be executed in
several counterparts and by each party on a separate
counterpart, each of which when so executed and delivered
shall be an original, and all of which together shall
constitute one instrument.
(b) This Second Amendment expresses the entire
understanding of the parties with respect to the transactions
contemplated hereby. No prior negotiations or discussions
shall limit, modify, or otherwise affect the provisions
hereof.
(c) Any determination that any provision of this
Second Amendment or any application hereof is invalid, illegal
or unenforceable in any respect and in any instance shall not
effect the validity, legality, or enforceability of such
provision in any other instance, or the validity, legality or
enforceability of any other provisions of this Second
Amendment.
(d) The Borrower shall pay on demand all costs
and expenses of the Agent, including, without limitation,
reasonable attorneys' fees in connection with the preparation,
negotiation, execution and delivery of this Second Amendment.
(e) The Borrower warrants and represents that
the Borrower has consulted with independent legal counsel of
the Borrower's selection in connection
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with this Second Amendment and is not relying on any
representations or warranties of any Revolving Credit Lender
or the Agent or their respective counsel in entering into this
Second Amendment.
(f) The Borrower acknowledges and agrees that
the Borrower does not have any claims, counterclaims, offsets,
or defenses against any Revolving Credit Lender or the Agent
directly or indirectly relating to the Borrower's relationship
with, and/or the Borrower's Liabilities, and to the extent
that the Borrower has or ever had any such claims,
counterclaims, offsets, or defenses against any of the
Revolving Credit Lenders or the Agent, the Borrower
affirmatively WAIVES the same. The Borrower, and for its
representatives, successors and assigns, hereby RELEASES, and
forever discharges the Revolving Credit Lenders and the Agent
and their respective officers, directors, agents, servants,
attorneys, and employees, and their respective
representatives, successors and assigns, of, to, and from all
known debts, demands, actions, suits, accounts, covenants,
contracts, agreements, damages, and any and all claims,
demands, or liabilities whatsoever, of every name and nature,
both at law and in equity through the date hereof.
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IN WITNESS WHEREOF, the parties have hereunto caused this Second
Amendment to be executed and their seals to be hereto affixed as of the date
first above written.
HASTINGS ENTERTAINMENT, INC.
("Borrower")
BY: /s/ Xxx Xxxx
-------------------------------------
Name : Xxx Xxxx
Title: CFO
FLEET RETAIL GROUP, INC.
("Agent")
BY: /s/ Xxxxx Xxxxxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: Vice President
THE CIT GROUP/BUSINESS CREDIT, INC.
("Co-Agent")
BY: /s/ Xxxx Xxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
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The "Revolving Credit Lenders"
FLEET RETAIL GROUP, INC.
By: /s/ Xxxxx Xxxxxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: Vice President
THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/ Xxxx Xxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
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