EXHIBIT 10.31
AMENDMENT NO. 4 TO
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDMENT ("Amendment No. 4") dated as of January 19, 2001 by and among
xXXxX*s Group Inc., a Delaware corporation, formerly known as xXXxX Inc.
("xXXxX*s"), the Subsidiaries of xXXxX*s set forth on Schedule 1 attached hereto
(collectively, the "Subsidiary Borrowers"), xXXxX*s Corp., a Delaware
corporation, formerly known as iTurf, Inc. ("Parent"), its wholly owned
subsidiary, iTurf Finance Company ("iFC", and together with xXXxX*s, the
Subsidiary Borrowers and Parent, each individually a "Borrower", and
collectively, "Borrowers") and Congress Financial Corporation, a Delaware
corporation ("Lender").
W I T N E S S E T H
WHEREAS, Borrowers and Lender have entered into financing arrangements
pursuant to which Lender has made and may make loans and advances and provide
other financial accommodations to Borrowers as set forth in the Amended and
Restated Credit Agreement, dated April 28, 2000, by and among Lender and
Borrowers, as amended by Amendment No. 1 to Amended and Restated Credit
Agreement, dated as of July 31, 2000, by and among Borrowers and Lender,
Amendment No. 2 to Amended and Restated Credit Agreement, dated as of November
10, 2000, by and among Borrowers and Lender and Amendment No. 3 to Amended and
Restated Credit Agreement, dated as of November 20, 2000, by and among Borrowers
and Lender (as amended hereby and as the same may hereafter be further amended,
modified, supplemented, extended, renewed, restated or replaced, the "Credit
Agreement") and the other agreements, documents and instruments referred to
therein or at any time executed and/or delivered in connection therewith or
related thereto, including this Amendment No. 4 (all of the foregoing, including
the Credit Agreement, as the same now exist or may hereafter be further amended,
modified, supplemented, extended, renewed, restated or replaced, being
collectively referred to herein as the "Financing Agreements"); and
WHEREAS, Parent, its wholly-owned subsidiary, XxxXxxxx.xxx Inc., a
Massachusetts corporation, formerly known as iTurf Caveman Acquisition
Corporation ("TheSpark", as hereinafter further defined), and the former
stockholders ("Former Stockholders", as hereinafter further defined) of
XxxXxxxx.xxx, Inc., a Massachusetts corporation ("Old SP") agreed to merge
TheSpark with and into Old SP and Parent agreed to pay the Former Stockholders
certain consideration all as set forth in the Agreement and Plan of Merger,
dated as of February 4, 2000, by and among Parent, TheSpark and the Former
Stockholders ("SP Merger Agreement", as hereinafter further defined);
WHEREAS, Parent, TheSpark and the Former Stockholders have agreed to amend
the SP Merger Agreement as set forth in the First Amendment to Agreement and
Plan of Merger, dated
as of even date herewith, by and among Parent, TheSpark and the Former
Stockholders ("First SP Amendment", as hereinafter further defined);
WHEREAS, Borrowers have requested that Lender agree to certain amendments
to the Credit Agreement and the other Financing Agreements and the other
Financing Agreements and Lender is willing to agree to such amendments, subject
to the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual conditions and agreements
and covenants set forth herein, and for other good and valuable consideration,
the adequacy and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
Section 1. DEFINITIONS
1.1 ADDITIONAL DEFINITIONS. As used herein, the following terms shall have
the respective meanings given to them below and the Credit Agreement shall be
deemed and is hereby amended to include, in addition and not in limitation of,
each of the following definitions:
(a) "AMENDMENT NO. 4" shall mean this Amendment No. 4 to Amended and
Restated Credit Agreement by and among Lenders and Borrowers, as the same now
exists or may hereafter be further amended, modified, supplemented, extended,
renewed, restated or replaced.
(b) "FIRST SP AMENDMENT" shall mean the First Amendment to Agreement and
Plan of Merger, dated of even date herewith, by and among Parent, TheSpark and
the Former Stockholders, as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.
(c) "FORMER STOCKHOLDERS" shall mean, collectively, the individuals listed
on Exhibit A hereto.
(d) "PCF&C" shall mean Xxxxxx Xxxxxx Flattau & Xxxxxx, LLP and it
successors pursuant to the terms of the Second Escrow Agreement.
(e) "SECOND ESCROW AGREEMENT" shall mean the Second Escrow Agreement,
dated as of December 13, 2000 by and among Parent, certain representatives of
the Former Stockholders and PCF&C, in its capacity as escrow agent, as the same
now exists or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.
(f) "SP MERGER AGREEMENTS" shall mean, collectively, the following (as the
same now exist or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced): (i) the SP Merger Agreement, (ii) the First SP
Amendment and (iii) any related agreements, documents and instruments.
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(g) "SP MERGER AGREEMENT" shall mean the Agreement and Plan of Merger,
dated as of February 4, 2000, by and among Parent, TheSpark and the Former
Stockholders, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
(h) "THESPARK" shall mean XxxXxxxx.xxx Inc., a Massachusetts corporation,
formerly known as iTurf Caveman Acquisition Corporation, together with its
successors and assigns.
1.2 INTERPRETATION. For purposes of this Amendment, all terms used herein,
including but not limited to, those terms used and/or defined herein or in the
recitals hereto shall have the respective meanings assigned thereto in the
Credit Agreement, unless otherwise defined herein.
Section 2. AMENDMENTS.
2.1 INDEBTEDNESS. Section 7.1 of the Credit Agreement shall be amended to
replace the period after Section 7.1(h) and to add a new Section 7.1(i) on to
the end of such Section as follows:
"(i) Indebtedness of Parent to the Former Stockholders arising
pursuant to the SP Merger Agreements as each in effect on the date
hereof; PROVIDED, THAT,
(i) such Indebtedness shall not be secured (other than by the
funds in the amount of $2,500,000 held by PCF&C pursuant to the
terms of the Second Escrow Agreement, as in effect on the date of
Amendment No. 4),
(ii) Borrowers shall not, directly or indirectly, make any
payments in respect of such Indebtedness, EXCEPT, THAT, Parent may
make the following payments in respect of such Indebtedness: (A) a
cash payment not to exceed $2,500,000, to be paid no later than June
1, 2001, (B) the issuance of not more than 2,000,000 shares of
Capital Stock of Parent after May 19, 2001 but not later than June
1, 2001, (C) a cash payment not to exceed $1,500,000 to be paid no
later than March 1, 2002, and (D) fifty (50%) percent of the net
proceeds (as defined in the First SP Amendment (as in effect on the
date of Amendment No. 4)) of a merger or consolidation of TheSpark,
a sale or other disposition of the Capital Stock of TheSpark by
Parent or a sale or other disposition of substantially all of the
assets of TheSpark in accordance with Section 3 of Amendment No. 4
which amount shall not exceed $8,000,000,
(iii) Borrowers shall not, directly or indirectly, (A) amend,
modify, alter or change any terms of such Indebtedness, the SP
Merger Agreements or any agreements related thereto, EXCEPT THAT
Parent may, after prior written notice to Lender, amend, modify,
alter or change the terms thereof so as to extend the maturity
thereof or defer the timing of any payments in respect thereof, or
to forgive or cancel any portion of such Indebtedness other than
pursuant to payments thereof, or to
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reduce any fees in connection therewith or to make any covenant
contained therein less restrictive or burdensome as to Parent or the
other Borrowers, or (B) redeem, retire, defease, purchase or
otherwise acquire such Indebtedness, or set aside or otherwise
deposit or invest any sums for such purpose, and
(iv) Borrowers shall furnish to Lender all notices, demands or
other materials concerning such Indebtedness either received by any
Borrower or on its behalf, promptly after receipt thereof, or sent
by any Borrower or on its behalf, concurrently with the sending
thereof, as the case may be."
2.2 TRANSFER OF ASSETS; MERGERS; LIQUIDATION. Section 7.7(b) of the Credit
Agreement shall be amended to add a new Section 7.7(b)(xi) on to the end of such
Section as follows:
"(xi) the issuance of Capital Stock of Parent to the Former
Stockholders pursuant to the terms of Section 7.1(i) hereof;"
2.3 PAYMENTS TO AFFILIATES. Section 7.9 of the Credit Agreement shall be
amended to add to the end of such Section as follows:
"PROVIDED, THAT, nothing in this Section 7.9 shall prohibit the
payment of the Indebtedness permitted under Section 7.1(i) hereof."
Section 3. CONSENT. Subject to the satisfaction of each of the terms and
conditions contained herein, notwithstanding anything to the contrary contained
in Section 7.7(b) and (c) of the Credit Agreement, Lender hereby consents to the
sale or other disposition of substantially all of the assets of TheSpark;
PROVIDED, THAT,
3.1 such sale or other disposition occurs prior to December 31, 2001;
3.2 Lender shall have received no less than fifteen (15) Business Days'
prior written notice of the sale or other disposition which notice shall set
forth in reasonable detail satisfactory to Lender the terms of the sale or other
disposition;
3.3 Lender shall have received such other information with respect to such
sale or other disposition as Lender may reasonably request within a reasonable
period of time of such requests;
3.4 Lender shall have received, true, correct and complete copies of all
agreements, documents and instruments relating to such sale or other
disposition;
3.5 in no event shall any Borrower make, or be required to make, any
payment or incur any obligation or liability in connection with such sale or
other disposition of substantially all of the assets of TheSpark (other than
reasonable and customary fees of financial and legal advisors
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not to exceed the greater of: (a) $200,000 or (b) four (4%) percent of the net
proceeds of such transaction) or take any other action which is otherwise
prohibited under the Credit Agreement;
3.6 Lender shall have received the net proceeds payable or delivered to
any Borrower in respect of such sale or other disposition (other than:(a) the
amounts paid to the Former Shareholders as permitted by Section 7.1(i)(ii)(D) of
the Credit Agreement or (b) the reasonable and customary fees of financial and
legal advisors permitted under Section 3.5 hereof); and
3.7 no Event of Default exists or has occurred, or act, condition or event
which with notice or passage of time or both would constitute an Event of
Default exists or has occurred or would exist or occur after giving effect to
any such sale or other disposition.
Section 4. REPRESENTATIONS AND WARRANTIES. In addition to the continuing
representations, warranties and covenants heretofore or hereafter made by
Borrowers to Lender pursuant to the other Financing Agreements, each Borrower,
jointly and severally, hereby represents, warrants and covenants with and to
Lender as follows (which representations, warranties and covenants are
continuing and shall survive the execution and delivery hereof and shall be
incorporated into and made a part of the Financing Agreements):
4.1 CORPORATE POWER AND AUTHORITY. This Amendment and each other agreement
or instrument to be executed and delivered by each Borrower have been duly
authorized, executed and delivered by all necessary action on the part of such
Borrower which is a party hereto and thereto and, if necessary, its
stockholders, and is in full force and effect as of the date hereof, as the case
may be, and the agreements and obligations of each Borrower contained herein and
therein constitute legal, valid and binding obligations of such Borrower
enforceable against it in accordance with their terms.
4.2 CONSENTS; APPROVALS. No action of, or filing with, or consent of any
Governmental Authority, and no approval or consent of any other party, is
required to authorize, or is otherwise required in connection with, the
execution, delivery and performance of this Amendment.
4.3 NO EVENT OF DEFAULT. As of the date hereof, and after giving effect to
the provisions of this Amendment, no Event of Default, and no condition or event
which, with the giving of notice or lapse of time, or both, would constitute an
Event of Default, exists or has occurred and is continuing. All of the
representations and warranties set forth in the Credit Agreement and the other
Financing Agreements, each as amended hereby, are true and correct in all
material respects on and as of the date hereof as if made on the date hereof,
except to the extent any such representation or warranty is made as of a
specified date, in which case such representation or warranty shall have been
true and correct as of such date.
4.4 SP MERGER AGREEMENT. Borrowers have delivered to Lender a true,
correct and complete copy of the SP Merger Agreement.
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4.5 PAYMENTS TO AFFILIATES. The Indebtedness permitted under Section
7.1(i) of the Credit Agreement is on terms and conditions no less favorable to
Borrowers as then would be obtained in a comparable arm's length transaction
with a person other than an Affiliate.
Section 5. CONDITIONS PRECEDENT. The amendment to the Credit Agreement in
Section 2 hereof shall only be effective upon the satisfaction of each of the
following conditions precedent in a manner satisfactory to Lender:
5.1 Lender shall have received, in form and substance satisfactory to
Lender, the SP First Amendment, as duly authorized, executed and delivered by
the parties thereto,
5.2 after giving effect to the amendments provided for herein, no Event of
Default shall exist or have occurred and be continuing and no event shall have
occurred or condition be existing and continuing which, with notice or passage
of time or both, would constitute an Event of Default, and
5.3 Lender shall have received an original of this Amendment No. 4, duly
authorized, executed and delivered by Borrowers.
Section 6. ADDITIONAL EVENTS OF DEFAULT. The parties hereto acknowledge,
confirm and agree that the failure of Borrowers to comply with the covenants,
conditions and agreements contained herein, shall in each case constitute an
Event of Default under the Financing Agreements, subject to the applicable cure
period, if any, with respect thereto provided for in the Credit Agreement.
Section 7. PROVISIONS OF GENERAL APPLICATION.
7.1 EFFECT OF THIS AMENDMENT. Except as modified pursuant hereto, no other
changes or modifications to the Financing Agreements are intended or implied and
in all other respects the Financing Agreements are hereby specifically ratified,
restated and confirmed by all parties hereto as of the effective date hereof. To
the extent of conflict between the terms of this Amendment No. 4 and the other
Financing Agreements, the terms of this Amendment No. 4 shall control. The
Credit Agreement and this Amendment No. 4 shall be read and construed as one
agreement.
7.2 GOVERNING LAW. The rights and obligations hereunder of each of the
parties hereto shall be governed by and interpreted and determined in accordance
with the laws of the State of New York.
7.3 BINDING EFFECT. This Amendment No. 4 shall be binding upon and inure
to the benefit of each of the parties hereto and their respective successors and
assigns.
7.4 COUNTERPARTS. This Amendment No. 4 may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one and
the same
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agreement. In making proof of this Amendment No. 4, it shall not be necessary to
produce or account for more than one counterpart thereof signed by each of the
parties hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their authorized officers as of the date and year
first above written.
xXXxX*s GROUP INC., formerly known as
xXXxX*s INC.
xXXxX*s DISTRIBUTION COMPANY
xXXxX*s FOREIGN SALES CORPORATION
xXXxX*s OPERATING COMPANY
xXXxX*s PROPERTIES INC.
xXXxX*s RETAIL COMPANY
SCREEEM! INC.
STORYBOOK INC.
TSI SOCCER CORPORATION
TSI RETAIL COMPANY
By: /s/ XXXXXXX X. XXXXXXX
---------------------------
Title: SENIOR VICE PRESIDENT
------------------------
xXXxX*s CORP., formerly known as iTURF, INC.
By: /s/ XXXXXXX X. XXXXXXX
---------------------------
Title: SENIOR VICE PRESIDENT
iTURF FINANCE COMPANY
By: /s/ XXXXXX XXXXXXXXX
-----------------------
Title: CHIEF FINANCIAL OFFICER
-------------------------
AGREED TO:
CONGRESS FINANCIAL CORPORATION
By: /s/ XXXXXX X. XXXXXX
-----------------------
Title: ASSISTANT VICE PRESIDENT
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SCHEDULE 1
SUBSIDIARY BORROWERS
xXXxX*s Distribution Company
xXXxX*s Foreign Sales Corporation
xXXxX*s Operating Company
xXXxX*s Properties Inc.
xXXxX*s Retail Company
Screeem! Inc.
Storybook Inc.
TSI Soccer Corporation
TSI Retail Company
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EXHIBIT A
FORMER STOCKHOLDERS
Xxx Xxxxx
Xxxxxx Xxxxxxxx
Xxxxx Xxxxxxxx
Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxxx
Xxxxxxxxx Xxxxxx
Xxxxxxx Xxxxxxxx
Xxxxxxxxxxx Xxxxx
Xxxxxxx Xxxxx
Xxx Xxxxxxx
Xxx Xxxx
Xxxxxx Xxxxx
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