EXHIBIT 10.1
SECOND AMENDMENT
TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (the "Amendment"), dated as
of October 29, 2004, is made by and among Too, Inc., a Delaware corporation (the
"Borrower"), each of the Guarantors (as defined in the Credit Agreement defined
below), the Lenders (as defined in the Credit Agreement defined below), National
City Bank, in its capacity as sole lead arranger and administrative agent for
the Lenders under the Credit Agreement (the "Agent"), Fifth Third Bank, as
co-syndication agent, LaSalle Bank National Association, as co-syndication
agent, Bank of America, N.A., as co-documentation agent, and The Huntington
National Bank, as co-documentation agent.
BACKGROUND
The parties hereto are parties to that Credit Agreement, dated as of
April 29, 2003 (as amended through the date hereof (including as amended by that
First Amendment to Credit Agreement, dated as of September 16, 2003, among the
parties hereto (the "First Amendment") the "Credit Agreement"), and desire to
amend various terms thereof as set forth herein.
OPERATIVE PROVISIONS
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter set forth and incorporating the
above-defined terms herein and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
1. Defined Terms; References. Terms not otherwise defined in this
Amendment shall have the respective meanings ascribed to them in the Credit
Agreement. Each reference to "hereof," "hereunder," "herein," and similar
references contained in the Credit Agreement, and each reference to "this
Agreement" and similar references contained in the Credit Agreement, shall refer
to the Credit Agreement as and to the extent amended hereby.
2. Amendment of Credit Agreement.
(a) Minimum Coverage Ratio. Effective as of the date hereof,
Section 7.02(n) of the Credit Agreement is hereby amended and restated in its
entirety as follows:
"(n) Minimum Coverage Ratio. The Loan Parties shall not permit
the Coverage Ratio to be less than 1.75 to 1.0.
(b) Dividends and Restricted Payments. Effective as of the date
hereof, Section 7.02(i) of the Credit Agreement is hereby amended and restated
in its entirety as follows:
(i) Dividends and Restricted Payments. Each of the
Loan Parties shall not, and shall not permit any of its
Subsidiaries to, make or pay, or agree to become or remain
liable to make or pay, any dividend or other distribution of
any nature (whether in cash, property, securities or
otherwise) on account of or in respect of its shares of
capital stock, partnership interests or limited liability
company interests or on account of the purchase, redemption,
retirement or acquisition of its shares of capital stock (or
warrants,
options or rights therefor), partnership interests or limited
liability company interests, except
(i) dividends or other distributions payable to
another Loan Party,
(ii) dividends on or redemptions or repurchases of
its shares of capital stock (or warrants, options or rights
therefor), partnership interests or limited liability
company interests the aggregate amount of which does not
exceed in any fiscal year of Borrower fifty percent (50%)
of the reported fiscal year consolidated net earnings of
Borrower and its Subsidiaries for such fiscal year;
provided, however, that the Loan Parties shall be permitted
to make dividends on and redemptions or repurchases of its
shares of capital stock (or warrants, options or rights
therefor), partnership interests or limited liability
company interests in an unlimited amount if for at least
ninety (90) days prior to each such dividend, redemption,
and repurchase, and after giving effect thereto, (A)
Borrower shall have at least $75,000,000 of unencumbered
cash showing on its consolidated balance sheet, and (B) no
Revolving Facility Usage (other than by way of Letters of
Credit utilized in the ordinary course of the business of
the Loan Parties) shall have occurred.
(c) Amendment to Section 7.01(k). The following is hereby added to
the end of Section 7.01(k) and made a part thereof:
As an alternative to the foregoing and upon the occurrence of any Event
of Default, Borrower may grant a security interest in and pledge to
Agent for the benefit of the Lenders and Agent a deposit account
(including a deposit account with an overnight sweep into a securities
account) having a value at all times no less than an amount, measured
on a daily basis, equal to 1.10 times the amount of the then
outstanding Revolving Facility Usage (the "Pledged Account"), provided
that at any time the value of the Pledged Account exceeds 1.10 times
the amount of the then outstanding Revolving Facility Usage and upon
the written request of Borrower, such excess will be returned to
Borrower; and, at any time that Borrower desires to increase the
Revolving Facility Usage (subject, however, to the terms hereof),
Borrower shall deposit or shall cause to be deposited in the Pledged
Account an amount equal to 1.10 times the amount of such increase. At
any time, during the continuation of an Event of Default, that the
Pledged Account is not in compliance with the foregoing, the Security
Documents referred in the first sentence of this Section 7.01(k) shall
immediately become irrevocably effective in accordance with the terms
of such sentence.
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3. Pledged Deposit Collateral.
(a) Reference is made to that Deposit Account and
Securities Account Security Agreement, dated as of
September 16, 2003, given by Too Brands, Inc., an
Ohio corporation (the "Pledgor"), in favor of Agent
for the Lenders (the "Deposit Pledge").
(b) Agent on behalf of the Lenders and itself hereby
releases the Collateral (as such term is defined in
the Deposit Pledge).
(c) The parties hereto agree that the Deposit Pledge is
hereby terminated.
(d) Agent shall promptly, upon the request and at the
expense of Borrower, do all such other things as
Borrower shall reasonably request to evidence the
release of the Collateral.
4. Representations and Warranties. Each of the Loan Parties hereby
represents and warrants to the Lenders, after giving effect to this Amendment,
as follows:
(a) Authorization. The execution and delivery by the Loan Parties
of this Amendment, the consummation by the Loan Parties of the transactions
contemplated by the Credit Agreement as amended hereby, and the performance by
each Loan Party of its respective obligations under the Credit Agreement as
amended hereby have been duly authorized by all necessary corporate or similar
applicable proceedings on the part of each Loan Party. On the date of each Loan
Party's execution hereof, there are no set-offs, claims, defenses,
counterclaims, causes of action, or deductions of any nature against any of the
Obligations;
(b) Valid and Binding. This Amendment have been duly and validly
executed and delivered by each Loan Party and constitute, and the Credit
Agreement as amended hereby constitutes, the legal, valid and binding
obligations of each Loan Party enforceable in accordance with the terms hereof
and thereof, except as the enforceability of this Amendment or the Credit
Agreement as amended hereby may be limited by bankruptcy, insolvency or other
similar laws of general application affecting the enforcement of creditors'
rights or by general principles of equity limiting the availability of equitable
remedies;
(c) No Conflicts. Neither the execution and delivery of this
Amendment nor the consummation of the transactions contemplated by this
Amendment or by the Credit Agreement as amended hereby nor compliance with the
terms and provisions of this Amendment or of the Credit Agreement as amended
hereby, by any of the Loan Parties, will (a) violate any Law, (b) conflict with
or result in a breach of or a default under the articles or certificate of
incorporation or bylaws or similar organizational documents of any Loan Party or
any material agreement or instrument to which any Loan Party is a party or by
which any Loan Party or any of their respective properties (now owned or
hereafter acquired) may be subject or bound, (c) require any consent or approval
of any Person or require a mandatory prepayment or any other payment under the
terms of any material agreement or instrument to which any Loan Party is a party
or by which any Loan Party or any of their respective properties (now owned or
hereafter acquired) may be subject or bound, (d) result in the creation or
imposition of any Lien upon any property (now owned or hereafter acquired) of
any Loan Party, or (e) require any authorization,
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consent, approval, license, permit, exemption or other action by, or any
registration, qualification, designation, declaration or filing with, any
Official Body; and
(d) No Defaults. After giving effect to the amendments made
herein: (i) no Event of Default under and as defined in the Credit Agreement has
occurred and is continuing, and (ii) the representations and warranties of each
of Borrower and the other Loan Parties contained in the Credit Agreement and the
other Loan Documents are true and correct on and as of the date hereof with the
same force and effect as though made on such date, except to the extent that any
such representation or warranty expressly relates solely to a previous date.
5. Effectiveness of Amendment.
(a) This Amendment shall become effective as of the date hereof
(except as to any provision of this Amendment which is stated to have an earlier
effective date in which case, upon the effectiveness of this Amendment, such
provision shall be deemed effective as of the date of its stated effectiveness)
upon receipt by the Agent:
(i) From the Loan Parties, of an opinion of counsel to
the Loan Parties, in form and substance satisfactory
to Agent, addressing, inter alia, the (i) existence,
capacity, and due authorization of the Loan Parties
to enter into this Amendment.
(ii) From the Loan Parties, of a certificate signed by the
Secretary or Assistant Secretary of each Loan Party
(or by a similar official of those Loan Parties which
are limited liability companies) certifying as to (i)
the articles, bylaws, relevant resolutions (or
similar documents of those Loan Parties which are
limited liability companies), and due authorization
to enter into this Amendment, and (ii) the incumbency
of the officer or similar official of such Loan
Party, and her or his specimen signature, executing
this Amendment on its behalf.
(iii) From each of the Loan Parties and each of the
Lenders, of a counterpart hereof signed by such party
or facsimile or other written confirmation (in form
satisfactory to Agent) that such party has signed a
counterpart hereof.
(b) Upon the effectiveness hereof, the Credit Agreement shall be
amended hereby in accordance with the terms hereof, and this Amendment and the
Credit Agreement shall hereafter be one agreement and any reference to the
Credit Agreement in any document, instrument, or agreement shall hereafter mean
and include the Credit Agreement as amended hereby. In the event of
irreconcilable inconsistency between the terms or provisions hereof and the
terms or provisions of the Credit Agreement, the terms and provisions hereof
shall control. Except as specifically amended by the provisions hereof, the
Credit Agreement and all other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed by the parties hereto. Each Lender,
by its execution hereof, hereby consents to this Amendment pursuant to the
Credit Agreement.
6. Joinder of Guarantors. Each of the Guarantors hereby joins in this
Amendment to evidence its consent hereto and to the release of the Deposit
Pledge, and each Guarantor hereby reaffirms its obligations set forth in the
Credit Agreement, as hereby amended, and in each Guaranty Agreement and each
other Loan Document given by it in connection therewith.
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7. Governing Law. This Amendment shall be deemed to be a contract under
the laws of the State of Ohio and for all purposes shall be governed by and
construed and enforced in accordance with the internal laws of the State of Ohio
without regard to its conflict of laws principles.
8. Counterparts; Telecopy. This Amendment may be signed in any number of
counterparts each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Delivery of executed
signature pages by facsimile or other electronic transmission will constitute
effective and binding execution and delivery.
[SIGNATURE PAGES FOLLOW]
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[SIGNATURE PAGE 1 OF 8 TO SECOND AMENDMENT]
IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound hereby, have caused this Amendment to be executed and delivered as
of the day and year first above written.
BORROWER:
TOO, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chairman, President and CEO
GUARANTORS:
AMERICAN FACTORING, INC.
By: /s/ Xxxxxxx X. May
-------------------------------------
Name: Xxxxxxx X. May
Title: President
FLORET, LLC
By: /s/ Xxxxxxx XxXxxxxx
-------------------------------------
Name: Xxxxxxx XxXxxxxx
Title: President
JUSTICE STORES, LLC
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
LT HOLDING, INC.
By: /s/ Xxxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: President and CEO
[SIGNATURE PAGE 2 OF 8 TO SECOND AMENDMENT]
LT IMPORT CORP.
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: President and CEO
LIMITED TOO CATALOG PRODUCTION, INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President and Chief Executive
Officer
LIMITED TOO CREATIVE DESIGN, INC.
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President and CEO
LIMITED TOO DIRECT, LLC
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President and CEO
LIMITED TOO PURCHASING, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and CEO
LIMITED TOO STORE PLANNING, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and CEO
-2-
[SIGNATURE PAGE 3 OF 8 TO SECOND AMENDMENT]
MISH MASH, LLC
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and CEO
TOO GC, LLC
By: /s/ Xxxxxxx X. May
--------------------------------------
Name: Xxxxxxx X. May
Title: President, Treasurer and Secretary
TOO BRANDS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and CEO
TOO BRANDS INVESTMENT, LLC
By: /s/ Xxxxxxx X. May
--------------------------------------
Name: Xxxxxxx X. May
Title: President, CEO and Treasurer
TOO IMPORT, LLP
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: President and CEO of LT Import
Corp., Managing Partner
-3-
[SIGNATURE PAGE 4 OF 8 TO SECOND AMENDMENT]
NATIONAL CITY BANK, individually and as
Agent
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
[SIGNATURE PAGE 5 OF 8 TO SECOND AMENDMENT]
FIFTH THIRD BANK
By: /s/ Xxxxxxxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxxxxxxx X. Xxxxx
Title: Vice President
[SIGNATURE PAGE 6 OF 8 TO SECOND AMENDMENT]
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
[SIGNATURE PAGE 7 OF 8 TO SECOND AMENDMENT]
BANK OF AMERICA, N.A.
By: /s/ Xxxx Xxxxx
--------------------------------------
Name: Xxxx Xxxxx
Title: Vice President
[SIGNATURE PAGE 8 OF 8 TO SECOND AMENDMENT]
THE HUNTINGTON NATIONAL BANK
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
