EXHIBIT 10.29
EXECUTION COPY
AMENDMENT NO. 2 TO
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDMENT ("Amendment No. 2") dated as of November 10, 2000 by and among
xXXxX*s Inc., a Delaware corporation ("xXXxX*s"), the Subsidiaries of xXXxX*s
set forth on Schedule 1 attached hereto (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 (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. 2 (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, one of the Borrowers, TSI Retail Company, a Delaware corporation
("TSI Retail") has agreed to enter into arrangements with Xxxxxx Xxxxxxxx Retail
Partners, LLC ("GBRP") pursuant to which TSI Retail shall retain GBRP as its
exclusive agent for the limited purpose of selling certain assets of TSI Retail
(the "TSI Sale"), as set forth in the Agency Agreement, dated as of even date
herewith, by and between GBRP and TSI Retail (the "Agency Agreement");
WHEREAS, Borrowers have requested that Lender consent to the TSI Sale and
agree to certain amendments to the Credit Agreement in order to permit the TSI
Sale 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) "AGENCY AGREEMENT" shall mean the Agency Agreement, dated of even date
herewith, by and between TSI Retail and GBRP, as the same now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced and attached hereto as Exhibit A.
(b) "AMENDMENT NO. 2" shall mean this Amendment No. 2 to Amended and
Restated Credit Agreement, by and among Lender and Borrowers, as the same now
exist or may hereafter be further amended, modified, supplemented, extended,
renewed, restated or replaced.
(c) "GBRP" shall mean Xxxxxx Xxxxxxxx Retail Partners, LLC, a Delaware
limited liability company, and its successors and assigns.
(d) "GBRP 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 Agency Agreement, (ii) the GBRP Security
Agreement and (iii) all other agreements, documents and instruments related to,
and delivered in connection with, the TSI Sale and the Agency Agreement.
(e) "GBRP DEBT" shall mean the Indebtedness of TSI Retail to GBRP arising
pursuant to the Agency Agreement as in effect on the date hereof consisting of
the following (each capitalized term used in this definition shall have the
meaning set forth in Amendment No. 2 or the Agency Agreement): (i) the
Guaranteed Amount to the extent that such amount has been paid by GBRP, (ii) the
Expenses to the extent that such Expenses have been paid by GBRP, (iii) the
Agent's Base Fee, (iv) the Agent's Secondary Fee, (v) the Agent's Additional
Fee, and (vi) the Merchandise remaining in the Stores at the conclusion of the
TSI Sale.
(f) "GBRP SECURITY AGREEMENT" shall mean the Security Agreement, dated of
even date herewith, by TSI Retail in favor of GBRP, as the same now exists or
may hereafter be amended, modified, supplemented, extended, renewed, restated,
or replaced and attached hereto as Exhibit B.
(g) "HANOVER FACILITY" shall mean the warehouse owned by xXXxX*s
Distribution Company and located at 000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxx
00000.
(h) "TSI COLLATERAL" shall mean certain assets and properties of TSI
Retail described on Exhibit C; PROVIDED, THAT, in no event shall TSI Collateral
mean the following in which any
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Borrower has an interest: (i) any Accounts (other than Accounts of TSI Retail
relating to or arising out of the TSI Sale), (ii) any Inventory (other than
Merchandise (as defined in the Agency Agreement) of TSI Retail); (iii) any
Equipment, (iv) any chattel paper (other than chattel paper of TSI Retail
relating to the Merchandise), (v) any general intangibles, (vi) any instruments
(other than instruments of TSI Retail relating to the Merchandise), (vii) any
documents (other than instruments of TSI Retail relating to the Merchandise),
(viii) any investment property, (ix) any letters of credit (other than letters
of credit of TSI Retail relating to the Merchandise) or (x) any proceeds of any
of the foregoing.
(i) "TSI SALE PROCEED ACCOUNTS" shall mean the bank accounts established
by TSI Retail and GBRP into which all proceeds of the TSI Sale shall be
deposited by TSI Retail and GBRP.
(j) "TSI SALE" shall mean the sale of certain assets of TSI Retail
pursuant to the terms of the Agency Agreement.
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. CONSENTS. Subject to the terms and conditions contained herein:
2.1 notwithstanding anything to the contrary contained in Section 7.7(b)
of the Credit Agreement, Lender hereby consents to the TSI Sale; and
2.2 notwithstanding anything to the contrary contained in Section 7.12 of
the Credit Agreement, Lender hereby consents to the establishment of the TSI
Sale Proceed Accounts.
Section 3. AMENDMENTS.
3.1 INDEBTEDNESS. Section 7.1 of the Credit Agreement shall be amended to
replace the period after Section 7.1(g) with "; and" and to add a new Section
7.1(h) on to the end of such Section as follows:
"(h) the GBRP Debt; PROVIDED, THAT,
(i) such Indebtedness is not secured by any assets or
properties of any Borrower other than the TSI Collateral,
(ii) Borrowers shall not, directly or indirectly, make any
payments in respect of such Indebtedness, EXCEPT, THAT, such Indebtedness
may be repaid from the proceeds of the TSI Sale in accordance with the
terms of the GBRP Agreements as in effect on the date hereof,
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(iii) Borrowers shall not, directly or indirectly, (A) amend,
modify, alter or change any terms of such Indebtedness, the GBRP
Agreements or any agreements related thereto; EXCEPT, THAT, TSI Retail may
amend, modify, alter or change the terms thereof: (1) so that the Expenses
(as defined in the Agency Agreement) and the other liabilities of TSI
Retail under the GBRP Agreements increase by no more than $100,000 in the
aggregate above the limits set forth in the Agency Agreement or (2)
provided that the terms of the GBRP Agreement as so amended are not less
favorable to Borrowers than the terms of the GBRP Agreements prior to such
amendments, or (B) purchase or otherwise acquire such Indebtedness, or set
aside or otherwise deposit or invest any sums for such purpose (other than
as permitted under the terms of the Agency Agreement as in effect on the
date of Amendment No. 2), and
(iv) Borrowers shall furnish to Lender (A) any and all notices
of default or demands concerning such Indebtedness and any notices under
pursuant to Article 5 of the GBRP Security Agreement, in each case 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, and (B) any other notices or materials
concerning such Indebtedness either received by any Borrower or on its
behalf, upon request by Lender."
3.2 LIENS AND ENCUMBRANCES. Section 7.4 of the Credit Agreement is hereby
amended to add a new Section 7.4(m) as follows:
"(m) the security interests in and liens upon the TSI Collateral in
favor of GBRP to secure the GBRP Debt permitted under Section 7.1(h)
hereof."
3.3 COLLECTION OF ACCOUNTS. Section 10.3(a)(ii) of the Credit Agreement is
hereby amended to delete Subsection (iii) contained therein and replace it with
the following:
"(iii) Excess Availability shall be less than $5,000,000, EXCEPT THAT for
the period from the date of Amendment No. 2 through November 20, 2000,
Excess Availability shall be less than $3,000,000."
Section 4. RELEASE. Upon the satisfaction of each of the conditions to the
effectiveness of this Amendment No. 2, Lender shall, at Borrowers' cost and
expense, release its security interest in and lien upon the TSI Collateral.
Section 5. 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):
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5.1 GBRP AGREEMENTS. Borrowers hereby acknowledge and agree with Lender
that:
(a) Borrowers have delivered, or caused to be delivered, to Lender, true,
correct and complete copies of the GBRP Agreements.
(b) Borrowers shall not permit any UCC-1 financing statements by and
between any Borrower, as debtor and GBRP, as secured party to be recorded until
Lender has notified Borrower in writing that the conditions precedent to
Amendment No. 2 have been satisfied as determined by Lender.
(c) The security interest in and lien of Lender upon all other assets of
Borrowers other than the TSI Collateral are and shall continue to be in full
force and effect, including but not limited to, all amounts at any time payable
to TSI Retail or any of its affiliates, and all rights, benefits and remedies of
TSI Retail, pursuant to the Agency Agreement.
(d) Borrowers shall cause all amounts at any time payable to TSI Retail or
any of its affiliates pursuant to the Agency Agreement or any related agreements
to be paid by GBRP directly to Lender at the following account ("Lender
Account"), for application to the Obligations (as defined in the Credit
Agreement):
The Chase Manhattan Bank
4 New York Plaza
New York, New York
ABA No. 000000000
Credit to Congress Financial Corporation
Account No. 322-001293
Re: xXXxX*s Inc.
(e) In the event TSI Retail or any of its affiliates receives any amounts
at any time payable to TSI Retail of its affiliates pursuant to the Agency
Agreement or any related agreements, such amounts shall be collected by TSI
Retail or its affiliates as property of Lender and held by it or them in trust
for Lender and shall on the day received, be remitted to Lender, if practicable,
but in no event shall such remittance be later than five (5) Business Days after
receipt by TSI Retail or its affiliates (other than the initial payment of the
Guaranteed Amount (as such term is defined in the Agency Agreement) which shall
be remitted to Lender no later than one (1) Business Day of its or their receipt
thereof), in the form received to the Lender Account, with any necessary
assignments or endorsements, for application to the Obligations.
5.2 CORPORATE POWER AND AUTHORITY. This Amendment, the GBRP Agreements 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
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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.
5.3 CONSENTS; APPROVALS. No action of, or filing with, or consent of any
Governmental Authority, other than the filing of UCC financing statements, 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.
5.4 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.
Section 6. CONDITIONS PRECEDENT. The consents set forth in Section 2
hereof and the amendments to the Credit Agreement in Section 3 hereof shall only
be effective upon the satisfaction of each of the following conditions precedent
in a manner satisfactory to Lender:
6.1 Lender shall have received, in form and substance satisfactory to
Lender, true, correct and complete copies of the GBRP Agreements as duly
executed and delivered by and to the appropriate parties thereto,
6.2 the aggregate amount of Excess Availability of Borrowers, as
determined by Lender, as of the date hereof, shall not be less than $3,000,000
after giving effect to the Loans and all Reserves,
6.3 Lender shall have received $2,340,000 from xXXxX*s in cash or other
immediately available funds, and
6.4 Lender shall have received an original of this Amendment No. 2, duly
authorized, executed and delivered by Borrowers.
Section 7. ADDITIONAL EVENTS OF DEFAULT. The parties hereto acknowledge,
confirm and agree that the failure of Borrowers to comply with the covenants 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 or herein and;
PROVIDED, THAT, any such default under Section 5.3 shall continue uncured for
twenty (20) days before it shall constitute an Event of Default under the
Financing Agreements.
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Section 8. PROVISIONS OF GENERAL APPLICATION.
8.1 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. 2 and the other
Financing Agreements, the terms of this Amendment No. 2 shall control. The
Credit Agreement and this Amendment No. 2 shall be read and construed as one
agreement.
8.2 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.
8.3 BINDING EFFECT. This Amendment No. 2 shall be binding upon and inure
to the benefit of each of the parties hereto and their respective successors and
assigns.
8.4 COUNTERPARTS. This Amendment No. 2 may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one and
the same agreement. In making proof of this Amendment No. 2, 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 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
------------------------
AGREED TO:
CONGRESS FINANCIAL CORPORATION
By: /s/ XXXXXX X. XXXXXX
------------------------------
Title: ASSISTANT VICE PRESIDENT
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SCHEDULE 1
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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