EXHIBIT 99.2
Execution Copy
THIRD AMENDMENT TO
LOAN AND SECURITY AGREEMENT
This THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT entered into as of
this 3rd day of March, 2004 (this "Third Amendment"), is hereby entered into
between and among, on the one hand, the lenders identified on the signature
pages hereof (such lenders, together with their respective successors and
assigns, are referred to hereinafter each individually as a "Lender" and
collectively as the "Lenders"), XXXXX FARGO RETAIL FINANCE II, LLC, a Delaware
limited liability company, as the arranger and administrative agent for the
Lenders ("Agent"), and, on the other hand, BIG DOG HOLDINGS, INC., a Delaware
corporation ("Parent" or "Guarantor"), and BIG DOG USA, INC., a California
corporation ("Big Dog") and CSI ACQUISITION CORPORATION, a California
corporation ("CSI" together with Big Dog collectively, the "Borrowers").
RECITALS
WHEREAS, Borrowers, Parent, Agent and Lenders have executed and
delivered that certain Loan and Security Agreement dated as of October 23, 2001,
as amended by the First Amendment to Loan and Security Agreement dated as of
June 5, 2003, as amended by the Second Amendment to Loan and Security Agreement
dated as of November 1, 2003 (as may be amended, modified or supplemented from
time to time, the "Loan Agreement");
WHEREAS, pursuant to the Walking Company Plan of Reorganization, TWC
Acquisition Corp., a Delaware corporation and subsidiary of the Parent ("TWC
Acquisition"), is to acquire the Walking Company;
WHEREAS, pursuant to the Walking Company Plan of Reorganization, TWC
Acquisition will issue the Junior Secured Creditors Promissory Note, the First
Unsecured Creditors Promissory Note and the Second Unsecured Creditors
Promissory Note;
WHEREAS, pursuant to the Walking Company Plan of Reorganization, the
Parent will provide the Junior Secured Creditors and the unsecured creditors
with certain put rights with an option of either cash payment or conversion
rights pursuant to the Junior Secured Creditors Note Put Right Agreement, the
Junior Secured Creditors Stock Put Right Agreement and the Second Unsecured
Creditors Note Put Right Agreement;
WHEREAS, the Warrant to Purchase Common Stock of Big Dog Holdings, Inc.
dated March 3, 2004, by and between Parent and the Junior Secured Creditors
("Junior Secured Creditors Warrant"), the Warrant to Purchase Common Stock of
Big Dog Holdings, Inc. dated March 3, 2004, by and between Parent and the
holders First Unsecured Creditors Note Holders ("First Unsecured Creditors
Warrant"), and the Warrant to Purchase Common Stock of Big Dog Holdings, Inc.
dated March 3, 2004, by and between Parent and the Second Unsecured Creditors
Note Holder ("Second Unsecured Creditors Warrant" together with the Junior
Secured Creditors Warrant and the First Unsecured Creditors Warrant,
collectively, the "Warrants"), provides the Junior Secured Creditors and the
unsecured creditors with a right to purchase the Parent's stock at $4.35 per
stock unit;
WHEREAS, Borrower wishes to make a Distribution (as defined in the Loan
Agreement) to Parent in the aggregate amount of Seven Million Five Hundred
Thousand Dollars ($7,500,000.00) ("Big Dog Distribution");
WHEREAS, the Parent will make the Parent Loan I, Parent Loan II and the
Parent Equity Contribution to TWC Acquisition in the aggregate amount of Eight
Million Nine Hundred Fifty Thousand Dollars ($8,950,000.00); and
WHEREAS, the Parent and the Borrowers have requested that Agent and
Lenders amend the Loan Agreement and other Loan Documents to permit the
consummation of the foregoing transactions.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, and upon the terms and conditions set
forth herein, the parties hereby agree as follows:
SECTION 1. RELATION TO THE LOAN AGREEMENT; DEFINITIONS.
1.1 Relation to Loan Agreement. This Third Amendment constitutes an integral
part of the Loan Agreement and shall be deemed to be a Loan Document for all
purposes. Upon the effectiveness of this Third Amendment, on and after the date
hereof each reference in the Loan Agreement to "this Agreement," "hereunder,"
"hereof," or words of like import referring to the Loan Agreement, and each
reference in the other Loan Documents to "the Loan Agreement," "thereunder,"
"thereof" or words of like import referring to the Loan Agreement, shall mean
and be a reference to the Loan Agreement as amended hereby. This Third Amendment
shall be considered a Loan Document and, without in any way limiting the
application of other provisions of the Loan Agreement, this Third Amendment
shall be governed by the provisions of Sections 11, 12, 13, 15, 16 and 17.6 of
the Loan Agreement. No further amendment to the Loan Agreement shall be made
except by a writing signed by all parties to the Loan Agreement.
1.2 Capitalized Terms. For all purposes of this Third Amendment, capitalized
terms used herein without definition shall have the meanings specified in the
Loan Agreement.
SECTION 2. AMENDMENT TO LOAN AGREEMENT.
2.1 Definitions.
(a) The following definitions are hereby added to Section 1.1 of the Loan
Agreement:
"Account Reserves" means such reserves as Agent determines
from time to time in its Permitted Discretion as being
appropriate to reflect impediments to the Agent's ability to
realize upon the Collateral. Without limiting the generality
of the foregoing, Account Reserves may include (but are not
limited to) reserves based upon the following: (a) any
Account or parties thereof is past due, delinquent or
otherwise at risk of non-payment, (b) any Account or portion
thereof which is subject to counterclaim, defense, or
dispute, (c) any Account or portion thereof which is subject
to setoff or chargeback, (d) any facts, events or
circumstances which impair the validity, enforceability or
collectibility of such Account or reduce the amount payable
or delay payment thereunder, (e) any material adverse change
in the financial condition of the Credit Card Processor or
Agent no longer deems the Credit Card Processor as credit
worthy, (f) any event of default under any Credit Card
Agreement which event of default gives the Credit Card
Processor the right to setoff against amounts otherwise
payable to a Borrower or the right to establish reserves or
establish or demand collateral."
"Big Dog Distribution" shall have the respective meaning as
set forth in the Recitals of this Third Amendment.
"Big Dog Dividend" means of the dividend by Big Dog to Parent
in the amount of One Million FiftyThousand Dollars
($1,050,000.00).
"Closing Date for Third Amendment" means March 3, 2004.
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"Commercial Tort Claims" shall have the same definition as in
the Code.
"Cost" means the lower of
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(a) the calculated cost of purchases, based upon a
Borrower's accounting practices, on a first-in,
first-out (FIFO) basis, in accordance with GAAP,
which practices are in effect on the date on
which this Agreement was executed as such
calculated cost is determined from invoices
received by a Borrower; such Borrower's purchase
journal; or such Borrower's stock ledger; and
(b) the cost equivalent of the lowest ticketed price
at which the subject Inventory is offered to the
public, after all ticketed xxxx-xxxxx (whether
or not such price is then reflected on a
Borrower's accounting system), determined in
accordance with the cost method of accounting
and reflecting a Borrower's practices in the
ordinary course of a Borrower's business;
provided that "Cost" shall not include Inventory
capitalization costs or other non-purchase price
charges (such as freight charges and UNICAP) used in a
Borrower's calculation of cost of goods sold.
"Customer Credit Liabilities" means gift certificates,
customer deposits, merchandise credits, layaway obligations,
frequent shopper programs, and similar liabilities of
Borrowers to its retail customers and prospective customers.
"Deposit Accounts" shall have the same definition as in the
Code.
"Distribution Center Inventory Reserve" means an aggregate
amount (based on cost) of Inventory at Borrowers' warehouses
or distribution centers (exclusive of Inventory, up to a
maximum aggregate amount of $2,000,000 at any one time, that
is physically segregated from the other Inventory and relates
to the mail order and internet business, corporate sales
business, or wholesale sales business), measured on a
consolidated and month-end basis, of not more than an amount
that is equal to 40% times the aggregate amount of all
Inventory on the last day of each month."
"Eligible Wholesale Accounts" means those Wholesale Accounts
that comply with each of the representations and warranties
respecting Eligible Wholesale Accounts made by Borrowers
under the Loan Documents, and that are not excluded as
ineligible by virtue of one or more of the criteria set forth
below, which criteria may be fixed and revised by Agent in
its Permitted Discretion from time to time after the Closing
Date of the Third Amendment. In determining the amount to be
included, Eligible Wholesale Accounts shall be calculated net
of customer deposits and unapplied cash remitted to
Borrowers. Eligible Wholesale Accounts shall not include the
following:
(a) Wholesale Accounts that the Account Debtor has
failed to pay within 90 days of original invoice date
or Accounts with selling terms of more than 60 days,
(b) Wholesale Accounts owed by an Account Debtor
(or its Affiliates) where 25% or more of all Wholesale
Accounts owed by that Account Debtor (or its
Affiliates) are deemed ineligible under clause (a)
above,
(c) Wholesale Accounts with respect to which the
Account Debtor is an employee, Affiliate, or agent of
any Borrower,
(d) Wholesale Accounts arising in a transaction
wherein goods are placed on consignment or are sold
pursuant to a guaranteed sale, a sale or return, a
sale on approval, a xxxx and hold, or any other terms
by reason of which the payment by the Account Debtor
may be conditional,
(e) Wholesale Accounts that are not payable in
Dollars,
(f) Wholesale Accounts with respect to which the
Account Debtor either (i) does not maintain its chief
executive office in the United States, or (ii) is not
organized under the laws of the United States or any
state thereof, or (iii) is the government of any
foreign country or sovereign state, or of any state,
province, municipality, or other political subdivision
thereof, or of any department, agency, public
corporation, or other instrumentality thereof, unless
(y) the Wholesale Account is supported by an
irrevocable letter of credit satisfactory to Agent (as
to form, substance, and issuer or domestic confirming
bank) that has been delivered to Agent and is directly
drawable by Agent, or (z) the Wholesale Account is
covered by credit insurance in form, substance, and
amount, and by an insurer, satisfactory to Agent,
(g) Wholesale Accounts with respect to which the
Account Debtor is either (i) the United States or any
department, agency, or instrumentality of the United
States (exclusive, however, of Wholesale Accounts with
respect to which the applicable Borrower has complied,
to the reasonable satisfaction of Agent, with the
Assignment of Claims Act, 31 USC ss. 3727), or (ii)
any state of the United States (exclusive, however, of
(y) Wholesale Accounts owed by any state that does not
have a statutory counterpart to the Assignment of
Claims Act or (z) Accounts owed by any state that does
have a statutory counterpart to the Assignment of
Claims Act as to which the applicable Borrower has
complied to Agent's satisfaction),
(h) Wholesale Accounts with respect to which the
Wholesale Account Debtor is a creditor of any
Borrower, has asserted a right of setoff, has disputed
its liability, or has made any claim with respect to
its obligation to pay the Wholesale Account, to the
extent of such claim, right of setoff, or dispute,
(i) Wholesale Accounts with respect to an Account
Debtor whose total obligations owing to Borrowers
exceed 15% (such percentage as applied to a particular
Account Debtor being subject to reduction by Agent in
its Permitted Discretion if the creditworthiness of
such Account Debtor deteriorates) of all Eligible
Wholesale Accounts, to the extent of the obligations
owing by such Account Debtor in excess of such
percentage, except for the Wholesale Account for
Casual Male where 25% or more of such Wholesale
Account owed by that Account Debtor (or its
Affiliates),
(j) Wholesale Accounts with respect to which the
Account Debtor is subject to an Insolvency Proceeding,
is not Solvent, has gone out of business, or as to
which a Borrower has received notice of an imminent
Insolvency Proceeding or a material impairment of the
financial condition of such Account Debtor,
(k) Wholesale Accounts with respect to which the
Account Debtor is located in the states of New Jersey,
Minnesota, or West Virginia (or any other state that
requires a creditor to file a business activity report
or similar document in order to bring suit or
otherwise enforce its remedies against such Account
Debtor in the courts or through any judicial process
of such state), unless the applicable Borrower has
qualified to do business in New Jersey, Minnesota,
West Virginia, or such other states, or has filed a
business activities report with the applicable
division of taxation, the department of revenue, or
with such other state offices, as appropriate, for the
then-current year, or is exempt from such filing
requirement,
(l) Wholesale Accounts, the collection of which,
Agent, in its Permitted Discretion, believes to be
doubtful by reason of the Account Debtor's financial
condition,
(m) Wholesale Accounts that are not subject to a
valid and perfected first priority Agent's Lien,
(n) Wholesale Accounts with respect to which (i)
the goods giving rise to such Account have not been
shipped and billed to the Account Debtor, or (ii) the
services giving rise to such Wholesale Account have
not been performed and billed to the Account Debtor,
(o) Wholesale Accounts that represent the right to
receive progress payments or other advance xxxxxxxx
that are due prior to the completion of performance by
the applicable Borrower of the subject contract for
goods or services; or
(p) Wholesale Accounts that Agent in its Permitted
Discretion or otherwise determines to be ineligible,
provided, however, Eligible Wholesale Accounts shall
be deemed to be Zero (0) Dollars if the aggregate
amount of Wholesale Accounts without regard to
eligibility is less than $750,000."
"First Unsecured Creditors Promissory Note" shall mean that
promissory note issued to the Liquidating Agent for the
benefit of the unsecured creditors of the Walking Company
pursuant to the Walking Company Plan of Reorganization in the
original face amount of $700,000.
"Goods" shall have the same definition as in the Code.
"IBD" means the Israel Discount Bank.
"IBD Note" shall mean that promissory note dated as of March
1, 2004 executed by Parent in favor of IDB establishing an
unsecured line of credit up to $3.0 million.
"Junior Secured Creditors" means Stratford Capital Partners,
L.P., Retail & Restaurant Growth Capital L.P., Provender
Opportunities Fund L.P., Cornerstone Equity Investors IV,
L.P., Xxxxx X. Xxxxxxxxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxx,
Trent and Xxxxxxx Xxxxxxx Trust, The Xxxxxxx Family Trust dtd
2/27/95, Xxxxxxxxx Family Trust dated March 17, 1998, Xxxxxxx
X. Xxxxxxxx Family Trust, Xxxxxx Family 1999 Trust UAD
5/2/99, Xxxxxx Xxxxxxx, Xxxxxxx Xxxxx, Xxxxx Xxxxx, Xxxx
Xxxxx and Xxx Xxxxxxxxx.
"Junior Secured Creditors Note Put Reserve" means $1,320,000
or the outstanding amount owed to Junior Secured Creditors
pursuant to the Parent's obligations pursuant to the Junior
Secured Creditors Note Put Agreement at any given time, and
$0 following irrevocable payment of all the Parent's
obligations in respect of the Junior Secured Creditors Note
Put Right Agreement on termination and/or expiry of such
agreement.
"Junior Secured Creditors Note Put Right Agreement" means
that certain Note Put Right (Junior Secured Creditors
Promissory Notes) Agreement dated March 3, 2004, by and
between the Parent and the Junior Secured Creditors.
"Junior Secured Creditors Promissory Note" means those
promissory notes issued by the Borrower to the Junior Secured
Creditors in the aggregate principal amount of $3.279 million
pursuant to the Walking Company Plan of Reorganization.
"Junior Secured Creditors Stock Put Right Agreement" means
that certain the Stock Put Right (Junior Secured Creditors)
dated March 3, 2004, by and between the Parent and the Junior
Secured Creditors.
"Liquidating Agent" means the Post-Confirmation Committee as
defined in the Walking Company Plan of Reorganization.
"Minimum Excess Availability Reserve" means One Million
Dollars ($1,000,000.00).
"Parent Capital Contribution" means the Parent Equity
Contribution and the Parent Loan I.
"Parent Equity Contribution" means an equity contribution by
Parent to TWC Acquisition in an amount of not less than Six
Million Four Hundred Fifty Thousand Dollars ($6,450,000.00).
"Parent Loan I" means that unsecured line of credit
established by Parent to Borrower pursuant to the
Subordinated Intercompany Promissory Note dated as of March
3, 2004 in the face amount of up to One Million Fifty
Thousand Dollars ($1,050,000.00), funded from the proceeds of
the Big Dog Dividend.
"Parent Loan II" means that unsecured line of credit
established by Parent to Borrower pursuant to the
Subordinated Intercompany Promissory Note dated as of March
3, 2004 in the face amount of up to Three Million Dollars
($3,000,000.00), funded from the proceeds of the IBD Note.
"Parent Note Put Obligations" means the Junior Secured
Creditors Note Put Agreement and the Second Unsecured
Creditors Note Put Agreement.
"Parent Stock Put Obligations" means the Junior Secured
Creditors Stock Put Agreement.
"Proceeding" means the Chapter 11 case of the Walking Company
pending before the Bankruptcy Court as case number SV
03-44040 GM, jointly administered with Case No. SV 03-15932
GM.
"Second Unsecured Creditors Promissory Note" means that
promissory note issued by the Borrower to the Liquidating
Agent in the original face amount of $21,000 pursuant to the
Walking Company Plan of Reorganization.
"Second Unsecured Creditors Note Put Agreement" means that
certain Note Put Right (Second Unsecured Creditors Promissory
Note) Agreement dated March 3, 2004, by and between the
Parent and the Liquidating Agent for the benefit of the
unsecured creditors of the Walking Company.
"Xxxxx.xxx Administrative Claim" means any claim of
Xxxxx.xxx, Inc. allowed by Final Order of the Bankruptcy
Court as an administrative claim against the Borrower
pursuant to Section 503 of the Bankruptcy Code in the
Proceeding.
"Xxxxx.xxx Loan" means an unsecured loan to be made by either
(i) Parent to TWC Acquisition or (ii) by Xxxx Xxxxx and/or
Xxxxxx Xxxxxxxx to TWC Acquisition in an amount sufficient to
satisfy the Xxxxx.xxx Administrative Claim after application
of then available proceeds of Parent Loan II.
"TWC Acquisition" shall have the respective meaning as set
forth in the Recitals of this Third Amendment.
"Walking Company" means The Walking Company, a California
corporation, and Alan's Shoes, Inc., an Arizona corporation,
both of which are debtors in possession in the Proceeding.
"Walking Company Acquisition" means the acquisition of the
Walking Company Assets by Borrower pursuant to the Walking
Company Plan of Reorganization.
"Walking Company Acquisition Orders" means, collectively, (a)
a Final Order from the Bankruptcy Court confirming (i) the
Walking Company Plan of Reorganization and (ii) the sale of
the Walking Company Assets free and clear of all liens and
encumbrances to Borrower pursuant to Section 1129 of the
Bankruptcy Code and (b) such other Final Orders of the
Bankruptcy Court required for the consummation of the Walking
Company Acquisition, all of which are determined by Agent, in
its Permitted Discretion, to be in form and substance
acceptable to Agent.
"Walking Company Assets" means all of the property and assets
(tangible and intangible) of the Walking Company that (i) are
proposed to be purchased by Borrower pursuant to the Walking
Company Plan of Reorganization, or (ii) are acceptable to
Agent in its Permitted Discretion.
"Walking Company Plan of Reorganization" means the Plan of
Reorganization of the Walking Company dated November 6, 2003,
filed by the Walking Company in the Proceeding, as such plan
may be modified, supplemented or amended from time to time
with the prior written consent of Agent.
"Warrants" shall have the respective meaning as set forth in
the Recitals of this Third Amendment.
"Wholesale Accounts" means those Accounts created by
Borrowers in the ordinary course of Borrowers' business, that
arise out of Borrowers' sale of goods or rendition of
services to Borrowers' wholesale customers.
(b) The definition of "Applicable Prepayment Premium" is hereby deleted in its
entirety and replaced with the following:
""Applicable Prepayment Premium" means, as of any date of
determination, an amount equal to (a) during the period of
time from and after the date of the execution and delivery of
this Agreement up to the date that is the first anniversary
of the Closing Date of the Third Amendment, 0.50% times the
Maximum Revolver Amount, (b) during the period of time from
and including the date that is the first anniversary of the
Closing Date of the Third Amendment up to the date that is
the second anniversary of the Closing Date of the Third
Amendment, 0.25% times the Maximum Revolver Amount, and (c)
during the period of time from and including the date that is
the second anniversary of the Closing Date of the Third
Amendment up to the Maturity Date, zero (0)."
(c) The definition of "Base Rate Standard Margin" is hereby deleted in its
entirety and replaced with the following:
""Base Rate Standard Margin" means 0 basis points."
(d) The definition of "Big Dog Borrowing Base" is hereby deleted in its entirety
and replaced with the following:
""Big Dog Borrowing Base", as of any date of determination,
shall mean the result of:
(a) the lesser of:
(i) $28,000,000, and
(ii) 85% times Big Dog's then extant Net
Liquidation Percentage times the
value (at Cost) of Big Dog's
Eligible Inventory, plus
(iii) 85% times the Eligible Wholesale
Accounts Receivables up to an
aggregate amount of $1,500,000,
minus
(b) the sum of (i) the Bank Product Reserve, (ii) the
portion of the Contractor Reserve attributable to
Inventory of Big Dog, and (iii) the aggregate amount
of reserves, if any, established by Agent under
Section 2.1(a)(ii)."
(e) The information set forth in Schedule B-1 of the Loan Agreement is hereby
deleted in its entirety and replaced with the following:
"Account number 4132-863689 of Big Dog maintained with the
Big Dog Designated Account Bank, or such other deposit
account of Big Dog (located within the United States) that
has been designated as such in writing, by Big Dog to Agent."
(f) The definition of "Big Dog Designated Account Bank" is hereby deleted in its
entirety and replaced with the following:
""Big Dog Designated Account Bank" means Xxxxx Fargo Bank,
whose office located at 0000 Xxxxxxx Xxxxxx, Xxxxx Xxxxxxx,
XX 00000, and whose ABA number is 121-000248."
(g) The definition of "Borrowers Collateral" is hereby deleted in its entirety
and replaced with the following:
""Borrowers Collateral" means all of each Borrower's now owned
or hereafter acquired right, title, and interest in and to each of the
following:
(a) Accounts,
(b) Books,
(c) Deposit Accounts,
(d) Equipment,
(e) General Intangibles,
(f) Inventory,
(g) Investment Property,
(h) Negotiable Collateral,
(i) Goods,
(j) Commercial Tort Claims,
(k) money or other assets of each such Borrower that
now or hereafter come into the possession, custody, or control of any
member of the Lender Group,
(l) the proceeds and products, whether tangible or
intangible, of any of the foregoing, including proceeds of insurance
covering any or all of the foregoing, and any and all Accounts, Books,
Documents, Equipment, General Intangibles, Instruments, Inventory,
Investment Property, Negotiable Collateral, real property, fixtures,
leases and leasehold interests, money, deposit accounts, or other
tangible or intangible property resulting from the sale, exchange,
collection, or other disposition of any of the foregoing, or any
portion thereof or interest therein, and the proceeds thereof, and
(m) liens, guaranties, rights, remedies, and
privileges pertaining to any of the foregoing, including the right of
stoppage in transit."
(h) The definition of "Equipment" is hereby deleted in its entirety and replaced
with the following:
""Equipment" includes, without limitation, "equipment" as it
is defined in the Code, and also all of Borrowers' now owned or
hereafter acquired right, title, and interest with respect to
equipment, machinery, machine tools, motors, furniture, furnishings,
fixtures, vehicles (including motor vehicles), tools, parts, goods
(other than consumer goods, farm products, or Inventory), wherever
located, including all attachments, accessories, accessions,
replacements, substitutions, additions, and improvements to any of the
foregoing."
(i) The definition of "General Intangibles" is hereby deleted in its entirety
and replaced with the following:
""General Intangibles" includes, without limitation, "general
intangibles" as defined in the Code; and also means all of Borrowers'
now owned or hereafter acquired right, title, and interest with respect
to general intangibles (including, but not limited to, payment
intangibles, healthcare insurance receivables, contract rights, rights
to payment, rights arising under common law, statutes, or regulations,
choses or things in action, judgments, payments under any settlement or
other agreement, rights to performance, royalties, all means and
vehicles of investment or hedging, including without limitation,
options, warrants, and future contracts, goodwill, patents, patent
applications, trade names, trademarks, servicemarks, trademark
applications, copyrights, mask work rights and interests, and
derivative works and interests, internet addresses and domain names,
developmental ideas and concepts, proprietary processes, blueprints,
drawings, designs, diagrams, plans, charts, purchase orders, customer
lists, telephone numbers, monies due or recoverable from pension funds,
route lists, rights to payment and other rights under any royalty or
licensing or franchise agreements, rights to admission, infringement
claims, computer programs, computer software, computer records,
information contained on computer disks or tapes, software, literature,
literary rights, reports, catalogs, manuals, technical data, money,
trade secret rights, insurance premium rebates, warranties, warranty
claims, tax refunds, and tax refund claims), and any and all supporting
obligations in respect thereof, and any other personal property other
than goods, Accounts, Investment Property, and Negotiable Collateral."
(j) The definition of "Inventory" is hereby deleted in its entirety and replaced
with the following:
""Inventory" includes, without limitation, "inventory" as
defined in the Code and also means all Borrowers' now owned or
hereafter acquired right, title, and interest with respect to
inventory, including goods held for sale or lease or to be furnished
under a contract of service, goods that are leased by a Borrower as
lessor, goods that are furnished by a Borrower under a contract of
service, and raw materials, work in process, or materials used or
consumed in a Borrower's business."
(k) The definition of "Intercompany Advances" is hereby
deleted in its entirety and replaced with the following:
""Intercompany Advances" means loans or advances (i) from
Borrower to Parent, any Subsidiary or any Affiliate, or (ii) from
Parent, any Subsidiary or any Affiliate to Borrower, or (iii) from
Parent to TWC Acquisition, or (iv) from Borrower to TWC Acquisition."
(l) The definition of "Landlord Reserve" is hereby deleted in
its entirety and replaced with the following:
"Landlord Reserve" means with respect to each leased location
(i) at which each Borrower stores Inventory in a state that has a
landlord lien or similar statute with respect to commercial property,
including without limitation, as of the Closing Date of the Third
Amendment, the states of Pennsylvania, Texas, Virginia and Washington,
and (ii) for which either (I) a Collateral Access Agreement has not
been received by Agent, or (II) the underlying lease agreement does
not contain a provision that waives the Lien rights that the landlord
may have in and to the Inventory, including without limitation all
rights of levy or distraint for rent; a reserve in an amount equal to
the greater of (a) the number of months rent for which a landlord will
have, under the applicable statutory lien, a Lien in the assets of the
applicable Borrower to secure the payment of rent or other amounts
under a lease, or (b) one (1) month rent under the lease."
(m) The following section is added to the definition of
"Permitted Dispositions":
"; (g) following exercise by any Junior Secured Creditor of
its put rights pursuant to the Junior Secured Creditors Note
Put Agreement, transfer of such Junior Secured Creditor's
Junior Secured Creditors Promissory Note to Xxxx Xxxxx and/or
Xxxxxx Xxxxxxxx for an amount equal to the Purchase Price (as
defined in the Junior Secured Creditors Note Put Agreement)
of such note; and (h) pledge of the Xxxxx.xxx Loan to Xxxx
Xxxxx and/or Xxxxxx Xxxxxxxx provided, that, Xxxx Xxxxx
and/or Xxxxxx Xxxxxxxx funded such loan."
(n) The definition of "Permitted Distributions" is hereby
deleted in its entirety and replaced with the following:
"Permitted Distributions" means (a) so long as no Default or
Event of Default has occurred and is continuing or would result
therefrom, cash Distributions by Borrowers to Parent for the sole
purpose of permitting Parent to pay, and Parent shall pay, federal and
state income taxes solely attributable to its ownership of Borrowers,
(b) so long as no Event of Default has occurred and is continuing or
would result therefrom, cash Distributions by Subsidiaries (other than
Borrowers) to Parent, (c) so long as no Default or Event of Default
has occurred and is continuing or would result therefrom and so long
as Borrowers have Aggregate Availability of not less than $2,000,000
after giving effect thereto, redemptions of Parent's outstanding Stock
in an aggregate amount not to exceed $250,000 in any fiscal year, (d)
so long as (i) no Event of Default has occurred and is continuing or
would result therefrom, (ii) Borrowers have at all times tested
Aggregate Availability 30 days prior to the date of such cash
Distribution and will maintain, on a pro forma basis, Aggregate
Availability for 60 days after the date of such cash Distribution of
not less than $3,500,000, after giving effect thereto, cash
Distributions by Borrowers to Parent for the sole purpose of
permitting Parent to pay Parent's obligations in respect of the Parent
Note Put Obligation, and (iii) Borrower is Solvent, and (e) so long as
no Event of Default has occurred and is continuing or would result
therefrom, and as long as Borrowers have Aggregate Availability of not
less than $5,000,000, after giving effect thereto, a cash Distribution
by Borrowers to Parent in an amount of Seven Million Five Hundred
Thousand Dollars ($7,500,000.00) for the sole purpose of permitting
Parent to make the Parent Capital Contribution in connection with the
consummation of the Walking Company Acquisition."
(o) The definition of "Permitted Intercompany Advances" is
hereby deleted in its entirety and replaced with the following:
""Permitted Intercompany Advances" means (A) Intercompany
Advances so long as (a) no Default or Event of Default exists at the time
of the making of any Intercompany Advance or would exist after giving
effect thereto, (b) if the Borrower is acting as the lender, after giving
effect to the making of such Intercompany Advance, the Borrower that is
acting as the lender with respect thereto (i) has Availability of not
less than Two Million Dollars ($2,000,000) and (ii) is Solvent, (c) the
Intercompany Subordination Agreement is in full force and effect with
respect to the proposed Intercompany Advance, and (d) after giving effect
to the making of such Intercompany Advance, the Borrower that is acting
as the borrower with respect thereto is Solvent; (B) advances made by Big
Dog for actual overhead charges reasonably allocable to TWC Acquisition
including, but not limited to, charges for general corporate shared
administrative services and TWC Acquisition's occupancy of a portion of
the warehouse or distribution centers operated by Big Dog in amounts not
to exceed caps to be established by Agent, in its Permitted Discretion,
based upon an allocation analysis to be furnished by TWC Acquisition to
Agent within 90 days of the Closing Date for Third Amendment, provided,
that an Intercompany Subordination Agreement is in full force and effect
with respect to the proposed Intercompany Advance. In the event TWC
Acquisition fails to provide Agent with such allocation analysis within
90 days of the Closing Date, TWC Acquisition shall pay Agent an extension
fee equal to $10,000 per month (or any portion thereof) until such
analysis is furnished to Agent; (C) Parent to TWC Acquisition in the
amount of the Parent Loan I for the sole purpose of permitting the Parent
to make the Parent Capital Contribution in connection with the
consummation of the Walking Company Acquisition; (D) Parent to TWC
Acquisition up to the amount of Parent Loan II, for the sole purposes of
(i) permitting Parent to make the Parent Capital Contribution, (ii) to
satisfy the Xxxxx.xxx Administrative Claim, and (iii) after satisfaction
of the foregoing, for general working capital of TWC Acquisition; and (E)
Parent to TWC Acquisition up to the amount of the Xxxxx.xxx Loan, for the
sole purposes of satisfying any Xxxxx.xxx Administrative Claim, provided,
that, the funding of such Intercompany Advance is as a consequence of a
loan or equity infusion by Xxxx Xxxxx and Xxxxxx Xxxxxxxx and such loan
or equity infusion is made on such terms and conditions as is acceptable
to Agent in its Permitted Discretion."
2.2 Amendment to Section 2.1.
(i) Section 2.1(a)(ii) of the Loan Agreement is hereby deleted
in its entirety and replaced with the following:
"(ii) Anything to the contrary in this Section 2.1(a)
notwithstanding, Agent shall have the right to establish
Landlord Reserves and such other reserves in such amounts,
and with respect to such matters, as Agent in its Permitted
Discretion shall deem necessary or appropriate, against the
Big Dog Borrowing Base, including reserves with respect to
(i) sums that Big Dog is required to pay (such as taxes,
assessments, insurance premiums, or, in the case of leased
assets, rents or other amounts payable under such leases) and
has failed to pay under any Section of this Agreement or any
other Loan Document, (ii) amounts owing by Big Dog to any
Person to the extent secured by a Lien on, or trust over, any
of its Collateral (other than any existing Permitted Lien set
forth on Schedule P-1 which is specifically identified
thereon as entitled to have priority over the Agent's Liens),
which Lien or trust, in the Permitted Discretion of Agent
likely would have a priority superior to the Agent's Liens
(such as Liens or trusts in favor of landlords, warehousemen,
carriers, mechanics, materialmen, laborers, or suppliers, or
Liens or trusts for ad valorem, excise, sales, or other taxes
where given priority under applicable law) in and to such
item of the Collateral, (iii) the Minimum Excess Availability
Reserve, (iv) shrinkage, markdowns (to the extent not taken
into account in the calculation of "Cost"), seasonality and
other such categories of reasons which the Agent may
establish, in its Permitted Discretion, which reflect other
factors which affect the market value of Eligible Inventory,
(v) Customer Credit Liabilities, (vi) the Distribution Center
Inventory Reserve, (vii) Junior Secured Creditors Note Put
Reserve, and (viii) Account Reserves. In addition to the
foregoing and subject to Section 2.11(c), Agent shall have
the right to have Big Dog's Inventory reappraised by a
qualified appraisal company selected by Agent from time to
time after the Closing Date of the Third Amendment for the
purpose of redetermining the Net Liquidation Percentage of
Big Dog's Eligible Inventory portion of its Collateral and,
as a result, redetermining the Big Dog Borrowing Base."
(ii) The following subsection is hereby added to Section 2.1
of the Loan Agreement:
"(e) Borrower shall not request and the Lender shall
have no obligation to make any CSI Revolver Advances during
the term of the Agreement. Furthermore, CSI's assets shall not
be eligible for inclusion in the calculation of CSI Borrowing
Base or otherwise available for borrowing hereunder. It being
understood, however, that such assets shall constitute
Collateral for the Obligations hereunder."
2.3 Amendment to Section 2.6. Section 2.6 of the Loan Agreement is hereby
deleted in its entirety and replaced with the following:
"(b) Letter of Credit Fees. Borrowers shall pay Agent (for
the ratable benefit of the Lenders, subject to any letter
agreement between Agent and individual Lenders), (i) a Letter
of Credit fee (in addition to the charges, commissions, fees,
and costs set forth in Section 2.12(e)), which shall accrue
at a rate equal to 1.00% per annum times the Daily Balance of
the undrawn amount of all outstanding standby Qualified
Import Letters of Credit, (ii) a Letter of Credit fee (in
addition to the charges, commissions, fees, and costs set
forth in Section 2.12(e)), which shall accrue at a rate equal
to 0.50% per annum times the Daily Balance of the undrawn
amount of all outstanding documentary Qualified Import
Letters of Credit, (iii) a Letter of Credit fee (in addition
to the charges, commissions, fees, and costs set forth in
Section 2.12(e)) which shall accrue at a rate equal to 1.00%
per annum times the Daily Balance of the undrawn amount of
all outstanding standby Letters of Credit (other than
Qualified Import Letters of Credit), and (iv) a Letter of
Credit fee (in addition to the charges, commissions, fees,
and costs set forth in Section 2.12(e)) which shall accrue at
a rate equal to 0.50% per annum times the Daily Balance of
the undrawn amount of all outstanding documentary Letters of
Credit (other than Qualified Import Letters of Credit)."
2.4 Amendment to Section 2.7. The following subsection is hereby added to
Section 2.7 of the Loan Agreement:
"(e) At the request of the Agent, the Borrowers shall deliver
to the Agent notification, executed by the Borrowers, to each
depository institution which any DDA (other than DDA's established for
xxxxx cash) is maintained, in form and substance satisfactory to the
Agent in its Permitted Discretion of the Agent's Lien in such DDA and,
instructs the depository institution, upon direction of the Agent, to
remit all amounts deposited from time to time in the DDA to the
Agent's Account or as otherwise directed from time to time by the
Agent. The Borrowers shall not establish any DDA hereafter unless,
contemporaneous with such establishment, Borrower notifies Agent and,
if requested by Agent, delivers to such depository institution the
notification described herein. The Borrowers shall not change such
direction or designation except upon the prior written consent of the
Agent."
2.5 Amendment to Section 2.11.
(i) Section 2.11(c)(i) of the Loan Agreement is hereby
deleted and replaced in its entirety with the following:
"(i) so long as no Event of Default shall have occurred and
be continuing, a Borrower shall be obligated to pay such
fees and expenses for only 2 financial audits and 2
appraisals of such Borrower in any calendar year, provided
that a Borrower shall be obligated to pay such fees and
expenses for no more than 1 financial audit and 1 appraisal
in any calendar year a Borrower at all times has maintained
Excess Availability of at least $7,500,000 during such
calendar year,"
(ii) The following subsection is added to Section 2.11 of
the Loan Agreement:
"(d) Servicing Fee. On the first (1st) day of each
month, a service fee of $1,000 per month will be due
and payable during the term of this Agreement. This
Servicing Fee amends, restates and supercedes any
prior agreement between the Borrowers and the Agent
pursuant to that certain Fee Letter dated as of
October 23, 2001."
2.6 Amendment to Section 3.4. Section 3.4 of the Loan Agreement is hereby
deleted in its entirety and replaced with the following:
"3.4 Term. This Agreement shall become effective upon the
execution and delivery hereof by Parent, Borrowers, Agent,
and the Lenders and shall continue in full force and effect
for a term ending on March 3, 2007 (the "Maturity Date").The
foregoing notwithstanding, the Lender Group, upon the
election of the Required Lenders, shall have the right to
terminate its obligations under this Agreement immediately
and without notice upon the occurrence and during the
continuation of an Event of Default."
2.7 Amendment to Section 6.2.
(i) Subsection 6.2(g) of the Loan Agreement is hereby deleted
in its entirety.
(ii) Subsection 6.2(i) of the Loan Agreement is hereby deleted
in its entirety.
(iii) Subsection 6.2(q) of the Loan Agreement is hereby
deleted in its entirety.
2.8 Amendment to Section 7.1. The following subsections are hereby added
to Section 7.1 of the Loan Agreement:
"(k) Indebtedness of Parent to IDB in respect of the IBD Note;
(l) Indebtedness of Parent Loan I and Parent Loan II.
(m) Indebtedness of Parent to the Junior Secured Creditors on
account of the Parent Note Put Obligations, Parent Stock Put
Obligations and Warrants in respect of Junior Secured Creditors
Promissory Note;
(n) Indebtedness of Parent to the Liquidating Agent on
account of the Warrants in respect of the First Unsecured Creditors
Promissory Note;
(o) Indebtedness of the Parent to the Liquidating Agent on
account of the Second Unsecured Creditors Note Put Agreement and
Warrants in respect of the Second Unsecured Creditors Promissory Note.
(p) Indebtedness of the Parent in respect of the Xxxxx.xxx
Administrative Claim in an amount not to exceed $2,900,000."
2.9 Amendment to Section 7.8. Section 7.8 of the Loan Agreement is hereby
deleted in its entirety and replaced with the following:
"7.8 Prepayments and Amendments.
(a) Except in connection with a refinancing permitted
by Section 7.1(d) or in connection with a Permitted Bond
Financing, prepay, redeem, defease, purchase, or otherwise
acquire any Indebtedness of any Borrower, other than the
Obligations in accordance with this Agreement;
(b) Except in connection with a refinancing permitted
by Section 7.1(d) or in connection with a Permitted Bond
Financing, directly or indirectly, amend, modify, alter,
increase, or change any of the terms or conditions of any
agreement, instrument, document, indenture, or other writing
evidencing or concerning Indebtedness permitted under Sections
7.1(b) or (c);
(c) Parent may make regularly scheduled payments of
interest and principal on account of the IBD Note, provided,
that if a Borrower is providing the funds to make such
payments (i) there does not exist an Event of Default and
there would not exist an Event of Default after giving effect
to any such payment and (ii) the Borrowers have certified to
Agent that they have, at all times tested, maintained Excess
Availability for 30 days prior to the date of such payment
and, on a pro forma basis, will maintain Excess Availability
for the 60 days after the date of such payment of at least
$2,000,000, after giving effect to such payment;
(d) Prepay, redeem, defease, purchase, or otherwise
acquire any Indebtedness of Borrowers, other than the
Obligations in accordance with this Agreement except Parent
may (A)prepay Indebtedness in respect of the Parent Note Put
Obligations, provided, that (i) there does not exist an Event
of Default and there would not exist an Event of Default after
giving effect to any such payment and (ii) the Borrowers have
certified to Agent that they have, at all times tested,
maintained Excess Availability for 30 days prior to the date
of such payment and, on a pro forma basis, will maintain
Excess Availability for the 60 days after the date of such
payment of at least $4,500,000, after giving effect to such
payment; and (B) prepay Indebtedness in respect of the IBD
Note, provided, that (i) there does not exist an Event of
Default and there would not exist an Event of Default after
giving effect to any such payment and (ii) the Borrowers have
certified to Agent that they have, at all times tested,
maintained Excess Availability for 30 days prior to the date
of such payment and, on a pro forma basis, will maintain
Excess Availability for the 60 days after the date of such
payment of at least $4,500,000, after giving effect to such
payment."
(e) Amend, modify, alter, increase, or change
(directly or indirectly) any of the terms or conditions of any
agreement, instrument, document, indenture, or other writing
evidencing or concerning Indebtedness permitted under Sections
7.1(b), (c), (g), (h), (i), (j), (k), (l), (m), (n), (o) or
(p)."
2.6 Amendment to Section 7.16. Section 7.16 of the Loan
Agreement is hereby deleted in its entirety and replaced
with the following:
"7.16 IDB Note. Use any of the proceeds of the IDB Note
provided that, TWC Acquisition may use proceeds of the IDB Note to (i)
fund the initial draw by TWC Acquisition under Parent Loan II in the
amount of $1.45 million to fund, in part, the Acquisition Proceeds,
(ii) fund the payment of any portion of the Xxxxx.xxx Administrative
Claim, and (iii) after satisfaction of the obligations pursuant to
Section 7.16(i) and (ii), above, for general corporate purposes."
2.7 Amendment to Section 7.21.
(i) Section 7.21(a) of the Loan Agreement is hereby deleted in
its entirety.
(ii) Section 7.21(b) of the Loan Agreement is hereby deleted
in its entirety.
(iii) Section 7.21(c)(i) of the Loan Agreement is hereby
deleted in its entirety and replaced with the following:
"(i) Capital Expenditures. Capital expenditures,
measured on a consolidated basis in excess of $1,000,000 for
the 2004 fiscal year. Capital expenditure covenants for each
succeeding fiscal year following 2004 shall be established by
mutual agreement between the Borrowers and Agent on or before
January 15th of each succeeding year. In the absence of such
mutual agreement, the Agent may establish a Minimum Excess
Availability Reserve at any time of $5,000,000."
2.8 Amendment to Section 8.4. Section 8.4 of the Loan Agreement is
hereby deleted in its entirety and replaced with the
following:
"8.4 If an Insolvency Proceeding is commenced by Parent or
Big Dog and/or the initiation by or on behalf of Big Dog of
the liquidation or wind up of all or any part of a Big Dog's
business or operations. To the extent that CSI has meaningful
business operations, if any Insolvency Proceeding is
commenced by CSI and/or the initiation by or on behalf of CSI
of the liquidation or wind up of all or any part of CSI's
business or operations."
2.9. Amendment to Section 8.9. Section 8.9 of the Loan Agreement is
hereby deleted in its entirety and replaced with the following:
"8.9 If there is a default in (A) any agreement involving an
aggregate amount of, in Agent's sole discretion, $1,000,000,
or (B) the Junior Secured Creditors Note Put Right Agreement,
to which Parent, any Borrower or any of their Subsidiaries is
a party and such default (i) occurs at the final maturity of
the obligations thereunder, or (ii) results in a right by the
other party thereto, irrespective of whether exercised, to
accelerate the maturity of Parent's, any Borrower's or their
Subsidiaries' obligations thereunder, to terminate such
agreement, or to refuse to renew such agreement pursuant to
any automatic renewal right therein;"
SECTION 3. REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGEMENTS.
3.1 Representations. Big Dog and Parent hereby represents and warrants to
Agent and Lenders that:
(a) Big Dog and Parent are corporations duly organized and existing and in good
standing under the laws of their respective jurisdiction of formation and are
duly qualified to do business and in good standing in every jurisdiction in
which the nature of the business done or the property owned by it would make
such qualification necessary;
(b) Big Dog and Parent have all requisite power and authority to own and operate
their properties, and to conduct their business as currently conducted and as
currently proposed to be conducted. Big Dog and Parent have all requisite power
and authority necessary to enter into this Third Amendment and to perform their
respective obligations under this Third Amendment;
(c) Big Dog and Parent have taken all corporate action necessary to be taken to
authorize the execution and delivery of this Third Amendment. This Third
Amendment has been duly executed and delivered by each of Big Dog and Parent and
constitutes legal, valid and binding obligations of each of Big Dog and Parent,
enforceable against each of Big Dog and Parent in accordance with its terms;
(d) After giving effect to the amendments and consent herein, no event has
occurred and no condition exists which constitutes a Default or an Event of
Default under the Loan Agreement or the other Loan Documents; and
(e) The Loan Agreement and all other Loan Documents and all representations,
warranties, terms and conditions therein remain in full force and effect, and
Big Dog and Parent hereby confirm and ratify each of the provisions of the Loan
Agreement and the other Loan Documents
SECTION 4. MISCELLANEOUS
4.1 Conditions of Effectiveness. The amendments contained in Section 2 above
shall become effective when, and only when, the following conditions have been
satisfied as determined in Agent's Permitted Discretion: (i) Agent shall have
received the reaffirmation and consent of Guarantor attached hereto as Exhibit
A, duly executed and delivered by an authorized officer of Guarantor; and (ii)
all conditions precedent to the effectiveness of the TWC Acquisition Loan and
Security Agreement have been satisfied by TWC Acquisition or waived by Agent
thereunder.
4.2 Cross-References. References in this Third Amendment to any Section of
("ss.") are, unless otherwise specified, to such Section (or "ss.") of this
Third Amendment.
4.3 Successors and Assigns. This Third Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
4.4 Counterparts. This Third Amendment may be executed by one or more of the
parties hereto on any number of separate counterparts, each of which shall be
deemed an original and all of which, taken together, shall be deemed to
constitute one and the same instrument. Delivery of an executed counterpart of
this Third Amendment by facsimile transmission shall be as effective as delivery
of an originally executed counterpart hereof.
4.5 Fees, Costs and Expenses. Each Borrower agrees to pay on demand all
reasonable fees, costs and expense in connection with the preparation,
execution, delivery, administration, modification and amendment of this Third
Amendment and the other instruments and documents to be delivered hereunder,
including, without limitation, the reasonable fees and out-of-pocket expenses of
counsel for the Agent and Lenders with respect thereto and with respect to
advising the Agent and Lenders as to their rights and responsibilities hereunder
and thereunder.
4.6 Governing Law. THIS THIRD AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO ANY
CONFLICT OF LAWS PRINCIPALS.
4.7 Ratification. Except as expressly amended herein, all of the
representations, warranties, terms, covenants and conditions of the Loan
Agreement and the other Loan Documents shall remain unamended and unwaived and
shall continue to be, and shall remain, in full force and effect in accordance
with their respective terms. The amendments and consent set forth herein shall
be limited precisely as provided for herein to the provisions expressly amended
and consented to herein and shall not be deemed to be a waiver of, amendment of,
consent to or modification of any other term or provision of any other document
or of any transaction or further action on the part of either Borrower or
Guarantor which would require the consent of Lenders or Agent under the Loan
Agreement.
4.8 Release. In consideration of Lender entering into this Third Amendment,
Borrowers hereby release and forever discharge Lender, and its successors,
assigns, agents, shareholders, directors, officers, employees, agents,
attorneys, parent corporations, subsidiary corporations, affiliated
corporations, affiliates, and each of them, from any and all claims, debts,
Obligations, demands, obligations, costs, expenses, actions and causes of
action, of every nature and description, known and unknown, whether or not
related to the subject matter of this Third Amendment or the other Loan
Documents, which Borrowers now have or at any time may have held, by reason of
any matter, cause or thing occurred, done, omitted or suffered to be done prior
to the date of this Third Amendment. Borrowers waive the benefits of any law,
which may provide in substance: "A general release does not extend to claims
which the creditor does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially affected his
settlement with the debtor." Borrowers understand that the facts which it
believes to be true at the time of making the release provided for herein may
later turn out to be different than they now believe, and that information which
is not know known or suspected may later be discovered. Borrowers accept this
possibility, and Borrowers assume the risk of the facts turning out to be
different and new information being discovered; and Borrowers further agree that
the release provided for herein shall in all respects continue to be effective
and not subject to termination or rescission because of any difference in such
facts or any new information. This release is fully effective on the date
hereof. Lender is not releasing Borrowers from any claims, debts, Obligations,
demands, obligations, costs, expenses, actions or causes of action.
[Remainder of page intentionally left blank]
Signature Page to Third Amendment
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment
to be executed and delivered as of the date first above written.
BIG DOG HOLDINGS, INC.,
a Delaware corporation
By:
Name:
Title:
BIG DOG USA, INC.,
a California corporation
By:
Name:
Title:
CSI ACQUISITION CORPORATION,
a California corporation
By:
Name:
Title:
XXXXX FARGO RETAIL FINANCE II, LLC,
a Delaware corporation
as Agent and as a Lender
By:
Name:
Title:
EXHIBIT A
Reaffirmation and Consent
All capitalized terms used herein but not otherwise defined
herein shall have the meanings ascribed to them in that certain Loan and
Security Agreement between and among, on the one hand, the lenders identified on
the signature pages thereof (such lenders, together with their respective
successors and assigns, are referred to hereinafter each individually as a
"Lender" and collectively as the "Lender"), XXXXX FARGO RETAIL FINANCE II , LLC
(formerly known as Xxxxx Fargo Retail Finance, LLC), a Delaware limited
liability company, as the arranger and administrative agent for the Lenders
("Agent"), and, on the other hand, BIG DOG HOLDINGS, INC., A Delaware
corporation ("Parent" or "Guarantor"), BIG DOG USA, INC., a California
corporation ("Big Dog"), and CSI ACQUISITION CORPORATION, a California
corporation ("CSI" together with Big Dog collectively, the "Borrowers"), dated
as of October 23, 2001 (as the same may be further amended, restated,
supplemented, or otherwise modified from time to time, the "Loan Agreement"), or
in the First Amendment to Loan and Security Agreement, dated as of June 5, 2003
(the "First Amendment"), among Borrowers, Parent, Agent and the Lenders, or in
the Second Amendment to Loan and Security Agreement dated as of November 1,
2003, among Borrowers, Parent, Agent and the Lenders (the "Second Amendment"),
or in the Third Amendment to Loan and Security Agreement, dated as of March 3,
2004 (the "Third Amendment"), among Borrowers, Parent, Agent and the Lenders.
The undersigned hereby (a) represents and warrants to the Lenders that the
execution, delivery, and performance of this Reaffirmation and Consent are
within its powers, have been duly authorized by all necessary action, and are
not in contravention of any law, rule, or regulation, or any order, judgment,
decree, writ, injunction, or award of any arbitrator, court, or governmental
authority, or of the terms of its charter or bylaws, or of any contract or
undertaking to which it is a party or by which any of its properties may be
bound or affected; (b) consents to the transactions contemplated by the Third
Amendment and the execution and delivery thereof; (c) acknowledges and reaffirms
its obligations owing to the Lenders under the Guaranty and any other Loan
Documents to which it is a party; and (d) agrees that each of the Loan Documents
to which it is a party is and shall remain in full force and effect. Although
the undersigned has been informed of the matters set forth herein and has
acknowledged and agreed to same, it understands that the Lenders have no
obligation to inform it of such matters in the future or to seek its
acknowledgment or agreement to future amendments, and nothing herein shall
create such a duty. Delivery of an executed counterpart of this Reaffirmation
and Consent by telefacsimile shall be equally as effective as delivery of an
original executed counterpart of this Reaffirmation and Consent. Any party
delivering an executed counterpart of this Reaffirmation and Consent by
telefacsimile also shall deliver an original executed counterpart of this
Reaffirmation and Consent but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Reaffirmation and Consent. The Reaffirmation and Consent shall be governed
by the laws of the State of California.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
Signature Page to Ratification and Consent for
Third Amendment
IN WITNESS WHEREOF, the undersigned has caused this Reaffirmation and
Consent to be executed as of the date of the Third Amendment.
Reaffirmation and Consent
of Guarantor:
BIG DOG HOLDINGS, INC.
A Delaware corporation
By: _______________________
Name:
Title:
